Thursday, September 20, 2007
The Tax Justice Network has published Closing the Floodgates: Collecting Tax to Pay for Development:
In preparing this report we have purposefully set out to provide (a) the most comprehensive review ever published of the nature and scale of the problems, and (b) a series of recommendations for how governments and international agencies might tackle them. ... We recognise that tax policy can be complex, particularly in an international context. We have therefore sought to do two things in this report: firstly to demystify the issues, and secondly, to demonstrate that much can be done immediately to diminish capital flight and tax evasion. Crucially, we show that the normal assumption that this requires multilateral agreement before effective progress can be made is simply not the case.
Wednesday, September 19, 2007
Interesting article from next week's National Law Journal: Law Profs Debate Mandatory Attendance Policies; ABA Requires "Regular and Punctual" Class Attendance, But Does Not Specify a Policy, by Vesna Jaksic:
A new law school year has begun, bringing with it a heated debate over a perennial subject: mandatory attendance. Several law blogs have been buzzing with debates by law professors and students on whether making attendance a requirement is necessary.
The Senate Finance Committee today holds a markup session on The Habitat and Land Conservation Act of 2007, which would:
- Permanently extend tax incentives for farmers, ranchers and other eligible taxpayers who establish conservation easements
- Establish tax credits for taxpayers who take voluntary measures to help protect and restore the habitats of threatened or endangered species
- Taxpayers would develop a management plan with the Secretary of Interior or other agency detailing the schedule, deadlines, monitoring and assistance of each specific recovery program
- Establish a tax deduction for the cost of specific actions recommended in habitat recovery plans approved under the Endangered Species Act taken by taxpayers
- Allow taxpayers to exclude from taxable income any payments received from the federal government under certain cost-sharing conservation programs
- Extend a provision to allow taxpayers to fully deduct the costs of environmental cleanups in the year the costs are incurred.
The bill also includes a provision to modify the effective date for the application of the 2004 reforms of certain Sale-In/Lease-Out (SILO) transactions.
- Senate Finance Committee, Press Release
- Joint Committee on Taxation, Description of the Chairman's Mark of the "Habitat and Land Conservation Act of 2007" (JCX-75-07)
- Joint Committee on Taxation, Estimated Revenue Effects of the "Habitat and Land Conservation Act of 2007" (JCX-76-07)
John K. Eason (Tulane) presents The Restricted Gift Lifecycle, or, What Comes Around Goes Around, 76 Fordham L. Rev. ____ (2007), at Penn State today. Here is the Conclusion:
Going beyond the Robertson v. Princeton dispute, I’d like to conclude with a few additional thoughts about the restricted gift lifecycle and the interconnectedness of decisions and outcomes across the lifespan of a restricted gift, with a particular focus on the trend towards a more liberalized cy pres doctrine. These doctrinal liberalizations will undoubtedly alter judicial decision-making, though at what pace remains unclear. Such liberalization should also influence non-judicial decision-making. Interaction with the state attorney general—being the primary party charged with enforcing the organization’s compliance with its fiduciary duties—is just one example. In this regard, the more liberal doctrinal acceptance of modifying donor directives should “grease the wheels” when it comes to the recipient organization’s dealings with the state attorney general. The “grease” comes in the form of the new starting premise; namely, that the donor possessed a general charitable intent notwithstanding her specific directives. This premise, plus the addition of a “wasteful” trigger for invoking cy pres, should also make the prospect of “tweaking” dead-hand controls less offensive and less likely to generate a public backlash (both an organizational and attorney general concern).
David A. Weisbach (Chicago) & Joseph Bankman (Stanford) have posted Consumption Taxation is Still Superior to Income Taxation on SSRN. Here is the abstract:
This essay responds to an article by Daniel Shaviro which argues in part that the failure of empirical assumptions behind the permanent income hypothesis undermines the case for preferring consumption taxation over income taxation. We consider each of Shaviro's arguments and conclude that none change the basic considerations in favor of consumption taxation in any significant way. Shaviro concludes that administrability and implementation concerns should be central to the choice of the tax base and that these concerns are likely to point to taxing consumption. We agree with this conclusion.
Democratic Presidential Candidates Propose Targeted Tax Cuts for Middle Class, Tax Increases on "Wealthy"
Interesting article in today's Wall Street Journal: Democrats Outline Tax Approach; Relief for Middle Earners Would Be Offset by Increases for Wealthy, by Deborah Solomon & Sarah Lueck:
Eager to avoid being branded old-style tax-and-spend liberals, the Democratic presidential candidates are starting to roll out detailed proposals to cut taxes for millions of Americans. But unlike the across-the-board cuts being floated in the Republican field, these are aimed only at lower- and middle-income households, often crafted narrowly as credits for specific expenses, like purchasing health insurance or buying a home. And, in a Democratic White House, any such tax cuts would be offset by big tax increases on upper-income families, investors and corporations, according to the emerging plans.
While their prescriptions vary in detail and scope, the top three contenders are all looking to use the tax code to correct what they say are imbalances that exacerbate income disparities. Their efforts are aimed at wooing voters who are increasingly concerned about their economic security and worried about not being able to afford health care, gas and retirement. ... But the plans are drawing criticism from some who say the candidates are pandering to voters by advocating policies that waste tax dollars instead of using the money to confront serious fiscal problems, such as shoring up Social Security and Medicare, which are forecast to run out of money once baby boomers retire.
Conservatives are attacking Democrats for using targeted tax cuts to mask what they say are really big tax increases.
The IRS's Office of Chief Counsel seeks to hire an attorney in the Procedure & Administration (P&A) business unit:
Major Duties: The Associate Chief Counsel, Procedure & Administration, located in Washington, DC, comprises approximately 120 attorneys. P&A attorneys handle a broad range of issues and work assignments that are fundamental to efficient tax administration, as well as advising the Chief Counsel and the IRS in all facets of judicial and tax administrative practice. P&A attorneys handle published guidance, advice and litigation related to a number of subjects: reporting and paying taxes; assessing and collecting taxes (including interest and penalties); abating, crediting, or refunding over-assessments or overpayments of tax; filing information returns; bankruptcy; summonses and information gathering; federal tax liens and levies; damage claims; attorney fees; disclosure, privacy and Freedom of Information Act issues; and judicial practice and judicial doctrines. Additionally, P&A attorneys argue motions before the Tax Court.
Salary: $66,767 to $121,967.
Application Deadline: September 21, 2007.
Terrence R. Chorvat (George Mason) has posted Tax Compliance and the Neuroeconomics of Intertemporal Substitution on SSRN. Here is the abstract:
This article argues that the relationship between the timing of tax payments and the decision of how much tax will be paid may have a greater impact on the level of tax compliance than would be predicted under standard exponential discounting models. To the extent that taxpayers exhibit hyperbolic or quasi-hyperbolic time discounting, compliance may be improved by separating the time at which tax returns are filed from the time in which it is paid or in which previously paid tax is refunded.
The Wall Street Journal and its Law Blog have picked up on my prior posts (here and here) on the deductibility of the $500,000 fine levied against New England Patriots coach Bill Belichick for videtape spying in the Pats' opening game against the New York Jets:
Wall Street Journal (article by Peter Lattman & Amir Efrati):
The $500,000 fine levied last week by the National Football League on New England Patriots head coach Bill Belichick for his team's using videotape to try to steal signals from the New York Jets has shaken the sports world. Oddly enough, it has also roiled the tax-law world.
The TaxProf blog posed this question: Can Mr. Belichick deduct the fine?
A dozen law professors weighed in with a combined 10,000 words on the matter, including testy exchanges over arcane sections of the tax code. Most of them concluded the fine is deductible as a "trade or business expense."
"Because, unfortunately, in this day and age, it probably is 'ordinary' for coaches and players in professional sports to cheat and, if caught, to be fined by the league, the fine levied on the Patriots' coach can be viewed as an ordinary and necessary business expense," wrote Myron Grauer of Capital University Law School.
But how could cheating be considered a business expense?
Drawing a contrast perhaps only a lawyer could love, Mike McIntyre of Wayne State University in Detroit distinguished between cheating and violating rules. "[T]he fine was for violating a rule, not for cheating," he wrote. "The Patriots were not accused of cheating by the Commissioner and were not fined for cheating." He added: "No professional football game is played without someone breaking the rules."
Wall Street Journal's Law Blog (post by Amor Efrati).
Bill Henderson has a fascinating post on the Moneyball implications of the Chemerinsky-UC-Irvine saga. Bill asks whether Chemerinsky could be the Billy Beane of Law Schools and revolutionalize the law school world:
I suspect a large number of deans would love to play his hand: (1) the UC brand and faculty benefits, (2) a public tuition subsidy for students, (3) a spectacular geographic location adjacent to a vibrant legal market, (4) the ability to select an entire faculty based on a unique institutional vision, and (5) seed money from private donors.
If law schools -- during the course of three years -- can add substantial and persistent value beyond raw aptitude, the innovators (and I hope Chemerinsky is one of them) could get a huge competitive advantage, at least until the elite schools are pressured by market forces to learn and apply those same innovations. And this would be far from a "marginal impact".
Update: David Bernstein has an op-ed in today's L.A. Times: What About Larry? Compare Chemerinsky's Tale with Academia's Bashing of Ex-Harvard Chief Summers:
The saga of controversial liberal law professor Erwin Chemerinsky's on-again, off-again deanship at the new UC Irvine law school was highly unusual in two ways. First, the pressure to enforce political orthodoxy at Chemerinsky's expense came from the right, not the left, and second, academic freedom and 1st Amendment values won a resounding victory when Chemerinsky was ultimately rehired. A more typical example of how academic freedom remains in jeopardy across the country is the UC Board of Regents' treatment of Larry Summers, the former president of Harvard. University....
The Chemerinsky episode, disturbing though it was, should not distract us from the primary challenge facing academic freedom in American universities: the rise of an academic far-left establishment that seeks to use universities as a base for political activism, and is perfectly willing to violate accepted standards of academic freedom to achieve that goal. Anyone concerned with the future of American higher education has the duty to defend the values of scholarship and open debate against authoritarian political correctness. Unfortunately, by disinviting Summers, the UC regents failed miserably.
Those of us who teach at public law schools can take heart in this article in Inside Higher Ed: The Public (Non-Salary) Advantage, by Scott Jaschik:
When it comes to faculty salaries, there’s little doubt that public higher education is at a real disadvantage these days. Private institutions pay more. According to the most recent salary data from the American Association of University Professors, private pay is more in all sectors of higher education. ...
A study released Monday by the Collaborative on Academic Careers in Higher Education (or COACHE) suggests that public colleges may have some advantages, at least once money is set aside. COACHE, which is based at Harvard University, has conducted a series of surveys of thousands of junior faculty members, trying to identify factors that make them satisfied (or not) with their jobs. Much of the analysis of the data has focused on the way female and minority faculty members are less likely than their white, male counterparts to feel good about their positions.
But a new look at that data finds that on a number of key factors related to tenure, public institutions outperform private institutions in the eyes of junior professors. Professors at public institutions were more likely than those at privates to consider that the tenure process and tenure standards are clear, and that expectations about job performance were reasonable. In addition, public college faculty rated four of five categories of questions on work/family balance more favorably than did their private college counterparts. While the data are not broken out to allow for comparisons only of universities, COACHE has previously reported that on many of these job satisfaction categories, smaller colleges outperform larger universities. Many of the small colleges in the survey are private, suggesting that they may be boosting even lower scores from private universities.
The findings could be significant because other studies from COACHE have found that junior professors place increasing importance on factors like the clarity of the tenure process in evaluating their employers. These findings go against the long-standing tradition in higher education that institutions that pay well and have impressive reputations need not think much about how professors (especially those without tenure) are treated.
Insider self-dealing scandals affect both for-profit and nonprofit corporations (the latter the entity choice of approximately 80% of § 501(c)(3) entities). Statutory exculpation for even gross negligence has eviscerated state law fiduciary duty of care liability in both the for-profit and nonprofit sector. Consequently, absent board self-dealing, the only board liability for oversight failures after Disney and Stone involve systemic abdication - not really an appropriate standard for nonprofit corporations since many board members volunteer and/or are donors and so do not attend. Therefore, I propose several "federalism" changes to the § 4958 excess benefit rules to (i) extend the § 4941 private foundation self-dealing absolute prohibitions to public charities (both exempting only reasonable compensation of insiders); (ii) increase the initial tax on the self-dealer to 50% of the transaction amount (not the excess) or some similar significant deterrent level; and (iii) require more trustworthy information on the Forms 1023 and annual 990 by requiring some Sarbanes-Oxley measures such as audited financial statements to an independent audit committee and an independent compensation committee to set reasonable compensation. I would exempt small charities from these requirements because of cost.
Tuesday, September 18, 2007
The Second Circuit on Monday reversed the district court and held that Yale Law School could be denied federal funding under the Solomon Amendment (10 U.S.C. § 983(b)) for barring military recruiters from its campus. Burt v. Gates, No. 05- 1732 (2d Cir. 9/17/07). The Second Circuit cited Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47 (2006), in concluding that the government's policy of withholding money to schools that bar military recruiters does not violate the First Amendment.
Press and blogosphere coverage:
- NY Law Journal: Denial of Funds to Yale Law School Upheld Over Military Recruiter Ban, by Beth Bar
- Inside Higher Ed: Appeals Court Upholds Military Recruiting, by Scott Jaschik
- Powerline: Yale's Disgrace, by Scott Johnson
Update: Yale Dean Harold Koh released this statement today.
Prior TaxProf Blog coverage:
- Supreme Court Unanimously Upholds Solomon Amendment (3/6/06)
- Reactions to Rumsfeld v. FAIR (3/7/06)
- More Reactions to Rumsfeld v. FAIR and the Solomon Amendment (3/13/06)
- NLJ on Rumsfeld v. FAIR: Good Ruling, Bad Policy (3/30/06)
Adam Chodorow (Arizona State) presents Biblical Tax Systems and the Case for Progressivity, 23 J.L. & Relig 101 (2007).at Pittsburgh today as part of its Faculty Workshop Series. Here is the abstract:
With the political rise of the religious right, American policymakers have increasingly looked to religion for guidance on important policy issues, including questions of distributive justice and how best to allocate tax burdens. While many claim that Judeo-Christian values require progressivity, the examples of taxation found in the sacred texts apparently refute this claim. This article examines four examples of taxation found in the Bible and Talmud to determine whether it is appropriate to infer from them a Judeo-Christian principle of tax fairness that should apply in a modern, secular tax system. I find that, not only do these examples use different methods for allocating tax burdens, making it impossible to identify one principle, but, more important, each example bears the stamp of its religious purpose or historical circumstances, making it inappropriate to rely on these examples as evidence of a divinely-sanctioned principle of tax justice.
I previously blogged Bruce Bartlett's criticism of the FairTax (Bartlett Slams FairTax in WSJ (8/27/07)) in a Wall Street Journal op-ed (FairTax, Flawed Tax), including his discussion of the origins of the FairTax in the Church of Scientology. Bartlett expands on this theme in The New Republic: Fred Thompson Channels L. Ron Hubbard: Dianetics, the Tax Plan:
The basic theological tenets of the Church of Scientology are well known: a fanatical hatred for psychiatry coupled with a creation myth that involves an evil alien ruler named Xenu and his sundry galactic allies. The basic tenets of its tax policy are somewhat less familiar. But Scientologists promulgated and, at one point, heavily promoted a proposal that would replace all federal income taxes with a national retail sales tax (NRST). And the theology and tax policy aren't entirely unrelated: Xenu used phony tax inspections as a guise for destroying his enemies.
In a strange confluence, the Scientologist proposal happens to be nearly identical to one of the trendiest conservative tax proposals of the year, the so-called FairTax, which has been endorsed by John McCain and Fred Thompson, as well as second-tier presidential candidates Mike Huckabee, Tom Tancredo, Duncan Hunter, and Democrat Mike Gravel. Georgians John Lindner and Saxby Chambliss have introduced FairTax legislation in the House and Senate that would establish a 23% national sales tax.
But, when you mention any hint of the nexus between Scientology and the nrst--as I did briefly in a recent Wall Street Journal op-ed--you'll be denounced by FairTax supporters as a smear artist. This retort, however, is simply evidence that these FairTax supporters don't know the history of their own proposal. That's too bad. Perhaps if they understood its origins in Scientology, they might have a greater appreciation for its inherent flaws.
(Hat Tip: Neil Buchanan.)
This morning's post on IRS Provides Web Resources for Taxpayers Who Lose Their Homes in Foreclosure provoked a lot of discussion on the TaxProf Email Discussion Group. I reprint below the fold comments from these Tax Profs (with their permission):
- Richard Beck (New York Law School)
- Deborah Geier (Cleveland State)
- Greg Germain (Syracuse)
- Lloyd Mayer (Notre Dame)
- Robert Nassau (Syracuse)
Update: Linda Beale (Wayne State) has a detailed post here.
Democratic Presidential candidate Barack Obama unveiled his five-part Tax Fairness for the Middle Class plan in a speech today in Washington, D.C.:
Barack Obama will stand up to the special interests and restore fairness to the tax code. Obama’s tax fairness plan will reward work and provided needed tax cuts to America’s workers. His five-part plan will provide a tax cut to over 150 million workers and their families. Obama will:
- Create a new “Making Work Pay” tax credit of up to $1,000 for America’s working families
- Create a new universal mortgage interest credit that will benefit low and middle-income homeowners
- Honor America’s seniors by eliminating income taxes for those making less than $50,000 per year
- Simplify tax filings so millions of Americans can do their taxes in less than 5 minutes
- Eliminate special interest loopholes and tax breaks and crack down on international tax havens
To listen to the speech, see here.
Update: Press coverage:
- Associated Press: Obama Economic Plan Includes Tax Breaks, by Nedra Pickler
- Bloomberg: Obama Proposes Tax Cut for Middle Class, Increase for Investors, by Matthew Benjamin & Max Berley
- Boston Globe: Obama Envisions Tax Burden Shift
- Daily Kos: Obama Speech: A Simpler, Fairer Tax Code, by Adam Bonin
- New York Times: Obama's Tax Cut Plan, by Jeff Zeleny
- Reuters: Obama Proposes U.S. Middle Class Tax Relief Plan
- Slate: Obama's Five-Minute Magic
From today's Wall Street Journal:
In an initiative to be announced today, several philanthropists -- including Bernard Marcus, the billionaire founder of Home Depot Inc., and investor John Templeton, who made a fortune running mutual funds -- are launching a nonprofit that will advise donors on how to attach legally enforceable conditions to their gifts.
The new Indianapolis-based Center for Excellence in Higher Education aims to curb colleges' discretion in spending donors' contributions. The three foundations backing the center -- those founded by Messrs. Marcus and Templeton and the John William Pope Foundation -- have about $1.25 billion in assets and have made $585 million in gifts over the past five years. Several current high-profile battles over gifts have inspired the effort. ...
the Center for Excellence says it is working with a number of other donors who are taking its advice on attaching strings to gifts. ... Among the techniques the center favors to hold schools accountable: parceling smaller gifts out over a set time, rather than giving a larger sum to an endowment. A donor might also set up a gift as an annuity within a trust, overseen by a third-party trustee, who can decide annually whether the gift's intent has been met. Instead of endowing a professor's chair in perpetuity, a donor might provide financial backing to a single professor only for his or her lifetime, guarding against a successor who might drift from the subject matter the donor wants taught.
Big-Money Donors Move to Curb Colleges' Discretion to Spend Gifts, by John Hechinger. For more, see Charity Governance Blog: A Gift Is a Gift: Let the College's trustees Decide, by Jack Siegel.
The NYU Tax Law Review and Law Review host a roundtable discussion today on Does Atlas Shrug? Taxing the Rich and the Carried Interest Debate:
The panel will consider income gained in the form of "carried interest." Private equity funds currently have over $1 trillion in assets under management. The managers of these funds are paid generously, and much of their income comes in the form of a "carried interest," which entitles them to 20% of the profits of the fund. This portion of their pay is taxed at the 15% capital gains rate rather than at the 35% rate that would apply if it were taxed as compensation. As a result, some have questioned whether private equity managers should be eligible for lower tax rates than their receptionists. The U.S. Congress is currently debating whether to change the tax treatment of carried interest and significantly increase the tax liabilities of some of the richest Americans.
- Noël Cunningham (NYU) (moderator)
- Mitchell Engler (NYU)
- Victor Fleischer (Illinois)
- Joel Slemrod (Michigan)
- Jon Talisman (Capitol Tax Partners)
The roundtable takes place at 4:00 - 6:00 p.m. at NYU’s Furman Hall, Room 216.
The September issue of Hispanic Business lists the Top 20 schools for Hispanics in business, engineering, law, and medicine. Here are the Top 20 Law Schools for Hispanics (with the percentages of Hispanic students and faculty for the Top 10 schools):
- New Mexico (27%; 22%)
- Miami (12%; 8%)
- Texas (17%; 4%)
- USC (16%; 6%)
- American (14%; 6%)
- Florida State (8%; 7%)
- Arizona State (15%; 7%)
- Stanford (11%; 7%)
- Arizona (12%; 8%)
- Florida International (28%; 17%)
- George Washington
- San Francisco
Following up on my recent posts (here and here) on proposed relief for homeowners who otherwise would have discharge of indebtedness income under § 108 on the relief of mortgage debt as a result of a bank's foreclosure and sale of the home: the IRS yesterday issued a news release (IR-2007-159) unveiling a special section of its website for people who have lost their homes due to foreclosure:
The IRS also reassured homeowners that, although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes.
The new section of IRS.gov includes a variety of information, including a worksheet designed to help borrowers determine whether any of the foreclosure-related relief provisions apply to them. For those taxpayers who find they owe additional tax, it also includes a form they can use to request a payment agreement with the IRS. . In some cases, eligible taxpayers may qualify to settle their tax debt for less than the full amount due using an offer-in-compromise. The IRS urges struggling homeowners to consider their options carefully before giving up their homes through foreclosure. Under the tax law, if the debt wiped out through foreclosure exceeds the value of the property, the difference is normally taxable income. But a special rule allows insolvent borrowers to offset that income to the extent their liabilities exceed their assets.
- Chronicle of Higher Education: Hiring Debacle Prompts Damage Control and Conflicting Views at UC-Irvine, by Katherine Mangan
- Dorf on Law: Dorf on Leiter on Althouse on Dorf on Chemerinsky, or Am I Really an Arrogant Snob?, by Mike Dorf
- L.A. Times:
- Controversy Timeline: The Firing and Rehiring of Erwin Chemerinsky
- 'Fess Up, Chancellor Drake; The Climate for Free Speech Will Remain Chilled, and the Political Atmosphere Poisonous, For as Long as We Don't Know Why the UC Irvine Leader Unhired Erwin Chemerinsky in the First Place (editorial)
- UCI, Chemerinsky Putting on a Happy Face; Chancellor and New Law School Dean Are All Smiles, but Questions About Breakup-to-Makeup Ado Remain Unanswered, by Dana Parsons
- UC Irvine Rehires Chemerinsky as Dean; The School's Chancellor Flies East to Re-recruit the Legal Scholar, Whom He Had Earlier Fired, by Garrett Therolf & Richard C. Paddock
- National Law Journal: Chemerinsky's Back In as UC Irvine Law Dean; Nearly 60 UCLA Faculty Criticized Chancellor's Decision and Asked Him to Reinstate Duke Law Professor as Founding Law Dean, by Amanda Bronstad
- New York Times: Furor Ends in Deanship for Liberal Scholar, by Adam Liptak
- News & Observer: Professor Will be Dean After All; UC-Irvine, Duke Scholar Reconcile, by Jane Stancill
- WSJ Law Blog: Chemerinsky: The End of the L’Affaire?, by Amir Efrati
Prior TaxProf Blog coverage of the Chemerinsky-UC-Irvine saga below the fold:
If an individual seeks a benefit under a congressionally-enacted statute, is a court obliged to examine that statute to determine whether he qualifies for that benefit? To many district and circuit courts, the answer to that question is a firm no.
Monday, September 17, 2007
From the New York Lawyer:
Q: Can you sanitize poor J.D. grades with an LL.M.?
A: In a word, no. Sorry about that. Unfortunately, you can’t run from or hide those grades. As I have discussed in many, many past columns, your law school transcript will be a part of your history for the rest of your career. Trying to improve the appearance of your transcript with a high gradepoint from an LL.M. degree just doesn’t work. I have also discussed the general reasons for earning – or not earning – an LL.M. in a number of my past columns. In my experience over the years, I have found that unless you are a tax attorney or perhaps an international lawyer, an LL.M. does not enhance the way any employer will view your J.D. academics, class ranking or school.
The D.C. Circuit on Friday rejected Marrita Murphy's petition for rehearing en banc. Murphy v. IRS, No. 05-5139 (D.C. Cir. 9/14/07). The panel's revised opinion is at 493 F.3d 170 (D.C. Cir. 7/3/07); the panel's original and subsequently withdrawn opinion is at 460 F.3d 79 (8/22/05). The case now has its own Wikipedia entry.
The WSJ Law Blog reports that Erwin Chemerinsky sent the following email to his Duke colleagues at 1:07 p.m. EST:
It is with excitement and sadness that I am writing to tell you that I have accepted the position to be the founding dean of the Donald Bren School of Law at the University of California, Irvine. After meeting with Chancellor Michael Drake at length this weekend, I accepted his renewed offer. He provided me the greatest possible assurance of academic freedom for the dean and all faculty.
It has been one of the strangest and most difficult weeks of my life. I cannot possibly express my thanks for all of the support that I received from the law school’s faculty, administrators, and students. I am sad to be leaving this wonderful supportive community, though excited about the new challenges ahead.
This renders moot a letter sent on Saturday by sixty UCLA law faculty (including Tax Profs Michael Asimow and Kirk Stark) "urg[ing] the Chancellor to reverse his decision and submit the appointment to the Regents." See the entire letter below the fold:
Today's Wall Street Journal contains the 2007 M.B.A. Program Rankings, based on a survey of 4,430 recruiters conducted by Harris Interactive. (For a detailed description of the methodology, see here.) There are 19 programs in the National Ranking, and 51 program in the Regional Ranking. Here are the Top 10 in each category:
- Dartmouth (Tuck)
- UC-Berkeley (Haas)
- Carnegie Mellon (Topper)
- North Carolina (Kenan-Flagler)
- Michigan (Ross)
- Virginia (Darden)
- BYU (Marriott)
- Wake Forest (Babcock)
- Ohio State (Fisher)
- Rochester (Simon)
- Indiana (Kelley)
- Florida (Warrington)
- LSU (Ourso)
- Emory (Goizueta)
- Maryland (Smith)
Michael J. Graetz (Yale) & Alvin C. Warren Jr. (Harvard) have posted Dividend Taxation in Europe: When the ECJ Makes Tax Policy on SSRN. Here is the abstract:
This article analyzes a complex line of recent decisions in which the European Court of Justice has set forth its vision of a nondiscriminatory system for taxing corporate income distributed as dividends within the European Union. We begin by identifying the principal tax policy issues that arise in constructing a system for taxing cross-border dividends and then review the standard solutions found in national legislation and international tax treaties. Against that background, we examine in detail a dozen of the Court's decisions, half of which have been handed down since 2006. Our conclusion is that the ECJ is applying a standard of nondiscrimination to evaluate national tax laws in a manner totally divorced from the underlying tax policy norms that produced the legislation at issue. Some, but not all, of the decisions seem to require nondiscrimination based on the destination, but not the origin, of corporate investment. The result is a jurisprudence that fails to hold together substantively, functionally, and rhetorically. In many instances, this result follows from largely formalistic distinctions made by the Court, such as whether a withholding tax on dividends should be considered corporate or shareholder taxation.
The three-day conference on International Tax Competition: What’s Next? kicks off today in Montreal, sponsored by The Université de Montréal and the Université d’Aix-Marseille. Among the speakers is Reuven S. Avi-Yonah (Michigan), who will be speaking on Government Assistance – Unfair Competition? For the complete list of speakers and their topics, see here.
Temple invites entry level and junior lateral candidates to apply for a tenure-track business tax faculty position. For more information or to apply, contact Tax Prof Alice G. Abreu, Chair, Faculty Selection and Recruitment Committee.
On Friday, I blogged the results of a question posed on the TaxProf Email Discussion Group: can New England Patriots coach Bill Belichick deduct the $500,000 fine levied by the NFL for videotape spying in the Pats' opening game against the New York Jets? Twelve Tax Profs used over 10,500 words to supply the answer: yes.
If Bill were my client, I would advise him to claim the fine as a deduction subject to the 2% miscellaneous itemized deduction rules (under 162). A few considerations:
- If it is ordinary and necessary, he may negotiate to turn the fine into his employer (the Pats) as an expense reimbursement under an accountable plan. I think Kraft would tell him to get out of his office, though.
- It's been reported Bill has an annual salary of about $5 million, so let's use that as a rough approximation of AGI. Assuming no other miscellaneous itemized deductions subject to limit, that shaves $100,000 off his deduction right there, leaving him with $400,000.
- The Pease phaseout will get him, as well. Assuming $5 million of AGI and $1 million of itemized deductions (about standard), the Pease phaseout will reduce his itemized deductions by $145,308. The pro-rated share (40%) of this assigned to the remainder of the fine is $58,123. That leaves him with $341,877 to deduct.
- Assuming he is in the 35% bracket, the federal tax subsidy on this will be $119,657. The IRS will subsidize 24% of the Belichick fine.
Vault has published its list of the Top 100 Most Prestigious Law Firms, based on a survey of 18,800 associates at the nation's top law firms. (See here for a full description of the survey methodology.)
Here are the Top 25 law firms, along with their "prestige scores":
- Wachtell, Lipton, Rosen & Katz (New York) (8.780)
- Cravath, Swaine & Moore (New York) (8.732)
- Sullivan & Cromwell (New York) (8.224)
- Skadden, Arps, Slate, Meagher & Flom (New York) (8.197)
- Davis Polk & Wardwell (New York) (8.126)
- Simpson Thacher & Bartlett (New York) (8.116)
- Cleary, Gottlieb, Steen & Hamilton (New York) (7.759)
- Latham & Watkins (Los Angeles) (7.712)
- Weil, Gotshal & Manges (New York) (7.672)
- Covington & Burling (Washington, D.C.) (7.510)
- Kirkland & Ellis (Chicago) (7.492)
- Debevoise & Plimpton (New York) (7.468)
- Paul, Weiss, Rifkind, Wharton & Garrison (New York) (7.444)
- Shearman & Sterling (New York) (7.240)
- Wilmer Cutler Pickering Hale and Dorr (Washington, D.C.) (7.237)
- Williams & Connolly (7.234)
- Sidley Austin (Chicago) (7.232)
- Gibson, Dunn & Crutcher (Los Angeles) (7.158)
- O'Melveny & Myers (Los Angeles) (7.105)
- White & Case (New York) (7.092)
- Arnold & Porter (Washington, D.C.) (7.012)
- Jones Day (Washington, D.C.) (6.932)
- Morrison & Foerster (San Francisco) (6.898)
- Milbank, Tweed, Hadley & McCloy (New York) (6.752)
- Clifford Chance (New York) (6.747)
For a list of the top tax firms, see here ($).
Following up on Sunday's post: Senate Finance Committee Republicans Urge IRS to Lift DOI Income Burden from Homeowners in Foreclosure:
- Congress has long required, in § 108, that homeowners report as discharge of indebtedness income the amount of any mortgage debt they are relieved of when they default on their mortgage and the bank forecloses on their home.
- The New York Times ran (on August 20) a front page story (After Foreclosure, a Big Tax Bill From the IRS) on a particularly egregious example of the unfairness of taxing strapped homeowners in these circumstances. In the story, the amount of the income was inflated as a result of an erroneous Form 1099 sent to the taxpayer after a sham foreclosure sale.
- Although this has long been the tax result, the problem is particularly acute now with (a) the decline in housing prices, and (b) the sub-prime mortgage mess.
- Bills are introduced in Congress (e.g., H.R. 1876, S. 1394) to provide relief in this situation.
- The President (on August 31) calls on Congress to change the law to provide relief to homeowners in this situation and endorses these bills.
- Rather than do the legislative heavy lifting, Republican on the Senate Finance Committee (Grassley, Smith, and Roberts) send a remarkable letter to the IRS on Friday, urging the IRS to simply ignore the statute that Congress enacted and administratively provide relief to homeowners.
- The letter concedes: "We recognize it would be simpler to change the law
- But why do the heavy lifting when it is easier to blame the IRS?: "Sen. Chuck Grassley, ranking member of the Committee on Finance, along with two fellow Finance Committee members, is urging the Treasury Department and Internal Revenue Service (IRS) to take action to ensure that working families who lose their homes to foreclosure face more reasonable, accurate tax bills for their home loan debt forgiveness. “Working families who lose their homes are getting hit with huge tax bills,” Grassley said. “Some of those bills are unfairly high and even inaccurate. The IRS needs to take steps to ensure the accuracy of the bill in the first place. Then the IRS should offer the taxpayer every opportunity to negotiate the size of the bill and a fair payment plan. The agency has plenty of authority to treat taxpayers reasonably in these situations. It needs to use that authority to serve taxpayers.”
- The proposed administrative relief -- at the Offer in Compromise stage -- would take several months for cases to wind their way through the system. Plenty of time to enact a legislative fix.
- But of course, a legislative fix would require revenue offsets under Congressional budget rules. Not so with administrative action by the IRS.
(Hat Tip: Ann Murphy, Mike McIntyre.) For a critical view of the proposed §108 fix, see The Heritage Foundation: The Subprime Mortgage Crunch: Providing Tax Relief for Ex-Homeowners, by JD Foster:
The Administration's tax proposal, while well intentioned, is nevertheless misguided and all the more unfortunate because the Administration missed an opportunity to provide tax relief through sound tax reform. ...
A sound and sensible means to reduce the bite of the federal income tax on families who have recently lost their homes to foreclosure is to correct the tax treatment of cancelled mortgage debt. The current treatment as taxable income violates normal income tax principles. The correct treatment would be as capital gain and, in almost all instances, long-term capital gain. If additional tax relief for these families is deemed appropriate, Congress can allow them to delay, for a year or two, payment of the tax on the capital gain.
Update: For more, see:
- Mauled Again:
- Roth & Co.: Dominating the Housing Market
- FindLaw: The Newly-Founded U.C. Irvine Law School's Firing of New Dean Erwin Chemerinsky: Why It Violates the Constitution, Destroys the School's Reputation, and Jeopardizes Its Accreditation, by Scott Moss (Colorado):
- Dorf on Law: Did Chemerinsky Dodge a Bullet?, by Michael Dorf (Columbia):
[I]t's remarkable that virtually all law professors, across the ideological spectrum, were united in outrage last week when the nascent U.C. Irvine Law School fired constitutional law guru Erwin Chemerinsky - just a week after reaching a contract with him to be the school's first Dean.
In this column, I'll start by recounting recent analyses of why the firing appears to have been unconstitutional under the U.S. and the California constitutions. I'll then proceed to discuss why the firing may not only tarnish U.C. Irvine's reputation, but also jeopardize its accreditation.
When I last saw Erwin Chemerinsky I asked him why he wanted to be the dean of a new law school. He was enthusiastic in response, talking about the opportunity to place his stamp on legal education as the founding dean of the UC Irvine Law School. I was skeptical and remain so. Chemerinsky has enormous talent and energy but I sincerely doubt that anyone could change legal education significantly without buy-in from the faculty of an already top law school.
Even solid but middling-ranked law schools can have at best a marginal impact on the course of legal education as a whole because no matter what they do to improve the actual outcomes for their students, they won't attract the very best students---and I doubt that, on average, an excellent innovative education for a mediocre student will produce better lawyers than a pretty good traditional education for excellent students. This explains why Yale Law grads---many of whom learn virtually no law at all while in law school---prove to be excellent lawyers; they have the credentials coming in.
- Althouse: Hey, You Mediocre Law Students. You Think You're Worth Erwin Chemerinsky's "Enormous Talent and Energy"?, by Ann Althouse (Wisconsin):
Law professors ought to know when they have snobby, elitist opinions and to make some effort to hide it.
- Brian Leiter's Law School Reports: L'Affaire Chemerinsky and Paranoia on the Right, by Brian Leiter (Texas):
From an objective perspective, one might have thought it relevant that from the actual McCarthy era to the present, those who have been fired from academic jobs in the U.S. do appear to be all on the left end of the political spectrum (though I hasten to add that L'Affaire Chemerinsky is far more mild than what happened during the McCarthy era, or what has happened more recently to Professor Finkelstein at DePaul--it tells us more about the venal politics of Orange County, and the spinelessness of the Irvine Admininstration, than it does about anything else).
Does anyone really doubt that if, say, a "Chemerinsky of the right" -- a high-profile, conservative constitutional law scholar at a top, if not super elite, law school (say, Steven Calabresi at Northwestern or Eugene Volokh at UCLA) -- were treated the same way as Professor Chemerinsky (offered a job, signed a contract, then had the offer rescinded because of political pressure from outside the university), that the reaction would not have been exactly the same? There is simply something creepy about the spectacle of anti-intellectual low lifes with power or money being able to undermine university appointments at the 11th hour, and it is that, more than anything else, to which I think everyone in the academy is reacting. ...
But what, it has been suggested, if Kenneth Starr, now Dean at Pepperdine, had been offered the Irvine job? That would have been peculiar for a whole variety of reasons. Pepperdine, unlike UC Irvine, has an explicit institutional identity as a conservative, religious school; Starr seems like a good fit. Obviously, no academically ambitious school would appoint Starr as Dean, since he is not a scholar, and has done no work of scholarly significance. The proposed Irvine Law School was to be part of an academically serious institution -- the University of California campus at Irvine -- and it was also, as I understand it, to have had a "public interest" focus. The choice of Chemerinsky makes good sense in this context: first, because he is an actual scholar with national standing, and second, becaues his ideological sympathies make him a quite credible leader for a school with a "public interest" orientation.
On the other hand, if after nine months of searching, UC Irvine had, for reasons unknown, chosen Kenneth Starr as the founding Dean, and had him sign a contract, then one would hope the decision would not be undone in similarly shabby fashion as has happened in the case of Professor Chemerinsky.
- National Law Journal: New Law School Trips Before Classes Begin; Irvine's Recruiting Efforts May Be Hurt, by Amanda Bronstad:
Law professors and law school deans, particularly in California, said University of California, Irvine could have difficulty recruiting a new dean and professors after its chancellor abruptly rescinded his offer last week to Duke Law School Professor Erwin Chemerinsky to become the first dean of its law school.
- Legal Profession Blog: UC Irvine Debacle -- Can We Follow the Money?, by Jeff Lipshaw:
ABA Standard 201(a) ... is about the money: ... "The present and anticipated financial resources of a law school shall be adequate to sustain a sound program of legal education and accomplish its mission." ... No doubt the promoter of any school has to show pro forma financial statements, and part of that would have to be private sources of funding. And I have no doubt that UC Irvine, despite its public status, will need an endowment. ... As much or more than being a scholar or caring for the faculty, a dean, and particularly a dean of a startup school, needs to raise money. Was there a concern that a high profile liberal couldn't raise money (given that there are no alumni to tap) in conservative Orange County? Did someone who had already made a commitment threaten to pull money off the table? This is all speculation on my part, but that's what I'd suspect.
- Adjunct Law Prof Blog: LA Times Article On Erwin Chemerinsky Firing Got It Wrong, by Mitchell H. Rubinstein:
- Huffington Post: Los Angeles Co. Supervisor Works to Fire UC Irvine Law School Dean, in Orange Co!, by Steve Anderson:
[T]he comparison to the Chemerinsky firing to political appointed Deans is wrong. Chemerinsky was not terminated for anything he recently wrote or said. He was terminated, as I understand from what has been reported, for what he has previously wrote-notwithstanding the fact that the university hired him. Stated differently, a Dean who is fired because of scholarly positions he has taken in the past is different from a Dean who currently takes a position as a result of a political appointment. In Chemerinsky situation, it appears that he is entitled to greater constitutional protection. In both situations, the First Amendment protection of academic freedom that the Deans might be entitled to are probably materially less than that of a professor because they hold policy level positions. The Chemerinsky situation is also unique in that he was fired for scholarly positions he has taken in the past even though the university hired him.
I am appalled that [L.A. County] Supervisor Antonovich would not only get involved with Orange County business, but that he would say the following:
Making Chemerinsky the head of the law school "would be like appointing al-Qaida in charge of homeland security,'' Michael Antonovich, a longtime Republican member of the county Board of Supervisors, said in a voicemail left with The Associated Press.
This is a disgustingly partisan thing to say, and it indicates to me that Mr. Antonovich is no longer an advocate for citizens of his district, but has become a shill for the failed policies of the Bush Administration. I will work to defeat Mr. Antonovich in the 2008 election.
Prior TaxProf Blog coverage:
- Chemerinsky Mulls Return to UC-Irvine; L.A. Times Airs Debate on Role of Law School Deans as Advocates (9/16/07)
- L.A. Times: UC-Irvine Trying to Rehire Chemerinsky (9/15/07)
- Chemerinsky-UC Irvine, Part III (9/14/07)
- More on Firing of Erwin Chemerinsky, UC-Irvine's Inaugural Dean (9/13/07)
- UC-Irvine Hires, Then Fires, Chemerinsky as Inaugural Dean (9/12/07)
Update: Brian Leiter subsequently posted In Fairness to Pepperdine, Robert Pushaw's "apt rejoinder" to Brian's "off-hand remarks in the course of discussing the Starr-at-Pepperdine/Chemerinsky-at-Irvine comparison."
Sunday, September 16, 2007
Zip Code data tables for Tax Year 2005 are now available for purchase [$25 per state or $500 for the entire United States]. Data tables include the number of individual income tax returns; the total number of exemptions and number of dependent exemptions (which approximates population); adjusted gross income; salaries and wages; taxable interest; total tax;contributions; number of returns with Schedules C and F; and number of returns with Schedule A, by State and 5-digit Zip Code. In addition to these items, data also show the amount of taxable dividends; net capital gain/loss, IRA payment adjustment; self-employed pension adjustment; taxes paid deduction; alternative minimum tax; tax before credits; earned income credit; and number of returns prepared by paid preparers. Zip Code and State data are derived from addresses shown on the returns when filed with the IRS.
- Tax Prof Profile: Kim Brooks
- Ninth Circuit Rules for IRS in § 2036 FLP Case
- L.A. Times: UC-Irvine Trying to Rehire Chemerinsky
- Ainsworth on UK Car-Flipping: The VAT Fraud Market-Place and Certified Solutions
- UNLV Seeks Entry Level and Lateral Candidates
- Top 5 Tax Paper Downloads
- Metrick & Yasuda on The Economics of Private Equity Funds
- Senate Finance Committee Republicans Urge IRS to Lift DOI Income Burden from Homeowners in Foreclosure
- TIGTA: Bright Line Rules Needed to Prevent Abuse of § 183 Hobby Loss Rules
- Chemerinsky Mulls Return to UC-Irvine; L.A. Times Airs Debate on Role of Law School Deans as Advocates
- CTJ Publishes Weekly Tax Digest
- Elkins on Responding to Rawls: Toward a Consistent and Supportable Theory of Distributive Justice
There ia lot of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3, #4, and #5. In addition, the #1 paper has climbed to #57 on the all-time tax paper downloads list (out of 4,592 tax papers):
1. [603 Downloads] The Taxation of Private Equity Carried Interests: Estimating the Revenue Effects of Taxing Profit Interests as Ordinary Income, by Michael S. Knoll (Penn) [blogged here]
3. [106 Downloads] Recent Developments in Federal Income Taxation: The Year 2006, by Ira B. Shepard (Houston) & Martin J. McMahon, Jr. (Florida) [blogged here]
4. [98 Downloads] Well-Being, Inequality and Time: The Time-Slice Problem and its Policy Implications, by Matthew D. Adler (Penn) [blogged here]
This paper analyzes the economics of the private equity industry using a novel model and dataset. We obtain data from a large investor in private equity funds, with detailed records on 238 funds raised between 1992 and 2006. Fund managers earn revenue from a variety of fees and profit-sharing rules. We build a model to estimate the expected revenue to managers as a function of these rules, and we test how this estimated revenue varies across the characteristics of our sample funds. Among our sample funds, about 60 percent of expected revenue comes from fixed-revenue components which are not sensitive to performance. We find major differences between venture capital (VC) funds and buyout (BO) funds – the two main sectors of the private equity industry. In general, BO fund managers earn lower revenue per managed dollar than do managers of VC funds, but nevertheless these BO managers earn substantially higher revenue per partner and per professional than do VC managers. Furthermore, BO managers build on their prior experience by raising larger funds, which leads to significantly higher revenue per partner and per professional, despite the fact that these larger funds have lower revenue per dollar. Conversely, while prior experience by VC managers does lead to higher revenue per partner in later funds, it does not lead to higher revenue per professional. Taken together, these results suggest that the BO business is more scalable than the VC business.
Senate Finance Committee Republicans Urge IRS to Lift DOI Income Burden from Homeowners in Foreclosure
Senate Finance Committee Ranking Member Charles Grassley and Republican colleagues Gordon Smith and Pat Roberts send a letter to the IRS requesting relief from DOI income for taxpayers whose homes are foreclosed:
We are writing to you regarding the President’s recent proposal [blogged here] to provide that cancelled mortgage debt on a primary residence is not counted as income. ... As these families struggle to reduce their home loan debt they are hit by taxes that are due to debt forgiveness from the lender. The President is right to seek relief for these working families. While the Congress considers the President’s proposal, Americans shouldn’t have to wait to get the relief that is needed right now.
We strongly urge the Treasury Department to take immediate steps to encourage working families that face the difficulties that the President outlined in his speech on August 31, 2007, to submit (and have the IRS accept) offers in compromise that will either eliminate or reduce the taxes that they owe due to cancelled mortgage debt on a primary residence.
Congress has granted IRS broad authority to compromise a tax liability under Section 7122. Perhaps most relevant here is that the Treasury Department has interpreted that authority such that “IRS may compromise to promote effective tax administration where compelling public policy or equity considerations identified by the taxpayer provide a sufficient basis for compromising the liability.” Treas. Regs. 301.7122-1(b)(3)(ii). President Bush on August 31, 2007, made the case himself for a compelling public policy rationale, stating: “When your home is losing value and your family is under financial stress, the last thing you need to do is to be hit with higher taxes.”
We recognize that it would be simpler to change the law to provide relief; however, the top goal we all share is providing relief for working families in financial stress as quickly as possible. If the IRS issues simple procedures for taxpayers to file an offer in compromise -- and undertakes a significant program of outreach to taxpayers, practitioners and lenders – much good can be accomplished immediately.
About 1.5 million taxpayers, many with significant income from other sources, filed Form 1040 Schedules C showing no profits, only losses, over four consecutive Tax Years (2002 – 2005) .... By claiming these losses to reduce their taxable incomes, about 1.2 million of the 1.5 million taxpayers potentially avoided paying $2.8 billion in taxes in Tax Year 2005. Changes are needed to prevent taxpayers from continually deducting losses in potential not-for-profit activities to reduce their tax liabilities.
This audit was initiated because the IRS estimates incorrect deductions of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions, and credits that result in about $30 billion per year in unpaid taxes. TIGTA conducted the audit to determine what actions the IRS is taking to address this potential noncompliance.
Section 183, also referred to as the “hobby loss” provision, and related Reg. § 1.183-1, do not establish specific criteria for the IRS to use to determine whether a Schedule C loss is a legitimate business expense without conducting a full examination of an individual’s books and records. The purpose of the hobby loss provision was to limit the ability of wealthy individuals with multiple sources of income to apply losses incurred in “side-line” diversions to reduce their overall tax liabilities. Our analysis showed 332,615 high-income taxpayers received the greatest benefit by potentially avoiding approximately $1.9 billion in taxes for Tax Year 2005.
The I.R.C. and Treasury Regulation do not require a taxpayer to have a reasonable expectation of profit; rather, the taxpayer needs just the “objective” of making a profit. Section 183 makes it difficult for the IRS to efficiently administer tax law that ensures taxpayers are not deducting not-for-profit losses to reduce their taxes on other incomes year after year.
TIGTA recommend[s] ... legislative changes to § 183. The proposal should include establishing a clearly defined standard or bright-line rule for determining whether an activity is a business or a not-for-profit activity.
Chemerinsky Mulls Return to UC-Irvine; L.A. Times Airs Debate on Role of Law School Deans as Advocates
Sunday's developments in the Chemerinsky-UC-Irvine saga:
- Orange County Register: Drake Decision Prompts Outcry; Reached at Home Saturday, Chemerinsky Says He's Willing to Talk to UCI's Chancellor Any Time About the Deanship, by Norberto Santana Jr., Marla Jo Fisher & Cindy Carcamo:
Mounting private and public overtures are being made to law professor Erwin Chemerinsky with the hope he can still become the founding dean of UC Irvine's law school, expected to open by 2009. ... Reached at his home in North Carolina on Saturday, Chemerinsky said he would be glad to talk to Drake any time. I have nothing but the highest respect for Michael Drake and of course I would talk to him," Chemerinsky said. "I really like him as a person. I feel bad about what has happened." He declined to comment on rumors that some people were trying to arrange a meeting between him and Drake but acknowledged that "a lot of faculty and supporters" have contacted him, saying they hoped he would still come to UCI. "That doesn't imply, however, anything about whether I would be willing to come back," Chemerinsky said.
- L.A. Times: Law School Deans Differ on Advocacy Roles; Some Believe They Must Curb Their Activism in the Interest of Their Institution; Others Say They Retain Their Right to Speak Freely, by Richard C. Paddock & Larry Gordon:
[D]oes being a law school dean automatically mean giving up the academic freedom enjoyed by professors?
Chemerinsky says no. "The whole point of academic freedom is that professors -- and, yes, even deans -- should be able to speak out on important issues," Chemerinsky wrote in an opinion piece Friday in The Times.
[UC-Berkeley Dean Christopher] Edley, who backs Drake's decision not to hire Chemerinsky, argues that a deanship requires a moderate public profile, especially for a dean of a publicly funded law school. "In taking on these responsibilities, one must subordinate a significant measure of autonomy in favor of the interests of the institution," Edley said. "In some respects, this is the antithesis of scholarly freedom and autonomy, and hence these jobs are not for everyone."
Paul Brest, who was dean of Stanford's law school for 12 years, said most deans subordinate their personal views because they speak on behalf of their institution. ...
David Van Zandt, dean of Northwestern University School of Law in Illinois for the past 13 years, said there are two models of deanships: those who are vocal on off-campus and national affairs, and others, like himself, who have decided to limit their public statements to issues of legal education. "Some deans use the office as a bully pulpit to do things they obviously think are morally right," he said. "When you have a dean from a major law school saying this piece of legislation is wrong or this policy is right, it certainly can have a big effect." However, he said he avoids that because he represents the entire school -- students, faculty and alumni. "Some people may say I'm a wet noodle with no views at all," he said. "I have strong views, but it is not appropriate in my role to express them."
But not all deans give up their role as advocates. Robert Pitofsky, a former dean of Georgetown University's law school, said the only limit on a dean's public and political activities should be whether they take up so much time that he cannot properly perform his job.
- Legal History Blog: Note to UC-Irvine: Don't Muzzle Chemerinsky, by Mary L. Dudziak:
Two models emerge: the outspoken dean, and the dean who removes herself from the public stage to focus on internal law school matters.
Whether one model or another is the best model for Irvine is no longer the relevant question. They selected a candidate who embodies the model of a public deanship, and it is Chemerinsky's very prominence that would have immediately put U.C. Irvine's new law school on the map. Chancellor Drake seems to have suffered buyer's remorse. He selected one kind of dean, but now wants another. Having selected a high-profile dean, whose national visibility comes from his public advocacy, the Chancellor has now expressed a desire that Irvine's first dean retreat from a national public stage. The Chancellor certainly could have selected a less visible dean for U.C. Irvine. But he didn't do that. If Irvine moves forward and tries to put the Chemerinsky Deanship back on track, a condition cannot be putting Chemerinsky in a muzzle.
- L.A. Times: UC-Irvine Trying to Rehire Chemerinsky
- Chemerinsky-UC Irvine, Part III
- More on Firing of Erwin Chemerinsky, UC-Irvine's Inaugural Dean
- UC-Irvine Hires, Then Fires, Chemerinsky as Inaugural Dean
- Romney Tax Plan Unlikely to Help Middle-Class
- President's Reckless Tax and Fiscal Policies Force Congress to Raise National Debt Limit — Again
- Senate Bill Would Crack Down on Employers Who Misclassify Workers to Avoid Payroll Taxes
- Pollsters Tell GOP Tax Breaks No Longer Priority for Independents
- Colorado: Fiscal Policies in the Forefront Again
- Georgia's GREAT Plan is Anything But...
- Hopefully NOT Coming to a Mall Near You
David Elkins (SMU) has posted Responding to Rawls: Toward a Consistent and Supportable Theory of Distributive Justice, 21 BYU J. Pub. L. 267 (2007), on SSRN. Here is the abstract:
Rawls' claim that undeserved traits cannot ground entitlement claim would appear to discount nationality as a factor in determining entitlements and would lead to cosmopolitanism. Attempts to avoid this result and justify domestic Rawlsianism invariably fail to do so. Thus, by limiting the application of his principles to the domestic front and rejecting their relevance internationally, Rawls was advocating an internally inconsistent position. Cosmopolitanism and libertarianism, on the other hand, while internally consistent, conflict with most people's considered opinions.
The article explores the possibility of grounding an internally consistent social philosophy which would capture the middle ground between cosmopolitanism and libertarianism. It argues that distributive justice should be concerned with the satisfaction of needs, not the mitigation of inequality, and explores the contours and limits of a needs-based approach to justice.
The article then considers whether, in regulating its internal affairs, a state may institute an internal redistribution which goes beyond the requirements of distributive justice. It posits that while distributive justice is limited to the satisfaction of needs, transactional justice, as embodied in benefit theory, may justify a more extensive redistribution.
Saturday, September 15, 2007
Kim Brooks (McGill University, Faculty of Law)
- B.A. 1994, University of Toronto
- L.L.B. 1997, University of British Columbia
- LL.M. 2001, York University (Osgoode Hall Law School)
I have a soft spot for Bruce Springsteen. When I was a little kid, my father would play “Hungry Heart” on high volume on our stereo, and we would jump around on our living room couches screaming the lyrics. It meant little that neither of us could carry a tune. Teaching tax law, at its best, is rather like those moments – it requires enormous energy, should be understood as a group effort, leads to sweating, and is a great deal of good fun. I love teaching tax, corporate tax, and international tax. I am always surprised that someone actually pays me to spend my days at this job.
The U.S. Court of Appeals for the Ninth Circuit yesterday affirmed the Tax Court (T.C. Memo. 2005-65) in a § 2036 family limited partnership case. Bigelow v. Commissioner, No. 05-75957 (9th Cir. 9/14/07):
The Estate of Virginia A. Bigelow appeals the decision of the Tax Court upholding a deficiency in the Estate’s federal estate tax return imposed by appellee Commissioner. We consider the applicability of § 2036(a), which recaptures in a decedent’s gross estate the value of certain assets transferred inter vivos. Upon Ms. Bigelow’s death, the Estate filed a federal estate tax return that applied a 37% discount for lack of control and marketability to her remaining interest in a family limited partnership that held a residential property Ms. Bigelow had transferred before her death. The Commissioner filed a notice of deficiency and assessed an additional $217,480.05 in federal estate tax, claiming that the residence’s fair market value, rather than the value of the partnership shares subject to the discount, should be included in the gross estate. The Tax Court affirmed the deficiency determination, finding that Ms. Bigelow and the Bigelow children had an implied agreement that Ms. Bigelow would retain income and economic enjoyment from the transferred asset, and that the inter vivos transfer was not a bona fide sale for adequate and full consideration under § 2036(a). ... We affirm.
From today's L.A. Times: UCI Reportedly Working on Deal to Rehire Chemerinsky, by Garrett Therolf & Maura Dolan:
UC Irvine officials on Friday were attempting to broker a deal to once again hire liberal scholar Erwin Chemerinsky as dean of its fledging law school, just three days after its chancellor set off a national furor by dumping him. Prominent Orange County attorney Tom Malcolm, a participant in high-level university discussions, said: "I think we are satisfied that if [UCI Chancellor Michael V. Drake and Chemerinsky] have a meeting, they can come to some understanding, and [Chemerinsky] can become a good dean."
Chemerinsky, who would have been the school's first dean, was noncommittal about whether he would still take the UCI job. "I have nothing to say about it. I haven't thought about it," he said. An agreement would be an extraordinary development after Chemerinsky contended this week that Drake succumbed to political pressure from conservatives and sacked him because of his outspoken liberal positions. The flap threatened to derail the 2009 opening of the law school and prompted some calls for Drake's resignation.
Also Friday, details emerged about the criticism of Chemerinsky that the university received in the days before Drake rescinded the job offer, including from California Chief Justice Ronald M. George, who criticized Chemerinsky's grasp of death penalty appeals. Also, a group of prominent Orange County Republicans and Los Angeles County Supervisor Mike Antonovich wanted to derail the appointment.
From Witness L.A.:
Making Chemerinsky the head of the law school “would be like appointing al-Qaida in charge of homeland security,” Michael Antonovich, a longtime Republican member of the county Board of Supervisors, said in a voicemail left with The Associated Press.
Prior Chemerinsky-UC-Irvine coverage:
- Chemerinsky-UC Irvine, Part III
- More on Firing of Erwin Chemerinsky, UC-Irvine's Inaugural Dean
- UC-Irvine Hires, Then Fires, Chemerinsky as Inaugural Dean
Other recent commentary:
- ABA Journal: UC Irvine Official on Hot Seat in Dean Case, by Matha Neil
- Althouse, by Ann Althouse:
- Associated Press: GOP Politician Sent Email Asking How to Stop Naming of Dean, by Gillian Flaccus
- Balkinization: Why Did Drake Fire Chemerinsky? He Still Won't Say, by Jack Balkin
- Brian Leiter's Law School Reports:
- Dorf on Law: O.C. Goes P.C. on E.C., by Michael Dorf
- Feminst Law Professors: That U.C. Irvine Law School, by Ann Bartow
- Jurist: Erwin Chemerinsky and the Post-9/11 Attack on Academic Freedom, by Marjorie Cohn
- L.A. Times: Right-Wing Bogeymen Located! Influence and Power over Chemerinskygate Undetermined
- Politics: Let's Claim Not to be Surprised, by Jeff Harrison
- Thoughts from a Former Anteater on the Chemerinsky Debacle, by Belle Lettre
- Orange County Register: An F in Contract Law (editorial)
- The Volokh Conspiracy:
- If This Isn't Sabotage, Then What Is?, by Stuart Benjamin
- May California Employers Avoid Politically Controversial Employees?, by Eugene Volokh
- The Chemerinsky Matter and the California Constitution, by Eugene Volokh
- Warren Reports on the Middle Class: Conservatives Welcome, Liberals Not, by Elizabeth Warren
- Wall Street Journal Law Blog:
- Washington Post: Scholars Decry Law School's About-Face on New Dean, by Sonya Geis
Richard T. Ainsworth (Boston University) has posted UK Car-Flipping: The VAT Fraud Market-Place and Certified Solutions on SSRN. Here is the abstract:
Missing Trader Intra-Community (MTIC) fraud and its offspring carousel fraud and contra trading fraud are siphoning huge amounts of VAT revenue from the UK Treasury. This fraud is not a function of the goods involved. It is a function of the market-place. Recently another type of market-place dependent VAT fraud has taken hold in the UK – car-flipping.
Friday, September 14, 2007
UNLV invites applications from entry level and lateral candidates for a position to begin with the 2008-09 academic year. There is substantial flexibility in subject matter. For more information or to apply, contact Christopher L. Blakesley, Chair of the Appointments Committee.