Tax Policy Center Hosts Conference Today On Wealth Taxation, Entrepreneurship, And Philanthropy


Pension and Health Care Benefits Syllabus, Spring 2018., i, 69, 82, 75, 71,, funded ratio, Executive Summary; (2 minutes), and here are some examples


Moneychimp, Annuity Calculator,


Society of Actuaries, Life Expectancy Calculator:


Business Tax Syllabus, Spring 2018.


Individual Income Tax Syllabus, Fall 2017.


Tax Practice & Procedure Syllabus, Fall 2017.


Pension and Health Care Benefits, Spring 2017




Tax Reform: Senate Finance legislative text released.  Last night, the Committee released the 515 -page legislative text, a 74-page section-by-section summary, and the Joint Committee on Taxation's score, showing net revenue loss of $1,414 b. FY18-FY27.  Additional material on the mark-up is here.










View Document [PDF]





Nonprofit Organizations Syllabus, Fall 2016. Books,


Nonprofit Law Prof Blog$file/2015_Pence_Tax_Return.pdf


Both Clinton and Trump would reduce tax incentives for charitable giving


Deducting Political Expenditures


Buckles Presents Religious Colleges That Embrace Heterosexual Monogamy Should Retain Their Tax Exemption Under Bob Jones, Despite Obergefell At Regent


Introducing our Tax Exempt & Government Entities FY 2017 Work Plan, 6, 8-9, 36, 38


Tax-Exempt College Endowments Need Closer Scrutiny, Trump Says

Seeking to address concerns over college affordability, Republican presidential nominee Donald Trump threatened September 22 to end the tax-exempt status of college endowments that don't spend enough of their funds on lowering tuition costs or supporting student activities., 53

EXCLUSIVE: John Kerry’s State Department Funneled MILLIONS To His Daughter’s Nonprofit

More than $9 million of Department of State money has been funneled through the Peace Corps to a nonprofit foundation started and run by Secretary of State John Kerry's daughter, documents obtained by


NY AG investigates Trump Foundation

Posted: 14 Sep 2016 05:43 PM PDT

Eric Schneiderman, Attorney General of New York, indicated that he has started an investigation into the Trump Foundation: In a CNN interview on Tuesday, Schneiderman said his office had now brought Trump's charitable foundation under scrutiny. "My interest in this...



News Analysis: The Donald: Entertainer, Developer, and Reluctant Conservationist

In news analysis, Lee A. Sheppard examines issues related to real estate development and charitable giving that might be raised in Republican presidential nominee Donald Trump's unreleased tax returns.

Foundation to Revise Donation Policy if Clinton Is Elected

The Clinton Foundation will stop accepting donations from foreign and corporate donors if Democratic presidential nominee Hillary Clinton wins the election in November, limiting donations to only those from U.S. citizens or independent charities, a spokesperson for the foundation said August 18.

IRS to Process Plaintiffs' Unresolved Tea Party Applications

The IRS will start processing the exemption applications of some Tea Party organizations that have been waiting years for the agency to tell them whether they qualify for tax-exempt status, according to the Justice Department.






IRS Launches Sharing Economy Website For Airbnb Hosts, Uber Drivers,

A gold medal in worthless ideas: Tax breaks for Olympic winners


SFC’s Ron Wyden turns up the heat on GOP nominee Donald Trump’s tax returns.


Senate Finance Committee’s top Democrat wonders whether Trump might be “hiding evidence of questionable international business dealings by not releasing his tax return.” He says lawmakers will again push legislation that would require presidential candidates to release their tax returns. “This information should be available to voters before they vote.”





Individual Income Tax Syllabus, Spring 2016.


Taxation of Business Entities and Oil and Gas Interests Syllabus, Spring 2016.


Individual Income Tax book:


Retirement Plans: Last Week Tonight with John Oliver (HBO) - YouTube



Calculations from the Society of Actuaries, Life Expectancy Calculator,


Former Tax Court Judge and Husband Indicted For Tax Evasion


U.S. News Data:  Law School Costs, Starting Salaries For Grads


8th Circuit Affirms Exotic Dancer's 3-Year Sentence For Tax Fraud, Rejects Argument That $1.1 Million From Customer Were Gifts Rather Than Payments For Sex


A Taxing Oscars:  $232,000 Swag Bags (40% Increase Over Last Year's), Tax Incentives For Best Picture Nominees


Two GOP candidates release partial tax returns.


Ted Cruz and Marco Rubio released summaries of their tax returns over the weekend. Rubio released Form 1040s for tax years 2010 to 2014, when his effective tax rate varied from 9.4 percent to 27.4 percent. Cruz released his 1040s for 2011 to 2014. His effective tax rate ranged between 28.38 percent and 32.22 percent. Neither disclosed any supplemental forms or schedules. Both demanded that Donald Trump release his tax filings.


But he says it will have to wait.


Trump says he wants the IRS to complete what he says is an annual audit before he’ll release his returns. While the IRS is mum about Trump’s returns, Commissioner John Koskinen says it’s rare for a taxpayer to be audited every year. “Usually when there’s an audit, and it’s cleared up, if there are no other issues, it’s a number of years, two or three at least, before you hear from us again, unless something in your next return pops up.”


Pension Supplement:

Affordable Care Act signs up  540,000 in first week of open enrollment—how much of the law will the Senate vote to repeal next week? The Department of Health and Human Services released preliminary enrollment numbers yesterday, noting a “solid start.” Senate Republicans aren’t yet sure how far to go in their effort to repeal the law. The leadership wants to  dump as much as it can, but some GOP senators want to preserve its expansion of Medicaid. Meanwhile, Senate Democratic Leader Harry Reid says the majority can only make “tailored changes” to the bill through reconciliation.

 Supreme Court to Decide Contraceptive Mandate Challenge

Posted November 06, 2015, 2:40 P.M. ET

The Supreme Court today granted review of yet another controversial issue raised by the Affordable Care Act: It will hear oral argument on objections filed by religious nonprofit corporations to provisions that, they say, require them to engage in sinful acts.

Specifically, the cases—seven in all—target regulations that require large employers to offer employee plans covering birth control at no cost to the employees. The government attempted to accommodate the religious nonprofits' objections by saying those groups could opt out of the requirement by telling the Department of Health and Human Services in writing of those objections, at which point their insurers would become responsible for supplying the coverage. Complying with the accommodation, however, would make the groups complicit in easing access to birth control, they said. That in itself violated their rights under the Religious Freedom Restoration Act (RFRA), they said.

The Supreme Court previously ruled that the birth control mandate violated the RFRA rights of for-profit, closely held corporations whose owners objected to providing birth control coverage. The court in that case, however, pointed to the fact that the mandate didn't contain any accommodation that would permit such entities to opt out.


Treasury Launches Expanded myRA Program

Posted November 04, 2015, 09:56 A.M. ET

By Jo-el J. Meyer

The Treasury Department announced this morning that after concluding the initial phase of its myRA program, the department will be expanding the program with new funding options.

The expanded portions of the myRA program include the ability for retirement savers to fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account, according to a fact sheet. In addition, myRA savers can direct all or a portion of a federal tax refund to a myRA.

myRA can give people confidence that they’re taking steps in the right direction, and it can serve as a bridge to other savings options that will carry them the rest of the way,” said Treasury Secretary Jacob J. Lew in announcing the expanded program. “myRA alone will not solve the nation’s retirement savings gap, but it will be an important stepping stone for encouraging and creating a nation of savers.”


Social Security and Social Security Disability Insurance (SSDI) Provisions in the Proposed Bipartisan Budget Agreement of 2015 (PDF) 
13 pages. "Among these changes is a temporary reallocation of the Social Security payroll taxes so that a larger share is deposited in the Disability Insurance (DI) trust fund to extend the life of this trust fund beyond its current predicted exhaustion in 2016. Under this provision, the allocation of the 12.4 0% Social Security payroll tax assigned to the DI trust fund would increase from 1.80% to 2.37% and the allocation to the Old-Age and Survivors Insurance (OASI) trust fund would decrease from 10.60% to 10.03%. These changes would last through 2018. In addition, these provisions extend the Social Security Administration's (SSA) demonstration authority for the Social Security Disability Insurance (SSDI) programs, make changes to data and earnings reporting, and increase penalties for benefit fraud." [Report No. R44250, dated Oct. 28, 2015.] (Congressional Research Service [CRS])

Bipartisan Budget Act set to pass the House late this morning.  Senate passage is likely as soon as Friday or as late as next Tuesday.  Just before midnight last night, by voice vote, the House Rules Committee cleared the Senate Amendment to H.R.1314 with an amendment, setting the vote for late this morning after one hour of debate.  Passage is very likely.  The Rules Committee action was delayed until an amendment could be drafted which corrected a drafting error in the Overseas Contingency Operations funding and to fully pay for the bill, which CBO scored as $14.06 b. short, by increasing Pension Benefit Guarantee Corporation fees and by extending pension stabilization for another year, through 2020.  The pension stabilization changes would cut spending by $6.4 b. and raise revenues by over $5 b. FY16-FY25.  Opposition is mounting over the $3 b. crop insurance pay for as well.  Senator Rand Paul (R-KY) plans to filibuster, but that will be overcome, although it may delay passage until early next week.

Pepperdine Symposium:  The Impact Of King v. Burwell On Judicial Deference To IRS Determinations

Tentative Budget Deal Would Hike PBGC Premiums

Posted October 27, 2015, 09:41 A.M. ET

By Sean Forbes

A tentative federal budget deal reached late Monday night would hike flat-rate and variable-rate premiums for single-employer pension plans beginning in 2017.

The per-participant flat-rate premiums for single-employer plans would jump to $68 for plan years beginning after Dec. 31, 2016, and before Jan. 1, 2018; to $73 for plan years beginning after Dec. 31, 2017, and before Jan. 1, 2019; and to $78 for plan years beginning after Dec. 31, 2018, according to the bill, which now must be voted on by the House and Senate.

The budget deal also would hike the variable-rate premiums for single-employer plans by $2 in calendar year 2017, $3 in 2018 and another $3 in 2019.

Bipartisan Budget Act of 2015 Section-by-Section Summary

Sec. 1. Short title; Table of Contents.

Subsection 1(a) provides that the short title of this Division is the ‘‘Bipartisan Budget Act of 2015’’. Subsection 1(b) sets forth the table of contents for the Act.

Title I – Budget Enforcement
Sec. 101. Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985.

The limits on discretionary spending are established in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA). The limits are subdivided in each fiscal year through 2021 into two categories: revised security category and revised nonsecurity category. The revised security category is defined to be the National Defense budget function (Function 050) which includes funding for the Department of Defense, the nuclear weapons- related work of the Department of Energy, intelligence-related activities, and the national security elements of the Departments of Commerce, Justice, Homeland Security, and several independent agencies. The Department of Defense (including the intelligence programs) usually receives over 95 percent of the budget authority in this function. The revised nonsecurity category comprises discretionary spending not contained in the revised security category. Subsection 101(a) amends section 251(c) of BBEDCA to increase the limits on discretionary spending for fiscal years 2016 and 2017. The revised levels for each category are shown in the table.

(Millions of $BA)

FY 2016

FY 2017

Revised Security

Revised Non- Security

Revised Security

Revised Non- Security

Current Law





Revised Cap





In addition to the limits on discretionary spending, section 251A of BBEDCA also includes a sequester of direct spending, the size of which interacts with the discretionary spending levels.

Subsection 101(b) provides for the implementation of the sequester of direct spending as if the amendments in subsection 101(a) had not been made. The President is required by law to implement the sequester of direct spending ordered on February 2, 2015 and the one in the Sequestration Preview Report for Fiscal Year 2017 as if the amendments in subsection 101(a) had not been made.


Subsection 101(c) reduces spending by $14 billion in fiscal year 2025 by requiring the President to sequester the same percentage of direct spending in 2025 as will be sequestered in 2021. It also replaces the arbitrary dips and increases in the Medicare sequester percentages in 2023 and 2024 with a flat two-percent rate as applies under current law in fiscal years 2016 through 2022.

Subsection 101(d) establishes minimum adjustments to the defense and non-defense caps for overseas contingency operations in fiscal years 2016 and 2017 providing certainty for two years on approximate OCO levels.

Sec. 102. Authority for fiscal year 2017 budget resolution in the Senate.

Subsection 102(a) authorizes in the Senate a congressional budget for fiscal year 2017. Subsection 102(b) provides that the chair of the Senate Committee on the Budget will submit after April 15 and no later than May 15, 2014 for publication in the Congressional Record allocations of budgetary resources for each congressional committee, aggregate spending and revenue levels, and levels of revenues and outlays for Social Security that will be enforceable as if included in a conference agreement on a budget resolution. Subsection 102(c) provides that the submission pursuant to subsection (b) may also include reserve funds adopted in the fiscal year 2016 budget resolution for fiscal year 2017 updated to cover the new budget window. Subsection 102(d) provides that this section shall expire if a budget resolution conference report for fiscal year 2017 is agreed to by the House and the Senate.

Title II - Agriculture Sec. 201. Standard Reinsurance Agreement.

Section 201 amends the Federal Crop Insurance Act to require that the Standard Reinsurance Agreement be renegotiated no later than December 31, 2016 and at least once every five years thereafter. This section also establishes an 8.9 percent cap on the overall rate of return for insurance providers under the agreement. Currently, the negotiated overall rate of return is approximately 14.5 percent.

Title III – Commerce Sec. 301. Debt collection improvements.

Subsection 301(a) amends the Communications Act of 1934 to authorize the use of automated telephone equipment to call cellular telephones for the purpose of collecting debts owed to the

(Millions of $BA)

FY 2016

FY 2017

Defense OCO



Nondefense OCO




United States government. This subsection also authorizes the Federal Communications Commission to issue regulations to limit the number and duration of any such calls.

Subsection 301(b) requires the FCC to issue regulations to implement this section within 9 months of the date of enactment of the Bipartisan Budget Act of 2015.

Title IV – Strategic Petroleum Reserve

Sec. 401. Strategic Petroleum Reserve test drawdown and sale notification and definition change.

Subsection 401(a) amends section 161 of the Energy Policy Conservation Act (EPCA) to require DOE to notify Congress prior to any Strategic Petroleum Reserve test sale, with an exception for emergency drawdowns, and to submit a report following any sale. Subsection 401(b) amends section 3 of EPCA to include terrorism as a qualifying cause of severe energy disruption.

Sec. 402. Strategic Petroleum Reserve mission readiness optimization.

Section 402 requires DOE to conduct a strategic review of SPR and develop proposals related to its role in national policy, relevant legal authorities, configuration and performance, and long- term effectiveness.

Sec. 403. Strategic Petroleum Reserve drawdown and sale.

Subsection 403(a) authorizes the sale of 58 million barrels of oil from the Strategic Petroleum Reserve (SPR) from 2018-2025. Subsection 403(b) prohibits sales under subsection (a) if such sales would limit the ability of the SPR to meet its strategic purpose of preventing and reducing the adverse impacts of severe domestic energy supply interruptions. Subsection 403(c) requires the proceeds of the sale to be deposited in the General Fund of the treasury to reduce the deficit.

Sec. 404. Energy Security and Infrastructure Modernization Fund.

Subsection 404(a) establishes an Energy Security and Infrastructure Modernization Fund (Modernization Fund). Subsection 404(b) provides that the purpose of the Modernization Fund is to provide for the construction, maintenance, repair, and replacement of Strategic Petroleum Reserve facilities. Subsection 404(c) authorizes the sale (subject to approval in advance through the appropriations process) of up to $2 billion of oil from the SPR and for deposit of the proceeds of the sale in the Modernization Fund. It also prohibits sales under this authority if such sales would limit the ability of the SPR to meet its strategic purpose of preventing and reducing the adverse impacts of severe domestic energy supply interruptions. Subsection 404(d) establishes the authorized uses of the Modernization Fund balances for operational improvements to extend the useful life of SPR’s surface and subsurface infrastructure; maintenance of SPR cavern storage integrity; and addition of SPR infrastructure and facilities to


optimize the drawdown and incremental distribution capacity of the Strategic Petroleum Reserve. Subsection 404(e) authorizes up to $2 billion of sales under subsection 404(c) from 2017-2020. Subsection 404(f) requires the Secretary of Energy to provide detailed plans in the Department of Energy’s annual budget requests. Subsection 404(g) terminates the authority provided in subsection 404(c) after 2020.

Title V – Pensions Sec. 501. Single Employer Plan Annual Premium Rates.

Current law: Single-employer pension plans annually pay a fixed premium to the PBGC, which is indexed for inflation, and will be $64 per person in 2016. Single-employer plans also pay a variable rate premium, which is indexed to inflation and will equal $30 per $1000 of underfunding in 2016.

Provision: The single-employer fixed premium would be raised to $68 for 2017, $73 for 2018, and $78 for 2019, and then re-indexed for inflation. The variable rate premium would continue to be indexed for inflation, but would be increased by an additional $2 in 2017, an additional $3 in 2018, and an additional $3 in 2019.

Sec. 502. Pension Payment Acceleration.

Current law: The due date for premiums is generally the fifteenth day of the tenth full calendar month of the premium payment year.

Provision: The premium due date for plan years beginning in 2025 would be the fifteenth day of the ninth calendar month beginning on or after the first day of the premium payment year.

Sec. 503. Mortality Tables.

Current law: Private sector defined benefit pension plans generally must use mortality tables prescribed by the Treasury for purposes of calculating pension liabilities. Plans may apply to Treasury to use a separate mortality table. Plans qualify to use a separate table only if (1) the proposed table reflects the actual experience of the pension plan maintained by the plan sponsor and projected trends in general mortality experience, and (2) there are a sufficient number of plan participants, and the plan was maintained for a sufficient period of time to have credible information necessary for that purpose.

Provision: The determination of whether the plan has credible information shall be made in accordance with established actuarial credibility theory, which is materially different from the current rules. In addition, the plan may use tables that are adjusted from the Treasury tables if such adjustments are based on a plan’s experience.


Sec. 504. Extension of Current Funding Stabilization Percentages to 2018 and 2019.

Current Law: Single employer defined benefit pension plan liabilities may be valued by using either spot interest rates or by taking into account the interest rates on investment grade corporate bonds over the prior two years. Under MAP-21 (the 2012 highway bill) and HAFTA (the 2014 highway bill), interest rates for valuing liabilities in 2012-2017 are deemed not to vary more than ten percent from the average interest rates over the prior twenty-five years. That corridor increases by 5 percent per year through 2021, at which point it remains permanently at 30 percent, which has the effect of deferring companies’ deductible required pension contributions.

Provision: The corridor on interest rates would remain at ten percent through 2019. The corridor would increase by five percent per year through 2023, at which point the corridor would remain permanently at 30 percent. The provision would generally be effective for plan years beginning after December 31, 2015. This proposed reduction in required pension contributions would, purely at the discretion of employers that choose to take advantage of this pension funding relief, result in those employers having more taxable income (because the contributions that they elect to defer are tax-deductible when contributed). This is estimated to increase revenues as compared to the budget baseline. It is also estimated to result indirectly in increased Pension Benefit Guaranty Corporation (PBGC) premiums because employers that, purely at their discretion, choose to take advantage of this funding relief would have a larger base for purposes of computing the variable rate premium on underfunding.

Title VI – Health Care

SEC. 601. Maintaining 2016 Medicare Part B Premium and Deductible Levels Consistent With Actuarially Fair Rates.

In 2015, the monthly Part B premium rate is $104.90. Without Congressional action, the estimated monthly Part B premium in 2016 for beneficiaries not held harmless would be $159.30. This policy would maintain the hold harmless provision in current law and prevent a dramatic premium increase on beneficiaries not held harmless. This policy accomplishes this by setting a new 2016 basic Part B premium for the beneficiaries not held harmless at $120, which is the amount the Part B premium would otherwise be for all beneficiaries in 2016 if the hold harmless provision in current law did not apply. To effectuate this policy, in 2016, there would be a loan of general revenue from the Federal Treasury to the Supplemental Medical Insurance (SMI) Trust Fund. To repay the loan, starting in 2016, beneficiaries not subject to the hold harmless would pay an additional $3 in their monthly Part B premium until the loan is repaid. Medicare beneficiaries who currently pay higher income-related premiums would pay higher than $3, the amount of which would increase for beneficiaries in each higher-income bracket in proportion to income-related premiums under current law. If there is no cost of living adjustment increase for 2017, this provision would apply again.


SEC. 602. Applying Inflation Adjustment to Medicaid Generic Drug Inflationary Rebate.

Currently, single source and innovator multiple source drugs pay an additional rebate if the price of the drug has increased faster than inflation (CPI-U). The inflation-based rebate, however, does not apply to generic drugs. Section 602 would apply the inflation-based rebate currently paid on brand drugs to generic drugs.

SEC. 603. Treatment of New Off-Campus Outpatient Departments of a Provider

Section 603 would codify the Centers for Medicare & Medicaid Services (CMS) definition of provider-based (PBD) off-campus hospital outpatient departments (HOPDs) as those locations that are not on the main campus of a hospital and are located more 250 yards from the main campus. The section defines a “new” PBD HOPD as an entity that executed a CMS provider agreement [after the date of enactment]. Any PBD HOPD executing a provider agreement after the date of enactment would not be eligible for reimbursements from CMS’ Outpatient Prospective Payment System (PPS). New PBD HOPDs, as defined by this section, would be eligible for reimbursements from either the Ambulatory Surgical Center (ASC PPS) or the Medicare Physician Fee Schedule (PFS).

Sec. 611. Repeal of automatic enrollment requirement.

Section 611 repeals Section 18A of the Fair Labor Standards Act (29 U.S.C. 218a), as added by section 1511 of the Affordable Care Act. Section 1511 requires employers with more than 200 employees to automatically enroll new full-time equivalents into a qualifying health plan if offered by that employer, and to automatically continue enrollment of current employees.

Title IX - Judiciary Sec. 701. Civil monetary penalty inflation adjustments.

Section 701(a) establishes the short title for this section as the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.” Section 701(b) amends the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) to:

1.     Require all agencies with civil monetary penalties covered by the statute to update penalties based on their value in the last update prior to 1996 and the change in the CPI between that date and October 2015. The increase in penalties that results from this “catch up” calculation would be capped at 150% (so a penalty now set at $10,000 could not increase to more than $25,000).

2.     Require all agencies to adjust their civil monetary penalties annually based on changes in the CPI, using data from October of each year.

3.     Replace current rounding rules with a simple rule that penalties be rounded to the nearest dollar.

4.     Apply these provisions to the Occupational Safety and Health Act and civil penalties assessed under the Social Security Act.


5.     Allow a Secretary of a covered agency to increase one or more penalties covered by these provisions by less than the new formula through a rulemaking only if the Secretary finds that increasing the penalty by the required amount will have a negative economic impact or that the social costs outweigh the benefits and the Director of the Office of Management and Budget concurs with this analysis.

6.     Speed implementation by:

1.     requiring OMB to issue guidance on how to implement the inflation provisions

by January 31, 2016 and annually thereafter by December 15th;

2.     requiring agencies to publish the first adjustment in the penalties by at latest July

1, 2016 through Interim Final Rulemaking (specified in statute) to become

effective by at latest August 1, 2016; and

3.     starting in January 2017, and annually thereafter, require agencies to publish

annual updates by January 15th each year in the Federal Register (specified in

statute). These annual inflationary adjustments would not require rulemaking.

7.     Improve oversight and agency compliance by (a) requiring agencies to include

information about penalties and their adjustments in agency annual financial statements, and (b) calling on GAO to assess compliance with required inflation adjustments as part of its annual agency audits.

Subsection 701(c) makes a conforming change to the Debt Collection Improvement Act of 1996 (28 U.S.C. 2461 note).

Sec. 702. Crime Victims Fund.

Section 802 rescinds and permanently cancels $1.5 billion from the Crime Victims Fund. This provision preserves adequate balances to meet programmatic funding needs for the foreseeable future.

Sec. 703. Assets Forfeiture Fund.

Section 703 rescinds and permanently cancels $746 million from the Department of Justice Asset Forfeiture Fund.

Title VIII – Social Security

Sec. 801. Short title.

This section establishes that the short title for this title is the “Social Security Benefit Protection and Opportunity Enhancement Act of 2015”.


Subtitle A: Ensuring Correct Payments and Reducing Fraud Sec. 811. Expansion of cooperative disability investigations units

Requires nationwide coverage by Cooperative Disability Investigations (CDI) units, jointly run by the Social Security Administration (SSA) and the Office of the Inspector General (OIG), and consisting of staff from local SSA offices, the OIG, State Disability Determination Services (DDS), and local law enforcement. CDI units generally investigate suspected fraud before benefits are awarded.

Sec. 812. Exclusion of certain medical sources of evidence

Prevents evidence submitted by unlicensed or sanctioned physicians and health care providers from being considered when determining disability. (Effective for determinations made on or after one year after enactment)

Sec. 813: New and stronger penalties

Creates a new specific felony for conspiracy to commit Social Security fraud, punishable by up to 5 years in prison, fines generally up to $250,000, or both. Increases the maximum felony penalty from 5 years to 10 years for individuals in positions of trust (including claimant representatives, doctors and other health care providers, translators, and current or former SSA employees) who use their specialized knowledge to defraud the SSA, in addition to fines (generally up to $250,000).

Increases the maximum Civil Monetary Penalty (CMP) that the SSA can levy against individuals in a position of trust from $5,000 to $7,500 for each false statement, representation, conversion, or omission the individual makes or causes to be made.

Disqualifies individuals from receiving benefits during a trial work period if they are assessed a CMP for fraudulently concealing work activity. (All provisions effective upon enactment)

Sec. 814. References to Social Security and Medicare in electronic communications

Clarifies that the prohibitions and penalties contained in Section 1140 of the Social Security Act, regarding the misuse of symbols, emblems, and names associated with Social Security and Medicare, also apply to electronic and Internet communications, and treats each Internet viewing as a separate offense. (Effective upon enactment)

Sec. 815. Change to cap adjustment authority

Increases the level of the cap adjustment spending for program integrity as allowed under the Budget Control Act. Additional funding totals $484 million FY 2017-2020. Expands the use of funds to include CDI units, Special Assistant United States Attorneys who prosecute Social Security fraud, and work-related continuing disability reviews.


Subtitle B: Promoting Opportunity for Disability Beneficiaries

Sec. 821. Temporary reauthorization of disability insurance demonstration project authority.

Reinstates the Social Security Administration’s demonstration authority through December 31, 2021 and requires all projects using the authority to terminate on December 31, 2022.

Sec. 822. Modification of demonstration project authority.

Updates requirements for the Congressional review period, under which the Commissioner must notify Congress in advance of any experiment or demonstration project conducted under this authority. Requires additional information to be sent to the Committee on Ways and Means and Committee on Finance prior to beginning. The proposal must now include a description of objectives, expected annual and total costs, start date, and end date. Specifies that participation in demonstration projects is voluntary and requires informed consent.

Sec. 823. Promoting opportunity demonstration project.

Requires the Social Security Administration to test the effect on beneficiary earnings of changing how earnings are treated for purpose of ongoing benefit eligibility. Under the demonstration, the existing “cash cliff” would be replaced with a benefit offset, under which the DI benefit would be reduced by $1 for every $2 of earnings in excess of a threshold. The SSA could test multiple thresholds at or below the current level of earnings that constitute a trial work month ($780 in 2015). Under the demonstration, there would be no trial work period and no extended period of eligibility, but beneficiaries could receive partial benefits if their earnings in a month exceeded the substantial gainful activity amount ($1,090 a month in 2015). In addition, the threshold amount could be adjusted upward to reflect an individual’s itemized Impairment Related Work Expenses. Once an individual’s benefit is fully offset, entitlement to benefits would end, but Medicare coverage would continue for 93 months.

Sec. 824. Use of electronic payroll data to improve program administration

Authorizes Social Security to obtain, with beneficiary consent, data on beneficiary earnings from payroll providers and other commercial sources of earnings data through a data exchange. Individuals for whom the SSA obtains earnings data from these sources would be exempt from the requirement to report their own earnings. The SSA would be required to publish regulations governing this process prior to implementation. (Effective one year after enactment)

Sec. 825. Treatment of earnings derived from services.

When a DI beneficiary works, the SSA must consider which month the income was earned in determining whether the individual’s earnings exceed the Substantial Gainful Activity amount. The SSA would be permitted to streamline the process of evaluating a beneficiary’s earnings by presuming that wages and salaries were earned when paid, unless information was available to the SSA that showed when the income was earned. Beneficiaries would receive a notification


when such presumption is made, and afforded an opportunity to provide additional wage information regarding when the services were performed. (Effective upon enactment)

Sec. 826. Electronic reporting of earnings.

Requires the SSA to permit DI beneficiaries to report their earnings via electronic means, including telephone and internet, similar to what is available to Supplemental Security Income recipients. (Effective not later than September 30, 2017)

Subtitle C: Protecting Social Security Benefits Sec. 831. Closure of unintended loopholes

Closes several loopholes in Social Security’s rules about deemed filing, dual entitlement, and benefit suspension in order to prevent individuals from obtaining larger benefits than Congress intended. (Effective for individuals who attain age 62 after 2015, with respect to dual entitlement and deemed filing; and effective for benefits payable beginning 6 months after enactment, with respect to benefit suspension.)

Sec. 832. Requirement for medical review.

In order to make an initial determination of disability, the Commissioner must make every reasonable effort to ensure that a qualified physician, psychiatrist or psychologist has completed the medical portion of the case review. (Effective for determinations made beginning one year after enactment)

Sec. 833. Reallocation of payroll tax revenue.

Reallocates to the Disability Insurance Trust Fund an additional 0.57 percentage points (for a total of 2.37 percentage points of the total combined 12.4 percent payroll tax) in 2016, 2017 and 2018. This would be sufficient to pay benefit until 2022, and the total rate would not change.

Sec. 834. Access to financial information for waivers and adjustments of recovery

When an individual requests waiver of an overpayment because they are without fault and are unable to repay the funds, the SSA would be permitted to verify their financial information using its Access to Financial Institutions system (which provides data on beneficiary financial accounts). (Effective for determinations made 3 months after enactment)

Subtitle C: Relieving Administrative Burdens and Miscellaneous Provisions

Sec. 841. Interagency coordination to improve program administration.

Under current law, the Office of Personnel Management (OPM) must reduce disability payments made to a Federal Employee Retirement System (FERS) annuitant who also receives


Social Security disability benefits. In some cases, OPM pays the FERS annuity before the SSA has determined whether the annuitant is also entitled to Social Security disability, resulting in a FERS overpayment. SSA would be permitted to repay OPM the amount of overpaid FERS benefits if an individual is found eligible for DI and is entitled to an award of past-due benefits, and deduct this overpaid amount from the past-due Social Security payment. This shall apply to past-due disability insurance benefits payable 1 year after enactment.

Sec. 842. Elimination of quinquennial determinations relating to wage credits for military service prior to 1957.

Eliminates the requirement that the SSA make quinquennial determinations for pre-1957 military service wage credits after the 2010 determination; the trust funds have been reimbursed for all costs attributable to granting these wage credits.

Sec. 843. Certification of benefits payable to a divorced spouse of a railroad worker to the Railroad Retirement Board.

Adds divorced spouses to the list of beneficiaries whose information is certified electronically.

Sec. 844. Technical amendments to eliminate obsolete provisions.

Technical change to remove subsections 226(j) and 226A(c) which are obsolete.

Sec. 845. Reporting requirements to Congress.

Requires the SSA to report on:

1.     Fraud Prevention Activities and Improper Payments

2.     Work-Related Continuing Disability Reviews

3.     Overpayment Waivers

Sec. 846. Expedited examination of Administrative Law Judges

SSA hires new ALJs through the Office of Personnel Management, which holds periodic examinations for potential ALJ candidates. SSA would be allowed to request additional examinations for Administrative Law Judges (ALJs) when the need arises.

Title IX – Temporary Extension of Public Debt Limit Sec. 901. Temporary extension of public debt limit.

Subsection 901(a) provides for the temporary suspension of the limit on public debt through March 15, 2017. Subsection 901(b) further provides that on March 16, the public debt limit will be increased, but only to the extent that: (1) the face amount of obligations issued and the face amount of obligations whose principal and interest are guaranteed by the federal government (except guaranteed obligations held by the Secretary of the Treasury) outstanding on March 15,


2017, exceeds (2) the face amount of such obligations outstanding on the date of enactment of this Act.

Sec. 902. Restoring Congressional Authority Over the National Debt.

Subsection 902(a) limits the adjustment under section 901(b) by prohibiting an obligation from being taken into account unless its issuance was necessary to fund a commitment incurred by the federal government that required payment before March 16, 2017.

Subsection 902(b) prohibits the Secretary of the Treasury from abusing the suspension of the debt ceiling to build up cash balances above normal operating balances.

Title X – Spectrum

Sec. 1001. Short title.

This section establishes the short title of this tile as the “Spectrum Pipeline Act of 2015.”

Sec. 1002. Definitions.

This section defines terms as used in this title.

Sec. 1003. Rule of construction regarding frequency bands.

Sec. 1004. Identification, Reallocation, and Auction of Federal Spectrum.

This section requires the NTIA to identify 30 MHz of spectrum below 3 GHz (excluding 1675- 1695 MHz) by 2022 in preparation for an auction by the FCC no later than July 1, 2024.

Requires the FCC to hold said auction.

Sec. 1005. Additional Uses of Spectrum Relocation Fund.

This section expands the eligible uses of the Spectrum Relocation Fund to include research and development of spectrum technologies and systems to improve government spectrum efficiency. It also allocates $500 million for such purposes and includes ongoing funding of 10% of funds deposited in the SRF. This funding will increase the ability of the Federal government to identify opportunities for spectrum reallocation and sharing with commercial systems.

Entities requesting funds from OMB must submit a plan to the technical panel established under the Middle Class Tax Relief and Job Creation Act of 2012 in order to make a determination whether the plan is likely to produce tangible positive results.

Sec. 1006. Plans for Auction of Certain Spectrum.

Establishes a series of reports from the FCC to Congress detailing new opportunities to reallocate spectrum from government to commercial or shared use.


Sec. 1007. FCC Auction Authority.

Extends expiring FCC auction authority from 2022 to 2025 for the specific spectrum identified under Section 1004.

Sec. 1008. Report to Congress on Rules Changes Relating to 3550-3650 MHz Spectrum.

Requires a report to Congress on the efficacy of the Spectrum Access System rules being implemented in the 3650-3750 MHz band to enable sharing between licensed, unlicensed, and government incumbents.

Title XI – Revenue Provisions Related to Tax Compliance Sec. 1101. Partnership Audits and Adjustments.

Three different regimes currently exist for auditing partnerships. For partnerships with 10 or fewer partners, the IRS generally applies the audit procedures for individual taxpayers, auditing the partnership and each partner separately. For most large partnerships with more than 10 partners, the IRS conducts a single administrative proceeding (under the so-called TEFRA rules, which were adopted as part of the Tax Equity and Fiscal Responsibility Act of 1982) to resolve audit issues regarding partnership items that are more appropriately determined at the partnership level than at the partner level. Under the TEFRA rules, once the audit is completed and the resulting adjustments are determined, the IRS must recalculate the tax liability of each partner in the partnership for the particular audit year.

A third audit regime applies to partnerships with 100 or more partners that elect to be treated as Electing Large Partnerships (ELPs) for reporting and audit purposes. A distinguishing feature of the ELP audit rules is that unlike the TEFRA partnership audit rules, partnership adjustments generally flow through to the partners for the year in which the adjustment takes effect, rather than the year under audit. As a result, the current-year partners’ share of current-year partnership items of income, gains, losses, deductions, or credits are adjusted to reflect partnership adjustments relating to a prior-year audit that take effect in the current year. The adjustments generally do not affect prior-year returns of any partners (except in the case of changes to any partner’s distributive share).

Under the provision, the current TEFRA and ELP rules would be repealed, and the partnership audit rules would be streamlined into a single set of rules for auditing partnerships and their partners at the partnership level. Similar to the current TEFRA rule excluding small partnerships, the provision would permit partnerships with 100 or fewer qualifying partners to opt out of the new rules, in which case the partnership and partners would be audited under the general rules applicable to individual taxpayers.

Under the streamlined audit approach, the IRS would examine the partnership’s items of income, gain, loss, deduction, credit and partners’ distributive shares for a particular year of the partnership (the “reviewed year”). Any adjustments would be taken into account by the partnership (not the individual partners) in the year that the audit or any judicial review is


completed (the “adjustment year”). Partners would not be subject to joint and several liability for any liability determined at the partnership level. Partnerships would have the option of demonstrating that the adjustment would be lower if it were based on certain partner-level information from the reviewed year rather than imputed amounts determined solely on the partnership’s information in such year. This information could include amended returns of partners opting to file, the tax rates applicable to specific types of partners (e.g., individuals, corporations, tax-exempt organizations), and the type of income subject to the adjustment (e.g., ordinary income, dividends, capital gains). As an alternative to taking the adjustment into account at the partnership level, a partnership would be permitted to issue adjusted information returns (i.e., adjusted Form K-1s) to the reviewed year partners, in which case those partners would take the adjustment into account on their individual returns in the adjustment year through a simplified amended-return process. As a result, partnerships generally would no longer issue amended Form K-1s after the partnership return is filed, but instead would use the adjusted Form K-1 process.

A partnership would also have the option of initiating an adjustment for a reviewed year, such as when it believes additional payment is due or an overpayment was made, with the adjustment taken into account in the adjustment year. The partnership generally would be permitted to take the adjustment into account at the partnership level or issue adjusted information returns to each reviewed-year partner. The provision would be delayed for two years, so that it applies to returns filed for partnership tax years beginning after 2017.

Sec. 1102. Partnership Interests Created By Gift.

A partnership generally is an unincorporated organization in which the parties (typically referred to as partners) have joined together with the purpose of conducting an active trade or business. A person also may be recognized as a partner if capital is a material income-producing factor, whether such interest was obtained by purchase or by gift. Congress intended this rule to clarify that a family member who receives via gift a capital interest in a partnership, where capital is a material income-producing factor, should be respected as a partner in the partnership and should be taxed on the income from that partnership. Some taxpayers have argued that this family partnership rule provides an alternative test for determining who is a partner without regard to how the term is generally defined in the partnership tax rules. Thus, they assert that if a partner holds a capital interest in a partnership, the partnership must be respected regardless of whether the parties have demonstrated that they joined together to conduct an active trade or business.

The provision would clarify that Congress did not intend for the family partnership rules to provide an alternative test for whether a person is a partner in a partnership. The determination of whether the owner of a capital interest is a partner would be made under the generally applicable rules defining a partnership and a partner. In addition, the family partnership rules would be clarified to provide that a person is treated as a partner in a partnership in which capital is a material income-producing factor whether such interest was obtained by purchase or gift and regardless of whether such interest was acquired from a


family member. The rule, therefore, is a general rule about who should be recognized as a partner.

Title XII – Designation of Small House Rotunda Sec. 1201. Designating Small House Rotunda as “Freedom Foyer”.

This section designates the first floor area of the House of Representatives wing of the U.S. Capitol known as the small House rotunda as “Freedom Foyer.” Busts of Winston Churchill, Lajos Kossuth, and Vaclav Havel are on display in the Freedom Foyer.


Health Care

Many Employers Deemed Unprepared for ‘Cadillac Tax'

A large majority of employers expect the ACA's ‘Cadillac tax' to impact their plans, but many of those employers haven't calculated when the tax will hit their plans or taken steps to reduce generous benefits to avoid it,...


Tesla Model X Buyers Get $35,000 Tax Break


L.A. Homeowners Hot Under The Collar As IRS Taxes 'Cash For Grass' Drought Rebates


Republicans' Plans to Raise Retirement Age Fall Heavily on Poor

Posted October 13, 2015, 2:10 P.M. ET

By Esme E. Deprez and Margaret Newkirk

Republican presidential candidates' rationale for raising the retirement age, that we're all living longer, holds true for those with multiple diplomas, homes in safe neighborhoods and a plan for golden-age leisure. In other words, for the wealthy.

For the poor, research shows that as incomes have stagnated, so have life expectancies.

Candidates Chris Christie, Ben Carson, Jeb Bush and Marco Rubio all support raising the age. Democrats tend to oppose their premise that Social Security is in crisis, and that working longer is a fair way to fix it. Lifting the age from 67, an idea pushed for years to bolster Social Security, would affect Americans in dramatically different ways depending on their wealth. Forcing the poor, who die younger, to work longer threatens to make a lengthy retirement a perk reserved only for the prosperous.

©2015 Bloomberg L.P. All rights reserved. Used with permission


St. Louis area Teamsters face deep cuts in income

Central States Pension Fund Submits Plan for Reducing Benefits
"Within 30 days of receiving an application to suspend benefits, Treasury will publish the Rescue Plan and request comments from contributing employers, unions, participants and other parties.... Treasury must approve or deny Central States' application within 225 days of the submission.... Within 30 days of an application's approval, the IRS must administer a vote for participants and beneficiaries to approve or reject the proposed benefit suspensions.... If a majority of participants and beneficiaries vote to reject the suspension, the plan sponsor may again apply for benefit suspensions.... [B]ased on the filing date for the Rescue Plan, if it is approved, it would be implemented on or around July 1, 2016."
(McGuireWoods LLP)  


Pension Fund May Cut Benefits for 273,000 Workers and Retirees
"The proposal, which still needs approval from the Treasury Department, will spare retirees age 80 or older from any cuts as well as anyone receiving disability protections. And reductions would be less severe for those older than 75 or widows and widowers receiving spousal benefits. While they vary, cuts will average about 23% and could happen as soon as July."



Groups Cheer Confirmation of PBGC Director

Retirement plan groups cheered the Senate's confirmation of W. Thomas Reeder Jr. as director of the Pension Benefit Guaranty Corporation....


Former U.N. Official Charged With Tax Crimes and Bribery
John W. Ashe, a former United Nations ambassador for Antigua and Barbuda and president of the U.N. General Assembly, was indicted October 5 on charges of filing false returns and bribery.

Central States Pension Fund Prepares to Slash Hundreds of Thousands of Workers' Pensions
"The cuts in monthly payments to workers covered by Central States will vary from nothing (for about one-third of the group) to more than 60 percent (the highest losses will be suffered by many in a group of about 28,400 Teamsters whose employers had abandoned their employees, usually via bankruptcy and closure). The average loss for all participants will be 22.6 percent of retirement pay on which they had counted, according to the summary prepared by the fund trustees."
(In These Times)  

Third Circuit: PPA Surcharges Not Included in Withdrawal Liability
"C&S Wholesale Grocers argued that a [PBGC] opinion letter suggested that an average of the contribution rates in its three CBAs should be used to determine its withdrawal liability from the IBT Local 863 Pension Fund. However, the court said it would not consider the argument since it found that the plain language of the MPPAA required otherwise." [Bd. of Trustees of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers, Inc., No. 14-1956 (3d Cir. Sept. 16, 2015)]

Ninth Circuit Holds That Asset Sale Successor May Be Liable for Predecessor Multiemployer Plan Withdrawal Liability Without Assumption of Liability
"Even though the purchaser (a former salesman of the predecessor employer) purchased only 30 percent of the predecessor's assets at public auction and none of its customer lists or goodwill, and used his own experience and contacts to hire the predecessor's former employees and contact customers, the court remanded the case back to the district court to determine whether there was sufficient continuity of the predecessor's business (most notably, continuity of the customer base) to be a successor." [Resilient Floor Covering Pension Trust Fund Bd. of Trustees v. Michael's Floor Covering, Inc. (9th Cir. Sept. 11, 2015)] (Haynes and Boone, LLP)  

Win for United Refining Retirees Stands

Posted October 05, 2015, 11:27 A.M. ET

United Refining Co. today lost its bid to have the U.S. Supreme Court review a decision awarding higher pension benefits to a class of the company's retirees.

The case involved United Refining's decision to reinterpret its pension plan in a way that provided lower benefit levels to retirees. The retirees alleged that this reinterpretation actually constituted a plan amendment that slashed their benefits in violation of the Employee Retirement Income Security Act's rule prohibiting cutbacks of accrued pension benefits.

The case is United Ref. Co. v. Cottillion, U.S., No. 15-66, cert. denied 10/5/15.

Did Volkswagen deceive the US government to secure tax breaks? The German automaker, along with other auto manufacturers, lobbied for $50 million in tax breaks to help market its diesel cars. If they planned to trick US authorities, VW executives could be charged with criminal tax fraud. The US could also bring a claim against VW under the False Claims Act. Firms  are not allowed to lie to the US (by manipulating software to allow a vehicle to pass an emissions test) in order to obtain a government benefit (a tax credit for a low-emissions alternative fuel vehicle).


Central States Teamsters pension fund seeks permission to cut benefits

The Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., is seeking permission to cut benefits for participants, including retirees, as part of a proposed rescue plan awaiting approval from the Treasury Department. The pension fund had assets of $17.8 billion as of Dec. 31, and is projected to become insolvent in 2026.


Fringe Benefits

PricewaterhouseCoopers to Offer Student Debt Benefit

Starting in July, accounting and consulting firm PricewaterhouseCoopers will offer some employees a practical perk: $1,200 a year for up to six years toward their student debt. ...


The Millennial Journey from Saving to Retirement (PDF)
16-page executive summary. "[M]illennials are often inclined to hold more cash than prior generations, are less likely to marry or own a home, and will increasingly finance their own retirements due to declining availability of defined benefit pension plans. Given rising life expectancies, their retirements may be longer than their working years ... How can median-income millennials do it? It starts with a plan to put 4%-9% of pre-tax income into retirement accounts each year, starting at age 25. For affluent millennials, the range would be 9%-14%; and for high net worth millennials, 14%-18%." [Also available: 72-page full report.]
(J.P. Morgan Asset Management)  


IRS Agent Busted for Extorting Money From Marijuana Dispensary Owner

Millennials: Today’s Underserved, Tomorrow’s Social Security and Medicare Bi-millionaires?

Posted: 16 Sep 2015 08:42 AM PDT

In a newly released study, Caleb Quakenbush and I find that a typical couple retiring today is scheduled to receive about $1 million in cash and health benefits; many millennials will receive $2 million or more. In effect, we’ve now scheduled many young adults to be future Social Security and Medicare bi-millionaires.

Kelsey-Hayes Ordered to Restore Lifetime Health Benefits

Kelsey-Hayes Co. must restore lifetime health benefits to a class of about 100 retirees and surviving spouses because the automotive brake manufacturer violated the terms of a collective bargaining agreement when it replaced the benefits with a less favorable health insurance system, a federal judge in Michigan rules. ... More »

Here's How Wide the Retirement Gap Is Between Men and Women
"Financial Finesse, which provides financial education programs to more than 600 organizations, examined data on median income, retirement savings, life expectancy, 401(k) salary deferral rates, and projected health-care costs for a woman and a man, each 45 years old. The goal: Figure out how much each needed in order to retire at age 65 and live on 70 percent of his or her pre-retirement income. The gap that emerged between the sexes: 26 percent. A man's retirement shortfall was more than $212,000. A woman's? More than $268,000."

Number of Americans who lack health insurance took big dip in 2014

The proportion of Americans who lack health insurance took a big dip last year, with nearly 9 million people gaining coverage since 2013, according to federal figures announced Wednesday. The figures from an annual Census survey found that the share of people across the country who were uninsured fell from 13.1 percent in 2013 to 10.4 percent last year.


Here's How Wide the Retirement Gap Is Between Men and Women
"Financial Finesse, which provides financial education programs to more than 600 organizations, examined data on median income, retirement savings, life expectancy, 401(k) salary deferral rates, and projected health-care costs for a woman and a man, each 45 years old. The goal: Figure out how much each needed in order to retire at age 65 and live on 70 percent of his or her pre-retirement income. The gap that emerged between the sexes: 26 percent. A man's retirement shortfall was more than $212,000. A woman's? More than $268,000."


How Pension Plans Can Adapt to a New Normal of Low Returns
"Whereas many pensions have embraced liability-driven investing in recent years, asset-liability mismatches remain. A rise in long-term bond yields would allow pension investors to close duration gaps at higher levels of funding. But what if it turns out that we're in an environment of lower yield and lower returns for longer than we expected? What if the slow rates of real and nominal growth we have experienced since the 2008-09 financial crisis are reflective of long-term secular trends?"
(Institutional Investor)  


 Public Pension Funds Roll Back Return Targets
"New upheavals in global markets and a sustained period of low interest rates are forcing officials who manage retirements for nearly 20 million U.S. beneficiaries to abandon a long-held belief that stocks, bonds and other holdings would earn 8% each year, as well as expectations that those gains would fund hundreds of billions of dollars in liabilities.... More than two-thirds of state retirement systems have trimmed assumptions since 2008 ... On [September 4], the New York State Common Retirement Fund, the third-largest public pension by assets, said it plans to drop its assumed returns to 7% from 7.5% after cutting a half-percentage point five years ago."
(The Wall Street Journal; subscription may be required)  


The World's 300 Largest Pension Funds at Year End 2014
"[T]he world's top 300 pension funds now represent around 43% of global pension assets. Total assets of the world's largest 300 pension funds grew by over 3% in 2014 (compared to around 6% in 2013). By individual region North America had the highest five-year combined compound growth rate of around 8%."
(Towers Watson)  


Moody's: Older IRS mortality tables could save sponsors $18 billion next year

The IRS' decision to stick with 15-year-old mortality assumptions will save corporate defined benefit plan sponsors at least $18 billion in contributions in 2016 and be a credit positive for them, said a report from Moody's Investors Service.

O'Malley: Apply Payroll Tax on Higher Incomes
To pay for expanded Social Security benefits, the payroll tax associated with the program should apply to wage income of more than $250,000, former Maryland Gov. Martin O'Malley said August 21.

Social Security Benefits, Finances, and Policy Options: A Primer


Tax Court: German Lawyer Cannot Deduct Cost Of Obtaining A U.S. J.D.


Tax Court Petition:  Can Boston Bruins (And Other Pro Sports Teams) Deduct 100% Of Meal Expenses At Away Games; Is Hotel A Team's 'Business Premises'?


The Best Legal Job Market for Millenials? Tax Law


Tax Court: A Snickers Bar Is Not a Deductible Business Expense


Herzig & Brunson:  Using the Tax Law to Combat Racist Fraternities and Sororities


WaPo Fact Checker:  Ted Cruz’s Claim That the Tax Code Has More Words Than the Bible


Bridging the Gap: How Prepared Are Americans for Retirement?
Hearing before the Senate Special Committee on Aging, March 12, 2015. Video and links to written testimony by [1] Jean Chatzky, NBC's Today Show; [2] Alicia Munnell, Ph.D., Center for Retirement Research, Boston College; [3] Michal Grinstein-Weiss, Ph.D., Brown School of Social Work, Washington University, Center for Social Development; and [4] Rob Carmichael, Maine Savings Federal Credit Union.
(Special Committee on Aging, U.S. Senate)  


Senate Holds Hearing on The Coming Debt Crisis


Senate Holds Hearing on Tax Reform, Growth and Efficiency


Congressional Research Service (CRS)

A Guide to Describing the Income Distribution

Sarah A. Donovan, Analyst in Labor Policy

February 5, 2015


The Tax Consequences of the $160,000 of Swag in This Year's Oscars' Gift Bags


Chartbook: The President's FY 2016 Budget


Malcolm Butler, Not Tom Brady, to Pay Income Tax on Super Bowl MVP Truck


The Tax Consequences of Tom Brady's Gift of His Super Bowl MVP Truck to Malcolm Butler


U.S. Department of the Treasury, The Budget in Brief: Internal Revenue Service FY 2016 1 tbl. (Tax Administration) (2015),

Money From Egg Donation Is Taxable Compensation, Court Holds
Money received by a woman for her egg donations is taxable as compensation for services performed and is not damages excludable from gross income under section 104(a)(2), the Tax Court held January 22.




dynamic analysis and dynamic scoring at this Brookings Institution conference (JCT PowerPoint).


Please visit to listen to the Annual Meeting podcasts.


Here's to 40 years of ERISA-and more to come!

View the 40th Anniversary of ERISA symposium Part I
View the 40th Anniversary of ERISA symposium Part II
Learn more about ERISA


Piketty's TED Talk on Capital in the 21st Century


Chodorow:  Should Martians Pay U.S. Taxes?


Villanova Symposium:  Selective Issues in Tax Administration


Will a Cheap Engagement Ring and Wedding Help Your Marriage?


NY Times:  The Year in Charts


Federal Tax Procedure Book

Assignment 1

Assignment 2

Assignment 3

Assignment 4

Assignment 5

Assignment 6 start at 26:33 Life Tables


Supreme Court Grants Cert. to Hear Challenge to IRS's Expansion of Affordable Care Act Tax Credit


1.    TaxProf Blog: IRS Says President's Use of University ...


TaxProf Blog


Jul 15, 2014 - Meanwhile, several leaders of other Ohio universities with arrangements similar or identical to OU's are still living tax-free, The Dispatch found.


Tax Revolving Door Enriches Former IRS Officials Who Cash in by Navigating Inversions Through Rules They Wrote


NY Times:  Law Lets IRS Seize Accounts on Suspicion, No Crime Required


Washington & Lee Seeks to Hire Tax Clinic Visitor for Fall 2015


How to Audit the President


Tax refunds could be delayed.  Yesterday, IRS Commissioner John Koskinen's Monday letter to Senate Finance Chair Ron Wyden (D-OR) was released with that warning.  See this Bloomberg News story for more.


Tax Court:  Tenured Art Professor Has Separate Trade or Business as Artist


Retired CUNY Professor Gets $560k/Year Pension:  'Darn Right I Deserve It'


The Tax Status of America's Professional Sports Leagues


60 Minutes:  The Tax Refund Scam here to view video directly on CBS to avoid interruption caused by blog's refresh rate.) (Click here to view video directly on CBS to avoid interruption caused by blog's refresh rate.)


Treasury Takes Action Against Inversions
In a much-anticipated notice, Treasury on September 22 took administrative action against companies that invert by substantially reducing the economic benefit to be gained from inverting and making inversions more difficult to accomplish.

Treasury Department Takes Action to Rein in Tax Inversions


Scott Brown and Debbie Wasserman Schultz:  The Deductibility of Politicians' Grooming and Clothing Expenses


ATAX Research Fellowship Application, 8:00; 42:40, 50


COD Income and Student Loan Debt Forgiveness 11:30


Tax Court Approves the IRS's Taxation of Frequent Flyer Miles,d.b2U


House IRS Budget Could Be 'Catastrophic' in 2015, Koskinen Says, 5:50




IRS Says President's Use of University-Provided House Constitutes Taxable Income


Obama and Biden Release Their 2013 Tax Returns's%20Mark%20-%20EXPIRE%20Act.pdf


Oklahoma For-Profit Corporation Not Subject to 501(c)(4) Rules Established to Support Republican Senate Candidate


New 2015 U.S. News Tax Rankings


Call for Student Papers:  Tax Notes, State Tax Notes, and Tax Notes International


Tax Provisions in President Obama's FY2015 Budget


A Taxing Oscars:  $80,000 Swag Bags, Tax Policy, and Divorce in Blue Jasmine, Thanks, Daniel Cook


p. 11: Sec. 1207. Repeal of exclusion for discharge of student loan indebtedness.

Current law: Under current law, discharge of indebtedness generally constitutes taxable income. However, an exception applies to student loans that are forgiven because the former students work for a period of time in certain professions or for certain classes of employers. The exception also applies to loan repayments as part of the National Health Services Corps Loan Repayment Program and loan repayments or forgiveness under certain State loan repayment programs intended to provide for increased health care services in certain areas.

Provision: Under the provision, the exclusion for discharge of student loan indebtedness would be repealed. The provision would be effective for amounts discharged after 2014.

JCT estimate: According to JCT, the provision would increase revenues by $1.1 billion over 2014-2023.


More on the Tax Treatment of Egg Donation


Tax Court Seeks Amicus Briefs on Tax Treatment of Egg Donation


The Tax Treatment of American Olympic Medal Winners


What Is the Value of Michael Jackson's Estate? Executor Says $7.2 Million; IRS Says $1.25 Billion


5th Circuit Nixes Tax Shelter Used by 3 Attorneys to Keep More of $600M Legal Fee Award


Man Sues IRS After Tripping at Audit, Receives Tax-Free $862k


Irving Berlin:


Taxing the Behemoths


JPMorgan Chase Cannot Deduct $1.7 Billion Madoff Settlement Payment


DOJ Appeals Invalidation of § 107 Housing Allowance for 'Ministers of the Gospel'


In the Loop: Tina Turner ‘relinquishes’ U.S. citizenship
The soul star, long a Swiss resident, declares that she has “no plans to reside in the United States in the future.”
( Al Kamen, The Washington Post)


Michael Jackson Estate's Valuation ($2,105) vs. IRS' MJ Valuation ($434 Million)


The Tax Treatment of Buyouts of Coaches' Contracts,-Opinion-and-Advisory-Letters


Inflation Adjustments Affecting Individual Taxpayers in 2014


 WSJ:  J.P. Morgan's $5.1 Billion Settlement Is Tax Deductible,_Subchapter_A,_Sec._1.72-9


Attorney Who Claimed Tax Expertise Sentenced to 20 Months in Jail for Understating His Income


For Today's Millionaires:  A Tax-Time Bargain


WSJ:  How Twitter Insiders Cut Their Taxes


Congressional Research Service (CRS)

Shutdown of the Federal Government: Causes, Processes, and Effects

Clinton T. Brass, Coordinator, Specialist in Government Organization and Management

September 25, 2013

[full-text, 24 pages]


Tax Court Closes During Government Shutdown


IRS Shutdown Plan


Subscribing to TaxProf Blog


Tom Hanks Leaves Captain Phillips Premiere Early to Avoid NYC Tax Man


Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products, for the Society of Actuaries’ Living to 100 Symposium 5, to be held in Orlando, Florida on January 8-10, 2014; forthcoming in 21(2) Elder Law Journal ___ (2014). PowerPoint Presentation.


Social Security: How It Works and How to Fix It, speech for an Internal Revenue Service Office of Chief Counsel Professor in Residence lecture, Washington, DC, October 13, 2009; for a Taxation and Fiscal Policy class at Dedman School of Law, Southern Methodist University, Dallas, Texas, March 4, 2009; the Chandler Lions Club, Chandler, Oklahoma, February 12, 2009; and for the John Marshal Law School, Employee Benefits Lunch and Learn, Chicago, Illinois, April 24, 2008. PowerPoint Presentation.


Founder of Beanie Babies to Plead Guilty to Tax Evasion


Save the Date:  Mugel National Tax Moot Court Competition


 Johnny Football's Toughest Foe:  Alabama or the IRS?


A Cartoon Guide to Tax Reform


CRS:  The Potential Federal Tax Implications of United States v. Windsor




13th Annual Law Student Tax Challenge (2013-2014)'s_Guide_to_Social_Security.pdf


Tax Expenditures movie:


Obama and Biden Release Their 2012 Tax Returns

Dilbert on Taxes


Tax Provisions in President Obama's FY2014 Budget


McCaffery Mark Zuckerberg May Never Pay Taxes Again

WSJ:  Taxing Lunch at Google and Facebook?

Q:  What do accountants suffer from that ordinary people don’t?  A:  Depreciation.


An accountant tries horseback riding:

Yesterday I had a near death experience that has changed me forever.   I went horseback riding.  Everything was going fine until the horse starts bouncing out of control. I tried with all my might to hang on, but was thrown off.   Just when things could not possibly get worse, my foot gets caught in the stirrup. When this happened, I fell head first to the ground. My head continued to bounce harder as the horse did not stop or even slow down.  Just as I was giving up hope and losing consciousness the Wal-Mart manager came and unplugged it.


The doorbell, rings, and a man answers it. Here stands this plain but well-dressed kid, saying, “Trick or Treat!” The man asks the kids what he is dressed up like for Halloween. The kid replies, “I’m an IRS agent.” Then he takes 40 percent of the man’s candy, leaves, and doesn’t say thank you.


The tax  lawyer looked down on the destroyed ruins of his car and cried “My BMW! My BMW! It’s ruined!” When a passerby pointed out that he had also lost his left arm in the crash, he moaned, “Oh no, not my Rolex too!”


"Tax day is the day that ordinary Americans send their money to Washington, D.C., and wealthy Americans send their money to the Cayman Islands." –Jimmy Kimmel courtesy of Barbara D’Amato


Facebook CEO Mark Zuckerberg’s got the fame. He’s a household name and an Andy Samberg character. He also made around $13 billion in his company’s initial public offering last year. Now for the little heartache: A tax bill for one. Billion. Dollars. Jolie O'Dell,, 3-28-13


IRS Video Scandal
Looks like there's someone at the IRS in need of some Spock logic. The tax collector with its hand perpetually in your pocket is getting two thumbs down these days from spending watchdogs for a "Star Trek"-themed training video that mostly just trains anyone viewing it to wince. Bad script? Check. Bad per-diem jokes? Check. Bad acting? Check. Good use of irony, though. The accountants-turned-wooden-actors are heading to the planet "Notax." Alas, about $60,000 worth of tax dollars were spent on this and a "Gilligan's Island" parody, which can't be a comfort to anyone facing an IRS audit.  MSN Now 3-24-13


And while I can understand the backlash against such frivolous spending of taxpayer dollars by a government agency, this video simply had to be made, because, you know, Star Trek. The link to the video is below, and it’s both hilarious and depressing, sort of like when a clown dies. Robert Wood, Forbes, 3-22-13



The uproar over the “Star Trek” parody is an example of the sort of moralistic nitpicking to which the public sector is often subjected. It’s related to the lazy disdain in which government employees are held by many politicians and taxpayers. You could even say that bashing “bureaucrats” is the prime directive of populist politics. Michael McGough’ Los Angeles Times, 3-27-13



But note that the criticism of the IRS videos comes from our least productive government employees, Congress. Robert McKenzie, 3-29-13



Suppose you were an idiot. And suppose you were a member of Congress. But  then I repeat myself. -- Mark Twain



In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a Congress. -- John Adams



Talk is cheap...except when Congress does it. – Anonymous



There is no distinctly native American criminal Congress. -- Mark Twain



The fear of an Internal Revenue Service audit ranks right with the fear of death, visiting the dentist or speaking in public. Most taxpayers don’t know what an audit involves, but they know they don’t want to find out., Mike McDevitt, 4-26-07, Colorado Springs Business Journal


     An engineer dies and reports to the pearly gates. St. Peter checks his dossier and says, “Ah, you’re an engineer. You’re in the wrong place.” So the engineer reports to the gates of hell and is let in.

     Pretty soon, the engineer gets dissatisfied with the level of comfort in hell, and starts designing and building improvements. After a while, they’ve got air conditioning and flush toilets and escalators, and the engineer is a pretty popular guy.

     One day God calls Satan up on the telephone and says with a sneer, “So, how’s it going down there in hell?”

     Satan replies, “Hey, things are going great. We’ve got air conditioning, flush toilets, and escalators, and there’s no telling what this engineer is going to come up with next.”

     God replies, “What??? You’ve got an engineer? That’s a mistake. He should never have gotten down there; send him up here.”

     Satan says, “No way. I like having an engineer on the staff and I’m keeping him.”

     God says, “Send him back up here or I’ll sue.”

     Satan laughs uproariously and answers, “Yeah, right. And just where are YOU going to get a lawyer?”


Carl E. Behrens & Carol Glover, U.S. Energy: Overview and Key Statistics (CRS Report for Congress No. R40187, April 11, 2012),


House Releases Small Business Tax Reform Options

CRS:  250 Tax Expenditures

New 2014 U.S. News Tax Rankings

No matter what, we will spend the last five weeks (~15 classes) on Oil and Gas Taxation.  Many of the remaining assignments refer to Noah S. Baer, Oil and Gas Transactions (BNA Portfolio 605-2d) [hereinafter “Baer”].  It is freely available to you on-campus only (using your own laptop or a school computer) at the following link:  (Right click on the page, and click on Create a Shortcut to put it on your desktop.)  Read the assigned material and generally read the linked worksheets, Code, and regulation sections as they are referenced.


Anyone who thinks the government is listening to their phone calls should try calling IRS for tax help!



An investor went to a tax expert and said: “If I give you $1,000, will you answer two questions?”

The expert replied: “Certainly. And what is the other question?”



What can we, as citizens, do to reform our tax system? As you know, under our three-branch system of government, the tax laws are created by: Satan. But he works through the Congress, so that’s where we must focus our efforts. Dave Barry, Column, April 6, 2003



I think that one of the scariest letters one can receive is the one from the Internal Revenue Service. Greg Roberts, Aiken Standard, 3-3-13



California levied the first jock tax in 1991, on athletes from Chicago, right after the Chicago Bulls beat the L.A. Lakers. (Chicago quickly responded in kind.) Today, most states with a professional sports team impose a jock tax. Jeanne Sahadi and Les Christie, CNN/Money 2-22-05



. The USA is a big ol’ country and my hard-earned money helps with such groovy things as superhighways, thermonuclear devices to protect us from rogue nations and anti-revolution insurance. But I know I paid my taxes that year. Uncle Sam’s records said I’d only paid a few hundred dollars but my records showed that I’d paid a few thousand. Somewhere along the way someone, and it wasn’t me, left off a digit. Grant McGee 8-13-10



When I was young I used to think that money was the most important thing in life. Now that I am old, I know it is. - Oscar Wilde



The chaplains who pray for the United States Senate and the House of Representatives might speak a word now and then on behalf of the taxpayers.



When the time comes for the meek to inherit the earth, taxes will most likely be so high that they won't want it.



A window sign in Chicago: "Tax Returns Prepared - Honest Mistakes Are Our Specialty."



A man dies and goes to hell and is shocked to see his former tax lawyer entwined with a beautiful woman while everyone else roasts in eternal flames. So he calls over the nearest demon and asks how come the tax lawyer gets a girl while he just gets fried. The demon glances over and shouts “Who are you to question that woman’s punishment?”


Former Kirkland & Ellis Partner Pleads Guilty to Tax Fraud

Karen L. Hawkins


“There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government."  — Benjamin Franklin




There will be an external announcement to for two (2) Attorney-Advisor positions that will post tomorrow. The information is below.  


Announcement #: 13CE2-PRX0479-0905-11-AK

Opening Date: 03/06/2013

Closing Date: 03/20/2013

# of Positions: 2

Grade of position: GS-11


Lawsky Modeling Uncertainty in Tax Law

LST:  The 46 Most Transparent Law Schools

Tax Court:  Taxes Come Before Tithing to Church, Children's College Expenses

Senate Holds Hearing Today on Reducing the Deficit by Eliminating Wasteful Spending in the Tax Code

House Holds Hearing Today on The Tax-Related Provisions in the President’s Health Care Law

Wealth Inequality in America

A Florida tax attorney recently died and his brother, a physician, gave the eulogy. He stated that it had been said that nothing was certain but death and taxes, but his brother had successfully beaten taxes on many occasions but he still could not beat death. Told to me by Martin Press, tax controversy lawyer. 2-27-13


Doing your own income tax return is a lot like a do it yourself mugging.


Isn’t it appropriate that the month when the taxes are due begins with April Fool’s Day and ends with cries of “May Day!”?


This year, there are some major changes that you, as a taxpayer, should be aware of, unless—to quote Internal Revenue Service Commissioner Charles Rossotti, in his annual Message To Taxpayers—“you wish to become roommates with a federal-prison inmate who weighs 400 pounds and likes to dress you up as Tinkerbell.”  Dave Barry 4-10-2002


The fourth of July, 1776 - that's when we declared our freedom from unfair British taxation. Then, in 1777, we started our own system of unfair taxation.


Ode To Prosperity

By Madeleine Begun Kane


The affluent prosper quite well,

As their savings continue to swell.

It is great to be rich.

Destitution’s a bitch.

You might say that it’s taxing as hell.


      A man, called to an IRS audit, asked his accountant for advice on what to wear. “Wear your shabbiest clothing. Let him think you are a pauper.”

     Then he asked his lawyer the same question, but got the opposite advice. “Do not let them intimidate you. Wear your most elegant suit and tie.

     Confused, the man went to his rabbi, told him of the conflicting advice, and requested some resolution of the dilemma.

 “Let me tell you a story,” replied the rabbi. “A woman, about to be married, asked her mother what to wear on her wedding night. ‘Wear a heavy, long, flannel nightgown   that goes right up to your neck.’ But when she asked her best friend, she got conflicting advice: ‘Wear your most sexy negligee, with a V neck right down to your navel.    

The man protested, “What does all this have to do with my problem with the IRS?”  

 “No matter what you wear, you are going to get screwed.”








 “A tax shelter is a dumb transaction done by smart people that will put my kids through college.” Chuck Rettig, tax controversy lawyer, at a 2005 tax conference.



Ambition in America is still rewarded . . . with high taxes.



America is the land of opportunity. Everybody can become a taxpayer.



Of course you can't take it with you, and with high taxes, lawyer's fees, and funeral expenses you can't leave it behind either.



Q: How do you humble a person that flaunts their wealth?

A: Have them fill out a tax return.



One tax resolution firm says in an ad that the IRS "is the most brutal collection agency on the planet." Good, it should be. Ken Herman,, April 14, 2012


Attention, millionaires, the watchful eye of the Internal Revenue Service is trained on you. During last year's tax season, 30 percent of multimillionaires were audited, the agency said. Overall, just 1.1 percent of individual income tax returns were checked. Tiffany Hsu - Los Angeles Times 3-23-12



In the current political climate, taxes have been so demonized that many citizens regard taxation itself as wrongful. And if people believe that taxation itself is wrongful, then it would seem to follow that such people would also believe that the failure to pay taxes is not wrongful.. Stuart P. Green, CNBC Blog, 4-11-11



On lawyers: "Ignorance of the law is no excuse not to practice. " — Conrad Teitell



A tough old cowboy from south Texas counseled his grandson that if he wanted to live a long life, the secret was to sprinkle a pinch of gunpowder on his oatmeal every morning.

The grandson followed this advice religiously until the day he died at age 103.

He left behind 14 children, 30 grandchildren, 45 great-grandchildren, 24 great-great-grandchildren, and a 15-foot hole where the crematorium used to be. Courtesy of Michael Lied



Johnston:  Income Inequality: 1 Inch to 5 Miles

 WSJ:  New Tax Riddle: S or C?

 Tax Court Denies Former NFL Star Bill Romanowski's Horse Breeding Expense Deduction


Facebook to Get $429 Million Tax Refund Despite $1.1 Billion in U.S. Profits

WSJ:  The New Capital-Gains Maze


Hilarious bit on the Colbert Report on the "Is Exotic Dancing Art?" question - taxation.


It's a bit racy, so if you are more on the "faint of heart" side, you may not want to watch it.


Cool Tax Charts

Tax Court Denies Attorney's $72k 'Business Development' Deduction for Costs of Attending Son's Equestrian Events


Tax Exam Question:  Taxpayer Buys Andy Warhol Sketch (Worth $2m) for $5 at Garage Sale

Mitch, Who Wants To Pay No Taxes

If the U.S. Internal Revenue Service ever asks me to defend anything I declared or exempted or deducted or itemized, I’ll just sigh, take out my wallet, and start handing them twenties until they stop talking. Joel Stein, Bloomberg BusinessWeek, 4-5-12


The odds of winning the $640-million "Mega Millions" lottery are estimated to be 175 million-to-1, according to its sponsors, but for the Internal Revenue Service, it's a sure thing. Patrick Temple-West, Reuters, 3-30-12


At the time of record deficits some of our Congressmen seek to increase the deficit by introducing legislation allowing deductions for pets.  “H.R. 3501, was introduced as the “Humanity and Pets Partnered Through the Years” (HAPPY Act) and would allow deductions of up to $3,500 a year for pet expenses. It was introduced by Michigan Rep. Thaddeus McCotter and co-sponsored by Rep. Steve Cohen of Tennessee and Rep. Jared Polis of Colorado.”  Robert W. Wood,, 4-2-12.  My question is : Who are the 13% of Americans who approve of the way Congress is doing its job?


Most of us treat the Internal Revenue Service as if it were an ancient and powerful god. We pay tribute through payroll deduction. We perform the annual ritual of the tax forms. We bring forth sacrifices and homage on its chosen day of April 15. We dread provoking its wrath. Jim Gallagher ST. LOUIS POST-DISPATCH 2-14-10


Anyone who thinks the government is listening to their phone calls should try calling IRS for tax help!


So the I.R.S. is like a street cop or, more precisely, the biggest fleet of street cops in the world, who are asked to enforce laws written by a few hundred people on behalf of a few hundred million people, a great many of whom find these laws too complex, too expensive and unfair. Stephen J. Dubner and Steven D. Levitt | April 2, 2006


Two guys walked into a bar late one afternoon and noticed that, among the few customers, was one guy sitting quietly in the shadows at the end of the bar. The two ordered some beers. The bartender brought them and said, “that will be 50 cents please.” They started a tab and a short time later ordered two more beers and again they were charged 25 cents each. The two could not believe the good deal and after having a third beer for the same price, they decided to ask the bartender what the catch was. The bartender replied, “there is no catch, gentlemen. I have just started brewing this beer on site and I am selling it below cost to introduce it to my customers. I am happy to see that you enjoy the beer.”

 Indeed, they noticed that almost everyone was enjoying the beer and the remarkable price except for the one man at the end of the bar. He had not ordered anything since the two came in. Becoming very curious about the guy at the end of the bar, the two asked the bartender, “Doesn’t he ever order anything?” “Oh yes,” said the bartender. “That is Sam  Smith our local tax preparer. He is just waiting for happy hour.”     


Late one night a mugger wearing a ski mask jumped into the path of a man and stuck a gun in his ribs. “Give me your money,” he demanded.

Indignant, the man replied, “You cannot do this   I am an IRS agent!”  “In that case,” replied the robber, “Give me MY money!”,or.r_gc.r_pw.r_qf.,cf.osb&cad=b

The Big Winner in Last Night's Mega-Millions Drawing:  The Tax Man,,id=250882,00.html


26 USC § 7421 - Prohibition of suits to restrain assessment or collection

US Code



prev | next

(a) Tax

Except as provided in sections 6015(e), 6212(a) and (c), 6213(a), 6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), and 7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.

(b) Liability of transferee or fiduciary

No suit shall be maintained in any court for the purpose of restraining the assessment or collection (pursuant to the provisions of chapter 71) of—

(1)the amount of the liability, at law or in equity, of a transferee of property of a taxpayer in respect of any internal revenue tax, or

(2)the amount of the liability of a fiduciary under section 3713(b) of title 31, United States Code [1] in respect of any such tax.

When you do a good deed, get a receipt in case Heaven is like the IRS.


I recently heard a CPA remark that the only accounting principle which the Internal Revenue Service regards as “generally accepted” is “A bird in the hand is worth two in the bush.” Although my friend overstates his case a bit -- quite a bit -- I cannot dismiss the thrust of his comment without some soul searching. --Sheldon S. Cohen


There're only two people who ever have understood the Internal Revenue Code in its entirety.   One is dead, and the other still is in therapy. Sent to me by Leonard W. Williams, CPA



A man made a Freedom of Information request to the IRS , asking whether there was an audit file on him.

A week later he received the reply. It said: “There is now.”


What do you call a lawyer with a 40 IQ? “Your Honor.”




An investor went to a tax accountant and said: “If I give you $1,000, will you answer two questions?” The accountant replied: “Certainly. And what is the other question?”



A financial planner suggested to a wealthy client that he should invest in a circus. The client expressed great surprise at such an unusual recommendation: “A circus? Why on earth should I buy into a circus?” The financial planner replied: “Because of the elephants.” The client, puzzled even more, then asked: “The elephants? What is the connection between circus elephants and investments?” The financial planner asked: “Well, do you know how much it costs to feed an elephant?” The client, slightly annoyed, responded: “No, of course I do not know much it costs to feed an elephant.” The financial planner explained: “Well, neither does the IRS Commissioner.”



    A businessman on his deathbed called his friend and said, “Bob, I want you to promise me that when I die you will have my remains cremated.”  Bob agreed to take of his friend’s request and asked “What do you want me to do with your ashes?”  The businessman said, “Just put them in an envelope and mail them to the Internal Revenue Service and write on the envelope, “Now you have everything.”



    The most successful tax lawyer in town had never made a contribution to the Red Cross.  The chairman of the Red Cross, Mr. Wilson, called on the lawyer, hoping to convince him to make a donation.  “You made over $600,000 last year but you haven’t given anything back to the community.  How do you reconcile that?”  The lawyer sighed, leaned forward and said, “If you only knew...   My mother is terminally ill; her medical bills far exceed her income.  My brother is a disabled veteran, blind and in a wheelchair.  My sister is raising three children alone since her husband died in an auto accident.” Mr. Wilson offered his sympathy, admitting he had no idea there were so many demands on the lawyer’s profits. The tax lawyer nodded and said, “Exactly...Why should I give to the Red Cross when I don’t even give to my own family!”


NPR:  A History of the Income Tax, From Abraham Lincoln to Donald Duck

Reasonable Compensation and Exacto Spring

Get more results from the past 24 hours

1.TaxProf Blog: Tax Court: Deductibility of Mortgage Interest Applies ...

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Tax Court:  Waffle House Waitress Liable for Tax on Gift of $10 Million Lottery Ticket Received From Customer

JCT Reviews Current Law Regarding Choice of Business Entity
The Joint Committee on Taxation in a March 5 report reviewed current tax provisions as they relate to decisions about operating as a C corporation, S corporation, or partnership.

 Senators Propose Closing 'Facebook Tax Loophole'

NY Times:  Republicans and Fiscal Responsibility

 Taxing the Oscars

Rick Santorum Releases Tax Returns


Promotional Frequent Flier Miles Are Taxable Income, IRS and Citibank Say
A seemingly routine recognition of award income has caught the attention of the national media and Congress, as both the IRS and Citibank insist that the value of frequent flier miles awarded upon opening a financial account should be treated as taxable income. 

Bow Wow Owes the IRS a Lil Money

SchlunkIs a Law Degree a Good Investment Today?

The Top 0.1% Earns 50% of All Capital Gains

Deductibility of Conrad Murray's Attorneys' Fees

IRS Memo Indicates Civil Unions Are Marriages for Federal Tax Purposes
An August 30 memo from the IRS Office of Associate Chief Counsel (Procedure and Administration) seems to say that an Illinois civil union is a marriage for federal tax purposes, permitting the parties to file federal tax returns as married filing jointly even if they are the same sex.


IRS Acquiesces in O’Donnabhain:  Gender Reassignment Surgery Is a Deductible Medical Expense


Slate:  How Many Words Are in the Internal Revenue Code?


Ex-BigLaw Partner with Tax LL.M. Suspended for Failing to File State Tax Returns


Rick Perry's Flat Tax Plan




The Oklahoma City Tax Lawyers Breakfast is pleased to announce that the Honorable L. Paige Marvel, United States Tax Court, will be the speaker at the breakfast meeting scheduled for 7:30 a.m., Wednesday, November 2, 2011.  I would like to invite all members, all Oklahoma tax practitioners, and those attorneys having cases on the October 31, 2011 Tax Court Calendar to attend this breakfast meeting with Judge Marvel.

The breakfast meeting will be at the Cattlemen's Steakhouse, 1309 S. Agnew.  Breakfast will include a buffet of scrambled egg, biscuits and gravy, breakfast potatoes, bacon, sausage, fresh fruit, and coffee.  There will be a charge of $10.00 for non-members of the Oklahoma City Tax Lawyers Breakfast group to defray the cost of the buffet.

The Tax Court Trial Calendar date is October 31 and the call starts at 10 am.  The address is Room 402 in the Federal Building and Courthouse at 200 N. W. 4th Street in OKC.  As you probably know, the call of the calendar usually is concluded around the lunch hour, the trial schedule is set and announced, there is generally a lunch break, then several of the simpler cases are disposed of in the afternoon.   


Sooner Express Bus # 24 leaves from the South Oval, stops at Homeland on 24th and Robinson in Norman.  If students don't want to drive and park the bus will get them here and back.  There are three runs in the morning, one of which arrives right around 9 am - and three in the afternoon/evening - leaving at 3:00, 4:50 and 5:30.

Former Ohio State Bar President Charged With Tax Fraud

Buffett Releases 2010 AGI ($62.9m), Taxable Income ($39.8m) & Tax ($6.9m), Challenges Richest 400 to Release Returns
because his two children resided with their mother and were not his qualifying children for the year at issue.

Claims Court Dismisses Couple's Refund Claim for Lack of Jurisdiction
The Court of Federal Claims dismissed for lack of jurisdiction a couple's claim for a refund for the 1995 tax year stemming from a net operating loss carryback related to their investment in a Hoyt cattle breeding partnership because they failed to fully pay their tax liability for that year.

Senate Holds Hearing Today on Incentives for Charitable Giving

More on Herman Cain's 9-9-9 Tax Plan

Chicago Women Give Birth After Completing Bar Exam, Marathon

10 Essential Fiscal Charts (Oct 11, 2011). 


Cords:  The Tax Court Appointment and Reappointment Process



Loyola-LA now offers an Accelerated Tax LLM Program for Visiting JD

Navigating the Web Site for Tax Professionals

At, you will find a wealth of valuable information. The “Basic Tools for Tax Professionals” page contains specific information for tax professionals about tax law updates, their responsibilities as a tax professional and frequently used telephone numbers.





1.     News Analysis: Overcoming Appeals' Bad Rap

In news analysis, Jeremiah Coder examines recent steps the IRS has taken to strengthen the independence of the Office of Appeals and whether those efforts are enough to reduce taxpayers' concerns about outside influence on the organization.





Filed June 20, 2011

Thomas F. Liotti, for petitioners.

Monica E. Koch, for respondent.

DEAN, Special Trial Judge: This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed. Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case. Unless otherwise indicated, subsequent section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.

Respondent determined a deficiency of $3,892 in petitioners' Federal income tax for 2005. The issue for decision is whether petitioners are liable for unreported discharge of indebtedness (DOI) income.


Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by reference.1 Petitioners resided in New York when they filed their petition.

During the year in issue Thomas F. Liotti (petitioner) was an attorney in New York. At the time of trial petitioner was admitted to practice before this Court. He had held a credit card account with MBNA America Bank N.A. (MBNA) since 1985. Petitioner's account was sponsored by the New York State Bar Association; his name was the only name on the account. At the time of trial petitioner had not used the account for several years. Over the course of 2004 and 2005 petitioner sent letters to MBNA in which he discussed the amount he felt he rightfully owed. There are no responses from MBNA to petitioner's letters in the record. At some point in 2005 petitioner and MBNA agreed that petitioner would pay $5,200 to settle his account. Petitioner made the final payment toward the settlement in July 2005. Petitioner's credit card statement with a closing date of September 21, 2005, reflects a finance charge adjustment of $244.47 and a "charge off" of $11,974.65. MBNA provided the Internal Revenue Service a Form 1099-C, Cancellation of Debt, which reflected a cancellation of petitioner's debt of $11,974.65 for 2005. Petitioner denied that he received a Form 1099-C from MBNA for 2005.

Petitioners did not include the $11,974.65 as income on their 2005 joint Federal income tax return. Respondent sent petitioners a notice of deficiency that included the $11,974.65 in petitioners' income for 2005 and determined a deficiency of $3,892.2 After the notice was issued, petitioner paid the tax and interest shown due on the notice.3


I. Burden of Proof and Production

Generally, the Commissioner's determinations are presumed correct, and the taxpayer bears the burden of proving that those determinations are erroneous. Rule 142(a); see INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden of proof for factual matters may be shifted to the Commissioner under section 7491. Petitioner has not alleged that section 7491 applies.

If an information return, such as a Form 1099-C, is the basis for the Commissioner's determination of a deficiency, section 6201(d) may apply to shift the burden of production to the Commissioner if in any court proceeding the taxpayer asserts a reasonable dispute with respect to the income reported on the information return and the taxpayer has fully cooperated with the Commissioner. See McQuatters v. Commissioner, T.C. Memo. 1998-88. As discussed infra, petitioner has failed to assert a reasonable dispute with respect to the income reported on the Form 1099-C.

Thus there is no burden shift under either section 7491 or 6201(d).

II. DOI Income

Gross income includes all income from whatever source derived. Sec. 61(a). DOI is specifically included as an item of gross income. Sec. 61(a)(12). This means that a taxpayer who has incurred a financial obligation that is later discharged or released has realized an accession to income. Id.; United States v. Kirby Lumber Co., 284 U.S. 1, 3 (1931). The rationale of this principle is that the discharge of a debt for less than its face value accords the debtor an economic benefit equivalent to income. United States v. Kirby Lumber Co., supra at 3; Friedman v. Commissioner, 216 F.3d 537, 545 (6th Cir. 2000), affg. T.C. Memo. 1998-196. Accordingly, when a taxpayer's obligation to repay a debt is settled for less than the face value of the debt, he ordinarily realizes DOI income. Sec. 61(a)(12); see Warbus v. Commissioner, 110 T.C. 279, 284 (1998) (citing Vukasovich, Inc. v. Commissioner, 790 F.2d 1409, 1413-1414 (9th Cir. 1986), affg. in part and revg. in part T.C. Memo. 1984-611). Accrued interest that is discharged through a settlement is considered DOI income. Payne v. Commissioner, T.C. Memo. 2008-66, affd. 357 Fed. Appx. 734 (8th Cir. 2009); see sec. 1.6050P-1(c), Income Tax Regs.

Accompanying the DOI rule are certain exclusions from gross income. Sec. 108(a)(1). Petitioner does not argue that any of the exclusions apply; thus the Court does not consider them.

Petitioner contends that he did not have DOI income on the basis that: (1) The amount he owed MBNA was in dispute (a contested liability); (2) the amount of interest MBNA was charging him was usurious; and (3) he did not receive a Form 1099-C from MBNA and did not know that there would be any tax ramifications for settling his account for less than the full amount of his MBNA account balance.

One exception to the general DOI rule is the "contested liability" doctrine, under which DOI income will be disregarded when computing gross income if the taxpayer disputes the original amount of a debt in good faith and the debt is subsequently settled. Preslar v. Commissioner, 167 F.3d 1323, 1327 (10th Cir. 1999) (citing Zarin v. Commissioner, 916 F.2d 110, 115 (3d Cir. 1990)), revg. T.C. Memo. 1996-543. A taxpayer's good faith challenge to the enforceability of a debt does not necessarily shield him from DOI income when the dispute is resolved. Preslar v. Commissioner, supra at 1328; see also Rood v. Commissioner, T.C. Memo. 1996-248, affd. without published opinion 122 F.3d 1078 (11th Cir. 1997). "To implicate the contested liability doctrine, the original amount of the debt must be unliquidated. A total denial of liability is not a dispute touching upon the amount of the underlying debt." Preslar v. Commissioner, supra at 1328. Additionally, the fact that a settlement is for less than the full amount of a taxpayer's debt is insufficient to establish that the debt was disputed. Melvin v. Commissioner, T.C. Memo. 2009-199 (citing, e.g., Rood v. Commissioner, supra). Petitioner has not shown a challenge to the original amount of the underlying debt.

Petitioner entered into evidence several letters that he wrote to MBNA in which he argues that he does not owe the amount listed as the balance of his account. Petitioner believed that he had paid more in interest than the underlying principal balance of the account because he had not used the account for a number of years.4 In a letter dated November 30, 2004, petitioner contends that he has paid more than $16,000 "on the underlying obligation". (Emphasis added.) In the same letter he also contends that he does not owe MBNA $16,387.78. In a letter dated January 18, 2005, petitioner writes that his account balance as of December 19, 1998, was $25,168.88. He then contends that between December 19, 1998, and December 20, 2002, he had paid MBNA $26,606 and had made additional payments since 2002. Petitioner also documents the rise in the interest rate of his account in the January 18, 2005, letter. In a letter dated March 8, 2005, petitioner writes that he has paid MBNA a total of $34,451 but that he is not certain how much of that amount was penalties and interest as opposed to principal.

Petitioner's contention that the debt is contested is incorrect. Petitioner has made no argument against the original amount of his debt. See Preslar v. Commissioner, supra at 1327. Through petitioner's letters to MBNA it is clear that his argument is with the amount of interest he is being charged, not the underlying debt. Petitioner admits to making payments on the underlying obligation in his letters and never argues that he did not incur the charges on the account or that he did not owe the principal balance of the account. The interest charged to petitioner's account is part of his debt obligation. See Payne v. Commissioner, supra. Interest is included in the definition of indebtedness. Sec. 1.6050P-1(c), Income Tax Regs.; cf. Payne v. Commissioner, supra. Petitioner's challenge to the amount of interest he is charged does not rise to a contested liability.

Coupled with, and seemingly a second prong of, petitioner's contested liability argument is his argument that the interest MBNA charged was usurious under New York law and the discharge of such interest should, therefore, not be income to him.

Petitioner testified and mentioned in more than one letter admitted into evidence that the usury rate of interest in New York was 25 percent.5 All of the credit card statements that petitioner entered into evidence reflect an annual interest rate of 22.98 percent. While this interest rate is high, it does not reach the level of what petitioner claims is usurious in New York.6

Petitioner also argues that he never received a Form 1099-C from MBNA and did not know that there would be any tax ramifications for settling his debt for less than the full amount. "The moment it becomes clear that a debt will never have to be paid, such debt must be viewed as having been discharged." Cozzi v. Commissioner, 88 T.C. 435, 445 (1987). The nonreceipt of a Form 1099 does not convert a taxable item into a nontaxable item. Vaughn v. Commissioner, T.C. Memo. 1992-317, affd. without published opinion 15 F.3d 1095 (9th Cir. 1993). Any identifiable event that fixes the loss with certainty may be taken into consideration. Cozzi v. Commissioner, supra at 445 (citing United States v. S.S. White Dental Manufacturing Co., 274 U.S. 398 (1927)); cf. sec. 1.6050P-1(b)(2)(i)(F), Income Tax Regs. (listing a discharge of indebtedness pursuant to an agreement between an applicable entity and a debtor to discharge indebtedness at less than full consideration as one of the eight exclusive "identifiable events" under which debt is discharged for information reporting purposes).

Petitioner is an attorney and a member of the Tax Court bar with legal acumen and a fundamental knowledge of legal research. The fact that petitioner did not know that there were tax ramifications associated with settling a debt for less than its face value does not negate his enjoyment of the economic benefit from the discharge of his debt. See sec. 61(a)(12); United States v. Kirby Lumber Co., 284 U.S. 1 (1931).


Petitioner has failed to prove that there was a contested liability concerning his MBNA account. Petitioner's failed usurious interest argument, his lack of receipt of a Form 1099-C, and his lack of knowledge of DOI income tax ramifications do not negate the fact that he received a discharge of debt that resulted in income. Therefore, the $11,974.65 of petitioner's MBNA account balance that was discharged is income to petitioners and should have been included on their 2005 joint Federal income tax return.

We have considered petitioner's arguments, and, to the extent not mentioned, we conclude the arguments to be moot, irrelevant, or without merit.

To reflect the foregoing,

Decision will be entered for respondent.


1 Petitioner Wendy Liotti did not sign the stipulation of facts, nor did she appear at trial. Petitioner Thomas F. Liotti stated that he represented himself and his wife and that she was listed as a petitioner solely because the couple filed a joint Federal income tax return for the year in issue. This case is considered submitted on the part of both petitioners. See Rule 149(a).

2 Other changes determined in the notice of deficiency were computational and will not be discussed.

3 The payment of tax after the mailing of a notice of deficiency shall not deprive the Court of jurisdiction over such deficiency. See sec. 6213(b)(4); Hazel v. Commissioner, T.C. Memo. 2008-134. The Court also has jurisdiction to determine an overpayment in a deficiency proceeding. See sec. 6512(b)(1).

4 Petitioner cited both 1998 and 2001 as the last year that the account had been used.

5 Petitioner has taken on the mantle of protecting all consumers from the aggressive tactics of the credit card companies and even informed the Court that he was "here, Judge, for the American people, as well as for myself."

6 Even if petitioner had made a "good faith" challenge to the interest rate, that alone would not "shield" him from DOI income. See Preslar v. Commissioner, 167 F.3d 1323, 1328 (10th Cir. 1999), revg. T.C. Memo. 1996-543. Petitioner does not know how much of his account balance was interest as opposed to principal.



Court Partially Quashes Subpoena Based on Attorney-Client Privilege, Work-Product Doctrine
A U.S. district court, after an in camera review, partially granted a company's motion to quash a subpoena issued to PricewaterhouseCoopers LLP for records in a suit that claims the company attempted to evade paying over $2 billion in taxes, finding that some documents were covered by the attorney-client privilege and work-product doctrine.

Obama nominated Kathryn Keneally, a partner at Fulbright & Jaworski and longstanding officer in the ABA Tax Section as chair of several important committees, as head of the Justice Department's tax division.  

Obama's  prior nomination, Mary Smith, was blocked in the Senate because of her lack of tax experience.  Keneally, in comparison, has extensive experiecne in tax controversies.  As her firm blurb notes, she 'has represented financial institutions, public and private corporations and individuals in commercial litigation matters, in addition to representing individuals and companies in federal, state and locasl tax proceedings, sensitive criminal investigations, trials and appeals."  Areas include "tax controversy, tax fraud, money laundering, currency trnasaction reporting, securities fraud, bank fraud, false statements, RICO and issues under the U.S. Sentencing Guidelines."

Keneally has been a pro-taxpayer litigator, arguing strenuously for taxpayer-favorable interpretations of the Code and common law privileges, including an article castigating the First Circuit for its decision in Textron that tax accrual workpapers, prepared in the ordinary course of business for financial accounting purposes, were not protected by the work product doctrine.  If confirmed as litigator in the Justice Department on behalf of the government, which there is every expectation that she will be, she will need to look at these issues more closely from the government's perspective.

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·  Wednesday, February 2, 2011 at 10:00 AM: Tax Reform: A Necessary Component for Restoring Fiscal Responsibility

·  C. Eugene Steuerle -- Institute Fellow and Richard B. Fisher, Chair, The Urban Institute

·  Donald B. Marron -- Director, Urban-Brookings Tax Policy Center/Visiting Professor, Georgetown Public Policy Institute

·  Dr. Rosanne Altshuler -- Professor, Rutgers University

·  Lawrence B. Lindsey -- President and Chief Executive Officer, The Lindsey Group