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Let’s Hope the New OECD Guidelines on Money Laundering Will Not Create More Unnecessary Tax Auditing

Daniel N. Erasmus II
In a world where authorities are being given more powers to investigate various crimes, the situation also arises where some representatives of these authorities will attempt to abuse their powers. In other instances, the powers are used without proper thought going into the purpose behind the powers, and without the checks and balances that should be introduced by administrators to ensure that abuses do not take place....
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Carbon tax heuristics and politics: the case of the gasoline tax

Shi-ling Hsu
Abstract Economists are beginning to form a consensus that the most effective and cost-effective way to reduce global greenhouse gas emissions is through a carbon tax. The insight of economists and other policy analysts is that in the greenhouse gas context, the design of cap-and-trade programs creates so many opportunities for rent-seeking that they may not be very cost-effective, and may not reduce greenhouse gas...
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Tax collection problems of military personnel

Burton J. Haynes
Many people with tax collection problems feel like they're in a combat zone, besieged by battalions of battle-hardened IRS Revenue Officers. But many tax practitioners, particularly those of us here in the Washington metropolitan area, will encounter clients who are or have recently been in real combat zones -- places like Iraq, the Persian Gulf, Afghanistan, Kosovo, Kuwait, Bahrain, Qatar, the United Arab Emirates, and...
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Dissecting O’Donnabhain

Anthony Infanti
The Tax Court recently issued its long-awaited decision in O'Donnabhain v. Commissioner.[1] This case concerns the deductibility under section 213 of expenses that the taxpayer incurred for hormone therapy, sex reassignment surgery, and breast augmentation related to her diagnosed gender identity disorder (GID). In a reviewed decision, a sharply divided Tax Court held that the taxpayer's expenses for hormone therapy and...
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The value of tax shields is not equal to the present value of tax shields: a correction

Pablo Fernandez
Abstract I correct some expressions of Fernandez (2004) and provide a more general expression for the value of tax shields. This expression is the difference between the present values of two different cash flows, each with its own risk: the present value of taxes for the unlevered company and the present value of taxes for the levered company. The value of tax shields in a world with no leverage cost is the tax rate...
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Slinking Away From Twinkie Taxes

Joel Newman
‘‘A tax can be a means for raising revenue, or a device for regulating conduct, or both.’’ — Felix Frankfurter[1] ‘‘Frankly, I think government shouldn’t have a darn thing to do with what we sell or how our customers eat. As long as it is safe, tastes good and is fair priced, why should the mayor care?’’ — Frances Sack, operating partner, Dalessandro’s, a chain of cheesesteak restaurants in...
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Tax Return Preparer Fraud and the Assessment Limitation Period

Bryan T. Camp
I have a confession: I can't spell. Not that you can tell from my columns, where I successfully hide behind the spell-check function and the good efforts of Tax Analysts' editors. How bad am I? Well, in sixth grade I won the English prize, but instead of the usual plaque, they gave me a dictionary. I still have it. It does not help. True, I use the dictionary when I am unsure of a word, but that is not the problem. The...
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Behavioral Dimensions of Tax Reform

Edward Mccaffery
Abstract These are powerpoint slides from a presentation at a joint UCLA-Tax Policy Center Conference on Tax Policy in the Obama Era. The basic insight is that it will be difficult to raise significant revenue through the current tax system. Behavioral perspectives suggest that a series of small (or large) cuts, aiming towards a flattened rate structure – as we have seen in the Ronald Reagan and George W. Bush...
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An Employer-Level Proxy Tax on Fringe Benefits

Calvin Johnson
A. Overview When nontaxable substitutes for cash are available, an employer and employee working in concert will inevitably shift compensation away from cash to the untaxed form. Goods and services are usually less convenient and less valuable to the employee than cash. Still, as long as the value lost is less than the tax avoided, the employer and employee will continue the shift. Taxing the cash substitute as well...
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The value of tax shields and the risk of the net increase of debt

Pablo Fernandez
Abstract The value of tax shields depends upon the nature of the stochastic process of the net increase of debt, and does not depend upon the nature of the stochastic process of the free cash flow. The value of tax shields in a world with no leverage cost is the tax rate times the debt plus the tax rate times the present value of the net increases of debt. This expression is the difference between the present values...
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