Saturday, January 8, 2005
The UCLA School of Law made one of the largest leaps in the latest US News survey of tax programs, moving from #25 in 2002 to #6 in 2004. In large part, this move was fueled by the unprecedented hiring of three tax professors in 2003, joining the four tax professors already on the faculty to form one of the strongest tax faculties in the country.
The resurgence of UCLA’s tax program is evident in its many activities planned for this year, including its Tax Policy and Public Finance Colloquium this Spring, the UCLA Law Review's Symposium on Rethinking Redistribution: Tax Policy in an Era of Rising Inequality in January, UCLA’s Institute on Tax Aspects of Mergers and Acquisitions in May, and the hosting of a Conference on Historical Perspectives on Tax Law & Policy in July. Moreover, because of the combination of an expanded tax faculty and substantial student interest, the UCLA Program in Business Law and Policy will offer a separate tax track in its business law concentration starting next year.
In a seven-part series, TaxProf Blog will spotlight the tax professors who make up the heart of UCLA’s tax program.
Victor Fleischer is the latest addition to a new tax powerhouse at UCLA School of Law. He teaches Federal Income Tax, Deals: Engineering Financial Transactions, and a seminar on Regulating Wall Street. His principal area of research focuses on the interaction between tax and corporate governance, with particular focus on the structure of venture capital startups and the importance of understanding institutional details when designing effective tax policy.
Victor’s route to teaching was fairly traditional. After graduating from Columbia Law School, he clerked first for Judge Blane Michael of the 4th Circuit in Charleston, West Virginia. Although there were few tax cases that year, Victor explained that Judge Michael did work on one case dealing with rolling over capital gains from one residence to another under old section 1034. The issue was whether one must be married to the same spouse to take advantage of the higher rollover amount for married couples. Victor added that while Judge Michael had great respect for the IRS, he did on occasion note that when he was growing up, his neighbors in rural West Virginia referred to the IRS as “those dang revenuers” when they came around to shut down the moonshine still. Victor thinks that Judge Michael was kidding about the moonshine, but he’s not sure.
Victor next clerked for Judge Alex Kozinski of the 9th Circuit, who is, well, no big fan of the Service. Victor had the pleasure of watching him write the Peracchi opinion, a corporate tax case which deals with the basis of a note contributed by a shareholder to a controlled corporation. “It’s a neat little opinion, and it caused a bit of controversy,” Victor explained. That year Judge Kozinski also wrote a dissent about a “tax turtle” case. The majority had held that the taxpayer, who worked on the road for the Ice Capades, had no permanent home and thus could not claim traveling expenses while “away from home.” (The taxpayer was thus like a turtle, carrying his tax home on his back from show to show.) Judge Kozinski explained that while the taxpayer was on the road a lot, he always returned to Idaho to stay with his folks in between shows. If the taxpayer had rented an apartment, the IRS would surely have allowed the deductions, but since the taxpayer was staying at home and had no duplication of expenses, they did not. Judge Kozinski concluded with the line, “Leave it to the IRS to turn a family reunion into a taxable event.”
Victor explained that his two wonderful judges taught him how to write about complex legal topics – even tax – in a way that’s accessible, persuasive, and even entertaining. Victor strives to carry those lessons into his work.
After clerking, Victor worked for Davis Polk & Wardwell for three years. He subsequently went to work for David Schizer as a Research Fellow at Columbia. Victor says that David was the ideal mentor to learn from – a gifted teacher, a brilliant scholar, and a patient and compassionate friend. As a rookie candidate, Victor had some great options. Victor explained that he was drawn to UCLA by not just the depth but the intellectual diversity of the tax faculty. He now has a stable of mentors who patiently answer questions and provide guidance. Bill Klein shares Victor’s interest in how tax affects the organization of economic activity. Michael Asimow shares his interest in tax and administrative law. He goes to Steve Bank for an historical perspective and Sam Thompson when he needs an M&A guru. Kirk Stark shares Victor’s interest in public finance and Eric Zolt is Victor’s go-to guy when he needs guidance on how to teach a particular tax concept or just a funny story to tell during class.
Lately, Victor has been studying the interaction between tax and private equity, and venture capital in particular. His first article, The Rational Exuberance of Structuring Venture Capital Start-Ups, 57 Tax L. Rev. 137 (2003), examined the puzzle of why start-ups organize as tax-inefficient corporations rather than as partnerships or LLCs. He’s also worked on some case studies in connection with his “Deals” course, which looks at the structuring of corporate transactions. Victor’s current work-in-progress looks at the puzzle of why investors in most private equity fund investors receive an 8% preferred return on their investment, while investors in venture capital funds do not. Surprisingly, tax provides part of the answer – though you’ll have to read his paper, The Missing Preferred Return, to find out why. It will be posted on SSRN (and the TaxProf Blog!) in a couple of weeks.
For prior UCLA tax faculty profiles, see:
Each Saturday, TaxProf Blog shines the spotlight on one of the 700+ tax professors in America's law schools. We hope to help bring the many individual stories of scholarly achievements, teaching innovations, public service, and career moves within the tax professorate to the attention of the broader tax community. Please email me suggestions for future Tax Prof Profiles. For prior Tax Prof Profiles, see here.