Taxation-Federal Commons^™

If A Tuition Reduction Is Taxable, What’S The Measure Of Income?, Erik M. Jensen

Faculty Publications

This article considers what the measure of income should be if a tuition reduction is taxable, and it challenges the idea that an educational institution’s stated tuition figure should control in that determination. It’s the value of the reduction, not the dollar difference between sticker price and the tuition actually paid by a particular student, that is potentially income, and the article suggests one reasonable method that might be used to determine that value. Although the focus of the article is on tuition reductions, the argument applies just as well to other situations in which a price reduction (or what …

The Misconstruction Of The Deductions For Business And Personal Casualty Losses, Jeffrey H. Kahn

Scholarly Publications

Losses suffered on an individual's personally used property generally are not deductible. Even after the changes made by the 2017 Tax Cuts and Jobs Act, in two circumstances an exception to this rule applies when "such losses arise from.fire, storm, shipwreck, or other casualty, or from theft." The principal issue that arises is determining the meaning of the term "other casualty." Taking what they deemed to be the common elements in the three explicitly identified casualties, the courts and the Internal Revenue Service determined that an event will qualify as an "other casualty" only if it is "sudden," "unusual," and …

Tax 2018: Requiem For Ability To Pay, Alice G. Abreu

Loyola of Los Angeles Law Review

Enactment of the TCJA was followed by a mad dash to understand its effects. The speed and process of enactment left no time for serious attempts to analyze whether the TCJA transforms the income tax system in any fundamental way. This Essay is a first step in that analysis. Although some of the most important changes I discuss are set to expire or phase out after 2025, understanding their policy implications is important, not only because they are the law now but also because Congress may extend them, perhaps indefinitely.

The TCJA has changed the way the tax system operationalizes …

Effects Of The New Sourcing Rule: Eci And Profit Sharing, David L. Koontz, Jeffery M. Kadet

Articles

For the first time in eons, Congress has seen fit to change a basic rule for the sourcing of income. The Tax Cuts and Jobs Act (P.L. 115-97) minced few words in its addition of a single sentence to section 863(b) that applies to sales or exchanges of inventory property (1) produced in whole or in part by the taxpayer in one country, and (2) sold or exchanged in another country. The United States can either be the country where the inventory property is produced or the country where it is sold.

With this change, income from the sale of …

Letter From Jeffery M. Kadet And David L. Koontz To The Internal Revenue Serv. (June 5, 2018) On Notice 2018-43, 2018-2019 Priority Guidance Plan Regulatory And Ruling Guidance Concerning Various International Tax Issues, Jeffery M. Kadet, David L. Koontz

Articles

A principal focus of our suggestions is the modernization and updating of regulations as well as providing guidance that will affect the many multinational corporations (MNCs) whose operations take place partially or wholly within the U.S. Many of these MNCs have embarked on complicated and legalistic schemes whose primary purpose is to shift profits without any real operational changes and to record those profits within zero- and low-taxed foreign members. Importantly, this includes not only U.S.-based MNCs, but also the many inverted MNCs that structured their inversions to remain untouched by the §7874 anti-inversion rules.

Sourcing Rule Change: Manufacturing And Competitiveness, Jeffery M. Kadet

Articles

In this article, Kadet explains how the Tax Cuts and Jobs Act favors foreign-based manufacturers selling through a U.S. sales branch over comparable U.S. manufacturers, and he recommends legislative fixes.

Harmonizing Federal Tax Law And The State Legalization Of Marijuana, Daniel Rowe

Loyola of Los Angeles Law Review

No abstract provided.

The Constitutionality Of A National Wealth Tax, Dawn Johnsen, Walter Dellinger

Indiana Law Journal

The United States needs innovative approaches to help rebuild foundational, shared understandings of American democracy, the American Dream, and opportunity and fairness. Tax policy provides one central context in which collective judgments about fundamental values help form national identity. We believe that a national wealth tax (that is, a tax on individuals’ net worth) should be among the policy options under consideration to support vital infrastructure, social service, and other governmental functions. Although not a new concept, a wealth tax may be an idea whose time has come, as inequality soars toward record highs.

Our aim in this Essay is …

Is Capping The Deduction For State And Local Taxes Constitutional?, Erik M. Jensen

Faculty Publications

In the Tax Cuts and Jobs Act of 2017, Congress capped the deduction available for state taxes not attributable to businesses or investments, and representatives of high-tax states are challenging the constitutionality of that cap—which, they argue, was motivated by animus. This article considers several possible rationales for a challenge—intergovernmental tax immunity, political animus in general, the uniformity rule, and equal protection—and concludes that the case for overturning the cap on constitutional grounds is weak at best.

Foreword – The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy, Michael J. Graetz

Faculty Scholarship

By lowering the corporate tax rate from 35% to 21%, the 2017 tax legislation brought the U.S. statutory rate into closer alignment with the rates applicable in other Organisation for Economic Co-operation and Development (OECD) nations, thereby decreasing the incentive for businesses to locate their deductions in the United States and their income abroad. Its overhaul of the U.S. international income tax rules simultaneously reduced preexisting incentives for U.S. multinationals to reinvest their foreign earnings abroad and put a floor on the benefits of shifting profits to low-tax jurisdictions. The 2017 legislation also added an unprecedented, troublesome lower rate for …

The Future Of The New International Tax Regime, Rosanne Altshuler, Fadi Shaheen, Jeffrey Colon, Michael Graetz, Rebecca Kysar, Susan Morse, Daniel Shaviro, Richard Phillips, Danielle Rolfes, David Rosenbloom, Stephen Shay, Steven Dean

Fordham Journal of Corporate & Financial Law

No abstract provided.

Wayfair And The Retroactivity Of Constitutional Holdings, David Gamage, Adam Thimmesch, Darien Shanske

Articles by Maurer Faculty

This essay analyzes the issue of retroactivity with respect to the Supreme Court case of South Dakota v. Wayfair.

Four Walls Do Not An Eating Facility Make: Arguing Against The U.S. Tax Court's Unprecedented Jacobs V. Commissioner Decision, Brendan Zwaneveld

Loyola of Los Angeles Law Review

No abstract provided.

Abandoning Realization And The Transition Tax: Toward A Comprehensive Tax Base, Henry Ordower

All Faculty Scholarship

The Tax Cuts and Jobs Act of 2017 imposed a tax, the “transition tax,” on as much as 31 years of undistributed, accumulated corporate income. This article focus on that transition tax as it evaluates thefunction and constitutionality of the tax and considers whether the transition tax might serve as a model for addressing the broader problem of deferred income in the United States. The article views the transition taxas joining the expatriation tax and other mark to market inclusion provisions in abandoning any pretext that there is continued vitality in the realization principle as something more compelling than any …

The Economics Of American Higher Education In The New Gilded Age, Paul Campos

Publications

No abstract provided.

It Takes A Village: Empowering The Dead Broke Parent, Wendy Tolson Ross

Faculty Works

No abstract provided.

The Federal Law Of Property: The Case Of Inheritance Disclaimers And Tenancy By The Entireties, David G. Carlson

Articles

The Supreme Court has issued two disturbing tax opinions which disrupt the notion that “property” (when used in federal statutes) refers to state-law notions. In Drye v. United States, the Supreme Court pierced the Arkansas fiction that inheritance disclaimers are retrospective in effect. Thus the Internal Revenue could claim that a tax lien attached to the pre-disclaimer inheritance. Disclaimer could not defeat this lien. In United States v. Craft, the Supreme Court pierced the Michigan fiction that a tenancy by the entireties does not belong to the individual spouses but, rather, the a corporate “marital” entity that is a separate …

Improving Tax Rules By Means-Testing: Bridging Wealth Inequality And “Ability To Pay”, James M. Puckett

Oklahoma Law Review

No abstract provided.

Failed Charity: Taking State Tax Benefits Into Account For Purposes Of The Charitable Deduction, Roger Colinvaux

Scholarly Articles

The Tax Cuts and Jobs Act (TCJA) substantially limited the ability of individuals to deduct state and local taxes (SALT) on their federal income tax returns. Some states are advancing schemes to allow taxpayers a state tax credit for contributions to a charity controlled by the state. The issue is whether state tax benefits are deductible as a charitable contribution for purposes of the federal income tax. Under a general rule of prior law—the full deduction rule—state tax benefits were ignored for purposes of the charitable deduction. If the full deduction rule is applied to the state workaround schemes, then …

Defending Place-Based Philanthropy By Defining The Community Foundation, Roger Colinvaux

Scholarly Articles

The article proceeds in three parts. Part I of the article provides a historical overview of the tax-exempt status of community foundations, from inception to the present day. Part II shows how the settled wisdom on the tax status of community foundations has been upset by the rise of the nationally sponsored donoradvised fund, the extent to which community foundations are different from national donor-advised fund sponsors, and whether it would be beneficial to define the community foundation for tax siders the possible content of a definition of the community foundation in the Internal Revenue Code in terms of their …