TaxProf Blog

Andy Rooney Supports Public Disclosure of Tax Returns

On April 15, I blogged Joe Thorndike's proposal advocating public disclosure of all tax returns.  Andy Rooney came out in favor of the idea on his 60 Minutes segment on CBS:

(Hat Tip: tax.com.)

2010 U.S. News Employed at Nine Months Rankings (v. Overall Rankings)

Continuing my coverage of the Placement Success component of the 2010 U.S. News Law School Rankings, which counts 20% in the U.S. News methodology: the chart below compares the Employed at Nine Months data (14%) with the school's overall ranking:

Employed at 9 Months Rank	Employed at 9 Months Score	School	Overall Rank
1	100.0%	Stanford	3
1	100.0%	Duke	10
1	100.0%	Utah	45
1	100.0%	Kentucky	55
5	99.8%	NYU	5
6	99.7%	UCLA	15
6	99.7%	Washington U.	19
6	99.7%	Boston University	20
6	99.7%	Seattle	77
10	99.6%	Pennsylvania	8
10	99.6%	Northwestern	10
10	99.6%	Georgia State	65
13	99.5%	Yale	1
13	99.5%	Chicago	6
13	99.5%	Michigan	9
13	99.5%	BYU	41
13	99.5%	George Mason	41
13	99.5%	Florida State	52
19	99.3%	Harvard	2
19	99.3%	UC-Berkeley	6
19	99.3%	Texas	15
19	99.3%	Alabama	30
19	99.3%	Wisconsin	35
24	99.2%	Virginia	10
24	99.2%	Iowa	26
24	99.2%	Georgia	35
24	99.2%	Cincinnati	52
24	99.2%	New Mexico	77
29	99.1%	William & Mary	28
30	99.0%	Notre Dame	23
31	98.9%	Cornell	13
31	98.9%	Minnesota	20
31	98.9%	U. Washington	30
34	98.8%	Columbia	4
35	98.7%	Illinois	23
35	98.7%	West Virginia	Tier 3
37	98.6%	South Dakota	Tier 3
38	98.5%	Indiana-Bloomington	23
38	98.5%	Fordham	30
38	98.5%	Ohio State	35
41	98.3%	American	45
42	98.2%	Vanderbilt	17
42	98.2%	USC	18
42	98.2%	Houston	59
42	98.2%	Loyola-LA	71
46	98.1%	Boston College	26
46	98.1%	SMU	49
46	98.1%	Toledo	Tier 3
49	98.0%	North Carolina	30
49	98.0%	Cardozo	49
49	98.0%	San Diego	61
49	98.0%	Arkansas-Little Rock	Tier 3
49	98.0%	Creighton	Tier 3
54	97.9%	Maryland	43
54	97.9%	Missouri-Columbia	65
54	97.9%	UNLV	75
54	97.9%	Louisville	98
58	97.8%	Tennessee	59
58	97.8%	SUNY-Buffalo	85
60	97.7%	Brooklyn	61
61	97.6%	Miami	71
62	97.5%	Albany	Tier 3
63	97.4%	Georgetown	14
63	97.4%	LSU	75
63	97.4%	Seton Hall	77
63	97.4%	Drake	Tier 3
67	97.3%	Idaho	Tier 3
68	97.2%	UC-Hastings	39
68	97.2%	Missouri-KC	Tier 3
70	97.1%	Denver	77
70	97.1%	Maine	100
72	97.0%	Emory	20
72	97.0%	Villanova	61
74	96.9%	Oklahoma	71
74	96.9%	North Dakota	Tier 3
76	96.8%	Case Western	55
76	96.8%	Gonzaga	100
76	96.8%	Hofstra	100
79	96.7%	Marquette	87
79	96.7%	Mississippi College	Tier 4
81	96.6%	Connecticut	52
81	96.6%	Pepperdine	55
81	96.6%	St. Louis	94
84	96.5%	Tulane	45
84	96.5%	Indiana-Indianapolis	87
84	96.5%	William Mitchell	Tier 3
87	96.4%	Penn State	65
87	96.4%	St. Thomas (MN)	Tier 3
87	96.4%	Florida Coastal	Tier 4
90	96.2%	UC-Davis	35
91	96.1%	Franklin Pierce	Tier 3
92	96.0%	Lewis & Clark	61
92	96.0%	St. John's	87
92	96.0%	Mercer	Tier 3
95	95.9%	Florida	51
96	95.8%	Loyola-New Orleans	Tier 3
97	95.7%	Pittsburgh	71
97	95.7%	San Francisco	98
97	95.7%	Whittier	Tier 4
100	95.6%	Santa Clara	85
100	95.6%	Samford	Tier 3
100	95.6%	Southwestern	Tier 3
100	95.6%	Wyoming	Tier 3
104	95.5%	Kansas	65
105	95.3%	Catholic	94
105	95.3%	Cleveland State	Tier 3
107	95.2%	South Carolina	87
107	95.2%	Ohio Northern	Tier 3
109	95.1%	Arizona	43
109	95.1%	Richmond	77
111	94.9%	Oregon	77
112	94.8%	Rutgers-Newark	87
112	94.8%	Baltimore	Tier 4
114	94.7%	Vermont	Tier 3
115	94.6%	Temple	65
115	94.6%	Wayne State	Tier 3
117	94.4%	Michigan State	Tier 3
118	94.3%	Wake Forest	40
118	94.3%	DePaul	87
120	94.2%	Akron	Tier 3
121	94.1%	Montana	Tier 3
121	94.1%	Northern Illinois	Tier 4
123	94.0%	Quinnipiac	Tier 3
123	94.0%	Detroit Mercy	Tier 4
125	93.9%	Colorado	45
125	93.9%	Texas Tech	Tier 3
125	93.9%	Suffolk	Tier 4
128	93.8%	Pacific	Tier 3
129	93.5%	Memphis	Tier 3
130	93.4%	Arkansas-Fayetteville	94
130	93.4%	NY Law School	Tier 3
130	93.4%	Valparaiso	Tier 4
133	93.3%	Washington & Lee	30
133	93.3%	Baylor	65
135	93.2%	Rutgers-Camden	77
135	93.2%	Florida International	Tier 4
135	93.2%	Washburn	Tier 4
138	92.9%	Golden Gate	Tier 4
139	92.8%	George Washington	28
139	92.8%	Stetson	Tier 3
141	92.7%	Loyola-Chicago	87
142	92.6%	Northeastern	94
143	92.4%	Campbell	Tier 4
144	92.3%	Arizona State	55
145	92.1%	Chapman	Tier 3
146	91.8%	Chicago-Kent	77
147	91.7%	Syracuse	Tier 3
147	91.7%	Regent	Tier 4
149	91.6%	Hamline	Tier 4
149	91.6%	St. Mary's	Tier 4
151	91.5%	Dayton	Tier 4
152	91.3%	Howard	Tier 3
153	91.0%	Texas Southern	Tier 4
154	90.9%	John Marshall	Tier 4
154	90.9%	Oklahoma City	Tier 4
156	90.7%	Hawaii	Tier 3
157	90.3%	Willamette	Tier 4
158	90.0%	Northern Kentucky	Tier 4
159	89.9%	CUNY	Tier 4
159	89.9%	Nova	Tier 4
161	89.6%	Tulsa	Tier 4
162	89.0%	Duquesne	Tier 4
163	88.9%	Mississippi	Tier 3
164	88.8%	Pace	Tier 4
165	88.5%	Widener	Tier 4
166	88.1%	Southern Illinois	Tier 4
167	87.5%	W. New England	Tier 4
168	87.2%	Roger Williams	Tier 4
169	86.7%	Thomas Jefferson	Tier 4
170	86.2%	Barry	Tier 4
171	85.9%	Southern	Tier 4
172	85.4%	South Texas	Tier 4
173	85.1%	California Western	Tier 4
174	85.0%	New England	Tier 4
175	83.3%	N. Carolina Central	Tier 4
176	82.3%	Texas Wesleyan	Tier 4
177	81.1%	Nebraska	Tier 3
178	80.8%	Ave Maria	Tier 4
178	80.8%	Capital	Tier 4
180	80.4%	St. Thomas (FL)	Tier 4
181	77.8%	Thomas Cooley	Tier 4
182	77.3%	Touro	Tier 4
183	73.8%	District of Columbia	Tier 4
184	64.8%	Appalachian	Tier 4

Prior 2010 U.S. News Law School Rankings coverage:

• 2010 U.S. News Quality Assessment Rankings (v. Overall Rankings) (40%)
  • 2010 U.S News Lawyer/Judge Reputation Rankings (v. Overall Rankings) (15%) 
  • 2010 U.S News Peer Reputation Rankings (v. Overall Rankings) (25%) 

Law School Book Tour: Broken Trust

Tax Prof Randall W. Roth (University of Hawai‘i) has spent the past three weeks discussing tax and other issues from the Bishop Estate saga in faculty forums and regularly scheduled classes at various law schools, including Boston College, Boston University, Denver, Duke, Harvard, McGeorge, North Carolina, San Diego, Santa Clara, UC-Berkeley, UC-Davis, UC-Hastings, and Wake Forest.  This was Prof. Roth's second such "tour" -- last year, he made presentations at some of these same law schools, as well as Alabama, Baltimore, George Mason, Georgia, Georgia State, Maryland, Michigan State, New England, and NYU. The University of Hawai‘i has supported these efforts with travel grants and a flexible teaching schedule.

Prof. Roth and Samuel P. King published the bestselling book, Broken Trust: Greed, Mismanagement, and Political Manipulation at America’s Largest Charitable Trust (University of Hawai‘i Press, 2006), which was named 2007 Book of the Year by the Hawai‘i Book Publishers Association.  They donate all of their royalties to local charities. Thanks to a special arrangement with the publisher, Prof. Roth is able to give copies of the book to interested professors and students at the schools that he visits.  (Hat Tip: Grayson McCouch.)

Abrams: Exiting a Partnership and Making Gain Disappear

Howard E. Abrams (Emory) has posted Now You See it, Now You Don't: Exiting a Partnership and Making Gain Disappear on SSRN.  Here is the abstract:

In this Article, three methods of exiting are partnership are examined. Each exit strategy offers significant tax advantages to the nonexiting partners. In two of the exit strategies, well-known defects in Subchapter K are exploited, and I conclude that the strategies cannot be attacked successfully by the government using either the detailed rules of Subchapter K or by resort to the partnership anti-abuse rules. However, the third of the exit strategies seeks to exploit language in a treasury regulation in a manner plainly not contemplated by the drafters and which yields a result inconsistent with the structure of subchapter K. I conclude that this exit strategy can be attacked successfully by the government. The two successful strategies show that in many cases the exit of a partner can be used to defer significant amounts of income.

The Path to Law Teaching at Harvard

Cain: Unmarried Couples and the Mortgage Interest Deduction

Patricia A. Cain (Santa Clara) has posted Unmarried Couples and the Mortgage Interest Deduction, 123 Tax Notes 473 (Apr. 27, 2009), on SSRN.  Here is the abstract:

On March 13, 2009, the IRS released Chief Counsel Advisory 200911007, concluding that unmarried co-owners of a residence were limited to mortgage interest deductions on $1 million of acquisition indebtedness. CCA 200911007 reasons that the $1 million limit should be applied per residence rather than per taxpayer. This article criticizes the IRS position.

Prior TaxProf Blog coverage:

• IRS Limits Home Mortgage Interest Deduction for Gay/Lesbian Couples (Mar. 23, 2009)
• McMahon: In Defense of CCA 200911007 (Mar. 25, 2009)
• Cain: In Defense of the Consensus on CCA 200911007 (Mar. 25, 2009)

Government Files Brief in Opposition in G-I Holdings

Continuing my coverage of the taxpayer's attempt to have the district court reconsider its decision in In re G-I Holdings, 369 B.R. 832 (D.N.J. 2007), based on affidavits to be supplied by Senate Finance Committee staffers on the meaning of a tax transition rule:  the Government yesterday filed its Brief in Opposition. Attached to the motion are several remarkable documents, including:

• A three-page letter from Senate Finance Committee Deputy Counsel Patricia Mack Bryan strongly objecting to the taxpayer's attempt to introduce into evidence the affidavit from the committee staffer.
• Skadden's $13.4 million attorney fee application.
• McKee Nelson's $10.7 million attorney fee application. 

Prior TaxProf Blog coverage:

• Can Congressional Staff Testify on Meaning of Tax Law? (Apr. 20, 2009)
• Kysar: Transition Rules and Statutory Interpretation in G-I Holdings (Apr. 28, 2009)

Disbarment Sought for Lawyer Who Altered Law School Grades

Following up on last week's post, Chicago Grad Faces 3-Year Suspension For Altering Grades on Law School Transcript:  the Chief Counsel of the Illinois Attorney Registration and Disciplinary Commission has called for Mr. Friedman's permanent disbarment.

• ABA Journal
• American Lawyer
• Chicago Tribune

Borden: Residual-Risk Model for Classifying Business Arrangements

Bradley T. Borden (Washburn) has posted Residual-Risk Model for Classifying Business Arrangements, 37 Fla. St. U. L. Rev. ___ (2010), on SSRN.  Here is the abstract:

Tax law classifies business arrangements as one of three general structures: (1) disregarded arrangements, (2) tax partnerships, or (3) tax corporations. Since the enactment of the income tax in 1913, tax law has struggled unsuccessfully to develop a good model for classifying business arrangements. The current model's sole virtue is its simplicity, derived from formalistic, elective attributes. Its greatest shortcoming may be that it disregards the reasons parties form business arrangements and their use of economic items to reduce rent-seeking behavior and agency costs. That disregard often allows business participants to choose their tax classification and minimize their taxes, which erodes the tax base and shifts tax burdens to others but does not alter the parties' economic relationships. This Article rejects the current model and presents a classification model based on the economic theory of the firm. Economic theory aids classification in three respects. First, it helps explain why parties form business arrangements. Second, it views business arrangements as nexuses of contracts composed of various parties. That view helps identify the economic aspects of business arrangements and the economic rights of business participants, irrespective of legal form. Third, it demonstrates that residual risk (the right to the residual assets of a business) measures the economic interests parties have in business arrangements. In particular, residual risk helps distinguish arrangements that can trace income from its source to the owner of the source or from allocations to the beneficiaries of those allocations from those arrangements that cannot. That knowledge clarifies the appropriate tax regime for all arrangements and leads to the residual-risk model for classifying business arrangements.

           

UNC Hosts Tax Institute Today

North Carolina hosts its annual J. Nelson Young Tax Institute today.

Virginia Tax Review Publishes New Issue

The Virginia Tax Review has published Vol. 28, No. 2 (Fall 2008):

• Reuven S. Avi-Yonah (Michigan), Comment on Yin, Reforming the Taxation of Foreign Direct Investment by US Taxpayers, 28 Va. Tax Rev. 281 (2008)
• Leonard E. Burman (Co-Director, Tax Policy Center), A Blueprint for Tax Reform and Health Reform, 28 Va. Tax Rev. 287 (2008)
• Alan D. Viard (American Enterprise Institute), Comment on Leonard E. Burman, A Blueprint for Tax Reform and Health Reform, 28 Va. Tax Rev. 325 (2008)
• Karen C. Burke (San Diego), Is the Corporate Tax System Broken?, 28 Va. Tax Rev. 341 (2008)
• Grayson M.P. McCouch (San Diego), The Empty Promise of Estate Tax Repeal, 28 Va. Tax Rev. 369 (2008)
• Mildred Wigfall Robinson (Virginia), Transfer Tax Reform After EGTRRA-2001: Reconstruction or Further Deconstruction?, 28 Va. Tax Rev. 391 (2008)
• Eric T. Laity (Oklahoma City), The Corporation as Administrative Agency: Tax Expenditures and Institutional Design, 28 Va. Tax Rev. 411 (2008)

2010 U.S. News Employed at Graduation Rankings (v. Overall Rankings)

Continuing my coverage of the 2010 U.S. News Law School Rankings:  I turn next to the Placement Success component, which counts 20% in the U.S. News methodology.  The chart below compares the Employed at Graduation data (4%) with the school's overall ranking.  64 law schools did not supply U.S. News with this data.

Employed at Grad. Rank	Employed at Grad. Score	School	Overall Rank
1	100.0%	Stanford	3
2	99.6%	NYU	5
3	99.3%	Boston University	20
4	98.8%	Columbia	4
5	97.7%	Duke	10
6	97.6%	Northwestern	10
7	97.5%	UCLA	15
8	97.4%	UC-Berkeley	6
8	97.4%	Michigan	9
10	97.2%	Harvard	2
10	97.2%	Pennsylvania	8
12	97.1%	Emory	20
13	97.0%	Virginia	10
14	96.8%	Cornell	13
14	96.8%	Texas	15
16	96.5%	Chicago	6
16	96.5%	George Mason	41
18	96.4%	Yale	1
19	96.3%	Vanderbilt	17
20	94.7%	Georgetown	14
21	94.1%	Washington U.	19
22	93.3%	USC	18
23	92.7%	U. Washington	30
24	91.8%	Utah	45
25	90.4%	Baltimore	Tier 4
26	90.3%	Alabama	30
27	89.7%	Howard	Tier 3
26	89.6%	Georgia	35
29	88.2%	George Washington	28
29	88.2%	William & Mary	28
31	88.1%	Notre Dame	23
32	87.9%	Fordham	30
33	87.4%	Illinois	23
33	87.4%	Iowa	26
35	87.2%	Indiana-Bloomington	23
36	87.1%	American	45
37	86.8%	Seton Hall	77
38	86.7%	UC-Davis	35
39	86.6%	DePaul	87
40	85.7%	Boston College	26
41	85.5%	Chapman	Tier 3
42	85.4%	Minnesota	20
43	85.2%	Southwestern	Tier 3
44	84.8%	Maryland	43
45	84.3%	Ohio State	35
46	84.1%	Wisconsin	35
47	83.6%	Rutgers-Newark	87
48	83.0%	Toledo	Tier 3
49	82.5%	Tulane	45
50	82.4%	SUNY-Buffalo	85
51	82.3%	Case Western	55
52	81.4%	SMU	49
53	80.4%	BYU	41
53	80.4%	Cardozo	49
55	80.2%	Houston	59
56	79.9%	Florida State	52
57	79.8%	Colorado	45
58	79.7%	Indiana-Indianapolis	87
59	79.4%	Akron	Tier 3
60	78.5%	Wake Forest	40
61	77.3%	Nebraska	Tier 3
62	77.2%	Kentucky	55
62	77.2%	LSU	75
64	76.7%	Miami	71
65	75.8%	Florida	51
66	75.7%	UNLV	75
67	75.5%	Pittsburgh	71
68	75.2%	Washington & Lee	30
68	75.2%	Rutgers-Camden	77
70	75.0%	Arizona	43
71	74.6%	Cincinnati	52
71	74.6%	St. John's	87
73	73.1%	Regent	Tier 4
74	72.1%	Chicago-Kent	77
75	71.5%	Brooklyn	61
76	71.2%	North Carolina	30
77	70.9%	Creighton	Tier 3
78	70.7%	Pepperdine	55
79	70.5%	Cleveland State	Tier 3
80	70.3%	West Virginia	Tier 3
81	70.1%	Catholic	94
82	69.5%	Villanova	61
82	69.5%	Memphis	Tier 3
84	69.2%	Hawaii	Tier 3
85	69.0%	UC-Hastings	39
85	69.0%	Connecticut	52
87	68.9%	Tennessee	59
88	68.6%	Denver	77
89	68.5%	Santa Clara	85
90	67.9%	Seattle	77
91	67.2%	St. Louis	94
92	67.1%	Kansas	65
93	66.7%	Marquette	87
94	66.2%	Franklin Pierce	Tier 3
95	65.9%	Richmond	77
96	65.7%	Vermont	Tier 3
97	63.9%	Oklahoma	71
97	63.9%	South Dakota	Tier 3
99	62.4%	New Mexico	77
100	61.7%	Widener	Tier 4
101	61.2%	Baylor	65
101	61.2%	South Carolina	87
103	60.9%	Temple	65
104	60.5%	Loyola-New Orleans	Tier 3
105	58.0%	Oregon	77
106	57.5%	Mississippi	Tier 3
107	56.7%	Whittier	Tier 4
108	56.3%	Valparaiso	Tier 4
109	56.1%	Mercer	Tier 3
109	56.1%	Samford	Tier 3
111	55.9%	Mississippi College	Tier 4
111	55.9%	Texas Wesleyan	Tier 4
113	54.3%	Louisville	98
114	52.9%	Missouri-Columbia	65
115	50.9%	Tulsa	Tier 4
116	47.2%	Campbell	Tier 4
117	45.4%	William Mitchell	Tier 3
118	45.2%	New England	Tier 4
119	44.2%	Arkansas-Little Rock	Tier 3
120	43.5%	Northern Illinois	Tier 4
N/A	N/A	Arizona State	55
N/A	N/A	Lewis & Clark	61
N/A	N/A	San Diego	61
N/A	N/A	Georgia State	65
N/A	N/A	Penn State	65
N/A	N/A	Loyola-LA	71
N/A	N/A	Loyola-Chicago	87
N/A	N/A	Arkansas-Fayetteville	94
N/A	N/A	Northeastern	94
N/A	N/A	San Francisco	98
N/A	N/A	Gonzaga	100
N/A	N/A	Hofstra	100
N/A	N/A	Maine	100
N/A	N/A	Albany	Tier 3
N/A	N/A	Drake	Tier 3
N/A	N/A	Idaho	Tier 3
N/A	N/A	Michigan State	Tier 3
N/A	N/A	Missouri-KC	Tier 3
N/A	N/A	Montana	Tier 3
N/A	N/A	New York Law	Tier 3
N/A	N/A	North Dakota	Tier 3
N/A	N/A	Ohio Northern	Tier 3
N/A	N/A	Pacific	Tier 3
N/A	N/A	Quinnipiac	Tier 3
N/A	N/A	St. Thomas (MN)	Tier 3
N/A	N/A	Stetson	Tier 3
N/A	N/A	Syracuse	Tier 3
N/A	N/A	Texas Tech	Tier 3
N/A	N/A	Wayne State	Tier 3
N/A	N/A	Wyoming	Tier 3
N/A	N/A	Appalachian	Tier 4
N/A	N/A	Ave Maria	Tier 4
N/A	N/A	Barry	Tier 4
N/A	N/A	California Western	Tier 4
N/A	N/A	Capital	Tier 4
N/A	N/A	CUNY	Tier 4
N/A	N/A	Dayton	Tier 4
N/A	N/A	Detroit Mercy	Tier 4
N/A	N/A	Duquesne	Tier 4
N/A	N/A	Florida Coastal	Tier 4
N/A	N/A	Florida International	Tier 4
N/A	N/A	Golden Gate	Tier 4
N/A	N/A	Hamline	Tier 4
N/A	N/A	John Marshall	Tier 4
N/A	N/A	Northern Kentucky	Tier 4
N/A	N/A	N. Carolina Central	Tier 4
N/A	N/A	Nova	Tier 4
N/A	N/A	Oklahoma City	Tier 4
N/A	N/A	Pace	Tier 4
N/A	N/A	Roger Williams	Tier 4
N/A	N/A	South Texas	Tier 4
N/A	N/A	Southern Illinois	Tier 4
N/A	N/A	Southern	Tier 4
N/A	N/A	St. Mary's	Tier 4
N/A	N/A	St. Thomas (FL)	Tier 4
N/A	N/A	Suffolk	Tier 4
N/A	N/A	Texas Southern	Tier 4
N/A	N/A	Thomas Jefferson	Tier 4
N/A	N/A	Thomas Cooley	Tier 4
N/A	N/A	Touro	Tier 4
N/A	N/A	District of Columbia	Tier 4
N/A	N/A	Washburn	Tier 4
N/A	N/A	W. New England	Tier 4
N/A	N/A	Willamette	Tier 4

Prior 2010 U.S. News Law School Rankings coverage:

• 2010 U.S. News Quality Assessment Rankings (v. Overall Rankings) (40%)
  • 2010 U.S News Lawyer/Judge Reputation Rankings (v. Overall Rankings) (15%) 
  • 2010 U.S News Peer Reputation Rankings (v. Overall Rankings) (25%) 

The First Tax Casualty of the Swine Flu Pandemic: Friday's University of San Diego - Procopio International Tax Institute

 

At the request of speakers and participants from Mexico City, the University of San Diego School of Law - Procopio International Tax Institute has postponed Friday's conference on U.S.-Mexico Cross-Border Tax Issues:

The fifth annual USD School of Law – Procopio International Tax Institute (ITI) Conference is the only conference dedicated to the latest developments in the dynamic field of U.S. and Mexican international tax law. This intensive two-day educational and networking event attracts internationally recognized leaders and experts in the field of international tax law. Featuring introductory and advanced courses, simultaneous Spanish translation and expert teaching panels in a state-of-the-art facility, the ITI provides the ideal atmosphere for education and interaction with internationally recognized leaders and experts in the field of international tax law. Among the speakers will be the highest ranking U.S. and Mexican international tax officials, many of whom are returning to share the latest updates and developments.

Among the scheduled speakers are University of San Diego visiting tax professors David Laro (U.S. Tax Court Judge) and M. Carr Ferguson (Davis Polk & Wardwell, New York).  The conference will be rescheduled for Fall 2009.

Ed Kleinbard to Deliver 2010 Woodworth Memorial Lecture in U.S. Tax Law and Policy

Edward D. Kleinbard, who is leaving his position as Chief of Staff of the Joint Committee on Taxation to join the faculty at USC Law School, will deliver the Laurence Neal Woodworth Memorial Lecture in United States Tax Law and Policy on May 7, 2009, at the ABA Tax Section Midyear Meeting.  The title of the lecture is The Role of Tax Expenditure Analysis in the Legislative Process.  (Last year, the Joint Committee on Taxation released A Reconsideration of Tax Expenditure Analysis (JCX-37-08).) 

     

Schwidetzky Posts Tax Papers on SSRN

Walter D. Schwidetzky (Baltimore) has posted several tax papers on SSRN:

• The New Activity Regulations Under Section 469: Into the Abyss, 9 Va. Tax Rev. 525 (1990)
• Partnership Taxation: Restructuring Partnership Debt -- Life is Change, 11 Va. Tax Rev. 523 (1992)
• Is it Time to Give the S Corporation a Proper Burial?, 15 Va. Tax Rev. 591 (1996)
• The Partnership Allocation Rules of Section 704(b): To Be or Not to Be, 17 Va. Tax Rev. 707(1998)
• A Comparison of Corporate Taxation in the United States and Germany: Different Ways Up the Mountain, 28 Ga. J. Int'l & Comp. L. 217 (2000)
• Last-Gasp Estate Planning: The Formation of Family Limited Liability Entities Shortly Before Death, 21 Va. Tax Rev. 1 (2001)
• Options to Acquire Partnership Interests: Can the Tax Law Keep Pace?, 20 J. Tax'n Inv. 99 (2003)
• Proposed Regulations on Noncompensatory Options: A Light at the End of the Tunnel, 21 J. Tax'n Inv. 155 (2004)
• Family Limited Partnerships: The Beat Goes On, 60 Tax Law. 277 (2007)

IRS Releases Strategic Plan 2009-2013

The IRS yesterday released its Strategic Plan 2009-2013:

The Internal Revenue Service strives to maintain the fairest and most effective system of voluntary tax compliance in the world. The environment in which we operate is complex and constantly changing, and the IRS must change with it. ...

[S]tudies of international tax systems show that the U.S. tax system is extremely effective, and the IRS has a highly motivated workforce that clearly understands its mission. The IRS must continue to deliver this high level of performance both in how we serve taxpayers and in how we enforce the tax laws. The Strategic Plan 2009-2013 will guide the IRS in this work by emphasizing two overarching goals.

Our first goal is to improve service to taxpayers to make voluntary compliance easier. We will work harder to incorporate taxpayer perspectives, expedite resolution of taxpayer issues, and provide timely guidance to help all taxpayers pay their fair share of taxes. We will also strengthen our partnerships with tax practitioners, preparers, and other third parties in the system.

Our second and equally important goal is to enforce the law to ensure everyone meets their obligation to pay taxes. We will be timely in our enforcement actions and expand the approaches and tools we use in compliance activities. We will meet the challenges of globalization by improving our expertise and coordinating better with international organizations.

We need to excel at both service and enforcement to meet our mission: it isn’t an either/or proposition. To succeed, we will support these goals by investing in two strategic foundations – our people and our technology. We will strive to make the IRS the best place to work in government. We will give our people the technology they need to improve efficiency, ensure privacy and security of data, and target the highest-risk areas of tax abuse and fraud.

Major trends affecting the IRS: 2009-2013

• Increasing complexity of tax administration
• Growing human capital challenges
• Explosion in electronic data, online interactions, and related security risks
• Accelerating globalization
• Expanding role of tax practitioners and other third parties in the tax system
• Accelerating change in business models

Goal 1:  Improve service to make voluntary compliance easier

• Objective 1: Incorporate taxpayer perspectives to improve all service interactions
• Objective 2: Expedite and improve issue resolution across all interactions with taxpayers, making it easier to navigate the IRS
• Objective 3: Provide taxpayers with targeted, timely guidance and outreach
• Objective 4: Strengthen partnerships with tax practitioners, tax preparers, and other third parties in order to ensure effective tax administration

Goal 2:  Enforce the law to ensure everyone meets their obligations to pay taxes

• Objective 1: Proactively enforce the law in a timely manner while respecting taxpayer rights and minimizing taxpayer burden
• Objective 2: Expand enforcement approaches and tools
• Objective 3: Meet the challenges of international tax administration
• Objective 4: Allocate compliance resources using a data-driven approach to target existing and emerging high-risk areas
• Objective 5: Continue focused oversight of the tax-exempt sector
• Objective 6: Ensure that all tax practitioners, tax preparers, and other third parties in the tax system adhere to professional standards and follow the law

Strategic Foundations: Invest for high performance:

• Objective 1: Make the IRS the best place to work in government
• Objective 2: Build and deploy advanced information technology systems, processes, and tools to improve IRS efficiency and productivity
• Objective 3: Use data and research across the organization to make informed decisions and allocate resources
• Objective 4: Ensure the privacy and security of data and safety and security of employees

(Hat Tip: Tax Resolution University.)

Yin: Temporary-Effect Legislation, Political Accountability, and Fiscal Restraint

George K. Yin (Virginia) has published Temporary-Effect Legislation, Political Accountability, and Fiscal Restraint, 84 NYU L. Rev. 174 (2009).  Here is the abstract:

The proper duration of legislation has become highly controversial as a result of the enactment of many temporary tax laws during the George W. Bush administration. The prevailing view is that inclusion of an expiration date or “sunset” feature in legislation permits the cost of the legislation to be misrepresented and allows its proponents to escape the discipline intended by the congressional budget process. Under this view, fiscal discipline is preserved through enactment of so-called permanent legislation.

This Article challenges that view and shows that, barring estimation error, the legislative process accounts completely for the costs of “temporary-effect” legislation but not permanent legislation. Consequently, enactment of temporary-effect rather than permanent legislation would promote more political accountability and may result in greater fiscal restraint. In addition, when temporary-effect legislation expires, the legislative process fully takes into account the cost of any extension. Extension of such legislation, therefore, competes with, and potentially displaces, adoption of other legislation. By contrast, the cost of continuing permanent programs largely disappears in the legislative process, and therefore continuation of such programs produces little or no crowding-out effect. This Article also addresses whether other features of the legislative process could overcome the problems associated with the budget accounting of permanent legislation and responds to criticisms of temporary-effect legislation.

ABA Tax Section Offers Webcast Today on The Stop Tax Haven Abuse Act

The ABA Tax Section offers a teleconference and webcast today on Stop Tax Haven Abuse Act - Using a Sledgehammer to Kill a Fly? from 1:00 - 2:30 p.m. EST:

The panel will discuss proposed legislation (S. 506) (otherwise known as the "Stop Tax Haven Abuse Act") introduced by Senator Carl Levin (and supported by then-senator Barack Obama when a similar bill was introduced by Senator Levin in 2007) and examine how such legislation will affect international tax planning, in general. In particular, the panel will focus on, among other provisions, (i) Section 103 of the proposed legislation, which proposes to treat foreign corporations that either are publicly traded or have gross assets of $50 million or more, and are “managed and controlled” in the United States as domestic corporations for U.S. federal tax purposes; (b) Section 105 which generally proposes to require any financial institution directly or indirectly opening a financial account or creating an entity in an offshore secrecy jurisdiction for a U.S. client to report the transaction to the IRS, and require any bank or securities firm that has a U.S. taxpayer as the beneficial owner of one of its foreign-owned financial accounts to report account income of that U.S. taxpayer to the IRS; and (c) Section 108, which seeks consistent tax treatment of dividends, dividend equivalents (paid under swap contracts), and substitute dividend payments (paid under a securities lending or a sale-leaseback transaction) by defining a “dividend” for U.S. withholding tax purposes to include dividend equivalents and substitute dividend payments.

Speakers:

• Jeffrey L. Rubinger (Holland & Knight, Fort Lauderdale) (Moderator)
• Jennifer A. Morgan (Fulbright & Jaworski, New York)
• Bruce Zagaris (Berliner, Corcoran & Rowe, Washington, D.C.)

Michigan Tax Conference

The 22nd Annual Michigan Tax Conference takes place today at The Inn at St. John's, Plymouth, Michigan.  Here are the Tax Prof speakers and their topics:

• Deborah H. Schenk (NYU), Federal Taxation
• Richard Pomp (UConn), State and Local Tax
• Reuven Avi-Yonah (Michigan), International Tax and International Tax Planning, Compliance and Audit Issues Facing Companies and Individuals: The Inbound and Outbound Perspectives
• Jeffrey N. Pennell (Emory), Estates & Trusts

Kysar: Transition Rules and Statutory Interpretation in G-I Holdings

Last week, I blogged important new developments in In re G-I Holdings, 369 B.R. 832 (D.N.J. 2007), in my post, Can Congressional Staff Testify on Meaning of Tax Law?.  Rebecca M. Kysar (Brooklyn), author of the important article on the subject, Listening to Congress: Earmark Rules and Statutory Interpretation, 94 Cornell L. Rev. 519 (2009), share her views on these developments:

A metaphor may be timeworn yet timeless. As blogged by Paul here, a recent court proceeding, involving the bankruptcy of G-I Holdings, confronts troublesome issues of statutory interpretation that arise from similarities of the tax legislative process to the making of sausage.

Specifically, the court was asked to interpret a provision Congress drafted to provide relief from a tax increase to certain taxpayers. These types of provisions are known generally as transition rules. Unsurprisingly, most taxpayers who obtain such relief employ lobbyists to advocate their position to members of Congress and their staffers. Thus, the transition rules are often targeted to benefit special interests.

Although common, individualized treatment due to lobbying efforts is nonetheless regarded by the public as unseemly. Hence, these deals carry heavy political and economic costs to the lawmakers who support them and to their beneficiaries as well. To reduce such costs, lawmakers not only enact transition rules “off-code” but hide them in obscure terms so that they are less visible to the wider constituency, as well as to competing interest groups. As a result, the tax laws are littered with elliptical provisions benefitting those lucky few who possess idiosyncratic characteristics, such as a specific sewage treatment facility operating under a service agreement approved on December 4, 1985 by a parish council. See Pub. L. No. 99-514, § 204(a)(10), (1986).

Lacking clearly worded beneficiaries, these transition rules are also often ensconced behind textual ambiguities and mis-drafting, rendering them susceptible to non-enforcement by courts that interpret these provisions against the special interests. When litigation arises over these provisions, beneficiaries often point to the details of their lobbying efforts to shed light on the meaning of the provision. The extent to which courts are institutionally equipped to and should consider these “gory” details in interpreting the sausage factory’s product, however, has perplexed judges, lawyers, and scholars alike.

In the instant matter, the court previously had held that a partnership agreement entered into by G-I Holdings did not qualify for targeted transition relief from a statutory amendment (the amendment is an exception to the nonrecognition rule of § 731 and would require gain recognition upon certain partnership distributions). This was due to the fact, the court explained, that the taxpayer’s partnership agreement did not provide for partnership distributions of “(i) a fixed value of marketable securities that are specified in the contract, or (ii) other property,” as is required by the transition rule. The court interpreted these distribution options as mutually exclusive and held that transition relief was not available to the taxpayer because the agreement entitled the partnership to vary the value of securities it distributed. In reaching that conclusion, the court ruled that it could not consider an affidavit from a lobbyist employed by G-I Holdings to secure such relief. G-I Holdings has now petitioned the court to reconsider its prior ruling in light of additional affidavits from congressional staffers, lobbyists, and others that could bear witness to the corporation’s lobbying activities.

At first glance, whether the court should rely on evidence of these activities in interpreting a Code section seems to implicate the classic debate between textualists and intentionalists. Textualists object to the use of extra-statutory devices in interpreting statutes. Such thinkers claim that consulting legislating history is inconsistent with democratic theory since it has not been voted upon and, furthermore, encourages congressional members or lobbyists to plant legislative history that does not represent majority will. In contrast, intentionalists contend that courts must discern legislative intent in interpreting ambiguous statutes. Intentionalists advocate for the use of tools external to the statutory text as a legitimate means of so doing.

The court, however, need not (and almost certainly will not) choose between these two theories of statutory interpretation. First, the court may simply uphold its prior ruling that the clause was unambiguous and, thus, evidence regarding the circumstances of its enactment should be ignored. Second, the court could strike the affidavits at issue since they constitute post-enactment statements and hence do not reliably inform contemporaneous congressional intent. Unlike other legislative history that may be implicitly approved by a floor vote, post-enactment statements carry no consequences and hence are cheap talk. Although this issue is not entirely resolved, the Supreme Court, in Western Air Lines v. Board of Equalization, 480 U.S. 123, 130 n.* (1987), refused to consider an affidavit from a lobbyist, relying in part on its “post hoc” nature. Additionally, in Consumer Product Safety Comm’n v. GTE Sylvania, 447 U.S. 102, 117-18 (1980), the Court expressed a reluctance to use subsequent legislative statements in statutory interpretation, identifying such a practice as “hazardous”. Accord Sullivan v. Finkelstein, 496 U.S. 617, 631-32 (1990) (Scalia, J., concurring) “[a]rguments based on subsequent legislative history, like arguments based on antecedent futurity, should not be taken seriously, not even in a footnote”). Finally, if the court generally adheres to the theory that deals between lawmakers and interest groups must be upheld by the judiciary, in the instant case, the hidden nature of the purported deal undermines this argument since the deal is invisible to non-participating lawmakers and their constituents. Even pure intentionalists regard legislative history as existing upon a spectrum of reliability and choose to rely upon those types that involve the enactment process. In this manner, there is a distinction between committee reports, which are collective statements known to the rest of Congress of a committee’s views on the law’s meaning, and affidavits from lobbyists and individual staffers, which perhaps reflect only empty promises whispered in the backroom. See Western Air Lines, 480 U.S. at 130 n.*.

Going forward, developments in the legislative process may ameliorate the difficulties in interpreting a special interest provision. Current “earmark rules” provide that lawmakers must expose hidden special interest deals by disclosing all beneficiaries of narrowly tailored tax and spending provisions. I have argued in an article, which discussed the G-I Holdings case, that courts should assume these earmark rules have functioned correctly: if no special interest beneficiary has been disclosed, judges should assume, I argue, that none was intended. This proposal is aimed at strengthening congressional adherence to the earmark rules, which is badly needed since the rules are self-enforcing. By refusing to uphold the undisclosed bargains of lawmakers and their special interest constituents, the proposal achieves this result through the imposition of costs upon these parties. Although this proposal would not apply in G-I Holdings since the earmark rules were enacted subsequent to the transition rule at issue, it may be the best way to navigate between competing theories of statutory interpretation in future cases involving narrowly tailored transition rules. It may even clean up the sausage factory.

2010 U.S. News Quality Assessment Rankings

I previously blogged the two quality assessment components in the 2010 U.S. News Law School Rankings:

• Academic Peer Assessment, based on reputation surveys sent to the dean and three faculty members at each school, which counts 25% in the U.S. News methodology.
• Lawyer/Judge Assessment, based on reputation surveys sent to various lawyers and judges, which counts 15% in the U.S. News methodology.

The Quality Assessment Ranking weights the Academic Peer Assessment and Lawyer/Judge Assessment according to the U.S. News methodology (62.5% and 37.5%, respectively):

Academic Peer & Lawyer/Judge Weighted Rank	Academic Peer & Lawyer/Judge Weighted Score	School	Overall Rank
1	4.80	Harvard	2
1	4.80	Yale	1
3	4.74	Stanford	3
4	4.60	Chicago	6
4	4.60	Columbia	4
6	4.50	NYU	5
6	4.50	UC-Berkeley	6
8	4.44	Michigan	9
9	4.41	Virginia	10
10	4.34	Pennsylvania	8
11	4.28	Duke	10
12	4.24	Cornell	13
13	4.21	Georgetown	14
14	4.14	Texas	15
15	4.11	Northwestern	10
16	3.93	UCLA	15
17	3.91	Vanderbilt	17
18	3.71	Washington U.	19
19	3.66	USC	18
20	3.65	North Carolina	30
21	3.61	Emory	20
21	3.61	George Washington	28
23	3.58	Minnesota	20
24	3.55	Iowa	26
24	3.55	Washington & Lee	30
26	3.54	Wisconsin	35
27	3.51	Boston College	26
28	3.49	Notre Dame	23
29	3.48	Boston University	20
29	3.48	Illinois	23
31	3.45	UC-Hastings	39
32	3.44	UC-Davis	35
33	3.41	William & Mary	28
34	3.38	Indiana-Bloomington	23
34	3.38	Ohio State	35
36	3.34	Fordham	30
37	3.31	U. Washington	30
38	3.29	Wake Forest	40
39	3.24	Arizona	43
40	3.21	Tulane	45
41	3.18	Florida	51
41	3.18	Georgia	35
43	3.11	Alabama	30
44	3.08	American	45
45	3.04	Arizona State	55
45	3.04	Colorado	45
47	2.99	BYU	41
47	2.99	George Mason	41
49	2.98	Maryland	43
50	2.95	Case Western	55
50	2.95	Oregon	77
52	2.94	Connecticut	52
53	2.91	Utah	45
54	2.89	Missouri-Columbia	65
54	2.89	SMU	49
56	2.88	Miami	71
57	2.86	Villanova	61
58	2.85	Kansas	65
59	2.84	Cardozo	49
59	2.84	Pittsburgh	71
59	2.84	San Diego	61
62	2.81	Temple	65
63	2.80	Florida State	52
64	2.79	Kentucky	55
65	2.78	Tennessee	59
66	2.76	Baylor	65
67	2.75	Houston	59
68	2.71	Cincinnati	52
69	2.69	Lewis & Clark	61
69	2.69	Nebraska	Tier 3
69	2.69	Oklahoma	71
69	2.69	Santa Clara	85
73	2.68	Rutgers-Camden	77
73	2.68	Rutgers-Newark	87
75	2.66	Brooklyn	61
75	2.66	Chicago-Kent	77
77	2.65	Catholic	94
77	2.65	Indiana-Indianapolis	87
77	2.65	Seton Hall	77
80	2.64	St. Louis	94
81	2.63	Loyola-Chicago	87
81	2.63	Marquette	87
81	2.63	Pepperdine	55
84	2.61	Denver	77
84	2.61	New Mexico	77
86	2.59	Penn State	65
86	2.59	Richmond	77
86	2.59	Seattle	77
89	2.55	DePaul	87
89	2.55	Syracuse	Tier 3
91	2.54	Hofstra	100
92	2.53	Loyola-LA	71
92	2.53	LSU	75
92	2.53	Mississippi	Tier 3
95	2.51	Arkansas-Fayetteville	94
95	2.51	Georgia State	65
95	2.51	Howard	Tier 3
95	2.51	Northeastern	94
95	2.51	South Carolina	87
100	2.50	Gonzaga	100
100	2.50	Loyola-New Orleans	Tier 3
102	2.48	Hawaii	Tier 3
102	2.48	UNLV	75
104	2.46	Michigan State	Tier 3
105	2.45	Louisville	98
105	2.45	Maine	100
105	2.45	Vermont	Tier 3
108	2.44	Wyoming	Tier 3
109	2.41	New York Law	Tier 3
109	2.41	St. John's	87
111	2.39	SUNY-Buffalo	85
112	2.38	Mercer	Tier 3
112	2.38	Missouri-KC	Tier 3
114	2.36	Creighton	Tier 3
115	2.35	Pacific	Tier 3
115	2.35	Wayne State	Tier 3
117	2.33	Drake	Tier 3
117	2.33	San Francisco	98
117	2.33	Willamette	Tier 4
120	2.31	Arkansas-Little Rock	Tier 3
120	2.31	West Virginia	Tier 3
122	2.29	Texas Tech	Tier 3
123	2.28	Stetson	Tier 3
124	2.26	South Dakota	Tier 3
124	2.26	Valparaiso	Tier 4
126	2.25	Cleveland State	Tier 3
126	2.25	Montana	Tier 3
128	2.24	Albany	Tier 3
129	2.23	Franklin Pierce	Tier 3
130	2.21	Suffolk	Tier 4
131	2.19	Baltimore	Tier 4
131	2.19	Dayton	Tier 4
131	2.19	Idaho	Tier 3
134	2.16	North Dakota	Tier 3
134	2.16	St. Thomas (MN)	Tier 3
136	2.15	Hamline	Tier 4
136	2.15	Memphis	Tier 3
136	2.15	Tulsa	Tier 4
136	2.15	Washburn	Tier 4
140	2.13	Akron	Tier 3
140	2.13	Duquesne	Tier 4
142	2.11	Samford	Tier 3
142	2.11	Southern Illinois	Tier 4
142	2.11	Toledo	Tier 3
145	2.10	Pace	Tier 4
145	2.10	Quinnipiac	Tier 3
147	2.08	CUNY	Tier 4
148	2.05	John Marshall	Tier 4
148	2.05	Widener	Tier 4
148	2.05	William Mitchell	Tier 3
151	1.99	St. Mary's	Tier 4
152	1.98	Chapman	Tier 3
153	1.96	Southwestern	Tier 3
154	1.95	New England	Tier 4
154	1.95	South Texas	Tier 4
156	1.91	California Western	Tier 4
156	1.91	Roger Williams	Tier 4
158	1.89	Northern Illinois	Tier 4
159	1.88	Capital	Tier 4
159	1.88	Nova	Tier 4
161	1.85	Golden Gate	Tier 4
161	1.85	Ohio Northern	Tier 3
163	1.83	Campbell	Tier 4
163	1.83	Mississippi College	Tier 4
165	1.81	Northern Kentucky	Tier 4
166	1.79	N. Carolina Central	Tier 4
166	1.79	Thomas Jefferson	Tier 4
168	1.75	Florida International	Tier 4
168	1.75	Oklahoma City	Tier 4
170	1.73	Texas Wesleyan	Tier 4
171	1.71	Texas Southern	Tier 4
172	1.69	Detroit Mercy	Tier 4
173	1.68	W. New England	Tier 4
174	1.66	Touro	Tier 4
174	1.66	Whittier	Tier 4
176	1.65	St. Thomas (FL)	Tier 4
177	1.61	Southern	Tier 4
178	1.59	Thomas Cooley	Tier 4
179	1.53	Ave Maria	Tier 4
180	1.50	District of Columbia	Tier 4
181	1.48	Appalachian	Tier 4
181	1.48	Florida Coastal	Tier 4
183	1.41	Barry	Tier 4
183	1.41	Regent	Tier 4

 

Snoop Dog Latest California Celebrity Tax Deadbeat

I previously blogged California's list of the 250 biggest state tax deadbeats -- which included Burt Reynolds, Sinbad, and Dionne Warwick.  TMZ reports that California has slapped a $284,000 tax lien on rapper Snoop Dogg.

Michael Caine on British Tax Rates: "At 51%, I'm Out of Here"

From the Telegraph:

His name, as they say, is Michael Caine. And he's not a happy bunny. The 76-year-old film star has revealed in colourful terms that he has had it, and will leave Britain if taxes get any higher.

"The Government has taken tax up to 50%, and if it goes to 51 I will be back in America," he said at the weekend. "We've got 3.5 million layabouts on benefits, and I'm 76, getting up at 6am to go to work to keep them. Let's get everybody back to work so we can save a couple of billion and cut tax, not keep sticking it up."

(Hat Tip: Andy Morriss, InstaPundit.)

Yesterday's NYC Scare, Courtesy of the Federal Government

NYLJ: Law Schools -- A Special Report

This week's New York Law Journal has published a special section, Law Schools -- A Special Report, with these articles:

• Rules of Engagement:  Tactical Survival Tips for Third-Year Law Students
• The Rankings, Deconstructed and Examined
• What Law Firms Want in New Recruits
• Students, Manage Your Careers

Foundation Press Publishes Federal Wealth Transfer Taxation

Paul McDaniel (Florida), Jim Repetti (Boston College), and I are delighted to announce that the new 6th edition of our casebook, Federal Wealth Transfer Taxation, is now available from Foundation Press (and will soon be available at fine bookstores everywhere).  Here is the publisher's description:

The Sixth Edition continues the comprehensive, yet flexible, presentation of prior editions. It explores both the technical and policy issues associated with wealth transfer taxation. It is adaptable for use in a single course covering basic wealth transfer taxation or a sequence of courses dealing with wealth transfer taxation at either the J.D. level or LL.M. level, while presenting selected in-depth coverage of advanced issues. Within each section, the book moves from the straightforward to the more complex rules associated with the topic so that each professor can decide the level of complexity he or she wishes to reach in the course. The Sixth Edition thoroughly integrates all relevant amendments to the Code enacted through January 1, 2009. This casebook is unrivaled in scope and depth of analysis and in its flexibility for use in different courses using any teaching technique.

The new Study Problems book and Teacher's Manual (with answers to all of the problems) will be available over the summer, well in time for Fall 2009 classes.  (Faculty can request a complimentary copy here.)  The book makes an excellent Graduation, Mother's Day, and Father's Day present!

Pete Wentz on the U.S. News Law School Rankings

Law School Consultant Pete Wentz (APCO Worldwide) (and father of Fall Out Boy's Pete Wentz) offers his thoughts on the 2010 U.S. News Law School Rankings:

There are always a number of complaints that the information supplied to U.S. News is not “verifiable.” However, much of the information that is used for the U.S. News rankings comes right from data that schools submit to the ABA on an annual basis. Presumably, deans have integrity and submit honest numbers there—and much of that information is then reprinted in the ABA-LSAC Law School guide, including:

• Median LSAT and GPA
• Acceptance rate
• Employment at 9 months
• Bar passage

Information on student-faculty ratio and faculty resources is not public in the LSAC Guide, but is reported to the ABA—and the ABA “takeoffs” using that information are sent to every dean.

The only school-provided information used by U.S. News that is not also sent to the ABA is employment at graduation, which is where schools have different definitions of what “employment” means. And this counts for 4% of the overall ranking.

U.S. News has used median LSAT and GPA as its measurement for many years. Some schools would tinker with that number, for instance by not including “special situation admits” as part of the calculation. In an effort to provide greater accountability, the ABA began to require that schools submit their median LSAT and GPA as part of their ABA submission.

One can quibble with the rankings or the weightings that U.S. News gives to the various components, but, with the one exception noted above, law schools should be providing U.S. News with the same information they provide the accrediting body.

Green: What is Wrong with Tax Evasion?

Stuart P. Green (Rutgers-Newark) has posted What is Wrong with Tax Evasion? on SSRN.  Here is the abstract:

This talk, originally delivered at a University of Houston symposium on tax crimes, asks why the norms that underlie our laws against tax evasions are so seemingly unstable. Ten reasons are offered: (1) tax evasion is difficult to distinguish from tax avoidance, (2) the conduct that underlies the crime of tax evasion is complex, (3) choate and inchoate liability are conflated, (4) a heightened mens rea of "willfulness" is required, (5) the level of enforcement is low, (6) enforcement practices are arbitrary and uneven, (7) criminal and civil violations are not clearly distinguished, (8) there is a sense that "everyone is doing it," (9) taxes are demonized in our political culture, and (10) the tax code is perceived as unfair and tax revenues are thought to be misused. It is also suggested that part of the reason the norms against tax evasion are so unstable is that there is confusion about exactly why tax evasion should be regarded as morally wrong. To that end, the debate over the moral content of tax evasion is revisited and extended.

                

NY Times: The End of the University As We Know It

New York Times op-ed:  End the University as We Know It, by Mark C. Taylor:

Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans). ...

The emphasis on narrow scholarship also encourages an educational system that has become a process of cloning. Faculty members cultivate those students whose futures they envision as identical to their own pasts, even though their tenures will stand in the way of these students having futures as full professors.

The dirty secret of higher education is that without underpaid graduate students to help in laboratories and with teaching, universities couldn’t conduct research or even instruct their growing undergraduate populations. That’s one of the main reasons we still encourage people to enroll in doctoral programs. It is simply cheaper to provide graduate students with modest stipends and adjuncts with as little as $5,000 a course — with no benefits — than it is to hire full-time professors.

In other words, young people enroll in graduate programs, work hard for subsistence pay and assume huge debt burdens, all because of the illusory promise of faculty appointments. But their economical presence, coupled with the intransigence of tenure, ensures that there will always be too many candidates for too few openings. ...

If American higher education is to thrive in the 21st century, colleges and universities, like Wall Street and Detroit, must be rigorously regulated and completely restructured. The long process to make higher learning more agile, adaptive and imaginative can begin with six major steps:

1. Restructure the curriculum, beginning with graduate programs and proceeding as quickly as possible to undergraduate programs. ...
2. Abolish permanent departments, even for undergraduate education, and create problem-focused programs. ...
3. Increase collaboration among institutions. ...
4. Transform the traditional dissertation. In the arts and humanities, where looming cutbacks will be most devastating, there is no longer a market for books modeled on the medieval dissertation, with more footnotes than text. As financial pressures on university presses continue to mount, publication of dissertations, and with it scholarly certification, is almost impossible. (The average university press print run of a dissertation that has been converted into a book is less than 500, and sales are usually considerably lower.) For many years, I have taught undergraduate courses in which students do not write traditional papers but develop analytic treatments in formats from hypertext and Web sites to films and video games. Graduate students should likewise be encouraged to produce “theses” in alternative formats.
5. Expand the range of professional options for graduate students. Most graduate students will never hold the kind of job for which they are being trained. It is, therefore, necessary to help them prepare for work in fields other than higher education. ...
6. Impose mandatory retirement and abolish tenure.

• Dorf on Law
• Voir Dire

(Hat Tip: Danny Sokol.)

NYSBA: State Should Adopt Appointment Process Like U.S. Tax Court

The New York State Bar Association Tax Section has released a report on  The Process for Making Appointments to the New York Tax Appeals Tribunal (No. 1181):

We believe that the process usually used in the nomination of judges to the U.S. Tax Court can serve as a model for a process that would assist you, as well as your successors, in ensuring that individuals with the characteristics mentioned above are appointed to the Tribunal. The process for selecting U.S. Tax Court judges starts with the administration (i.e., those appointed by the President) developing a list of possible nominees. That list (along with resumes) is furnished to the Appointments to the Tax Court Committee of the ABA's Tax Section. That committee reviews the background and qualifications of those whose names are on the list. This activity is pursued through confidential inquiries; the committee meets in executive sessions only. The committee rates each candidate as "well qualified," "qualified," or "not qualified" and these conclusions are communicated to the administration; the President makes the ultimate decision on whom to nominate; the Senate must confirm a nomination for the process to be completed.

In connection with Tribunal appointments, a number of groups could take the role fulfilled by the ABA Tax Section committee in the federal context, such as the New York State Bar Association, the ABA Tax Section's State and Local Tax Committee, or a New York State Judicial Screening Committee. If you believe that such a process would be worthwhile and feasible, we would be happy to work with your staff in (a) identifying the appropriate review group and (b) developing procedures for the process.

Florida's Dean Alleges Errors in U.S. News Data

Last week, I blogged the report from U.S. News that it is looking into allegations "that a few school might have submitted incorrect data to U.S. News," as well as reports that Brooklyn and Nebraska may be two of those schools.  Florida now can be added to the list.

Florida's Dean sent an email to its Board of Trustees, which included this charge:

There are a number of things in the rankings this year that do not appear correct. Today US News announced that it was starting to look at possible errors in this year’s results. At this time, we believe that there are errors in the information for some law schools in our vicinity in the rankings that have had a material effect upon the results. I will try to keep you posted.

Florida's Dean sent an email to the student body, which reported this error in the Florida data:

I must add that U.S. News does not measure many of the things which make us good, such as our new facilities, our robust array of outside speakers and visitors, our fundraising successes, and the achievements of our students in a variety of extramural, co-curricular, and student organization settings. I must also add that it is well known that many schools game the system and that over half of the information upon which U.S. News relies cannot be verified. Although U.S. News has assured us that this did not affect the rankings, it is worth noting that U.S. News published incorrect information (due to an error in my office) for our entering class GPA at the 75th and 25th percentiles; both are actually almost one-tenth of a point higher. This underscores the problems with verification and accuracy that are pervasive in the U.S. News ratings process.

For a timely post on the Faculty Lounge, see US News Rankings and the Data Disclosure Dance

One partial answer to Judge Pollak’s call for a better focused ranking system could be a more extensive disclosure of data by US News. Under the current system, each law school provides US News the data it requests. This component data is not made broadly available by either US News or the law schools. US News then notifies each school about how its own data is converted into points which result in its overall score. Disclosure by US News of every school’s component points and the underlying data used to create component points would enable users to better evaluate factors that are important to them individually. ...  

More disclosure should also lead to better reliability. ...  [T]he legal education community ought to take taking very seriously its obligation of providing accurate data to US News. Such an obligation already exists in the ABA accreditation standards (specifically Interpretation 509-4). US News requires deans to sign their school’s submission. Maybe the ABA should pile on and require a Sarbanes Oxley like certification to it that the law school is playing fair with US News.

Call for Tax Papers: 2010 Critical Tax Conference

On April 9-10, 2010, Saint Louis University School of Law and its Center for International and Comparative Law will host the Critical Tax Conference.  The 2010 conference will depart from its customary format in order to contribute to a symposium issue of the Saint Louis University Law Journal:

On Friday, April 9, 2010, conference participants will present previously unpublished papers on topics related to comparative or international tax law. These papers should generally be in publishable or near publishable form. This session will be open to the public. Saint Louis University Law Journal will publish these papers in a symposium issue dedicated to this purpose. Saint Louis University School of Law will fund travel for the symposium presenters, including airfare to St. Louis, accommodations in the University Hotel, meals and miscellaneous travel expenses. Individuals wishing to present on Friday, April 9, 2010 should submit developed proposals by August 17, 2009 to Henry Ordower, Nan Kaufman, or Kerry Ryan.

On Saturday, April 10, 2010, we will follow our customary conference format with a mix of works-in-progress and incubator sessions. These sessions will not be open to the public.

Gans Wins Teaching Award at Hofstra

Mitchell Gans has been voted one of the 2008-2009 Teachers of the Year by Hofstra University students.  From the press release:

Mitchell Gans, JD, is the Steven A. Horowitz Distinguished Professor of Tax Law at Hofstra. Before joining the law school faculty, he had been an associate in the Tax and Trust and Estates Departments at the New York City law firm of Simpson, Thacher & Bartlett and law clerk to Associate Judge Jacob D. Fuchsberg, New York State Court of Appeals. He is an Academic Fellow at the American College of Trust and Estate Counsel. He is also an Adjunct Professor of Law at the NYU School of Law.

More on Bono's Tax Hypocrisy

I previously have blogged (see list below the fold) the flap over Bono's arranging his music business affairs to escape Irish taxes.  Here is the latest chapter:  What Bono Says and What He Does; There’s a Well-Documented Reason the Do-Gooder Can’t Put His Money Where His Mouth Is:

After playing the Obama inauguration a couple of months back, the pop star Bono flew back home to a rare barrage of hostile headlines. As you know, the global do-gooder wants us to send more of our money to Africa. So why is he sending his money to the Netherlands?

• U2 & Bono Bail Out to Avoid Irish Tax (Part 1)
• U2 & Bono Bail Out to Avoid Irish Tax (Part 2)
• Bono, Tax Avoider; The Hypocrisy of U2
• Netherlands Is Latest Tax Shelter Hot Spot
• Bono "Hurt" by Criticism of His Move From Ireland to Avoid Tax on Music Royalties

(Hat Tip: Andy Morriss.)

SOI Releases Foreign Recipients of U.S. Income, 2006

The IRS's Statistics of Income Division has released Foreign Recipients of US Income Study, 2006 Tax Year:

Two tables that present data for tax year 2006 from Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, are now available. The tables include data on the number of returns, total income, income subject to withholding, income exempt from withholding, income by category of income and tax withheld. These data items are available by selected countries and by selected recipient types.

The Innocent Spouse Manual

The Legal Aid Society of Middle Tennessee and the Cumberlands has published The Innocent Spouse Manual:  Representing Taxpayers in Innocent Spouse Cases (2d ed. 2009):

The Second Edition of the Innocent Spouse Manual explains how to effectively represent your client from the first meeting with the client through the Tax Court trial. The manual contains 108 double-spaced pages of text and ten pages of appendices. See the Table of Contents. ...

The manual is free to Low Income Tax Clinics operating under I.R.C. section 7526 grants and to other legal aid offices which represent taxpayers in innocent spouse controversies. To obtain a PDF copy, fax a request for the Innocent Spouse Manual on your organization's letterhead to 615-244-6186. Direct the request to Robert B. Nadler and include your email address in the letter. You will be sent a PDF copy of the manual by email.

For other parties interested in obtaining a copy, you can order a PDF copy here. The cost is $25.00.

(Hat Tip: Francine Lipman.)

2010 U.S News Lawyer/Judge Reputation Rankings (v. Overall Rankings)

Last week, I blogged the academic peer reputation component of the 2010 U.S. News Law School Rankings, along with each school's overall ranking.  Here is the lawyer/judge reputation component (which counts for 15% in the U.S. News methodology), along with each school's overall ranking:

Lawyer/Judge Rank	Lawyer/Judge Score	School	Overall Rank
1	4.8	Yale	1
1	4.8	Harvard	2
1	4.8	Stanford	3
4	4.6	Columbia	4
4	4.6	Chicago	6
4	4.6	Virginia	10
7	4.5	NYU	5
7	4.5	UC-Berkeley	6
7	4.5	Michigan	9
10	4.4	Pennsylvania	8
10	4.4	Duke	10
10	4.4	Georgetown	14
13	4.3	Northwestern	10
13	4.3	Cornell	13
15	4.2	Texas	15
16	4.1	Vanderbilt	17
17	3.9	Washington U.	19
17	3.9	North Carolina	30
19	3.8	UCLA	15
19	3.8	Emory	20
19	3.8	Notre Dame	23
19	3.8	Iowa	26
19	3.8	Geo. Washington	28
19	3.8	Washington & Lee	30
25	3.7	Minnesota	20
25	3.7	Boston College	26
25	3.7	UC-Hastings	39
28	3.6	USC	18
28	3.6	Boston University	20
28	3.6	Illinois	23
28	3.6	William & Mary	28
28	3.6	Wisconsin	35
28	3.6	Wake Forest	40
34	3.5	Indiana-Bloom.	23
34	3.5	U. Washington	30
34	3.5	Ohio State	35
34	3.5	UC-Davis	35
38	3.4	Fordham	30
38	3.4	Tulane	45
40	3.3	Alabama	30
40	3.3	Georgia	35
40	3.3	BYU	41
40	3.3	George Mason	41
40	3.3	Arizona	43
40	3.3	Florida	51
40	3.3	Villanova	61
47	3.2	American	45
47	3.2	SMU	49
47	3.2	Case Western	55
47	3.2	Baylor	65
47	3.2	Missouri-Columbia	65
47	3.2	Oregon	77
47	3.2	St. Louis	94
54	3.1	Maryland	43
54	3.1	Colorado	45
54	3.1	Utah	45
54	3.1	Arizona State	55
54	3.1	Kentucky	55
54	3.1	Kansas	65
60	3.0	Connecticut	52
60	3.0	Pepperdine	55
60	3.0	Houston	59
60	3.0	Lewis & Clark	61
60	3.0	Temple	65
60	3.0	Miami	71
60	3.0	Oklahoma	71
60	3.0	Santa Clara	85
60	3.0	Loyola-Chicago	87
60	3.0	Marquette	87
60	3.0	Gonzaga	100
60	3.0	Loyola-New Orleans	Tier 3
60	3.0	Nebraska	Tier 3
60	3.0	Wyoming	Tier 3
74	2.9	Cardozo	49
74	2.9	Cincinnati	52
74	2.9	Tennessee	59
74	2.9	San Diego	61
74	2.9	Penn State	65
74	2.9	Loyola-LA	71
74	2.9	Pittsburgh	71
74	2.9	LSU	75
74	2.9	Richmond	77
74	2.9	Seattle	77
74	2.9	Seton Hall	77
74	2.9	Indiana-Indianapolis	87
74	2.9	Catholic	94
74	2.9	Michigan State	Tier 3
74	2.9	Mississippi	Tier 3
89	2.8	Florida State	52
89	2.8	Denver	77
89	2.8	New Mexico	77
89	2.8	Rutgers-Camden	77
89	2.8	DePaul	87
89	2.8	Rutgers-Newark	87
89	2.8	Creighton	Tier 3
89	2.8	Syracuse	Tier 3
97	2.7	Georgia State	65
97	2.7	South Carolina	87
97	2.7	Arkansas-Fayetteville	94
97	2.7	Northeastern	94
97	2.7	Louisville	98
97	2.7	San Francisco	98
97	2.7	Maine	100
97	2.7	Drake	Tier 3
97	2.7	Howard	Tier 3
97	2.7	South Dakota	Tier 3
97	2.7	Vermont	Tier 3
97	2.7	Valparaiso	Tier 4
97	2.7	Willamette	Tier 4
110	2.6	Brooklyn	61
110	2.6	UNLV	75
110	2.6	Chicago-Kent	77
110	2.6	St. John's	87
110	2.6	Hofstra	100
110	2.6	Franklin Pierce	Tier 3
110	2.6	Hawaii	Tier 3
110	2.6	NY Law School	Tier 3
110	2.6	North Dakota	Tier 3
110	2.6	Pacific	Tier 3
110	2.6	St. Thomas (MN)	Tier 3
110	2.6	Texas Tech	Tier 3
110	2.6	Wayne State	Tier 3
123	2.5	Arkansas-Little Rock	Tier 3
123	2.5	Cleveland State	Tier 3
123	2.5	Idaho	Tier 3
123	2.5	Mercer	Tier 3
123	2.5	Missouri-KC	Tier 3
123	2.5	Montana	Tier 3
123	2.5	Akron	Tier 3
123	2.5	West Virginia	Tier 3
123	2.5	Baltimore	Tier 4
123	2.5	Dayton	Tier 4
123	2.5	Duquesne	Tier 4
134	2.4	Memphis	Tier 3
134	2.4	Stetson	Tier 3
134	2.4	Hamline	Tier 4
134	2.4	Suffolk	Tier 4
134	2.4	Tulsa	Tier 4
134	2.4	Washburn	Tier 4
140	2.3	Albany	Tier 3
140	2.3	Samford	Tier 3
140	2.3	Toledo	Tier 3
140	2.3	William Mitchell	Tier 3
140	2.3	John Marshall	Tier 4
140	2.3	Southern Illinois	Tier 4
140	2.3	St. Mary's	Tier 4
140	2.3	Widener	Tier 4
148	2.2	SUNY-Buffalo	85
148	2.2	Campbell	Tier 4
148	2.2	CUNY	Tier 4
148	2.2	Mississippi College	Tier 4
148	2.2	New England	Tier 4
148	2.2	Northern Illinois	Tier 4
148	2.2	South Texas	Tier 4
155	2.1	Chapman	Tier 3
155	2.1	Ohio Northern	Tier 3
155	2.1	Quinnipiac	Tier 3
155	2.1	California Western	Tier 4
155	2.1	Golden Gate	Tier 4
155	2.1	N. Carolina Central	Tier 4
155	2.1	Pace	Tier 4
155	2.1	Roger Williams	Tier 4
155	2.1	Thomas Jefferson	Tier 4
155	2.1	Whittier	Tier 4
165	2.0	Capital	Tier 4
165	2.0	Detroit Mercy	Tier 4
165	2.0	Florida International	Tier 4
165	2.0	Northern Kentucky	Tier 4
165	2.0	Nova	Tier 4
165	2.0	Oklahoma City	Tier 4
171	1.9	Southwestern	Tier 3
171	1.9	Ave Maria	Tier 4
171	1.9	St. Thomas (FL)	Tier 4
171	1.9	Texas Southern	Tier 4
171	1.9	Thomas Cooley	Tier 4
176	1.8	Southern	Tier 4
176	1.8	W. New England	Tier 4
178	1.6	Appalachian	Tier 4
178	1.6	Barry	Tier 4
178	1.6	Florida Coastal	Tier 4
178	1.6	Regent	Tier 4
178	1.6	Texas Wesleyan	Tier 4
178	1.6	Touro	Tier 4
184	1.5	District of Columbia	Tier 4

Griffith Wins Teaching Award at USC

Thomas Griffith, John B. Milliken Professor of Taxation at USC has been awarded the  William A. Rutter Distinguished Teaching Award.  (Prof. Griffith is pictured holding the award next to Mr. Rutter.) From the USC press release:

"He's been the prime mover in our academic support program. In his criminal law class, he teaches an extra hour each week for which he receives no extra teaching credit, no extra compensation, but rather he does it because he recognizes that all USC Law students can be successful attorneys," [Dean] Rasmussen said.

"Tax, by all accounts, is one of the most complex statutory courses that we teach at the law school ... [Griffith] has that rare and important ability of great professors to be clear without inordinately simplifying the material; he's able to ensure that everyone in the classroom understands precisely what is being said and learns the basic structure and argument of our tax code."

Andrew Lloyd Webber: High Taxes Are Killing Britain

Andrew Lloyd Webber:  The Last Thing This Country Needs Is a Pirate Raid on the Wealth Creators Who Still Dare Navigate Our Stormy Waters (The Daily Mail):

The opinion polls have uttered. The country loves the new 50% top rate of income tax. Soak the rich. Smash the bankers. So Government spin doctors are in second heaven. The Conservatives' silence redefines a tomb. And I suppose there'd be quite a turnout for the public flogging of Sir Fred the Shred.

But before you book your tickets, hold hard. And before you lynch me as a rich b*****d flying a kite for my own cause, let me beg you to believe that I am not.

I believe that this new top rate of tax could be the final nail in the coffin of Britain plc.

I am 61 years old. I have lived and worked in Britain all my life. Not even in the dark days of penal Labour taxation in the Seventies did I have any intention of leaving the country of my birth.

Despite a rumour put around some years back, I have never contemplated leaving Britain for tax reasons. But in the 40-plus years I have been lucky enough to work here, I've seen a bit. So I must draw your attention to what is really proposed in this Budget.

Here's the truth. The proposed top rate of income tax is not 50 per cent. It is 50% plus 1.5% national insurance paid by employees plus 13.3% paid by employers. That's not 50%. Two years from now, Britain will have the highest tax rate on earned income of any developed country.

(Hat Tip: Andy Morriss.)

Judge Denies Law Profs' Injunction Against West, But Signals They May Succeed on Merits of Claim That West Put Their Names on "Sham" Supplement

Earlier this month, I blogged Two Law Profs Sue West for Putting Their Names on a "Sham" Supplement to Their Treatise:

David Rudovsky (Penn) and Leonard N. Sosnov (Widener) are suing West, claiming that they were falsely identified as the authors of a poorly researched “sham” supplement to their treatise, Pennsylvania Practice:  Criminal Procedure Law, Commentary and Forms.  The authors stopped working on the treatise when West cut their annual pay from $5,000 to $2,500 each.

The professors sought an immediate injunction on the ground that the supplement "was so poorly researched it would harm their reputations if allowed to remain on library shelves."  The National Law Journal reports that Senior U.S. District Judge John P. Fullam last week denied the injunction on the ground that "the harm has already been done," but signaled great sympathy for the professors' case on the merits:

[T]he four-page decision by Fullam appeared to provide only a empty victory for West. Fullam seemed to strongly hint that the professors will likely succeed in proving their claims under the Lanham Act as well as state defamation claims, but cannot show that an injunction at this stage would do any good.

"Although plaintiffs had no role in authoring the pocket part, defendant West made it appear that they had indeed authored the pocket part, with aid from members of the publisher’s staff," Fullam wrote. "To make matters worse," Fullam wrote, "the quality of that particular pocket part was not up to standard." Fullam found that "few if any relevant court decisions were included in the publication," and that readers were "not informed that some cases cited in earlier volumes had since been reversed or modified." .

Fullam concluded that while the plaintiffs had proven they were harmed, they had failed to prove that they risked suffering any further irreparable harm. "It seems clear that plaintiffs have established a right to some form of remedy -- damages to reputation come to mind -- but it would seem that the harm has already been done, and that, if plaintiffs do require further injunctive relief I order to complete their remedy, such relief would be just as effective after final hearing," Fullam wrote.

Rudovsky v. West Publishing Co., No 09-cv-00727 (Apr 23, 2009).

McMahon, Shepard & Simmons: Recent Developments in Federal Income Taxation: 2008

Martin J. McMahon, Jr. (Florida), Ira B. Shepard (Houston) & Daniel L. Simmons (UC-Davis) have published Recent Developments in Federal Income Taxation: The Year 2008, 9 Fla. Tax Rev. 275 (2009). Here is the abstract:

This article discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the IRS and Treasury Department during 2008 -- and sometimes a little farther back in time if the authors find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted. Amendments to the Internal Revenue Code generally are discussed to the extent that (1) they are of major significance, (2) they have led to administrative rulings and regulations, or (3) they have affected previously issued rulings and regulations otherwise covered by the outline. The outline focuses primarily on topics of broad general interest -- income tax accounting rules, determination of gross income, allowable deductions, treatment of capital gains and losses, corporate and partnership taxation, exempt organizations, and procedure and penalties. It deals summarily with qualified pension and profit sharing plans, and generally does not deal with international taxation or specialized industries, such as banking, insurance, and financial services.

TaxProf Blog Weekend Roundup

Saturday:

• Emmanuel Saez Awarded John Bates Clark Medal
• UC-Hastings Hosts Northern California Tax Roundtable
• Understanding Twitter
• Laity:  The Competence of Nations and International Tax Law
• Section 162(m), Executive Compensation, and Rev. Rul. 2008-13

Sunday:

• Alleged Tax and Financial Improprieties at Harvard Endowment
• Which Companies Pay the Most (and Least) U.S. Taxes?
• Top 5 Tax Paper Downloads
• Careers in Tax Law: Perspectives on the Tax Profession
• Bartlett: Tax Tea Party Fantasy
• New Issue of Tax Watch

Alleged Tax and Financial Improprieties at Harvard Endowment

Harvard Crimson:  HMC Tax Concerns Aided Federal Inquiries; Former Employee Expressed Concerns Over Tax Reporting, Offshore Accounts, by Peter F. Zhu:

He says he was told it was simply a difference in investment policy. But to Steven M. Rose, then a tax director for Harvard Management Company, the deceptive financial reporting and pervasive ethical deficiencies he says he witnessed there were far from benign. And while the University commissioned an investigation into the issues he raised, he says he quickly reached the point where he felt his concerns had been brushed aside.

“The general disregard for the rules, procedures and compliance—it was ridiculous,” Rose said in an interview with The Crimson. “You had to be quiet and do it and put blinders on. If you were doing work in other aspects of the company, you could just do your job. But in [my] part of the job, you couldn’t ignore things.”

Harvard Management Company—which oversees Harvard’s multi-billion dollar endowment—was plagued by a culture of ethical laxity, Rose said. Special relationships with funds run by former employees and the use of offshore investment companies—both used to boost HMC’s once-legendary returns—may not be illegal, but are considered to be ethically questionable by some, particularly in light of Harvard’s non-profit status.

“Some people think that even if you’re [using offshore companies] legally, there’s something...unethical about it,” said Benjamin Leff, a visiting professor at Harvard Law School who specializes in taxes and regulation of non-profit organizations. “Would there be totally legal and proper things that an investment company with a Cayman subsidiary would be doing? There could be. Could there be illegal [things]? Definitely. Are there some things in between? Yes.” ...

Before joining HMC, Rose lectured in taxation at Northeastern University and worked as a tax manager for what is now PricewaterhouseCoopers.

While Rose only served as a tax director for a year at HMC before resigning, he previously helped prepare the company’s taxes for ten years as an independent contractor. Although he had never noticed any suspect activity at HMC before—he said he was simply given data from which to produce returns—his new position’s oversight and personnel access provided him with information that gradually coalesced into broader—and more disturbing—insights into the company’s complex network of operations.

According to Rose, HMC frequently under-reported its income from outside money management firms by “netting” it, or cancelling it out, with management fees paid out by the University. This practice, which reduces HMC tax obligations, is questionable because much of the income that Harvard receives from the firms actually derives from management fees that the firms collect from other investors—activities unrelated to the University’s tax-exempt purpose.

Daniel Halperin, an HLS professor who specializes in tax policy and non-profit organizations, said that an evaluation of the proper tax treatment for the income would also depend on whether Harvard’s share of the management fees is collected from regularly conducted trade or business, and the reasons why Harvard is making special arrangements with the money managers. He added that resolving these issues conclusively is difficult without access to more detailed information.

Rose said that when he raised concerns to HMC lawyers about netting, they said they had “no tax authority,” or legal precedent, to be engaging in the practice—but continued nonetheless.

Leff, the visiting HLS professor, said that while he did not have enough understanding of Rose’s specific concerns to make an informed judgment, “a lawyer asked by an auditor about the legal authority for the treatment of a transaction should be able to give at least the legal reasoning under which the treatment is proper.” ...

A further point of contention was HMC’s use of complex “structured finance agreements,” which created and linked so many investment entities that tax reporting became nearly impossible to conduct without attending planning discussions among the managers and HMC lawyers, Rose said.

And many of the entities that Harvard owned and invested in, both for- and non-profit, were directed and staffed by former University employees who continued to receive millions of dollars in management fees from Harvard, presenting what he saw as a conflict of interest.

In one particularly infuriating incident, Rose said that after he repeatedly inquired about a seemingly purposeless investment vehicle, a lawyer informed him that the company was actually set up to help a former employee defer his income to a Cayman Islands entity—thereby avoiding substantial tax payments. He also mentions another instance in his disclosure in which HMC officials adamantly opposed the reporting of a foreign entity—likely because the form used would have been attached to the publicly visible IRS Form 990, exposing Harvard to questioning about its use of offshore accounts.

(Hat Tip: InstaPundit, Mary O'Keeffe.)

Which Companies Pay the Most (and Least) U.S. Taxes?

What U.S. Companies Really Pay in Taxes -- A Study Commissioned by BusinessWeek Shows That Corporate America Pays the IRS Anywhere From Zero to 400% of Income, by Nanette Byrnes:

To get a real-world view of how corporate players fare under the complexities of the tax code, we had data tracker Capital IQ analyze the tax burdens of companies in the S&P 500-stock index. ...  Instead of simply adopting the tax rate that companies report on their income statements, Capital IQ looked at the cash taxes disclosed in footnotes and cash flow statements companies file with the SEC, the closest we can get to what they actually paid in taxes. By dividing that figure by a company's pretax income (excluding extraordinary items) and averaging it over four years to minimize anomalies, we calculated what we consider to be the true tax rate.

The result is a list of players whose tax burdens ranged widely, from essentially nothing to almost 400% of pretax income a year. Troubled industries with weakening profits had the highest tax rates: The auto sector averaged 45.5%, banks paid 50.3%, and real estate companies paid 66.1%. The least-taxed industries were semiconductors, at 19.6%, often because of high expenses in the U.S. and high overseas income. Infrastructure investments helped to keep telecoms at a low 22.2%. ...

Corporate Taxes: Who Pays the Most (4-Year Average Annual Tax Rate):

1. Verizon:  391.3%
2. Fidelity National Information Services: 254.8%
3. Zions Bancorporation:  226.1%
4. Eastman Kodak:  146.1%
5. Sun Microsystems:  139.5%
6. Citigroup:  106.3%
7. Motorola:  106.0%
8. Goodyear:  84.1%
9. Notheast Utilities:  70.7%
10. Dominion Resources:  69.6%

Corporate Taxes: Who Pays the Least (4-Year Average Annual Tax Rate):

1. Range Resources:  0.4%
2. Allegheny Energy:  1.1%
3. FPL Group:  1.3%
4. Broadcom:  1.7%
5. Nividia:  2.2%
6. Xcel Energy:  2.5%
7. Akamai Technologies:  2.9%
8. Teco Energy:  3.0%
9. Boeing: 3.2%
10. CMS Energy: 3.5%

Methodology: We looked at the companies in the S&P 500 index, excluding those with two or more recent years of losses, and instead of the "effective tax rate" companies calculate and apply to their income statement, pulled out the figure companies disclose as cash taxes paid. That's the closest number available in public filings to the check they wrote to the IRS and other tax collectors around the world. Dividing that by pretax income excluding extraordinary items, we came up with a tax rate closer to reality. Real estate investment trusts, and companies based outside the U.S were dropped from the list. To minimize the impact of one-time anomalies, we then averaged the last four years' numbers.

Top 5 Tax Paper Downloads

The papers in this week's list of the Top 5 Recent Tax Paper Downloads are the same as last week's, with some shuffling in the order:

1.  [256 Downloads]:  2008 Developments in Connecticut Estate and Probate Law, by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid & Riege, Hartford)

2.  [203 Downloads]:  Huford:  Family Limited Partnership Practice Pointers, by Wendy C. Gerzog (Baltimore)

3.  [161 Downloads]:  Choice of Entity: Considerations and Consequences, by Ellen P. Aprill (Loyola-L.A.) & Sanford Holo (Musick Peeler & Garrett, Los Angeles)

4.  [159 Downloads]:  The Case for the Carbon Tax: How to Overcome Politics and Find Our Green Destiny, by Roberta F. Mann (Oregon)

5.  [148 Downloads]:  Hidden Taxes, by Brian D. Galle (Florida State)

Careers in Tax Law: Perspectives on the Tax Profession

The ABA Tax Section has published Careers in Tax Law: Perspectives on the Tax Profession and What It Holds for You, by John Gamino, Robb A. Longman & Matthew R. Sontag:

Designed for those considering or beginning a career in tax law, this informative guide presents a series of offerings -- autobiographies in miniature -- by a broad cross section of working tax professionals. Each contribution stands as a unique story of paths taken, choices made, and lessons learned. Each adds to a composite portrait of the profession and its possibilities for the next generation of tax lawyers. In essays divided thematically into the following chapters, over 75 tax professionals share their unique perspectives, knowledge, and experiences. Nowhere else will you find such an honest and entertaining portrayal of the tax profession and what it holds for you.

See the Forward and Table of Contents.  Contributions from Tax Profs include:

• Edward D. Kleinbard (USC), Private Clients, Public Good, p. 124
• George K. Yin (Virginia), Lawyer, Teacher, Public Servant, p. 127
• Leandra Lederman (Indiana-Bloomington), It’s Not Just Teaching, p. 133
• Alice G. Abreu (Temple), The Best Job in the World, p. 136
• Mona L. Hymel (Arizona), The Impossible Dream?, p. 140
• Francine J. Lipman (Chapman), The Gift That Keeps on Giving, p. 143

Bartlett: Tax Tea Party Fantasy

Following up on prior posts on articles by Bruce Bartlett:

• Tax Tea Parties Misstate U.S. Tax Burden
• Tax Tea Party, Part Two

Tax Tea Party Fantasy:

The universal reaction [to the first article] was, "So what?" Why should Americans care if foreigners are even more overtaxed than we are?”

I thought this was a fair point, so I did another analysis looking only at taxation in the U.S. ... [F]ederal revenues will consume 15.5% of GDP this year, down from 17.7% last year, 18.8% in 2007, and 20.9% in 2000. ...  The federal government will take less out of the economy in the form of revenue than any year since 1950.

But what about the average American, I wondered? Is it possible that the tax code has changed in some way that makes families worse off even though the aggregate level of taxation has fallen? ...

In 2007, the latest year available, the median family paid 5.91% in federal income taxes. In every year from 1958 — the first year available — through 2002, it paid more. In 1981, before the Reagan tax cut took effect, the federal income tax rate on the median family was 11.79% — twice what it was in 2007. ...

In my opinion, these tea parties had little, if anything, to do with current or projected tax levels. They were just partisan pep rallies designed to make out-of-power conservatives and Republicans feel better. Secondarily, they were about building audiences for Fox News and right-wing talk radio hosts.

New Issue of Tax Watch

The Tax Foundation has published the Spring 2009 issue of Tax Watch, with these articles:

• Federal Tax Reform on the Way?
• State Budget Shortfalls May Spark Tax Reform
• America's Tax Freedom Day Arrives Early
• Experts Talk Stimulus, Reform in Recent Tax Policy Podcasts

Emmanuel Saez Awarded John Bates Clark Medal

The American Economic Association announced on Friday that Emmanuel Saez (UC-Berkeley, Department of Economics) has won the 2009 John Bates Clark Medal, awarded to the "American economist under the age of forty who is judged to have made the most significant contribution to economic thought and knowledge."  From the press release:

Emmanuel Saez has distinguished himself through definitive contributions to the field of Public Economics. His work attacks policy questions from both theoretical and empirical perspectives, on the one hand refining the theory in ways that link the characteristics of optimal policy to measurable aspects of the economy and of behavior, while on the other hand undertaking careful and creative empirical studies designed to fill the gaps in measurement identified by the theory. Through a collection of interrelated papers, he has brought the theory of taxation closer to practical policy making, and has helped to lead a resurgence of academic interest in taxation.

• Chronicle of Higher Education
• Paul Krugman's Blog
• Greg Mankiw's Blog
• Wall Street Journal

UC-Hastings Hosts Northern California Tax Roundtable

UC-Hastings hosted a Northern California Tax Roundtable yesterday with these papers and commentary:

• Patricia Cain (Santa Clara), DOMA and the Internal Revenue Code
  • Commentator:  David Gamage (UC-Berkeley) 
• Mark Gergen (UC-Berkeley), A Pragmatic Case for Taxing an Equity Fund Manager's Profit Share as Compensation
  • Commentator:  Susan Morse (Santa Clara) 
• Daniel Simmons (UC-Davis), Transactions Underlying Economic Substance Decisions