Textualism and Tax Shelters

A substantial debate about the approaches employed by courts to interpret statutes and regulations has developed during the last decade. Some have argued that the search for a statute\u27s meaning and purpose should focus on the text, itself, and should not include consulting legislative history. In contrast, others have argued that it is difficult to determine the meaning of a statute without consulting legislative history to determine the legislature\u27s purpose for the statute. The debate about the appropriate method for interpreting statutes underlies a crisis in the administration of tax law. The recent proliferation of tax shelters has at least in part been facilitated by the ascendancy of textualism. Our conversations with practitioners indicate that tax advisors have become more aggressive in structuring transactions that comply with the form of the tax statutes even though the transactions may be highly questionable in light of the legislation\u27s history or underlying purpose. The result has been a cottage industry where investment banks and accounting firms market tax shelters that triumph in form, but not substance, at the expense of the fisc. Because most tax shelter activity is hidden, it is difficult to ascertain its revenue impact. It is estimated that tax shelters reduced tax revenues by approximately $10 to$24 billion in 1999. In addition, practitioners and government officials worry that the use of shelters is eroding confidence in the tax system. Although the majority of courts have not adopted textualism, the legal community\u27s acceptance of textualism as a plausible method of interpretation has dramatically affected the practice of tax law. Taxpayers often invest in tax shelters based upon the opinion of counsel assessing the probability that the desired tax results from the transaction, if challenged, will be sustained. These opinion letters are essential to attract investors because they protect taxpayers from various penalties that otherwise might be imposed if the Service successfully challenges the transaction. Under the textualist approach, it is much easier for an attorney to write a favorable opinion for transactions that are designed to comply with the letter of the law, but not its spirit, for at least two reasons. First, the attorney is permitted to ignore, or at least downplay, any legislative history that would argue against, or undercut, the desired tax results. Second, under a textualist approach, it is arguable that various well-accepted judicial doctrines, such as the business purpose doctrine, are suspect. At the extreme, a textualist might argue that these doctrines are the product of judicial activism and either should no longer be followed, or at a minimum should not be extended into new areas of the law. Tax shelter promoters have exploited the move towards textualism by designing transactions that comply with the letter of the law, but that generate results clearly never contemplated by Congress or the Treasury. Some promoters believe that the more detailed and complex the underlying law is, the more likely it is that a transaction complying with the letter of the law will be respected. One area in tax law that is particularly detailed and complex is Subchapter K, the partnership tax provisions. Subchapter K also has several special rules not otherwise available in the Internal Revenue Code. It is, therefore, not surprising that Subchapter K has become the vehicle of choice for a wide variety of abusive transactions. Transactions are designed so that a partnership is created or joined just to take advantage of these special rules (reverse engineered transactions). In an attempt to stem the tide, the IRS adopted a general anti-abuse rule for Subchapter K. This rule requires that the provisions of Subchapter K be interpreted consistent with the intent of subchapter K. Oversimplified, the regulations assert that there is an overall legislative intent underlying Subchapter K, and if a partnership is formed or availed of in connection with a transaction to substantially reduce federal taxes in a manner inconsistent with this intent, the transaction may be recast. The regulations make clear that for a transaction to pass muster, doctrines that originated with the judiciary, i.e., the requirements of a business purpose, economic substance, and substance over form, must be taken into account. In addition, the regulations require that the purposivist method of statutory interpretation be used to interpret Subchapter K. The anti-abuse regulations caused an unprecedented furor within the tax bar. They have been severely criticized by academics and practitioners alike on a variety of bases, the most damning of which is that Treasury lacked the authority to promulgate the rules and that therefore they are not valid. Indeed, it is fair to say that there is a general consensus that the partnership anti-abuse regulations are an extreme example of administrative overreaching. We disagree. Although we do not endorse all the policy choices in the anti-abuse regulations, we believe that they are not only valid, but suggest a way in which transactions that are the product of reverse engineering can and should be attacked, both within and without Subchapter K. Initially, it may seem inappropriate for Treasury to instruct the judiciary on how and when the courts should apply judicial doctrines and what tools they should use in interpreting statutes. After all, as every law student knows, [i]t is emphatically the province and duty of the judicial department to say what the law is. Marbury v. Madison, 5 U.S. 137, 177 (1803). Where does Treasury get the authority to instruct a court as to which method of interpretation it should use to interpret a tax statute? On reflection, however, we believe that Treasury acted well within its authority under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) and was simply filling a gap in the statute left by Congress. The judicial doctrines that are implicit in the intent of subchapter K were well-developed when Subchapter K was first enacted in 1954 and continue to be applied in a variety of contexts by the courts. At that time, however, it was not clear exactly how and when these doctrines should be applied in the context of Subchapter K. There is little doubt Congress could have clarified this issue by statute. It could have insisted that these doctrines (or variations thereof) be applied with full force, or it could have forbidden their application altogether. Congress, however, chose not to address this issue, leaving a gap in the statute. Under current administrative law principles, this silence constitutes an implied delegation of authority by Congress to Treasury to fill that gap. In addition to being valid, we also believe that, as a general proposition, it is sound tax policy to use broad standards to administer the tax law. Historically this had been accomplished by the courts through the use of these judicial doctrines. Although the ascendancy of textualism cast doubt on the continuing viability of the doctrines, Treasury eliminated that doubt by promulgating these regulations (if valid), and requiring lawyers and courts to consider the intent of subchapter K. This approach allows the IRS to use broad standards to administer the tax law in place of a collection of narrow rules that must be constantly changed in a hopeless attempt to keep pace with the latest tax gimmick. To assure proper consideration of these doctrines by tax advisors, we recommend that the IRS amend its standards for practice to require advisors opining on the validity of tax shelters to apply the doctrines to the specific facts of the tax shelter in their opinion letter

Socioeconomic risk, parenting during the preschool years and child health age 6 years

Parent–child relationships and parenting processes are emerging as potential life course determinants of health. Parenting is socially patterned and could be one of the factors responsible for the negative effects of social inequalities on health, both in childhood and adulthood. This study tests the hypothesis that some of the effect of socioeconomic risk on health in mid childhood is transmitted via early parenting. Methods: Prospective cohort study in 10 USA communities involving 1041 mother/ child pairs, selected at birth at random with conditional sampling. Exposures: income, maternal education, maternal age, lone parenthood, ethnic status and objective assessments of mother child interaction in the first 4 years of life covering warmth, negativity and positive control. Outcomes: mother’s report of child’s health in general at 6 years. Modelling: multiple regression analyses with statistical testing of mediational processes. Results: All five indicators of socioeconomic status (SES) were correlated with all three measures of parenting, such that low SES was associated with poor parenting. Among the measures of parenting maternal warmth was independently predictive of future health, and among the socioeconomic variables maternal education, partner presence and ‘other ethnic group’ proved predictive. Measures of parenting significantly mediated the impact of measures of SES on child health. Conclusions: Parenting mediates some, but not all of the detectable effects of socioeconomic risk on health in childhood. As part of a package of measures that address other determinants, interventions to support parenting are likely to make a useful contribution to reducing childhood inequalities in health

Mental Health of Parents and Life Satisfaction of Children: A Within-Family Analysis of Intergenerational Transmission of Well-Being

This paper addresses the extent to which there is an intergenerational transmission of mental health and subjective well-being within families. Specifically it asks whether parents’ own mental distress influences their child’s life satisfaction, and vice versa. Whilst the evidence on daily contagion of stress and strain between members of the same family is substantial, the evidence on the transmission between parental distress and children’s well-being over a longer period of time is sparse. We tested this idea by examining the within-family transmission of mental distress from parent to child’s life satisfaction, and vice versa, using rich longitudinal data on 1,175 British youths. Results show that parental distress at year t-1 is an important determinant of child’s life satisfaction in the current year. This is true for boys and girls, although boys do not appear to be affected by maternal distress levels. The results also indicated that the child’s own life satisfaction is related with their father’s distress levels in the following year, regardless of the gender of the child. Finally, we examined whether the underlying transmission correlation is due to shared social environment, empathic reactions, or transmission via parent-child interaction

Measuring the impact and costs of a universal group based parenting programme : protocol and implementation of a trial

Background Sub-optimal parenting is a common risk factor for a wide range of negative health, social and educational outcomes. Most parenting programmes have been developed in the USA in the context of delinquency prevention for targeted or indicated groups and the main theoretical underpinning for these programmes is behaviour management. The Family Links Nurturing Programme (FLNP) focuses on family relationships as well as behaviour management and is offered on a universal basis. As a result it may be better placed to improve health and educational outcomes. Developed in the UK voluntary sector, FLNP is popular with practitioners, has impressed policy makers throughout the UK, has been found to be effective in before/after and qualitative studies, but lacks a randomised controlled trial (RCT) evidence base. Methods/Design A multi-centre, investigator blind, randomised controlled trial of the FLNP with a target sample of 288 south Wales families who have a child aged 2-4 yrs living in or near to Flying Start/Sure Start areas. Changes in parenting, parent child relations and parent and child wellbeing are assessed with validated measures immediately and at 6 months post intervention. Economic components include cost consequences and cost utility analyses based on parental ranking of states of quality of life. Attendance and completion rates and fidelity to the FLNP course delivery are assessed. A nested qualitative study will assess reasons for participation and non-participation and the perceived value of the programme to families. By the end of May 2010, 287 families have been recruited into the trial across four areas of south Wales. Recruitment has not met the planned timescales with barriers including professional anxiety about families entering the control arm of the trial, family concern about video and audio recording, programme facilitator concern about the recording of FLNP sessions for fidelity purposes and delays due to the new UK research governance procedures. Discussion Whilst there are strong theoretical arguments to support universal provision of parenting programmes, few universal programmes have been subjected to randomised controlled trials. In this paper we describe a RCT protocol with quantitative and qualitative outcome measures and an economic evaluation designed to provide clear evidence with regard to effectiveness and costs. We describe challenges implementing the protocol and how we are addressing these

The LOFAR Two Meter Sky Survey: Deep Fields, I -- Direction-dependent calibration and imaging

The Low Frequency Array (LOFAR) is an ideal instrument to conduct deep extragalactic surveys. It has a large field of view and is sensitive to large-scale and compact emission. It is, however, very challenging to synthesize thermal noise limited maps at full resolution, mainly because of the complexity of the low-frequency sky and the direction dependent effects (phased array beams and ionosphere). In this first paper of a series, we present a new calibration and imaging pipeline that aims at producing high fidelity, high dynamic range images with LOFAR High Band Antenna data, while being computationally efficient and robust against the absorption of unmodeled radio emission. We apply this calibration and imaging strategy to synthesize deep images of the Boötes and Lockman Hole fields at ∼150 MHz, totaling ∼80 and ∼100 h of integration, respectively, and reaching unprecedented noise levels at these low frequencies of .30 and .23 µJy beam−1 in the inner ∼3 deg2 . This approach is also being used to reduce the LOTSS-wide data for the second data release

Earth observation for sustainable urban planning in developing countries: needs, trends, and future directions

Abstract: Cities are constantly changing and authorities face immense challenges in obtaining accurate and timely data to effectively manage urban areas. This is particularly problematic in the developing world where municipal records are often unavailable or not updated. Spaceborne earth observation (EO) has great potential for providing up-to-date spatial information about urban areas. This article reviews the application of EO for supporting urban planning. In particular, the article overviews case studies where EO was used to derive products and indicators required by urban planners. The review concludes that EO has sufficiently matured in recent years but that a shift from the current focus on purely science-driven EO applications to the provision of useful information for day-to-day decision-making and urban sustainability monitoring is clearly needed

Early Adversity and the Prospective Prediction of Depressive and Anxiety Disorders in Adolescents

The current study was a prospective exploration of the specificity of early childhood adversities as predictors of anxiety and depressive disorders in adolescents. Participants were 816 adolescents (414 males, 402 females) with diagnostic information collected at age 15; information on early adversities had been collected from the mothers during pregnancy, at birth, age 6 months, and age 5 years for a related study. Adolescents with "pure" anxiety disorders were compared with adolescents with "pure" depressive disorders (major depressive disorder, dysthymia), and these groups were compared to never-ill controls. Analyses controlled for gender and maternal depression and anxiety disorders. Results indicated that adolescents with anxiety disorders were more likely than depressed youth to have been exposed to various early stressors, such as maternal prenatal stress, multiple maternal partner changes, and more total adversities, whereas few early childhood variables predicted depressive disorders. Even when current family stressors at age 15 were controlled, early adversity variables again significantly predicted anxiety disorders. Results suggest that anxiety disorders may be more strongly related to early strees exposure, while depressive disorders may be related to more proximal stressors or to early stressors not assessed in the current study

ATLAS liquid argon calorimeter back end electronics

The Liquid Argon calorimeters play a central role in the ATLAS (A Toroidal LHC Apparatus) experiment. The environment at the Large Hadron Collider (LHC) imposes strong constraints on the detectors readout systems. In order to achieve very high precision measurements, the detector signals are processed at various stages before reaching the Data Acquisition system (DAQ). Signals from the calorimeter cells are received by on-detector Front End Boards (FEB), which sample the incoming pulse every 25ns and digitize it at a trigger rate of up to 75~kHz. Off-detector Read Out Driver (ROD) boards further process the data and send reconstructed quantities to the DAQ while also monitoring the data quality. In this paper, the ATLAS Liquid Argon electronics chain is described first, followed by a detailed description of the off-detector readout system. Finally, the tests performed on the system are summarized

Genetic studies of hypertrophic cardiomyopathy in Singaporeans identify variants in TNNI3 and TNNT2 that are common in Chinese patients

Background - To assess the genetic architecture of hypertrophic cardiomyopathy (HCM) in patients of predominantly Chinese ancestry. Methods - We sequenced HCM disease genes in Singaporean patients (n=224) and Singaporean controls (n=3,634), compared findings with additional populations and Caucasian HCM cohorts (n=6,179) and performed in vitro functional studies. Results - Singaporean HCM patients had significantly fewer confidently interpreted HCM disease variants (Pathogenic (P)/Likely Pathogenic (LP):18%, p<0.0001) but an excess of variants of unknown significance (exVUS: 24%, p<0.0001), as compared to Caucasians (P/LP: 31%, exVUS: 7%). Two missense variants in thin filament encoding genes were commonly seen in Singaporean HCM (TNNI3:p.R79C, disease allele frequency (AF)=0.018; TNNT2:p.R286H, disease AF=0.022) and are enriched in Singaporean HCM when compared with Asian controls (TNNI3:p.R79C, Singaporean controls AF=0.0055, p=0.0057, gnomAD-East Asian (gnomAD-EA) AF=0.0062, p=0.0086; TNNT2:p.R286H, Singaporean controls AF=0.0017, p<0.0001, gnomAD-EA AF=0.0009, p<0.0001). Both these variants have conflicting annotations in ClinVar and are of low penetrance (TNNI3:p.R79C, 0.7%; TNNT2:p.R286H, 2.7%) but are predicted to be deleterious by computational tools. In population controls, TNNI3:p.R79C carriers had significantly thicker left ventricular walls compared to non-carriers while its etiological fraction is limited (0.70, 95% CI: 0.35-0.86) and thus TNNI3:p.R79C is considered a VUS. Mutant TNNT2:p.R286H iPSC-CMs show hypercontractility, increased metabolic requirements and cellular hypertrophy and the etiological fraction (0.93, 95% CI: 0.83-0.97) support the likely pathogenicity of TNNT2:p.R286H. Conclusions - As compared to Caucasians, Chinese HCM patients commonly have low penetrance risk alleles in TNNT2 or TNNI3 but exhibit few clinically actionable HCM variants overall. This highlights the need for greater study of HCM genetics in non-Caucasian populations

Parental longevity correlates with offspring’s optimism in two cohorts of community-dwelling older subjects

Dispositional optimism and other positive personality traits have been associated with longevity. Using a familial approach, we investigated the relationship between parental longevity and offspring’s dispositional optimism among community-dwelling older subjects. Parental age of death was assessed using structured questionnaires in two different population-based samples: the Leiden Longevity Study (n = 1,252, 52.2% female, mean age 66 years, SD = 4) and the Alpha Omega Trial (n = 769, 22.8% female, mean age 69 years, SD = 6). Adult offspring’s dispositional optimism was assessed with the Life Orientation Test—Revised (LOT-R). The association between parental age of death and levels of optimism in the offspring was analysed using linear regression analysis within each sample and a meta-analysis for the overall effect. In both samples, the parental mean age of death was positively associated with optimism scores of the offspring. The association remained significant after adjustment for age, gender, living arrangement, body mass index, smoking status, education and self-rated health of the offspring. The pooled B coefficient (increase in LOT-R score per 10-year increase in parental mean age of death) was 0.30 (SE = 0.08, p < 0.001). In conclusion, parental longevity was positively associated with optimism in adult offspring, suggesting a partial linked heritability of longevity and optimism