TaxProf Blog

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

Thursday, November 30, 2017

Ring Presents Leak-Driven Law Today At The London School Of Economics

Ring (2017)Diane Ring (Boston College) presents Leak-Driven Law, 65 UCLA L. Rev. __ (2018) (with Shu-Yi Oei (Boston College)) today at the London School of Economics:

Over the past decade, a number of well-publicized data leaks have revealed the secret offshore holdings of high-net-worth individuals and multinational taxpayers, leading to a sea change in cross-border tax enforcement. Spurred by leaked data, tax authorities have prosecuted offshore tax cheats, attempted to recoup lost revenues, enacted new laws, and signed international agreements that promote “sunshine” and exchange of financial information between countries.

The conventional wisdom is that data leaks enable tax authorities to detect and punish offshore tax evasion more effectively, and that leaks are therefore socially beneficial from an economic welfare perspective. This Article argues, however, that the conventional wisdom is too simplistic.

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November 30, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Business School Alumni Perspectives On The Need For Legal Studies

Chase Jeremiah Edwards & Reece Theriot et al., Business School Alumni Perspectives on the Need for Legal Studies:

Law professors who teach in schools of business have continually been forced to serve as advocates for their own presence in the business academy. Despite increasing rates of white-collar crime, ethical misconduct, and bankers run amuck, accrediting bodies for elite colleges and schools of business and, more surprisingly, accounting programs have repeatedly considered scaling back or eliminating requirements for basic legal training. This article adds a third decade of linear data as reaffirming testimony to business students’ continued need for more knowledge of the law.

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November 30, 2017 in Legal Education | Permalink | Comments (0)

WSJ Op-Ed: How Tax Reform Will Lift The Economy

Wall Street Journal op-ed:  How Tax Reform Will Lift the Economy, by Robert Barro (Harvard), Michael Boskin (Stanford), John Cogan (Stanford), Douglas Holtz-Eakin (American Action Forum), Glenn Hubbard (Dean, Columbia), Lawrence Lindsey ( The Lindsey Group), Harvey Rosen (Princeton), George Shultz (Stanford University), John Taylor (Stanford University):

The present debate over tax reforms proposed by President Trump’s administration and embodied in bills that have passed the House of Representatives and the Senate Finance Committee has raised the basic question of whether the bills are “pro-growth”: Would the proposals raise current and future economic activity and generate federal tax revenue that would reduce the “static cost” of the reforms? This letter explains why we believe that the answer to these questions is “yes.” ...

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November 30, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (3)

Death Of Chris Bergin (Tax Analysts)

BerginObituary:

Christopher E. Bergin, 65, former president and publisher of Tax Analysts and a longtime advocate for greater transparency in taxation, died suddenly November 22 following complications from an earlier surgery.

Bergin's time at Tax Analysts began in 1991 as editor of Tax Notes. A decade later, he took the helm of the organization, serving as president and publisher for 16 years. Previously, Bergin was managing editor at Prentice Hall.

A tireless advocate for transparency, in his own words, Bergin wrote that his "passion here is to see that every citizen gets equal and fair treatment in paying taxes." To that end, Bergin was never reluctant to seek legal means to compel government agencies to release information and shed light on how the Internal Revenue Service performed its duties.

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November 30, 2017 in Obituaries, Tax | Permalink | Comments (1)

Can The GRE Cure What Ails Law Schools?

GRELaw.com, Can the GRE Cure What Ails Law Schools?:

As more law schools accept a new admissions test from aspiring law students, debate about their motives and whether they’ll meet their goals of diversifying the applicant pool has swirled behind the scenes.

Law deans hope to recruit a new type of law student by accepting applications that use Graduate Record Examination scores, rather than the traditional Law School Admission Test. Law schools, eyeing the extremely large group of GRE test takers, have seen a potential to improve not only the gender, racial and ethnic mix of law students, but also broader metrics such as socioeconomic status, educational backgrounds and professional experience. Particularly, law schools, which have seen the number of applicants decline and LSAT scores fall, want students who have studied or had careers in science, technology, engineering and mathematics, a cohort that statistically has been shown to perform well in legal education.

Meanwhile, critics of the GRE cast doubts about whether the test is capable of increasing diversity along racial and ethnic lines, and question whether schools are trying to fill seats while gaming the law school ranking system.

Because the trend of law schools accepting the GRE is new, the idea that it can diversify the pool of law students is just a promise—there’s no hard data to show it will come true. However, extensive information about the people who take the GRE is available, including their undergraduate majors and their racial, ethnic and gender attributes.

An analysis of the data provides a window into why law school deans are pinning their hopes on the GRE to boost diversity and the sheer number of applicants, at a time when the total number of people applying to American Bar Association-accredited law schools has plunged by about 61 percent in the last decade, according to the Law School Admission Council’s comparable data. ...

The lack of STEM diversity among current law school applicants taking the LSAT is profound, and the available data backs up law schools’ hopes that using the GRE can help them recruit more of those students.

STEM majors would do very well in law school, according to an analysis published this year by Pepperdine University School of Law professor Robert Anderson. He found that STEM students on average score 160 or higher on the LSAT.

That’s promising information considering that, overall, [applicants with] LSAT scores of more than 160 have dropped [45] percent since 2010, according to research by Pepperdine’s dean, Paul Caron. Meanwhile, the average score on the Multistate Bar Exam in February hit the lowest point since the exam was first administered in 1972.

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November 30, 2017 in Legal Education | Permalink | Comments (3)

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 November 1, 2017) 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.)

73,183

Reuven Avi-Yonah (Mich.)

12,822

2

Michael Simkovic (USC)

37,730

Lily Batchelder (NYU)

5530

3

Paul Caron (Pepperdine)

33,777

D. Dharmapala (Chicago)

3753

4

D. Dharmapala (Chicago)

32,255

Richard Ainsworth (BU)

3501

5

Louis Kaplow (Harvard)

28,745

Michael Simkovic (USC)

3430

6

Vic Fleischer (San Diego)

24,117

Michael Graetz (Columbia)

2995

7

Ed Kleinbard (USC)

23,699

David Gamage (Indiana)

2948

8

James Hines (Michigan)

23,265

Andy Grewal (Iowa)

2905

9

Richard Ainsworth (BU)

22,337

Hugh Ault (Boston College)

2709

10

Richard Kaplan (Illinois)

22,449

David Weisbach (Chicago)

2648

11

Ted Seto (Loyola-L.A.)

22,301

Ed Kleinbard (USC)

2410

12

Katie Pratt (Loyola-L.A.)

20,647

William Byrnes (Texas A&M)

2222

13

David Weisbach (Chicago)

19,926

Omri Marian (UC-Irvine)

2050

14

Robert Sitkoff (Harvard)

19,589

Darien Shanske (UC-Davis)

2038

15

Brad Borden (Brooklyn)

18,735

Louis Kaplow (Harvard)

2007

16

Chris Sanchirico (Penn)

18,463

Steven Bank (UCLA)

1862

17

Carter Bishop (Suffolk)

18,446

Daniel Shaviro (NYU)

1761

18

Francine Lipman (UNLV))

18,078

Bridget Crawford (Pace)

1661

19

Daniel Shaviro (NYU)

17,986

Chris Sanchirico (Penn)

1579

20

Bridget Crawford (Pace)

17,792

Jordan Barry (San Diego)

1574

21

Jen Kowal (Loyola-L.A.)

17,781

Stephen Shay (Harvard)

1558

22

Dennis Ventry (UC-Davis)

16,662

Paul Caron (Pepperdine)

1544

23

Steven Bank (UCLA)

15,957

Jeff Kwall (Loyola-Chicago)

1519

24

David Walker (BU)

15,827

Francine Lipman (UNLV)

1496

25

Gregg Polsky (Georgia)

14,344

Cliff Fleming (BYU)

1483

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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November 30, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

House GOP To Cap Amount Of Student Loans For Law School, Eliminate Public Service Loan Forgiveness

Wall Street Journal, House GOP to Propose Sweeping Changes to Higher Education:

The Republican-controlled U.S. House of Representatives this week will propose sweeping legislation that aims to change where Americans go to college, how they pay for it, what they study and how their success — or failure — affects the institutions they attend.

The most dramatic element of the plan is a radical revamp of the $1.34 trillion federal student-loan program. It would put caps on borrowing by parents and students and eliminate some loan-forgiveness programs for students. ...

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November 30, 2017 in Legal Education | Permalink | Comments (12)

Tax Cut Pie

Ed McCaffery's People's Tax Page on the Senate's tax bill:

Cut

November 30, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (4)

Wednesday, November 29, 2017

Sanchirico Presents Expensing And Interest In The GOP Tax Blueprint Today At Penn

SanchiricoChris Sanchirico (Pennsylvania) presents Expensing and Interest in the GOP Blueprint: Good Deal? Good Idea?, 155 Tax Notes 339 (Apr. 17, 2017), at Pennsylvania today as part of its Tax Policy Workshop Series:

November’s election thrust to the fore the tax reform Blueprint released last June by House GOP leaders. One of the plan’s key features, which has received surprisingly little attention, is its treatment of business investment. Outlays for plant, equipment and other business assets would be immediately deductible, rather than depreciated over time, while interest costs would be deductible only to the extent of interest income. This plan to replace net interest deductions with expensing of capital outlays is likely to hurt most businesses — some significantly — and so is likely to face a growing chorus of objections in coming months as this becomes clear to business leaders.

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November 29, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Burman: Congress Should Slow Down On Tax Reform And Ask, What Would Reagan Do?

Leonard Burman (Syracuse), Congress Should Slow Down On Tax Reform And Ask, What Would Reagan Do?:

Congress is rushing to rewrite the tax code before Christmas. True tax reform would be a wonderful present for America, but the current tax bills are deeply flawed, the product of a hasty and partisan process. Congress and the president should slow down and go back to the drawing board.

Compare what we are seeing now with the process that led to the landmark Tax Reform Act of 1986. It started in January 1984 when President Reagan directed his Treasury Department to put together a comprehensive tax reform plan that the Treasury would release later that year after the presidential election. While many dismissed this as an election-year gambit, nobody told the Treasury analysts who produced an epic three-volume proposal that justified the most sweeping reform in history. (I joined the Treasury staff midway through tax reform process.) A revised version reflecting input from the White House released in 1985 provided a comprehensive grounding for serious tax reform.

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November 29, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

The Top 25 Law School Moot Court Programs

Following up on my previous post, 2016-17 Moot Court Rankings:  preLaw, Best Schools For Moot Court:

For the top moot court programs, winning is just a happy side effect. Preparing students to practice law and argue in court is what moot court is really all about. ...

[The] University of Houston Law Center’s Blakely Advocacy Institute ... uses a scoring system that assesses the quality of the competitions a school participated in, the size of the competitions and the school’s performance in those competitions to determine the top 16 programs in the nation.

Moot Court

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November 29, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

Meghan Markle’s U.S. Citizenship Could Cause Tax Headaches For British Royal Family

Washington Post, Meghan Markle’s U.S. Citizenship Could Cause Tax Headaches For British Royal Family:

It may seem like a modern fairy tale, but the upcoming wedding of Britain's Prince Harry to American actress Meghan Markle will come with some mundane hurdles. Perhaps most inconveniently for the British royals, this transatlantic partnership could end up involving the United States' Internal Revenue Service.

Buckingham Palace announced Tuesday that Markle will become a British citizen after her wedding next year. Though some foreign politicians are required to give up their dual citizenship, there are no similar rules for British royals — and there has already been widespread speculation that the union of Harry and Markle could eventually result in some British royal children wielding American passports.

But there's a big obstacle in the way: American tax laws. "U.S. citizens are subject to U.S. tax obligations regardless of their country of residence," wrote Peter Spiro, a Temple University law professor and the author of At Home in Two Countries: The Past and Future of Dual Citizenship in an email to The Washington Post. "A member of the royal family would be treated just like anyone else."

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November 29, 2017 in Tax | Permalink | Comments (15)

Florida Coastal Law School: 'We Are Not For Sale'

Florida Coastal (2017)Following up on Saturday's post, WSJ: The Rise And Fall Of A Law School Empire Fueled By $1 Billion Of Federal Loans:  Jax Daily Record, Florida Coastal School of Law: We’re Not For Sale:

Florida Coastal School of Law Dean Scott DeVito on Tuesday described the story published Saturday in the Wall Street Journal stating Florida Coastal could be sold or transition from for-profit to nonprofit status as “old news and reactionary.”

He said the law school is not for sale and there are no plans for it to leave Jacksonville.

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November 29, 2017 in Legal Education | Permalink | Comments (2)

Grinberg: A Destination-Based Cash Flow Tax And The WTO

Itai Grinberg (Georgetown), A Destination-Based Cash Flow Tax Can Be Structured to Comply With World Trade Organization Rules, 70 Nat'l Tax J. 803 (2017):

This paper briefly outlines alternative approaches to enacting a destination-based cash flow tax that are more clearly compatible with the World Trade Organization rules than the approach that has previously been described in the literature. The first structural alternative involves expanding the universe of businesses subject to the tax by clearly defining both the base of the new U.S. business tax and its tax nexus requirement as domestic consumption, and thereafter treating foreign importers and other sellers equivalently, rather than imposing a deduction disallowance or an import tax.

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November 29, 2017 in Scholarship, Tax | Permalink | Comments (0)

NY Times: Laptops Are Great. But Not During A Lecture Or A Meeting.

MacbookNew York Times op-ed:  Laptops Are Great. But Not During a Lecture or a Meeting., by Susan Dynarski (Michigan):

Step into any college lecture hall and you are likely to find a sea of students typing away at open, glowing laptops as the professor speaks. But you won’t see that when I’m teaching.

Though I make a few exceptions, I generally ban electronics, including laptops, in my classes and research seminars.

That may seem extreme. After all, with laptops, students can, in some ways, absorb more from lectures than they can with just paper and pen. They can download course readings, look up unfamiliar concepts on the fly and create an accurate, well-organized record of the lecture material. All of that is good.

But a growing body of evidence shows that over all, college students learn less when they use computers or tablets during lectures. They also tend to earn worse grades. The research is unequivocal: Laptops distract from learning, both for users and for those around them. ...

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November 29, 2017 in Legal Education | Permalink | Comments (3)

Sanchirico: Senate Bill Would Enshrine International Tax Gimmicks

The Hill op-ed:  Senate Bill Would Enshrine International Tax Gimmicks, by Chris Sanchirico (Pennsylvania):

The version of the GOP tax plan that came charging out of the Senate Finance committee just before Thanksgiving break — the version the full Senate takes up this week, and the version most likely to become law — reads like it was written in a rush. This is especially true of the several diverse provisions ostensibly designed to prevent U.S. multinationals from avoiding tax on their foreign earnings.

Those sections, like so many paintballs shot at a wall, present no clear pattern. But step back, tilt your head, and squint: you’ll see that even all the splotches taken together do not in fact put a stop to the tax games that multinationals presently play. Instead they codify and sanctify them. ...

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November 29, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Tuesday, November 28, 2017

Batchelder Presents Improving Retirement Savings Choices Through Smart Defaults Today At Boston College

BatchelderLily Batchelder (NYU) presents Improving Retirement Savings Choices Through Smart Defaults at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu Yi Oei:

Many Americans are not financially prepared for retirement. One of the most powerful levers for influencing their retirement savings choices is defaults. Yet despite the overwhelming evidence of defaults’ power and new research on optimal retirement savings strategies, there have been relatively few reforms to leverage their influence over the past decade.

Making defaults “smarter”—including by taking the novel step of adjusting defaults based on socio-economic characteristics of savers—is a simple way that policymakers could dramatically improve retirement preparedness at little cost to taxpayers. This is true both in the employer plan context and as part of any reforms, such as new state-based auto-IRAs, that expand easy access to tax-preferred retirement savings vehicles outside of employer plans.

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November 28, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Gottlieb Presents The Spillover Effects Of Top Income Inequality Today At Columbia

GottleibJoshua Gottlieb (British Columbia) presents The Spillover Effects of Top Income Inequality (with Jeffrey Clemens (UC-San Diego), David Hemousat (Zurich) & Morten Olsen (Copenhagen)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Top income inequality in the United States has increased considerably within occupations as diverse as bankers, managers, doctors, lawyers and scientists. The breadth of this phenomenon has led to a search for a common explanation. We show instead that increases in income inequality originating within a few occupations can “spill over” into others, driving broader changes in income inequality.

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November 28, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Galle: The Dark Money Subsidy? Tax Policy And Donations To 501(c)(4) Organizations

Brian D. Galle (Georgetown), The Dark Money Subsidy? Tax Policy and Donations to 501(c)(4) Organizations:

This Article presents the first empirical examination of giving to § 501(c)(4) organizations, which have recently become central players in U.S. politics. Although donations to a 501(c)(4) are not legally deductible, the elasticity of c(4) giving to the top-bracket tax-price of charitable giving is - 1.24, very close to the elasticity for charities. 501c(4) donations also correlate with changes in the tax savings from in-kind gifts. These responses could be driven either by donor-side behavior, such as misunderstandings or intentional over-claiming, or by firm-side fundraising.

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November 28, 2017 in Scholarship, Tax | Permalink | Comments (0)

Why Taxpayers Should File Timely Returns Even if Owed A Refund

Taxpayer sometimes believe that they can blow off the filing deadline if they are simply filing a return that will show an overpayment.  That's poor thinking as Professor Les Book explains over at Procedurally Taxing blog.  See “I Thought I Was Getting a Refund” is An Inadequate Excuse for Late Filing"  

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November 28, 2017 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (0)

July 2017 New York Bar Exam Results: Pass Rate Rises To 86% (+4%); CUNY, Pace, Syracuse Outperform Their Predictors

NYSBA (2017)The July 2017 New York bar passage rates by school are out. Here are the results for first time test takers for the 15 New York ABA-approved law schools, along with each school's U.S. News ranking (New York and overall).

Bar Pass

Rank (Rate)

 

School

US News Rank

NY (Overall)

1 (97.9%)

NYU

2 (6)

2 (97.6%)

Columbia

1 (5)

3 (95.7%)

Cornell

3 (13)

4 (93.4%)

Fordham

4 (36)

5 (91.6%)

Syracuse

8 (92)

6 (89.2%)

St. John's

6 (72)

7 (86.8%)

CUNY

14 (127)

86.0%

Statewide Average

8 (85.8%)

Cardozo

5 (65)

9 (78.6%)

Brooklyn

7 (88)

10 (77.5%)

Pace

13 (120)

11 (75.8%)

SUNY-Buffalo

9 (106)

12 (71.3%)

Albany

10 (109)

13 (70.4%)

Hofstra

12 (118)

14 (64.8%)

Touro

15 (Tier 2)

15 (64.7%)

New York Law School

11 (112)

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November 28, 2017 in Legal Education | Permalink | Comments (1)

The IRS Is Building A Safe To Hold Trump’s Tax Returns

SafeThe Politico, The IRS Is Building a Safe to Hold Trump’s Tax Returns:

This week, the 78-year-old Koskinen began his third retirement. And he says the IRS is still a distressed organization. “When Eisenhower left office, his message was: Beware the military-industrial complex,” Koskinen said. “My message is: Beware the collapse of the IRS.”

But its problems, Koskinen said, have nothing to do with politics; a recent inspector general report found no evidence of political bias in the agency’s decisions. Koskinen believes its real problems stem from underfunding and understaffing, which have imperiled its ability to nail tax evaders and collect the tax revenues that fund the government. ...

Koskinen basically believes the IRS and its professional culture are virtually impregnable to political agendas. He hasn’t spoken to Trump or anyone in the White House in 2017, even though he’s known the president since they negotiated the sale of the Commodore Hotel in New York City in 1975. He’s never looked up Trump’s tax returns—legally, he can’t, and neither can any other IRS employee who isn’t working on them—and says the agency not only keeps them in a locked cabinet in a locked room, but is replacing the cabinet with a safe.

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November 28, 2017 in Tax | Permalink | Comments (2)

An Empirical Analysis Of Law School Learning Strategies

Jennifer M. Cooper (Tulane) & Regan A. R. Gurung (Wisconsin), Smarter Law Study Habits: An Empirical Analysis of Law Learning Strategies and Relationship with Law GPA, 62 St. Louis. L.J.  ___ (2018):

Non-empirical law school study advice that emphasizes reading and briefing cases, memorizing rules, and outlining without frequent self-testing and formative self-assessment is contrary to cognitive science and leads to a "law school learning trap." Law students fall into a "law school learning trap" by focusing on memorization of cases and rules for "class prep," putting off practice application of the law as "exam prep." Law students and legal educators misjudge the power of testing as a learning tool, instead relying on non-empirical, anecdotal resources to guide law student study methods.

Empirical research from a Law Student Study Habit Survey shows that practice application of the law through self-testing, self-quizzing, and elaborative strategies positively correlates with academic success in law school, while reading and briefing cases, weak critical reading skills, and rote memorization of rules without practice applying the law negatively correlates with academic success in law school.

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November 28, 2017 in Legal Education, Scholarship, Teaching | Permalink | Comments (0)

Herzfeld: A New Direction For U.S. International Tax Policy

Mindy Herzfeld (Florida), A New Direction for U.S. International Tax Policy:

These slides were prepared for lectures I gave at law schools in Shanghai and in Israel the week of November 13, while the Tax Cuts & Jobs Act of 2017 (H.R.1) was under active consideration in the U.S. House of Representatives and the Senate version of the Tax Cuts and Jobs Act was being considered by the Senate Finance Committee.

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November 28, 2017 in Scholarship, Tax | Permalink | Comments (0)

Monday, November 27, 2017

Josh Blank Leaves NYU For UC-Irvine

Blank (2018)Press Release:

UCI Law is pleased to announce the appointment of renowned tax expert Joshua Blank to its faculty. Blank joins from New York University School of Law, where he currently is a professor of tax law, vice dean for technology-enhanced education, and faculty director of the school’s Graduate Tax Program. He joins UCI Law as a professor of law.

"We are elated to have Josh join our preeminent faculty," said UCI Law Interim Dean L. Song Richardson. "Our innovative curriculum and collegial community continue to attract the brightest minds in legal education. Josh made extraordinary contributions to innumerable areas at NYU Law, and I am excited for the future of UCI Law with him on our team."

"I am thrilled to join the UCI Law community and look forward to working with its dynamic faculty and administration and teaching its outstanding students," said Blank.

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November 27, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (2)

Dimick: The Law And Economics Of Redistribution

Matthew Dimick (SUNY-Buffalo), The Law and Economics of Redistribution:

Should legal rules be used to redistribute income? Or should income taxation be the exclusive means for reducing income inequality? This article reviews the legal scholarship on this question. First, it traces how the most widely-cited argument in favor of using taxes exclusively — Kaplow & Shavell’s (1994) “double-distortion” argument — evolved from previous debates about whether legal rules could even be redistributive and whether law and economics should be concerned exclusively with efficiency or with distribution as well.

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November 27, 2017 in Scholarship, Tax | Permalink | Comments (0)

How Artificial Intelligence Will Affect The Practice of Law

Benjamin Alarie (Toronto), Anthony Niblett (Toronto) & Albert Yoon (Toronto), How Artificial Intelligence Will Affect the Practice of Law:

Artificial intelligence is exerting an influence on all professions and industries. We have autonomous vehicles, instantaneous translation among the world’s leading languages, and search engines that rapidly locate information anywhere on the web in a way that is tailored to a user’s interests and past search history. Law is not immune from disruption by new technology. Software tools are beginning to affect various aspects of lawyers’ work, including those tasks that historically relied upon expert human judgment, such as predicting court outcomes. These new software tools present new challenges and new opportunities.

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November 27, 2017 in Legal Education | Permalink | Comments (0)

Future Tax Traps Lurk For Multinationals In Senate Tax Bill

Bloomberg:  ‘Future Tax Traps’ Lurk for Multinationals in Senate's Proposal, by Lynnley Browning:

Senate Republicans tucked some multibillion-dollar tax increases for corporations into the 515-page tax bill they released this week — spring-loaded hikes that would begin after 2024 if the economy doesn’t grow as fast as GOP lawmakers have promised.

Some of the taxes in question aim squarely at companies like Apple and Alphabet, which rely on intellectual property, also known as “intangibles,” that they’ve transferred to overseas subsidiaries, tax experts say. Spokesmen for the two tech giants didn’t respond to requests for comment Tuesday.

“These so-called ‘sunrise’ provisions essentially are future tax traps for unsuspecting multinationals,” said David Sites, a partner in Grant Thornton LLP’s National Tax Office in Washington. In all, changes made by the Senate Finance Committee last week would boost revenue from international provisions aimed at such companies by about $55.6 billion over a decade, to $154.6 billion; most of the increase would come in 2026 and 2027. 

Senate Republicans want permanent changes that will make American companies more competitive globally — while erecting guardrails to shore up the U.S. tax base.

But they’re also under pressure to produce a bill that won’t increase the long-term federal deficit — a standard that would allow them to fast-track their tax legislation over Democrat objections that would otherwise stymie their bill. They’ve argued that their tax cuts would lead to economic growth, making up any lost revenue. Analysts have questioned that claim.

According to the Joint Committee on Taxation, one of Congress’s official fiscal scorekeepers, the Senate’s bill would boost the deficit by $1.4 trillion over 10 years. But — with the help of the latter-year tax increases — it would actually reduce the deficit by $30.6 billion in 2027, the JCT found. On its very last page, the Senate bill sets a revenue trigger designed to keep any revenue losses below the $1.5 trillion level that Congress agreed to in its 2018 budget. ...

[T]he measure also contains three new taxes aimed at preventing companies from sending taxable income overseas to affiliates in jurisdictions with even lower tax rates:

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November 27, 2017 in Tax | Permalink | Comments (0)

Toledo Aims To Boost Bar Passage, Job Placement, Enrollment: 'Once You Take The Bar For Granted, It Will Bite You In The Butt'

Toledo LogoThe Blade, UT Aims to Boost Law School Performance:

As the University of Toledo continues to sit in the bottom half of Ohio’s nine law schools, administrators have watched two accredited law schools shutter [Charlotte, Whittier] and a third [Valparaiso] announce it will stop admitting new students. ... “It’s been a tough seven years for law schools nationwide,” said Ben Barros, dean of UT’s College of Law.

The numbers show the past decade has been a difficult one for UT’s College of Law.

The rate at which UT graduates pass the July bar exam on their first try fell from a high of 90 percent in 2008 to a dismal 63 percent in 2016, and the overall pass-rate mirrored the trend, slipping from 85 percent to 59 percent during the same period.

Enrollment also plummeted, from 496 in 2008 to just 228 in 2016. ...

Mr. Barros, who took over as dean in 2015, is working to prevent UT from becoming the next law school to face closure. He is pushing for higher enrollment by offering scholarships while simultaneously raising admission requirements. He has also implemented programs to help lower performing students prepare for the bar exam.

And 2017 already shows improvement: The first-time passage rate jumped 11 percentage points — from 63 percent last year to 74 percent in July 2017 — and enrollment saw its first increase in years, from 228 to 247.

But UT is still a long way from the days of 90 percent bar passage rates.

“Once you take the bar for granted, it will come up and bite you in the butt,” Mr. Barros said. “That’s what happened with us. We were doing really well, and we took it for granted, and it takes a couple years to get your program back together again.” ...

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November 27, 2017 in Legal Education | Permalink | Comments (0)

Lesson From The Tax Court: Forms Over Substance

Tax Court (2017)Last week’s lesson was about “self-assessment.” The idea was that even though it’s the IRS’s job to assess taxes, our system nonetheless depends upon taxpayers truthfully reporting the substance of their financial affairs.

Undergirding that idea is another idea: that for every taxpayer there exists a correct tax liability. The goal of tax administration is to get to the substance of taxpayer’s transactions to determine that correct amount of taxes due. For those interested, I explore this idea in my article Tax Administration as Inquisitorial Process ..., 56 Fla. L. Rev. 1 (2004).

The process of getting to that truth involves many forms, and not just the famous 1040. In 2016 the IRS processed over 244 million tax returns of various sorts. 2016 IRS Data Book Table 2, And that figure does not include all the other Forms that are important to tax administration.

This week’s lesson is about one of those other Forms. The case of Craig K. Potts and Kristen H. Potts v. Commissioner, T.C. Memo. 2017-228 (Nov. 20, 2017), teaches the importance the Form 870-AD, both to taxpayers and to tax administrators. The Form has a purpose and that purpose can, as it did in this case, trump substance.  More below the fold.

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November 27, 2017 in Bryan Camp, New Cases, Tax Practice And Procedure | Permalink | Comments (0)

Law School-Administered Financial Aid: The Good News And The Bad News

William C. Whitford (Wisconsin), Law School-Administered Financial Aid: The Good News and the Bad News, 67 J. Legal Educ. 4 (2017):

In 2015, the ABA Task Force on Financing Legal Education reported a vast increase in law school-administered financial aid over the previous ten years. Financial aid administered by law schools was even the most rapidly rising cost factor for law schools collectively. At first glance this increase might seem like some good news for persons sharing my values and worldview. Historically financial aid has been associated with helping the financially needy, encouraging them and members of underrepresented identities to attend law school, and helping make it possible for students who want to devote their careers to low-paying, public-interest-oriented work to achieve their dreams. In fact, however, as the task force makes clear, almost all the increased financial aid is being awarded to applicants with high LSAT scores and high undergraduate GPAs — what is called “merit” these days.

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November 27, 2017 in Legal Education | Permalink | Comments (1)

TaxProf Blog Holiday Weekend Roundup

Sunday, November 26, 2017

George Soros’s $18 Billion Tax Shelter

Open SocietyWall Street Journal op-ed:  George Soros’s $18 Billion Tax Shelter, by Stephen Moore (Freedom Works):

Congress is still scrambling to find ways to pay for its tax cut, so perhaps it should pay closer attention to last month’s news that George Soros had transferred $18 billion of his fortune to a private charity that he controls. There it will be sheltered from the Internal Revenue Service forever. This may be the single biggest tax dodge in U.S. history, yet no one on the right or left seems to have raised an eyebrow.

True tax reform is predicated on the principle that all income should be taxed at a low rate once, and only once. But much of the wealth that Mr. Soros spent years moving into his Open Society Foundations will never be taxed. A gift of billions of dollars of appreciated stock escapes any capital gains tax, and the estate tax as well. So Mr. Soros can donate appreciated stock that Open Society Foundations can liquidate without the government ever taking a cut.

There’s more. When a person donates untaxed, appreciated assets to a private foundation, he may also deduct up to 20% of its market value on his personal return, carrying forward this deduction for five years. This double write-off may be the sweetest deal in the tax code.

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November 26, 2017 in Tax | Permalink | Comments (4)

The Socratic Method

The Socratic method is much maligned these days.  I do not personally use it when teaching Tax.   I use a problem method where I lecture on a topic then assign homework problems to the students which we then go over in the next class period.  

But I do use the Socratic method of teaching when I teach my first year students Civil Procedure.  I confess I am not great at it, but I think that, properly used, it really helps students learn how law is both determinate and indeterminate at the same time.   It's not determinate when you are trying to predict the legal outcome (is the deduction allowable or no?  does the court have personal jurisdiction over the defendant or no?).  But it becomes determinate once the legal authority rules!  That was the point of my post the other week about the power of fact-finding.  

Here's a nice opinion piece in the Washington Post about how Socrates would not make it as a teacher in today's high schools.

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November 26, 2017 in Bryan Camp, Legal Education, Teaching | Permalink | Comments (2)

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:

  1. [418 Downloads]  Background and Current Status of FATCA and CRS, by William Byrnes (Texas A&M)
  2. [302 Downloads]  The Rise of Trust Decanting in the United States, by Robert Sitkoff (Harvard)
  3. [217 Downloads]  Slicing and Dicing: The Structural Problems of the Tax Reform Framework, by Reuven Avi-Yonah (Michigan)
  4. [195 Downloads]  Exploiting the Medicare Tax Loophole (review here), by Karen C. Burke (Florida)
  5. [162 Downloads]  Brigham Young vs. The Bureau of Internal Revenue, by Samuel Brunson (Loyola-Chicago)

November 26, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The Pope, Social Justice And The American Law School: We Are Made For Love

Michael Kaufman (Loyola-Chicago), Social Justice and the American Law School Today: Since We Are Made for Love, 40 Seattle U. L. Rev. 1187 (2017):

This Article is intended to facilitate that new dialogue by finding a series of profound provocations in the Pope’s teachings. First, the Pope provokes us to consider whether our existing education and economic systems are based on an incomplete understanding of human nature. The first section contends that the understanding that human beings are by nature competitive and consumptive wealth maximizers is not only contrary to the Pope’s teachings but also contrary to the latest research in the fields of neuroscience, neuro-psychology, cognitive psychology, educational psychology, economics, and behavioral economics.

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November 26, 2017 in Legal Education | Permalink | Comments (1)

Saturday, November 25, 2017

This Week's Ten Most Popular TaxProf Blog Posts

WSJ: The Rise And Fall Of A Law School Empire Fueled By $1 Billion Of Federal Loans

InfiLawWall Street Journal, The Rise and Fall of a Law-School Empire Fueled by Federal Loans:

Don Lively had a plan to bring more blacks and Hispanics into the practice of law.

Mr. Lively, a professor who is white, set out to open a law school that would take minority students even if they had low test scores or did poorly in college. Using retirement savings, a loan from his father and a check from a retired couple who read about him in a local newspaper, he opened Florida Coastal School of Law in 1996 in Jacksonville.

That school and two others he later helped run — Arizona Summit in Phoenix and Charlotte School of Law in North Carolina — became among the fastest-growing law schools in the country. Half of their students were from minority groups. The for-profit schools became part of a business network called the InfiLaw System, backed by Chicago private-equity investors. Enrollment soared from several dozen at Florida Coastal in 1996 to roughly 4,000 at the three schools combined in 2012.

Now, two decades after it all started, Mr. Lively’s mission is in tatters. The Charlotte school closed in August after North Carolina revoked its license. Enrollment in Arizona and Florida is down sharply, and InfiLaw is looking for buyers for both schools. Thousands of InfiLaw students have dropped out, transferred or failed state bar exams and are struggling to pay down a total of more than $1 billion in federal student loans, Education Department and American Bar Association data indicate. Many owe more than $100,000.

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November 25, 2017 in Legal Education | Permalink | Comments (7)

Dayton, Vermont Offer 3+2 Programs: Undergraduate + Law Degree In 5 Years

DVLaw.com, Dayton School of Law Offers 3+2 JD:

Plenty of law schools have rolled out programs designed to shave a year off the traditional path to a J.D. But on Friday, the University of Dayton School of Law became just the second school to offer a way to slice two years off the typical seven year undergrad-J.D. combo. Dayton, like other schools offering shorter tracks, is eager to attract stronger candidates as the overall applicant pool remains shallow. While many schools have 3+3 programs or accelerated two-year J.D. programs, so far only Dayton and Vermont Law School offer a way to become a lawyer in five years total. ...

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November 25, 2017 in Legal Education | Permalink | Comments (1)

Avi-Yonah & Fishbien: The 'Tax Cuts And Jobs' Act And The Original Intent Of Subpart F

Reuven S. Avi-Yonah (Michigan) & Nir Fishbien (S.J.D. 2018, Michigan), Once More, with Feeling: The 'Tax Cuts and Jobs' Act and the Original Intent of Subpart F:

For the first time since 1913, Congress is considering abandoning the principle that US residents should be subject to tax on all income “from whatever source derived.” Specifically, the House proposed tax reform legislation, the so-called “Tax Cuts and Jobs Act”, would completely exempt from US taxation dividends from “Controlled Foreign Corporations”. This is therefore a good occasion for considering the reasons we tax such dividends in the first place.

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November 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

Friday, November 24, 2017

Tax Policy In The Trump Administration

Weekly Legal Education Roundup

Taking Law School Mission Statements Seriously

Irene Scharf (Massachusetts) & Vanessa Merton (Pace), "Your Mission, Should You Choose to Accept It . . .": Taking Law School Mission Statements Seriously, 56 Washburn L.J. 289 (2017):

[W]e have constructed a Word Cloud showcasing the key themes embodied in these statements. Take a look.

Mission

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November 24, 2017 in Legal Education | Permalink | Comments (1)

Michigan International Tax Symposium

Michigan Law Logo (2015)Tax Symposium, 38 Mich. J. Int'l L. 161-285 (2017):

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

Thursday, November 23, 2017

WKRP in Cincinnati Thanksgiving Turkey Drop

November 23, 2017 in Legal Education, Tax | Permalink | Comments (2)

What Tax Profs Are Thankful For

  • ThanksgivingBryan Camp (Texas Tech):  "I am thankful for being able to recognize the joy that comes in life. It’s not always a happy journey, but the bad parts help me appreciate the good."
  • Paul Caron (Pepperdine):  "I am thankful for the incredible opportunity to serve in my new role at this wonderful institution."
  • Bridget Crawford (Pace):  "I am thankful for the health care professionals at the Cleveland Clinic and the Hospice of the Western Reserve who have cared for my family members. I’m also thankful for librarians, hard copy books, my co-authors and co-editors."
  • Cliff Fleming (BYU):  "More than ever, I'm thankful for the checks and balance in our Constitution."
  • David Hasen (Florida):  "I am thankful for John 3:16 ('For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.')."

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

Oxford Sued Over Grades By Student Who Didn't Get Into Yale Law School

OxfordyaleBloomberg, Oxford Sued Over Grades by Student Who Didn't Get Into Yale:

Lawyers for an Oxford graduate who is suing the university over his “disappointing” exam grades nearly two decades ago told a London court Tuesday that he missed out on going to law school in the U.S. because of his results.

Faiz Siddiqui, who received a 2:1 degree, the second-highest grade available, says in a submission to the court that he received poor teaching for one of his papers.

“While a 2:1 degree from Oxford might rightly seem like a tremendous achievement to most, it fell significantly short of Mr. Siddiqui’s expectations and was, to him, a huge disappointment,” his lawyers said in court filings.

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

University Of Arkansas To Permit Firing Of Tenured Faculty For Lack Of Collegiality

Arkansas LogoFollowing up on last month's post, University Of Arkansas To Change Tenure Policy To Permit Firing Of Faculty For Lack Of Collegiality

Chronicle of Higher Education, When ‘Collegiality’ and Evaluating Faculty Collide:

Faculty members typically must meet standards related to their research, teaching, and service to earn tenure and keep their jobs. But sometimes, an additional criterion — collegiality — gets added to the mix, and it tends to raise professors’ hackles.

In fact, even the specter of collegiality is enough to cause alarm. Proposed changes to policies that govern tenure, promotion, and faculty dismissals within the University of Arkansas system included language that moved professors there to quickly mobilize in opposition last month. Among the concerns is what faculty see as a thinly veiled attempt by the Board of Trustees to use collegiality — or the lack thereof — as grounds for terminating a tenured professor.

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November 23, 2017 in Legal Education | Permalink | Comments (7)

Wednesday, November 22, 2017

Gillman & Chemerinsky: Professors Are Losing Their Freedom of Expression

Free SpeechWashington Post op-ed:  Professors Are Losing Their Freedom of Expression, by Howard Gillman (Chancellor, UC-Irvine) & Erwin Chemerinsky (Dean, UC-Berkeley) (Co-Authors, Free Speech on Campus (Yale University Press 2017)):

With so much attention focused on whether controversial speakers such as Milo Yiannapoulos or Richard Spencer should be allowed to appear on campus, an even more basic issue has been obscured: universities punishing faculty who, outside of professional settings, express views that are considered controversial or even offensive.

There are many recent examples of this. A year ago, a University of Oregon law professor was suspended for wearing blackface at a Halloween party held at her house. Twenty-three law school faculty members wrote a letter urging the professor to resign. A campus investigation found that by wearing this costume at a party in her home she had engaged in “discriminatory harassment.” [More here]. ...

In responding to those who would silence or censor speakers, many people, especially on the right, argue that, at universities, all ideas should be expressible, and if someone doesn’t like particular ideas, the response should be to engage and rebut the speakers rather than harass them or shout them down. These same sentiments should apply when faculty members express controversial opinions. ...

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November 22, 2017 in Book Club, Legal Education | Permalink | Comments (5)

Cato Institute Reviews Hatfield's Cybersecurity And Tax Reform

CatoChris Edwards (Cato Institute), Tax Reform, the IRS, Cybersecurity, and Privacy (reviewing Michael Hatfield (University of Washington), Cybersecurity and Tax Reform, 93 Ind. L.J. ___ (2018)):

The current tax reform debate has focused on economic growth and the value of cuts to different groups of taxpayers. Tax simplification has received less attention, and Republican bills would only make modest gains in that regard.

Yet a major tax code simplification would not only save time on administration, it would increase financial privacy and deter cyberattacks on the Internal Revenue Service. A new study by Michael Hatfield of the University of Washington looks at the risks posed by the IRS’s vast data collection on 290 million Americans. The more micromanagement there is in the tax code, the more information the IRS collects on our finances, lifestyles, and activities. ...

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