Category Archives: Law: Tax

It’s Not Too Late to Give

There are still several hours in the tax year. It may be too late to emulate my brother and acquire that extra two-legged tax deduction, but it’s not too late to make charitable donations online via Network for Good.

We particular favor Ashoka, Daily Bread Food Bank of Miami, EPIC, Human Rights First (formerly the Lawyers’ Committee for Human Rights), and the University of Miami H.O.P.E. program (student public interest programs), but there are so many good causes to choose from.

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First They Rebated the Scientologists, Next…

Paul Caron has an interesting post up about a lawsuit by an orthodox Jew seeking the same tax exemption the IRS has given the Scientologists:

A lawyer for an Orthodox Jewish couple claimed Monday that the Internal Revenue Service has violated the First Amendment by refusing to allow tax deductions for their children's religious schooling. The IRS should allow the deductions because it permits members of the Church of Scientology to write off the cost of spiritual counseling sessions, attorney Jeffrey Zuckerman said during the first day of a non-jury trial in U.S. Tax Court before Judge John O. Colvin. The First Amendment prohibits the IRS from discriminating on the basis of religion, Zuckerman said.

Coincidentally, we were talking about this case at lunch before the faculty seminar yesterday. It has all sorts of implications….

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UM’s Fran Hill Subtly Suggests IRS Is Blowing Smoke on NAACP Case

From TaxProf™ Blog

Today's New York Times, Wall Street Journal, and Washington Post report on an October 8 letter from the IRS threatening to revoke the NAACP's tax-exempt status in light of NAACP Chairman, Julian Bond's speech this summer condemning the policies of President Bush. Tax Prof Frances Hill (Miami) is critical of the IRS's action in a Newsday article on the subject:

Frances Hill, a University of Miami law professor and an expert on the political rights of tax-exempt organizations, read Bond's speech and said it was indeed critical of President George W. Bush. But she added that Bond was probably on safe legal ground because his speech was broadly conceived, didn't focus solely on Bush and touched on a range of issues that have long been trademarks of the NAACP, such as equality and justice. “You can be passionate and still have a tax-exempt status,” Hill said. “If the IRS thinks that this speech is sufficient to trigger an audit, then I think we have quite a new standard and they must be planning to audit hundreds of other groups.”

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US Taxation of Multinational Enterprise: Part XIII

Michael Froomkin will be back full-time tomorrow, so this is my last post. I still have a lot of stuff to say on the threads to my posts, however, which I will do over the weekend, so you are not rid of me quite yet.

Thank you all! I learned a lot about stuff and the blogosphere. Thank you Michael! It has been as much work as I expected. I cannot imagine how Michael finds time to blog, maintain this remarkable site (which I had no responsibility for, and which must take up as much time as blogging), and have a life. Amazing….. And Michael just emailed that I should have my own blog….

Well, I have been stalling for weeks on the fundamental issue of international tax policy: As a practical matter, in an open worldwide economy, can one country impose an income tax? There are two sub-issues: First, can a country tax residents (or citizens) on their worldwide income. Here, can the US tax Sue on her foreign surgeries, given that she can move? Second, can one country tax income related to mobile local factors of production? For example, can the US tax the capital of Ford Motor invested in a US factory if Ford can close the factory and move production to low-tax Mexico?

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US Taxation of Multinational Enterprise: Part XII

I am sitting here reading the fine print in a contract to buy a house for a price that is three times what I sold my house in Minnesota for. I am not UMC in Miami, I guess. Forgive me if I am even less coherent than normal — and that I haven't had a chance to do more commenting.

Oh, well, back to taxing the nowhere and everywhere profits of multinationals. The world-wide network of tax treaties rests on the arm's-length notion, which, I have argued (and the comments seem to be moving somewhat — somewhat — toward accepting), misses nowhere and everywhere profit. This is real important, as failure to tax nowhere and everywhere profit guts business income taxes as a source of revenue for countries. (Yes, tax jocks, the current US regs, whiile pretending to be arm's-length regs, do capture some nowhere and everywhere income.)

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US Taxation of Multinational Enterprise: Part XI

Well, it is time to talk about multinationals again. I am somewhat over my head here, as this is a developing area, and I am not current in the literature. That said, here goes.

The classic analysis of the “extra” profitability of multinationals looks to market barriers. If there weren't barriers to forming a multinational, there would be new ones created seeking that extra profit. As more multinationals are formed, the extra profit goes away. After all, it must be costly to set up a business that can function legally and practically as one enterprise in many countries, or everybody would do it. Back when there were few multinationals, the market barrier analysis seemed to tell the whole story. Today?

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US Taxation of Multinational Enterprise: Part X

There have been a lot of insightful comments on my posts. sorry that I haven't had time to comment back. Been dealing with horrendous computer problems. Comments on comments soon.

Yesterday, I noted, and one great comment (by the ominously named Consultant) telegraphed, that stripping is the ball game when it comes to protecting the US business income tax base. What is going on? One can get a feel for the hidden concerns here by reading between the lines of the Treasury report that I gave a link to yesterday.

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