Tax Law Commons^™

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

Law & Economics Working Papers

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 Platforms 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.

Should Tax-Free Triangular Mergers Be Eliminated?, Reuven Avi-Yonah

Articles

The tax advantages of reverse triangular mergers under section 368(a)(2)(E) are well known. They enable the acquiring corporation (P) to use up to 60 percent cash consideration to acquire the stock of target (T) through a merger with a controlled subsidiary (S), with T surviving. This amount of boot is higher than what is allowed under a B or C reorganization. Because it is a triangular merger, it avoids exposing the assets of P to the liabilities of T (unlike a direct merger), and because it is equivalent to a stock acquisition, it avoids having to transfer assets, which is …

Profit Shifting And The States: A Short Primer, David Gamage

Faculty Publications

This essay argues that corporate profit shifting remains one of the most significant challenges for U.S. state tax systems. Multinational enterprises continue to shift billions in profits to offshore tax havens, eroding state tax bases, distorting market competition, and forcing a greater reliance on more regressive taxes. We contend that the dominant "water's-edge" combined reporting method used by most states is structurally inadequate to combat modern profit-shifting techniques, which primarily involve the manipulation of intangible assets. The recent transformation of federal tax law (from GILTI to NCTI) and the global adoption of the OECD's Pillar 2 minimum tax framework create …

Chapter 9 Bankruptcy: The Solution That Causes Problems, Peter C. Alexander

Brooklyn Journal of Corporate, Financial & Commercial Law

There is a little-known form of bankruptcy called a “Chapter 9,” reserved for insolvent cities, villages, and other municipalities. Occasionally, one reads about a city or a county that has filed for Chapter 9 relief, like Detroit, Michigan, or Orange County, California; however, it is very hard to file a Chapter 9 case, in part, because existing law requires a municipality to obtain permission from its home state before it can file for relief in the U.S. Bankruptcy Court. An additional constraint is that the only option municipalities have when seeking bankruptcy relief is to file a Chapter 9 because …

Front Matter

ACTEC Law Journal

No abstract provided.

Private Functional Wildlife Trusts, Stuart W. Babcock

ACTEC Law Journal

Public wildlife law is clear: wild animals exist and are managed for the public writ large. This is a mistake. Wild animals are beings of moral concern; their lives can be good or bad, better or worse, and they should be treated accordingly. This article explores a novel legal instrument which can account for wild animals' unique interests and circumstances: private wildlife trusts, in which wild animals are the trust beneficiaries. Wildlife trusts pose distinctive management and implementation challenges. This article aims to provide a path forward for wildlife advocates seeking new tools to protect wild animals and the habitats …

Law Firms As Trust Directors, Raymond C. O’Brien

ACTEC Law Journal

The practice of permitting a third party, other than a settlor or a trustee, to give guidance to the trustee over some aspect of trust management reflects the trend of granting settlors increasing control over their transfers of wealth. In decades past, a few states enacted legislation permitting what is known as directed trusts, but in 2017, the Uniform Directed Trust Act was promulgated, seeking to provide a modicum of uniformity among the states, as wealth is now increasingly both interstate and international. Using the Uniform Directed Trust Act as a template, this Article discusses issues pertinent to directed trusts, …

Fiscal Federalism And The Fall Of Inheritance Taxes In The United States, Safia Sayed

ACTEC Law Journal

Modern scholars of American wealth transfer taxation underappreciate the system’s history—characterized at its incipience by a broad patchwork of state inheritance taxes rather than current law’s federal estate tax. Moreover, this history is not only neglected but incompletely recounted; in the last four decades of the twentieth century, a majority of states in all parts of the country suddenly and voluntarily dispensed with their inheritance taxes. This Article seeks for the first time to understand why, and in doing so, offers lessons to those attempting to optimally design a transfer tax system within a federalist system of governance. Through original …

Should The Oecd Accept Gilti As A Valid Iir?, Reuven S. Avi-Yonah

Articles

On June 26 Treasury Secretary Scott Bessent announced a deal with the G7 to accept the global intangible low-taxed income tax as a valid income inclusion rule tax and not apply the undertaxed profits rule to U.S. multinational enterprises. Bessent said a “joint understanding” among the United States and other countries will be announced soon. “OECD pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 inclusive framework in coming weeks and months,” Bessent wrote. Soon after, Senate Finance Committee Chair Mike Crapo, RIdaho, and House Ways and Means …

Nothing To Gain: The Disparate Impact Of The Capital Gains Tax Preference On Women And Persons Of Color, Ann M. Murphy

Nevada Law Journal

Tax preference provisions are scattered across the Internal Revenue Code, and the capital gains tax rate offers an enormous advantage for wealthy taxpayers. When first enacted, it was touted as eliminating the “lock-in effect” which caused investors to hold on to their investment property. Today, it is justified as encouraging investment and eliminating gains produced merely by the passage of time. The provision’s unequal benefits are hidden from the picture. Although not overtly dis-criminatory, the preference operates as a tax cut for the wealthy. Women and per-sons of color see little benefit from the lower tax rate. The difficulty of …

Proposed Cloud Services Sourcing Rule: The Right Direction, Reuven Avi-Yonah, Jeffery M. Kadet, Karen Sam

Articles

This past January, in conjunction with the issuance of a final regulation (T.D. 10022) that treats income from defined cloud transactions as income from services, Treasury and the IRS released a proposed regulation (REG-107420-24) on the sourcing of that income. In 2019 a Treasury official had asked the tax community for feedback on whether specific cloud transaction sourcing rules were needed, and the preamble to a 2019 proposed regulation asked for comments on “administrable rules for sourcing income from cloud transactions in a manner consistent with sections 861 through 865.” The feedback was “split almost evenly with regard to whether …

No Trade Wars Without Taxation -Who's To Blame, And What Comes Next?, Domenico Imparato, Reuven S. Avi-Yonah, Doron Narotzki

Law & Economics Working Papers

As tariff policy once again shapes U.S. trade strategy, this article makes a foundational claim: trade wars are, at their core, tax wars. Against the backdrop of escalating economic tensions with the United States’ trade partners, this article argues that tariffs cannot be understood apart from the fiscal architecture that sustains them. What appears to be protectionism often masks deeper structural asymmetries in the U.S. tax system.

The discussion proceeds through three interrelated dimensions: reshoring production, promoting fair trade, and raising revenue. In each, the interaction between tariffs and the tax system reveals deeper distortions. U.S. export mechanisms such as …

Smu Launches International Tax Research Initiative With Grant From The Tax Academy Of Singapore, Singapore Management University

SMU Press Releases and News

Singapore Management University (SMU) Yong Pung How School of Law (YPHSL) and Tax Academy of Singapore announced the establishment of the Singapore Tax Academy Research Initiative (STARI) which will be undertaken by YPHSL’s Centre for Commercial Law in Asia. Supported by a grant from the Tax Academy of Singapore, this initiative aims to both contribute to the international tax academic community and serve the body of tax professionals in Singapore through three main streams of work: 1) conduct world-class international tax research; 2) develop local academic capacity in taxation; and 3) build links with international thought-leaders in taxation.

Fixing A 100-Year-Old Mistake, Michael J. Graetz

Faculty Scholarship

Posing the question of international tax cooperation versus competition reminds me of multiple-choice exams in which the right answer is “all of the above.” National interests determine which dominates at any given time. And in tax competition among nations, zero is not a lower bound.

In 1918, to encourage U.S. investments abroad, the United States enacted a credit for foreign taxes paid by U.S. companies and relinquished taxing rights to most foreign-source income. With the foreign tax credit, the United States assumed sole responsibility for reducing the double taxation of its residents and citizens. As the influential economist Edwin Seligman …

Volume 48 Masthead

Seattle University Law Review

Volume 48 Masthead

Keynote Address: Community Over Constitution, Riddhi Mukhopadhyay

Seattle University Law Review

In this keynote address, Riddhi Mukhopadhyay challenges the veneration of the U.S. Constitution by highlighting its origins in exclusion and its continued failure to protect marginalized communities. Drawing from her experience in civil legal aid and gender justice, she argues that the Constitution was drafted to consolidate power among white, wealthy men and continues to reflect that legacy through racial, gender, and class-based inequities. While acknowledging the significance of constitutional amendments and landmark cases, Mukhopadhyay emphasizes that meaningful change has always come from community-led action, not top-down reform. Additionally, Mukhopadhyay calls on lawyers and legal advocates to center community, practice …

The Lost Child: A Critique On Transracial Adoption Rhetoric, Hallie Conyers-Tucker

Seattle University Law Review

Transracial adoption in the United States reflects a deeply rooted history of colonialism, cultural assimilation, and racial hierarchy, masked by rhetoric focused on the “best interest of the child.” The author critiques that rhetoric and traces how adoption practices and policies, both domestic and international, have evolved to reinforce systemic inequities. Through historical analysis of the forced adoption of Native American, Black, and Asian children, it reveals how the best interest standard has been wielded not to protect children but to uphold political and racial ideologies. The author argues that the prevailing adoption framework relies on child-saving and color-blind narratives …

A Global Reconstruction: Black Internationalism And The Human Rights Regime, Britta Redwood

Seattle University Law Review

Black American advocates for civil, political, and economic rights have long taken an internationalist approach and fostered connections with international organizations and transnational movements. This engagement has also been a generative force and played role in shaping international law. Beginning in the early years of the twentieth century, Black intellectuals and leaders, spearheaded by the NAACP and the UNIA, focused on human rights as a means for addressing and repairing the harms wrought by slavery, Jim Crow, and racism. From the Paris Peace Conference of 1919 through the Universal Declaration of Human Rights, the Genocide Convention, and the drafting of …

The Gap: Addressing The Missing Piece In HawaiʻI’S Anti-Discrimination Laws On Credit And Lending, Wendy Mun

Seattle University Law Review

This author addresses the significant gap in Hawaiʻi’s anti-discrimination laws, specifically the lack of explicit protections for LGBTQ+ individuals against credit and lending discrimination. Although federal laws like the Equal Credit Opportunity Act (ECOA) and recent interpretations by the Consumer Financial Protection Bureau (CFPB) extend some protections, they remain vulnerable to shifting federal priorities and interpretations. The author explores how other states, particularly California and Washington, have enacted robust statutory protections that clearly prohibit credit discrimination based on sexual orientation and gender identity. They argue that Hawaiʻi, despite its large LGBTQ+ population, must amend its credit protection laws to reflect …

The U.S. Drug Policy Hamster Wheel: A Critical Discourse Analysis Of Seattle’S New Drug Ordinance, Hallie Conyers-Tucker

Seattle University Law Review

The author critically examines Seattle’s new drug ordinance using Critical Discourse Analysis (CDA) to reveal how legislative language influences the policy's actual effect. Although the ordinance claims to prioritize diversion and community health, the use of permissive language such as “may” and “shall” grants broad discretionary power to law enforcement and undermines the stated intent. The author situates the ordinance within a broader historical context, highlighting how drug policy in the United States has consistently been shaped by racialized and stigmatizing narratives. Additionally, the author argues that meaningful reform requires reframing the discourse around substance use to support public health …