Tax Law Commons^™

Analysis Of Judicial Decisions Interpreting §482, Reuven S. Avi-Yonah

Other Publications

The purpose of this chapter is to survey the judicial interpretations of transfer pricing, as developed in the cases decided under §482. The chapter is divided into three major sections: first, an overview of the general legal principles underlying the judicial interpretation of §482; second, a chronological survey of the development of the case law under §482, with particular attention to the development of the arm's length standard and the search for comparables; third, an analytical survey of the techniques used by courts to decide transfer pricing cases, with particular emphasis on the techniques developed in recent cases to deal …

Ifa Branch Report: United States (Trends In Company / Shareholder Taxation: Single Or Double Taxation?), Reuven S. Avi-Yonah

Other Publications

United States IFA Branch Report on Trends in Company / Shareholder Taxation: Single or Double Taxation?

The Case For Retaining The Corporate Amt, Reuven S. Avi-Yonah

Articles

PROFESSORS Chorvat and Knoll present us with a strong argument for repealing the corporate alternative minimum tax (AMT). In 2001, repeal was recommended by the Joint Committee on Taxation as part of their simplification study, endorsed by the ABA/AICPA/TEI tax simplification project, and included in a bill passed by the House of Representatives. Since this issue is likely to arise again, it seems worthwhile to review the arguments raised by Chorvat and Knoll. Upon review, none of these arguments seem particularly persuasive; at best, they make a case for reforming the corporate AMT, not for repealing it. On the other …

Incremental Versus Fundamental Tax Reform And The Top One Percent, Deborah A. Geier

Law Faculty Articles and Essays

This article describes the historical shift from consumption taxation at the federal level to income taxation with the enactment of the 16th amendment (the intent of which was chiefly to tax the capital income of the wealthy) and the incremental shifts since then back toward consumption taxation (which frees capital from tax) through expansion of both the payroll taxes as well as the consumption tax features of our current hybrid income/consumption tax that target the middle class.

It then addresses the issue of whether we ought to expand consumption tax treatment to the very wealthy by reviewing two recently published …

An International Tax Regime In Crystallization, Yariv Brauner

UF Law Faculty Publications

The grand illusion of a single, worldwide, tax system that will eliminate all international inefficiencies, and assist all the nations of the world to maximize their relative advantages, is, as commonly accepted, utopian. The tax, academic and professional, writing in the field of international taxation, and cross-border interaction, between tax systems and jurisdictions has grown, exponentially, in the last decade, but no significant work has been done to prove, or disprove, the naivety of this hypothesis. Some scholars and tax executives, in certain international organizations, have discussed ideas along this line, but no single organization has, seriously, attempted to promote …

Contributions, Distributions, And Assumption Of Liabilities: Confronting Economic Reality, Karen C. Burke

UF Law Faculty Publications

To combat a relatively arcane international tax-shelter abuse, Congress recently amended Code sections 357 and 362 governing contributions of encumbered property to a corporation. This Article offers a critical assessment of the recent amendments to the liability assumption rules of section 357 and corresponding basis provisions of section 362. Part I explores the divergence between the former liability assumption rules and the "economic benefit" doctrine of the section 1001 regulations. Part II focuses on the technical definition of assumption of recourse and nonrecourse liabilities under amended section 357(d). Part III examines the corollary basis provisions of section 362, as modified …

Recent Developments In Federal Income Taxation: The Year 2002, Ira B. Shepard, Martin J. Mcmahon Jr.

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during 2002 - and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted. Amendments to the Internal Revenue Code generally are not discussed except to …

Legal Transitions, Rational Expectations, And Legal Progress, Kyle D. Logue

Articles

In the literature on legal transitions, the term "transition policy" is generally understood to mean a rule or norm that influences policymakers' decisions concerning the extent to which legal change should be accompanied by transition relief, whether in the form of grandfathering or phase-ins or direct compensation. Legal change within this literature is defined broadly, and somewhat counter-intuitively, to include any resolution of the uncertainty regarding what the law will be in the future or how the law will be applied to future circumstances. Thus, a legal change would obviously include an unexpected repeal of a tax provision, such as …

"Gifts, Gafts And Gefts" – The Income Tax Definition And Treatment Of Private And Charitable "Gifts" And A Principled Policy Justification For The Exclusion Of Gifts From Income, Jeffrey H. Kahn, Douglas A. Kahn

Scholarly Publications

No abstract provided.

Learning To Live With An Imperfect Tax: A Defence Of The Corporate Tax, Kim Brooks

Articles, Book Chapters, & Popular Press

Following an introduction, the paper is divided into two parts followed by a conclusion. Part II reviews a number of objectives of the corporate tax, arguing that they should carry more weight as arguments in favour of the corporate tax than they are often attributed. Furthermore, while it is conceded that the corporate tax is a second or even an nth best tax for achieving these objectives, there are simply no administratively feasible or politically acceptable alternatives to it. The arguments reviewed in the paper are as follows. First, by taxing income from capital, the corporate tax increases the comprehensiveness, …

Redistributing Optimally: Of Tax Rules, Legal Rules, And Insurance, Kyle D. Logue, Ronen Avraham

Articles

From the beginning of the law and economics movement, normative legal economists have focused almost exclusively on evaluating the efficiency of alternative legal rules. The distributional consequences of legal rules, therefore, have largely been ignored. It is tempting to conclude that legal economists are hostile or indifferent to concerns of distributional fairness. In fact, however, the discipline of economics has a great deal to say about distributional policy. The normative branch of economics, known as welfare economics, has always been deeply concerned with distributional issues. It is not that welfare economists purport to know a priori the "right" or "optimal" …

Book Review: Tax Stories: An In-Depth Look At Ten Leading Federal Income Tax Cases, Kim Brooks

Articles, Book Chapters, & Popular Press

This piece is a book review of Tax Stories, a book edited by Paul L. Caron. It reviews the contributions of Tax Stories, and provides a summary of each of the book's ten chapters, comparing the American tax cases discussed to the Canadian treatment of the same issues.

Reform Proposal: Uniform Source Withholding Tax And Global Profit Split, Jinyan Li

Articles & Book Chapters

This chapter first presents a case for a re-evaluation of the fundamental concepts and principles of international taxation in light of the challenges posed by electronic commerce. It also argues that inter-nation fairness should be the primary policy objective of any improvement(s) to the present system and that single taxation should be the guiding principle.

A Resource Guide To Tax Law Careers, Robert H. Hu

Faculty Articles

This Guide is designed to assist law students and attorneys in the pursuit of careers in tax law. It is also intended for librarians and career counselors to readily find tax law career information so that they can assist their clients effectively. It includes resources in both print (for example, books and articles) and electronic formats (for example, Web sites). Each item included has a brief annotation so that the user can quickly decide the relevancy and value of that item.

Gifts, Gafts And Gefts: The Income Tax Definition And Treatment Of Private And Charitable 'Gifts' And A Principled Policy Justification For The Exclusion Of Gifts From Income, Douglas A. Kahn, Jeffrey H. Kahn

Articles

Gifts have been given special treatment by the income tax laws since the first post-16th Amendment tax statute was adopted in 1913. The determination of how the income tax law should treat gifts raises a number of issues. For example: should gifts be given special treatment? If so, what should qualify as a gift? Should gifts to a private party be taxable to the donee? Should gifts to a private party be deductible by the donor? Should the donee's basis in a gift of property be determined by reference to the basis that the donor had, and should any modifications …

Allocation And Reallocation In Accordance With The Partners' Interests In The Partnership, Stephen Utz

Faculty Articles and Papers

If a partnership agreement either fails to allocate an item of partnership income, gain, deduction, credit, or loss, or does so invalidly, section 704(b) requires the item to be allocated in accordance with the partners' interests in the partnership (PIP). A brief portion of the section 704(b) regulations interpret this reallocation standard, providing guidelines of varying specificity. Commentators agree that the guidelines are vague and puzzling. The courts have not often had to apply this portion of the regulation. However, in the event that the courts do employ section 704(b), they have assigned an implicit priority to the different guidelines, …

Race Conscious Affirmative Action By Tax Exempt 501(C)(3) Corporations After Grutter And Gratz, David A. Brennen

Law Faculty Scholarly Articles

The Equal Protection Clause of the Fourteenth Amendment generally acts as a legal limit on the permissible bounds of government action. Accordingly, public universities and other government entities are constitutionally prohibited from engaging in acts that violate equal protection of the laws. The Supreme Court recently reinforced this point when it ruled, in two related cases, that public universities may consider the race of applicants when making admissions decisions, so long as an applicant's race does not amount to a deciding factor when granting admission. By its very terms, the constitutional limitation imposed by the Equal Protection Clause only directly …

Business Law Reform In The United States: Thinking Too Small?, Douglas C. Michael

Law Faculty Scholarly Articles

Dean Johan Henning presents the South African experience with business entity reform as one part of a coordinated whole. It included, for example, government funding for business, tax reforms, accounting and securities changes. Henning says that these reforms, though multi-faceted, had a uniform purpose: to use small business as an engine to improve the economy and to move “historically and socially disadvantaged groups” into the mainstream of the economy and the society.

These are noble goals and far reaching efforts, and a lot to ask of business entity reform. But because the South African experience was nonetheless successful by all …

Big Picture, Fine Print: The Intersection Of Art And Tax, Anne-Marie E. Rhodes

Faculty Publications & Other Works

No abstract provided.

Out With The Open-Transaction Doctrine: A New Theory For Taxing Contingent Payment Sales, Jeffrey L. Kwall

Faculty Publications & Other Works

No abstract provided.

The Tension Between Textualism And Substance-Over-Form Doctrines In Tax Law, Allen Madison

Faculty Publications

This article discusses the tension that exists between the recent textualist approach taken in the U.S. Supreme Court and the judicially developed substance-over-form doctrines that pervade tax law. It sets forth Justice Antonin Scalia’s textualist approach, provides an overview of the substance-over-form doctrines, and then analyzes whether the current Supreme Court would uphold a case that overrode the literal text of the Internal Revenue Code on the basis of one of the doctrines. The article concludes that the current Supreme Court would reject any of these doctrines if faced with the issue.

Tax Stories And Tax Histories: Is There A Role For History In Shaping Tax Law?, Reuven S. Avi-Yonah

Reviews

The teaching of law is usually rather ahistorical. Teachers commonly focus on current doctrine and policy debates, discarding on the "garbage pile of history" any law that has been repealed or superseded. And yet, much of law teaching is still based on reading cases. And cases are by definition historical artifacts - they arise from a specific time and place, and reflect a frequently long-gone historical context. Thus, it is hard to imagine a modern law course completely devoid of history, even if the history gets short shrift. A constitutional law course, for example, will likely include some discussion of …

Tax Policy And Global Warming, David G. Duff

All Faculty Publications

The Canadian government announced its ratification of the Kyoto Protocol to the United Nations Framework Convention on Climate Change on December 17, 2002. Under this protocol, Canada has agreed to reduce annual emissions of greenhouse gases (GHGs) to 6 percent below 1990 levels during the period 2008-2012 - a commitment that requires a 30 percent reduction relative to projected GHG emissions for 2010 assuming business as usual. In order to achieve this objective, the Canadian government has established specific reduction targets and proposed various policy instruments in its climate change action plan (CCAP) released in November 2002. Although the main …

The Case For Tax Sparing Along With Expanding And Limiting The Subpart F Regime, Samuel C. Thompson Jr.

Faculty Scholarship

No abstract provided.

Myth Of Ownership / Myth Of Government, Jeffrey Schoenblum

Vanderbilt Law School Faculty Publications

Indisputably, the lives of all individuals, now and throughout history, have not been commensurate in every respect. No individual has the most of everything at all times - net worth, love, happiness, security, companionship, fame, food, land, grandchildren, or whatever else he or she values.1 Nevertheless, a utopian strain in intellectual thought, emanating as the Enlightenment afterglow,2 continues to place its faith in the public construction of an ersatz equality that has never existed naturally.3 The Myth of Ownership, a recent book by two New York University law/philosophy professors, Liam Murphy and Thomas Nagel, is a striking exemplar of this …

Frictions And Tax-Motivated Hedging: An Empirical Exploration Of Publicly-Traded Exchangeable Securities, William M. Gentry, David M. Schizer

Faculty Scholarship

As financial engineering becomes more sophisticated, taxing income from capital becomes increasingly difficult. We offer the first empirical study of a high profile strategy known as "taxfree hedging," which offers economic benefits of a sale without tnggering tax. We explore nontax costs that taxpayers face when hedging by issuing so-called "DECS," "PHONES," and other publicly-traded exchangeable securities. Focusing on 61 transactions between 1993 and 2001, we shed light on why taxpayers might prefer to hedge through private "over-the-counter" transactions: An offering of exchangeable securities is announced in advance and implemented all at once, triggering an almost 4 percent decline in …

When The Endowment Tanks: Some Lessons For Nonprofits, Jeffrey J. Haas

Other Publications

No abstract provided.

Taxing International Portfolio Income, Michael J. Graetz, Itai Grinberg

Faculty Scholarship

Most analyses of the taxation of international income earned by U.S. corporations or individuals have addressed income from direct investments abroad. With the exception of routine bows to the "international tax compromise" and sporadic discussions of the practical difficulties residence countries face in collecting taxes on international portfolio income, the taxation of international portfolio income generally has been ignored in the tax literature.

Analysis and reassessment of U.S. tax policy regarding international portfolio income is long overdue. The amount of international portfolio investment and its role in the world economy has grown exponentially in recent years. In most years since …

The Federal Income Tax Act And Private Law In Canada: Complementarity, Dissociation, And Canadian Bijuralism, David G. Duff

All Faculty Publications

This article examines the relationship between the federal Income Tax Act (ITA) and provincial private law, evaluating judicial decisions and statutory provisions according to the goals of Canadian bijuralism expressed in the policy on legislative bijuralism adopted by the federal Department of Justice in June 1995, the preamble to the first Federal Law-Civil Law Harmonization Act, No. 1, and new sections 8.1 and 8.2 of the federal Interpretation Act. The first part of the article reviews notable cases in which Canadian courts have recognized a relationship of complementarity between the ITA and provincial private law, looking at cases arising in …

Special Federal Tax Assistance For Charitable Donations Of Publicly Traded Securities: A Tax Expenditure Analysis, David G. Duff

All Faculty Publications

This comment questions both the justification offered in the Department of Finance study and tax assistance for charitable giving in the form of a reduced capital gains inclusion rate on gifts of publicly traded securities. The article begins by presenting the most persuasive rationale for special tax treatment of charitable contributions under the income tax and the implications of this justification for the design of an appropriate tax incentive. In light of this analysis, the article turns to the reduced capital gains inclusion rate on gifts of publicly traded securities and the justification offered in the Department of Finance study. …