Results tagged “Tax Law”

November 1, 2011

Professor Katie Pratt discussed the tax consequences of sex-reassignment surgery at the Loyola of Los Angeles Law Review symposium, "LGBT Identity & the Law."

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July 25, 2011

This op-ed was originally published by the levinson.jpg Daily Journal.

By Visiting Associate Clinical Professor Jessica A. Levinson

A small but well-publicized part of California's newly enacted budget, the so-called "Amazon tax," looks to be the catalyst behind California's next big ballot initiative battle. The law requires Internet retailers with a "physical presence" in the state to collect a sales tax from customers in the state and expands the definition of physical presence to include online retailers that have related companies or affiliates in the state. After the passage of the law, Amazon promptly cut ties with approximately 10,000 affiliates in the state.

Who would like this tax? Well, in addition to those hoping to raise revenues for the state (the state estimates that it could receive in the low hundreds of millions in tax revenues each year if residents paid taxes on online sales), anyone losing business to online retailers. Exhibit A: Wal-Mart Inc.

So what is an online retail giant to do? Since this is California, a resource-depleting two-front attack is the likely course.

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June 27, 2011

Loyola Law School Professors Ellen Aprill, Jennifer Kowal, Katie Pratt and Ted Seto are among the top 25 U.S. tax professors as ranked by downloads on the Social Science Research Network.

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May 25, 2011

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By Professor Ellen Aprill

This is another installment in the Summary Judgments summer series, "The Headline Club," in which Loyola Law School professors will discuss legal issues ripped from the front page.

The role of noncharitable exempt organizations, in particular section 501(c)(4) social welfare organizations, was perhaps the key feature of last year's election. One New York Times editorial, for example, declared: "For all the headlines about the Tea Party and blind voter anger, the most disturbing story of this year's election is embodied in an odd combination of numbers and letters: 501(c)(4)." IRS rules permit Section 501(c)(4) organizations to engage in political campaign activity so long as such is not their primary activity. At the same time, section 501(c)(4) organizations need not disclose their contributors to the public. There is, however, no statutory exception to the gift tax for transfers to section 501(c)(4) organizations., and the IRS announced as far back as 1982 that it considered such transfers subject to gift tax.

Until recently, the IRS has not enforced the gift tax on transfers to section 501(c)(4) organizations for many years. Moreover, few contributors would be subject to the gift tax. Currently, a contributor to a section 501(c)(4) organization does not treat annual transfers of the first $13,000 as a taxable gift; a contributor would owe no gift tax out of pocket until total transfers to these organizations and other taxable gifts exceeded $5,000,000.

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May 23, 2011

Recent graduate Michael Boardman published the following op-ed in the Friday, May 20 edition of the Los Angeles Daily Journal.

By Michael Boardman, Class of 2011

Back in January, a California Court of Appeal sided with one of California's most influential special interests, the Howard Jarvis Taxpayer Association, and overturned the state Legislature's ability to draft language for the titles and summaries that explain legislative initiatives on state ballots.

The decision itself is not necessarily a surprise. Titles of initiatives are supposed to be impartial descriptions, yet the Legislature had suggestively titled Proposition 9 the "Safe, Reliable High-Speed Passenger Train Bond Act," and the Howard Jarvis Taxpayer Association has been a juggernaut in state politics since it shepherded the infamous Proposition 13 in 1978. The surprise is that Jarvis and other special interests have repeatedly transformed the California Constitution with the help of the courts' standard of review, which takes inspiration from the harshest critics of constitutional dynamism -- the originalists.

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February 11, 2011

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By Professor Katherine Pratt

This is another installment of Loyola's "11 on '11" series, in which Loyola Law School professors are weighing in on what they expect to be the biggest legal issues in their fields in 2011.

This is the year in which the president and the Congress should focus on reducing inefficient and out-of-control spending through the tax code, to reduce federal budget deficits without gutting worthwhile discretionary spending programs.

President Barack Obama deserves credit for speaking frankly in his recent State of the Union address about the critical need to cut "spending" in all parts of the federal budget, not just in the non-defense discretionary spending that makes up a relatively small part of the federal budget. Obama also deserves credit for suggesting that we eliminate tax "loopholes" - also known as "tax expenditures" (targeted tax subsidies that benefit a narrow group of taxpayers, reduce tax revenue and drive up tax rates for other taxpayers). However, the president missed an opportunity to call for reform of many of the loopholes in the individual income tax, to make the tax system more efficient and fair, and to contain the rapid growth of tax expenditures, currently estimated to total over $1 trillion a year.

Tax expenditures frequently are the economic equivalent of a federal spending program. Generally, in an income tax system, legitimate business expenses (e.g., the cost of renting an office) are deductible, but personal living expenses (e.g. the cost of renting an apartment) are not deductible. Our tax code provides generally that personal expenses are not deductible, but allows individual taxpayers to take certain types of itemized deductions (e.g., the home mortgage interest deduction) if the taxpayer's total itemized deductions exceed the "standard deduction" ($11,600 for married couples and $5,800 for individuals in 2011). The itemized deductions allowed by the tax code thus generally are the functional equivalent of a loophole-free income tax code plus a federal spending program. For example, the home mortgage interest deduction is a federal housing subsidy that disproportionately benefits upper-income homeowners. Our tax code also provides tax subsidies in the form of "exclusions," meaning that the excluded item is not treated as income and is not taxed. An example is the income tax exclusion for employer-sponsored health insurance ("ESI"), which drives up the cost of healthcare and disproportionately benefits taxpayers whose employers provide "Cadillac" health insurance.

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January 24, 2011

Tax Notes recently spoke to Professors Jennifer Kowal, Katie Pratt and Ted Seto for an article on the 10th anniversary of Loyola's graduate tax program. The story discusses the steps the program is taking to respond to changes in the legal market, as well as issues in tax policy.

Read the entire article on TaxProfBlog.

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January 19, 2011

Professors Ellen Aprill and Rick Hasen co-authored the article "Lobbypalooza" for The American Interest magazine. The article briefly describes the history of tax-related and disclosure-related regulation of lobbying. It also flags some developments in the lower courts, in which lower courts are relying on Citizens United to strike down some lobbying regulations. Hasen describes those lower court developments in his draft, "Lobbying, Rent Seeking, and the Constitution" (posted on SSRN).

Excerpt from "Lobbyapalooza":
"In the face of the financial crisis, partisan recriminations and other problems of contemporary American governance, some have urged limits on lobbying in order to promote the public interest. They fear not only potential lobbyist corruption, but also lobbyists facilitating a raiding of the public fisc...Lobbyists provide legislators and other government officials with crucial information and convey the points of view of important constituencies. A responsive government needs to hear various viewpoints, and in a complex world legislators and staffers need help analyzing, and even writing, important legislation. It is hard to imagine the U.S. government today functioning without lobbying. Moreover, lobbying also enjoys constitutional protections. The First Amendment guarantees both free speech and the right to petition the government. "

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January 14, 2011

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January 12, 2011

KatiePratt.jpgBy Professor Katie Pratt

This op-ed was originally published in the Jan. 12, 2011 edition of the Los Angeles Daily Journal.

If President Barack Obama and Congress ever decide to get serious about federal deficit reduction, there is a potential $1 trillion deficit reduction funding source that they have ignored. With annual federal budget deficits projected to average $1 trillion for the next decade, they should seriously consider this funding source, instead of assuming - contrary to fact - that radical cuts in federal discretionary spending programs can painlessly and equitably achieve meaningful deficit reduction.

Last week, the new Speaker of the House, John Boehner, citing the "Pledge to America," committed to cut federal spending, reduce federal budget deficits, cut federal taxes and shrink the size of the federal government. Democrats also have acknowledged the serious threat posed by projected federal budget deficits, and Obama has proposed a freeze on discretionary spending programs. Freezing discretionary spending or cutting wasteful discretionary spending will not achieve meaningful deficit reduction, however, because the total funding for non-defense domestic discretionary spending programs adds up to only about one-sixth of the federal "spending" budget; defense and homeland-security spending, interest on the federal debt and entitlement-benefit spending account for most federal outlays.

Boehner and other prominent Republicans do not acknowledge any connection between tax cuts and federal budget deficits, despite the fact that federal revenue fell during the Bush administration to the lowest levels since the 1950s, and that revenue loss has been a major contributor to federal budget deficits. Instead, they frame tax cuts as "pro-growth" measures and budget deficits as the result of the federal government spending too much money on wasteful and inefficient programs. Many voters also erroneously assume that spending cuts can be achieved painlessly by cutting wasteful, inefficient or overly generous programs.

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January 11, 2011

Subsidies totaling over $1 trillion, known as "tax expenditures," are woven throughout the federal tax code. These tax expenditures provide federal subsidies that are targeted to specific industries and activities. Some of these tax expenditures (e.g., the home mortgage interest deduction) are well known and considered by most Americans as entitlements. Many tax expenditures are hidden from public view, however, buried in the complex morass of the federal tax code.

Unlike discretionary spending programs, most tax expenditures are not subject to annual budget scrutiny or performance review (such as cost-benefit analysis), and often provide disproportionate subsidies to upper-income Americans.

-Excerpt from Professor Katie Pratt's op-ed, "Show Me the Money: A Hidden Source of Funding for Federal Deficit Reduction," scheduled to appear in the Jan. 12 edition of the Los Angeles Daily Journal

Loyola Law School and the Urban-Brookings Tax Policy Center are co-hosting a daylong exploration of tax-expenditure reform during "Starving the Hidden Beast: New Approaches to Tax Expenditure Reform" to be held from 8 a.m.-4 p.m. on Friday, Jan. 14 at Loyola Law School's downtown L.A. campus. Speakers include Loyola Professors Ellen Aprill, Katie Pratt and Ted Seto, as well as tax law and policy experts from academia and think tanks such as the Urban-Brookings Tax Policy Center, the Federal Budget Reform Initiative of the Pew Economic Policy Group and the Congressional Research Service. The panels will dissect a range of topics: "The Salience of Tax Expenditures and Implications for Reform," "Reforming the Tax Expenditure Budget Presentation," "Evaluating Tax Expenditures" and "Approaches to Tax Expenditure Reform."

See the event website for complete details.

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