TaxProf Blog

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

Wednesday, August 23, 2017

Could Puerto Rico Be The Next Hot Tax Haven?

Those TaxProf Blog readers who also read Surly Subgroup know that some of us over there have been quite interested in tax and related topics concerning Puerto Rico over the past year or so. You can look at some of those posts here. For far more extensive coverage of the Puerto Rico "bankruptcy" and PROMESA, you can visit our friends at over at Credit Slips blog.

Well, here is a Bloomberg story squarely at the intersection of Puerto Rico and tax and other topics I find interesting. I am just going to leave this here:

Bloomberg, Could Puerto Rico Be the Next Hot Tax Haven?:

Some 65,000 Puerto Ricans left their bankrupt U.S. island commonwealth last year. A group of private bankers are moving the other way. They’re increasingly opening offshore banks known as International Financial Entities, which were created by a Puerto Rican law in 2012. There are 44 IFEs now, with 18 opening in the past year, according to data compiled by the U.S. territory’s financial regulator. “Just in the last six months, we’ve probably closed seven deals for international banks,” says Ryan Christiansen, president of Christiansen Commercial Real Estate, a brokerage based in Puerto Rico that leases office space.

Tax experts attribute at least part of the influx to a little-known loophole made possible by the IFE structure. It lets non-U.S. account holders put money in Puerto Rico anonymously and potentially avoid taxes at home even as they benefit from the stability and safety of the U.S. That’s become increasingly attractive because of a new global financial-disclosure system taking effect in September. Under the Common Reporting Standard, more than 100 countries have agreed to automatically provide to one another annual reports about accounts belonging to people subject to taxes in each member nation. Previously, they mainly shared information on request, making it harder to identify suspect accounts. Much like the U.S.’s Foreign Account Tax Compliance Act, which requires foreign banks to report on Americans with accounts, the CRS initiative is meant to combat the use of offshore bank accounts to evade taxes.

The loophole arises from quirks in various international disclosure agreements. First, the IFEs aren’t subject to the CRS reporting process because the U.S. hasn’t signed on to it, opting to stick with its 113 separate bilateral agreements. But the IFEs don’t have to comply with these because Puerto Rico, like all U.S. territories, is excluded from those deals. Puerto Rico provides substantial confidentiality protection for foreign individual investors, according to Tim Richards, whose law firm, Richards & Sanchez, specializes in international tax law.

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August 23, 2017 in Tax | Permalink | Comments (0)

Tuesday, August 22, 2017

Women Economists Face A 'Toxic' Work Environment

Alice H. Wu, Gender Stereotyping in Academia: Evidence from Economics Job Market Rumors Forum:

This paper examines whether people in academia portray and judge women and men differently in everyday “conversations” that take place online. I combine methods from text mining, machine learning and econometrics to study the existence and extent of gender stereotyping on Economics Job Market Rumors forum. Through a topic analysis, I find that the discourse tends to become significantly less academic or professional oriented, and more about personal information and physical appearance when women are mentioned. The words with the strongest predictive power on gender, selected by the Lasso-logistic model, provide a direct look into the gender stereotyping language on this forum. Moreover, a panel data analysis reveals the state dependence between the content of posts within a thread. In particular, if women are mentioned previously in a thread, the topic is likely to shift from academic to personal. Finally, I restrict the analysis to discussions on specific economists, and find that high-profile female economists tend to receive more attention on EJMR than their male counterparts.  

Table 1E

New York Times, Evidence of a Toxic Environment for Women in Economics:

A pathbreaking new study of online conversations among economists describes and quantifies a workplace culture that appears to amount to outright hostility toward women in parts of the economics profession. 

Alice H. Wu, who will start her doctoral studies at Harvard next year, completed the research in an award-winning senior thesis at the University of California, Berkeley. Her paper has been making the rounds among leading economists this summer, and prompting urgent conversations.

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August 22, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

Buckles: The Sexual Integrity Of Religious Schools And Tax Exemption

Johnny Rex Buckles (University of Washington), The Sexual Integrity of Religious Schools and Tax Exemption, 40 Harv. J.L. & Pub. Pol'y 255 (2017):

Many private universities and other schools adhere to religiously grounded codes of conduct that embrace heterosexual monogamy as the sole moral context for sexual relationships. The federal income tax exemption of these schools has been questioned following the recent Supreme Court opinion of Obergefell v. Hodges. In Obergefell, the Supreme Court held that the right to marry is a fundamental constitutional right that same-sex couples may exercise. The relevance of this decision to the federal tax status of private religious schools arises from another Supreme Court decision, Bob Jones University v. United States. The Court in Bob Jones held that two schools with racially discriminatory policies as to students were not entitled to exemption from federal income tax because the policies violate established public policy. The issue now is whether the sexual conduct policies of private religious schools violate the established public policy of the United States following Obergefell.

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August 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

Westfahl & Wilkins: The Leadership Imperative — A Collaborative Approach To Professional Development

Scott A. Westfahl (Harvard) & David B. Wilkins (Harvard), The Leadership Imperative: A Collaborative Approach to Professional Development in the Global Age of More for Less, 69 Stan. L. Rev. 1667 (2017):

Notwithstanding the increasing importance of technology, the practice of corporate law is — and is likely to remain for the foreseeable future — a human capital business. As a result, law firms must continue to attract, develop, and retain talented lawyers. Unfortunately, the traditional approach, which divides responsibility for professional development among law schools, which are supposed to teach students to think like a lawyer; law firms, which are expected to train associates to “be” lawyers; and corporate clients, whose job it is to foot the bill, is no longer well aligned to the current realities of the marketplace. In this Article, we document the causes for this misalignment and propose a new model of professional development in which law schools, law firms, and corporate clients collaborate to train lawyers to be lifelong learners in the full range of technical, professional, and network-building skills they will need to flourish throughout their careers. We offer specific proposals for how to achieve this realignment and confront the resistance that will inevitably greet any attempt to do so.

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August 22, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

Lang & Soled: Disclosing Audit Risk To Taxpayers

Michael B. Lang (Chapman) & Jay A. Soled (Rutgers), Disclosing Audit Risk to Taxpayers, 36 Va. Tax Rev. ___ (2017):

When taxpayers file their tax returns, they are often worried about the prospect of an Internal Revenue Service (Service) audit. To date, the position of the Service and of professional organizations has been that tax return preparers cannot take into account audit risk in evaluating the merits of a return position. Some practitioners have broadly — and incorrectly — interpreted this regulation as a mandate against talking about audit risk with their clients. Taxpayers therefore often make their own assessment of their audit risk, relying on information sources such as the Internet and tax return preparation software. Given the uncertain reliability of such sources, it is appropriate to encourage more communication between tax return preparers and taxpayers on the subject of audit risk.

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August 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

Most Lawyers Are Satisfied With Their Careers

Milan Markovic (Texas A&M) & Gabriele Plickert (Cal Poly Pomona), Attorneys' Career Dissatisfaction in the New Normal:

The 2008 economic recession had a seismic impact on the legal profession. This Article is the first to empirically assess whether the recession has made law an unsatisfying career.

Relying on survey data from over 11,000 active members of the State Bar of Texas, we find that only 13.5% of all attorneys and 11.5% of full-time attorneys are dissatisfied with their careers. Newer attorneys report greater career dissatisfaction than more experienced attorneys, yet they too are largely satisfied.

Table 3

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August 22, 2017 in Legal Education | Permalink | Comments (0)

Sanchirico: KISS The Tax Blueprint Goodbye — Meet The 25-25-25 Plan

Chris William Sanchirico (Pennsylvania), KISS the Tax Blueprint Goodbye: Meet the 25-25-25 Plan:

Seeking definitive legislative success after the stall-out on healthcare, Congressional Republicans may want to keep it simple on tax reform. This paper examines the merits and demerits of a particular minimalist tax plan: lower the corporate tax rate to 25%; tax legacy foreign earnings at 25%; move to a “territorial” tax system for foreign earnings with a minimum tax patch at 25%. The paper uses analysis of this specific plan as a vehicle for clarifying some general considerations surrounding business tax reform.

August 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

Friedman: Fixing Law Reviews

Harvard Law ReviewBarry Friedman (NYU), Fixing Law Reviews:

Very few people are happy at present with the law review publishing process, from article submission and selection to editing. Complaints are longstanding, and similar ones emerge from faculty and students alike. Yet, heretofore, change has not occurred. Instead, we are locked in our ugly world of submit and expedite, stepping on the toes of numerous student editors in the process. And the editing process falls far short of ideal.

This Article recommends wholesale change to the submission and editing process.

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August 22, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

Oei, Hemel On 'Robot Taxes'

Daniel Hemel and I just published a couple of blog posts — at Surly Subgroup and Whatever Source — about the taxation of robots (or, "Robotaxation," as I like to call it). You can read them here:

Shuyi Oei (Boston College), So About That Robot Tax ...

I came across a couple of news stories recently about how South Korea is introducing the world’s first robot tax. But based on the press reports, it sounds like the so-called robot tax is actually just a reduction of the tax deductions available to businesses that invest in productivity-boosting automation. The news sources themselves concede that this “robot tax” not exactly a tax on robots but rather a tax benefit reduction for automation investment. ...

A lot of what seems to be driving the tax conversation is the fear that robots are taking over jobs, though there’s some uncertainty about the extent to which robots are to blame.

Personally, I’ve been having a hard time squaring the newly ascendant tax conversation about the robot tax with the broader legal scholarship on robots. In some of the news and other commentary discussing Robotaxation, my reaction has been something to the effect of “I’m not sure that word means what you think it means.” Turns out, there is something of an existing conversation about what constitutes a robot in the first place — see, for example, Richards and Smart (2013) for a nice discussion of some of the definitional issues. See also this “What is a Robot?” piece in The Atlantic. In defining “robot,” it might matter how a robot moves in the physical world, what kind of quasi-independent agency it seems to exercise (autonomous vs. semi-autonomous), how humans interact with it, and even what sorts of emotions it triggers in us mere humans. We might understand some automated machines to be robots but others to just be automated equipment. And these distinctions make sense, from the viewpoint of areas like tort law, privacy law, the law of principals and agents, and the more general regulation of robots (and of artificial intelligence as a subcategory of robots).

But in some of the tax discussions about robots that I’ve seen on the interwebs, it’s quite clear that the authors don’t necessarily mean Robot when they say Robot. ...

Daniel Hemel (Chicago), Should Robots be Subsidized?:

Proposals for a tax on robots have attracted increasing attention since Bill Gates floated the idea in a February 2017 interview with Quartz’s Kevin Delaney. (Shu-Yi Oei has an excellent overview of the debate over at the Surly Subgroup blog.) The concern that motivates most of these robot tax proposals, as I understand it, is that robots will replace human labor as an input into the production process, leading to higher unemployment and economic inequality. Missing from the debate is the argument that robot taxes should be negative  —  in other words, that robots should be subsidized. Yet in my view, the argument for a robot subsidy is much more persuasive than the argument for a robot tax.

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August 22, 2017 in Tax | Permalink | Comments (1)

Monday, August 21, 2017

Tax Profs Enjoy Today's Solar Eclipse

Liscow: Is Efficiency Biased?

Zachary D. Liscow (Yale), Is Efficiency Biased?:

The most common underpinning of economic analysis of the law has long been the goal of efficiency (i.e., choosing policies that maximize people’s willingness to pay), as reflected in economic analysis of administrative rulemaking, judicial rules, and proposed legislation. Current thinking is divided on the question whether efficient policies are biased against the poor, which is remarkable given the question’s fundamental nature. Some say yes; others, no.

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August 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Huang: Adventures In Higher Education, Happiness, And Mindfulness

Peter H. Huang (Colorado), Adventures in Higher Education, Happiness, and Mindfulness:

This Article recounts my unique adventures in higher education, including being a Princeton University freshman mathematics major at age 14, Harvard University applied mathematics graduate student at age 17, economics and finance faculty at multiple schools, first-year law student at the University of Chicago, second- and third-year law student at Stanford University, and law faculty at multiple schools. This Article analyzes why law schools should teach law students about happiness and mindfulness. This Article discusses how to teach law students about happiness and mindfulness. Finally, this Article provides brief concluding thoughts about how law students can sustain happiness and mindfulness once they graduate from law school.

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August 21, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

The Impacts Of Autonomous Vehicles And E-Commerce On Local Government Budgeting And Finance

Benjamin Clark, Nico Larco & Roberta Mann (Oregon), The Impacts of Autonomous Vehicles and E-Commerce on Local Government Budgeting and Finance:

Autonomous vehicles (AVs) are already being used and their proliferation is inevitable. AVs have the potential to fundamentally alter transportation systems by averting deadly crashes, providing critical mobility to the elderly and disabled, increasing road capacity, saving fuel, and lowering emissions (Fagnant and Kockelman 2015). Eighteen states and the District of Columbia have enacted legislation regarding AVs1, and the governors of four other states have signed executive orders about AVs2 (National Conference of State Legislatures 2017). In 2017 there were 33 states that had introduced AV legislation, up from 20 in 2016 (National Conference of State Legislatures 2017). As of June 2, 2017, there were 31 companies that had received permits from the California DMV to test autonomous vehicles, and the list is getting longer each month (California Department of Motor Vehicles 2017). In Berlin, Deutsche Bahn, Germany’s largest train and bus operator, is testing a driverless twelve-passenger shuttle bus (Scott 2017). Over 20 pilot or existing AV public transport programs have taken place in Europe. And the most recent AV testing permit recipient in California is a private shuttle bus operator — Bauer’s Intelligent Transportation (California Department of Motor Vehicles 2017).

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August 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Kleinbard: Business Taxes Reinvented — The Dual Business Enterprise Income Tax

Edward Kleinbard (USC), Business Taxes Reinvented — A Term Sheet, 156 Tax Notes 999 (Aug. 21, 2017):

This short overview and accompanying term sheet summarize the key features of a proposed comprehensive business tax environment termed the Dual Business Enterprise Income Tax (the Dual BEIT). The term sheet format is a useful mode of presentation for capturing in one accessible document the major policy recommendations of the Dual BEIT (or any other comprehensive tax reform proposal).

This paper makes the case that the Dual BEIT satisfies the objectives of policymakers from both parties for comprehensive business tax reform that can serve as the platform for economic growth while collecting appropriate levels of tax revenue. The arguments are developed further in two more detailed papers: Capital Taxation in an Age of Inequality, 90 So. Cal. L. Rev. 593 (2017), and The Right Tax at the Right Time, 20 Fla. Tax Rev. ___ (2017).

Patrick Driessen (Former Revenue Estimator, U.S. Treasury Department and Joint Committee on Taxation), Dual BEIT’s Effects on Revenue and Distribution, 156 Tax Notes 1015 (Aug. 21, 2017):

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August 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

More Law School Deans Call For Lowering California Bar Exam Cut Score

California Bar ExamABA Journal, More Law School Deans Call For Lowering California Bar Exam Cut Score:

Law school deans at public hearings this week in San Francisco and Los Angeles called on the state of California to lower its bar exam cut score. ...

The state bar commissioned a standard setting study, which offered two suggestions: Set a new interim bar exam cut score at 141 from the current 144, or make no change to the current score.

Among those who spoke Tuesday in San Francisco were Anthony Niedwiecki of Golden Gate University School of Law, Courthouse News Service reports. He said a shift in teaching strategy is needed. “With California scores so out of sync with other states, California schools are required to spend more time teaching students how to take the bar exam instead of providing them the essential skills and opportunity to engage with clients in real practice,” Niedwiecki said.

Only 26 percent of 148 Golden Gate graduates sitting for the July 2016 California bar passed it, according to a supplemental statistics report posted on TaxProf Blog.

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August 21, 2017 in Legal Education | Permalink | Comments (0)

Trump’s Bruising Tweet Highlights Amazon's Lingering Tax Fight

Amazon logoBloomberg, Trump’s Bruising Tweet Highlights Amazon's Lingering Tax Fight:

President Donald Trump waded into a longstanding scrap between online retailers and their brick-and-mortar rivals with a Twitter posting Wednesday about Inc. and taxes.

And he has a point — though the Seattle-based online giant has taken steps to reduce its tax advantage in recent years — retail industry specialists say.

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August 21, 2017 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, August 20, 2017

Queen Of The Multistate Bar Exam Bids Adieu

Erica MoeserNational Law Journal, Queen of the Multistate Bar Exam Bids Adieu:

Erica Moeser has long been the face of the National Conference of Bar Examiners — the organization that designs and administers the all-important Multistate Bar Exam used by jurisdictions nationwide.

On Aug. 21, she’ll put down her No. 2 pencil, hand in her Scantron sheet and retire from Wisconsin-based NCBE after 23 years as president. She will be replaced by current director of test operations Judith Gundersen, who has worked at the conference since 2000.

During her tenure, Moeser oversaw a push to professionalize how the test is put together and launched the Uniform Bar Exam drive. The uniform exam allows takers to transport their scores to participating jurisdictions without having to retake the test, and 28 different jurisdictions have signed on since 2010.

More recently, Moeser has served as the bar exam’s defender-in-chief against critics who blame the test itself for plummeting pass rates across the country over the past three years — a decline she attributes to law schools lowering their admission standards. She also has challenged naysayers who claim the bar exam doesn’t assess the skills and knowledge lawyers need in practice, and she has been a vocal proponent of the American Bar Association’s ongoing effort to raise the bar pass minimum that law schools must meet to stay accredited.

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August 20, 2017 in Legal Education | Permalink | Comments (3)

6th Circuit Rejects Rand Paul's Constitutional Challenge To FATCA On Standing Grounds

FATCAFollowing up on my recent posts (links below):   Crawford v. U.S. Treasury Dep’t, No. 16-03539 (6th Cir. Aug. 18, 2017) (citations omitted):

In 2010, Congress passed the Foreign Account Tax Compliance Act (FATCA), a law aimed at reducing tax evasion by United States taxpayers holding funds in foreign accounts. FATCA imposes account-reporting requirements (and hefty penalties for noncompliance) on both individual taxpayers and foreign financial institutions (FFIs). FFIs are further required to deduct and withhold a "tax" equal to 30% of every payment made by the FFI to a noncompliant (or "recalcitrant") account holder. To implement FATCA worldwide, the United States Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) have concluded intergovernmental agreements (IGAs), which facilitate FFIs' disclosure of financial-account information to the United States government, with more than seventy countries. Separately from FATCA and the IGAs, the Bank Secrecy Act imposes a foreign bank account reporting (FBAR) requirement on Americans living abroad who have aggregate foreign-account balances over $10,000; willful failure to file an FBAR invites a penalty of 50% of the value of the reportable accounts or $100,000, whichever is greater.

Plaintiffs — who include Senator Rand Paul and several individuals who claim to be subject to FATCA and the FBAR — sought to enjoin the enforcement of FATCA, the IGAs, and the FBAR, and they now appeal the dismissal of their lawsuit for lack of standing. For the reasons that follow, we affirm the judgment of the district court. ...

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August 20, 2017 in New Cases, Tax | Permalink | Comments (1)

Using Hamilton To Teach Economics

Hamilton 3Matthew C. Rousu (Susquehanna University) & Courtney A. Conrad (Susquehanna University), Economic Lessons from the Musical Hamilton, 2 J. Econ. Teaching 30 (2017):

The musical Hamilton is the most popular musical in recent history and might be the best single album one could use to teach economic concepts. We explore how the songs in Hamilton can be used to teach about opportunity cost, trade-offs, time preferences and time-inconsistent preferences, the Federal Reserve System and central banking, economic freedom, and more. We also provide discussion questions that educators could use to teach concepts presented in Hamilton.

(Hat Tip: Greg Mankiw.)  For more on my obsession with interest in Hamilton, see here and:

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August 20, 2017 in Legal Education | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3, #4, and #5:

  1. [648 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan Blattmachr (Milbank, New York)
  2. [456 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [376 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  4. [196 Downloads]  BEPS and European Union Law, by Sjoerd Douma (Leiden)
  5. [121 Downloads]  Codification of the Tax Law and the Emergence of the Staff of the Joint Committee on Taxation, by George Yin (Virginia)

August 20, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, August 19, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Valparaiso Enrolls 28 1Ls, Down 73% From Last Year (87% From 2013)

Valparaiso (2017)Indiana Lawyer, Valparaiso Law Incoming Class Significantly Smaller but Posts Higher LSATs and GPAs:

As classes begin again, Valparaiso University Law School is standing apart from other Indiana law school as it welcomes an incoming 1L class of just 28 students, 73 percent smaller than the class that entered last year.

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August 19, 2017 in Legal Education | Permalink | Comments (6)

The Hazards Of Deaning

The bad news:  I broke my finger playing in the annual faculty v. 1L kickball game.
The good news:  I did it turning a nifty 6-3 double play.


August 19, 2017 in Legal Education, Tax | Permalink | Comments (2)

The IRS Scandal, Day 1563: Judge Orders IRS To Disclose Names Of Employees Who Targeted Conservative Groups And To Prove That It Has Stopped The Practice

IRS Logo 2Washington Times, Lay It on the Line’: Judge in Tea Party Case Orders IRS to Disclose Employee Names, Reasons:

A federal judge on Thursday ordered the IRS to name the specific employees the agency blames for targeting tea party groups for intrusive scrutiny and said the government must prove it has ceased the targeting.

Judge Reggie B. Walton also said the IRS must explain the reasons for the delays for 38 groups that are part of a lawsuit in the District of Columbia, where they are still looking for a full accounting of their treatment.

Judge Walton approved another round of limited discovery in the case and laid out six questions that the IRS must answer, including the employees’ names, why the groups were targeted and how the IRS has tried to prevent a repeat.

At a hearing earlier this week, Judge Walton said it was time to get everything on the table. “Lay it on the line. Put it out there,” he told attorneys for the IRS, who are continuing to fight some tea party groups’ demands for full disclosure. ...

Judge Walton came down in the middle, writing his own set of inquiries for the IRS. “Why hide the ball?” he asked the tax agency. “If there’s nothing there, there’s nothing there.” Mr. Walton told the IRS to go beyond searching a basic agency database for records and ordered it to scour “other relevant resources containing documents from the relevant time period.”

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August 19, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, August 18, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by David Weisbach (Chicago), New View Integration, 71 Tax L. Rev. (forthcoming 2017). 

Glogower (2016)David Weisbach’s new work argues that integration methods eliminating the double tax on corporate earnings should focus on alleviating the double tax on new corporate equity, but not on old equity already invested in corporate form.  Limiting integration to new equity achieves all of the efficiency gains achieved through complete integration with respect to all equity, at a lower revenue cost.

As we are often told, the corporate tax discourages investors from using the corporate form, and encourages corporations to retain earnings and to favor issuing debt over equity. Corporate integration would generally eliminate these inefficiencies by equalizing the tax rates on investments through corporations with the tax rates on investments outside the corporate sector. 

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August 18, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Measuring Law School Clinics

ClinicColleen Shanahan (Temple), Jeffrey Selbin (UC-Berkeley), Alyx Mark (George Washington) & Anna Carpenter (Tulsa), Measuring Law School Clinics, 92 Tul. L. Rev. ___ (2018):

Legal education reformers have long argued that law school clinics address two related needs: first, clinics teach students to be lawyers; and second, clinics serve low-income clients. In clinics, so the argument goes, law students working under the close supervision of faculty members learn the requisite skills to be good practitioners and professionals. In turn, clinical law students serve clients with civil and criminal justice needs that would otherwise go unmet.

Though we have these laudable teaching and service goals — and a vast literature describing the role of clinics in both the teaching and service dimensions — we have scant empirical evidence about whether and how clinics achieve these goals. We know from studies that law students value clinics, but do clinics prepare them to be lawyers? We also know from surveys that clinics provide hundreds of thousands of hours of free legal aid in low-income communities, but how well do clinic students serve clients?


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August 18, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

Fennell & McAdams: Inverted Theories

Lee Anne Fennell (Chicago) & Richard H. McAdams (Chicago), Inverted Theories:

This essay makes the case for “inverting” popular versions of certain theories widely used in legal analysis. Inversion begins with the observation that the assumptions underlying a given theory are substantively false. But rather than reject the theory outright, the theory inverter sees something valuable in the structure of the theory’s logic, and looks to extract the implications of the theory given a recognition that the assumptions are false.

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August 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Schlunk: The Charitable Deduction For Gifts To Universities' Endowments Should Be Repealed

Herwig Schlunk (Vanderbilt), Why the Charitable Deduction for Gifts to Educational Endowments Should Be Repealed, 71 U. Miami L. Rev. 702 (2017):

The country’s collective patience for coddling private institutions of higher education is waning. At the local level, there is an effort afoot to challenge the tax-exempt status of Princeton University. At the state level, legislators in Massachusetts and Connecticut have suggested imposing taxes that would target Harvard University and Yale University. At the federal level, a number of proposals have been floated that would impact the tax treatment of universities and their endowments, including imposing an excise tax on endowment income.

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August 18, 2017 in Scholarship, Tax | Permalink | Comments (1)

NY Times: Some Democrats See Tax Reform As A Path To Taxing Carbon

New York Times, Some Democrats See Tax Reform as a Path to Taxing Carbon:

With a sweeping overhaul of the tax code on the horizon, two Senate Democrats believe this is the moment to broach the third rail of climate change policy: a carbon tax.

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August 18, 2017 in Tax | Permalink | Comments (0)

Hickman Appointed To Administrative Conference Of The United States

Hickman (2017)Prof. Kristin E. Hickman Appointed to Administrative Conference of the United States:

Kristin E. Hickman, a Distinguished McKnight University Professor and holder of the Harlan Albert Rogers Professorship at the Law School, has been appointed to serve as one of the 40 public members of the Administrative Conference of the United States. The part-time appointment is for a term of two years.

ACUS is an agency of the federal government, charged with convening expert representatives from the public and private sectors to investigate, deliberate, and recommend improvements to administrative process and procedure. ACUS initiatives promote efficiency, participation, and fairness in the promulgation of federal regulations and the administration of federal programs. Its work impacts all three branches of government and is focused on improving government effectiveness through reducing costs and/or increasing revenues, expediting regulatory activities, reducing litigation, improving the use of science, and other strategies.

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August 18, 2017 in Tax | Permalink | Comments (0)

Thursday, August 17, 2017

ABA Forms New Commission To Rethink Legal Education

ABA Logo (2016)As New Presidential Initiative, ABA Commission to Develop Roadmap to Rethink Legal Education:

New American Bar President Hilarie Bass will focus on redesigning legal education as one of her key priorities, and has created a commission of top legal educators and innovators to provide forward-thinking recommendations.

The 10-member Commission on the Future of Legal Education will explore several of the most critical issues in legal education, such as falling bar passage rates, a challenging employment environment for new lawyers and sliding LSAT scores for prospective law students. The commission will seek the perspectives of various constituencies, including judges, deans, professors and practitioners.

“The ABA is a unique position to work with the various stakeholders, such as bar examiners, legal academics and bar leaders, interested in training future lawyers” said Bass, who became ABA president on Tuesday after the conclusion of the ABA Annual Meeting. “Through the Commission on the Future of Legal Education, we will enhance our leadership role in anticipating, articulating and influencing dramatic changes in the legal profession and their effect on legal education.”

The commission will be chaired by Patricia D. White, dean and professor of law at the University of Miami School of Law. Other commission members include:

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August 17, 2017 in Legal Education | Permalink | Comments (1)

Supreme Court To Consider Prosecutors' Use Of An 'Uber Tax Crime Statute' As An 'All-Purpose Tax Felony'

National Law Journal, Jenner Lawyers Attack 'Uber Tax Crime Law' in New High Court Term:

In a series of recent decisions, the U.S. Supreme Court has reined in prosecutors' use of broadly worded statutes and clauses to charge criminal conduct. The federal tax code could be the justices' next target.

Jenner & Block's Matthew Hellman will face the government this term in Marinello v. United States in whick he argues, prosecutors are using an "omnibus" clause in the tax code as an "uber tax-crime statute" that puts at risk unwary businesses and individuals.

"This isn't even a statute — it's a clause in a statute that has been turned into the all-purpose tax felony," said Hellman's tax partner Geoff Davis.

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August 17, 2017 in Tax | Permalink | Comments (0)

Do We Really Want To Make It Easier To Go To Law School?

American Lawyer LogoThe American Lawyer, Do We Really Want to Make It Easier to Go to Law School?:

Can we cut through the bull about why law schools are now accepting GREs for admission? The fact is that applications are falling, and law schools are desperate for hot bodies to fill their empty seats. (Law schools that now accept the GRE include Harvard, Northwestern and Georgetown, reports The National Law Journal; the first school to do so was the University of Arizona.)

Not for one minute do I buy the argument that law schools are now realizing that LSATs aren't the end-all/be-all predictor of future success. As for the argument that allowing the GRE for law school admission will attract more hot commodities such as math and science types to apply: Puh-leeze.

If you're a bright young thing with quantitative or tech abilities, there are less painful ways to make a decent living. As any fourth grader in New York knows, the legal profession kinda sucks. They see how hard lawyer-parents work (compared to those hedge fund parents who have more fun and make a lot more moolah). And they know it's damn impossible to become equity partner in Big Law these days.

"The Golden Age for law schools is definitely over," says Paul Caron, dean of Pepperdine Law School. "Harvard and the other schools that have jumped on the GRE bandwagon are undoubtedly seeking to expand their pool of potential students." ...

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August 17, 2017 in Legal Education | Permalink | Comments (5)

ABA Tax Section Publishes New Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 36 Tax Times No. 4 (Aug. 2017):

It Was a Very Good Year
By William H. Caudill, Norton Rose Fulbright LLP, Houston, TX
It has been my honor to serve as Chair of the Tax Section for 2016-2017. The year seems to have passed too quickly. There were many good times and some disappointments, but I am proud to have had the opportunity to lead and carry out the best job in the Section.

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August 17, 2017 in ABA Tax Section, Tax | Permalink | Comments (1)

A Law Professor Asks: Should I Retire?

Dan Subotnik (Touro), Considering Retirement:

At a talk I attended several years ago on such law school economic travails as declining enrollments, accreditation, new programs, and the bar exam, I asked whether senior faculty were a worrisome part of the problem, given the increasing age professorial retirement. The speaker hastened to assure the senior-heavy audience that no, older faculty served importantly as the institutional memory of the school.

Not wanting to embarrass a leader in legal education and a dean at a prestigious law school, I did not follow up my own question, though I knew that several months earlier he had proposed a generous retirement plan to his senior faculty. If these seniors were so valuable, I wondered, why the proffered buyouts at his and so many other schools? And why the refusal to candidly talk about senior faculty retirement?

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August 17, 2017 in Legal Education | Permalink | Comments (8)

Jensen: Recent Law Review Articles On Taxation And The Constitution

Erik M. Jensen (Case Western), Taxation and the Constitution: Recent Articles, 155 Tax Notes 1607 (June 12, 2017):

This article reviews several significant articles dealing with the national taxing power and related subjects. The articles were published or generally made available within the preceding year or so.

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August 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Grimmelmann on Blowing Up the Property Law Course

PropertyJames Grimmelmann (Cornell) has posted a lively and provocative essay, Real + Imaginary = Complex: Toward a Better Property Course (66 J. Leg. Educ. 930 (2017)), on SSRN.  Here is the abstract:

"Property” in most law schools means real property: the dense, illogical, and special-purpose body of land law. But this is wrong: property also comes in personal, intangible, and intellectual flavors—all of them more important to modern lawyers than land. Real property is deeply unrepresentative of property law, and focusing our teaching on it sells the subject short. A better property course would fully embrace these other forms of property as real property’s equals. Escaping the traditional but labyrinthine classifications of real property frees teachers to bring out the underlying conceptual coherence and unity of property law. The resulting course is easier to teach, more enjoyable for students, and more relevant to legal practice. There is no excuse not to switch.

Having just posted my own "burn down the mission" screed in which I suggest dismantling most law school courses not mandated by the Uniform Bar Examination (and several that are), I enjoyed reading James's critique of property.  We both quoted Holmes's famous dictum about doing things because that's the way they've always been done.

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August 17, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 1561: Why Hasn't Trump Drained The IRS/DOJ Swamp?

IRS Logo 2Wall Street Journal:  Trump’s IRS Swamp: Obama-era Lawyers Are Still Obstructing Lawsuits to Hold the Agency Accountable, by Kimberley A. Strassel:

Donald Trump promised to drain the swamp, and here’s a seven-month progress report: The Washington bog is still as wide and fetid as ever. Consider that Mr. Trump’s Justice Department has inexplicably continued to defend the IRS’s misdeeds under President Obama.

Voters put a Republican in the White House in part to impose some belated accountability on the scandal-laden Obama administration. And the supreme scandal was the IRS’s assault on tea-party groups—a campaign inspired by congressional Democrats, perpetrated by partisan bureaucrats like Lois Lerner, and covered up by Mr. Obama’s political appointees. This abuse stripped the right to political speech from thousands of Americans over two election cycles. To this day, no one has answered for it.

The groups targeted are still doggedly trying to obtain justice through lawsuits that have dragged on for years. They believed Mr. Trump’s election would bring an end to the government obstruction. It hasn’t. “The posture of the DOJ and the IRS under the Trump administration is identical to the posture under the Obama administration,” Mark Meckler, president of Citizens for Self-Governance, tells me. “Nothing has changed.” ...

The problem is that the same old Obama-era lawyers have been left to run these cases in the same old hostile ways. Who are these people? Laura Beckerman, one of the lead lawyers defending the IRS in the Ohio class action, left government only this month. Her LinkedIn profile says she is now pro bono coordinating counsel at Citizens for Responsibility and Ethics in Washington. CREW is among the most liberal outfits in the capital, fanatically devoted to taking down conservatives. That’s the type still calling the shots in Mr. Trump’s bureaucracy.

The Justice Department’s job is to defend the government, but it is also supposed to pursue justice. And there is no question the IRS did wrong. It has been documented by the Treasury Department’s inspector general and admitted by the IRS itself. It’d be one thing if the plaintiffs were demanding a billion-dollar payout, but they aren’t. Their main request is that the IRS come clean on what happened, and the government is resisting with all its power. The real question is why the Justice Department is even fighting this suit, when it ought to be leading a renewed investigation into what happened and how it got covered up.

It’s time for some judgment. Senior leaders in the Justice Department may be wary of replacing or redirecting attorneys on the IRS cases, fearing it might provoke another round of media caterwauling. The White House may be wary of canning Mr. Koskinen, thinking it would be cast as another high-profile firing. But Mr. Trump was hired to impose exactly that sort of accountability. If he’s going to get rapped for dramatic moves, it might as well be for doing something that serves justice.

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August 17, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, August 16, 2017

Death Of Harry Grubert

GrubertHarry Grubert, longtime Senior Research Economist in the Office of Tax Analysis at the U.S. Treasury Department, has died at age 81 after a long illness.  From Dan Shaviro:

Harry had more knowledge about U.S. international taxation than any other living individual. I'm not referring to legal knowledge, of course, as he was an economist — albeit, an exceptionally well-informed one about the law. But his long years of research and study regarding U.S. multinational firms, based on tax data that he understood better than anyone else, made him an extraordinary resource, almost like a public utility in light of his kind generosity and willingness to share what he knew.

He was also a leading scholar who developed a number of interesting and important international tax reform ideas (often in coauthored work with Rosanne Altshuler), and one whose research yielded innumerable consequential empirical findings — for example, regarding the costs associated with U.S. multinationals keeping their funds tied up abroad.

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August 16, 2017 in IRS News, Obituaries, Tax | Permalink | Comments (0)

Hayashi: The Quiet Costs Of Taxation — Cash Taxes And Noncash Bases

Andrew T. Hayashi (Virginia), The Quiet Costs of Taxation: Cash Taxes and Noncash Bases:

Tax law gives relief to “illiquid” taxpayers, those with income or wealth but no cash. This relief results in revenue losses, creates opportunities for tax avoidance, and distorts economic decisions. And yet, we don’t know how much hardship is actually created by illiquidity. This Article provides a framework for determining the magnitude of that hardship.

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August 16, 2017 in Scholarship, Tax | Permalink | Comments (3)

Law Schools Are Looking For Answers In All The Wrong Places

David Barnhizer (Cleveland State), US Law Schools: Looking for Answers in All the Wrong Places:

On a very regular basis we see reports on the state of how many people are taking the LSAT, applying to law school, actually enrolling in law schools, comparing applicants’ LSAT and GPA credentials with students from previous years, as well as how law schools’ graduates fared in the job market.  This latter category has become a bit more complex and slightly more honest, including paying attention to whether the jobs were subsidized by the law schools in an effort to improve the placement statistics, required a law degree and bar passage, or if an advantage was created for people who had received a law degree.

This entire process of “casting bones” to interpret whether law schools have weathered the storm of declining demand for their educational services is mainly a bunch of unproductive “navel gazing”.  This is because it fails to look closely at what is happening in the world external to the parochial focus of law schools in terms of specific tiers of the legal profession, the dramatic and increasing shrinkage in jobs of many kinds — including law — alternative ways to obtain “law knowledge” and legal services, flat or declining wages over an extended period, the rise of the “gig” economy, and the aging of the American population and the significant financial and employment pressures under which Millennials are now functioning. 

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August 16, 2017 in Law School Rankings, Legal Education | Permalink | Comments (13)

Viswanathan: Tax Compliance In A Decentralizing Economy

Manoj Viswanathan (UC-Hastings), Tax Compliance in a Decentralizing Economy:

Tax compliance in the United States has long relied on information from centralized intermediaries — the financial institutions, employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities, consumers and businesses are not. New technologies, such as the “sharing” economy (companies such as Airbnb, Uber, and Instacart) and the blockchain (the platform on which Bitcoin is based) are providing new, decentralized options for exchanging goods and services. Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance.

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August 16, 2017 in Scholarship, Tax | Permalink | Comments (0)

Stetson Seeks To Hire A Tax Prof

Stetson LogoStetson University College of Law invites applications for a full-time tenured or tenure-track faculty position for a dedicated teacher/scholar specializing in tax law. While we are particularly interested in receiving applications from experienced lateral candidates, we will consider hiring at all levels, with or without tenure.

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August 16, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Kingi & Rozema: The Effect Of Tax Expenditures On Automatic Stabilizers

Hautahi Kingi (Cornell) &  Kyle Rozema (Chicago), The Effect of Tax Expenditures on Automatic Stabilizers: Methods and Evidence,  14 J. Empirical Legal Stud. 548 (2017):

We study the effect of tax expenditures on the stabilizing power of the tax system. We propose a micro‐simulation strategy that exploits links that we identify between automatic stabilizers, tax expenditures, and effective marginal tax rates. Using U.S. tax return micro data from 2000 to 2010, we estimate that, on average, the mortgage interest deduction and the charitable contributions deduction decreased the ability of the tax system to absorb fluctuations in aggregate consumption by an average of 7.4 percent and 3.9 percent, respectively.

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August 16, 2017 in Scholarship, Tax | Permalink | Comments (0)

Columbia Offers 1-Year Masters In Data Journalism For $106,000

ColumbiaInside Higher Ed, $147,000 for a One-Year Master's? In Journalism?:

For those with an extra $147,514 lying around, there is a new a master of science in data journalism from Columbia University’s School of Journalism.

For everyone else, dropping just over $106,000 for tuition and fees — plus $41,232 in living expenses, per Columbia’s estimate — for a master’s degree in an unstable, layoff-ravaged industry where the median annual salary is less than $40,000 might seem ludicrous, or at least deserving of mockery.

“The higher ed Institution is crumbling,” journalist Josh Sternberg wrote on Twitter. “A $100,000 master's of science in data journalism degree?”

Press Release, New Data Journalism Degree at Columbia Journalism School Prepares Next Generation of Newsroom Leaders:

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August 16, 2017 in Legal Education | Permalink | Comments (4)

Tax Law And Social Norms In Mandatory Palestine And Israel

Tax LawAssaf Likhovski (Tel-Aviv University), Tax Law and Social Norms in Mandatory Palestine and Israel (Cambridge Univ. Press 2017):

This book describes how a social-norms model of taxation rose and fell in British-ruled Palestine and the State of Israel in the mid-twentieth century. Such a model, in which non-legal means were used to foster compliance, appeared in the tax system created by the Jewish community in 1940s Palestine and was later adopted by the new Israeli state in the 1950s. It gradually disappeared in subsequent decades as law and its agents, lawyers and accountants, came to play a larger role in the process of taxation. By describing the historical interplay between formal and informal tools for creating compliance, Tax Law and Social Norms in Mandatory Palestine and Israel sheds new light on our understanding of the relationship between law and other methods of social control, and reveals the complex links between taxation and citizenship.

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August 16, 2017 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Tuesday, August 15, 2017

Charlotte Law School Closes 'Effective Immediately'

CharlotteWSOCTV, Charlotte School of Law Closing Immediately, Alumni Association Says:

The Charlotte School of Law is closing effective immediately, according to an email the alumni association sent out to former students.

An email obtained by Channel 9 from Lee Robertson, the president of the Charlotte School of Law Alumni Association, said he received a call Monday from Interim Dean Meggett about the school’s future.

During the call, Meggett said that the American Bar Association denied the law school’s Teach-Out Plan and that the North Carolina Board of Governors declined to grant an extension of the law school’s license to operate, according to Robertson.

Robertson said the students would be informed Tuesday of the development.

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August 15, 2017 in Legal Education | Permalink | Comments (2)