TaxProf Blog

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

Monday, July 16, 2018

McGrath & Morriss: Law School Assessment, From Admissions To Curriculum To The Bar Exam

James McGrath (Texas A&M) & Andrew P. Morriss (Texas A&M), Assessments All the Way Down:

The role of assessments is getting attention throughout legal education. A growing acceptance of the Graduate Record Examination (“GRE”) as an alternative to the Law School Aptitude Test (“LSAT”) and its incorporation into the U.S. News & World Report (“USN&WR”) law school rankings opened the door to changes in who is going to law school and how they are recruited. At the other end of students’ journey through legal education, the discussion of recent graduates’ bar exam performance — linked by some to declining LSAT scores of entering students — raised questions about the design of bar exams as well as about law schools’ preparation of graduates for the bar. In between, the American Bar Association’s incorporation of assessment into its accreditation process spurred growing interest in how law schools conduct assessments and is prompting changes in how legal educators evaluate students.

In this article, we begin with the issues raised by the GRE’s appearance as an alternate pathway. Next, we set out assessment principles likely to influence future conversations in the legal academy. Then we look at how the bar results discussion connects to improving assessment strategies. Finally, we conclude with speculation about what this all means.

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July 16, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

IRS Gives Green Light To Back-Door Roth IRAs For High-Income Taxpayers

Forbes, IRS Unlocks The 'Door' For High-Income Savers:

For years, there’s been a debate raging in the financial planning community surrounding something that’s colloquially become known as “The Back-Door Roth IRA.” Some practitioners (including myself) have been advocates of the planning strategy, which involves a two-step process that effectively enables certain high-income taxpayers to skirt the Roth IRA contribution income limits, viewing it as a clever technique to make the most of nonsensical rules. Other practitioners, however, have preached caution, and have largely encouraged their clients to avoid making such transactions out of concern that the IRS could disallow the move thanks to something known as “the step-transaction doctrine.”

Despite the uncertainty surrounding the somewhat popular strategy, the IRS had been relatively tight-lipped as to its official view on the matter… or at least it had been until this past Tuesday. Earlier this week, on a July 10th Tax Talk Today webcast, Donald Kieffer Jr., a tax law specialist with the IRS’s Tax-Exempt and Government Entities Division, gave the Back-Door Roth IRA it’s biggest vote of confidence yet. Here’s what Kieffer had to say about the strategy:

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July 16, 2018 in Tax | Permalink | Comments (0)

Simkovic: How Secure Is Tenure?

Following up on my recent posts:

Michael Simkovic (USC), How Secure Is Tenure?:

Colleges and universities typically pay educated professionals a fraction of what similar individuals earn in the private sector (typically around 60 to 80 cents on the dollar) in return for greater job security and academic freedom.  In recent years, some law schools have effectively reneged on this bargain, slashing compensation, de-prioritizing research support and/or accepting outside funding that compromises academic freedom, and terminating even some tenured faculty members.

Recent reports suggest that Vermont Law School has taken this to the extreme. According to the ABA Journal, Vermont Law School recently stripped tenure from 14 of its 19 tenured professors. This was done without a formal declaration of financial exigency, and according to faculty members and the AAUP, apparently without the consent of faculty members typically required for such decisions. ...

If the reports are accurate, Vermont has essentially acted as if tenure does not exist. This could potentially raise questions about whether Vermont is in compliance with ABA standard 405, but it is unclear how assertive the ABA or site visit teams will be in enforcing those standards. 

The incident highlights the importance of faculty members joining organizations like the AAUP which protect tenure and academic freedom.  At many institutions, tenured faculty members are increasingly getting the worst of both worlds—private-sector level risks with public-sector level compensation.

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July 16, 2018 in Legal Education | Permalink | Comments (1)

UC-Irvine Launches Graduate Tax Program

UCI Logo (2018)UCI Law Launches a New, Innovative Graduate Tax Program:

The University of California, Irvine School of Law is pleased to announce its Graduate Tax Program, a one-of-a-kind, practice-oriented Master of Laws (LL.M.) degree program led by renowned tax scholars Omri Marian, Joshua Blank and Victor Fleischer. True to the spirit of UCI Law’s cutting-edge approach to legal education, the Graduate Tax Program offers a unique tax curriculum emphasizing practice skills and featuring small class sizes and a collegial, supportive learning environment. The program will provide students with both the doctrinal depth and the experiential learning needed to practice tax law and to develop a deep understanding of the new tax law — enacted in 2017. The program will prepare graduate students for careers as tax attorneys, judges, tax administrators and policy advocates in the United States and abroad, and will also offer the opportunity for current practitioners to dramatically expand their tax knowledge and skills. The Program will begin accepting applications in August 2018 for admission to the inaugural class, with students matriculating in the fall of 2019.

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July 16, 2018 in Legal Education, Tax | Permalink | Comments (0)

Lesson From The Tax Court: An 'Origin of the Claim' Test For §104(a)(2) Exclusions

Tax Court (2017)Here at Texas Tech we require all law students to take the basic course in federal income tax. That is not because we are especially cruel, but rather because tax law touches so many other areas of practice that the faculty believes every student should have an introduction to tax. I must shape my course knowing that at least two thirds of the students do not want to become tax lawyers. One tack I take is to highlight tax issues that regularly come up in other practice areas such as family law and litigation.

A case from the Tax Court last week teaches a useful lesson about the intersection of tax with litigation practice.  Jacques L. French and Sherry L. French v. Commissioner, T.C. Summary Op. 2018-36 (July 12, 2018) involves taxpayers seeking to exclude a settlement payment under §104(a)(2), the section that allows taxpayers to exclude from gross income the amount of damages received because of personal physical injury or physical illness.

We usually think about the “origin of the claim” test in the §162 context, where courts use it to decide when taxpayers may deduct expenses associated with litigation. In fact, just this last week I saw another Tax Court opinion that involves this application of the origin of the claim test. I may blog that next week, unless something else catches my eye.

This week, however, I think it is useful to see how the Tax Court takes a very similar approach to deciding when a taxpayer can exclude a damage award under §104(a)(2). In both situations, it is the nature of the claim asserted in litigation that governs the potential exclusion or the potential deduction.  Looking at §104(a)(2) also allows me to give a shout out to the Tax Court's newest Special Trial Judge, Diana L. Leyden.  Her carefully constructed opinion shows us exactly how the Tax Court applies this “origin of the claim test” in the §104(a)(2) context. It makes for a nice lesson from the Tax Court.

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July 16, 2018 in Bryan Camp, New Cases, Tax | Permalink | Comments (0)

LSAT Adopts 12 Different Gender Identity Options; GRE Only Has Two

From Switzerland With Love: Surrey’s Papers And The Original  Intent(s) Of Subpart-F

Nir Fishbien (S.J.D. 2018, Michigan), From Switzerland with Love: Surrey’s Papers and the Original  Intent(s) of Subpart-F, 38 Va. Tax Rev. ___ (2018):

For the first time since 1913, and as part of the 2017 tax reform, Congress adopted a tax regime that exempted from U.S. taxation dividends from foreign subsidiaries. By doing so, Congress abandoned the general principle that U.S. residents should be subject to tax on all income “from whatever source derived.” This shift marked a good occasion for considering the reasons the United States taxed such dividends in the first place. In 1962, Congress enacted a new law, also known as ‘Subpart-F’, which subjected certain earnings of foreign subsidiaries of American parent corporations to current-base taxation. This was a deviation from the general tax principle of tax deferral, under which earnings of foreign subsidiaries are taxed only upon repatriation of these earnings (by a dividend, for example). The new legislation was the result of a political compromise. While Treasury supported a wide-scale elimination of tax deferral, Congress eventually adopted a much narrower law, eliminating tax deferral only in cases where it was abused by using it to avoid otherwise owed U.S. taxes.

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July 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 15, 2018

Willamette Seeks To Hire A Tax Prof

WillametteWillamette University College of Law seeks applicants for up to two full-time, tenure-track faculty positions beginning in fall 2019:

While the focus of our search is for entry-level candidates, we also welcome applications from early-career lateral candidates. Our curricular interests include Business Associations, Commercial Law, and Health Law, as well as Trust & Estates, Property, Family Law, Tax, Torts, and Criminal Law. Applicants must possess strong academic credentials and a proven ability to produce thoughtful scholarship, as well as the skills necessary to communicate their expertise to colleagues and their students. The Faculty Appointments Committee will begin reviewing applications in the late summer and will continue to do so until the positions are filled. ...

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July 15, 2018 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

U.S. Government Revenues Fall In Wake Of GOP Tax Cut

WSJWall Street Journal, U.S. Government Revenues Drop in Wake of Tax Cuts:

Corporations taking advantage of new, lower tax rates reduced their payments to the federal government last month.

The Treasury Department on Thursday said government receipts fell 7% in June compared with the same month a year earlier, including a 33% drop in gross corporate taxes. Individual withheld and payroll taxes were down 5% from June 2017, while non-withheld individual taxes rose by 7%.

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July 15, 2018 in Tax | Permalink | Comments (0)

Enrollment Soars In College's Online Program Costing 60% Less Than Regular Tuition

60%Inside Higher Ed, A College Prices Its Online Programs 60% Less:

Most institutions charge students the same or more for online programs than for face-to-face. Berklee has found success with a pricing model that favors online students.

Berklee College of Music’s online program, priced at just over a third of tuition for the Massachusetts institution’s face-to-face degree offerings, raised eyebrows when it got off the ground in 2013. Conventional wisdom that online programs require more resources to produce had taken hold, and pricing models that favor online students were few and far between.

Five years later, Berklee remains an anomaly in higher ed, as most institutions continue to charge the same or more for online programs as for their face-to-face equivalents. Some arguments hinge on a philosophical belief that online education should be valued equivalently to face-to-face programs, while others emphasize the significant financial burden of designing and launching online courses from scratch.

In the face of a shifting landscape, Berklee has held firm. Online tuition for a bachelor's degree will go up half a percentage point this fall, from $1,479 per course ($59,160 for a 40-course degree program) to $1,497 per course ($59,880 total), but it still remains more than 60 percent less than face-to-face tuition — $171,520. In the last few years, on-ground tuition has increased by a few thousand dollars while online tuition has stayed the same, widening the gap between the two even farther, according to Debbie Cavalier, Berklee’s senior vice president of online learning and continuing education.

As of fall 2017, Berklee Online's undergraduate enrollment stood at 1,138 students, up from 244 just two academic years earlier. Though Cavalier’s team had worried early on that the online program would cannibalize existing offerings, campus enrollment has instead increased from 4,490 undergraduates in 2013 to 4,532 in 2017, even as online has grown more popular. ...

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July 15, 2018 in Legal Education | Permalink | Comments (10)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. [289 Downloads]  Introduction to Tax Policy Theory, by Allison Christians (McGill)
  2. [254 Downloads]  Higher Education Savings and Planning: Tax and Nontax Considerations, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [250 Downloads]  Code Sec. 1031 after the 2017 Tax Act, by Brad Borden (Brooklyn)
  4. [215 Downloads]   The International Provisions of the TCJA: A Preliminary Summary and Assessment, by Reuven Avi-Yonah (Michigan)
  5. [215 Downloads]   Rethinking Legal Taxonomies for the Gig Economy: Tax Law, Employment Law, and Economic Incentives, by Abi Adams, Judith Freedman & Jeremias Prassl (Oxford)

July 15, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 14, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Can Trump Enact A Second Tax Cut On His Own By Indexing Capital Gains?

Wall Street Journal op-ed:  Trump Alone Can Cut Taxes, by Kimberley A. Strassel:

What if President Trump had the authority—on his own—to enact a second powerful tax reform? He does. The momentum is building for him to use it.

In the halls of Congress, the corridors of the administration, and the nerve centers of activist groups, forces are aligning behind a plan: a White House order to index capital gains for inflation. It’s a long-overdue move—one that would further unleash the economy and boost GOP election prospects. And Mr. Trump could be the president bold enough to make it finally happen.

At President Reagan’s behest, Congress in the 1980s indexed much of the federal tax code for inflation. Oddly, capital gains weren’t similarly treated. The result is that businesses and individuals pay taxes on the full nominal amount they earn on investments, even though inflation eats up a good chunk of any gain. It’s not unheard of for taxes to exceed real gains after inflation. The result is significant capital distortion, as companies sit on buildings and property or investors sit on stock—rather than selling and thereby putting both assets and gains to more productive use.

Conservatives have understood this problem for decades, yet for decades they have been held hostage to a 1992 government brief. The paper by the Justice Department’s Office of Legal Counsel offered a few faulty arguments as to why the Treasury lacked the authority to make this regulatory change. Neither President Bush questioned it, but others have.

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July 14, 2018 in Tax | Permalink | Comments (10)

Want To Kill Tenure? Be Careful What You Wish For

Chronicle of Higher Education, Want to Kill Tenure? Be Careful What You Wish For:

The trustee hadn’t said a word for an hour as the board of the small Midwestern liberal-arts college debated ways to turn around its flagging fortunes. But during a lull in the conversation, he finally spoke up. As David Strauss recalls, "He looked at everybody as if we’d all been fools, and said, ‘Well, the solution is easy. Get rid of tenure.’"

Strauss, a principal of the Art & Science Group, a consulting firm that works with colleges, had heard the argument before. Almost anyone who works in higher education has. Many outside academe — and some within — see tenure as an entitlement that encourages "deadwood" professors to coast and shields firebrands who spout off, an anachronism that hinders colleges from innovating and drives up costs.

Strauss says that the trustee’s suggestion was politely ignored and talk soon turned back to more pressing issues, such as enrollment and academic programs. Though tenure is increasingly scarce, its status as an ­ideal in higher education is so sacred that sentiments like the trustee’s are rarely expressed openly. Indeed, several academic leaders, lawmakers, and advocates for adjuncts and academic freedom didn’t respond to requests for interviews for this article. But the trustee’s argument against tenure isn’t going away, and may be gaining momentum.

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July 14, 2018 in Legal Education | Permalink | Comments (11)

Ellen Aprill Receives ABA Outstanding Academic Award

Aprill (2016)The Nonprofit Organizations Committee of the ABA Business Law Section has awarded the Outstanding Academic Award for distinguished academic achievement in the nonprofit sector to Ellen P. Aprill (Loyola-L.A.):

Ellen Aprill is the John E. Anderson Chair in Tax Law at Loyola Law School in Los Angeles and is the founding director of its Tax LLM program. She has been a member of the Loyola Law School faculty since 1989.

Professor Aprill is one of the founders of the Loyola Law School Western Conference on Tax Exempt Organizations, considered by many to be the premier nonprofit law conference on the West coast. She has co-hosted this conference for twenty years and has been instrumental in bringing together leaders in government, academia and the nonprofit law bar each year for this conference.

Professor Aprill has written extensively on issues of nonprofit law and is a reliable source of knowledge both for her students and the public. 

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July 14, 2018 in Tax | Permalink | Comments (4)

Friday, July 13, 2018

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Christians's Introduction to Tax Policy Theory

This week, Sloan Speck (Colorado) reviews a new work by Allison Christians (McGill), Introduction to Tax Policy Theory (2018).

Speck (2017)In Introduction to Tax Policy Theory, Allison Christians fulfils the Herculean task set forth in her title with deft grace and critical perspective. Christians’s short paper first elucidates three general goals of taxation from the taxing authority’s perspective, which she describes as state-building, internal management, and negotiated expansion. Then, Christians juxtaposes these goals with three metrics well-known among tax policy aficionados: equity, efficiency, and administrative capacity (which easily could be “simplicity”). Out of this analysis, Christians calls for the tax policy community to think and reflect on fundamental questions of approach and methodology—and to acknowledge the “discrepancies and weaknesses” in conventional approaches to tax policy.

Christians’s taxonomy of the goals of taxation is a major contribution, although certain to engender disagreement. Some dissention is inevitable when parsing all of human experience into three bins, each labeled with two words, and Christians presents her “imperfect” but “adequate” categories as poles, or touchstones, rather than as discrete silos.

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July 13, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

House Panel Passes $1,000 Tax Break For Gym Memberships, Exercise Classes: 'It Violates Every Principle Of Tax Policy'

Wall Street Journal, House Panel Passes Tax Break for Gym Memberships, Exercise Classes:

Taxpayers would be able to claim new breaks for gym memberships, exercise classes and other fitness expenses under a bipartisan bill advanced Thursday in the House of Representatives.

The bill would consider those costs as medical expenses for tax purposes, enabling people to use tax-advantaged health-savings accounts and flexible spending accounts to pay for them. The break would be capped at $500 a year for individuals and $1,000 for joint filers. It would reduce federal revenue by $3.5 billion over a decade.

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July 13, 2018 in Congressional News, Tax | Permalink | Comments (0)

Vermont Strips Tenure From 14 Of 19 Law Profs

Vermont Law School Logo (2017)Following up on my previous posts (links below):  ABA Journal, 14 of 19 Vermont Law Professors Lose Tenure, Retention Chair Tells Professors' Organization:

After being informed by the chair of Vermont Law School's retention committee that the school stripped 14 law professors of tenure, the American Association of University Professors has questioned whether the school followed proper regulations.

In a June 19 letter sent to the school’s tenure and retention committee chair, the AAUP conceded that under “extraordinary circumstances because of financial exigencies,” law schools can terminate faculty appointments for reasons other than adequate cause. However, in such circumstances, the faculty, administration and governing board should together determine if financial exigencies exist, and faculty should have a “primary responsibility” in determining where the termination of appointments occur, as well as identifying criteria for the terminations, according to the letter.

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July 13, 2018 in Legal Education | Permalink | Comments (4)

Hemel's Advice To Democrats On Kavanaugh's Nomination

From Tax Prof Daniel Hemel (Chicago):
Give Kavanaugh a Chance:

Several Democratic senators already have said that they will oppose Judge Brett Kavanaugh’s nomination to the Supreme Court seat that Justice Anthony Kennedy is vacating (here are statements from Richard BlumenthalKirsten GillibrandKamala HarrisBernie SandersChuck Schumer, and Ron Wyden). This strikes me as a grave mistake — normatively and strategically. Kudos to Democrats — including Sherrod BrownJoe DonnellyHeidi Heitkamp, and Joe Manchin — who have resisted the rush to judgment.

Brett Kavanaugh is a conservative. That should not be disqualifying. Republican presidents generally will nominate conservatives to the Court, and Democratic presidents generally will nominate liberals. Senators of the opposite party should insist upon well-qualified nominees who fall within the mainstream of American legal thought — not extreme ideologues. Judge Kavanaugh is well qualified by any measure, and his views are much closer to the center than those of many of his former and current Republican-appointed colleagues on the D.C. Circuit. ...

Judge Kavanaugh, moreover, is about the best that we liberals could hope for. Yes, he is a conservative, but as far as conservatives go, he is a judicial minimalist. ...

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July 13, 2018 in Legal Education | Permalink | Comments (2)

Shanske: State Conformity And Tax Base Erosion

Darien Shanske (UC-Davis), States Should Conform to — and Improve — the New Federal Tax Provisions Meant to Counter Base Erosion:

The United States used to tax multinational corporations (MNCs) on the basis of their worldwide income, except that most foreign source income would only be taxed when actually repatriated to the United States. This structure naturally created considerable incentive to strip income out of the United States and then not to repatriate it.

Now, thanks to the TCJA, the United States is ostensibly only going to tax MNCs on their US source income. This shift to a so-called territorial system means, of course, that MNCs will continue to have incentive to shift income abroad in order to avoid US tax. The TCJA has two separate provisions meant to counter this: GILTI and BEAT. One question for the states is whether they should conform to these provisions. I think the answer is yes. I also think it is clear that states should improve these provisions when they adopt them.

There is a preliminary question as to whether states can — as a matter of federal constitutional law — conform to these provisions. I think the answer is again yes, but the details of the state law will matter a great deal. ...

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July 13, 2018 in Tax | Permalink | Comments (0)

Gianni: OECD BEPS (In)Action 1 — Factor Presence As A Solution To Tax Issues Of The Digital Economy

ABA Tax LawyerMonica Gianni (California State-Northridge), OECD BEPS (In)Action 1: Factor Presence as a Solution to Tax Issues of the Digital Economy, 72 Tax Law. ___(2018):

The Organisation for Economic Cooperation and Development (OECD) launched its project to address base erosion and profit shifting (BEPS) in 2013 with an Action Plan of 15 Actions. Action 1 encompasses identifying difficulties the digital economy poses for applying existing international tax rules and developing options to address them. Under current international tax rules, an enterprise generally is not taxed in a country in which it does not have a physical presence. With the economy having evolved so that business can be conducted over the internet with no physical presence in a country, companies have been able to avoid taxation in many jurisdictions from which they generate significant income. The OECD issued a final report on Action 1 in 2015 and a subsequent report in 2018, yet has failed to recommend a solution to address the physical presence issue. In effect, Action 1 has become Inaction 1. Countries and the European Union have grown impatient with the OECD and have taken matters into their own hands, with countries and the European Commission (EC) proposing or enacting legislation to address head on the issue of nontaxation of multinational digital companies, tax authorities assessing tax against multinational companies under the existing rules, and the EC bringing actions against countries for illegal state aid.

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July 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

Thursday, July 12, 2018

After Temple Admitted That Its Business School Misreported Data To Goose Its Ranking, U.S. News Demands Certification Of Other Schools' Data (Including Law School)

TempleFollowing up on Tuesday's post, Temple Business School Dean Fired For Knowingly Submitting False Data To Inflate U.S. News Ranking Over Several Years:  U.S. News has sent a letter to Temple asking it to certify the accuracy of data submitted by its other schools and programs (including the law school) because "the scope and duration of the misreporting at Fox calls into question all of Temple University’s submissions to U.S. News."

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July 12, 2018 in Law School Rankings, Legal Education | Permalink | Comments (4)

Avi-Yonah & Mazzoni: BEPS, ATAP And The New Tax Dialogue — A Transatlantic Competition?

Reuven S. Avi-Yonah (Michigan ) & Gianluca Mazzoni (S.J.D. 2018, Michigan), BEPS, ATAP and the New Tax Dialogue: A Transatlantic Competition?:

The Tax Cuts and Jobs Act (TRA17) signed into law by President Trump on 22 December 2017 contains multiple provisions that incorporate the principles of the OECD/G20 Base Erosion and Profit Shifting (BEPS) into domestic US tax law. Together with the changes in the 2016 US Model Tax Treaty, these provisions mean that the United States is following the European Union in implementing BEPS and particularly its underlying principle, the single tax principle (all income should be subject to tax once at the rate derived from the benefits principle, i.e. active income at a minimum source tax rate and passive at the residence state rate).

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July 12, 2018 | Permalink | Comments (0)

Professor Who Fabricated Lateral Offer From University Of Minnesota To Get $5,000 Raise Faces Criminal Charges

McNChronicle of Higher Education, This Professor Made Up a Job Offer From Another University. Now He Faces a Criminal Charge:

In January 2015, Brian R. McNaughton, an associate professor at Colorado State University, sent his administration an offer letter he’d received from another university.

To entice McNaughton to stay, Colorado State raised his base pay by $5,000, a university spokeswoman said. Using offer letters from other institutions as leverage in salary negotiations is common practiceat colleges and universities.

There was just one problem with McNaughton’s case: The offer letter was fake.

McNaughton now faces a criminal charge of attempting to influence a public official for allegedly falsifying an offer letter from the University of Minnesota. He has since resigned from his position at Colorado State.

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July 12, 2018 in Legal Education | Permalink | Comments (2)

$111 Billion In Tax Cuts For The Top 1%

Following up on yesterday's post, Tax Cuts Under Bush, Obama & Trump Have Increased Ineqality:  New York Times op-ed:  $111 Billion in Tax Cuts for the Top 1 Percent, by David Leonhardt:

More inequality? Yes, please. Federal tax policy in the 21st century has been like a tug of war. Thanks to President Trump, the rich are winning it once again.

The top-earning 1 percent of households — those earning more than $607,000 a year — will pay a combined $111 billion less this year in federal taxes than they would have if the laws had remained unchanged since 2000. That’s an enormous windfall. It’s more, in total dollars, than the tax cut received over the same period by the entire bottom 60 percent of earners, according to an analysis being published today.

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July 12, 2018 in Tax | Permalink | Comments (5)

Trump's Tariffs Will Erase His Tax Cut

Wall Street Journal op-ed:  Trump Plots to Erase His Tax Cut, by Karl Rove:

President Trump is justifiably proud of passing tax reform last December, telling audiences “because of our tax cuts, you can keep more of your hard-earned money.” He’s right: American taxpayers will save $75 billion this year and $189 billion next year, according to the Joint Committee on Taxation.

Yet the president’s tariffs on imports could negate much of the tax relief he’s been bragging about. These levies are not paid by foreign countries or companies. They are passed on to American consumers in the form of higher prices for either foreign or U.S.-made goods. ...

All these actions add up to $19 billion a year in new tariffs already levied or pending, and potentially up to $125 billion a year more from additional tariffs the administration has threatened. Most of this money will come from Americans’ family budgets, erasing a large share of their savings from the tax cut.

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July 12, 2018 in Tax | Permalink | Comments (0)

Millionaires Flee California After Tax Hike

CalifForbes, Millionaires Flee California After Tax Hike:

According to new research released by Charles Varner, associate director of the Stanford Center on Poverty and Inequality, California lost an estimated 138 high-income individuals following passage of the Proposition 30 income tax increase championed by Gov. Jerry Brown (D) and approved by Golden State voters in 2012.

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July 12, 2018 in Scholarship, Tax | Permalink | Comments (5)

Kirkland & Ellis Booted From Arizona Summit's Lawsuit Against The ABA

KirklandLaw360, Kirkland Booted From For-Profit Law School's ABA Suit:

An Arizona federal judge overseeing a suit by a for-profit law school against the American Bar Association has removed from the case three Kirkland & Ellis attorneys representing the school, including former U.S. Solicitor General Paul D. Clement, saying they have not complied with out-of-state attorney admission procedures.

In a text order Monday the judge noted that Arizona Summit Law School is still represented by local counsel and removed Clement, Viet D. Dinh and H. Christopher Bartolomucci from the case.

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July 12, 2018 in Legal Education | Permalink | Comments (4)

Long-Ignored § 962 Could Let Wealthy Tap 21% Corporate Rate Under New Tax Law

Bloomberg, Tax Loophole From 1960s Could Let Wealthy Tap 21% Corporate Rate:

An obscure tax provision [§ 962] from the 1960s that was left untouched by President Donald Trump’s overhaul could let wealthy individual investors seize for themselves the largest corporate tax cut in U.S. history.

The measure — signed into law by President John F. Kennedy — was designed to prevent Americans from indefinitely shielding themselves from taxes by keeping investments offshore. It forced them to pay taxes annually on these investments, but gave them the option to have that income taxed at the corporate rate instead of at individual rates.

But that all changed in December, when Trump’s tax law slashed the corporate rate to 21 percent — 16 percentage points lower than the top federal individual income tax rate.

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July 12, 2018 in Tax | Permalink | Comments (2)

Wednesday, July 11, 2018

The Fed: GOP Tax Cuts May Not Boost Economic Growth

Federal Reserve Bank of San Francisco, Fiscal Policy in Good Times and Bad:

Recent U.S. federal fiscal policy has taken a decidedly procyclical turn, driven primarily by the large and front-loaded tax cuts enacted by the 2017 Tax Cuts and Jobs Act. Many analysts have forecast large increases in GDP growth over the next two to three years as a result. However, recent research finds that the effects of fiscal stimulus on overall economic activity are much smaller during expansions than during downturns. This suggests these forecasts may be overly optimistic.

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July 11, 2018 in Gov't Reports, Tax | Permalink | Comments (1)

Sharp Contrasts Mark Opening Of Columbia Business School Sexual Harassment Trial, Sharp Contrasts Mark Opening of Columbia Business School Sexual Harassment Trial:

Sharply contrasting versions of events marked the opening statements Monday in the civil trial against a senior Columbia Business School professor accused by a former junior tenure-track colleague of sexual harassment and career sabotage.

The picture painted by counsel for former Columbia University assistant professor Enrichetta Ravina of professor Geert Bekaert is one that has become familiar in the #MeToo era. A powerful figure at both the prestigious university and in the broader economic academic world, Bekaert dangled the prospects of important research critical for a coveted tenure position to cultivate a close working relationship with Ravina after she arrived at the school in 2008.

However, this, according to Sanford Heisler Sharp name attorney David Sanford, was all a pretext for Bekaert’s ulterior motives. Over dinners and coffee, Bekaert made it clear he desired a romantic relationship with Ravina. He made physical advances toward her, and discussed sexual topics, such as pornography and his own sexual exploits, Sanford told the jury. He demanded Ravina provide him with compliments, warning her of a fragile ego in need of positive feedback.

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July 11, 2018 | Permalink | Comments (0)

Tax Cuts Under Bush, Obama & Trump Have Increased Ineqality

Institute on Taxation and Economic Policy, Federal Tax Cuts in the Bush, Obama, and Trump Years:

Since 2000, tax cuts have reduced federal revenue by trillions of dollars and disproportionately benefited well-off households. From 2001 through 2018, significant federal tax changes have reduced revenue by $5.1 trillion, with nearly two-thirds of that flowing to the richest fifth of Americans, as illustrated in Figure 1. The cumulative impact on the deficit during this period is $5.9 trillion, including interest payments.


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July 11, 2018 in Tax, Think Tank Reports | Permalink | Comments (1)

NALP: Salaries Rise For Public Service Attorneys

NALP New LogoNALP, New Public Service Attorney Salary Figures from NALP Show Slow Growth Since 2004:

According to new research from NALP, salaries for public service attorneys have risen modestly since 2004, but among attorneys working in civil legal services organizations, as public defenders or local prosecuting attorneys, or as attorneys in public interest organizations, those providing civil legal services have the lowest median entry-level salary, earn the smallest increases in salary based on experience, and have seen the slowest growth in salary levels over the past 14 years. ...

The 2018 report demonstrates that, in general, practice experience brings with it relatively modest salary increases, particularly within civil legal services organizations. For example, the median entry-level salary for a legal services attorney is $48,000; at 11-15 years of experience the median is $69,500. Pay for public defenders and local prosecuting attorneys is somewhat higher, starting at about $58,000 and $56,000, respectively, and increasing to about $96,000 and $84,000, respectively, for those with 11-15 years of experience

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July 11, 2018 in Legal Education | Permalink | Comments (1)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN 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.  This ranking includes downloads from two 30- and 35-page papers by 12 tax professors on the new tax legislation that garnered a lot of media attention (including the New York Times and Washington Post) and generated a massive amount of downloads (the papers are the most downloaded papers over the past 12 months across all of SSRN and the most downloaded tax papers of all-time by over 200%).  See Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings. (For some reason, Mitchell Kane (NYU) — the twelfth academic co-author of the two papers — is not included in the SSRN download rankings (although the downloads are included on his individual author page)).  Here is the new list (through July 1, 2018) 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):







Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Dan Shaviro (NYU)


Daniel Hemel (Chicago)



David Gamage (Indiana)


David Gamage (Indiana)



Lily Batchelder (NYU)


Darien Shanske (UC-Davis)



Daniel Hemel (Chicago)


Dan Shaviro (NYU)



Darien Shanske (UC-Davis)


Manoj Viswanathan (Hastings)



Cliff Fleming (BYU)


Lily Batchelder (NYU)



David Kamin (NYU)


Cliff Fleming (BYU)



Rebecca Kysar (Brooklyn)


Ari Glogower (Ohio State)



Manoj Viswanathan (Hastings)


David Kamin (NYU)



Ari Glogower (Ohio State)


Rebecca Kysar (Brooklyn)



Michael Simkovic (USC)


Gladriel Shobe (BYU)



D. Dharmapala (Chicago)


Michael Simkovic (USC)



Paul Caron (Pepperdine)


Richard Ainsworth (BU)



Louis Kaplow (Harvard)


D. Dharmapala (Chicago)



Richard Ainsworth (BU)


Jacob Goldin (Stanford)



Ed Kleinbard (USC)


Omri Marian (UC-Irvine) 



Vic Fleischer (UC-Irvine)


Kirk Stark (UCLA)   



Jim Hines (Michigan)


Hugh Ault (Boston College)



Gladriel Shobe (BYU)


Ruth Mason (Virginia)



Richard Kaplan (Illinois)


Sam Donaldson (Georgia St.)   



Ted Seto (Loyola-L.A.)


Kyle Rozema (Chicago)  



Katie Pratt (Loyola-L.A.)


Joe Bankman (Stanford) 



Robert Sitkoff (Harvard)


Stephen Shay (Harvard)



David Weisbach (Chicago)


Dennis Ventry (UC-Davis)


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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July 11, 2018 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

ABA Wins Early Round Against Florida Coastal Law In Accreditation Lawsuit

Florida Coastal (2017), ABA Wins Early Round Against Florida Coastal Law in Accreditation Suit:

In denying Florida Coastal School of Law a preliminary injunction, a federal judge ruled on Monday that the "proverbial cat is out of the bag" when it comes to the school's accreditation shortcomings.

Florida Coastal School of Law must continue to disclose its accreditation shortcomings on its website, a federal judge ruled Monday.

The Jacksonville school had sought a preliminary injunction blocking an American Bar Association-imposed requirement that it publicly disclose that it was found out of compliance with several accreditation standards this spring. But Judge Brian Davis of the U.S. District Court for the Middle District of Florida thwarted the law school’s efforts, finding that the accreditation dispute is not ripe for judicial review because the school has not yet exhausted the ABA’s internal appeals process.

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July 11, 2018 in Legal Education | Permalink | Comments (0)

Krugman: Trump, Tariffs, Tofu And Tax Cuts

New York Times op-ed:  Trump, Tariffs, Tofu and Tax Cuts, by Paul Krugman:

According to early indications, recent U.S. economic growth was full of beans.

No, seriously. More than half of America’s soybean exports typically go to China, but Chinese tariffs will shift much of that demand to Brazil, and countries that normally get their soybeans from Brazil have raced to replace them with U.S. beans. The perverse result is that the prospect of tariffs has temporarily led to a remarkably large surge in U.S. exports, which independent estimates suggest will add around 0.6 percentage points to the U.S. economy’s growth rate in the second quarter.

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July 11, 2018 in Tax | Permalink | Comments (0)

Coase and Fireworks

493l4SRQTVOydKrgKSgSugIn my continuing effort to demonstrate what the mundane world looks like through the eyes of a nerdy law professor, today we will talk about Ronald Coase, recipient of the Nobel Prize in economics, and fireworks.

The bulk of this is cross-posted over at PrawfsBlawg.  But since it deals in part with Pigouvian taxes, it may appeal as well to nerdy tax law types.

Before we had dogs, I liked fireworks, at least the professionally staged kind.  Up here in Charlevoix, Michigan, every year in late July the town has a week-long event called Venetian Festival.  The highlight on Friday night is a spectacular fireworks show out over the lake for which our deck is effectively a front row seat.  For the last seventeen years or so, however, I have not been out on the deck nor have I seen the fireworks.  No, I am back in a closet with the door closed, comforting our dog(s) who is/are going batshit crazy.

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July 11, 2018 in Jeff Lipshaw, Legal Education, Scholarship, Tax | Permalink | Comments (2)

Tuesday, July 10, 2018

Temple Business School Dean Fired For Knowingly Submitting False Data To Inflate U.S. News Ranking Over Several Years

Temple OnlineFollowing up on my previous post, Rankings Scandal Unfolds At Temple Business School:  Jones Day, Findings and Recommendations from Jones Day Investigation into Rankings Information Provided by Fox School to U.S. News:

In January 2018, Temple University learned that the University’s Fox School of Business (“Fox”) had submitted certain inaccurate information to U.S. News & World Report in connection with U.S. News’s 2018 survey of the best Online MBA (“OMBA”) programs. In particular, the University learned that Fox’s survey submission to U.S. News had erroneously indicated that all new entrants to the OMBA program had provided Graduate Management Admission Test (“GMAT”) scores as part of their applications. Fox self-reported to U.S. News that this GMAT data were incorrect. ...

Jones Day made multiple factual findings based on the investigation, as set forth below. In short, the investigation revealed that, over the past several years, Fox provided U.S. News with inaccurate information across multiple data metrics that are part of the publication’s OMBA rankings methodology. And while Jones Day focused on information that Fox provided to U.S. News relating to the school’s OMBA program, the investigation revealed that Fox provided U.S. News with erroneous information relating to other programs as well. On certain occasions, Fox’s reporting of inaccurate information to U.S. News was done knowingly and intentionally for the purpose of improving or maintaining Fox’s standing in the relevant U.S. News rankings.

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July 10, 2018 in Legal Education | Permalink | Comments (1)

The Secret Of Success: Think, Don't Act; When The Going Gets Tough, The Tough Do Not Get Going — They Think

Never StopWall Street Journal, Don’t Just Dive Into Action: Stop to Think First, by Bradley Staats (North Carolina Business School; author, Never Stop Learning: Stay Relevant, Reinvent Yourself and Thrive (Harvard Business Review Press (2018)):

As we’ve seen in recent weeks, some of the most dramatic moments of the World Cup are the penalty kicks, when the outcome of an entire match can rest on a showdown between the shooter and the goalie. In a penalty kick, the ball is placed 11 meters from the goal line and centered on the goal. The goalie must stay on the line but may move left or right before the ball is kicked.

Surprisingly, however, the goalie’s best strategy may be not to move at all. In a 2007 study published in the Journal of Economic Psychology, Michael Bar-Eli of Israel’s Ben-Gurion University and colleagues examined almost 300 penalty kicks taken against goalies in professional competitions. They found that goalies jump to the left 49.3% of the time, to the right 44.4% of the time and stay in the center only 6.3% of the time. Kicks, however, go to the left, right or center 32.2%, 28.7% and 39.2% of the time, respectively. This means that goalies are much more likely to stop a kick if they just stay put.

So why don’t they? The answer is simple, and it has implications for all kinds of work, including jobs far from the soccer pitch. The problem is that we have an action bias: We would rather be seen doing something than doing nothing. When the going gets tough, the tough get going, right? This idea is so deeply ingrained that we are afraid to give the appearance of doing nothing, even when it is the best strategy.

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July 10, 2018 in Legal Education | Permalink | Comments (1)

More Commentary On The Supreme Court's Wayfair Online Sales Tax Decision

McGowan: Legal Education And The Ethics of Acceptance

David McGowan (San Diego), Legal Education and the Ethics of Acceptance:

This paper reflects comments made at the 2018 AALS annual meeting regarding positive and normative critiques of the ethics of legal education. Adopting a nexus of contracts approach, the paper argues that guild practices interfere with reasonable student expectations from a normative perspective, though not as a matter of positive law. The difference between the study of law as an object and the study of law as a practice, and the different payoff structures to the two approaches, accounts for some of this difference, but guild considerations are the root cause. The paper advocates greater flexibility in accreditation standards to facilitate experimentation with different models.

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July 10, 2018 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Wax Does Not Wane

A colleague of mine here at Tech Law, Dwight McDonald, only recently found out about the Amy Wax controversy at U. Penn. when he read this editorial by Walter Williams, a professor at George Mason Law School. It was published in our local paper on July 4th.  Dwight was inspired to write a response in a letter to our paper.

In his editorial, Mr. Williams supports Ms. Wax’s claims and says: “The fact that black students have low class rankings at such high-powered law schools as Penn doesn't mean that they are stupid or uneducable. It means that they've been admitted to schools where they are in over their heads."

In Dwight's pithy response, he points out some weaknesses in Williams' claims, and also a curious contradiction among some of those who take Mr. William’s position.  You can read it below the fold.

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July 10, 2018 in Bryan Camp, Legal Education, News | Permalink | Comments (13)

Anthony Bourdain's Estate Planning Lessons For All Of Us

Forbes, How Anthony Bourdain's Estate Plan Reflected The Two Most Important Parts Of His Life:

Ever since his untimely death, the press and the public hasn't been able to get enough of Anthony Bourdain. His name caused another commotion this week when his will was probated in New York. The New York Post’s Page Six headline read “Anthony Bourdain Worth Only $1.21M at the Time of His Death.” Social media responded immediately as the actual dollar amount just didn’t seem right.  How could Bourdain’s net worth be so much less than the public previously speculated?

While a man’s worth is quite subjective, Bourdain, by all accounts, was an American success story. Though he often admitted that he’d lived paycheck to paycheck well into his 40s, by having an estate valued in excess of $1 million, Bourdain could be considered in the top 3% of all Americans in terms of wealth. In his case, the estate plan reflected two interesting aspects of the man and what he truly valued.

Estate Planning Is About Protecting Those You Love
Bourdain was thorough in making provisions for his only child as the bulk of his estate will pass to her. ...

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July 10, 2018 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

University Slammed For 'Mansplaining" Ad

Brown: Proposing A Single, Simpler Test For Cash Equivalency

ABA Tax LawyerFred B. Brown (Baltimore), Proposing a Single, Simpler Test for Cash Equivalency, 71 Tax Law. 543 (2018):

Under the cash method of accounting, generally taxpayers include income items that are received in the form of cash, checks, and property, in the year in which they are received. Under the cash equivalency doctrine, a promise to pay an amount in the future, even though it is a property right, generally will be included upon receipt only if the promise to pay constitutes a cash equivalent.

Whether an obligation is a cash equivalent is generally determined based on common law standards developed by the courts with some assistance from the Service. As a consequence, the current approach to cash equivalency suffers from the lack of a uniform standard. There is also uncertainty in applying the particular tests, given the fact-intensive, imprecise inquiry that is required. In addition, the current standards for cash equivalency may also present liquidity difficulties for taxpayers.

To address these problems, this article proposes a single test for determining whether an obligation calling for future payments is a cash equivalent.

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July 10, 2018 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Monday, July 9, 2018

The Future Of JD Admissions: 91% OF MBA Programs Accept GRE, Many Offer Math Boot Camps For Incoming Students

GREWall Street Journal, M.B.A. Programs Try Catering to Liberal-Arts Types—With Math Camp:

Business schools are making greater accommodations for applicants who have analyzed more sonnets than spreadsheets.

As many flagship M.B.A. programs struggle to attract a broader array of young professionals, some schools, including Carnegie Mellon University, Yale University and Columbia University, are helping former English literature and political-science majors prepare for math-intensive coursework before their first semesters.

M.B.A. admissions offices historically limited applicants to the quant-heavy Graduate Management Admission Test for admission. But some 91% of U.S. business schools surveyed by Kaplan Test Prep last fall accept the Graduate Record Examination, an entrance exam used mainly for social-science and humanities master’s programs. That is up from 24% of schools in 2009. The same survey found that 67% of schools said offering the GRE option has increased enrollment of students from backgrounds outside the traditional pre-M.B.A. tracks of finance, consulting and other business-related fields.

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July 9, 2018 in Legal Education | Permalink | Comments (0)

Australia, Canada, England, Netherlands & U.S. Launch The J5: Joint Chiefs Of Global Tax Enforcement

J5Joint Chiefs of Global Tax Enforcement:

About Us
The Joint Chiefs of Global Tax Enforcement (known as the J5) are committed to combatting transnational tax crime through increased enforcement collaboration. We will work together to gather information, share intelligence, conduct operations and build the capacity of tax crime enforcement officials.

The J5 comprises the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), HM Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

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July 9, 2018 in IRS News, Tax | Permalink | Comments (0)