Tax Law Commons^™

What Issues Are Fair Game In Moore V. United States?, Conor Clarke

Scholarship@WashULaw

On December 5th, the Supreme Court heard oral argument in Moore v. United States, a constitutional challenge to the mandatory repatriation tax (“MRT”) in the 2017 Tax Cuts and Jobs Act. The case raises basic questions about the scope of Congress’s taxing power, and has the potential to reshape and limit federal taxation. (Ben Silver had a nice summary of the complicated constitutional and statutory background last week, and I’ve also written about the case elsewhere. Rather than rehash those details, I will assume some basic familiarity with the case in what I say below.

Sovereign Immunity Tests Bankruptcy’S Least Contested Axioms, Deborah L. Thorne, Luke L. Sperduto

Emory Bankruptcy Developments Journal

Section 106 of the Bankruptcy Code expressly abrogates the sovereign immunity of governmental units with respect to fifty-nine other provisions of the Code. There are currently two distinct issues splitting circuit courts over the meaning of this provision. First, does section 106 waive the sovereign immunity of the Internal Revenue Service in avoidance actions brought against it by a bankruptcy trustee under section 544(b)? Second, are Native American Indian Tribes “governmental units” within the meaning of section 101(27), such that their sovereign immunity is abrogated to the extent set forth in section 106? Invoking conventional canons of statutory construction, this …

What Would Surrey Say? The Long Reach Of Stanley S. Surrey, Reuven Avi-Yonah, Nir Fishbien

Articles

Stanley S. Surrey died in 1984, two years before the enactment of the Tax Reform Act of 1986, which gave us the Internal Revenue Code of 1986 as amended. Historians have recently discovered Surrey’s work through his memoirs, published in 2022, and several articles based on the memoir and on the unpublished Surrey papers at Harvard Law School. There is no doubt that Surrey was a towering historical figure during his “Half-Century with the Internal Revenue Code.” As his protégé Donald Lubick, who served as Assistant Secretary for Tax Policy in both the Carter and the Clinton Administrations, stated, Surrey …

The Utpr And The Credits, Reuven S. Avi-Yonah

Articles

Critics of the UTPR (formerly known as the undertaxed payments rule) of the G-20/0ECD/ inclusive framework base erosion and profit shifting project's pillar 2 have focused on the potential impact of the top- up tax on U.S. environmental credits enacted in the Inflation Reduction Act(IRA, P.L.11 7-169) and on credits to encourage domestic chip manufacturing in the Creating Helpful Incentives to Produce Semiconductors and Science Act (the CHIPS Act, P .L. 117-167). They argue that Congress's ability to effectively implement its chosen policy goals is undermined because the UTPR - when applied to other parts of U.S. multinational enterprises - …

A New Framework For Taxing Cryptocurrencies, Reuven S. Avi-Yonah, Mohanad Salaimi

Articles

This Article explores the tax law challenges associated with the taxation of cryptocurrencies and offers proposals to address such challenges. The Article addresses the proper tax treatment of different cryptocurrency transactions and activities. It examines various aspects associated with the taxation of cryptocurrency through its life cycle, starting from earning cryptocurrency, through its disposal or exchange. The Article also examines the tax treatment of two special crypto events, hard forks and airdrops. Specifically, this Article describes a proposal to tax cryptocurrencies based on their unique features. It argues that various ways of earning or receiving crypto tokens (for example, mining …

Tax Benefits And Fairness In K–12 Education, Linda Sugin

Faculty Scholarship

This Article examines the tax law’s subsidies for inequality and segregation in primary and secondary education, analyzing the federal charitable deduction and education savings plans, and state tax credits for education. It argues that the tax system diverts funds from traditional public education into private education, fostering economic, racial, religious, and political separation. The tax law also operates to increase resource inequality within public education by subsidizing schools that affluent children attend. In a novel analysis, the Article contends that the jurisprudence around the charitable deduction for education—though longstanding—is legally incoherent, and argues that no deduction should ever be allowed …

Reforming The Exit Tax, Reuven S. Avi-Yonah

Articles

Code Sec. 877A was enacted in 2008 to impose a significant price on U.S. cit-izens who expatriate. But the price is not right. The quarterly data on expatri-ations (published in the Federal Register since 1998) show an increasing trendsince 2008. For example, 3,422 Americans expatriated in 2022, and the averagesince 2013 was 3,239. By comparison, between 1998 and 2012, fewer than1,000 Americans expatriated each year. This paper will discuss why the increasehappened and what Congress can do about it.

Common Sense Recommendations For The Application Of Tax Law To Digital Assets, Linda M. Beale, Jeremy Bearer-Friend, Jennifer Bird-Pollan, Samuel D. Brunson, Luís Calderón Gómez, Bryan Camp, Adam Chodorow, Mark Cochran, Lin William Cong, Matthew Foreman, Phil Gaudiano, I. Richard Gershon, Nathan C. Goldman, Jillian Grennan, Megan Justice, Young Ran (Christine) Kim, Herbert I. Lazerow, Tao Li, Lawrence Lokken, Omri Y. Marian, Orly Mazur, Stephanie Hunter Mcmahon, Tyler Menzer, Matt Metras, Ann M. Murphy, Henry Ordower, Amanda Parsons, Daniel Rabetti, Alex Raskolnikov, Tracey M. Roberts, Kerry A. Ryan, Edward A. Zelinsky

All Faculty Scholarship

In response to the Joint Committee on Taxation’s July 2023 request for comments on application of various Internal Revenue Code sections on digital assets, we propose a consistent set of rules to apply current law to digital assets. We highlight that the underlying economics and characteristics of transactions should be the primary concern for the application of rules and the valuation of digital assets. We believe any digital asset rules should (1) treat classes of digital assets with unique characteristics differently based on their economics, (2) minimize incentives for users to engage in tax-motivated structuring of transactions, and (3) allow …

The Internet Tax Freedom Act At 25, Walter Hellerstein, Andrew D. Appleby

Scholarly Works

In October 1998, Congress enacted the Internet Tax Freedom Act (ITFA), a temporary three-year “moratorium” on the enactment of new state and local “taxes on Internet access” and on “multiple or discriminatory taxes on electronic commerce.” After extending the act temporarily several times, Congress, in 2016, finally and controversially struck the language temporarily extending the act, thereby making it permanent.

With its idiosyncratic legislative history and statutory language, as well as the recent attention it has received in connection with legal challenges to digital services and analogous taxes, we thought it would be appropriate to commemorate ITFA’s 25th birthday by …

Keeping Current - Probate [Notes], Claire Hargrove, Paula Moore, William P. Lapiana, Jake W. Villanueva

Articles & Chapters

No abstract provided.

The Shifting Economic Allegiance Of Capital Gains, Amanda Parsons

Publications

Technological advances and the digitalization of the global economy have created an economic environment beyond the imagination of the original designers of the international tax system. Much scholarly attention has been paid to the question of how these economic transformations should affect which country is able to tax a multinational company's income. But which country should be able to tax capital gains income from the sale of that company's shares is an important and overlooked question.

This Article answers this question. It concludes that taxing authority over capital gains income must be reallocated to the countries in which companies conduct …

Investment Bankers And Inclusive Corporate Leadership, Afra Afsharipour

Seattle University Law Review

Few major deals happen without the engagement and advice of investment bankers. Whether a company is undertaking an initial public offering or engaging in a large merger or acquisition deal, investment bankers play a central role in advising corporate executives. Successful investment bankers are devoted to cultivating relationships with executives. And these relationships place bankers in a position to earn tens of millions in fees for their advisory and service roles in connection with corporate dealmaking. Investment bankers’ constant endeavors to nurture relationships with executives, while also maximizing their own ability to enhance fees, commonly leads to allegations of double-dealing, …

Selective Patronage, Omari Scott Simmons

Seattle University Law Review

Contemporary academic corporate governance narratives have a blind spot. They focus on institutions, rules, regulations, processes, procedures, intermediaries, and market forces. Yet, missing in this narrative, is the impact of corporate leadership. Ignoring the “black box” of corporate leadership, particularly individual actors, renders an incomplete descriptive assessment as well as potential miscalculations. The examination of key historical figures and their corporate activism provides an important lens through which to identify potential challenges and opportunities related to the contemporary ESG movement.

Generally, this essay examines corporate leadership’s potential to address socio-political issues through the prism of Civil Rights Movement activism. Specifically, …

Reframing The Dei Case, Veronica Root Martinez

Seattle University Law Review

Corporate firms have long expressed their support for the idea that their organizations should become more demographically diverse while creating a culture that is inclusive of all members of the firm. These firms have traditionally, however, not been successful at improving demographic diversity and true inclusion within the upper echelons of their organizations. The status quo seemed unlikely to move, but expectations for corporate firms were upended after the #MeToo Movement of 2017 and 2018, which was followed by corporate support of the #BlackLivesMatter Movement in 2020. These two social movements, while distinct in many ways, forced firms to rethink …

Women In Shareholder Activism, Sarah C. Haan

Seattle University Law Review

Even a cursory review of the history of American environmental, social, and corporate governance (ESG) shareholder activism reveals the presence of women leaders. This Article sketches some of this history and interrogates the role of women in the shareholder activism movement. That movement typically has involved claims by minority shareholders to corporate power; activists are nearly always on the margins of power, though minority shareholders may, collectively, represent a majority interest. This Article ascribes women’s leadership in shareholder activism to their longstanding position as outsiders to corporate organization. Women’s participation in shaping corporate policy—even from the margins—has provided women with …

#Metoo And The Corporation In Popular Culture, Brenda Cossman

Seattle University Law Review

#MeToo’s initial virtual explosion in the fall of 2017 was very much about Hollywood, with famous actresses speaking out against famous producers, media moguls and celebrities, exposing the ubiquity of sexual harassment and sexual violence in and around the entertainment industry. Since then, #MeToo has made its way into Hollywood representations without much irony. Films and television shows have explicitly taken up the #MeToo themes, exploring issues of sexual harassment and violence and its afterlives. Many television shows, from the relaunched version of Murphy Brown to Brooklyn Nine-Nine to The Good Fight have incorporated #MeToo themes into episodes exploring the …

Woke Capital Revisited, Jennifer S. Fan

Seattle University Law Review

Inclusive corporate leadership is now at the forefront of discussions related to corporate governance. Two corporate theories help to explain the rise in prominence of diversity, equity, and inclusion (“DEI”) efforts in corporate leadership. First, an expanded definition of corporate purpose which elevated the idea of the importance of stakeholders, contributed to the momentum from business and legal quarters for broader corporate inclusion. Second, the increasing publicness of corporations—the social expectation of how large, typically public corporations should act given their position of power—also led to corporations becoming more active in the DEI space. It is against this backdrop that …

Army Commander’S Role—The Judge, Jury, & Prosecutor For The Article 15, Anthony Godwin

Seattle University Law Review

Service members in the armed forces are bound by a different set of rules when compared to other U.S. citizens. Some of the normal safeguards and protections that civilians enjoy are much more restrictive for military service members, and this is generally for a good reason. Such restrictions are partly due to the complex demands and needs of the United States military. Congress and the President have entrusted military commanders with special powers that enable them to handle minor violations of law without needing to go through a full judicial proceeding. Non-judicial punishments (NJP), also known as Article 15s, are …

A Synthesis Of The Science And Law Relating To Eyewitness Misidentifications And Recommendations For How Police And Courts Can Reduce Wrongful Convictions Based On Them, Henry F. Fradella

Seattle University Law Review

The empirical literature on perception and memory consistently demonstrates the pitfalls of eyewitness identifications. Exoneration data lend external validity to these studies. With the goal of informing law enforcement officers, prosecutors, criminal defense attorneys, judges, and judicial law clerks about what they can do to reduce wrongful convictions based on misidentifications, this Article presents a synthesis of the scientific knowledge relevant to how perception and memory affect the (un)reliability of eyewitness identifications. The Article situates that body of knowledge within the context of leading case law. The Article then summarizes the most current recommendations for how law enforcement personnel should—and …

Constitutional Review Of Federal Tax Legislation, Reuven S. Avi-Yonah, Yoseph M. Edrey

Articles

What does the Constitution mean when it says that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States” (U.S. Const. Article I, Section 8, Clause 1)?

The definition of “tax” for constitutional purposes has become important considering the Supreme Court’s 2012 decision in National Federation of Independent Business v. Sebelius (“NFIB”), in which Chief Justice Roberts for the Court upheld the constitutionality of the individual mandate of the Patient Protection and Affordable Care Act (“ACA”) under the taxing …