TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, February 29, 2016

2017 U.S. News Law School Rankings

2017 U.S. NewsRobert Morse (Director of Data Research, U.S. News & World Report) announced today that the new 2017 law school rankings will be released online on Wednesday, March 16 and in hard copy on Tuesday, April 5.  Here is my coverage of the current 2016 law school rankings:

February 29, 2016 in Law School Rankings, Legal Education | Permalink | Comments (2)

Billionaire Wealth Is Increasingly Dynamic, Rather Than Inherited, Especially In The United States

Caroline Freund & Sarah Oliver (Peterson Institute for International Economics), The Origins of the Superrich: The Billionaire Characteristics Database:

This working paper presents a new dataset on the sources of billionaire wealth and uses it to describe changes in extreme wealth in the United States, Europe, and other advanced countries. Th e data classify wealth as either self-made or inherited and identify the company and industry from which it comes. Among self-made billionaires, individuals are further classified as company founders, executives, politically-connected, or in finance. Data analysis shows that the superrich in the United States are more dynamic than in Europe. Just over half of European billionaires inherited their fortunes, as compared with one-third in the United States. Th e median age of a company of a European billionaire is nearly 20 years older than that of an American billionaire. Traditional sectors explain more than half of the rise in wealth in Europe; the financial sector and technology-related sectors together are largely responsible for the rise in US wealth. Th ere is some evidence that rents are higher in the United States than Europe, as not only is the number of US billionaires expanding rapidly, but US billionaires are also getting richer on average over time, especially when wealth is connected to resources, nontradables, or finance.

Figure 4

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February 29, 2016 in Tax | Permalink | Comments (0)

Global Tax Fairness

GlobalGlobal Tax Fairness (Thomas Pogge (Yale) & Krishen Mehta (Tax Justice Network, eds.) (Oxford University Press, 2016):

This book addresses sixteen different reform proposals that are urgently needed to correct the fault lines in the international tax system as it exists today, and which deprive both developing and developed countries of critical tax resources. It offers clear and concrete ideas on how the reforms can be achieved and why they are important for a more just and equitable global system to prevail. The key to reducing the tax gap and consequent human rights deficit in poor countries is global financial transparency. Such transparency is essential to curbing illicit financial flows that drain less developed countries of capital and tax revenues, and are an impediment to sustainable development. A major break-through for financial transparency is now within reach. The policy reforms outlined in this book not only advance tax justice but also protect human rights by curtailing illegal activity and making available more resources for development. While the reforms are realistic they require both political and an informed and engaged civil society that can put pressure on governments and policy makers to act.

U.S. Tax Prof chapter authors include:

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February 29, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (1)

Columbia Symposium:  Exploring Solutions To Persisting Discrimination In Legal Academia

ColumbiaSymposium, The More Things Change ...: Exploring Solutions to Persisting Discrimination in Legal Academia, 31 Colum. J. Gender & L. 1-254 (2015):

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February 29, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

Zelinsky: Tax And ERISA Implications Of The Illinois Private Sector Retirement Plan

Edward A. Zelinsky (Cardozo), Retirement in the Land of Lincoln: The Illinois Secure Choice Savings Program Act, 2016 U. Ill. L. Rev. 173:

In 2015, Illinois became the first state to enact a state-mandated and state-operated retirement system for private sector employers: The Illinois Secure Choice Savings Program Act. The Illinois program resembles a system approved by the California legislature—a system that has not yet been enacted since it is conditioned on an additional vote by the legislature. Illinois’ program and the one proposed in California have notable differences in that (1) the Illinois retirement accounts will qualify as individual retirement accounts (“IRAs”) under the Internal Revenue Code (“Code”); (2) the Illinois IRAs will be Roth IRAs; (3) the California program requires participation by firms with five or more employees, rather than twenty-five or more as mandated by the Illinois law; (4) the Illinois law accepts the status of its private sector retirement plan as governed by the Employee Retirement Income Security Act (“ERISA”), as long as both Illinois employers and the state incur no liability from that status; and (5) the Illinois law does not provide procedures by which employers may supplement employees’ contributions to the state-mandated fund

While the Illinois law will pass legal muster under both ERISA and the Code, it is less clear that its arrangement is sound as a matter of policy. Furthermore, there is great irony in the fact that the legislatures of two states that have failed to properly fund the pensions of their public employees instead choose to address the private sector’s retirement challenges. Nevertheless, the Illinois law is superior to the law proposed in California, and it may result in improved private sector savings.

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February 29, 2016 in Scholarship, Tax | Permalink | Comments (0)

The Economist:  After Starting The Global War On Offshore Tax Evasion, America Is Now The World's Biggest Tax Loophole

Economist Logo (2015)The Economist, The Biggest Loophole of All: Having Launched and Led the Battle Against Offshore Tax Evasion, America Is Now Part of the Problem:

Devin Nunes raised eyebrows in 2013 when, as chairman of a congressional working group on tax, he urged reforms that would make America “the largest tax haven in human history”. Though he was thinking of America’s competitiveness rather than turning his country into a haven for dirty money, the words were surprising: America is better known for walloping tax-dodgers than welcoming them. Its assault on Swiss banks that aided tax evasion, launched in 2007, sparked a global revolution in financial transparency. Next year dozens of governments will start to exchange information on their banks’ clients automatically, rather than only when asked to. The tax-shy are being chased to the world’s farthest corners.

And yet something odd is happening: Mr Nunes’s wish may be coming true. America seems not to feel bound by the global rules being crafted as a result of its own war on tax-dodging. It is also failing to tackle the anonymous shell companies often used to hide money. The Tax Justice Network, a lobby group, calls the United States one of the world’s top three “secrecy jurisdictions”, behind Switzerland and Hong Kong. All this adds up to “another example of how the US has elevated exceptionalism to a constitutional principle,” says Richard Hay of Stikeman Elliott, a law firm. “Europe has been outfoxed.”

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February 29, 2016 in Tax | Permalink | Comments (0)

Alphabet Could Be Big Winner If Intel Wins Altera Appeal In 9th Circuit

AlphabetWall Street Journal, Google’s Parent Could Be Big Winner in Intel Tax Dispute; Alphabet Stands to Gain at Least $3.5 Billion If IRS Loses its Appeal of Court Ruling:

Alphabet Inc., Google ’s parent company, could gain at least $3.5 billion in new tax benefits if Intel Corp. succeeds in its international tax dispute with the Internal Revenue Service, an amount that exceeds Google’s entire 2015 tax cost.

The case, which the IRS appealed to the Ninth U.S. Circuit Court of Appeals last week, is being closely watched in the tech industry and elsewhere. At least 20 companies, including Microsoft Corp. and eBay Inc., have disclosed they’re monitoring the outcome of the case involving share-based compensation. However, the case’s uncertainty has kept them from quantifying the potential benefits.

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February 29, 2016 in Tax | Permalink | Comments (1)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through February 1, 2016) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

53,141

Reuven Avi-Yonah (Mich)

9542

2

Michael Simkovic (S. Hall)

30,484

Michael Simkovic (S. Hall)

4694

3

Paul Caron (Pepperdine)

30,284

D. Dharmapala (Chicago)

3932

4

D. Dharmapala (Chicago)

25,384

Paul Caron (Pepperdine)

2527

5

Louis Kaplow (Harvard)

25,252

Richard Ainsworth (BU)

2181

6

Vic Fleischer (San Diego)

21,946

Ed Kleinbard (USC)

2019

7

James Hines (Michigan)

21,414

Jeff Kwall (Loyola-Chicago)

1861

8

Ted Seto (Loyola-L.A.)

20,550

Louis Kaplow (Harvard)

1847

9

Richard Kaplan (Illinois)

20,279

Robert Sitkoff (Harvard)

1696

10

Ed Kleinbard (USC)

19,282

Gregg Polsky (N. Carolina)

1676

11

Katie Pratt (Loyola-L.A.)

18,332

Nancy McLaughlin (Utah)

1673

12

Richard Ainsworth (BU)

17,089

Dan Shaviro (NYU)

1526

13

Carter Bishop (Suffolk)

16,614

Chris Hoyt (UMKC)

1525

14

Robert Sitkoff (Harvard)

16,305

Jack Manhire (Texas A&M)

1490

15

Jen Kowal (Loyola-L.A.)

16,182

Omri Marian (UC-Irvine)

1478

16

Chris Sanchirico (Penn)

16,064

Katie Pratt (Loyola-L.A.)

1453

17

Brad Borden (Brooklyn)

15,968

Vic Fleischer (San Diego)

1413

18

David Weisbach (Chicago)

15,917

Chris Sanchirico (Penn)

1340

19

Dennis Ventry (UC-Davis)

15,873

Francine Lipman (UNLV))

1212

20

Francine Lipman (UNLV)

15,523

Jen Kowal (Loyola-L.A.)

1155

21

Bridget Crawford (Pace)

15,050

Jordan Barry (San Diego)

1133

22

David Walker (BU)

14,799

Ruth Mason (Virginia)

1131

23

Dan Shaviro (NYU)

14,341

Yariv Brauner (Florida)

1093

24

Herwig Schlunk (Vanderbilt)

13,048

David Weisbach (Chicago)

1085

25

Steven Bank (UCLA)

12,659

Carter Bishop (Suffolk)

1063

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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February 29, 2016 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Low Income Taxpayer Clinic Grant Recipients For 2016

LITC LogoThe IRS announced on Friday (IR-2016-32) that it has awarded $10.72 million in matching grants to 129 Low Income Taxpayer Clinics (LITCs) for the 2016 grant cycle (Jan. 1, 2016 through Dec. 31, 2016).  Through the LITC program, the IRS awards matching grants of up to $100,000 a year to qualifying organizations.  For the full list of grant recipients, see here.  For a list of the 39 law school tax clinic grant recipients, and the amount of their grants, see below the fold:

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February 29, 2016 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1026

IRS Logo 2Wall Street Journal editorial, Justice and Clinton’s Email Probe: A ‘Career’ Official Doesn’t Guarantee an Honest Investigation:

Attorney General Loretta Lynch this week tried to assure House Republicans about the impartiality of her department’s investigation into Hillary Clinton’s State Department emails by noting that it would be handled by career government officials. ...

That’s what they always say, and it is nice to think so. But there’s reason to doubt given the example of Justice’s investigation into the IRS targeting of conservative groups before the 2012 election. To lead that probe, then Attorney General Eric Holder appointed Barbara Bosserman, a trial attorney in the department’s Civil Rights Division.

Ms. Bosserman’s appointment was curious given that her area of expertise is civil rights, not tax law. She had also donated $6,100 to President Obama’s campaigns and the Obama Victory Fund in 2008 and 2012. That’s no small donation on a career employee’s salary and suggests some serious political loyalty.

Ms. Bosserman’s conflict of interest came to light only after Justice stonewalled congressional requests for information about the status of the IRS probe. The House Oversight Committee then began investigating Justice’s investigation. In September 2014 we wrote about the involvement of former department spokesman Brian Fallon, now a press secretary for the Clinton presidential campaign.

The House also discovered that Justice had assigned former IRS tax attorney Andrew Strelka to the case brought against the agency by Z Street, a pro-Israel group that claimed its tax-exempt status had been delayed because of its political leanings. Mr. Strelka had previously served as a presidential management fellow working in the IRS tax-exempt office managed by Lois Lerner, who by the way was also a career government official with clear anti-Republican political leanings. Mr. Strelka was removed from the case before being deposed as a witness.

Justice closed its investigation of the IRS last October with no criminal charges.

We’ll hope for the best from Ms. Lynch’s career prosecutors, and especially from the FBI. But whoever handles the case, at either the State or Justice Department, will presumably create a paper trail of evidence and legal analysis. If a Republican wins the presidential election, his appointees will be able to look at the files and judge the evidence independently.

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February 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, February 28, 2016

A Taxing Oscars:  $232,000 Swag Bags (40% Increase Over Last Year's), Tax Incentives For Best Picture Nominees

Johnston:  Nine Key Points About Trump’s Income Taxes

TrumpDavid Cay Johnston (The National Memo), 9 Key Points About Trump’s Income Taxes (And Many More Questions):

Donald Trump, challenged again to release his tax returns, offers a nonsense excuse for keeping them secret. But worse than that, the national political reporters covering Trump’s presidential campaign have, yet again, missed big, obvious stories about his conduct and character

Compounding these errors, some journalists have reported nonsense as egregious as Trump’s, concerning what his tax returns would tell us. Many seem certain that they will reveal his actual wealth even though tax returns measure income, not net worth, as I will explain.

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February 28, 2016 in Political News, Tax | Permalink | Comments (4)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some reshuffling of the order within the Top 5:

  1. [390 Downloads]  Conservation Easements and the Valuation Conundrum, by Nancy McLaughlin (Utah)
  2. [364 Downloads]  The Taxation of Crowdfunding: Income Tax Uncertainties and a Safe Harbor Test to Claim Gift Tax Exclusion, by Paul Battista
  3. [348 Downloads]  What Now? A Boomer's Baedeker for the Distribution Phase of Defined Contribution Retirement Plans, by Richard Kaplan (Illinois)
  4. [344 Downloads]  Uncle Sam Wants … Who? A Global Perspective on Citizenship Taxation, by Allison Christians (McGill)
  5. [261 Downloads]  Profit Shifting Of U.S. Multinationals, by Tim Dowd (Joint Committee on Taxation), Paul Landefeld (Joint Committee on Taxation) & Anne Moore (Joint Committee on Taxation)

February 28, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

IRS Releases Winter 2016 SOI Bulletin

The IRS Scandal, Day 1025

GAO LogoThe GAO reports that the IRS's enforcement of the tax law is at high risk for fraud, waste, abuse, and mismanagement:

Government Accountability Office, U.S. Government's Fiscal Years 2015 and 2014 Consolidated Financial Statements (GAO-16-357R) (Feb 25, 2016):

Every 2 years, GAO provides Congress with an update on its High-Risk Series, which highlights federal entities and program areas that are at high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of broad reform. ... Another area included in the High-Risk Series that could affect the federal government’s financial condition in the future is the Internal Revenue Service’s (IRS) enforcement of tax laws, including reducing the net tax gap—the difference between taxes owed and taxes paid—which was last estimated to be $385 billion.

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February 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, February 27, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Amidst 39% Enrollment Decline, Valparaiso Law School Offers Buyouts To 27 Faculty

Valpo LogoChicago Tribune, Valparaiso Law School Announces 'Right-Sizing' Plan:

Valparaiso University announced Friday that in the wake of declining enrollment for its law school, it is offering buyouts to tenured faculty and faculty members with multi-year contracts.

The school has 21 tenured faculty and six with multi-year contracts and any of them could be eligible for a buyout, said Andrea Lyon, the law school's dean, adding she couldn't comment on a target number for the buyouts because that would depend on salaries and the school's budget.

She said the school is "right-sizing" its faculty because of a drop in students. The school has an enrollment this year of 430 full- and part-time students, and had an incoming class in the fall of 133 students [down from 217 in 2011]. At its peak, the school had 600 students,

Valparaiso's LSAT and GPA percentile bands for entering 1Ls have fallen dramatically despite the enrollment decline:

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February 27, 2016 in Legal Education | Permalink | Comments (9)

IRS Says 114,000, 334,000, 724,000 Taxpayer Accounts Were Hacked

ID TheftWall Street Journal, IRS Says Cyberattacks on Taxpayer Accounts More Extensive Than Previously Reported:

The Internal Revenue Service said Friday that more than twice as many taxpayer accounts may have been hit by cybercriminals than the agency previously reported, with hackers gaining access to as many as 724,000 accounts and attempting to break into an additional 575,000.

The disclosure is the second revision by the IRS in the last six months and comes as Americans are preparing their tax returns for 2015.

Last August, the IRS said cybercrooks used stolen Social Security numbers and other data to gain access to taxpayer information for as many as 334,000 accounts, up from a number of 114,000 announced in May 2015.

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February 27, 2016 in IRS News, Tax | Permalink | Comments (4)

IRS Releases Fall 2015 SOI Bulletin

IRS Logo 2The IRS Statistics of Income Division has released the Fall 2015 SOI Bulletin (Vol. 35, No. 1), with these articles:

Historical Tables and Appendix

February 27, 2016 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1024

Donald Trump claimed after Thursday's GOP debate that he has been audited for the past 12 years because he is "a strong Christian":

During Thursday's GOP debate, Ben Carson repeated his claim that he was never audited by the IRS until after he spoke at the National Prayer Breakfast in 2013 and was critical of President Obama:

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February 27, 2016 in IRS News, IRS Scandal, Political News, Tax | Permalink | Comments (2)

Friday, February 26, 2016

Fleischer Presents The Hidden Difficulties Of Taxing Wealth Today At Boston College

Perry Fleischer (2016)Miranda Perry Fleischer (San Diego) presents Not So Fast: The Hidden Difficulties of Taxing Wealth at Boston College today as part of its Tax Policy Workshop Series hosted by James Repetti and Diane Ring:

As an antidote to increasing inequality, policymakers and academics frequently call for heavier taxes on the wealthy. To those outside the tax academy, proposals such as increasing marginal rates, implementing a wealth tax, or strengthening the estate tax likely sound like variations on the same theme. Many discussions of using the tax system to fight inequality therefore ignore differences among tax instruments. As this Essay shows, using the tax system to fight inequality requires careful consideration of both normative and practical concerns. Certain goals (for example, the concern that wealth concentrations harm the political and economic systems) suggest taxing wealth itself via an annual wealth tax as an ideal solution. Not only would such a tax be hobbled by administrative and valuation concerns, however, it is likely unconstitutional.

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February 26, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (5)

Walker Presents Understanding And Evaluating Performance-Based Executive Pay Today At Florida

Walker (2016)David Walker (Boston University) presents The Way We Pay Now: Understanding and Evaluating Performance-Based Executive Pay at Florida today as part of its Tax Colloquium Series hosted by Yariv Brauner:

Over the last ten years, performance-based equity pay, and particularly performance shares, have displaced stock options as the primary instruments for compensating executives of large, public companies in the U.S. This article examines that transformation, analyzing the structure and incentive properties of these newly important instruments and evaluating the benefits and risks from an investor’s perspective. Notable observations include the following:

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February 26, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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February 26, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Auerbach & Gale:  The Deteriorating Fiscal Outlook

Alan J. Auerbach (UC-Berkeley) & William G. Gale (Tax Policy Center), Once More Unto the Breach: The Deteriorating Fiscal Outlook:

After worsening sharply during the Great Recession, the long-term fiscal outlook generally improved through 2015, due to a combination of legislative acts and lower projected growth of health care spending. The same factors and the slow but steady economic recovery helped reduce short-term deficits over that period, as well.

Over the past year, though, the medium- and long-term fiscal outlooks have deteriorated. Part of this is due to legislative changes, part to changes in economic and technical factors, and a small part to changes in assumptions. This deterioration has happened without much fanfare and, even with a fall in projected interest rates working in the other direction, the estimated changes are large.

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February 26, 2016 in Tax, Think Tank Reports | Permalink | Comments (4)

The Tax Implications Of Immigration Reform: Two Perspectives

Institution on Taxation and Economic Policy, Undocumented Immigrants' State & Local Tax Contributions:

An updated 50-state study ...  finds that undocumented immigrants’ tax contributions would increase significantly under the Obama Administration’s executive actions and even more substantially under comprehensive immigration reform granting  all undocumented immigrants lawful permanent residence.

The 11 million undocumented immigrants currently living in the United States collectively paid $11.64 billion in state and local taxes.  ITEP’s analysis finds their combined nationwide state and local tax contributions would increase by $805 million under full implementation of the administration’s 2012 and 2014 executive actions and by $2.1 billion under comprehensive immigration reform.

Federation for American Immigration Reform, The Fiscal Burden of Illegal Immigration on United States Taxpayers:

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February 26, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

How Shady Tax Treaties Are Fueling Inequality and Poverty

MistreatedAction Aid, Mistreated: How Shady Tax Treaties are Fueling Inequality and Poverty:

Right now, stretching across the world is a web of tax agreements between governments. They may not seem like the frontline in the fight against inequality and poverty, but today ActionAid shows how crucial they are for ordinary people everywhere.

Our report, ‘Mistreated’, shows how tax treaties are reducing the tax that some of the world’s poorest countries can collect from  multinational companies.

Measuring Tax Treaty Negotiation Outcomes: The ActionAid Tax Treaties Dataset:

This paper introduces a new dataset that codes the content of 519 tax treaties signed by low- and lower-middle-income countries in Africa and Asia. Often called Double Taxation Agreements, bilateral tax treaties divide up the right to tax cross-border economic activity between their two signatories. When one of the signatories is a developing country that is predominantly a recipient of foreign investment, the effect of the tax treaty is to impose constraints on its ability to tax inward investors, ostensibly to encourage more investment.

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February 26, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

Law School Transparency Fundraiser: Women In The Law Podcast Mini-Series

Law School Transparency is conducting a fundraiser for its Women In The Law podcast mini-series on the challenges women face in the legal profession:

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February 26, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1023

IRS Logo 2The Hill, Brady: IRS 'Lost Credibility' But Can Regain It:

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said he thinks the Internal Revenue Service has “lost credibility” but can regain it.

When the IRS starts to address its issues in an objective way, Brady said Thursday at an event at the Brookings Institution, there will be more bipartisan support for providing the agency with more resources for customer service.

“I'm anxious frankly for an IRS commissioner who I don’t know whose party they’re in, who runs that agency differently than what we have today,” he said. ...

Brady also expressed concern about the IRS’s implementation of ObamaCare and recent Government Accountability Office reports that found there are areas where there is a risk that audits could be driven by political considerations.

“I long for the day when the IRS was truly an independent agency, where I frankly couldn’t tell you which party the commissioner was from when they were in our office twice a year talking about their challenges on customer service,” he said. “Those days seem like a quaint memory.”

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February 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, February 25, 2016

Blair-Stanek Presents Just Compensation As Transfer Prices Today At Duke

Blair-Stanek (2013)Andrew Blair-Stanek (Maryland) presents Just Compensation as Transfer Prices at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Patents encourage innovation by allowing patentholders to charge higher prices, but these higher prices cause huge deadweight losses to society. Economists have long recognized that society could be made better off if the government used eminent domain to take widely used patents and dedicate them to the public domain, making them free for all to use. The formidable obstacle is determining an appropriate price, the “just compensation” required by the Fifth Amendment’s Takings Clause.

This Article identifies a novel but powerful solution: base the “just compensation” on the price the patentholder chose for transferring the patent to a tax-haven subsidiary. Most valuable patents are transferred to minimize taxes, and the tax-law standards for valuing such transfers closely match Takings Clause case law.

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February 25, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Stark Presents Regional Taxation And Regional Tax Base Sharing In State Tax Reform Today At UCLA

Stark (2014)Kirk Stark (UCLA) presents Regional Taxation and Regional Tax Base Sharing in State Tax Reform at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Eric Zolt:

This article describes and evaluates a specific subset of state tax reforms—i.e., those involving regional approaches to funding subnational public goods. Reforms examined include those where policymakers devise new multi-jurisdictional fiscal arrangements to address regional objectives that conventional local governments, by virtue of their more limited geographic scope, are unlikely to tackle. As used in this article, the term “region” refers to a geographic area (1) constituting less than the entire jurisdiction of a state, and (2) encompassing more than one local government jurisdiction. A “regional tax” is therefore any tax (fee, assessment, etc.…) limited in its application to a geographic area so defined. A closely related policy is “regional tax base sharing”—i.e., the imposition of a tax on a base that is shared among several local jurisdictions, with the proceeds distributed among those localities.

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February 25, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hickman Presents Treasury's Retroactivity Today At Colorado

Hickman 2014 2Kristin Hickman (Minnesota) presents Treasury's Retroactivity at Colorado today as part of its Tax Policy Colloquium Series hosted by David Hasen and Sloan Speck:

In Bowen v. Georgetown University Hospital, the Supreme Court described retroactivity as "not favored in the law" and generally rejected allowing federal administrative agencies to adopt regulations "altering the past legal consequences of past actions."  Unlike most regulatory agencies, Treasury and the IRS are expressly authorized by Congress to adopt regulations with precisely such primary retroactive effect.  Specifically, IRC § 7805(b) grants Treasury and the IRS the power to backdate tax regulations under a variety of circumstances.  Preliminary analysis shows that Treasury and the IRS utilize this authority regularly with little judicial oversight for abuse of discretion. 

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February 25, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fleming:  Some Cautions Regarding Tax Simplification

J. Clifton Fleming Jr. (BYU), Some Cautions Regarding Tax Simplification:, in Tax Simplification (Chris Evans, Richard Krever & Peter Mellor, eds.) (Wolters Kluwer 2015):

Although tax simplification enjoys the attractiveness of being the opposite of complexity, it can have untoward effects as illustrated by the examples of a capitation tax, an international income tax regime that lacks rigorous base protection measures, and a system of negotiated tax liabilities. Moreover, complexity is not a problem for most taxpayers because most either benefit from complexity and have the capacity to deal with it or have simple compliance burdens. Small business taxpayers are the principal exception to this observation and tax system reformers need to develop simplification measures for those taxpayers without creating truck holes to be exploited by others. At the end of the day, simplification is only one of several tax policy criteria that must be taken into account in a balancing process. Tax expenditure analysis is often a helpful tool in this regard but it should not be viewed as a device for attacking tax expenditures solely because they add complexity to the tax law. On the other hand complex tax expenditures that have humanitarian objectives should not be sheltered from tax expenditure analysis solely because of their humanitarian ends. This point is illustrated by examples. Finally, we must accept that complex economies demand correspondingly complex tax regimes, and that the complexity will inevitably reside somewhere in the legal system where it will have to be endured.

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February 25, 2016 in Scholarship, Tax | Permalink | Comments (0)

How A Secondary Earner Deduction Will Reduce The Gender Bias In The U.S. Tax Code

Lauren Pignataro (Tax LL.M. 2016, NYU), How a Secondary Earner Deduction Will Reduce the Gender Bias in the U.S. Tax Code, 39 N.Y.U. Rev. L. & Soc. Change 245 (2015):

Congress drafted the current United States Internal Revenue Code, as it relates to marriage, in 1969, when the composition of the American family looked very different from today’s family structure. The Code was structured to benefit so-called “traditional families,” consisting of a stay-at-home mother and working father. Under the 1969 Code—assuming two couples earn the same amount of income—tax liability increases upon marriage if both spouses work, but decreases if a couple has only one working spouse. This increase in tax liability upon marriage for dual-earning couples is commonly known as the marriage penalty. To make matters worse, it only increases as the earnings of both spouses become more equal.

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February 25, 2016 in Scholarship, Tax | Permalink | Comments (3)

6 Of 13 IRS-Approved Tax Preparers Fail Cybersecurity Test, Put Confidential Taxpayer Information At Risk

E-fileWall Street Journal, Six of 13 IRS-Approved Tax Preparers Fail Cybersecurity Test; Firms Didn’t Protect Customers’ Information From Potential Tax Identity Theft, Audit Finds:

Nearly half the firms that have agreements with the Internal Revenue Service to provide online tax-preparation and filing services are failing to protect customers’ privacy and security, according to an audit scheduled to be released Wednesday.

The audit by the nonprofit Online Trust Alliance found that six out of 13 firms, including Jackson Hewitt and Free1040TaxReturn.com, don’t provide adequate security against cybercriminals. Seven firms, including TurboTax, H&R Block, TaxAct and TaxSlayer were praised for their practices and named to an “Honor Roll.” ...

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February 25, 2016 in IRS News, Tax | Permalink | Comments (0)

Hanna:  Some Observations On Corporate or Business Tax Reform

Christopher Hanna (SMU), Some Observations on Corporate or Business Tax Reform, 68 SMU L. Rev. 595 (2015):

The current push for tax reform seems to be coming from corporate America. This is quite different than the circumstances surrounding tax reform in 1986, the last time the United States enacted comprehensive tax reform. At that time, upper-income individuals were investing in a variety of tax shelters. This paper examines tax reform according to the interests of four categories of Corporate America.

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February 25, 2016 in Scholarship, Tax | Permalink | Comments (0)

IRS Accepting Applications For Part-Year Low Income Taxpayer Clinic Grants In Identified Underserved Areas Starting March 1

IR-2016-31, IRS Accepting Applications for Part-Year Low Income Taxpayer Clinic Grants in Identified Underserved Areas Starting March 1:

The Internal Revenue Service today announced it will accept applications for a part-year Low Income Taxpayer Clinic (LITC) matching grant from qualified organizations, in certain identified geographic areas, to provide representation to low income taxpayers and education about taxpayer rights and responsibilities to individuals who speak English as a second language. 

The supplemental application period will run from March 1, 2016, to April 1, 2016.

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February 25, 2016 in IRS News, Tax | Permalink | Comments (0)

Tax Policy Center Hosts Program Today On Tax Policy In 2016

Tax Policy Center (2015)The Tax Policy Center hosts a program today on Tax Policy in 2016: What’s New and What’s Next at the Brookings Institution in Washington, D.C. from 8:45 am - 12:00 pm EST:

Tax policy has returned to its traditional place of prominence in policy circles, with leading presidential candidates proposing both sweeping and incremental reforms. Members of Congress are considering a wide variety of changes as well. How will tax policy shape up as the year progresses? What role will tax policy play in the election? Are we situated for a major reform in 2017? What are the implications for the economy and the American people?

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February 25, 2016 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1022

IRS Logo 2Americans for Tax Reform, Impeach IRS Commissioner John Koskinen:

Years after it was revealed that the IRS targeted tea party and conservative organizations, no one has been held accountable.

Despite overwhelming evidence, the Department of Justice (DoJ) recently announced that no IRS employee including Lois Lerner would face criminal charges over targeting conservative groups.

The Obama DoJ dismissed the treatment of groups as mere “mismanagement, poor judgment and institutional inertia,” despite the fact that just one conservative group was granted non-profit status in a three-year period.

American taxpayers are left with only one option: Impeachment.

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February 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, February 24, 2016

Markle Presents The Effect Of Financial Constraints On The Income Shifting Of U.S. Multinationals Today At Penn

MarkleKevin Markle (Iowa) presents The Effect of Financial Constraints on the Income Shifting of U.S. Multinationals (with Scott D. Dyreng (Duke)) at Pennsylvania today as part of its Center for Tax Law and Policy Seminar Series hosted by Chris Sanchirico and Reed Shuldiner:

When a U.S. multinational corporation shifts income from the U.S. to foreign jurisdictions, it incurs costs and reaps benefits. The benefits may be reduced if the shifted income must be returned to the U.S. as a dividend in the short term and face the same U.S. tax it would have if the income had not been shifted. Firms, then, have incentive to defer repatriation of earnings and to fund domestic cash needs with external financing. The cost of external financing, however, is increasing in financial constraints, leading to the prediction that constrained firms will be unable to defer repatriation and, therefore, will reap no benefits from shifting. Using a new methodology for measuring income shifting, we find, consistent with predictions, that financially constrained firms shift less income from the U.S. to foreign countries than their unconstrained peers.

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February 24, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

McCormack:  Overtaxing The Working Family

Shannon Weeks McCormack (University of Washington), Overtaxing the Working Family: Uncle Sam and the Childcare Squeeze, 114 Mich. L. Rev. 559 (2016):

Today, many working parents are caught in a “childcare squeeze”: while they require two incomes just to make ends meet, they end up spending a strikingly large percentage of their income on childcare so that they can work outside the home. Worse still, some parents find themselves “squeezed out” of the market entirely, unable to earn the additional income their families require because they cannot find jobs that pay enough to offset soaring childcare expenses. This Article argues that the tax laws have played an important role in aggravating these hardships.

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February 24, 2016 in Scholarship, Tax | Permalink | Comments (2)

The Tax Exclusion For Compensation For Wrongful Imprisonment

TaxThe Atlantic, Taxing the Wrongfully Convicted:

If it seems like stories of men and women being released after years behind bars for crimes they didn’t commit are becoming more commonplace, it’s because they are. According to a report from the University of Michigan, there were a record 149 exonerations in 2015. That’s about five times as many exonerated men and women as there were 20 years early in 1995. On average, those released last year had spent 14.5 years in prison.

Many assume that following the acknowledgment of such a gross error is a wave of apologies both public and private, lots of assistance to help exonerees re-acclimate to daily life, and some form of restitution. But all too often that is not the case. Few services exist to help the growing population of exonerated Americans once they are free. Instead, many are left with either the same services available to released convicts or are entirely on their own, with no guidance for finding jobs or housing, or even transportation, says Jon Eldan, the director of the After Innocence project, an organization that works to help exonerated individuals get back on their feet. And one of the things that exonerees need help with: their taxes.

Often exonerees receive some sort of compensation from the state for their time wrongfully served. Is that money taxable? For years that was unclear, but a law that President Obama signed at the close of 2015, the Wrongful Convictions Tax Relief Act, will mean that exonerees can keep the entirety of these sums. ...

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February 24, 2016 in Tax | Permalink | Comments (0)

A Paen To The Humanities

New York Times op-ed:  Don’t Turn Away From the Art of Life, by Arnold Weinstein (Professor of Comparative Literature, Brown):

Enthusiasm for the Humanities ... is much diminished in today’s educational institutions. Our data-driven culture bears much of the blame: The arts can no longer compete with the prestige and financial payoffs promised by studying the STEM fields — a curriculum integrating science, technology, engineering and mathematics. These are all worthy disciplines that offer precise information on practically everything. But, often and inadvertently, they distort our perceptions; they even shortchange us.

The regime of information may well sport its specific truths, but it is locked out of the associations — subjective but also moral and philosophical — that bathe all literature. A new technology like GPS provides us with the most efficient and direct route to a destination, but it presupposes we know where we are going. Finding an address is one thing; finding one’s way in life is another. Even our smartest computers or most brilliant statisticians are at a loss when it comes to mapping our psychic landscapes. ...

“How much do you know about Shakespeare,” I once asked a friend who has committed much of her life to studying the Bard. She replied, “Not as much as he knows about me.” Remember this the next time someone tells you literature is useless.

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February 24, 2016 in Legal Education | Permalink | Comments (5)

House Holds Hearing Today On International Tax Reform

House LogoThe House Ways & Means Committee holds a hearing today on The Global Tax Environment in 2016 and Implications for International Tax Reform:

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Recent Global Developments Related To Cross-Border Taxation (JCX-8-16) (Feb. 23, 2016) (100 pages):

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February 24, 2016 in Congressional News, Tax | Permalink | Comments (0)

2015 Google Law Review Rankings, Including Specialty Journals: The 10 Most-Cited Articles In The Tax Law Review

Google Scholar LogoFollowing up on last week's post on the 2015 Google Law Review Rankings: my Pepperdine colleague Rob Anderson has expanded his annual Google Law Review Rankings to include specialty, secondary, and law-related peer-reviewed journals.  The Tax Law Review is the only tax journal to make the list of the Top 299 law review, at #121.  Here are the ten most cited articles in the Tax Law Review over the past five years:

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February 24, 2016 in Law Review Rankings, Legal Education, Scholarship, Tax | Permalink | Comments (1)

America’s Un-American Resistance To The Estate Tax

AtlanticThe Atlantic, America’s Un-American Resistance to the Estate Tax:

Though Americans argue over whether income taxes should be higher or lower, there is consensus that they are a part of life. Inheritance and estate taxes, though, enjoy no such acceptance. Americans simply don’t like the concept of taxing inheritances, but the estate tax actually meshes well with the cherished American ideal of fairness—in fact, its vilification is partially the result of a calculated campaign on the part of those whom it benefits most.

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February 24, 2016 in Scholarship, Tax | Permalink | Comments (13)

McEntee:  30% Of Law Schools Would Fail Proposed New ABA 10% Attrition Accreditation Standard

ABAFollowing up on my previous posts (links below):  Kyle McEntee (Law School Transparency), Attrition May Jeopardize Accreditation Status Of Dozens Of Law Schools:

Earlier this month, the ABA Section of Legal Education and Admissions to the Bar took an important step towards holding law schools accountable through the accreditation standards. The committee charged with writing the law school accreditation standards voted to send a slate of accountability measures to the Council of the Section of Legal Education — the final authority for law school accreditation.

Last week I wrote about the proposed changes to the minimum bar passage standard and the transparency standard. This week, I discuss the Standards Review Committee’s proposals for refining the non-exploitation standard, Standard 501. ...

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February 24, 2016 in Legal Education | Permalink | Comments (4)

WSJ:  Ticket To A Tax Audit — $1 Million

One MillionWall Street Journal, Ticket to a Tax Audit: $1 Million:

The sum of $1 million doesn’t go as far as it used to. But increasingly, it is enough to get you special attention from Uncle Sam.

The Internal Revenue Service continued to ramp up its focus on high earners in fiscal 2015, according to data released by the agency Monday [Fiscal Year 2015 Enforcement and Service Results].

The IRS audited nearly 10% of returns with income of more than $1 million, compared with 7.5% the year before, in the fiscal year ended Sept. 30. Overall, the agency audited less than 1% of nearly 147 million individual returns in 2015, the lowest rate in a decade.

WSJ 1

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February 24, 2016 in Tax | Permalink | Comments (0)