Taxation-Federal Commons^™

Can Treasury Overrule The Supreme Court?, Gregg D. Polsky

Scholarly Works

This article considers whether the Treasury's check-the-box regulations, which have been widely praised by tax practitioners, are valid. These regulations generally allow any unincorporated entity to elect whether it will be treated as a corporation or a partnership for tax purposes. When these regulations were first proposed, there was some debate as to whether such an elective regime was foreclosed by the statutory scheme, which requires that "associations" be taxed as corporations. This article argues that the focus of this debate was misplaced because, even assuming that the statutory scheme itself was sufficiently ambiguous as to permit an elective regime, …

Legislating Morality: The Duty To The Tax System Reconsidered, Watson

Scholarly Works

Four years ago, I presented a paper at a symposium on professionalism jointly sponsored by the University of Kansas Law School and the Kansas Bar Association. That paper espoused the view (contrary to what appears to be the popular view among tax scholars) that tax lawyers owe no special duty to the "tax system" other than to abide by the law and the applicable standards of professional conduct. During the four-year interim since my last visit to Kansas, however, we have witnessed the deleterious effect of the IRS Restructuring and Reform Act of 1998 (RRA '98) on IRS enforcement and …

Race-Conscious Affirmative Action By Tax Exempt 501(C)(3) Corporations After Grutter And Gratz, David A. Brennen

Scholarly Works

Part I of this Article examines how the Equal Protection Clause limits the government's ability to engage in race-based affirmative action. Part I focuses on how constitutional law analysis has evolved in light of the Supreme Court's recent decisions in Grutter v. Bollinger and Gratz v. Bollinger. Part II provides a brief description of tax law's public policy limitation. This part shows how the IRS, though not required to do so, has generally followed Equal Protection Clause jurisprudence when applying the public policy limitation to race-based activity by private tax exempt 501(c)(3) institutions. Part III discusses how the Supreme …

Taxation Of U.S. Llc With Foreign Participation, Victor Ianovitch

LLM Theses and Essays

The instant thesis is organized in three main parts. The first contains an overview of U.S. law including constitutional issues of the topic focusing on the separation of tax powers between federal and state authorities with special attention to the basis and extent to which a State is entitled to impose levies on business organizations; a brief analysis of federal legislation allowing the pass-through regime; and summary concerning LLC legislation in the States. The second analyzes the application of the main, basic principles of international taxation (such as residence, source rules, application of international treaties, and connected with it the …

Tax Lawyers, Ethical Obligations, And The Duty To The System, Watson

Scholarly Works

Perhaps the most elusive area of law is that of legal ethics. While the term itself is easy to define,' the subject all but defies codification because ethics, or morals (the terms are interchangeable), cannot be encapsulated by or in law. This is because law, in general, contains its own standard of validity on which there is usually clear societal consensus. For example, murder, rape, and theft are morally repugnant universally. Hence, punishment for any of these offenses does not impinge upon religious or individual autonomy because there is no ethical freedom to choose whether or not to engage in …

Debt Instruments' Tax Treatment In Corporate Mergers And Acquisitions, Tae Oon Jang

LLM Theses and Essays

The increase of merger and acquisition(M&A) activity since 1992 has resulted mainly from a domestic economic recovery. The current M&A trend shows that M&A is still an important means of enhancing many corporations' competitive power and of stimulating growth in such areas as computer software and services, wholesale and distribution, miscellaneous services, banking and finance, and leisure and entertainment. Fundraising for mezzanine-fund financing, which reflects investors' foresight about current and future M&A trends, has also seen rapid growth. After the Tax Reform Act of 1986 and the repeal of the General Utilities doctrine, the elimination of the capital gain preference …

Taxation Of Telecommunications And Electronic Commerce, Walter Hellerstein

Scholarly Works

No abstract provided.

An Analysis Of The Disallowance Of Advertising Expenses For Tobacco Products, Ravi Mannam

LLM Theses and Essays

Generally, reasonable expenses incurred in the ordinary and necessary course of a legitimate trade or business are deductible from gross income under the U.S. Tax Code; however in an effort to curb tobacco use, recent legislation has disallowed this benefit to tobacco companies for advertising expenses. The judiciary has upheld this disallowance under the doctrine of legislative grace. This thesis critiques the doctrine of legislative grace along with a review Congress’s power to tax income and the role of deductions. Also, the possibility of disallowing business expenses under public policy grounds is examined, and the relationship between lobbying expenses and …

Administrative Procedure And The Internal Revenue Service: Delimiting The Substantial Understatement Penalty, Peter A. Appel

Scholarly Works

In the early 1980's, Congress faced the mounting problems of tax shelters and other forms of tax avoidance. It responded by passing a series of laws.1 One of these provisions, section 6661 of the Internal Revenue Code, penalizes "substantial understatement" of tax liability.2 While section 6661 may appear to be a typical, innocuous tax code provision, close examination reveals that the substantial understatement penalty threatens to expand quietly the power of the Internal Revenue Service (IRS) over taxpayers, violating the spirit of the Administrative Procedure Act (APA) in the process.

Section I of this Note explores the background of section …

State Taxation Of Federally Deferred Income: The Interstate Dimension, James C. Smith, Walter Hellerstein

Scholarly Works

Most states that impose income taxes conform their levies to the federal model. Consequently, when income is realized but not recognized at the federal level-for example, when a taxpayer reinvests the gain from the sale of her former residence in a new residence or when a taxpayer realizes gain from the exchange of like-kind property -- states typically follow the federal rule in deferring recognition of that income. On the assumption that state conformity to the federal nonrecognition rules reflects an implicit endorsement of the policies underlying those rules, state deferral ordinarily raises no issue independent of those raised by …

Taxation Of Natural Resources: Are Provisions Applying To The Domestic Natural Resources Industry Also Applicable To Deep Seabed Mining?, Jozef Leysen

LLM Theses and Essays

Deep seabed mining may diminish American dependence on foreign sources of minerals. It is thus in the interest of the United States (and other mineral importing countries) to encourage this highly risky industry and to provide for favorable legal conditions in general and for favorable tax conditions in particular. This thesis examines whether United States law on the taxation of natural resources applies to deep seabed mining.

The Parenting Tax Penalty: A Framework For Income Tax Reform, Charles R.T. O'Kelley

Scholarly Works

Part I considers the proper tax treatment of out-of-pocket parenting expenses such as the costs incurred in providing food, clothing, shelter, and other goods and services to children for their consumption. Part I first characterizes the principal design alternatives to the present flat dependency deduction. It then examines the dominant accretion definition of income and concludes that the current flat dependency deduction is more consistent with the accretion concept and our actual governing beliefs than is any of the alternatives advocated by its critics.

Part II considers the tax relevance of imputed income from self-performed services. It explains (1) how …

Tax Policy For Post-Liberal Society: A Flat-Tax-Inspired Redefinition Of The Purpose And Ideal Structure Of A Progressive Income Tax, Charles R.T. O'Kelley

Scholarly Works

A flat rate comprehensive federal income tax could be achieved by replacing graduated rates with a single rate that applies to all taxpayers, eliminating many currently available deductions and credits, and treating as taxable income types of economic gain presently excluded from the tax base. The fact that Congress is seriously considering such radical changes makes it appropriate for tax scholars to reconsider longheld beliefs about the ideal structure of an income tax. This Article analyzes the characteristics and underlying rationale of a progressive flat rate comprehensive income tax and reconsiders the nature and purpose of a progressive income tax. …

The Tax Expenditure Budget: A Typological Analysis, Jochen Winter

LLM Theses and Essays

The Tax Expenditure Budget has been part of the budgetary process for more than ten years. This study attempts to review the academic and administrative pros and cons. It focuses on the effect of the tax Expenditure Budget on tax legislation. Finally, it determines the role of the Tax Expenditure Budget in today’s fiscal policy.

Rawls, Justice, And The Income Tax, Charles R.T. O'Kelley

Scholarly Works

To the extent the primacy of justice is acknowledged in tax policy debate, such acknowledgment is coupled with the assertion that, of course, questions of justice cannot be meaningfully debated. The discussants then attempt to resolve the issue in question by use of ad hoc arguments of fairness and efficiency. The major purpose of this article is to show that not only is justice the primary issue, but that questions of justice can be meaningfully addressed. First, I will examine some of the ad hoc arguments of fairness and efficiency which have been made by proponents of a consumption base …

Tax Significance Of Payments In Satisfaction Of Liabilities Arising Under Section 16(B) Of The Securities Exchange Act Of 1934, Lawrence Lokken

Scholarly Works

This article examines the income tax significance to the insider of his payment in satisfaction of a liability arising under section 16(b). Such taxpayers have usually sought a deduction against ordinary income in the year of payment. When the issue was first raised, the deduction was denied. Section 16(b) liability was held to be in the nature of a penalty; allowance of the deduction, it was found, "would weaken an effective method of enforcing the sharply defined policy expressed in sectin 16(b)...." In 1961 the Internal Revenue Service modified its earlier position by ruling that section 16(b) is not a …