Tax Law Commons^™

The Irs Under Siege, Tanina Rostain, Milton C. Regan

Georgetown Law Faculty Publications and Other Works

This is Chapter 1 of Confidence Games (MIT, 2014).

Confidence Games provides an account of the wave of tax shelters that occurred at the turn of the twenty-first century. During this period, some of America’s most prominent law and accounting firms created and marketed products that enabled the very rich—including newly minted dot-com millionaires—to avoid paying their share of taxes by claiming benefits not recognized by law. These abusive tax shelters bore names like BOSS, BLIPS, and COBRA and were developed by such prestigious firms as KPMG, Ernst & Young, BDO Seidman, the now defunct Jenkens & Gilchrist and Brown …

Unwinding The Ceiling Rule, Leigh Osofsky

Articles

This article closely examines the unwinding of the ceiling rule. Congress and partnership tax experts historically have assumed perfect unwinding of the ceiling rule on liquidation or sale of a partnership interest. However, this assumption glosses over a significantly more complicated reality. This article closely examines the history of section 704(c) and the interaction between the ceiling rule and the rules regarding sales and liquidations of partnership interests to reveal the extent to which the assumption does not hold. By debunking long-held assumptions about the perfect unwinding of the ceiling rule, this article displays that there is no reasonable justification …

Bad Tax Shelters — Accountability Or The Lack Thereof: Ten Years Of Tax Malpractice, Jacob L. Todres

Faculty Publications

In the 1990’s and early 2000’s the tax landscape in the United States was overrun by an epidemic of tax shelters that was unprecedented. The shelters were designed and sold by seemingly reputable large accounting and law firms. The same shelters were sold to many taxpayers. They became generic, off-the-shelf, products. However, the tax shelters had no business substance. The shelters were eventually found to be invalid by the courts. In light of the invalidity of the shelters, the large fees paid for the shelters and the large damages caused by participating in the invalid shelters, there were predictions that …

The Devil In The Details: Reflections On The Tax Reform Act Of 2014, Reuven S. Avi-Yonah

Law & Economics Working Papers

The Discussion Draft of the “Tax Reform Act of 2014” (TRA14) released by US House Committee on Ways and Means Chairman Dave Camp (R-MI) on February 26, 2014 represents a major effort for fundamental and far reaching reform of US tax law. Unfortunately, while many parts of the proposal seem quite sensible as an effort to bring back the “spirit of 1986”, the international tax reform proposals are deeply flawed and based on obsolete assumptions on the world facing US multinationals in 2014.

Overall, TRA14 represents a welcome effort to propose a revenue neutral combination of base broadening and rate …

Just Say No: Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah

Law & Economics Working Papers

This article will address the question whether publicly traded US corporations owe a duty to their shareholders to minimize their corporate tax burden in any way that they may be able to get away with from a purely legal perspective. First, however, to render the subsequent discussion a bit more concrete, I will describe a recently unveiled case study of corporate tax aggressiveness.

The Geography Of Marriage, William P. Lapiana

Articles & Chapters

No abstract provided.

Unilateral Climate Regulation, James W. Coleman

Faculty Journal Articles and Book Chapters

It is now plain that decades of negotiation toward a binding global climate treaty have failed. Yet, at the same time, many nations are adopting a range of unilateral policies to address climate change. The existing literature on climate policy neglects these unilateral climate regulations because it focuses on the necessity and possible design of a multilateral climate treaty. But these domestic regulations present a unique puzzle: given that climate outcomes are determined by global emissions, and that unilateral regulations inevitably influence incentives to regulate elsewhere, how can domestic action achieve the greatest marginal reduction in global emissions? In other …

Why Wynne Worries Me, Edward A. Zelinsky

Articles

No abstract provided.

The Aftermath Of Hobby Lobby: Hsas And Hras As The Least Restrictive Means, Edward A. Zelinsky

Articles

In Burwell v. Hobby Lobby Stores, Inc., the United States Supreme Court held that the Religious Freedom Restoration Act of 1993 (RFRA) does not require closely-held corporations’ employer-sponsored medical plans to provide forms of contraception that shareholders of such corporations object to on religious grounds. The question now raised is how the President, Congress, and the departments of Health and Human Services (HHS), Treasury and Labor, ought to respond to the Hobby Lobby decision.

Apportioning State Personal Income Taxes To Eliminate The Double Taxation Of Dual Residents: Thoughts Provoked By The Proposed Minnesota Snowbird Tax, Edward A. Zelinsky

Articles

As a matter of both tax policy and constitutional law, it is time to apportion state personal income taxes to eliminate the double taxation of dual residents. Individuals who, for income tax purposes, are residents are two or more states should be taxed along the lines recently proposed by Minnesota Governor Mark Dayton for “snowbirds”: As to income with respect to which a state has source jurisdiction, that state should tax such income. As to income which two or more states tax only on the basis of residence, such states should apportion, based on the dual resident’s relative presence in …

Valuation In Light Of Uncertainty: How Stock Option Pricing Models Can Inform More Accurate Valuation Discounts For Built-In Gains, Rebecca N. Morrow

Kentucky Law Journal

No abstract provided.

Charitable Contributions Of Services: Charitable Gift Planning For Non-Itemizers, Henry Ordower

All Faculty Scholarship

This Article examines the tax treatment of charitable contributions and concludes that contributors who do not itemize their deductions (nonitemizers) should contribute their services to charity whenever possible rather than contributing cash or property. Charitable donees similarly should embrace opportunities to accept and utilize service contributions from their donor bases, give service contributions as much recognition as money or property contributions, and encourage their lower-income donors to render services rather than giving money earned with performance of services. The Article suggests that nonitemizing taxpayers are the donors who have the most “skin in the game” for charitable contributions in terms …

Understanding The Amt, And Its Unadopted Sibling, The Amxt, James R. Hines Jr., Kyle D. Logue

Articles

Four million Americans with extensive tax preferences are subject to the Alternative Minimum Tax (AMT). By taxing a broad definition of income, the AMT makes it possible to have a tax system that both encourages certain activities with generous tax preferences and maintains a semblance of distributional equity. The same rationale supports the imposition of an Alternative Maximum Tax (AMxT), which would cap tax liabilities of individuals with very few preference items and thereby afford Congress greater flexibility in designing the income tax. The original 1969 AMT proposal included an AMxT; it is difficult to justify imposing one without the …

Don't Give Up On Taxes, Linda Sugin

Faculty Scholarship

Professor Sugin discusses professor Edward D. Kleinbard's latest book, We are Better Than This (2015, Oxford) about the fiscal system and the broader implications of progressive taxation as a policy goal.

Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah

Articles

This Article will address the question of whether publicly traded U.S. corporations owe a duty to their shareholders to minimize their corporate tax burden through any legal means, or if instead, strategic behaviors like aggressive tax-motivated transactions are inconsistent with corporate social responsibility (“CSR”). I believe the latter holds true, regardless of one’s view of the corporation. Under the “artificial entity” view, such behavior undermines the constitutive relationship between the corporation and the state. Under the “real view,” such behavior runs contrary to the normal obligation of citizens to comply with the law (even absent effective enforcement). And under the …

Eitc As Income (In)Stability?, Kerry A. Ryan

All Faculty Scholarship

Congress enacted the Earned Income Tax Credit (EITC) to entice poor single mothers to work (or work more) as a means of lifting themselves out of poverty. Its design as a wage subsidy that phases out at higher earnings levels is intended to accomplish this goal. A strong labor market is crucial to the success of work-based benefit programs, like the EITC. The EITC can motivate female household heads to work (or work more) but they cannot act on that motivation if no jobs or additional hours exist. This article demonstrates that during economic downturns, the EITC wage subsidy contributes …

Tax Consequences Of Distributing Equity Compensation Rights In Divorce, Gregg Polsky, Jeffrey D. Fisher, Zachry R. Potter

Scholarly Works

This article discusses the federal tax issues arising from the equitable distribution of compensatory stock options and restricted stock in divorce. While the tax consequences of distributing vested options and shares are clear, the treatment of unvested rights is muddled. This article explains the state of the law and provides practical advice to divorce lawyers who confront these issues.

Improving Hedge Fund Governance, Houman B. Shadab

Articles & Chapters

This article provides a comprehensive analysis of the internal governance of hedge funds. The primary components of hedge fund governance are investors with a high propensity to exercise their short-term redemption rights; managers with high pay performance sensitivity, because they are being compensated with an annual performance-based fee plus earnings from their own investment in the funds they manage; sophisticated investors who demand quality governance; and short-term creditors and derivatives counterparties who provide close monitoring. Hedge fund governance needs the most improvement in the areas of performance reporting (valuation) and the timing of performance-fee calculations. Further, counterintuitively, in some circumstances …

Revisiting The Tax Treatment Of Citizens Abroad: Reconciling Principle And Practice, Michael S. Kirsch

Journal Articles

In an increasingly mobile world, the taxation of citizens living abroad has taken on increased importance. Recent international administrative developments — most notably, the weakening of foreign bank secrecy and expansion of global information sharing norms — have further raised the profile of this issue. While U.S. law traditionally has taxed U.S. citizens living abroad in the same general manner as citizens living in the United States, a number of scholars have proposed abandoning the use of citizenship as a jurisdictional basis to tax. In its place, they would apply residence-based principles — i.e., exercising full taxing rights over U.S. …

The Oecd's Flawed And Dated Approach To Computer Servers Creating Permanent Establishments, Monica Gianni

Vanderbilt Journal of Entertainment & Technology Law

As the digital economy changes the way that we do business, tax laws have been challenged to adapt appropriately to this nontraditional business method. International tax rules were developed in a different technological era. To accommodate electronic commerce, existing tax rules either have to be applied to electronic-commerce transactions, or new rules have to be developed. The Organisation for Economic Co-operation and Development (OECD) has taken the lead in studying and recommending appropriate international taxation rules for electronic commerce. This Article focuses on the original central tax issue that the OECD considered--jurisdiction to tax income from electronic commerce based on …