TaxProf Blog

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

Wednesday, February 28, 2018

Prichard Presents China, International Taxation And The Global System Today at Toronto

MunkWilson Prichard (Toronto) presents China, International Taxation and the Global System (with Martin Hearson (London School of Economics)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

There has been mounting interest in China’s role in shaping global economic governance, but conclusions have been guided by a small set of empirical cases. We offer an analysis of Chinese engagement with the reform of international tax rules, in order to shed light on the broader factors shaping Chinese global governance strategies. We argue that China has pursued a dual track strategy: it has adopted a cooperative and moderately reformist position at the OECD, but has pushed a potentially more radical agenda at the UN, and through domestic policy positions that quietly – but substantially — challenge OECD conventions. In doing so if has rhetorically signalled a desire to represent broader developing country interests, yet in practice appears guided primarily by narrower national interests, which often — but not always — overlap with those of developing countries more broadly.

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February 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

McMahon Presents Tax As Part Of A Broken Budget Process Today At Indiana

McMahonStephanie McMahon (Cincinnati) presents Tax as Part of a Broken Budget: Good Taxes are Good Cause Enough at Indiana today as part of its Faculty Workshop Series:

The federal budget is a myth.  Despite being a myth, Congress uses the budget to limit its choices by linking its revenue-raising and spending powers and to threaten itself and the public with the federal debt ceiling.  Through its self-imposed limits, Congress puts tremendous pressure on how it defines its budget.  The budget process generally assumes its tax provisions will raise revenue when the law becomes effective.  However, many tax provisions are not self-executing.  The Treasury Department and the IRS as a bureau of the department must create guidance to operationalize the Internal Revenue Code.  Consequently, limiting the production of tax guidance that implements tax statutes is problematic because their projected revenue is used to balance the budget.Nevertheless, guidance is under attack on the grounds that its issuance fails to comply with the Administrative Procedure Act (APA). 

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February 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Tyranny Of Metrics

MetricsFollowing up on my previous post, The Tyranny Of Metrics: 'Not Everything That Is Important Is Measurable, And Much That Is Measurable Is Unimportant':  Inside Higher Ed, 'The Tyranny of Metrics':

These days colleges boast about their admissions rankings, their graduation rates, their faculties’ achievements and much more. Many say that the statistics are a tool to promote accountability and improvement.

Jerry Z. Muller disagrees. His new book, The Tyranny of Metrics (Princeton University Press 2018), critiques not only higher education but many parts of society that rely on metrics.

"Gaming the metrics occurs in every realm: in policing, in primary, secondary and higher education; in medicine, in nonprofit organizations; and, of course, in business," Muller writes. "And gaming is only one class of problems that inevitably arise when using performance metrics as the basis of reward and sanction. There are things that can be measured. There are things that are worth measuring. But what can be measured is not always what is worth measuring; what gets measured may have no relationship to what we really want to know."

Q: Some colleges, government agencies and businesses promote tools to evaluate faculty productivity -- number of papers written, number of citations, etc. What do you make of this use of metrics?

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February 28, 2018 in Book Club, Legal Education | Permalink | Comments (1)

Aprill: Tax Status of Public Universities

Ellen P. Aprill (Loyola-L.A.), Tax Status of Public Universities, 154 Tax Notes 539 (Jan. 22, 2018):

New section 4960 imposes a 20% excise tax on certain organizations not subject to income tax if any their five highest paid employees have annual compensation above $1 million. (It also imposes the tax on “excess parachute payments,” as defined in the statute.) In December, 2017, I wrote a blog post arguing that, whatever the Congressional intent, the language of the statute did not reach states and their political subdivisions or their integral parts. The blog post emphasized state universities, although the reasoning applied to other governmental entities as well. Professor Douglas Kahn of University of Michigan took issue with my position on the basis that the new section does apply to section 501(c)(3) organizations. This piece is my response to him.

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February 28, 2018 in Scholarship, Tax | Permalink | Comments (1)

Median Private Law School Tuition Discount: 28% (Average Scholarship: $20,129)

Which Schools Are Discounting Tuition the Most?, Nat'l Jurist, Vol. 27, p. 13, Winter 2018:

The National Jurist analyzed ABA grant and scholarship data, using the number of scholarships per school, the percentage of students receiving scholarships and the scholarship amount at the 25th, 50th and 75th percentiles to estimate an average grant amount. With an average, it then determined the average tuition discount per school.

The median private law school discounted tuition by 28.3 percent, with an average scholarship of $20,129. That was up from 25.4 percent from two years earlier and significantly higher than 2010, when it was an estimated 16 percent.

Here are the 20 private law schools with the highest tuition discounts:

NJ Top 20

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February 28, 2018 in Law School Rankings, Legal Education | Permalink | Comments (2)

NY Times: Trump’s Tax Cuts In Hand, Companies Spend More On Themselves Than On Wages

New York Times, Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages:

President Trump promised that his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.

Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares.

Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.

But the purchases can come at the expense of investments in things like hiring, research and development and building new plants — the sort of investments that directly help the overall economy. The buybacks are also most likely to worsen economic inequality because the benefits of stocks purchases flow disproportionately to the richest Americans. ...

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February 28, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

Buchanan: Law Schools Need Faculty To Both Teach And Write In All Major Fields

Neil Buchanan (George Washington), Do Law Faculties Need to Cover the Range of Fields in Scholarship or Only in Teaching?:

[T]he decline in potential students’ interest in attending law school inevitably led to a marked decline in law faculty hiring. ... I am interested in the question of whether law schools should commit themselves to maintaining a faculty whose scholarship covers the full range of intellectual areas that are typically part of the law school curriculum.

This question can be applied to any area of law: Does it matter whether a law school has no one on its faculty who writes about criminal law? Or human rights law? Or legal history? Answering that question is surprisingly challenging.

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February 28, 2018 in Legal Education | Permalink | Comments (1)

2017 IFA International Tax Student Writing Award; Call For Entrants In 2018 Competition

IFA Logo (2015)The winner of the International Fiscal Association's 2017 International Tax Student Writing Competition is David Maranjan (Virgina), What’s in a Name? XILINX, ALTERA, and Why Using “Arm’s Length” as a Catchall is Causing Problems for Treasury,  47 BNA Tax Mgmt. Int'l J. ___ (2018)
Faculty Sponsor:  Ruth Mason

2018 IFA International Tax Student Writing Competition:
Subject: Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.
Open to: All students during the 2017-18 academic year pursuing a graduate degree. Any appropriate papers written in fall 2017 or spring and summer 2018.
Submission Deadline:  September 30, 2018.
Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in Feb 2019.

Here are the recent winners:

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February 28, 2018 in Scholarship, Tax, Teaching | Permalink | Comments (0)

Tuesday, February 27, 2018

Goldin Presents Complexity And Take-Up Of The Earned Income Tax Credit Today At NYU

Goldin (2017)Jacob Goldin (Stanford) presents Tax Benefit Complexity and Take-Up of the Earned Income Tax Credit at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Tax benefits like the Earned Income Tax Credit (EITC) represent an important source of income to their recipients, but millions of those who are eligible to claim tax benefits fail to do so. One possible explanation is that the rules governing most tax benefits are extraordinarily complex. I consider efforts to increase tax benefit take-up in light of this complexity. A key fact in thinking about this issue is that the vast majority of tax filers today prepare their taxes with assisted preparation methods (APMs) like software or professional assistance. Because APMs eliminate most of the barriers to claiming tax benefits for which one is eligible, I ague that efforts to increase benefit take-up should focus on inducing benefit-eligible individuals to file a tax return using an APM. In contrast, efforts aimed at increasing awareness of a benefit (of the type widely employed by governments and nonprofits) are less likely to be successful, except to the extent they themselves induce an increase in tax filing.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Mathur Presents The Elasticity Of Taxable Income Today At Georgetown

Mathur (2018)Aparna Mathur (American Enterprise Institute), The Elasticity of Taxable Income in the Presence of Intertemporal Income Shifting (with Aspen Gorry (Clemson Business School) & R. Glenn Hubbard (Dean, Columbia Business School)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

Knowing the elasticity of taxable income (ETI) is crucial for understanding the effects of taxation on taxpayer behavior and consequently on tax revenues. Previous research has found that high-income individuals are most sensitive to tax policy changes. However, these individuals have more opportunity to defer income to future tax bases by altering the composition of their compensation. This paper considers the taxable income elasticity when individuals can shift income across tax bases and thereby defer taxation. We decompose the elasticity of taxable income into a real response as well as an income shifting response. We measure the tax rate on deferred income by the expected tax gain from deferring income using stock options as developed by Hall and Liebman (2000). Our results demonstrate that income shifting is an important component of previous estimates of the ETI. Because shifted income is taxed at future dates, this income shifting decreases the welfare loss from personal income taxation associated with previous estimates.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mason Presents Why State Aid Needs Discrimination At Houston

Mason (2016)Ruth Mason (Virginia) presented Why State Aid Needs Discrimination at Houston yesterday as part of its Distinguished Speaker Series:

In August 2016, the European Union’s (EU) Commission dropped a bombshell: it would require Ireland to collect more than $14.5 billion in back taxes from Apple under anti-subsidy rules that most American tax lawyers had never even heard of—the state-aid rules. Suspicions that certain EU Member States colluded with large multinationals to help them evade other states taxes suggests the need for a supra-national authority that could curb harmful state tax practices.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Borden: Choice-Of-Entity Decisions Under The New Tax Act

Bradley T. Borden (Brooklyn), Choice-of-Entity Decisions Under the New Tax Act:

This short article illustrates how the 2017 Tax Cuts and Jobs Act taxes $500,000 of ordinary income depending upon whether it is earned by a corporation, a passthrough as qualified business income (QBI), or a passthrough as income from a specified service trade or business (SSTB). The article shows that the effective tax rate on QBI, which qualifies for the 20% QBI deduction, will rival the effective tax rate on income earned and distributed by a corporation. Tax on income from an SSBT will be higher than the same income from a QBI, but, if the owner of the SSBT plans to withdraw most of the earnings from the SSTB, a passthrough entity will often provide a lower effective tax rate than a corporation. The choice between passthrough entity and corporation will be affected by the amount of income that the owner withdraws from the business and the amount of income the business generates. Lower-income SSTBs may qualify for the QBI deduction, reducing the effective tax rate on passthrough income, and enhancing the attractiveness of the passthrough entity. Conversely, the effective tax rate on passthrough income increases as business income moves into the millions of dollars, triggering the application of the highest marginal rates. The choice-of-entity preference for businesses with that level of income may move toward corporations, especially if the owners do not withdraw all of the business’s income.

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February 27, 2018 in Scholarship, Tax | Permalink | Comments (1)

2019 U.S. News Law School Rankings

US NewsRobert Morse (Chief Data Strategist, U.S. News & World Report) announced today that the new 2019 law school rankings will be released on Tuesday, March 20. Here is my coverage of the current 2018 law school rankings:

February 27, 2018 in Law School Rankings, Legal Education | Permalink | Comments (0)

NY Times: Well-Heeled Investors Reap The Republican Tax Cut Bonanza

New York Times editorial, Well-Heeled Investors Reap the Republican Tax Cut Bonanza:

After President Trump signed the Republican tax cut into law, companies put out cheery announcements that they were giving workers bonuses because of their expected windfalls from the tax reductions. The president and Republican lawmakers quickly held up these news releases as vindication for their argument that cutting the top federal corporate tax rate to 21 percent, from 35 percent, would boost workers’ incomes even as it added $1.5 trillion to the debt that future generations would have to pay off.

Now corporate announcements and analyst reports confirm what honest observers always said — this claim is pure fantasy. As executives tell investors what they intend to do with their tax savings and their spending plans are tabulated into neat charts and graphs, the reports jibe with what most experts said would happen: Companies are rewarding their stockholders.

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February 27, 2018 in Tax | Permalink | Comments (2)

Net Tuition Trends By LSAT Category, 2010-2014: Net Tuition Rose In Highest (165+) And Lowest (<145) Bands, Fell In Middle (145-164) Bands

Jerry Organ (St. Thomas), Net Tuition Trends by LSAT Category from 2010 to 2014 with Thoughts on Variable Return on Investment , 67 J. Legal Educ. 51 (2017):

The “macro” discussion of legal education highlights that law school is expensive. This general point fails to highlight the extent to which differences exist at a “micro” level due both to geography and LSAT profile. First, some regions of the country are more expensive than others. Second, where one is on the LSAT distribution profile influences the average net tuition because of scholarship patterns associated with institutional efforts to preserve or improve ranking. As a result, law school is not equally expensive across the entire LSAT distribution.

This article begins in Section I by briefly summarizing the geographic differences in tuition, which are not insignificant. Then, in Section II, this article briefly describes a dynamic net tuition model I developed for calculating net tuition trends by LSAT category and describes the results of that dynamic net tuition model. The results demonstrate that the variability of average net tuition by LSAT category increased significantly between 2010 and 2014 after accounting for inflation, with two LSAT categories seeing increases of 9.1% and 11.9% and four seeing decreases ranging from 2.8% to 13%. Section III looks at various outcome measures—specifically, bar passage rates, “bad news” employment outcomes, and imputed average first-year income—and demonstrates that, on average, the short-term return on investment varies significantly depending upon where someone is in the LSAT distribution. Section IV concludes with some thoughts on what this might mean for prospective law students and for law schools.

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February 27, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

WSJ Op-Ed: The Story Behind The IRS’s Exemption From Regulatory Oversight,

Wall Street Journal op-ed:  The Story Behind the IRS’s Exemption From Oversight, by Susan E. Dudley & Sally Katzen:

Americans may differ on whether we have too much or too little regulation, but we should all agree that regulations should be transparent, accountable and based on a reasoned analysis that they are necessary and appropriate. The Treasury Department, especially the Internal Revenue Service, appears to have fallen short of these expectations, by expanding a narrow exemption to evade the good-government requirements that generally apply to federal regulators. As a result, Treasury risks imposing high-impact regulations that are neither accountable nor transparent.

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February 27, 2018 in Tax | Permalink | Comments (0)

Monday, February 26, 2018

Glogower Presents Taxing Inequality Today At BYU

Glogower (2016)Ari Glogower (Ohio State) presents Taxing Inequality at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The argument proceeds in three main parts. The Article first interrogates the justifications in the literature for a wealth tax and introduces a new justification grounded in the relative economic power theory which explains how inequality generates social and political harm. This theory formalizes the problem of inequality and has specific implications for the way that economic inequality should be measured and constrained. In particular, this theory implies that economic inequality should be measured by differences in economic spending power during the taxing period.

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February 26, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Amidst Declining 1L Enrollments, Competition For Transfer Students Heats Up

Crain's Cleveland Business, Law Schools Get Creative With Their Pitches:

The competition for top undergrads among U.S. law schools is so intense that administrators at Case Western Reserve University School of Law are trying to recruit first-year law students at other universities.

It's a new tactic for Case this year — and a clear sign of the times.

U.S. law schools, which have faced dwindling student ranks in the years following the last recession, are beginning to see enrollment trends flip back in their favor.

Despite optimism in the outlook for the legal field, the fight to draw not only a sizable group of students, but the best of the bunch, is far from over — as a message from Case law school's associate dean of admissions to potential transfers shows.

That email was received mid-month by several students at Cleveland-Marshall College of Law. Besides touting the school's merits, Case tells recipients "special privileges" are reserved for them should they reapply, including a waiving of the $40 application fee, an "expedited" review and consideration for one of their "generous" scholarships.

Case's law school co-deans, Jessica Berg and Michael Scharf, said the emails were sent to students with high LSAT scores and GPAs who applied to the school in the past, but didn't matriculate. They said there isn't one university or geographic region being targeted.

Cleveland-Marshall dean Lee Fisher said that while messages like that are rare, they're not to be totally unexpected. "Of course, I hope that none of you transfer to Case or to any other law school, but if you are considering transferring for any reason, I have a request," wrote Fisher in a direct email response to students. "Please give me the opportunity to speak with you before you make any decision."

Like increasingly aggressive or imaginative recruiting efforts, more direct contact with law school deans seems to be a trend among schools looking to attract and retain students in today's climate. And it's just one in a litany of ways schools are reworking themselves to not only prep law-minded academics for changing careers, but keep their ranks — and the schools themselves — viable.

Total enrollment in U.S. law schools remains at one of its lowest points in more than 40 years. According to stats from the American Bar Association, total nationwide J.D. enrollment as of fall 2017 stood at 110,156 students. That's 25% less than the collective number of students in fall 2010, when enrollment last peaked. In Northeast Ohio, law schools are seeing comparable impacts, according to ABA data.


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February 26, 2018 in Legal Education | Permalink | Comments (0)

Artificial Intelligence Software Is More Accurate, Faster Than Expert Lawyers In Reviewing Contracts

AILMashable, An AI Just Beat Top Lawyers at Their Own Game:

The nation's top lawyers recently battled artificial intelligence in a competition to interpret contracts — and they lost.

A new study, conducted by legal AI platform LawGeex in consultation with law professors from Stanford University, Duke University School of Law, and University of Southern California, pitted twenty experienced lawyers against an AI trained to evaluate legal contracts. Competitors were given four hours to review five non-disclosure agreements (NDAs) and identify 30 legal issues, including arbitration, confidentiality of relationship, and indemnification. They were scored by how accurately they identified each issue.

Unfortunately for humanity, we lost the competition — badly.

The human lawyers achieved, on average, an 85 percent accuracy rate, while the AI achieved 95 percent accuracy. The AI also completed the task in 26 minutes, while the human lawyers took 92 minutes on average. The AI also achieved 100 percent accuracy in one contract, on which the highest-scoring human lawyer scored only 97 percent. In short, the human lawyers were trounced.

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February 26, 2018 in Legal Education | Permalink | Comments (2)

NY Times: Washington’s Fight Over Taxes Is Only Just Beginning

New York Times, Washington’s Fight Over Taxes Is Only Beginning:

Never mind that “once in a generation” tax bill that just passed last year. Congress is headed for years more of big fights over taxes, particularly those for individuals.

That tax battle is a byproduct of America’s polarized political climate and of the go-it-alone choices Republicans made to speed the 2017 law through Congress in less than two months.

It is already complicating tax planning for companies and workers around the country, particularly in high-tax states like New York, Maryland and California, where lawmakers are actively pursuing workarounds for some provisions of the new federal law that limit state and local income and property tax deductions.

It’s only going to get messier.

“This legal regime is very unstable; Congress has created many, many problems,” both in the substance of the bill and the exclusion of Democrats in enacting it, said Rebecca Kysar, a professor and tax expert at Brooklyn Law School. “All of those dynamics are going to make for a very uncertain landscape going forward.” ...

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February 26, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Updated LSAC Data On The Quantity And Quality Of Law School Applicants

Continuing my partnership with LSAC President (and former University of Washington Dean) Kellye Testy (see links below), here are updated data from LSAC on the quantity and quality of law school applicants:


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February 26, 2018 in Legal Education | Permalink | Comments (1)

Lesson From The Tax Court: Underwater Debtors

Tax Court (2017)Last week’s lesson was about the tax consequences to the borrower when the lender cancels the debt. This week’s case looks at the other side of the transaction to teach a lesson about what constitutes debt. Section 166 allows a lender who gives up trying to get back borrowed money to deduct the bad debt, effectively treating current income as a return of the lost capital. Similarly, a lender who sells debt to a third party for less than basis can calculate a loss under §1001 and may be able to treat that loss as a long-term capital loss.

But to have either a bad debt under §166 or a loss under §1001, there must be a “debt” in the first place. That is the lesson from last week’s case of Michael J. Burke and Jane S. Burke v. Commissioner, T.C. Memo. 2018-18. There, the taxpayer attempted to take both long-term and short-term capital losses in 2010 and 2011 through a mix of §166 deductions and claimed capital losses from sale of debt at less than basis. The alleged bad debts arose in connection with a scuba diving business in Belize. On audit, the IRS disallowed the deductions, creating a deficiency in taxes totaling some $444,000. The dispute was whether the Burkes had “debt” to lose. Judge Holmes’ opinion does a deep dive into the meaning of “debt” and shows why the taxpayer’s arguments here were all wet. If you think I’ve gone overboard in my water metaphors, Judge Holmes’ opinion is drenched with them. Makes for a splashy opinion.

More below the fold.

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February 26, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Former Davis Polk Tax Partner Dana Trier Quits Position As Deputy Assistant Secretary For Tax Policy

Wall Street Journal, Treasury Official, Critical of Parts of Tax Law, Quits:

A Treasury Department official deeply involved in implementing the new tax law left the government unexpectedly this week.

Dana Trier, a retired New York attorney praised by fellow tax lawyers in both parties, was a deputy assistant secretary for tax policy, putting him near the center of administration decision-making about how to write the crucial and highly technical rules stemming from the new Tax Cuts and Jobs Act.

Accountants, tax lawyers and businesses have been watching his actions and speeches closely for clues on how the Trump Administration will enforce complex new deductions for pass-through businesses, restrictions on business interest deductions and other matters. ...

Tax-focused publications had previously written about some of Mr. Trier’s remarks that were critical of parts of the new tax law, including a speech earlier this month in San Diego at a conference sponsored by the American Bar Association’s Tax Section. ... In San Diego, Mr. Trier had said people looking at pieces of the new law sometimes asked him whether lawmakers could have reasonably meant to write it the way they did. “We’re going to have trouble with about half the legislation if we apply that standard,” said Mr. Trier, whose name rhymes with clear.

Late Friday, Mr. Trier, 69 years old, said he and Assistant Secretary David Kautter agreed that he should leave. “Between these public comments and the constant friction with the bureaucratic elements of the government, I really just think…it was time to go,” Mr. Trier said. “I have enough of a big ego to think that they’ve lost something when they’ve lost me, but I think they can do it.”

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February 26, 2018 in IRS News, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 25, 2018

New Tax Law Ignites White House Power Struggle

Treasury OMBFollowing up on last week's post, Tax Reform and IRS Resistance:  Politico, Tax Law Ignites White House Power Struggle:

A political battle over the fate of hundreds of regulations and other guidance for the new tax law may soon land on President Donald Trump’s desk, forcing him to choose between two of his favorite Cabinet members.

At stake is who has ultimate authority to shape the nuances of the tax cuts and other rules as part of the $1.5 trillion Republican tax overhaul: Treasury Secretary Steven Mnuchin and the IRS have that power now, but White House budget director Mick Mulvaney and some of his GOP allies in Congress want the Office of Management and Budget to have the final say.

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February 25, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Two More Law Schools Admit 1Ls Based On GRE Rather Than LSAT

 GREFlorida State and Pace are the latest law schools to accept the GRE in lieu of the LSAT, joining: Arizona, Brooklyn, BYU, Cardozo, Columbia, George Washington, Georgetown, Harvard, Hawaii, John Marshall, Northwestern, St. John's, Texas A&M, Wake Forest, and Washington University. In addition, two law schools allow the GRE in limited circumstances: Chicago (admissions committee may grant LSAT waiver) and UCLA (students enrolled in, or applying to, another UCLA graduate program).

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February 25, 2018 in Legal Education | Permalink | Comments (0)

NY Times Op-Ed: The Misguided Drive To Measure 'Learning Outcomes'

Here at Texas Tech University School of Law we are gearing up for our ABA site inspection.  In the past few years the ABA has required law schools to create "Learning Outcomes."  Here's the language from Section 3.02:

A law school shall establish learning outcomes that shall, at a minimum, include competency in the following:
(a) Knowledge and understanding of substantive and procedural law;
(b) Legal analysis and reasoning, legal research, problem-solving, and written and oral communication in the legal context;
(c) Exercise of proper professional and ethical responsibilities to clients and the legal system; and
(d) Other professional skills needed for competent and ethical participation as a member of the legal profession.

This is the first year that the site teams will be evaluating a law school's compliance with the new standard.  We knew it was coming and I have been on a committee for the past three years that has been trying to translate this standard into operation. While I believe we have done a good job with it, I also believe the standard to be of questionable value. 

I read with pleasure this New York Times op-ed by Molly Worthen, The Misguided Drive to Measure 'Learning Outcomes'.  I especially like its concluding line:  "[T]here's just no app for that." 

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February 25, 2018 in Bryan Camp, Legal Education, Teaching | Permalink | Comments (7)

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list.

  1. [32,284 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1899 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [985 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [679 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College)
  5. [447 Downloads]  The Tax Lifecycle Of A Single Member LLC, by F. Philip Manns Jr. (Liberty) & Timothy M. Todd (Liberty)

February 25, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 24, 2018

This Week's Ten Most Popular TaxProf Blog Posts

College Consultant Charged $1.5 Million To Get Student Admitted To Ivy League College

Ivy CoachInside Higher Ed, $1.5 Million to Get Into an Ivy:

In 2005, Inside Higher Ed reported that a leading private college consultant was charging $9,999 each to 10 attendees for a weekend "boot camp" on college admissions. The idea that parents would pay that kind of money for a few days of advice stunned and appalled many.

These days, $9,999 may be pocket change in the world of elite college consulting. A lawsuit filed last week by Ivy Coach revealed that it charged a woman in Vietnam $1.5 million to help her daughter apply to 22 elite colleges, as well as seven top boarding schools she sought to attend in high school, before applying to college. The fee was worth it, the lawsuit says. In December, an (unnamed) Ivy League institution granted the daughter early admission.

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February 24, 2018 in Legal Education | Permalink | Comments (9)

WSJ: Pass-Through Businesses Are Rethinking Their Status In Wake Of The New Tax Law

WSJWall Street Journal, Pass-Through Businesses Are Rethinking Their Status in Wake of Tax Law:

As business owners pore through the new tax law, many are asking themselves a fundamental question: Will changing how their company is structured cut their tax bills?

“This is one of the most pressing issues for taxpayers and business owners,” said Mark Everson, vice chairman of tax-consulting firm Alliantgroup LP. “They are looking carefully now at how they are legally organized.” 

For many entrepreneurs, the big question is whether to operate as a C corporation, which pays its own taxes to the Internal Revenue Service, or as a pass-through company, which pays tax through individual rather than corporate returns. Pass-through businesses include S corporations, sole proprietorships and limited liability companies.

The clock is ticking. Many business owners have until March 15 to make an election that would be retroactive to the beginning of 2018.

The rethinking of corporate structures is one byproduct of the new tax bill, which cuts the corporate tax rate to 21%, down from a top rate of 35%, though owners pay a second tax on profits distributed as dividends. ..,

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February 24, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Gelbach: On Amy Wax’s Credibility And Conduct

Penn (2017)Folowing up on Wednesday's post, Penn Dean Denies Amy Wax's Claim That He Asked Her To Take Leave Due To Controversial Op-Ed:  The Daily Pennsylvanian op-ed:  On Amy Wax’s Credibility and Conduct, by Jonah B. Gelbach (Penn):

In the Evidence class I’m teaching, we’ve just finished discussing “impeachment” — how to challenge a witness’s credibility. Sometimes a trial lawyer may ask a witness about past conduct, because reasonable jurors may doubt a witness’s truthfulness today if they determine the witness has behaved deceitfully in the past.

That came to mind Tuesday when The Daily Pennsylvanian asked me to write a guest column about Professor Amy Wax’s recent Wall Street Journal op-ed. ...

Professor Wax’s WSJ op-ed characterizes conversations with several colleagues — and the Dean, who she claims caved to “pressure” to “banish” her by asking her “to take a leave of absence.” A news article in the DP quotes the law school’s spokesperson stating the Dean discussed Professor Wax’s regular sabbatical leave, which is one form of leave of absence under Penn’s policies.

I wasn’t involved in whatever communications occurred between Professor Wax and either Dean Theodore Ruger or our other colleagues. But her record of selective editing and behavior that contradicts her claimed principles have led me to distrust whatever Professor Wax won’t document in full. ...

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February 24, 2018 in Legal Education | Permalink | Comments (1)

Friday, February 23, 2018

Lederman Presents Information Matters In Tax Enforcement Today At Florida

Lederman (2018)Leandra Lederman (Indiana) presents Information Matters in Tax Enforcement at Florida today as part of its Graduate Tax Speaker Series:

Most legal and economics scholars recognize that the government needs information about taxpayers’ transactions in order to determine whether their reporting is honest, and that third-party reporting helps the government obtain that information. Yet, a recent paper by Professor Wei Cui [Taxation Without Information: The Institutional Foundations of Modern Tax Collection] asserts that “modern governments can practice ‘taxation without information.’” Cui’s argument rests on two premises: (1) “giving governments effective access to taxpayer information through third parties does not explain the success of modern tax administration” because, he argues, other important taxes, such as the value added tax (VAT), do not involve information reporting; and (2) modern tax administration succeeds because business firms are “sites of social cooperation under the rule of law,” fostering compliance. As this Essay argues, the literature demonstrates that Cui is wrong on both points.

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February 23, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup: Glogower Reviews Aprill & Hemel's A Byrd's Eye View Of The Tax Legislative Process

This week, Ari Glogower (Ohio State) reviews a new work by Ellen P. Aprill (Loyola-LA) and Daniel Hemel (Chicago), The Tax Legislative Process: A Byrd's Eye View, 81 Law & Contemp. Probs. ___ (2018).

Glogower (2016)Ellen Aprill and Daniel Hemel’s timely and enlightening new essay described the effect of the Byrd Rule on tax legislation and policy since its adoption in 1985. Named for former Senator Robert Byrd (D-WV), the rule limits the scope of legislation that can be passed in the Senate by a simple majority through the budget reconciliation process.

The 1974 Congressional Budget Act allowed for the reconciliation process as a way for Congress to pass revenue-related legislation and avoid the threat of a “filibuster”—and specifically to avoid the supermajority requirement (now 60 votes) for cloture ending debate on a measure in the Senate. The Byrd Rule, in turn, limits the ability to pass additional measures through this process that are not revenue-related. In particular, the rule precludes provisions that are “extraneous” to the reconciliation instructions as specified in a budget resolution that must be passed first authorizing an increase in outlays or revenues up to a specified amount over a specified budget window.

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February 23, 2018 in Ari Glogower, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Survey Confirms 'Trump Bump' In Law School Applications


Following up on Wednesday's post, LSAT Test-Takers Surge 29.7% In December; 19.2% Yearly Rise Would Be Highest In 16 Years:  Kaplan Test Prep Survey, Over 30 Percent of Pre-Law Students Say the Results of the 2016 Election Impacted Their Decision to Apply to Law School:

The results of a new Kaplan Test Prep nationwide survey of over 500 pre-law students reveal a potential reason why the number of law school applications and LSATs® administered are up by double digits compared to last year: politics*. Nearly one third of pre-law students surveyed (32 percent) say the results of the 2016 election impacted their decision to become lawyers. ...

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February 23, 2018 in Legal Education | Permalink | Comments (3)

Charleston Law Students Win 7th Consecutive National Tax Moot Court Competition

2018 National Tax Moot CourtPost and Courier, Charleston School of Law Moot Court Team Defends its Dynasty With 7th National Title:

To the uninitiated, tax moot court might sound like a bit of a snoozefest.

Unlike the academic marathon of a spelling bee or the sassy courtroom repartee of "Judge Judy," deliberations over the finer points of U.S. tax code do not make for a lively spectacle.

But to the Charleston School of Law, the 2018 National Tax Moot Court Competition in St. Pete Beach, Florida, was a chance to defend a dynasty. The school's Moot Court Board had won the championship six years in a row leading up to the event on Feb. 1-3, and its team was ready to notch a seventh national title. ...

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February 23, 2018 in Legal Education, Tax, Teaching | Permalink | Comments (0)

NALP: Perspectives On 2017 Law Student Recruiting

Nalp 2NALP, Perspectives on 2017 Law Student Recruiting:

Following the near collapse of entry-level recruiting by large law firms in 2009, most law firms have rebuilt their summer programs and in many ways, Big Law recruiting volume and practices resemble those measured before the recession. On the other hand, for the second year in a row aggregate summer offer volume decreased compared with the year before, and a significant percentage of law firms said they made fewer offers for 2018 summer programs than for 2017 summer programs. Also, the average summer program class size at the largest law firms dipped in 2017. The data collected from NALP’s surveys of law schools and law firms at the end of the 2017 recruiting cycle present something of a nuanced picture, suggesting not so much a contraction as a leveling of recruiting volumes following years of growth.

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February 23, 2018 in Legal Education | Permalink | Comments (0)

Pepperdine Disaster Relief Clinic Helps California Fire Victims

PDRPepperdine Legal Clinics Aid California Fire Victims:

The Pepperdine School of Law instituted the Disaster Relief Clinic this semester in response to the need of the hundreds of individuals affected by the local Thomas fires, as well as the Texas hurricanes. Through this program, law students are able to provide pro-bono legal services to those who would not otherwise be able to afford it.

The School of Law’s Clinical Education Program includes 10 separate clinics this semester. ... “When teaching students, we also manifest our mission to the world and try to contribute to our communities and our neighbors and serve people who need it,” Director of Clinical Education and Associate Clinical Professor of Law Jeffrey Baker said. ... “Generally, the legal clinics are our teaching law firm inside the law school. So we actually practice real law for real clients…and students work under faculty supervision to get experience practicing law,” Baker said.

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February 23, 2018 in Legal Education | Permalink | Comments (0)

Thursday, February 22, 2018

McCormack Presents America's (D)evolving Childcare Tax Laws Today At Duke

McCormackShannon Weeks McCormack (University of Washington) presents America's (D)evolving Childcare Tax Laws at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Proponents have touted the ability of the Tax Cuts and Jobs Act (the TCJA) — enacted in the twilight of 2017 — to help American working families. But while the TCJA expanded some benefits available to parents with dependent children, these “parental tax benefits” may be claimed regardless of whether or to what extent childcare costs are incurred to work outside the home. To help working parents with these costs (which are often their largest expense), Congress might have turned to two other mechanisms in the tax law — the child and dependent care credit, and the “dependent care exclusion. While these “childcare tax benefits” are only available to working parents that pay for childcare, stringent limitations have kept many from recovering anything near their actual costs, particularly in the critical years before children reach school-age. As a result, the Code has been taxing families with different childcare needs inequitably. But the TCJA left these “childcare tax laws” untouched and thus did nothing to address this problem. By exploring critical junctures in their development, this Article seeks to understand how America’s tax laws have (d)evolved in this manner and, in doing so, situates some of TCJA’s so-called reforms into their historical context.

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February 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pratt Presents Learning To Live Without Form 1040 Today At UCLA

Pratt (2017)Katherine Pratt (Loyola-L.A.) presents Learning to Live Without Form 1040 at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

This Article explores the functions served by the annual mass filing of individual income tax returns on Form 1040 and considers the institutional design opportunities presented by the proposed conversion of the “mass” income tax into a “class” income tax. Focusing on Michael Graetz’s Competitive Tax Plan, Part I briefly summarizes proposals that would narrow the scope of the income tax and significantly reduce the number of Form 1040 tax returns filed annually. The prospect of eliminating so many income tax returns raises the question of whether a reduction in Form 1040 filings could have unexpected consequences.

Part II asks: aside from raising revenue, what functions does the mass filing of Form 1040 serve? Larry Zelenak posits certain functions served by the mass filing of Form 1040, including the “warm glow” “fiscal citizenship” function. This Article addresses additional functions that the mass filing of Form 1040 serves.

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February 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Law Schools Examine Predictive Value Of GRE, LSAT

GRELSATABA Journal, Law Schools Examine Predictive Value of GRE, LSAT:

In 2016, the University of Arizona announced that its law school would accept Graduate Record Examinations scores as well as the traditional Law School Admission Test from applicants. Since then, debate has swirled around how valid and reliable both standardized tests are in predicting how applicants would perform in law school.

The Educational Testing Service, which designs and administers the GRE, claims that exam’s ability to predict law school success is comparable to that of the LSAT. The Law School Admission Council, which designs and administers the LSAT, counters that its exam is specifically designed to test skills needed to excel in law school, and that the validity of the exam has years of research.

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February 22, 2018 in Legal Education | Permalink | Comments (0)

WSJ: New BEAT Tax Could Eliminate Benefit From Lower Corporate Tax Rate For Some Foreign Firms

WSJ 2Wall Street Journal, BEAT UP? U.S. Tax Provision May Sting Foreign Firms:

Executives around the world have embraced the overhaul’s big reduction in the federal corporate-tax rate—from 35% to 21%. Less-well-known provisions in the new code, however, could hurt some companies based outside the U.S. and doing business in the country.

One of the biggest potential threats is the base-erosion and anti-abuse tax. Dubbed BEAT, the levy could damp—or even completely offset—any gains that foreign multinationals such as SAP might otherwise expect from the reduction in the U.S. tax rate.

Here is how BEAT is designed to work: If a company generates more than $500 million in annual revenue in the U.S., and its American units make above a specified level of tax-deductible payments to related companies overseas, those units must pay a minimum tax on their U.S. profit after adding back in certain types of deductions. The minimum rate is 5% in 2018, but rises to 10% in 2019 and 12.5% in 2026.

Drafters of the tax law say the provision was meant to discourage companies from inappropriately channeling profit generated in the U.S. to lower-tax regimes.

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February 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Syracuse Law School's New Hybrid J.D.: 75% Online, 25% Residential/Externships

Syracuse (2017)Following up on last week's post, ABA Approves Online JDs At Syracuse, Southwestern:  Inside Higher Ed, Syracuse Law Gains Approval for (Mostly) Online J.D.:

Syracuse University College of Law has won approval from the American Bar Association's accreditation division to offer a J.D. program in which roughly two-thirds of the course work will be completed online — although about half of the credits completed at a distance will be conducted live, in real time, school officials note. The ABA has been cautious in permitting law schools to educate students via the internet, and before Syracuse, the bar association had approved two institutions to offer more than 15 of their credits online, its current limit (though an increase is under review).

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February 22, 2018 in Legal Education | Permalink | Comments (0)

NY Times: Tax Overhaul Gains Public Support, Buoying Republicans

NYTNew York Times, Tax Overhaul Gains Public Support, Buoying Republicans:

The tax overhaul that President Trump signed into law now has more supporters than opponents, buoying Republican hopes for this year’s congressional elections.

The growing public support for the law coincides with an eroding Democratic lead when voters are asked which party they would like to see control Congress. And it follows an aggressive effort by Republicans, backed by millions of dollars of advertising from conservative groups, to persuade voters of the law’s benefits.

That campaign has rallied support from Republicans, in particular. But in contrast with many other issues — including Mr. Trump’s job approval rating — it also appears to be winning over some Democrats. Support for the law remains low among Democrats, but it has doubled over the past two months and is twice as strong as their approval of Mr. Trump today.

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February 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

2017 Tannenwald Tax Writing Competition Winners

Tannenwald (2016)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship has announced the winners of the 2017 tax writing competition:

First Prize ($5,000):
David Berke (Yale), Reworking the Revolution: Treasury Rulemaking & Administrative Law
Faculty Sponsor:  Anne L. Alstott

Second Prize ($2,500):
Daniel W. Blum (NYU), Treaty Shopping and its Prevention in a Post-BEPS World Limitation-on-Benefits, Beneficial Ownership and the Principal Purpose Test: Evolution, Underlying Rationales and Interrelation
Faculty Sponsor:  H. David Rosenbloom

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February 22, 2018 in ABA Tax Section, Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

Gallup: Only 23% Of Law School Grads Say Their Education Was Worth the Cost

Gallup, Few MBA, Law Grads Say Their Degree Prepared Them Well:

Masters of business administration (MBAs) and law degree graduates are less likely than other postgraduates to say their graduate degree prepared them well for life outside of graduate school and that it was worth the cost. Only two in 10 MBAs and law degree holders say their education prepared them well, while half of medical degree holders say the same.


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February 22, 2018 in Legal Education | Permalink | Comments (9)

Wednesday, February 21, 2018

Wallace & Glogower: Shades Of Basic Income

Clint Wallace (South Carolina) & Ari D. Glogower (Ohio State), Shades of Basic Income:

The basic income concept, at a high level of generality, has generated increasing interest among scholars, policymakers, and members of the public around the world and across the political spectrum. In practice, however, the basic income label encompasses a variety of different proposals, with different underlying policy motivations, design features, and anticipated effects. The varied motivations reflect different political ideologies and policy priorities, as well as different expectations for the future of the economy and labor market demand. While many agree that basic income could be a useful solution, there is no consensus as to the problems basic income solves.

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February 21, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Key To Law Student Well-Being? We Have To Love Our Law Students

David B. Jaffe (American), The Key to Law Student Well-Being? We Have to Love Our Law Students:

Anyone paying attention has moved well beyond guesswork regarding the health of our law students. A recent survey focusing on law student well-being reflects, inter alia, that students are drinking excessively, are taking drugs not prescribed to them, and are expressing high rates of depression and/or anxiety. Another landmark study refutes earlier notions that these issues befall attorneys as they age, suggesting instead that younger attorneys are suffering in greater numbers, which in turn reflects a closer proximity to a lawyer’s time in law school and underscores the importance of addressing these issues at an earlier time. Law school deans of students report increasing meetings and counseling of students (a good sign), which may reflect a coming of age of students who were diagnosed with a mental health issue or substance use disorder, as well as a greater self-awareness and desire for self-care than previously witnessed. However, these students are not seeking professional help for their issues in the numbers that would be anticipated. Unfortunately, after acknowledging that something more should be done to help these students, those who are able to make a difference often return to their own tasks and responsibilities, assuming someone else will address the myriad problems.

This article is an effort to close the gap in the care provided to law students. A National Task Force, convened to focus on well-being in the legal profession, developed a series of recommendations for critical stakeholders. Underscoring the recommendations, the Report is a “call to action” at a critical juncture for those in the legal profession. This article focuses on the greater attention needed in law schools, offering concrete suggestions to take each of us beyond merely agreeing that more needs to be done to making a commitment to action. The article is thus divided into sections in an effort to address the many stakeholders who can play a role in taking better care of our students.

After counseling thousands of law students, many of whom came forward only when in crisis and thus with reduced opportunities to help at the law school’s disposal, I suggest that the time for strengthened approaches is upon us. Together we can make a significant difference in the lives of our law students; we have to start by loving them.

The Dean’s role is critical to the success of almost every suggestion provided here. The Dean must establish the policy if it does not exist, or modify the policy if it is not addressing the needs of the school. Perhaps above all, however, the Dean must decide if well-being is to be among the mandates of governance. The Dean is the face of the law school and as such should be modeling what well-being looks like at the institution. The traditional prongs for assessment of law faculty — teaching, scholarship, and service — do not cater to the substantial needs raised in this article, perhaps because the needs are less traditional, and perhaps because they are less quantifiable. Whether choosing to expand on “service” to include regular non-classroom dedication to one’s students, or to expand the prongs in a similar vein, the Dean is charged with making this work.

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February 21, 2018 in Legal Education | Permalink | Comments (1)