Tax Law Commons^™

Federalism And Phantom Economic Rights In Nfib V. Sibelius, Matthew Lindsay

All Faculty Scholarship

Few predicted that the constitutional fate of the Patient Protection and Affordable Care Act would turn on Congress’ power to lay and collect taxes. Yet in NFIB v. Sebelius, the Supreme Court upheld the centerpiece of the Act — the minimum coverage provision (MCP), commonly known as the “individual mandate” — as a tax. The unexpected basis of the Court’s holding has deflected attention from what may prove to be the decision’s more constitutionally consequential feature: that a majority of the Court agreed that Congress lacked authority under the Commerce Clause to penalize people who decline to purchase health insurance. …

What's Wrong With A Federal Inheritance Tax?, Wendy G. Gerzog

All Faculty Scholarship

Scholars have proposed a federal inheritance tax as an alternative to the current federal transfer tax, but there are serious flaws with that idea. In existing inheritance tax systems, those problems include: (1) different tax rates and exemptions based on the decedent’s relationship to the beneficiary; (2) the lack of a tax on lifetime gratuitous transfers, including gifts with retained interests or control; and (3) the persistence of most current valuation distortion abuses. In any inheritance tax model, moreover, there would be significantly decreased compliance rates and increased administrative costs because by focusing on the transferees instead of the transferor, …

Summary Of Harrah's V. Nevada Department Of Taxation, 130 Nev. Op. 15, Edward Wynder

Nevada Supreme Court Summaries

The Court considered the meaning of “first use” to determine whether Harrah’s was entitled to a refund of the Nevada use tax under NRS 372.258 for four aircraft it purchased outside Nevada and used to fly employees and clients to Harrah’s properties when most flights either began or ended outside Nevada.

Business Lobbying As An Informational Public Good: Can Tax Deductions For Lobbying Expenses Promote Transparency?, Michael Halberstam, Stuart G. Lazar

Journal Articles

The view that “lobbying is essentially an informational activity” has persistently served the suggestion that lobbying provides a public good by educating legislators about policy and the consequences of legislation.

In this article, we link a proposed tax reform with a substantive disclosure requirement to promote the kind of “information subsidy” that serves the public interest, while mitigating – at least to some extent – the distortion that may result from the imbalance of financial resources on the business side and other institutional contraints identified in the literature. We argue that corporate lobbying should be encouraged – by allowing business …

Pass-Through Entity Reform: Is A Major Overhaul Necessary?, Walter D. Schwidetzky

All Faculty Scholarship

No abstract provided.

The 2013 Irs Crisis: Where Do We Go From Here?, Donald B. Tobin

Faculty Scholarship

This article argues that the IRS’s new proposed regulation on candidate-related political activities is a good first step. It creates a bright-line standard that is easy to apply and will reduce concerns that the IRS is manipulating the enforcement process for political gain. The regulation addresses serious concerns that some independent groups are circumventing disclosure laws in the code. These groups are improperly arguing that they qualify as social welfare organizations when in fact they are political organizations subject to disclosure under section 527. A better solution would be for Congress to pass broad-based campaign disclosure laws that would apply …

The Supercharged Ipo, Victor Fleischer, Nancy Staudt

Vanderbilt Law Review

A new innovation on the IPO landscape has emerged in the last two decades, allowing owner-founders to extract billions of dollars from newly public companies. These IPOs-labeled supercharged IPOs-have been the subject of widespread debate and controversy: lawyers, financial experts, journalists, and members of Congress have all weighed in on the topic. Some have argued that supercharged IPOs are "brilliant, just brilliant," while others have labeled them "underhanded" and "bizarre."

In this Article, we explore the supercharged IPO and explain how and why this new deal structure differs from the more traditional IPO. We then outline various theories of financial …

Joint Ventures Of Nonprofits And For-Profits, Terri Lynn Helge

Faculty Scholarship

This article summarizes special tax considerations that should be taken into account when for-profit parties seek to engage in joint ventures with charitable organizations. In particular, there are two areas of concern unique to charitable organizations with respect to joint ventures with for-profit parties. First, certain rules restrict or prohibit a charitable organization's ability to enter into transactions with insiders. Second, a charitable organizations' participation in a joint venture with a taxable party may cause the charitable organization to incur unrelated business taxable income or lose its tax-exempt status. Underlying both of these areas of concern is the overriding concern …

Unfair And Unintended: The Tax-Exempt Organization Blocker Loophole, Andrew M. Dougherty

BYU Law Review

No abstract provided.

Even Adr Must Pay Its Dues: An Analysis Of The Evolution Of The Internal Revenue Service's Adr Programs And Where They Still Need To Grow, Stephen Folan

Pepperdine Dispute Resolution Law Journal

The article offers information on the evolution, development and effectiveness of the alternative dispute resolution (ADR) programs in the Internal Revenue Service (IRS) appeals system. It analyzes the history of the IRS's post-appeal mediation and arbitration systems and advocates adoption of its contemporary commercial arbitration principles to increase the ADR program's desirability for both the taxpayers and the IRS. It proposes cost-effective measures for dispute resolution processes.

Investment Treaties And Industrial Policy: Select Case Studies On State Liability For Efforts To Encourage, Shape And Regulate Economic Activities In Extractive Industries And Infrastructure, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

This paper, prepared in connection with a February 2014 conference organized by the UN Economic Commission for Africa, discusses some of the implications that investment treaties have for investments in infrastructure and the extractive industries. It focuses on liability for government conduct (1) in connection with tenders and negotiations; (2) when responding to questions regarding the legality of the investment; (3) in using performance requirements to leverage benefits and capture spillovers from the investment; (4) changing the legal framework governing an investment in response to evolving needs, circumstances, and interests; (5) administering the investment; and (6) requesting, and responding to …

Cigarette Tax To Fund Brain Research. Initiative Statute

Initiatives

Increases cigarette tax by $1.00 per pack, with an equivalent increase on other tobacco products. Requires tax revenues to be deposited into a special fund to provide grants and loans to support brain research on causes, treatments, detection, and cures for brain disorders and diseases. Creates 11-member oversight committee charged with administering the fund. If new tax causes decreased tobacco consumption, transfers sufficient amount of new tax revenues to offset revenue decrease to other programs funded by existing tobacco taxes. Requires annual independent audit. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and …

Cigarette Tax To Fund Brain And Stem Cell Research. Initiative Statute.

Initiatives

Increases cigarette tax by $1.00 per pack, with an equivalent increase on other tobacco products. Requires tax revenues to be deposited into a special fund to provide grants and loans to support brain research, including stem cell research, on causes, treatments, detection, and cures for brain disorders and diseases. Creates 11-member oversight committee charged with administering the fund. If new tax causes decreased tobacco consumption, transfers sufficient amount of new tax revenues to offset revenue decrease to other programs funded by existing tobacco taxes. Requires annual independent audit. Summary of estimate by Legislative Analyst and Director of Finance of fiscal …

Van Alen: A Reasonable Consistency, Wendy G. Gerzog

All Faculty Scholarship

In Van Alen, the Tax Court held that the duty of consistency required that two of the decedent’s children use the section 2032A basis valuation figures to determine gain on the sale of their interest in the decedent’s ranch, which was left to them in trust. The siblings had argued that their stepmother erroneously completed their father’s estate tax return.

Review Of Current Scholarship On The Fiscal Cliff, David J. Herzig

Law Faculty Publications

No abstract provided.

Taxation And Incentives In The Business Enterprise, David Gamage, Shruti Rana

Faculty Scholarship

This book chapter discusses the tax perspective on business enterprise law with a comparative focus on the U.S. and Japan.

The Internal Revenue Service And A Crisis Of Confidence: A New Regulatory Approach For A New Era, Donald B. Tobin

Faculty Scholarship

The Internal Revenue Service is not usually thought of as the agency charged with enforcing the nation’s campaign finance laws. It has found itself, however, at the center of a firestorm over both its involvement and its ineptitude in enforcing certain rules that regulate the campaign activities of tax-exempt organizations. For historical, legal, and practical reasons, the Internal Revenue Code regulates the political activity of tax-exempt groups, in some instances providing for disclosure of campaign donors and expenditures, and in other instances limiting the amount of political activity engaged in by tax-exempt organizations. As campaigns become more sophisticated and complicated, …

The United States Tax Court: An Historical Analysis (2d Ed. 2014), Harold Dubroff, Brant J. Hellwig

Books and Chapters

The second edition leaves largely intact the first four Parts of the original text, which provide a remarkably detailed history of the creation of Board of Tax Appeals through the congressional chartering of the United States Tax Court as a court of record established under article I of the Constitution. Part V is a new chapter devoted to the judicial consideration of the Tax Court’s constitutional status that culminated in the Supreme Court’s 1991 decision in Freytag v. Commissioner.

Whereas the original text addressed procedural matters following the discussion of the historical development of the Court, the second edition …

The Individual Mandate Tax Penalty, Jeffrey H. Kahn

Scholarly Publications

In 2010, President Obama signed legislation that significantly altered the healthcare and health insurance markets in the United States. An integral part of that reform is the individual mandate, a provision that requires individuals to purchase and maintain healthcare insurance. Failure to maintain such coverage subjects an individual to a tax penalty. The Supreme Court upheld the constitutionality of that provision under Congress’s taxing power.

Despite the Supreme Court upholding the individual mandate, fundamental questions remain. This Article addresses the question of whether the use of a tax penalty to encourage taxpayers to do something that the government desires is …

Loving And Legitimacy: Irs Regulation Of Tax Return Preparation, Steve R. Johnson

Scholarly Publications

No abstract provided.

Tax Favors For Philanthropy: Should Our Republic Underwrite De Tocqueville's Democracy?, Rob Atkinson

Scholarly Publications

This article critically reviews the current rationales for the federal income tax system's favorable treatment of philanthropy, gives those rationales a new descriptive synthesis based on de Tocqueville's account of American democracy, and offers a normative alternative based on neo-classical ethical and political theory. It first identifies the two basic normative questions: What is the function of philanthropy that warrants favorable tax treatment, and how well does favorable tax treatment advance that function? It then examines the answers of three distinct phases of normative tax theory: the traditional subsidy thesis, the antithetical technical definition of income theory, and a set …

Codifying And Miscodifying Judicial Anti-Abuse Tax Doctrines, Linda Jellum

Articles

No abstract provided.

Pfics Gone Wild!, Monica Gianni

Akron Tax Journal

This Article begins in Part II with a discussion of what constitutes a passive foreign investment company ("PFIC") and follows in Part III with the tax rules applicable to PFICs. Part IV begins with a general explanation of the goal of tax deferral, with discussion of several anti-deferral tax regimes enacted prior to the PFIC provisions, i.e., Personal Holding Companies ("PHCs"), Foreign Personal Holding Companies ("FPHCs"), Subpart F income of CFCs, Foreign Investment Companies ("FICs"), and Regulated Investment Companies ("RICs"). An understanding of these regimes is necessary to appreciate the genesis of the PFIC rules. Part V analyzes the policy …

Helvering V. Gregory: All The Perspectives From Which Learned Hand Was Wrong, Anthony P. Polito

Akron Tax Journal

At a fundamental level, this Article is about interpretation. The best way for a court to remain faithful to a complicated statute reflecting a delicate legislative compromise is to enforce its language literally without introducing extraneous tests or elements that cannot be found in the statutory language. Yet, it is important to be clear that it approaches the question from an ex ante perspective, from where things stood before Learned Hand's famous opinion.

This Article is not a call for the judicial reversal of Hand's opinion. Given the value of the predictability of established expectations as to statutory meaning, stare …

I Got 99 Problems And They’Re All Fatca, Nirav (Jonathan) Dhanawade

Northwestern Journal of International Law & Business

Offshore personal income tax evasion accounts for approximately $50 billion in annual lost revenue for the United States. These large sums of money are squirrelled away in tax havens—jurisdictions, such as Aruba, the Cayman Islands, and Dubai, whose laws allow some U.S. citizens to evade paying their U.S. income taxes. Before the Foreign Account Tax Compliance Act (FATCA) was enacted, U.S. citizens could avoid taxes on passive income by not reporting this income to the Internal Revenue Service (IRS). To detect tax evasion, the IRS pursued U.S. citizens with undeclared assets in foreign banks. But the IRS’s quest was largely …

What Innocent Spouse Relief Says About Wives And The Rest Of Us, Stephanie Mcmahon

Faculty Articles and Other Publications

Every time spouses sign joint returns, knowingly or not they accept joint and several liability, meaning that either spouse may be held liable for all of the tax due on the joint return. Although joint and several liability facilitates tax collection, it may conflict with a spouse’s claims to have signed the return while being lied to, abused, or manipulated. The question for Congress is how to balance these competing demands. Innocent spouse relief provides some tax relief for spouses Congress does not believe should be jointly and severally liable. The existence of this relief also offers an opportunity to …

Why Congress Adopted The Church Audit Procedures Act And What Must Be Done Now To Restore The Law For Churches And The Irs, J. Michael Martin

Akron Tax Journal

This Article explores the significant policy purposes achieved by CAPA through the lens of the law's history and present challenges. Part II reviews the historical context and events leading to the adoption of CAPA in 1984. Part III then describes the present challenges associated with the law due to the failure of Congress and the Treasury Department to rectify the issue of who is an appropriate high-level Treasury official under CAPA. Finally, Part IV concludes with recommended solutions for restoring the law consistent with congressional intent in adopting CAPA-solutions that could easily be achieved through a simple amendment to the …

What's Mine Is Mine: Taxing Pre-Contribution Gains, Rodney P. Mock, Jeffrey Tolin

Akron Tax Journal

This article conducts an analysis of the Internal Revenue Code's varied income tax treatment between depreciated property and appreciated property transferred into C corporations by shareholders in nonrecognition transactions.7 It is at the entry point of the non-recognition transaction where the lobster pot unfairly doubles up on unrecognized gains at both the corporate and shareholder level notwithstanding that unrecognized losses generally remain singular at either level. The authors call into question this long-standing practice of artificial gain duplication upon corporate entry under Subchapter C. From a tax policy perspective, such disparate treatment makes little sense - particularly when the duplicated …

A Case For Simpler Gain Bifurcation For Real Estate Developers, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Occupy Wall Street, Distributive Justice, And Tax Scholarship: An Ideology Critique Of The Consumption Tax Debate, Partrick Crawford

The University of New Hampshire Law Review

[Excerpt] “This Article argues that the pro-consumption tax literature is wrong to claim that no legitimate fairness objections to the consumption tax exist. It argues that the persistent and widespread wariness about replacing our current hybrid consumption tax/income tax system with a pure consumption tax is, contrary to what the pro-consumption tax literature asserts, completely justified. In fact, our reservations about the consumption tax’s fairness reflect legitimate concern about the role of capitalist power in America, particularly over the past thirty years. Indeed, the more the nation continues to experience the social welfare effects of increased capitalist power, the more …