Pub Date : 2014-07-15DOI: 10.5195/TAXREVIEW.2014.26
J. Plecnik
Much ink has been spilled, and many keyboards worn, debating the definition of “Officers of the United States” under the Appointments Clause of Article II, Section 2, Clause 2 of the U.S. Constitution. Most recently, this debate has focused on the denizens of the Office of Appeals of the Internal Revenue Service (IRS). In Tucker I , the U.S. Tax Court faced the question of whether the settlement officers, appeals officers, and appeals team managers (collectively, IRS hearing officers) within the Office of Appeals are Officers or mere employees. In Tucker II , the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) faced the same question on appeal. Both courts sided with the IRS in holding that none of the above are Officers. Although it hardly seems controversial to agree with the Tax Court and D.C. Circuit when the U.S. Supreme Court denies certiorari in the case, remarkably, all previous scholarship disputes the outcome of the Tucker decisions. This Article will defend that outcome as a proper application of Supreme Court precedent.
{"title":"Officers Under the Appointments Clause","authors":"J. Plecnik","doi":"10.5195/TAXREVIEW.2014.26","DOIUrl":"https://doi.org/10.5195/TAXREVIEW.2014.26","url":null,"abstract":"Much ink has been spilled, and many keyboards worn, debating the definition of “Officers of the United States” under the Appointments Clause of Article II, Section 2, Clause 2 of the U.S. Constitution. Most recently, this debate has focused on the denizens of the Office of Appeals of the Internal Revenue Service (IRS). In Tucker I , the U.S. Tax Court faced the question of whether the settlement officers, appeals officers, and appeals team managers (collectively, IRS hearing officers) within the Office of Appeals are Officers or mere employees. In Tucker II , the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) faced the same question on appeal. Both courts sided with the IRS in holding that none of the above are Officers. Although it hardly seems controversial to agree with the Tax Court and D.C. Circuit when the U.S. Supreme Court denies certiorari in the case, remarkably, all previous scholarship disputes the outcome of the Tucker decisions. This Article will defend that outcome as a proper application of Supreme Court precedent.","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127774131","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}
Pub Date : 2014-03-26DOI: 10.5195/TAXREVIEW.2013.20
Danshera Cords
{"title":"\"Let's Get Together\": What Tax Should Learn About Collaborative Regulation Development","authors":"Danshera Cords","doi":"10.5195/TAXREVIEW.2013.20","DOIUrl":"https://doi.org/10.5195/TAXREVIEW.2013.20","url":null,"abstract":"","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123884199","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}
Pub Date : 2014-03-26DOI: 10.5195/TAXREVIEW.2013.23
M. L. Drumbl
Refundable credits, particularly the earned income tax credit (EITC) and the child tax credit, serve an important anti-poverty measure for low-income taxpayers. Annually, millions of taxpayers who do not owe any federal income tax must file a tax return in order to claim these credits that are in the nature of social benefits. The eligibility requirements for refundable credits are complex, and these returns are particularly prone to audit: EITC audits comprise one-third of all individual income tax audits. Because of the large dollar amounts at stake, a taxpayer’s mistaken understanding of the eligibility requirements for these refundable credits can often result in a deficiency of several thousand dollars. Though studies indicate that taxpayer error is more commonly inadvertent than intentional, the section 6662 20% accuracy-related penalty applies once the deficiency reaches a statutory “understatement” threshold; it is imposed computationally and without regard to the taxpayer’s intent. By statute, taxpayers have the right to contest the accuracy-related penalty by demonstrating that there was reasonable cause for the underlying error and the taxpayer acted in good faith. Treasury regulations provide that such a circumstance might include “an honest misunderstanding of fact or law that is reasonable in light of all the facts and circumstances, including the experience, knowledge, and education of the taxpayer”. Yet for all of these reasons – lack of experience, lack of knowledge, and relative lack of education – the taxpayer is unlikely to have the knowledge or resources to raise the very defense that is meant to protect an unsophisticated taxpayer. Drawing comparisons between refundable tax credits and social programs administered by other agencies, this article calls upon the IRS to better differentiate between inadvertent error (“those who don’t know”) and intentional or fraudulent error (“those who know better”). The article argues that the current accuracy-related penalty approach is unduly punitive. It concludes by proposing solutions that the IRS might consider in light of Congress’s desire for the Service to administer these social benefits through the Internal Revenue Code.
{"title":"Those Who Know, Those Who Don’t, and Those Who Know Better: Balancing Complexity, Sophistication, and Accuracy on Tax Returns","authors":"M. L. Drumbl","doi":"10.5195/TAXREVIEW.2013.23","DOIUrl":"https://doi.org/10.5195/TAXREVIEW.2013.23","url":null,"abstract":"Refundable credits, particularly the earned income tax credit (EITC) and the child tax credit, serve an important anti-poverty measure for low-income taxpayers. Annually, millions of taxpayers who do not owe any federal income tax must file a tax return in order to claim these credits that are in the nature of social benefits. The eligibility requirements for refundable credits are complex, and these returns are particularly prone to audit: EITC audits comprise one-third of all individual income tax audits. Because of the large dollar amounts at stake, a taxpayer’s mistaken understanding of the eligibility requirements for these refundable credits can often result in a deficiency of several thousand dollars. Though studies indicate that taxpayer error is more commonly inadvertent than intentional, the section 6662 20% accuracy-related penalty applies once the deficiency reaches a statutory “understatement” threshold; it is imposed computationally and without regard to the taxpayer’s intent. By statute, taxpayers have the right to contest the accuracy-related penalty by demonstrating that there was reasonable cause for the underlying error and the taxpayer acted in good faith. Treasury regulations provide that such a circumstance might include “an honest misunderstanding of fact or law that is reasonable in light of all the facts and circumstances, including the experience, knowledge, and education of the taxpayer”. Yet for all of these reasons – lack of experience, lack of knowledge, and relative lack of education – the taxpayer is unlikely to have the knowledge or resources to raise the very defense that is meant to protect an unsophisticated taxpayer. Drawing comparisons between refundable tax credits and social programs administered by other agencies, this article calls upon the IRS to better differentiate between inadvertent error (“those who don’t know”) and intentional or fraudulent error (“those who know better”). The article argues that the current accuracy-related penalty approach is unduly punitive. It concludes by proposing solutions that the IRS might consider in light of Congress’s desire for the Service to administer these social benefits through the Internal Revenue Code.","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131928063","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}
Pub Date : 2013-09-03DOI: 10.5195/TAXREVIEW.2013.17
M. J. Bouey
{"title":"AVOIDING DELEGATION DOCTRINE CHALLENGES TO INTERNET SALES TAX LEGISLATION: LESSONS LEARNED FROM THE MAIN STREET FAIRNESS ACT","authors":"M. J. Bouey","doi":"10.5195/TAXREVIEW.2013.17","DOIUrl":"https://doi.org/10.5195/TAXREVIEW.2013.17","url":null,"abstract":"","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"39 14","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"113939492","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}
Pub Date : 2013-09-03DOI: 10.5195/taxreview.2013.15
Ronald H. Jensen
{"title":"WHEN ARE DAMAGES TAX FREE?: THE ELUSIVE MEANING OF \"PHYSICAL INJURY\"","authors":"Ronald H. Jensen","doi":"10.5195/taxreview.2013.15","DOIUrl":"https://doi.org/10.5195/taxreview.2013.15","url":null,"abstract":"","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131414224","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}
Defined value clauses used to value nonmarketable family limited partnership (FLP) interests create valuation distortions and other public policy issues. This paper describes these abuses and proposes the employment of restrictions similar to those applied to pecuniary formula marital deduction clauses. The article explains how pecuniary formula marital deduction provisions created valuation distortions by allowing for undervaluation of the marital share that were remedied by the IRS’s Rev. Proc. 64-19 and the enactment of section 2056(b)(10). The article analyzes recent case law expanding the use of defined value clauses into the FLP area and criticizes the courts for not applying the public policy doctrines of Procter and Robinette to those cases. The article distinguishes defined valuation clauses in the FLP context and shows how all fixed value clauses are not equivalent. Finally, the article proposes solutions to deal with the valuation distortions that these clauses create.
用于评估非市场家庭有限合伙(FLP)利益的定义价值条款造成了估值扭曲和其他公共政策问题。本文描述了这些弊端，并建议采用类似于适用于金钱公式婚姻扣除条款的限制。本文解释了金钱公式婚姻扣除条款是如何通过允许对婚姻份额的低估而造成估值扭曲的，而IRS的Rev. Proc. 64-19和第2056(b)(10)条的制定纠正了这一点。本文分析了最近的判例法将定义价值条款的使用扩展到FLP领域，并批评法院没有将宝洁和罗比内特的公共政策理论应用到这些案件中。本文区分了FLP背景下的已定义估值条款，并说明了所有固定价值条款是如何不等同的。最后，本文提出了应对这些条款造成的估值扭曲的解决方案。
{"title":"Not All Defined Value Clauses are Equal","authors":"Wendy C. Gerzog","doi":"10.2139/ssrn.2106008","DOIUrl":"https://doi.org/10.2139/ssrn.2106008","url":null,"abstract":"Defined value clauses used to value nonmarketable family limited partnership (FLP) interests create valuation distortions and other public policy issues. This paper describes these abuses and proposes the employment of restrictions similar to those applied to pecuniary formula marital deduction clauses. The article explains how pecuniary formula marital deduction provisions created valuation distortions by allowing for undervaluation of the marital share that were remedied by the IRS’s Rev. Proc. 64-19 and the enactment of section 2056(b)(10). The article analyzes recent case law expanding the use of defined value clauses into the FLP area and criticizes the courts for not applying the public policy doctrines of Procter and Robinette to those cases. The article distinguishes defined valuation clauses in the FLP context and shows how all fixed value clauses are not equivalent. Finally, the article proposes solutions to deal with the valuation distortions that these clauses create.","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125443125","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}
Pub Date : 2012-12-01DOI: 10.5195/TAXREVIEW.2012.11
John W. Kettering
{"title":"DR. STRANGETAX OR: WHY PENNSYLVANIA SHOULD LEARN TO STOP WORRYING AND JUST END THE FILM TAX CREDIT","authors":"John W. Kettering","doi":"10.5195/TAXREVIEW.2012.11","DOIUrl":"https://doi.org/10.5195/TAXREVIEW.2012.11","url":null,"abstract":"","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117122444","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}
When the United States acted to phase-out its estate tax by 2010, it joined a small but growing group of countries which have also repealed their wealth transfer taxes. In Canada, federal gift and estate taxes were repealed in 1972 and provincial wealth transfer taxes were abolished in the 1970s and 1980s. In Australia, State and Commonwealth wealth transfer taxes were repealed in the late 1970s and early 1980s. New Zealand followed suit in the 1990s, reducing estate tax rates to zero in 1992 and repealing the tax in 1999. This paper reviews the abolition of wealth transfer taxes in Canada, Australia and New Zealand, relying on public choice theories of politically efficient revenue structures to help explain the repeal of these taxes in each country. Part II outlines the essential elements of public choice theory and its implications for tax policy. Part III surveys the history of wealth transfer taxes in Canada, Australia and New Zealand, examining in detail the events leading up to the repeal of these taxes, and illustrating the relevance of public choice theory to their abolition in each country. Part IV offers brief conclusions on the significance of this experience for the future of wealth transfer taxation in these and other countries.
{"title":"The Abolition of Wealth Transfer Taxes: Lessons from Canada, Australia and New Zealand","authors":"D. Duff","doi":"10.2139/SSRN.719744","DOIUrl":"https://doi.org/10.2139/SSRN.719744","url":null,"abstract":"When the United States acted to phase-out its estate tax by 2010, it joined a small but growing group of countries which have also repealed their wealth transfer taxes. In Canada, federal gift and estate taxes were repealed in 1972 and provincial wealth transfer taxes were abolished in the 1970s and 1980s. In Australia, State and Commonwealth wealth transfer taxes were repealed in the late 1970s and early 1980s. New Zealand followed suit in the 1990s, reducing estate tax rates to zero in 1992 and repealing the tax in 1999. This paper reviews the abolition of wealth transfer taxes in Canada, Australia and New Zealand, relying on public choice theories of politically efficient revenue structures to help explain the repeal of these taxes in each country. Part II outlines the essential elements of public choice theory and its implications for tax policy. Part III surveys the history of wealth transfer taxes in Canada, Australia and New Zealand, examining in detail the events leading up to the repeal of these taxes, and illustrating the relevance of public choice theory to their abolition in each country. Part IV offers brief conclusions on the significance of this experience for the future of wealth transfer taxation in these and other countries.","PeriodicalId":237834,"journal":{"name":"Pittsburgh Tax Review","volume":"98 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134621887","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}
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