Tax Law Commons^™

Recent Irs Guidance Provides A Degree Of Certainty For 403(B) Plans, Gregory L. Needles, Christina Payne-Tsoupros

Journal Articles

The IRS has released long-awaited guidance expanding the availability of self correction for 403(b) plans and opening the pre-approved plan program. On Dec 12, 2012, the IRS released Rev. Proc. 2013-12, 2013-4 IRB 313, which expanded its self-correction program -- the Employee Plans Compliance Resolution System (EPCRS) -- for 403(b) plans. On 3/28/13, the IRS issued Rev. Proc. 2013-22, 2013-18 IRB 985, opening its 403(b) pre-approved plan program. The broader scope of correction under Rev. Proc. 2013-12 is a welcome relief to 403(b) plan sponsors, who may now take advantage of EPCRS to remedy mistakes and avoid plan disqualification in …

Give Taxpayers A Break: Putting The Reliance Element Back Into The Reasonable Reliance And Good Faith Defense, 28 Akron Tax J. 123 (2013), Ronald Z. Domsky

UIC Law Open Access Faculty Scholarship

This Article considers the present law regarding the accuracy related penalties pursuant to I.R.C § 6662 and the reasonable reliance and good faith defense provided for in I.R.C § 6664 using Canal as a prime example of how the courts have treated and penalized taxpayers for relying on tax advisors in planning proposed transactions and in taking positions on returns and proposes a new analysis of a taxpayer's good faith and reasonable reliance. Section II of this Article discusses the current state of the law regarding the Section 6662 penalties, the function and regulations imposed on tax attorneys in advising …

Death, Taxes, And Property (Rights): Nozick, Libertarianism, And The Estate Tax, Jennifer Bird-Pollan

Law Faculty Scholarly Articles

The primary purpose of this Article is to dispute the moral claims to post-death property rights made by libertarians when they argue against the estate tax. As I will show later in this Article, my argument does not necessarily entail enacting an estate tax, nor does it require a particular level of tax. I am merely trying to demonstrate that those who argue that the estate tax is an immoral violation of the private property rights of the deceased are mistaken. This is not to say that the estate of the deceased should necessarily pass to the government. It is …

Taxing Anxiety, Morgan Holcomb

Faculty Scholarship

In this article, I argue for a statutory change to the disparity in the taxation of damages. I submit that nearly all damages, including damages received on account of physical injury, ought to be taxable, and that juries must be apprised of tax consequences so that they can make proper adjustments to take account of these tax consequences. I will refer to this as the full inclusion proposal with jury awareness - for ease, the full inclusion proposal.

My proposed change is the more sound solution for several reasons. Full inclusion creates certainty and avoids wasteful tax gamesmanship. Furthermore, assuming …

Unwanted Exposure To Religious Expression By Government: Standing And The Establishment Clause, Carl H. Esbeck

Faculty Publications

For nearly half a century the Supreme Court has relaxed traditional standards of justiciability and permitted taxpayer standing when a claimant has invoked the Establishment Clause in a lawsuit to prohibit government funding of religion. The Court has recently cutback, however, permitting taxpayer standing only when a tax is extracted from the claimant and money is appropriated by a legislature to fund a statutory program that directs the use of public aid for religion.

Chartism And The Income Tax, Stephen Utz

Faculty Articles and Papers

Although the identity of Chartism was bound up with political demands, many in the movement consistently pressed for the repeal of duplicative taxes on consumption and the introduction of even-handed taxation of land, capital and labour. Earlier popular radicals had asked for limited tax relief. Chartist leaders from the outset saw a link between fiscal problems and the democratic deficit prolonged by the Reform Act, insisting that a broader franchise would quickly lead to a broad direct tax. Novel features of their tax agenda emerged as they transformed views first aired in radical attacks on the replacement of workers with …

Am I My Brother's Keeper? A Tax Law Perspective On The Challenge Of Balancing Gatekeeping Obligations And Zealous Advocacy In The Legal Profession, Richard Lavoie

Loyola University Chicago Law Journal

Recently the question of whether lawyers have a general ethical obligation to serve a gatekeeping function has been raised in a number of legal contexts. The reaction of the practicing bar has generally been unenthusiastic. While the assertion that a gatekeeping function should be applicable to all attorneys is a relatively modern stance, such an obligation has historically been acknowledged to various degrees in several practice areas, including federal income taxation. This Article examines the gatekeeping question—and how the practicing bar should react to it—through an examination of the gatekeeping role historically asserted as applicable to tax lawyers, including how …

Carbon Tax, Health Care Tax, Bank Tax, And Other Regulatory Taxes, Reuven S. Avi-Yonah

Book Chapters

The momentous decision of the U.S. Supreme Court to uphold the constitutionality of the Patient Protection and Affordable Health Care Act (PPACA) took sides in a long-running dispute about whether taxation can legitimately be used for purposes other than raising revenue for the government. The context was the imposition by Congress of a monetary penalty on individuals who refuse to buy health insurance. Opponents of the Act argued that calling this levy a tax added nothing to its constitutional validity since "the noncompliance penalty . .. does not meet the historical criteria for a tax" because "the clear purpose of …

Jurisdiction To Tax Corporations, Omri Y. Marian

UF Law Faculty Publications

Corporate tax residence is fundamental to our federal income tax system. Whether a corporation is classified as “domestic” or “foreign” for U.S. federal income tax purposes determines the extent of tax jurisdiction the United States has over the corporation and its affiliates. Unfortunately, tax scholars seem to agree that the concept of corporate tax residence is “meaningless.” Underlying this perception are the ideas that corporations cannot have “real” residence because they are imaginary entities and because taxpayers can easily manipulate corporate tax residence tests. Commentators try to deal with the perceived meaninglessness by either trying to identify a normative basis …

Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke

UF Law Faculty Publications

Reform of the U.S. corporate tax system is again on the agenda. Despite important differences, many current proposals share two common goals: (1) reducing the statutory corporate tax rate to improve U.S. “international competitiveness” and (2) broadening the corporate tax base by reducing or eliminating business expenditures to offset revenue losses. Given the significance of the passthrough sector and the relationship between individual and corporate taxes, however, such reforms need to be considered within a broader context. Part I of this article discusses the growing significance of the passthrough sector, which now accounts for roughly half of net business income. …

Recent Developments In Federal Income Taxation: The Year 2012, Martin J. Mcmahon Jr., Ira B. Shepard, Daniel L. Simmons

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the most recent twelve months - and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted - unless one of us decides to go …

Kite: Irs Wins Qtip Battle But Loses Annuity War, Kerry A. Ryan

All Faculty Scholarship

In Kite, the Tax Court held that a 10-year deferred annuity constituted adequate and full consideration for a transfer of family partnership interests, even though the transferor died before receiving any payments. The court also held that the liquidation of a qualified terminable interest property trust and subsequent sale of its assets constituted a disposition of the qualifying income interest for life, resulting in a deemed transfer of the entire trust under section 2519. Ryan discusses those holdings and two more issues that were not raised in the Tax Court proceeding but are clearly implicated by the Kite facts.

Utopian Visions Toward A Grand Unified Global Income Tax, Henry Ordower

All Faculty Scholarship

Over the past several decades, many countries that historically relied on progressive taxes on income, wealth, and decedents’ estates for much governmental revenue have shifted to less progressive and regressive taxes on labor and consumption. Reasons for the shift are many but include international tax competition as world economies have become increasing global. This paper assumes that progressive taxes remain the best and fairest choice for providing governmental revenue, so that a fundamental change in the scope of the progressive income tax is essential to protect progressivity.

The paper argues that the rapid growth of international cooperation on economic and …

Section 7433'S Statute Of Limitations: How Courts Have Wrongly Turned A Taxpayer's Exclusive Sword Into The Irs's Shield Against Damages , Diana Leyden

Cleveland State Law Review

Congress expressly authorized taxpayers to bring a private cause of action against the United States for economic damages caused by “unauthorized collection.” Codified as section 7433 of the Internal Revenue Code, this statute provides taxpayers with the exclusive remedy for abuses by IRS employees in connection with the collection of taxes. ... Despite the importance of section 7433 to check government unauthorized tortious collection activity, federal courts have turned section 7433 into a shield against excessive or unsupported IRS collection action, rather than maintain it as the small, but important, sword that Congress intended to give taxpayer. This Article contributes …

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

Scholarly Publications

No abstract provided.

Navigating Tefra Partnership Audits In Multi-Tiered Entity Structures, Mary A. Mcnulty, Robert D. Probasco, Lee S. Meyercord

Faculty Scholarship

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) established a unified procedure for determining the tax treatment of partnership items at the partnership level rather than the partner level. Although these rules addressed a serious and real administrative problem in the assessment of partnership level deficiencies, they also created a complex process with many new problems and potential traps. One particularly unique set of challenges arises in the context of multi-tiered entities.

Multi-tiered entities are partnerships that have a partnership or other pass-through entity as a partner. The pass-through partner is commonly referred to as a “tier,” and …

Direct Taxation, Tax Treaties And Iias: Mixed Objectives, Mixed Results, Martha O'Brien, Kim Brooks

Articles, Book Chapters, & Popular Press

Tax treaties and international investment agreements (“IIAs”) have much in common. They share the same purpose of facilitating foreign direct investment (“FDI”), and they provide similar legal protections, such as prohibitions of discriminatory treatment of non-nationals and access to binding dispute resolution. Among other objectives, they are intended to reduce risk and create security and predictability, allowing investors to plan and carry out commercially viable activities under the protection of an international legal regime . In this sense, they both contribute to ensuring the sustainability of FDI and the legal regimes that support it. There are other similarities as well. …

Technological Innovation, International Competition, And The Challenges Of International Income Taxation, Michael J. Graetz, Rachael Doud

Faculty Scholarship

Because of the importance of technological innovation to economic growth, nations strive to stimulate and attract the research and development ("R&D") that leads to that innovation and to make themselves hospitable environments for the holding of intellectual property ("IP"). Tax policies have taken center stage in their efforts to accomplish these goals and to capture a share of the income from technological innovations.

Designing cost-effective methods of supporting technological innovations has, however, become substantially more difficult as the world economy has become more interconnected. Where R&D is performed and where income is earned change in response to the nature and …

Rethinking The Penalty For The Failure To File Gift Tax Returns, Jay A. Soled, Paul L. Caron, Charles Davenport, Richard L. Schmalbeck

Faculty Scholarship

In this article, the authors argue that Congress must reform the penalty structure associated with the failure to file gift tax returns if it wants to maintain the integrity of the transfer tax system.

Section 7433'S Statute Of Limitations: How Courts Have Wrongly Turned A Taxpayer's Exclusive Sword Into The Irs's Shield Against Damages, Diana Leyden

Faculty Articles and Papers

Over twenty years ago, Congress took the extraordinary step of authorizing taxpayers to sue the Internal Revenue Service (“IRS”) for damages if the IRS engaged in “unauthorized collection action” when trying to collect a federal tax debt. For many years the IRS has generally been immune from any private action by three laws. Thus, fashioning a private cause of action against the IRS for damages was an extraordinary act. Congress expressly authorized taxpayers to bring a private cause of action against the United States for economic damages caused by “unauthorized collection.” Codified as section 7433 of the Internal Revenue Code, …