TaxProf Blog

Solving Tax-Treaty Shopping Through Limitation on Benefits Provisions

Anna A. Kornikova (J.D. 2009, Brooklyn) has published Comment. Solving the Problem of Tax-Treaty Shopping Through the Use of Limitation on Benefits Provisions, 8 Rich. J. Global L. & Bus. 249 (2008). Here is the Conclusion:

The current practice of including LOB [Limitation on Benefits ] provisions in the U.S. DTCs [double taxation conventions] is an important step towards harmonization of the national tax systems. This practice targets the problem of treaty shopping, which leads to a revenue loss in the United States, weakens the U.S. position in future negotiations and creates economic inefficiencies, both in the United States and globally. Several States have adopted unilateral measures seeking to combat treaty shopping, but such uncoordinated measures alone do not completely remove the incentives for treaty shopping. Moreover, a comparative perspective on anti-abuse laws in different jurisdictions, such as Canada, India and the European Union demonstrates that States differ in their views on the appropriate scope of unilateral anti-abuse principles. This shows the need to raise the issue of anti-abuse measures in the course of treaty negotiations and *286 develop mutually acceptable anti-abuse clauses in DTCs, such as LOB provisions. A collaborative approach, rather than unilateral one, would be more likely to succeed in solving the problem of treaty shopping.

Southern Illinois President Reverses Dean's Detenuring of Law Prof

In a remarkable sequence of events, Southern Illinois President Glenn Poshard has reversed the decision by Dean Peter Alexander, who detenured Law Prof Jill Adams for "not meet(ing) the expectations of the School of Law."  From The Daily Egyptian:

Chancellor Sam Goldman’s decision to go against a Faculty Senate Judicial Review Board recommendation on a March faculty dispute has been overturned by the Office of the President, sources close to the matter say.

Jill Adams, who was involved in the faculty dispute that had her on the brink of termination, said it was her understanding that SIU President Glenn Poshard took the advice of a committee and took her off disciplinary probation.

According to a letter sent to Goldman dated March 18, Peter Alexander, dean of the School of Law, placed Adams on disciplinary probation and sought to revoke her tenure for two academic years for “not meet(ing) the expectations of the School of Law.”

Adams appealed the decision to the Faculty Senate’s Judicial Review Board, a 12-person committee that reviews faculty complaints against other faculty and administrators. The board unanimously sided with Adams.

Goldman ignored the board’s decision, which prompted Adams to seek the support of the American Association of University Professors.

Poshard formed the committee after the case escalated to the point where the university was in danger of AAUP censure.

The reversal effectively takes Adams off probation and keeps her tenure intact. “Basically it takes me off probation and does set forth a course of action to get my writing back on track,” she said. “My understanding is that Poshard accepted the recommendations.”

• AAUP Letter to Chancellor Goldman
• Chancellor Goldman's Response to the AAUP

Like-Kind Exchanges and Qualified Intermediaries

Bradley T. Borden (Washburn), Paul L.B. McKenney (Varnum, Novi, MI) & David Shechtman (Drinker Biddle & Reath, Philadelphia) have posted Like-Kind Exchanges and Qualified Intermediaries, 123 Tax Notes ___ (July 6, 2009), on SSRN. Here is the abstract:

The economic downturn has depressed the real estate market, a significant component of the section 1031 industry. In its wake, the industry witnessed three major qualified intermediary failures. QI failures deprive exchangers of exchange proceeds and also create potential tax and legal liablities for the exchangers. This article analyzes those potential liabilities and also discusses the cause of QI failures and actions that exchangers and QIs may consider to help safeguard exchange proceeds.

Ayers: The Undertraining of Lawyers and its Effect on the Advancement of Women and Minorities

Irene Segal Ayers (NYU) has posted  The Undertraining of Lawyers and its Effect on the Advancement of Women and Minorities in the Legal Profession, 3 Duke Forum L. & Soc. Change ___ (2009), on SSRN.  Here is the abstract:

The undertraining of law students documented in a century’s worth of critiques of legal education, most recently by the Carnegie Foundation, has different and much more detrimental consequences for the post-J.D. careers of women and minority attorneys. However, studies of their early careers focus primarily on problems with law-firm mentoring and pay little, if any, attention to how the earlier training that these lawyers received (or failed to be given) in law school might have contributed to the later career obstacles they face. Conversely, studies of the ways that law schools undertrain law students pay little or no attention to how the deficiencies in the current model of law school education may disproportionately disadvantage women and minority law students later in their careers. This article examines an emerging literature, narratives of professionalization by women attorneys of color, and puts those narratives into the dual context of critiques of legal education (exemplified by the Carnegie Report) and critiques of law-firm practice (exemplified by the recent A.B.A. study “Visible Invisibility: Women of Color in Law Firms”) in order to demonstrate how law schools contribute to the career difficulties faced by women and minority attorneys. Two types of undertraining occur: 1) formal curricular undertraining; 2) self-undertraining, caused by the disengagement produced by law school culture. Only by reforming the curriculum and culture of legal education can law schools live up to the democratic civic mission they espouse as proponents of equal opportunity.

SSRN Faculty Rankings (Law Schools Ranked 22-100 in U.S. News)

Tax Prof Bridget Crawford (Pace) has prepared a faculty scholarship ranking by recent SSRN downloads (following Brian Leiter's methodology) of the law schools ranked 23-100 in U.S. News, along with the Top 3 faculty by this measure at each of these schools.   The Top 10 schools are:

1. George Washington
2. Illinois
3. San Diego
4. George Mason
5. St. John's
6. American
7. Temple
8. Tennessee
9. Florida State
10. Ohio State

Tax Profs in the Top 3 at their law schools are:

• Karen Burke (#3 at San Diego (#3))
• Dennis Ventry (#1 at American (#6); #1 at UC-Davis (#17)))
• Leandra Lederman (#2 at Indiana-Bloomington (#14))
• Ted Seto (#2), Katie Pratt (#3 at Loyola-L.A. (#16))
• Ruth Mason (#2 at UConn (#18))
• Eric Jensen (#2 at Case Western (#19))
• Vic Fleischer (#2 at Colorado (#21))
• Matthew Barrett (#2 at Notre Dame (#22))
• Allison Christians (#1 at Wisconsin (#36))
• Paul Caron (#1 at Cincinnati (#57)
• Josh Blank (#3 at Rutgers-Newark (#58))
• Josh Tate (#2), Chris Hanna (#3 at SMU (#60))
• Sam Donaldson (#3 at U. Washington (#63))
• Brant Hellwig (#3 at South Carolina #69))
• Roberta Mann (#1 at Oregon (#71))
• Jon Forman (#1 at Oklahoma (#77))

Camp: Protecting Trust Assets from the Federal Tax Lien

Bryan Camp (Texas Tech) has published Protecting Trust Assets from the Federal Tax Lien, 1 Est. Plan. & Community Prop. L.J. 295 (2009).  Here is the abstract:

One common issue facing those who create trusts is how to protect beneficiaries from creditors. One of the biggest, baddest creditors out there is the Internal Revenue Service (IRS or Service), wielding two weapons of mass collection: the federal tax lien and the federal tax levy. These weapons regularly pierce boilerplate spendthrift provisions. Discretionary trusts do not fare much better. Court decisions over the past ten years make it increasingly likely that even pure discretionary trusts contain clauses that traitorously turn over the treasure house keys to the federal tax lien. Once the lien attaches, the IRS can enforce it through either administrative or judicial attachments, blowing through state law barriers that keep out other creditors.

This Article offers some ideas on how to keep the federal tax lien locked out from trust assets using property law concepts of springing and shifting executory interests. This Article posits that a properly drafted tax lien lockout provision can deflect the federal tax lien. Moreover, tax lien lockout provisions can do this in the context of a support trust, thus allowing settlors to give enforceable directions to their trustees and to avoid the potential downsides of pure discretionary trusts. In short, tax lien lockout provisions can protect trust assets from the long and mighty arm of the IRS while preserving a client‟s wish to hold trustees to clear standards of behavior towards beneficiaries.

This Article proceeds in three parts. Part II illustrates the limited role that state law plays in controlling the scope of tax liens and in protecting non-delinquent third parties from the effect of the lien. It explains the basics of the federal tax lien, focusing on the relationship between state and federal law and the two key methods by which the IRS enforces the lien: the administrative levy and the lien foreclosure suit. Part III introduces a basic hypothetical involving a fictitious elderly widower who wants to create a trust for his kids and grandkids. Part III then uses this hypothetical to illustrate why spendthrift provisions offer no protection from federal tax liens and why it is likely that neither discretionary nor protective trusts do much better. Finally, Part IV looks at how Texas law regarding shifting executory interests might provide an opportunity for the well-advised settlor to craft trust provisions that can lock out the federal tax lien when a beneficiary encounters either expected or unexpected tax difficulties.

More Fallout From DePaul's Firing of Dean Glen Weissenberger

One of the bizarre aspects of DePaul's abrupt firing of Dean Glen Weissenberger (blogged here, here, here, here, and here) was that DePaul is scheduled to host 185 law school deans at an all-expenses-paid conference on Vanishing Act: Legal Education in a World Without Trials later this month at the five-star Peninsula Hotel.  Wags wondered:  how awkward would that be after whacking a wildy successful dean who had just be reappointed to a five-year term.  Alas, we'll never know, as DePaul sent this email to Deans announcing the postponement of the conference:

I am writing to let you know that the symposium, Vanishing Act: Legal Education in a World Without Trials, scheduled for July 31, will not be proceeding. The withdrawal of a number of panelists has persuaded us that we should look at restaging this important event at a later date.

I deeply regret any inconvenience that this decision may cause to you, and look forward to welcoming you to Chicago on a future occasion.

The Distribution of Tax Burdens in Four EU Countries

The Distribution of Effective Tax Burdens in Four EU Countries, by Joachim Merz (University of Lüneburg, Germany), C.A. De Kam (Groningen University, The Netherlands), J. De Haan (Groningen University, The Netherlands), C. Giles (The Institute for Fiscal Studies, United Kingdom), A. Manresa (Universitat de Barcelona, Spain), E. Berenguer (Universitat de Barcelona, Spain), S. Calonge (Universitat de Barcelona, Spain) & Kshama Venkatarama (University of Lüneburg, Germany):

National policymakers are increasingly aware that their tax policy options are constrained by international tax competition. Important features of national tax systems - notably the tax mix, tax rates and rules which define the tax base - will influence decisions of firms and individuals regarding the location and (re)structuring of economic activities. The aim of the present paper is twofold: Firstly, we detail the tax mix of four member states of the European Union (Germany, The Netherlands, Spain and United Kingdom). Secondly, the paper aims to trace the distribution of the tax burden over rich and poor households in these four countries. Although tax mix and tax rates differ considerably among the four countries included in the study, the distribution of tax burdens proves to be amazingly similar.

Susan Pace Hamill to Run for Alabama House Seat

Alabama Tax Prof Susan Pace Hamill announced yesterday that she is running for the House District 63 seat in the Alabama Legislature.  Tuscaloosa News: UA Law Professor Announces Bid for Legislature:

Hamill, a Democrat, on Wednesday listed the core principles that she said compelled her to seek public office. “I believe government must serve the weak equally as well as it serves the strong,” she told friends and supporters in front of Trinity Methodist Church. “I believe tax policy should be written not by those with the most lobbyists, but those with the greatest commitment to equity and fairness.

(Hat Tip:  Law School Headlines.)  Susan is best known for a series of pathbreaking articlesapplying Judeo-Christian principles to tax policy and for her strong condemnation of Alabama's tax system.

Boyd & Young: Feminist Research in Tax Law

Susan B. Boyd & Claire Young (both of the University of British Columbia Faculty of Law) have posted Feminism, Law, and Public Policy: Family Feuds and Taxing Times, 42 Osgoode Hall L.J. 545 (2004), on SSRN.  Here is the abstract:

This article offers a retrospective analysis of feminist research on tax and family law and developments in these fields since the early 1980s. We identify the sometimes contradictory trends-both in legislation and in case law-that raise questions about the influence that feminist research has had on these areas of law. We then flag some ongoing challenges confronting feminists engaged in law reform efforts. Some common themes will emerge, but notable differences are also evident in the ways that feminist thought has played out in tax and family law.

Do State Tax Breaks Actually Boost Jobs?

Business Week: Will Tax Breaks Boost Jobs?, by Jessica Silver-Greenberg:

With the economy slumping and unemployment approaching 10%, states are kicking corporate tax incentives into overdrive. In the past year they've doled out a record $50 billion to spur job growth. Cash-strapped locales are depending indirectly on federal aid to fund the tax-break bonanza.

But economists are beginning to wonder whether such initiatives create or save jobs at all. Companies taking advantage of lucrative tax incentives are jumping from state to state—and bringing their jobs with them. Sure, some states will see job gains, but they may be only temporary. As a result, the states' efforts likely won't improve the national jobs picture. The tax-break boom "undermines the economic union, and it misallocates resources," says Arthur J. Rolnick, senior vice-president and research director for the Federal Reserve Bank of Minneapolis. "It amounts to economic warfare among states." ...

[S]tates often use tax breaks to poach jobs from each other. In March, Pepsi Bottling Group (PBG) began threatening to move its headquarters from Somers, N.Y., if local lawmakers didn't pass favorable tax and other policies. Now both New Jersey and Connecticut are using a slew of tax incentives to lure Pepsi Bottling to their states.

Such warring is creating a conundrum for the Obama Administration. The states are an integral part of the U.S. recovery and job-creation plan. Some economists say the only remedy is a congressionally mandated cease-fire; they're suggesting the U.S. withhold federal funds unless the states stop using tax incentives to grab jobs from other states. Says Rolnick of the Minneapolis Fed: "It's time for Congress to act."

Distribution of Income and Redistribution

Igor Barenboim (Graduate Student, Harvard University, Department of Economics) & Loukas Karabarbounis (Ph.D. Candidate, Harvard University, Department of Economics) have posted One Dollar, One Vote on SSRN.  Here is the abstract:

We revisit the relationship between inequality and redistribution in a panel of advanced OECD countries. Using panel data methods that hold constant a variety of determinants of the public redistributive policy, we find a non-monotonic relationship between distribution of income and redistribution. Relatively to mean income, a more affluent rich and middle class are associated with lower, and a richer poor class with higher public spending for redistribution. These results are consistent with what we define as a one dollar, one vote politico-economic equilibrium: When the income of a group of citizens rises (relative to mean income), aggregate redistributive policies tilt towards this group's most preferred public policy.

District Court: Failure to Retain Tax Expert Constitutes Ineffective Assistance of Counsel

The U.S. District Court for the Northern District of Illinois has vacated the two-year prison sentence given to a CPA who plead guilty to obstructing and impeding the administration of the federal tax laws on the ground of ineffective assistance of counsel because her lawyer did not retain a tax expert.  Baxter v. United States, No. 1:04-cr-00371 (N.D. Ill. June 25, 2009):

To meet the objective standard of reasonableness, it is essential for criminal defense counsel to recognize that certain criminal cases require the retention of an expert. Criminal tax cases involving seemingly legitimate, sophisticated tax schemes, like the Aegis Trust System in Baxter's criminal case, are among the types of cases where it is necessary that criminal defense counsel retain the assistance of a tax expert before any critical stages of the defendant's criminal case occur. Otherwise, the defense may be adversely affected, as occurred in Baxter's criminal case.

The performance of Baxter's criminal defense counsel, Mr. Keith Spielfogel and Mr. James Montgomery, fell below the Strickland objective standard of reasonableness because they did not analyze or present the mitigating facts and arguments a tax expert's testimony would have assisted them in doing to reduce the tax-loss figure the court used in sentencing Baxter. The evidence also establishes that Baxter was prejudiced by her criminal defense attorneys' constitutionally deficient performance. It undermined the court's confidence in the fairness of the plea negotiations, the sentencing proceeding, and the sentence imposed in Baxter's case. The court believes that had the facts and analysis that have now been presented by Baxter's tax expert, who was retained by her new counsel after her sentencing, been presented to the court prior to Baxter's 2006 sentencing, the court would have imposed a lower sentence.

Albany Seeks to Hire Tax Prof

Albany Law School is looking to hire full-time faculty members in several areas, including Tax and Trusts and Estates:

We are willing to consider all qualified candidates, including those with no prior teaching experience, for appointment at the Assistant, Associate or Full Professor level, as appropriate.

Albany Law School is the oldest independent law school in the country. We have a strong tax program, traditionally taught by three full time faculty members (Ira Bloom, Harold Dubroff, David Pratt) and several adjuncts. We also have a low-income taxpayer clinic.

We offer considerable support to new faculty, particularly in connection with scholarship. Albany Law School is an excellent place to teach and Albany is a great place to live. We will be interviewing at AALS in November, but we would be delighted to hear from or about potential candidates over the summer. If you are interested in knowing more, please feel free to contact me (David Pratt).

Hite Posts Tax Papers on SSRN

Leonard "Jay" Hite (KPMG) has posted two tax papers on SSRN:

• The Cohan Rule and Research Credit Claims: Testimony as Evidence Establishing the Amount of Creditable Expenditures, 10 J. Tax Prac. & Proc. 31 (Dec. 2008–Jan. 2009)
• Export Controls and the R&D Tax Credit: Practitioners Beware!, 122 Tax Notes 869 (Feb. 16, 2009)

Supreme Court Declines to Resolve Circuit Split Over Leadership of Law School Christian Legal Society Chapters

The Supreme Court has declined to settle a split between the 7th Circuit and the 9th Circuit on the applicability of anti-discrimination policies at various law schools (Hastings, Montana, Sourth Illinois) to the Christian Legal Society's prohibition of gay and lesbian students from serving in leadership roles.  Inside Higher Ed:  Supreme Court Punts.

Michael Jackson's Will

 

The five-page Michael Jackson will is available here and here.  For commentary on the will, see:

• ABC News
• CNN
• New York Daily News
• New York Times
• Rolling Stone
• USA Today
• Wall Street Journal

Tax Prof Moves, 2009-2010

Entry Level Hires

• Ilan Benshalom (Northwestern VAP) to Hebrew University, Israel 
• Sam Brunson (Willkie Farr, New York) to Loyola-Chicago
• Mirit Eyal-Cohen (UCLA SJD) to Pittsburgh
• Benjamin Leff (Harvard VAP) to American
• Sagit Leviner (Tel Aviv University, Israel, VAP) to Ono Academic College, Faculty of Law, Israel
• Shuyi Oei (Bingham McCutchen, Boston) to Tulane
• Randle Pollard (Ice Miller, Indianapolis) to Widener-Harrisburg.

Lateral Moves

• Craig Boise (Case Western) to DePaul
• Dhammika Dharmapala (University of Connecticut, Department of Economics) to Illinois
• Michael Doran (Virginia) to Georgetown
• Victor Fleischer (Illinois) to Colorado
• Michael Graetz (Yale) to Columbia
• David Hasen (Michigan) to Penn State
• Jeffrey Kahn (Penn State) to Washington & Lee
• Edward Kleinbard (Joint Committee on Taxation) to USC
• Daniel Lathrope (UC-Hastings) to San Francisco
• Roberta Mann (Widener) to Oregon
• Amy Monahan (Missouri-Columbia) to Minnesota
• Miranda Perry Fleischer (Illinois) to Colorado
• John Stephens (Georgetown) to NYU
• Ethan Yale (Georgetown) to Virginia

Promotions, Tenures, Chairs, and Professorships

• Craig Boise (DePaul), Professor of Law with Tenure
• Bryan Camp (Texas Tech), George H. Mahon Professor of Law
• Danshera Cords (Capital), Professor of Law
• Marjorie Gell (Thomas Cooley), Associate Professor of Law
• Nicholas Mirkay (Widener-Delaware), Associate Professor of Law with Tenure 
• Amy Monahan (Minnesota), Associate Professor of Law with Tenure
• Richard Schmalbeck (Duke), Simpson, Thacher & Bartlett Professor of Law
• Michael Yu (California Western), Associate Professor of Law with Tenure

Administrative Appointments

• Rosanne Altshuler (Rutgers University, Department of Economics) to Co-Director, Tax Policy Center
• Linda Beale (Wayne State), to Director, Graduate Studies
• Craig Boise (DePaul) to Director, Graduate Tax Program
• David Brennen (Georgia) to Dean. Kentucky
• Jonathan Forman (Oklahoma) to IRS Professor-in-Residence
• Myron Grauer (Capital) to Academic Director of Graduate Programs
• Richard Gershon, Dean, Charleston, returns to faculty
• Carolyn Jones, Dean, Iowa, returns to faculty
• Michael Kirsch (Notre Dame), to Associate Dean
• Leo Martinez (UC-Hastings) to Interim Dean
• Deborah Schenk (NYU) to Faculty Director, Graduate Tax Program
• John Stephens (NYU) to Director, Graduate Tax Program
• Donald Tobin (Ohio State) to Associate Dean for Faculty

Visits

• Neil Buchanan (George Washington) to Cornell (Visiting Scholar, 2009-10)
• Len Burman (Tax Policy Center) to UCLA (January Intersession)
• Paul Caron (Cincinnati) to San Diego (Summer 2009)
• Adam Chodorow (Arizona State) to China on a Fulbright Scholarship (2009-10)
• Danshera Cords (Capital) to Albany (Spring 2010)
• Mihir Desai (Harvard Business School) to NYU
• David Elkins (Netanaya College of Law, Israel) to SMU (2009-10)
• Cliff Fleming (BYU) to Central European University, Hungary (April-May 2009)
• Brian Galle (Florida State) to George Washington (2009-10)
• Steve Johnson (UNLV) to UC-Hastings (Spring 2010)
• Darryll Jones (Stetson) to Florida A&M (2009-10)
• Darlene Kennedy (Baltimore City Planning Commission) to Widener-Delaware (2009-10)
• Michael Knoll (Penn) to Columbia (Fall 2009)
• Sarah Lawsky (George Washington) to Virginia (2009-10)
• Assaf Likhovski (Tel Aviv University, Israel) to UCLA (2009-10)
• Francine Lipman (Chapman) to UC-Hastings (Fall 2009)
• Bill Lyons (Nebraska) to Miami (Fall 2009)
• Allen Madison (Fenwick & West, Mountain View, CA) to University of Navarra, Spain (2009-10) 
• Robert Peroni (Texas) to Georgetown (Fall 2009)
• Walter Schwidetzky (Baltimore) to California Western
• David Walker (Boston University) to NYU (Fall 2009)

Retirements and Departures

• Allan Samansky (Ohio State), retired
• David Shores (Wake Forest), retired

For prior years' Tax Prof Moves, see:

• 2008-09
• 2007-08
• 2006-07
• 2005-06
• 2004-05

Miami Offers $5k to Incoming 1Ls to Defer Until 2010

Deferral of incoming associate classes unfortunately has become all too common at many law firms.  Miami is the first law school to offer an array of incentives for ILs to defer enrolling until Fall 2010:

• Miami website
• ABA Journal
• Above the Law
• Discourse.net
• Faculty Lounge
• JD Journal

Doran Posts Tax Papers on SSRN

Michael Doran (Georgetown) has posted or updated several of his tax papers on SSRN:

• Managers, Shareholders, and the Corporate Double Tax, 95 Va. L. Rev. 517 (2009) 
• Tax Penalties and Tax Compliance, 46 Harv. J. Legis. 111 (2009)
• Legislative Compromise and Tax Transition Policy, 74 U. Chi. L. Rev. 545 (2007)
• Executive Compensation Reform and the Limits of Tax Policy (2004)

Subscribing to TaxProf Blog

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State Taxation of Professional Athletes

Alan Pogroszewski (St. John Fisher College) has published When is a CPA as Important as Your ERA? A Comprehensive Evaluation and Examination of State Tax Issues on Professional Athletes, 19 Marq. Sports L. Rev. 395 (2009).  Here is part of the Introduction:

This article will begin with a historical look at the states’ ability to tax both their resident and those nonresidents who earn income within their borders by reviewing the Supreme Court’s interpretation whether this is within the state’s constitutional power. This will be followed by an examination on how individual states came to determine the apportionment of income of a nonresident. This section reviews the individual state court decisions that define the tax implications to off season training, spring training the post season, and the allocation of athletes playing and signing bonus for a nonresident athlete. The article then examines the practical application of this tax in whether or not states increase their overall income tax revenue by this practice. Research in this section indicates that they in fact do. The article then concludes with the practical consequences on how these laws affect individual athletes. This Article concludes with the fact that there may be at least one reason why you may want to sign a free agent client with the Tampa Bay Rays rather than with the San Diego Padres.  [Editor's note:  ouch.]

[Click on chart to enlarge.]

The Five Love Languages of Law Professors

Galen L. Fletcher (BYU) has posted Faculty Services and the Five Love Languages of Law Professors on SSRN.  Here is the abstract:

As law librarians seeking to facilitate the connecting bridge between people and information, the people aspect of the equation is vital. If your Faculty Services program is working well from a resource and organization standpoint, to further improve you may want to consider evaluating the relationship part of your work.

This article’s goal is to help you improve in your work relationships by looking at your (and your co-workers’ and law professors’) preferred way of receiving attention.

I also am motivated to share these concepts because so often we librarians see ourselves like firemen climbing a ladder to rescue a law professor cat stuck in a tree, while the law professors see themselves as guests at a nice restaurant a.k.a. library waiting to be served, pampered and treated well.

SOI Releases Two New Studies

The IRS's Statistics of Income Division yesterday released Tax Stats 2009-14, with two new studies:

• International Boycott Study, 2005-2006
• Foreign Tax Credit Study, 2005

Death of Tom Lefevre

Thomas V. Lefevre, former tax lawyer and Chair of Morgan, Lewis, has died at the age of 90.  From the firm's press release (via Blog of Legal Times):

Tom’s history at Morgan Lewis began in 1955, when he joined the firm as a tax law associate. He made partner a year later....  Tom developed a segment of tax practice focused on leveraged lease transactions – the success of which ultimately spawned the opening of our New York office. ... 

Born in Dallas on December 5, 1918, Tom graduated from high school at age 16, and earned his B.A. and law degrees from the University of Florida in 1939 and 1942, respectively. He enlisted in the Marines, survived heavy combat in World War II and rose to the rank of major before retiring from the service in 1945 and obtaining his L.L.M. from Harvard the following year.

Before joining Morgan Lewis, Tom practiced as a litigation associate at Sullivan & Cromwell; as a trial lawyer at the IRS; at a Washington, D.C. firm launched by former Sen. Claude Pepper; at Paul, Weiss, Rifkind Wharton & Garrison; and finally at Chapman, Bryson, Walsh & O’Connell. ...

Tom left Morgan Lewis in 1979 to become VP of corporate development for longtime firm client UGI Corp. A year later, he became UGI’s president, and, ultimately, its chairman and CEO – a position he held until his retirement in 1989.

DOJ Asks Court to Order UBS to Release Names of 52,000 U.S. Offshore Account Holders in Tax Evasion Case

• DOJ Memo
• Associated Press
• Bloomberg
• Reuters
• Wall Street Journal

National Taxpayer Advocate Releases Mid-Year Report to Congress

National Taxpayer Advocate Nina E. Olson submitted her Mid-Year Report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year.  From the IRS press release:

Among the key areas of focus will be working with the IRS to improve taxpayer services, enhancing IRS oversight of federal tax return preparers, improving the accessibility of the offer in compromise program, and working with the IRS to improve its ability to administer refundable tax credits effectively.

The report notes that FY 2010 will mark the ten-year anniversary of the Taxpayer Advocate Service, which began operations in March of 2000. “As TAS enters its tenth year, both TAS and the IRS face a difficult environment for achieving what is, in essence, the same mission – ensuring that the IRS treats taxpayers fairly and identifying ways to increase voluntary compliance while addressing noncompliance,” Olson said. She identified the collection of tax revenue at a time when “increasing numbers of taxpayers have difficulty paying their daily living expenses” as a principal challenge.

The Advocate’s report, which is required by law, sets out the objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year and provides substantive analysis of issues and statistical information. Among the areas the report identifies for particular emphasis in FY 2010 are the following:

1. Taxpayer Services
2. Oversight of Tax Return Preparers
3. Offers in Compromise
4. Refundable Tax Credits

The Coming Demise of the TaxProf Email Discussion List?

As most of you know, I also manage the 14-year old TaxProf Email Discussion List, which currently has over 300 subscibers.  This week's suggests that its days may be numbered:  Change or Die: Scholarly E-Mail Lists, Once Vibrant, Fight for Relevance, by Jeffrey R. Young:

Once they were hosts to lively discussions about academic style and substance, but the time of scholarly e-mail lists has passed, meaningful posts slowing to a trickle as professors migrate to blogs, wikis, Twitter, and social networks like Facebook.

That's the argument made by T. Mills Kelly, an associate professor of history and associate director of the Center for History and New Media at George Mason University. Naturally, he first made the argument on his blog, and he has mentioned it on the technology podcast he hosts with two colleagues.

A close look at some of the largest academic listservs, however, shows signs of enduring life and adaptation to the modern world.

Mr. Kelly is not swayed, though. He says he was once an enthusiastic participant in several scholarly e-mail lists, mainly ones run by the H-Net service, which offers e-mail lists on various topics in the humanities. He even moderated one of them. But he says one of those lists shut down for lack of use in 2005, and the activity on the others sputters along with little useful information.

"As more and more people become comfortable with blogs and Twitter, e-mail lists will become increasingly irrelevant," he said. "They're just a much less dynamic form of communication." ...

I pitched the story to my editors, who loved the headline "Death of the E-Mail List."

But then a surprising thing happened. I started to hear passionate defenses of listservs from other people in my digital network, even those who are just as plugged in to the latest trends.
...

It turns out that the audiences for many academic mailing lists are actually growing — though even some organizers admit that the lists are less likely to contain the spirited debates that once thrived there. Administrators at some of the largest academic listervs say they are beginning to upgrade their services for the Web 2.0 era. ...

Perhaps e-mail lists will occupy a space like radios did in the television age, sticking around but fading to the background. Although people are fond of declaring the death of e-mail in general, it remains a key tool that just about everyone opens every day. As long as that's true, the trusty e-mail list will be valuable to scholars of all stripes.
 

Brunson: Taxing Investors on a Mark-to-Market Basis

Samuel D. Brunson (Loyola-Chicago) has posted Taxing Investors on a Mark-to-Market Basis on SSRN.  Here is the abstract:

Although the U.S. tax system generally only taxes income on a realization basis (that is, when payment changes hands), mark-to-market accounting better reflects economic income. Although there are practical difficulties that compel the continued use realization accounting, the tax code in certain limited situations allows or requires taxpayers to recognize income or loss on a mark-to-market basis. For example, a trader in securities or commodities can make an election to mark gains or losses to the market. This election is not available, however, to investors who are not “traders” for tax purposes.

The Article demonstrates that there is no compelling tax policy reason to limit the availability of the mark-to-market election; rather, based on the superiority of mark-to-market accounting over the current realization regime, the policy justifications for allowing (and encouraging) taxpayers to determine their tax liability on a mark-to-market basis outweigh any objections to liberalizing the election’s availability.

Alternatively, the Article proposes a safe harbor that approximates the criteria courts look to in order to determine if a taxpayer is a trader, but that, unlike the current trade or business test, can be applied in advance of the taxable year. Although providing a safe harbor solely to traders is a worse solution than making the mark-to-market election available to all taxpayers, it is nonetheless better than the current unworkable criteria because it provides certainty to taxpayers at the time they must make the election.

Altman: We Need to Raise Taxes, Soon

Op-ed in today's Wall Street Journal:  We'll Need to Raise Taxes Soon; Expect Congress to Seriously Consider a Value-Added Tax, by Roger Altman:

Today, the U.S. ranks next to last among the 28 OECD nations in total federal revenue as a share of GDP. Our federal revenues represent 18% of national output, down from 20% just 10 years ago. That makes the mismatch between our spending and our revenue very large, producing the huge deficits we face.

We all know the recent and bitter history of tax struggles in Washington, let alone Mr. Obama's pledge to exempt those earning less than $250,000 from higher income taxes. This suggests that, possibly next year, Congress will seriously consider a value-added tax (VAT). A bipartisan deficit reduction commission, structured like the one on Social Security headed by Alan Greenspan in 1982, may be necessary to create sufficient support for a VAT or other new taxes.

This challenge may be the toughest one Mr. Obama faces in his first term. Fortunately, the new president is enormously gifted. That's important, because it is no longer a matter of whether tax revenues must increase, but how.

New Issue of Atax's eJournal of Tax Research

Volume 7, Issue 1 (June 2009) of the eJournal of Tax Research, published by Atax (Australian Taxation Studies Program), University of New South Wales, Sydney, Australia, and edited by Binh Tran-Nam & Michael Walpole, is available on its web site:

• Michael Haug, Luise Hölscher & Tim Vollans, An Examination of the Influence of Inheritance Tax upon Business Succession -- Lessons for Germany (pp. 5-36)
• Grantley Taylor & Greg Tower, Impact of Adoption of IFRS on the Thinly Capitalised Position of Australian Companies (pp. 37-53)
• Monica Bhandari, Tax Advantages for Bungling Trustees (pp. 54-71)
• Nicole Wilson-Rogers & Dale Pinto, Tax Reform: A Matter of Principle? An Integrated Framework for the Review of Australian Taxes (pp. 72-105)

Tax Oppression Index: U.S. Is #12

A new study, Tax Burden and Individual Rights in the OECD: An International Comparison, ranks the U.S. 12th among 30 OECD countries in its "tax oppression index":

The tax oppression index is based on 18 representative criteria measuring fiscal attractiveness, public governance and financial privacy in the 30 member states of the OECD.

1. Italy
2. Turkey
3. Poland
4. Mexico
5. Germany
6. Netherlands
7. Belgium
8. Hungary
9. France
10. Greece
11. United Kingdon
12. United States

(Hat Tip: Cato Institute.)

Joulfaian: Estate Tax Repeal and Charitable Bequests

David Joulfaian (Office of Tax Analysis, Treasury Department) has posted On Estate Tax Repeal and Charitable Bequests, 123 Tax Notes 1221 (June 8, 2009), on SSRN.  Here is the abstract:

This note reviews trends in charitable bequests over the past two decades. It provides a time series on bequests and wealth reported by estates, a snapshot of the dispersion in the degree of generosity, as well as a brief introduction to data sampling issues. It also presents a critical review of the recent literature on the effects of the estate tax on giving. Because of differences in estimation and simulation methodologies, it is difficult to make meaningful comparisons of the various estimates.

Buckles: Should Yale Lose its Tax Exemption Because of its Opposition to the Solomon Amendment?

Johnny Rex Buckles (Houston) has published Do Law Schools Forfeit Federal Income Tax Exemption When They Deny Military Recruiters Full Access to Career Services Programs? The Hypothetical Case of Yale University v. Commissioner, 41 Ariz. St. L.J. 1 (2009).  Here is the abstract:

Most U.S. law schools prohibit prospective employers who discriminate against students on any of several grounds, including sexual orientation, from utilizing the schools' student recruitment programs conducted by their career services offices. Because homosexuals who disclose their sexual orientation may not serve in the United States armed forces, some law schools at times have limited the channels through which military recruiters may interview students. In response to the application of these anti-discrimination policies to military recruiters, Congress enacted the Solomon Amendment. The Solomon Amendment eliminates certain federal funding otherwise available to an institution of higher education if it denies military recruiters the same access to its students and campus that other recruiting employers receive. Although the Supreme Court has recently upheld the constitutionality of the Solomon Amendment, another legal issue -- one that existing legal scholarship has never considered -- remains outstanding. The issue is whether private law schools that have denied military recruiters full access to student recruitment programs have forfeited their federal income tax exemption under § 501(c)(3) under the public policy doctrine announced in Bob Jones University v. United States. This article rigorously analyzes this provocative issue by positing a hypothetical Supreme Court case, Yale University v. Commissioner, in which four opinions written by fictional Supreme Court Justices determine the tax-exempt status of several private, free-standing law schools or their affiliated universities. This format not only facilitates an analysis of the nuances of the public policy doctrine, but also exposes and illustrates the vagaries of the doctrine. Building on Reforming the Public Policy Doctrine, 53 U. Kan. L. Rev. 397 (2005), this article concludes that the hypothetical case of Yale University v. Commissioner demonstrates that the public policy doctrine should be reformed.

Law Prof Plutocrats

Daniel Gordon (St. Thomas University School of Law) has posted Hiring Law Professors: Breaking the Back of an American Plutocratic Oligarchy, 19 Widener L. Rev. ___ (2010), on SSRN.  Here is the abstract:

Law students and the consumers of legal services like to think that professors are hired by law schools on the basis of pure intellectual ability and achievement. No doubt, individual intellectual ability and achievement play significant roles in law school faculty hiring. However, another important dynamic is overlooked, wealth.

Zelenak Responds to Raskolnikov's Revealing Choices

I previously blogged the new article by Alex Raskolnikov (Columbia), Revealing Choices: Using Taxpayer Choice to Target Tax Enforcement, 108 Colum. L. Rev. 689 (2009). Lawrence Zelenak (Duke) has published a response, Tax Enforcement for Gamers: High Penalties or Strict Disclosure Rules?, 109 Colum. L. Rev. Sidebar 55 (2009).  Here is the Conclusion:

By explaining the advantages of applying different enforcement regimes to taxpayers with different motivations and by offering a detailed description of how such regimes might be designed, Raskolnikov has made an important contribution to the scholarly literature on tax compliance and enforcement strategies. In addition to the attractions of the specific proposal for a [compliance regime] (CR) and a [deterrence regime] (DR). Raskolnikov's article is also valuable for enabling the reader to understand the current system in a new light—as already applying a special enforcement regime to the most important category of gamers through its stringent tax shelter disclosure requirements. Whether the current system's way of dealing with gamers is preferable to Raskolnikov's proposal is a difficult question. All things considered—including the effect of each approach on non-gamers—I am inclined to think the current system is the better choice. But neither Raskolnikov's article nor this Response has attempted a comprehensive evaluation of the relative merits of deterring gamers via Raskolnikov's DR, versus deterring gamers via stringent tax shelter disclosure requirements. On that important question, much work remains to be done.

Federal Income Tax, Brought To You By . . .

In today's Inside Higher Ed:  Study on Idea of Letting Donors Sponsor Courses:

Trustees of City College of San Francisco have agreed to consider a formal plan to let donors sponsor classes that would otherwise be eliminated, The San Francisco Chronicle reported. Don Griffin, the chancellor, first raised the idea last week, saying that he would let donors pay $6,000 to rescue one of the 800 courses being called off due to state budget cuts. Trustees hadn't been briefed on the idea and demanded a formal discussion first. The San Francisco newspaper reported that the discussion appeared headed toward killing the idea. Some trustees worried about the concept letting the state feel it could ignore the college's needs. One trustee was worried about the possibility of an alcohol or tobacco company sponsoring a health course. But the trustees were swayed to allow Griffin to develop a plan for their review after faculty members and others spoke, detailing their concerns about how many classes were disappearing. One speaker told the board to "take the money and run."

IRS Updates FAQ For Individuals With Offshore Accounts

The IRS has updated its 30-question FAQ by adding 21 new questions for individuals with unreported income relating to offshore transactions who want to voluntarily disclose the information to the IRS. (Hat Tip: Peter Lagonowicz.)

Henderson: The End of an Era -- The Law School Class of 2008

Bill Henderson (Indiana) today blogs The End of an Era: the Bi-Modal Distribution for the Class of 2008, with this just-released chart from NALP on entry-level starting salaries for the class of 2008 [click on chart to enlarge]:

Bill notes:

Of the 22,305 law school graduates, a remarkable 23% (5,130 members of the class of 2008) reported an entry-level salary of $160,000. In contrast, 42% of entry level lawyers reported salaries in the $40,000 to $65,000 range. Once again, the central tendencies are a poor guide to the distribution as a whole: whereas the mean salary is a $92,000, the median salary was $72,000. Further, the two modes ($50,000 and $160,000) are separated by $110,000.

Bill traces the history of the bi-modal salary distribution pattern with salary data from the law school classes of 1991, 2000, 2006, and 2007.

Desai & Dharmapala: Earnings Management, Corporate Tax Shelters, and Book–Tax Alignment

Mihir A. Desai (Harvard Business School) & Dhammika Dharmapala (Illinois) have published Earnings Management, Corporate Tax Shelters, and Book–Tax Alignment, 62 Nat'l Tax J. 169 (2009).  Here is the abstract:

This paper reviews recent evidence analyzing the link between earnings management and corporate tax avoidance and considers the implications for how policymakers should evaluate the financial reporting environment facing firms. A real–world tax shelter is dissected to illustrate how tax shelter products enable managers to manipulate reported earnings. A stylized example is developed that generalizes this view of corporate tax avoidance and empirical evidence consistent with this view is discussed. This view of corporate tax avoidance implies that shareholders and policymakers should question the rationale for distinct financial reports and that greater book–tax alignment may have mutually beneficial effects for investors and tax authorities.

Michael Jackson's Looming "Estate Tax Disaster"

In a previous article, Estate Planning Implications of the Right of Publicity, 68 Tax Notes 95 (1995), I warned that celebrities (and their counsel) must carefully plan their estates in light of the inclusion of the value of rights of publicity for estate tax purposes under § 2033.  In the Conclusion, reprinted below the fold, I contrasted the different estate planning strategies appropriate for celebrities who zealously guard their privacy (e.g., J.D. Salinger) and for those who shamelessly exploit their celebrity (e.g., Michael Jordan).  As Tax Prof Bridget Crawford (Pace) notes, an Estate Tax Disaster Looms for Michael Jackson’s Estate if he and his counsel did not properly plan for the enormous value of his descendible right of publicity under California law.

Continue reading "Michael Jackson's Looming "Estate Tax Disaster""

Judge Sotomayor's Tax Opinions

The Congressional Research Service has released Judge Sonia Sotomayor: Analysis of Selected Opinions (R40649).  Here is the discussion of Judge Sotomayor's tax opinions:

Judge Sotomayor has not written extensively in the area of taxation, and it is not possible to draw conclusions about her judicial philosophy from the tax cases in which she has been involved. One Second Circuit case in which she authored an opinion has received attention, primarily because the Supreme Court, while agreeing with the holding, expressly disagreed with her reasoning.

In that case, William L. Rudkin Testamentary Trust v. Commissioner, [467 F.3d 149 (2d Cir. 2006),] the issue was whether investmentadvice fees incurred by a trust were “costs which are paid or incurred in connection with the administration of the … trust and which would not have been incurred if the property were not held in such trust ….” [§ 67(e).]  If so, the fees were fully deductible; if not, they were only partially deductible as miscellaneous itemized deductions. At the time the Second Circuit heard the case, a split had developed among the other circuits. The Sixth Circuit had held the fees were fully deductible, while the Fourth and Federal Circuits reached the opposite conclusion after finding the provision only applied to expenses that were not customarily incurred by individuals.

Continue reading "Judge Sotomayor's Tax Opinions"

Update on Former Florida Law Prof's Racial and Sexual Discrimination Lawsuit Against School

I previously blogged (here, here, and here) the racial and sexual discrimination lawsuit filed against the University of Florida Levin College of Law and its dean,lawsuit by Sherrie L. Russell-Brown, a law professor at UF from 2001-2007, who alleges that she was forced out of her faculty position and denied consideration for tenure in retaliation for complaining about unfair treatment.  TaxProf Bridget Crawford (Pace) provides this update on the case, including this 43-page amended complaint. 

   

Law School 4.0

The American Lawyer: Time for Law School 4.0, by Paul Lippe:

If I need some insight into the future of medicine, I might head over to Stanford Medical School. If I wanted to learn about likely directions in finance and hedge funds, I might visit Penn's Wharton. If I were looking to make investments in computing, I might arrange a tour of a lab at MIT. If I decided to learn something about where legal practice, law firms and legal departments will be in 2014, where would I go? Not to law school.

Relative to other professional schools, law schools are extremely disengaged from professional practice — they seek neither to understand nor to influence it. As I have said previously, law has lagged behind the world of global competition — and technology-driven clients — over the last 15 years. It's now entered a whiplash period where it must catch up. ...

In the simplest terms, we can identify three phases of legal education.

Phase I was the apprenticeship system, where folks "read" law under more senior lawyers. ...

Phase II, pioneered by Dean Christopher Columbus Langdell at Harvard, created the professional school, and centered the curriculum around the case method and classroom discussion, which is the template for every law school in the country. The ABA and later the AALS worked to eradicate the trade school model, ratcheting up admissions standards and driving the emergence of the faculty as a distinct profession.

Phase III reflects the last generation or so, where law schools have grown more distant from the profession, and the legal academy has come to define itself as primarily engaged in a scholarly pursuit (like, say, literature or history), as opposed to a professional pursuit, like, say, medicine or business.

Some obvious problems with the Phase III model include:

• Students graduate from law school with a lot of debt but without client-marketable skills, so their primary option is to serve long apprenticeships in law firms ...
• It's no surprise that law graduates don't acquire client-marketable skills, since so many law faculty don't care much about the practice of law. ...
• Law school is weak on empiricism — unlike, for example, medical school, which is moving in the direction of being ever more evidence-based. ...

Let me suggest some likely elements of change (some of which already are in play at Northwestern and elsewhere):

• An accelerated curriculum, with no more than a year of case method, a year of clinical, and then a year of externship with subject area focus, along the lines of medical school.
• More practice orientation in teaching, with far more adjunct faculty who are active practitioners. ...
• Better use of technology (both connectivity, like video or Web conferencing, and Web 2.0 social networks) to connect schools and practitioners and clients. ...
• A much more empirical approach to practice, forcing much deeper inquiry, rather than just trotting out hypotheticals and issue-spotting. ...
• A move back to mission-centered management. In a recent meeting with law school deans, I asked, "If you decided the purpose of law school was to maximize the comfort and income of the faculty, what would you do differently?" The answer: "Nothing." When my wife's grandfather was a law school dean, it was understood that the law school was there to serve society, the profession and students — not vice versa.
• A lifetime (or at least 10 years) of orientation for skills development for students/alums. ...

Call it law school 4.0.

TaxProf Blog Weekend Roundup

Saturday:

• Tax Court Disallows Deductions for Unsubstantiated Expenses of Thomson-West Sales Rep
• Income Redistribution Under Obama's Budget
• Hanlon & Maydew:  Book–Tax Conformity: Implications for Multinational Firms

Sunday:

• 11th Circuit Grants Wesley Snipes Oral Argument in Appeal of His Tax Fraud Conviction
• More on DePaul's Firing of Dean Weissenberger
• Top 5 Tax Paper Downloads
• Cap-and-Trade: The Song
• Shaviro:  Internationalization of Income Measures and the U.S. Book–Tax Relationship

11th Circuit Grants Wesley Snipes Oral Argument in Appeal of His Tax Fraud Conviction

Ellen Podgor (Stetson) of our sister White Collar Crime Blog reports that the 11th Circuit has granted actor Wesley Snipes oral argument in the appeal of his conviction on three misdemeanor tax fraud counts.  Oral argument is scheduled for November 2009, so Mr. Snipes should remain free on bail until well into 2010.  Ellen notes that the 11th Circuit last year granted oral argument in only 16% of criminal appeals, so this is a real coup for the Snipes defense team.

More on DePaul's Firing of Dean Weissenberger

Following up on my previous coverage of DePaul's firing of Dean Glen Weissenberger:

• DePaul Fires Dean in Dispute Over Tuition to be Retained by Law School (6/19/09)
• DePaul's Firing of Dean Glen Weissenberger Is Universally Condemned (6/21/09)
• DePaul Names Illinois Judge as Interim Dean Over Unanimous Opposition of Faculty (6/22/09)
• Leiter Condemns DePaul's Firing of Dean Glen Weissenberger (6/24/09)

In Conflict Between DePaul University Officials, Students Over Ousted Law Dean Hits Facebook, The Shark reports on several statements made by Provost Epps at a meeting with DePaul students (a complete account is in this Facebook post):

• University officials gave Dean Weissenberger the opportunity to resign, but he refused.
• Dean Weissenberger consistently spent more than the law school budget allowed, in excess of $1 million.
• Dean Weissenberger filled four positions at the law school without permission from the provost.
• Dean Weissenberger's decision to contact the ABA was "highly irregular" and "making mischief."

A DePaul faculty member shared with me for posting on TaxProf Blog an email from Dean Weissenberger to the faculty addressing the circumstances of his firing:

From: Weissenberger, Glen
Sent: Tue 6/23/2009 7:56 PM
To: ***
Subject: RE: The Meeting

Colleagues,

 

I would be happy to clarify with the faculty any facts regarding my termination. I would be pleased to meet with you and set the record straight. The statements attributed to Mary Dempsey, John Simon and and Helmut Epp are misleading if not outright false, and I would happy to clarify what actually occurred in regard to every matter..

 

For now, let me assure you that I did not make unauthorized tenured offers.  Early in the process I cleared these appointments with Kelly Johnson, and I have the e-mail to prove it.  We also reported early in the process in writing that we would be making lateral, tenured appointments. New hiring protocols were subsequently rolled out this year, but we had already complied with them.  Brian Havel is quite familiar with our compliance.  Without checking the record, Provost Epp sent me an e-mail while I was at the AALS meeting in San Diego instructing me to rescind or withdraw our four offers within 24 hours and to demonstrate I had done so by sending him tracking receipts.  I responded by e-mail and told him I would not do so. I frankly spent several days thinking I would be fired.  When I returned to Chicago, I met with the provost, and he backed down. To suggest that this is a basis for my termination is false and disingenuous. Yes, I admit that many deans would have terminated the offers as directed to save their jobs, but in this case, the only thing I am guilty of is standing up to an abuse of authority.

 

I will be happy to discuss both the fiscal matters and the ABA reporting matters with the faculty.  Very quickly, the deficit spending in certain accounts was a matter that has continued for several years. Every year for the past several years, we cured those deficits with gift monies and other discretionary money.  We were frequently commended by the provost for honorably curing the deficits.  We did this even in years when the university failed to transfer funds to the law school pursuant to Margin Agreement. You can't imagine how deeply offended I am that this mutually condoned practice has been cited as a basis for my termination, and that members of the Board of Trustees have been mislead to believe that I have not exercised fiscal responsibility. 

 

As to ABA reporting, clearly the Board members have been mislead.  I cannot begin here to explain the complexity of the reporting to the ABA regarding the Margin Agreement, but let me assure you that getting this matter right with the ABA will determine our fiscal viability for a long time. That is why when I discovered a problematic aspect of the University's calculation of the margin, I sent a letter to the ABA. I was told by the ABA that I had a duty to do this, and I advised the provost that I would send the letter.  I followed a protocol that I had a duty to follow, and as such, this simply cannot be a basis for termination.  Just to point out how slippery these issues are, the provost handed out a spread sheet at the meeting on Monday. I took one look at it and realized that it was not relevant to the issue being discussed.  The document referred to BUDGETED income and expenses. The Margin Agreement is based on ACTUAL income and expenses.  In fact  the whole idea behind the Margin Agreement, is to return actual revenue to College of Law when it exceeds the budgeted revenue. Again, I am deeply offended that this type of disingenuousness is used to mislead the faculty and the trustees.

 

I really don't want to debate the provost and the president about my record. I am proud of everything we have accomplished in seven years and the record, even with the fabrications, cannot possibly justify termination. I can absolutely assure you that I have never acted improperly as to hiring, the budget or the ABA.  What I am guilty of is mastering these areas in a way that threatens those do not want to adhere to the principles of shared governance.  I have also demonstrated a leadership style that is fearless in the face of intimidation and bullying.

 

Again, I am happy to meet with the faculty to discuss any facts it needs to have clarified.

 

As always, I am grateful for your support.

 

Glen

 

P.S. It's been a great run, and I loved every minute of it no matter how it ended.  Thanks. I am proud of all of you. 

Top 5 Tax Paper Downloads

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

1.  [384 Downloads]  Now You See it, Now You Don't: Exiting a Partnership and Making Gain Disappear, by Howard Abrams (Emory)

2.  [261 Downloads]  Measuring Rates of Return for Lobbying Expenditures: An Empirical Analysis Under the American Jobs Creation Act, by Raquel Meyer Alexander (University of Kansas, School of Business), Stephen W. Mazza (University of Kansas, School of Law) & Susan Scholz (University of Kansas, Accounting and Information Systems Area)

3.  [171 Downloads]  The Obama International Tax Plan: A Major Step Forward, by Reuven S. Avi-Yonah (Michigan)

4.  [108 Downloads]  The Last Best Hope for Progressivity in Tax, by Edward J. McCaffery (USC) & James R. Hines Jr. (Michigan)

5.  [102 Downloads]  What is Wrong with Tax Evasion?, by Stuart P. Green (Rutgers-Newark)

Cap-and-Trade: The Song

The House on Friday approved the cap-and-trade bill, 219-212 .  Here is the Tax Foundation's perspective on the legislation:

Shaviro: Internationalization of Income Measures and the U.S. Book–Tax Relationship

Daniel N. Shaviro (NYU) has published Internationalization of Income Measures and the U.S. Book–Tax Relationship, 62 Nat'l Tax J. 155 (2009).  Here is the abstract:

Taxable income and financial accounting income are measures that use the same name but serve different purposes, leading to some differences in how they might ideally be defined. However, concern about managerial incentive problems may support integrating them, either to increase the accuracy of amounts reported or to reduce the resources that managers expend on reducing taxable income and increasing reported earnings. Political incentive problems, on the other hand, arguably support separating the measures, so that legislative eagerness to control the tax base need not promote politicization of accounting standards. The case for a largely one–book system may grow stronger, however, if pressures for international convergence in defining income on both the tax and accounting fronts lead to reduced politicization of both.