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Sunday, April 26, 2015

What LSU Portends for the Future of Legal Education

LSU Logo (2016)Boston Globe, LSU to Draft Insolvency Plan as Jindal Cuts Loom:

Louisiana State University will draw up a financial exigency plan, equivalent to college bankruptcy, as $608 million in budget cuts proposed by Governor Bobby Jindal threaten to cripple the state’s higher-education system.

Exigency, declared when schools face insolvency, would allow the state’s flagship institution to restructure and fire tenured faculty.

TaxProf Blog op-ed:   What LSU Portends for the Future of Legal Education, by David Barnhizer (Cleveland State):

When we are trying to figure out what is going to happen with law schools we need to think through what is going to happen with universities. Regardless of what law schools do, if they become financial burdens on their host universities it can be expected that the universities will initiate actions. One is the bankruptcy variation such as reported in relation to LSU in the Boston Globe and the other is the closing of the law school in its entirety and termination of its faculty en masse. The latter approach may be as strategically cynical as closing a school for 3-5 years and then reopening as a new school after ridding the university of faculty during a period in which the demand for new law graduates may increase again.

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April 26, 2015 in Legal Education | Permalink | Comments (4)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [271 Downloads]  The U.S. Foreign Account Tax Compliance Act: American Legal Imperialism?, by Bruce W. Bean (Michigan State) & Abbey Wright Farnsworth
  2. [252 Downloads]  Recent Developments in Federal Income Taxation: The Year 2014, by Martin J. McMahon Jr. (Florida), Bruce A. McGovern (South Texas) & Ira B. Shepard (Houston)
  3. [217 Downloads]  Can Sharing Be Taxed?, by Shu-Yi Oei (Tulane) & Diane M. Ring (Boston College)
  4. [176 Downloads]  Using the 'Smart Return' to Reduce Tax Evasion, by Joseph Bankman (Stanford), Clifford Nass (Stanford) & Joel Slemrod (Michigan)
  5. [169 Downloads]  The Historical Origins of the Debt-Equity Distinction, by Camden Hutchison (Wisconsin)

April 26, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The Plight Of A Christian Professor At An Elite Law School

CLS 2Rod Dreher, The Post-Indiana Future for Christians:

I spent a long time on the phone last night with a law professor at one of the country’s elite law schools. This professor is a practicing Christian, deeply closeted in the workplace; he is convinced that if his colleagues in academia knew of his faith, they would make it very hard for him. ... I will call him Prof. Kingsfield, after the law professor in The Paper Chase. 

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April 26, 2015 in Legal Education | Permalink | Comments (16)

The IRS Scandal, Day 717

IRS Logo 2Pittsburgh Tribune-Review, The Gathering Storm: An IRS Defeat:

Attempting to obscure the extent of its alleged targeting of conservative groups, the Internal Revenue Service has been smacked with a serious setback in its court fight in Ohio.

A federal judge granted a motion compelling the IRS to list the 298 targeted organizations, which the IRS had identified for the Treasury Department inspector general. In a lawsuit filed in 2013, 10 conservative groups, through discovery, have been trying to pry free the list of all groups targeted by the IRS. This, in order to seek class certification and expand the lawsuit to "all the organizations on (ex-IRS official) Lois Lerner's hit list," writes Hans von Spakovsky of The Heritage Foundation. ...

The discernible rumbling of distant thunder portends the gathering storm that is going to rain down on the IRS.

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April 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, April 25, 2015

Class of 2014 Law School Job Placement Rankings

RankingsMatt Leichter, Class of 2014 Employment Report (Leaked Edition):

I’ve been peeking daily at the ABA’s employment summary Web page.  On Friday morning, the class of 2014 data appeared ...  Yet when I returned Friday afternoon, I found it was gone … But not before I downloaded the spreadsheet. ...  I’ve run the numbers, so I just have to leak the results.

58.7 percent of graduates held full-time jobs requiring bar passage, up from 55.9 percent for the class of 2013. However—and this is very important—the actual number of graduates in such jobs fell to 25,292 from 25,762 last year, about a 1.8 percent decline. [43,115 graduated from an ABA-accredited law school outside of Puerto Rico in 2014, compared to 45,824 in 2013, a 4.8% decline.]

Leichter 2

[Here is] the comparison table for each law school, sorted by their 2014 percentage of graduates in full-time bar-passage required jobs less school-funded positions:

Full-Time/Long-Term in Bar-Passage-Required Jobs
(Excluding Law-School-Funded Jobs)

RankLaw School’13’14Change
1. Pennsylvania 85.7% 91.4% +5.7%
2. Cornell 81.3% 90.1% +8.8%
3. Duke 85.1% 87.9% +2.8%
4. Columbia 88.3% 87.2% -1.1%
5. Chicago 86.5% 87.1% +0.6%
6. NYU 86.2% 86.0% -0.2%
7. Harvard 84.9% 85.5% +0.6%
8. UC-Berkeley 78.4% 85.4% +7.0%
9. Stanford 85.1% 85.0% -0.1%
10. Virginia 79.7% 84.8% +5.1%
11. Michigan 81.2% 81.8% +0.6%
12. New Mexico 73.7% 80.2% +6.5%
13. Kentucky 74.4% 80.2% +5.8%
14. Northwestern 77.5% 78.4% +0.9%
15. Iowa 76.3% 77.8% +1.5%
16. Boston College 64.0% 74.4% +10.4%
17. Minnesota 68.2% 73.7% +5.5%
18. Nebraska 66.1% 73.5% +7.4%
19. Vanderbilt 78.2% 73.2% -5.0%
20. Washington University 66.0% 72.9% +6.9%
21. Alabama 71.7% 72.5% +0.8%
22. Ohio State 60.4% 72.4% +12.0%
23. LSU 67.4% 72.4% +5.0%
24. Washburn 62.9% 72.3% +9.4%
25. Seton Hall 68.9% 72.3% +3.4%
26. UCLA 66.6% 71.7% +5.1%
27. Texas 75.1% 71.5% -3.6%
28. Georgia State 62.6% 71.2% +8.6%
29. Georgia 68.4% 70.6% +2.2%
30. Arizona State 61.8% 70.2% +8.4%
31. SMU 70.9% 69.7% -1.2%
32. Georgetown 72.4% 69.6% -2.8%
33. Yale 74.4% 69.6% -4.8%
34. Wake Forest 58.5% 69.5% +11.0%
35. Florida 66.4% 69.3% +2.9%
36. Mercer 65.6% 69.2% +3.6%
37. North Carolina 68.1% 68.7% +0.6%
38. Oklahoma 66.3% 68.5% +2.2%
39. Tulsa 58.0% 68.4% +10.4%
40. Idaho 62.4% 68.3% +5.9%
41. Miami 60.7% 68.2% +7.5%
42. BYU 64.6% 68.1% +3.5%
43. Kansas 64.2% 68.1% +3.9%
44. South Dakota 62.0% 67.9% +5.9%
45. Boston University 61.2% 67.9% +6.7%
46. Fordham 63.4% 67.8% +4.4%
47. Baylor 70.5% 67.6% -2.9%
48. Montana 69.1% 67.5% -1.6%
49. Florida State 69.6% 67.2% -2.4%
50. Colorado 67.0% 66.7% -0.3%

The bottom 10 law schools are:

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April 25, 2015 in Law School Rankings, Legal Education | Permalink | Comments (14)

Ring Presents Can Sharing Be Taxed? Today at Fordham

FordhamDiane M. Ring (Boston College) presents Can Sharing Be Taxed?, 93 Wash. U. L. Rev. ___ (2016) (with Shu-Yi Oei (Tulane)), at Fordham today as part of its conference on Sharing Economy, Sharing City: Urban Law and the New Economy:

The past few years have seen the rise of a new model of production and consumption of goods and services, often referred to as the “sharing economy.” Fueled by startups such as Uber and Airbnb, sharing enables individuals to obtain rides, accommodations, and other goods and services from peers via the Internet or mobile application in exchange for payment. The rise of sharing has raised questions about how it should be regulated, including whether existing laws and regulations can and should be enforced in this new sector or whether new ones are needed.

In this Article, we explore those questions in the context of taxation. We argue that, contrary to the claims of some commentators, the application of substantive tax law to sharing is mostly (though not completely) clear, because current law generally contains the concepts and categories necessary to tax sharing. However, tax enforcement and compliance may present challenges, as a result of two distinctive features of sharing. First, some sharing businesses tend to opportunistically pick the more favorable regulatory interpretation if there is ambiguity regarding which rule applies or whether a rule applies. This leads to compliance and enforcement gaps. Second, the “microbusiness” nature of sharing raises unique compliance and enforcement concerns. We suggest strategies for addressing these dual challenges, including lower information reporting thresholds, safe harbors and advance rulings to simplify tax reporting, and targeted enforcement efforts.

April 25, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Law School Dean’s Art Teaches Life Lessons For His Students

The Star, Law School Dean’s Art Pieces Translate Into Advice for the Audience:

Dean

A drove of horses, koi swimming in a pond, a ship basking in a warm orange glow — these are some of the works on display at Harmahinder Singh’s first solo art exhibition titled UNwritten Law Bespoke Art at the CODA Gallery in Taylor’s University.

At first impression, the piece with the horses can be interpreted as strength in teamwork but the explanation beside it describes something different.

The five internal forces of mankind — lust, anger, greed, worldly attachment and pride — must be held in check. Lose your head and chaos will follow. Either way, it represents positivity and thus, serves as a meaningful conversation piece.

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April 25, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 716

IRS Logo 2Forbes, IRS Forced To Release Names Of Targeted Groups, by Peter J. Reilly:

So we had another Tea Party decision on April 1 of all days. NorCal Tea Party Patriots is one of the ten organizations in a lawsuit against the IRS because of delays and intrusive scrutiny while they were applying for exempt status.  They want it to be a class action suit, but they need information from the IRS to determine what organizations should be in the class. ...

The IRS argued that it could not make those disclosures, because they would be in violation of Code Section 6103 which protects the confidentiality of returns and return information.  The judge went with NorCal on this one.

The Court concludes that the return information sought is directly related to the issue of class certification in this federal court proceeding. The names of the putative class member organizations and their control dates—the date which the putative class member organizations submitted their applications for tax exempt status to the IRS—are directly related to the issue of class certification. Plaintiffs seek the return information of the putative class members to prove to the Court that the Federal Rule of Civil Procedure 23(a) and 23(b) requirements such as typicality, commonality, and whether the IRS acted on a grounds that applied generally to the putative class are satisfied. ...

I’m beginning to despair of their ever being an end to the IRS Scandal on Day 714 by the TaxProf count, as I write this. I thought this latest decision might be a good opportunity to reach out to someone who might have a different view on the whole matter.

Frank Wolpe, Professor Emeritus at Bentley University has written a white paper about rebuilding the IRS. (download)

The paper identifies the ill-conceived massive 1998 structural reorganization and division (like salami-slicing) of field operations as a major cause of the IRS’s current legal battles and “downward slide.” In its 1998 aftermath, we were all left with an overly centralized Washington IRS National Office and an undermanaged array of field operations. That’s where the Tea Party scandal started; and, even more importantly, it need never be repeated. Indeed, such events must stop!

“With that recognition, change-makers can travel a 2015 bipartisan pathway to addressing a wrong-headed 1998 “solution” to a 1998 non-existent structural problem by introducing a 2015 proposal for a National Office consolidation (slimming down) coupled with a field operations decentralization (closer to customers and ending the practice of absentee senior management without local accountability).

Of course the notion that the scandal must have actually started in the Oval Office still has an irresistible grip in some circles, so a boring reorganization just won’t be satisfying.  So maybe it never will end.

Hans von Spakovsky of cnsnews.com wrote:

The arguments in this case by the Justice Department are another example of how the IRS has been hiding behind Section 6103. That law was intended to prevent the IRS from publicly disclosing private tax information—such as its illegal disclosure of the tax returns of the National Organization for Marriage (the IRS agreed to pay National Organization for Marriage $50,000 to settle that case in June of 2014). But the IRS has been trying to use this law to prevent having to disclose its abusive treatment of taxpayers.

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April 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, April 24, 2015

Today Is Tax Freedom Day — Earlier In LA, MS & SD, Later In CT, NJ & NY

Tax Foundation logoToday is Tax Freedom Day, the day on which Americans will have earned enough money to pay all federal, state, and local taxes for the year:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2015, Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 24, or 114 days into the year.

This year, Americans will work the longest to pay federal, state, and local individual income taxes (43 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (12 days), and property taxes (11 days). The remaining 7 days are spent paying estate and inheritance taxes, customs duties, and other taxes.

Tax Freedom

Center on Budget and Policy Priorities, Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens:

The Tax Foundation released its annual "Tax Freedom Day" report today that, once again, can leave a strikingly misleading impression of tax burdens -- showing an average federal tax rate across the United States that's likely higher than the tax rate that 80 percent of U.S. households actually pay.

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April 24, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

April 24, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

ATPI Hosts Conference Today On Delivering Benefits To Low-income Taxpayers

ATPI Logo (2015)The American Tax Policy Institute hosts a conference today on Delivering Benefits to Low-income Taxpayers through the Tax System  organized by George Plesko (Connecticut) and Stephen Shay (Harvard) in Washington, D.C.:

Congress has increasingly tasked the IRS to deliver a range of benefits through the tax system. The tax system has become home to some of our most important social policies, including health care, work incentives and poverty relief. The program will bring together leading academics, policymakers and administrators from both the US and abroad to consider issues revolving around administration and design of these important policies.

Panel #1:  Creative Ways to Improve Targeting and Take-Up of Earnings-Related Tax Benefits

This panel will consider ways the US tax system can adapt to its increasing role as a provider of benefits to low-income workers. The three papers explore creative approaches for better targeting of EITC benefits, including using information from other provisions and compliance functions to identify nonparticipants, experimenting with providing the EITC in advance to Chicago, and a proposal to replace existing benefits with a work credit.

Moderator/Discussant:  Damon Jones (Chicago)
Panelists:  Day Manoli (Texas), Elaine Maag (Tax Policy Center), David Marzahl (Center for Economic Progress)

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April 24, 2015 in Conferences, Tax | Permalink | Comments (0)

LSAC: 2.6% Decline In Law School Applicants

Wall Street Journal, Law School Applicant Pool Still Shrinking:

The dramatic drop in law school applicants — a 40% decline between 2005 and 2014 — has many wondering when demand for a law degree will finally rebound.

Not this year, at least. The latest numbers released by the Law School Admission Council indicate that the downward spiral is still…spiraling.

As of April 17, 47,172 people have applied to go to an accredited U.S. law school this fall, according to LSAC, which administers the LSAT entrance exam. That’s a 2.6% fall-off compared to a year ago. Applications are down 4.7% from 2014.

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April 24, 2015 in Legal Education | Permalink | Comments (3)

Forman & Mann: Making The IRS Work

Florida Tax ReviewJonathan Barry Forman (Oklahoma) & Roberta F. Mann (Oregon), Making the Internal Revenue Service Work, 17 Fla. Tax Rev. ___ (2015):

This is an Article about how to redesign the federal tax system so that the Internal Revenue Service (IRS) can administer it more effectively given that Congress is only willing to let the IRS have around 82,000 employees and a $12 billion budget. As the IRS Oversight Board and the National Taxpayer Advocate frequently emphasize, the United States underinvests in the IRS, and that underinvesting means that taxpayer services are suffering and that tax enforcement has been significantly weakened.

With budget deficits for “as far as the eye can see” and the recent IRS troubles with tax-exempt political organizations, the prospects for increased funding for the IRS are remote. In this Article, we consider a variety of approaches that would make it easier for the IRS to raise and collect revenue, and we offer a number of recommendations for legislative and administrative changes. For example, we recommend simplifying the tax system, enhancing third-party reporting, and streamlining the tax-filing and dispute-resolution procedures.

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April 24, 2015 in Scholarship, Tax | Permalink | Comments (0)

Symposium: Teaching the Academically Underprepared Law Student

TUSSymposium, Teaching The Academically Underprepared Law Student,  53 Duq. L. Rev. 1-278 (2015):

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April 24, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 715

IRS Logo 2Breitbart, Did John McCain Know about IRS Targeting?:

When the IRS scandal broke, Sen. John McCain sent out a press release claiming to be shocked at the news. But was he?

Three years’ of IRS e-mail evidence continues to build against the federal government. The most interesting and possibly disturbing piece of information deals with the fact that Republican Senator McCain and Democrat Senator Carl Levin were both aware of the targeting eleven days before Lerner’s public admission of “inappropriate” actions.

E-mails reveal that staffers from McCain’s office met with IRS personnel for six hours, 11 days before Lerner’s public admission of “inappropriate” actions. ...

This revelation served as chilling confirmation of a suspicion Tea Party groups had all along: they were under fire from both sides of the establishment in Washington, D.C. Republicans and Democrats worked together to crush their common enemy, actual conservatives. ...

[W]hat about that six hour meeting? McCain has some serious explaining to do about just how much he knew about the targeting at the IRS. He’s certainly had his differences with the Tea Party and conservative Republicans in the past. And his positions on free speech and political action have more in common with liberals who prefer a one-way street over the marketplace of ideas.

Maybe, just maybe, Senator McCain did not mind the IRS’ attempts to stifle the First Amendment rights of Tea Party citizens. Maybe his shock at Lerner’s revelation was just as fake as the outrage from the White House.

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April 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, April 23, 2015

Crane Presents Uncovering A Meaning For 'Direct Tax' Today At Ohio State

CraneCharlotte Crane (Northwestern) presents Uncovering a Meaning for “Direct Tax” at Ohio State today in a tax colloquium sponsored its Law, Finance and Governance Program:

This paper argues that the references article I to “direct taxes” (which if “layed and collected” by Congress must be apportioned among the states) is a reference to taxes the burden of which can be traced to a particular location, and thus to a particular state. The paper looks to the history of the grant of the impost to the Confederation Congress to support this argument. It demonstrates that throughout the decade before 1787, those involved in financing the War distinguished the impost (which could not appropriately be credited to the state in which it was paid when reckoning whether that state had met its fiscal obligation to the Confederation) from those “direct taxes” (which should be so credited). This same distinction was embedded in the Constitution, to provide both for the final reckoning of those obligations of the states and for the ongoing support of the United States.

Erik Jensen (Case Western) is the discussant.

April 23, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Defeated North Carolina Law Student Body Presidential Candidate Challenges Election, Objects To Dean's Email Opposing His '25 By 2025' Platform

2016 U.S. News RankingsDaily Tar Heel, Student Contests Law School Election:

The loser of the Student Bar Association presidential election is challenging the results in the Student Supreme Court.

Former presidential candidate Billy Piontek claims the elections committee failed to hold a fair, unbiased election.

On April 14, Piontek filed the complaint about the tactics of the winning write-in candidates. Piontek also objected to an email Jack Boger, dean of the law school, sent to the student body that Piontek said disparaged his platform. ...

The night before the election, Boger emailed the classes of 2016 and 2017 to advise against supporting the “25 by 2025” plan that Piontek and other candidates pushed for. [North Carolina is currently ranked 34th by U.S. News.] The platform centered on elevating the law school’s U.S. News and World Report ranking into the top 25 schools by 2025.

In his email, Boger said the plan contradicted the school’s values and motto, “to be rather than to seem.”

Update:  From a North Carolina faculty member:

I just wanted to add a clarification re: your post on the UNC SBA election: 

In particular, the Daily Tar Heel story didn’t make clear what prompted Dean Boger to write his email.  Piontek had not just distributed the platform to all students, but he did so while stating that he and his slate were developing the plan with the faculty and administration.  The Dean initially resisted responding broadly, even though neither he nor anyone else in the administration had ever heard of the plan, much less was working on it.  However, after numerous emails and phone calls from faculty and students distressed that he may have embarked on a significant change in focus without any faculty input or discussion, he decided that he had to make clear that the administration had nothing to do with the plan.

April 23, 2015 in Legal Education | Permalink | Comments (1)

Should Professor With Lowest Student Evaluations Be Fired Each Year?

Survivor 2Chronicle of Higher Education, Iowa Legislator Wants to Give Students the Chance to Fire Underwhelming Faculty:

A bill circulating in the Iowa State Senate offers a novel (and cutthroat) way to hold professors accountable: putting their fates into students’ hands, Survivor-style. Every year the professor most disliked by students would be voted off the campus.

The bill, introduced by Sen. Mark Chelgren, a Republican, would require the state’s public universities to rate professors’ performance based solely on students’ evaluations of their teaching effectiveness. Professors whose evaluation scores didn’t reach a minimum threshold would be automatically fired by the university.

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April 23, 2015 in Legal Education | Permalink | Comments (1)

Bloomberg: Five Charts That Show You Should Apply to Law School This Year

Bloomberg, Five Charts That Show You Should Apply to Law School This Year:

Becoming a lawyer has never been a more obvious decision. ... It is still a perfect time to apply to law school, and here are five charts that prove it.

  1. Law schools need bodies.
  2. The Law School Admission Test is less competitive than it used to be.
  3. A good applicant has an excellent shot at getting in.
  4. When I say good applicant, I'm probably talking about you.
  5. The law job market is better than it looks.

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April 23, 2015 in Legal Education | Permalink | Comments (4)

Movie Night With Judge Kozinski Offers Behind The Curtain View Of 9th Circuit

Movie NightLos Angeles Times, After Court Adjourns, 9th Circuit Judge's Movie Nights Are a Hit:

It's movie night at the courthouse.

U.S. 9th Circuit Court of Appeals Judge Alex Kozinski, his identification and security tags hanging from his neck, greets dozens of people who have shown up early for a guided tour of the court's headquarters, an ornate columned building on the edge of San Francisco's seamy Tenderloin. ...

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April 23, 2015 in Legal Education | Permalink | Comments (1)

Life After Loving: IRS Regulation of Tax Preparers

Florida Tax ReviewAlex H. Levy (NYU), Believing in Life After Loving: IRS Regulation of Tax Preparers, 17 Fla. Tax Rev. 437 (2015):

Nearly anyone can be a tax preparer. There is no test to pass or code of ethics to follow. With few barriers to entry, the field of tax preparation has drawn unscrupulous players, many of whom prey on low-income families who claim the earned-income tax credit. In 2011, the IRS endeavored to regulate the anything-goes world of tax preparation. But a group of small-government activists at the Institute for Justice challenged the IRS’s regulations in federal court. And they won. The U.S. Court of Appeals for the D.C. Circuit struck down the regulations as beyond the IRS’s authority under section 330 of Title 31 of the United States Code. In the wake of that decision, Loving v. IRS, the only path forward for advocates of taxpayer protection is for Congress to explicitly empower the IRS to regulate swindlers posing as tax professionals.

This Article is, fundamentally, a story of political and judicial failure in the age of small government absolutism. In a different era, federal oversight of unscrupulous tax preparers would have represented the blandest kind of common sense. But the Institute for Justice was able to convince a panel of judges on what is widely regarded as the second most influential court in the country that IRS oversight of tax preparers is unlawful. The government’s litigation strategy proved bumbling and ill-considered; it was easily outmaneuvered by its ideologically-driven adversary.

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April 23, 2015 in Scholarship, Tax | Permalink | Comments (2)

Auerbach, Gamage Named to California Tax Reform Advisory Panel

SealCalifornia State Controller's Office, Council of Economic Advisors:

Within her first four months of taking office, State Controller Betty Yee created a Council of Economic Advisors to examine the many ideas for comprehensive tax reform in California.

Controller Yee and other elected officials have called for a tax system that is less vulnerable during economic downturns and is more sustainable, providing greater certainty from year to year. While numerous reform ideas have merit, Controller Yee believes that changes to the tax system must be examined as a whole with focus on fairness to taxpayers and practicality. A comprehensive reform should avoid locking in even more money for specific groups and instead provide a dependable source of revenue that avoids major disruptions to government services.

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April 23, 2015 in Legal Education, Tax | Permalink | Comments (3)

House Report: IRS ‘Deliberately’ Cut Customer Service to Make Tax Season Painful for Taxpayers

House LogoHouse Ways & Means Committee Majority Staff Report, Doing Less With Less: IRS’s Spending Decisions Harm Taxpayers (Apr. 22, 2015):

During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.

The IRS’s spending choices and mismanagement of resources raise serious questions about the nature and extent of the agency’s self-described budget crisis and its commitment to serving the taxpayer.

Press and blogosphere coverage:

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April 23, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (9)

Measuring Teaching Excellence: Shifting From Delivery Of Course Content To Impacting Student Lives

CTEInside Higher Ed, What Is Teaching Excellence?:

College and university faculty are expected to be excellent teachers. In public, college leaders emphasize to potential students and their parents that at their institution, teaching matters above all else. Colleges seem to unabashedly promote that the teaching done by their faculty is markedly better than at peer institutions -- or that the opportunities for close working relationships between students and faculty are unique to their campus. ...

There is no shortage of lip service from various academic ranks on the value of teaching excellence. ... But what exactly is teaching excellence? Institutional commitments, workshops, conferences and journals, all sharing the intent of improving teaching and content delivery, do not necessarily translate to a universal agreement on exactly what it is we are improving.

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April 23, 2015 in Legal Education, Teaching | Permalink | Comments (0)

The IRS Scandal, Day 714

IRS Logo 2Forbes, Before IRS Targeting, Lois Lerner Targeted At Federal Election Commission, by Robert W. Wood:

The IRS audits, sends bills, imposes penalties, files liens and levies. Yet incredibly, most of the money the IRS collects is self-assessed. We all fill out tax returns and voluntarily send in money. How much we believe in the system is critical to making it work. Sure, part of the reason we comply is our fear that we’ll be viewed as willful risking jail if we don’t. But there may be a correlation between how much people cheat and their faith that the tax system is impartial. That’s one reason the state of the IRS is so terribly important.

It is hard to believe that the IRS scandal is on day 711. More than two years on, we know that Lois Lerner got a pass on prosecution. She even got nice bonuses. And it seems clear that nothing more will happen. Democrats say that is as it should be, since as President Obama remarked that there is not even a smidgen of corruption at the IRS. But Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) spoke in support of Congressman Jim Renacci’s (R-OH) Prevent Targeting at the IRS Act, which passed unanimously along with several other measures to rein in the IRS. Rep. Roskam called the targeting insidious and poisonous. ...

There is arguably no part of the government more important than our tax system. Our country cannot exist without it. Our tax code and how we administer it could be improved. Yet it is still a system with integrity, one that is administered mostly on the honor system. IRS employees deserve better than the black eye they are getting over this mess. American taxpayers deserve better too.

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April 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, April 22, 2015

Closing The Books On My 25th Year Of Law Teaching

I taught my last Federal Income Tax and Tax Policy classes of the semester today, closing the books on my 25th (and best) year of law teaching. Thanks to the students who have put up with me through the years, including my hokey closing advice on the secret of life:

April 22, 2015 in Legal Education, Tax | Permalink | Comments (3)

Mazur: Taxing the Cloud

CloudsOrly Mazur (SMU), Taxing the Cloud, 103 Cal. L. Rev. 1 (2015):

Transacting business in the “cloud” has quickly gained popularity worldwide as the new method of providing information technology (IT) resources. Instead of purchasing or downloading software, we can now use the Internet to access software and other fundamental computing resources located on remote computer networks operated by third parties. These transactions offer companies lower operating costs, increased scalability, and improved reliability, but also give rise to a host of international tax issues. Despite the rapid growth and prevalent use of cloud computing, U.S. taxation of international cloud computing transactions has yet to receive significant scholarly attention. This Article seeks to fill that void by analyzing the U.S. tax implications of operating in the cloud from both doctrinal and policy perspectives. Such an analysis shows that the technological advances associated with the cloud put pressure on traditional U.S. federal income tax principles, which creates uncertainty, compliance burdens, liability risks for businesses, and a potential loss of revenue for the government. Applying the current law to cloud computing transactions also results in tax consequences that run counter to sound tax policy and may result in double taxation or complete nontaxation of cloud income.

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April 22, 2015 in Scholarship, Tax | Permalink | Comments (0)

Warren Buffett’s Nifty Tax Loophole

BuffettBarron's, Warren Buffett’s Nifty Tax Loophole:

Warren Buffett has backed higher individual tax rates–while ensuring that his vast wealth in Berkshire Hathaway is almost immune.

Warren Buffett is fond of saying his tax rate is lower than his secretary’s. He does not publicize his tax returns, but for the tax year 2010, he paid $6.9 million on taxable income of $39.8 million, according to partial disclosures he made in 2011.

What is astounding about those numbers is not the 17.3% tax rate, but that Buffett’s $39.8 million of taxable income is only about 0.05% of his reported net worth ($71 billion according to Forbes, which put him third on its list of the 400 wealthiest people in the world for 2015).

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April 22, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (4)

WaPo: Why Law Schools Are Losing Relevance — And How They’re Trying To Win It Back

Washington Post, Why Law Schools Are Losing Relevance — And How They’re Trying to Win It Back:

Law schools across the country are facing their lowest enrollment numbers in years, causing some to slash their budgets and revamp their programs in an effort to attract students worried about finding a job in a diminished legal industry.

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April 22, 2015 in Legal Education | Permalink | Comments (0)

20 Law Professors Elected To American Law Institute

ALI Logo (2015)Twenty law professors have been elected to membership in the American Law Institute:

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April 22, 2015 in Legal Education | Permalink | Comments (0)

Seto: The Problem of Law School Tuition

Seto (2014)TaxProf Blog op-ed:  The Problem of Law School Tuition, by Theodore P. Seto (Loyola-L.A.):

In a recent op-ed in the New York Law Journal, Dean Jeremy Paul of Northeastern writes about the future of legal education. Although he makes many good points, he avoids the single hardest question facing law schools going forward: what to do about tuition? Most schools have dealt with this temporarily by holding net tuition constant. (Net tuition is nominal tuition less scholarships.) But in the long run, the parade of horribles at the bottom of each law school's class will get worse if nominal tuition rises faster than the rate of average lawyer compensation, because the bottom of each class will absorb the brunt of any such disproportionate increase.

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April 22, 2015 in Legal Education | Permalink | Comments (10)

Practicing Law With Your Apple Watch

Apple WatchABA Journal, Smartwatches and Other Wearables Can Enhance the Practice of Law, Attorneys Say:

Smartwatches and other forms of wearable technology aren’t just for fitness enthusiasts or techies that can’t bear to be away from the Net.

In a Friday afternoon session at ABA Techshow, attorneys Rick Georges and Robert Sisson talked about how wearable technology has enhanced their ability to practice law on their own terms. Showing off their large collection of smartwatches, virtual reality devices and other gadgets, Georges and Sisson talked about their favorite devices while providing examples of how they used them in their practice. ...

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April 22, 2015 in Legal Education | Permalink | Comments (2)

Florida Tax Institute Kicks Off Today

FloridaThe three-day Florida Tax Institute kicks off today at the Grand Hyatt in Tampa.  Tax Prof speakers include:

  • Sam Donaldson (Georgia State), Recent Developments Affecting Estate Planning
  • Lawrence Lokken (Florida), Current Developments in International Taxation
  • Martin McMahon (Florida) & Bruce McGovern (South Texas), Recent Developments in Federal Income Taxation 
  • Louis Nostro (Nostro Jones) & Grayson McCouch (Florida), Innovative Charitable Gift Planning Strategies
  • Hap Shashy (King & Spalding) & Michael Friel (Florida), Debt vs. Equity

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April 22, 2015 in Conferences, Tax | Permalink | Comments (0)

Law School Puffery and Smoke Blowing

David Barnhizer (Cleveland State), 'Puffing' and 'Blowing Smoke':

The “back and forth” over what is happening and will happen in America’s legal profession and US law schools is frustrating. I see many of the assertions being made by deans and law professors as wishful thinking about what they hope or feel will occur in order to keep up a “brave front” in the face of a catastrophe they cannot prevent. The fact is that if deans and other significant figures in the world of legal education admitted the truth of what was occurring the result would be an acceleration of the downward slide. There is virtually no chance that an honest analysis will be forthcoming from “official” sources. Nor is there much chance that the process has run its course.

Rather than an honest assessment of what is happening and what pretty much is guaranteed to take place over the next five to fifteen years in law schools and “law jobs”, we see claims that the legal profession will rebound and jobs for law graduates return. Almost daily, momentary micro-shifts in the situation are projected pro or con without connection to the macro-dynamics that are playing the primary role in the contracting future of the legal profession and law schools. It feels that we are either running around like little chickens proclaiming “the sky is falling” or like big chickens who are comfortably ensconced in our nests and dedicated to the proposition that “we have seen everything before and it will all be OK soon so stop being so alarmist”.  Either way we are mostly just “clucking” around.

The reality is that “things” will be OK—just not for many of the faculty members and staff of a majority of US law schools whose jobs are at risk or for heavily indebted law students and graduates without jobs of the kind they spent huge sums trying to obtain through their legal education. “Things” will be quite OK for the country because we don’t need more lawyers of the kind we have seen for the past half-century in the volume law schools have been producing. “Things” will be OK because this is a period of re-imagining what it means to educate someone to provide legal services and one in which the long-term monopolistic control over entry into the legal profession by law schools, the ABA and state supreme courts is finally being recognized as the self-interested and expensive restraint of trade that it is. ...

Several Dismal “Truths”

There are many things that could and have been said about what is going on in law schools and the legal profession. But there are some “truths” being ignored far too easily. I suggest they include the following.

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April 22, 2015 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 713

IRS Logo 2News Max, IRS Tea Party-Targeting Scandal Continues:

If the tea party and other conservative groups had been fully active in the critical months leading up to the 2012 election, would Mitt Romney be president today? The public will, of course, never know for certain.

Thanks to Judicial Watch, however, the American people do now know the Internal Revenue Service (IRS) targeted right-leaning organizations applying for tax-exempt status and prevented them from having their voice heard during that period. ...

In their lawsuit, Judicial Watch is asking the courts to order the IRS to do the following:

  • Conduct a search for any and all records responsive to (Judicial Watch’s) FOIA requests.
  • Produce, by a certain date, any and all nonexempt records responsive to (Judicial Watch’s) FOIA requests and a Vaughn index of any responsive records withheld under claim of exemption.
  • Enjoin the [RS from continuing to withhold any and all non-exempt records responsive to the plaintiff’s FOIA requests.

This targeting of donors and other right-leaning groups is intriguing in light of a new Lerner email Judicial Watch just released.

The email discloses that the IRS audited tax-exempt political groups using a separate investigation arm (under Lerner’s control), the Review of Operations Unit. Lerner wrote: "Also, we often use the ROO [Review of Operations Unit] to do initial research. Before starting audits — they don’t touch taxpayers, but can look at publicly available info about orgs."

These documents should dispel any remaining doubt that the Obama administration used tea party applications to do opposition research on individual citizens and groups opposed to President Obama’s policies.

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April 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, April 21, 2015

Albouy Presents The Optimal Taxation Of Housing Consumption Today At NYU

AlbouyDavid Albouy (Illinois) presents Should We Be Taxed Out Of Our Homes? The Optimal Taxation of Housing Consumption at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

Optimal tax theory suggests that it is more efficient to tax housing as a consumption good than other forms of consumption as it is a complement to leisure and is produced more intensively from land, an inelastic factor, than other goods. This tax rate appears to be at least 50 percent higher than other forms of consumption, justifying high rates of property taxation, particularly in areas with inelastic housing supply. It may be efficient to offer a lump sum transfer to households who choose to live close to high-paying jobs, justifying infra-marginal subsidies to housing units in some high-price areas. Proximity to amenities may also influence optimal tax rates depending on whether they are substitutes or complements to labor supply or housing consumption.

April 21, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

California Law School Job Placement Rankings

RankingsDerek Muller (Pepperdine), Visualizing Legal Employment Outcomes in California in 2014:

I thought I'd recreate last year's data on California law school employment outcomes, with a couple of tweaks due to external changes.

A few things jump out from the data. First, there were fewer graduates: there were about 400 fewer graduates from California schools, from 5185 for the Class of 2013 to 4731 for the Class of 2014.

Second, total job placement remained flat. Between 2800-2900 California graduates obtained unfunded positions in the last three years. This year shows that 2849 obtained these unfunded, full-weight positions, good for 60.2% of California graduates--a percentage better than previous years, no doubt, because of the smaller graduating classes.

Third, school-funded positions continue to rise. There were 145 school-funded positions from California schools .Two schools significantly increased school-funded positions: USC went from 12 to 33 (15% of the graduating class), and UC-Irvine went from 0 to 13 (14% of the graduating class). Davis added 9, and Stanford and Loyola each added 5 more school-funded positions, among other more modest changes. (Keep in mind that the Class of 2012 had just 24 such school-funded positions among California schools.)

Below is a graph of the unfunded and funded full-time, long-term, bar passage-required and J.D.-advantage positions.

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April 21, 2015 in Law School Rankings, Legal Education | Permalink | Comments (1)

Do You Want A Work/Life Balance? Don't Be A Lawyer ('Unless You Want To Live In A Van Down By The River')

Work Life 2ABA Journal, Concerned About Lifestyle and Balance? You Probably Won't Amount to Much in the Law, Recruiter Says:

Legal recruiter Harrison Barnes has a message for lawyers who want to avoid living in a van down by the river.

If you want to be a legal professional with the responsibility of handling people’s problems, “You sure as hell better be committed to what you are doing,” writes Barnes, managing director of the Los Angeles office for BCG Attorney Search. And that means being willing to work late and on weekends.

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April 21, 2015 in Legal Education | Permalink | Comments (0)

Barry Law School Seeks To Hire An Entry Level Tax Prof

Barry LogoBarry University Dwayne O. Andreas School of Law in Orlando, Florida is seeking to hire entry level tenure track faculty in Tax, Legal Research and Writing, Business Law, Commercial Law, and Property. Other doctrinal areas are also being considered. To apply for a position, email a cover letter, CV, and list of references to Faculty Appointments Committee Chair Seema Mohapatra.

April 21, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Law School Rankings And Law Firm Partners

Above the Law, What Your Law School Ranking Says About Your Prospects For Making Partner:

Every year bright-eyed graduates walk from their respective campuses wondering what the future will hold for them. Will I end up at a Biglaw firm? Will I make partner? Where will I live? In many cases, these questions are already answered by looking at statistical trends and correlations. ...

There is a -.54 correlation between law school ranking and “chance of making partner,” meaning the lower (towards 1) your school is ranked, the better “chance” there is of you making partner. 

Here are the stats for the Top 20 Law Schools:

Top 20 LL 4-10

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April 21, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

Bloomberg's Zachary Mider Wins Pulitzer Prize For His Tax Reporting

BloombergThe 2015 Pulitzer Prize Winners: Explanatory Reporting:

Awarded to Zachary R. Mider of Bloomberg News for a painstaking, clear and entertaining explanation of how so many U.S. corporations dodge taxes and why lawmakers and regulators have a hard time stopping them.  [Photo: Bloomberg News Wins Pulitzer for Explanatory Reporting.]

Here are links to some of Zachary's tax reporting over the past year:

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April 21, 2015 in Tax | Permalink | Comments (0)

New York Law Journal Special Report: Law Schools

NYLJNew York Law Journal Special Report: Law Schools:

Jeremy Paul (Dean, Northeastern), Changing the 'How' But Not the 'Why':

Law school applications are declining more slowly and entry level hiring has begun to recover. First-year law school enrollments have shrunk from more than 52,000 in 2010 to a far more sustainable 38,000 in 2014. Recent studies by Profs. Frank McIntyre and Michael Simkovic continue to vindicate the long-run earning power of the J.D. degree. Perhaps you can hear law school deans breathing sighs of relief. Alas, it is way too soon for that.

Law schools that view nascent positive trends as license to return to business as usual will be missing the far more profound changes in the legal profession that demand new approaches to legal education. The most significant change is the extent to which knowledge of the law is cheaper and easier to obtain for everyone with access to a computer. Future lawyers can expect to earn less for merely informing clients about the law. How lawyers will add value in this changed environment is the question of the day. How lawyers should be trained to do so should be a top priority for every legal educator in the United States.

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April 21, 2015 in Legal Education | Permalink | Comments (5)

Eyal-Cohen: Lessons in Fiscal Activism

Mirit Eyal-Cohen (Alabama), Lessons in Fiscal Activism:

This article highlights an anomaly. It shows that two tax rules aimed to achieve a similar goal were introduced at the same time. Both meant to be temporary and bring economic stimuli but received a dramatically different treatment. The economically inferior rule survived while its superior counterpart did not. The article reviews the reasons for this paradox. It shows that the causes are both political and an agency problem. The article not only enriches an important and ongoing debate that has received much attention in recent years, but also provides important lessons to policymakers.

April 21, 2015 in Scholarship, Tax | Permalink | Comments (0)

14th Annual Conducting Empirical Legal Scholarship Workshop

Wash.U. LogoThe 14th Annual Workshop on Conducting Empirical Legal Scholarship, co-taught by Lee Epstein (Washington University) and Andrew D. Martin (Michigan), will run from June 15-17 at Washington University in St. Louis. The workshop is for law school faculty, lawyers, political science faculty, and graduate students interested in learning about empirical research and how to evaluate empirical work. It provides the formal training necessary to design, conduct, and assess empirical studies, and to use statistical software (Stata) to analyze and manage data.

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April 21, 2015 in Conferences, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 712

IRS Logo 2National Review, The IRS Assures an Atheist Group It Will Monitor Churches:

It was bad enough, as I wrote here last August, that the Internal Revenue Service appeared to reach an agreement to monitor the pulpits of ill-favored churches. What’s worse is that the IRS, directly counter to Freedom of Information Act (FOIA) requirements, steadfastly has refused to make public key documents pertaining to that decision.

So the IRS, acting with the whole power of government behind it, seems to be saying it can monitor and presumably punish churches for the content of their sermons, but the churches can’t know exactly if, how, and why they are being monitored.

To fight this combined assault on religious liberty and on government transparency, conservative legal stalwarts Alliance Defending Freedom (ADF) and Judicial Watch together filed suit April 9 to force release of the IRS documents. ADF asserts that the IRS already has shared the documents with the atheist Freedom From Religion Foundation (FFRF). Once again, the IRS bends over backwards on behalf of leftists while harassing and ignoring the rights, on multiple levels, of conservative groups or faith communities.

And if the IRS continues to flout FOIA, we ought to treat its obstinacy as a major scandal. Then again, the IRS’s connivance with FFRF is itself a scandalous and deliberate trampling of our founding freedom of religious exercise and expression, guaranteed by the First Amendment.

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April 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, April 20, 2015

Field Presents Aggressive Tax Planning and the Ethical Tax Lawyer Today at Pepperdine

Field (2015)Heather Field (UC-Hastings) presents Aggressive Tax Planning and the Ethical Tax Lawyer at Pepperdine today as part of our Tax Policy Colloquium Series:

[H]ow should a tax planner, who wants to engage in “permissible tax planning” but not cross the line over into “unethical loophole lawyering,” exercise her discretion and judgment? This paper seeks to answer this question by drawing on both (a) the extensive literature on lawyering and professionalism and (b) the social science literature regarding factors that contribute to biased decision-making and unintentional lapses in judgment. The explicit incorporation of these strands of literature into the discourse on tax ethics helps each tax planner operationalize, on an individual basis and in a way that aligns with her values, both the general and tax-specific rules of professional conduct. The existing tax ethics literature primarily focuses either on how to comply with the rules governing practice or on how the rules should be improved. Thus, this paper contributes to the literature by focusing on the issues that the rules leave to the discretion of the tax practitioner (rather than on the issues that the rules address) and by approaching the discussion from a lawyering perspective20 (rather than from a policymaking perspective).

Specifically, this paper argues that a lawyer seeking to pursue a career as an ethical tax planner should identify and implement her philosophy of lawyering to help her make difficult discretionary decisions in a principled way, and when implementing that approach to lawyering, she should work to counteract the subtle factors that can skew her professional judgment. ...

Ultimately, this paper argues that an important part of being an ethical tax planner, particularly when dealing with contestable tax positions, includes being deliberate about how one approaches the task of giving tax planning advice and being self-aware about the ways in which one exercises judgment. By fleshing out the concept of ethical tax planning, I hope to give our students confidence and guidance as they embark on (hopefully, ethical) careers as tax planners, and I hope to ease the tension between tax academics’ scholarly work condemning aggressive tax planning and their classroom work, in which they often teach students how to use those same tax planning techniques. And perhaps this limited defense of the ethics of the tax planning profession can help to rehabilitate the public image of tax lawyers.

Update:  Post-presentation lunch:

Field

April 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Yale: Anti-Basis

Ethan Yale (Virginia), Anti-Basis, 94 N.C. L. Rev. ___ (2015):

Anti-basis is the untaxed benefit enjoyed by a taxpayer when a liability or obligation is incurred. In the business context, the untaxed benefit is an increase in asset basis or a tax deduction. In the personal context, the untaxed benefit might take one of those forms, or it might be (nondeductible) personal consumption. A well-functioning income tax system must keep track of any such untaxed benefit. If the liability from which the benefit derived is avoided by the taxpayer, the prior untaxed benefit must be taken into income (or must reduce basis). If there was no prior untaxed benefit relating to a liability, exceptions are necessary to various rules requiring income recognition (or basis reduction) on discharge or shifting of liabilities.

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April 20, 2015 in Scholarship, Tax | Permalink | Comments (0)