Tax Law Commons^™

Continuity As The Key To Reform Of Section 355, Charlene Luke

UF Law Faculty Publications

There can be little doubt that Internal Revenue Code (Code) section 355 is overly complex; the piecemeal adjustments spanning multiple decades could serve as exemplars of the potential pitfalls of incremental reform. Revisions to section 355 have tended to be under- or over-inclusive because they are reactive to particular deals, yet they leave largely intact older structures that dealt with different deals. The result is a jumble of provisions that fail to implement a coherent, principled approach to the tax treatment of corporate divisions. In Reform of Section 355, Bret Wells urges changing Code section 355 to focus on the …

Taxing Combat, Samuel Kan

Dickinson Law Review (2017-Present)

When you are being shot at or dodging landmines you are in a combat zone. Diplomatic niceties aside, these brave warriors are in danger because of the policies of their Government and we must take care of them. Quite frankly, we must act to insure that we do not have a repeat of what happened in Somalia. In Somalia, the families of the soldiers who lost their lives could not receive the benefits that should have gone to them under the Tax Code because the President never declared it a combat zone.

We don’t know exactly where we’re at in …

The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Gamage, David Kamin

Articles by Maurer Faculty

The 2017 tax legislation brought sweeping changes to the rules for taxing individuals and business, the deductibility of state and local taxes, and the international tax regime. The complex legislation was drafted and passed through a rushed and secretive process intended to limit public comment on one of the most consequential pieces of domestic policy enacted in recent history. This Article is an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage and describes key problem areas in the new legislation. Many of the new changes fundamentally undermine the integrity of the tax …

Legislation And Comment: The Making Of The § 199a Regulations, Shu-Yi Oei, Leigh Osofsky

Faculty Scholarship

In 2017, Congress passed major tax legislation at warp speed. After enactment, it fell to the Treasury Department to write regulations clarifying and implementing the new law. To assure democratic legitimacy in making regulations, administrative law provides that an agency must issue a notice of proposed rulemaking, followed by an opportunity for the public to comment (so-called “notice and comment”). But, after the 2017 tax overhaul, many sophisticated actors did not wait until the issuance of a notice of proposed rulemaking to comment, instead going to the Treasury Department immediately with comments designed to influence the regulations.

In this Article, …

Constituencies And Control In Statutory Drafting: Interviews With Government Tax Counsels, Shu-Yi Oei, Leigh Z. Osofsky

Faculty Scholarship

Tax statutes have long been derided as convoluted and unreadable. But there is little existing research about drafting practices that helps us contextualize such critiques. In this Article, we conduct the first in-depth empirical examination of how tax law drafting and formulation decisions are made. We report findings from interviews with government counsels who participated in the tax legislative process over the past four decades. Our interviews revealed that tax legislation drafting decisions are both targeted to and controlled by experts. Most counsels did not consider statutory formulation or readability important, as long as substantive meaning was accurate. Many held …

Crisis-Driven Tax Law: The Case Of Section 382, Albert H. Choi, Quinn Curtis, Andrew T. Hayashi

Articles

At the peak of the 2008 financial crisis, the Internal Revenue Service (IRS) issued Notice 2008–83 (the Notice), administrative guidance that limited Internal Revenue Code (the Code) section 382, an important tax rule designed to discourage tax-motivated acquisitions. Although styled as a mere interpretation of existing law, the Notice has been widely viewed as an improper exercise of the IRS’s authority that undermined its legitimacy. But did the Notice work? There were many extraordinary interventions during the financial crisis that raised questions about eroding the rule of law and the long-term destabilizing effects of bail­outs. In a financial crisis, regulators …

Hb 61 - Revenue And Taxation, Taylor N. Armstrong, Caitlin E. Correa

Georgia State University Law Review

The Act amends Georgia’s sales tax statute to shift the burden for the collection of sales taxes on online sales from the purchaser to the retailer.

Sourcing Service Receipts For Franchise Tax Apportionment In Texas, Ray Langenberg, Matt Jones

St. Mary's Law Journal

Abstract forthcoming

Perils Of Tax Reform, James R. Hines Jr.

Articles

Tax reforms dangle possibilities of improving the tax system, but are fraught with perils that are evident from the 2017 U.S. experience and caution against frequent reforms of its ilk. The first peril is that reforms containing tax provisions selected simply on the basis of their projected revenue contributions will produce less tax revenue than anticipated, illustrative calculations suggesting shortfalls of roughly 8–16 percent. The second peril is that reforms will not advance the objectives of efficiency and tax equity to the extent that they include provisions intended to influence future tax legislation or government spending. The third peril is …

Designing A Robust Tax System For Nigeria: Lessons From An International Perspective, Olukemi Tawoju

LLM Theses

This thesis argues that Nigeria can adapt its tax system for better gain from investment and other taxation. It outlines the foundation for a good tax policy, and explores initiatives by the Organisation for Economic Co-operation and Development (OECD and the United Nations (UN) regarding harmful tax practices and tax incentives. Their recommendations and those of scholars, conclude that tax incentives are ineffective in attracting foreign direct investment, may result in taxpayer abuse, and erode the revenue base of capital importing countries like Nigeria. Utilizing internationally accepted features on effective tax incentive design, examining the operation of the Nigerian tax …

Tax Compliance In A Decentralizing Economy, Manoj Viswanathan

Georgia State University Law Review

Tax compliance in the United States has long relied on information from centralized intermediaries—the financial institutions,employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities,consumers and businesses are not. New technologies, such as sharing economy platforms (companies such as Airbnb, Uber, and Instacart)and the blockchain (the platform on which various cryptocurrencies are based) are providing new, decentralized options for exchanging goods and services.

Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance. Until now, legal …

Soda Taxes As A Legal And Social Movement, David A. Dana, Janice Nadler

Northwestern Journal of Law & Social Policy

No abstract provided.

Getting Local Governments Where They Need To Go Without Taking Taxpayers For A Ride: "Cabs," Why They Are Used, And What Can Be Done To Prevent Their Misuse, Heather G. White

St. Mary's Law Journal

Abstract forthcoming

Something's Gotta Give: Origin-Based E-Commerce Sales Tax, Juliana Frenkel

Brooklyn Journal of Corporate, Financial & Commercial Law

How to tax interstate online purchases is a frequently debated and contentious topic in the business and tax arena. There are numerous parties affected when a transaction occurs and each affected party would like a taxation policy that benefits its own economic interests, without regard for others. Neither the legislative nor the judicial branch has successfully resolved this e-commerce taxation issue. With the growing need for tax revenue, it is prudent for Congress to finally resolve this circuit split and agree on a unifying Online Sales Tax Law. As opposed to the vast majority of proposals pending in Congress, this …

26 Usc Section 280e: Will The Dragon Now Be Slayed?, Bill Greenberg, Rebecca Greenberg

Journal of Law and Policy

26 USC § 280E of the Internal Revenue Code (“§ 280E”) prohibits the deduction of ordinary business expenses for businesses deemed by the federal government to be drug traffickers as defined by the Controlled Substances Act (“CSA”). The tax enactment is specifically designed to serve as a disincentive to socalled drug traffickers who might otherwise deduct “ordinary and necessary business expenses” from their taxes. However, this harms legitimate cannabis businesses by promoting unintended consequences, such as under-reported income. For three decades, there has been a patent incongruity between § 280E’s congressional purpose and the expansion of state-legalized cannabis businesses in …

The Enforcement Of Irs Summonses And Section 7609, Madeline Tusa

St. John's Law Review

(Excerpt)

This Note argues that because the Tenth Circuit decision ignores important policy concerns dealing with the efficiency of the IRS, failing to comply with notice requirements under Section 7609(a) should be analyzed under the totality of the circumstances standard. Part I discusses the history and development of Section 7609(a) and notice requirements for third-party summonses in IRS investigations. Part II outlines the general requirements for the enforcement of an IRS summons and how Section 7609(a) is analyzed in light of those requirements. Part III discusses the current circuit split and the significance of each respective court’s holdings and reasoning. …

Open Source: The Enewsletter Of Rwu Law 09-22-2017, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

Gaars And The Nexus Between Statutory Interpretation And Legislative Drafting: Lessons For The U.S. From Canada, Reuven S. Avi-Yonah, Amir Pichhadze

Articles

Rules targeting specific known schemes are not the only tools available in the battle against tax avoidance. Legal systems also use measures that apply generally. The U.S. for example has tended to rely heavily on general doctrines. One such doctrine which is discussed in part 2 of this chapter is the “economic substance” doctrine. Yet as Xiong and Evans recently pointed out “although such judicial doctrines can be used to deal with various aspects of complicated tax abuse judges tended sometimes to limit and sometimes to enlarge the scope of jurisprudential interpretation leading to substantial uncertainty and risk.” One way …

Tax Symposium: Introduction, Reuven S. Avi-Yonah

Michigan Journal of International Law

This issue of MJIL features four out of the many outstanding papers that were presented at a conference on Taxation and Citizenship held at Michigan Law in October 2015 and co-organized by Allison Christians and myself. The impetus for the conference was the realization that the unique U.S. practice of taxing its citizens on worldwide income, regardless of where they reside, has become a major flashpoint in the relationship between the United States and its citizens living overseas, and sometimes also between the United States and the country those citizens resided in.

The Tax-Immigration Nexus, Tessa R. Davis

Faculty Publications

Tax and immigration law have a shared interest in defining community. In order to implement a tax, we must know who belongs to the taxable community. At the same time, immigration law must define and administer the requirements for membership in the national community. Despite the differing objectives of tax and immigration law—raising revenue and deciding who may enter, remain, and become a citizen in the United States, respectively—both of these regimes uses a concept of citizenship to define their respective communities. Starting from this common thread of the relevance of citizenship to both immigration and tax law, this Article …

Minimalism About Residence And Source, Wei Cui

Michigan Journal of International Law

In this Article, I relate the discomfort with fundamental principles in taxing individuals’ worldwide income to a problem that has attracted greater attention in recent years: the assignment of geographical sources to income. I suggest that there is substantial similarity between critiques of residence rules (of which critiques of citizenship-based taxation are examples) and critiques of source rules. However, I argue that problematic residence and source rules are only symptoms, not causes, of unsatisfactory conceptual paradigms in international taxation. Many scholars portray source and residence rules as inadequate means for achieving purportedly given normative objectives in the age of intense …

Defining Residence For Income Tax Purposes: Domicile As Gap-Filler, Citizenship As Proxy And Gap-Filler, Edward A. Zelinsky

Michigan Journal of International Law

In this paper, I place the United States’ adherence to citizenship-based taxation in the context of the states’ tax systems. Forty-one states impose general income taxes on the worldwide incomes of their respective residents. These state tax systems are important repositories of experience that confirm the administrative benefits of citizenship-based taxation. Domicile today plays an important role in state tax systems as a gap-filler when more objective statutory residence laws fail to assign any state of residence to the taxpayer. Citizenship is an administrable proxy for domicile and serves a similar gap-filling role in the taxation of individuals whose income …

Citizenship Overreach, Peter J. Spiro

Michigan Journal of International Law

This Article examines international law limitations on the ascription of citizenship and national self-definition. The United States is exceptionally generous in its extension of citizenship. Alone among the major developed states, it extends citizenship to almost all persons in its territory at the moment of birth. This birthright citizenship is constitutionally protected under the Fourteenth Amendment. At the same time that it is generous at the front end, U.S. citizenship is sticky at the back. Termination of citizenship on the individual’s part can involve substantial fees. Expatriation is contingent on tax compliance and, in some cases, will implicate the recognition …

A Global Perspective On Citizenship-Based Taxation, Allison Christians

Michigan Journal of International Law

This Article contends that, with regard to individuals who reside permanently outside of the United States, the global assistance sought under FATCA to enforce U.S. income taxation solely on the basis of citizenship violates international law. It argues that insisting upon foreign cooperation with the FATCA regime, under threat of serious economic penalties, is inconsistent with universally accepted norms regarding appropriate limits to the state’s jurisdiction to tax, while also being normatively unjustified. Accordingly, FATCA should be rejected by all other nation states to the extent it imposes any obligations with respect to individuals who permanently reside outside of, and …

Perspectives On The Tax Avoidance Culture: Legislative, Administrative, And Judicial Ambiguity, Henry Ordower

All Faculty Scholarship

Henry Ordower discusses the effect that legislating economic incentives through the tax system has on taxpayer behaviour and explores the resulting difficulty in drawing the line between legitimate and objectionable tax avoidance. He argues that while the attempts to separate the two types of tax avoidance – attempts such as enacting general anti-avoidance rules (GAARs) and following general principles of economic substance – may be partially successful, subsidies delivered through the tax system will inherently limit their effect. The lack of clear delineation between legitimate tax planning and objectionable tax avoidance enables an even firmer embedding of “the culture of …

How The 1 Percent Pays Taxes; How The 99 Percent Could: The Subchapter T Worker Cooperative Tax Loophole, Michael Haber

Journal of Law and Policy

The ratification of the Sixteenth Amendment to the United States Constitution granted Congress the right to tax income “from whatever source derived.” Since its inception, the tax code has become long and complicated, filled with broad taxation rules and innumerable exceptions. Over time, the tax code has been amended with the stated purpose of promoting “fairness, efficiency, and enforceability.” However, the complexity of the tax code has led to abuse of “tax loopholes” by wealthy taxpayers who want to avoid paying their fair share of taxes. While abuse is likely to continue, as legislators remain intent on lowering taxes on …

How The 1 Percent Pays Taxes; How The 99 Percent Could: The Subchapter T Worker Cooperative Tax Loophole, Michael Haber

Journal of Law and Policy

The ratification of the Sixteenth Amendment to the United States Constitution granted Congress the right to tax income “from whatever source derived.” Since its inception, the tax code has become long and complicated, filled with broad taxation rules and innumerable exceptions. Over time, the tax code has been amended with the stated purpose of promoting “fairness, efficiency, and enforceability.” However, the complexity of the tax code has led to abuse of “tax loopholes” by wealthy taxpayers who want to avoid paying their fair share of taxes. While abuse is likely to continue, as legislators remain intent on lowering taxes on …

Qualified Residence Interest Deduction: A Win For Unmarried Co-Owners, Christine Manolakas

Nevada Law Journal

Despite the seemingly simple language of the statute, the interpretation of the home mortgage interest deduction has recently garnered much attention as the Internal Revenue Service and the courts grappled with its application to unmarried co-owners of a residence. In determining whether the indebtedness limitations apply on a “per-residence” or “per-taxpayer” basis, the Internal Revenue Service, the Tax Court, and the Ninth Circuit have conducted in-depth analysis of the language of the statute, the statute’s legislative history, implications of related tax provisions, social and policy concerns, and financial consequences, and have consulted almost every canon of statutory interpretation. This Article …

Nfib V. Sebelius And The Individual Mandate: Thoughts On The Tax/Regulation Distinction, Kyle D. Logue

Michigan Business & Entrepreneurial Law Review

When Chief Justice John Roberts wrote the opinion of the Court in National Federation of Independent Businesses v. Sebelius (NFIB) explaining the constitutionality of the Affordable Care Act’s (ACA) minimum essential coverage provision (sometimes referred to as the individual mandate), he reasoned that the mandate—or, more precisely, the enforcement provision that accompanied the mandate (the Shared Responsibility Payment or SRP)—could be understood as a tax on the failure to purchase health insurance. According to this view, the enactment of the mandate and its accompanying enforcement provisions fell within Congress’s virtually unlimited power to “lay and collect taxes.” This tax-based interpretation …

The Internet Tax Freedom Act: Necessary Protection Or Deferral Of The Problem?, Timothy Fallaw

Journal of Intellectual Property Law

No abstract provided.