Tax Law Commons^™

Corporate Inversions: Realigning Tax Incentives To Keep Corporations In The United States, Michael A. Gose

CMC Senior Theses

ABSTRACT

This thesis analyzes the corporate income tax, more specifically related to foreign sourced income, and proposes a solution to reduce the desirability of tax inversions and restore the competitiveness of United States’ corporations. The paper introduces the topic and discusses why corporate taxation has returned to the forefront of political discussion. It then addresses early 2000s regulation passed in response to increased inversion activity of the late ‘90s and how that regulation failed to achieve its intended purpose. Then, the current laws will be introduced with a focus on corporate actions to circumvent these laws in order to reduce …

A Retrospective On The Contributions Of Neil Brooks: So Far, Kim Brooks

Articles, Book Chapters, & Popular Press

This introduction to a symposium in honour of Neil Brooks originated in opening remarks at a workshop held on 10-11 May 2013.

The Troubling Role Of Tax Treaties, Kim Brooks, Richard Krever

Articles, Book Chapters, & Popular Press

The notional purpose of tax treaties is to prevent double taxation and tax evasion. The actual purpose is to reallocate taxing rights between an investor’s home jurisdiction (the residence state) and the host jurisdiction (the source state). The effect is to reduce or remove the taxing rights of a source state (a capital importing state) to leave more room for tax in the residence state (a capital exporting state). The revenue costs of agreeing to reduce taxing rights in a treaty are thought to be offset by other benefits. The benefits may be exaggerated. To the extent they may actually …

Inversions And Competitiveness: Reflections In The Wake Of Pfizer-Allergan, Reuven S. Avi-Yonah, Omri Marian

Articles

The recent announcement that Pfizer Inc. has reached a merger agreement with Allergan PLC, with the combined entity being tax resident in Ireland, is a good occasion to reconsider U.S. policy options in regard to inversions. We consider an "inversion" as any transaction in which a U.S. corporation becomes foreign for tax purposes without a meaningful change to its underlying business or management activities. This short article explains what we believe to be the true motives of inversion transactions, as well as potential policy responses, in light ofthe Pfizer inversion. Part II explains what is unique about the Pfizer inversion …

Cancellation Of Debt And Related Transactions, Douglas A. Kahn, Jeffrey H. Kahn

Articles

If a taxpayer borrows money, the borrowed funds are not included in the taxpayer's gross income. That treatment is proper even though the taxpayer has increased his assets by the amount he borrowed because he also has created a corresponding liability to pay back the loan. The taxpayer's net: wealth has not increased. 'The more difficult and interesting questions arise when the taxpayer fails to repay the loan. At first blush, it would appear that upon cancellation of a loan, the taxpayer should have income for the amount that was cancelled. However, the current tax treatment is not that simple. …

企業の社会的責任と戦略的租税行動 [Corporate Social Responsibility And Strategic Tax Behavior], Reuven S. Avi-Yonah, Keisaku Koga Translator

Articles

This paper addresses two questions. First, from the perspective of the corporation, should the corporation cooperate and pay the corporate tax, or should it engage in "strategic" tax behavior designed to minimize or eliminate its corporate tax burden? Second, from the perspective of the state, should the state use the corporate tax just to raise revenue, or should it also try to use it as a regulatory tool to steer corporate behavior in directions that it deems beneficial to society? The paper argues that whatever our view of the nature of the corporation and of the legitimacy of corporate social …

Modernizing The State Corporate Income Tax: Market-Based Apportionment For Content Providers, Richard Pomp

Faculty Articles and Papers

This Issue Paper discusses how technology has overtaken the traditional ways the states tax the income of “content providers” that operate broadcast and cable networks, sell advertising, and produce content such as movies and television programs. This content is licensed at wholesale to distributors and along with the advertising, is watched by customers of these distributors on their televisions, smart phones, tablets, gaming consoles, and computers— either in their homes or on the move.

The so-called “model” for taxing multistate businesses like content providers--the Uniform Division of Income for Tax Purposes Act (UDITPA)--was developed in 1957 and has been adopted …

The Denial Of Irs Access To Its Adversary's Playbook, Allen Madison

Faculty Publications

When examining a corporate taxpayer, the IRS often seeks special accounting documents called tax accrual workpapers. These workpapers often contain privileged documents, but the IRS does not care. It believes it is entitled to the documents despite that the work product doctrine protects the documents from the IRS's investigation authority. Although the law seems clear, some courts appear to have ignored the law and permitted the IRS to obtain the documents in some cases. Differing results under similar circumstances have made the law less clear. The IRS should stop trying to obtain taxpayers' work product, and the Supreme Court should …

The Rise And Fall Of Chevron In Tax: From The Early Days To King And Beyond, Steve R. Johnson

Scholarly Publications

No abstract provided.

Catalogs, Alex Stein, Gideon Parchomovsky

Faculty Scholarship

No abstract provided.

Merger Is Indirect Gift In Cavallaro, Kerry A. Ryan

All Faculty Scholarship

In Cavallaro v. Commissioner, the Tax Court held that a merger of two family-owned businesses resulted in a substantial taxable gift. The taxpayers avoided penalties by demonstrating that they relied in good faith on the mistaken advice of competent tax advisers.

Taxation And Inequality In Canada And The United States: Two Stories Or One?, Richard M. Bird, Eric M. Zolt

Osgoode Hall Law Journal

Canada and the United States have both experienced a substantial increase in income inequality over the last several decades. In this article, we examine the complex interaction of income inequality with tax and transfer systems in Canada and the United States. We begin by comparing the data on taxation and expenditure to understand the similarities and differences between the two countries. We then consider how changes to tax and transfer policies have affected the levels of inequality in both countries. The article concludes by offering some policy recommendations that each country may consider to address the increasing levels of inequality.

Tax Law Within The Larger Legal System, J. Scott Wilkie, Peter W. Hogg

Osgoode Hall Law Journal

Tax law may be viewed as occupying its own universe, even though tax funds the implementation of public policies that animate Canadian society. This article reminds us that tax law must respond to basic rule-of-law norms in spite of overarching and well-meaning policy goals. It adopts reference points featured in recent cases. One is the Charter, which limits penalties that can be imposed on non-compliant taxpayers and tax advisers without adhering to due process safeguards. Another is the impact of international arrangements among countries in a global business environment to guide consistent regulatory responses and to identify and share information. …

What Kind Of Corporation Tax Regime?, Sijbren Cnossen

Osgoode Hall Law Journal

This article explores the taxation of corporations in the wider context of capital income taxation. The article discusses pros and cons of various income-based and cash-flow forms of corporation tax (CT) and concludes that the dual income tax (DIT), which taxes all capital income at the proportional CT rate, is to be preferred over other forms of taxing capital income. The DIT is best attuned to the reality of capital mobility and is not held hostage by the higher tax on labour income. Levied at a uniform flat rate, the DIT minimizes opportunities for tax arbitrage.

The Rise And Fall Of The Consumption Tax, Reuven S. Avi-Yonah

Articles

The year 1974 was an eventful one in U.S. history. For the first time, a president resigned under threat of impeachment. Watergate and the Vietnam War shook Americans’ faith in their government. The economy was reeling from the first oil embargo, and the United States’ prospects seemed bleak. In that context, Professor William Andrews of Harvard Law School published an article that would revolutionize tax scholarship. Against the backdrop of widespread dissatisfaction with the government in general and the income tax in particular, Andrews suggested replacing the income tax with a consumption tax. That suggestion was ironic for anyone familiar …

Net Operating Losses And Mistakes In Closed Tax Years, James R. Gadwood

NYLS Law Review

No abstract provided.

Change And Continuity In Fringe Benefit Taxation: Seeking Sense And Sensibility, Richard L. Kaplan, Dawson J. Price

NYLS Law Review

No abstract provided.

Who Invented The Single Tax Principle?: An Essay On The History Of U.S. Treaty Policy, Reuven S. Avi-Yonah

NYLS Law Review

No abstract provided.

Reporting Loss Transactions: Too Much Of A Good Thing, Megan L. Brackney

NYLS Law Review

No abstract provided.

The Need For Tax Reform: Schedule K-1 Document Matching Program And Effective Revenue Collection, Valeriya Avdeev

NYLS Law Review

No abstract provided.

Table Of Contents

Marquette Benefits and Social Welfare Law Review

No abstract provided.

Taxation Of State Owned Enterprises: A Review Of Empirical Evidence From China, Wei Cui

All Faculty Publications

This chapter reviews empirical evidence from China that bears on the general theory of the income taxation of state-owned enterprises (SOEs). Prior theoretical literature has offered three conflicting views of SOE taxation. The first is that SOE taxation is superfluous, because the government shareholder can simply demand profit distributions. The second is that SOE taxation is necessary to put state-owned and private firms on an equal competitive footing. The third view holds that the significance of SOE taxation lies in the fact that SOE managers, like managers of private firms, may be dividend averse; in the absence of other effective …

Book Review. Reviving Fiscal Citizenship, Ajay K. Mehrotra

Articles by Maurer Faculty

In recent years, numerous lawmakers, policy analysts, and scholars have been decrying the many defects of the present U.S. income tax system. Few have attempted to defend our return-based mass income tax. This essay reviews Learning to Love Form 1040, Lawrence Zelenak’s stirring and persuasive defense of a simplified version of our present federal income tax system. In contrast to the conventional economic critiques, Zelenak explores the underappreciated social, cultural, and political benefits of a return-based, mass income tax. Chief among these, he argues, is the existing regime’s potential to raise the tax consciousness of the average citizen and to …

Uncovering Women In Taxation: The Gender Impact Of Detaxation, Tax Expenditures, And Joint Tax/Benefit Units, Kathleen A. Lahey

Osgoode Hall Law Journal

Women have made great progress in gaining individual civil and political rights since the 1800s. However, for nearly a century, the use of couple-based tax and benefit provisions has increased steadily, enshrouding women in new and extensive forms of fiscal coverture that run counter to democratic ideals of economic equality. While the pros and cons of joint taxation have been well-rehearsed, the reality is that between unequal distributions of new and old varieties of tax and benefit items to women and men and the continued expansion of joint tax and benefit items in recent decades, Canada’s tax and transfer system …

Perceptions Of Taxing And Spending: A Survey Experiment, Conor Clarke, Edward Fox

Scholarship@WashULaw

This paper presents the results of an original survey experiment on whether the public prefers “tax expenditures” to “direct outlays” — that is, whether members of the public are more likely to support government spending that takes the form of a tax credit rather than a check or cash. Using a survey that spans a wide variety of policy areas — and with important variations in wording and information — we show that the public strongly prefers tax expenditures even when the “economic substance” of the proposed policies is identical. We also show that the public views tax expenditures as …

Charitable Organization Oversight: Rules V. Standards, Philip T. Hackney

Journal Articles

Congress has traditionally utilized standards as a means of communicating charitable tax law in the Code. In the past fifteen years, however, Congress has increasingly turned to rules to stop fraud and abuse in the charitable sector. I review the rules versus standards debate to evaluate this trend. Are congressional rules the best method for regulating the charitable sector? While the complex changing nature of charitable purpose would suggest standards are better, the inadequacy of IRS enforcement and the large number of unsophisticated charitable organizations both augur strongly in favor of rules. Congress, however, is not the ideal institution to …

International Tax Policy: The Counter-Story Presented By The Brics, Kim Brooks

Articles, Book Chapters, & Popular Press

This chapter focuses on the international tax policy directions of Brazil, Russia, India, China, and South Africa (BRICS). The BRICS countries present something of a counter-story to the narrative that international tax law has harmonized. These five countries, major economic and trade players in the world but not members of the Organisation for Economic Co-operation and Development (OECD), have developed their international tax policy with an eye to the approach suggested by the OECD, but not necessarily in conformity with its strictures. This chapter explores the international tax policy directions of the BRICS jurisdictions under the familiar, broad heads of …

Income Taxation, Wealth Effects, And Uncertainty: Portfolio Adjustments With Isoelastic Utility And Discrete Probability, Theodore S. Sims

Faculty Scholarship

The expected utility formulation of the problem of a risk-averse agent’s allocating a portfolio between a safe and a risky asset is widely taken as standing for the proposition that if α* ε (0, 1) is the optimal allocation to the risky asset in the absence of tax, α*/(1-t) is the optimal allocation in the presence of tax at rate t, a finding obtained on the assumption that the return r to the riskless asset is (or is taxed as though it were) zero. In this paper I model the agent as exhibiting constant relative risk aversion and the probability …

International And Foreign Tax Research, Jason Zarin

Law Faculty Publications

Tax research often strikes fear in the heart of lawyer and librarian alike, and foreign and international tax research, doubly-so. Fortunately, the resources available for tax research are top-notch, which should enable your research to proceed painlessly.

This article will look at resources and tools for finding model and in-force bilateral tax treaties; foreign tax law in both English and vernacular; and newsletters for keeping abreast of current issues in international and foreign tax law.

U.S. Tax Imperialism, Diane Lourdes Dick

Faculty Articles

This article uses historical and legal analysis to demonstrate how U.S. domination over Puerto Rico's tax and fiscal policies has been the centerpiece of a colonial system and an especially destructive form of economic imperialism. Specifically, this article develops a novel theory of U.S. tax imperialism in Puerto Rico, chronicling the sundry ways in which the United States has used tax laws to exert economic dominance over its less developed island colony. During the colonial period, U.S. officials wrote and revised Puerto Rican tax laws to serve U.S. economic interests. In more recent years, U.S. tax laws have disadvantaged Puerto …