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Winning by Losing: The Strategy of Adverse Private Letter Rulings
No full textEvery year, the Internal Revenue Service (IRS) issues hundreds of Private Letter Rulings (PLRs) responding to formal taxpayer inquiries about how tax law will apply to their proposed situations and transactions, which functionally bind the IRS with respect to the taxpayer. Although the Internal Revenue Code formally forbids relying on PLRs as precedent, taxpayers and practitioners closely monitor and structure their operations and advice around PLRs. Taxpayers can withdraw a PLR request at any time for any—or no—reason, and they generally know in advance whether the PLR will be favorable or adverse. Conventional wisdom assumes adverse PLRs should be extremely rare, yet this Article demonstrates that a significant number do exist. Based on a unique dataset of 473 adverse PLRs from 1977–2024, only a small minority can be explained by mistakes or apathy; the majority appear to be strategic. Notably, 65 adverse PLRs (13.7%) were likely obtained for highly strategic reasons tied to PLRs’ normative force, including efforts to trigger backlash against the IRS or to level competitive playing fields.
Examining adverse PLRs reveals how they illuminate the substantive world of letter rulings and generate several important implications for the tax system. These include the need to broaden and formalize third‑party participation in PLRs, to improve equity in access to consequential IRS guidance, and to consider modifications that reduce hidden or one‑sided interpretive effects. Finally, noting the parallels between strategic adverse PLRs and impact litigation, this Article proposes that PLRs themselves can serve as a tool for advancing public‑interest, pro‑fisc positions—counteracting aggressive and abusive tax practices by leveraging PLRs’ unique combination of concreteness, visibility, and normative influence
Where Torrens Failed
No full textThe early days of the Torrens system in the United States looked promising. Its spread through the country was rapid — by the early 20th century, it had been adopted in almost half of America’s states. Today, however, Torrens is all but obsolete in America. This article examines what went wrong. For one thing, a workable, if cumbersome, system of title assurance — relying on recorded deeds, warranties of title, and title insurance — already existed. For title holders, the process of petitioning for Torrens registration was unfamiliar, often expensive and protracted, and invited risk from adverse claimants. Pragmatic factors such as market preferences for title insurance, lawyerly skepticism born of unfamiliarity and potential loss of business, and a characteristic American distrust of government all helped to seal its fate. Ultimately, Torrens, for all its advantages, failed to displace established systems of title assurance
Notice, Consent, and Choice-of-Jurisdiction Clauses in the United States
No full textAlthough choice-of-jurisdiction clauses are routinely enforced by courts in the United States, there are circumstances where they are subject to special scrutiny. One of these circumstances is when the party resisting the clause was not provided with proper notice as to the existence of the clause or the identity of the chosen jurisdiction. This Article first reviews the existing case law in this area and shows that while some U.S. courts have refused to enforce clauses for lack of notice, others do so as a matter of course. It then discusses several decisions where U.S. courts have held that notice may serve as a substitute for consent to bind parties to choice-of-jurisdiction clauses in agreements that they never signed
More Information or More Frequent Information? A Proposal for Quarterly 1099s
No full textThird-party information reporting enhances tax compliance. When substantial information reporting is present, the compliance rate reaches 94 percent, compared to just 45 percent when there is little or no information reporting. Accordingly, policymakers have expanded information reporting requirements over the past several decades to enhance revenue collection. More recently, Congress has expanded information reporting requirements for third-party settlement organizations (“TPSOs”) by significantly lowering the reporting threshold from 600 as well as eliminating the requirement for 200 or more transactions. While such a shift will subject more taxpayers to information reporting, it will also create additional burden on the IRS to process the influx of new information returns. Although the new 20,000/200 transactions threshold for 2023, and a phased 600 reporting threshold for TPSOs illustrates a tension in tax administration. More information is generally better for tax enforcement, as subjecting more taxpayers to information reporting means that more individuals should be deterred from cheating and should report their income accurately. However, casting a wider net imposes costs. First, more information returns impose a greater burden on the IRS to process those returns, as well as greater costs on the third parties that must issue the returns. Second, casting a wider net among taxpayers will likely increase the chances that nonreportable income shows up on information returns (for example, gross proceeds from casual sales that do not exceed basis), increasing complexity and confusion among taxpayers. Third, and relatedly, if information returns become too prevalent (particularly for nontaxable income), taxpayers may perceive they are not meaningful and they may lose some of their deterrent effect. Thus, in setting a threshold for information reporting, policymakers face a tradeoff between these costs and the foregone revenue that results from unreported income.
The current approach to enhancing tax enforcement through information reporting has been to expand its use through either lowering the reporting threshold (as in the recent case of TPSOs) or widening the scope of third parties required to report. Either approach generally results in more information returns issued to more taxpayers. However, there is a third approach that has received virtually no attention in the United States: policymakers could also increase the frequency and efficacy of tax information sent to taxpayers. More specifically, Congress could require information returns to be sent quarterly to align with taxpayers’ estimated tax payment deadlines. While receiving quarterly tax information would likely help taxpayers make timely estimated tax payments, this approach is also not without costs. Third parties would have an increased burden to compile and distribute tax information four times rather than once a year. And although the IRS would not have to process quarterly information returns (which would be sent only to taxpayers), it would have to enforce a requirement to send quarterly returns (for example, by imposing penalties on third parties who fail to do so). This article will explore the tradeoffs between the current approach of expanding the scope of information reporting with an approach that requires more frequent information
Future Crime: A Theoretical Foundation for Designing Effective Cybercrime Laws in the Age of AI and Ransomware
No full textAdministrability Over Testamentary Freedom of Disposition
No full textThis Article challenges the widely accepted view that testamentary freedom is the dominant principle of American inheritance law. It argues that administrability—the need for a predictable, efficient probate system—frequently overrides freedom of disposition. Examining executor selection, procedural constraints, contest doctrines, settlement mechanisms, and the pervasive role of judicial and statutory oversight, the Article shows that testators have far less control over the disposition of their estates than traditional rhetoric suggests. Because process shapes outcomes, limits on testators’ ability to control the probate process constitute significant limits on testamentary freedom. The Article also demonstrates how doctrines such as intestacy and settlement agreements routinely undermine a testator’s stated preferences. It concludes that testamentary freedom is merely one component of a larger administrative framework and urges scholars and policymakers to recognize administrability as a central organizing value in inheritance law