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Pepperdine University School of Law

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Monday, January 26, 2015

NY Times: Middle Class Continues to Shrink Under President Obama

New York Times, Middle Class Shrinks Further as More Fall Out Instead of Climbing Up:

The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.

In the late 1960s, more than half of the households in the United States were squarely in the middle, earning, in today’s dollars, $35,000 to $100,000 a year. Few people noticed or cared as the size of that group began to fall, because the shift was primarily caused by more Americans climbing the economic ladder into upper-income brackets.

But since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom. At the same time, fewer of those in this group fit the traditional image of a married couple with children at home, a gap increasingly filled by the elderly. 

NY Times Chart 2

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January 26, 2015 in Tax | Permalink | Comments (0)

Amazon Offers Self-Publishing For Faculty Books

KindleLast Thursday, Amazon launched KDP EDU for academics to self-publish books through the Kindle Direct Publishing program:

Amazon’s new Kindle Textbook Creator Beta helps you convert PDFs of your textbooks, course notes, study guides and other educational content that includes complex visual information like charts, graphs and equations into Kindle books. Books created through Kindle Textbook Creator take advantage of features that enhance a student’s learning experience such as dictionary look-up, notebook, highlighting and flashcards. Plus, preview your book across all supported devices.

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January 26, 2015 in Book Club, Legal Education | Permalink | Comments (0)

How Yahoo Might Sell Billions in Alibaba Stock and Pay No Taxes

YahooBloomberg,  How Yahoo Might Sell Billions in Alibaba Stock and Pay No Taxes, by Jesse Drucker:

Yahoo! on Tuesday is expected to reveal something most companies usually try to keep secret: how it plans to avoid a multibillion-dollar tax bill.

The Web portal has spent more than a year figuring out how to cash out a chunk of its $40 billion stake in China-based Alibaba. Typically, a U.S. company faces a federal tax bill of about 35 percent when it sells stock in another enterprise for cash.

Yahoo took a $3 billion tax hit last year when it sold about $10 billion in Alibaba shares. This time around, activist investors are leaning on the Sunnyvale, California-based company to be more savvy.

Marissa Mayer, Yahoo’s chief executive officer, probably will maintain at least part of the Alibaba holding to keep a finger in China’s fast-growing Web market. Were Yahoo to sell the entire stake, it could face a federal tax bill of as much as $14 billion.

Here are some of Yahoo’s options to avoid capital-gains tax, both legal:

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January 26, 2015 in Tax | Permalink | Comments (0)

U.S. News College Efficiency Rankings

U.S. News General Logo (2015)U.S. News & World Report, Data Show Which Top-Ranked Colleges Operate Most Efficiently:

Ohio's Miami University—Oxford took top honors as the most efficient school among National Universities and Michigan's Hope College was most efficient among National Liberal Arts Colleges in an exclusive U.S. News analysis that compared spending and educational quality.

For this analysis, U.S. News looked at the public and private colleges that scored the highest on overall undergraduate academic educational quality, as measured by their position in the 2015 Best Colleges rankings, but that spent relatively less on their educational programs to achieve that quality.

U.S. News measures financial resources by taking into account how much a school spends per student on instruction, research, student services and related educational expenditures. The financial resources indicator has a 10 percent weight in the Best Colleges ranking methodology.

The lists below are based on operating efficiency, which U.S. News has defined as a school's 2013 fiscal year financial resources per student divided by its overall score – the basis U.S. News uses to determine its overall numerical rank – in the 2015 Best Colleges rankings.

This calculation reveals how much each school is spending to achieve one point in its overall score and thus its position in the rankings. The premise of the analysis is that the less a school spent relative to its position in the overall rankings, the more efficient it was in its ability to produce a top-quality education.

SchoolU.S. News RankOverall ScoreFinancial Resources RankSpending Per Student For Each Point in Overall Score
Miami Univ. (OH) 76 50 205 $383.66
Florida State 95 47 214 $392.77
Alabama 88 48 198 $423.02
SUNY-Binghamton 88 48 185 $437.23
William & Mary 33 67 110 $441.82
BYU 62 56 156 $457.29
Indiana 76 50 156 $469.00
Clemson 62 56 138 $486.02
Missouri 99 46 171 $499.61
Clark 76 50 145 $502.24

January 26, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

FBA Tax Section Hosts Tax Practice & Procedure Monthly Roundtable Today

FBA Tax SectionThe Federal Bar Association Tax Section hosts its free Tax Practice & Procedure Monthly Roundtable today from 1:00-2:00 p.m. EST (dial-in number: 866-690-2070; Password:  3008455329):

Auditing of Large Partnerships
Monte Jackel, Jackel Tax Law

The GAO recently issued a report on the audit of large partnerships. There was also a panel discussion on the topic at the most recent University of Chicago Tax Institute. The GAO report concludes that the audit rate is very low. But that is not really where the problem is. Monte Jackel, who has spent decades working on partnership issues on behalf of the government and the IRS, will address the significance of the developing IRS approach to auditing partnership returns

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January 26, 2015 in Conferences, Tax | Permalink | Comments (0)

Law Prof Twitter Rankings

Twitter (2014)Ryan Whalen (Northwestern), The Law Prof Twitter Network:

Following recent discussions about the importance of blogging/tweeting to contemporary academia (see: LSE via TaxProf), and Bridget Crawford’s Law Prof Twitter Census (version 3.0) over at TheFacultyLounge, I thought I’d do some number crunching and network building.

I wrote a short script to read all of the law prof twitter handles included in the census and query the twitter API to get the follower lists and statistics for each user. This allowed me to both rank law prof twitterers (because we all know how much people like to rank things) and project them onto an interactive network so we can see how they relate to one another. ...

The law prof network (consisting of following relationships amongst law profs in the census) has 535 nodes and 16354 edges (directed density = 0.057). The entire network (including all of the followers of all of the law profs) is much larger. In total there are 741,385 unique twitter users who follow law profs.

The table below lists the top twenty profs by number of followers:

Handle Name School Followers
lessig Lawrence Lessig Harvard 324,336
SportsLawGuy Gabe Feldman Tulane 33,728
zittrain Jonathan Zittrain Harvard 30,787
McCannSportsLaw Michael McCann New Hampshire 29,771
ZephyrTeachout Zephyr Teachout Fordham 25,328
CassSunstein Cass Sunstein Harvard 21,333
gregorymcneal Greg McNeal Pepperdine 17,440
scrawford Susan Crawford Cardozo 15,641
superwuster Tim Wu Columbia 11,804
JonathanTurley Jonathan Turley George Washington 11,715
bethnoveck Beth Simone Noveck NYLS 10,422
patentlyo Dennis Crouch Missouri 9,889
PrivacyLaw Michael Scott Southwestern 9,024
garylfrancione Gary Francione Rutgers-Newark 8,844
adamwinkler Adam Winkler UCLA 8,706

Limiting our rankings to those professors who have the most followers amongst other law professors on twitter, changes the results quite a bit:

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January 26, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

Spring 2015 Law Review Article Submission Guide

Nancy Levit (UMKC) & Allen Rostron (UMKC) have updated their incredibly useful document, which contains two charts for the Spring 2015 submission season covering 204 law reviews.

The first chart (pp. 1-52) contains information gathered from the journals’ websites on:

  • Methods for submitting an article (such as by e-mail, ExpressO, regular mail, Scholastica, or Twitter)
  • Any special formatting requirements
  • How to request an expedited review
  • How to withdraw an article after it has been accepted for publication elsewhere

The second chart (pp. 53-59) contains the ranking of the law reviews and their schools under six measures:

  • U.S. News: Overall Rank
  • U.S. News: Peer Reputation Rating
  • U.S. News: Judge/Lawyer Reputation Rating
  • Washington & Lee Citation Ranking
  • Washington & Lee Impact Factor
  • Washington & Lee Combined Rating

They also have posted a list of links to the submissions information on each law journal’s website. Nancy notes:

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January 26, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Reynolds: Obama's Proposed Tax Increases Target the Middle Class

USA Today op-ed:  Middle-class Savings Like Blood in the Water, by Glenn Reynolds (Tennessee):

Bank robber Willie Sutton is said to have explained his career this way: "That's where the money is." Whether Sutton ever really said that, it's an aphorism that, according to Bloomberg's Megan McArdle, explains President Obama's plans to go after middle class assets like 529 college savings plans and home appreciation.

Though millions of Americans have been putting money into "tax free" 529 plans to save for their children's increasingly expensive college educations, President Obama would change the law so that withdrawals from the plans to fund college would be taxed as ordinary income. So while you used to be able to get a nice tax benefit by saving for college, now you'll be shelling out to Uncle Sam every time you withdraw to pay for Junior's dorm fees.

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January 26, 2015 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 627

IRS Logo 2Commentary, Contentions Obama Administration Again Proves It Cannot Be Trusted with Your Data:

Yesterday’s important ObamaCare revelation was the latest in a series of Obama-era developments in which big-government projects prove their conservative critics correct. This particular aspect of the administrative state is, however, worse than incompetence. It’s yet another proof that the government cannot be trusted with the private information it gathers from the public.

This has been an ongoing debate that conservatives have lately been winning handily. Democrats moved to require more transparency in those who make political donations, though the Democrats sought to protect major liberal donor groups like unions. Conservatives said the information would be used to harass and target donors. The Obama administration then promptly proved conservatives right, by doing just that.

Then the IRS scandal came to light. Conservative and pro-Israel groups were targeted for nonprofit status, and part of the targeting was invasive questioning. It was unnecessary and unfairly applied, but conservatives also said the IRS couldn’t be trusted with the information. The IRS then proved them right, going on a leaking spree and releasing confidential information, in some cases to ideological allies for cooperative (and very much illegal) targeting. Concerns about government use of private information have infused opposition to gun-control legislation as well.

And now comes perhaps the least surprising entry in the list: the government’s ObamaCare website is sharing insurance customers’ personal information with advertisers.

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January 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, January 25, 2015

CBS News: Are Law School Admission Standards Slipping?

CBS NewsCBS News, Are Law School Admission Standards Slipping?:

Good news for aspiring lawyers: It's getting easier to get into law school, and the legal job market is showing some signs of improvement. The bad news: Many experts worry that unqualified entrants will have little chance to pass the bar exam and will be saddled with unaffordable levels of debt.

According to an analysis by Jerome Organ, a professor at the University of St. Thomas, 33 percent of law school entrants had median LSAT scores of 160 or higher in 2013, compared with 40.8 percent in 2010 (the LSAT is scored on a scale between 120 and 180). Conversely, first-year students with scores of 149 or lower rose from 14.2 percent to 22.5 percent.

"Not all law schools are lowering admission standards," wrote Wendy Margolis of the Law School Admissions Council in an email. "If some of them are, you would need to ask them about their individual reasons. ...

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

Top 5 Tax Paper Downloads

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

  1. [230 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  2. [216 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  3. [169 Downloads]  Do Audits Matter?: A Parallax Theory of the Relation between Tax Enforcement and Underreporting, by J. T. Manhire (U.S. Treasury Department)
  4. [139 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)
  5. [139 Downloads]  Return on Political Investment in the American Jobs Creation Act of 2004, by Hui Chen (Zurich), Katherine Gunny (Colorado) & Karthik Ramanna (Harvard)

January 25, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Bainbridge: Solve the Law School Crisis by Unleashing the Free Market

Stephen Bainbridge (UCLA), Want to Solve the Law School Scam? Expose Law Schools to a Market for Control:

If you think of law schools as companies selling a product, our customer base has skrunk dramatically and continues to shrink:

In a market system, the result would be business failures and a lot of mergers. Sadly, higher education is effectively insulated by the government from market forces, so we're not seeing the kind of consolidation process that is necessary.

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January 25, 2015 in Legal Education | Permalink | Comments (5)

The IRS Scandal, Day 626

IRS Logo 2Commentary, Contentions Obama Administration Again Proves It Cannot Be Trusted with Your Data:

Yesterday’s important ObamaCare revelation was the latest in a series of Obama-era developments in which big-government projects prove their conservative critics correct. This particular aspect of the administrative state is, however, worse than incompetence. It’s yet another proof that the government cannot be trusted with the private information it gathers from the public.

This has been an ongoing debate that conservatives have lately been winning handily. Democrats moved to require more transparency in those who make political donations, though the Democrats sought to protect major liberal donor groups like unions. Conservatives said the information would be used to harass and target donors. The Obama administration then promptly proved conservatives right, by doing just that.

Then the IRS scandal came to light. Conservative and pro-Israel groups were targeted for nonprofit status, and part of the targeting was invasive questioning. It was unnecessary and unfairly applied, but conservatives also said the IRS couldn’t be trusted with the information. The IRS then proved them right, going on a leaking spree and releasing confidential information, in some cases to ideological allies for cooperative (and very much illegal) targeting. Concerns about government use of private information have infused opposition to gun-control legislation as well.

And now comes perhaps the least surprising entry in the list: the government’s ObamaCare website is sharing insurance customers’ personal information with advertisers.

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January 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, January 24, 2015

It Is Time to End Tenure at Age 70

Retire AlreadyDan Subotnik (Touro), Untenuring Tenure:

A specter haunting the academy today is of an intellectually wizened white male professoriate refusing to step aside for au courant, energetic, ambitious, and of course diverse younger faculty. Part of a larger concern with tenure itself, the fear in question is that tenured old-timers, of which I am one, are holding fast to financial and administrative perks, limiting institutional control and stifling institutional development in the process.

Sometimes the fear is expressed openly.  Intractable seniors, according to a recent, widely debated Chronicle Review post (The Forever Professors) often “crush the young” through their “selfish[ness].” A law school colleague argues that, having enjoyed our share of university bounty, responsible seniors should facilitate succession by quickly and gracefully exiting the stage.  Such a development might be contrasted with what is actually happening today:  seniors in effect extorting rich buyouts to retire.

More of the time, of course, the critique is not explicit. Yet who among us seniors has not felt the sting of “what are you still doing here, gramps” looks from junior law faculty and deans? ...

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January 24, 2015 in Legal Education | Permalink | Comments (14)

Maine Governor Proposes Taxing Large Charities

Wall Street Journal, Maine Gov. LePage Wants to Tax Big Nonprofits:

A sweeping proposal to cut taxes for Maine families and businesses could upend one of the most widely accepted practices in the country: the property-tax exemption for nonprofit organizations.

A recent budget plan by Republican Gov. Paul LePage calling for an overhaul of individual, corporate and sales taxes also would make Maine the first state in the nation to require colleges, hospitals and other large charities to go on the property-tax rolls in their municipalities.

“It would be a stunning development,” said Daphne Kenyon, a fellow at the Lincoln Institute of Land Policy in Cambridge, Mass. “I think there would be all kinds of reaction, from litigation to nonprofits’ possibly moving.”

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January 24, 2015 in Tax | Permalink | Comments (9)

Houston Hosts Moot Court National Championship This Weekend

The IRS Scandal, Day 625

IRS Logo 2OpenSecrets.org, In the Garden of Dark Money, the Thorny Case of Rosebush Corp.:

Ever since news broke in 2013 that the IRS had targeted the exemption applications of tea party and some other politically-oriented groups for extra scrutiny, conventional wisdom had it that the agency throws up roadblocks for organizations trying to obtain its seal of approval.

But much evidence indicates the IRS backs down without much fuss when groups seeking 501(c)(4) “social welfare” status come calling.

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January 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, January 23, 2015

80% of Provosts Favor Civility as Factor in Faculty Hiring and Tenure Decisions

Inside Higher Ed, 2015 Survey of Chief Academic Officers:

CivilityA majority of provosts are concerned about declining faculty civility in American higher education. And a large majority of provosts believe that civility is a legitimate criterion in hiring and evaluating faculty members. Generally, the provosts are confident that faculty members show civility in their treatment of students, but have mixed views on whether professors show civility in dealings with colleagues and doubt how much civility is shown to administrators.

These results are clear from Inside Higher Ed's 2015 Survey of College and University Chief Academic Officers. And after a year of intense debate over civility, the survey shows that provosts are not aligned with faculty leaders on the issue. ...

How Provosts View Civility on Their Campuses

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January 23, 2015 in Legal Education | Permalink | Comments (7)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

C-Span: Economic Inequality and the U.S. Tax System

C-Span Washington Journal, Economic Inequality and the U.S. Tax System:

Edward Kleinbard talked about his book, We are Better Than This: How Government Should Spend Our Money.  He spoke about why the government should do more, including increasing the size of the tax system, to improve the economy and combat income inequality. (Click on button on bottom right to view video directly on C-Span to avoid interruption caused by blog's refresh rate.)

January 23, 2015 in Book Club, Tax | Permalink | Comments (3)

Tax Court: Payments for Donations of Eggs to Infertile Couples Constitute Income, Not Damages Excludable Under § 104

EggFollowing up on my previous posts (links below):  Perez v. Commissioner, 144 T.C. No. 4 (Jan. 22, 2014):

We acknowledge that this case has received some publicity in tax and nontax publications, which is why it is important to state clearly what it does not concern. It does not require us to decide whether human eggs are capital assets. It does not require us to figure out how to allocate basis in the human body, or the holding period for human-body parts, or the character of the gain from the sale of those parts. Fn.4

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January 23, 2015 in New Cases, Tax | Permalink | Comments (0)

ITPF, TPC Conference Today on Corporate Inversions and Tax Policy

TPC 2The International Tax Policy Forum and Tax Policy Center are co-hosting a conference today at the Brookings Institution from 8:50 - 11:15 a.m. (webcast here) on Corporate Inversions and Tax Policy:

Corporate inversions, which change the tax home of a multinational corporation by merging it with a foreign company that then becomes the parent of the multinational group, received considerable attention in 2014, including from the IRS, which in September released a notice describing regulations the government intends to issue to reduce the tax benefits of future inversion transactions. Corporate inversions elicit strong reactions: some call U.S. companies involved in these transactions “unpatriotic,” while others view them as symptomatic of an out-of-step U.S. corporate tax system, with its high rate and worldwide reach that differs from the territorial taxes widely used by other countries. These inversions are also not unique to the U.S, with firms in the United Kingdom and elsewhere also using them during periods when their foreign incomes were subject to high rates of domestic taxation.

On Friday, January 23rd, the Urban-Brookings Tax Policy Center and the International Tax Policy Forum will co-host a conference examining the history, causes, and consequences of corporate inversions, the policy response in the United Kingdom, and what actions the U.S. should take. Experts from a variety of backgrounds will share their perspectives, and Senator Orrin Hatch will give keynote remarks at the close of the event.

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January 23, 2015 in Conferences, Tax | Permalink | Comments (0)

TurboTax Apologizes for Bait-and-Switch, Provides $25 Refunds to Customers

Turbo Tax (2015)Following up on last week's post, TurboTax Customers Angry Over Change In Tax Return Software:  USA Today, TurboTax 'Messed Up,' Refunds Customers:

Investors outraged by TurboTax’ recent change that forced them to pay 50% more for the tax preparation software: put down your pitchforks. TurboTax isn’t just apologizing, but will refund your money.

Beginning Friday, TurboTax’ maker Intuit will issue $25 refunds back to any TurboTax customer forced to buy the most expensive version of the company’s software this year after buying the less-costly Deluxe version last year. Intuit will put a link up on its Web site on Jan. 23 where TurboTax customers can claim their refund. ...

In addition to refunding $25 to affected customers, TurboTax General Manager Sasan Goodarzi is issuing a lengthy written apology to TurboTax customers for the change.

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January 23, 2015 in Tax | Permalink | Comments (12)

Living Amidst Wildlife in Malibu

LionMy wife and I were watching our DVR'd Saturday Night Live Wednesday night in bed when we received an email warning us that a mountain lion had been spotted on campus a few hundred yards from our home. Pepperdine helpfully included an Emergency Preparedness Guide with specific safety guidelines for encountering a mountain lion: 

Should you encounter a mountain lion, take the following actions:

  • If you see a mountain lion, maintain eye contact and back away slowly. Do not run; the lion’s instinct will be to chase you. Appear as large, loud, and powerful as possible and yell and throw stones. ...
  • If attacked, fight back. Under no circumstances should you fall to the ground or roll into a fetal position. Hit as hard as possible, especially around the animal’s head. If you are attacked from behind, try to reposition yourself to meet the cat face to face.

SNL guest host Kevin Hart apparently lives near us (click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate):

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

The IRS Scandal, Day 624

IRS Logo 2Wall Street Journal, 7 Down, 1 to Go: An Ungracious Address Even By This President’s Standards, by James Taranto:

In four of the past six midterm elections, voters have administered what is sometimes called a “shellacking” or a “thumpin’ ” to the sitting president’s party. In 1994, 2006, 2010 and 2014, the president’s party lost seats in both houses of Congress and the majority in at least one. In 1995, 2007 and 2011 the president began his State of the Union address with an acknowledgment of the other party’s electoral success. ...

This year’s State of the Union was an ungracious address even by this president’s standards. There was no word of congratulation for the Republicans or even for the new Congress. Worse, Obama extemporaneously taunted his adversaries about his own past electoral success.

“I have no more campaigns to run,” the president declared during the speech’s coda. One suspects that was not intended as an applause line, but applaud some in the audience did. Obama began reading his next sentence, then interrupted with a #humblebrag: “My only agenda—I know because I won both of them.”

To which we add the obligatory asterisk: While it is true without qualification that he won the first one, the second came with the assistance of the Internal Revenue Service’s suppression of his opponents. To be sure, one cannot rule out the possibility that he would have won a licit campaign. But then again, it’s not as if it was a 45-7 blowout.

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

Thursday, January 22, 2015

Knoll Presents Balancing State Sovereignty and Interstate Commerce Today at Northwestern

KnollMichael Knoll (Pennsylvania) presents Striking a Balance Between State Sovereignty and Interstate Commerce, 75 State Tax Notes ___ (2015) (with Ruth Mason (Virginia)), at Northwestern today as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

This Article discusses Wynne v. Comptroller, a dormant Commerce Clause case against Maryland pending before the Supreme Court. We use economic analysis to rebut Maryland’s claim that its tax regime does not discriminate against interstate commerce. We also argue that the parties’ framing of the central issue in the case as whether the Constitution requires states to relieve double taxation draws focus away from the discrimination question, and therefore could undermine the Wynnes’ case and lead to unjustified narrowing of the dormant Commerce Clause. We also show how our approach to tax discrimination resolves many of the issues that seemed to trouble the Justices at oral argument.

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

D.C. Tax Law Gave Washington Nationals Unique Advantage in Inking Max Scherzer to $210 Million Deal

MaxWashington Post, Can Max Scherzer’s Contract be a Model for Other Superstars Thinking of Washington?:

Washington may have at least one advantage over other pro sports cities when it comes to wooing high-priced free agent talent: the District’s tax laws.

Scott Boras, the agent for pitcher Max Scherzer and several other Nationals stars who has negotiated some of the biggest contracts in sports, said local tax laws allowed Scherzer and the Nationals to hammer out a creative contract that could provide a blueprint of sorts for other area teams courting big-name talent. That includes the kind of deals that likely would be required for the Wizards to lure, say, Kevin Durant back to his home town or for the Nationals to keep slugger Bryce Harper. ...

Boras said Scherzer’s $210 million contract is not only historic in terms of its size but noteworthy in structure. The deal takes advantage of District tax laws to save Scherzer money — possibly in the seven or eight figures — and keeps the team’s annual salary payments down. It would not have worked in New York, Los Angeles or most other baseball cities, he said. ...

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January 22, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

The Responsible Way Out of the Law School Crisis

Law School (2015)Jay Sterling Silver (St. Thomas), Pedagogically Sound Cuts, Tighter (Not Looser) Accreditation Standards, and a Well-oiled Doomsday Machine: The Responsible Way Out of the Crisis in Legal Education, 66 Rutgers L. Rev. 353 (2014):

With runaway tuition, sky-high graduate debt and unemployment, plummeting law school applications, and the tectonic shift in the nature and delivery of legal services further clouding the picture, we must do more than bitterly bemoan the plight of law students and loosely cast aspersions over how we got here. We must decide, very quickly, exactly what in legal education should be salvaged, what should be reengineered, and what should be tossed overboard. The trouble is, with little agreement on what legal education is supposed to do, how it should do it, or who it is supposed to serve, most of the solutions posed to date are shots in the dark, often liberally laced with acrimony, that will do more harm than good. Dean Erwin Chemerinsky got it right when he said that the measures recently proposed by the ABA's Task Force on the Future of Legal Education to address the crisis in legal education are “definitely not a blueprint for useful reform.”

With an eye to the role of legal education as a training ground, a public and private good, and a unit of the academy, this Article prescribes a clear set of pedagogically sound measures to root out the actual causes of the crisis and significantly reduce law school tuition, graduate debt, and graduate unemployment, while preserving the considerable, but underappreciated, good in legal education. The man who sounded the general alarm with his book Failing Law Schools lays much of the blame at the feet of the professoriate, which, he says, is overpaid, underworked, and resistant to change. According to Professor Brian Tamanaha, the ABA Task Force on the Future of Legal Education, and numerous others, the principal culprits are tenure, high salaries, the shunning of adjuncts, emphasis on scholarship, and the ABA accreditation standards that prop it all up, drive up tuition, and block competition and change. Deregulate legal education, they advise, and allow the marketplace to develop leaner alternatives to the one-size-fits-all model. Specific suggestions include replacing the third year of law school with apprenticeships or lopping it off altogether to eliminate a year of esoteric filler, and replace tenured faculty with adjuncts fresh from practice.

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January 22, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Herzig: Supreme Court Will Approve Same-Sex Marriage for Tax Reasons

MarriageSlate:  A Taxing Decision, by David Herzig (Valparaiso):

For years people have been trying to predict what the Supreme Court will do about same-sex marriage. That speculation has intensified now that the Supreme Court has decided to hear marriage cases originating in the 6th Circuit that upheld the state-level bans against same-sex marriage and recognition. How will the Supreme Court decide this crucial issue? In fact, it has already tipped its hand on the outcome. To understand why, you have to understand tax law.

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January 22, 2015 in Tax | Permalink | Comments (0)

'Sugar Daddies' and Student Loan Debt

The Atlantic, Where the Sugar Babies Are:

In recent years the rising cost of student debt has given birth to an odd phenomenon: a population of ostensibly generous older men who appear poised to solve the higher-education crisis, one student at a time. Once a relatively underground subculture, this benevolent group of men is coming to the rescue across the country, essentially volunteering to subsidize the students’ tuition costs. But that description could be, shall I say, sugarcoating it.

Yes, these men are ponying up their money—plus more—for financially struggling students. However, it’s not free money, and it’s not all students. In other words, these benefactors typically expect some compensation from their beneficiaries—students who generally tend to be women willing to accept the help from the men in exchange for providing some tender loving care. And, at least, flaunting their good looks.

"Sugar daddies"—the official moniker granted to these wealthy men—and the microcosm they occupy aren’t anything new, but they’ve become more mainstream in recent years. That they’ve emerged as a noteworthy group during America's student-debt crisis is indicative of their growing prevalence—as well as that of "sugar babies," the ones entrenched in that crisis. And the subculture—"daddies" and "babies" alike—appears to be expanding rapidly. 2014 saw a huge spike in sugar babies nationwide, especially in the southern states, according to new data from SeekingArrangement, a site where "babies" and "daddies" sign up and connect. The trend itself, let alone writing about it, might seem frivolous or demeaning. But the data could clarify what's going wrong with the system and where those problems lie. ...

U.S. Colleges With the Highest Number of "Sugar Babies"

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

Ryan: Merger Is Indirect Gift In Cavallaro

Kerry A. Ryan (Saint Louis), Merger is Indirect Gift in Cavallaro, 146 Tax Notes 139 (Jan. 5, 2015):

In Cavallaro v. Commissioner, [T.C. Memo. 2014-189,] the Tax Court held that a merger of two family-owned businesses resulted in a substantial taxable gift. The taxpayers avoided penalties by demonstrating that they relied in good faith on the mistaken advice of competent tax advisers.

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

Hubbard: A Tax Reform Plan to Enhance Growth, Work and Opportunity

New York Times op-ed:  Obama’s Bad Economic Ideas, by Glenn Hubbard (Dean, Columbia Business School):

[T]he president’s proposals do invite a case for a comprehensive tax and entitlement reform, one based not on redistribution but on growth, work and opportunity.

Our unwillingness to confront mounting inefficiencies in the nation’s tax code and growing obligations in entitlement programs has led to increasingly limited options. Corporate tax reform is held hostage to the misguided idea that tax cuts and tax increases must be balanced within the corporate sector alone, and to the faulty assumption that beneficial tax reform will not raise economic activity.

Piling up child tax credits and subsidies for health care over narrow household income ranges, as the president proposes, leads to high rates of taxation on earnings from work as assistance is phased out. Likewise, raising marginal tax rates on investment by the well-to-do reduces asset prices and is a threat to continued economic expansion.

So how can we enhance growth, work and opportunity? Four steps can help get us there.

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January 22, 2015 in Tax | Permalink | Comments (0)

Why Don't Law Profs Write More Books?

Eugene Mazo (Wake Forest), The Little Legal Academy and the Big Idea Book:

Why does law insist on remaining an article field? In law schools, many professors never aspire to write books. Perhaps worse, many don’t have a book idea in them. In my view, our lack of emphasis on books—and especially on "big idea" books—is detrimental. When legal scholars get together, their conversations seldom concern big idea books. There are too many articles, opinions, and statutes to discern. Law review articles are the coin of the realm, and, as a result, we face a dearth of big idea books—by which I mean books that try to capture or espouse a grand theory or strategy of life. Without big idea books, we are left with far fewer big ideas.

In other fields, big idea books proliferate. ... I’m not claiming that we don’t have best-selling authors in the legal academy. We do. And I’m not claiming that we don’t have books. That would be silly. Obviously, we have plenty of both. I’m not even claiming that we don’t have big idea books. Rather, what I’m arguing is that we don’t have enough of them. And that we don’t place enough emphasis on them, either. A law professor friend told me recently that he had no time for such books. They took too long to write, did not fit his research needs, and were not available (wait for it ... wait for it) on Hein-on-Line.

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

Only 38% of Law Students Are Paying Full Tuition

Matt Leichter, Law School Gives Away Free Money to Non-Students (More 509 Errata):

[T]he 2013-14 academic year saw another precipitous drop in the percentage of full-time law students paying full tuition.

Percent Full-Time Law Students Paying Full Tuition

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

The IRS Scandal, Day 623

IRS Logo 2Headlines & Global News, Lois Lerner Begged Supervisor To Refrain From Visiting IRS Office Ahead Of 2012 Presidential Election, Bombshell Document Finds:

Ex-IRS official Lois Lerner reportedly pleaded with her supervisor not to deeply inquire about whether the IRS had unfairly targeted Tea Party and conservative groups for tax-exempt status just ahead of the 2012 presidential election, according to new emails obtained by a government watchdog group.

Joseph H. Grant, former Tax Exempt and Government Entities Division deputy director, was specifically asked by Lerner to refrain from visiting the tax agency's Cincinnati office and keep from asking specific questions related to any Congressional inquiries, according to emails obtained by Judicial Watch through a Freedom of Information Act Lawsuit.

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

Wednesday, January 21, 2015

Abreu & Greenstein: The Rule of Law as a Law of Standards -- Interpreting the Internal Revenue Code

Alice Abreu (Temple) & Richard K. Greenstein (Temple), The Rule of Law as a Law of Standards: Interpreting the Internal Revenue Code, 64 Duke L.J. Online 53 (2015):

Although fields of law ordinarily comprise both rules and standards, and foundational tax scholars such as Professors Surrey, Warren, and Bittker understood the importance of standards in tax law, many tax scholars and professionals have come to regard federal tax law as “the paradigmatic system of rules.” The vision of tax-as-rules is particularly alluring because rules have been associated with rule-of-law values, and it seems that the rule of law might be especially important in the field of taxation. The rule of law constrains the coercive power of government, and perhaps few powers are viewed with as much suspicion as the taxing power. Our claim that the existence of many rules in the tax law does not dictate the interpretation of all tax formulations as rules seems to threaten critical rule-of-law values. Nevertheless, we believe with Surrey and Warren that tax, like other areas of law, can flourish only if the IRS and the courts are able to respond to “unforeseen cases as they arise” and that this flexibility demands that many Code provisions be interpreted as standards. We also believe that this use of standards does not threaten rule-of-law values. In this essay we defend both propositions.

To do so we engage pointedly with Professor Larry Zelenak’s critique of the position we took in our earlier article, Defining Income [11 Fla Tax Rev. 295 (2011)], where we claimed that the category of “gross income” in the Internal Revenue Code is best understood as a standard, not a rule. In Custom and the Rule of Law in the Administration of the Income Tax, Professor Zelenak worried that our position threatened the rule of law by “stretch[ing] beyond the breaking point” the concept of interpretation [Custom and the Rule of Law in the Administration of the Income Tax, 62 Duke L.J. 855 (2012)].

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

Are You Paying Too Much for Law School?

Following up on my previous post,  The Variable Affordability of Law School: How Geography and LSAT Profile Impact Tuition Costs:  Bloomberg, Are You Paying Too Much for Law School?:

Law schools are increasingly relying on less-qualified applicants to fill their classes, but according to a new analysis, those people are getting the worst deal on their education.

The data, presented this month at the Association of American Law Schools’ annual meeting in Washington, suggest that people who did poorly on the Law School Admission Test didn’t just pay more than everyone else, they also got less for their money. Low-performing students tended to go to lower-ranked schools, “where the bar passage risk is higher and the employment outcomes are less inspiring,” says University of St. Thomas School of Law professor Jerome Organ, who conducted the study. In other words, the students shelling out the most are often in the most danger of leaving law school with the bleakest prospects.

Organ

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

Graetz: Taxation of Unrealized Gains at Death Redux

Michael J. Graetz (Columbia), What Goes Around Comes Around: Taxation of Unrealized Gains at Death:

Forty-two years ago, in the Virginia Law Review, long before Congress twice enacted—and twice repealed—carryover basis for assets transferred at death, I published this article examining and evaluating a number of proposals for taxing gains at death, as well as for carryover basis. (One of these was being advanced by the American Bankers Association.)  [Taxation of Unrealized Gains at Death -- An Evaluation of the Current Proposals, 59 Va. L. Rev. 830 (1973)]  The president, in his State of the Union address on January 20, 2015, has again proposed a tax on gains on assets transferred at death.  This article may be helpful in identifying some of the main issues and alternatives if Congress considers the proposal in its upcoming tax reform deliberations.  I have made no attempt to update this article for current circumstances. Most of the design issues remain unchanged, although the exemption and illustrative numbers are out of date. 

January 21, 2015 in Scholarship, Tax | Permalink | Comments (2)

More Commentary On President Obama's Tax Proposals In His State Of The Union Address

Leviner Presents Tax Policy Making in Israel at Hebrew University Law School

Leviner (2015)Sagit Leviner (Ono) presented Comparative Evaluation of Tax Policy-Making in Israel: Exploring the Trajectories on Monday at the Hebrew University Law School Tax Colloquium:

This project explores the transformation of Israel’s tax policy over the years while placing it within Israel’s broader economic and social context and unique characteristics. To better evaluate the merit and trajectory of this transformation, the project positions the Israeli tax experience under a comparative lens. In other words, the project evaluates whether the Israeli experience brings Israel closer to, or further from, its counterparts in the developed world.

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

Fleischer: Echoes of Piketty in Obama's Proposal to Tax Gifts and Bequests

NY Times Dealbook (2013)New York Times DealBook:  Echoes of Piketty in Obama Proposal to Address Income Inequality, by Victor Fleischer (San Diego):

At the end of his book Capital in the Twenty-First Century, Thomas Piketty proposes a global wealth tax to help address the problem of runaway income inequality. In contrast with the careful research that went into the book, the suggestion of a global wealth tax struck many tax policy veterans as naïve and unhelpful.

By contrast, the White House proposal to treat gifts and bequests as taxable events is eminently sensible as a matter of tax policy. It is also well-targeted at the superrich — the only group that has truly benefited from the economic recovery.

While the White House proposal is not likely to receive proper care and feeding from a Republican Congress, it is important nonetheless. It helps set a progressive economic agenda for the 2016 presidential campaigns and establishes goal posts for negotiations over tax legislation in the meantime. ...

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January 21, 2015 in Tax | Permalink | Comments (1)

Serial Blogging

SerialKudos to Colin Miller, editor of our EvidenceProf Blog for his series of posts beginning November 21, 2014 on the Serial Podcast, which deals with the 1999 prosecution of 17 year-old Adnan Syed for murdering his ex-girlfriend, 18 year-old Hae Min Lee, on January 13, 1999.  In Colin's words:

The purpose of these posts was to create a legal companion to the podcast so that listeners interested in the legal issues raised by the podcast would have some answers. This post collects and categorizes each of those posts.

Colin's posts have produced the most interest of any series of posts in the history of the Law Professor Blogs Network:  925,000 page views, compared with 65,000 page views for EvidenceProf Blog for the corresponding period last year.

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

Pepperdine Dean: Law Schools Need to be More Holistic

U.S. News General Logo (2015)Pepperdine Dean: Law Schools Need to be More Holistic, U.S. News & World Report (The Legal Issue), pp. 38-41:

Deanell Reece Tacha, a former circuit judge appointed by President Ronald Reagan, is dean of Pepperdine University's School of Law.  Before taking the reigns at Pepperdine in 2011, Tacha spent several years as a law professor at the University of Kansas, as well as associate dean and other administrative positions.  Under her leadership, Pepperdine implemented a two-year J.D. program, whose first class graduated in May 2013. Tacha spoke with U.S. News about how law schools are adapting to declining enrollments and new workforce demands -- and where the system of legal education is heading.

January 21, 2015 | Permalink | Comments (0)

Law School Diversity Rankings

PreLaw CoverMost Diverse Law Schools, PreLaw (Winter 2015):

To determine the most diverse law schools, we broke down each school into six categories -- percentage of minority faculty; percentage of black students; percentage of Asian and Hawaiian students; percentage of Hispanic students; percentage of American Indian students; and percentage of Caucasian students.

We assigned each school a score from one to 10 for all categories, except for American Indians.  We assigned each school a score from one to five for that category, given the much smaller number of students.

A school that matched the U.S. national average for any race received a seven (or 3.5 for American Indian), and a school that was 30 percent or greater than the national average received a 10 (or 5 for American Indian). We then weighted the student categories as 75 percent of the final diversity score and faculty at 25 percent.

preLaw ranked the Top 70 law schools for diversity. 28 law schools received an A+ grade, led by:

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

The IRS Scandal, Day 622

IRS Logo 2New York Times editorial, The Dangerous Erosion of Taxation I.R.S., Already Hobbled, Likely to Be Further Damaged:

The obsession among House conservatives to hobble the Internal Revenue Service is about to pay off this tax season in foolhardy budget cuts to the agency that will cost the government an estimated $2 billion in lost revenue.

That works out to about $6 in lost taxes for every $1 in cuts Congress made in reducing the I.R.S. budget another 3 percent this year, according to the Treasury Department.

The slashed budget is a victory for penny-wise-and-pound-foolish politicians. It amounts to payback demanded by House Republicans to penalize the I.R.S. for daring to scrutinize Tea Party operations that tried to claim exemptions under the tax code for nonpolitical groups. Democratic groups trying the same thing were also scrutinized.

Undermining the I.R.S. was part of the overall budget deal worked out by House Republicans, Senate Democrats and the White House. The agency — hardly the most popular of essential government offices — had too few defenders in the horse-trading. It is likely to suffer even more damage under the new Republican-controlled Congress.

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

Tuesday, January 20, 2015

Madrian Presents The Roth 401(k): Does Front-Loading Taxation Increase Savings? Today at NYU

MadrianBrigitte Madrian (Harvard) presents Does Front-Loading Taxation Increase Savings? Evidence from Roth 401(k) Introduction (with John Beshears (Harvard), James Choi (Yale) & David Laibson (Harvard)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

Can governments increase private savings by taxing savings up front instead of in retirement? Roth 401(k) contributions are not tax-deductible in the contribution year, but withdrawals in retirement are untaxed. The more common before-tax 401(k) contribution is tax-deductible in the contribution year, but both principal and investment earnings are taxed upon withdrawal. Using administrative data from eleven companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after the Roth introduction, which means that the amount of retirement consumption being purchased by 401(k) contributions increases after the Roth introduction. A survey experiment suggests two behavioral factors play a role in the unresponsiveness of contribution rates to their tax treatment: (1) employee confusion about or neglect of the tax properties of Roth balances and (2) partition dependence.

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

Freedman Presents Tax Avoidance and the Proposed Google Tax Today at Florida

FreedmanJudith Freedman (Oxford) presents Tax Avoidance and the Proposed U.K. Diverted Profits Tax (Google Tax) at Florida today as part of its Graduate Tax Program Colloquium Series hosted by Yariv Brauner:

This paper aims to inform the important debate on tax avoidance by exploring the language used and setting this in context. Tax avoidance is something that needs to be tackled with vigour and public confidence that the tax system treats people equitably is vital. Yet the actors concerned ‐ taxpayers, advisers and revenue authorities ‐ operate within a complex domestic and international tax environment. Many of the complexities and flaws in the system can only be tackled by radical structural changes, which will require fundamental policy thinking and change and international co‐operation. Oversimplifying the debate and searching for individual or corporate villains will not assist in remedying the underlying problems. Even if public naming and shaming influences a few taxpayers in the public eye to impose their own voluntary constraints, it will not necessarily affect the worst avoiders, and may even encourage some non‐compliance from those who feel that “everyone is at it”. Only understanding the flaws in the tax system and working on serious changes can give long‐term results.

Ana Paula Dourado (University of Lisbon) is the discussant.

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