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December 19, 2011
On Tax Increase Limitations: Part I -- a Costly Incoherence
Special fiscal requirements are a common feature of state constitutions.
December 12, 2011
The Anti-Injunction Act and the Individual Mandate
The Supreme Court will soon hear challenges to the constitutionality of the individual mandate of the healthcare reform legislation.
December 5, 2011
The Best of 2011
State Tax Notes is pleased to announce its first annual awards edition.
November 30, 2011
International Tax Enforcement Continues to Rise
There are many multilateral developments regarding international tax enforcement, especially regarding the OECD, the Financial Stability Board (FSB), and the Financial Action Task Force on anti-money-laundering (FATF).
November 30, 2011
Let the Sunshine in: The Age of Cloud Computing
There are probably as many bad metaphors about the state and local tax implications of cloud computing as there are articles on the subject.
November 17, 2011
Health Plan Affordability Test Focus of IRS Hearing
An unofficial transcript is available of a November 17 IRS hearing on proposed regulations (REG-131491-10) on the health insurance premium tax credit, providing guidance to individuals who enroll in qualified health plans through affordable insurance exchanges and to exchanges that make plans available to individuals and employers.
November 11, 2011
The Home Bathroom Deduction
On August 17 Tax Court Judge Harry A. Haines handed down his decision in Bulas v. Commissioner.
November 11, 2011
The Swiss-U.S. 'Turnover' Ground Rules: A Technical Update
This article provides a technical update in light of many media reports that the ongoing negotiations between the U.S. and Swiss governments will purportedly result in a global tax settlement agreement with an immediate turnover of Swiss banking data otherwise protected by Swiss bank secrecy law.
November 11, 2011
Estate Tax Relief and the Erosion of Capital Gains Tax Revenues
One consequence of Congress raising the estate tax exemption to $5 million is that far fewer estates will be subject to it.
November 8, 2011
The Federal and State Taxation of Domestic Partner Benefits
The definition of family is changing rapidly in America. The traditional model of an opposite-sex married couple with children is declining as more and more opposite-sex and same-sex couples are living together without marrying.
November 4, 2011
User Fees Versus Taxes
State tax lawyers have a panoply of weapons to deploy against state taxes, but may not be as ready to discern that a tax is really a user fee, or to attack the fee once identified.
November 4, 2011
Check-the-Box and Hybrids: A Second Look at Elective U.S. Tax Classification for Foreign Entities
In the waning days of 1996, the U.S. Treasury and the IRS issued the final check-the-box regulations, which would go into effect on January 1 of the following year.
October 31, 2011
To Hell With Tax Reform -- for Now
I hate to drag you away from your fascination with Herman Cain's 999 plan and Rick Perry's flat tax, but if we are going to make real progress, we can't fixate on every overhyped, half-baked tax slogan that comes along.
October 25, 2011
Time for a Little Class Warfare?
The evidence is overwhelming that America's rich are getting much richer while income growth for low- and middle-income earners has stagnated.
October 25, 2011
Not Getting Enough Respect: State and Local Tax in Law Schools
Only 80 of the 199 law schools accredited by the American Bar Association regularly offer a state and local tax law course. The profession and academia should both be ashamed.
October 21, 2011
Tax Reform 1986: A Silver Anniversary, Not a Jubilee
The Tax Reform Act of 1986 was an important achievement, but it has not proved lasting. Nor did it receive much public support.
October 19, 2011
Taxes, Free Expression, and Adult Entertainment
The interaction of morality and money produces interesting results. One manifestation is legislation in some states and proposals in others to impose higher taxes on "gentlemen's show lounges" (OK, I mean strip clubs) and other venues of adult entertainment.
October 18, 2011
Taxing Groupon-Type Coupons: New York Tax Department Guidance
Have you hopped on the social media bandwagon yet and started purchasing online discounted coupons for such varied things as a zip-line adventure, a dental exam and cleaning, or a meal at your local Italian eatery?
October 17, 2011
Tax Analysts Exclusive: Conversations: Bill Bradley
This year marks the 25th anniversary of the 1986 reform effort. Bradley recently sat down with Tax Analysts' Meg Shreve to discuss the potential for another major overhaul of the tax code.
October 17, 2011
Business Tax Reform From the Bottom Up
The relentless chatter about relieving tax burdens on small business might lead you to believe Congress is giving top priority to helping the beleaguered entrepreneur. But that inference is false.
October 13, 2011
Spangler Offers Perspectives on Four Decades With Idaho, MTC
When Ted Spangler won the Multistate Tax Commission's 2011 Paull Mines Award, it was the culmination of four distinguished decades in the state and local tax field.
October 11, 2011
Are Capital Gains Double Taxed?
The very rich get most of their income from capital gains.
October 11, 2011
California's Once and Future 'Amazon' Law
California's recently enacted "Amazon" law is important for three reasons.
October 6, 2011
Rethinking the U.S. Estate Tax on Nonresident Aliens
The U.S. federal estate tax rates are among the highest in the world.
October 3, 2011
Last Class Before the Deficit Exam
OK, class, settle down. Judging from the less than stellar work you've handed in so far, it looks like most of you have been studying cable TV news instead of the assigned reading. I'm not optimistic about your chances on next week's exam.
September 30, 2011
A Two-Pronged Approach to Reforming International Corporate Taxes in the U.S.
The current system for taxing the income of controlled foreign subsidiaries of U.S. corporations -- foreign-source income -- makes no sense for U.S. multinational companies or the U.S. Treasury.
September 28, 2011
The Small Business Love-Hate Relationship With Corporate Tax
A small business can easily avoid double tax and retain all-important liability protection either by incorporating under state law and adopting subchapter S status for federal tax purposes or by forming a limited liability company under state law and filing as a partnership.
September 28, 2011
International Tax Competition: The Last Battleground of Globalization
The topic of globalization and tax is an ancient one. Writings on the subject date back at least 2,500 years to the work of Herodotus, the ancient Greek scholar who coined the term "history."
September 28, 2011
Excluding Expert Valuation Testimony
In its 2003 partnership return, Boltar claimed a charitable deduction for a conservation easement on property it owned in Lake County, Ind.
September 28, 2011
How Valuable Is a Tax LLM? It Depends
Conventional wisdom suggests a tax LLM degree can open professional doors for an aspiring tax lawyer -- and that more are pursuing that degree in the sluggish economy -- but not all firms value the degree equally.
September 21, 2011
Economic Substance Doctrine and Tax-Motivated Investments
In its recent decision in Superior Trading, the Tax Court addressed a distressed asset loss importation transaction known as DADs or DATs.
September 21, 2011
Stevens: Is Zealous Advocacy Obstruction of Justice?
The government has recently increased criminal enforcement against attorneys and other professionals.
September 21, 2011
When Surrender Sounds Like Victory
Billy, the school bully, threatens meek and mild Jason every morning. In response to the threat, Jason hands over his lunch money.
September 21, 2011
Should We Raise Tax Rates on Wealthy Employers?
While the big shots in Washington politics were on vacation, the hardworking economists at Treasury released a technical study shining new light on the employment effects of allowing the top individual rates to return to 36 and 39.6 percent.
September 21, 2011
The Myth of Mom-and-Pop Businesses
It is common practice for politicians and the press to use the term "small business" to describe passthrough businesses -- sole proprietorships, partnerships, and subchapter S corporations.
September 1, 2011
Is There Anything Wrong With the Guidance Process?
On July 22 Tax Analysts held a roundtable discussion of the tax guidance process run by Treasury's Office of Tax Policy (OTP) and the national office of the IRS Office of Chief Counsel (OCC). The roundtable discussion was pretty calm as those things go.
August 31, 2011
Tax Reform: Reduce the Corporate Income Tax Rate and More
The U.S. corporate income tax rate is too high. In an increasingly global economy, we are the odd man out. Among all the OECD countries, we have the second highest nominal marginal tax rate.
August 31, 2011
How to Save the Corporate Income Tax
The honor of offering the Richard Crawford Pugh Lecture is increased by my long friendship with Dick.
August 31, 2011
Effects of 2004 Int'l Tax Holiday, Recommendations Going Forward
In late 2004 Congress enacted the American Jobs Creation Act of 2004 (Jobs Act, P.L. 108-357), enabling U.S. firms to repatriate foreign profits at a reduced tax rate for one year.
August 25, 2011
Illusory Partnership Interests and the Anti-Antiabuse Rule
In this report, the authors examine the continuing vitality of the Culbertson standard for determining the validity of a partnership for federal income tax purposes. In recent litigation, notably Castle Harbour, taxpayer's counsel have argued that section 704(e)(1) validates partner status based solely on ownership of a capital interest, making Culbertson essentially irrelevant for capital-intensive partnerships.
August 17, 2011
Why Liberals Should Learn to Love the Debt Debate
The debt limit crisis is the best thing to happen to liberalism in 30 years. It's a manufactured crisis, of course.
July 25, 2011
Foreign Tax Profile of Top 50 U.S. Companies
In 2010 America's 50 most profitable companies generated nearly $600 billion of profits before taxes -- 38 percent of all U.S. profits.
July 20, 2011
Tax Analysts Exclusive: Conversations: Prof. Charlotte Crane
Charlotte Crane is a law professor at Northwestern University School of Law, where she teaches corporate tax and tax policy in both the JD and graduate tax programs and frequently conducts an annual colloquium for academic tax scholarship.
July 19, 2011
Tax Expenditure Reform: Some Common Misconceptions
The debate on tax reform has focused almost exclusively on tax expenditures.
July 19, 2011
What the Debt Limit Debacle Teaches Us About Tax Reform
Tax reform will not be a part of the legislation that raises the debt limit.
July 13, 2011
Taxing GE and Other Masters of the Universe
As The New York Times reported in a page one story, General Electric Co. is a very rich company that pays very little income tax.
July 11, 2011
Tax Background Key to Bachmann's Presidential Pitch
It's a notion with a certain logic: Who would be better to spearhead top-to-bottom tax reform than a former tax attorney?
July 8, 2011
When Is the Economic Substance Doctrine Relevant?
In this column, Jackel reviews the recent Third Circuit Schering-Plough decision and attempts to determine whether the court's express refusal to address the lower court's economic substance analysis provides any guidance for future cases under new section 7701(o).
July 5, 2011
A Cosmic Visitor's Take on Tax
It is a human tendency to assume the world we are born into is as it should be -- a Panglossian assumption that colors our understanding of the abstract, like tax policy.
June 30, 2011
Canal: Casting Stones
In this report, Browne argues that the Tax Court in Canal erred in holding that reliance on a tax adviser is per se unreasonable when the adviser was involved in planning the transaction and had a financial interest in its outcome.
June 30, 2011
The Repeal of Graduated Corporate Tax Rates
Section 11 applies a bracket system to corporations, imposing lower tax rates on lower amounts of income. Similarly, section 1 applies a bracket system to individuals, which is intended to adjust the tax rate to the taxpayer's standard of living.
June 27, 2011
'Stateless Income' Is Key to International Reform
Next time you hear multinationals talk about international tax reform -- which they equate to an exemption system that does not deny deductions for expenses allocable to foreign income -- notice that there is no mention of profit shifting.
June 21, 2011
Fixing the Federal Wealth Transfer Tax System
According to the old chestnut attributed to Benjamin Franklin, nothing in life is certain other than death and taxes. For estate planners -- whose profession is concerned with the combination of the two -- quite the opposite is true.
June 20, 2011
Close Encounters of the Tax Myth Kind
In this column, Johnston addresses several tax myths, including the economic effects of the Bush tax cuts, the number of jobs created by targeted tax benefits, and how Formula One racing will help the Texas economy.
June 17, 2011
I'm Not a Tax Lawyer, but . . .
Most tax advisers have encountered this phrase, usually as a preface to a real zinger. It may be uttered by litigation lawyers, corporate lawyers, real estate brokers, bankers, structured settlement brokers, or other professional -- or not so professional -- people.
June 14, 2011
The Top Total Income Tax Rate on Corporate Profits, 1913-2011
Corporate profits are taxed under both the corporate and individual income taxes.
June 6, 2011
Why Not Tax Large Passthroughs as Corporations?
Most large profitable American businesses must pay the corporate income tax. Others are completely exempt from it.
June 3, 2011
Deference to Tax Agencies' Interpretation of Their Regulations
Tax is statutory. No one owes tax unless a statute or ordinance imposes that liability. Thus, all tax cases begin with the applicable statute.
June 2, 2011
Earl vs. Seaborn: Did the Fruit Fall Too Far From the Tree?
In 1948 Congress created the joint filing status to try to create tax equality between married couples in community and non-community-property states.
May 31, 2011
Economic Substance Doctrine Felonies
The economic substance doctrine is so obscure that Congress has been unable to define when it applies and what exactly it is.
May 26, 2011
Friedland: Did the Tax Court Blow Its Whistleblower Jurisdiction?
Well, the Tax Court did it again. Congress keeps giving the court new areas of jurisdiction, but it seems set in its ways -- continuing to treat all tickets to the Tax Court alike.
May 25, 2011
Why Obama's Corporate Tax Reform Will Fail
A large reduction in the U.S. corporate tax rate is inevitable. It can't miss when proponents have an easy-to-understand talking point: The United States will soon have the highest corporate tax rate in the world.
May 25, 2011
1986-Style Tax Reform: A Good Idea Whose Time Has Passed
The Tax Reform Act of 1986 is widely viewed as one of the great success stories of modern legislation. Cynics tried their best to undercut its appeal, and nearly everyone understood that the politics of enactment had required it to be quite imperfect.
May 20, 2011
Building on Wyden-Coats: Making International Tax Reform Possible
In this column, Durst praises the recently introduced Wyden-Coats reform proposal, but he suggests ways it might be enhanced to increase the likelihood of enactment, particularly regarding its international provisions.
May 20, 2011
Corporate Meltdowns Caused by Compensatory Stock Options
Tax contributes to high-risk investments that cause meltdowns when the high risk turns into losses. This proposal would end the exemption of compensatory stock options from the section 162(m) $1 million limit on compensation deductions.
May 12, 2011
DOJ Won't Argue for Chevron Deference for Revenue Rulings and Procedures, Official Says
The Department of Justice will no longer argue for Chevron deference for revenue rulings and revenue procedures, said Gilbert Rothenberg, appellate section chief in the DOJ's Tax Division.
May 12, 2011
Ryan's $34 Trillion Tax Folly
Johnston examines how the cost shifting in the Ryan budget plan would increase costs for individuals by many times more than the amount of taxes saved, creating vast new inefficiencies.
May 12, 2011
Defining 'Partnership' for Federal Tax Purposes
This report examines the case law and statutory history of the terms "partner" and "partnership," including the seminal Supreme Court cases of the late 1940s, the 1951 amendments that added the language now codified at section 704(e)(1), and the check-the-box regulations added in 1996.
May 3, 2011
Corporate Meltdowns and the Deduction of Credit-Risk Interest
Common stock in a corporation has a position like that of an option holder if the corporation invests in high-volatility assets.
May 2, 2011
GE's Response to Johnston
Gary Sheffer responds to David Cay Johnston's article that compared the tax rate of General Electric Co. with that of The New York Times, saying that GE's tax rate was low because of the global financial crisis.
April 29, 2011
Challenging Legal Issues Confronting VAT Regimes
In our brief foray into the extensive body of case law, we thought it would be useful to focus on a few areas of current controversy that raise fundamental issues confronting contemporary VAT regimes: treatment of single-entity or branch-to-branch transactions, judicial restraints on VAT structure planning, and treatment of customer loyalty rewards programs
April 25, 2011
Return to Sherwood Forest
Thank goodness for House Budget Committee Chair Paul Ryan, R-Wis.
April 22, 2011
Legal Defense Funds as Political Organizations
This report lays out the advantages of, and difficulties with, registering a congressional legal defense fund as a section 527 organization.
April 15, 2011
How U.S. Tax Law Encourages Investment Through Tax Havens
David S. Miller is a partner with Cadwalader, Wickersham & Taft LLP. In this report, he catalogues the many ways that federal and state tax law encourages taxpayers to operate through foreign tax haven companies to reduce their federal and state tax liabilities, and he suggests some changes to the law that would eliminate these incentives.
April 11, 2011
Regressive Tax Inc
Just as the individual income tax falls more heavily on the affluent than the super-rich, so too does the corporate income tax. The giants of American business pay at lower effective cash rates than much smaller corporations.
March 29, 2011
Corporate Reform: Time to Think Outside the Box
Thanks to President Obama, corporate tax reform has gone prime time.
March 4, 2011
Schizophrenia Around the Country
Are the states in fiscal trouble or not? Minnesota faces a biannual budget deficit of $6.2 billion. Its new governor, Mark Dayton (D), is proposing to raise the state's top income tax rate to 13.95 percent, which will be the highest in the nation.
February 16, 2011
Winners and Losers in Corporate Tax Reform
More and more, the feeling here inside the Beltway is that the U.S. corporate tax rate should be about 25 percent.
February 10, 2011
The State of Tax Guidance After Mayo
Some practitioners are fearing the worst following a recent Supreme Court decision prescribing greater judicial deference to Treasury and IRS administrative guidance, but the decision is unlikely to result in significant changes to the rulemaking process or different judicial outcomes.
February 8, 2011
The VAT Reader: What a Federal Consumption Tax Would Mean for America
Tax Analysts is proud to announce The VAT Reader: What a Federal Consumption Tax Would Mean for America, a special publication that is available for free as a PDF, ePub, or hard copy while supplies last.
February 3, 2011
Tax Refunds: More for Taxpayers, Less for Bankers
January 13 was an unusual day for tax policy in America, one of the few times that the poor, the desperate, and the innumerate won a victory over the increasingly powerful forces of corporate socialism in Washington.
January 4, 2011
The 2010 Tax Person of the Year
2010 was no ordinary year for taxpayers and practitioners.