Taxation-Federal Commons^™

The Tax Gap: Do Billions In Uncollected Income Taxes Speed Up Economic Downturn During A Global Pandemic?, Offiong Ekah

Journal of the National Association of Administrative Law Judiciary

Section I will explore how maximizing taxpayer compliance will be a crucial component of closing the tax gap, and what initiatives the IRS implements to garner compliance; Section I will also examine how past and current Tax Code affects levels of compliance—the goal always being compliance optimization. Section II will explore the CARES Act of 2020, and how the Act fared as a response to the onset of COVID-19. This section will also discuss how the concerns of the IRS are accentuated by the tax gap, and how a lack of governmental funding, particularly relating to detailed exclusions enumerating within …

Monsanto: Creator Of Cancer Liability

DePaul Business & Commercial Law Journal

No abstract provided.

Impact Of Corporate Response To Controversial Presidential Statements Or Policies

DePaul Business & Commercial Law Journal

No abstract provided.

Bargain Basement Progressivity? Constitutional Flat Taxes, Demogrants, And Progressive Income Taxation, Samuel D. Brunson

Loyola University Chicago Law Journal

State and local governments raise revenue in three primary ways: property, sales, and income taxes. Property and sales taxes tend to impose a higher burden on low-income households. To ensure the fairness and progressivity of their overall revenue system, states need their income tax to be sufficiently progressive.

Four states face an apparently insurmountable barrier to progressive income taxation: their state constitutions mandate that any income tax must have a flat rate, applicable to all taxpayers. Without a constitutional amendment, a difficult process, they cannot adopt marginal rates that increase as income increases.

While the impediment appears insurmountable, however, it …

What’S A Tax For Bankruptcy Law Purposes?, Erik M. Jensen

Faculty Publications

In 2012, the Supreme Court, in NFIB v. Sebelius, decided that the shared responsibility payment (SRP) required to be made under the Patient Protection and Affordable Care Act by many persons who didn’t acquire minimum essential health insurance was a tax authorized by the Taxing Clause of the Constitution, even though Congress had called the SRP a penalty. In recent years a similar issue has arisen in the bankruptcy context: Is the SRP a tax that may not be eligible for discharge in bankruptcy—it may, that is, be a “priority” under Bankruptcy Code Section 507(a)(8)—or is it a potentially …

Recent Developments Affecting The Salt Cap, Including And Appellate Court Decision Upholding The Cap's Constitutionality, Erik M. Jensen

Faculty Publications

The $10,000 annual limitation on the deduction of state and local taxes (the so-called SALT cap), which was included in the Tax Cuts and Jobs Act of 2017, has been the subject of much political and legal scrutiny. This article describes some of the recent debates, examines some state responses to the cap, and discusses litigation that culminated in a Second Circuit decision, New York v. Yellen, concluding that the cap meets constitutional requirements.

Taxing Sports, John T. Holden, Kathryn Kisska-Schulze

American University Law Review

Sports are no longer mere games. In today’s money-driven culture, they have cultivated into a lucrative business enterprise where everyone—whether professional or amateur; owner or player; coach or spectator—stands to make significant money. Modern sports have also morphed into a landscape encompassing both the traditional athletic events and the more novel esports and daily fantasy sports (DFS) arenas. Across all these physical, digital, and biological spheres, sports revenues are being measured in terms of billions. It thus stands to reason why taxes have become a progressively critical discussion point within U.S. professional and collegiate sports, the video gaming world, and …

Fighting The Tax Gap: A Prime And Recent Example Of The Value Of Gao Oversight & Reporting, Josh Bill

Upper Level Writing Requirement Research Papers

No abstract provided.

Speeding Up Benefits To Charity By Reforming Gifts To Intermediaries, Roger Colinvaux

Scholarly Articles

Charitable giving tax incentives are intended to encourage giving for public benefit. Gifts to intermediaries frustrate this goal. Presently, $1.26 trillion has accumulated in donor advised funds (DAFs) and private foundations. These are charitable intermediaries that do not benefit the public until they release their funds for public use. Congress has long recognized that intermediaries cause a “delay in benefit” problem because the tax incentive is awarded before the public benefits from the gift. Congress addressed this problem for foundations in 1969 by requiring them to pay out a minimum amount annually. Congress, however, has not addressed the problem for …

The Irs’S Proposed Regulations On The Minimum Distribution Rules: Post-Secure Act, 50 Tax Mgmt. Comp. Plan. J. No. 5 (May 6, 2022), Kathryn J. Kennedy

UIC Law Open Access Faculty Scholarship

No abstract provided.

Finding The Purpose Of Tax Treatyprovisions Under Gaar: Lessons From Alta Energy, Jinyan Li

Articles & Book Chapters

Establishing the object and purpose of tax treaty provisions lies at the heart of applying antiabuse rules, such as general antiavoidance rules under domestic law and the principal purpose test (PPT) in tax treaties. Tax planning arrangements like treaty shopping, designed to obtain treaty benefits, are not abusive unless they contravene the object and purpose of the provisions relied upon by the taxpayer.

The Misuse Or Abuse Exception: The Role Of Economic Substance, Jinyan Li

Articles & Book Chapters

The “misuse or abuse” exception under subsection 245(4) of the Income Tax Act draws the line between acceptable and unacceptable tax avoidance. As a “safety valve” or “relieving provision,” this exception has proved to be the “most crucial and controversial single factor in the application of the GAAR.” Whether a transaction that lacks economic substance is subject to the general anti-avoidance rule (GAAR) is the question considered in this chapter.

It’S Past February 1, 2022: The Dol’S Pte 2020-02 Is Now Enforceable, 50 Tax Mgmt. Comp. Plan. J. No. 4 (Apr. 1, 2022), Kathryn J. Kennedy

UIC Law Open Access Faculty Scholarship

No abstract provided.

Can Blockchain Revolutionize Tax Administration?, Orly Sulami Mazur

Faculty Journal Articles and Book Chapters

Experts predict that the use of smart contracts and other applications of blockchain technology could revolutionize the manner in which we do business. Blockchain technology promises the elimination of middlemen, increased trust and transparency, and improved access to shared information and records. Thus, it is no surprise that companies and entrepreneurs are developing blockchain solutions for an array of markets, ranging from real estate to health care. But can this new technology revolutionize tax administration?

This Article is the first to consider blockchain technology’s role in addressing the shortcomings of our current administration system— namely, a large tax gap, high …

The Guardians Of The New Internal Revenue Code, Douglas C. Michael

Law Faculty Scholarly Articles

The proliferation of electronic filing (e-filing) of income tax returns creates new problems and opportunities for the regulation of the tax return preparation industry. Now that e-filing is universal, the rules of the law are, for many taxpayers, the code of the tax software, not in the Internal Revenue Code. The natural consequences of universal e-filing are unremitting complexity in a tax code which is also used to deliver social benefits in the form of tax credits. This, combined with the polit¬ical pariah status of the Internal Revenue Service (IRS), makes it imperative that the IRS work with the tax …

The "Rainbow Tax": Overcoming Repayment Barriers, Hannah C. Deloach

Lewis & Clark Law Review

In 1996, the Defense of Marriage Act passed through Congress and was signed into law by President Bill Clinton. The Defense of Marriage Act effectively banned same-sex couples from receiving federal benefits that were otherwise available to heterosexual couples. In 2004, the first legal same-sex marriages were performed in the United States of America in the state of Massachusetts. These marriages allowed the now-married couples to access state tax benefits previously unavailable to them. However, because of section 3 of the Defense of Marriage Act, which defined marriage as a union between one man and one woman, those newly married …

Facing The Sunset: An Egalitarian Approach Against Taxing Couples As A Unit, James M. Puckett

Faculty Scholarship

With the sunset of marriage penalty relief in 2025, Congress has a bittersweet opportunity to align the taxable unit with the guiding norm of taxation according to "ability to pay." The federal income tax brackets have been designed around a misguided and poorly targeted assumption that comparing married couples is appropriate, whether because of pooling income, economies of scale, or untaxed housework and caregiving. This Article argues that the individual, rather than (married) couples, should emerge as the unit for income taxation under an egalitarian approach to distributive justice.

Welfarist insights and egalitarian arguments sometimes align on solutions to tax …

Weathering State And Local Budget Storms: Fiscal Federalism With An Uncooperative Congress, David Gamage, Darien Shanske, Gladriel Shobe, Adam Thimmesch

Articles by Maurer Faculty

Throughout most of 2020, state and local governments faced severe budget crises as a result of the COVID-19 pandemic. Increased demand for state welfare services and rising state expenses related to controlling the spread of COVID-19 stretched state and local budgets to their breaking points. At the same time, layoffs, business closures, and social distancing measures reduced states’ primary sources of tax revenues. The traditional practice of American fiscal federalism is for the federal government to step in to provide aid during a national emergency of this magnitude, because state and local governments lack the federal government’s monetary and fiscal …

Good Intentions: Administrative Fiat And The General Welfare Exclusion, Samuel D. Brunson, Christian A. Johnson

Faculty Publications & Other Works

Since its introduction in 1913, the federal income tax has viewed income expansively, subjecting virtually all types of enrichment as gross income unless Congress explicitly exempted the income from taxation. But in the income tax’s second decade, the Bureau of Internal Revenue created an exception to the broad reach, an exception not grounded in any type of Congressional enactment. The Bureau’s practice of excluding certain benefits began innocuously in the late 1930s by excluding certain social security benefits from gross income. Over the decades, the IRS has used what it now refers to as the “general welfare exclusion” to exclude …

Restricting Funeral Expense Deductions, William A. Drennan

Dickinson Law Review (2017-Present)

During the Middle Ages, the wealthy often requested burial in mass graves with their fellow mortals, as a sign of humility. But since the rise of the cult of the individual during the Renaissance, individual burial plots have been an expression of prestige, wealth, and social status for some. For example, Leona Helmsley, real estate baroness and “Queen of Mean,” dedicated $3 million upon her death for the care and maintenance of her 1300 square foot, $1.4 million mausoleum. Respectful disposition of the body is a hallmark of civilization and a common law requirement of estate administration, but an extravagant …

Disabusing The Tax Aid Narrative: What Inter-National Tax Equity Really Means For "Poor" Countries And How To (Re)Frame It, Okanga Ogbu Okanga

PhD Dissertations

International tax regimes (e.g., the “double taxation regime”) are created by states with competing tax jurisdiction to coordinate their tax rules and, specifically, to address common efficiency problems like international double taxation. In developing such regimes, states attempt to balance competing tax policy priorities: efficiency, administrability, and equity. This work engages with equity, as a policy norm of international tax (inter-national tax equity). It is my thesis that the framing/articulation of inter-national tax equity suffers from a narrative problem that, perhaps, stems from its apparent conceptual unclarity and multifarious usage. This narrative problem is most evident in the articulation of …

How The American Taxation System Unduly Affects The Black Community

Florida A & M University Law Review

This article provides evidence that the American taxation system disproportionately impacts the Black community due to long-term tax policy implications, racial disparities in income, and the overall accumulation of wealth. Part I of this article will provide a brief synopsis of the start of the American taxation system and the first instances of tax implementation. Part II of this article will discuss the income disparities among the Black and White races and the interplay with gender. Part III of this article will expound on the effect that income inequalities, tax policies, and tax breaks have on wealth accumulation between Black …

Cryptocurrency, Legibility, And Taxation, Amanda Parsons

Publications

In Jarrett v. United States, a taxpayer in Tennessee is arguing that staking cryptocurrency did not result in him earning “income” under federal income tax law. This case illustrates the fundamental challenge that cryptocurrency and blockchain technology present for tax law. Wealth creation in the crypto space is not readily legible to the state. This absence of legibility threatens tax law’s reliance on placing economic activities into categories to determine how they should be taxed. Furthermore, this case highlights the harms Congress and Treasury are risking by not taking action on cryptocurrency taxation. The uncertainty and lack of guidance on …

Reducing Administrative Burdens To Protect Taxpayer Rights, Leslie Book, T. Keith Fogg, Nina E. Olson

Oklahoma Law Review

No abstract provided.

Broken Infrastructure, Del C. Wright Jr.

Faculty Works

This article examines the cryptocurrency-related provisions of the Infrastructure Investment and Jobs Act of 2021, focusing on amendments to the Internal Revenue Code that expand tax reporting and surveillance obligations for digital assets. Specifically, it analyzes the new “Broker” and “Tax” provisions, which extend reporting requirements beyond traditional financial intermediaries to actors in the blockchain ecosystem who may lack access to the necessary data. The article situates these provisions within the broader regulatory and political context, tracing their roots to prior Treasury rulemaking efforts and exploring their intended role in closing the “tax gap.” It highlights the significant compliance challenges, …

Taxing Choices, Tessa R. Davis

FIU Law Review

Tax has a choice problem. At all stages of the making of tax, choice plays a role. Lawmakers consider how tax will impact the range and appeal of choices available to an individual. Scholars critique how tax may drive an individual toward or away from a given choice. Courts craft stories of how an individual had either free or deeply constrained choice, using their perception of the facts to guide their interpretation of tax law. And yet for all the seeming relevance of choice to tax, we have no clear definition of what we mean when we talk about choice …

Firpta Repeal: The United States’ Post-Pandemic Economic Solution To Infrastructure Reform, Adam Mazin

University of San Francisco Law Review

No abstract provided.

The Intergenerational Equity Case For A Wealth Tax, Daniel Schaffa

Law Faculty Publications

Intergenerational equity is commonly set aside in favor of other policy objectives, perhaps because of the extreme challenges inherent in adopting and applying an intergenerational equity normative framework. Even when there is a near consensus that the choices of today will have substantial costs in the future, these costs are often downplayed or disregarded. This Article asks whether there are measures that might offer redress to a generation for the costs imposed on it by its predecessors and finds that a one-time wealth tax is a promising option. Although its analysis applies more generally, this Article focuses on the widely …

The Parallel March Of The Ginis: How Does Taxation Relate To Inequality, And What Can Be Done About It?, Reuven S. Avi-Yonah

Articles

The United States currently has one of the highest levels of inequality among industrialized economies. In addition, numerous scholars have shown that social mobility in the United States is significantly lower than it was in the period between 1945 and 1970, when inequality was declining. The combination of these trends is dangerous because it risks transforming the United States into a society where small elites capture most of the gains, a pattern in which growth cannot be sustained over time. The level of inequality in the United States after taxes and transfers are taken into account is much lower, but …

May I Pay More? Lessons From Jarrett For Blockchain Tax Policy, Amanda Parsons

Publications

In this article, Parsons examines Jarrett, t in which the taxpayers argue that blockchain reward tokens should be included in income only upon sale or exchange (a position that would raise their tax bills), and she explores why they sought this treatment and what implications it holds for policymakers trying to develop a tax regime for blockchain activities.