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.
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.
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
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.
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
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
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
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.
Repeat as Necessary: Historical IRS Policy Weapons to Combat Conduit Captive Insurance Company Deductible Purchases of Life Insurance
Beckett G. Cantley, Repeat as Necessary: Historical IRS Policy Weapons to Combat Conduit Captive Insurance Company Deductible Purchases of Life Insurance, 13 U.C. Davis Bus. L.J. 1 (2012). Summary. This article argues that the IRS is likely to view an arrangement where a small business owner funds a CIC for the primary purpose of obtaining deductions on owner-insider life insurance premium payments as similarly abusive to prior listed transactions involving IRC § 419 plans, IRC § 412(e)(3) plans, and IRC § 831(b) PORCs, as well as in violation of its historical tax enforcement policies against discriminatory insider tax benefits, and improper uses of key man life insurance. The article states that the IRS should view the use of an entity as a direct conduit for achieving an impermissible tax-deductible premium payment in the same manner as it would the taxpayer taking the deduction directly. This article discusses (1) the history of IRS enforcement and tax policy in combating improper tax uses of life insurance, and (2) evaluates the likely success of applying these historical arguments to establish that insider life insurance premiums are not deductible, nor should any tax-deducted funds be used to purchase such policies.
Environmental Protection or Mineral Theft: Potential Application of the Fifth Amendment Takings Clause to U.S. Termination of Unpatented Mining Claims
Beckett G. Cantley, Environmental Protection or Mineral Theft: Potential Application of the Fifth Amendment Takings Clause to U.S. Termination of Unpatented Mining Claims, Wash. & Lee 4 J. Energy Climate & Env’t 203 (2013). Summary. This article discusses how the invalidation and withdrawal of an otherwise valid unpatented mining claim may constitute a compensable 5th Amendment taking by the federal government. The article provides some background on federal mining claims, and discusses: (1) the process of locating and maintaining an unpatented claim; (2) the process and requirements of claim patenting; (3) the relative benefits of patenting; (4) the federal land withdrawal power under the Antiquities Act; and, most importantly, (5) 5th Amendment takings issues, including: (a) the effect of increased regulatory compliance costs, in general; (b) the effect of federal land withdrawals of otherwise valid unpatented mining claims; (c) procedures for litigating mining claim contests; and (d) a former unpatented claimholder’s standing to sue or intervene in a mining claim contest.