Taxation-Federal Commons^™

Psychiatric Defenses In Tax Fraud Cases , Thomas J. Gallagher Jr.

Pepperdine Law Review

No abstract provided.

Application Of The Active Business Requirement To The Tax-Free Spin-Off Of Corporate Real Estate , Richard J. Albrecht

Pepperdine Law Review

No abstract provided.

Civil Tax Penalties: Changes And Recommendations, Arthur A. Graves Iii

Pepperdine Law Review

No abstract provided.

Tax Frauds And The Government's Right Of Access To Taxpayer's Books And Records , Ronald K. Van Wert

Pepperdine Law Review

No abstract provided.

Administrative Savings From Synchronizing Social Welfare Programs And Tax Provisions, Jonathan Barry Forman

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

E-Verify Can Stop Refund Fraud, Richard Thompson Ainsworth, Andrew Shact

Faculty Scholarship

Two issues in the current Washington debates need to be linked. E-Verify, the Internet-based database that allows employers to verify an employee’s work eligibility that is at the center of the immigration debate, is the ideal tool for stopping tax refund fraud. All that is needed is a digital signature of the E-Verify result, and the mandatory inscription of this signature on tax documents to make them self-authenticating.

The central features of this proposal have been made before. The technology it requires is tried and proven. The processes and procedure it advocates are in place and effectively deployed in foreign …

Taxation Without Representation: The Illegal Irs Rule To Expand Tax Credits Under The Ppaca, Jonathan H. Adler, Michael F. Cannon

Faculty Publications

The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insurance plans on state-run insurance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is …

When Sommers Are Winters: Do Blanks Denote Revocability?, Wendy G. Gerzog

All Faculty Scholarship

In Sommers, ruling on both parties’ motions for partial summary judgment, the Tax Court dealt with claims of issue preclusion and collateral estoppel, equitable apportionment, the completion of gifts of limited liability company interests, and retained powers that would cause estate tax inclusion.

Two aspects of Sommers held particular interest for me. The first is that the parties appear to be arguing their opponent’s conventional position. The second is that the court grappled with whether the blanks left in the gift documents were immaterial to gift completion; however, the court did not address whether the decedent’s completed gifts qualified for …

Tax Court Find Stars Transaction Lacks Economic Substance, Robert D. Probasco, Lee S. Meyercord

Faculty Scholarship

In Bank of New York Mellon Corp. v. Commissioner, the Tax Court found that a structured trust advantaged repackaged securities (“STARS”) transaction entered into by BNY Mellon lacked economic substance, and disallowed foreign tax credits of $199 million as well as transactional expenses of $8 million. BNY Mellon is the first test case to emerge from the IRS’s attempts to disallow tax benefits to several financial institutions that participated in the STARS transaction.

The STARS transaction is one of a number of different transactions that the IRS refers to as “foreign tax credit generators.” These transactions generally rely on inconsistent …

Tax Planning For Marijuana Dealers, Benjamin Leff

Scholarly Articles in Law Reviews & Journals

In recent years, many states have legalized marijuana while the federal government continues to consider all marijuana sales and use illegal. But marijuana industry insiders consider not federal criminal law but federal tax law to be the biggest impediment to the development of a legitimate marijuana industry. State-sanctioned marijuana sellers are required to pay federal income taxes pursuant to § 280E, a formerly largely symbolic provision that Congress enacted to punish drug dealers, but which now could potentially drive legitimate marijuana sellers underground.

This paper proposes a tax strategy that enables state-sanctioned marijuana sellers to avoid the impact of § …

Should The Us Dictate World Tax Policy? Reflections On Ppl, Reuven S. Avi-Yonah

Articles

The U.S. Supreme Court’s decision to grant certiorari in PPL offers it a unique opportunity to change the law regarding foreign tax credits that has significantly impeded the ability of other countries to engage in meaningful tax reform. In 1938 the Court said in dicta that to qualify for the FTC a tax had to be an income or excess profits tax (or a tax imposed in lieu thereof) under U.S. tax principles. This statement has led to an elaborate set of regulations defining what is an income tax, which has significantly hampered the ability of foreign countries to adopt …

Fringe Benefits, Proposed Section 84, And Tax Policy , Gregory M. Fowler

Pepperdine Law Review

No abstract provided.

The New Starker: A Nonsimultaneous Exchange Expands Section 1031/ Collateral Estoppel Clarification, Robert B. Paysinger

Pepperdine Law Review

The new Starker decision addresses the issue whether a nonsimultaneous exchange qualifies for section 1031 nonrecognition treatment. The Court of Appeals for the Ninth Circuit, in addressing this issue, also had to determine the appropriateness of the collateral estoppel "separable facts" doctrine under the facts in the case. The author provides an in-depth examination of the court's clarification of collateral estoppel and expansion of section 1031. The author, in agreeing with-the decision, welcomes the added flexibility the case lends to the real estate finance field.

Horse Syndication: A Sure Footed Winner In The Investment Sweepstakes, Thomas R. Catanese

Pepperdine Law Review

Recent changes in the scheme of federal taxation coupled with increasing interest in the equine industry has propelled that industry into the forefront of tax sheltered investments. In this article the author takes an in-depth look at the federal securities and tax law aspects of a typical equine syndication as a tax sheltered investment.

The Professional Corporation—Has The Death Knell Been Sounded?, Forest J. Bowman

Pepperdine Law Review

The favorable tax reasons for incorporating a professional practice have been substantially reduced by the Tax Equity and Fiscal Responsibility Act. The retirement benefits of the professional corporation have effectively been eliminated by TEFRA. In addition, the new allocation of income powers provided by TEFRA may have eliminated the tax incentive for forming a professional corporation. The professional's decision whether to incorporate his practice will now rest with his desires as to how he wishes to carry out that practice. This article discusses the changes that TEFRA has wrought, and its impact on the professionals' decision to incorporate.

Go Abroad, Young Man, Go Abroad: The Economic Recovery Tax Act Of 1981'S Changes In The Treatment Of Foreign Earned Income, Sheldon J. Fleming

Pepperdine Law Review

The Economic Recovery Tax Act of 1981 made major revisions in the taxation of foreign earned income. The former tax provisions of sections 911 and 913failed in their purpose of equitably compensating individuals for the increased costs of working abroad, and have been replaced with a new section 911. The new law encourages Americans to go abroad by according them the most liberal tax benefits in over fifty years.

Caveat Taxpayer: How And Why The Internal Revenue Service May Examine Your Books, Your Accountant And Even Your Attorney, Brian E. Holthus

Pepperdine Law Review

The IRS is authorized, by the use of an administrative summons, to thoroughly inspect a taxpayer's business and financial background. Although the taxpayer's attorney may feel powerless to restrict this free flow of information, there are defined limitations to the use of an administrative summons. These limitations are designed to abrogate its abuse by the IRS. This comment provides a summary of the limitations of an administrative summons, case law interpretation of the requirements for its issuance, and practical considerations for the protection of the taxpayer's financial privacy.

Crane And Tufts: Resolved And Unresolved Issues, John Zimmerman

Pepperdine Law Review

Crane v. Commissioner and its famous footnote 37 have inspired much controversy and commentary. This article discusses the issues and unresolved questions surrounding the calculation of gain from relief of nonrecourse indebtedness. It does so through a thorough analysis of the actions of the courts, the Congress, and administrative agencies. The author concludes by suggesting several possible courses of action in resolving remaining ambiguities.

Zappers & Employment Tax Fraud, Richard Thompson Ainsworth

Faculty Scholarship

Beyond the grey area of worker misclassifications and general employment tax irregularities there are darker employment relationships where workers are intentionally paid in cash “off-the-books” or “under-the-table.” Grey employment relationships present civil enforcement issues that may become criminal; darker-relationships are criminal from the beginning. Zappers are found on the dark side.

Zappers are fraud-technologies that automatically (and remotely) skim cash from electronic cash registers (ECRs) or back room point of sales (POS) systems. Globally, tax auditors are finding that Zappers frequently provide the cash that is used to compensate “under-the-table” workers. In fact, a Zapper appears to be at the …

Wimmer Wins Flp Annual Exclusions, Wendy G. Gerzog

All Faculty Scholarship

In Wimmer, the Tax Court held that the income stream from a taxpayer’s gifts of family limited partnership interests was eligible for the annual exclusion. By comparing the income interest in the partnership’s dividend paying marketable securities to the income interest in a trust, the court made Wimmer a winner. But does the opinion logically lead to that conclusion?

A Tax Hike Liberals And Conservatives Should Both Like, Nathan B. Oman

Popular Media

No abstract provided.

Justice For All: Reimagining The Internal Revenue Service, David J. Herzig

Law Faculty Publications

The ability of the Internal Revenue Service to both collect the tax and enforce the initial determination of tax liability in a neutral and fair manner has been compromised by a February 2011 pronouncement issued by the Department of Justice stating that the President and the Department of Justice believe that section 3 of the Defense of Marriage Act is unconstitutional and that the Department of Justice will no longer defend the statute in courts. The pronouncement results in a disparate treatment of similar taxpayers based solely on the forum of litigation. Through this lens, I examine whether it is …

Those Who Know, Those Who Don't, And Those Who Know Better: Balancing Complexity, Sophistication, And Accuracy On Tax Returns, Michelle Lyon Drumbl

Scholarly Articles

Refundable credits, particularly the earned income tax credit (EITC) and the child tax credit, serve an important anti-poverty measure for low-income taxpayers. Annually, millions of taxpayers who do not owe any federal income tax must file a tax return in order to claim these credits that are in the nature of social benefits. The eligibility requirements for refundable credits are complex, and these returns are particularly prone to audit: EITC audits comprise one-third of all individual income tax audits. Because of the large dollar amounts at stake, a taxpayer’s mistaken understanding of the eligibility requirements for these refundable credits can …

Reforming Federal Tax Litigation: An Agenda, Steve R. Johnson

Scholarly Publications

King Vertigorn, it is said, wished to build a castle to defend Britain against invaders. Each day, his mason raised and set the stones. Each night, however, the earth would rumble, bringing the work crashing to the ground. Vexed, Vertigorn asked Merlin for an explanation. Merlin’s mystical divination revealed that, in a cavern far below the surface, there resided two foes, a red dragon and a white dragon. In their perpetual struggle for dominance, first one dragon then the other would gain temporary ascendancy. Their jostling unsettled the ground, rendering all construction temporary.

In federal tax procedure, the red dragon …

Omg! Esd Codified!: The Overreaction To Codification Of The Economic Substance Doctrine, Monica D. Armstrong

Florida A & M University Law Review

No abstract provided.

Auer/Seminole Rock Deference In The Tax Court, Steve R. Johnson

Scholarly Publications

No abstract provided.

Dirty Remics, Revisited, David J. Reiss, Bradley T. Borden

Faculty Scholarship

No abstract provided.

Reforming The Second Tier Of The U.S. Pension System: Tabula Rasa Or Step By Step?, 46 J. Marshall L. Rev. 631 (2013), G. A. (Sandy) Mackenzie, Jonathan Barry Forman

UIC Law Review

No abstract provided.

Rationale And Changing The Charitable Deduction, Roger Colinvaux

Scholarly Articles

There are two principal rationales for the charitable deduction. Depending upon choice of rationale, some tax reform changes are suggested and others are not. A base measurement rationale suggests eliminating the deduction for unrealized appreciation, keeping the benefit as a deduction and not a credit, not adopting caps or a nonitemizer deduction, and protecting the tax base by narrowing the class of organizations eligible to receive deductible contributions. A subsidy rationale, depending upon which strand is emphasized, might favor a more equitable tax benefit in the form of a credit or through caps or a nonitemizer deduction, and could lead …

Charitable Contributions Of Property: A Broken System Reimagined, Roger Colinvaux

Scholarly Articles

On average, nearly $46 billion of property is given to charitable organizations each year, about twenty-five percent of the total charitable deduction. This makes the charitable contribution deduction for property a tax expenditure within a tax expenditure, yet it is rarely analyzed as such. It emerged as part of a noble effort to encourage contributions to worthy organizations. But the deduction for property has never worked well. The general rule allowing a deduction based on the fair market value of the property may have some intuitive appeal, but its implementation has yielded numerous exceptions and immense complexity. The Article argues …