Columbia Journal of Tax Law最新文献

{"title":"Keep Charitable Oversight in the IRS","authors":"Philip Hackney","doi":"10.52214/cjtl.v15i2.12713","DOIUrl":"https://doi.org/10.52214/cjtl.v15i2.12713","url":null,"abstract":"          Critics are increasingly calling for Congress to remove charity regulation from the IRS. The critics are wrong. Congress should maintain charity regulation in the IRS. What is at stake is balancing power between the state, charity as civil society, and the economic order. In a well-balanced democracy, civil society maintains its independence from the state and the economic order. Removing charitable jurisdiction from the IRS would blind the IRS to dollars placed in the charitable sector increasing tax and political shelters and wealthy dominance of charities as civil society. A new agency without understanding of, or jurisdiction over, tax cannot act as the bulwark as can the IRS. The critics are right that both the states and the IRS are failing at charitable regulation. Ideally, Congress would allocate sufficient resources to the IRS. However, the long history of charity regulation shows that they are unwilling to allocate the resources to this endeavor. This, in fact, is a flaw of the proposals for a quasi-federal charitable regulatory agency. These proposals will not generate new funds but will instead spread scarce resources even thinner. Instead, Congress should acknowledge its unwillingness to adequately fund charity regulation and shrink the tax-exempt sector by removing the parts that have limited justification for charitable benefits, such as hospitals and private foundations.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"77 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141111939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"TRANSACTION-SPECIFIC TAX REFORM IN THREE STEPS: THE CASE OF CONSTRUCTIVE OWNERSHIP","authors":"Thomas Brennan, David Schizer","doi":"10.52214/cjtl.v15i1.12357","DOIUrl":"https://doi.org/10.52214/cjtl.v15i1.12357","url":null,"abstract":"            Similar investments are often taxed differently, rendering our system less efficient and fair. In principle, fundamental reforms could solve this problem, but they face familiar obstacles. So instead of major surgery, Congress usually responds with a Band-Aid, denying favorable treatment to some transactions, while preserving it for others. These loophole-plugging rules have become a staple of tax reform in recent years. But unfortunately, they often are ineffective or even counterproductive. How can Congress do better? As a case study, we analyze Section 1260, which targets a tax-advantaged way to invest in hedge funds. This analysis is especially timely because a multi-billion dollar litigation is pending about this rule.\u0000            This Article proposes a three-step approach. First, when faced with a new type of tax planning, policymakers should decide whether a response is really necessary. How harmful is the transaction? How feasible is it to target this transaction without also burdening “good” transactions, which don’t involve the same abuse? This first phase determines what we call “the normative presumption” about the transaction.\u0000            Second, Congress should define which transactions are potentially problematic. An “initial filter” should exempt transactions that clearly don’t pose the relevant concern.\u0000            Third, once a transaction is deemed to be potentially problematic, a sophisticated test is needed to check whether it actually is. Admittedly, a sophisticated test is costly to administer. This is why initial filters are needed to limit how often it is used.\u0000            Along with proposing this three-part framework, this Article offers a novel critique of a sophisticated test the government has begun using: a “delta” test, which measures how closely investments track each other. Although delta is often considered the gold standard, we show how easy it is to manipulate. The trick is to add contingencies (e.g., so the investment terminates when the price reaches a specified level). To head off this gaming, we recommend an alternative test that focuses on value instead of on changes in value–and, more generally, on enduring features instead of temporary quirks.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"112 23","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139615460","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"WORST CHOICE FOR SCHOOL CHOICE: TUITION TAX CREDITS ARE A BAD IDEA AND DIRECT FUNDING IS WISER","authors":"Michael Broyde, Anna Gabianelli","doi":"10.52214/cjtl.v15i1.12356","DOIUrl":"https://doi.org/10.52214/cjtl.v15i1.12356","url":null,"abstract":"            School choice is on the rise, and states use various mechanisms to implement it. One prevalent mechanism is also a uniquely problematic one: the tax credit. Tax credits are deficient at equitably distributing a benefit like school choice; they are costly, and they invite fraud. Instead of using tax credits, states opting for school choice programs should use direct funding. Direct funding will more efficiently achieve the goals of school choice because it can be regulated like any other government benefit, even if it ends up subsidizing religious private schools.\u0000            Tax credits’ prevalence is not inexplicable, of course. It is based on a prior legal understanding that states were constitutionally restricted from directly funding religious schools. Historically, states that wanted to include religious private schools in their school choice programs therefore felt pushed to use tax credits as their only constitutionally viable option. However, the landscape has changed. The Supreme Court held in 2022 that direct funding of religious private schools is not only constitutionally permissible, but it is required if a state funds non-religious private schools and provides no neutral basis for excluding religious ones. The initial reason for tax credits’ popularity therefore no longer exists; both tax credits and direct funding alike are constitutionally acceptable. It is time, therefore, to revisit the merits of tax credits and ask whether, knowing what we know now, it is worth disposing of them in favor of direct funding. This Article answers that question with a resounding yes. Tax credits carry significant disadvantages—specifically, inequitable distribution and difficulties in regulation—that direct funding does not. Now that the law is clear, states choosing to sponsor school choice should discontinue their use of tax credits in favor of direct funding.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"116 34","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139615131","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"SHAPING THE FUTURE OF TRANSNATIONAL TAX DISPUTE SETTLEMENT","authors":"J. Chaisse, Xueliang Ji","doi":"10.52214/cjtl.v14i1.11799","DOIUrl":"https://doi.org/10.52214/cjtl.v14i1.11799","url":null,"abstract":"           The underlying objective of the Article is to impart an insightful comprehension of mediation and its efficacy as a viable alternative for resolving transnational tax disputes. The Article posits three main arguments. Firstly, mediation, as a method of conflict resolution, offers an array of benefits, and its utilization has witnessed a surge in popularity, particularly with the recent establishment of the Singapore Mediation Convention. Secondly, in the rapidly evolving global landscape, transnational tax disputes have become increasingly intricate and arduous to adjudicate. The current system of dispute resolution, though possessing certain advantages, ultimately falls short in keeping pace with the evolving demands of the industry. The final contention is that mediation can serve as a potent tool to augment the effectiveness of the Mutually Agreed Procedure (MAP) system. In sum, the Article posits that the use of mediation in the context of tax-related disputes embodies the characteristics of soft law, owing to its imaginative and inventive nature. Additionally, as a non-binding mechanism, mediation confers increased flexibility to contending parties, particularly sovereign entities, to safeguard their respective interests. Consequently, mediation can be a valuable adjunct to the MAP system in facilitating the resolution of tax-related conflicts.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125756238","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"PROTECTIVE TAX ELECTIONS","authors":"Emily L. Cauble","doi":"10.52214/cjtl.v13i2.9795","DOIUrl":"https://doi.org/10.52214/cjtl.v13i2.9795","url":null,"abstract":"            In many instances, taxpayers can select among various available tax outcomes by simply filing (or not filing) a tax election. Oftentimes, taxpayers file tax elections on a protective basis. When a taxpayer believes that filing an election may not be necessary but files it just in case, the taxpayer files a “protective tax election.” While existing academic literature explores various aspects of tax elections, the filing of tax elections on a protective basis has not been addressed. This Article begins to fill that gap.\u0000            In some circumstances, the tax outcome that follows from making a protective tax election is not necessarily what the taxpayer intends to claim. A taxpayer might plan to claim a given tax outcome but be wary of a risk that the claim will fail. The taxpayer files a protective tax election to opt for the taxpayer’s second choice. In other words, the taxpayer uses the election to ensure that, if the taxpayer’s intended claim does fail, the alternative tax treatment imposed upon the taxpayer is more favorable than what would befall the taxpayer in the absence of the protective tax election. This Article adopts the phrase “Favorable Fallback Protective Tax Elections” to refer to protective tax elections filed under these circumstances.\u0000            The policy implications of Favorable Fallback Protective Tax Elections are numerous. The policy disadvantages of such elections include their potential to trap unwary taxpayers as well as their propensity for encouraging well-advised taxpayers to take more aggressive reporting positions. One policy advantage of such elections is the possibility that they may encourage taxpayers to reveal useful information to the IRS.\u0000            This Article explores the various uses of protective tax elections, assesses their policy advantages and disadvantages, and recommends ways to amplify their advantages and mitigate their disadvantages.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133358685","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"CONGLOMERATE SPIN-OFFS: WHETHER U.S. TAX LAW INHIBITS DECONGLOMERATION","authors":"Bryce Maxey","doi":"10.52214/cjtl.v13i2.9799","DOIUrl":"https://doi.org/10.52214/cjtl.v13i2.9799","url":null,"abstract":"            In this Note, I examine whether the complex nature of the U.S. spin-off rules and the burdens associated with successfully navigating such rules discourage conglomerates from breaking up into smaller companies through tax-free spin-offs. First, I argue that there are numerous disadvantages of conglomeration, which generally tend to outweigh any economic benefits derived from the conglomerate form. Next, I describe the statutory and nonstatutory requirements of tax-free spin-offs, evaluating particularly how each requirement may impact a conglomerate wishing to spin off one or more of its business units. Because conglomerates are usually multinational corporations, I also briefly consider the tax consequences of spinning off a foreign company. In the following section, I discuss the issuance of private letter rulings in connection with conglomerate spin-offs and assess whether the I.R.S.’s recent policy changes have accelerated spin-off activity or, to the contrary, whether they have produced a chilling effect on conglomerate spin-offs. Finally, I examine a recent example of a successful conglomerate spin-off—Liberty’s spin-off of TripAdvisor—before analyzing an example of a failed conglomerate spin-off—Yahoo’s attempt to spin off Alibaba. I conclude that, although tax-free spin-offs are occasionally unsuccessful, such failures are rare. \u0000            Even if the tax rules are byzantine and the monetary stakes are exceptionally high, conglomerates wishing to spin off business units typically manage to satisfy the requirements. Therefore, although U.S. tax law does not completely hinder deconglomeration, spin-offs are nevertheless costly. Fulfilling the spin-off requirements leads to economic inefficiencies because it entails expensive pre-spin-off restructuring and delays, as well as high transaction and friction costs.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134550914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"THE EXPANSION AND INTERNATIONALIZATION OF MANDATORY DISCLOSURE RULES","authors":"Noam Noked, Z. Marcone, A. Ka Tat Tsang","doi":"10.52214/cjtl.v13i2.9798","DOIUrl":"https://doi.org/10.52214/cjtl.v13i2.9798","url":null,"abstract":"            The Panama Papers, the Paradise Papers, and most recently the Pandora Papers have exposed the role of tax advisors, lawyers, financial institutions, and other intermediaries in enabling cross-border tax avoidance and evasion. In response, mandatory disclosure rules (MDRs), which require that intermediaries report their clients’ tax schemes, are becoming prominent tools in the international fight against tax avoidance and evasion. This Article analyzes the development of MDRs over the past four decades as a global phenomenon with three distinct phases beginning in the 1980s. The analysis reveals several trends: expansion in the types of schemes that are reportable, extension of reporting obligations to a great diversity of intermediaries, and increasing multilateralism in the effort to curb intermediary-enabled tax avoidance and evasion. This Article shows how developments in international tax policy have affected, and will likely continue to affect, the expansion and internationalization of MDRs.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124115584","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"TAXPAYER CHOICES, ITEMIZED DEDUCTIONS, AND THE RELATIONSHIP BETWEEN THE FEDERAL & STATE TAX SYSTEMS","authors":"Heather M. Field","doi":"10.52214/cjtl.v13i1.8981","DOIUrl":"https://doi.org/10.52214/cjtl.v13i1.8981","url":null,"abstract":"Almost 30 million taxpayers who itemized their federal deductions for the 2017 tax year switched to the standard deduction for 2018. The provisions of the Tax Cuts & Jobs Act (“TCJA”) that led to this shift were intended to simplify the individual income tax system. This Article’s empirical study of federal and state tax filing data, however, demonstrates that the TCJA’s simplifying effect varied state-to-state depending on whether a state obligated its taxpayers to make the same choice for state tax purposes (i.e., to itemize deductions or take the standard deduction) as the taxpayer made for federal purposes. In states that obligated taxpayers to make the same choice, taxpayers experienced at least some simplification, and tax administration by the IRS and state tax authorities became materially easier, although the IRS’s simplification benefit was dampened to some degree. In states that allowed taxpayers to make state tax choices that differed from their federal choices, the TCJA’s simplifying effect for many taxpayers was largely illusory, state income tax administration actually became more complex, and some tax enforcement costs were, in effect, shifted from the IRS to state tax authorities. Thus, this Article’s study reveals that state-level rules about tax choices undermined the federal policy goal motivating the TCJA’s itemization-related changes. \u0000A taxpayer’s choice whether to itemize is just one of many tax elections explicitly provided to taxpayers. Accordingly, this Article’s study of taxpayers’ itemization choices also serves as an example that illustrates a broader point—state-level rules about whether taxpayers must make uniform federal and state tax elections create important, but previously underappreciated, interactions between the federal and state tax systems. Policymakers cannot fully understand the policy implications of many federal tax law changes unless they appreciate these federal/state interactions. This Article helps policymakers do so.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115804083","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"SECRETS OF THE PANAMA PAPERS: HOW TAX HAVENS EXACERBATE INCOME INEQUALITY","authors":"A. Cockfield","doi":"10.52214/cjtl.v13i1.8979","DOIUrl":"https://doi.org/10.52214/cjtl.v13i1.8979","url":null,"abstract":"\u0000 \u0000 \u0000Data leaks like the Panama Papers show how tax havens provide a secret offshore financial system that privileges three main actors: malefactors, millionaires, and multinational corporations. Such leaks have provided millions of documents detailing how certain taxpayers benefit from tax haven services. Wealthy criminals use the offshore world to anonymize their financial misdeeds and, in low-income countries, drain governments of valuable resources while citizens remain in dire circumstances. High-income taxpayers exploit the offshore world to legally reduce their tax bills, deploying techniques that are not available to ordinary-income taxpayers. The leaks also show how the wealthiest members of society—the top 0.01%—are more likely to engage in the criminal offense of offshore tax evasion by hiding their fortunes in tax havens. Finally, multinational corporations set up related corporations in tax havens to reduce global tax liabilities legally, providing higher returns for wealthier shareholders. By privileging the interests of criminals, millionaires, and corporations, the offshore world is exacerbating the growing income inequality found in much of the world. This Article considers legal and policy reforms to address this challenge. \u0000 \u0000 \u0000","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132525995","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"THE CASE FOR OVER-WITHHOLDING FEDERAL INCOME TAX: BENEFITS TO LOW-INCOME TAXPAYERS","authors":"S. Kroeber","doi":"10.52214/CJTL.V12I2.8380","DOIUrl":"https://doi.org/10.52214/CJTL.V12I2.8380","url":null,"abstract":"The W-4 tax withholding form has been used by individual taxpayers for decades to calculate their tax withholdings. It is based, however, on the faulty assumption that most U.S. workers have a single source of income. This assumption has caused millions of taxpayers to incur unnecessary tax debt. The formula for calculating federal income tax withholding for employees routinely under-withholds for low-income workers who have multiple sources of income because, without substantial documentation and calculation by the employee, employers withhold as if they are the employee’s single source of income. Taxpayers may therefore see their income tax withheld at too low a marginal rate, oftentimes zero percent, and can have significant balances due on short notice at the end of the tax year.This Note documents that reality and proposes a solution. It proposes a reconception of the Form W-4 and the withholding formula through the lens of low-income filers and aims for a policy of over-withholding from those filers in order to reduce surprise tax due and related penalties. The proposed solution removes the bias towards achieving a “zero refund” from the form design by eliminating the tax-free threshold—for most filers, the equivalent of their standard deduction—from the withholding scheme. As discussed in the Note, the proposed policy would also have the benefit of increasing tax compliance, minimizing bureaucratic burdens, and providing a revenue-neutral solution for the government. This Note further suggests an extension of the proposed policy to provide a much-needed savings mechanism for low-income filers.","PeriodicalId":368484,"journal":{"name":"Columbia Journal of Tax Law","volume":"124 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114143529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}