Academic

Welcome to the second week of the Fourth Annual Congloemrate Junior Scholars Workshop.  Today's featured scholar is Heather Field, an associate professor at Hastings College of Law, where she teaches corporate and partnership tax, federal income tax and tax policy.  Heather's paper today is of great interest not only to tax wonks, but also those of us lowly business law professors who talk about choice of entity, Checking in on Check-the-Box.  Think of it as our version of VH-1:  I Love the 90s.

Eleven years ago, new regulations dramatically changed the manner in which the federal income tax system determines how business entities are taxed. These new explicitly elective "check-the-box" regulations for entity classification replaced a multi-factored corporate resemblance test and drew wide praise for their potential to increase simplicity and certainty, reduce costs, and enhance efficiency and equity. Now, with the benefit of hindsight and with data regarding entity classification elections made since 1997, this Article revisits the "check-the-box" regulations. This Article analyzes the application of the "check-the-box" regulations over the last eleven years and concludes that, while the "check-the-box" regulations represent an improvement over the prior entity classification rules, they fall short of their promise. This Article also examines the scope of the explicit "check-the-box" election itself and argues that the election lacks a coherent set of limitations, which undermines the provision of the explicit entity classification election at all. Ultimately, this Article concludes that the policy weaknesses revealed by a close examination of the "check-the-box" regulations stem fundamentally from the existence of a multi-regime system for taxing businesses, and hence, the "check-the-box" regulations expose a problem with the choices themselves, thus adding to the literature in favor of reforming the federal income tax's treatment of businesses.

Today's expert commentary is provided by Leandra Lederman, Steven Dean, Gregg Polsky and past workshop participant David Gamage.  Each of our commentators' remarks will appear below this post.  Readers are invited and encouraged to give their thoughts in the comment section to this post.  Happy reading!