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TaxProf Blog

Paul L. Caron
Dean
Pepperdine Caruso
School of Law

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  • Paul Caron

    One-Month Anniversary of TaxProf Blog

    Saturday, May 15, 2004

    Today marks the one-month anniversary of TaxProf Blog. It looks like we are here to stay, as we have been blown away by the number of visitors (27,000+, presumably not all of whom came to see Jack Bodganski with his shirt off). In blog parlance, that already makes TaxProf Blog a Flappy Bird in the TTLB Blogosphere Ecosystem (#8 of 20 blog categories ranked by traffic). Thanks for the many words of encouragement and support, as well as the helpful suggestions on how to improve the site. (And feel free to keep both coming!)

    We are now listed among the top 10-15 law professor blogs on various sites, including LawSchool.com, JD2B, and the Law Professor Blog Honor Roll. We are grateful for the many kind comments in the blogosphere, including Iowa Professor Tung Yin’s prediction that TaxProf Blog “will become the tax equivalent of Larry Solum’s Legal Theory Blog.” Our favorite review is from netlawblog:

    [T]ake a look a fairly new weblog, TaxProf Blog. It is interesting because it aims at a fairly narrow audience, tax academics, and is written at a rather high level. I think that it represents yet another advance of weblogs from personal diaries to endeavors with greater intellectual substance…. Steve Bainbridge’s weblog, although offering more of his political opinion, inhabits a place close on the academic/non-academic spectrum to the TaxProf blog. I am certain that there are others.

    These comments raise the bar for us quite a bit, and I hope over the coming months that TaxProf Blog can approach these lofty standards.

  • Paul Caron

    ATPI Grant Requests Due Today

    Saturday, May 15, 2004

    Requests for research grants from the American Tax Policy Institute are due today for consideration at ATPI’s July meeting. For a list of prior ATPI grant recipients, see here.

  • Paul Caron

    Senate Staff Summary of JOBS Bill

    Saturday, May 15, 2004

    The Senate Finance Committee has posted a very helpful 34-page summary of the JOBS Act (S.1637).

  • Paul Caron

    Joint Committee on Taxation Releases Revenue Estimates on Two Tax Bills

    Friday, May 14, 2004

    The Joint Committee on Taxation today released revenue estimates on two tax bills passed by the House:

    • HR 4279 (JCZ-33-04) (disposition of unused health benefits in cafeteria plans and flexible spending accounts)

    • HR 4275 (JCZ-34-04) (permanent extension of 10% rate bracket)

  • Paul Caron

    TV Tax Trivia, Take Three: “Frasier” Finale

    Friday, May 14, 2004

    Following up on posts about the tax consequences of the Friends finale and Extreme Makeover: Home Edition, I offer here a TaxProf Blog guide to tax issues raised in the Frasier finale last night:

    • Head of household filing status for Frasier while his father Martin lived with him?

    • Marriage penalty for Martin and Ronee after they tie the knot?

    • Medical expense deduction for Niles and Daphne when their vet delivers the baby?

    • Casualty loss deduction for dog eating wedding ring (at least until it appears out the other end)?

    • Moving expense deduction for Charlotte’s new job in Chicago?

    • Tax planning for Roz as a result of her big promotion?

    Intrepid TaxProf Blog readers are invited to send in more Frasier tax issues here!

  • Paul Caron

    GOP Split on Paying For Tax Cuts

    Friday, May 14, 2004

    Interesting Washington Post article today on the split in the GOP ranks on requiring that tax cuts be paid for by spending reductions or tax hikes.

  • Paul Caron

    Kirsch on Alternative Sanctions

    Friday, May 14, 2004

    Michael Kirsch (Notre Dame) has published Alternative Sanctions and the Federal Tax Law: Symbols, Shaming, and Social Norm Management as a Substitute for Effective Tax Policy, 89 Iowa L. Rev. 863 (2004). Here is the abstract:

    On several occasions in the past decade, when confronted with taxpayers taking advantage of the Internal Revenue Code in ways that Congress considered objectionable, Congress responded in an unusual way. Rather than merely modifying the Internal Revenue Code to alter the tax consequences of the taxpayer’s actions, or imposing traditional civil or criminal penalties on the taxpayer, Congress turned to alternative sanctions. For example, in response to United States citizens who renounce citizenship to avoid taxes, Congress enacted public shaming provisions that require publication of the individuals’ names in the Federal Register and modified the federal immigration laws to banish the former citizens from re-entering the United States. Similarly, in response to United States corporations that reincorporate abroad to reduce United States tax liability, Congress enacted legislation purporting to ban the corporation from entering into future government contracts. This Article, relying primarily on the public shaming and immigration-law banishment provisions applicable to individuals who renounce citizenship to avoid taxes, analyzes the alternative sanctions from three perspectives: their instrumental effects, their expressive function in altering social norms, and their role as symbolic legislation. This Article concludes that alternative sanctions, when used to deter or condemn behavior for which the tax code provides a tax benefit, produce significant instrumental, expressive, and symbolic problems. This Article suggests a narrower role for alternative sanctions, as a limited tool of tax enforcement, that might avoid these problems.

  • Paul Caron

    Yet More on Extreme Makeover = Extreme Taxes

    Friday, May 14, 2004

    Following up on this week’s TaxProf Blog posts (see here and here) on Newsweek’s discussion of the tax consequences of ABC’s plan to help the recipients of home makeovers avoid tax on the value of the improvements by characterizing the items as short term rental payments within the meaning of Code section 280A(g), two Tax Profs report that they use very similar fact patterns in their tax books:

    From Gail Levin Richmond (Nova), Federal Tax Research (Foundation Press, 6th ed. 2002):

    Your client was approached by a movie producer, who wants to film her home. He is interested only in the home’s façade; he will film interior shots at the production company’s studio. The producer offered your client rent for “camping out” on her lawn. Although he believes he will need only two days, he has offered $7,000 for ten days or $12,000 for twenty days. Find any tax provisions concerning the short-term rental of a home. Discuss how these apply to the time periods involved and to renting the façade only. What advice do you give your client?

    From Sam Donaldson (Washington), Federal Income Taxation of Individuals (West, forthcoming 2004):

    On the television show “Trading Spaces,” neighbors agree to switch homes for 48 hours and completely redecorate one room in the other’s house. They are assisted by a professional designer and a carpenter. The designer and the neighbors are limited to a budget of $1,000, furnished by the producers of the show.

    Suppose that Ricky and Lucy Ricardo, a married couple, agree to appear on the show with their neighbors, Fred and Ethel Mertz, also married. Ricky and Lucy remodeled the kitchen in the Mertz home with the assistance of designer Laurie Hickson-Smith. Meanwhile, Fred and Ethel remodeled the living room in the Ricardo home with the idle assistance of designer Doug Wilson. Amy Wynn Pastor served as the carpenter for both projects.

    Because of Laurie’s expert eye and good taste, and because of the Herculean efforts of Ricky and Lucy, the Mertz home increased in value by $5,000. On the other hand, Doug’s awkward sense of style and penchant for clashing colors caused the value of the Ricardo home to increase by only $1,000, the cost of the materials used to make the “improvements.” Without the skills of Amy Wynn, the Ricardo home might have even lost value!

    Assuming that Laurie and Doug both charge their normal customers $10,000 for two full days of advice and assistance, what are the federal income tax consequences to Ricky, Lucy, Fred, and Ethel?

  • Paul Caron

    Washington University Mini-Course on Conducting Empirical Legal Scholarship

    Thursday, May 13, 2004

    Nancy Staudt (Washington University) is one of the featured faculty at the Mini-Course on Conducting Empirical Legal Scholarship held May 11-13 at Washington University. Other (non-tax) faculty conducting the program are Lee Epstein, Pauline Kim, Andrew Martin, and Katherine Barnes.

  • Paul Caron

    Guest Blogger Don Leatherman Reports on Affiliated & Related Corporations at ABA Tax Section Meeting

    Thursday, May 13, 2004

    Guest Blogger Don Leatherman (Tennessee) shares his PowerPoint slides of the talk he gave at the Affiliated & Related Corporations panel at the ABA Tax Section May Meeting in Washington, D.C. Here is an overview of the presentation from the first slide:

    • Proposed Legislation

    • 2003-2004 Priority Guidance Plan

    • Section 1504 & Value Fluctuations

    • Final §1.1502-31, Stock Basis After a Group Structure Change

    • Consolidated worthless stock deduction rules

    • Administration of §1.337(d)-2T

    • Other Matters

    • Consolidated §108(b)

    ,

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