On Marginal and Effective Tax Rates

By Sam Brunson

A friend sent me a cartoon that’s been going around his Facebook feed. The cartoon’s message amounts, roughly, to: undocumented immigrants are far better-off than legal residents because taxes.

The various assertions the cartoon makes are an amazing collection of racist and wrong. In fact, there’s too much racist, and too much wrong, to address. But it’s worth pointing out that, although the cartoon uses numbers, its numbers are wildly, wildly wrong.

If you want to hate-read the whole thing, you can see it here, but for my purposes, we’re going to look at these two panels: Continue reading “On Marginal and Effective Tax Rates”

… and police are on their way to your house to arrest you

By Sam Brunson

Over the last couple weeks I’ve gotten at least three calls from numbers I’m not familiar with. When I pick up, a heavily-accented recorded voice tells me that I haven’t paid my taxes, the IRS has filed a lawsuit (or, in one recording, a “law-sweet”) against me, and that police are on their way to arrest me. I can get out of my problems if I call them back immediately.

I’ve called back three times. The first time, I got flustered when asked for personal information, and told the guy I knew it was a scam. The third time, the call center noises were so loud that I could barely hear the person, and eventually, she put me on hold and then the call dropped. The second, though …

The second, I told the guy on the phone that my name was Carlos Danger. (I had to spell “Danger” for him.) I gave him a fake string of 9 digits (that he read back to me, and I was lucky that I mostly remembered it. Protip: if you’re giving a fake SSN to scammers, do something memorable. David Herzig, for example, recommends 867-53-0909). He put me on hold, and checked his computer, and then told me his records showed I owed $9,700 in back taxes. Continue reading “… and police are on their way to your house to arrest you”

About the ACLU’s [Update: FFRF’s] Challenge to the Promoting Free Speech and Religious Liberty EO

By Sam Brunson

Trump signed his Promoting Free Speech and Religious Liberty executive order earlier today. The EO was expected to order the IRS to stop enforcing the so-called Johnson Amendment against religious organizations. As Ben explained, by its language, it may have done significantly less—it appears to merely reaffirm the status quo for enforcement. Whatever its substantive effects, though, the existence of the order is no surprise, and, as has happened with any number of Trump’s previous EOs, the ACLU Freedom From Religion Foundation has already announced that it will challenge the EO in court. [Update: the ACLU looked at the EO and agreed with Ben that there was nothing there, and decided not to sue. The FFRF, otoh, decided to sue. So it’s the FFRF that will face these procedural hurdles before it has to face the substantive (or rather, lack of substance) ones.]

Leaving aside the question of whether this EO actually does anything substantive, it’s worth remembering that any judicial challenge to the executive order faces two significant hurdles: standing and administrative discretion.[fn1] It’s also possible that the Trump administration inadvertently made those hurdles easier to pass. Continue reading “About the ACLU’s [Update: FFRF’s] Challenge to the Promoting Free Speech and Religious Liberty EO”

Ebooks and ExamSoft

By Sam Brunson

A couple weeks ago, one of my students emailed me. This semester, he bought the ebook for my BizOrg class, and didn’t bother buying a physical copy. And he wanted to know if he could use his ebook on the final.

My finals are all open-book; students can bring in and use the casebook, the statutory supplement, and any notes that they create (on their own or in their study group). So in theory, I’m totally fine with it.

In practice, though, I had to send him to our Dean of Students. Because, like many law schools (and some bar examiners), we use ExamSoft for tests.[fn1] Now. I haven’t personally used ExamSoft since I was in law school (it was fine back then, though it was apparently not Mac compatible back in those days). Basically, when I used it, it was a basic word processor that saved your work every minute and blocked access to the rest of your computer while you took the exam. Continue reading “Ebooks and ExamSoft”

Under His Plan, Will Trump’s Taxes Go Up?

By Sam Brunson

Honestly, we have no way of knowing. For one thing, we don’t know how much Trump currently pays in taxes. For another, the plan he has provided is less a plan than it is a shopping list, a shopping list that’s really light on details. But we can at least make a guess. (Spoiler alert: he probably won’t.) Continue reading “Under His Plan, Will Trump’s Taxes Go Up?”

Grover and Godwin

By Sam Brunson

Over the weekend, tax opponent extraordinaire and Americans for Tax Reform founder Grover Norquist said …

Well, I’ll let him speak for himself:

In two follow-up tweets (here and here), he clarified and doubled-down on his position: essentially, he argues that (a) without the 16th Amendment, the country couldn’t have enacted an income tax, (b) without an income tax, we couldn’t have afforded to enter World War I, (c) if we hadn’t entered the war, the Versailles Treaty wouldn’t have happened,[fn1] and (d) without the Versailles Treaty, World War II, with all of its attendant evils, wouldn’t have happened.[fn2] Continue reading “Grover and Godwin”

Neil Gorsuch and the Tax Law

On Friday, the Senate confirmed Neil Gorsuch as the newest Justice on the Supreme Court, and today he was officially sworn in, taking the seat that Justice Scalia’s passing left vacant.

When Justice Scalia passed away, I looked at the tax opinions he had authored. It turns out, Justice Scalia didn’t author a whole lot of tax opinions, and those that he did author were, as I said, “workmanlike,” without the verbal pyrotechnics, wit, and flair he was known for.

I was curious whether Justice Gorsuch would bring anything different to that seat, so I looked for tax opinions he had authored.[fn1] My search terms brought up 34 hits; the vast majority were not actually cases dealing with the federal income tax.[fn2] In fact, I only saw two cases dealing with federal income tax issues, and neither of them really dealt with the tax law. Continue reading “Neil Gorsuch and the Tax Law”

Chuck Berry, Cash, and Taxes

Copyright Missouri History Museum, Some Rights Reserved

By Sam Brunson

In the aftermath of Chuck Berry’s death on March 18, I learned that I’m way more familiar with his music than I had realized. I’ll confess that I never spent a lot of time thinking about Chuck Berry, but his songs (it turns out) were an accidental soundtrack to my growing up. My dad had two or three oldies stations programmed into the radio, and Berry’s music was ubiquitous on their playlists. And many songs I’m partial to have turned out to be his. (I’m thinking particularly of Nina Simone’s cover of “Brown-Eyed Handsome Man.”)

Still, I’m not a big enough fan to try to write about Berry on a tax blog. Or, rather, I wasn’t until last night, at the gym. As I listened to Sound Opinions, I learned that, like so many musicians, Berry had a run-in with the IRS. Continue reading “Chuck Berry, Cash, and Taxes”

Update on the Future of Treasury Regulations

cfrBy Sam Brunson

I previously wrote about the fact that Treasury and the IRS were going to essentially stop issuing guidance in light of the Trump administration’s one-in-two-out rule for regulations.[fn1]

There seems to be some movement on this front. Yesterday, Commissioner Koskinen announced that the IRS was set to begin issuing “subregulatory” guidance again. He didn’t define what he meant by subregulatory, but it probably includes revenue procedures, notices, and revenue rulings, at least. (Interestingly enough, the Tax Notes reporting doesn’t mention revenue rulings,[fn2] while the BNA reporting does. I don’t know if that difference is accidental, or if the two organizations are interpreting differently what Commissioner Koskinen means by subregulatory.) Continue reading “Update on the Future of Treasury Regulations”

Satan, Tea Parties, and the IRS

By Sam Brunson

Did you hear that the IRS granted a Satanic cult tax-exempt status in ten days?!? Meanwhile, Tea Party groups’ exemption applications languished for months or even years?!?

I know, it sounds pure conspiracy theory: the IRS loves Satan and hates conservatives. But it’s true! Or, at least, kind of! But it needs to be contextualized, because comparing the exemption application of Reason Alliance, Ltd. (the putative Satanic cult) and Tea Party groups is inapposite.[fn1] Continue reading “Satan, Tea Parties, and the IRS”