TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, October 23, 2018

Schön: Taxation And Democracy

Wolfgang Schön (Max Planck), Taxation and Democracy, 72 Tax L. Rev. ___ (2019):

Political economy assumes that taxation and democracy interact beneficially when there exists “congruence” or “equivalence” among those who vote on the tax, those who pay the tax, and those who benefit from the tax. Yet this only holds true when we look at the community of taxpayers as an aggregate, not at the position of the individual taxpayer. Individuals might regard democratic decision-making as a tool for the majority to exploit the minority. They might also perceive powerful special interest groups to extract preferential tax treatment to the detriment of other constituencies. In the international situation, the notion of “congruence” or “equivalence” comes under additional strain. Why do most countries allow citizens abroad to vote without being subject to tax while resident aliens are subject to tax without the right to vote?

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October 23, 2018 in Scholarship, Tax | Permalink | Comments (0)

Undergraduate Perspectives On Graduate And Professional Degrees

BTB2AALs, Gallup & LSAC, Beyond the Bachelor’s: Undergraduate Perspectives on Graduate and Professional Degrees:

At the very time when it could not be more important for the nation for college graduates to earn a graduate or professional degree, Beyond the Bachelor’s: Undergraduate Perspectives on Graduate and Professional Degrees offers new insight into what college students are thinking about advanced degrees. The findings reported in Beyond the Bachelor’s provide new answers to old questions about undergraduate views and values from which colleges, universities, researchers, and prospective students can all benefit.

Today’s potential graduate students are more likely to be women than men. They are more likely to be Asian, Black, and Hispanic than are college students unlikely to pursue an advanced degree. They are also more likely to have at least one parent with an advanced degree than are those unlikely to go to graduate school or those who have never thought about it.

BTB3

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October 23, 2018 in Legal Education | Permalink | Comments (0)

Undergraduate Perspectives On Graduate And Professional Degrees

BTB2AALs, Gallup & LSAC, Beyond the Bachelor’s: Undergraduate Perspectives on Graduate and Professional Degrees:

At the very time when it could not be more important for the nation for college graduates to earn a graduate or professional degree, Beyond the Bachelor’s: Undergraduate Perspectives on Graduate and Professional Degrees offers new insight into what college students are thinking about advanced degrees. The findings reported in Beyond the Bachelor’s provide new answers to old questions about undergraduate views and values from which colleges, universities, researchers, and prospective students can all benefit.

Today’s potential graduate students are more likely to be women than men. They are more likely to be Asian, Black, and Hispanic than are college students unlikely to pursue an advanced degree. They are also more likely to have at least one parent with an advanced degree than are those unlikely to go to graduate school or those who have never thought about it.

BTB3

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October 23, 2018 in Legal Education | Permalink | Comments (0)

Rosenbloom & Shaheen: The BEAT And The Treaties

H. David Rosenbloom (Caplin & Drysdale, Washington, D.C.) & Fadi Shaheen (Rutgers), The BEAT and the Treaties, 92 Tax Notes Int'l 53 (Oct. 1, 2018): 

The focus of this paper is the relationship of the Base Erosion and Anti-Avoidance Tax (the BEAT) to the income tax conventions in force to which the United States is a party. Courts generally seek to resolve apparent conflicts between the Code and the treaties. They are reluctant to approve a statutory override of negotiated treaty provisions even when a conflict is found. We believe they would be even less inclined to do so in the absence of some indication that Congress intended that result with respect to a statute enacted under a special reconciliation procedure that did not contemplate treaty overrides, with legislative history affirmatively indicating an intention not to override, and with nothing to the contrary in the statutory text. We believe that the BEAT’s conflicts with the nondiscrimination provision and its reconcilable inconsistency with the foreign tax credit provision of U.S. treaties do not constitute treaty overrides. Therefore, for purposes of calculating the BEAT, deductions for otherwise deductible payments to related persons resident in treaty countries and foreign tax credits for foreign taxes paid to treaty countries should be allowed.

October 23, 2018 in Scholarship, Tax | Permalink | Comments (0)

Grewal: The Battle For Trump’s Taxes And The President’s Potential Revenge

Trump Tax ReturnsAndy Grewal (Iowa), The Battle for Trump’s Taxes and the President’s Potential Revenge, 36 Yale J. on Reg.: Notice & Comment (Oct. 18, 2018):

The 2018 midterm elections are around the corner, and Democrats are favored to retake the House. Democratic leaders have indicated that, should they regain control, they will perform robust investigations into President Trump and his administration. Trump’s tax returns have drawn particularly strong interest, and House Minority Leader Nancy Pelosi has already promised that obtaining those returns would be “one of the first things we’d do.”

My prior post discussed the tax code provisions that would support congressional requests for Trump’s tax returns. It noted that Section 6103(f)’s plain language would authorize some congressional committees to request those returns, and that those returns could potentially be made public. However, if a committee sought Trump’s returns for an improper reason, Trump could present constitutional defenses to disclosure. Whether those defenses would succeed remains uncertain, given the breadth of Congress’s investigatory powers and the absence of any direct case law.

But Trump might have another way of discouraging any improper congressional requests. Section 6103(g) authorizes the President to obtain anyone’s tax return from the IRS, with no carve-out for federal legislators. Thus, if a congressional committee threatens to request Trump’s tax returns, the President could respond in kind, and threaten to review Democrats’ returns.

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October 23, 2018 in Tax | Permalink | Comments (0)

Thomas Jefferson Law School Obtains California Accreditation In Case It Loses ABA Accreditation

Thomas Jefferson Logo (2015)ABA Journal, Thomas Jefferson School of Law Wins California Accreditation:

The State Bar of California’s Committee of Bar Examiners voted Friday to approve state accreditation for Thomas Jefferson School of Law, an ABA-accredited institution that has been on probation since November 2017.

The vote was 8-7, with one committee member abstaining.

California law requires that bar applicants graduate from a law school accredited by the ABA or the state. The San Diego-based law school this month sought California accreditation in case it loses its ABA accreditation, according to the State Bar of California’s Committee of Bar Examiners memo.

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October 23, 2018 in Legal Education | Permalink | Comments (0)

NY Times: He Raised Legal Hell For 35 Years. Now He’s Back After Imprisonment On Tax Charges.

CohenNew York Times, He Raised Legal Hell for 35 Years. Now He’s Back.:

On the day his law license was reinstatedthis past summer, Stanley L. Cohen got a call from an old friend and client, Mousa Abu Marzook, a senior political leader of Hamas, the militant Islamic group that controls Gaza.

“He said, ‘You’re up to trouble again already?’” recalled Mr. Cohen, 67.

In certain circles in the Middle East, he said, “Word had gotten around very quickly that I was back.”

That Mr. Cohen is back — after a prison sentence on federal tax charges that resulted in the suspension of his law license — is certain to infuriate many people.

He has spent much of his 35-year law career raising legal hell, defending controversial clients with an audacity that has antagonized his enemies, including United States intelligence figures and many Jewish groups.

He calls his clients “the despaired, the despised and the disenfranchised.” Others call them terrorists and irredeemable criminals.

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October 23, 2018 in Legal Education, Tax | Permalink | Comments (0)

NY Times: Another Tax Cut? Trump And Republicans Offer A Midterm Pitch, If Not A Plan

New York Times, Another Tax Cut? Trump and Republicans Offer a Midterm Pitch, if Not a Plan:

The 2017 Republican tax cuts have been a dud on the campaign trail ahead of the November midterm elections, so President Trump has come up with a new plan: more tax cuts.

In Nevada on Saturday, Mr. Trump said he and Republican lawmakers had been working on “a very major tax cut” for middle-income people that would be rolled out in the coming weeks.

There is no chance of such a plan passing even the House before the midterms, let alone the Senate, because Congress is in recess through the election. So the move appears to be an effort to give Republican voters a jolt of enthusiasm as the polls are opening — and perhaps an acknowledgment of how small a boost Mr. Trump’s signature tax bill seems to be giving Republicans in the battle to control Congress.

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October 23, 2018 in Tax | Permalink | Comments (0)

Monday, October 22, 2018

Londoño-Vélez Presents Can Wealth Taxation Work In Developing Countries? Today At UC-Berkeley

Londono-VelezJuliana Londoño-Vélez (Ph.D. Candidate, UC-Berkeley) presents Can Wealth Taxation Work in Developing Countries? Quasi-Experimental Evidence from Colombia at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Many countries are considering using wealth taxes to curb rising wealth inequality but face direct enforcement challenges due to the threat of capital flight to tax havens. However, little empirical evidence exists documenting evasion responses to wealth taxation, and all recent studies have focused on the developed world. Using administrative tax records from Colombia and focusing on tax reforms that introduce large variation in exposure to wealth taxes from year-to-year, we document large elasticities of reported wealth to the net-of-tax rate. These imply substantial revenue losses to the government. Importantly, the evidence strongly suggests that these elasticities are driven by evasion— not real— responses to wealth taxes.

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October 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Stark Presents The Power Not To Tax: State Responses To TCJA 2017 Today At Loyola-L.A.

Stark (2018)Kirk Stark (UCLA) presents The Power Not to Tax: State Responses to TCJA 2017 at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katie Pratt: 

One of the most controversial provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) is the new limitation on the deductibility of state and local taxes Under that provision, for tax years 2018 to 2025, individual taxpayers may deduct only $10,000 in state and local taxes paid. This change in the law represents a significant increase in the after-tax cost of funding state and local public goods, particularly in those states where voters have demanded service levels requiring higher tax burdens. Perhaps not surprisingly, lawmakers representing these states have not responded favorably to these new limits. Following the enactment of TCJA, New York and several other states began considering legislation aimed at restoring the ability of their residents to fund state and local public services on a tax-favored basis.

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October 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tenured Chaired Professor Barred From Faculty Meetings, Conferences For 'Bullying' His Colleagues

AratoChronicle of Higher Education, ‘My Fights Are With My Peers’: When a Professor Gets Banned for Bullying:

James E. Miller was a newly minted Ph.D. presenting at his first academic conference when another scholar in his field thundered his disapproval, calling him a left-wing "irrationalist," he recalls, for being sympathetic to Nietzsche.

"He was shouting and gesticulating as if I had just committed a murder in front of everyone," said Miller, who is now a professor of liberal studies and politics at the New School, in Manhattan. "I was not used to that level of intellectual fisticuffs."

He said he was "momentarily stunned" by the rebuke from the scholar, Andrew Arato, now a renowned professor of political and social theory at the New School. It wasn’t the first run-in they would have.

More than four decades after that encounter, Miller is among the institution’s scholars whose complaints of "boorish behavior" prompted the college to ban Arato from campus this fall semester, except while teaching and working with graduate students.

The unusual arrangement, which prompted letters of complaint from some of Arato’s colleagues and students, bars him from discussing university matters with colleagues and requires him to participate in an anger-management program. All of his correspondences with students and teaching assistants have to be copied to the dean of faculty affairs. For the remainder of his time at the New School, he won’t be allowed to attend faculty or committee meetings or public events where his colleagues’ work is being presented.

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October 22, 2018 in Legal Education | Permalink | Comments (0)

Call For Tax Papers And Presentations: 4th International Conference On Taxpayer Rights

ICTR

Call For Conference Papers and Presentations: 4th International Conference on Taxpayer Rights: Taxpayer Rights in the Digital Age: Implications for Transparency, Certainty, and Privacy:

The National Taxpayer Advocate will convene the 4th International Conference on Taxpayer Rights on May 23 and 24, 2019, in Minneapolis, Minnesota. The conference is hosted by the University of Minnesota School of Law and sponsored by Tax Analysts, with technical assistance from IBFD. The 2019 conference will explore the role of taxpayer rights in the digital age, and the implications of the expanding digital environment for transparency, certainty, and privacy in tax administration.

We are currently seeking presentation and paper proposals on a range of topics. In developing proposals, the conference encourages proposals from multiple disciplines (e.g., from the fields of law, economics, psychology, anthropology, sociology, computer science as well as from government officials and ombuds and taxpayer advocates) that address the following topics:

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October 22, 2018 in Conferences, IRS News, Scholarship, Tax | Permalink | Comments (0)

Lesson From The Tax Court: The TFRP Trap For Accommodating Payroll Service Providers

Tax Court (2017)In last week's blog post about Loveland v. Commissioner, we learned that declining the opportunity to go to Appeals for a post-assessment hearing did not bar the taxpayer from raising the non-appealed issue in a later CDP hearing.  This was good for the taxpayer because the declined hearing was non-reviewable whereas the CDP hearing was reviewable (albeit lightly) by the Tax Court.  And we all clapped when the Tax Court remanded the case to Appeals to properly consider the OIC issue and gave Appeals some guidance on how to do that. The Tax Court thought that lesson so important that it made Loveland a reviewed opinion.

This week gives a contrasting lesson.  The contrast will not have you clapping.  This week's case involves the more common lesson that that a pre-assessment opportunity for a hearing with Appeals does indeed preclude the taxpayer from raising the issue in a later CDP hearing.  So it is not a reviewed opinion.  But I also see a second lesson here, about exposure to the Trust Fund Recovery Penalty (TFRP).  I see this case as one about a Payroll Service Provider who went too far in accommodating her client's needs and thereby exposed herself to the TFRP, perhaps needlessly.   This lesson may make you put you hands together, but more likely in prayer for your clients who are in the business of providing payroll services. 

The case is Joanna Kane v. Commissioner, T.C. Memo. 2018-122 (Aug. 6, 2018), and the details, as usual, lie below the fold.  

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October 22, 2018 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Michigan Denies Merit Raise, Sabbatical For Professor Who Refused To Write Letters Of Recommendation For Political Reasons

Michigan LogoFollowing up on my previous post:  Chronicle of Higher Education, U. of Michigan Disciplines Professor Who Refused to Recommend a Student Heading to Israel:

The University of Michigan at Ann Arbor has disciplined a professor who retracted his offer to write a letter of recommendation for a student who wished to study in Israel, The Detroit News reported Tuesday evening.

John Cheney-Lippold, an associate professor in the department of American culture, found himself at the center of a firestorm last month, when he told the student, Abigal Ingber, that he could not recommend her to study for a semester at Tel Aviv University. In that message, which circulated widely after it was posted on social media, Cheney-Lippold wrote that “many university departments have pledged an academic boycott against Israel in support of Palestinians living in Palestine.” ...

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October 22, 2018 | Permalink | Comments (0)

IRS Issues Proposed Regs On New Opportunity Zone Tax Incentive

IRS Logo 2R-2018-206 (Oct. 19, 2018), Treasury, IRS Issue Proposed Regulations on New Opportunity Zone Tax Incentive:

The Treasury Department and the Internal Revenue Service today issued proposed regulations and other published guidance for the new Opportunity Zone tax incentive.

Opportunity Zones, created by the 2017 Tax Cuts and Jobs Act, were designed to spur investment in distressed communities throughout the country through tax benefits. Under a nomination process completed in June, 8,761 communities in all 50 states, the District of Columbia and five U.S. territories were designated as qualified Opportunity Zones. Opportunity Zones retain their designation for 10 years. Investors may defer tax on almost any capital gain up to Dec. 31, 2026 by making an appropriate investment in a zone, making an election after December 21, 2017, and meeting other requirements.

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October 22, 2018 in IRS News, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 21, 2018

Experts To Law Grads: Don't Freak Out About Public Service Loan Forgiveness—Yet

Law.com, Experts to Law Grads: Don't Freak Out About Public Service Loan Forgiveness—Yet:

Early numbers from the federal government’s Public Service Loan Forgiveness program look grim.

Of the roughly 28,000 borrowers who applied to have their loans forgiven this year, a mere 289 were approved—or about 1 percent—and just 96 borrowers actually had their loans discharged.

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October 21, 2018 in Legal Education | Permalink | Comments (0)

Does Trump's Tax Law Doom The L.A. Rams?

NFLBloomberg, You May Be Able to Blame Trump for Your Football Team’s Lousy Record:

If your favorite NFL team doesn’t make it to the playoffs, President Donald Trump’s tax overhaul might be in part to blame.

The 2017 law could put teams in states with high personal income tax rates at a disadvantage when negotiating with free agents thanks to new limits on deductions, including for state and local taxes, according to tax economist Matthias Petutschnig of the Vienna University of Economics and Business.

Petutschnig’s research into team performance over more than two decades shows that National Football League franchises based in high-tax states lost more games on average during the regular season compared to teams in low or no-tax states. That’s because of the NFL’s salary cap for teams, according to Petutschnig; if they have to give certain players more money to compensate for higher taxes, it reduces how much they pay other players and lowers the team’s overall talent level [Regulatory Compensation Limits and Business Performance – Evidence from the National Football League].

NFL

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October 21, 2018 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

Pepperdine Partners With AEG To Offer Sports And Entertainment Classes And Programming At STAPLES Center In Downtown L.A.

AEG and Pepperdine University Unveil Classroom and Educational Programming at STAPLES Center:

Innovating to meet the demand for graduate and undergraduate level educational offerings in the sports and entertainment industries, AEG and Pepperdine University are proud to debut a branded classroom within the iconic STAPLES Center, home to four professional sports franchises and more than 250 events a year.

“Pepperdine University is a world-class partner, and we’re proud to unveil the Pepperdine University classroom inside STAPLES Center,” said Dan Beckerman, president and CEO, AEG. “The classroom is a first-of-its-kind initiative for AEG. As we continue to grow our relationship, we also look forward to cultivating the next generation of sports and entertainment executives through this unique program we’ve created for students in partnership with Pepperdine.”

Classroom 1

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October 21, 2018 in Legal Education | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [503 Downloads]  Compelled Subsidies and the First Amendment, by William Baude (Chicago) & Eugene Volokh (UCLA)
  2. [217 Downloads]  The Death of the Income Tax (or, the Rise of America's Universal Wage Tax), by Edward McCaffery (USC)
  3. [203 Downloads]  Taxing the Robots, by Orly Mazur (SMU)
  4. [198 Downloads]  The International Provisions of the TCJA: Six Results after Six Months, by Reuven Avi-Yonah (Michigan)
  5. [143 Downloads]  Tax Competition and the Ethics of Burden Sharing, by Ivan Ozai (McGill)

October 21, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 20, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Kysar Presents Unravelling The Tax Treaty At Northwestern

Kysar (2018)Rebecca Kysar (Fordham) presented Unravelling the Tax Treaty at Northwestern on Thursday as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties likely lose significant U.S. revenues. Additionally, they enable taxpayer abuse, stagnate domestic policy, and thwart reforms of the antiquated international tax system. These consequences are particularly problematic for the United States. Other nations, after all, have been able to supplement their revenues and pursue destination-based taxation through treaty-friendly VATs.

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October 20, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Tax Reform Gone Wrong: Exposing The High Cost Of Trump Tax Cuts For People Of Color

Conference LogoTax panel at the yesterday's Conference on Coalitions of Color and the Rule of Law in the Trump Administration at UNLV, jointly sponsored by Western Law Professors of Color and the Conference of Asian Pacific American Law Faculty:

TaxReform Gone Wrong: Exposing the High Cost of Trump Tax Cuts for People of Color:

The Tax Cuts and Jobs Act, also known as #TrumpTaxCuts, made sweeping changes to our tax laws. Far from addressing, fixing, or improving institutional racism in the tax code that financially disadvantages people of color, the new law strengthened some of these provisions and even added new ones. The panel of tax scholars will deconstruct and discuss these changes and suggest how we might move forward.

  • Christine Kim (Utah) (moderator) 
  • Darrick Hamilton (New School)
  • Randall Johnson (Mississippi College)
  • Goldburn Maynard (Louisville)
  • Francine J. Lipman (UNLV)

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October 20, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (2)

What Will Students Remember From Your Class In 20 Years?

Chronicle of Higher Education, What Will Students Remember From Your Class in 20 Years?:

One rainy September day, a small group of faculty members gathered around a conference table in a seminar room at my college to puzzle over an extraordinarily difficult question: Twenty years from now, what do we hope students will remember from our courses?

The answers were slow in coming, but fascinating. Some of us hoped students would remain intrigued by the subject of our course or discipline. ... Our answers were vague, broad, and aspirational. The things we wanted for our students, in the longest possible run, proved difficult to articulate in the language with which we normally described our teaching.

But one thing became painfully clear in the weeks that followed as we continued the conversation in person and in writing: None of us listed specific course content as something we hoped our students would recall in 20 years. The biologist made this point most clearly: "Everything I learned as an undergraduate, 25 years ago, is out of date. The same will be true for my students in 25 years." ...

It turned out we weren’t at all focused on hoping students "remember" some set of facts or ideas for 20 years, as we had framed it in the original question. Instead we hoped to have transformed our students in some fundamental way — to help enrich their intellectual lives, to make them into better people, to give them the skills and knowledge they would need to make the world a better place. ...

Twenty years from now, they want students to have retained:

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October 20, 2018 in Legal Education | Permalink | Comments (2)

Friday, October 19, 2018

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Schmalbeck & Zelenak's The NCAA And The IRS

This week, Mirit Eyal-Cohen (Alabama) reviews Richard Schmalbeck (Duke) & Lawrence Zelenak (Duke), The NCAA and the IRS: Life at the Intersection of College Sports and the Federal Income Tax, 91 S. Cal. L. Rev. ___ (2018).

Mirit-Cohen (2018)This Article is right down my alley. Athletics pretty much dominates my household of four boys (five, if you count my husband) that eat, sleep, and breathe all types of sports. Also, living in Tuscaloosa, AL, home of the Crimson Tide NCAA Champion leaves a mark. Bama’s beloved coach Nick Saban is often the subject of many discussions in my tax classes. So when I find something that interconnects both business (tax) and pleasure (sports), such as this Article, I grab the opportunity with both hands.

This Article offers a detailed account of the history and current status of the intersection between federal tax laws and college sports. The authors begin by stating that for many decades, college athletics enjoyed preferential tax treatment due to either the IRS’s lack of enforcement or direct tax benefits provided by Congress to college sports. This status quo was maintained until last year with the enactment of the Tax Cuts and Jobs Act of 2017 (“The 2017 Act”) that increased the tax burden on college athletics in several aspects. The authors seem optimistic about this change, yet recognize, that no similar signs of transformation have yet been observed from the IRS that has continued its lax enforcement policy regarding college sports.

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October 19, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

G-20 Eyes Tax Gold Mine In ‘Sexy’ Crypto Market

Bloomberg Tax, G-20 Eyes Tax Gold Mine in ‘Sexy’ Crypto Market:

Tax authorities across the world, dazzled by potential revenue, have taken notice of the cryptocurrency market—despite its many booms and busts.

For tax authorities, the cryptocurrency market could be a rich source of revenue that has gone largely untapped—the market once soared in value to about $800 billion. But in their quest for cash, tax authorities have had to create new definitions and regulatory approaches. ...

Bloomberg

Yet, in a stark warning to regulators in the U.S., economist Nouriel Roubini—noted for calling the 2008 financial crisis—bludgeoned the credibility of cyrptocurrencies in testimony before the Senate Banking Committee on Oct. 11.

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October 19, 2018 in Tax | Permalink | Comments (0)

Stiglitz: America’s Growing Inequality — Causes And Remedies

Heritage Foundation Suspends Clerkship Boot Camp After NY Times Questions Secrecy, Loyalty Oaths

HeritageNew York Times:  A Conservative Group’s Closed-Door ‘Training’ of Judicial Clerks Draws Concern, by Adam Liptak:

The closed-door “training academy” was aimed at a select group: recent law school graduates who had secured prestigious clerkships with federal judges. It was organized by the Heritage Foundation, a conservative group that has played a leading role in moving the courts to the right, and it had some unusual requirements.

“Generous donors,” the application materials said, were making “a significant financial investment in each and every attendee.” In exchange, the future law clerks would be required to promise to keep the program’s teaching materials secret and pledge not to use what they learned “for any purpose contrary to the mission or interest of the Heritage Foundation.”

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October 19, 2018 in Legal Education | Permalink | Comments (6)

Weisbach, Hemel & Nou: The Marginal Revenue Rule In Cost-Benefit Analysis

David A. Weisbach (Chicago), Daniel J. Hemel (Chicago) & Jennifer Nou (Chicago), The Marginal Revenue Rule in Cost-Benefit Analysis, 160 Tax Notes 1507 (Sept. 10, 2018):

In April 2018, the U.S. Department of the Treasury and the Office of Management and Budget released a memorandum of agreement stating that certain tax-related regulations must be accompanied by a formal cost-benefit analysis. In this report, we propose a method of performing cost-benefit analysis of tax related-regulations. Our approach — which we call the marginal revenue rule — instructs that the social benefit of an increase in revenue generated by a tax regulation is equal to the increase in revenue resulting from reporting and behavioral changes induced by the regulation.

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October 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

NY Times Op-Ed: Think Professors Are Liberal? Try School Administrators

New York Times op-ed:  Think Professors Are Liberal? Try School Administrators, by Samuel J. Abrams (Sarah Lawrence College):

While considerable focus has been placed in recent decades on the impact of the ideological bent of college professors, when it comes to collegiate life — living in dorms, participating in extracurricular organizations — the ever growing ranks of administrators have the biggest influence on students and campus life across the country.

Today, many colleges and universities have moved to a model in which teaching and learning is seen as a 24/7 endeavor. Engagement with students is occurring as much — if not more — in residence halls and student centers as it is in classrooms. Schools have increased their hiring in areas such as residential life and student centers, offices of student life and success, and offices of inclusion and engagement. It’s not surprising that many of the free-speech controversies in the past few years at places like Yale, Stanford and the University of Delaware have concerned events that occurred not in classrooms but in student communal spaces and residence halls.

Intrigued by this phenomenon, I recently surveyed a nationally representative sample of roughly 900 “student-facing” administrators — those whose work concerns the quality and character of a student’s experience on campus. I found that liberal staff members outnumber their conservative counterparts by the astonishing ratio of 12-to-one. Only 6 percent of campus administrators identified as conservative to some degree, while 71 percent classified themselves as liberal or very liberal. It’s no wonder so much of the nonacademic programming on college campuses is politically one-sided.

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October 19, 2018 in Legal Education | Permalink | Comments (5)

Thursday, October 18, 2018

WSJ: U.S. Is World’s Most Competitive Economy For First Time In A Decade

WSJWall Street Journal, U.S. Is World’s Most Competitive Economy for First Time in a Decade:

The U.S. is back on top as the most competitive country in the world, regaining the No. 1 spot for the first time since 2008 in an index produced by the World Economic Forum, which said the country could still do better on social issues.

America climbed one place in the rankings of 140 countries, with the top five rounded out by Singapore, Germany, Switzerland and Japan. All five countries’ scores rose from 2017, with the U.S. notching the second-biggest gain after Japan’s.

The top spot hasn’t gone to the U.S. since the financial crisis stalled output and triggered a global economic slowdown.

“Economic recovery is well underway, with the global economy projected to grow almost 4% in 2018 and 2019,” said the report, published Tuesday by the organization that produces the Davos conference on global politics and economics.

However, “recovery remains vulnerable to a range of risks and potential shocks,” the authors warned. They cite a brewing trade war between the U.S. and China as a possible hindrance to growth that could potentially derail the recovery and deter investment. ...

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October 18, 2018 in Tax | Permalink | Comments (0)

Trump’s Tax Law Failed To Kill Off Corporate America's Prized Dodge

Bloomberg, Trump’s Tax Law Failed to Kill Off Corporate America's Prized Dodge:

U.S. corporations have largely abandoned the contentious deals that allowed them to shift their addresses abroad for a lower tax rate. Yet a key part of the transactions is continuing quietly even after President Donald Trump’s tax overhaul.

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October 18, 2018 in Tax | Permalink | Comments (0)

WSJ: What’s A Service Business? That’s Now A Multibillion-Dollar Tax Question

Wall Street Journal, What’s a Service Business? That’s Now a Multibillion-Dollar Tax Question:

For Extraco Banks of central Texas, the 2017 tax law that promised a 20% deduction is turning into something of a headache.

S-corporation banks such as Extraco technically qualify for the break. But under proposed IRS regulations, Extraco might lose out, because it gets too much revenue from managing trusts and selling mortgages into the secondary market. Those activities may be ineligible and taint the ability of the whole business to qualify.

Situations like Extraco’s were a crucial part of an IRS public hearing Tuesday, as the agency prepares to finish the rules for the new 20% deduction for pass-through businesses such as partnerships and S corporations, closely held companies that don’t pay standard corporate taxes.

Companies and the government are struggling over who is eligible for the tax break, and representatives of veterinarians, escrow agents, automobile dealers and franchised businesses pleaded their case at the hearing. Major League Baseball sent in a new detailed letter explaining why teams think they should get the tax break.

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October 18, 2018 in IRS News, Tax | Permalink | Comments (0)

Brooks: Legal Education, Legal Services, And Income-Contingent Loans

John R. Brooks (Georgetown), Curing the Cost Disease: Legal Education, Legal Services, and the Role of Income-Contingent Loans, 68 J. Legal Educ. ___ (2019):

The costs of both legal education and legal services have been rising steadily for decades. This is because they share a common root: the constant above-inflation growth in the cost of labor-intensive goods and services known as the “cost disease.”

Brooks 2

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October 18, 2018 in Legal Education | Permalink | Comments (1)

July 2018 Massachusetts Bar Exam Results Are The Worst This Century

Boston Business Journal, Law School Grads Reach a New Low on Mass. Bar Exam:

Nearly one in three aspiring lawyers who took the Massachusetts bar examination this summer failed the test, the highest failure rate in the Bay State this century.

Only 69.2 percent of test-takers passed the bar exam in July, according to statistics posted by the Massachusetts Board of Bar Examiners on Monday. The previous low for the July exam this century — 70.9 percent — occurred in 2016.

First-Time Bar Pass Rank (Rate)

 

School

US News Rank

MA (Overall)

1 (98.6%)

Harvard

1 (3)

2 (93.7%)

Boston University

2 (22)

3 (92.6%)

UMass

Tier 2

4 (87.8%)

Northeastern

4 (74)

5 (86.8%)

Boston College

3 (27)

   (69.2%)

Statewide Average

 

6 (64.5%)

Suffolk

5 (144)

7 (63.7%)

New England

Tier 2

8 (58.7%)

W. New England

Tier 2

9 (35.9%)

Mass (Andover)

Tier 2

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October 18, 2018 in Legal Education | Permalink | Comments (6)

NY Times: Trump’s Tax Cut Isn’t Paying For Itself (At Least Not Yet)

New York Times, No, Trump’s Tax Cut Isn’t Paying for Itself (at Least Not Yet):

The Treasury Department released figures on Monday showing the federal budget deficit widened by 17 percent in the 2018 fiscal year, to $779 billion. That’s an unusual jump for a year in which unemployment hit a five-decade low and the economy experienced a significant economic expansion. But the increase demonstrates that the tax cuts President Trump signed into law late last year have reduced federal revenues considerably, even against the backdrop of a booming economy.

Some conservatives don’t see the rising deficit numbers that way. They note that the Treasury reported that federal revenues rose by 0.4 percent from the 2017 fiscal year to the 2018 fiscal year, and view that as a sign that the tax cuts are “paying for themselves,” as Republicans and Mr. Trump promised.

That’s not the case. ...

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October 18, 2018 in Tax | Permalink | Comments (1)

How Faculty Can Overcome Impostor Syndrome

Following up on my previous post, How A Dean Got Over Impostor Syndrome:  Chronicle of Higher Education, How to Overcome Impostor Syndrome:

Pathologized for a reason, "impostor syndrome" runs thick in the veins of academics, from newly arrived graduate students to those nearing retirement (yes, really). It seems to be such a deep part of the ecosystem of the academy that it is hard to imagine faculty life without it. At the same time, it can be deeply painful and damaging, almost paralyzing. ...

You can find ways to feel better about who you are and what you have done, and as a result, maybe even achieve more. ...

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October 18, 2018 in Legal Education | Permalink | Comments (5)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 15, No. 2 (2018):

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October 18, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, October 17, 2018

Gale Presents Fiscal Therapy Today At Pennsylvania

GaleWilliam G. Gale (Brookings Institution) presents Fiscal Therapy: Curing America’s Debt Addiction and Investing in the Future (Oxford University Press 2019) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Keeping the economy strong will require addressing two distinct but related problems. Steadily rising federal debt makes it harder to grow our economy, boost our living standards, respond to wars or recessions, address social needs, and maintain our role as a global leader. At the same time, we have let critical investments lag and left many people behind even as overall prosperity has grown.

In Fiscal Therapy, William Gale, a leading authority on how federal tax and budget policy affects the economy, provides a trenchant discussion of the challenges posed by the imbalances between spending and revenue. America is facing a gradual decline as debt accumulates and delay raises the costs of action. But there is hope: fiscal responsibility aligns with both conservative and liberal goals and citizens of all stripes can support the notion of making life better for our children and grandchildren.

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October 17, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Elkins Presents The Merits Of Tax Competition Today In Singapore

Elkins (2018)David Elkins (Netanya) presents The Merits of Tax Competition in a Globalized Economy today at the Singapore Management University - Tax Academy Centre for Excellence in Taxation:

Since the turn of the current century, leading transnational organizations and academic scholarship have identified tax competition among countries as one of the scourges of the international tax regime. Both the EU and the OECD have warned that tax competition erodes the tax bases of Member States and impedes their ability to provide essential services. Commentators have argued that unrestrained competition is driving tax rates on mobile sources of income to (or close to) zero, a process that jeopardizes the very existence of the welfare state, exacerbates problems of global poverty, and deprives developing countries of funds that they desperately need in order to improve their physical infrastructure and human capital. Tax competition is also said to misallocate economic resources by driving investment to where the tax rate is lowest rather than to where the return on investment is highest.

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October 17, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Osofsky Reviews Wallace's Centralized Review Of Tax Regulations

Jotwell (Tax) (2016)Leigh Osofsky (North Carolina), Fleshing Out Centralized Review of Tax Regulations (JOTWELL) (reviewing Clinton Wallace (South Carolina), Centralized Review of Tax Regulations, 71 Ala. L. Rev. __ (2018)) (also reviewed by Ari Glogower (Ohio State) (here):

In a new article, Centralized Review of Tax Regulations, Clinton Wallace addresses the timely question of whether and how tax regulations should be subject to centralized review by the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget (“OMB”). While OMB review has become standard for “significant” or “economically significant” agency regulations, tax regulations have long avoided review even when they meet this standard, raising, yet again, the question of whether tax should be different than other areas of administrative law. In addition to helping us understand the historical lack of centralized review of tax regulations, Wallace’s paper does the important job of showing the inadequacy of the new framework for centralized review, and pushing us to recognize the complex questions that have to be answered to develop objective criteria for review. ...

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October 17, 2018 in Scholarship, Tax | Permalink | Comments (0)

Gender Equality In The Family And The Market

Hila Shamir (Tel Aviv University), Tsilly Dagan (Bar Ilan University) & Ayelet Carmeli (Tel Aviv University), Questioning Market Aversion in Gender Equality Strategies: Designing Legal Mechanisms for the Promotion of Gender Equality in the Family and the Market, 27 Cornell J.L. & Pub. Pol'y 717 (2018):

Post-industrial economies are at a crossroad. On the one hand countries are dealing with the crisis of unemployment and underemployment, developing strategies to increase labor market participation of all adults, and increase productivity. On the other hand, the same countries are responding to demographic concerns regarding an aging population and decreased birth ratios. These concerns, coupled with a growing demand for gender equality in the labor market, and better work/family balance, lead to the development of new tax and welfare policies around child care, as well as restructuring the workplace to fit the needs of workers with familial care obligations. A storm of new legislation, regulation and voluntary initiatives attempting to address child care, parental leaves, and the structure of the work day, are sweeping through developed economies, with significant innovation, variation, and experimentation.

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October 17, 2018 in Legal Education, Tax | Permalink | Comments (0)

Bar Exam Failure Is A Harbinger Of Professional Discipline

Following up on my previous post,  WSJ: Deans Push To Lower California Bar Pass Score, But Lawyers With Lower Scores Are More Likely To Be Disciplined Or Disbarred:  Jeffrey S. Kinsler (Founding Dean, Belmont), Is Bar Exam Failure a Harbinger of Professional Discipline?, 91 St. John's L. Rev. 883 (2017):

[T]his Article promised to substantiate two theses: (1) The more times it takes a lawyer to pass the bar exam the more likely that lawyer will be disciplined for ethical violations, particularly early in the lawyer’s career; and (2) The more times it takes a lawyer to pass the bar exam the more likely that lawyer will be disciplined for lack of diligence—including noncommunication—and/or incompetence. With regard to the first thesis, the evidence in this Article establishes a link between bar failure—particularly repeated failure—and subsequent professional discipline. As to the second thesis, the evidence in this Article shows that lawyers who fail the bar exam are not only more likely to be disciplined, but that they have an even greater likelihood of being disciplined for client neglect and/or incompetence. In addition, this Article demonstrates that lawyers who fail the bar exam are more likely to face severe discipline—disbarment or suspension—than lawyers who pass the bar exam on the first attempt.

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October 17, 2018 in Legal Education | Permalink | Comments (10)

Grewal: The Proposed SALT Regulations May Be Doomed

Andy Grewal (Iowa), The Proposed SALT Regulations May Be Doomed, 103 Iowa L. Rev. Online ___  (2018):

The IRS recently followed through on its promise to address state strategies designed to avoid the new state & local tax deduction limits. Although programs adopted by blue states sparked the IRS’s interest, the proposed regulations address both blue and red state programs. This has, predictably, led to IRS criticism from all sides. But the IRS was right to step in here. Revenue and policy concerns easily justify administrative guidance on the state strategies.

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October 17, 2018 in Scholarship, Tax | Permalink | Comments (3)

An Empirical Analysis Of 'Public Interest Drift' In Law School

John Bliss (Harvard), From Idealists to Hired Guns? An Empirical Analysis of "Public Interest Drift" in Law School, 51 UC Davis L. Rev. 1973 (2018):

Recent commentaries on American legal education have questioned whether law students are prepared to seek out satisfying, publicregarding, and financially viable careers in a changing profession. To these debates, this Article offers an empirical perspective on how students approach job-path decisions during law school. I address this issue through a five-year multi-method study of a subset of the law student population — elite-school students who state preferences for jobs in the public-interest sector at the beginning of law school but by their second year decide to pursue positions in large private law firms. A widely circulated hypothesis in popular and academic discourses suggests that implicit lessons of the first-year curriculum steer these students away from public-interest career goals, inducing a widespread “public interest drift.” However, skeptical commentators have speculated that the survey findings showing this drift phenomenon may be inaccurate and exaggerated. This Article responds to the skeptical position by empirically exploring the descriptive limits of the drift effect through a qualitative study of students’ experiences.

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October 17, 2018 in Legal Education, Scholarship | Permalink | Comments (3)

The TCJA Shifted The Benefits Of Tax Expenditures To Higher-Income Households

Howard Gleckman (TaxVox), The TCJA Shifted The Benefits Of Tax Expenditures to Higher-Income Households:

Until the Tax Cuts and Jobs Act (TCJA), people across the income distribution could say they benefited from the tax code’s many targeted tax benefits. But, according to a new analysis by the Tax Policy Center, the benefits of many itemized deductions have shifted from middle-income households to those with higher incomes.

Mortgage

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October 17, 2018 in Tax | Permalink | Comments (1)

Tuesday, October 16, 2018

Lederman Presents Information Matters In Tax Enforcement At San Diego

Lederman (2018)Leandra Lederman (Indiana) presented Information Matters in Tax Enforcement (with Joseph Dugan) at San Diego yesterday as part of its Tax Law Speaker Series hosted by Jordan Barry and Miranda Perry Fleischer:

Most legal and economics scholars recognize that the government needs information about taxpayers’ transactions in order to determine whether their reporting is honest, and that third-party reporting helps the government obtain that information. Yet, a recent paper by Professor Wei Cui [Taxation Without Information: The Institutional Foundations of Modern Tax Collection] asserts that “modern governments can practice ‘taxation without information.’” Cui’s argument rests on two premises: (1) “giving governments effective access to taxpayer information through third parties does not explain the success of modern tax administration” because, he argues, other important taxes, such as the value added tax (VAT), do not involve information reporting; and (2) modern tax administration succeeds because business firms are “sites of social cooperation under the rule of law,” fostering compliance. As this Essay argues, the literature demonstrates that Cui is wrong on both points.

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October 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

NY Times: Budget Deficit Jumps 17% in 2018, Due To Declining Corporate Tax Revenues Following The Trump Tax Cuts

New York Times, Budget Deficit Jumps Nearly 17% in 2018:

The federal budget deficit swelled to $779 billion in fiscal year 2018, the Treasury Department said on Monday, driven in large part by a sharp decline in corporate tax revenues after the Trump tax cuts took effect.

The deficit rose nearly 17 percent year over year, from $666 billion in 2017. It is now on pace to top $1 trillion a year before the next presidential election, according to forecasts from the Trump administration and outside analysts. The deficit for the 2018 fiscal year, which ended Sept. 30, was the largest since 2012, when the economy and federal revenues were still recovering from the depths of the recession.

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October 16, 2018 | Permalink | Comments (6)