Questions the IRS Will Not Answer

When a taxpayer plans to undertake a transaction and its tax consequences are unclear, the taxpayer can request a letter ruling from the IRS. The IRS issues numerous letter rulings each year. In 2020, for instance, the IRS issued 777 letter rulings. The IRS refrains from issuing letter rulings on certain topics. At the beginning of each year, the IRS publishes an updated list of the topics on which it will not rule. Many of the topics on which it will not rule arise in areas of tax law governed by standards where the tax outcome depends heavily on each transaction’s specific facts. This pattern is consistent with the IRS’s stated position that it ordinarily does not rule in certain areas because of the factual nature of the matter involved. This Article suggests that a policy against ruling on fact-specific topics sacrifices an opportunity to rule on many of the very topics for which a letter ruling could be particularly useful. Because the fact-specific nature of a topic makes it ill-suited for generally applicable guidance, such a topic is a particularly good candidate for a letter ruling. Existing literature contains very little examination of the reasons for the IRS’s policy against ruling on fact-specific topics. This Article begins to fill that gap and suggests eight potential concerns that might underlie the IRS’s reticence. This Article analyzes whether each concern could be addressed by means other than simply not issuing rulings. To gauge the validity of some of the concerns, this Article examines letter rulings that the IRS did, in fact, issue on several fact-specific topics prior to adding them to the no ruling list. The previously issued letter rulings illustrate that many of the concerns do not inevitably arise in the case of all letter rulings on fact-specific topics. Some of the previously issued letter rulings also demonstrate steps that the IRS should take, or avoid, in order to mitigate some of the concerns if it does rule on fact-specific topics

Parabens Promote Protumorigenic Effects in Luminal Breast Cancer Cell Lines With Diverse Genetic Ancestry

Context One in 8 women will develop breast cancer in their lifetime. Yet, the burden of disease is greater in Black women. Black women have a 40% higher mortality rate than White women, and a higher incidence of breast cancer at age 40 and younger. While the underlying cause of this disparity is multifactorial, exposure to endocrine disrupting chemicals (EDCs) in hair and other personal care products has been associated with an increased risk of breast cancer. Parabens are known EDCs that are commonly used as preservatives in hair and other personal care products, and Black women are disproportionately exposed to products containing parabens. Objective Studies have shown that parabens impact breast cancer cell proliferation, death, migration/invasion, and metabolism, as well as gene expression in vitro. However, these studies were conducted using cell lines of European ancestry; to date, no studies have utilized breast cancer cell lines of West African ancestry to examine the effects of parabens on breast cancer progression. Like breast cancer cell lines with European ancestry, we hypothesize that parabens promote protumorigenic effects in breast cancer cell lines of West African ancestry. Methods Luminal breast cancer cell lines with West African ancestry (HCC1500) and European ancestry (MCF-7) were treated with biologically relevant doses of methylparaben, propylparaben, and butylparaben. Results Following treatment, estrogen receptor target gene expression and cell viability were examined. We observed altered estrogen receptor target gene expression and cell viability that was paraben and cell line specific. Conclusion This study provides greater insight into the tumorigenic role of parabens in the progression of breast cancer in Black women

Prostate Field Cancerization and Exosomes: Association Between CD9, Early Growth Response 1 and Fatty Acid Synthase

Intracapsular and well‑defined adenocarcinomas of the prostate are often surrounded by tissue areas that harbor molecular aberrations, including those of genetic, epigenetic and biochemical nature. This is known as field cancerization, or a field effect and denotes a state of pre‑malignancy. Such alterations in histologically normal tumor‑adjacent prostatic tissues have been recognized as clinically important and are potentially exploitable as biomarkers of disease and/or targets for preventative/therapeutic intervention. The authors have previously identified and validated two protein markers of field cancerization: The expressional upregulation of the transcription factor early growth response 1 (EGR‑1) and the lipogenic enzyme fatty acid synthase (FASN). However, the molecular etiology of prostate field cancerization, including EGR‑1 and FASN upregulation, remains largely unknown. It was thus hypothesized that extracellular vesicles, notably exosomes, released by tumor lesions may induce molecular alterations in the surrounding tissues, resulting in field cancerization, priming the tissue, and ultimately promoting multifocal tumorigenesis, which is often observed in prostate cancer. Towards testing this hypothesis, the current study, to the best of our knowledge, for the first time, presents correlative protein expression data, generated in disease‑free, tumor‑adjacent and cancerous human prostate tissues by quantitative immunofluorescence, between the exosomal marker CD9, and EGR‑1 and FASN. Despite the pilot character of the present study, and the static nature and heterogeneity of human tissues, the data suggest that CD9 expression itself is part of a field effect. In support of this hypothesis, the results suggest a possible contribution of exosomes to the induction of field cancerization in the prostate, particularly for EGR‑1. These findings were corroborated in established cell models of cancerous (LNCaP) and non‑cancerous (RWPE‑1) human prostate epithelial cells. The findings of this study warrant further investigation into the functional interface between exosomes and field cancerization, as a detailed understanding of this characterization may lead to the development of clinical applications related to diagnosis and/or prognosis and targeted intervention to prevent progression from pre‑malignancy to cancer

Reforming the Non-Disavowal Doctrine

One well established feature of tax law is that, oftentimes, substance prevails over form. Therefore, the substance of a transaction will determine the transaction\u27s tax consequences. For instance, tax consequences will not depend solely on the label that a taxpayer assigns to a given transaction. Instead, the Service can examine the transaction\u27s economic features to more accurately characterize it for tax purposes. Also deeply entrenched in tax law is the notion that the Service, frequently, experiences more success than taxpayers when invoking the concept that substance prevails over form. In other words, when substance matters, the Service can freely assert that a transaction should be taxed based on its true substance rather than the form selected by the taxpayer. A taxpayer, by contrast, is less likely to succeed when making the same assertion. The resistance to taxpayers\u27 attempts to invoke the SubstanceOver-Form Doctrine is known as the Non-Disavowal Doctrine. Although the Non-Disavowal Doctrine\u27s existence is widely acknowledged, the purposes of the doctrine have not been adequately theorized. This is perhaps unsurprising, given that court decisions invoking the Non-Disavowal Doctrine have been described as muddled and inconsistent. Courts and existing literature have offered various explanations for the doctrine, but the explanations that have been offered are not fully developed. This article will examine potential rationales in detail. Providing a detailed analysis of the theory underlying the Non-Disavowal Doctrine serves two useful purposes. First, it helps to explain some of the factors upon which courts rely that might otherwise seem irrelevant. Second, it provides guidance for how and when courts should apply the doctrine to better serve its goal

Taxing Selling Partners

When a partner sells a partnership interest, the resulting gain or loss is treated as capital gain or loss, except to the extent that the partnership holds certain items whose sale would result in gain or loss that was not capital. Seemingly, the purpose of this regime is to prevent taxpayers from obtaining more favorable treatment by selling an interest in a partnership than what would result if the partnership were to sell its underlying assets. But given this legislative aim, the existing tax provisions produce results for taxpayers that are both unduly favorable (in that sale of a partnership interest sometimes receives more beneficial treatment than sale of underlying assets) and unduly unfavorable (in that, in other instances, sale of a partnership interest triggers a less beneficial outcome than the sale of underlying assets). The design of the partnership tax rules also necessitates piecemeal reform as taxpayers discover new opportunities to benefit from unduly favorable results produced by the partnership tax regime. Most recently, in December 2017, Congress adopted legislative reform to address one such instance involving the sale of a partnership interest by a non-U.S. person. In addition, the method used by the partnership tax rules requires Congress to update the statute governing sale of a partnership interest to take into account potential ripple effects of unrelated legislative changes. As a result, the design is error prone because, inevitably, Congress overlooks and fails to address these potential ripple effects. Changes enacted by Congress in December 2017 provide at least one example of this phenomenon. In particular, Congress enacted a new restriction on the deductibility of losses incurred in a trade or business. However, Congress did not provide for a corresponding modification to the tax provisions governing sale of an interest in a partnership-creating the potential for another way in which the existing statutory design is unduly favorable. Some of the problems identified by this Article existed long before the adoption of significant tax legislation in December 2017; one of the problems was partially (but incompletely) addressed by that legislation and one of the problems was created by that legislation. To address each of the failings that it identifies, this Article proposes equating the tax treatment of the sale of a partnership interest with the tax treatment of the sale of underlying assets in all cases

Itemized Deductions in a High Standard Deduction World

New tax legislation enacted in December 2017 exacerbates the extent to which various itemized deductions, such as the charitable contribution deduction and the home mortgage interest deduction, disproportionately benefit high income individuals. This essay develops this critique and concludes by suggesting paths for reform that should be considered by a future Congress

Tax Law\u27s Loss Obsession

This Article will address tax law\u27s inconsistent treatment of gains and losses-focusing in particular on certain instances in which a taxpayer is prevented from shifting a built-in loss to another taxpayer but would be allowed to shift a built-in gain to another taxpayer. The article will explore whether any legitimate justification can explain the inconsistency. Finding no such legitimate justification for at least some of the examples, this Article will conclude that lawmakers ought to have also addressed gains and the failure to do so results from lawmakers crafting an overly narrow response that addressed only the most recent, high-profile gimmick in engineering transactions to reduce tax liability

Superficial Proxies For Simplicity In Tax Law

Simplification of tax law is complicated. Yet, political rhetoricsurrounding tax simplification often focuses on simplistic, superficialindicators of complexity in tax law such as word counts, pagecounts, number of regulations, and similar quantitative metrics.This preoccupation with the volume of enacted law often results inlaw that is more complex in a real sense. Achieving real simplification-a reduction in costs faced by taxpayers at various stages inthe tax planning, tax compliance, and tax enforcement process--oftenrequires enacting more law, not less. In addition, conceptualizingsimplicity in simplistic terms can leave the public vulnerable topolicies advanced under the guise of simplification that have realaims that are less innocuous. A perennial example involves lawmakersproposing a reduction in the number of tax brackets underthe heading of simplifying tax law. In reality, this change does verylittle, if anything, to simplify law in a meaningful sense, and itstruer aim is to reduce progressivity in the tax code. Although the taxlegislation ultimately enacted in December 2017 did not change thenumber of brackets applicable to individual taxpayers, political discoursepreceding its enactment once again touted a reduction in thenumber of tax brackets as a simplifying measure

Exploiting Regulatory Inconsistencies

In many instances, sophisticated parties exploit inconsistencies between regulatory regimes to achieve beneficial treatment under each regime by obtaining classification under one regime that is, at least superficially, inconsistent with classification under the other regime. For instance, parties might design an instrument that is treated as debt for tax purposes, but equity for purposes of capital requirements instituted by financial regulators. This Article asks whether exploiting regulatory inconsistencies is problematic. This Article concludes that inconsistency, in and of itself, is not necessarily a problem. Different regulatory regimes might classify a transaction differently when doing so best serves the unique goals of each regime. However, in other cases, inconsistency could be a byproduct of inaccurate classification by at least one regulatory regime. In such cases, the relevant regulator needs to reconsider its classification scheme