TaxProf Blog

Tax Notes to WaPo: "We Are Not an 'Obscure' Journal"

Following up last week's post, which quoted the observation in a Washington Post article on Pulitzer Prize winning author Edward Paul Jones that "[h]e labored for years as a proofreader or columnist for an obscure journal called Tax Notes":  Christopher Bergin, President and Publisher of Tax Analysts, responds today in a letter to the editor in the Washington Post, A Star in Tax Circles:

Tax Notes has been called the "bible" of the federal tax world and is considered "must reading" among tax professionals in Washington and elsewhere. So we don't consider ourselves "obscure." More to the point, neither do the tens of thousands of Treasury Department and Internal Revenue Service officials; members of Congress and their staffers; and tax professionals in the private sector who read our products, including Tax Notes, with enthusiasm. 

(Hat Tip: Deborah Schenk.)

Madoff: Estate Tax Reform to Protect Family Farms and Business ($10m Exemption), Not Wealthy Heirs ($1-2m Exemption)

New York Times op-ed, Protect the Farm, Tax the Manor, by Ray D. Madoff (Boston College):

How do you tell a wealthy heiress from a family farmer? It sounds like the setup for a joke. But in fact it is the fundamental problem underlying sensible reform of the federal estate tax.

Members of Congress are hoping to revise the current law on the estate tax by the end of this year; if they don’t, the estate tax will disappear for a year. Lawmakers should use the opportunity to solve the farmer/heiress riddle once and for all and move our tax system closer to the values on which the country was founded — that hard work should be rewarded and power should not be conferred by birth. ...

Proponents of the estate tax, mainly Democrats, argue that we should return to lower exemptions and higher rates so that the wealthy can contribute much-needed dollars to the nation’s recovery.

Opponents, mainly Republicans, argue that there should be no estate tax at all, not just next year but forever, because of the burden on small-business owners.

President Obama has proposed a middle course: blocking the scheduled 2010 repeal but making permanent the $3.5 million exemption and the 45% tax rate we have now. That would mean less revenue from estate taxes over the next 10 years than if Congress did nothing to change the 2001 law — an estimated $233 billion less. Moreover, this approach would leave in place the Achilles’ heel of the estate tax — its potential harm to family farms and small businesses — while providing an unnecessary giveaway to Americans who least need it.

Instead, Congress and the president should forge a different compromise that would respond to the concern for the family farmer and business owner, but still impose appropriate taxes on the wealthy heiresses — and heirs — of America.

What’s needed, to begin with, is a special rule to facilitate the transfer of family farms and small businesses from one generation to the next. ...  [I]t is appropriate for the estate tax to have a large exemption for family businesses — perhaps as much as $10 million, and indexed to rise with inflation. In order to ensure that this benefit goes to the right taxpayers, the law should require that both the transferring and receiving generations participate in the business or farm for several years and that the enterprise make up a significant portion of the estate. ...

Then, we could have a meaningful debate about the appropriate tax for inherited wealth. There is a big difference between wealth acquired through hard work and creativity and wealth bestowed as an accident of birth, and Congress should not be afraid to make this distinction. ... American estate tax rates have been as high as 77 percent, so 55% would be reasonable when coupled with a general exemption of $1 million to $2 million.

For too long, the family farm and business issue has served as a distraction, preventing sensible estate tax reform. Congress should get this issue off the table, so that wealthy heirs can contribute their fair share.

For a detailed critique of the op-ed, see here.

IRS Issues Rules Implementing 5-Year NOL Carryback

The IRS yesterday issued rules implementing the new 5-year NOL carryback provision:

• IR-2009-105
• Rev. Proc. 2009-52, 2009-49 I.R.B. ___ (Dec. 7, 2009)

Federal Judicial Clerkship Applications Up 66%

The Blog of the Legal Times, Online Federal Clerkship Applications at All-Time High:

The federal judiciary saw a huge spike in online applications for clerkships from last year, according to a release from the judiciary.

The Web site used by about two-thirds of all federal judges to find clerks saw 401,576 electronic applications between Oct. 1, 2008 and Sep. 30, 2009. That’s a 66% increase from that time period last year, when 241,529 applications were turned in.

The applications came from only 10,722 applicants this year, meaning each applied for an average of about 38 clerkships. That’s a 42 percent increase over last year’s applicant pool, which was 7,556. Last year, each clerk hopeful applied for an average of about 31 jobs. ...

Fifty-two percent of this year’s applicants were law school graduates and 48 percent were third-year law students. But 68 percent all the applications were generated by third-year law students, meaning they applied for more clerkships on average than their graduated peers. ...

The online application system has been in use since 2005, when it saw 94,693 applications from 4,902 applicants. In 2006, 5,614 applicants submitted 174,363 applications and the next year 7,556 applicants submitted 180,832 applications.

Closing the Tax Gap: Encouraging Voluntary Compliance Through Mass-Media Publication of High-Profile Tax Issues

Elizabeth Branham (J.D. 2009, UC-Hastings) has published Note, Closing the Tax Gap: Encouraging Voluntary Compliance Through Mass-Media Publication of High-Profile Tax Issues, 60 Hastings L.J. 1507 (2009).  Here is the Conclusion:

The issue of voluntary compliance is essential to any discussion of methods of closing the tax gap. Because of the size and scope of the American tax system, performing individual audits on even a majority of income tax returns is not feasible. Therefore, approaches to reducing the tax gap are more effectively focused on encouraging taxpayers to want to honestly and completely report their income. As a supplement to actual legal punishment, influencing social norms and values can be a valuable tool in combating noncompliant behavior and improving compliance among marginal taxpayers. The mass-media approach focuses on the use of mass media to publicize the prosecution of high-profile individuals as a way to change attitudes and behavior. To the extent that mass media and advertising have a lasting effect on behavior, presenting an appropriate campaign for voluntary compliance can have lasting effects on norms of behavior. Because it is limited in scope, however, the mass-media approach can only be viewed as a supplement to alternative and more traditional methods of encouraging compliance. Increased audits, increased punishment, simplification of the Code, and better customer services are therefore all still relevant considerations in creating a symbiotic approach to tax compliance.

Erasmus Posts Tax Papers on SSRN

Daniel N. Erasmus II (Thomas Jefferson) has posted several tax papers on SSRN:

• How Robust is Your Structured Finance Transaction?
• Let’s Hope the New OECD Guidelines on Money Laundering Will Not Create More Unnecessary Tax Auditing
• Proactive Tax Risk Management
• Submission on IASB Income Tax Statement Draft EB/2009/02
• Summary of How Partnerships are Taxed in Terms of International Law and Convention: An Entity or Transparent for Tax Purposes?
• Tax Planning as Part of Tax Risk Management
• Tax Risk Management: Sox 404 & FIN48
• Taxpayer's Constitutional Rights: A South African Perspective
• Transfer Pricing in South Africa: Constitutional or Unconstitutional?

Stanford Hosts Northern California Tax Roundtable Today

Stanford hosts the Fall 2009 Northern California Tax Roundtable today with these papers and commentary:

• David M. Hasen (Penn State), Financial Options in the Real World: An Economic and Tax Analysis
• Commentator:  David S. Gamage (UC-Berkeley)   
• David S. Gamage (UC-Davis) & Darien Shanske (UC-Hastings), Shedding Some Light on Hidden Taxes: An Examination of Tax Salience and Fiscal Illusion
• Commentator:  Susan C. Morse (Santa Clara)   
• Dennis J. Ventry (UC-Davis), The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest
• Commentator:  Darien Shanske (UC-Hastings)

Lawsky Presents Declining Marginal Utility and Tax Policy Today at Virginia

Sarah B. Lawsky (George Washington; visiting at Virginia) presents On the Edge: Declining Marginal Utility and Tax Policy at Virginia today as part of its Faculty Workshop Series.  Here is the abstract:

Tax policy and scholarship generally assume that income has declining marginal utility (that is, that the next dollar is worth less to a wealthier person than to a poorer person). This assumption provides an easy justification for redistributive taxation. But the legal literature provides no firm grounding for the assumption of declining marginal utility. This article shows that while some evidence does support declining marginal utility, other evidence suggests that a significant number of people actually experience increasing marginal utility, at least over some range of wealth.

If some people’s marginal utility increases, a non-egalitarian welfarist analysis still supports redistribution, but not, or at least not only, from the rich to the poor: it also supports redistribution from (some) less wealthy people to (certain) wealthier people. A welfarist who finds poor-to-rich redistribution unpalatable could explicitly incorporate equality into his analysis (by, for example, adopting a social welfare function that somehow incorporates equality). Or he could continue to use a non-egalitarian approach and assume declining marginal utility, but also acknowledge that declining marginal utility is not a fact about the world, but rather a normative judgment: a rich person should value his next dollar less than a poorer person values her next dollar, whether or not he actually values it less.

Conference on Empirical Legal Studies at USC

The two-day Fourth Annual Conference on Empirical Legal Studies kicks off today at USC.  The tax panel is chaired by Scott Altman (USC):

• Dhammika Dharmapala (University of Illinois College of Law), C. Fritz Foley (Harvard Business School) & Kristin J. Forbes (MIT, Sloan School of Management), Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act:

This paper analyzes the impact on firm behavior of the Homeland Investment Act of 2004, which provided a one-time tax holiday for the repatriation of foreign earnings by U.S. multinationals. The analysis controls for endogeneity and omitted variable bias by using instruments that identify the firms likely to receive the largest tax benefits from the holiday. Repatriations did not lead to an increase in domestic investment, employment or R&D - even for the firms that lobbied for the tax holiday stating these intentions and for firms that appeared to be financially constrained. Instead, a $1 increase in repatriations was associated with an increase of almost $1 in payouts to shareholders. These results suggest that the domestic operations of U.S. multinationals were not financially constrained and that these firms were reasonably well-governed. The results have important implications for understanding the impact of U.S. corporate tax policy on multinational firms.

• Lilian V. Faulhaber (Harvard Law School), Martin Katz (Ph.D. candidate, University Michigan, Department of Political Science) & Michael James Bommarito II (Ph.D. candidate, University of Michigan, Department of Political Science), A Tale of Two Codes: An Empirical Analysis of the Jurisprudence of the United States Tax Court:

What can empirical data tell us about the United States Tax Court? What sections of the Internal Revenue Code are most frequently cited and what recent tax legislation has sparked the most change in the Tax Court’s jurisprudence? Contributing to the growing extant literature on citation networks, this Article presents an analysis of the citation practices of the United States Tax Court between 1990 and 2008. While previous citation studies appropriately rely upon case-to-case citations as their unit of analysis, we modify this approach to focus on statutory citations, which represent the best proxy for the underlying content of the decisions in the field of tax law. Building upon prior citation scholarship and leveraging techniques from computer science and informatics, we collected and analyzed more than 11,000 decisions and 244,000 statutory citations authored by the United States Tax Court between 1990 and 2008. Our analysis includes both a static and time-series analysis for the most cited Internal Revenue Code sections. We also offer a network analysis and subsequent analytics focusing both on the static reporting of which Code sections are most often cited and the dynamic patterns of change in citation practices over time. Although this data retrieval itself answers the call for greater empiricism in tax scholarship, we also argue that our findings support the idea that there are effectively two Codes: the legislated Code, made up of the sections that are the basis of legislative action but only infrequently make it into Tax Court opinions, and the litigated Code, made up of the sections most frequently cited by Tax Court judges. We then discuss the implications of this argument, as well as opportunities for further research.

• Sagit Leviner (Ono Academic College Faculty of Law, Israel) & Kyle Richison (IRS Office of Research, Analysis, and Statistics), The Role Paid Preparers Play in Taxpayer Compliance in the United States: An Empirical Investigation with Policy Implications:

This paper underscores the growing need to shed better light on paid preparers and their effect on the tax system and its administration. The paper undertakes an empirical analysis of U.S. individual tax returns based on (1) tax return characteristics (by line item and type of return), and (2) preparation mode (self or paid prepared return; if paid - whether by lawyer, CPA, enrolled agent or other) as the independent variables. The dependent variable applied is the compliance or noncompliance of these returns. In a second stage of the analysis where noncompliance is found, a taxonomy of the errors identified will be explored to examine whether certain types of errors are associated with the independent factors. By offering a taxonomy of errors and forming a web of associations between these errors and the independent variables, the paper seeks to explore both the motivations behind and facilitators of tax noncompliance as well as the strategies to curb them so as to more effectively foster taxpayer compliance. The analysis draws from 3,457 returns where the taxpayer claimed an Earned Income Tax Credit (EITC) for Tax Year 1999. These returns have all been subject to either face-to-face or correspondence audit and provide a uniquely thorough pool of raw data that is presently unavailable for the general population.

Discussants:

• Edward D. Kleinbard (USC)
• James Spriggs (Washington University, Department of Political Science)
• Theodore P. Seto (Loyola-L.A.)

The 70% Discount on Goldman's $500m Gift

Smart Money, The 70% Discount on Goldman's $500M Gift, by Diana Ransom:

It’s been dubbed the apology with a half-billion-dollar gift attached. In an attention-grabbing move this week, Goldman Sachs said it would launch a $500 million initiative to help small businesses with Warren Buffett as a key adviser, an announcement that coincided by hours with a public mea culpa from CEO Lloyd Blankfein for mistakes in the financial crisis. But it turns out Goldman’s program includes its own discount — the kind that only an investment banker could love.

Continue reading "The 70% Discount on Goldman's $500m Gift"

Tough Week for 'Girls Gone Wild' Founder Joe Francis: $34m Tax Lien, Mocked by Stanford Band

Following up on my prior post: the IRS has filed a $34 million tax lien against Girls Gone Wild founder Joe Francis', two weeks after U.S. District Judge S. James Otero sentenced Francis to 301 days time served following his guilty plea to two misdemeanor counts of filing false tax returns.

• Tax Girl
• TMZ
• WebCPA 

It was a tough week for Francis, as the Stanford band mocked the USC grad at halftime of Stanford's 55-21 rout of USC (text here):

Prior TaxProf Blog coverage:

Continue reading "Tough Week for 'Girls Gone Wild' Founder Joe Francis: $34m Tax Lien, Mocked by Stanford Band"

Gender Diversity in the Law Stories Series

Following up on Wednesday's post, Foundation Press Publishes 30th Law Stories Book, in which I expressed my pride in serving as series editor and helping to recruit 50 incredibly talented faculty to edit books in the series:  Tax Prof Bridget J. Crawford (Pace) highlights another point of pride in this Feminist Law Professors post:

Law Stories is a 30-strong (and growing) volume series published by Foundation Press  and edited by Paul Caron, the Charles Harstock Professor and Associate Dean of Faculty at the University of Cincinnati College of Law.  Each “Stories” volume has its own editors (Paul is the series editor). 

Many of us are familiar with the Law Stories series.  For my courses, some of my favorite supplemental teaching material comes from the Tax Stories volume.  There are 50 volume editors in the total series (some volumes have more than one editor).  What a nice surpise to learn that of all volume editors, 62% (31 out of 50) are male; 38% (19 out of 50) are female.  

According to the 2007-2008 AALS Directory of Law Teachers, 62.7% of all faculty members are male and 36.9% are female. 

Gender proportionality among the Law Stories series editors!  That’s a bit of pleasant news after a series of rather depressing observations about women’s representation among authors and speakers in other legal academic arenas.

11th Circuit Hears Oral Argument Today in Wesley Snipes' Tax Appeal

The 11th Circuit hears oral argument at 9:00 a,m, in actor Wesley Snipes' appeal of his conviction on three misdemeanor tax fraud counts. The panel is Judge Stanley Marcus (a "movie buff') and Senior Circuit Judges R. Lanier Anderson (a former tax lawyer) and Peter Fay.

Update: The AAssociated Press reports on the oral argument here.

Senate Finance Committee Meets Today on Brainard and Mundaca Nominations

Following up on Wednesday's post, Senate to Move Forward on Lael Brainard's Nomination Despite Tax Problems: the Senate Finance Committee meets today to vote on her nomination to be Undersecretary of the Treasury for International Affairs.

Following up on Tuesday's post, Mundaca Responds to Senate Finance Committee Questions: the Senate Finance Committee meets today to vote on his nomination to be Assistant Secretary for Tax Policy.

Fishman: Stealth Preemption -- The IRS's Nonprofit Corporate Governance Initiative

James J. Fishman (Pace) has posted Stealth Preemption: The IRS's Nonprofit Corporate Governance Initiative, 29 Va. Tax Rev. ___ (2010), on SSRN.  Here is the abstract:

The IRS, the primary federal regulator of charities, has initiated a corporate governance initiative. The intervention by the IRS into an area traditionally the preserve of state nonprofit corporate law has little relationship to issues of tax compliance. This corporate governance initiative has been accomplished in the face of IRS acknowledgement that it has no statutory authority relating to these issues. Yet, the power of the Service to recognize tax exempt status and the method it has used to ensure it vision of correct corporate governance practices through a series of questions when an organization applies for recognition of tax exempt status and on the annual information return, the latter available on the Internet for public scrutiny, has resulted in substantial compliance. This article casts a skeptical eye on the IRS’s corporate governance initiative from the perspective of federalism. Its thesis is that the Service’s regulation of nonprofit corporate governance is a kind of stealth preemption, which undermines the principles of our federal system. The issues of preemption described herein relating to the IRS’s corporate governance initiative are at least one degree separated from traditional constitutional analysis. There is no question of an agency regulation, pursuant to direct or indirect Congressional authorization to supersede state legislation. Essentially, the Service has interpreted the scope of its own jurisdiction, expanding its authority at the expense of the states. The article argues the corporate governance initiative is inefficient from a cost/benefit basis, and diverts nonprofit organizations from their charitable mission. At a time when many charities are struggling to survive and maintain their level of activity, when there are pressures to reduce administrative expenses, the corporate governance initiative is an unwelcome, unnecessary distraction. It increases administrative costs, diverts boards and staff from the focus on the charity’s mission, and has no empirically verified relationship to tax compliance.

TIGTA: 372,000 Taxpayers Erroneously Claimed Education Tax Credits

The Treasury Inspector General for Tax Administration yesterday reported that 372,000 taxpayers erroneously claimed education tax credits in 2006 and 2007, totaling $532 million (an average of over $1,400 improper credit per taxpayer).  Improvements Are Needed in the Administration of Education Credits and Reporting Requirements for Educational Institutions (2009-30-141).

More 'Fiscal Blood on the Tax Tracks'

Following up on my previous post, NY Times: LILOs & SILOSs Cause "Fiscal Blood on the Tracks":  Business Week, Wall Street Plays Hardball:

Across the nation, local governments and related public entities, already reeling from the recession, face another fiscal crisis: billions of dollars in fees owed to UBS, Goldman Sachs, and other financial giants on investment deals gone wrong.

The seeds of this looming disaster were sown during the credit boom, when Wall Street targeted cities big and small with risky financial products that promised to save them money or boost returns. Investment bankers sold exotic derivatives designed to help municipalities cut borrowing costs. Banks and insurance companies constructed complicated tax deals that allowed public utilities, transit authorities, and other nonprofit organizations to extract cash immediately from their long-term assets. Private equity firms, pointing to stellar historical gains, persuaded big public pension funds to plow billions of dollars into high-cost investments at the peak of the market. Many of the transactions shared a striking similarity: provisions that protected the banks from big losses and left the customers on the hook for huge payouts.

Now, as many of those deals sour, Wall Street is ramping up its efforts to collect from Main Street. "The banks stuffed customers with [questionable investments] and then extorted money from the customers to get rid of them," says Christopher Whalen, managing director at research firm Institutional Risk Analytics. The New Jersey Transportation Trust Fund Authority, for instance, must pay nearly $1 million a month at least until December 2011 to Goldman Sachs on derivatives deals tied to municipal debt—even though the state retired the debt last year. The Chicago Transit Authority (CTA), having entered into complex arrangements to lease its equipment to outside investors and then lease it back, could face termination fees of $30 million. The investors could collect penalties because American International Group (AIG), which backed the arrangement, has seen its credit rating tumble. "These [sorts of deals] are potentially huge liabilities," says Stanford Law School's Joseph Bankman. "Investors aren't going to be settling for chump change."

Galle Receives Honorable Mention in AALS Scholarly Paper Competition

Brian D. Galle (Florida State) received honorable mention in the 2010 AALS Scholarly Paper Competition for his paper, Foundation or Empire? The Role of Charity in a Federal System, 88 Tex. L. Rev. ___ (2010). Brian will present the paper at the AALS Annual Meeting on Friday, January 8, at 4:00 p.m.  Here is the abstract:

This Article critiques the prevailing justification for subsidies for the charitable sector, and suggests a new alternative. According to contemporary accounts, charity corrects the failure of the private market to provide public goods, and further corrects the failure of government to provide goods other than those demanded by the median voter.

Continue reading "Galle Receives Honorable Mention in AALS Scholarly Paper Competition"

Desai Presents Investor Taxation in Open Economies Today at Columbia

Mihir A. Desai (Harvard Business School) presents Investor Taxation in Open Economies (with Dhammika Dharmapala (Illinois)) at Columbia today as part of its Tax Policy Colloquium Series. Here is the abstract:

Despite the rise of foreign portfolio investment (FPI) as a dominant international capital flow, existing international tax policy norms are largely focused on the taxation of FDI. This paper proposes a new principle - global portfolio neutrality (GPN) - for assessing the efficiency of tax policy towards FPI. With respect to outbound FPI, GPN entails imposing the same tax rate on domestic and foreign investment income. With respect to inbound FPI, GPN entails imposing the same tax rate on foreign portfolio investors that they face at home. Unlike existing principles of international taxation that address FDI and worldwide welfare, GPN explicitly addresses national welfare maximization and is derived from a framework that emphasizes risk considerations and portfolio diversification as central motivations for FPI. This principle is violated in practice frequently, particularly with respect to tax-exempt entities. Possible remedies are proposed including reciprocal recognition of tax-exempt status and the implementation of refundable or tradable foreign tax credits. The utility of GPN is reinforced by exploring the legitimate role of the combination of withholding taxes and tax treaties in responding to various forms of tax evasion that employ FPI.

17 Tax Increases in Senate Health Care Bill = $370.2 Billion

The Joint Committee on Taxation has published a list of the 17 tax increases in the Senate health care bill, which are estimated to raise $370.2 billion in revenues over ten years:

1. 40% excise tax on health coverage in excess of $8,500/$23,000 ($149.1 billion)
2. Employer W-2 reporting of value of health (negligible revenue effect)
3. Conform definition of medical expenses ($5.0 billion)
4. Increase penalty for nonqualified health savings account distributions to 20% ($1.3 billion)
5. Limit health flexible spending arrangements in cafeteria plans to $2,500 ($14.6 billion)
6. Require information reporting on payments to corporations ($17.1 billion)
7. Additional requirements for section 501(c)(3) hospitals (negligible revenue effects)
8. Impose annual fee on manufacturers & importers of branded drugs ($22.2 billion)
9. Impose annual fee on manufacturers & importers of medical devices ($19.3 billion)
10. Impose annual fee on health insurance providers ($60.4 billion)
11. Study and report of effect on veterans health care (no revenue effect)
12. Eliminate deduction for expenses allocable to Medicare Part D subsidy ($5.4 billion)
13. Raise 7.5% AGI floor on medical expenses deduction to 10% ($15.2 billion)
14. $500,000 deduction limitation on taxable year remuneration to health insurance officials ($0.6 billion)
15. Additional 0.5% hospital insurance tax on wages > $200,000 ($250,000 joint) ($53.8 billion)
16. Modification of section 833 treatment of certain health  organizations ($0.4 billion)
17. Impose 5% excise tax on cosmetic surgery ($5.8 billion)

Update:  See CCH's Special Report.

Madoff Presents Immortality and the Law: The Rising Power of the American Dead Today at BC

Ray D. Madoff (Boston College) presents her forthcoming book, Immortality and the Law: The Rising Power of the American Dead (Yale University Press, 2010), at Boston College today as part of its Legal History Roundtable.  Here is the publisher's description:

This book takes a riveting look at how the law responds to that distinctly American dream of immortality. While American law provides virtually no protections for the interests we hold most dear—our bodies and our reputations—when it comes to property interests, the American dead have greater control than anywhere else in the world. Moreover, these rights are growing daily. From grave robbery to Elvis impersonators, Madoff shows how the law of the dead has a direct impact on how we live. Madoff examines how the rising power of the American dead enables the deceased to exert control over their wealth forever through grandiose schemes like "dynasty trusts" and perpetual private charitable foundations and to control their creative works and identities well into the unforeseeable future. Madoff explores how the law of the dead can, in essence, extend the reach of life by granting virtual immortality to individuals. All of this comes, Madoff contends, at real costs imposed on the living.

More 'Super Lawyer' Per Capita Law School Rankings

Following up on my prior post, Law School Rankings by 'Super Lawyers', which blogged the Top 50 law schools by the number of "Super Lawyers" that are graduates of each school, as well as Super Lawyer ranking of the 50 largest law schools and the 50 smallest law schools.  Here are other Super Lawyer rankings that adjust for class size:

• Brian Leiter (Chicago)
• David Van Zandt (Dean, Northwestern)

Update:

• Alfred Brophy (North Carolina), Super Lawyers Rankings and Law School Size
• Dan Filler (Drexel), The Van Zandt Law School Rankings

Philadelphia Tax Conference

The two-day 20th Annual Philadelphia Tax Conference kicks off today.  For a list of speakers and their topics, see here.

Caron: Section 2036 Ruling May Force Bengals Out of Cincinnati

With the Cincinnati Bengals now alone in first place in the AFC North Division, I thought it would be an opportune time to follow up last week's post (Tax Court Fumbles Substance-Over-Form Ball in Estate of Brown) and upload my article, Section 2036 Ruling May Force Bengals Out of Cincinnati, 67 Tax Notes 1504 (1995), on SSRN.  Here is the abstract:

Lee Sheppard has written recently in these pages of how the Service has assisted the estate planning objectives of plutocrats who own professional sports teams to keep their franchises in their local communities. (See Tax Notes, May 15, 1995, p. 881.) As Ms. Sheppard has explained, the Service recently approved an elaborate plan devised by the late Ewing Kauffman to keep the Royals baseball team in Kansas City. When Kauffman died in 1993, he left the team to the Greater Kansas City Community Foundation, and the Service recently blessed the estate's claimed charitable deduction by ruling that the foundation served the charitable purpose of keeping the team in Kansas City. Tech. Adv. Mem. 9518002 (Jan. 23, 1995), however, may force the Bengals football team to move out of Cincinnati by its use of the substance over form doctrine to recharacterize a transaction designed by the late Paul Brown to leave the team to his children.

Court Lacks Jurisdiction to Order IRS to Apologize to Taxpayer

The Tax Court yesterday ruled that it lacks jurisdiction to order the IRS to apologize to a taxpayer. Caldwell v. Commissioner, T.C. Summ. Op. 2009-169 (Nov. 18, 2009):

The part of Caldwell's motion which we characterize as a "Request for Apology" asks that we require the IRS to enter into the record "a written apology to the Petitioner, signed by the Commissioner, Internal Revenue Service" ...

The Tax Court may exercise jurisdiction only to the extent authorized by Congress. See sec. 7442; Naftel v. Commissioner, 85 T.C. 527, 529 (1985). ...

Despite the Court's warning to him in the previous case that the Court's powers to grant relief are limited, Caldwell has not stated why he believes that we have jurisdiction to order the Commissioner of Internal Revenue to apologize to him ...

The IRS objected to the Request for Apology on the ground that Congress has not, through section 7430 (relating to administrative or litigation costs) or otherwise, authorized us to grant such relief. [Fn.3]  We agree.

We lack jurisdiction to order the IRS to grant the relief requested in the Request for Apology, or similar relief, and will accordingly deny the Request for Apology.

[Fn. 3]:  The IRS further argued that the Federal Government's sovereign immunity would prevent us from granting such relief. Since nothing of which we are aware even suggests we could grant the relief, we need not consider whether sovereign immunity prevents us from granting it.

A Distributional Analysis of the 50 State Tax Systems

The Institute on Taxation and Economic Policy yesterday released Who Pays? A Distributional Analysis of the Tax Systems in All 50 States:

Ten states—Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama—are particularly regressive. These “Terrible Ten” states ask poor families—those in the bottom 20% of the income scale—to pay almost six times as much of their earnings in taxes as do the wealthy. Middle-income families in these states pay up to three-and-a-half times as high a share of their income as the wealthiest families.

 

Galle: Hidden Taxes

Brian D. Galle (Florida State) has published Hidden Taxes, 87 Wash. U. L. Rev. 59 (2009). Here is the abstract:

The idea of hidden taxes is as old as John Stuart Mill, but convincing evidence of their existence is new. In this Article, I survey and critique recent studies that claim to show that there are some taxes that can go unnoticed by those who pay them. I also develop the array of unanswered theoretical questions and policy implications that potentially follow from the studies’ results.

Probably the central question for hidden taxes is whether they might enable government to raise revenue without also distorting the economy. If so, I argue, they have the potential to radically refashion the architecture of redistributive government. But, as I also show, whether that is true turns on the cognitive mechanisms that might permit taxes to go unnoticed. For example, if hidden taxes are caused not by rational ignorance but by cognitive shortcomings, then it is likely that the burden of a hidden tax will be borne disproportionately by poorer taxpayers, and vice-versa. Thus, I attempt to integrate with the tax literature some recent developments in our understanding of bounded rationality in consumers more generally.

How the Tax Code Encourages Debt

The New Yorker (Nov. 23, 2009), The Debt Economy -- How the Tax Code Encourages Debt, by James Surowiecki:

John Kenneth Galbraith wrote that all financial crises are the result of “debt that, in one fashion or another, has become dangerously out of scale.” The recent financial crisis was no exception, with everyone—homeowners, private-equity investors, our biggest banks—taking on enormous amounts of debt. If it’s frustrating that the government is footing the bill to clean up the mess, it’s even worse that the government helped pay for the debt binge that created the mess in the first place, thanks to a tax system that actually subsidizes borrowing. Debt didn’t get dangerously out of scale because the system was broken. It got out of scale, in part, because the system worked.

The government doesn’t make people go into debt, of course. It just nudges them in that direction. Individuals are able to write off all their mortgage interest, up to a million dollars, and companies can write off all the interest on their debt, but not things like dividend payments. This gives the system what economists call a “debt bias.” It encourages people to make smaller down payments and to borrow more money than they otherwise would, and to tie up more of their wealth in housing than in other investments. Likewise, the system skews the decisions that companies make about how to fund themselves. Companies can raise money by reinvesting profits, raising equity (selling shares), or borrowing. But only when they borrow do they get the benefit of a “tax shield.” Jason Furman, of the National Economic Council, has estimated that tax breaks make corporate debt as much as forty-two per cent cheaper than corporate equity. So it’s not surprising that many companies prefer to pile on the leverage. ...

[B]ecause tax breaks on debt have been around so long, we can hardly imagine what it would be like if we changed them, and we tend to underestimate their influence in shaping our behavior. Subsidizing debt seems harmless simply because we’ve always done it. But the fact that you’ve had a bad habit for a long time doesn’t make it less dangerous.

(Hat Tip: Francine Lipman.)

Senate to Move Forward on Lael Brainard's Nomination Despite Tax Problems

I previously blogged the tax problems of Lael Brainard, President Obama's nominee to be Undersecretary of the Treasury for International Affairs.  The tax problems are (1) twelve late payments of real estate and personal property taxes, and late payment of unemployment taxes; (2) failure to timely file employment eligibility verification forms for her household help; and (3) failure to substantiate home office deductions.  Senate Finance Committee Chair Max Baucus today annnounced that he would support the nomination and that the committee would soon vote on the nomination:

• Statement of Chairman Baucus
• Press release
• Staff Memo (5 pages)
• Documents (15 pages)
• ABC News, Treasury Nominee Overcomes Tax Issues, Wins Lawmaker's Support
• Associated Press, Another Obama Nominee Runs Into Tax Problems
• New York Times, A Taxing Time for Treasury Nominee
• Reuters, Treasury Nominee Passes Senate Tax Grilling
• Wall Street Journal, Treasury Nominee Under Tax Scrutiny To Get Hearing

America's First $60k/Year Law School?

Last month, I asked Is UC-Hastings America's Most Expensive Law School?  Its $50,310 nonresident tuition for 2010-11 was higher than that at the top law schools (which ranged from $43,900 to $50,140).  Proposed tuition increases at California's four public law schools would blow the top off and create America's first $60,000/year law school [click on chart to enlarge]:

• Above the Law, Law School Tuition Hikes Spread Like Wildfires in California
• Legal Pad, Berkeley Law Students Protest Over Fee Hikes

House & Senate Seek to Avoid 2010 Estate Tax Repeal

Democratic leaders on the House Ways & Means Committee today announced that they would seek to pass by December 31 a one-year extension of the current estate tax ($3.5 million exemption and 45% top rate) for 2010, to avoid the scheduled repeal of estate tax in 2010.

Yesterday, Senators Thomas R. Carper (D-DE) and George V. Voinovich (R-OH) introduced S.2784, a bi-partisan measure that would make permanent the current $3.5 million exemption and 45% top rate, but indexed for inflation (see here).

• Wall Street Journal, House Democrats To Ditch Permanent Estate Tax Bill For 1-Year Fix

Allison Christians Named Teacher of the Year at Wisconsin

Tax Prof Allison Christians has been named Teacher of the Year at Wisconsin.  From the press release:

Allison Christians was chosen Teacher of the Year from among all eligible tenure-track professors at the Law School by a poll of the three most recent classes (excluding the graduating class). Christians joined the law faculty in 2005, after practicing tax law at Wachtell, Lipton, Rosen & Katz in New York City. She has written several articles and book chapters addressing national and international policy, globalization, competition, institutional, and development aspects of taxation and is co-author of a leading casebook on U.S. international tax law.

• Law in Action
• Interview

What Constitutes 'Unforeseen Circumstances' Under § 121?

David W. Randolph (Xavier University, Williams College of Business), "Unforeseen Circumstances" Exclusion From Gain on Sale of Home: Regulations and Private Letter Rulings Offer Examples of Situations the IRS Has Approved as Qualifying for Partial Exclusion of Gain (Journal of Accountancy):

Single taxpayers or those married filing separately generally can exclude up to $250,000 of the gain from the sale or exchange of a home ($500,000 for married taxpayers filing jointly). This exclusion may be taken once every two years if the taxpayers have owned and used the property as a principal residence for a period of (or periods totaling) at least two years during the five-year period ending on the date of the sale or exchange. Taxpayers who don’t meet these conditions can qualify for a reduced exclusion under § 121(c) if the sale or exchange is because of a change in place of employment, health or “unforeseen circumstances.” ...

Unforeseen circumstances. Unforeseen circumstances are defined by Treas. Reg. § 1.121-3(e)(1) as events the taxpayer could not reasonably have anticipated before purchasing and occupying the residence. Specific-event safe harbors are provided in Treas. Reg. § 1.121-3(e)(2): involuntary conversion of the residence; disasters or acts of war or terrorism damaging the residence; or a qualified individual’s death, unemployment (if eligible for unemployment compensation), change in employment status that results in an inability to pay housing costs and basic living expenses, divorce or legal separation  under a decree of divorce or separate maintenance, or a multiple birth. These, however, are hardly all the common life events that can result in the sale or exchange of a home, such as marriage, adoption or other circumstance that results in the addition of dependents to the family. Despite not being specified as safe harbor events, circumstances such as these and others may still qualify as unforeseen. Determining whether fact patterns exhibit the level of unforeseeability necessary to qualify as unforeseen circumstances requires taxpayers and practitioners to exercise their best judgment.

NONSPECIFIC EVENTS

The following summarizes the 15 letter rulings that were issued from Aug. 13, 2004 (the date final regulations were issued under IRC § 121), through August 2009 that have addressed whether given facts and circumstances qualify as unforeseen despite falling outside the specific-event safe harbors. In each case, the IRS found that unforeseen circumstances were present and granted the taxpayer partial gain exclusion relief under section 121(c); no unfavorable rulings were issued. The rulings can be broadly characterized as relating to (1) additional dependents arising out of marriage or other events, (2) environmental factors that detrimentally affect the quality of living in a particular locale and (3) job-related circumstances. Although the rulings may not be cited as precedent and do not establish a safe harbor of general applicability, they do provide a basis for understanding what circumstances the IRS is likely to consider unforeseen.

ADDITIONAL DEPENDENTS

Life events the Service has most frequently ruled upon are those taxpayers did not plan when they purchased a residence and that increased the number of dependents living under one roof. They include the addition of children via pregnancy, adoption or second marriage, and providing in-home care for a parent who became ill or disabled. Here are summaries of these rulings (in chronological order) and their circumstances:

Blended family moves to children’s school district. PLR 200601022. ...

Adult child moves back in with parents. PLR 200601023. ...

Bigger house for adoption. PLR 200613009. ...

Caring for disabled parent. PLR 200626024. ...

Pregnancy and end of relationship. PLR 200652041. ...

Large blended family. PLR 200725018. ...

Second child and home office. PLR 200745011. ...

Blended family and schools. PLR 200826024. ...

Marriage with visiting child. PLR 200841022. ...

 

ENVIRONMENTAL FACTORS

The IRS has also granted taxpayers relief under section 121(c) in instances where crime or acts of violence or even noise detracts from the taxpayer’s ability to maintain a satisfactory quality of living in a particular location.

Assaults and threats. PLR 200601009. ...

Robbery. PLR 200630004. ...

Aircraft noise. PLR 200702032. ...

Child assaulted on school bus. PLR 200820016. ...

JOB-RELATED CIRCUMSTANCES

The IRS has also granted taxpayers relief under section 121(c) in at least two instances where circumstances changed as a result of the taxpayer’s occupation.

K-9 officer. PLR 200504012. ...

Narcotics investigator threatened. PLR 200615011. ...

Gamage: Preventing State Budget Crises: Redefining 'Tax Cuts' and 'Tax Hikes'

David Gamage (UC-Berkeley) has posted Preventing State Budget Crises: Redefining 'Tax Cuts' and 'Tax Hikes', 98 Cal. L. Rev. ___ (2010), on SSRN.  Here is the abstract:

Forty-nine of the U.S. states have balanced budget requirements, and every state acts as though bound by such constraints. These constraints create fiscal volatility - the states must either cut spending or raise taxes during economic downturns, while doing the opposite during upturns. This paper discusses how states should cope with fiscal volatility on both the levels of ordinary politics and of institutional-design policy. On the level of ordinary politics, the paper applies principles of risk allocation theory to conclude that states should primarily adjust the rates of broad-based taxes as their economies cycle, rather than fluctuating public spending. States should raise their tax rates during economic downturns and lower them during periods of growth. On the level of institutional-design policy, the key question is how we define terms like “tax cuts” and “tax hikes.” By adopting a new baseline for defining these terms, states can increase the likelihood of using tax rate adjustments to cope with fiscal volatility rather than (more harmful) spending fluctuations.

Foundation Press Publishes 30th Law Stories Book

Foundation Press's Law Stories Series has passed an impressive milestone: there are now thirty books in the series:

• Administrative Law Stories (2006), edited by Peter L. Strauss (Columbia)
• Antitrust Stories (2007), edited by Eleanor M. Fox (NYU) & Daniel A. Crane (Cardozo)
• Bankruptcy Law Stories (2007), edited by Robert Rasmussen (Dean, USC)
• Business Tax Stories (2005), edited by Steven A. Bank (UCLA) & Kirk J. Stark (UCLA) 
• Civil Procedure Stories (2d ed. 2008), edited by Kevin M. Clermont (Cornell)
• Civil Rights Stories (2008), edited by Myriam Gilles (Cardozo) & Risa Goluboff (Virginia)
• Constitutional Law Stories (2d ed. 2009), edited by Michael C. Dorf (Cornell)
• Contracts Stories (2006), edited by Douglas G. Baird (Chicago)
• Corporate Law Stories (2009), edited by J. Mark Ramseyer (Harvard)
• Criminal Procedure Stories (2006), edited by Carol S. Steiker (Harvard)
• Death Penalty Stories (2009), edited by John H. Blum (Cornell) & Jordan M. Steiker (Texas)
• Education Law Stories (2008), edited by Michael A. Olivas (Houston) & Ronna Greff Schneider (Cincinnati)
• Employment Discrimination Stories (2006), edited by Joel William Friedman (Tulane)
• Employment Law Stories (2007), edited by Samuel Estreicher (NYU) & Gillian Lester (UC-Berkeley)
• Environmental Law Stories (2005), edited by Richard J. Lazarus (Georgetown) & Oliver A. Houck (Tulane)
• Evidence Stories (2006), edited by Richard O. Lempert (Michigan)
• Family Law Stories (2008), edited by Carol Sanger (Columbia)
• Federal Courts Stories, edited by Vicki C. Jackson (Georgetown) & Judith Resnik (Yale)
• Human Rights Advocacy Stories (2008), edited by Deena R. Hurwitz (Virginia) & Margaret L. Satterthwaite (NYU), with Doug Ford (Virginia)
• Immigration Stories (2005), edited by David A. Martin (Virginia) & Peter H. Schuck (Yale)
• Intellectual Property Stories (2005), edited by Jane C. Ginsburg (Columbia) & Rochelle Cooper Dreyfuss (NYU)
• International Law Stories (2007), edited by John Noyes (California Western), Mark Janis (Connecticut) & Laura Dickinson (Connecticut)
• Labor Law Stories (2005), edited by Laura J. Cooper (Minnesota) & Catherine L. Fisk (UC-Irvine)
• Legal Ethics Stories (2005), edited by Deborah L. Rhode (Stanford) & David Luban (Georgetown)
• Presidential Power Stories (2008), edited by Christopher H. Schroeder (Duke) & Curtis A. Bradley (Duke)
• Property Stories (2d ed. 2009), edited by Gerald Korngold (New York Law School) & Andrew P. Morriss (Illinois)
• Race Law Stories (2008), edited by Rachel F. Moran (UC-Irvine) & Devon Carbado (UCLA)
• Tax Stories (2d ed. 2009), edited by Paul L. Caron (Cincinnati)
• Torts Stories (2003), edited by Robert L. Rabin (Stanford) & Stephen D. Sugarman (UC-Berkeley)
• Trial Stories (2008), edited by Michael E. Tigar (American) & Angela J. Davis (American)

Tax Stories served as the genesis of the series, and I have been honored to work with Foundation Press as series editor in recruiting editors for new books.  I wrote about the pedagogical theory behind the series in Back to the Future: Teaching Law Through Stories, 71 U. Cin. L. Rev. 405 (2002), and I am enormously gratified at the reception the series has received.  I am most proud of the 50 editors and 405 chapter authors who have joined this scholarly project -- the list reads a like virtual who's who of the leading figures in these fields.  I also am delighted at the many positive reviews of books in the series, including:

• Reuven Avi-Yonah (Michigan), Tax Stories and Tax Histories: Is There a Role for History in Shaping Tax Law, 101 Mich. L. Rev. 2227 (2003)
• Leslie Bender (Syracuse), Teaching Torts Stories, 55 J. Legal Educ. 108 (2005)
• Kim Brooks (McGill), Tax Stories, 28 Queen's L.J. 705 (2003)
• Fernand N. Dutile (Notre Dame), Bringing Cases to Life: Education Law Stories, 35 J.C. & U.L. 131 (2008)
• Tim Edgar, Tax Stories, 51 Canadian Tax J. 1066 (2003)
• Erin Jones (UC-Berkeley), Labor Law Stories, 27 Berkeley J. Emp. & Lab. L. 246 (2006)
• Nancy L. Marder (Chicago-Kent), Teaching Civil Procedure Stories, 55 J. Legal Educ. 138 (2005)
• Ajay K. Mehrotra (Indiana-Bloomington), Teaching Tax Stories, 55 J. Legal Educ. 116 (2005)
• Thomas Ross (Pittsburgh), Teaching Constitutional Law Stories, 55 J. Legal Educ. 126 (2005)
• Jay A. Soled (Rutgers), Tax Stories Adds Anecdotal Interest to Tax Cases, 100 Tax Notes 727 (2003)
• Laura S. Underkuffler (Duke), Teaching Property Stories, 55 J. Legal Educ. 152 (2005)

Johnson: It's Time to End the Tax Subsidy for Timber

Calvin H. Johnson (Texas) has posted Timber!, 125 Tax Notes 801 (Nov. 16, 2009), on his website.  Here is the abstract:

With budget deficits of $1.4 trillion, or 9.9% of GDP, we are facing a revenue crisis of epic proportions. Our tax accounting for timber produces an antitax subsidy when it needs to produce government revenue. This proposal would capitalize the costs of reforestation and annual forest maintenance, allowing them to be deducted only against recognized income from the harvest of timber. The proposal would end the treatment of timber as a capital asset because deferral of tax is a rationale for increasing the tax rate rather than reducing it. The proposal would also impute the rental value of the land and capitalize it.

Lavoie: Instilling a Taxpaying Ethos

Richard Lavoie (Akron) has posted Flying Above the Law and Under the Radar: Instilling a Taxpaying Ethos in Those Playing by Their Own Rules, 29 Pace L. Rev. ___ (2009), on SSRN.  Here is the abstract:

These days it really does seem like "only the little people pay taxes." Whether they are from the world of politics, sports or entertainment, the elites of this country are demonstrating a penchant for not paying their taxes. Nevertheless, Americans in general continue to exhibit a high degree of tax compliance. Why do most people pay their taxes? What distinguishes them from those who cheat? What can we learn from these differences that could promote greater compliance amoung noncompliant segments of the populace?

This article examines these questions in light of the relevant social science literature. As a general matter, empirical research regarding tax compliance finds that the conventional analysis of compliance in terms of penalties and enforcement activity only represents a piece of the overall compliance dynamic. Beyond such deterrence mechanisms an individual‘s taxpaying behavior is shaped by a wide variety of cultural, institutional, and individual factors. When a confluence of such factors exists within a society they create a cultural norm in favor of honoring one‘s tax obligations that is persistent and self-reinforcing, a "taxpaying ethos." This article hightlights the most relevant factors contributing to the creation of a taxpaying ethos and utilizes them to create a framework for promoting increased tax compliance among historically reticent groups of taxpayers. Part II of this article reviews the inadequacy of the traditional deterrence approach to tax compliance and contrasts it with the taxpaying ethos explanation. Part III examines the empirically identified factors influencing a society's taxpaying commitment. Part IV translates these factors into general policy prescriptions aimed a cultivating a taxpaying ethos in a society.

100% More Americans Admit Offshore Tax Cheating Than IRS Expected

From the Department of Justice:

The Justice Department and IRS announced that over 14,700 taxpayers have come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

• American Lawyer, Swiss to Reveal Tax Man Tactics
• New York Times, 14,700 Disclosed Offshore Accounts, by Lynnley Browning
• Reuters, Nearly 15,000 Americans Admit Offshore Tax Cheating
• USA Today, IRS Offshore Tax Crackdown Should Produce 'Billions'
• Wall Street Journal, IRS Details Map To Find UBS Tax Fraud
• Wall Street Journal, Swiss Will Give Up Names of U.S. Taxpayers
• Washington Post, Swiss No Longer Shielding Biggest U.S. Tax Dodgers

ABA Tax Section Publishes Fall 2009 Issue of News Quarterly

The ABA Tax Section has published 29 News Quarterly No. 1 (Fall 2009):

• Opinion Point: Management Based Definition for Domestic Corporations, by Jonathan Schwartz (Barrister, Temple Tax Chambers, London) (pp. 1, 16)
• Opinion Point: Saving Private Ryan's Tax Refund, by Francine J. Lipman (Chapman) (pp. 17-19)
• Opinion Point: What's Next in the Section 6501(e) Overstated Basis Controversy, by Steve Johnson (UNLV) (pp. 19-21)
• From the Chair (Stuart M. Lewis) (Buchanan Ingersoll & Rooney, Washington, D.C.) (pp. 3-4)
• Interview with Irwin Treiger (Stoel Rives, Seattle), by Jasper L. Cummings, Jr. (Alston & Bird, Washington, D.C.) & Alan J.J. Swirski (Skadden, Washington, D.C.) (pp. 5-8)
• Focus on Pro Bono & Public Service: The Tax Literacy Project, by Marjorie E. Kornhauser (Arizona State) (pp. 9-10)
• Focus on Pro Bono & Public Service: Vijay Raghavan -- 2009 Public Service Fellow (pp. 11-12)
• New Briefs (p. 12)
• Tax Bites:  A Tax Lawyer's Interpretation of Shakespeare, by Ellen P. Aprill (Loyola-L.A.) (p. 13) 
• CLE Calendar (p. 14)
• Government Submissions Boxscore (pp. 15-16)

Law School Rankings by 'Super Lawyers'

Following up on my prior post, Which Law Schools Produce the Most "Super Lawyers"? : the magazine has aggregated its rankings of law schools producing the most "Super Lawyers" in each state into an overall law school ranking which measures the total number of "Super Lawyers" that are graduates of each school.  The ranking does not adjust for class size, so larger law schools have a built-in advantage over smaller law schools.

Here are the Top 50 law schools, along with the size of their J.D. enrollment:

Rank	Law School	Size
1	Harvard	1730
2	Michigan	1151
3	Texas	1233
4	Virginia	1156
5	Georgetown	2005
6	NYU	1423
7	Columbia	1267
8	Florida	1224
9	UC-Berkeley	865
10	Yale	588
11	UC-Hastings	1251
12	George Washington	1683
13	Boston	832
14	UCLA	1012
15	Pennsylvania	787
16	Chicago	593
17	Boston College	801
18	Northwestern	781
19	Stanford	539
20	Miami	1235
21	Vanderbilt	578
22	SMU	953
23	Duke	640
24	Minnesota	780
25	Wisconsin	811
26	Cornell	591
27	Fordham	1536
28	Temple	974
29	Loyola-L.A.	1287
30	North Carolina	735
31	Villanova	744
32	Emory	697
33	Suffolk	1652
34	Houston	948
35	Ohio State	670
36	Tulane	745
37	Wayne State	593
38	South Carolina	683
39	Illinois	587
40	Seton Hall	1099
41	USC	605
42	Georgia	660
43	Notre Dame	558
44	Indiana-Indianapolis	953
45	DePaul	1184
46	Oklahoma	517
47	Brooklyn	1490
48	SUNY-Buffalo	745
49	Case Western	658
50	Maryland	897

Here are the rankings of the 50 largest law schools:

Rank	Law School	Size
146	Thomas M. Cooley	3678
5	Georgetown	2005
1	Harvard	1730
12	George Washington	1683
33	Suffolk	1652
102	New York Law School	1596
27	Fordham	1536
47	Brooklyn	1490
180	Florida Coastal	1470
66	American	1461
6	NYU	1423
110	Widener	1407
90	John Marshall-Chicago	1354
29	Loyola-L.A.	1287
73	South Texas	1267
7	Columbia	1267
11	UC-Hastings	1251
20	Miami	1235
3	Texas	1233
8	Florida	1224
45	DePaul	1184
4	Virginia	1156
2	Michigan	1151
114	Hofstra	1143
131	Cardozo	1102
40	Seton Hall	1099
53	Denver	1092
133	New England	1077
104	Baltimore	1077
108	Seattle	1043
52	William Mitchell	1031
69	Stetson	1027
61	San Diego	1025
14	UCLA	1012
82	Southwestern	1011
93	McGeorge	1007
147	Nova	1000
84	Saint Louis	981
28	Temple	974
75	Santa Clara	963
101	Chicago-Kent	957
120	Michigan State	955
44	Indiana-Indianapolis	953
22	SMU	953
34	Houston	948
89	Catholic	920
67	St. John's	901
50	Maryland	897
130	California Western	887
60	Loyola-Chicago	887

Here are the rankings of the 50 smallest law schools:

Rank	Law School	Size
142	South Dakota	199
150	Wyoming	223
140	North Dakota	243
138	Montana	245
165	District of Columbia	251
155	Maine	269
163	Northern Illinois	297
166	Hawai'i	300
174	Faulkner	304
145	Idaho	307
154	Ohio Northern	309
136	New Mexico	346
169	Laverne	354
77	Cincinnati	361
160	Campbell	361
162	Southern Illinois	361
99	Utah	385
148	Western State	387
153	Quinnipiac	387
179	CUNY	387
95	Washington & Lee	391
76	Kentucky	395
139	Arkansas-Fayetteville	403
113	Nebraska	404
128	Memphis	414
176	Regent	414
51	Baylor	418
106	Louisville	419
103	West Virginia	428
118	Willamette	428
105	Washburn	429
158	Franklin Pierce	433
122	Mercer	443
119	Drake	445
72	Missouri-Columbia	453
167	Howard	454
134	Arkansas-Little Rock	456
129	BYU	458
117	Tulsa	460
115	Creighton	463
80	Tennessee	468
97	Arizona	469
81	Wake Forest	470
96	Missouri-Kansas City	475
149	Dayton	479
83	Richmond	482
137	Akron	488
71	Kansas	489
74	Cumberland	494
85	U. Mississippi	494

• ABA Journal, New Law School Survey Ranks 'Super Lawyer' Quotient
• Above the Law, Super Law School Rankings
• WSJ Law Blog, Harvard Tops First Ever Super Lawyers' Ranking of Law Schools

Karen Brown Is Dean Finalist at Seattle

Tax Prof Karen Brown (George Washington) is one of four dean finalists at Seattle:

The Dean Search Committee at Seattle University School of Law is delighted to announce four finalists for the deanship. The committee was impressed by their outstanding records of academic achievement, administrative experience, and their enthusiastic embrace of the law school's mission to educate outstanding lawyers who are leaders for a just and humane world. The committee reviewed dozens of applications and nominations. These four stood out among the highly qualified pool. ...

Karen Brown is the Phillip Rothschild Research Professor of Law at George Washington University School of Law. She has also served as a professor at Brooklyn Law School and the University of Minnesota, where she was the Julius E. Davis Professor of Law and served as associate dean for academic affairs. Before beginning her teaching career, Brown was a trial attorney for the U.S. Department of Justice, Tax Division, and an associate at Steptoe & Johnson in Washington, D.C. Her teaching and scholarship interests are in the areas of income, corporate, and international taxation. She has co-authored a book on international tax transactions and co-edited a book on tax reform, written numerous articles and book chapters, and delivered many presentations on federal taxation. She earned her J.D. and LL.M. from New York University.

(Hat Tip: The Faculty Lounge.)

Lyons Presents Congress, Treasury, and the Responses to the Home Mortgage Crisis Today at Miami

William H. Lyons (Nebraska; visiting at Miami) presents Why Didn’t They Ask the Tax Experts? Congress, Treasury, and the Responses to the Home Mortgage Crisis at Miami today as part of itsFaculty Speaker Series:

Lyons will discuss the various real estate recovery programs the Treasury Department has implemented under the Housing and Economic Recovery Act (HERA) and the Troubled Asset Relief Program (TARP). He contends that these recovery programs were developed quickly and without adequate consideration of the federal income tax consequences. Lyons’ paper identifies and analyzes the tax and bankruptcy policy issues, as well as the technical issues, posed by HERA, TARP and the Mortgage Forgiveness Debt Relief Act.

Bill Belichick, Moneyball Savant?

Bill Belichick, coach of my beloved New England Patriots, has been pilloried in the media for going for a first down Sunday night on 4th and 2 from his own 29-yard line with a little over 2 minutes remaining while leading the Indianapolis Coats 34-28.  It turns out that Belichick was following the advice of UC-Berkeley economics professor David H. Romer, whose paper, Do Firms Maximize? Evidence from Professional Football, makes the statistical case for going for it on 4th down in virtually all situations, including the one facing Belichick:

Figure 4 combines the analyses of kicking and going for it by showing the number of yards to go where the estimated average payoffs to the two choices are equal as a function of the team’s position. On the team’s own half of the field, going for it is better on average if there is less than about 4 yards to go. After midfield, the gain from kicking falls, and so the critical value rises. It is 6.5 yards at the opponent’s 45 and peaks at 9.8 on the opponent’s 33. As the team gets into field goal range, the critical value falls rapidly; its lowest point is 4.0 yards on the 21. Thereafter, the value of kicking changes little while the value of going for it rises. As a result, the critical value rises again. The analysis implies that once a team reaches its opponent’s 5, it is always better off on average going for it.

 

Indeed, Sports Illustrated wrote about an Arkansas High School football coach who has taken this advice to heart and always goes for it on 4th down; his team has not punted since 2007 (Just Go for It! A Coach's Case for Kicking Conventional Wisdom to the Curb).

• WEEI.com, When It Comes To Fourth Down, Belichick Is Anything But Conventional
• Wall Street Journal, What's So Great About Punting? Belichick's Decision Draws Fire, But Number Crunchers Are in His Corner
• Freakonomics, Bill Belichick Is Great
• ESPN, Bottom Line Is, Bill Belichick Was Right 
• Greg Mankiw's Blog, A Rational Loss for Bill Belichick
• Tax Policy Blog, Bill Beleichick as Frederic Bastiat
• Wall Street Journal, It's Time to Man Up on Fourth Down
• Wall Street Journal, Sometimes Gutsy Call Is Safer One
• Wall Street Journal: It's Fourth and Long. Go For It?

http://www.flickr.com/photos/compujeramey/ / CC BY 2.0

New Issue of Journal of Taxation of Investments

The Journal of Taxation of Investments has published its Fall 2009 issue (Vol. 27, No. 1), with these articles:

• Matthew F. Kluchenek & Nicole M. Kuchera, A Credit Default Swaps Primer: Uses, Mechanics, Benefits, Risks, Regulation, and Developments, 27 J. Tax'n Inv. 3 (Fall 2009)
• Joseph Septimus, Are Life Settlements a Trade or Business? Applying Old Standards to a New Idea, 27 J. Tax'n Inv. 47 (Fall 2009)
• Dashiell Shapiro, OECD Tax Treaties: Who Beneficially Owns Dividends in a Total Return Swap?, 27 J. Tax'n Inv. 63 (Fall 2009)
• Kenneth A. Goldstein, Estate and Gift Planning: Ten Reasons to Plan Now, 27 J. Tax'n Inv. 81 (Fall 2009)
• Bradley T. Borden, Section 1031 Qualified Intermediaries in the New Economy, 27 J. Tax'n Inv. 86 (Fall 2009)

A Great Tax PowerPoint

Here. (Hat Tip: Jim Maule.)

Record Number of LSAT Test-Takers

Following up on last week's posts, Law School Is a Bad Investment and "Going to Law School Is Like Starting to Smoke":  a new blog notes Big Law, We Have a Problem:

The numbers are out, and they are huge. On September 26th, more students took the LSAT than have ever taken a single administration of the LSAT in the history of the exam.

 

Mundaca Responds to Senate Finance Committee Questions

Following up on my prior post, Senate Holds Hearing Today on Michael Mundaca's Nomination to be Assistant Secretary for Tax Policy: Michael Mundaca has submitted this 41-page document responding to questions from the Senate Finance Committee.

Google Scholar Adds Case Law to its Search Engine

Google Scholar has now added "legal opinions and journals" to its search engine:

As many of us recall from our civics lessons in school, the United States is a common law country. That means when judges issue opinions in legal cases, they often establish precedents that will guide the rulings of other judges in similar cases and jurisdictions. Over time, these legal opinions build, refine and clarify the laws that govern our land. For average citizens, however, it can be difficult to find or even read these landmark opinions. We think that's a problem: Laws that you don't know about, you can't follow — or make effective arguments to change.

Starting today, we're enabling people everywhere to find and read full text legal opinions from U.S. federal and state district, appellate and supreme courts using Google Scholar. You can find these opinions by searching for cases (like Planned Parenthood v. Casey), or by topics (like desegregation) or other queries that you are interested in. For example, go to Google Scholar, click on the "Legal opinions and journals" radio button, and try the query separate but equal. Your search results will include links to cases familiar to many of us in the U.S. such as Plessy v. Ferguson and Brown v. Board of Education, which explore the acceptablity of "separate but equal" facilities for citizens at two different points in the history of the U.S. But your results will also include opinions from cases that you might be less familiar with, but which have played an important role.

We think this addition to Google Scholar will empower the average citizen by helping everyone learn more about the laws that govern us all. To understand how an opinion has influenced other decisions, you can explore citing and related cases using the Cited by and Related articles links on search result pages. As you read an opinion, you can follow citations to the opinions to which it refers. You can also see how individual cases have been quoted or discussed in other opinions and in articles from law journals. Browse these by clicking on the "How Cited" link next to the case title.

Former Call Girl Belle de Jour/Brooke Magnanti Paid Taxes on Her "Sex Work Earnings"

Times Online, Belle de Jour Owns Up to Her Mother:

Belle de Jour can rest easy: her mum doesn’t mind that she worked as a call girl whose online diary became a literary phenomenon.

Dr. ooke Magnanti, a research scientist working in Bristol, unmasked herself yesterday as the anonymous author behind the best-kept secret in modern literature. ...

An entry on the Belle de Jour blog website today ... took the opportunity to clarify her relationship with Her Majesty’s Revenue and Customs department. “So much curiosity about my tax situation!” she wrote. “Yes, I did pay taxes on sex work earnings.”

(Hat Tip: Andy Morriss.)

Duff Presents Carbon Taxation in Theory and Practice Today at Loyola-L.A.

David G. Duff (University of british Columbia) presents Carbon Taxation in Theory and Practice at Loyola-L.A. today as part of its Tax Policy Colloquium Series.   The commentators are Charles D. Kolstad and Corbett A. Grainger (both of the University of California-Santa Barbara, Department of Economics) (authors of Who Pays a price on Carbon?). Here is the abstract:

There are a number of regulatory approaches to addressing the problem of global climate change, but four stand out: (i) carbon taxation, (ii) cap-and-trade programs, (iii) government subsidies, and (iv) so-called command-and-control regulation. This chapter reviews the carbon tax programs in effect throughout the world, and evaluates their effectiveness in reducing carbon dioxide emissions in an economically efficient manner. This chapter also sets out a list of economic, political, legal and administrative reasons for favouring carbon taxation over all of the other options. We do not argue that carbon taxation is the only solution to climate change, but that it should serve as the centerpiece of national governmental responses to the problem of climate change. Indeed, one reason we favour carbon taxation is precisely because it leaves room for other approaches, and also avoids some problems with federalism that plague Canada, the United States, and other democratic nations.