Tax Law Commons^™

Corporate Scenarios: Drawing Lessons From History, Madison Condon

Seattle University Law Review

As corporations are increasingly pressed to reveal information about their exposure to climate-related risks, they are often asked to undertake and disclose the outcome of “scenario analysis.” In this exercise, corporations, including financial institutions, examine how their business would fare under different pathways the future may take. One oft-used scenario, for example, is the International Energy Agency’s “Net-Zero by 2050: A Roadmap for the Energy Sector.” This Essay presents a history of the use of scenarios as a corporate planning tool, particularly in the oil industry, arguing that it is key for understanding our present moment and the role of …

Shareholder Expression In A Time Of Heightened Political Tension, Aaron A. Dhir

Seattle University Law Review

In this article, I provide context for my forthcoming research project on shareholder proposals and racial equity audits. Since the murder of George Floyd in May of 2020, progressive shareholder actors have increasingly used the proposal mechanism to advance diversity, equity, inclusion, and justice-related goals. These proposals have frequently gone beyond requesting the usual corporate fare of diversity trainings, intersectionality workshops, affinity groups, etc. Instead, a more ambitious type of proposal asks corporate America to conduct racial equity audits, defined as “an independent, objective and holistic analysis of a company’s policies, practices, products, services and efforts to combat systemic racism …

Corporate Governance Speech, Sarah C. Haan

Seattle University Law Review

The State has always regulated the intra-firm communications that make corporate governance possible, most commonly by mandating disclosures of information by a corporation to its shareholders. Some such laws are labeled “securities regulation,” but securities regulation is a broad category that extends to speech by actors who are outside the corporate enterprise as well. Also, the conventional securities regulation category does not capture all such laws; other examples, including informationforcing mandates, can be found in state corporate law. This Article uses the term “corporate governance speech” to describe the communications among shareholders, directors, and officers through which corporate governance is …

Dark Accounting Matter, Colleen Honigsberg

Seattle University Law Review

Physicists calculate that approximately 85% of the matter in the universe is composed of “dark matter” that “does not absorb, reflect, or emit electromagnetic radiation and is therefore difficult to detect.” The S&P 500 currently trades at a price-to-book value of 4.2, suggesting that book value accounts for less than 20% of the S&P 500’s market value. The remaining 80% appears nowhere in these firms’ balance sheets—it is invisible to contemporary accounting techniques and constitutes “dark accounting matter.”

Some “dark accounting matter” is composed of factors commonly described as components of “ESG.” Human capital, for example, is an intangible asset …

The Employees’ Dilemma: Balancing Internal Reporting, Whistleblowing, And Insider Trading Risks, Geeyoung Min

Seattle University Law Review

The Essay examines how recent developments in insider trading regulations and whistleblower reward programs can lead to unintended and counterproductive results of discouraging employees from using internal reporting channels within corporate compliance programs. While the presence of a robust and well-functioning corporate compliance program is a critical factor both in mitigating the level of public enforcement actions against companies and in protecting corporate managers from liability in private litigation, these programs often provide little incentive for employees to report potential misconduct internally.

Corporate compliance programs are designed to promote the upward information flow within the company, which is essential for …

How The Antidiscrimination Law Of Commercial Transactions Really Works, Helen Norton

Seattle University Law Review

A variety of businesses now cite 303 Creative when seeking First Amendment protection for their refusal to serve certain customers based on those customers’ protected class status. How this litigation will play out remains to be seen. But future courts need not, and should not, repeat the 303 Creative Court’s misunderstanding of how the antidiscrimination law of commercial transactions actually works.

Part I of this Essay explains the Court’s longstanding understanding of the antidiscrimination law of commercial transactions, and then describes the Court’s failure to engage with this precedent in 303 Creative. Part II then identifies the 303 Creative decision’s …

Improper Use Of Tax Treaties And Source Taxation: Policy, Practice And Beyond, Eivind Furuseth, Jinyan Li

Conference Papers

The question of improper use of tax treaties (or treaty shopping) defies a simple or straightforward answer. The line between “proper use” and “improper use” a tax treaty depends on the determination of the intended use of a treaty provision by Contracting States (i.e. the common intention as well as the object and purpose of the treaty provision). As a treaty interpretation issue, that determination varies from country to country. Furthermore, the extent of taxpayers’ right to tax planning and expectation of tax certainty also varies across countries. Finally, the effect of domestic general-anti-avoidance rules (GAARs) and the new principal …

Delay, Politics, And Expertise In Oira Tax Review, Kristin E. Hickman, Bridget C.E. Dooling

Articles

The opening months of the second Trump administration have featured a wide range of changes to federal policy accomplished through presidential  executive orders. Among those changes, a lesser-known shift is the reinstatement of centralized review of tax regulations by the Office of Information of Regulatory Affairs (OIRA).

For many years, most tax regulations were exempt from OIRA review. That changed in the first Trump administration when the Treasury Department (Treasury) and OIRA signed a memorandum of agreement bringing more tax regulations within OIRA’s oversight sphere. In the Biden administration, Treasury and OIRA reversed course, this time clearly and unequivocally exempting …

Money Moves: Taxing The Wealthy At The State Level, David Gamage, Brian D. Galle, Darien Shanske

Faculty Publications

It's widely understood today that inequality is a major social problem that in turn contributes to other crises. By most accounts, tax systems are supposed to be our engines of equality. Yet in today’s United States, state and local tax systems mostly do the opposite: they take a greater percentage of the resources of the poor and middle class than of the rich.

Perhaps surprisingly, the traditional view among fiscal policy experts has been that this state of affairs is correct. In this standard account, only national governments should impose progressive or redistributive taxes. While acknowledging that there would be …

#Taxback? Prohibiting State Real Property Taxes On Land In Indian Country, Pippa Browde

Marquette Law Review

Land is a critical asset of Indian tribes. As tribes wrestle with how to create sustainable economies to support their sovereignty, the use and management of tribal land is integral. Taxation is a key component of economic development. This Article is about taxation of land within Indian country. It considers existing law that allows for state taxation of some land within Indian country. It makes a normative claim as to who the proper taxing sovereign should be based on tax policy principles and principles that support tribal self-governance and tribal sovereignty.

In Part II, this Article provides the background for …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Should Congress Reform The Accumulated Earnings Tax?, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah explains why the shifting landscape of the corporate tax rate requires congressional intervention. The Tax Cuts and Jobs Act 2017 permanently cut the corporate tax rate from 35 percent to 21 percent, and the Republican victory in the 2024 presidential election means that the rate is unlikely to be raised in the next four years. This means that there is, once again, a large disparity between the top individual tax rate of 37 percent (scheduled to increase to 39.6 percent in 2026 unless Congress acts) and the corporate rate. The corporate …

Should Harvard And Other Large Nonprofits Be Taxed?, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines justifications for exempting Harvard University and other large nonprofits from tax and argues that treating those organizations like large C corporations would not be such a bad thing. The proposal to subject large university endowment investment income to the corporate tax rate of 21 percent instead of the current 1.4 percent rate has engendered significant debate. More recently, President Trump’s threat to strip Harvard University of its tax-exempt status and treat it as a taxable corporation has likewise been controversial. In their recent Tax Notes article, Harvey Dale, Daniel Hemel, …

Can Side By Side Work?, Reuven S. Avi-Yonah

Articles

On June 26 Treasury Secretary Scott Bessent announced that a compromise had been reached between the United States and the rest of the G7 (Canada, France, Germany, Italy, Japan, and the United Kingdom), providing that pillar 2 of the OECD’s two-pillar global tax reform project will not apply to U.S. multinationals. As a result, proposed section 899, which would have imposed retaliatory taxation on corporations from countries that apply pillar 2 (and specifically the undertaxed profits rule) to U.S.-based multinationals, was removed from the One Big Beautiful Bill Act.

The Irs Approach To Periodic Adjustments: Losing Bet Or Royal Flush?, Jeffery M. Kadet, Reuven S. Avi-Yonah, David G. Chamberlain, Stephen L. Curtis

Articles

In this article, the authors argue that GLAM 2025-001 is consistent with the terms and purposes of the commensurate with income provision, relevant legislative history, and applicable case law and that the IRS approach to commensurate with income enforcement is a valid application of discretion delegated by Congress to the Treasury under Loper Bright.

Should The United States Abandon Citizenship-Based Taxation?, Reuven S. Avi-Yonah

Articles

President Trump proposed during the election campaign to end the “doubletaxation” of American citizens living overseas.To which the answer is,what double taxation?Americans living overseas already benefit from three significant provisions thatin most cases prevent any double taxation, and because of these most of them donot have any U.S. tax liability.Those who do are typically wealthier, derive incomefrom investments or from high wages, and are not subject to foreign tax becausethey live in tax havens or in countries that do not tax rich immigrants on foreignsource income, and they do not have any income from their country of residence.

Periodic Adjustments And The Arm's Length Principle, Reuven S. Avi-Yonah

Articles

The Internal Revenue Service (IRS) recently issued AM 2025-001, whichrepresents a significant change in its interpretation of the periodic adjustment rules for transfers of intangibles within a multinational and forcost-sharing agreements.Arguably, this finally brings the IRS into compliancewith the “commensurate with income” language added to Code Sec. 482 in1986.

Moore Questions, Some Answers: Fixing The Personal Tax System Despite Constitutional Constraints, David Gamage, John R. Brooks, Edward J. Mccaffery

Faculty Publications

Moore v United States was expected to rule on the constitutional necessity of the tax-law realization requirement originating from Eisner v Macomber, a potential impediment to progressive tax reform efforts aimed at shutting down the planning techniques of Buy Borrow Die. The various opinions in Moore, however, provided no definitive answer to this core question, instead leaving many more questions. Amid the lingering uncertainty, we argue that various responses to the problem of wealthy Americans’ not needing to pay any taxes remain possible after Moore. An incremental, “mix-and-match” approach to progressive tax reform may best suit the …

Green Dividends: A Case Study In Green Dividends And The Conditions For Private Ordering Solutions, Anne M. Tucker

Seattle University Law Review

This Essay introduces a novel private ordering solution to facilitate corporate investments in pro-social and environmental initiatives: Green dividends. Green dividends are an optional increase in shareholder dividends that are returned to the company to be reinvested in environmental initiatives or kept by a shareholder.

Green dividends pose an alternative to the current gridlocked debate that corporations can’t, won’t, shouldn’t, and shouldn’t even try to act in pro-social or environmental ways. Turning the common refrains on their head converts each narrative into an element for a successful private ordering solution: authority, accountability, shareholder buy-in, and government- backed enforcement. With Green …

Does Climate Disclosure Work To Reduce Greenhouse Gas Emissions? Emerging Evidence Suggests Cautious Optimism, Cynthia A. Williams

Seattle University Law Review

Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions will be discussed. First, what does the empirical evidence …

Virtual Currency As Real Currency, Jeffrey A. Maine

Faculty Publications

Convertible virtual currency is increasingly equated with the notion of real currency. Indeed, the increased acceptance of virtual currency as a payment method among retailers and consumers, the evolution of new types of virtual currency that alleviate price volatility, and the recent expansion of foreign country initiatives confirm the strong trajectory toward virtual currency’s function as a transactional currency. Yet, the tax system continues to classify all forms of virtual currency as “property,” and not “currency,” which results in immediate taxation every time someone buys something with virtual currency. This Article argues that the adopted tax treatment of virtual currency …

In (Tax) Hindsight: When Should The Tax System Ease Taxpayer Regrets?, Charlene Luke

UF Law Faculty Publications

A brief review of, Emily Cauble, Taxpayers’ Tax Election Regrets, 77 The Tax Law. 77 (2023), that focuses on § 754 elections.

Taxing People, Not Residents, Yariv Brauner

UF Law Faculty Publications

Essentially all states tax their residents’ worldwide income. This norm is difficult to justify beyond vague notions of state provided benefits enjoyed by residents. Recent increased mobility (particularly tax-motivated mobility of wealthy individuals) and the growing importance of remote work and digital nomadism present a serious challenge to this linking of residence and taxing rights. This article examines whether exclusive source taxation of individuals could replace the existing rules which are based on a compromise between residence and source taxation. The article concludes that exclusive source taxation of individuals is both feasible and desirable, mainly due to its fairness and …

Taxing Torts Today And Tomorrow, Steven J. Willis

UF Law Faculty Publications

This article shows how tax law has long subsidized tortfeasors, often to the detriment of victims. Changes in the 1980s reduced the tortfeasor subsidy but did not eliminate it. The article shows how various changes which purported to help victims have, in practical terms, helped tortfeasors.

The article first covers the pre-1985 tax history of making torts profitable. The resulting financial incentives triggered multiple legal changes, which the article outlines prior to covering them in depth. The statutory issues involve Internal Revenue Code sections 104 (allowing victims to exclude personal physical injury payments from income); 130 (purporting to facilitate structured …

The Service’S Overgenerous Tax Treatment Of Crowdfunding, Jeffrey H. Kahn

Cardozo Law Review de•novo

The Internal Revenue Service released a fact sheet that defines crowdfunding as a method to raise money on websites by soliciting contributions from a large number of people. This article considers how crowdfunding is treated for tax purposes and argues that, contrary to the fact sheet's determination, all donations collected by commercial websites should be income to the recipient.

Foreword: Moore, Loper Bright, Corner Post, And The Future Of The Federal Tax System, David Hasen

UF Law Faculty Publications

In the 2023 Term, the Supreme Court decided three cases that are likely to have significant implications for the federal tax system. Moore v. United States presages a resuscitated constitutional realization requirement for the income tax—a requirement long thought moribund, if not dead, by most commentators and policymakers. Loper Bright Enterprises v. Raimondo jettisoned the Chevron doctrine’s deferential standard of review of agency rulemaking, returning the standard to some perhaps modified version of its more searching pre-Chevron status. And Corner Post, Inc. v. Board of Governors of the Federal Reserve System held that the statute of limitations for most …