Whistleblowers and Disinformation — Roundtable #2: The Public Sector

By Diane Ring

We are back again this week looking at the role of misinformation and disinformation in democracy, good governance, and well-grounded decisionmaking! On Friday, we are hosting the second Roundtable in the Whistling at the Fake research project (with Dr. Costantino Grasso as PI, and funded by NATO’s Public Diplomacy Division). In our first Roundtable, we focused on disinformation in the private sector.

This Friday February 25, 2022 at 10:00am EST, the subject is Disinformation and the Public Sector.

The Roundtable includes three sessions: (1) Democracy and Disinformation – the Political Level; (2) Disinformation and Public Administration; and (3) Special Issues and Final Recommendations. The international panel includes experts from law, media, government, and civil society, along with whistleblowers. To join this exciting Roundtable session, register here!

Whistleblowers and Disinformation: “Whistling at the Fake” Roundtable

By Diane Ring

Information lies at the heart of a sound democracy, good governance, and well-grounded decision making, whether at the individual, community, business, or government level. Yet every day we see how misinformation and disinformation undermines all of these goals.

In response to this problem, a new research project, Whistling at the Fake (with Dr. Costantino Grasso as PI, and funded by NATO’s Public Diplomacy Division) aims to address the gap in the public’s understanding of the full scope and impact of misinformation and disinformation, and to empower the general public and regulators with tools, suggestions and recommendations for the future. The project focuses in particular on the role of whistleblowers and other informed insiders in “exposing misleading and hostile information activities and increasing public resistance to acts of this nature.”

As part of its project, Whistling at the Fake is hosting Roundtables on zoom– the first of which is this Friday, January 28, 2022 at 10:00am EST. The Roundtable, “Disinformation and the Private Sector” includes three sessions: (1) Exploring the Phenomenon, (2) Disinformation and Corporate Power and Wealth, and (3) Special Issues and Recommendations. The international panel includes experts from law, media, business, research, along with whistleblowers. To join what should be an amazing zoom Roundtable, register here!

Why Do Non-OECD, Non-G20 Countries Pursue International Tax Cooperation? Shu-Yi Oei Investigates in an Empirical Study of Membership in the BEPS Inclusive Framework

by Diane Ring

A dominant theme of international taxation over the past 15 years has been that of cooperation and consensus—from the BEPS Project to the new Multilateral Instrument to the new BEPS Inclusive Framework. Regardless of one’s assessment of nations’ true commitments to such cooperation and consensus, it is clear that notable changes in the framework of international tax engagement are afoot.

Yet, countries themselves remain very different in terms of the wealth, GDP, natural resources, tax revenues, commercial base, infrastructure, technological capacity, and financial systems. It is not obvious that cooperation and consensus are uniformly in countries’ interests, particularly in light of who is drafting the agenda. Most pointedly, it is reasonable to ask why non-OECD, non-G20 countries would be willing to commit to global tax cooperation.

In a new empirical paper, “World Tax Policy in the World Tax Polity? An Event History Analysis of OECD/G20 BEPS Inclusive Framework Membership,” Shu-Yi Oei tackles this question by studying the OECD/BEPS Inclusive Framework, which currently has a total of 140 member states, of which 96 are non-OECD, non-G20 countries. Using event history regression methods, Oei seeks to answer the question of how these states came to join the Inclusive Framework. She posits a series of hypotheses regarding membership drivers and tests them against a new database that she has constructed. In a paper that is accessible to both international tax policy makers and empiricists, Oei provides a compelling answer to the question. Not surprisingly, the actions and initiatives of international organizations and blocs play a the significant role in the story. In fact, many of the findings prove consistent with earlier work that Oei and I have written (both separately and together) including analyses of international relations dynamics in international tax, the scope of actors shaping international tax policy, the potential for disjuncture between international agreement and domestic action, the potential influence of nonstate actors, and the ability of powerful states to draw other nations into specific tax policy choices. Oei’s new empirical paper propels this research agenda forward by allowing greater insight into the world of international tax.

Season 2 of Break Into Tax

By: Leandra Lederman

By now, you may have seen one or more videos on the Break Into Tax YouTube channel (www.BreakIntoTax.com) that I started earlier this year with Allison Christians (McGill). We’ve created overview videos on tax policy, tax procedure, an array of income tax topics, legal writing, and more. We’ve done “Tax Papers Unlocked” micro-workshops on current tax scholarship. We’ve also released some #WhyTakeTax videos for students featuring a lot of tax profs, plus some tax humor videos. All Break Into Tax videos are intended to be entertaining, and most also are designed to be informative!

After about 30 videos, we wrapped up what we term “season 1.” It’s now time for season 2! We released a new intro video today, which you can find here. As mentioned there, I’ll be running this season. I’ve got some fun videos coming up, including more on income tax, more tax humor, a “crossover episode,” and something for folks interested in academia. Subscribe to the channel and turn on notifications if you don’t want to miss these as they come out!

If you’re a professor, I hope you’ll assign some of the Break Into Tax videos in lieu of a reading, for review, or as an optional resource! If you’re a student, I hope you find the explanations and illustrations helpful. Join us as you break into tax!

International Symposium: “The Professionals: Dealing with the Enablers of Economic Crime”

By Diane Ring

Just as summer is in full swing, the VIRTEU Project is back with a close look at a less than sunny side of economic life — the role that professionals (read lawyers, accountants and auditors) can play in enabling economic crime. This coming Wednesday July 21, 2021 (starting at 10:15am ET) join us in a three-panel zoom symposium that investigates how and why professionals may play this enabling role, and what responses and solutions we might consider. We will look carefully at real life case studies and talk with experts from various sectors as we explore this ongoing issue.

Advance Payments of the Child Tax Credit

By: Sam Brunson

Yesterday my neighbor texted me to mention that three pieces of my mail had been left in his mailbox; he dropped them off in front of my door. Two were just standard junk mail but one is potentially important: a letter from the Department of the Treasury.

Perhaps you also got this letter: it has some important information about the way the the child tax credit now works. In short, the American Rescue Plan, a law signed in March, makes a number of significant changes to the child tax credit.

Two of those changes are particularly notable. First, it increases the amount of the credit to $3,000 for most children and $3,600 for children five and younger.

Second, it makes allows the IRS to make advance payments of the child tax credit. Essentially, unless parents choose otherwise, starting in July the will receive monthly payments of $250 or $300 per child (depending on the child’s age).

Third, the credit is fully refundable. Even if a parent doesn’t have enough income to owe taxes, they will receive the full amount of the child tax credit.

Finally, the age limit for the child tax credit has been increased from 16 to 17. (Note that currently these changes are all temporary–they only apply to 2021, though the may be extended as some point.)

Continue reading →

Institutional Corruption and Avoidance of Taxation: Final VIRTEU Roundtable

By Diane Ring

The most recent Roundtable session in the series of four VIRTEU [Vat fraud Interdisciplinary Research on Tax crimes in the European Union] sessions this spring focused on the limited success we have seen with the formal regimes of gatekeepers tasked with ensuring that taxpayers accurately meet their reporting and taxpaying obligations. The session then explored the role that whistleblowers play in remedying the resulting enforcement gaps. (A recording of this 3rd Roundtable is available here). Building on that discussion, the 4th and final Roundtable session, to be held Friday March 12, 2021 at 12:30pm EST (5:30pm GMT), will turn to the related topic, Institutional corruption and tax avoidance.

This March 12th discussion will examine corruption broadly understood to encompass not only the most direct forms of corruption (e.g. bribes) but more indirect forms (including implicit deals with officials), on to questions of undue influence, conflict of interest and the power of lobbying. Attention will be given to not only government actors, but also structural and institutional features that impact corruption and avoidance of taxation, including the role of large corporations, wealth, and power bases. For more information on the Roundtable, see below. To join us for the discussion, please register here.

VIRTEU Roundtable #3: Whistleblowing, Reporting, and Auditing in the area of taxation

by Diane Ring

We do not yet live in a world in which taxpayer compliance can simply be assumed. Instead, we must rely on the interplay of reporting requirements, internal and external auditing, and ultimately whistleblowing, to help ensure compliance with the tax system. How do they fit together? What can we expect from reporting and auditing? When do they breakdown, and why? How does whistleblowing–both the actual cases and the “threat” of whistleblowing–shape law, taxpayer behavior, and society’s understanding of compliance. And when does this tax noncompliance intersect with government corruption and fraud? What recommendations and options might we consider for the future?

Next week, the VIRTEU Roundtable Series tackles these questions in its 3rd Roundtable: “Whistleblowing, Reporting and Auditing in the area of taxation.” (VIRTEU [Vat fraud : Interdisciplinary Research on Tax crimes in the European Union]). This session builds on the first two Roundtables which gathered experts from around the world to discuss tax crime, corruption, CRS, and business ethics, and which can be viewed online: (1) Roundtable #1: Exploring the Interconnections between tax crimes and corruption; and (2) Rountable #2: CSR, Business Ethics, and Human Rights in the area of taxation.

The 3rd Roundtable, on “Whistleblowing, Reporting and Auditing in the area of taxation,” will be held Friday February 26, 2021 at 5:30-7:00pm GMT (12:30-2:00pm EST). For more information on the panel, see below. To join us, visit the registration link here.

CSR, Business Ethics & Human Rights through a Tax Lens: VIRTEU Roundtable Series Continues

by Diane Ring

Last month, the VIRTEU Roundtable Series launched with a discussion I had the opportunity to moderate on the basic connections between tax crime and corruption. (VIRTEU [Vat fraud : Interdisciplinary Research on Tax crimes in the European Union]). Clearly, we were only just getting started — the discussion ended because time was up but the questions continued. This week’s roundtable takes a closer look at the role that CSR (corporate social responsibility), business ethics and human rights can, should, or do play in business conduct, in tax enforcement strategies, and in the design of tax law itself.

These three frames for regulating (business) behavior are regularly examined and debated in the corporate and regulatory literature, but their application to the tax system remains under explored. If you are interested in thinking more about the tax side, join us this Friday February 12, 2021 at 5:30-7pm GMT (12:30-2:00pm EST). For more information on the panel, see below. To join, visit the registration link here.

Break Into Tax

By: Leandra Lederman & Allison Christians

We’ve started a new YouTube series we wanted to share with our readers! It’s called “Break Into Tax” (BiT) and can be found at tinyurl.com/BreakIntoTax.

The idea behind BiT is that we’ll discuss and break down tax-related concepts, broadly defined. This includes issues that may be of interest to law students and others newer to tax or to particular issues. The topics we plan to cover include substantive tax law concepts, tax policy concerns, the study of taxation, and the pursuit of tax as a career. We also welcome suggestions for topics in the comments on our videos!

We come at the issues from the perspective of tax law professors in the U.S. and Canada with cross-border interests. The BiT series is not at all designed to be of interest only to people from these two countries. We expect to focus on concepts that are foundational enough or general enough to be of broad interest.

Our introduction video, located here, is a good place to start. It shares more about us and the BiT channel. Our first playlist covers Tax Policy Colloquia: what are they, how to ask a good question in a tax workshop, and tips for students writing reaction papers.

Please join us as we break into tax!

Why Tax Losses Matter (for Pres. Trump’s Taxes and Everyone Else’s)

By: Leandra Lederman

Tax losses pose a special problem for the federal fisc. I’ll get to that in a minute, but first some set-up as to how tax noncompliance differs on the income side versus the deduction and credit side. The overall purposes of this post are to address some questions I’ve gotten and pull together some tax enforcement themes that are implicated by the recent NY Times reporting on Pres. Trump’s returns.

The Importance of Third-Party Reporting

A lot of tax noncompliance occurs with respect to income. Not for folks with mainly wage and salary income who maybe earn a little bit of interest from a bank account. All of that is reported by third parties (the payors) to the IRS, on information returns like Form W-2 or Form 1099. The taxpayer/payee receives a copy the information return and that both simplifies reporting and communicates what information the IRS has about the transaction. As Joe Dugan and I argue in a forthcoming article, third-party reporting is very effective. With the IRS able to do simple return matching to catch any incorrect reporting (intentional or otherwise), IRS figures like this bar graph show that there’s not a lot of noncompliance where there’s substantial third-party information reporting.

Where much tax noncompliance occurs is with respect to income earned by the self-employed and small businesses, where there’s much less third-party reporting and also more use of untraceable cash. (I added the red circle to the IRS image below.)

Continue reading →

Wrap-Up of the 2020 Indiana/Leeds Summer Tax Workshop Series

Zoom Composite 2.0

By: Leandra Lederman

The 2020 Indiana/Leeds Summer Tax Workshop Series ended on Thursday, after 13 weeks of talks. It was terrific getting to spend the summer with so many tax enthusiasts–professors, practitioners, and students–from all over the world! Dr. Leopoldo Parada and I really enjoyed co-hosting this series, and we expect to continue it next summer!

We received speaker permission to share videos of most of the talks. The speaker’s scripted remarks and our introductions are included. Those videos can be found at this link.

The complete speaker list and papers presented were as follows:

May 21	Ruth Mason, University of Virginia	The Transformation of International Tax
May 28	Stephen Daly, King’s College London	Trust, Tax Administration and State Aid
June 4	Susan Morse, University of Texas	Modern Custom in Tax
June 11	James Repetti, Boston College	The Appropriate Roles for Equity and Efficiency in a Progressive Income Tax
June 18	Diane Ring & Shuyi Oei, Boston College	Regulating in Pandemic: Evaluating Economic and Financial Policy Responses to the Coronavirus Crisis
June 25	Umut Turksen, Coventry University	The Role of Human Factors in Tax Compliance and Countering Tax Crimes
July 2	Allison Christians, McGill University	Accurately Counting Value in the International Tax System
July 9	Joshua Blank, University of California, Irvine	Automated Legal Guidance
July 16	Michael Devereux, University of Oxford	The OECD GloBE Proposal
July 23	Ana Paula Dourado, University of Lisbon	The Concept of Digital Economy for Tax Purposes: a Reassessment
July 30	Ricardo García Antón, Tilburg University	Enhancing the Group Interest in Transfer Pricing Analysis
Aug. 6	Steven Dean, New York University	A Constitutional Moment in Cross-Border Taxation
Aug. 13	Monica Victor, University of Florida	The Taxman’s Guide to the Galaxy: Allocating Taxing Rights in the Space-based Economy

Thank you again to all those who joined us, and we hope to see you next year! #IndianaLeedsSummerTax

Announcing the 2020 Indiana/Leeds Summer Tax Workshop Series!

Indiana Leeds PR image to use By: Leandra Lederman

As I posted previously, this summer, Dr. Leopoldo Parada from the University of Leeds School of Law and I (with the support of the Indiana University Maurer School of Law) will co-host the new Indiana/Leeds Summer Tax Workshop Series. It will meet online via Zoom on Thursdays from 10:30am-noon Eastern time (3:30-5pm British Summer Time). If you are interested in cutting-edge tax issues, we hope you will consider attending!

We received many terrific submissions in response to the Call for Papers. As stated there, we prioritized tax topics that would be of interest to scholars in multiple countries. We are very fortunate to have Professor Ruth Mason from the University of Virginia kicking off what promises to be an outstanding series! The following is the full list of speakers and the papers they’ll be presenting: Continue reading “Announcing the 2020 Indiana/Leeds Summer Tax Workshop Series!” →

Taking Control of the State Tax Base During the Pandemic

COVID-19 has impacted society in nearly every dimension, and state and local governments have been hit especially hard. Those governments are simply not equipped to deal with major revenue shocks like those that accompany a global pandemic. In that vein, a group of scholars has joined forces to create Project SAFE (State Actions in Fiscal Emergencies), which is focused on providing research-backed policy recommendations for states. Among the project’s areas of focus is how states can help themselves by modifying their own taxing and spending programs and priorities.

One of the features of state taxation that I have been looking at quite a bit in recent years is states’ conformity practices—states using the federal tax code for purposes of defining their own tax bases. Continue reading “Taking Control of the State Tax Base During the Pandemic” →

Updated Working Paper on Pandemic Regulation Includes Analysis of the CARES Act, H.R. 748

My co-authors and I (Hiba Hafiz, Shu-Yi Oei, and Natalya Shnitser) have just posted an updated version of our Working Paper, Regulating in Pandemic: Evaluating Economic and Financial Policy Responses to the Coronavirus Crisis. The Working Paper is revised and updated to incorporate the provisions of H.R. 748 (the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES” Act) enacted into law on March 27, 2020. In addition, the revised draft considers recent action by the Federal Reserve, the Department of Labor, and other agencies all through the analytical framework we offer for evaluating these initiatives.