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Friday, February 22, 2013

UW-TEI Host Tax Forum Today in Seattle

The University of Washington and Tax Executives Institute host a Tax Forum today in Seattle. Among the speakers in Kristin Hickman (Minnesota), An Update on Transfer Pricing – The Number One Tax Enforcement Issue Worldwide.

February 22, 2013 in Conferences, Tax | Permalink | Comments (0) | TrackBack (0)

ABA Seeks to Hire Law School Data Cop

ABA Logo 2National Law Journal:  ABA Seeks Help Monitoring Law Graduate Employment Statistics:

The ABA is in the market for a law school data cop. The organization's Section of Legal Education and Admissions to the Bar has put out a request for proposals for a process by which it can better police the postgraduate employment data that law schools release.

"We want to know, if we wanted to audit a school's employment data or force schools to give us an audit, how would you do that? What would it look like?" said Barry Currier, the ABA's interim consultant on legal education. "Maybe we would look at how law schools go about collecting their employment data, but we're not really sure right now how that would be done."

The request for proposals is the ABA's latest effort to boost confidence in the data that it requires law schools to release each year. Those efforts came after two schools [Illinois and Villanova] were found to have inflated their admissions data and amid broad skepticism over the veracity and comprehensiveness of graduate jobs data. Graduates have sued 15 law schools around the country alleging that they inflated employment data, and critics have faulted the ABA for not keeping a close eye on schools' numbers. ...

ABA officials believe that a partnership with the Law School Admission Council—which administers the LSAT and tracks law school applicant data—has thoroughly addressed any potential problems with the reporting of admissions figures and made it impossible for schools to fudge their numbers. For the first time this year, the council analyzed the LSAT scores and grades of new students at individual law schools to ensure the reported averages are correct. That process is in its final stages and the ABA may soon release those figures, Currier said. ...

"We're comfortable that the admissions piece of this is taken care of, so now we're looking at what can be done about employment data," Currier said. Unlike admissions data, there is no centralized source of law graduate jobs data—which the schools themselves sometimes struggle to compile. So the ABA is seeking guidance from experts. The organization last year adopted more detailed postgraduate jobs reporting requirements, which has complicated the reporting process for law schools and made oversight tougher. "Eventually, we would like to get to a place where the data schools are giving us doesn't cause us to sit back and say, 'OK, what's the new game schools are playing?' " Currier said.

February 22, 2013 in Legal Education | Permalink | Comments (0) | TrackBack (0)

Muller: Campos is Right: Law Profs Don't Know How Effective Our Teaching Is

Eric Muller (North Carolina), Sometimes the Emperor Is Indeed Scantily Clad, Even If Paul Campos Is the Observer:

Brian Leiter here takes Paul Campos to task for admitting that he doesn't "know] what it means" to think like a lawyer.  I read Campos as admitting something slightly different -- that he doesn't know what it means to "teach students" how to think like lawyers. The difference is significant.  In my view, Campos is saying a few things that, however embarrassing, are true for most of us in law teaching:  as a group, we don't really know why we do what we do in the classroom or how effective our methods are. ...

I would add these observations:

* Once in a faculty position, most law professors receive no training in teaching and are slow to seek out development resources from teaching centers on their campuses.  (Count me among the slow, at least until I started running one of those centers.)

* Mentoring efforts for junior faculty are much likelier to focus on scholarship than teaching.

* Most law faculty members (of all levels of seniority) generally receive no more peer feedback on their teaching than they absolutely must.

* The more prestigious the institution, the more teaching is seen as a hindrance to research, the less time people spend in the classroom, the more a reduced teaching load is dangled as a hiring or retention incentive, and the harder faculty members work to find ways of getting release time from teaching.  (As with all rules, there are exceptions, but who could deny that this is the rule?)

February 22, 2013 in Legal Education | Permalink | Comments (4) | TrackBack (0)

Tax Analysts Hosts Conference Today on The Federal Income Tax: Has It Run its Course?

Federal Income TaxTax Analysts hosts a roundtable discussion on The Federal Income Tax: Has It Run its Course? at the National Press Club in Washington, D.C. today at 9:00 - 11:00 a.m. EST:

Please join us for a roundtable discussion on whether the federal income tax, which celebrates its 100th birthday this year, can retain its role as a prime federal revenue source.
  • Christopher E. Bergin (President and Publisher, Tax Analysts) (moderator)
  • Jared Bernstein (Senior Fellow, Center on Budget and Policy Priorities)
  • Robert Goulder (Editor in Chief of International Publications, Tax Analysts)
  • Michael J. Graetz (Professor of Tax Law, Columbia Law School)
  • Joseph J. Thorndike (Director of the Tax History Project, Tax Analysts)

February 22, 2013 in Conferences, Tax, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

WSJ: New Tax Riddle: S or C?

Wall Street Journal:  New Tax Riddle: Pick S or C:

Business owners can't change the tax code, but many of them say they might change the way their businesses are structured in order to pay less tax. ...

This year personal income-tax rates for the highest earners—single filers exceeding $400,000 and joint filers exceeding $450,000—rose to 39.6% from 35% in 2012. ... The top corporate-tax rate, by contrast, is 35%, though it might decline if Congress overhauls corporate taxes. ...

Thirty-five percent of 848 small-business owners and chiefs surveyed by The Wall Street Journal and Vistage International, a peer-advisory firm for CEOs and senior executives, said they would consider reorganizing into C-Corporations if corporate-tax rates were cut. ...

Ninety-five percent of all business entities declare business profits on their owners' personal tax returns, according to an August 2012 report from Congress's Joint Committee on Taxation. Some experts say C-Corporations may not significantly lower these business owners' tax bills—and might raise their tax burden.

"Even though on the surface you're looking at 35% versus 39.6%, it's a deceptive comparison," says Robert W. Wood, a tax lawyer with Wood LLP in San Francisco. "There may be a slight short-term advantage in C-Corporations, but there are a number of negative long-term implications that would outweigh short-term benefit."

For example, C-Corporation profits can be double-taxed. In addition to the corporate tax on profits, owners also would owe personal taxes on any money they take out of the company as dividends. The double tax kicks in when a business is sold, too.

Another potential problem is that a firm that switches from an S-Corporation generally has to remain a C-Corporation for at least five years....

In the survey, 29% said they wouldn't consider reorganizing into C-Corporations, even if corporate tax rates fell.

February 22, 2013 in Tax | Permalink | Comments (1) | TrackBack (0)

Hickman Presents Unpacking the Force of Law at Illinois

HickmanKristin Hickman (Minnesota) presented Unpacking the Force of Law at Illinois yesterday as part of its Faculty Lecture Series:

In 2011, in Mayo Foundation for Medical Education and Research v. United States, the Supreme Court held that general authority Treasury regulations adopted using notice-and-comment rulemaking carry the force of law and thus are eligible for Chevron deference. In the wake of Mayo, courts and scholars are now struggling with its implications for whether temporary Treasury regulations and IRB guidance documents (revenue rulings, revenue procedures, and notices) that lack notice and comment but are enforceable through civil penalties are likewise eligible for Chevron deference and, relatedly, whether these formats are in fact subject to APA notice-and-comment rulemaking requirements. Currently prevailing judicial tests for evaluating these questions do not offer clear or easy answers for the tax context. Ultimately, both questions turn on whether the agency actions in question carry “the force of law.” The purpose of this article is to take a step back from existing doctrinal standards and to sort through the basic administrative law principles and Supreme Court precedents that drive those standards in an effort to develop a coherent approach to Treasury and IRS rulemaking and judicial review thereof.

February 22, 2013 in Colloquia, Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Feldstein: A Simple Route to Major Deficit Reduction: Capping Deductions at 2% of AGI

Wall Street Journal op-ed:  A Simple Route to Major Deficit Reduction, by Martin Feldstein (Harvard University, Department of Economics):

Putting a cap on tax expenditures—those features of the tax code that are a substitute for direct government spending—can break the current fiscal impasse and prevent the dangerous explosion of the national debt. If a cap is combined with entitlement reforms, the government will also be able to reduce tax rates and increase some spending to accelerate the economic recovery. ...

Limiting the tax savings from all deductions and the two major tax exclusions to 2% of an individual's adjusted gross income would reduce the deficit in 2013 by $220 billion. This 2% cap does not refer to the amounts of the deductions and exclusions but to the tax saving. This means that for someone taxed at a 25% marginal tax rate, the 2% cap would limit deductions and exclusions to 8% of that individual's adjusted gross income.

The 2% cap could also be modified to retain the existing deduction for all charitable contributions and to allow employees to exclude the first $8,000 of employer-paid health-insurance premiums from the cap. This would still reduce the current year's deficit by $141 billion. That translates to about a $2.1 trillion reduction in the national debt over the next decade.

Higher tax rates, in short, are not necessary in order to raise substantial revenue. Indeed, some of the $2.1 trillion could be used to reduce current tax rates and promote growth.

February 22, 2013 in Tax | Permalink | Comments (6) | TrackBack (0)

Call for Participants: Workshop on Historical Approaches to Fiscal Sociology

SSHASocial Science History Association, 5th Annual Workshop on Comparative Historical Approaches to Fiscal Sociology:

In recent years, scholars from a variety of disciplines have embarked on an innovative wave of multidisciplinary research on the social and historical sources and consequences of taxation. We invite interested graduate students from history, law, and the social sciences to participate in a one-day workshop on this “new fiscal sociology.” In addition to brief lectures introducing students to the basics of taxation and the comparative history of taxation, the workshop will consist of discussion of classic and contemporary texts.

The workshop will be held on Wednesday, November 20th, in Chicago, IL in conjunction with the annual meetings of the Social Science History Association (SSHA). Interested students will also have a chance to present their own work on Thursday, November 21st, as part of the SSHA conference.

Space is limited. Small housing and travel stipends will be provided for a limited number of applicants under a grant from the National Science Foundation.

Applicants should submit a CV and a paragraph explaining their interest in this workshop, and (if applicable) a draft of a research paper that they would be willing to present at the SSHA. Preference will be given to students who also submit conference papers, but we encourage applications from all students interested in the workshop, including those at early stages of their graduate career.

Submit materials via e-mail to:
Monica Prasad, Department of Sociology, Northwestern University; and
Ajay Mehrotra, Maurer School of Law, Indiana University – Bloomington; and
Isaac Martin, Department of Sociology, University of California – San Diego,
no later than February 22, 2013.

February 22, 2013 in Conferences, Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, February 21, 2013

National Jurist Acknowledges 67% Error Rate, But Sticks With Revised Law School Rankings

NJ CoverThe National Jurist has revised its new law school rankings system after admitting it made errors in 67% of the law school data it originally reported from RateMyProfessors.com (which counts 20% in their rankings). Jonathan Adler (Case Western) and Brian Leiter (Chicago) rightly argue that the National Jurist should scuttle their rankings:

Adler:  "Even if one were to believe that it was reasonable to use RMP scores in the first place — and it was not (as discussed here and here) — this degree of sloppiness  is appalling.  It was utterly  irresponsible for NJ to go to press with rankings based on such slipshod work, and a disservice to the prospective students NJ was purporting to serve.  Brian Leiter is correct – NJ should simply confess error, deep six these rankings, and start over from scratch."

Leiter:  "The editors have appended a list of articles on "Rate My Professors," but as I noted before, the literature (if you actually read it) does not support the use to which National Jurist put it.  They still should withdraw the entire ranking, and hire some educational and statistical consultants to come up with a worthwhile metric."

Update: Above the Law,  National Jurist Needs To Delete Their Law School Rankings And Apologize To Us All For Wasting Our Time

February 21, 2013 in Law School Rankings, Legal Education | Permalink | Comments (3) | TrackBack (0)

Camp Presents The Taxation of Electronic Gaming Today at Indiana

CampBryan Camp (Texas Tech) presents The Play’s the Thing II: The Taxation of Electronic Gaming at Indiana today as part of its Tax Policy Colloquium hosted by Leandra Lederman:

This article proceeds as follows. Part I describes the world of electronic gaming, which encompasses not only casual gaming on the internet but also electronic gaming in casinos. Part II reviews the foundational concept of “gross income” to show how current legal doctrine is influenced by both economic theory and the need for practical accounting. Part III looks at the unsettled nature of current tax treatment of redeemable game credits and critiques the current thinking expressed by the IRS, courts and commentators. Part IV then defends the idea that gains received from electronic gaming should properly be accounted for and taxed only when actually redeemed for cash or cash-equivalent.

February 21, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Mark Moreau and Carlton Smith Receive Janet Spragens Pro Bono Award

ABA Tax Section Logo (2012)ABA Tax Section Press Release (Feb. 20, 2013):

The ABA Section of Taxation presented its annual Janet Spragens Pro Bono Award to Mark Moreau, Co-Executive Director, Southeast Louisiana Legal Services in New Orleans, and Carlton Smith, Clinical Associate Professor of Law and Director, Tax Clinic, Benjamin N. Cardozo School of Law at Yeshiva University, during a luncheon on Jan. 26 at the Section’s 2013 Midyear Meeting in Orlando, Fla.

The Janet Spragens Pro Bono Award, named after the late American University Law professor who greatly contributed to ensuring representation for low-income taxpayers, is presented each year to an individual lawyer or law firm that has demonstrated outstanding and sustained commitment to pro bono legal services, particularly with respect to federal and state tax law.

February 21, 2013 in ABA Tax Section, Legal Education, Tax | Permalink | Comments (0) | TrackBack (0)

Repetti & Ring: Horizontal Equity Revisited

James R. Repetti ( Florida Tax ReviewBoston College) & Diane M. Ring (Boston College), Horizontal Equity Revisited, 13 Fla. Tax Rev. 135 (2012):

In the years since McDaniel and Repetti’s 1993 article evaluating the intellectual landscape on horizontal equity (“HE”), the question has continued to generate controversy and debate. Perhaps one way to encapsulate the question after all this time is to ask - if we started with HE as our motivating concept in setting tax policy and burdens where would we be? If HE says treat equals the same, what does our tax system look like? The answer is - we don’t know because the term has no independent meaning for fairness and equality. We must turn to some theory of distributive justice to determine equality and to determine an appropriate tax burden. At this point HE collapses into one concept, which is generally referred to as VE. The crucial point is not that this single concept is VE, but that VE and HE are together a single concept which lacks normative content and is itself only a proxy for theories of distributive justice. It is a detour in history that led us to frame the issues of equality and fairness in the tax system in the language of VE and HE -- a path which has both masked the emptiness of the concepts and overemphasized the possibility of two, distinct fairness inquires. We have been side-tracked from our larger task of tackling our disagreements over the underlying questions of distributive justice, but perhaps can return now with renewed vigor to these intractable questions.

For those who remain committed to a gut sense that HE means something, we would say, “yes, but a different something.” Several of the post-1993 authors discussed herein construct a role for HE, but it is not a role in determining tax burdens and tax equity. Instead, HE became the language for expressing ideas about the appropriate process for determining tax policy and the administration of the tax system. We question the usefulness of viewing HE this way because HE does not provide guidance as to how administration of the tax system should proceed. But another role for HE may be that it represents agreement that governments should be required to articulate reasons for treating taxpayers differently. Perhaps this notion that governments should explain its reasons for treating taxpayers differently is the unstated but visceral commitment to HE that has continued to spark debate over the past 20 years. We don’t imagine the debate is over, but we look forward to a deepening inquiry into the driving questions of distributive justice as pillars of our tax policy.

February 21, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Californians Pay Second Highest Capital Gains Tax Rate in the World

Tax Foundation logoTax Foundation: The High Burden of State and Federal Capital Gains Taxes:

As Congress begins to debate tax reform in the coming months, there is one tax that they should pay close attention to: the capital gains tax. The capital gains tax is a tax on profit through the sale of property or investments. At the beginning of this year, the top marginal statutory capital gains tax rate was increased to 23.8% from 15%. Although lower than the tax on ordinary income, states also tax capital gains, some of them as high as 13.3%, adding an additional tax burden to savers and investors. Some taxpayers could pay up to a 33% tax on capital gains, a rate that far exceeds rates throughout the world. This high tax rate has long-term negative implications for the economy as people save and invest less and capital seeks higher returns in other countries.

Long-term Capital Gains Rate

Rank

Country/State

Capital Gains Rate

1

Denmark

42.0%

2

California

33.0%

3

France

32.5%

4

Finland

32.0%

5

New York

31.4%

6

Oregon

31.0%

7

Delaware

30.4%

8

New Jersey

30.4%

9

Vermont

30.4%

10

Maryland

30.3%

11

Maine

30.1%

12

Ireland

30.0%

13

Sweden   

30.0%

14

Idaho

29.7%

15

Minnesota

29.7%

16

North Carolina

29.7%

17

Iowa

29.6%

18

Hawaii

29.4%

19

District of Columbia

29.1%

20

Nebraska

29.1%

21

Connecticut

29.0%

22

West Virginia

28.9%

23

Ohio

28.7%

24

Georgia

28.6%

25

Kentucky

28.6%

February 21, 2013 in Tax, Think Tank Reports | Permalink | Comments (3) | TrackBack (0)

Joint Tax Committee Quadruples Cost Estimate of MLP Tax Break for Oil and Gas Pipeline Companies

Bloomberg:  U.S. Quadruples Pipeline Tax Break Cost to $7 Billion:

A tax break used by oil and gas pipeline companies ... will cost the U.S. government $7 billion through 2016, about four times more than previously estimated, Congress’s tax scorekeepers said this month. The nonpartisan Joint Committee on Taxation quadrupled its cost estimate for exempting the fast-growing “master limited partnerships” from corporate income tax in the year ended in September to $1.2 billion from $300 million. The annual cost will rise to $1.6 billion by fiscal 2016, the committee said.

The revision reflects the growth of tax-free publicly traded partnerships. They have taken over the U.S. pipeline business and are expanding into the rest of the oil and gas industry, partly by gobbling up dozens of tax-paying companies. With President Barack Obama and congressional Republicans calling for a tax overhaul, the higher cost estimate may make it harder for industry to protect the MLP subsidy, said John Buckley, a tax professor at Georgetown University Law Center. ...

The estimate increased primarily because the latest data show MLP’s are generating more income than before, said Thomas Barthold, the chief of staff of the committee. ...

MLP’s don’t pay corporate income taxes because they’re structured as partnerships, and they don’t distribute taxable dividends. Individual members pay personal income tax on any profits, offsetting to some extent the government’s loss of revenue. In 1987, six years after large businesses started forming publicly traded partnerships, Congress passed a law requiring them to pay the same taxes as corporations, a rate that is currently 35%. The law included an exception for industries involving oil and gas and other natural resources.

Since then, the pipeline industry has mostly shifted to the partnership structure. Two of the biggest are Houston-based Kinder Morgan, run by billionaire Richard Kinder, and Enterprise Products Partners LP.  

For more, see Karen C. Burke (San Diego), Passthrough Entities: The Missing Element in Business Tax Reform, 40 Pepp. L. Rev. ___ (2013).

February 21, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

Supreme Court Hears Oral Argument in PPL Corp. v. Commissioner

United States Supreme CourtThe U.S. Supreme Court yesterday heard oral argument in PPL Corp. v. Commissioner, Docket No. 12-43 (Third Circuit's opinion here). The issue presented is:

Whether, in determining the creditability of a foreign tax, courts should employ a formalistic approach that looks solely at the form of the foreign tax statute and ignores how the tax actually operates, or should employ a substance-based approach that considers factors such as the practical operation and intended effect of the foreign tax. 

The transcript of the oral argument is here.  Allison Christians (McGill) previews the oral argument on SCOTUSBlog. Press coverage of the oral argument:

Prior TaxProf Blog coverage:

February 21, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

Tax Court Denies Former NFL Star Bill Romanowski's Horse Breeding Expense Deduction

RomoThe Tax Court yesterday (1) upheld a $4.75 million tax deficiency against former NFL player Bill Romanowski and his wife and denied the couple's claimed deductions for expenses related to their horse-breeding activity; and (2) denied $950,000 in accuracy-related penalties on the ground that the couple reasonably relied on the advice of Rodney Atherton, a former tax partner at Greenberg Traurig. Romannowski v. Commissioner, T.C. Memo. 2013-55 (Feb. 20, 2013).

Bloomberg, Romanowski Barred by Court From Deducting Horse Costs:

The expenses incurred by the Romanowskis stemmed from an investment in a Kentucky-based horse-breeding business conducted by ClassicStar LLC, whose operators pleaded guilty in 2009 to conspiring to defraud the U.S. by running an illegal tax shelter.  ...  The Romanowskis learned of ClassicStar through Rodney Atherton, an attorney for Greenberg Traurig LLP, which represented the horse breeder at the time on certain tax matters, according to the tax court ruling. ...

The Romanowskis leased mares owned by ClassicStar, which provided boarding and care for the horses and bred them to stallions. The couple “did not have significant interaction with their mares or foals and delegated essentially all the breeding work to ClassicStar,” Goeke wrote. The Romanowskis “did not expect their (mostly hypothetical) foals to appreciate in value to the point where they would recognize a profit,” he said.

February 21, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

Reis: Law Schools Under Siege

Robert I. Reis (SUNY-Buffalo), Law Schools Under Siege: The Challenge to Enhance Knowledge, Creativity, and Skill Training, 38 Ohio N.U. L. Rev. 855 (2013):

The Citadel of legal education stands besieged by attacks from students and practitioners alike regarding the lack of defined skill training in contemporary legal education. The belief is that graduates of law schools are not adequately prepared to practice law. This challenge to the model of legal education is not new. Law schools have historically focused on theory using readings and questioning to create the foundation and knowledge base of law and lawyering. That foundation has been shaken by diminished course requirements and an increase in attracting students and faculty by giving them the freedom to choose electives they may desire. At the same time, gaping holes in core knowledge requirements necessary to practice law may result. Students are under increasing financial pressures and uncertain futures. They face a myriad of distractions that affect the learning process and classroom attendance. Students have limited immersion and are barely insulated from the distractions of the world around them. Law school courses can bridge some of these issues if they are configured to engage the students and bring them back to the classroom in both body and spirit, as active participants in the learning experience. Law schools must focus their attention on requiring courses that provide a full and functional knowledge base necessary for all lawyers. They must, in this required course paradigm, include clear skill opportunities in courses, seminars, practicums, clinics, and, as this Article suggests, the newly formed Law School Law Firm, staffed by academic practitioners and requiring participation from all students in the final year. The Law School Law Firm should also provide the possibility of a fourth year of study, with tuition covered by the earnings of the Law Firm, as well as a stipend to qualified students who would earn an LL.M. in Practice and be deemed "certified for practice." This transition can bridge fluctuations in the market place for employment opportunities and produce “practice ready” graduates. The future of the law, education, and practice is clearly what we make of it today.

February 21, 2013 in Legal Education | Permalink | Comments (0) | TrackBack (0)

Mirkay: Globalism, Public Policy, and Tax-Exempt Status

Nicholas A. Mirkay III (Creighton), Globalism, Public Policy, and Tax-Exempt Status: Are U.S. Charities Adrift at Sea?, 91 N.C. L. Rev. ___ (2013):

This article wrestles with whether charitable organizations’ international activities can or should impact such organizations’ domestic tax exemption. It addresses the issues raised by such international activities — if those activities contravene current U.S. foreign policy or international law is a charity’s tax-exempt status adversely affected? Does such contravention implicate the public policy doctrine? On one hand, this article agrees with other legal scholars that the public policy doctrine needs congressional attention, including some codification of the doctrine to provide legislative boundaries and ensure against arbitrary and capricious application by the Internal Revenue Service (“IRS”). On the other hand, this article contends that the automatic inclusion of U.S. foreign policy and international law as components of “established public policy” would be administratively impracticable and onerous and would result in significant compliance difficulties for charitable organizations. Considering all these challenges, this article nevertheless proposes that some codification of the public policy doctrine accompanied by a listed transaction scheme, similar to those employed in other areas of the Internal Revenue Code (“Code”), could provide Congress and ultimately the IRS with the ability to target certain international activities as inherently in conflict with tax-exempt status. In addition, this article proposes that the codification of the public policy doctrine should include an excise tax regime, as an alternative to revocation, to address isolated or small violations of the public policy doctrine in relation to a charitable organization’s overall tax-exempt activities. Although these proposals are not without pitfalls and criticisms, they will nevertheless provide practical guidance to charitable organizations, thereby aiding compliance and ensuring uniform treatment of charitable organizations with international activities or operations.  

February 21, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 20, 2013

More on the New Emmanuel Saez Income Inequality Data

Following up on Monday's post on the new income inequality data from Emmanuel Saez (UC-Berkeley): 

Chart 11

What should we make of these numbers? One approach is to stress the increase in wealth inequality, deploring the gains of the top 1% while lamenting the decline in the income of the remainder of the population. But this approach is only half right. We should be uneasy about any and all income declines, period. But, by the same token, we should collectively be pleased by increases in income at the top, so long as they were not caused by taking, whether through taxation or regulation, from individuals at the bottom.

This conclusion rests on the notion of a Pareto improvement, which favors any changes in overall utility or wealth that make at least one person better off without making anyone else worse off. By that measure, there would be an unambiguous social improvement if the income of the wealthy went up by 100% so long as the income of those at the bottom end did not, as a consequence, go down. That same measure would, of course, applaud gains in the income of the 99% so long as the income of the top 1% did not fall either.

This line of thought is quite alien to thinkers like Saez, who view the excessive concentration of income as a harm even if it results from a Pareto improvement. Any center for “equitable growth” has to pay as much attention to the first constraint as it does to the second. Under Saez’s view of equity, it is better to narrow the gap between the top and the bottom than to increase the overall wealth. ...

Rather than focus on “equitable growth,” the President should focus on flattening the income tax and deregulating labor markets. Today’s constant emphasis on progressive taxation and government intervention in labor markets will continue to lead the country, especially the middle class, on a downward path.

(Hat Tip: Bill Turnier.)

February 20, 2013 in Tax | Permalink | Comments (19) | TrackBack (0)

Bartlett: Who Pays the Corporate Income Tax?

New York Times:  Who Pays the Corporate Income Tax?, by Bruce Bartlett:

The United States has had a corporate income tax since 1909, but in all the years since there is a major question about it that economists haven’t been able to answer satisfactorily: who pays it? The possibility that Congress may act on corporate tax reform this year makes this a highly salient question. ...

Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices. All economists reject that idea. ...

That leaves two remaining groups that may bear the burden of the corporate tax: workers and shareholders.

Most economists now agree that the burden of the corporate income tax falls on labor to some extent, but there is disagreement over the degree. This is important because the political prospects for cutting the statutory corporate tax rate, a goal shared by all tax reformers, may depend on the extent to which it can be shown that workers will benefit.

The just-published March 2013 issue of The National Tax Journal, the principal academic journal devoted to tax analysis, contains four articles by top scholars who have sought to clarify the incidence of the corporate income tax. Unfortunately, there is no consensus.

February 20, 2013 in Scholarship, Tax | Permalink | Comments (1) | TrackBack (0)

NLJ: Update on Lawsuits Against Law Schools Over Allegedly Fraudulent Placement Data

National Law Journal:  Plaintiffs Take Law School Fraud Cases to New York's Highest Court:

The New York courts haven't been friendly to a spate of fraud class actions targeting law schools, but the attorneys behind the suits aren't throwing in the towel just yet.

They have asked the New York State Court of Appeals to review an intermediate appellate panel's December dismissal of a suit brought by nine former students who allege New York Law School inflated its postgraduate employment statistics to trick them into enrolling.

The plaintiff's legal team—led by Jesse Strauss, Frank Raimond and David Anziska—argued in a motion for leave to appeal filed on February 19 that the Court of Appeal—New York's highest court—should weigh in on the case, given that several lower court judges have cited differing grounds for dismissing nearly identical cases. The New York dismissals also are out of sync with rulings in California that have been more favorable to similar fraud suits, they argued. ...

The New York Law School case was among the first of the 15 fraud actions against law schools around the country. (Different attorneys are handling the very first case, against Thomas Jefferson School of Law.)

New York County, N.Y., Supreme Court Justice Melvin Schweitzer dismissed the New York Law School case in March 2012—the first in a set of legal roadblocks the law school litigants have faced. ...

A trial judge dismissed a nearly identical case against Albany Law School in early January, and Strauss said he was preparing an appeal. The parties were still awaiting a decision on the motion to dismiss their case against Brooklyn Law School, which Kings County, N.Y., Supreme Court Justice David Schmidt heard last August. A motion to dismiss their case against the Hofstra University Maurice A. Deane School of Law was also pending.

Similar suits have also faced an uphill climb in Illinois, where cases against DePaul University College of Law, Chicago-Kent College of Law and The John Marshall Law School have been dismissed. There is likely to be a consolidated appeal in those cases, Strauss said.

Their fraud suit against the Thomas M. Cooley Law School also was dismissed, and is under appeal before the U.S. Court of Appeals for the Sixth Circuit.

California has been the one bright spot for plaintiffs in law school litigation, with suits against California Western School of Law; Golden Gate University School of Law; the University of San Francisco School of Law; Southwestern Law School and Thomas Jefferson School of Law surviving initial motions to dismiss.

February 20, 2013 in Legal Education | Permalink | Comments (1) | TrackBack (0)

Investing in Tax Breaks: Assessing the Outcomes of Political Strategy Choices

Jennifer L. Brown (Arizona State University, W.P. Carey School of Business), Katharine D. Drake (University of Arizona, Eller College of Management) & Laura Wellman (Arizona State University, W.P. Carey School of Business), Investing in Tax Breaks: Assessing the Outcomes of Political Strategy Choices:

This study examines the interaction of two corporate political tactics, campaign financing activity and lobbying. Following prior literature, we consider campaign financing activity (PAC contributions) as an investment in access and differentiate this activity from lobbying, which we consider a more direct attempt to influence policy. We examine the role of both political tactics and their potentially complementary relationship in a tax setting, and find that investing in access to candidates appears to enhance attempts to influence policy and is associated with lower levels of future cash ETRs. We then investigate a second potential benefit of campaign financing activity, more sustainable tax savings over time. Prior management literature suggests that firms choose from a menu of political strategies, and that the most proactive firms, those that invest in continued exchanges with policymakers, should experience reduced variability in outcomes over time (Hillman and Hitt 1999). We demonstrate that the most politically active firms across both dimensions of access and tax-specific influence also enjoy lower variability in cash ETR.

February 20, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Johnston: Tax Havens Let Billions Vanish Into Thin Air

Sacramento Bee op-ed:  Tax Havens Let Billions Vanish Into Thin Air, by David Cay Johnston:

As you work on your state income tax return, give some thought to how much extra state income tax you must pay to make up for very wealthy California residents and multinational corporations who squirrel away money offshore.

The burden they shifted onto you came to $2.9 billion from wealthy individuals and $4.2 billion from big companies in the 2011-12 state budget year, a pioneering new study estimates [The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure From Tax Loophole Abuse]. Together the escaped tax comes to $7.15 billion that you have to make up through higher state taxes, fewer services or the state taking on more debt to fund current operations. ...

California, with 12% of the nation's population, sustained 18% of the losses because of its concentration of very wealthy people and multinational companies. Some of these companies, such as Google and Hewlett-Packard, are well known for their use of tax havens to avoid taxes.

February 20, 2013 in Tax | Permalink | Comments (3) | TrackBack (0)

Caron: Tax Advice for the Second Obama Administration

Tax Symposium GraphicPaul L. Caron (Cincinnati & Pepperdine), Tax Advice for the Second Obama Administration, 40 Pepp. L. Rev. __ (2013):

Twenty-five of the nation’s leading tax academics, practitioners, journalists, and public intellectuals gathered in Malibu, California on the Friday before President Obama’s second inauguration to plead for tax reform. The papers published in this issue of the Pepperdine Law Review provide very different prescriptions for America’s tax ills. But there is a unanimous diagnosis that the country’s tax system is sick indeed. A re-elected president’s inauguration offers a particularly propitious moment to put politics aside and embark on a treatment plan. If our lawmakers are interested in healing our tax wounds, the ideas presented in these pages offer a good place to begin. They run the gamut from relatively minor procedures to total transplantation. But all would improve the health of our current tax system.

Keynote Address:  Michael Graetz (Columbia), Tax Advice for the Second Obama Administration, 138 Tax Notes 631 (Feb. 4, 2013)

Panel #1:  The Buffett Rule, the 1%, and the Fairness/Growth Divide

  • Dorothy A. Brown (Emory), The 535 Report: A Pathway to Fundamental Tax Reform, 40 Pepp. L. Rev. ___ (2013)
  • Francine J. Lipman (UNLV), Access to Tax InJustice, 40 Pepp. L. Rev. ___ (2013)
  • Kirk Stark (UCLA) & Eric M. Zolt (UCLA), Tax Reform and the American Middle Class, 40 Pepp. L. Rev. ___ (2013)
  • David Brunori (Tax Analysts) (moderator)
  • Bruce Bartlett (New York Times) (commentator)
  • David S. Miller (Cadwalader, Wickrsham & Taft, New York) (commentator)

Panel #2:  Estate and Gift Tax

Panel #3:  Business and International Taxation (1)

Panel #4:  Business and International Taxation (2)

Luncheon Address and Closing Remarks (What Have We Learned Today?):  David Cay Johnston (author/journalist)

February 20, 2013 in Conferences, Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

NYU Hosts Program Today on Tax Reform and the Future of Fiscal Policy

NYU Logo 2NYU hosts a forum today on Cliffs Forever? Tax Reform and the Future of Fiscal Policy:

After weeks of negotiations, in the first days of January, Congress and the Obama Administration struck a last-minute deal that averted the so-called "fiscal cliff," a combination of federal tax increases and budget cuts. Yet this compromise merely deferred until March 1 "sequestration," which will cause the military and dozens of other government agencies to face about $1 trillion in automatic budget cuts over the coming decade. And, the debt limit again looms later in the year. Did Congress make progress toward reducing our fiscal shortfalls by enacting tax increases earlier this year? What is likely to happen in the upcoming sequestration negotiations and how will it affect the economy? Is tax reform the way forward, or is it a distraction? And why do budget and tax debates appear to occur only when the clock is ticking on looming high-stakes deadlines?

February 20, 2013 in Conferences, Tax | Permalink | Comments (0) | TrackBack (0)

Law Grads Need to be 'Client-Ready' (Not 'Practice-Ready')

National Law Journal op-ed:  Law School Grads Should be 'Client Ready', by Ruth Anne Robbins (Rutgers-Camden):

The phrase "practice ready" is something of a misnomer. It was popularized by The New York Times in late 2011 in a feature about law firms teaching law graduates how to practice law because law schools give it short shrift. The Times borrowed the phrase from the ABA's resolution about legal education, adopted that summer. Since then, the phrase has made dozens of appearances online and in print. ...

The time has come for entire law school faculties to move the focus of nonclinical experiential courses toward the notion of client. True curricular reform will begin when law schools, consistent with the ABA's call, choreograph a curriculum that is constructed around client-centeredness.

See also Paul Horwitz (Alabama), What Ails the Law Schools?, 111 Mich. L. Rev. ___ (2013):

[T]he role and needs of the client have been surprisingly marginal in recent discussions of law school reform. The client needs to be a prominent part of reform discussions, which suggests, contrary to some extant views, that curricular reform ought to continue to be part of the discussion along with economic and structural reform.

February 20, 2013 in Legal Education | Permalink | Comments (1) | TrackBack (0)

CBPP: The Case Against Cutting State Personal Income Taxes

CBPPCenter on Budget and Policy Priorities:  Cutting State Personal Income Taxes Won’t Help Small Businesses Create Jobs and May Harm State Economies, by Michael Mazerov:

There is almost nothing in economic theory or empirical research to support an assertion that cutting state personal income taxes will have a significant impact on the emergence, success, or job-creation performance of small businesses.  The vast majority of any revenue forgone from such tax cuts will flow to people who don’t own businesses, and of the limited tax savings that does happen to flow to business owners, the vast majority will be received by people with no intent or authority to hire additional people.  State personal income tax cuts do not increase the cash flow of most small businesses sufficiently to finance the creation of new jobs, and, conversely, small businesses with good growth prospects do not need to rely on their own cash flow to finance expansion.

Neither economic theory nor empirical research support the assertion that personal income tax cuts inherently encourage increased work-effort on the part of small business owners that could generate additional hiring as a side-effect.  Nor is there any evidence that entrepreneurs on the cusp of starting their ventures are likely to be attracted to a state merely because it cuts its personal income taxes.  Perhaps most importantly, a very detailed and careful empirical study commissioned by the U.S. Small Business Administration concluded, in the words of the authors, that there is “no evidence of an economically significant effect of state tax [policy] portfolios on entrepreneurial activity. . . .” 

While there is no compelling evidence that the large state income tax cuts promoted by a number of governors would be a cost-effective means of encouraging entrepreneurship, there is a significant risk that the cuts would seriously impair the ability of these states to fund infrastructure, education, public safety, and other services that are a critical underpinning of a healthy state economy.  Policymakers should therefore reject proposals for state personal income tax cuts as a means of encouraging the birth and growth of small businesses and focus instead on more targeted approaches to assisting these firms.

February 20, 2013 in Tax, Think Tank Reports | Permalink | Comments (3) | TrackBack (0)

Faculty Development, Faculty Incentives, and Law School Innovation

Stephen Daniels (American Bar Foundation), William M. Sullivan (Denver) & Martin Katz (Dean, Denver), Analyzing Carnegie's Reach: The Contingent Nature of Innovation, 62 J. Legal Educ. ___ (2013):

Our interest is curricular innovation, with a focus on the recommendations of the 2007 Carnegie report – Educating Lawyers. Recognizing that meaningful reform requires an institutional commitment, our interest also includes initiatives in the areas of faculty development and faculty incentive structure that would support curricular innovation. Additionally, we are curious as to what might explain change and whether certain school characteristics will do so or whether external factors that challenge legal education offer an explanation. To explore these issues we surveyed law schools (a 60.5% response rate). The results show that while there is much activity in the area of curriculum – including the key matters of lawyering, professionalism, and especially integration – there is much less in the important areas of faculty development and faculty incentive structure. School characteristics, including rank, do not provide a sufficient explanation for the patterns emerging from the survey’s results. Additionally, activity by law schools with regard to curriculum, faculty development, and faculty professional activity is not simply a response to external challenges either. However, it appears that those pressures are providing a potential window of opportunity for innovation, reinforcing the need for change, and accelerating its pace.

February 20, 2013 in Legal Education | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 19, 2013

NYU Tax Law Review Publishes New Issue

NYUThe Tax Law Review has published a new issue (Vol. 65, No. 4 (Summer 2012)), Tax Law and Healthcare Reform. 65 Tax L. Rev. 619-858 (2012):

February 19, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Rutgers Dean: Legal Profession Should Adopt Medical Residency Model

New York Times op-ed:  To Practice Law, Apprentice First, by John J. Farmer, Jr. (Dean, Rutgers-Newark):

The ABA, which sets the standards for accrediting law schools, met recently in Dallas at a time of existential crisis for legal education. The job market for law school graduates is collapsing; some schools have been misleading, or even fraudulent, in reporting admissions and employment data; tuition and student debt have reached record levels. Some question legal education itself: What is its mission? What value does it add?

Those are legitimate questions. But to answer them for legal education, we also need to ask them of the profession.

Consider this: Nearly half of those who graduated from law school in 2011 did not quickly find full-time, long-term work as lawyers. Yet the need for legal representation has never been greater. ...

Legal education has not so much failed the profession as mirrored it. Law schools have trained students for a profession that has left a huge part of the public unable to afford representation — especially the middle class — and at a cost that perpetuates the problem. ...

There is a way out. Law schools and the legal profession could restore a vibrant job market by making representation easier to obtain. In doing so, they would revive their historic commitment to the balance between acquiring wealth and promoting civic virtue. ... We need, at its entry level, the equivalent of a medical residency. Law school graduates would practice for two years or so, under experienced supervision, at reduced hourly rates; repaying their debts could be suspended, as it is for medical residents.

Law firms would be able to hire more lawyers, at the lower rates, and give talented graduates of less prestigious institutions a chance to shine. The firms, at the end of the residencies, could then select whom to keep. Even for those who don’t make the cut, the residency will have provided valuable experience. The law firms should be required, under this proposal, to offer stipends to help those residents who don’t make the cut but have debt burdens.

(Hat Tip: Bob Kamman.)

Update:  Matt Leicher, How Long Until the NYT Confers a Permanent Editorial Space for Law School Deans?:

Residencies/apprenticeships isn’t a bad idea, except there wouldn’t be enough slots because there isn’t enough demand for legal services.

Real GDP & Legal Sector Value Added (Billions 2005 $)

To the next law school dean who writes in the NYT: There are more law students than there will be jobs available. There should be fewer law students and fewer law schools. Those who wish to work in Smalllaw shouldn’t have to spend three years getting a law degree to become a lawyer. Residencies are nice, but paying workers a pittance and then dumping them on the market doesn’t sound any more attractive than the current system.

February 19, 2013 in Legal Education | Permalink | Comments (3) | TrackBack (0)

Zelenak: Custom and the Rule of Law in the Administration of the Income Tax

Lawrence Zelenak (Duke), Custom and the Rule of Law in the Administration of the Income Tax, 62 Duke L.J. 855 (2012):

From the early years of the federal income tax to the present, the IRS has engaged in what might be termed “customary deviations” from the dictates of the Internal Revenue Code, always in a taxpayer-favorable direction. A prominent current example is the IRS’s “don’t ask, don’t tell” policy with respect to employee-retained frequent flier miles; in a 2002 announcement (which, as of 2012, is still in force), the IRS indicated that such miles were technically within the scope of the statutory definition of gross income, but that the IRS had no intention of enforcing the law. This Essay describes and evaluates the phenomenon of administratively created customary deviations from the Code. After defining the concept of customary deviations and explaining why such deviations are sometimes attractive to tax administrators, the Essay offers a brief historical survey of customary deviations, paying particular attention to the pre-1984 treatment of a miscellany of fringe benefits of employment, and to a spate of recent announcements that the IRS would not enforce the Code’s anti-loss-trafficking rules in certain contexts. The Essay also explains how the development of customary deviations has depended on the absence of third-party standing in tax litigation, and how the lack of any judicial check on unauthorized giveaways by tax administrators threatens rule-of-law values. It concludes with a proposal for legislation aimed at retaining the practical advantages of customary deviations while assuaging rule-oflaw concerns.

February 19, 2013 in Scholarship, Tax | Permalink | Comments (3) | TrackBack (0)

Bloomberg: Reinsurance Tax Dodge Saves Hedge Fund Managers Billions

Bloomberg:  Paulson Leads Funds to Bermuda Tax Dodge Aiding Billionaires:

Last year, about $450 million belonging to top executives at billionaire hedge fund manager John Paulson’s New York firm took a quick round trip to Bermuda. In April, the executives sent the money to a reinsurance company that they’d set up on the island 650 miles off the North Carolina coast. By June, the Bermuda company, which has no employees and sells far less reinsurance than the industry norm, had sent all the cash back to New York, to be invested in Paulson & Co. funds.

By recycling the funds through Bermuda-based Pacre Ltd., the Paulson executives are positioned to legally exploit a little-known tax loophole, reduce their personal income taxes and delay paying the bill for years. “These types of reinsurance companies are permitting U.S. taxpayers to defer -- indefinitely -- U.S. tax,” said David S. Miller, a tax lawyer at Cadwalader Wickersham & Taft LLP. For some, he said, it’s “an unjustified benefit.”

A decade after the IRS threatened to crack down on what it said were abuses by hedge-fund backed reinsurers, more high-profile money managers are setting up shop in tax havens. ... Because reinsurers, which sell coverage to other insurers, manage large pools of capital, they’re a handy way to funnel a U.S. hedge fund investment through a tax haven.

At a time when the Obama administration and Congressional leaders of both parties are calling for a corporate tax overhaul that includes eliminating some loopholes, the reinsurance tax dodge is gaining popularity among hedge funds. The three new reinsurers backed by U.S. hedge fund managers put a combined $1.7 billion back into the managers’ hands. ...

By setting up reinsurance companies there, money managers can take advantage of a loophole in IRS rules. Ordinarily, when hedge fund managers invest in their funds, they pay either the 39.6% rate for ordinary income or the 20% long- term capital gains rate, depending on how frequently securities are traded, plus an extra 3.8% health-law surcharge. If they were to move the hedge funds to tax havens, they would incur IRS penalties on earnings from what the agency calls “passive foreign investment companies.”

Here’s the catch: The IRS doesn’t penalize earnings from insurance companies, which it considers to be “active” businesses. As a result, by routing money through a Bermuda reinsurer, which in turn puts its assets back into their own hedge funds, fund managers can defer any taxes until selling the stake. They then pay only the lower capital gains tax rate.

In the meantime, the money grows tax-free, and the savings add up. Investing $100 million in a hedge fund that returns 15% annually, and paying the top marginal ordinary income rate on profit, results in a $50 million profit after taxes after five years. If the investment is taxed like a Bermuda reinsurer, the gain is $77 million.

To qualify as an active company and avoid the tax penalty, the IRS says firms can’t have a pool of capital that’s far greater than what they need to back the insurance they sell. But the IRS has never specified exactly how much is too much. ...

The IRS in 2001 disclosed plans to clarify its definition of insurance companies, a move that might prevent abuses by hedge funds, Cadwalader’s Miller said. He said it never followed through.

Update:  Linda Beale (Wayne State), Hedge Fund Tax Avoidance Schemes--Using (Purported) Offshore Reinsurers

February 19, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

NY Times: From Stay-at-Home Moms to Back-to-Work Lawyers

New York Times:  From Stay-at-Home Moms to Back-to-Work Lawyers:

Since 2007, the Pace University School of Law in White Plains has been running a program aimed at helping lawyers who had left the field — typically stay-at-home mothers — re-enter the legal profession. Called New Directions, the course consists of 11 weeks of classroom refresher training and then an 11-week internship working as a lawyer in any of a number of settings, including law firms, government and nonprofit agencies and corporate offices. Pace offers two sessions a year, typically of 12 to 18 lawyers each. About 95 percent are women, and the average age is about 50. To date, 150 people have completed the training, with about half going on to paying jobs as lawyers. The cost is $7,000; participants may qualify for retraining grants of up to $3,000 from the United States Department of Labor. Other schools offering similar programs include the American University Washington College of Law Lawyer Re-Entry Program. That course is six days, spread over three weeks, and costs about $1,500; there are no internships. The University of California Hastings College of the Law in San Francisco also has a program.

Following are interviews with three women who completed the Pace New Directions program.

For more, see:

February 19, 2013 in Legal Education | Permalink | Comments (0) | TrackBack (0)

TIGTA: IRS Wastes Millions in Internet Access Fees for Employee Laptops and Blackberrys

TIGTA The Treasury Inspector General for Tax Administration today released Inadequate Aircard and BlackBerry Assignment and Monitoring Processes Result in Millions of Dollars in Unnecessary Access Fees (2013-10-010):

In Fiscal Year 2011, the IRS had approximately 35,000 active aircards and more than 4,400 BlackBerrys assigned to employees, providing them with mobile Internet and e-mail access.  TIGTA found that cost savings can be achieved if the IRS ensures that only those employees with a valid business need are assigned an aircard and/or BlackBerry and provides more effective oversight and monitoring of these devices.  Improved policies and procedures can result in savings of $5.9 million over five years. ...

Processes for assigning and monitoring the use of aircards and BlackBerrys are not adequate to ensure that employees have a business need for the devices.  Assignment of these devices is generally based on job series classifications without adequately ensuring a business need exists.

In addition, the IRS paid approximately $1.1 million during Fiscal Year 2011 for 13,878 aircards and 754 BlackBerrys that were not used for periods of three months to one year.  For example, TIGTA identified 45 aircards and 68 BlackBerrys that were not used at all for the entire 12 months of the fiscal year. 

Finally, 2,560 employees may have been assigned an aircard or BlackBerry without required management approval.  These devices cost the IRS more than $950,000 in Fiscal Year 2011, or about $4.8 million over five years. 

February 19, 2013 in Gov't Reports, IRS News, Tax | Permalink | Comments (4) | TrackBack (0)

2011 Tax Journal Rankings: NYU #1, Virginia #2, Tax Notes #3

Here are the Washington & Lee tax law review rankings, based on citations to articles published in 2004-2011:

Here are the Top 25 tax journals (out of 44 ranked tax journals):

Rank

Tax Journal

Combined

Impact

Law Reviews

Cases

Currency

1

Tax Law Review

100.0

0.98

412

1

1.74

2

Virginia Tax Review

89.6

0.71

554

9

1.00

3

Tax Notes

76.0

0.01

1165

14

0.02

4

Florida Tax Review

60.8

0.63

210

0

0.75

5

Elder Law Journal

57.6

0.54

257

8

0.36

6

Tax Lawyer

44.0

0.21

435

10

0.40

7

Pittsburgh Tax Review

41.6

0.48

85

3

0.42

8

Houston Bus. & Tax J.

35.2

0.31

184

4

0.30

9

Journal of Taxation

28.8

0.06

370

5

0.11

10

Heckerling Inst. Est. Plan.

26.4

0.22

150

0

0.41

11

Akron Tax Journal

22.4

0.25

56

3

1.17

12

National Tax Journal

22.4

0.11

217

0

0.16

13

Marquette Elder's Advisor

17.6

0.14

107

1

0.14

14

Estate Planning

14.4

0.04

172

1

0.17

15

Taxes

14.4

0.05

162

0

0.08

15

Tax Notes International

12.8

0.00

193

0

0.00

17

New Zealand J. Tax'n Law

9.6

0.08

58

0

0.00

18

Tax Management Mem.

9.6

0.03

111

1

0.05

18

Tax Management Int’l J.

5.6

0.02

66

0

0.05

20

Taxation of Exempts

4.0

0.02

33

0

0.08

21

British Tax Review

3.2

0.01

36

0

0.01

22

Corporate Taxation

3.2

0.02

31

0

0.04

23

eJournal of Tax Research

3.2

0.03

16

0

0.03

24

Real Estate Taxation

3.2

0.02

24

1

0.01

25

Tax Mgmt Real Estate J.

3.2

0.02

23

0

0.01

Tax Notes is #1 by a wide margin in citations in law reviews (1165 v. #2's Virginia Tax Review's 554), but fairs relatively poorly (.001, ranked #24) in the Impact Factor category (citations/number of articles published).  My guess is that W&L counted as "articles" all of the advance sheet material in Tax Notes. (Note:  I omitted the NYU Journal of Law and Business from the above chart because it is not a tax journal.)

Prior W&L Tax Journal Rankings:

Update: Thanks to Omri Marian for letting me know that Washington & Lee has released an updated ranking based on citations to articles published in 2005-2012.  I will blog those rankings in a forthcoming post.

February 19, 2013 in Law Review Rankings, Legal Education, Scholarship, Tax, W&L Tax Journal Rankings | Permalink | Comments (0) | TrackBack (0)

IBFD Meetings for Doctoral Tax Researchers and Early Career Tax Scholars

IbfdIn 2013, for the 11th time, IBFD (International Bureau for Fiscal Documentation) will organize its Research Students Meeting for doctoral students. For the 2nd time, parallel meeting for Early Career Scholars will take place.

The purpose of these meetings is to provide doctoral students and early career scholars (post-docs) with an opportunity to discuss their current research projects with leading academic experts and a select circle of colleagues. All participants will benefit from tailored coaching provided by our panels of selected experts, as well as from the input given by their fellow researchers, coming from all around the world. Our aim is to provide researchers with an adequate forum to further develop their projects that, ultimately, will lead to the enhancement of research in the tax field. Applications are open March 4, 2013.

February 19, 2013 in Legal Education, Tax | Permalink | Comments (0) | TrackBack (0)

Dodge: Disallowing Deductions Paid with Excluded Income

Joseph M. Dodge (Florida State), Disallowing Deductions Paid with Excluded Income:

The idea advanced herein, as a thought experiment, is the possibility of expanding (by legislation) -- or possibly interpreting (by Treasury regulation) -- § 265(a)(1) to disallow deductions deemed to have paid out of tax-exempt (i.e., excluded) income. Although § 265(a)(1) already disallows deductions to obtain tax-exempt income (hereinafter referred to as “forward disallowance”), the Treasury has not seriously attempted to systematically disallow deductions paid with tax-exempt income (hereinafter referred to as “backward disallowance”). The reason for this Treasury inattention is undoubtedly a realization that a tracing rule (that would disallow deductions actually paid with tax-exempt income) would, in most cases, be easily avoidable (because cash is fungible) and only serve to unfairly lay a trap for the unsophisticated. This conundrum could be finessed, however, by disallowing that percentage of otherwise-allowable deductions as excluded income bears to total (included and excluded) income – an approach that respects the fungibility of cash.  

February 19, 2013 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Gilbert Posts Tax Papers on SSRN

Monday, February 18, 2013

Shaviro Presents Should Social Security and Medicare be More Market Based? Today at Tulane

ShaviroDaniel N. Shaviro (NYU) presents Should Social Security and Medicare be More Market Based? at Tulane today as part of its Faculty Workshop SeriesShu-Yi Oei is the discussant.

Contemporary political debate about Social Security and Medicare often conflates the issue of the programs’ long-term fiscal sustainability with that of whether their design should be made more market-based, such as by transforming Social Security into a private accounts program and Medicare into a voucher-based program. In fact, the sustainability and design issues are fundamentally separate.

This article assesses the case for making the programs more market-based by using two main conceptual vehicles: (1) the model for understanding the programs’ substantive features and rationales that I offered in my books, Making Sense of Social Security Reform and Who Should Pay for Medicare?, and (2) Paul Samuelson’s classic description of Social Security as providing what we would now call an implicit financial instrument that reflects an intergenerational compact. In the end, it reaches largely skeptical conclusions about altering the programs to use either private accounts or vouchers.

February 18, 2013 in Colloquia, Scholarship, Tax | Permalink | Comments (1) | TrackBack (0)

Villanova Symposium: Taxation of Offshore Accounts, Executive Compensation

Villanova Law LogoNorman J. Shachoy Symposium: U.S. Taxation of Offshore Activity and Regulation of Executive Compensation, 57 Vill. L. Rev. 421-673 (2012):

Leslie Book (Villanova), Introduction:  Offshore Accounts, Corporate Income Shifting, and Executive Compensation, 57 Vill. L. Rev. 421 (2012)

Taxation of Offshore Accounts

Regulation of Executive Compensation

February 18, 2013 in Conferences, Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

NY Times: Incomes Flat in Recovery, but Not for the 1%

New York Times:  Incomes Flat in Recovery, but Not for the 1%:

Incomes rose more than 11% for the top 1% of earners during the economic recovery, but not at all for everybody else, according to new data. The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7% over the period. But there was a wide gap between the top 1%, whose earnings rose by 11.2%, and the other 99%, whose earnings declined by 0.4%. [Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2011 estimates)]

Saez Chart

(Hat Tip: Mike Talbert.)

February 18, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

Alford: Why Is Academic Legal Writing So Bad?

Roger Alford (Notre Dame), Why Is Academic Writing So Bad?:

There is an interesting discussion by Stephen Walt over at Foreign Policy on why academic writing is so bad. It is a subject academics are reluctant to discuss, yet there is no doubt that much of what passes as legal scholarship is dull, disagreeable, undigestable. ...

My own sense is that legal scholarship is better than most academic writing because we are trained at law school and in law firms to be convincing and comprehensible. Once in the academy, we are further trained to reach two audiences: our academic peers and our student gatekeepers who hold the keys to the kingdom. Obscurity may be appropriate for one audience, but not the other. Our law student underlords save us from the trap of most other academics.

So why does legal scholarship still miss the mark?

First, legal scholarship is formulaic. There is an order and predictability to legal writing that stifles creativity. ...

Second, legal scholarship is prosaic. Many legal scholars are more interested in arguments than words. We love the research, but not the writing. We are “ideasmiths” rather than wordsmiths. ...

Third, legal scholarship has a footnote fetish. ...

Fourth, legal scholarship is technical. ... Great legal writing often is about taking dry and tedious ingredients and transforming them into agreeable fare. It will not keep your teenager from rolling her eyes when you explain what you did at work today, but it should keep your colleagues and students from giving up in frustration.

February 18, 2013 in Legal Education, Scholarship, Tax | Permalink | Comments (2) | TrackBack (0)

Professor Allows Students to Cite CNN, But Not Fox News

CNNInside Higher Ed:  A Professor vs. Fox News:

Students in a political science class at West Liberty University were given an assignment recently to keep a "politics journal" in which they would record their reactions to various articles they had selected.

The instructor at the West Virginia public institution included some possible news sources, such as The Economist, BBC, CNN and The Huffington Post. But the instructor also specified that two sources could not be used. One was The Onion, which the assignment notes "is not news" and "is literally a parody."

The other barred source is the one that got the instructor -- Stephanie Wolfe -- scrutiny this week. She banned articles from Fox News, writing: "The tagline 'Fox News' makes me cringe. Please do not subject me to this biased news station. I would almost rather you print off an article from the Onion."

February 18, 2013 in Legal Education, Political News, Tax | Permalink | Comments (2) | TrackBack (0)

WSJ: The New Capital-Gains Maze

WSJWall Street Journal Tax Report:  The New Capital-Gains Maze, by Laura Saunders:

Chances are your capital-gains taxes are going up this year—and if you aren't careful, you could end up paying more than necessary. ...

Under the old system, there were often only two rates: zero and 15%, depending on your income. Now, there are three tax tiers: zero, 15% and 20%.

And that isn't all. There also are three backdoor tax increases that can push your effective rate even higher—to nearly 25%.

Experts say many taxpayers whose rate still is 15% could well owe one-third more than they would have last year. And many top-bracket taxpayers will owe nearly two-thirds more, even if their income is that high only because of a once-in-a-lifetime sale....

Fortunately for investors, there still are ways to minimize the hit—and even dodge it. Strategies include carefully timing investment sales, making charitable donations and family gifts with assets instead of cash, and minimizing certain income. With markets approaching record highs, investors need to know them. ...

Here is what to do to minimize your gains pain this year.

  • Lower your adjusted gross income. ...
  • Take advantage of "air pockets."  The tax code stacks income, deductions and net long-term gains in a way that shrewd taxpayers can exploit. Here's an example: A retired couple has $70,000 of adjusted gross income before capital gains and $30,000 of itemized deductions. (They might also have tax-free income from munis and Roth IRAs.) According to tax rules, the deductions reduce their income to about $40,000. This leaves them with an "air pocket" of about $33,000 before they cross from the zero rate to the 15% rate on long-term gains. ...
  • Give appreciated assets to charity. ...
  • Strategize family gifts. ...
  • Hold on for dear life. ...
  • Consider installment sales. ...
  • Remember the home exemption. ...
  • Beware of lower limits for trusts. ...
  • Don't be driven by taxes. ...

February 18, 2013 in Tax | Permalink | Comments (2) | TrackBack (0)

Facebook to Get $429 Million Tax Refund Despite $1.1 Billion in U.S. Profits

FacebookCitizens for Tax Justice, Facebook's Multi-Billion Dollar Tax Break: Executive-Pay Tax Break Slashes Income Taxes on Facebook-- and Other Fortune 500 Companies:

Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.

Instead, Facebook says it will receive net tax refunds totaling $429 million. Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million.

(Hat Tip: John Stanley.)

February 18, 2013 in Tax | Permalink | Comments (4) | TrackBack (0)

Sullivan: Can States Swap Sales Taxes for Income Taxes?

Tax Analysts Martin A. Sullivan (Tax Analysts), Can States Swap Sales Taxes for Income Taxes?, 138 Tax Notes 789 (Feb. 19, 2013):

Among the 44 states with significant income tax revenue, only a few could repeal their income taxes, replace the lost revenue with sales taxes, and keep sales tax rates below 8% with their current sales tax base (or, for those without sales taxes, with a tax base equal in breadth to the average of other states). They are New Hampshire, Alaska, Montana, Hawaii, and Florida. Two more states, New Mexico and Alabama, might also be able to repeal their income taxes and keep sales tax rates below 8% if they aggressively expanded their sales tax base. In general, states where a tax swap is most likely have relatively low income tax collections and relatively low sales tax rates.

If states already had broad-based consumption taxes in place, a widespread phaseout of state income taxes might be a real possibility. Concerns about regressivity could be addressed with a sales tax rebate to low-income households. But as long as states rely on sales taxes that exclude most services and include business inputs, the difficulties in most states will be insurmountable and the desirability questionable.

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February 18, 2013 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

G-20 Vows Corporate Tax Crackdown

G-20George Osborne (Chancellor of the Exchequer, UK), Pierre Moscovici (Minister of Finance, France) & Wolfgang Schäuble (Federal Minister of Finance, Germany), We Are Determined That Multinationals Will Not Avoid Tax:

Germany, France and Britain want competitive corporate tax systems that attract global companies to our countries and help our economies to grow. They are a significant source of growth, investment, employment and tax. But we also want global companies to pay their fair share of taxes.

International tax standards have struggled to keep pace with our changing economy. This has allowed some multinational companies to restructure their business to minimise the amount of tax they pay, shifting the taxation of their profits away from the jurisdictions where they are being generated, so that they pay less tax than smaller, less international companies.

We are taking steps to clamp down on tax avoidance in our own countries. But acting alone has its limits. Clamp down in one country and those companies, their lawyers and their accountants move elsewhere. In fact, the Organisation for Economic Co-operation and Development has argued that unilateral action could even be counterproductive. That’s why we need to act together.

(Hat Tip: Ann Murphy.)

February 18, 2013 in Tax | Permalink | Comments (0) | TrackBack (0)

TaxProf Blog Weekend Roundup

Sunday, February 17, 2013

Should Law Reviews Take Race, Gender, and Sexual Orientation of Authors Into Account When Selecting Articles?

February 17, 2013 in Legal Education | Permalink | Comments (1) | TrackBack (0)

Top 5 Tax Paper Downloads

SSRNThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with new papers debuting on the list at #4 and #5:

1.  [347 Downloads]  Important Developments in Federal Income Taxation, by Edward A. Morse (Creighton)
2.  [321 Downloads]  Why Tax Revenues Must Rise, by Edward D. Kleinbard (USC)
3.  [244 Downloads]  Occupy the Tax Code: Using the Estate Tax to Reduce Inequality, by Paul L. Caron (Cincinnati) & James R. Repetti (Boston College)
4.  [176 Downloads]  Seven Ways to Strengthen and Improve the L3C, by Cass Brewer (Georgia State)
5.  [173 Downloads]  Dirt Lawyers, Dirty REMICs, by Bradley T. Borden (Brooklyn) & David J. Reiss (Brooklyn)

February 17, 2013 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0) | TrackBack (0)