The Surly Subgroup Turns One!

Time flies when you’re having fun, I guess. Today is the one-year blogiversary of the Surly Subgroup. What started off as a group-blogging experiment hatched at last year’s Critical Tax Conference at Tulane Law School has provided quite a bit of entertainment for Surly bloggers and our guest bloggers, and hopefully for our readers as well.

It’s obviously been a big year on tax and other fronts. Since our inception, we’ve published 206 blog posts on a variety of topics. And we’ve drawn readers from 140 different countries.

Surly regulars and guest bloggers have covered various tax-related issues surrounding politics and the 2016 election—including disclosure of presidential tax returns, the Emoluments Clause, the Trump Foundation, and the Clinton Foundation. We’ve written about churches, 501(c)(3)s and the IRS treatment of non-profits. We’ve discussed the tax reform proposals of the 2016 presidential candidates and the #DBCFT. We’ve written several administrative law posts about Treasury Regulations and rulemaking.

Politics aside we’ve also covered other important issues in tax policy—including taxation and poverty, healthcare, tax policy and disabilities, tax compliance, and tax aspects of the Puerto Rico fiscal crisis. We’ve discussed several issues in international and cross-border taxes, touching on the EU state aid debate, the CCCTB, taxation and migration, the Panama Papers, tax leaks more generally, and tax evasion in China.

We hosted our first ever online Mini-Symposium on Tax Enforcement and Administration, which featured posts by ten different authors on a variety of tax administration topics. The Mini-Symposium was spearheaded by Leandra Lederman. Leandra had organized and moderated a discussion group on “The Future of Tax Administration and Enforcement” at the 2017 AALS Annual Meeting, and many of the discussion group participants contributed to the online symposium. We hope to organize future online symposia on other topics.

We’ve blogged about various conferences, workshops, and papers, both tax related and not-so-much tax related. We’ve also had lots of fun writing about taxes in popular culture – Surly bloggers and guest bloggers have written about the tax aspects of Pokémon Go, tax fiction, music-related tax issues (Jazz Fest! Prince! “Taxman”!), soccer players, dogs, Harry Potter fan fiction, Star Trek, and John Oliver. Surly bloggers even recorded a few tax podcasts!

In short, it’s been a busy year, and we’ve had a lot of fun with the Surly platform. We hope you have as well. Going forward, we’re going to keep the blog posts coming. We also hope to draw more regular and guest bloggers and to organize other online symposia.

Thanks for reading!

Panama Papers: The One-Year Anniversary

By: Diane Ring

This month marks the one-year anniversary of the Panama Papers leak. In April 2016, the ICIJ announced the leak and a few weeks later (May 9, 2016) released a database that included a subset of the leaked data. The leak itself comprised over 11 million records spanning 40 years from the Panamanian law firm Mossack Fonseca. At its core, the leak revealed the true ownership of over 200,000 offshore entities, thereby raising a host of tax and political questions regarding many of the entities’ owners.

So what has happened over the past year as a result of the leak? Continue reading “Panama Papers: The One-Year Anniversary”

The Strategic Case Against the Democratic Filibuster of Neil Gorsuch

Photo: Jarrad Henderson, USA TODAY

By: Daniel Hemel and David Herzig

[Note: This post is co-authored with Daniel Hemel, Assistant Professor of Law at The University of Chicago School of Law.]

The strategic case against a Democratic filibuster of Neil Gorsuch is straightforward. The argument is not that the filibuster will prevent President Trump from putting someone like Andrew Napolitano on the Court. The argument is that the filibuster may prevent President Trump from filling a future vacancy with a well-credentialed conservative who is ideologically similar to or right of Judge Gorsuch. To elaborate:

— (a) The filibuster accomplishes no work when there are fewer than 50 Senators who will support a nominee on an up-or-down vote. (Napolitano presumably falls into this category.)

— (b) The filibuster also does no work when there are 50 or more Senators who will support a nominee even if that means going nuclear. (Judge Gorsuch appears to fall into this category.)

— (c) The filibuster matters when (1) there is a nominee who would win 50 or more Senators on an up-or-down vote, but (2) fewer than 50 Senators would support the nuclear option in order to put the nominee on the Court.

Is (c) an empty set?

Continue reading “The Strategic Case Against the Democratic Filibuster of Neil Gorsuch”

Cross-Training (or, Tulane Corporate and Securities Law Roundtable)

My pal Ann Lipton–corporate governance and securities law expert and blogger extraordinaire over at BLPB–is organizing a conference at Tulane Law School today on the topic of “Navigating Federalism in Corporate and Securities Law.” It looked so interesting that I had to leave Henry Ordower and Kerry Ryan’s fabulous Critical Issues in Comparative and International Taxation: Taxation and Migration Conference a day early to crash her party! I’ve been auditing Securities Regulation and very much feeling like a little duckling in the securities/corporate world all semester, so I’m really looking forward to sitting in on an unfamiliar conversation. I always find that “cross-training” in other fields gives me fresh perspectives on my own work.

Here is the schedule. Some of these papers are really interesting!

The Problem of Large Shareholders
(Discussant: Urska Velikonja)

The Problem of Small Shareholders
(Discussant: Ann Lipton)

  • Jill Fisch (Penn), Advance Voting Instructions: Tapping the Voice of the Excluded Retail Investor
  • J.W. Verret (George Mason), Uber-ized Corporate Law

What Can States Regulate?
(Discussant: Jill Fisch)

  • Kent Greenfield (Boston College), Corporate Power and Campaign Finance
  • Summer Kim (Irvine), Corporate Long Arms

The Line Between Corporate Law and Securities Law
(Discussant: James Cox)

  • Ann Lipton (Tulane), Reviving Reliance
  • James Park (UCLA), Delaware and Santa Fe
  • Robert Thompson (Georgetown), Delaware’s Dominance: A Peculiar Illustration of American Federalism

The Operation of the SEC
(Discussant: James Park)

  • James Cox (Duke), Revolving Elites: Assessing Capture in the SEC
  • Urska Velikonja (Emory), Admissions in Public Enforcement

Twitter Tax Feeds for 2017

By David Herzig

I promised I would update the twitter tax feeds in my last post.  There are a number of new names on the updated list as tax professors continue to enter the twitterverse.  I did update the list to be in alphabetical order.  As always, if I am missing someone, please let me know.

Starting with the SurlySubgroup (@surlysubgroup)

Jennifer Bird-Pollan (@jbirdpollan)

Sam Brunson (@smbrnsn)

Phil Hackney (@EOTaxProf)

David Herzig (@professortax)

Stephanie Hoffer (@Profhoffer)

Leandra Lederman (@leandra2848)

Ben Leff (@benmosesleff)

Francine Lipman (@Narfnampil)

Diane Ring (@ringdi_dr)

Shu-Yi Oei (@shuyioei)

Other United States/Canadian Tax Professor (in alphabetical order):

Continue reading “Twitter Tax Feeds for 2017”

ClassCrits IX: The New Corporatocracy and Election 2016

Surly bloggers Sam Brunson, David Herzig and I (and Leslie Book over at Procedurally Taxing) are attending the ClassCrits IX conference hosted by Loyola University Chicago School of Law today and tomorrow. From the call for papers back in March:

As the U.S. presidential election approaches, our 2016 conference will explore the role of corporate power in a political and economic system challenged by inequality and distrust as well as by new energy for transformative reform.

There are some notable tax-related panels happening at the conference, along with other interesting panels relating to corporations and democracy:

Taxation, Social Justice and Development (Friday 10/21/16)

Doron Narotzki, University of Akron Business Administration
Corporate Social Responsibility and Taxation: The Next Step of the Evolution

Rohan Grey, Binzagr Institute for Sustainable Prosperity & Nathan Tankus, Modern Money Network
Corporate Taxation in a Modern Monetary Economy: Legal History, Theory, Prospects

Karl Botchway, CUNY Technology & Jamee Moudud, Sarah Lawrence Economics
Capacity Building, Taxation and Corporate power in Africa

Martha T. McCluskey, SUNY Buffalo Law, Corporatocracy and Class in State and Local “Job-Creation” Subsidies

Distributing Wealth, Law and Power (Friday 10/21/16)

Goldburn P. Maynard, Jr., University of Louisville Law
A Plea for Courts to Abolish the Judicially Created Right of the Wealthy to Avoid Estate Taxes

Victoria J. Haneman, Concordia University Law
The Collision of Holographic Wills and the 120-Hour Rule

Doron Narotzki, University of Akron Business Administration
Dark Pools, High-Frequency Trading and the Financial Transaction Tax: A Solution or Complication?

Robert Ashford, Syracuse University Law
Why Working But Poor?

Critical Perspectives on Tax Law (Saturday 10/22/16)

Shu-Yi Oei, Tulane University Law
The Troubling Case of Offshore Tax Enforcement

Les Book, Villanova University Law
Bureaucratic Oppression and the Tax System

Samuel Brunson, Loyola University Chicago Law
Avoiding Progressivity: RICs, Pease, and the AMT

David Herzig, Valparaiso University Law
Let Prophets Be (Non) Profits

Trump Pays $2,500 Excise Tax: Is that Enough?

By: Philip Hackney

boy-666803_1280

A couple of months ago, I wrote about the tax consequences of the Donald J. Trump Foundation paying $25,000 to the Pam Bondi campaign for attorney general in Florida in 2013. While most folks are focused on whether the payment was a bribe, I still see signs of a mismanaged charitable organization. I suggested that the political contribution could lead to the Foundation losing its exempt status and should require it to pay some excise taxes. I also said that there was enough questionable information for the IRS to open an audit of the Foundation. Well, last week, David Fahrenthold reported that Donald Trump recently paid $2,500 to the IRS as a tax for that impermissible political contribution made by the Foundation. This action leaves a lot of odd unanswered questions that I write about here.

Jeffrey McConney, the senior vice president and controller of the Foundation, told the Washington Post that Trump himself filed paperwork with the IRS alerting them to the improper political contribution from the Foundation, paid a 10% excise tax, and returned the $25,000. McConney states that the Foundation believes this should end the problem because the Foundation has done everything it has “been instructed to do”. While some have assumed that the IRS had communicated with the Foundation, it is not clear who did the instructing. Continue reading “Trump Pays $2,500 Excise Tax: Is that Enough?”

Tax Professor Letter Opposing Impeachment or Censure of IRS Commissioner Koskinen

By: Leandra Lederman

123 tax law professors recently signed a letter (available here) urging House leaders “to oppose any resolution to impeach or censure John Koskinen, the Commissioner of Internal Revenue.” Full disclosure: I am among the signatories. The letter explains not only that “[w]e believe that nothing that has been reported provides any basis for impeachment or censure” but also that impeachment or censure will undermine tax administration:

“The IRS carries out a vitally important mission for our country. Respect for the IRS fosters the voluntary compliance that is essential for our revenue system to work.

Impeachment or censure will harm the country by weakening our revenue system.  Impeachment or censure would disrupt the functioning of the IRS—which has had four Commissioners in as many years—leading to increased tax evasion, reduced revenue collection, and a higher national debt.  Impeachment or censure would also set a dangerous precedent and deter talented people from working to improve the country’s struggling revenue system.”

This is an important message and I hope House leaders will listen.

Continue reading “Tax Professor Letter Opposing Impeachment or Censure of IRS Commissioner Koskinen”

DC Circuit Seems to have Decided IRS Violated Constitution Before Trial in True the Vote Appeal.

By: Philip Hackney

graphics-882729_1280In 2014, a District Court dismissed (based on 12(b)(6) and 12(b)(1) motions) the complaint of a number of conservative organizations who alleged that the IRS “targeted” them by subjecting them to greater scrutiny in their applications for tax exemption. The lead organization, True the Vote, sought 501(c)(3) charitable organization status; the others primarily sought 501(c)(4) social welfare organization status. The world became aware of this targeting controversy in May 2013 when Lois Lerner, the head of the Exempt Organizations division of the IRS apologized to the Tea Party and other conservative groups for how the IRS treated their applications. To this day Taxprof Blog continues the IRS Scandal post over three years later dedicated at least in part to this controversy.

The primary complaints were the second and fifth claims: (2)  the IRS violated the organizations First Amendment rights to freedom of speech, and (5) the IRS violated the Administrative Procedures Act. The District Court concluded that because the IRS had granted exempt status to these organizations, the complaints were moot. True the Vote appealed this dismissal to the DC Circuit Court of Appeals.

Last week the Circuit Court breathed new life into claims 2 and 5. Though the Court found that some of the complaints were moot (including Bivens complaints against IRS employees and a claim of violation of 6103 disclosure rules), it allowed claims 2 and 5 forward because it found that the IRS had not voluntarily ceased its unlawful actions.

In reading the opinion, I find astonishing that the Circuit Court appears to have already concluded, without trial, that the IRS acted unconstitutionally. I recognize that for a 12(b)(1) motion the court is to assume the complaint true, but the court appears to have done much more than make assumptions. I focus on this issue. Continue reading “DC Circuit Seems to have Decided IRS Violated Constitution Before Trial in True the Vote Appeal.”

Don’t Impeach IRS Commissioner Koskinen

Rep. Jason Chaffetz (R-Utah), Chair of the House Committee on Oversight and Government Reform, has introduced H. Res. 737, which would condemn and censure IRS Commissioner John Koskinen. Efforts to impeach or censure the Commissioner are the latest skirmish between Congress and the embattled IRS stemming from the IRS’s use of “Be On the Lookout” (BOLO) lists to screen for excessive political activity by applicants for tax-exempt status under Code section 501(c)(4). The American College of Tax Counsel (ACTC) has sent several House leaders a compelling letter expressing its “view that such actions are not commensurate with the alleged conduct” and its justifiable concern that resolutions to impeach and censure Commissioner Koskinen “will damage the agency at a time when it needs strong leadership.”

Readers may recall that Steve Miller was Acting Commissioner when the Treasury Inspector General for Tax Administration (TIGTA) released its report on the BOLO issue, entitled “Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review” in May 2013. Miller resigned shortly after that, because President Obama asked Secretary of the Treasury Jack Lew to request Miller’s resignation. Daniel Werfel then became Acting Commissioner for about seven months. Mr. Koskinen did not become IRS Commissioner until Dec. 23, 2013. This was a challenging time to take on that role, given the state of the IRS’s relationship with Congress. The House Committee on Oversight and Government Reform held particularly partisan, contentious hearings. Continue reading “Don’t Impeach IRS Commissioner Koskinen”