TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Saturday, November 28, 2015

This Week's Ten Most Popular TaxProf Blog Posts

NY Times: Pfizer Didn’t Need An Inversion To Avoid Paying U.S. Taxes

PfizerNew York Times Deal Book:  Pfizer Didn’t Need an Inversion to Avoid Paying U.S. Taxes, by Jeff Sommer:

Pfizer’s declaration that it intends to merge with Allergan and cut taxes by moving its tax home to Dublin from New York City has set off something of a furor.

The deal, which may not technically be a tax inversion, functions similarly. President Obama has called inversions unpatriotic, the Treasury has tried to block them, and an array of political and government figures have criticized them.

Tax inversions pose a quandary, but by focusing on them too narrowly we might easily overlook an important truth: Companies haven’t needed tax inversions to avoid American taxes. They’ve already got mountains of earnings stored overseas, well over $2 trillion and, quite likely, much, much more.

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November 28, 2015 in Tax | Permalink | Comments (1)

The Average College In America Offers A 48% Discount

48% OffInside Higher Ed, Discount Much?:

Is a high discount rate a guaranteed trouble sign for colleges? Not necessarily, experts say -- sometimes colleges can leverage discounts to increase revenue, at least if they are increasing enrollment. But maintaining very high discount rates can be a risky strategy and an indicator a college is in distress.

The average discount rate offered by colleges to first-year students has risen significantly in recent years. In 2014 it was 48 percent -- the highest level ever, according to a survey of 411 private colleges by the National Association of College and University Business Officers -- up one-fifth from 2007’s average of 39 percent.

Many private college leaders say they needed to raise the rate, even beyond their comfort level for such decisions in prior years, to respond to family concerns about paying for college after the economy tanked in 2008. But if 48 percent is one thing, what about 60 percent or higher? And it's not lost on many higher education finance experts that Sweet Briar College decided to close when it topped a 60 percent discount rate (even if the college's alumnae subsequently intervened and the college revived itself). But some colleges are going to large discounts as part of enrollment strategies they think could reshape their institutions.

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November 28, 2015 in Legal Education | Permalink | Comments (2)

Ohio State Law School Under Microscope For Reaction To 2L's Pro-Life Op-Ed

Ohio State LogoWashington Times, Ohio State Law School Under Microscope for Reaction to Pro-Life Column:

Student: Leaders more concerned about squelching conservative voice than ensuring safety.

All Madison Gesiotto wanted to do when she met with the dean of her law school was report a threat prompted by a newspaper column she wrote pointing out the high abortion rate in the black community.

She assumed the meeting would last 10 minutes. Instead, she said, she was there for about an hour as three deans at the Ohio State University Moritz College of Law critiqued her on what they saw as problems with her Oct. 23 column in The Washington Times, The Number One Killer of Black Americans. ...

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November 28, 2015 in Legal Education | Permalink | Comments (15)

The IRS Scandal, Day 933

IRS Logo 2Washington Times, Impeach IRS Chief John Koskinen: Congress Must Halt the Tax Agency’s Partisan Scheming, by Alexander Hendrie:

After revelations that the Internal Revenue Service was restricting political speech and targeting conservative and tea party groups, John Koskinen was appointed to head the agency, promising reform and transparency.

These promises never came to fruition. Instead of admitting fault, Mr. Koskinen’s IRS refused to admit wrongdoing and undertook a concerted effort to evade and stonewall congressional investigations.

Investigations into the Lois Lerner targeting scandal have since concluded. A detailed report compiled by the House Oversight and Government Reform Committee and Republican Chairman Jason Chaffetz of Utah has determined that the IRS misled Congress and failed to serve the American people during the targeting and the resulting investigation.

Now the agency must be held accountable from the top down.

Following the release of the findings, congressional investigators called on Mr. Koskinen to resign. He refused.

Investigators called on President Obama to remove him. The president refused.

Then last month, the Obama Department of Justice announced that no IRS employee, including Lois Lerner, would face criminal charges over targeting conservative groups. The Justice Department dismissed the treatment of groups as mere “mismanagement, poor judgment and institutional inertia,” despite the fact that just one conservative group was granted nonprofit status in the three-year time period between February 2009 and May 2012.

The next logical step is to impeach Mr. Koskinen, and Mr. Chaffetz has done what he should by introducing articles of impeachment. ...

While it is clear that there is much to fix in this out-of-control agency, reform can only go so far as long as the commissioner remains so intent on behaving as a political actor.

Step One must be installing new leadership. John Koskinen should be impeached.

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November 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, November 27, 2015

More Bar Exam Carnage: California

CaliforniaFollowing up on my previous posts (links below):

Los Angeles Times, Pass Rate for Summer California Bar Exam Hits Historic Low: Under 47%:

For the second year in a row, the percentage of people who successfully took the summer California bar exam fell to a historic low, with less than 47% passing, according to state statistics. Last year, only 48.6% of those who took the exam made the grade, the first time the passage rate dipped below half in nearly a decade.

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November 27, 2015 in Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Different Perspectives On The Racial Unrest At Harvard Law School

Harvard Law School Logo (2014)Following up on my prior posts:

Boston Globe op-ed:  Harvard Law School Alumni, Stop Donating, by Bianca Tylek (Harvard Law School 3L):

Three months ago, as the summer before my last year of law school was winding down, I received a call from the administration asking me to speak on behalf of the student body at a gala commemorating the launch of the Campaign for the Third Century. They encouraged me to accept the engagement, explaining that I would have a powerful platform to tell a compelling story. I agreed. Just a few weeks ago, after months of preparation, I delivered my testimonial in front of 600 Harvard Law School alumni. ...

After telling my story, I praised the law school and specific faculty members for their continual support over the past three years. To my surprise, the alumni took to their feet with tears in their eyes, standing up to applaud in what felt like a thunderous demonstration of support not just for me, but also for the marginalized groups I represent.

The night ended with Dean Martha Minow making the ask: $305 million.

To the extent that my story motivated our alumni to open their wallets, I now ask that they close them and stop donating.

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November 27, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 932

IRS Logo 2Town Hall, Obama's IRS: "Where Criminals Go Free and Americans Fear Their Government":

It was no surprise DOJ announced it wasn't pressing charges, because after all, considering DOJ attorneys colluded with Lerner on efforts to throw at least one conservative leader in jail to send a message, they'd also have to bring charges against themselves. As a reminder

Last year emails revealed former IRS official Lois Lerner was in contact with the Department of Justice Criminal Division about criminally prosecuting conservative tea party groups for pursuing political activity (opposed to President Obama's agenda) by "posing" as non-profit organizations.

Now, new documents obtained by government watchdog Judicial Watch through two different Freedom of Information Act lawsuits show extensive collaboration between the IRS and DOJ (and subsequently the FBI) to go after conservative groups with criminal charges. The IRS likely violated federal law by illegally sharing 1.25 million pages of taxpayer information with DOJ, which were contained on nearly two dozen FBI backup tapes. Further, information shows DOJ wanted IRS officials who were scheduled to testify in front of Congress about the targeting scandal to turn over planned remarks to them first before delivering on Capitol Hill.

Now that DOJ has issued its non-punishment, individuals and groups targeted by the IRS, DOJ and Lerner are speaking out. ...

“By failing to indict Lois Lerner, the Obama Justice Department – or, should we say, the Obama Injustice Department – is making a mockery of this ‘investigation,’ when countless American citizens, by Ms. Lerner’s own admission, were persecuted by the Internal Revenue Service. This is a woman, after all, who looked into the camera at a national television audience and directly at a congressional committee and refused to answer their questions for fear of incriminating herself," Tea Party Patriots President Jenny Beth Martin said in a statement. “This is just the latest evidence that the Justice Department, whether under Eric Holder or Loretta Lynch, has simply become the political hatchet-men for President Obama and his cronies throughout the Administration. Clearly, we cannot rely on the Department of Justice to provide justice. Consequently, we continue to urge Congress to vigorously investigate the IRS, Ms. Lerner, and their illegal persecution of law abiding American citizens.

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November 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, November 26, 2015

WKRP in Cincinnati Thanksgiving Turkey Drop

November 26, 2015 in Legal Education, Tax | Permalink | Comments (2)

WSJ: Skadden Is At Center Of Election Year Tax Policy Debate Over Inversions

Skadden LogoWall Street Journal, At Skadden, Tax Law Isn’t So Boring as Inversions Raise the Stakes: Law Firm Lands in the Middle of an Election-Year Debate About U.S. Tax Policy:

It isn’t boring to be a tax attorney these days.

Just ask the team at Skadden, Arps, Slate, Meagher & Flom, working on Pfizer’s $155 billion deal with Allergan. Their immediate task is getting the biggest tax-lowering merger in history past U.S. authorities.

Meanwhile, they are facing off with the IRS to get tax-free treatment for Yahoo’s spinoff of its $20 billion stake in Alibaba—an effort the agency dealt a setback in September—as well as shepherding a pair of other big transactions that would move U.S. companies overseas.

The deals have landed Skadden in the middle of an election-year debate about U.S. tax policy and corporate tax planning, with billions of dollars riding on the firm’s efforts.

“It does seem like they are involved in all of the really difficult and controversial deals,” said Robert Willens, an independent tax analyst. “They have a great reputation in the tax area, but if they are found to be wrong on one or two, they go from looking aggressive and smart,” he cautioned, “to just looking aggressive.” ...

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November 26, 2015 in Tax | Permalink | Comments (1)

What Tax Profs Are Thankful For

  • ThanksgivingPaul Caron (Pepperdine):  "I am thankful for my beautiful wife, daughter, son, and dog, and that three of them are gainfully employed."
  • Jeffrey Cooper (Quinnipiac):  "I'm thankful for my family of 5-- Benjamin, Ethan, Colleen, and my wife, Alexandra. Colleen turns 1 on Saturday and she is quite pleased to be making her TaxProf Thanksgiving debut."
  • Bridget Crawford (Pace):  "I am thankful for health, my creative Fed Tax students, and Cambridge University Press."
  • Cliff Fleming (BYU):  "I'm grateful for the blessing of my wife and best friend being able to push back against her cancer for another year so that we were able to celebrate our 51st anniversary. That's enough."
  • Stephanie Hoffer (Ohio State):  "I am thankful for my dad."

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November 26, 2015 in Legal Education, Tax | Permalink | Comments (0)

Hoffer: Financial Planning for Children With Disabilities

HofferStephanie Hoffer (Ohio State), Financial Planning for Children With Disabilities:

My son George is a bright shining star. He is almost five, and he loves to read out loud, play the harmonica, and paint. He also happens to have Down Syndrome. He is smart, funny, and loving, and I can’t imagine life without him. I am grateful every day for the privilege of being his mom. And like any other mom of any other child, I worry every day about his future. ...

Until recently, parents and individuals with significant disabilities had two basic estate planning options to preserve Medicaid eligibility: the responsible sibling or the special needs trust. Leaving money with a responsible sibling is risky. It is exposed the sibling’s creditors. It can be lost in a divorce. If the sibling dies, it might be dispersed.   But putting money in a special needs trust isn’t much better. Although the money is protected from creditors, the Medicaid law requires that the trustee have absolute discretion over the money and that the money not be used for expenses that could be covered by government programs. In other words, an individual who is a beneficiary of a special needs trust can never demand money from the trust, and if the trustee decides to distribute money, the individual beneficiary cannot use it for ordinary adult expenses like rent, groceries, or even some utilities.

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November 26, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 931

IRS Logo 2American Thinker, America's Soft Tyranny is Hardening:

We are semi-officially a lawless, soft (but hardening) tyranny.  How else does one explain Lois Lerner not being charged with the numerous crimes she has most certainly committed? ...

American citizens outside of the protective bubble of the government are not only expendable, they are fodder for bureaucratic abuse.  The IRS, the EPA, the DOJ, the VA, and the FEC under Obama are free to target and abuse those of us without the financial or government resources to protect ourselves.   The countless good people who were targeted by the IRS were prevented from exercising the freedoms guaranteed to them by the Constitution.  The actions of Lerner and the IRS very likely changed the outcome of the 2012 election.  That was the plan and it worked.  Prevent, with malice aforethought, hundreds of conservative groups across the country from organizing and raising money for their cause and you have silenced millions of people.

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November 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Wednesday, November 25, 2015

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2014)The Virginia Tax Review has published Vol. 34, No. 3 (Winter 2015):

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November 25, 2015 in Scholarship, Tax | Permalink | Comments (0)

Henderson: The Hardest Working Lawyers Are Also The Happiest

The Legal Whiteboard:  What Is The Impact of Longer Hours on Lawyer Satisfaction?, by William Henderson (Indiana):

This fall, Lawyer Metrics was given the opportunity to analyze survey data supplied to us from by The Indiana Lawyer, the paper of record for the Indiana legal profession.  The sample included 516 respondents drawn from the paper's readership.  My colleague at Lawyer Metrics, Evan Parker, sliced and diced the data in a way the gave us some useful insights into the hours/satisfaction question, at least for a broad swath of lawyers in one midwestern state. ...

The most satisfied lawyers, at least in Indiana, appear to be those working longer hours.  The simplest explanation is that they love their work.  Lawyers working fewer hours appear to acknowledge the better work-life balance and the organizational flexibility that makes it possible.  But shorter hours are not associated with higher scores on the other dimensions of satisfaction.  Apparently, at least some lawyers prefer an all-you-can-work buffet style workplace. ...

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November 25, 2015 in Legal Education | Permalink | Comments (0)

IRS Has Second Lowest Favorability Rating (42%) Among Federal Agencies, With Largest Partisan Divide: 24% Of Republicans, 58% Of Democrats View IRS Favorably

Chart 1Pew Research Center, Ratings of Federal Agencies, Congress and the Supreme Court:

As in the past, the public expresses favorable opinions of a wide range of federal agencies and departments, but there are some notable exceptions. Currently, majorities give favorable assessments of 13 of the 17 agencies and departments tested; by contrast, fewer than half express favorable opinions of the Justice Department, the Department of Education, the IRS and the Department of Veterans Affairs (VA). ...

Of the 17 agencies and departments in the survey, the Department of Justice (46%), the Department of Education (44%), the IRS (42%) and the VA (39%) receive among the lowest favorability ratings. Roughly half have unfavorable impressions of all four organizations. ...

As with other attitudes toward the federal government, there continue to be deep partisan differences in favorability: 45% of Democrats and Democratic leaners have a favorable view of the federal government, compared with 18% of Republicans and Republican leaners. ...

There are substantial partisan gaps in the views of several federal departments and agencies. Roughly two-thirds of Democrats and Democratic leaners have favorable impressions of the Department of Health and Human Services, or HHS (68%), and the EPA (67%). Only about four-in-ten Republicans and Republican leaners view these agencies favorably (both 39%).

And more than twice as many Democrats (58%) as Republicans (24%) have a favorable opinion of the IRS.

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

Fleischer: Why Pfizer’s Deal May Change The System Of Taxing Multinationals

NY Times Dealbook (2013)New York Times Deal Book:  Why Pfizer’s Deal May Change the System of Taxing Multinationals, by Victor Fleischer (San Diego):

Pfizer’s proposed merger with Allergan is a blockbuster deal in the pharmaceutical industry. History may remember the deal instead for finally killing off the United States’ outdated approach to taxing multinational corporations.

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November 25, 2015 in Tax | Permalink | Comments (0)

Should Law Librarians Attend And Participate In Faculty Meetings?

Faculty MeetingCharlotte D. Schneider (Reference Librarian, Rutgers), Inclusion and Participation: Law Librarians at Law Faculty Meetings, 107 Law Libr. J. 113 (2015):

Despite the vital role they play in the success of their law schools, academic law librarians are often denied attendance to and participation in law faculty meetings on certain matters of law school governance. This article argues that including qualified librarians in faculty meeting discussions and decision making will benefit law schools, faculty, and students alike.

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November 25, 2015 in Legal Education, Scholarship | Permalink | Comments (4)

The IRS Scandal, Day 930

IRS Logo 2The Daily Signal:  Lois Lerner Won’t Be Facing Criminal Charges. Here Are the Problems With the ‘Investigation’ That Cleared Her., by Hans von Spakovsky (Heritage Foundation):

In the Oct. 23 letter, Peter J. Kadzik, the assistant attorney general for legislative affairs, said that the Justice Department’s investigation, conducted jointly by the Criminal Division’s Public Integrity Section and the Civil Rights Division’s Criminal Section, “uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia.”

Indeed, the letter admits that the IRS “mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups, leaving the appearance the IRS’s conduct was motivated by political, discriminatory, corrupt, or other inappropriate motive.”  However, according to Kadzik, “ineffective” or “poor management is not a crime.”

Hans von Spakovsky is an authority on a wide range of issues—including civil rights, civil justice, the First Amendment, immigration, the rule of law and government reform—as a senior legal fellow in The Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies and manager of the think tank’s Election Law Reform Initiative. Read his research.

In an eight-page letter last week to the Judiciary Committee of the U.S. House of Representatives, the Justice Department informed Chairman Bob Goodlatte, R-Va., that it was closing its investigation of the IRS targeting scandal, claiming there is not sufficient evidence to “seek any criminal charges” against Lois Lerner or any other IRS officials.

However, there were some key omissions in the letter that will continue to raise questions over the credibility of the investigation and its conclusion.

In the Oct. 23 letter, Peter J. Kadzik, the assistant attorney general for legislative affairs, said that the Justice Department’s investigation, conducted jointly by the Criminal Division’s Public Integrity Section and the Civil Rights Division’s Criminal Section, “uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia.”

Indeed, the letter admits that the IRS “mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups, leaving the appearance the IRS’s conduct was motivated by political, discriminatory, corrupt, or other inappropriate motive.”  However, according to Kadzik, “ineffective” or “poor management is not a crime.”

The Daily Signal is the multimedia news organization of The Heritage Foundation.  We’ll respect your inbox and keep you informed. Kadzik says that what happened is “disquieting” and may “necessitate corrective action.”  But criminal prosecution would require the Justice Department to prove that an “IRS official intentionally discriminated against an applicant based upon viewpoint.”  Such “viewpoint discrimination” may violate a number of civil rights statutes as well provisions of the tax code.  Kadzik claims that proof that an “IRS employee acted because of mistake, bad judgment, ignorance, inertia, or even negligence would be insufficient to support a criminal charge.”

Kadzik may be correct in his analysis of the applicable law. But in his recitation of the many witnesses investigators interviewed and all of the IRS documents they reviewed, Kadzik never really gives a credible explanation of why the IRS developed the criteria it used to identify the organizations targeted for increased scrutiny. As originally reported by the Treasury Department’s inspector general, and as Kadzik admits in his letter, those criteria were clearly based on the specific politics of conservative groups, particularly Tea Party organizations, who used words like “Patriots” in their applications.

Kadzik claims that no IRS employee, including some witnesses who self-identified as supposedly “politically conservative,” reported any allegation that the mishandling of these conservative organizations was “motivated by political bias, discriminatory intent, or corruption.” The explanation Kadzik provides for organizations being targeted that were clearly conservative in their political outlook was a desire by IRS employees “to treat similar applications consistently and avoid making incorrect decisions.” If that is so, then why weren’t applications from liberal advocacy organizations, whose only difference was their political outlook, not their basic tax or organizational structure, also targeted to be “consistent?”

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November 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, November 24, 2015

Fennell Presents The Distributive Deficit In Law And Economics Today At Columbia

Fennell (2015)Lee Anne Fennell (Chicago) presents The Distributive Deficit in Law and Economics, 100 Minn. L. Rev. ___ (2016) (with Richard H. McAdams (Chicago)), at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Welfarist law and economics ignores the distributive consequences of legal rules to focus solely on efficiency, even though distribution unambiguously affects welfare, the normative maximand. The now-conventional justification for disregarding distribution is the claim of tax superiority: that the best means of influencing or correcting distribution is via tax-and-transfer. Critics have observed that optimal redistribution through tax may be politically infeasible, but have generally overlooked the rejoinder that the same political impediments to redistribution through tax will block redistribution through legal rules. This “invariance hypothesis,” as we label it, holds that there is only one distributive equilibrium and that Congress will offset through tax any deviations from it.

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November 24, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hillary Clinton's Growing Tax Agenda

Hillary 2016Wall Street Journal, Clinton’s Proposed Tax Credits Expand: Latest Focus on Caregivers Is at Least the Ninth Tax Proposal Since This Summer:

If you’re caring for an aging parent, deciding whether to invest in rural America or struggling to pay medical bills, Hillary Clinton has a tax credit for you.

As the Democratic presidential front-runner rolls out her policy agenda, she has repeatedly turned to the tax code as one of her favorite policy tools. It offers a way to reward behavior she wants to see more of, punish actions that she sees as harmful, and directly aid families with particular challenges.

Compared with outright spending programs, tax cuts can be simpler to administer, carefully targeted and politically easier to enact.

But there are downsides: They have a mixed record of success and often reward businesses for doing things they were going to do anyway. It can be complicated to claim the benefits. And the Internal Revenue Service, already sagging under budget cuts and the complex task of administering the Affordable Care Act, would be given even more work.

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November 24, 2015 in Political News, Tax | Permalink | Comments (0)

It's Time To Drain The Bipartisan Tax Extender Feeding Trough

Extenders 2New York Times op-ed:  Giving Billions to the Rich, by Marc Short & Andy Koenig (Freedom Partners):

It's that time of year again, when Republicans and Democrats put aside their differences to dole out gifts of corporate welfare to a lucky few.

Congress will soon take up the so-called tax extenders package, which has more than 50 tax breaks affecting a variety of industries and issues. Lawmakers will undoubtedly spin this as a tax cut that will benefit hardworking Americans and improve our economy, but the reality is that this bill mostly helps the wealthy and the well connected.

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November 24, 2015 in Tax | Permalink | Comments (0)

Bar Exam Carnage Spreads Across The Country

Following up on my recent posts (links below):  National Law Journal, Bar Exam Pass Rates Drop Across the Country:

Bar exam passage rates sank in several big states, indicating a drop in the qualifications of students amid fewer law school applications.

Pass rates in California, the District of Columbia, Florida, Georgia, New Jersey, New York and Pennsylvania all came in lower for the July 2015 exam.

“As demand for law schools has dropped over the last few years, law schools, as a result, have been admitting and graduating less-qualified students,” said Derek Muller, an associate professor at Pepperdine University School of Law in Malibu, California, who has studied and blogged about the issue.

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November 24, 2015 in Legal Education | Permalink | Comments (0)

60% Of CalPERS' Private Equity Investments Contain Management Fee Waivers

Calpers 2Reuters, Majority of Calpers Private Equity Investments Contain Tax Deal:

The majority of deals signed by the California Public Employees' Retirement System with private equity firms allow the firms to reduce their tax bills by treating ordinary management fees as capital gains, an issue that is drawing increasing regulatory scrutiny.

At issue is what's known as a management fee waiver, in which private equity firms can waive the right to collect a management fee from an investor and instead accept the same amount of money as a capital contribution. The device allows the firms to decide themselves whether to treat their fees as ordinary income or as capital gains, which are taxed at lower rates.

Almost 60 percent of the $30.5 billion in private equity investments held by Calpers, the nation's largest public pension fund, contain the waivers.

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November 24, 2015 in Tax | Permalink | Comments (1)

Three Blogs In Our Law Professor Blogs Network Chosen For ABA Blawg 100

Congratulations to our Law Professor Blogs Network bloggers recognized by the ABA Journal:Blawg 100

Blogs named to the 2015 ABA Blawg 100 ("the 100 best Web sites by lawyers, for lawyers, as chosen by the editors of the ABA Journal"):

  • EvidenceProf Blog, edited by Colin Miller (South Carolina).  ABA:  "Every weekday, law professors post on the very latest rulings regarding the admissibility of evidence in criminal cases and what sorts of lines of questioning should be permitted at criminal trials. They also note differences between the federal rules of evidence and the rules of various states. Occasionally, they will comment on whether they think courts have reached the right outcomes in these evidence cases or note fishy behavior by prosecutors."
  • Brian Leiter's Law School Reports, edited by Brian Leiter (Chicago).  ABA:  "This blog highlights academic job openings and covers salaries of professors, salaries of recent law school graduates, recent law review articles and other law school news. It can also be counted on to come up with its own rankings of law schools and law reviews."

Hall of Fame 2Blog named to the ABA Blawg 100 Hall of Fame:

  • Wills, Trusts & Estates Prof Blog, edited by Gerry W. Beyer (Texas Tech).  ABA:  "A loyal audience devours this blog seven days a week—and some readers have reported that trusted Texas Tech law professor Gerry W. Beyer will respond to them when they reach out. Beyer stays on top of new regulations in Texas ad nationwide as well as news and insights from both mainstream media and scholarly journals that affect those with estate planning and elder law practices."

Two other Law Professor Blogs Network blogs were inducted in the ABA Blawg 100 Hall of Fame in previous years:

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November 24, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Manoj Viswanathan Joins UC-Hastings Tax Faculty

ViswanathanPress Release:

Viswanathan is currently a Visiting Assistant Professor and will co-teach UC Hastings' Business Tax Practicum for Social Enterprises, scheduled to start next semester. His research focuses on tax policy, economic development, and the regulation of tax-exempt organizations.

Prior to his arrival at UC Hastings, Viswanathan was a clinical teaching fellow and lecturer at Yale Law School, where he co-taught the Community and Economic Development clinic, and worked as a tax associate with Skadden, Arps, Slate, Meagher, & Flom LLP's New York City office.

He received his LLM and J.D. from New York University School of Law, and undergraduate and graduate degrees from the Massachusetts Institute of Technology. ...

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November 24, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Pfizer-Allergan Merger Skirts New Anti-Inversion Rules, Sticks Shareholder With The Tax Bill

TIGTA: IRS Should Shift Definition Of Rich From $200k to $600k For Audits

TIGTAThe Treasury Inspector General for Tax Administration has released Improvements Are Needed in Resource Allocation and Management Controls for Audits of High-Income Taxpayers (2015-30-078):

Given the IRS’s goal of providing higher audit coverage to high-income taxpayers and its reduced operating budget, it is that much more important that the IRS selects audits that have the highest compliance impact.  However, it is not clear that the IRS audits the most productive high-income taxpayer cases or that it has a clear rationale for the inventory balance it has established among taxpayers at different TPI levels.

We conducted an analysis on Fiscal Year 2014 audit closures of high-income taxpayers comparing the number of audits to the number of tax returns filed in Calendar Year 2013 to evaluate the IRS’s audit coverage and audit productivity in the various TPI ranges.  Figure 5 shows that the IRS is providing increased audit coverage as a percentage of each TPI range as the high-income taxpayers’ TPIs increase.

Figure 5

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November 24, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 929

IRS Logo 2Daily Caller, DOJ’s Lois Lerner Letter Leaves Much To Be Answered:

The Department of Justice’s (DOJ) explanation as to why top Internal Revenue Service (IRS) official Lois Lerner isn’t facing criminal charges leaves much to be desired.

After a two-year probe — which faced challenges due to Lerner’s crashed hard drive, the absence of email archives and the destruction of over 400 electronic backup tapes — the DOJ said it was unable to prove the IRS official “intentionally discriminated against an applicant based upon viewpoint” and cited line-employees’ “ignorance, inertia” and “negligence” for delays in Tea Party applications. Concerns raised by lawmakers over the course of the investigation were omitted from the department’s explanation. 

The DOJ’s letter failed to address whether investigators looked into who could have had access to Lerner’s private email account, which she sometimes used for official business — an issue members of the Ways and Means Committee asked to be investigated in a letter to Attorney General Eric Holder in April 2014.

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November 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, November 23, 2015

Brooks Presents The Troubling Role Of Tax Treaties Today At McGill

BrooksKim Brooks (Dalhousie University, Schulich School of Law) presents The Troubling Role of Tax Treaties (with Richard Krever (Monash University, Department of Business Law & Taxation)) at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series:

The notional purpose of tax treaties is to prevent double taxation and tax evasion. The actual purpose is to reallocate taxing rights between an investor’s home jurisdiction (the residence state) and the host jurisdiction (the source state). The effect is to reduce or remove the taxing rights of a source state (a capital importing state) to leave more room for tax in the residence state (a capital exporting state). The revenue costs of agreeing to reduce taxing rights in a treaty are thought to be offset by other benefits. The benefits may be exaggerated. To the extent they may actually be realized, all can likely be achieved more efficiently through unilateral action by the source state.

November 23, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

2016 Business Tax Climate: Chilliest in Blue States

Tax Foundation logoThe Tax Foundation has released the 2016 State Business Tax Climate Index, which ranks the fifty states according to five indices: corporate tax, individual income tax, sales tax, unemployment insurance tax, and property tax. Here are the ten states with the best and worst business tax climates:






South Dakota














Rhode Island






New Hampshire










New York




New Jersey

Interestingly, all ten of the states with the worst business tax climates voted for Barack Obama in the 2012 presidential election, and seven of the ten states with the best business tax climates voted for Mitt Romney.

Tax Foundation

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November 23, 2015 in Tax, Think Tank Reports | Permalink | Comments (6)

WSJ: Elizabeth Warren’s Tax Warning To Democrats

Warren 3Following up on Wednesday's post, Elizabeth Warren Delivers Major Speech Today On International Corporate Tax Reform: Wall Street Journal editorial, Elizabeth Warren’s Tax Warning: She Orders Democrats Not to Make the U.S. Tax Code More Competitive:

Sen. Elizabeth Warren (D., Mass.) must be getting nervous about the chances of tax reform for U.S. businesses. On Wednesday she fired a shot across the bow of any Democrat tempted to consider lowering the highest corporate income-tax rate in the industrialized world. By “any” we mean Sen. Chuck Schumer. The New York Democrat has flirted with the idea of making the U.S. economy more competitive.

Ms. Warren showed up at the National Press Club to pronounce that the idea that American companies are overtaxed is “not true.” In her prepared remarks she said the strategy of “giant corporations” is to “tell a story about high U.S. taxes, demand tax cuts from the U.S. Congress, and threaten to leave the U.S. for good if they don’t get what they want. I say it’s time to call their bluff.”

Call their bluff? Their bluff has been called. They’ve shown their cards. And they’ve moved overseas.

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November 23, 2015 in Tax | Permalink | Comments (4)

Ending Segregation Of LGBTQ Students By Creating Barriers To 501(C)(3) Tax-Exempt Status

Jennifer Lunsford (Segar & Sciortino in Rochester, New York) & R. Zachary Sanzone, Outing the New Jim Crow: Ending Segregation of LGBTQ Students by Creating Barriers to 501(C)(3) Tax-Exemption Status, 23 Am. U. J. Gender Soc. Pol'y & L. 435 (2015):

Congress has broad taxation powers. As such, both the government and the citizenry have used the tax code throughout history to accomplish otherwise impossible goals. In the 1960s and 1970s, following the forced desegregation of public schools, private, religious schools began cropping up all over the country to provide a de facto segregated experience to white students. The legal obstacles that prevented the government from forcing these schools to accept black students are the same obstacles standing in the way of LGBTQ integration in similar schools today. To circumvent these legal obstacles the IRS issued Revenue Rule 71-447, which refused § 501(c)(3) tax-exempt status to private schools with racially discriminatory admission standards. Section 501(c)(3) status was vital to these schools as it allowed them to not only avoid tax burdens, but also encouraged monetary contributions from others by making donations tax deductible under § 170. This revenue rule effectively put a chokehold on the funding stream for private, religious schools that refused to accept non-white students, thereby forcing these schools to either integrate or close their doors. Implementing such a method today can help integrate LGBTQ students into the classroom community.

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November 23, 2015 in Scholarship, Tax | Permalink | Comments (2)

Bottom 50% Earn 11% Of Income, Pay 3% Of Income Taxes; Top 1% Earn 19% Of Income, Pay 38% Of Income Taxes

Tax Foundation logoFollowing up on my previous post, Income Inequality Decreased Significantly in 2013:  Tax Foundation, Summary of the Latest Federal Income Tax Data, 2015 Update:

The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2013, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles. The data demonstrates that the U.S. individual income tax continues to be progressive, borne mainly by the highest income earners. ...

High-Income Americans Paid the Majority of Federal Taxes
In 2013, the bottom 50 percent of taxpayers (those with AGIs below $36,841) earned 11.49 percent of total AGI. This group of taxpayers paid approximately $34 billion in taxes, or 2.78 percent of all income taxes in 2013. In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $428,713 and above), earned 19.04 percent of all AGI in 2013, but paid 37.80 percent of all federal income taxes.

In 2013, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $465 billion, or 37.80 percent of all income taxes, while the bottom 90 percent paid $372 billion, or 30.20 percent of all income taxes.

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November 23, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Amidst 32% Enrollment Decline, Gonzaga Law School Offers Buyouts To All 17 Tenured Faculty (4 Accept)

Gonzaga LogoInlander, Why Gonzaga University School of Law Offered Buy-Outs to its Tenured Professors:

From 2011 to 2014, GU's School of Law has seen its application pool deplete by 36 percent. Enrollment has dropped by 28 percent in that same time.

As a result, the administration has offered buy-outs to all of its tenured professors. So far, four of the 17 faculty members have taken the offer. Law school dean Jane Korn does not anticipate the need to cut any more positions.

"Nationally, since 2011, applications to law schools have dropped around 40 percent," Korn says. "Every dean had to make a decision to lower standards or take a budget hit, and we decided to take the budget hit."

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November 23, 2015 in Legal Education | Permalink | Comments (12)

Death Of Matthew Rosen, Co-Head Of Skadden's Tax Practice

RosenNew York Times Obituary (Nov. 20, 2015):

The partners, attorneys and staff of Skadden, Arps, Slate, Meagher & Flom mourn the passing of our partner and friend Matthew Rosen. A co-head of our tax practice, Matthew was a rare kind of lawyer -- one of the very finest tax practitioners of his generation and an unsurpassed mentor of the generations growing up under him. He led by example and will be remembered as always supporting new talent and the expansion of the practice into new spheres. Matthew joined our New York tax team in 1979 and, building upon the culture of camaraderie he inherited, enhanced the tightly knit group's reputation exponentially. Matthew handled every aspect of tax work and developed various types of financial instruments. He was repeatedly ranked among the top practitioners of his field.

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November 23, 2015 in Obituaries, Tax | Permalink | Comments (0)

Harvard Law Students React To Vandalism On Portraits Of Black Law Profs

Harvard Crimson, Police Investigate Vandalism on Portraits of Black Law Professors, by Andrew M. Duehren :

Black tape, stuck systematically across the portraits of black law professors, spurred on Thursday a police investigation into vandalism and a pronouncement from the dean of Harvard Law School that the school has a “serious problem” with racism.

New York Times, A Lesson at Harvard Law, by Charles Fried (Harvard):

Instead of dignifying with inflated philosophical bloviation the grim nastiness of the anonymous vandal(s) who pasted strips of black tape on the portraits of African-American professors, Harvard Law students responded with wit and human warmth: They put along the frames of those same portraits hundreds of colored Post-it notes bearing messages of affection and gratitude.

These young men and women teach us all a valuable lesson.

Harvard Crimson, Supportive Sticky Notes After Law School Vandalism, by Jennifer Y. Yao:

Harvard 2

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

The IRS Scandal, Day 928

IRS Logo 2Leader & Times, Koskinen Needs to be Impeached, So Does Lynch and Numerous Others:

IRS Commissioner John Koskinen is in the sights of Rep. Jason Chaffetz, who is chairman of the powerful House Oversight Committee, which has been investigating the IRS for more than two years. Chaffetz said Koskinen has failed to comply with a congressional subpoena, allowed documents to be destroyed and misled the public.

The committee’s call for impeachment falls on the heels of a report from the U.S. Justice Department that said it “found no evidence that Lois Lerner or any IRS official acted based on political, discriminatory, corrupt or other inappropriate motives that would support a criminal prosecution.”

What a crock.

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November 23, 2015 in IRS Scandal | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, November 22, 2015

Prof Sues Dean, Law School For Access To Admissions Data

UALRArkansas Online, Law School Violates Open-Records Act, Suit Says:

The man helping to write a book on the state Freedom of Information Act says the dean of the University of Arkansas at Little Rock law school is not complying with the open-records law in a lawsuit filed against the university Tuesday.

Law professor Robert Steinbuch sued both the university and Michael Schwartz, dean of the William H. Bowen School of Law, in a Pulaski County court, stating Schwartz failed to turn over public records that Steinbuch is seeking to research student admissions.

The records are a spreadsheet showing individual test scores, college grade-point average, law school grade-point average, race, gender and age for all students who graduated from the law school and took the bar exam over a seven-year period.

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

Choose To Be Grateful. It Will Make You Happier.

GratefulNew York Times Sunday Review:  Choose to Be Grateful. It Will Make You Happier, by Arthur C. Brooks (President, American Enterprise Institute):

For many people, gratitude is difficult, because life is difficult. Even beyond deprivation and depression, there are many ordinary circumstances in which gratitude doesn’t come easily. This point will elicit a knowing, mirthless chuckle from readers whose Thanksgiving dinners are usually ruined by a drunk uncle who always needs to share his political views. Thanks for nothing.

Beyond rotten circumstances, some people are just naturally more grateful than others. A 2014 article in the journal Social Cognitive and Affective Neuroscience identified a variation in a gene (CD38) associated with gratitude. Some people simply have a heightened genetic tendency to experience, in the researchers’ words, “global relationship satisfaction, perceived partner responsiveness and positive emotions (particularly love).” That is, those relentlessly positive people you know who seem grateful all the time may simply be mutants.

But we are more than slaves to our feelings, circumstances and genes. Evidence suggests that we can actively choose to practice gratitude — and that doing so raises our happiness. ...

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November 22, 2015 in Legal Education, Tax | Permalink | Comments (3)

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:

  1. [403 Downloads]  Income Tax Deductions for Charitable Bequests of IRD, by Christopher R. Hoyt (UMKC)
  2. [360 Downloads]  Big Data and Tax Haven Secrecy, by Arthur J. Cockfield (Queen's University)
  3. [311 Downloads]  2014 Developments in Connecticut Estate and Probate Law, by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid and Riege, Hartford)
  4. [223 Downloads]  Too Big to Tax? Vanguard and the Arm’s Length Standard, by Reuven Avi-Yonah (Michigan)
  5. [199 Downloads]  2015 Trying Times: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)

November 22, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

50% Of Law Grads Who Failed California Bar Would Have Passed In A Different State

CaliforniaDerek Muller (Pepperdine), California Bar Exam Takers Are Far More Able Than Others Nationwide But Fail at Much Higher Rates:

The California July 2015 bar results were recently released, reflecting a modest drop in scores, slightly less than other jurisdictions this year. The overall pass rate dropped from 48.6% in July 2014 to 46.6%. The first-time pass rate dropped from 61% to 60%. And among California ABA-accredited schools, the first time rate also dropped a point to 68%.

California is one of the rare jurisdictions that also discloses its statewide mean scaled MBE score. The NCBE discloses the nationwide mean scaled MBE score, which has dropped fairly significantly over the last couple of years. But California has consistently outperformed the nationwide cohort, sometimes rather dramatically. ...

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

Remand: Pepperdine Law School's Global Justice Program In Uganda

My wife and I spent a wonderful Saturday night in Santa Monica, having dinner with some bigwigs and watching a preview of the forthcoming documentary Remand, detailing Pepperdine Law School's work in reforming Uganda's criminal justice system.


Watch the trailer:

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November 22, 2015 | Permalink | Comments (0)

The IRS Scandal, Day 927

IRS Logo 2The Blaze, Legal Experts: ‘Utterly Irresponsible’ Not to Conduct IRS Impeachment Probe:

While bringing impeachment charges against Internal Revenue Service Commissioner John Koskinen could seem an audacious move, some constitutional law experts believe it’s the only responsible step for members of Congress to take.

“Impeachment is a remedy to deal with grave offense in the abuse of office — whether or not someone committed private wrongs that warrant being put in jail,” Andrew McCarthy, former chief assistant U.S. attorney in New York, told TheBlaze. “If there have been abuses of power committed by public officials, it would be irresponsible to leave them there.” ...

“Impeachment is one of the few checks the legislature has on executive power. High crimes and misdemeanors don’t have to be felonies,” John Eastman, a law professor and director of the Center for Constitutional Jurisprudence at Chapman University. “When a public official won’t comply with the law, it is the only option left. If Congress doesn’t conduct proper oversight, they are part of the problem.” ...

Though Koskinen was not involved in the targeting scandal itself, his actions likely prevented the truth from surfacing, said David Rivkin, who formerly served as a deputy director in the Reagan Justice Department and as a legal adviser in White House Counsel’s office

“He didn’t cause this, but just as prosecutors bring a case to send a message, this could be done to make a point,” Rivkin, now a partner at the Washington law firm Baker Hostetler LLP., told TheBlaze. “There is a broader narrative in the context of how this administration has violated separation of powers.”

Rivkin said that the purpose of impeachment is not to punish — or even fire — a public official. Rather, it’s to protect the public trust. “If Congress does nothing, it is de facto approval,” Rivkin said. “It would be utterly iresponsible and utterly dangerous to civil liberties and the balance of powers for the House to do nothing.”

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November 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, November 21, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Dexter Presents A Tax Expenditure Approach to Reparations Today At Duke

DexterBobby Dexter (Chapman) presents The Hate Exclusion: Moral Tax Equity for Damages Received on Account of Race, Sex, or Sexual Orientation Discrimination, 13 Pitt. Tax Rev. ____ (2016), at the Duke Law School Center on Law, Race and Politics conference today on The Present and Future of Civil Rights Movements:  Race and Reform in 21st Century America:

Scholars on both sides of the reparations literature divide commonly contemplate some form of federal monetary outlay.  At the same time, given both the absence of such an outlay and the dire prognosis that such largesse is forthcoming, tax scholars rarely contribute to traditional reparations literature.  With this Article, Professor Dexter introduces the notion that reparations take the form of narrowly-tailored federal tax expenditures.

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November 21, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

NTA 108th Annual Conference on Taxation

Cover2The three-day National Tax Association 108th Annual Conference on Taxation concludes today in Boston.  Today's highlights:

Fiscal Federalism, Multilateralism, and Tax Law Design

  • Session Chair:  Daniel Shaviro (NYU)
  • Daniel Schaffa (Michigan), Federal Collection of State Individual Income Taxes
  • Eric Kades (William & Mary), Corrective Progressivity
  • David Gamage (UC-Berkeley) & Darien Shanske (UC-Davis), Fiscal Federalism from the Subnational Government Perspective: Tax Reform for the U.S. States
  • Itai Grinberg (Georgetown), The New International Tax Diplomacy
  • Discussants:  Brian Galle (Georgetown), Daniel Shaviro (NYU)

Tax Forms, Publications, and Compliance

  • Session Chair:  Leigh Osofsky (Miami)
  • Kathleen Thomas (North Carolina), User-friendly Taxpaying
  • Leigh Osofsky (Miami) & Joshua Blank (NYU), Simplexity and the Tax Law
  • Samara Gunter (Colby College), Your Biggest Refund, Guaranteed? Tax Filing Method and Reported Tax Liability
  • Joseph Bankman (Stanford), Using the ‘Smart Return’ to Reduce Tax Evasion
  • Discussants:  Larry Zelenak (Duke), Kristin Hickman (Minnesota)

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