Tax Law Commons^™

Clarifying The Constitutional Boundaries Of Income Taxation After Moore V. United States, Catherine Gluchowski

St. Thomas Law Review

Despite the significance of the term “income,” both the United States Supreme Court and the Internal Revenue Code do not provide an explicit definition of the term. This ambiguity causes the constitutionality of income taxation to remain a contested issue. Central to this ongoing debate is the issue of realization as a prerequisite for income taxation, exemplified by the case of Moore v. United States. In a landmark decision, the Ninth Circuit ruled that realization is not a constitutional requirement for Congress to impose a tax exempt from apportionment under the Sixteenth Amendment. This decision marked a pivotal departure from …

Allocative Justice As A Constraint On Fiscal Imperialism In International Tax, Okanga Ogbu Okanga, Kim Brooks

Articles, Book Chapters, & Popular Press

Taxpayers’ cross-border activities often result in two (or more) states claiming the right to tax their income. To address concerns about how those tax liabilities might aggregate and suppress international activities, states typically agree to split the tax base between them. But how can states fairly share tax revenue from cross-border activities? Tax scholars and policymakers offer different normative perspectives to address this inter-nation equity conundrum. In this article, we conceptualize these normative perspectives into two types. One centres on identifying where the economic factors that lead to the ability to produce the income are located (and uses that determination …

Tax Treaty Arbitration: An Unacceptable Surrender Of National Sovereignty Or An Expression Of Sovereign Power?, Kim Brooks, Richard Krever

Articles, Book Chapters, & Popular Press

The release in 2016 by the Organisation for Economic Co-operation and Development of a draft multilateral treaty to modify thousands of global bilateral tax treaties was met with surprisingly strong support by the international community, with many states signing, ratifying, and implementing the treaty. One of the treaty’s most contentious elements is the addition to the dispute resolution measures in bilateral treaties, a process known as mutual agreement procedure, of a mandatory arbitration procedure that is to be available where agreement cannot be reached under the conventional process. In contrast to the mutual agreement procedure, which includes no requirement that …

Are We Trapped By Realization?, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines the downsides of the realization requirement and potential solutions to them. In an excellent Tax Notes article, Steven Sheffrin recently mounted the most convincing defense of the realization requirement I have read. He explained that the case for taxing unrealized capital gains is based on the Haig- Simons definition of income. In this definition, income equals consumption plus savings when savings includes both realized and unrealized capital gains. If asset prices change because of changes in future cash flows, Haig-Simons income can provide an appropriate guide for designing tax policies.

Fiscal Citizenship And Taxpayer Privacy, Alex Zhang

Faculty Articles

Should individual tax data be public or confidential? Within the United States, secrecy has been the rule since the Tax Reform Act of 1976. But at three critical junctures—the Civil War, the 1920s, and the 1930s—Congress made individual tax records open for public inspection, and newspapers published the incomes of the billionaires of the time. Today, Finland, Norway, and Sweden all mandate significant transparency for individual tax information.

This Essay intervenes in the tax-confidentiality debate by building a new analytical framework of fiscal citizenship. Until now, scholars have focused on compliance—whether disclosure incentivizes honest reporting of income, and if it …

Corporate Tax: Best Tool For Taxation's Regulation Goal, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah explains the three primary goals of taxation — revenue, redistribution, and regulation — and shows how VAT, the individual tax, and the corporate tax each uniquely match one of the goals. On January 20 President Trump signed two executive orders related to international taxation, marking a sharp policy shift from the prior administration. The first renounced any prior U.S. commitments to the OECD/inclusive framework global anti-base-erosion (GLOBE) project, stating that “the Global Tax Deal has no force or effect in the United States.” The order argued that the GLOBE project infringed …

Eliminating Qbai - One Step Forward, Two Steps Back?, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah explains what makes an effective U.S. tax regime and uses those attributes to evaluate the One Big Beautiful Bill Act. There is plenty to criticize about the One Big Beautiful Bill Act (OBBBA, P.L. 119-21), signed into law by President Trump on July 4. It increases the deficit by about $4 trillion when the interest costs from the additional borrowing are included, and by about $5.5 trillion if its provisions are made permanent in 2029, like the Tax Cuts and Jobs Act provisions were in 2025. It is distributionally skewed to …

Is The Obbba Compatible With Pillar 2?, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah compares House and Senate sections of the One Big Beautiful Bill Act and examines the potential effect on international tax relations. On May 22 the House of Representatives passed the One Big Beautiful Bill Act (OBBBA). The House version of the OBBBA extended the Tax Cuts and Jobs Act tax cuts but did not significantly change its international provisions. It did, however, contain proposed section 899, which would have imposed enhanced taxation on residents and corporations from countries that have “discriminatory or extraterritorial taxes,” defined to include primarily the undertaxed profits …

Facebook Decision Enables Irs To Seek Cwi Enforcement Against Meta, Stephen L. Curtis, Reuven S. Avi-Yonah, David G. Chamberlain

Articles

In this report, the authors explain how the Tax Court’s recent decision in the Facebook transfer pricing case — although widely viewed as a victory for the taxpayer, Meta Inc. — could instead be a Pyrrhic victory because it enables the IRS to pursue a potentially substantial periodic adjustment against the company. The views expressed in this report are solely the authors’ and do not necessarily reflect those of any other person or institution. On May 22 the Tax Court issued its opinion in Facebook. This was the third case, after Amazon and Veritas, in which the IRS tried to …

Boden Lecture: Taxation Of Autonomous Artificial Intelligence, Reuven S. Avi-Yonah, Lucas Brasil Salama, Herbert Snitz, W. Robert Thomas

Articles

This Article proposes that tax can be a useful supplement to other measures to regulate Autonomous Artificial Intelligence (AAI) and limit its potential harmful effects. This proposal differs from command-and-control regulation of AAI along the lines of European Union legislation that may unduly limit the development of AAI. It also differs from existing proposals to tax AAI to generate revenue to help workers displaced by AAI programs, or to tax the data used by AAI The proposal is based on granting AAI programs like ChatGPT separate legal personhood, like corporate personhood, while incentivizing or requiring their corporate owner to place …

Us Policy And Pillar 2: The Evolution Of Us Tax Policy Toward Oecd Pillar 2 And Its Global Implications, Reuven S. Avi-Yonah

Articles

This paper analyzes the United States’ evolving position on OECD Pillar 2, focusing on the Trump administration’s initial rejection and subsequent negotiations to exempt US multinationals from the Undertaxed Profits Rule (UTPR). It examines the legislative and diplomatic strategies that led to international acceptance of GILTI as a valid IIR. The analysis concludes that the resulting compromise preserves US tax sovereignty while maintaining the global framework’s integrity.

The Perils Of Pseudo-Textualism, Reuven S. Avi-Yonah

Articles

How much freedom does the IRS have to interpret the code?

In recent years, the Supreme Court and lower courts have put significant barriers in front of the IRS’s ability to interpret the code as it wishes. The question is to what extent the IRS can live with the barriers of textualism, nondeference, the major questions doctrine, nondelegation, and the Administrative Procedure Act. Of these, textualism seems to be the most problematic because it is the hardest to fix. The major questions doctrine rarely applies to statutory tax cases. Nondeference based on Loper Bright can be restricted by Congress adding …

Was The Niit A Treaty Override?, Reuven S. Avi-Yonah

Articles

Three court decisions have recently addressed the interaction of the NetInvestment Income Tax (NIIT) and U.S. tax treaties. The issue waswhether the treaty provided an independent basis for crediting a foreigntax against the NIIT, because no such credit is available under the Code.First,in Toulouse, the Tax Court held that there was no treaty-based credit.Second,in Christensen, the Court of Federal Claims held that a treaty-based credit wasavailable, distinguishing Toulouse.Third, in Bruyea, the Court of Federal Claimsissued a broader opinion that allowed the credit.

Refundable Tax Credit Design: Cohabitating Parents And Gender Presumptions, Michelle Lyon Drumbl

Scholarly Articles

This Essay is meant to encourage further thinking to improve upon design options for unmarried cohabitating parents. Are there better ways to recognize the needs of unmarried co-parents (whether living together or not) and to provide support for shared parenting? The policy considerations for providing support to unmarried cohabitating parents are different than those for supporting married couples, given that these individuals lack the financial protections of a formal partnership.

One solution is to have a default rule whereby the CTC is awarded to the primary caregiver. Canada’s gender presumption provides a degree of administrative simplicity, but the IRS could …

The Arena Tax: Subsidiary Athletics Departments And The Limits Of University Property Tax Exemptions, Matthew Razzano

Marquette Sports Law Review

No abstract provided.

Gregory, Textualism, And Tax Shelters, Reuven S. Avi-Yonah

Articles

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah suggests that courts should adopt a consequentialist approach to tax shelter litigation that would acknowledge the long- term risks of enabling tax shelters and seek to prevent their recurrence. In his excellent article on Gregory v. Helvering, David Elkins says that the common assumption that the case was about abuse of the tax-free reorganization provisions of the code is mistaken. Therefore, he argues, both Judge Learned Hand and the Supreme Court were wrong when they focused on whether the transaction was a “reorganization” as intended by Congress. Instead, they should have …

Offshore Tax Havens: An Intriguing Problem For Canadian Tax Law, Jinyan Li, Angelo Nikolakakis

Articles & Book Chapters

The use of offshore tax havens by Canadians and multinational enterprises is an intriguing problem for Canadian tax law. This submission explains why that is the case and recommends a systematic review of the existing law and specific reform ideas.

Transforming Tax Expenditures, Sloan G. Speck

Publications

For decades, reformers have advocated the repeal of tax expenditures--disguised government spending through special preferences in the Internal Revenue Code. And yet, tax expenditures persist, impairing federal tax receipts by more than $1.8 trillion in 2024. This Article introduces a novel mechanism for tax expenditure reform. To the extent that direct statutory repeal proves impossible or impractical, lawmakers can achieve an equivalent result through a strategy of legislative anti-repeal. By radically expanding a tax expenditure's legal scope, then adjusting progressive income tax rates to account for revenue loss and distributional considerations, lawmakers can effectively eliminate tax expenditures from the tax …

What Can One Learn From Chinese Tax Administration? A Precis Of The Administrative Foundations Of The Chinese Fiscal State (Cambridge University Press, 2022), Wei Cui

All Faculty Publications

The Administrative Foundations of the Chinese Fiscal State (Cambridge University Press 2022) explores how China developed a tax system to support its economic transformation. Among scholars who study taxation and economic growth, a familiar idea is that it is generally very difficult for poor countries to develop the state apparatus needed to raise revenue. The lack of revenue, in turn, prevents governments from providing critical public goods and services needed to spur economic growth. State capacity in taxation, therefore, is a major determinant of which countries become prosperous and which do not. An obvious question, then, is whether the evolution …

Spending Clause Standing, Edward Webre Plaut

Michigan Law Review

The Biden Administration’s American Rescue Plan Act allotted almost $220 billion to state, local, and tribal governments to help combat the COVID-19 pandemic. This money, the Coronavirus State and Local Fiscal Recovery Fund, gave recipients wide spending discretion to address their struggling economies. But the legislation had one key limitation: Recipients could not use the money to “directly or indirectly” cut their taxes. If a recipient violated this “Offset Provision,” the Department of the Treasury might recoup the funds.

Nearly two-dozen states alleged that the Offset Provision was unduly coercive and ambiguous, violating the Spending Clause. However, with no threatened …

Brief For Tax Law Professors As Amici Curiae In Support Of Petitioners In Learning Resources (No. 24-1287) And Respondents In V.O.S. Selection (No. 25-250), Conor Clarke, Jon Endean, Ari Glogower, Daniel J. Hemel

Scholarship@WashULaw

The Constitution gives Congress, and not the President, the authority to “lay and collect Taxes, Duties, Imposts, and Excises.” The Constitution also mandates that revenue measures begin in the House of Representatives, requires that such measures be geographically uniform, and prohibits the states from imposing import duties without congressional consent. Read together with Article I’s vesting of “all legislative Powers” in Congress and the familiar requirements of bicameralism and presentment, these provisions reflect a recurring constitutional commitment: Tariffs are national and legislative—and thus to be determined by a representative Congress.

History bolsters these textual commitments. State conflict over import duties …

The Original Function Of Tax Apportionment, Conor Clarke, Peter J. Wiedenbeck

Scholarship@WashULaw

The Constitution’s requirement that direct taxes be apportioned by state population is both confounding and important. At best, tax apportionment is regarded as reflecting the unique federalism concerns of the Founding; at worst, it is viewed as a tainted product of the constitutional compromise over slavery. And, in light of the Supreme Court’s decision in Moore v. United States (2024)—which refused to rule out that apportionment might be required for taxes on unrealized gains—tax apportionment is the subject of renewed legal and scholarly interest.

We consider one historical dimension of tax apportionment that has not been developed elsewhere: its original …

The Shifting Economic Allegiance Of Capital Gains, Amanda Parsons

Publications

No abstract provided.

The Alchemy Of Sin: Turning Tobacco Sin Tax Revenue Into Public Health Gold, Audre L. Sylvester

Lewis & Clark Law Review

This Note proposes a reallocation of tobacco excise tax revenue towards health and education programs related to tobacco cessation. Revenue collected from federal excise taxes on tobacco products is currently used to support the daily and long-term operations of the United States while tobacco cessation and education programs remain underfunded and underutilized. This Note examines the history of these “sin taxes,” their modern-day function, and the issues that arise from the current allocation of sin tax revenue to support the argument that revenue from federal sin taxes on tobacco products should be exclusively allocated to a dedicated federal trust fund …

Un Tax Negotiations: North-South Tensions And The Challenge Of Institutional Legitimacy, Assaf Harpaz

Scholarly Works

The drafting process for a United Nations Framework Convention on International Tax Cooperation, along with two early protocols, is now underway. A UN framework convention represents a Global South effort to shift international tax policymaking from the OECD to the UN. For developing countries, the UN has long been viewed as a more inclusive space for tax policy negotiations, producing more favorable but historically less influential standards compared to the OECD.

Support for the UN framework convention, including its terms of reference, has been sharply divided across traditional Global North-South lines. The backlash following the OECD’s recent two-pillar reform triggered …

Global Tax Wars In The Digital Era, Assaf Harpaz

Scholarly Works

The digital economy fundamentally disrupts international tax principles that rely on physical presence. When a business earns income abroad, the country of residence (where the taxpayer resides) and the country of source (where income is generated) both have legitimate, competing claims to tax that income. The international tax system tends to favor residence-based taxation. The source country has the right to tax business profits only if the enterprise carries on a permanent establishment within its borders, which typically requires physical presence. The permanent establishment standard becomes flawed in a digital economy where profit shifting practices are abundant and businesses no …

Reading The Tea Leaves: Unrealized Income, Separation Of Powers, And An Examination Of Whether There Is More To The Moore Case Than The Mandatory Repatriation Tax, Natasha Varyani

Roger Williams University Law Review

No abstract provided.

A Tax Friendly Approach To Agrivoltaics, Avery S. Younis

Law Student Publications

The first reported agrivoltaic farm experiment was performed on lettuce crops in 2013 in Montpellier, France. Ground-mounted solar panels were co-located with either food crops or livestock to simultaneously engage in agricultural activities while producing energy. This dual purposing of land is called agrivoltaics. Agrivoltaic projects are promising because the co-location aids with food production, renewable energy production, and preservation of natural resources.

In America, the agricultural industry is supported by a myriad of policies protecting and benefitting farmers. One such benefit comes from current use programs. Many states offer current use programs in which agricultural land is assessed and …

The Irs's Misguided Playbook For Nil Collectives, Olivia M. Lubarsky

American University Law Review

Since the emergence of name, image, and likeness (NIL) opportunities for NCAA student-athletes, the IRS continues to scrutinize and ultimately deny many NIL collectives’ claims for section 501(c)(3) tax-exempt status, particularly questioning their asserted charitable purposes. This Note explores the foundation of the IRS's reasoning and argues that the IRS tangles key legal requirements, undervalues the public benefits generated by NIL collective activities, and applies inconsistent standards that overlook the educational and amateur sports charitable purposes these collectives can serve. By addressing the inconsistencies in the IRS's reasoning, NIL collectives may chart a viable path toward securing tax-exempt status.

Canadian Gaar And Statutory Interpretation, Jinyan Li, Joanne Magee

All Papers

The Canadian GAAR is an anti-abuse rule that denies the tax benefit resulted from abusive avoidance transactions. This paper examines the history, technical design, policy objectives and judicial interpretation of the GAAR. It explains the role of the new preamble and economic substance in applying the GAAR.