Federal Employee is Entitled to Trial De Novo on Employment Discrimination Claim and Not Merely Judicial Review of Agency Record. Hackley v. Roudebush, 520 F.2d 108 (D.C. Cir. 1975).

Ralph Hackley, an African American, was employed as an investigator within the Veteran Administration\u27s Investigation and Security Service Division. He had served for one year at the GS-12 level when he was denied promotion. Hackley complained that this denial was based solely upon his race. The charge was investigated and he was afforded a hearing before a complaints examiner, who ruled that there had been no discrimination. This finding was adopted by the Veteran\u27s Administration. Upon appeal, the Board of Appeals and Review of the Civil Service Commission affirmed. Having thus exhausted his administrative remedies, plaintiff commenced a civil action in the District Court for the District of Columbia pursuant to section 717(c) of the Equal Employment Opportunity Act of 1972 (EEOA). He sought injunctive relief, retroactive promotion, and back pay, plus a declaratory judgment to the effect that he was to be free from discrimination. The district court, in Hackley v. Johnson (Hackley 1), granted the government\u27s motion for summary judgment, holding that it only had jurisdiction to consider whether Hackley had been afforded administrative due process before the Civil Service Commission and that he had, in fact, received due process during the administrative hearing. In Hackley v. Roudebush (Hackley II), the Court of Appeals for the District of Columbia Circuit reversed, remanding Hackley\u27s claim of discrimination for trial, concluding, inter alia, that section 717(c)\u27s grant of a private right of action requires the district court to conduct a trial de novo in civil actions filed under the section. In so ruling, the court fell into line with several other jurisdictions which had held that the vindication of a federal employee\u27s rights under EEOA required more than mere review of the administrative record

Now You See it, Now You Don’t: The Comings and Goings of Disregarded Entities

While state law recognizes an LLC as a distinct type of entity, an LLC is not a distinct entity for federal tax purposes. An LLC that has two or more owners is treated as either a corporation or a partnership, while an LLC with a single owner will be disregarded for federal income tax purposes unless it elects to be treated as a corporation. In addition to single-member LLCs, the Code and Regulations recognize a second type of disregarded entity – the qualified subchapter S subsidiary (commonly called a QSub). The first part of this Article examines the tax consequences of (1) the formation and dissolution of single member LLCs, (2) check-the-box elections and revocations for a single member LLC, (3) the addition of a second member to an LLC, which converts a disregarded entity into a partnership, (4) the reduction of the number of members of an LLC from two or more to one, which converts the LLC from a partnership into a disregarded entity, (5) the election by a LLC to be taxed as a corporation – including “check and sell” and “check and merge” transactions – and the revocation of an election by an LLC to be taxed as a corporation, (6) the merger of a single member LLC into another LLC or a partnership, and (7) the merger of an LLC into a corporation. The second part of the Article examines the treatment of QSub elections, revocations, and terminations, in various contexts, including merger and acquisition transactions

2018 Erwin N. Griswold Lecture Before the American College of Tax Counsel: Tax Policy Elegy

For over four decades there have been unrelenting calls to make the tax code “fair, simple, and efficient.” But despite nine major tax acts between 1969 and 2003, along with many less extensive tax acts, the refrain for a “fair, simple, and efficient” tax code has continued to be heard. This continuing plea is not surprising, because over the decades the tax system has evolved to ask the highest income earners to pay less in taxes, become ever more complex, and eschewed “efficiency” in favor of the allowance of an ever-increasing number of tax preferences. Tax act after tax act failed to produce a fair, simple, and efficient tax code. The recently enacted Tax Cuts and Jobs Act is simply another failure to enact tax reform that provides a fair, simple, and efficient tax code. The call for a “fair, simple, and efficient” tax code has become a mere trope. True “tax reform” entails revising the tax code better to meet normative tax policy criteria. “Fairness” needs to be determined with respect to the extent to which the tax code provides both horizontal and vertical equity. The tax burden on similarly situated taxpayers should be equal. If a dollar is a dollar, then two taxpayers (or households) with equal incomes, however derived, should pay equal income taxes. Vertical equity means that taxpayers with greater income than others should pay appropriately greater taxes. This criterion has been interpreted to call for imposing graduated progressive rates, including very high marginal rates on extraordinarily high incomes, based on the ability to pay principle, reflecting the diminishing marginal utility of money. These equitable criteria call for repeal of preferential rates for capital gains. Determining ability to pay requires re-examination of the role of itemized deductions and the standard deduction. The standard deduction should be abolished. Deductions for unreimbursed employee business expenses, producing investment income, casualty losses, medical expenses, and state and local taxes should be allowed without any significant limitation. In reality, the tax system cannot be “simple.” All that we can ask is that the tax system is not unnecessarily unduly complex. That means minimizing special rules that are not necessary accurately to determine economic income or ability to pay consistent with both horizontal and vertical equity principles. “Efficiency” requires structuring the tax system to minimize interference with economic decision-making. To the greatest extent possible, the tax law should be neutral, taxing every investment made by a particular taxpayer identically and taxing all industries identically. In this regard, the Internal Revenue Code is an abject failure. It is replete with special provisions — tax expenditures — favoring various investments by various industries to one extent or another. It is long past time to pay more attention to the wisdom advanced over fifty years ago by Stanley Surrey in his analysis of the systemic problems created by introducing spending provisions through tax expenditure preferences in the tax code. An efficient tax system requires that all businesses, however organized, should be taxed at the entity level under a system that applies the same bases rules and rates to all businesses. The only distinction should be with respect to the treatment of distributions from publicly traded business entities and distributions from privately held businesses. Distributions from publicly traded business entities should continue to be taxed as dividends. Distributions from privately held businesses should be taxed to the owners by applying the imputation-credit model for corporate tax integration

Understanding Consolidated Returns

Section 1501 allows all of the members of an affiliated group of corporations to elect to file a consolidated return. A consolidated return permits the includible members of an affiliated group of corporations to combine their incomes into a single return. The detailed rules for filing consolidated returns are found in regulations promulgated pursuant to a broad delegation of authority in section 1502 of the Internal Revenue Code. In general, the regulations reflect a “single entity” approach that attempts to treat the several members of a consolidated group in the same manner as divisions of a single corporation. This article explains the most important general principles governing consolidated returns and is intended to provide an overview of the consolidated return regulations for lawyers who are generally unfamiliar with the detailed rules. Among other topics, the article explains (1) the rules governing eligibility to file a consolidated return, (2) the computation of consolidated taxable income, including relevant limitations on the use of net operating losses, (3) intercompany transactions and distributions, (4) stock basis adjustments, and (5) earnings and profits calculations. It explains both the rules in the consolidated return regulations and the differences from the rules that otherwise would govern had the corporations not elected to file a consolidated return