TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, August 29, 2016

Online Courses Fuel Growth Of 'The Cheating Economy': Colleges Prioritize Boosting Enrollment Over Catching Cheaters

WeChronicle of Higher Education:  The New Cheating Economy, by Brad Wolverton:

The Chronicle spoke with people who run cheating companies and those who do the cheating. The demand has been around for decades. But the industry is in rapid transition.

Just as higher education is changing, embracing a revolution in online learning, the cheating business is transforming as well, finding new and more insidious ways to undermine academic integrity.

A decade ago, cheating consisted largely of students’ buying papers off the internet. That’s still where much of the money is. But in recent years, a new underground economy has emerged, offering any academic service a student could want. Now it’s not just a paper or one-off assignment. It’s the quiz next week, the assignment after that, the answers served up on the final. Increasingly, it’s the whole class. And if students are paying someone to take one course, what’s stopping them from buying their entire degree?

The whole-class market is maturing fast. More than a dozen websites now specialize in taking entire online courses, including BoostMyGrade.com, OnlineClassHelp.com, and TakeYourClass.com. One of them, NoNeedtoStudy.com, advertises that it has completed courses for more than 11,000 students at such colleges as Duke, Michigan State, even Harvard.

As cheating companies expand their reach, colleges have little incentive to slow their growth. There’s no money in catching the cheaters. But there’s a lot of money in upping enrollment. ...

Continue reading

August 29, 2016 in Legal Education | Permalink | Comments (0)

NY Times Op-Ed By Venture Capitalist:  Close My Carried Interest Tax Loophole

New York Times op-ed:  Close My Tax Loophole, by Alan J. Patricof (Co-founder & Managing Director, Greycroft):

My fellow venture capitalists and private equity investors are paying close attention to the heated election-year rhetoric about the future of “carried interest,” which is the performance fee we charge to manage other people’s money. Carried interest is the fund manager’s share of the earnings from a profitable investment, normally paid on top of a much smaller management fee. ...

Continue reading

August 29, 2016 in Tax | Permalink | Comments (0)

Kleinbard:  Searching For Our Fiscal Soul

Edward D. Kleinbard (USC), Searching for Our Fiscal Soul (Presentation Slides):

This is an extended version of a presentation made at TEDx Livermore 2016, the theme of which was The Economics of Empathy. Searching for Our Fiscal Soul argues that democracy is an exercise in empathy towards fellow citizens we do not know, and, if we did, might not like. We express that empathy through government spending, because that is how we actualize values that are important enough that we are willing to pay for them. This is our fiscal soul in action. Whether measured against the values we all routinely recite, or against the social environments achieved by peer countries, the fiscal soul of the United States is in peril. The remedy lies in understanding the value of a complementary economy, in which government spending is properly reframed as purchasing investments and insurance that private markets do not, and cannot, reach.

(Click on YouTube button on bottom right to view video to avoid interruption caused by blog's refresh rate.)

Continue reading

August 29, 2016 in Scholarship, Tax | Permalink | Comments (1)

University Of Houston:  Like KFC And Pittsburgh Paints, We Own City Law School Moniker

LogosFollowing up on my previous posts (links below):  Houston Chronicle, Courtroom Showdown: Houston Law Schools Battle Over Name:

One day after the University of Houston gleefully announced its basketball arena would get a new sponsor and name, the Cougars brought out their clutch players Friday for a federal hearing challenging the new name taken by a rival law school across town.

The university chancellor and president and the law school dean attended the jam-packed hearing in the downtown federal courthouse, where their lawyers asked U.S. District Judge Keith Ellison to grant a temporary injunction barring Houston College of Law, formerly South Texas College of Law, from using its new name until the matter can be resolved.

UH also wants the private law school to stop using the colors red and white in conjunction with the words "Houston" and "College of Law," fearing the similarities between the two brands might confuse potential applicants, students, and alumni and cause irreparable harm by confusing voters who determine national rankings.

UH's Law Center tied for 50th in the nation in the 2016 U.S. News rankings, along with Temple, Tulane, University of California Hastings and Florida State. The Houston College of Law, the official colors of which are crimson and gold, did not make the list, which goes up to 150.

Continue reading

August 29, 2016 in Legal Education | Permalink | Comments (2)

Chodorow:  Olympians Don’t Need A Tax Break

Olympic RingsFollowing up on my previous posts (links below):  Adam Chodorow (Arizona State), Olympians Don’t Need a Tax Break:

The Rio Olympics are over, and the Paralympics are less than two weeks away. Nonetheless, America’s athletic finest face one adversary at home: the taxman. As has been widely reported, the U.S. Olympic Committee awards $25,000 to gold medal winners, $15,000 for silver medalists, and $10,000 for bronze medalists. Under current law, they must pay taxes not only on those awards but also on the value of the medals themselves. Sen. Chuck Schumer, the presumptive majority leader should the Democrats win back the U.S. Senate, wants to change that, and the Republicans couldn’t be happier about it. ...

Continue reading

August 29, 2016 in Tax | Permalink | Comments (3)

Advice To Harvard 1Ls

HarvardHarvard Law Record, Class of 2019: Welcome to HLS!:

Continue reading

August 29, 2016 in Legal Education | Permalink | Comments (0)

Quantum Physics And The IRS Scandal, Day 1208

IRS Logo 2Fox News, Congress Faces Physicists' 'Multiverse' of Issues Including IRS, Zika Upon Impending Return:

Quantum physicists sometimes discuss the possibility of a “multiverse.” A multiverse is where the cosmos is like a layered quilt, populated with alternate realities, different dimensions and unique timelines. As a result, an infinite number of possibilities or scenarios pass along each temporal continuum.

Capitol Hill is now seemingly moored in a legislative multiverse. The House and Senate return to Washington in early September, following an epic, seven-week summer recess. There are only a handful of policy issues lawmakers must tackle when Congress reconvenes, but an almost incalculable string of outcomes loom ahead when they return.

In other words, almost anything can happen.

House Republican leaders conducted a half-hour conference call with rank-and-file GOPers late Thursday. According to sources familiar with the call, the Republican brass offered few specifics as to their approaches on big issues like funding the government, Zika and even an effort by House conservatives to impeach IRS Commissioner John Koskinen. ...

Just before the break in July, Huelskamp and Rep. John Fleming, R-La., filed a special resolution demanding that the House impeach IRS Commissioner John Koskinen. That resolution dissolved over the break.

Now, members of the House Freedom Caucus want to bring it back. Fox has learned the House won’t wrestle with the issue immediately as Freedom Caucus members will wait to see how the GOP leadership intends to handle the matter.

House Republican leaders aren’t fans of Koskinen. But they are lukewarm on impeaching the IRS chief. Congress hasn’t impeached a cabinet official since it sanctioned Secretary of War William Belknap in 1876.

As IRS commissioner, Koskinen isn’t even a cabinet official. There’s concern about setting a precedent if Congress begins impeaching various administration officials.

House Republicans will hold a separate conference meeting on Koskinen in mid-September. A source familiar with the thinking of the Freedom Caucus tells Fox its members aren’t in a hurry to refile the Koskinen resolution right away.

They don’t want to pressure leadership right off the bat. A House GOP leadership source told Fox that the public isn’t attuned to impeaching Koskinen. Still, the GOP leadership could further draw the ire of the Freedom Caucus if there isn’t a try to impeach Koskinen.

This is the Capitol Hill multiverse. No one is quite sure how lawmakers will resolve these issues in the end. But as lawmakers return to Washington, there are almost an infinite number of scenarios and possibilities -- because virtually no one’s decided anything yet.

Continue reading

August 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, August 28, 2016

Rocky Mountain High:  The Secret Ingredient In Colorado Law School's 'Remarkable Recent Popularity'?

Colorado 2Following up on yesterday's post, Colorado Law School Enjoys All-Time High: Marijuana Law, Policy & Reform: Does Marijuana Legalization at Least Partially Account for the Remarkable Recent Popularity of Colorado Law?, by Douglas Berman (Ohio State):

I am disinclined to assert that hundreds (and perhaps even thousands) of prospective law students are now applying to the University of Colorado Law School just so they can legally relax with cannabis as well as with Coors after a tough week of classes.  But  marijuana reform has surely contributed to the recent success of the Colorado economy and this success surely produces unique benefits and opportunities for law students and junior lawyers.

Continue reading

August 28, 2016 in Legal Education | Permalink | Comments (3)

ABA Tax Section Publishes Fall 2016 Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 35 Tax Times No. 4 (Fall 2016):

FROM THE CHAIR
Hail and Farewell
By George C. Howell, III, Hunton & Williams LLP, Richmond, VA
It has been an honor and a privilege to serve as Chair of the Tax Section over the past year. With the devotion of our volunteer members and the help of our dedicated staff, much has been accomplished.

FROM THE CHAIR-ELECT
Providing a Valuable Benefit
By William H. Caudill, Norton Rose Fulbright LLP, Houston TX
It is both exciting and humbling to be presented with the opportunity to serve as Chair of the Tax Section for 2016-2017. I have three objectives for the coming year: (1) focusing on the high quality output of our Committees in the areas of CLE programming and government submissions: (2) continuing the promotion of the Section’s pro bono and public service efforts—a longstanding priority for the Section; and (3) attracting new members, particularly younger and diverse tax lawyers, to the Section, and identifying new opportunities to meet their needs.

POINT & COUNTERPOINT
Perspectives on Two Proposals for Tax Filing Simplification
By Joseph Bankman, Ralph Parsons Professor of Law and Business, Stanford Law School, Stanford, CA, and James E. Maule, Professor of Law, Villanova University Charles Widger School of Law, Villanova, PA
In this Point and Counterpoint, Stanford Professor Joseph Bankman and Villanova Professor James Edward Maule debate two related tax-filing simplification proposals: data-retrieval system and pro forma return system.

Continue reading

August 28, 2016 in ABA Tax Section, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some minor reshuffling of the order within the Top 5:

  1. [470 Downloads]  Dark Pools, High-Frequency Trading, and the Financial Transaction Tax: A Solution or Complication?, by Doron Narotzki (Akron)
  2. [346 Downloads]  The True Economic Effects of Corporate Inversions, by Doron Narotzki (Akron)
  3. [281 Downloads]  Property Is Another Name for Monopoly Facilitating Efficient Bargaining with Partial Common Ownership of Spectrum, Corporations, and Land, by Eric A. Posner (Chicago) & E. Glen Weyl (Yale)
  4. [277 Downloads]  Executive Pay: What Worked? , by Steven A. Bank (UCLA), Brian R. Cheffins (Cambridge) & Harwell Wells (Temple)
  5. [237 Downloads]  The Trojan Horse of Corporate Integration, by Edward D. Kleinbard (USC)

August 28, 2016 in Scholarship, Tax | Permalink | Comments (0)

FBI Interview With Ex-Girlfriend Of Dan Markel's Ex-Brother-in-Law/Mother Of Hit Man's Children

Adelson GarciaDavid Lat (Above the Law), The Dan Markel Case: A Notable New Document:

Earlier this week, we reported on prosecution efforts to find out who paid for the 2014 breast augmentation of Katherine Magbanua [more here]. If you’ve been following the investigation into the 2014 murder of law professor Dan Markel, you’ll recall that Magbanua is a key figure in the case. She is the mother of two children with Sigfredo Garcia, one of the two alleged hit men, and she is the ex-girlfriend of Charlie Adelson, the former brother-in-law of Dan Markel. At the time of his death, Dan was litigating against Charlie’s sister, Wendi Adelson, regarding various matters arising out of their divorce. ...

We now have more information about the breast-implants issue — and it could be interpreted in a light favorable to Charlie Adelson. We have the FD-302 (aka FBI interview notes) for Yindra Velazquez Mascaro, the friend of Katherine Magbanua who apparently told law enforcement about Charlie covering half the cost of the procedure. ...

Continue reading

August 28, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1207

IRS Logo 2Neil Buchanan (George Washington), How to Make a Dead IRS Conspiracy Theory Look Not Completely Dead:

How does a right-wing conspiracy theory work?  Why do Republicans insist on pursuing even obvious dead ends?  One answer to those questions is that they have a virtual army of people who are willing to push these stories relentlessly in many directions, and they know that they can sometimes get useful headlines even from misleading underlying stories.

Thus on Monday of this week we saw this headline on a tax blog: "The IRS Scandal, Day 1201: Larry Tribe Says 'IRS Is Engaged In Unconstitutional Discrimination Against Conservative Groups And Must Be Halted'—'Inexcusable Abuse'."

How did a liberal lion like Harvard law professor Laurence Tribe get pulled into this mess, seeming to back up a right-wing talking point? He did so by being intellectually open-minded and generous, but apparently without being aware of the underlying conspiracy theory that his words seemed to confirm. ...

More than three years on, conservatives are still trying to claim that there was a political conspiracy. Republicans in Congress have spent millions of dollars investigating these claims, while also diverting millions of dollars worth of IRS resources to answering repetitive requests for evidence.

Despite all of this, there continues to be no evidence to support any of the conspiracy theories.

So why is the story still alive, and how did Larry Tribe end up playing a starring role for a day in this never-ending saga?

Apparently, Tribe recently (correctly) dismissed the idea of an IRS scandal as a non-scandal that has been debunked. Because Tribe is among the most well-known liberal legal scholars in the country, as well as a former advisor to President Obama, he is regularly trolled by right-wingers. Apparently, one or more of them took to Twitter to tell Tribe that there really is an IRS scandal.

One such response pointed Tribe to a recent decision from the U.S. Court of Appeals for the D.C. Circuit. Because Tribe is intellectually honest and open to being corrected, he said that he would look at the evidence. What he found, upon reading the court's opinion, was that there had really been IRS activities that needed to be stopped. Like the IRS lawyers who had stopped the vetting program when they found out about it, Tribe was rightly shocked.

Which, of course, does not at all support the conspiracy theories that conservatives have been pushing. No one has ever claimed that the IRS employees did nothing wrong. That was all covered in the TIGTA report, and the IRS's leadership had already ended the practice before the report was issued.

But why would Tribe's tweet be in the present tense: "IRS Is Engaged In Unconstitutional Discrimination ..."? Is engaged, not was. Why did he say that the IRS "must be stopped," given that it has already stopped?

Tribe might simply have erred by not using the past tense, or he might not have realized that the activity had been stopped a long time ago.  Another explanation, however, is intriguing (though equally exculpating of Professor Tribe). ...

At this point, therefore, all the IRS has to do to make this case go away is to process the last two applications and issue a new directive putting a bureaucratic stake through the heart of the long-abandoned procedures.

This is, therefore, yet another example of how legal concepts can be misleading. Professor Tribe (assuming that he meant to use the present tense) correctly said that the IRS "is" still doing something wrong, but only in the procedural sense that the last of the effects of the wrongdoing have not been completely cleaned up and tied off.

In the broader political context, of course, the misunderstanding of this legal nuance is more than a bit unfortunate. An important public intellectual was directed toward one tiny bit of the public record on the IRS non-scandal, and he responded to that evidence appropriately. But his words are being misused by people who want to keep the anti-Obama scandal claims alive.

To repeat: Some IRS employees did something that they should not have done. Their superiors made them stop. An inspector general reported what happened to Congress. Republicans have no evidence to show that the Obama people were involved. And Laurence Tribe is rightly dismayed that it ever happened, as are we all.

Continue reading

August 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

Saturday, August 27, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Police Video Released Of Wendi Adelson Being Told Of Dan Markel's Murder, Says Her Brother Joked About Hiring A Hit Man

ABC News, Police Video Shows Woman Hearing About Shooting Death of Her Ex, an FSU Law Professor:

When asked in her videotaped interview whether she thought someone would kill Markel for her benefit without asking her, Wendi Adelson said, “No.”

But she acknowledged being “scared someone maybe did this - not because they hate Danny but because they thought this was good somehow.”

Adelson then recalled an eyebrow-raising phone conversation with her brother Charlie earlier that day, as they were discussing what to do about a television he bought her that had broken down.

“And I was talking to him about whether it made sense to pay to fix it or I should get a new one,” she said. “And it was always his joke that, like, he knew that Danny treated me badly, and it was always his joke, he said, I looked into hiring a hit man but it was cheaper to get you this TV.”

Continue reading

August 27, 2016 in Legal Education | Permalink | Comments (3)

Treasury Department Backs Apple In $19 Billion EU Tax Dispute

TAFollowing up on Wednesday's post, Treasury Department White Paper: The European Commission And Transfer Pricing:  Wall Street Journal editorial, The EU’s Tax Attack on U.S. Business:

As diplomatic broadsides go, the shot the Obama Administration fired at Europe over tax policy this week is impressive. The U.S. Treasury released a 25-page white paper explaining why the European Commission’s attempts to extract more revenue from American companies violate international tax standards and European legal principles. Too bad the Obama Administration has set such a bad tax example that other nations are now following.

Continue reading

August 27, 2016 in IRS News, Tax | Permalink | Comments (1)

Colorado Law School Enjoys All-Time High

Colorado Logo (2016)Colorado Law School press release:

With 170 individuals, the University of Colorado Law School’s incoming class of 2019 is the most selective and academically competitive in the school’s history. The 2016-17 admissions cycle set the school’s record for number of applications and highest median GPA of an incoming class.

Continue reading

August 27, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1206

IRS Logo 2Vox, How President Donald Trump Could Ruin His Enemies’ Lives:

Indulge for a minute in the worst-case scenario.

A Trump Force One flight to Mar-a-Lago in early January 2017. Donald J. Trump — the pettiest, most vicious version of Trump — is preparing for the ecstasies of his inauguration. He sits by the window, scrolling through Twitter and preparing for a well-deserved weekend at home.

Incoming White House Chief of Staff Corey Lewandowski and Chris Christie — yet to be named attorney general — burst into the cabin with a sheaf of notepaper and a couple of silent young attorneys in tow. "Well, boss," Lewandowski says, "we have a little bit of bad news and a whole lot of good news."

Trump raises an eyebrow. "There are some people we can’t figure out how to get back at yet, but there are a lot of people we can," Lewandowski says. ...

"Now on IRS — we’re doing Kasich and Cruz first, right?" (A nod from the president.) "We figure we just take the memo they sent out about targeting Tea Party groups and make some changes. Every group that’s ever done a fundraiser with those guys, or put up ads for them, or sent them an email, those are going to be audited first," Lewandowski says. "Bezos, we figure, probably next, maybe if the antitrust thing goes too slow. And we’re not allowing any new groups to get registered as 501(c)3s or (c)4s until we figure out who the rest of our targets are." ...

Because there are so many violations, the question of how investigators choose whom to target becomes the most important one. And the specter of politically motivated investigations is always there. This is most obvious when it comes to the IRS.

In 2013, the Treasury inspector general for tax administration found that the IRS had evaluated applications for new tax-exempt 501(c)3 groups, which can’t engage in "political activity," in part based on inappropriate things like whether a group had "Tea Party" in the name.

Conservatives felt this was evidence that the Obama administration was using the IRS to target conservative groups. Moulton of the Project on Government Oversight doesn’t think it quite reached the level of persecution — but still thinks the politically motivated use of the IRS, especially when it comes to tax audits, is a genuine cause for concern.

The government doesn’t even have to use all of these powers to change people’s behavior. Just the very possibility of an investigation is likely to make people tread carefully. Reporters sniffing around might worry about finding themselves snared in a costly audit. ...

In December, NBC and MSNBC correspondent Katy Tur live-tweeted a Trump rally that had been repeatedly disrupted by protesters. She received a note from Trump’s press secretary calling her coverage "disgraceful" and "not nice!" — followed by a tweet from Trump himself, calling for her and a colleague to be fired.

Then Trump singled her out at a rally in South Carolina, pointing to the press pen and saying, "She’s back there. Little Katy. … What a lie. Katy Tur. What a lie it was. Third. Rate. Reporter. Remember that."

Imagine that in 2017, Tur gets an audit request from the IRS for the past seven years of her tax information. She served as a foreign correspondent for NBC before covering the election, and the IRS sends her a letter every few weeks asking for more documentation about how she reported her income while on reporting trips abroad. ...

A vindictive president would need sympathetic political appointees in key positions: attorney general, DHS secretary, head of the IRS, maybe the director of National Intelligence. (The head of the FBI is a 10-year appointment, so James Comey — if he wants to — will be in charge until September 2023.)

Continue reading

August 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, August 26, 2016

Weekly SSRN Tax Roundup 2.0

SSRN LogoNote from Paul Caron:  As I explained on August 1, due to my growing other commitments, I have taken steps to reduce the amount of time I devote to TaxProf Blog. Six weeks ago, I stopped doing the weekly tax, legal education, SSRN, and student tax note roundups. I previously announced that Scott Fruehwald of our sister Legal Skills Prof Blog has agreed to take over the weekly legal education roundup. Today, I am pleased to announce that David Gamage (UC-Berkeley), Ari Glogower (Ohio State), and Daniel Hemel (Chicago) have agreed to share responsibility for the weekly SSRN tax roundup:

In addition to a list of newly posted papers, we’ll also include a write-up about at least one of the week’s additions. A quick administrative note: The best way to make sure we see your paper is to use the JEL code K34 (Tax Law) when you upload to SSRN. (If your reaction is “what’s a JEL code?”, check out  Lea-Rachel Kosnik’s overview. And for a fascinating read on the tangled history of JEL codes, see Beatrice Cherrier’s article.)

If you would like to take over the weekly tax roundup as a service to the tax community, either alone or as part of a group of co-editors, please let me know.

This week, Daniel Hemel highlights a new paper by David Hasen (Colorado), Accretion-Based Progressive Wealth Taxation, which is forthcoming in the Florida Tax Review:

HemelDavid Hasen's excellent article emphasizes the distinction between an “excise tax,” which “applies to or is triggered by a transfer or other event,” and an “accretion tax,” which “appl[ies] to the ‘same’ item over time.” Examples of “excise taxes” include consumption taxes, realization-based income taxes, and estate and gift taxes. Examples of “accretion taxes” include real property taxes, mark-to-market income taxes, and periodic wealth taxes. Hasen argues that “a federal accretion-type, progressive wealth tax would appropriately supplement either an income tax or a consumption tax and would do so more effectively than our existing excise wealth tax regime, the federal estate and gift tax.” In the following post, I'll walk through (parts of) Hasen's argument and then explain why I'm not entirely persuaded that an accretion-type wealth tax is the way to go.

Continue reading

August 26, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

What Is The Authority Of A Tax Opinion Written By A Judge Under IRS Audit Who Later Was Indicted For Tax Fraud?

TCGFollowing up on my previous post, Retired U.S. Tax Court Judge Indicted For Tax Evasion While She Sat On The Court:  Tax Controversy 360, Taxpayer Argues First Circuit Should Not Follow Tax Court Decision by Judge Indicted for Tax Fraud:

On August 15, 2016, the taxpayer in Santander Holdings USA filed its brief to the US Court of Appeals for the First Circuit in its case involving what the Internal Revenue Service (IRS) has labeled a “foreign tax credit generator” transaction. The taxpayer prevailed at the district court level and the IRS appealed that decision, arguing that the lower court’s opinion was contrary to existing precedent in the Tax Court and other appellate courts. Much has been written about these cases and the issue presented, but this post focuses on an interesting argument raised by the taxpayer regarding the weight to be afforded to a prior Tax Court opinion.

Continue reading

August 26, 2016 in IRS News, New Cases, Tax | Permalink | Comments (1)

Weekly Legal Education Roundup

Ayres & McGuire:  Using The False Claims Act To Remedy Tax Expenditure Fraud

Ian Ayres (Yale) & Robert A. McGuire III, Using the False Claims Act to Remedy Tax Expenditure Fraud:

The federal False Claims Act (FCA) might be used to combat fraudulent claims regarding tax expenditures. The FCA has been used to protect the public fisc by imposing liability upon anyone who makes a false or fraudulent claim relating to an expenditure of federal funds. A substantial share of government spending is implemented through tax credits and deductions granted to individuals and entities for taking particular actions promoted through the Tax Code. Government funds dedicated to such tax incentives — so-called “tax expenditures” — are themselves potentially subject to false claims — for example, when a borrower makes a false representation that a mortgage relates to a principle or second residence in order to claim a home mortgage interest deduction. This article explores how the FCA as currently enacted might be invoked to combat fraud that targets tax expenditures, as well as doctrinal counter-arguments to such application.

Continue reading

August 26, 2016 in Scholarship, Tax | Permalink | Comments (2)

Law Prof Loses Assault Suit Over Shoulder Grab By Dean: 'Decade-Long Struggle For Appreciation From His Colleagues, Administrators'

GerberFollowing up on my previous post, Federal Judge Allows Prof's Lawsuit Against Law School, Faculty Colleague For Bullying To Proceed:  ABA Journal, Law Prof Loses Assault Suit Over Alleged Shoulder Grab by Colleague:

An Ohio Northern University law professor who sued over an alleged “strong and tight” squeeze of his shoulder by a colleague has lost his case.

U.S. District Judge Jack Zouhary ruled against the professor, Scott Gerber [right], in a bench trial. “This is a case seemingly ripped from the pages of a first-year torts exam, with the added twist that the parties are, in real life, law school professors,” Zouhary wrote in the Aug. 24 opinion (PDF).

Continue reading

August 26, 2016 in Legal Education | Permalink | Comments (2)

Law Faculty Rankings By Judicial Citations

Valerie Aggerbeck, Nick Farris, Megan McNevin & Gregory C. Sisk (all of St. Thomas-Minnesota), Judicial Impact of Law School Faculties:

This study is a follow-up to our scholarly impact study published in 2015, Scholarly Impact of Law School Faculties in 2015: Updating the Leiter Score Ranking for the Top Third. Looking at an expanded time period (2005-2014), we assessed the extent to which extensive citations in the legal literature translated into citations by courts. It is important to acknowledge that the judicial citation rates were very low, precluding extensive analysis and making it difficult to regard some of the results as reliable and robust. Our study indicates that a certain subset of scholars are both noticed and cited by the judiciary as well as their peers.

Continue reading

August 26, 2016 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

Mike Pence, Law School Cartoonist

The IRS Scandal, Day 1205

IRS Logo 2Bloomberg, IRS Chief Faces Likely Impeachment Vote in U.S. House Next Month:

U.S. House conservatives are set to re-launch next month their effort to impeach Internal Revenue Service Commissioner John Koskinen, with or without Speaker Paul Ryan’s go-ahead.

Representative John Fleming says he and other conservatives are prepared to unilaterally force an impeachment vote within days after Congress returns to session on Sept. 6. “The only thing up in the air is whether it will be the first or second week we’re back,” the Louisiana Republican said in an interview.

Any action would be largely symbolic, because the effort would get blocked in the Senate if it passes the House. But Republicans remain angry at Koskinen, who they accuse of impeding an investigation into whether the tax agency improperly targeted conservative non-profits. Their allegations include failing to prevent the IRS from destroying evidence and providing false and misleading information to Congress.

Continue reading

August 26, 2016 in Legal Education | Permalink | Comments (5)

Thursday, August 25, 2016

First Circuit: Puerto Rico's Special 100% Tax Imposed Only On Wal-Mart Is Unconstitutional

Walmart Logo (2013)Reuters, Puerto Rico Cannot Enforce a Wal-Mart Tax: U.S. Appeals Court:

A U.S. appeals court on Wednesday said cash-strapped Puerto Rico cannot force Wal-Mart's  affiliate on the island to pay a special corporate tax that the retailer claimed was discriminatory and violated the U.S. Constitution.

The 1st U.S. Circuit Court of Appeals in Boston upheld a lower court order blocking Puerto Rico from imposing its alternative minimum tax against Wal-Mart Puerto Rico Inc. [Wal-Mart Puerto Rico, Inc. v. Zaragoza-Gomez, No. 16-1370 (1st Cir. 2016)]

Continue reading

August 25, 2016 in New Cases, Tax | Permalink | Comments (0)

More On Donald Trump's Tax Returns

Richmond Welcomes 112 1Ls, Down 36% From Last Year's 175

Richmond LogoRichmond Law School (ranked #55 in U.S. News) welcomed 112 1Ls this Fall, down 36% from last year's 175.  Their median LSAT and UGPA improved to 161 and 3.55 (from 160 and 3.51); their 75th percentile LSAT improved to 163 from 161 (although their 25% percentile LSAT declined to 154 from 155).

August 25, 2016 in Legal Education | Permalink | Comments (2)

House Republican To Unveil Sales Tax Plan for Purchases Across State Lines

Wall Street Journal, Key House Republican to Unveil Sales Tax Plan for Purchases Across State Lines:

A top House Republican will release a new proposal in coming days that attempts to resolve the long-running dispute among retailers, state governments and online retailers over how to tax purchases made across state lines.

The discussion draft from House Judiciary Committee Chairman Bob Goodlatte (R., Va.) would introduce a new legal framework for cross-border sales, largely replacing the current system that relies on whether a seller has a physical presence in a state.

Instead, sales would be taxed according to the tax base of the retailer and a single tax rate chosen by the consumer’s state, a Judiciary Committee aide said. So, for example, an Ohio company shipping a pair of pants to Maryland would use Ohio’s rules for taxing clothing and Maryland’s tax rate. Currently, that seller only collects

Continue reading

August 25, 2016 in Tax | Permalink | Comments (2)

University Of Cincinnati Board Votes 5-4 To Reject Plan To Move Law School Downtown

Tha Banks 2Cincinnati Enquirer, UC Kills Plan to Move Law School Downtown:

The University of Cincinnati on Wednesday scrapped plans to move its law school to the Downtown riverfront, deciding to keep it on the main campus.

In a split vote during a special meeting, UC's board of trustees turned back an effort by top business leaders to build a new law school at The Banks. Business leaders were allowed to be part of the board's 2½-hour private session to make a last-ditch presentation, but it wasn't enough to convince Chairman Rob Richardson Jr., faculty and student leaders who believe the law school should remain on the Uptown campus. ...

Continue reading

August 25, 2016 in Legal Education | Permalink | Comments (3)

Clinton, Trump, Taxes, And Silicon Valley

Silicon ValleyBloomberg: Trump’s Offshore Tax-Cut Pitch Falls Flat in Silicon Valley, by Lynnley Browning:

Republican Donald Trump is proposing a big tax cut for companies like Apple Inc., which would see its tax rate slashed on about $200 billion of profit it keeps offshore. Yet Apple’s boss is co-hosting a fundraiser on Wednesday for Trump’s Democratic opponent for the White House.

Continue reading

August 25, 2016 in Political News, Tax | Permalink | Comments (0)

WSJ:  The Joy Of Working At 4:00 A.M.

4 amWall Street Journal, Why 4 A.M. Is the Most Productive Hour:

Most people who wake up at 4 a.m. do it because they have to—farmers, flight attendants, currency traders and postal workers. Others rise before dawn because they want to.

Continue reading

August 25, 2016 in Legal Education, Tax | Permalink | Comments (7)

The IRS Scandal, Day 1204

IRS Logo 2New York Post editorial, A Liberal Legal Icon Condemns the IRS’ Abuses:

One of the leading liberal lights of American law now says the “IRS is engaged in unconstitutional discrimination against conservative groups and must be halted.”

To be clear, Harvard prof Laurence Tribe is a convert: Early in the week, he sent out a tweet dismissing the idea of an IRS scandal as long-debunked.

But, as the Cato Institute’s Walter Olson noted at Overlawyered, for once social media actually shed light on a dispute: Others asked Tribe to read this month’s DC Circuit Court of Appeals ruling against the IRS in the case — and he did.

That unanimous decision, reinstating lawsuits against the IRS for its targeting of righty groups, noted that there’s “little factual dispute” about the targeting and the “unequal treatment” of conservatives. More, it’s “plain . . . the IRS cannot defend its discriminatory conduct on the merits.”

Tribe read that, plus a key Inspector General report, and tweeted, “I confess error [with regard to] IRS ideological targeting. The IG report and the [DC Circuit] decision seems right to me. Inexcusable abuse.”

If a liberal icon can see the serious abuse, there’s hope for the House drive to impeach IRS chief John Koskinen for his scorched-earth defense of the cancer in his agency.

Continue reading

August 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, August 24, 2016

Hemel And Maynard Push Boundaries Of Equity In Ohio State Tax Workshops

HMStephanie Hoffer (Ohio State), Hemel and Maynard Push Boundaries of Equity in Recent Workshops:

As part of its summer workshop series, Ohio State’s Moritz College of Law invites junior scholars to present works-in-progress.  This summer, we had the pleasure of hosting both Daniel Hemel, an assistant professor at the University of Chicago Law School and Goldburn Maynard, an assistant professor at the University of Louisville Brandeis School of Law.  Both junior tax scholars are challenging the ways in which tax policy makers think about equity in the context of distributive justice.

Continue reading

August 24, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Treasury Department White Paper:  The European Commission And Transfer Pricing

Treasury Department (2016)U.S. Department of the Treasury White Paper, The European Commission's Recent State Aid Investigations of Transfer Pricing Rulings (Aug. 24, 2016):

The U.S. Department of the Treasury (“U.S. Treasury Department”) shares the European Commission’s (“Commission”) concern with tax avoidance by multinational firms. The international community, including the European Union (“EU”) and its Member States, has long recognized the need to address this issue multilaterally. For more than two decades, the U.S. Treasury Department has worked closely as part of the international community to achieve a collective solution to this global problem.

Beginning in June 2014, the Commission announced that certain transfer pricing rulings given by Member States to particular taxpayers may have violated the EU’s restriction on State aid. These investigations, if continued, have considerable implications for the United States— for the U.S. government directly and for U.S. companies—in the form of potential lost tax revenue and increased barriers to cross-border investment. Critically, these investigations also undermine the multilateral progress made towards reducing tax avoidance.

In light of these consequences, U.S. Secretary of the Treasury Jacob J. Lew sent a letter on February 11, 2016, to Commission President Jean-Claude Juncker describing the U.S. Treasury Department’s principal concerns with the Commission’s recent State aid investigations. This White Paper provides additional detail regarding Secretary Lew’s concerns, focusing primarily on the following issues:

Continue reading

August 24, 2016 in IRS News, Tax | Permalink | Comments (0)

Congressional Staffer Charged With Failure To File Tax Returns On $170,000 Salary For Five Years

DOJ Logo (2016)Department of Justice Press Release, Congressional Staffer Charged with Failure to File Tax Returns for Five Years:

A congressional staffer was charged yesterday with five counts of willfully failing to file a tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.

According to the criminal information and affidavit, Isaac Lanier Avant of Arlington, Virginia, is a staff member employed by the U.S. House of Representatives since approximately 2002. For tax years 2009 through 2013, Avant earned annual wages of over $170,000, but did not timely file a personal income tax return for any of those years. In May 2005, Avant filed a form with his employer that falsely claimed he was exempt from federal income taxes. Avant did not have any federal tax withheld from his paycheck until the Internal Revenue Service (IRS) mandated that his employer begin withholding in January 2013.

Continue reading

August 24, 2016 in Congressional News, Tax | Permalink | Comments (7)

Sturgeon:  Doing Law School (And Life) In Lane 8

Lane 8Starting to Look Up:  Life in the Outside Lane, by Al Sturgeon (Pepperdine):

Anyone with track and field experience knows that the 400 meters is a brutal, gut-wrenching, death sprint, and those same people know that the absolute worst draw is the outside lane, that lonely place where the only sounds one hears after the starter’s gunfire are screaming lungs and the invisible footsteps of your competitors—invisible until that terrible moment when they enter your peripheral vision stage left and you realize all is lost.

Which is why South African Wayde Van Niekirk’s world record in the Rio Olympics is so remarkable: his shocking destruction of the seventeen-year-old record occurred in lane eight.  Afterward, ESPN.com quoted the new world-record holder as saying, “I was running blind all the way . . . and it gave me motivation to keep on pushing.”

Continue reading

August 24, 2016 in Legal Education, Tax | Permalink | Comments (1)

Should Larry Tribe Be Disbarred For His Trump Tweet?

Tribe

Simple Justice, Disbar Laurence Tribe:

Tribe’s twit is an outrage and affront to legal ethics. He does not deserve to be part of a profession that exists to serve and protect clients. Disbar Laurence Tribe.

Wall Street Journal Law Blog, Laurence Tribe Tweet About Trump Sparks Controversy:

Prof. Tribe has responded in an email to Law Blog:

Continue reading

August 24, 2016 in Legal Education | Permalink | Comments (13)

Clinton’s Punitive ‘Exit Tax’: 'Banana Republic Economics'

Wall Street Journal editorial, Clinton’s Punitive ‘Exit Tax’:

Hillary Clinton and Donald Trump are having a tax debate of sorts, with the Democrat wheeling out the familiar class-warfare artillery. Mr. Trump hasn’t replied on the specifics, but the irony is that his reform would solve the problem that Mrs. Clinton claims to be angry about—namely, the wave of American companies fleeing for foreign tax climes.

Continue reading

August 24, 2016 in Tax | Permalink | Comments (0)

Back To (Law) School: The Full Report

BackBack To (Law) School: The Full Report:

About 114,000 attorney-hopefuls are headed to law school this month. Law.com has it covered, with details about new courses and educators, and a look back at the school where it all began. In addition, one first-year student explains why he’s entering law school, fully aware of the tough job market. We’ve also queried big-name attorneys about their experiences in law school to prove that, yes, there is life on the other side. Take a look.

Continue reading

August 24, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1203

IRS Logo 2CDN, Trump Wants to ‘True the Vote’:

[S]tanding up for electoral integrity can get you noticed—in a bad way.

“My life before I spoke out for good government stands in stark contrast to the life I now lead,” says Catherine Engelbrecht, founder of the anti-voter fraud organization True the Vote.

In her 2014 testimony before the House Oversight and Government Reform Committee, she said:

“Shortly after filing IRS forms to establish 501 (c)(3) and 501 (c)(4), an assortment of federal entities including law enforcement agencies and a Congressman from Maryland [Democrat], Elijah Cummings came knocking at my door … my private businesses, my nonprofit organizations, and family have been subjected to more than 15 instances of audit or inquiry by federal agencies.”

Representative Cummings vehemently denied Engelbrecht’s charge, but subpoenaed emails from former IRS Exempt Organizations Director Lois Lerner showed that he and his staff did ask Lerner to give True the Vote extra special attention.

Lerner, like Clinton, never faced charges for mishandling sensitive information. Although ethics charges were filed against Cummings for “weaponizing government” on behalf of his party, nothing ever came of them.

Continue reading

August 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, August 23, 2016

Marty McMahon Named Director Of Florida Graduate Tax Program; Florida To Hire Three New Tax Faculty

McMahonUniversity of Florida Levin College of Law Names Martin J. McMahon as Director of the Graduate Tax Program:

The University of Florida Levin College of Law has announced that Martin J. McMahon, the James J. Freeland Eminent Scholar in Taxation has been appointed to succeed Michael K. Friel as Director of the Graduate Tax Program. Professor Friel stepped down as Director of the Director of the Graduate Tax Program when he retired at the end of the 2016-2017 academic year after serving as the Director for more than 25 years. Emeritus Professor Friel will continue to teach in the Graduate Tax Program as an adjunct professor, as have Lawrence Lokken, Emeritus Hugh Culverhouse Eminent Scholar in Taxation and Emeritus Professors David Hudson and Patricia Dilley. Professor McMahon has been a member of the faculty of the UF Graduate Tax Program since 1997.

Continue reading

August 23, 2016 in Legal Education, Tax, Tax Prof Jobs, Tax Prof Moves | Permalink | Comments (3)

Clinton Proposes Small Business Standard Tax Deduction

Hillary Logo (2016)Factsheet, Hillary Clinton Will Make Life Easier for Small Business at Every Step of the Way:

Work to create a new standard deduction for small businesses—like the one available to individual filers. This proposal will vastly simplify filing for small businesses and entrepreneurs—whether they’re running a business out of their own home, managing a shop on Main Street, or selling online through platforms like Etsy and eBay. Rather than having to track and file forms documenting their overhead costs—potentially including transportation, computer and phone use, maintaining an office, and more—a small business would be offered the option of taking a single, simple deduction. Hillary will ask her Treasury Department to bring together small business owners and leading experts to design this new standard deduction, including its limits and parameters, which existing expenses could voluntarily be replaced, and measures to prevent gaming and abuse—all to advance the goal of making it far easier for small businesses to file their taxes. This proposal would be focused on true small businesses, with restrictions preventing larger businesses or high-income taxpayers from claiming it. Small businesses could still opt to track and deduct their expenses individually, just like individual filers.

Continue reading

August 23, 2016 in Political News, Tax | Permalink | Comments (0)

Republican Congressional Tax Writers Oppose Proposed Debt-Equity Regs

NY Times:   Report Accuses Mexico’s President Of Plagiarism In Law School Thesis

PlagiarismNew York Times, Report Accuses Mexico’s President of Plagiarism in Law School Thesis:

Already reeling from corruption scandals and a declining security situation, President Enrique Peña Nieto of Mexico was accused on Sunday of plagiarizing nearly a third of his law school thesis, according to a report by an investigative journalist. ...

Continue reading

August 23, 2016 in Legal Education | Permalink | Comments (0)

Judge In Dan Markel Murder Case Approves Subpoena To See If Wendi Adelson's Brother Paid For Breast Implants For Mother Of Hit Man's Children

Adelson (Charlie)Following up on Saturday's post, Prosecutors Seek Records Showing Wendi Adelson's Brother Paid For Breast Enhancement Surgery For Mother Of Hit Man's Children After Dan Markel's Murder:

ABA Journal, Judge in Dan Markel Murder Case Approves Subpoena for Breast Implant Payment Records:

A judge in Florida has approved a subpoena for medical records showing who paid for breast enhancement surgery for a woman whose name has surfaced as a possible witness in the murder-for-hire case against two men accused of killing Florida State University law professor Dan Markel.

Forward, Does ‘Dr. Boobner’ Surgery Prove Missing Link in Dan Markel Murder Mystery?:

Prosecutors investigating the mysterious murder of Florida law professor Dan Markel believe a woman’s breast augmentation surgery — performed by a surgeon who markets himself as “Dr. Boobner” — provides a crucial tie between the man accused of killing him and his ex-wife’s family.

Continue reading

August 23, 2016 in Legal Education | Permalink | Comments (2)

IRS Launches Sharing Economy Website For Airbnb Hosts, Uber Drivers

AUIRS, Sharing Economy Tax Center:

If you use one of the many online platforms available to rent a spare bedroom, provide car rides, or to connect and provide a number of other goods or services, you’re involved in what is sometimes called the sharing economy.

Continue reading

August 23, 2016 in Tax | Permalink | Comments (0)

Minnesota (-33%), Oregon (-43%) Law Schools Welcome Much Smaller 1L Classes Compared to 2011

The IRS Scandal, Day 1202

IRS Logo 2Roll Call, Freedom Caucus' Jordan Eyes Another Push to Oust IRS Chief:

Rep. Jim Jordan and other conservatives are reviving efforts to press the House to impeach IRS Commissioner John Koskinen as the embattled agency head tries to woo Democrats and undecided Republicans.

The Ohio Republican, chairman of the House Freedom Caucus, said in an interview that he and other allies were weighing the use of procedural tactics similar to the July bid by Louisiana GOP Rep. John Fleming to bring up an impeachment resolution as a privileged measure bypassing committee consideration. The measure calls for formal impeachment of Koskinen for misstatements and a failure to cooperate with a House investigation of the IRS' handling of tax-exempt status requests from conservative groups.

Congress didn't act on the measure before it left for a seven-week recess. And because the House did not take it up within two legislative days, Fleming would have to offer another one after Labor Day.

"We may have to bring that up again. We'll see," Jordan said. He said members of the Freedom Caucus and other conservatives would keep the pressure on Speaker Paul D. Ryan of Wisconsin and others in leadership to take action when Congress returns after Labor Day.

"We are committed to holding John Koskinen and the IRS accountable for what took place there. So, we can do that in a formal way, which is through hearings … and vote it out of the Judiciary Committee and move that direction, or we can look at going to the floor," Jordan said.

Continue reading

August 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)