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Full-Text Articles in Taxation-Federal

Federalism And The Commerce Clause: A Comparative Perspective, Reuven S. Avi-Yonah Jan 2007

Federalism And The Commerce Clause: A Comparative Perspective, Reuven S. Avi-Yonah

Articles

The U.S. Supreme Court has on numerous occasions addressed the constitutionality of state taxes under the U.S. Constitution (most often under the Commerce Clause, but sometimes under the Equal Protection and Due Process Clauses). In general, the Supreme Court has granted wide leeway to the states to adopt any tax system they wish, only striking down the most egregious cases of discrimination against out-of-state residents. Thus, for example, the Court has generally refused to intervene against state tax competition to attract business into the state. It has twice upheld a method of calculating how much income of a multinational enterprise …


The Internal Markets Of Multinational Firms, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr. Jan 2007

The Internal Markets Of Multinational Firms, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.

Articles

The rising economic importance of multinational firms has been accompanied by significant changes in their structure and functioning. Multinational firms, historically characterized as webs of autonomous subsidiaries spread across countries, now represent globally integrated production systems serving worldwide customers. These changes are manifest in the rising significance of intrafirm trade and financial flows for these firms. While there is extensive analysis of aggregate patterns in intrafirm flows of goods and capital, few firm-based studies examine the workings of the internal markets of multinational firms, largely because of the difficulty in accessing the necessary data. A number of our recent projects …


Taxation And Multinational Activity: New Evidence, New Interpretations, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr. Jan 2006

Taxation And Multinational Activity: New Evidence, New Interpretations, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.

Articles

In the midst of rapid integration and globalization, multinational firms still face tax systems that differ among countries, and these differences have the potential to affect major investment and financing decisions. This research covers a wide range of topics, including the impact of indirect taxes as well as of corporate income taxes, the sensitivity of financing decisions to tax rates, the effects of taxes on repatriation policies, the demand for, and impact of, tax havens, and the use of indirect ownership as a means of avoiding taxes. The behavior of US multinational firms as revealed by the evidence collected by …


Prevention Of Double Deductions Of A Single Loss: Solutions In Search Of A Problem, Douglas A. Kahn, Jeffrey H. Kahn Jan 2006

Prevention Of Double Deductions Of A Single Loss: Solutions In Search Of A Problem, Douglas A. Kahn, Jeffrey H. Kahn

Articles

In the current tax system, a corporation is treated as a separate taxable entity. This tax system is sometimes referred to as an entity tax or a double tax system. Since a corporation is a separate and distinct entity from its owners, the shareholders, the default rule is that transfers between them are treated as realization events. Without a specific Internal Revenue Code (Code) provision providing otherwise, such transactions will also require the parties to recognize the realized gain or loss. Congress has enacted several nonrecognition corporate provisions when forcing the recognition of income could prevent changes to the form …


The Silver Lining: The International Tax Provisions Of The American Jobs Creation Act - A Reconsideration, Reuven S. Avi-Yonah Jan 2005

The Silver Lining: The International Tax Provisions Of The American Jobs Creation Act - A Reconsideration, Reuven S. Avi-Yonah

Articles

The American Jobs Creation Act of 2004, passed by the US Congress on 12 October and signed into law by President Bush on 22 October 2004, has been greeted by general dismay by various critics. The Act has been described as overloaded with “pork” and giveaways to special interest groups like tobacco farmers. The critics contend that the only achievement of the Act, the repeal of the “extraterritorial income” (ETI) regime that was ruled by the WTO to be a prohibited export subsidy, is dwarfed by 633 pages of special interest legislation. Even the Bush Administration distanced itself from the …


The Ingenious Kerry Tax Plan, Reuven S. Avi-Yonah Apr 2004

The Ingenious Kerry Tax Plan, Reuven S. Avi-Yonah

Articles

The tax plan proposed by Democratic presidential candidate John Kerry at Wayne State University on March 26 is an ingenious set of ideas to encourage domestic job creation. Its greatest strength, however, may be its contribution to long-term economic growth, fairness, and tax law simplification. In this article I will first describe the Kerry proposal, then analyze its advantages, and finally address some counterarguments.


Recharacterization Of Unreasonable Compensation: An Equitable Mandate, Barbara F. Sikon Jan 2004

Recharacterization Of Unreasonable Compensation: An Equitable Mandate, Barbara F. Sikon

Cleveland State Law Review

This note identifies the inequities inherent in the failure to recharacterize unreasonable compensation payments and proposes that the taxpayer be allowed to present evidence of an alternative characterization after the government determines a reasonable allowance. Part I of this note demonstrates the historical applications of section 162 supporting a purpose of challenging payments disguised as compensation with an accompanying tax advantage. It will explore the legislative history and statutory implications, as well as applications in case law. Part II explains the highly subjective character of the determination of reasonableness and explores the numerous dimensions of that judgment. Part III explains …


Exchanges Of Multiple Stocks And Securities In Corporate Divisions Or Acquisitive Reorganizations, Douglas A. Kahn, Jeffrey S. Lehman Jan 2004

Exchanges Of Multiple Stocks And Securities In Corporate Divisions Or Acquisitive Reorganizations, Douglas A. Kahn, Jeffrey S. Lehman

Articles

If specified conditions are satisfied, the Internal Revenue Code provides nonrecognition for gain or loss realized when stocks and securities of one corporation are exchanged for stocks and securities of another corporation. When the exchange is made as part of a corporate division (a split-off or a split-up), the principal nonrecognition provision is section 355; and when the exchange is made as part of an acquisitive reorganization, the principal nonrecognition provision is section 354. Complete nonrecognition is provided only when stock is exchanged solely for stock and securities are exchanged solely for securities of no greater principal amount. If, in …


Taxation, Craig D. Bell Nov 2003

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.


Back To The 1930s? The Shaky Case For Exempting Dividends, Reuven S. Avi-Yonah Dec 2002

Back To The 1930s? The Shaky Case For Exempting Dividends, Reuven S. Avi-Yonah

Articles

This article is based in part on the author’s U.S. Branch Report for Subject I of the 2003 Annual Congress of the International Fiscal Association, to be held next year in Sydney, Australia (forthcoming in Cahiers de droit fiscal international, 2003). He would like to thank Emil Sunley for his helpful comments on that earlier version, and Steve Bank, Michael Barr, David Bradford, Michael Graetz, and David Hasen for comments on this version. Special thanks are due to Yoram Keinan for his meticulous work on the EU regimes (see Appendix). All errors are the author’s. In this report, Prof. Avi-Yonah …


For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah Jun 2002

For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah

Articles

This article discusses “inversion” transactions, in which a publicly traded U.S. corporation becomes a subsidiary of a newly established tax haven parent corporation. In the last three years, an increasing number of these transactions have been taking place, undeterred by the shareholderlevel tax imposed by the IRS on them in 1994. The article first discusses the reasons for the increasing popularity of the transactions and the tax goals they aim at achieving (primarily avoiding subpart F and U.S. earnings stripping). The article then discusses the tax policy implications of these transactions. In the short run, the article suggests that the …


Why The Corporate Amt Should Be Retained, Reuven S. Avi-Yonah Nov 2001

Why The Corporate Amt Should Be Retained, Reuven S. Avi-Yonah

Articles

The corporate AMT is under attack. Repeal has been proposed by the White House, endorsed by the ABA/AICPA/TEI tax simplification project, and included in the stimulus bill passed by the House of Representatives. Repeal is supported on two principal grounds: That the corporate AMT increases complexity, and that it is pro-cyclical.


The U.S. Treasury's Subpart F Report: Plus Ça Change, Plus C'Est La Même Chose?, Reuven S. Avi-Yonah Jan 2001

The U.S. Treasury's Subpart F Report: Plus Ça Change, Plus C'Est La Même Chose?, Reuven S. Avi-Yonah

Articles

On 29 December 2000, the U.S. Treasury Department released its long-awaited study of Subpart F, entitled “The Deferral of Income Earned through U.S. Controlled Foreign Corporations." This study was commenced in the aftermath of the controversy that ensued from the issuance and subsequent withdrawal of Notice 98-11. The study was originally expected to be issued in 1999 in response to the report published that year by the National Foreign Trade Council, which advocated significant changes in Subpart F. The Treasury Study’s delayed issuance at the end of the Clinton Administration means that it only has (at best) persuasive force for …


What's In A Name: An Argument For A Small Business Limited Liability Entity Statute (With Three Subsets Of Default Rules), Dale A. Oesterle, Wayne M. Gazur Jan 1997

What's In A Name: An Argument For A Small Business Limited Liability Entity Statute (With Three Subsets Of Default Rules), Dale A. Oesterle, Wayne M. Gazur

Publications

The recent proliferation of small business entity forms is primarily a result of their tax characterization. With the recent adoption of the IRS "check-the-box" regulations and, as a consequence, the elimination of traditional tax distinctions, many of these forms have lost their appeal. This article proposes starting over with one form, the "limited liability entity." Part I discusses the history of small business forms. Part II analyzes the current forms in light of the recent check-the- box legislation. Part III discusses the necessity of and rationale behind a unified entity statute. Finally, Part IV outlines a unified limited liability entity …


Who Should Pay The Corporate Tax In A Flat Tax World?, Rebecca S. Rudnick Jan 1989

Who Should Pay The Corporate Tax In A Flat Tax World?, Rebecca S. Rudnick

Articles by Maurer Faculty

This article reviews the corporate tax system within the context of the historical bias and current effects of the current system of taxation of corporations and shareholders. Drawing on public finance theory, financial markets microstructure research, and perspectives on corporate governance, Professor Rudnick proposes a profits tax on the liquid equity of firms. She finds this to be a normative rationale for a double tax system under optimal tax principles due to the inelasticity of demand for and supply of liquidity and the economic rent it produces. The value of liquidity in different capital markets is the crucial determinate. Under …


Should General Utilities Be Reinstated To Provide Partial Integration Of Corporate And Personal Income—Is Half A Loaf Better Than None?, Douglas A. Kahn Jan 1988

Should General Utilities Be Reinstated To Provide Partial Integration Of Corporate And Personal Income—Is Half A Loaf Better Than None?, Douglas A. Kahn

Articles

The General Utilities doctrine is the name given to the now largely defunct tax rule that a corporation does not recognize a gain or a loss on making a liquidating or nonliquidating distribution of an appreciated or depreciated asset to its shareholders. The roots of the doctrine, can be traced to a regulation promulgated in 1919 that denied realization of gain or loss to a corporation when making a liquidating distribution of an asset in kind. No regulatory provision existed which specified the extent to which realization would or would not be triggered by a nonliquidating distribution such as a …


Distinguishing Between Capital Expenditures And Ordinary Business Expenses: A Proposal For A Universal Standard, Steven J. Greene Apr 1986

Distinguishing Between Capital Expenditures And Ordinary Business Expenses: A Proposal For A Universal Standard, Steven J. Greene

University of Michigan Journal of Law Reform

It is apparent from an examination of the various court decisions that there is no single, common standard used to distinguish between capital expenditures and ordinary business expenses. The courts are not completely to blame for this situation, however, because the Internal Revenue Code provides little guidance on the capital/ordinary distinction. This Note proposes an amendment to the Tax Code that would provide courts with a universal standard to apply in differentiating between the two types of expenditures and that best reflects the general purpose of the Code in matching income with its related expenses. Part I analyzes the historical …


Disparate Tax Treatment Of Different Types Of Business Organizations: Where Should We Go From Here?, Douglas A. Kahn Jan 1985

Disparate Tax Treatment Of Different Types Of Business Organizations: Where Should We Go From Here?, Douglas A. Kahn

Articles

If several persons wish to join together in a common enterprise in order to pool their capital or labor or some of each, they may choose among a variety of available organizational structures that will serve that purpose. The most common entity forms are partnerships (including joint ventures), corporations, and trusts. While, in its typical structure, each of those entity forms has its own distinct characteristics, the structure of such organizations often is modified by agreement so as to adopt attributes of another type of entity. Because of this, the substantive distinction between entity types is blurred.


A New Export Policy: The Foreign Sales Corporation And State Unitary Taxation Of Foreign Source Income, Reed D. Rubinstein Jan 1984

A New Export Policy: The Foreign Sales Corporation And State Unitary Taxation Of Foreign Source Income, Reed D. Rubinstein

Michigan Journal of International Law

Part I of this note will examine the structure of the FSC, and analyze its potential benefits in light of the Domestic International Sales Corporation (DISC) tax incentive. Part II discusses the use of the unitary tax as a disincentive to direct foreign investment by U.S. corporations. Finally, Part III outlines the new export policy based upon a combination of the FSC export incentive and state unitary taxation of foreign-source income. If implemented, this policy would increase export production and discourage direct foreign investment, thereby making a substantial contribution to U.S. economic well-being.


Tax Equity And Fiscal Responsibility Act Of 1982, Merlin G. Briner Jan 1983

Tax Equity And Fiscal Responsibility Act Of 1982, Merlin G. Briner

Akron Tax Journal

O N AUGUST 20, 1982, President Reagan signed into law the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the fourth piece of major tax legislation in less than seven years. Though TEFRA has been said to provide the single largest tax increase in American history, President Reagan lobbied for it not as a tax bill, but as a revenue measure which, to his mind, in no way represented a backing-off from his vaunted "supply side-trickle down" economic program. This article will discuss the implications of TERFA on both the individual taxpayer and businesses.


Tax Treatment Of Previously Expensed Assets In Corporate Liquidations, Michigan Law Review Aug 1982

Tax Treatment Of Previously Expensed Assets In Corporate Liquidations, Michigan Law Review

Michigan Law Review

This Note argues that although the Tennessee-Carolina majority adopts overbroad language and ignores established tax principles, a more careful refinement of its theory will yield the same proper result, without, in most situations, departing from accepted principles. The proper inquiry must focus first on whether the corporation has received any benefit, and then on whether that gain should be exempted by the nonrecognition provisions of section 336, or on any other basis. Part I of this Note examines these questions from a theoretical perspective, and concludes that expensed assets remaining at the time of liquidation give rise to corporate income, …


Eliminating The Capital Gains Preference. Part Ii: The Problem Of Corporate Taxation, Michael J. Waggoner Jan 1977

Eliminating The Capital Gains Preference. Part Ii: The Problem Of Corporate Taxation, Michael J. Waggoner

Publications

No abstract provided.


Eliminating The Capital Gains Preference. Part I: The Problems Of Inflation, Bunching And Lock-In, Michael J. Waggoner Jan 1977

Eliminating The Capital Gains Preference. Part I: The Problems Of Inflation, Bunching And Lock-In, Michael J. Waggoner

Publications

No abstract provided.


The Judicial Public Policy Doctrine In Tax Litigation, Michigan Law Review Nov 1975

The Judicial Public Policy Doctrine In Tax Litigation, Michigan Law Review

Michigan Law Review

This Note evaluates the merits of Revenue Ruling 74-323. First, it asserts that, while not arbitrary, the Service's resolution of the preemption issue was not mandated by the language of amended section 162 or by the relevant legislative history. Second, it maintains that it is both appropriate and procedurally feasible to apply the judicial public policy doctrine to violations of federal civil rights laws that impose no fine, imprisonment, loss of license, or other criminal penalty. The denial of a deduction in this situation would extend the public policy doctrine beyond both section 162(c)(2) and the judicial doctrine as it …


A Definition Of "Liabilities" In Code Sections 357 And 358(D), Douglas A. Kahn, Dale A. Oesterle Jan 1975

A Definition Of "Liabilities" In Code Sections 357 And 358(D), Douglas A. Kahn, Dale A. Oesterle

Articles

Internal Revenue Code section 351(a) provides that no gain or loss shall be recognized if property is transferred to a corporation solely in exchange for its stock or securities and the transferors control the corporation immediately after the exchange. If, in addition to receiving stock or securities in an exchange that would otherwise qualify for section 351 treatment, a transferor receives other property or money -- "boot" -- any realized gain is recognized up to the amount of the money and the fair market value of the other property received. The transferee corporation's assumption of the transferor's liabilities or its …


Basic Corporate Taxation, Stefan F. Tucker May 1974

Basic Corporate Taxation, Stefan F. Tucker

Michigan Law Review

A Review of Basic Corporate Taxation, 2d Ed. by Douglas A. Kahn


Kahn: Basic Corporate Taxation, John C. Chommie Jan 1971

Kahn: Basic Corporate Taxation, John C. Chommie

Michigan Law Review

A Review of Basic Corporate Taxation by Douglas A. Kahn


Mandatory Buy-Out Agreements For Stock Of Closely Held Corporations, Douglas A. Kahn Nov 1969

Mandatory Buy-Out Agreements For Stock Of Closely Held Corporations, Douglas A. Kahn

Articles

A buy-out of a shareholder's stock is a sale of his stock holdings in a specific corporation pursuatnt to a pre-existing contract. In recent years such arrangements have, deservedly, become an increasingly popular planning device for shareholders in closely held corporations; they make it possible to limit the class of potential shareholders, provide liquidity for the estate of a deceased shareholder, and establish a value for stock which has no active market. There are two popular categories of buy-out plans. If the prospective purchaser of a decedent's shares is the corporation that issued them, the plan is called an "entity …


Income Tax: Corporations--Incorporated Professional Service Organization Taxable As A Corporation; Kintner Regulations Held Invalid--Empey V. United States, Michigan Law Review Feb 1968

Income Tax: Corporations--Incorporated Professional Service Organization Taxable As A Corporation; Kintner Regulations Held Invalid--Empey V. United States, Michigan Law Review

Michigan Law Review

Lawrence G. Empey, a lawyer, was employed by the Drexler and Wald Professional Company, an association of attorneys that had incorporated in 1961 pursuant to the Colorado Corporation Code and rule 265 of the Colorado Rules of Civil Procedure. Empey began his employment with Drexler and Wald in March 1965, and in November of the same year he acquired ten shares (ten per cent) of the outstanding capital stock of the corporation. On his 1965 federal income tax return, he reported income consisting of his salary as an employee of the company for ten months and ten per cent of …


(F) Reorganizations And Proposed Alternate Routes For Post-Reorganization Net Operating Loss Carrybacks, Michigan Law Review Jan 1968

(F) Reorganizations And Proposed Alternate Routes For Post-Reorganization Net Operating Loss Carrybacks, Michigan Law Review

Michigan Law Review

Section 368(a)(l)(F) of the Internal Revenue Code (Code) defines the least complex of all corporate reorganizations-commonly known as the (F) reorganization-as "a mere change in identity, form, or place of organization, however effected." Since 1921, when the (F) reorganization first appeared in a Revenue Act, a significant amount of judicial gloss has been appended to this simple definition. To qualify as an (F) reorganization, a reorganization must result in neither a change of shareholders nor a shift in proprietary interest, and there must be a continuation of the business in the pre-organization fields of activity, using essentially the same operating …