Tax Law Commons^™

Taxing Book Profits: New Proposals And 40 Years Of Critiques, Mindy Herzfeld

UF Law Faculty Publications

This paper considers recent domestic and international proposals to use financial statement earnings as the basis for imposing additional or minimum taxes on corporate income and to reallocate corporate profits among jurisdictions. It reviews prior research undertaken in the context of previous proposals to partially substitute financial accounts for taxable income and considers how valid critiques of prior proposals are with respect to current initiatives. It concludes by noting that the concerns raised about earlier proposals have neither been fully considered nor addressed in the recent initiatives.

Taxes As Pandemic Controls, Ashley C. Craig, James R. Hines Jr.

Articles

Tax policy can play important roles in limiting the spread of communicable disease and in managing the economic fallout of a pandemic. Taxes on business activities that bring workers or customers into close contact with each other offer efficient alternatives to broad regulatory measures, such as shutdowns, that have been effective but enormously costly. Corrective taxation also helps raise the revenue required to cover elevated government expenditure during a pandemic. Moreover, the restricted consumer choice that accompanies a pandemic reduces the welfare cost of raising tax revenue from higher-income taxpayers, making it a good time for deficit closure. Current U.S. …

Artificially Low Salaries And Tax Dodging, Hern Kuan Liu, Vincent Ooi

Research Collection Yong Pung How School Of Law

In the recent case of Wee Teng Yau v Comptroller of Income Tax, the Singapore Supreme Court considered the issue of tax avoidance by professionals for the first time. The case involved a dentist, Dr Wee, who was initially employed by Alfred Cheng Orthodontic Clinic Pte Ltd (ACOC). Subsequently, he incorporated Straighten Pte Ltd (SPL), of which he was the sole director and shareholder. Dr Wee continued to provide the same dental services to ACOC's patients as he had done before. However, instead of paying Dr Wee directly for his services, ACOC paid for his services to SPL, which in …

Overcoming Political Polarization: Federal Funding Of Education Is The Key, Reuven S. Avi-Yonah

Law & Economics Working Papers

The best way of overcoming political polarization in the US (the last two elections were both decided by fewer than 100,000 votes in WI, MI, PA (2016) and WI, AZ, GA (2020)) is to reduce disparities in education. But how can we do that?

The basic problem arises from the US system of funding K-12 education from property taxes. While the picture above refers to college education, it is K-12 education that determines both college admissions and college readiness.

Thus, the only viable solution is a federal solution. As President Nixon proposed in 1972, the United States should adopt an …

Tax Experimentation, Michael Abramowicz

Florida Law Review

Random experiments could allow the government to test tax policies before they are enacted into general law. Such experiments can be revenue-neutral, with the tax authority ensuring ex post that average tax revenues received from taxpayers in the treatment and control groups are equal. Taxpayers might thus volunteer even for experiments that would broaden the tax base, for example by eliminating deductions. Continued participation by taxpayers in such experiments would indicate that the proposed reforms are efficient at least if externalities are disregarded. Non-revenue-neutral experiments raise greater concerns about horizontal inequity, but they may be helpful in addressing questions about …

Taxpayer Self-Inspections, Audits, And Optimal Tax Administration: Evidence From China, Wei Cui

All Faculty Publications

I document an important tax collection practice that is previously unknown to research on tax administration: mandatory taxpayer self-inspections. The practice emerged spontaneously across China in the 1990s and persists to this day despite having no basis in law. If taxpayers report additional liabilities after self-inspections, no penalties are imposed. Unlike tax amnesties, self-inspections are (i) backed up by the threat of government inspections with a significantly higher-than-normal audit probability, and (ii) used as a basic, routine revenue-generation technique. I show that self-inspections represent roughly 50% of the activity in China’s “tax inspection” (jicha) system and assume even greater importance …

Alternatives To California’S Sb 27: Incentivizing The Release Of Tax Returns Without Restricting Ballot Access, Matthew Tang

Loyola of Los Angeles Law Review

Donald Trump is the first President since 1977, and the first major- party nominee since 1980, to refuse to release any of his federal income tax returns. This break in tradition has led lawmakers in at least twenty- five states to propose legislation requiring presidential candidates to disclose their tax returns in order to appear on state ballots. California is one of those states. On July 30, 2017, California Governor Gavin Newsom signed SB 27 into law, effectively barring presidential candidates who have not made available for public inspection the last five years of their income tax returns from appearing …

The Tax Treatment Of Student Loan Discharge And Cancellation, John R. Brooks

Georgetown Law Faculty Publications and Other Works

The standard view is that, absent an express exclusion in the tax code, cancellation of student debt is taxable. Under this view, any immediate debt relief through administrative action would generate a tax bill. More troubling, the millions of borrowers in Income-Driven Repayment could face a “tax bomb” because of their promised loan cancellation, potentially hitting borrowers with bills for $100,000 or more in the same year that the government tells them their loan obligations have ended. These perverse outcomes are, however, based on a misreading of the tax law. The standard tax treatment of debt cancellation does not work …

Information Matters In Tax Enforcement, Leandra Lederman, Joseph C. Dugan

BYU Law Review

Most scholars recognize both that the government needs information about taxpayers’ transactions to determine whether their reporting is honest, and that third third-party reporting helps the government obtain that information. Given governments’ reliance on tax collections, it would be risky to think that information or third third-party reporting is not needed by tax agencies. However, a recent article by Professor Wei Cui asserts that “modern governments can practice ‘taxation without information.’” Professor Cui’s argument rests on two claims: (1) “giving governments effective access to taxpayer information through third parties does not explain the success of modern tax administration” because, he …

Taxation, Craig D. Bell, Michael H. Brady

University of Richmond Law Review

This Article reviews significant recent developments in the laws affecting Virginia state and local taxation. Its Parts cover legislative activity, judicial decisions, and selected opinions and other pronouncements from the Virginia Department of Taxation (the “Tax Department” or “Department of Taxation”) and the Attorney General of Virginia over the past year. Part I of this Article addresses state taxes. Part II covers local taxes, including real and tangible personal property taxes, license taxes, recordation taxes, and administrative local tax procedures. The overall purpose of this Article is to provide Virginia tax and general practitioners with a concise overview of the …

Fixing The Johnson Amendment Without Totally Destroying It, Benjamin Leff

Scholarly Articles in Law Reviews & Journals

The so-called Johnson Amendment is that portion of Section 501(c)(3) of the Internal Revenue Code that prohibits charities from "intervening" in electoral campaigns. The intervention has long been understood to include both contributing charitable funds to campaign coffers and communicating the charity's views about candidates' qualifications for office. The breadth of the Johnson Amendment potentially brings two important values into conflict: the government's interest in preventing tax-deductible contributions to be used for electoral purposes (called "nonsubvention") and the speech rights or interest of charities.

For many years, the IRS has taken the position that the Johnson Amendment's prohibition on electoral …

Afghanistan's New Vat, Part 1: Invoice Matching Or A Unitary Digital Invoice, Richard Thompson Ainsworth, Musaad Alwohaibi, Andrew Leahey, Yujin Li, Haseena Rahman

Faculty Scholarship

In the summer of 1990 two groundbreaking articles on business process re-engineering (BPR) were published, one by Thomas H. Davenport (a professor in information technology at Babson College) in the MIT Sloan Management Review, the other by Michael Hammer (a professor of computer science at MIT) in the Harvard Business Review. BPR is a management strategy that analyzes IT-intensive workflow designs and business processes within an organization.

On December 21, 2020 (Jadi 1, 1399) Afghanistan was scheduled to implement a 10% VAT. It has been delayed one year by the pandemic. When it does implement, Afghanistan will have significant workflow …

Dispute Settlement Under The African Continental Free Trade Area Agreement: A Preliminary Assessment, Olabisi D. Akinkugbe

Articles, Book Chapters, & Popular Press

The African Continental Free Trade Area Agreement (AfCFTA) will add a new dispute settlement system to the plethora of judicial mechanisms designed to resolve trade disputes in Africa. Against the discontent of Member States and limited impact the existing highly legalized trade dispute settlement mechanisms have had on regional economic integration in Africa, this paper undertakes a preliminary assessment of the AfCFTA Dispute Settlement Mechanism (DSM). In particular, the paper situates the AfCFTA-DSM in the overall discontent and unsupportive practices of African States with highly legalized dispute settlement systems and similar WTO-Styled DSMs among other shortcomings. Notwithstanding the transplantation of …

Biden's International Tax Plan, Reuven S. Avi-Yonah, Gianluca Mazzoni

Articles

The October 7 U.S. vice presidential debate highlighted fundamental differences between the two parties' approaches to the economy and tax policy. In particular, vice presidential candidate Sen. Kamala D. Harris, D-Calif., criticized the Tax Cuts and Jobs Act for "benefitting the top 1 percent and the biggest corporations of America, leading to a $2 trillion deficit that American people are going to have to pay for." She also said, "The economy is about investing in the people of our country, as opposed to passing a tax bill, which had the benefit of letting American corporations go offshore to do their …

Enough Is As Good As A Feast, Noah C. Chauvin

Seattle University Law Review

Ipse Dixit, the podcast on legal scholarship, provides a valuable service to the legal community and particularly to the legal academy. The podcast’s hosts skillfully interview guests about their legal and law-related scholarship, helping those guests communicate their ideas clearly and concisely. In this review essay, I argue that Ipse Dixit has made a major contribution to legal scholarship by demonstrating in its interview episodes that law review articles are neither the only nor the best way of communicating scholarly ideas. This contribution should be considered “scholarship,” because one of the primary goals of scholarship is to communicate new ideas.

Recovery For Causing Tax Overpayment - Lyeth V. Hoey And Clark Revisited, Douglas A. Kahn, Jeffrey H. Kahn

Law & Economics Working Papers

The question has arisen in numerous cases as to the extent to which a settlement between arms’ length parties is dispositive in tax cases of the claims on which the settlement is based. Another issue that often arises is whether the receipt of compensation for a tax payment that was incurred because of the negligence of the payor is excluded from gross income. While those two issues were central to the proper resolution of a recent case in the United States Court of Appeals for the Eleventh Circuit, McKenny v. United States, the court failed even to note one of …

House Oversight Hearing On Tax Avoidance And The Irs, Leandra Lederman

Public Testimony by Maurer Faculty

Professor Leandra Lederman testifimony for the House Oversight Hearing on Tax Avoidance and the IRS, October 13, 2020.

Click the "Download" button to read the text of Professor Lederman's prepared testimony, or view the video of the fulll hearing below.

To view just professor Lederman's testimony, click HERE

The Province Of (Substantive) Legitimate Expectation In Nigeria's Tax Administration: A Law And Policy Evaluation, Okanga Ogbu Okanga

LLM Theses

The interplay between tax administration and legitimate expectation has been the subject of debate and scholarship in many jurisdictions. Questions around how much discretion tax authorities should be allowed and whether courts should uphold the (substantive) legitimate expectations of taxpayers – by implication, bind the tax authority – when the tax authority reverses itself on a guidance, promise, position, etc. feature prominently in this conundrum. In Nigeria, the disposition of both the tax authority and the court appears to lean towards outright dismissal of legitimate expectation. Put differently, it seems that the tax authority does not consider itself bound by …

Tax Considerations For Funds Structuring In Asia, Vincent Ooi

Research Collection Yong Pung How School Of Law

Tax considerations play a major role in the decisions of fund managers of where to base their funds. The highly mobile nature of capital has resulted in tax competition, leading to several host jurisdictions for funds in Asia (Hong Kong, Singapore, Labuan, and the BVI) having very similar tax characteristics in terms of low effective corporate income tax rates; no capital gains taxes; no exit taxes; a single tier of taxation; and generally no withholding taxes. Other ways in which jurisdictions have attempted to distinguish themselves include a strong Double Tax Agreement network, certainty on the taxation of the carried …

Two More Plumbers Look At The Leak: Purchasing An Annuity In An Institutionalized Spouse's Ira That Is Irrevocably Payable To The Community Spouse May Work For Medicaid Purposes But Runs A Risk Of Adverse Tax Treatment, David M. English, Ron M. Landsman

Faculty Publications

A recent article in NAELA ]ournal addressed the problem of how to maximize Medicaid benefits and minimize the tax burden for an institutionalized spouse who has a substantial individual retirement account (IRA) in a state where the account is not exempt. The primary problem is that most strategies require that the IRA be cashed out, triggering income tax liability for the entire withdrawal for that tax year. Once the IRA is cashed out, the proceeds can be spent down in any number of ways; one option is for the community spouse to purchase a Medicaid qualified annuity (MQA). The proposed …