Tax Law Commons^™

The Contemporary Tax Journal Volume 7, No. 2 – Summer 2018

The Contemporary Tax Journal

No abstract provided.

Taxing & Zapping Marijuana: Blockchain Compliance In The Trump Administration Part 1, Richard Thompson Ainsworth, Brendan Magauran

Faculty Scholarship

On January 4, 2018, the Trump Administration through Attorney General Sessions rescinded an Obama-era policy1 that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases under the federal Controlled Substances Act,2 as well as under the Bank Secrecy Act.3 Federal law is at odds with state law in the majority of states on the legalization and subsequent state taxation of marijuana.4 Twenty-eight states and the District of Columbia have at least partially legalized marijuana. Eight of these states have legalized both medicinal and recreational use.5 With limited exceptions, legalized sales of marijuana are taxed.

We …

The Beat And Treaty Overrides: A Brief Response To Rosenbloom And Shaheen, Reuven S. Avi-Yonah, Brett Wells

Law & Economics Working Papers

In a recent paper posted on SSRN, Profs. David Rosenbloom and Fadi Shaheen argue that the Base Erosion Anti-Abuse Tax (BEAT) (IRC section 59A), as enacted in 2017, is a potential violation of Articles 23 and 24 of US tax treaties. In addition, they argue that the BEAT does not override those treaties and therefore the treaties can be relied upon to overcome the effects of the BEAT. In our opinion, this conclusion is wrong, for two reasons. First, we believe that the BEAT is not a treaty violation. Second, we believe that even if the BEAT were found to …

Failed Charity: Taking State Tax Benefits Into Account For Purposes Of The Charitable Deduction, Roger Colinvaux

Buffalo Law Review

The Tax Cuts and Jobs Act (TCJA) substantially limited the ability of individuals to deduct state and local taxes (SALT) on their federal income tax returns. Some states are advancing schemes to allow taxpayers a state tax credit for contributions to a charity controlled by the state. The issue is whether state tax benefits are deductible as a charitable contribution for purposes of the federal income tax. Under a general rule of prior law—the full deduction rule—state tax benefits were ignored for purposes of the charitable deduction. If the full deduction rule is applied to the state workaround schemes, then …

Tax Expenditure And The Treatment Of Tax Incentives For Investment, Agustin Redonda, Santiago Diaz De Sarralde, Mark Hallerberg, Lise Johnson, Ariel Melamud, Ricardo Rozemberg, Jakob Schwab, Christian Von Haldenwang

Columbia Center on Sustainable Investment Staff Publications

Governments use tax expenditures to boost investment, innovation and employment. However, these schemes are largely opaque, costly and often ineffective in reaching their stated goals. They also frequently trigger unwanted side effects. In order to improve the performance of these tools, the authors present three concrete policy proposals: First, governments should increase transparency on tax benefits. G20 members should take the lead on this with frequent and comprehensive tax expenditure reports. Second, G20 governments should improve the design of tax incentives with the aim of minimizing the generation of windfall profits and negative spillover effects within and across (in particular, …

Making Sense Of The European Union's Vat Tax System: Does The European Court Of Justice's Jurisprudence Support Harmonization?, Jarrod Tudor

Global Business Law Review

The Sixth Council Directive 77/388/EEC was adopted by the European Union (EU) as a means toward harmonization of the value-added tax (VAT) system. The Framers of Directive 77/388/EEC believed that a disjointed VAT tax system that existed previously was harmful to the common market’s guarantee of free movement of goods and services that are subject to the VAT tax. The jurisprudence of the European Court of Justice (ECJ) on the subject of the Sixth Council Directive 77/388/EEC reflects four dominant patterns, including the limitation of member-states to dictate the parameters of the VAT tax, that additional administrative measures cannot be …

Code Sec. 1031 After The 2017 Tax Act, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Carried Interest And Beyond: The Nature Of Private Equity Investment And Its International Tax Implications, Young Ran Kim

Utah Law Faculty Scholarship

Private equity funds (PEFs) eliminate entity-level taxation by using pass-through entities. They further minimize their investors’ tax liability by taking the position that profits distributed to both general partners (GPs) and limited partners (LPs) are passive portfolio investment income and taxed preferentially. The taxation of carried interest at low capital gains rates is likely the most infamous loophole. This article challenges such tax position and instead argues that the nature of PEF investment is active. PEFs seek to influence their portfolio companies to increase their value so that they actively manage the companies by acquiring at least 10% of their …

Tax Monitoring As A New Form Of Tax Control, I. Turaboev, M. Berdikulov

Review of law sciences

This article considers a new tax audit, which includes tax monitoring, its features, use and reviews of foreign scientists.

The Peculiar Features Of Applying Liability Of Offences Related To Tax In The Republic Of Uzbekistan, F. Isaeva

Review of law sciences

This article analyzes the tax infringements and the peculiarities of imposing liability for them in the Republic of Uzbekistan, as well as reforms conducted in our country.

A View From American Courts: The Year In Indian Law 2017, Grant Christensen

Seattle University Law Review

This Article provides a comprehensive review of Indian law for 2017. It does not include a citation to every case related to Indian law issued by the courts but tries to incorporate the majority of opinions into its catalog to provide a robust discussion of the changes in Indian law over the course of 2017. Part I of this Article provides some general statistics about Indian law in 2017. Part II focuses on activity at the U.S. Supreme Court, which is the most watched forum for Indian law cases for obvious reasons. Part III groups cases by subject area and …

The New Welfare Rights, Susannah Camic Tahk

Brooklyn Law Review

Participating in the tax system gives rise to what could be enormously powerful rights for poor people. The tax system has become one of the main tools the United States uses to fight poverty. A thick bundle of tax rights accompanies the many tax antipoverty programs. This paper is the first to recognize the potentially substantial rights that poor people have through the tax code. For decades, poverty law advocates and scholars have lamented the decline of the “welfare rights” that poor people once had in their benefits. No one has yet recognized that in fact poor people still have …

Sourcing Service Receipts For Franchise Tax Apportionment In Texas, Ray Langenberg, Matt Jones

St. Mary's Law Journal

Abstract forthcoming

Perils Of Tax Reform, James R. Hines Jr.

Articles

Tax reforms dangle possibilities of improving the tax system, but are fraught with perils that are evident from the 2017 U.S. experience and caution against frequent reforms of its ilk. The first peril is that reforms containing tax provisions selected simply on the basis of their projected revenue contributions will produce less tax revenue than anticipated, illustrative calculations suggesting shortfalls of roughly 8–16 percent. The second peril is that reforms will not advance the objectives of efficiency and tax equity to the extent that they include provisions intended to influence future tax legislation or government spending. The third peril is …

Defying The Tone At The Top: An Analysis On The Effects Of Board Characteristics On The Level Of Tax Avoidance Across Philippine Publicly Listed Firms, John Ryan G. Ledesma, Chester T. Herrera, Sharlene Camille A. Li, Angelo A. Unite, Ailyn A. Shi, Michael J. Sullivan

Angelo King Institute for Economic and Business Studies (AKI)

Over the years, the growing culture of tax avoidance among multinational companies around the world has shed light on the importance of improving corporate governance mechanisms. In the Philippines, poor tax collection due to tax leakages has contributed to chronic fiscal deficits in the country. The literature argues that good corporate governance mechanisms (e.g., the structure of the board of directors) play a significant role in ensuring that the management acts in the best interest of the firm and shareholders, thus eventually helping to mitigate the incidences of corporate tax avoidance. Specifically, agency theory argues that the presence of more …

"Our Taxes Are Too Damn High": Institutional Racism, Property Tax Assessment, And The Fair Housing Act, Bernadette Atuahene

Northwestern University Law Review

To prevent inflated property tax bills, the Michigan Constitution prohibits property tax assessments from exceeding 50% of a property’s market value. Between 2009 and 2015, the City of Detroit assessed 55%–85% of its residential properties in violation of the Michigan Constitution, and these unconstitutional assessments have had dire consequences. Between 2011 and 2015, one in four Detroit properties have been foreclosed upon for nonpayment of illegally inflated property taxes. In addition to Detroit, the other two cities in Michigan’s Wayne County where African-Americans comprise 70% or more of the population—Highland Park and Inkster—have similarly experienced systemic unconstitutional assessments and unprecedented …

Perpetual Motion Machines: Esops Don’T Pay For Themselves, Andrew Stumpff Morrison

Law & Economics Working Papers

In this article, Stumpff addresses policy issues regarding employee stock ownership plans and demonstrates how some claims in support of ESOPS aren’t supported by the math.

Reworking The Revolution: Treasury Rulemaking & Administrative Law, David Berke

Michigan Journal of Environmental & Administrative Law

How administrative law applies to tax rulemaking is an open and contested question. The resolution of this question has high stakes for the U.S. tax system. The paradigm is shifting away from so-called “tax exceptionalism”—where Treasury action is considered effectively exempt from the Administrative Procedure Act (the “APA”) and related administrative law doctrines. This paradigm-shift is salutary. However, currently prevailing anti-exceptionalist theory—an administrative framework for tax that is rapidly gaining credence within both the federal judiciary and the legal academy—threatens to destabilize the U.S. tax system. This formalistic approach to administrative law in tax rulemaking has the potential to invalidate …

Designing A Robust Tax System For Nigeria: Lessons From An International Perspective, Olukemi Tawoju

LLM Theses

This thesis argues that Nigeria can adapt its tax system for better gain from investment and other taxation. It outlines the foundation for a good tax policy, and explores initiatives by the Organisation for Economic Co-operation and Development (OECD and the United Nations (UN) regarding harmful tax practices and tax incentives. Their recommendations and those of scholars, conclude that tax incentives are ineffective in attracting foreign direct investment, may result in taxpayer abuse, and erode the revenue base of capital importing countries like Nigeria. Utilizing internationally accepted features on effective tax incentive design, examining the operation of the Nigerian tax …

Legislated Interpretation And Tax Avoidance In Canadian Income Tax Law, David G. Duff, Benjamin Alarie

All Faculty Publications

Predictable statutory interpretation helps ensure the reliable operation of contemporary systems of taxation. Tax liabilities that are not clearly expressed and articulated by legislatures lead to over-reliance on litigation as a means to enforce and clarify legislative intent. For this reason, modern legislatures continually amend and draft new tax provisions, reformulating existing rules and introducing new ones to address ever-changing social and economic environments. Moreover, legislatures also respond with amendments directed at judicial decisions with which they disagree, as well as the transactions and arrangements at issue in these cases. As these amended and new rules are then subject to …

Singapore Income Taxation, Vincent Ooi, Irving Aw, Joanna Yap

Research Collection Yong Pung How School Of Law

28.1.1 Section 10(1) of the Income Tax Act (Cap. 134, 2014 Rev. Ed.) (“ITA”) is the charging provision which provides for income tax to be payable for each year of assessment (“YA”) upon the income of any person. Income is taxable if it falls within one of the enumerated heads of charge under sections 10(1)(a) to (g).Income is taxable only if it is sourced in Singapore, i.e. accruing in or derived from Singapore, or received in Singapore from outside Singapore, subject to variations.Only revenue (and not capital) receipts are taxable, and only revenue (and not capital) expenses are deductible for …

Directed Tax Holidays: Economic Stimulus Or Corporate Dream?, Dakota Newton

William & Mary Business Law Review

U.S. corporations currently have more than $2.4 trillion stashed in the accounts of their overseas subsidiaries—a sum that costs the domestic economy billions of dollars every year. A directed tax holiday is one potential method of inducing repatriation of those funds and stimulating the domestic economy. Although a previous tax holiday failed to meet expectations, current proposals from the public and private sectors suggest that a directed tax holiday could fund much-needed infrastructure investment. A review and economic analysis of these proposals shows that a directed tax holiday that channels revenue into expanding and updating infrastructure will greatly benefit the …

The New Tax Law In Context, Donald Roth

Faculty Work Comprehensive List

"Efforts must be undertaken to foster stability, even with the likely ongoing reality of substantial policy disagreement, and we absolutely have to face the hard realities of the challenges of debt in our current economic system."

Posting about ­­­­­­­­changes in taxation legislation from In All Things - an online journal for critical reflection on faith, culture, art, and every ordinary-yet-graced square inch of God’s creation.

https://inallthings.org/the-new-tax-law-in-context/

Fact-Checking Claims About Winners And Losers With New Tax Reform (Part Ii), Donald Roth

Faculty Work Comprehensive List

"Overall, the impact of the new tax law, judged independently, is not as dire as many public perceptions cast it."

Posting about ­­­­­­­­how taxation legislation affects American citizens from In All Things - an online journal for critical reflection on faith, culture, art, and every ordinary-yet-graced square inch of God’s creation.

https://inallthings.org/fact-checking-claims-about-winners-and-losers-with-new-tax-reform-part-ii/

Fact-Checking Claims About Winners And Losers With New Tax Reform (Part I), Donald Roth

Faculty Work Comprehensive List

"The changes incentivize more capital investment and less debt-financing."

Posting about ­­­­­­­­how taxation legislation changes will affect Americans from In All Things - an online journal for critical reflection on faith, culture, art, and every ordinary-yet-graced square inch of God’s creation.

https://inallthings.org/fact-checking-claims-about-winners-and-losers-with-new-tax-reform-part-i/

Grading The New Tax Law, Donald Roth

Faculty Work Comprehensive List

"The biggest restructuring of the tax code that the new tax law enacts is a substantial reduction in the corporate income tax rate."

Posting about changes to taxation legislation from In All Things - an online journal for critical reflection on faith, culture, art, and every ordinary-yet-graced square inch of God’s creation.

https://inallthings.org/grading-the-new-tax-law/

Private Benefits In Public Offerings: Tax Receivable Agreements In Ipos, Gladriel Shobe

Vanderbilt Law Review

Historically, an initial public offering ("IPO") was a process whereby a company sold all of its underlying assets to the public. A new tax innovation, the "tax receivable agreement" ("TRA'), creates private tax benefits in public offerings by allowing pre-IPO owners to effectively keep valuable tax assets for themselves while selling the rest of the company to the public. Prior to 2005, TRAs were almost never used in IPOs. Today they have become commonplace, changing the landscape of the IPO market in ways that are likely to become even more pronounced in the future. This Article traces the history of …

A Human Capital Theory Of Alimony And Tax, Tessa R. Davis

Faculty Publications

The current taxation of alimony is a broken scheme. Severed from any strong theoretical mooring, it draws lines in the sand between property settlement, child support, and alimony. The lack of coherence between the substance of alimony in family law and the tax concept of alimony (“tax alimony”) could be justified on other policy grounds, however. Yet current law, which allows the payor a deduction under §215 and requires inclusion by the recipient per §71, is difficult to interpret, resulting in frequent litigation and costly noncompliance. In short, the current concept of tax alimony fails to satisfy any of the …

The Charitable Deduction And Looting Of Antiquities: A Comparative Approach, Sabrina Y. Hsieh

Cornell International Law Journal

The tax incentive structure for charitable giving in the United States, as in many other countries, is imperfect. The structure over-incentivizes donations from wealthy individuals, whether those donations are made up of cash or of property. This structure has negative impacts not only domestically, but abroad as well.

By providing an incentive for donations of antiquities to museums— an incentive that was perhaps largely necessitated by the state of American museums in the 19th century— the charitable deduction has not only created a market for antiquities of questionable provenance, but has also created what is potentially a get-out-of-jail free card …

Quantitative Prediction Model Of Tax Law's Substantial Authority, Bradley T. Borden, Sang Hee Lee

Faculty Scholarship

No abstract provided.