The New Tax Shelter Opinion Letter Regulations: Cutting Back a Client’s Ability to Rely on the Advice of His Counsel

07-May-2019

Beckett G. Cantley, The New Tax Shelter Opinion Letter Regulations: Cutting Back a Client’s Ability to Rely on the Advice of His Counsel, 18 Akron Tax J. 47 (2003). Summary.  This article analyzed certain Proposed Treasury Regulations (“Opinion Regs”) relating to the issuance of tax opinions by counsel on matters that are “reportable transactions”.  The Opinion Regs were the seemingly final piece in Treasury’s offensive against tax shelters.  The Opinion Regs put up significant barriers to a client being able to rely on advice of counsel in tax shelter matters.  The main question this article discussed was whether the inability of a client to rely on a client’s counsel on such complicated matters as tax shelters is good public policy.  This article answers the question by concluding that it is not good public policy.

United States v. KPMG

07-May-2019

Beckett G. Cantley, United States v. KPMG: Does Section 6103 Allow the IRS to Put Taxpayer Names on the Front Page of the Wall Street Journal?, 50 Clev. St. L. Rev. 1 (2002-2003). Summary.  This article discussed whether the IRS violated Section 6103 of the Internal Revenue Code (“IRC”) when it disclosed the names of several prominent taxpayers in a public lawsuit involving KPMG, a “Big Four” CPA firm.  The disclosure lead to a Wall Street Journal article titled “IRS Releases Names of People in Disputed KPMG Tax Shelters”.  Section 6103(a) sets forth the general rule that taxpayer “return information” is generally confidential, subject to certain limited exceptions.  Section 6103(b)(2) provides that “return information” includes taxpayer names as well as other information.  The article concluded that it is likely that the United States (“US”) violated the general rule of Section 6103 because the US improperly disclosed taxpayer names in the KPMG case.  However, the article further concluded that it is unlikely that the named taxpayers would recover damages because the US is likely to meet the exception where the disclosing party has a good faith, but erroneous, interpretation of Section 6103.

New Tax Information Exchange Agreement: A Potent Weapon Against U.S. Tax Fraud

07-May-2019

Beckett G. Cantley, New Tax Information Exchange Agreement: A Potent Weapon Against U.S. Tax Fraud, 4 Hous. Bus. & Tax L.J. 231 (2004). Summary.  This article discussed the then-new information exchange agreement to the tax treaty between the U.S. and Switzerland.  The agreement established new guidelines on how to properly implement Article 26 (pertaining to information sharing) of the Convention between the U.S. and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income. The new agreement attempted to strengthen each government’s respective ability to combat tax fraud. The new agreement clarifies the tax treaty and provides guidance as to what constitutes “tax fraud” under the existing agreement by providing fourteen (14) hypothetical situations that constitute tax fraud.  The focus of this article was to discuss operational and policy elements of specific points of the new agreement followed by a discussion of what Switzerland and U.S. officials think about the possible long-term effects of the new agreement.

The New Dividend Tax Cut: Bush’s Prescription for Rescuing the Economy

07-May-2019

Beckett G. Cantley, The New Dividend Tax Cut: Bush’s Prescription for Rescuing the Economy, 19 Akron Tax J. 25 (2004). Summary.  This article This article discussed President Bush’s various tax cuts contained in his 2004 “economic growth” package, including Bush’s plan to eliminate the double taxation on dividends. The article outlines the different tax cuts, the legislative process that produced them, the differing interests involved in the process and several different viewpoints on whether these tax cuts will have their intended growth effect.

Congress Giveth and Congress Taketh Away: The Slow Death of the SESOP

07-May-2019

Beckett G. Cantley, Congress Giveth and Congress Taketh Away: The Slow Death of the SESOP, 20 Akron Tax. J. 59 (2005). Summary.  This article discusses the cat and mouse game that had taken place between the IRS and tax planners surrounding the use of the SESOP.  The article outlines how the SESOP has been a very rich source of tax gamesmanship since its inception.  However, while Congress and the IRS have been very effective at closing all the perceived loopholes used by tax planners, they have equally been extremely adept at dismantling the SESOP as a viable planning vehicle for the average small family business.

The Cure Causes New Symptoms: Capital Control Effects of Tax Enforcement, Gold Regulation and Retirement Reform

07-May-2019

Beckett G. Cantley, The Cure Causes New Symptoms: Capital Control Effects of Tax Enforcement, Gold Regulation and Retirement Reform, 7 S.C. J.Int’l L. & Bus. 75 (2010). Summary.  This article discusses the potential intended or unintended capital control effect of certain tax and non-tax US policies that cumulatively make investing offshore more burdensome, make investing in gold more precarious, and would radically shift the capital currently flowing into private retirement account investment vehicles into a new US government controlled retirement system at a time when the US government is running a huge deficit. This paper discusses the concepts of international and domestic capital control, the current actions of the government referenced above, and the capital control effect of these government actions.

The U.B.S. Case: the U.S. Attack on Swiss Banking Sovereignty

07-May-2019

Beckett G. Cantley, The U.B.S. Case: the U.S. Attack on Swiss Banking Sovereignty. 7 B.Y.U. Int’l L. & Mgmt. Rev. 1 (2011). Summary.  This article’s focus is on dissecting the intricacies and arguments surrounding the U.S. attack on offshore banking in an attempt to curtail, arguably, rampant tax evasion, followed by a detailed look into the development, policy implications, and consequences of the U.S. v. UBS AG case.

The New Section 1202 Tax-Free Business Sale: Congress Rewards Small Businesses that Survived the Great Recession

07-May-2019

Beckett G. Cantley, The New Section 1202 Tax-Free Business Sale: Congress Rewards Small Businesses that Survived the Great Recession, 17 Fordham J. Corp. & Fin. L. 1127 (2012). Summary.  This article provides an overview of the IRC Section 1202 tax-free business sale provision, the history behind the development of the IRC amendments, the apparent intent for enacting the provision, the likelihood it will achieve its purposes, the statute’s ambiguities, and some policy implications of creating a tax-free business sale provision.

The Forgotten Taxation Landmine: Application of the Accumulated Earnings Tax to IRC § 831(b) Captive Insurance Companies

07-May-2019

Beckett G. Cantley, The Forgotten Taxation Landmine: Application of the Accumulated Earnings Tax to IRC § 831(b) Captive Insurance Companies, 11 Rich. J. Global L. & Bus. 159 (2012.   Summary.  This article discusses: (1) the requirements, benefits, and tax attributes of an IRC § 831(b) captive insurance company (“CIC”); (2) an overview of the Accumulated Earnings Tax (“AET”) and the reasonable needs test which must be met to avoid the AET; and (3) the potential future application of the AET to an IRC § 831(b) CIC and the negative results that could arise if the IRS chooses to do so.  Given that the IRS has yet to announce any policy about applying the AET to combat the growth of this popular tax arrangement, this article seeks to analyze how the IRS may prospectively make use of this tool and how CIC owners and managers should conduct themselves to not run afoul of the IRS.

Steering Into the Storm: Amplification of Captive Insurance Company Compliance Issues in the Offshore Tax Crackdown

07-May-2019

Beckett G. Cantley, Steering Into the Storm: Amplification of Captive Insurance Company Compliance Issues in the Offshore Tax Crackdown, 12 Hous. Bus. & Tax L.J. 224 (2012). Summary.  This article provides: (1) a discussion on the compliance issues surrounding the use of CICs; (2) a detailed discussion of the progression of the IRS offshore crackdown; (3) an analysis of the rationales for choosing an offshore jurisdiction for forming a CIC; and (4) a discussion of the IRS crackdown’s potential negative effect on the choice to utilize an offshore IRC § 831(b) CIC.