Tax Law Commons^™

Relational Tax Planning Under Risk-Based Rules, Alex Raskolnikov

Faculty Scholarship

Risk-based rules are the tax system's primary response to aggressive tax planning. They usually grant benefits only to those taxpayers who accept risk of changes in market prices (market risk) or business opportunities (business risk). Attempts to circumvent these rules by hedging, contractual safeguards, and diversification are well-understood. The same cannot be said about a very different type of tax planning. Instead of reducing risk directly, some taxpayers change the nature of risk. They enter into informal, legally unenforceable agreements with contractual counterparties that are designed to eliminate market or business risk entirely. The new uncertainty these tax planners inevitably …

Foreign Income And Domestic Deductions, James R. Hines Jr.

Articles

To what extent should taxpayers deduct expenses incurred domestically that contribute to foreign income production? It is widely believed that if the home country does not tax foreign income, then it also should not permit deductions for that portion of domestic expenses attributable to earning foreign income. This prescription is, however, inconsistent with the decision to exempt foreign income from taxation in the first place. The paper shows that, for any system of taxing foreign income, the consistent and efficient treatment is to permit domestic expense deductions for all expenses incurred domestically. This differs from the current U.S. regime, under …

Quantifying The Tax Advantage Of Deferred Compensation, Eric D. Chason

Faculty Publications

No abstract provided.

The Post-Cuno Litigation Landscape, Morgan Holcomb, Nicholas Allen Smith

Faculty Scholarship

In 1996, Northeastern University School of Law Professor Peter Enrich wrote a groundbreaking article, in which he argued that certain state tax incentives are unconstitutional as violations of the Commerce Clause. This article begins by describing the constitutional landscape into which Enrich cast his argument, and them turns describe the litigation that Enrich’s article has generated, including the much-watched case, Cuno v. DaimlerChrysler Corp., which held the promise of resolving this dormant Commerce Clause question, only to wither away on the vine of standing. Following the discussion of Cuno, this article will turn to an exploration of the litigation that …

Tax My Ride: Taxing Commuters In Our National Economy, Morgan Holcomb

Faculty Scholarship

States constitutionally impose individual income taxes on two bases: (1) Residency: a state of residence can tax its residents and domiciliaries and (2) Source: the state in which income is earned can tax the individual earner. At present, there is no articulated constitutional barrier to "double taxation" of individual income. That is, there is no requirement that the source state and residence state collaborate to tax no more than 100% of an individual's income, and there is no requirement that only one state consider itself the "source" of a particular item of income. In the realm of corporate income taxation …

Partnership Tax Allocations And The Internalization Of Tax-Item Transactions, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Recent Developments In Federal Income Taxation: The Year 2007, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most importnat judicial decisions and administrative rulings and regulations and promulgated by the Internal Revenue Service and Treasury Department during 2007- and sometimes a little farther back in time if we find the item particulary humourous or outrageous. Most Treasury Regulations, houever, are so complex that they cannot be dicussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted. Admendmentsto the Internal Revenue Code generally are not dicussed except to the …

The Irs' Classification Settlement Program: Is It An Adequate Tool To Relieve Taxpayer Burden For Small Businesses That Have Misclassified Workers As Independent Contractors, Judson D. Stelter

Cleveland State Law Review

This Note argues that the timely filing of informational tax forms should not be a condition of an IRS Classification Settlement Program (CSP) settlement offer; the CSP should incorporate more settlement options; and the CSP should make settlement offers mandatory. Part II of this Note will discuss the legal history behind worker classification. Part III will demonstrate the unique situation of the small business owner in classifying workers. Part IV will explain § 530, a safe harbor provision for small business owners who have incorrectly classified workers. Part V will introduce the CSP in detail and explain its applications. Part …

Inter-Nation Equity: The Development Of An Important But Underappreciated International Tax Value, Kim Brooks

Articles, Book Chapters, & Popular Press

Modern high-income states have relied on income taxes and redistributive spending to reduce inequality nationally; yet few states have considered how their national tax systems might have important implications for international income flows between high-income and low-income states and how their tax treaties might be used as a mechanism for achieving a fairer distribution of income internationally. Discussions about the possibilities of tax systems as a means of distributing income globally, and of acting in the service of the reduction of global inequality, are nascent, but not new. The foundational, and still leading, contribution to this area of scholarship is …

Helping Out In The Family Firm: The Legal Treatment Of Unpaid Market Labor, Lisa Philipps

Articles & Book Chapters

This article investigates the work of individuals who help out informally with a family member's job, often without pay. Examples include the relative who works in the back room of the family business, the executive spouse who hosts corporate functions, the political wife who campaigns with her husband, or the child who does chores on the family farm. The term "unpaid market labor" (UML) is used here to describe the ways that family members collaborate directly in paid activities that are legally and socially attributed to others. The practical legal problems that can arise in relation to UML are illustrated …

Third-Party Tax Administration: The Case Of Low- And Moderate-Income Households, Michael S. Barr, Jane K. Dokko

Articles

Using a unique household-level data set, this article investigates the taxfiling experiences and refund behavior of low- and moderate-income (LMI) households. We document households' tax-filing behavior, attitudes about the withholding system, use of tax refunds to consume and save, and the mechanisms by which households would prefer to receive their income. We also document the prevalence of the use of tax-preparation services and the receipt of tax refunds and refund-anticipation loans. Finally, we argue that there may be a role for tax administration to enable LMI households to make welfare-improving financial decisions.

Genes As Tags: The Tax Implications Of Widely Available Genetic Information, Kyle D. Logue, Joel Slemrod

Articles

Advances in genetic research promise to loosen the tradeoff between progressivity and effi ciency by allowing tax liability (or transfer eligibility) to be based in part on immutable characteristics of individuals (“tags”) that are correlated with their expected lot in life. Use of genetic tags would reduce reliance on tax bases (such as income) that are subject to individual choices and, therefore, subject to ineffi cient distortion to those choices. If genetic information can be used by private employers and insurers, the case for basing tax in part on it becomes more compelling, as genetic inequalities would be exacerbated by …

Taxes And The 2008 Us Election, Stephen Utz

Faculty Articles and Papers

No abstract provided.

Taxes And The 2008 Election, Stephen Utz

Faculty Articles and Papers

No abstract provided.

Tax Equity, Anthony C. Infanti

Buffalo Law Review

No abstract provided.

Time To Start Over On Deferred Compensation, Michael Doran

Georgetown Law Faculty Publications and Other Works

Writing good regulations--"good" in the sense of promoting the public interest--always presents challenges. Regulators must hit a small but important target where private conduct is brought within appropriate government control, but unnecessary compliance burdens and other deadweight costs are minimized. Even if they see the government's objectives clearly, regulators often have only a limited understanding of the underlying private activities. Moreover, regulators may be unaware of how their rules disrupt or distort those activities in socially harmful ways.

Regulators occasionally hit the target exactly. More often, they miss--though not by an intolerably wide margin (good enough for government work, as …

Tax Fairness, Brian Galle

Georgetown Law Faculty Publications and Other Works

This Article argues that, contrary to the consensus of economists and many legal scholars, the norm of "horizontal equity" in taxation has independent meaning as a default rule in favor of existing arrangements. Although it has long been said, and widely thought, that tax should be fair in its dealings with individuals who are situated similarly to one another, no one has been able to say convincingly just what that fairness comprises. As a result, the learned referees in the last major dispute over the significance of horizontal equity judged that fairness's critic had decidedly won the day. Since then, …

Access Assured: Restoring Progressivity In The Tax And Spending Programs For Higher Education, Kerry A. Ryan

All Faculty Scholarship

Presently, the federal government subsidizes the higher education expenses of individual college students through two distribution channels: the tax system and the transfer system. Under each subsystem, there are a multitude of programs available to assist students in meeting their postsecondary educational expenses. The proliferation of so many forms of federal student aid raises issues of intra- and inter-program effectiveness. In their current form, the tax benefits for higher education do not get the right amount to the right people at the right time. The federal college spending programs, on the other hand, get the right amount to the right …

Deductions In A Proposed Calculation And Allocation Of Distributable Net Income To The Separate Shares Of A Trust Or Estate, Michael T. Yu

Faculty Scholarship

This article examines the treatment of certain deductions1" in the separate share regulations and discusses how the separate share regulations arguably provide two methods for calculating distributable net income (DNI) to be used in coordinating the income taxation of a trust or estate with separate shares and of the beneficiaries of such trust or estate. Specifically, this article analyzes how the two methods address the income taxation of a trust or estate with two separate shares in which one separate share has a net loss as to at least one type of income. Such loss, pursuant to the separate share …

The Tax Treatment Of Advance Receipts, David Hasen

Publications

Under the present income tax, some advance receipts are neither taxable on receipt nor deductible on repayment, while others are taxable when received and deductible when repaid or paid for. From a purely theoretical perspective, it remains unclear why different sets of rules apply in different cases. For example, if the fact of unrestricted control over the payment compels the conclusion that it is income, then most advance receipts, including loan proceeds, should be included in income immediately. Conversely, if the presence of an offsetting liability compels the conclusion that the payment is not (yet) income, then most advance receipts, …

The Tax Treatment Of Cancelled Interest And Penalties On Consumer Debt, Richard C.E. Beck

NYLS Law Review

No abstract provided.

Third-Party Profit-Taking In Tax Exemption Jurisprudence, Darryll K. Jones

Journal Publications

Nothing is free, not even charity. In almost every case, a tax-exempt nonprofit organization must transact with profit-seekers to achieve the charitable goal for which the organization has been granted tax exemption. The organization will have to fund somebody's accession to wealth. It may be, for example, that a particular nonprofit organization need only hire one or two employees to deliver meals to elderly beneficiaries. Even in that circumstance, an organization must normally pay market rates for the labor necessary to achieve its charitable goal. Employees will profit; the law presumes as much, and we would be hard pressed to …

The Elusive Cap And Gown: The Impact Of Tax Policy On Access To Higher Education For Law-Income Individuals And Families, Phyllis C. Taite

Faculty Articles

No abstract provided.

Tax Appeal: A Proposal To Make The United States Tax Court More Judicial, Leandra Lederman

Articles by Maurer Faculty

Accountability is a critically important protection for any justice system; its absence provides an opportunity for shortcuts that may undermine procedural fairness or even change case outcomes. Yet, the United States Tax Court, which is an Article I court, is not subject to Administrative Office of U.S. Courts or the U.S. Judicial Conference - institutions that serve and oversee the federal judiciary. In addition, because the Tax Court is not an administrative agency, it is not covered by the Administrative Procedure Act or the Freedom of Information Act. The principal source of oversight of Tax Court actions is appellate review. …

Tax Fairness And The Tax Mix, David G. Duff

All Faculty Publications

Since a society’s tax system is one of its most basic and essential social institutions, the justice or fairness of this tax system is an important subject for social and political theory, as well as for practical politics. In order to assess the fairness of any particular tax or the tax system as a whole, however, it is essential to consider the purpose of the tax and the tax system in general. While the most obvious purpose of most taxes is to raise revenue to finance public expenditures, taxes are also employed to regulate social and economic behaviour and to …

Policy And Theoretical Dimensions Of Qualified Tax Partnerships, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Business Profits (Article 7 Oecd Model Convention), Reuven S. Avi-Yonah, Kimberly A. Clausing

Book Chapters

The 2006 OECD Report on attribution of profits to permanent establishments states that its recommendation "was not constrained by either the original intent or by the historical practice and interpretation of Article 7." Moreover, the Report recommends a redrafting of both the Article itself and the Commentary. Given this, it seems appropriate to begin by asking: If we were working on a clean slate, what would be the best way to tax MNEs at source in the light of 21st century business practices? The beginning point has to be that a modern MNE does not operate as if its constituent …

A Multilateral Solution For The Income Tax Treatment Of Interest Expenses, Michael J. Graetz

Faculty Scholarship

Recent developments – including greater taxpayer sophistication in structuring and locating international financing arrangements, increased government concerns with the role of debt in sophisticated tax avoidance techniques, and disruption by decisions of the European Court of Justice of member states' regimes limiting interest deductions – have stimulated new laws and policy controversies concerning the international tax treatment of interest expenses. National rules are in flux regarding the financing of both inbound and outbound transactions.

Heretofore, the question of the proper treatment of interest expense has generally been looked at from the perspective of either inbound or outbound investment. As a …

Why And How To Tax Carbon, Michael Waggoner

Publications

Increased concern about possible global warming due to rising levels of greenhouse gases such as carbon dioxide ("CO2") suggests the need to control emissions of CO2. This article explores a system of revenue-neutral carbon taxes as a supplement or alternative to other CO2 control systems such as subsidies, regulation, and cap-and-trade. A system of carbon taxation should be, the Article suggests, sufficiently fairer and simpler and more efficient than the other possible systems of CO2 control and that it merits serious consideration. Because the carbon tax that is suggested would be revenue neutral, it should be politically acceptable. Problems with …

Patents, Taxes And The Nuclear Option: Do We Need A “Tax Strategy Patent” Ban?, Max Oppenheimer

All Faculty Scholarship

No abstract provided.