Copyright (c) 2009 All rights reserved. http://works.bepress.com/bryan_camp Recent documents in Bryan T Camp en-us Fri, 04 Dec 2009 10:06:38 PST 3600 http://works.bepress.com/bryan_camp/3 http://works.bepress.com/bryan_camp/3 Sat, 01 Sep 2007 09:30:37 PDT In a series of hearings in 1997 and 1998, Congress heard allegations that the Internal Revenue Service ("IRS" or "Service") was abusing taxpayers during the process of collecting taxes. The resulting distrust of the tax bureaucracy led Congress to create a special adversary proceeding providing for judicial review of IRS collection decisions. The proceeding is beguilingly titled "Collection Due Process" (and commonly referred to as "CDP"). My study of CDP's structure, operation, and of 976 court decisions issued through the end of 2006 demonstrates that it has failed to fulfill its promise. Of the over 15 million collection decisions made since 2000, courts have reviewed at most 3,000 and have reversed only 16. That is a reversal rate of about one in a million. These numbers strongly support this article's claim that adversary process is neither necessary nor sufficient to check government abuses in the modern administrative state. This article pursues two goals. First, it documents and explains CDP's failure to provide a meaningful external check on tax collection abuses. In fact, CDP most likely hurts those who most need its promised protection from arbitrary agency action: the working poor who risk seeing their Earned Income Tax Credit subsidies snatched away. Second, the article links CDP's failure to larger questions of the proper role for adversary process in the administrative state. Some commentators contend there can be no proper "rule of law" without adversarial process. This study of CDP proves the opposite claim: adversarial process, used in the wrong place and the wrong time, becomes a rule of deception rather than a rule of law. CDP is a failure on many levels, but an instructive one. This article proceeds in four parts. Part I gives the conceptual overview of the tax administration forest necessary to understand both the evaluation and critique of CDP. Part II explains the origins and operations of CDP. Part III applies the theory of tax administration developed in Part I to larger administrative law concepts to show how CDP fails to serve its promised purpose, and how it actually harms both taxpayers and the cause of good tax administration. Part IV sketches out some ideas about how tax collection might be structured along the lines of what I term "inquisitorial due process." Bryan T. Camp Practice and Procedure Public Law and Legal Theory Taxation Taxation-Federal Income Administrative Law Law and Society General Law Jurisprudence http://works.bepress.com/bryan_camp/1 http://works.bepress.com/bryan_camp/1 Tue, 17 Apr 2007 10:58:53 PDT The Play's The Thing: A Theory of Taxing Virtual Worlds: Bryan T. CampAbstract Taxation is shadow life. As our culture monetizes more and more life activities, the shadow grows. This article looks at the potential tax issues arising from a new life activity: online role-playing games in virtual worlds. Currently, some 12 million people regularly play such games and the number is growing. Exploring the reach of the Tax Code into virtual world transactions not only responds to the potentially practical needs of millions of U.S. taxpayers, it also permits a reevaluation of core principles of income tax as they interplay with life activities in the context of 21st century American culture. This article's central thesis is that while player activity in virtual worlds undoubtedly produces measurable economic value to the player, player activity that occurs solely within the online virtual world is not gross income under current doctrine, nor should current doctrine change. The article argues that a "cash out" rule for determining gross income is the appropriate rule, both descriptively and normatively. Players whose added wealth consists solely in what I shall define as "units of play" should not be taxed unless and until they convert those units into cash or property that is something other than a unit of play. Conversely, players whose in-world wealth becomes less like units of play and more like a medium of exchange can and should count virtual world transactions as producing gross income. When the play ceases, taxation begins. The resulting line-drawing difficulties have nothing to do with the intent of the player and have nothing to do with "fun" and "games." Instead, the issue presented is as old as the Tax Code itself: at what point does economic gain become legal gain? The new context of virtual words allows for a renewed exploration of how and why the legal concept of "income" differs, and indeed must differ, from the economic concept. The article proceeds in three parts. Part I describes the relevant facts of online role-playing games. It describes two popular virtual worlds which sit at opposite ends of the spectrum of online gaming--World of Warcraft and Second Life--and describes how two types of game-related activity in each produce economic income to players. Part II reviews the basic rules of income taxation in the United States federal system, focusing on the broadness of the theory of gross income under section 61. Part II argues that the limits of section 61, whether imposed by Congress, the courts, or the IRS, are best described as operational limits. Part III applies the basic tax rules to the virtual worlds described in Part II and advances a theory based on "units of play" to distinguish between virtual worlds that are games and virtual worlds that are the equivalent of bingo halls or barter clubs. Using the concept of imputed income, Part III discusses the circumstances under which economic activity in-world involving only trade of virtual goods or services for virtual money will cast a real world tax shadow. Bryan T. Camp Administrative Law Arts and Literature Constitutional Law Economics Law and Economics Law and Society Practice and Procedure Property-Personal and Real Public Law and Legal Theory Taxation Taxation-Federal Income