Tax Law Commons^™

When Your Body Is Your Business, Morgan Holcomb, Mary Patricia Byrn

Washington Law Review

Surrogacy in the United States is a multi-million dollar industry in which well paid professionals seek out specially qualified women to fill the difficult job of being a surrogate. Surrogates enter lengthy contracts in which they agree, in intricate and intimate detail, to provide a service for significant compensation—as a group, surrogates in the United States are paid well over $22 million per year. This Article argues that surrogates are professionals in this for-profit industry and are required to report surrogacy compensation as income. As a corollary, surrogates may deduct most of their surrogacy-related expenses as business deductions. Being a …

Taking The Good With The Bad: Recognizing The Negative Externalities Created By Charities And Their Implications For The Charitable Deduction, Shannon Weeks Mccormack

Articles

The tax code allows taxpayers to deduct amounts donated to an extremely broad variety of organizations deemed to create societal benefits — that is, positive externalities. But many organizations that may receive tax-deductible contributions also cause harms. Both the tax code and subsidy theory, one of the most utilized scholarly theories developed to analyze the deduction from an economic and morally neutral perspective, fail to properly account for these negative externalities. In order to do so, one needs to look beyond the economic models utilized by subsidy theorists. For instance, there should be some limit to the types of harms …

Equity And Efficiency In Intellectual Property Taxation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

This article examines the federal income tax regime governing intellectual property using normative criteria in evaluating taxes: equity and efficiency. The article first evaluates the current intellectual property tax scheme in terms of horizontal equity, identifying differences in tax treatment of what appear to be similar intellectual property activities. It argues that disparate tax treatments between seemingly similar intellectual property owners signal that flaws may exist in the tax system. The article then assesses the efficiency of the intellectual property tax system, examining numerous tax subsidies for intellectual property and their effectiveness in promoting economic growth. It argues that many …

Tax Shelters And Statutory Interpretation: A Much Needed Purposive Approach, Shannon Weeks Mccormack

Articles

Few are unaware that the Tax Code and Regulations provide a detailed, complex (and lengthy) set of rules. It is hardly surprising (or new) that taxpayers attempt to avoid these rules to lower their taxes. Courts and lawmakers have long grappled to identify abusive transactions and strip taxpayers of the associated tax savings. The transactions have, however, changed dramatically over the last decade making the task much more challenging. The rapid proliferation of aggressive and diverse tax shelters has created what many refer to as a tax shelter war. In general, tax shelters refer to transactions carefully designed to fit …

Acquiring Innovation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

In recent years, the innovation market has witnessed a new business model involving companies that are mere patent holding shells and not operating entities. They have no customers or products to offer, but they do have an aggressive tactic of using patent portfolios to threaten other operating companies with potential infringement litigation. The strategy is executed with the end goal of extracting handsome settlements. Acquisitions of patents for offensive use have become a major concern to operating companies because such acquisitions pose the threats of patent injunction, interrupting the business and crippling further innovation.

While many operating companies today know …

Macniven V. Westmoreland And Tax Advice Using “Purposive Textualism” To Deal With Tax Shelters And Promote Legitimate Tax Advice, Scott A. Schumacher

Articles

The last few years have seen a flurry of activity aimed at the tax shelter industry. Beginning with the “covered opinion” rules of Treasury Circular 230 in 2005, the government has adopted several changes to the standards applicable to tax advice, all in an effort stop abusive tax shelters. Most recently, both Congress (in 2007) and Treasury (in 2008) have revised the standards applicable to tax advice to require that a position have a “more likely than not” chance of succeeding on the merits, or the position must be disclosed to the IRS. While the government’s desire for reform is …

Giving Intellectual Property, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

The interdisciplinarity of intellectual property and taxation poses many challenges to the disparate existing norms in each respective field of law. This Article identifies and critiques the current tax regime governing the giving of intellectual property as a manifestation of the failure to understand the principles and policies underlying intellectual property and the firm. It proposes an economic, incentives-based system that would encourage firms to extricate part of their repository of residual rights by surrendering their monopolistic ownership of intellectual property for the benefit of charitable organizations and, in turn, the development and growth of society.

Holding Intellectual Property, Xuan-Thao Nguyen

Articles

The collapse of WorldCom, Inc., exposed a complex web of accounting irregularities. Within that web, recent filings by Dick Thornburgh, WorldCom's Bankruptcy Court Examiner, reveal a different type of scheme that involves the holding of intellectual property. Further scrutinizing the scheme reveals that WorldCom and its tax advisors, KPMG Peat Marwick LLP (KPMG), devised a tax avoidance scheme through the creation of an intellectual property holding company (IP holding company). This type of scheme has been widely and quietly utilized in the last twenty years by many corporations with substantial intellectual property.

Indeed, as state taxing authorities have become more …

Taxing The New Intellectual Property Right, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

Current, albeit arbitrary, rules exist governing the tax treatment of traditional forms of intellectual property, such as patents, trade secrets, copyrights, trademarks, and trade names. While tax principles exist for these traditional intellectual property and intangible rights, specific tax rules do not exist for new intellectual property rights, such as domain names, that are emerging with the arrival of global electronic commerce transactions on the Internet. This article explores the proper tax treatment of domain name registration and acquisition costs, addressing these parallel questions? Are domain names merely variations of traditional forms of intellectual property and other intangible rights to …

One Country, Two (Taxation) Sytems: A Treaty In All But Name, Andrew Halkyard

Washington International Law Journal

It came as no small surprise when it was announced in February 1998 that the Chinese mainland ("the Mainland") and Hong Kong had agreed to enter into an arrangement for the avoidance of double taxation of income. Although concerns of double taxation between the Mainland and Hong Kong tended to be more academic than practical, this arrangement helps establish a firm foundation for future co-operation by the Mainland and Hong Kong on trade and other economic matters. From a Hong Kong taxation perspective, it is one of the most significant developments to have occurred for a very long time. From …

The Taxation Of Gifts And Bequests In Australia: A Prototype For Transfer Tax Reform In The United States?, Jeffrey S. Kinsler

Washington International Law Journal

Australian tax law presents a possible prototype for the reform of gift taxation in the United States. Unlike the United States, Australia does not impose a separate transfer tax on gifts and bequests. Rather, gratuitous transfers of appreciated property are treated as capital gains under Australian tax law, exposing donors to income taxation. In an effort to interject the Australian model of taxation into the already robust debate over how best to reform the U.S. transfer tax system, this article examines the advantages and disadvantages of the Australian system and the Australian Income Tax Assessment Act ("ITAA").

Indeterminancy, Complexity, And Fairness: Justifying Rule Simplication In The Law Of Taxation, John A. Miller

Washington Law Review

This Article addresses the appropriateness of elaborate tax rules, that is, rules that are long, detailed, specific, and interconnected, by reference to the debate among jurisprudential scholars concerning the determinacy of law. It gives special attention to the works of Professors Anthony D'Amato, Kent Greenawalt, Ken Kress, and Frederick Schauer by placing their ideas concerning legal indeterminacy into the context of tax law. Professor D'Amato asserts that law is entirely indeterminate. Professor Greenawalt believes that "many legal questions have determinate answers." Professor Kress believes that "the indeterminacy of the law is no more than moderate." Professor Schauer argues that highly …

The Charitable Status Of Nonprofit Hospitals: Toward A Donative Theory Of Tax Exemption, Mark A. Hall, John D. Colombo

Washington Law Review

This Article examines the growing controversy over the multi-billion dollar charitable tax exemption enjoyed by nonprofit hospitals. It begins by articulating four criteria for evaluating a rationale of the charitable exemption: deservedness, incorporating the elements of worth and need; proportionality; universality; and historical consistency. The Article then employs these criteria to refute three conventional explanations of why nonprofit hospitals are exempt: because health care is a per se charitable activity; because the treatment of indigent patients relieves a government burden; and because nonprofit hospitals provide community benefits. The Article also uses these criteria to refute two academic theories: Boris Bittker's …

Teaching Tax Law After Tax Reform, Martin D. Ginsburg

Washington Law Review

Professor Ginsburg compares the teaching of individual income taxation before and after the extensive statutory revisions of the 1980s. The pervasive question, what is income, remains the central inquiry in the basic tax course, he observes, and the great classifications, personal versus commercial and current versus capital, unavoidably persist. The development in tax law that has most significantly changed the way the subject is taught, he believes, is embodied in the recent enactment of a variety of Internal Revenue Code provisions which, while facially inconsistent in their approach to particular cases, have in common an appreciation of differences in present …

National Tax Administration In The Philippines, Elias E. Vega, Ralph B. Short

Washington Law Review

On August 1, 1964, the Philippine Bureau of Internal Revenue held a picnic in Taytay, Rizal Province, attended by more than 2,000 persons, to celebrate the 60th anniversary of its founding. The Philippine Bureau of Internal Revenue was organized on August 1, 1904, some six years after the Philippines came under the control of the United States. Its present complement of approximately 6,000 employees administers a variety of National Government taxes and can claim credit for providing roughly sixty per cent of total National Government revenues.

Tax Consequences Of Doing Business In The Philippines, Ricardo J. Romulo

Washington Law Review

The impact of the Philippine system of taxation is of great importance to American investors and businessmen. According to the American Chamber of Commerce of the Philippines, the total direct United States investment in the Philippines at the end of 1963 was 415 million dollars and of this amount 110 million dollars are invested in manufacturing. Consequently, the aim of this Article, after briefly tracing the history of Philippine tax laws, is to present a thorough but concise discussion of the tax consequences of establishing and operating a business, with emphasis on American owned or controlled corporations, in the Philippines.

The New Japanese Approach To The Taxation Of Foreign Individuals And Enterprise, Griffith Way

Washington Law Review

It is only partly true that the lack of materials on Japanese taxation which are available to the foreign lawyer in English is the result of difficulties of language or a lack of familiarity with the legal and tax systems. Rather more it seems to reflect the Japanese bar's own lack of interest in the subject, a large part of which is occasioned by the lack of tax litigation. The tax field has been long and well occupied by the government tax economist on the one hand and the ordinary accountant on the other; the lawyer's role has been peripheral. …

Taxation, Gust A. Ledakis

Washington Law Review

Covers cases on inheritance taxation of insurance proceeds and on property previously exempt.

The Coordination And Integration Of Federal, State, And Local Tax Systems, James K. Hall

Washington Law Review

Of the fiscal problems pressing for immediate solution, few are as important economically and socially as the problem of establishing proper working relationships between and among the fiscal systems of the federal, state, and local governments. Today, as in the past, there is a conspicuous lack of coordination and integration among these several revenue systems. Only in recent years has any considerable emphasis been placed on the importance and necessity of visualizing our fiscal problems in perspective—of viewing the problems and issues of local, of state, or of federal finance as integral parts of a related whole. Pragmatic exigencies often …

The Coordination And Integration Of Federal, State, And Local Tax Systems, James K. Hall

Washington Law Review

Of the fiscal problems pressing for immediate solution, few are as important economically and socially as the problem of establishing proper working relationships between and among the fiscal systems of the federal, state, and local governments. Today, as in the past, there is a conspicuous lack of coordination and integration among these several revenue systems. Only in recent years has any considerable emphasis been placed on the importance and necessity of visualizing our fiscal problems in perspective—of viewing the problems and issues of local, of state, or of federal finance as integral parts of a related whole. Pragmatic exigencies often …

Cases On Taxation, By Joseph H. Beale (1924), J. Grattan O'Bryan

Washington Law Review

No abstract provided.