TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, October 24, 2017

The Troubling Expansion Of The Criminal Offense Of Obstructing The IRS

Kathryn Ward Booth (Vanderbilt), Obstructing by Omission: The Troubling Expansion of the Criminal Offense of Obstructing the IRS and How DOJ Internal Policy Has Played a Role:

A majority of circuits hold that it is possible to be convicted of corruptly obstructing the administration of the Internal Revenue laws even if there is no pending IRS proceeding to obstruct. Even more strikingly, the Second Circuit recently held that making an omission is sufficient to obstruct the IRS, which means that it is a federal felony to corruptly not maintain records or to corruptly not provide records to an accountant. Despite the obvious potential problems with these issues, there is very little recent scholarship addressing them. In June, the Supreme Court granted certiorari to consider these issues.

This article examines the circuit split over whether 26 U.S.C. § 7212(a), interfering with the administration of the Internal Revenue laws, requires that the defendant obstructed a known IRS proceeding.

Continue reading

October 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

The Troubling Expansion Of The Criminal Offense Of Obstructing The IRS

Kathryn Ward Booth (Vanderbilt), Obstructing by Omission: The Troubling Expansion of the Criminal Offense of Obstructing the IRS and How DOJ Internal Policy Has Played a Role:

A majority of circuits hold that it is possible to be convicted of corruptly obstructing the administration of the Internal Revenue laws even if there is no pending IRS proceeding to obstruct. Even more strikingly, the Second Circuit recently held that making an omission is sufficient to obstruct the IRS, which means that it is a federal felony to corruptly not maintain records or to corruptly not provide records to an accountant. Despite the obvious potential problems with these issues, there is very little recent scholarship addressing them. In June, the Supreme Court granted certiorari to consider these issues.

This article examines the circuit split over whether 26 U.S.C. § 7212(a), interfering with the administration of the Internal Revenue laws, requires that the defendant obstructed a known IRS proceeding.

Continue reading

October 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

Monday, October 23, 2017

Pichhadze Presents Transfer Pricing In Canada Today At McGill

AmirAmir Pichhadze (Deakin University, Australia) presents Canada’s Federal Income Tax Act: The Need for a Principle (Policy) Based Approach to Legislative (Re)drafting of Canada’s Transfer Pricing Rule at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series at McGill covened by Allison Christians:

Pichhadze's new paper builds on his prior work with Reuven Avi-Yonah on GAARs and the Nexus Between Statutory Interpretation and Legislative Drafting Lessons for the U.S. From Canada and draws on insights from Judith Freedman's work on Interpreting Tax Statutes: Tax Avoidance and the Intention of Parliament. The working draft explores the evolution of arm's length transfer pricing in Canada and makes the case for Canada’s parliament to adopt and apply a more explicit principle/policy-based approach to legislative drafting.

Continue reading

October 23, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Toder Presents How Do We Tax The Income Of Entrepreneurs? Today At Loyola-L.A.

Toder (2017)Eric Toder (Tax Policy Center) presents How Do We Tax the Income of Entrepreneurs? at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

Entrepreneurs create successful enterprises that generate substantial value through the innovations they introduce. They typically must wait many years before their firms generate net operating profits. The tax system favors entrepreneurial activity by allowing deferral of tax on the accrual of wealth within new firms and by taxing the gains of entrepreneurs when realized at favorable capital gains rates. But taxes on the income of mature enterprises offset some of this benefit by reducing the value of the firms that entrepreneurs create. Taxation of entrepreneurial income matters because of the important contributions the innovations entrepreneurs introduce make to economic growth.

 

Continue reading

October 23, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Georgia State Launches Legal Analytics Lab To Apply Big Data To Several Areas Of Law

LAAGSLegal Analytics Lab Tackles Projects at the Intersection of Business, Law and Big Data:

A groundbreaking new lab at Georgia State University is bringing business and legal scholars together with data scientists to analyze millions of litigation filings and outcomes, corporate financial disclosures, patent applications and other legal documents to identify patterns and evaluate how the law operates to predict future outcomes.

The Legal Analytics Lab, an initiative of the J. Mack Robinson College of Business with support from Georgia State’s College of Law, will be housed in Robinson’s big data analytics facility, the Institute for Insight. The lab will first focus on three subject areas: civil litigation, intellectual property, and compliance and corporate social responsibility.

Continue reading

October 23, 2017 in Legal Education | Permalink | Comments (0)

McGill Hosts Symposium On 100 Years Of Tax Law In Canada

100 YearsMcGill hosted a symposium earlier this month on 100 Years of Tax Law in Canada:

Keynote:  Kim Brooks (Dalhousie University)

Roundtable 1:  The Intertwined Evolution of Corporate Law and Corporate Tax in Canada
Kim Brooks (Dalhousie University), Marc Barbeau (McGill), Jakub Adamsky (McGill)

Continue reading

October 23, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Lesson From The Tax Court: Tax Protesting Is A Hobby That Eats

Tax Court (2017)Everyone needs a hobby. Psychology Today explained why here. But some hobbies grow and grow until they become all-consuming. As Benjamin Franklin reportedly put it: beware the hobby that eats. Protesting your taxes for stupid reasons is one of those hobbies that eat.

Bob Wood once wrote a great blog post about stupid tax protest arguments. The legal term for “stupid” is, of course, “frivolous.” Bob rightly says it’s one of the worst names you can be called in the tax world. I really love his line: “In IRS lingo, it’s about as bad as you can get, just shy of the other “f” word, fraudulent.”

The case of Henry M. Jagos and Kathy A. Jagos v. Commissioner, T.C. Memo. 2017-202 (Oct. 16, 2017), teaches such a lesson. It appears from the opinion that the Jagoses are among those lucky taxpayers who do not have to work for their money because their money works for them. Of their total taxable income in 2012 of $544,000, $520,000 seems to have come from investments. At least it came from payments they received from Fidelity Investments and Fidelity withheld about $98,000 in taxes.

With that kind of income, one has plenty of time for hobbies. It appears from this case the Jagoses decided that tax protesting would be a good hobby to have. In 2012 they filed a return to get back the $98,000 in withheld taxes. They reported zero income, claiming the payments they received were not taxable income because they “are private-sector citizens (non-federal employee) employed by a private-sector company (non-federal entity) as defined in 3401(c)(d).”

In old-fashioned texting parlance my reaction to that statement vacillates between OMG, LOL and WTF. For the more measured IRS and Tax Court reaction, see below the fold.

Continue reading

October 23, 2017 in Bryan Camp, New Cases, Tax | Permalink | Comments (1)

Elizabeth Warren Says A Senior Faculty Member Sexually Harassed Her When She Was A 'Baby Law Professor', Presumably At Rutgers

WarrenBoston Globe, Elizabeth Warren Recalls Story of Sexual Harassment by Law School Colleague:

U.S. Sen. Elizabeth Warren is joining the growing chorus of women talking about their experiences with sexual harassment in the wake of allegations against Hollywood mogul Harvey Weinstein.

The Massachusetts Democrat shared a story from when she was a “baby law professor” during a videotaped interview session with three other female senators that aired Sunday on NBC’s “Meet The Press.”

Warren says a senior faculty member had asked her to stop by his office one day. When she did, he slammed the door and “lunged” for her. He then chased her around a desk, trying to get his hands on her.

 

Continue reading

October 23, 2017 in Legal Education | Permalink | Comments (0)

Victoria Schwartz Receives Pepperdine University's Highest Teaching Honor

SchwartzCongratulations to my friend and colleague Victoria Schwartz, who has received Pepperdine University's highest teaching honor, the Howard A. White Award for Teaching Excellence:

The Howard A. White Award for Teaching Excellence recognizes outstanding teachers who embody Pepperdine University's commitment to excellence. The award honors teachers who inspire, stimulate, challenge, and motivate their students; teachers who develop in students the ability to think critically and creatively about the world; teachers who instill in their students a lifelong love of learning.

Victoria was awarded tenure this year and received the law school's 2016 Faculty Scholarship Award.  Victoria's recent articles include:

Continue reading

October 23, 2017 in Legal Education | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 22, 2017

Tax Panel At Midwestern Law & Economics Association Annual Meeting At Marquette

Marquette LogoTax Panel at this weekend's Midwestern Law & Economics Association Annual Meeting at Marquette:

Continue reading

October 22, 2017 | Permalink | Comments (0)

WSJ: Can Evangelicals And Academics Talk to Each Other?

Wall Street Journal Essay:  Can Evangelicals and Academics Talk to Each Other?, by Alan Jacobs (Baylor):

Last year, as the fire and fury of the presidential election were intensifying and people all around me were growing more and more hostile to one another, I was struck by the familiarity of the situation. For all my adult life, I’ve been dealing with the kinds of hostilities and misunderstandings that now dominate American politics, because I belong to two very different and mutually suspicious groups. I am an academic, but I am also an evangelical Christian.

When I hear academics talk about Christians, I typically think, “That’s not quite right. I don’t believe you understand the people you think you’re disagreeing with.” And when I listen to Christians talk about academics, I have precisely the same reaction.

I have spent decades trying to figure out how these pervasive misunderstandings arise and looking for ways to correct them. But they are very hard to combat, because academics and Christians (like the rest of us) treasure their enmities. And where your treasure is, there will your heart be also.

Continue reading

October 22, 2017 in Legal Education | Permalink | Comments (2)

Brunson: Brigham Young v. The Bureau of Internal Revenue — Tithing And The Income Tax

Samuel D. Brunson (Loyola-Chicago), Brigham Young vs. The Bureau of Internal Revenue:

In 1871, Brigham Young, the president and trustee-in-trust of the Mormon church, decided to end the church’s practice of tithing, a significant source of revenue for the Mormon church. This decision was the culmination of more than a year of conflict with the Bureau of Internal Revenue, which had decided that tithing was taxable under the Civil War income tax.

Continue reading

October 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 papers is #53 among 13,040 tax papers in all-time downloads.

  1. [2,669 Downloads]  Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, by Gladriel Shobe (BYU)
  2. [291 Downloads]  Background and Current Status of FATCA and CRS, by William Byrnes (Texas A&M)
  3. [243 Downloads]  The Rise of Trust Decanting in the United States, by Robert Sitkoff (Harvard)
  4. [227 Downloads]  Rejecting Charity: Why the IRS Denies Tax Exemption to 501(C)(3) Applicants, by Terri Lynn Helge (Texas A&M)
  5. [150 Downloads]  Slicing and Dicing: The Structural Problems of the Tax Reform Framework, by Reuven Avi-Yonah (Michigan)

October 22, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 21, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Clausing & Kleinbard: Trump’s Economists Say A Corporate Tax Cut Will Raise Wages by $4,000. It Doesn’t Add Up.

Following up on Tuesday's post, Council of Economic Advisers: Reducing Corporate Tax Rate From 35% To 20% Would Increase Household Income By $4,000/Year:  Kimberly Clausing (Reed) & Edward Kleinbard (USC), Trump’s Economists Say a Corporate Tax Cut Will Raise Wages by $4,000. It Doesn’t Add Up.:

The President’s Council of Economic Advisers claims that slashing the corporate tax rate to 20 percent would boost the average American’s wages by $4,000 per year (“very conservatively”) — and perhaps by as much as $9,000. If true, that would be a remarkable gain for working Americans.

Unfortunately, it’s extraordinarily unlikely to be true.

Continue reading

October 21, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (8)

How Faculty Can Publicize Their Research And Increase Their Scholarly Metrics And Reputation

BlogsChronicle of Higher Education, Publicize Your Research:

Legislators and the public are often skeptical that higher-education tax dollars are being put to good use. Colleges see it as more important than ever, then, for academics to be able to explain their research in lively, accessible ways. At Michigan State University, a group of faculty members recently gathered to learn how.

The leaders of a three-hour workshop outlined a number of ways to to communicate beyond academic peers. Among them: 30-second elevator speeches, jargon-free writing, linking your work to real-world problems, and cultivating a certain level of media savvy. Equally important is a sense of urgency. "We need everyone to understand," says Stephen Hsu in a video that kicks off the training, "why what we do is important."

Continue reading

October 21, 2017 in Legal Education | Permalink | Comments (0)

Sukhsimranjit Singh Named Managing Director Of Pepperdine's #1 Ranked Straus Institute For Dispute Resolution

SinghSukhsimranjit Singh Named Managing Director of the Straus Institute for Dispute Resolution:

Professor Singh came to the Institute in 2016 as an Associate Director of the Institute and Director of the LL.M. program. He brought with him nearly a decade of teaching and administrative experience as the founding Associate Director of Willamette School of Law’s Center for Dispute Resolution, where he ran the LL.M. program and also taught at the school of management. He is an excellent trainer, teacher and mediator. Singh will now take on expanded responsibilities, managing the day-to-day operations of Straus and joining the leadership team.

Continue reading

October 21, 2017 in Legal Education | Permalink | Comments (0)

Friday, October 20, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews a new article by Rebecca Morrow (Wake Forest), Government as Investor: The Case for Immediate Expensing, 105 Ky. L. Rev. ___ (2017).

Scharff (2017)In her forthcoming article, Government as Investor:  The Case for Immediate Expensing, Rebecca Morrow enters the thicket of existing academic and policy debates about how our tax system should treat business investment.  With clear writing and voluminous footnotes, she surveys the capitalization versus immediate expensing debate, and she emerges with some interesting suggestions for reforming our current system. 

Morrow’s chief insight is to focus on the federal government, rather than the taxpayer.  As she writes, “since the government already, by operation of immediate expensing tax policies, acts like an indirect investor in long-standing, expensive, and expanding ways, it should expressly acknowledge and begin to be deliberate about this role.” 

Continue reading

October 20, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Law School Responses To Speech Protests, From Best (Georgetown) To Worst (Seattle, Thurgood Marshall)

GSTFollowing up on my previous posts:

American Lawyer, At Law Schools, Rowdy Protests Provide Teachable Moments:

Since February, when violent protests canceled a speech by provocative writer Milo Yiannopoulos at the University of California, Berkeley, colleges and universities nationwide have faced criticism for caving to opposition by canceling events.

Law schools have not escaped the clashes. The nationwide free-speech-on-campus debate took root at three law schools this fall as protesters opposed speakers or events, prompting widely different responses from schools.

Those reactions from law school administrators provide examples of best and worst practices in the free-speech realm, and they come at a time when First Amendment advocates say it’s more important than ever for law schools to be role models in upholding free speech. ...

Continue reading

October 20, 2017 in Legal Education | Permalink | Comments (3)

Does A Professor's Scholarly Productivity Decline With Age?

Inside Higher Ed, Productivity: Age Is Just a Number:

Conventional wisdom on faculty research productivity, backed by decades of studies, says that it’s all downhill after tenure. A new paper challenges that paradigm, suggesting great variability in peak research activity among individual scientists — even if their aggregate productivity curve still feeds the posttenure “dead weight” myth.

IHE

Continue reading

October 20, 2017 in Legal Education, Scholarship | Permalink | Comments (4)

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 36, No. 3 (Summer 2017):

Continue reading

October 20, 2017 in Scholarship, Tax | Permalink | Comments (1)

Recent Trends In Like-Kind Exchanges

Gerald Auten (U.S. Treasury Department, Office of Tax Analysis), David Joulfaian (U.S. Treasury Department, Office of Tax Analysis & Romen Mookerjee (Dartmouth), Recent Trends in Like-Kind Exchanges:

Like-kind exchanges enable taxpayers to defer capital gains taxes when certain types of property are exchanged rather than sold. The deferred gains from such exchanges have grown over the years, peaking at over $100 billion before the onset of the Great Recession. Equally noteworthy, the share of corporations of these exchanges has increased in recent years, with much of the corporate deferred gain concentrated in certain sectors and accounted for by a relatively small number of firms.

Continue reading

October 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Rethinking Fiscal Federalism’s Tax-Assignment Problem

Lord of the RingsPeter A. Prescott (Butler), One Tax to Rule Them All: Rethinking Fiscal Federalism’s Tax-Assignment Problem, 96 Neb. L. Rev. 1 (2017):

In J.R.R. Tolkien’s The Lord of the Rings, the Dark Lord Sauron created the One Ring to enslave the leaders of the elves, dwarves, and humans. On it, Sauron inscribed the latter half of this poetic warning: “One ring to rule them all, one ring to find them; One ring to bring them all and in the darkness bind them.” The intergovernmental tax system proposed here for the United States might well be described in the same way — one federal-level tax structure to “rule” (and largely replace) the fifty states’ current tax structures. Because the proposed structure is centralized, it would better “find” multi-state taxpayers and it would more efficiently and effectively “bring” and “bind” their corresponding tax bases (e.g., taxable income) before converting those bases into tax revenue that would feed expenditures at the federal and state government levels. To develop and support that proposal, this Article revisits fiscal federalism’s tax-assignment problem using traditional tax policy considerations and with an eye toward reevaluating the conventional wisdom disfavoring centralized taxation in light of recent developments in the field of behavioral economics. ...

Continue reading

October 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Thursday, October 19, 2017

Toder Presents Replacing Corporate Revenues With A Mark-to-Market Tax On Shareholder Income Today At San Francisco

Toder (2017)Eric Toder (Tax Policy Center) presents Replacing Corporate Revenues With a Mark to Market Tax on Shareholder Income (with Alan D. Viard) at San Francisco today as part of its Tax Policy Lecture Series:

We propose reducing the corporate tax rate to 15 percent and replacing the foregone revenue with a tax at ordinary income rates on the accrued, or mark-to-market, income of American shareholders of publicly traded corporations, accompanied by an imputation credit for U.S. corporate income taxes paid. The proposal would dramatically reduce the tax significance of the source of corporate profits and the residence of corporations, both of which can be easily manipulated. Lowering the corporate tax rate to 15 percent would encourage a flow of capital into the United States and reduce incentives to shift reported profits overseas and to engage in inversion transactions, while continuing to impose tax on foreigners who earn economic rents from investing in the United States.

Continue reading

October 19, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

McCaffery Launches The People's Tax Page

PTPHuffington Post:  The Deep Problem with Tax Policy: No One Understands It, by Edward McCaffery (USC):

As America once again considers tax reform, with President Trump promising the greatest tax cut ever, the nation faces many choices. We could attempt to shore up the individual income tax, or move to a more consumption-based system. We could lower all rates, or just raise the standard deduction. We could cut the payroll tax instead of or in addition to the income tax. We could flatten tax rates or make them more progressive. We could reform and make corporate taxes more sensible, or even eliminate them altogether. And so on: there are many options.

Continue reading

October 19, 2017 in Tax | Permalink | Comments (4)

McMahon: Pre-Enforcement Litigation Needed For Taxing Procedures

Stephanie Hunter McMahon (Cincinnati), Pre-Enforcement Litigation Needed for Taxing Procedures, 92 Wash. L. Rev. 1317 (2017):

Courts have opened tax guidance to procedural attack. Consequently, taxpayers who are found to owe tax may challenge the validity of the guidance implementing the tax if the procedure used by the Treasury Department in adopting the guidance failed to comply with the Administrative Procedure Act, in particular, with notice-and-comment. This increased willingness to consider tax guidance’s procedural defects offers little to most taxpayers unless they are also given a better means to raise procedural challenges. Under current law and in most circumstances, generally, taxpayers can bring a challenge only after they have been found to owe taxes in an audit and completed an internal IRS appeal process. This delay in the ability to challenge guidance reduces the likelihood taxpayers will challenge the procedure used to create a particular rule. Moreover, delayed litigation requires taxpayers to plan their affairs under the umbrella of guidance that might not survive a procedural challenge. To the extent procedural challenges are accepted in the tax context, this Article argues Congress should narrowly repeal its prior limitations on pre-enforcement litigation of those procedures.

Continue reading

October 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

Engler: Goodwill Hunting Gone Bad — Tax Law's Outmoded Treatment Of Goodwill

Goodwill HuntingMitchell L. Engler (Cardozo), Goodwill Hunting Gone Bad: Tax Law's Outmoded Treatment of Goodwill, 96 Neb. L. Rev. ___ (2017):

Goodwill reflects the positive consumer association with a business. Goodwill thus overlaps with trademarks and other related assets. This close association impedes the separation of goodwill value from such related assets. Difficulties thus arise when the tax law treats goodwill more (or less) favorably than related intangible assets.

For instance, the tax law previously denied any depreciation deductions for goodwill. Business buyers thus often allocated their costs away from goodwill and towards related assets like depreciable customer lists. The IRS responded with the initial “goodwill hunting” wave, challenging taxpayers’ low goodwill valuations. Congress addressed this litigious area in 1993 with new, matching depreciation rules for purchased goodwill and related intangible assets.

Continue reading

October 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

The One Percent Across Two Centuries: Piketty Presents Misleading Picture Of The Dynamics Of Wealth Inequality In The United States

PikettyRichard Sutch (UC-Riverside), The One Percent Across Two Centuries: A Replication of Thomas Piketty's Data on the Concentration of Wealth in the United States, 41 Soc. Sci. Hist. 587 (2017) (free earlier online version):

This exercise reproduces and assesses the historical time series on the top shares of the wealth distribution for the United States presented by Thomas Piketty in Capital in the Twenty-First Century. Piketty's best-selling book has gained as much attention for its extensive presentation of detailed historical statistics on inequality as for its bold and provocative predictions about a continuing rise in inequality in the twenty-first century. Here I examine Piketty's US data for the period 1810 to 2010 for the top 10 percent and the top 1 percent of the wealth distribution. I conclude that Piketty's data for the wealth share of the top 10 percent for the period 1870 to 1970 are unreliable. The values he reported are manufactured from the observations for the top 1 percent inflated by a constant 36 percentage points. Piketty's data for the top 1 percent of the distribution for the nineteenth century (1810–1910) are also unreliable. They are based on a single mid-century observation that provides no guidance about the antebellum trend and only tenuous information about the trend in inequality during the Gilded Age. The values Piketty reported for the twentieth century (1910–2010) are based on more solid ground, but have the disadvantage of muting the marked rise of inequality during the Roaring Twenties and the decline associated with the Great Depression. This article offers an alternative picture of the trend in inequality based on newly available data and a reanalysis of the 1870 Census of Wealth. This article does not question Piketty's integrity. ...

Continue reading

October 19, 2017 in Tax | Permalink | Comments (1)

California Keeps Bar Exam Cut Score At 144, Second Highest In Nation

California Bar ExamCalifornia Courts News Release:

In view of the rising costs of legal education and the financial hardship potentially resulting from non-admission to the California bar, the court determined last February to assess whether the current pass score (cut score) of 1440 for the California bar exam is appropriate for evaluating the minimum competence necessary for entering attorneys to practice law in this state. 

Continue reading

October 19, 2017 in Legal Education | Permalink | Comments (3)

Nevada Lowers Bar Exam Cut Score From 140 to 138, Pass Rate Increases By 23%

UNLV Logo (2016)Following up on my previous post, Oregon Lowers Bar Exam Cut Score From 142 to 137, Pass Rate Increases By 36%:  Las Vegas Review-Journal, UNLV Law School Sees Big Jump in Bar Exam Passage:

The verdict for Nevada’s most recent bar exam is in, and it’s a positive outcome for UNLV’s Boyd School of Law. Boyd students who sat for the test for the first time in July passed at a rate of 81 percent, 15 percentage points higher than in July 2016. ...

Nevada’s bar exam, which is administered twice a year, is notorious for being one of the nation’s toughest. But this year, the state Supreme Court made several decisions to make the test more user-friendly.

Continue reading

October 19, 2017 in Legal Education | Permalink | Comments (1)

Real Property, Trust & Estate Law Journal Publishes New Issue

RPTE (2018)The Real Property, Trust and Estate Law Journal has published Vol. 52, No. 1 (Spring 2017):

Continue reading

October 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, October 18, 2017

Satterthwaite Presents Electing Into A Value-Added Tax Today At Northwestern

SatterthwaiteEmily Satterthwaite (Toronto) presents Electing into a Value-Added Tax: Evidence from Ontario Micro-Entrepreneurs at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Across countries, value-added tax (VAT) statutes typically recognize the disproportionate burden of VAT compliance for smaller firms by exempting “small suppliers” (defined as businesses with annual revenues less than a specified registration threshold) from the obligation to register for, collect, and remit VAT on their sales.  But most input-credit-style VATs also offer small suppliers a curious choice: they can elect into the VAT by voluntarily registering.  Because VAT paid on inputs is refundable for registered firms, small suppliers have stronger incentives to voluntarily register as they (1) purchase more of their inputs from registered firms (the “input channel”) or (2) sell more of their output to registered firms (the “customer channel”).  In theory, these “formality chain effects” can improve the efficiency of a VAT.  In practice, however, many VATs feature registration thresholds that are far lower in dollar terms than recommended by economists.  Where a registration threshold is very low, might microenterprises’ high VAT compliance costs weaken their incentives to voluntarily register, thereby undermining the policy rationale for offering the election?  This paper uses qualitative and quantitative research methods to explore the relevance of the formality chain effect theory in the context of a low registration threshold.

Continue reading

October 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Halpern Presents Litigation In The U.S. Tax Court Today At Pennsylvania

Penn (2017)James S. Halpern (Judge, U.S. Tax Court) presents Litigation in the Tax Court at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

The Tax Court continues to serve a unique and important role in the Federal government’s tax collection process. The Court provides an impartial tribunal for the adjudication of tax disputes before assessment of the tax (and the government’s ability to invoke its powerful extrajudicial means of seizing property to satisfy tax debts). It also creates a body of precedents that interpret Federal tax law uniformly across the country. The Court’s fundamental role has not changed since …

Continue reading

October 18, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Harvard Law School Report On The State Of Black Alumni

HarvardDavid B. Wilkins (Harvard) & Bryon Fong (Harvard), Harvard Law School Report on the State of Black Alumni II 2000-2016:

One hundred and fifty years ago this year, the Law School enrolled George Lewis Ruffin, who would go on to be the first black person to graduate from any law school in the United States. In the intervening years, Harvard has graduated more black lawyers — over 2,700 — than any law school in the country with the exception of the great Howard University School of Law. Among their ranks are some of the most powerful and influential lawyers in the world, including the 44th President of the United States and the country’s former First Lady, Michelle Obama ’88.

In 2000, the Harvard Law School Center on the Legal Profession released a Report on the State of Black Alumni: 1869-2000 chronicling the achievements and continuing challenges of this remarkable group of lawyers on the basis of a comprehensive survey of the careers of over 650 of the school’s African American alumni. In this new Report, based on a second survey of the school’s black alumni, including those that graduated in the new millennium and matured during the Age of Obama, we both bring that history up to date and offer new perspectives for this new era.

Continue reading

October 18, 2017 in Legal Education | Permalink | Comments (0)

Call for Papers: 2018 International Conference On Tax Administration

UNSWCall for Papers:

The International Conference on Tax Administration is a prestigious biennial event that brings together leading tax administrators, academics and practitioners from around the globe. The theme of the 2018 conference will be Tax System Integrity in a Digital Age. The conference will explore the impact of digital and disruptive technologies upon all aspects of tax administration in developed and developing economies, including (but not limited to): taxpayer and intermediary interactions with revenue authorities; tax filing; tax compliance and compliance costs; tax collection; information and big data management; the cashless economy; blockchain and crypto-financing; harnessing technology in the post-BEPS environment and taxing the virtual economy.

Your proposal should include the following details:

Continue reading

October 18, 2017 | Permalink | Comments (0)

REMAND Makes National Television Broadcast Premiere Tonight

GashRemand: To remain indefinitely and hopelessly in prison while awaiting trial.

I encourage you to check out tonight’s national television broadcast premiere of the inspiring and award-winning documentary film REMAND.  The BBC and Washington Post both chronicle how Pepperdine Law professor Jim Gash’s representation of a wrongly accused Ugandan juvenile prisoner named Henry led to his exoneration and release.  Revolution Pictures dramatically captures how this case sparked transformative change in Uganda’s entire criminal justice system through the work of Pepperdine’s Sudreau Global Justice Program.

Continue reading

October 18, 2017 in Legal Education | Permalink | Comments (0)

Hickman & Kerska: Restoring The Lost Anti-Injunction Act

Kristin E. Hickman (Minnesota) & Gerald Kerska (J.D. 2017, Minnesota), Restoring the Lost Anti-Injunction Act, 103 Va. L. Rev. ___ (2017):

Should Treasury regulations and IRS guidance documents be eligible for pre-enforcement judicial review? The D.C. Circuit’s 2015 decision in Florida Bankers Association v. Treasury puts its interpretation of the Anti-Injunction Act at odds with both general administrative law norms in favor of pre-enforcement review of final agency action and also the Supreme Court’s interpretation of the nearly identical Tax Injunction Act. A 2017 federal district court decision in Chamber of Commerce v. Internal Revenue Service, appealable to the Fifth Circuit, interprets the Anti-Injunction Act differently and could lead to a circuit split regarding pre-enforcement judicial review of Treasury regulations and IRS guidance documents.

Continue reading

October 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Columbia Is Seventh Law School To Accept GRE For Admissions

Columbia (2017)Following up on my previous posts (links below):  Columbia is the seventh law school to accept the GRE as an alternative to the LSAT,  joining (in chronological order) Arizona, Harvard, Northwestern, Georgetown, Hawaii, and Washington University:

As part of its ongoing commitment to preparing students to be leaders in the legal profession, as well as other fields such as science, technology, public policy, and business, Columbia Law School will accept Graduate Record Exam (GRE) scores in addition to LSAT scores from applicants to the three-year J.D. program beginning on a trial basis in fall 2018. ...

Continue reading

October 18, 2017 in Legal Education | Permalink | Comments (0)

Pittsburgh Tax Review Publishes New Issue

Tuesday, October 17, 2017

Weisbach Discusses The Unified Framework For Fixing Our Broken Tax Code Today At Columbia

WeisbachDavid A. Weisbach (Chicago) discusses the Treasury Department's Unified Framework For Fixing Our Broken Tax Code at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk.  The discussion builds on David's article, A Guide to the GOP Tax Plan – The Way to a Better Way,  8 Colum. J. Tax L. 171 (2017):

The tax reform plan — A Better Way — put forward by the chairman of the House Ways and Means Committee Kevin Brady and the Speaker of the House, Paul Ryan would be the most substantial tax reform in the United States since the enactment of the income tax in 1913. At the corporate level, the reform would allow immediate expensing of investments, deny deductions for net interest expense, and eliminate the taxation of income from sales in foreign countries while taxing the full value of imports (together shifting the tax base to a destination basis). At the individual level, the system would tax capital income including interest, dividends, and capital gains at half the rate that wages and salaries are taxed. It would also repeal the estate and generation skipping taxes. These changes would go a long way toward shifting the tax system to taxing consumption rather than income.

This paper considers the implementation of the House GOP tax plan and addresses issues that will need to be resolved if the plan is to work as intended. The plan is based on, and builds off of, a long history of thinking about consumption taxes. To understand the basic choices made in the plan, it is helpful to understand this history and how consumption taxes work in general.

Continue reading

October 17, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Sander & Steinbuch: Mismatch And Bar Passage: A School-Specific Analysis

Richard H. Sander (UCLA) & Robert Steinbuch (Arkansas-Little Rock), Mismatch and Bar Passage: A School-Specific Analysis:

Past research on law school mismatch has been hampered by the absence of school-specific data, thus requiring scholars to estimate individual levels of mismatch through various indirect techniques. In this paper, the authors use data on nearly four thousand students at three law schools to directly measure mismatch levels based on LSAT scores or an academic index. The analysis shows large and statistically significant effects of mismatch; when one controls for mismatch, racial effects lose statistical significance. The results highlight the importance of mismatch in explaining both racial bar passage gaps and individual outcomes on the bar. The results also illustrate the great importance of individual school-level data across a range of schools in studying mismatch.

Table 2

Continue reading

October 17, 2017 in Legal Education, Scholarship | Permalink | Comments (3)

Council of Economic Advisers: Reducing Corporate Tax Rate From 35% To 20% Would Increase Household Income By $4,000/Year

WHCouncil of Economic Advisers, Corporate Tax Reform and Wages: Theory and Evidence:

Wage growth in America has stagnated. Over the past eight years, the real median wage in the U.S. rose by an average of six-tenths of a percent per year. But even as Americans’ real wages stagnated, real corporate profits soared, increasing by an average of 11 percent per year. The relationship between corporate profits and worker compensation broke down in the late 1980s. Prior to 1990, worker wages rose by more than 1 percent for every 1 percent increase in corporate profits. From 1990-2016, the pass-through to workers was only 0.6 percent, and looking most recently, from 2008-2016, only 0.3 percent.1 The profits of U.S. multinationals are still American profits, but, increasingly, the benefits of those profits do not accrue to U.S. workers.

The deteriorating relationship between wages of American workers and U.S. corporate profits reflects the state of international tax competition. The problem is not unique to America; countries around the world have responded to the international flow of capital by cutting their corporate tax rates to attract capital back from other countries. They have doubled down on such policies as they have seen business-friendly policies benefit workers. This analysis from the Council of Economic Advisers reviews the evidence that has driven other developed countries to pursue the path of lower corporate tax rates and estimates how business tax reform in the Unified Framework for Fixing Our Broken Tax Code2 (hereafter, the “Unified Framework”) is expected to affect wages for American workers.

Reducing the statutory federal corporate tax rate from 35 to 20 percent would, the analysis below suggests, increase average household income in the United States by, very conservatively, $4,000 annually. The increases recur each year, and the estimated total value of corporate tax reform for the average U.S. household is therefore substantially higher than $4,000. Moreover, the broad range of results in the literature suggest that over a decade, this effect could be much larger.

Figure 2

Continue reading

October 17, 2017 in Gov't Reports, Tax | Permalink | Comments (0)

Shobe:  Supercharged IPOs And The Up-C

Gladriel Shobe (BYU), Supercharged IPOs and the Up-C, 88  U. Colo. L. Rev. 913 (2017):

The “supercharged IPO”, a new and increasingly popular financial transaction, has fundamentally changed the nature of IPOs for many companies. Traditionally, an IPO was a tax nonevent for the company and the owners, meaning it created no tax liability for either. Through creative and questionable tax planning, companies have found a way to do better than this by effectively generating a negative tax liability for the company and its owners. These transactions have received substantial attention from practicing lawyers, investment bankers, journalists, and even briefly caught the attention of Congress. Yet these transactions have attracted surprisingly little scrutiny from scholars, and the attention they have received has failed to consider the different types of supercharged IPOs, which is necessary for understanding why these transactions exist, why they have increased in popularity, and whether they are justified legally and normatively. This Article examines the costs and benefits of the different types of supercharged IPOs to show that some of these transactions have greater tax benefits than scholars have realized. It places a particular emphasis on the Up-C, a structure with the greatest tax benefits, which scholars have overlooked even though it is by far the most common, and increasingly popular, form of supercharged IPO. A closer examination of the Up-C, separate from other supercharged IPOs, reveals that this structure produces tax benefits that are not justified by the regulations that supposedly allow them.

Continue reading

October 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Hickman: Altera Meets Chamber Of Commerce

Hickman (2017)TaxProf Blog op-ed:  Altera Meets Chamber of Commerce, by Kristin Hickman (Minnesota):

Last week, a Ninth Circuit panel heard oral arguments in the government’s appeal from Altera Corp. & Subs. v. Commissioner, 145 T.C. 91 (2015).  Frequent readers of this blog will recall that the appeal concerns the Tax Court’s decision to invalidate regulations under Section 482 regarding cost-sharing arrangements on grounds that the regulations were not the product of reasoned decisionmaking as required by the arbitrary and capricious standard of Administrative Procedure Act (APA) § 706(2)(A) and Motor Vehicle Manufacturers Association of the United States v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983).  For the most part, the oral argument considered the substantive reasonableness of the regulations in question as an interpretation of Section 482, although there was also some discussion of whether the IRS adequately explained its reasoning in the regulatory preamble.  Judge Kathleen O’Malley of the Federal Circuit, sitting by designation, asked a question that in turn raises an interesting issue, particularly in light of recent coverage of Chamber of Commerce v. IRS, in which a federal district court in Texas interpreted the Anti-Injunction Act (AIA), 26 U.S.C. § 7421(a), as allowing pre-enforcement judicial review of an APA procedural challenge against Treasury regulations addressing inversion transactions.

Continue reading

October 17, 2017 in New Cases, Scholarship, Tax | Permalink | Comments (0)

Harvard Law Review Elects First Ever Majority Female Class

HarvardHarvard Crimson, Law Review Elects First Ever Majority Female Class:

The Harvard Law Review selected more female editors than male editors to join the prestigious journal’s ranks this summer, welcoming a majority-female class for the first time in the publication’s history.

The editorial class, chosen after a rigorous competition tested the skills of prospective first-year law students, consists of 24 women and 22 men.

Continue reading

October 17, 2017 in Legal Education | Permalink | Comments (0)

The Problem Of Taxpayer Communications And The Return Receipt Requirement

Return Receipt 2Nina Olson, the National Taxpayer Advocate (as if you did not know), had a great blog last week describing a really cool study her office conducted on how to improve taxpayer compliance with the Earned Income Tax Credit (ETIC ... again, as if you did not know).

The basic idea was to see if a simple letter mailed to taxpayers who had demonstrated some identifiable error in their 2014 EITC claims would result in them making fewer errors in their 2015 EITC claims. Not only that, but the study compared that group to a control group of similar taxpayers who made similar errors but who were not sent a letter explaining where they went wrong.

Certainly, my intuition as a teacher is that when you give feedback on what students do wrong, they tend to do better. The study supports that intuition’s application to taxpayers: tell them what they were doing wrong and they will do better overall and will certainly do better than those who get no such feedback.

What struck me as particularly interesting and worth further comment was the feature of just how the Taxpayer Advocate Service sent the letter to the taxpayers. Nina gives this description:

Continue reading

October 17, 2017 in Bryan Camp, Gov't Reports, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Yu: Cross-Deductions In The Net Investment Income Tax Imposed On A Trust Or Estate With Separate Shares

Michael T. Yu (California-Western), Cross-Deductions in the Net Investment Income Tax Imposed on a Trust or Estate with Separate Shares, 14 Pitt. Tax. Rev. 77 (2016):

The Health Care and Education Reconciliation Act of 2010 imposed, through new Code § 1411, a tax of 3.8% on certain net investment income (NII) of certain individuals, estates, and trusts for taxable years beginning after December 31, 2012 (the Net Investment Income Tax, or NIIT). Final regulations under § 1411 were published on December 16, 2013, which are effective for taxable years beginning after December 31, 2013.2 Section 1411 and the regulations thereunder, despite imposing the NIIT on certain trusts and estates, contain no reference to § 663 or the regulations thereunder (the separate share rule). Neither § 663(c) nor the regulations thereunder have been amended to reflect new § 1411 or the regulations thereunder. Treasury Regulation § 1.1411-1(a) ostensibly incorporates § 663(c) (and all other Chapter 1 Code provisions that determine taxable income under § 63(a), sometimes referred to in this article as the regular income tax) into determining the NIIT, but I argue that the regulation uses imprecise language and should be amended along the lines of my proposed language.

Continue reading

October 17, 2017 in Scholarship, Tax | Permalink | Comments (0)