TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Sunday, July 24, 2016

Perry Fleischer Presents Autonomy, Uncertainty and the Poor: Reflections On 'Charity Law And The Liberal State' Today At Melbourne

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents Autonomy, Uncertainty and the Poor: Reflections on Matthew Harding's "Charity Law and the Liberal State", 41 Australian J. for Legal Phil. ___ (2016), today at the Australian Society Of Legal Philosophy Annual Conference at Melbourne Law School:

In Charity Law and the Liberal State [Cambridge University Press 2014], Matthew Harding argues that one can best justify the existence, scope, and substance of charity law as reflecting the state’s desire to further the political ideal of autonomy as grounded in Razian principles.  Complicating Harding’s job, however, is the problem of factual uncertainty:  it is frequently hard to identify the impact of a given state policy on a specific currency such as autonomy, equality, opportunity, or well-being. This commentary argues that Harding both under- and over-values the importance of this uncertainty.

He over-values this uncertainty in his discussion of the charitable tax subsidies, when he implies that the complex nature of distributive questions surrounding the subsidies renders them an ultimately unfulfilling line of inquiry.  Despite the fact that the charitable tax subsidies are but one component by which a state might further the autonomy of the poor, however, understanding the extent to which the subsidies do or do not do so is necessary for determining whether the poor in a given state can adequately exercise their autonomy.

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July 24, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Trump's Call To Repeal The Johnson Amendment And Allow Churches To Endorse Political Candidates

The Top 5 Tax Paper Downloads

The IRS Scandal, 1172

IRS Logo 2Politico, IRS Manager Punished for Attending Obama Rally on Work Trip:

A supervisor at the Internal Revenue Service has received a 14-day suspension for ditching work in 2012 to attend a re-election rally for President Barack Obama.

The IRS official's actions violated the Hatch Act, a federal law limiting politicking by government employees, according to a statement Wednesday from the Office of Special Counsel. ...

The statement did not name the IRS staffer, but said she is an "operations manager" for the tax agency. The 14-day unpaid suspension was agreed to by the worker as part of a settlement that also resolved charges she violated the tax agency's internal code of conduct, the statement said.

"Federal employees are encouraged to participate in the political process, but they must do so on their own time, outside the workplace, and in their personal capacity,” Special Counsel Carolyn Lerner said.

Several enforcement actions have been taken against IRS personnel for political activity in the 2012 election cycle.

In 2014, Lerner's office announced that an IRS help line worker received a 100-day unpaid suspension for urging callers to support Obama and for reciting a pro-Obama chant "based on the spelling of the employee's last name."

The personnel actions come amid continuing Republican complaints of anti-conservative bias at the tax agency. Some House GOP lawmakers are pressing a drive to impeach IRS Commissioner John Koskinen over his alleged lack of cooperation with Congressional investigations into the bias claims.

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July 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, July 23, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Perry Fleischer Presents How Is The Opera Like The Soup Kitchen? Today At Melbourne

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents How is the Opera Like the Soup Kitchen? in The Philosophical Foundations of Tax Law (Oxford University Press, forthcoming 2016) today at the Australian Society Of Legal Philosophy Annual Conference at Melbourne Law School:

The charitable tax subsidies are, at heart, redistributive. Some individuals (the recipients of charitable goods and services, such as students, museum-goers, and soup kitchen patrons) receive benefits. Other individuals pay for these benefits, both voluntarily (through donations) and involuntarily (in the form of higher taxes or reduced benefits). At first glance, it appears that the redistribution effectuated by the subsidies violates commonly-held notions of distributive justice. After all, the subsidies treat charities that serve the wealthy (like the opera) the same as charities that aid the poor (such as the soup kitchen). How can spending public funds on the wealthy in this manner be considered just? As this Chapter shows, so doing is just under expansive interpretations of resource egalitarianism and left-libertarianism that account for expensive tastes and talent-pooling.

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July 23, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Senate Bill Would Exempt Student Loans Discharged For Any Reason From Being Taxed As Income

Student Loans CautionSenators Cory Booker (D-NJ), Bob Menendez (D-NJ), Debbie Stabenow (D-MI), Elizabeth Warren (D-MA), and Ron Wyden (D-OR) have introduced the Student Loan Tax Relief Act:

The bill amends the Internal Revenue Code of 1986 to exempt student loans discharged for any reason from being taxed as income, including through participation in the federal income-based repayment (IBR) and income-contingent repayment (ICR) loan forgiveness programs; through death or disability of the recipient; or due to fraud by an institution of higher education, known as "borrower defense to repayment."

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July 23, 2016 in Legal Education, Tax | Permalink | Comments (3)

Amazon Enters Student Loan Business

Amazon logoWall Street Journal, Amazon Tiptoes Into Banking Business Through Student Loans:

Amazon is stepping into the student-loan marketplace.

The online retailer has entered into a partnership with San Francisco lender Wells Fargo in which the bank’s student-lending arm will offer interest-rate discounts to select Amazon shoppers. ...

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July 23, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1171

WSThe Politicization of Everything, The Weekly Standard (Aug. 1, 2016):

Justice Ruth Bader Ginsburg’s recent outburst against Donald Trump has been roundly criticized by people of all political stripes. Insofar as her comments suggested a clear bias about cases that could come before the Supreme Court, they were clearly a mistake and a departure from the norms of Court behavior. After predictable media attempts to defend her by saying "everyone does it," Justice Ginsburg apologized and walked back her remarks.

This is not, however, a one-off incident. It is part and parcel of a clear and consistent pattern of the left's increasing politicization of everything. And the chief instigator of this behavior has been President Obama. In the modern era, presidents and ex-presidents once showed a degree of political restraint. President Obama has blasted through these restraints and spoken freely as a partisan rather than as a president. 

An early example is the president's criticism of the Citizens United case in his 2010 State of the Union address. It is one thing for a president to advance a view about the role of money in politics; it is quite another to launch a broadside about a specific Court decision in front of Supreme Court justices captive in the front row of a nationally televised speech, complete with cheering partisans standing all around. This, of course, resulted in a classic media deflection, namely, criticism of Justice Samuel Alito's silent (and accurate by the way) response. This was certainly no sign of presidential respect for the Court's independence.

President Obama's behavior here was of a piece with his comments about the unfolding IRS scandal in 2014. Here was a genuine abuse of government power, replete with lying, stonewalling, and the wanton destruction of public documents. It would be one thing if the president were to opine about a congressional investigation into the IRS scandal. It is quite another to do so when the president's Justice Department had launched its own investigation of the IRS.

It is perhaps fair to say that the administration's investigation, headed by Justice Department attorney (and Obama contributor) Barbara Bosserman, was a sham from the beginning. But is it acceptable for the president to pronounce there was not "even a smidgen" of IRS wrongdoing while the Justice Department's so-called investigation was underway? ...

With regard to IRS targeting of political opponents, for example—the temerity of which would make Richard Nixon blush—was there really a sufficient reason to excuse lying, stonewalling, and the destruction of computers and literally thousands of emails? Is there no single Democrat who can rise above his or her own partisanship and acknowledge that while there may be partisan gain for Republicans, an investigation might also be good for the defense of liberty and government restraint? Would they want the IRS to target them?

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July 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, July 22, 2016

Bank, Cheffins & Wells:  Executive Pay—What Worked?

Steven A. Bank (UCLA), Brian R. Cheffins (Cambridge) & Harwell Wells (Temple), Executive Pay: What Worked?,  42 J. Corp. L. ___ (2016):

CEO pay is a controversial issue in America but there was a time, often overlooked today, when chief executives were not paid nearly as much as they are now. From 1940 to the mid-1970s executive pay was modest by today’s standards even though U.S. business was generally thriving. What worked to keep executive pay in check? Economist Thomas Piketty and others credit high marginal income tax rates, leading to calls for a return to a similar tax regime. This paper casts doubt on the impact tax had and also shows that neither the configuration of boards nor shareholder activism played a significant role in constraining executive pay. It emphasizes instead the roles played by strong unions, a different and more circumscribed market for managerial talent, and social norms, explanations that do not easily lend themselves to generating modern policy prescriptions.

Bank

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July 22, 2016 in Scholarship, Tax | Permalink | Comments (1)

Could Your Social Media Posts Prevent You From Becoming A Lawyer?

Social MediaKeith Lee, Could Your Social Media Posts Prevent You From Becoming A Lawyer?:

The July bar exam is coming up next week and is on the minds of many law school graduates. ... But after law school, and before the bar exam, there is one other hurdle law school graduates must clear on their path to becoming a licensed attorney – they must pass a Character and Fitness Evaluation (CFE). ...

[Otion] Gjini was denied admission to Bar of Maryland. [He is not] a sympathetic applicant. Gjini was mostly denied because he had frequent DUIs and did not disclose that he was facing a charge of violating his probation until the charge was found by the Maryland Character Committee (MCC) and brought up during his hearing.

But also at issue when Gjini appeared before the MCC, were his online postings. During law school, Gjini, like almost every law school student, frequently commented on various social media services. During his examination, the MCC came across Gjini’s public accounts and found the following comments:

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July 22, 2016 in Legal Education | Permalink | Comments (1)

Mike Graetz Looks At International Tax From 30,000 Feet

Graetz (2015)TaxVox:  Mike Graetz Looks at International Tax From 30,000 Feet, by Howard Gleckman:

It is so easy to get lost in the weeds of tax policy. Nowhere is that more true than in the hyper-technical world of international tax that only a handful of economists and lawyers really understand. That’s why a recent short talk by Columbia University law professor Michael Graetz was so useful.

Mike spoke last Friday at a Tax Policy Center conference that examined two interesting corporate tax reforms designed by Alan Auerbach of the University of California Berkeley and Michael Devereux of Oxford University and colleagues. One was a destination-based corporate income tax and the other was a destination-based cash flow tax that would function much like a Value-Added Tax. ...

Graetz did the rest of us a great service by providing an easily understandable 30,000-foot overview of the challenges of international tax.

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July 22, 2016 in Tax | Permalink | Comments (0)

ABA Question Of The Week: Did You Like Law School?

ABA Logo (2016)ABA Journal Question of the Week:  Did You Like Law School?:

In the last week, Indiana Gov. Mike Pence—who graduated from the Indiana University Robert H. McKinney School of Law in 1986—was named Donald Trump’s running mate on the Republican presidential ticket. In a 1994 news story unearthed in response to Pence’s nomination, Pence said he didn’t like law school.

“No one I know likes law school,” he told the Indianapolis Business Journal at the time. “It was a bad experience. I wouldn’t wish it on a dog I didn’t like.”

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July 22, 2016 in Legal Education | Permalink | Comments (3)

Trump Family Would Get $7 Billion Windfall From Estate Tax Plan

Trump (2016)The Hill, Trump Family Would Get $7B Windfall From Estate-Tax Plan: Analyst:

Donald Trump's family would get a $7.1 billion tax cut under the Republican presidential nominee's proposal to eliminate the federal estate tax, a centrist think tank estimated.

"The staggeringly high value of the tax cut for the Trump dynasty alone carries the same price tag as multiple high-value national priorities," Third Way said in an analysis Wednesday.

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July 22, 2016 in Political News, Tax | Permalink | Comments (4)

WSJ:  G-20 To Scrap 30 Years Of Tax Policy And Recommend Taxing Capital Income At Higher Rates Than Wages

G202Wall Street Journal, A Shrinking World Spurs Calls to Rewrite the Tax Guidebook:

The argument against taxing capital income relatively more than wages is losing its force.

The Group of 20 has spouted the importance of “inclusive growth” for years without spelling out what it really means or how to generate it. The Organization for Economic Cooperation and Development, at least, will be telling G-20 finance ministers in Chengdu, China, this weekend what it thinks it should mean for taxation: less of it on low-income workers and more on high-income shareholders.

The Paris-based think tank has just junked the conventional economic wisdom on tax it had been promoting for years. That old view said income from capital that individuals receive—such as interest, rents, and dividends—should be taxed much more lightly than wages and salaries.

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July 22, 2016 in Tax | Permalink | Comments (2)

Amidst Financial Free Fall, Nine Thomas Jefferson Faculty Retire

Thomas Jefferson Logo (2015)Amidst a very challenging budgetary environment caused by an ill-fated building project and a 38% enrollment decline since 2011 (links below), nine Thomas Jefferson Law School faculty have retired:

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July 22, 2016 in Legal Education | Permalink | Comments (4)

New York Terminates The Tampon Tax

TamponFollowing up on my previous posts:

Newsweek, New York Terminates the Tampon Tax:

There are plenty of things you can buy in the U.S. tax-free: bagged salads in Colorado, seasoned croutons in Texas, manicures and massages in West Virginia. But in 40 states, menstrual products—used to care for a normal bodily function that occurs every month, for 30 to 40 years—are taxed anywhere from 4 to 10 percent. Meanwhile, we can all participate in rodeos tax-free (thanks, South Dakota!)

On Thursday, however, New York became the 11th state without a tax on menstrual products when Governor Andrew Cuomo signed legislation eliminating local and state sales taxes on them.

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July 22, 2016 in Political News, Tax | Permalink | Comments (0)

'A Talent For Teaching Simply Does Not Factor Into Tenure Decisions At Dartmouth'

DartmouthDartBlog, Tenure/Teaching: The Pendulum Swings:

A member of the faculty writes in:

Faculty hired 5-7 years ago were told explicitly that a couple of peer-reviewed articles and a book contract with a well-respected academic press was sufficient for tenure. I often used the word “humane” to describe the requirements for tenure, in that they rewarded both scholarship of a high caliber and teaching prowess. ...

Professors hired at that time are now coming up for tenure. ... Recent tenure decisions have many members of my cohort scrambling for the exits—going on the market and taking on visiting appointments elsewhere—now that they understand that they were given a false impression of how different aspects of their trajectories would be evaluated.

I hate to say this, but many younger colleagues express regret at having agonized over their lesson plans and expended so much effort on honing their skills as classroom instructors, when a talent for teaching simply does not factor into tenure decisions. Phil Hanlon’s recent remarks on education only confirm what we already know, that Dartmouth is moving toward a corporate state university model wherein professors are retained for their “productivity”—quantity of publication over quality—and ability to bring in large grants, while underpaid adjuncts teach undergraduates. ...

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July 22, 2016 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 1170

IRS Logo 2Town Hall, Pushing Back the Bullies:

The most important thing to learn about bullies is that they don’t expect resistance, and when it comes, they often back down – but not if the pushback isn’t serious.

Several instances come to mind. ...

The best example of progressive bullying with no sufficient pushback is the Obama Administration’s use of the Internal Revenue Service as a political goon squad.

In 2010, Democrat U.S. Sen. Max Baucus (MT) openly pressured the Internal Revenue Service to investigate tea party groups, followed by similar letters to the IRS from other prominent Democrats. It worked. 

In the most egregious instance, after True the Vote founder Catherine Engelbrecht applied for tax exempt status in 2010, she and her husband were subjected to six FBI domestic terrorism inquiries, an IRS “visit,” two IRS business audits, two IRS personal audits, and inspections of their business by the Bureau of Alcohol, Tobacco and Firearms (ATF), and the Occupational Safety and Health Administration (OSHA). No one has answered for these Soviet-style actions by the Obama Administration to silence her. 

IRS Commissioner John Koskinen was brought in supposedly to clean up the mess left by departed nonprofit section official Lois Lerner and other partisan IRS employees.  Instead, he has effectively thwarted the effort.  The House Oversight and Government Reform Committee woke up long enough to vote along party lines on June 17 to censure Koskinen, but so what?  He’s still running the IRS.

Last Thursday, conservative House members finally paved the way for a possible floor vote later in the year to impeach Mr. Koskinen for blocking inquiries, lying under oath, “losing” emails (sound familiar?) and ignoring a congressional subpoena.

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July 22, 2016 | Permalink | Comments (0)

Thursday, July 21, 2016

Grewal & Hemel Debate:  Why Doesn’t The IRS Comply With The Congressional Review Act?

Yale Journal on Regulation Notice & Comment Blog: Why Doesn’t the IRS Comply with the Congressional Review Act?, by Andy Grewal (Iowa):

Under the Congressional Review Act, the effective date of so-called “major” regulations must be delayed to give Congress a chance to veto them via a joint resolution. Major regulations are generally those that would have a $100+ million effect on the economy. See 5 USC 804(2)(A). See also 5 USC 804(2)(B) & (C) (providing other categories of major rules). However, as discussed in recent news stories, the White House and the IRS have signed a memo that exempts tax regulations from the CRA’s definition of a major rule. The IRS apparently believes that tax regulations merely implement statutes and thus do not have a significant effect on the economy. Consequently, they do not require congressional review.

At first blush, the IRS’s position might seem unfathomable. Of course tax regulations significantly affect the economy -- otherwise they would not raise so many controversies The IRS’s notices and regulations on inversion transactions, for example, essentially killed multiple cross border deals, including the $160 billion Pfizer-Allergan merger. And when the IRS interpreted Section 36B to extend ACA tax credits for policies purchased on HealthCare.Gov, that had potentially billion-dollar consequences. Senator Orrin Hatch has consequently raised concerns about the IRS’s failure to observe the CRA and is currently awaiting a response from Treasury Secretary Jack Lew.

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July 21, 2016 in IRS News, Tax | Permalink | Comments (0)

Should After-Hours Work-Related Email Be Illegal?

GmailFast Company, What Sending After-Hours Emails Does To Your Productivity:

In a new report called "Exhausted But Unable to Disconnect," professors from Lehigh University, Virginia Tech, and Colorado State University found that an "always on" culture may prevent employees from fully disengaging from work, causing stress.

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July 21, 2016 in Legal Education, Tax | Permalink | Comments (1)

Georgetown 3L:  Law School Is A Terrible Idea For Most People

Boston Globe: Put Down That Law School Application Before It’s Too Late, by Isvari Mohan (J.D. 2016, Georgetown ("among the 1 percent of students who love law school"):

I’m going to bet that many of you have considered going to law school. Whether you’re a scientist, a doctor, an engineer, a businesswoman, or a stereotypical liberal arts grad, you might have thought that law school would help you with something. Most of the time, it won’t. Here’s why law school is a terrible idea for most people:

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July 21, 2016 in Legal Education | Permalink | Comments (18)

NY AG Continues Crackdown On Sales Tax Abuse In Art World With Gagosian Gallery $4.3 Million Settlement

GagosianFollowing up on my previous posts (links below):  Press Release, A.G. Schneiderman Announces $4.28 Million Settlement With International Art Dealer Gagosian Gallery For Failure To Collect And Remit New York Sales Tax:

Attorney General Eric T. Schneiderman announced today a $4.28 million settlement with international art dealer Gagosian Gallery following an investigation into sales tax collection practices. Gagosian Gallery is a leading dealer of contemporary art, with galleries in New York City, Beverly Hills, San Francisco, London, Paris, Geneva, Rome, Athens and Hong Kong. Its owner, Laurence Gagosian, is a prominent figure in the contemporary art scene, and it is estimated to sell over one billion dollars of art annually. ...

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July 21, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (2)

David Cole Named National Legal Director Of ACLU

Cole 3Press Release, ACLU Taps Constitutional Expert David Cole as National Legal Director:

The American Civil Liberties Union has tapped David Cole, a leading constitutional law expert and litigator, to become its National Legal Director, leading its Supreme Court practice and overseeing the work of the organization’s nearly 300 lawyers, Executive Director Anthony D. Romero announced today. The ACLU has participated in nearly every landmark case involving political expression, freedom of the press, speech on the internet, and separation of church and state in the U.S. Supreme Court during the last 96 years. Cole will replace Steven R. Shapiro, who has served as National Legal Director for a quarter century. ...

In his role as National Legal Director, Cole will direct a program that includes approximately 1,400 state and federal lawsuits on a broad range of civil liberties issues. He will directly manage 100 ACLU staff attorneys in New York headquarters, oversee the organization’s U.S. Supreme Court docket, and provide leadership to more than 200 staff attorneys who work in ACLU affiliate offices in all 50 states, Puerto Rico, and Washington, D.C. Another 1,700 volunteer cooperating attorneys throughout the country are engaged in ACLU litigation. With an annual headquarters budget of $140 million, and 1.3 million supporters, the ACLU is the nation’s largest and oldest civil liberties organization. ...

Cole is currently the Hon. George J. Mitchell Professor in Law and Public Policy at Georgetown University Law Center, where he teaches constitutional law, national security, and criminal justice. ...

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July 21, 2016 in Legal Education | Permalink | Comments (1)

Brooks Reviews Hines & Logue's Delegating Tax

Jotwell (2016)Kim Brooks (Schulich School of Law, Dalhousie University), Don’t Delegate This Reading, JOTWELL (reviewing James R. Hines Jr. (Michigan) & Kyle D. Logue (Michigan), Delegating Tax, 114 Mich. L. Rev. 235 (2015)):

In modern regulatory states, the theoretically firm lines dividing the legislative, executive, and judicial branches of government are increasingly blurred. Teasing out how to design and enforce effective regulation has become a major preoccupation of scholars and policymakers in every area of law.

Delegating Tax, an article by the talented James R. Hines Jr. and Kyle D. Logue, is wonderful reading in that light. The article contrasts the reluctance of Congress to delegate the lawmaking authority of the IRS and Treasury in the tax area with Congress’ increasing willingness to delegate that authority to other federal administrative agencies. The authors make the case for great delegation in the tax area, noting the potential for the executive branch to draw on greater expertise and to respond more quickly. ...

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July 21, 2016 in Scholarship, Tax | Permalink | Comments (0)

Houston College Of Law Seeks To Hire Staff Attorney In Its Low Income Taxpayer Clinic

Houston College 2Houston College of Law seeks to hire a Staff Attorney in its Low Income Taxpayer Clinic:

Job Description

SUMMARY  Houston College of Law, located in downtown Houston, recently received approval from the IRS to receive a grant to operate a LITC. Beginning with the fall 2016 semester, the LITC will provide direct representation in federal tax controversies to low income taxpayers. Clients assisted by the LITC might need a variety of types of assistance in resolving their federal tax issues with the IRS, including entering into installment agreements, submitting offers in compromise, negotiating with IRS Appeals, requesting Collection Due Process Hearings, and filing petitions and litigating in the United States Tax Court. Funding for this position through the IRS grant currently is available only for the fall 2016 semester. Houston College of Law has applied for grant funds for calendar year 2017 and intends to apply for grant funds for future years. Employment as a Staff Attorney in the LITC following the fall 2016 semester is contingent on grant funding and the law school’s requirements.

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July 21, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Pepperdine University Seeks To Hire Tenure-Track And Visiting Undergraduate Business Law Professors

PepperdineAssistant Professor of Business Law

The business administration division of Pepperdine University seeks a candidate with a terminal degree in law for a tenure-track position in business law. Candidates are expected to complete all requirements for the JD before the date of appointment, which is August 1, 2017. A documented research interest in law is required and teaching experience is preferred. The expected courses taught would be undergraduate classes in business law and international business. The flexibility to teach occasionally in another field is preferred.

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July 21, 2016 | Permalink | Comments (0)

Law School App Tracks Students’ Professional Skills

UNNational Law Journal, Law School App Tracks Students’ Professional Skills:

Want to graduate from law school as a well-rounded attorney?

There’s an app for that.

Next month, the University of Nebraska College of Law will roll out an app designed to help students develop 27 distinct professional skills by tracking their activities and coursework. Administrators say that the app, built by students in the university’s computer science school over the past year with input from law faculty and students, is the first of its kind at a law school.

“The goal is to help students focus on the broad range of skills they will need as lawyers,” said Interim Law Dean Richard Moberly. “In some ways, I want students to use this to take ownership over their educational opportunities.”

The Build Your Character app aims to encourage students to look beyond reading, writing and “thinking like a lawyer” to hone abilities including networking, listening, organizing and problem solving—skills that students tend to overlook.

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July 21, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1169: Tax Profs Oppose Impeachment/Censure Of Commissioner Koskinen

IRS Logo 2Forbes:  Congress Reaches New Low In Proposed Censure Of IRS Commissioner, by Bryan Camp (Texas Tech):

Those who voted for H. Res. 737 are like my son who, when younger, would throw objects across the house in his fits of frustration.  The difference, however, is that at least my son was careful to hurl objects that would not do much damage or break.  In contrast, H. Res. 737 seeks to throw Commissioner Koskinen across the House and so risks doing great damage to a decent man and risks further breakage to a tax collection agency already weakened by relentless and mindless budget cuts.

Look, I’m a law professor.  I try to teach my students more than just an understanding of the rules relating to taxation.  I want them to respect the law-giving authorities, both the Congress that writes the laws and the agency that must administer the laws as written, the IRS.

H. Res. 737 undermines my teachings. The resolution is permeated with pettiness, putrid with peevish odors. In case you think I just like alliteration, let’s take a look at some of the “charges” in the document and you will see what I mean. ...

Not only are these accusations baseless, they’re trashy.  The entire reason that Congress even knew about the potentially missing email was because Mr. Koskinen was, in fact, transparent about the email search process and dutifully reported to Congress about several problems in June 2013.  He was able to do so, in part, because he consistently attempted to inculcate a sense of duty within the IRS.  Rather than hiding problems as the resolution asserts, Mr. Koskinen went to extreme lengths to disclose and explain them.

What seems to affront the sensitive souls of those who voted H. Res. 737 out of committee is that Ms. Lerner’s hard drive crashed in June 2011.  They have faith, sure and pure, certain and implacable, that this was no accident and that Lerner was hiding something.  I say “faith” because they have no evidence.  Even the faith part is shaky:  the TIGTA report that started it all (May 14, 2013) shows Lerner had no reason to hide or cover up anything in June 2011.  No one was watching or investigating her in June 2011.  The entire matter of inappropriate scrutiny of 501(c)(4) applications was still an internal matter.  It did not hit the Congressional radar screen (according to the first TIGTA report, on page 3), until the 2012 election cycle.  TIGTA began its investigation in June 2012, about a year after Lerner’s hard drive crashed.   It sure takes a lot of faith to believe that a hard drive crash in June 2011 was Lerner’s attempt to thwart an investigation that started in June 2012.  Gosh, you’d THINK she’d would have at least waited until May 2012 so she could get rid of more stuff…

But those searching for conspiracy have faith.  Their faith guides them even a step further into fantasy: since Lerner’s hard drive must have contained incriminating evidence (because it crashed), it follows that the White Paper and Mr. Koskinen’s letter were just covering up the cover-up.  You see, a determined and faithful conspiracy theorist is not deterred by a lack of evidence.  A lack of evidence just proves a successful cover-up. ...

H. Res. 737 is a petty product of petulance. I’ve watched Mr. Koskinen testify at several hearings and what I have seen is grace under pressure. He came out of retirement at age 74 to volunteer for his country.  I would like to see any one of the yahoos who voted H. Res. 737 out of committee step up and volunteer to manage the IRS when they turn 74.  Wait…no…on second thought, given how they have mangled their oversight duties, that is not a sight I hope to see.

I sincerely hope that when Congress re-convenes in September, the House will treat H. Res. 737 like the garbage it is and throw it away.

The Surly Subgroup:  Don’t Impeach IRS Commissioner Koskinen, by Leandra Lederman (Indiana):

... The censure and impeachment efforts relate to government attempts to obtain Lois Lerner’s emails. Production of these emails was a major challenge for the IRS, for many reasons, as detailed in an enclosure accompanying a June 2014 letter from IRS employee Leonard Oursler to the Senate Committee on Finance. Among them was the fact that Ms. Lerner’s computer’s hard drive had crashed in June 2011. In written testimony before the House Oversight Committee in March 2014, Commissioner Koskinen stated that “More than 250 IRS employees have spent nearly 100,000 hours working directly on complying with the investigations, at a cost of nearly $8 million. In order to properly protect taxpayer information while efficiently processing voluminous materials for production, we had to add capacity to our information technology systems and, therefore, spent an additional $6 million to $8 million to optimize existing systems and ensure a stable infrastructure.” In June 2015, TIGTA reported that “[n]o evidence was uncovered that any IRS employees had been directed to destroy or hide information from Congress, the DOJ, or TIGTA”, although it also found “that the IRS did not put forth an effort to uncover additional, responsive emails” (p.18 of TIGTA’s June 30, 2015 report). Bryan Camp discusses that issue in a post at Procedurally Taxing.

Others have observed that the attempt to impeach Commissioner Koskinen seems partisan and unjustified, as well as unprecedented. It is an unnecessary distraction for an agency struggling with inadequate resources. Moreover, attacks like this one will no doubt deter other talented individuals from being willing to serve in the top ranks of the IRS. The ACTC is right in requesting “Congress [to] reject impeachment and censure, and instead apply its time and attentions to improving both the tax law and the administration of our tax system.”

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July 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Wednesday, July 20, 2016

Law School 2.0: How Legal Tech Disrupted Traditional Legal Education

LHLegal Tech News, Law School 2.0: How Legal Tech Disrupted Traditional Legal Education:

Data-driven law school decisions and more hands-on technology courses are upending conventional legal education.

Providing attorneys with the economic mobility and technical acumen to survive in today's competitive marketplace should seem like the goal of any modern legal education. But oftentimes, it is an area where law schools fall short.

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July 20, 2016 in Legal Education | Permalink | Comments (0)

McCaffery:  It's Tax, Not Trade

Edward J. McCaffery (USC), It's Tax Not Trade (Stupid):

Globalization, trade and other free market policies increase wealth. But the gains from trade are not being evenly spread among all citizens. People and politicians rage against foreigners. But it is the United States tax system, not trade, that ought to change, and wealthy Americans, not workers world-wide, who should be sharing the wealth. And it is the form of tax, not just its rate structure, that must reform, so that capital at last bears a meaningful share of the burden.

July 20, 2016 in Scholarship, Tax | Permalink | Comments (0)

The Tax Army Is Three Times Larger Than The U.S. Army

USA2Chris Edwards (Cato Institute), Tax Army Larger than U.S. Army:

The Office of Management and Budget has released new data on the amount of time Americans spend complying with the federal tax code. Tax Foundation summarizes the data here.

Individuals and businesses spend 8.9 billion hours a year on federal tax paperwork, which is equivalent to 4.3 million people working full-time and year-round on this unproductive activity. That “tax army” is three times larger than our uniformed military of 1.4 million active duty service members.

The burden of tax paperwork can be expressed in dollars. Based on the average earnings of U.S. workers, Tax Foundation finds that federal tax paperwork imposes a $409 billion annual cost on the economy.

The main reason to overhaul the tax code is to increase incentives for working, investing, and other productive activities. But you can appreciate how wasteful the tax code is by considering the paperwork burden of particular provisions.

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July 20, 2016 in IRS News, Tax | Permalink | Comments (9)

Grads Of Mid- And Low-Tier Law Schools Hang Out Their Shingles To Survive In Brutal Job Market

AttyNational Law Journal, In Tight Job Market, New Law Grads Boldly Hang a Shingle:

Let’s face it, the Big Law life isn’t for everyone. Some 4.4 percent of law school graduates—or about 1,900 each year—launch their own firms, according to the National Association for Law Placement, which last ran the numbers in 2014.

In talking to young lawyers who went into business for themselves during the past few years, Law.com found that some had no choice: They couldn’t find a place at a law firm, where hiring from top-tier schools has improved since the recession but generally not from lower-ranked schools. Some of the recent graduates we talked to did find a law firm job; they didn’t like it. Others were realizing ambitions—they preferred the flexibility and autonomy of running their own practices, plus the close interaction with clients.

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July 20, 2016 in Legal Education | Permalink | Comments (28)

Vic Fleischer Named Co-Chief Tax Counsel For Democrats On Senate Finance Committee

Fleischer (2016)Wall Street Journal: He Made ‘Carried Interest’ Famous. Now He’s Going to Help Write The Law, by Richard Rubin:

The tax law professor who helped turn carried interest from a technical tax term into a populist cause is coming to Washington.

Victor Fleischer, whose 2006 academic paper started the debate on how private equity managers are taxed [Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 N.Y.U. L. Rev. 1 (2008)], will become co-chief tax counsel for Senate Finance Committee Democrats. His partner will be Tiffany Smith, already a member of the Finance Democrats’ staff.

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July 20, 2016 in Congressional News, Tax | Permalink | Comments (2)

Cooper Reviews Caron's The One-Hundredth Anniversary Of The Federal Estate Tax: It’s Time To Renew Our Vows

JOTWELL (General)Jeffrey Cooper (Quinnipiac), The Estate Tax Of Our Youth JOTWELL (July 19, 2016) (reviewing Paul L. Caron (Pepperdine), The One-Hundredth Anniversary of the Federal Estate Tax: It’s Time to Renew Our Vows, 57 B.C. L. Rev. 823 (2016)):

In The One-Hundredth Anniversary of the Federal Estate Tax: It’s Time to Renew Our Vows, Paul L. Caron tracks how the modern estate tax has evolved since its 1916 inception and contends the tax should be modified to serve its original purposes. Caron analogizes the nation’s relationship to the estate tax as that of an aging marriage, arguing that our passion for the tax has cooled with the passage of time. He urges us to find that lost passion and renew our vows to the estate tax we once so adored. To do so, we must reinvigorate the estate tax and restore it to its historical position as an important, robust component of our federal tax system.

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July 20, 2016 in Scholarship, Tax | Permalink | Comments (0)

North Carolina Central Law School Seeks To Hire A Tax Clinic Director

NCC LogoNorth Carolina Central University School of Law invites applications from entry-level and lateral candidates for the position of Director/Supervisor of its Low Income Taxpayer Clinic:

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July 20, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

WaPo:  Is Chief Counsel Retaliating Against IRS Attorney Who Blew Whistle On Multi-Billion Dollar Black Liquor Tax Credit Giveaway?

IRS Office of Chief Counsel Logo (2015)Washington Post, Is the IRS Getting Back At An In-House Critic?:

Three hundred and twenty days ago, the Internal Revenue Service launched an investigation of one of its own lawyers over things he allegedly told media outlets, including The Washington Post, about a multibillion-dollar corporate tax credit scheme involving a source of energy informally known as black liquor.

The Treasury Inspector General for Tax Administration, which examines criminal allegations, questioned William Henck on Sept. 11, 2015, wrote a report and gave it to the IRS chief counsel to decide whether any wrongdoing took place.

Then nothing.

Henck is still waiting to find out what the inspector general recommended — and what, if anything, the IRS is going to do about it. He was told by the inspector general’s office that its report, completed at least six months ago, can’t be shared with him. The matter now rests in the hands of the IRS chief counsel. The IRS has declined to comment on the matter, and the Treasury, which oversees the IRS, said it is up to the agency and would not comment.

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July 20, 2016 in IRS News, Tax | Permalink | Comments (3)

Malcolm Gladwell-Bowdoin College Food Fight Over Student Amenities v. Financial Aid To Low-Income Students

GBInside Higher Ed, Food Fight:

Why do some seemingly similar colleges admit more low-income students than others?

Malcolm Gladwell, the popular writer (The Tipping Point, among other books), has an answer for that question. Elite colleges that spend to have quality food and other amenities for students are making choices he finds immoral. Letting students make do with mediocre food would enable these colleges to admit more low-income students and provide them with the aid and support they need to succeed, he maintains.

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July 20, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1168

IRS Logo 2The Hill, Hillary Clinton's IRS Abuse Chutzpah:

After skating through the FBI investigation and successfully stonewalling the Benghazi committee, Hillary Clinton is now worried that Donald Trump will use the IRS against his political enemies. ...

One might give Clinton, the presumptive Democratic nominee, a small amount of credence if she had joined Republicans in their efforts to impeach IRS Commissioner John Koskinen for his part in the cover-up of Lois Lerner's campaign against conservative groups from her IRS perch, but she didn't.

Is it possible that Clinton is so unaware of what is going on that she didn't know that the Obama IRS has been weaponized against Tea Party groups? ...

[T]he explanation for Clinton and her staff's blind ignorance to President Obama's abuse of not only the IRS, but also the Departments of Labor, Homeland Security and Justice in targeting conservative group leaders like Catherine Engelbrecht of Texas might be because Clinton only gets her news from Obama cheerleader outlets like MSNBC — which scoffed at the IRS abuse story, actively participating in the cover-up through its editorial decisions.

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July 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, July 19, 2016

Thimmesch:  The Tax Aspects Of Pokémon Go

Pokemon GoThe Surly Subgroup:  The Tax Aspects of Pokémon Go, by Adam Thimmesch (Nebraska):

The new Pokémon Go app has already generated many discussions regarding the multiple ways that the game intersects with the law. I’ve previously opined on some of the broader issues, but, as a tax professor, my thoughts have naturally focused on that topic. Fortunately, the Surly Subgroup was nice enough to let me present those thoughts here in a guest post.

The tax issues that I’ve been thinking about stem largely from the fact that Pokémon Go is built on a freemium business model. That is, the app is free, but users can pay for certain “premium” features like additional Pokéballs, incense, and lure modules. (If these phrases mean nothing to you, here is a nice primer on the game.) Those purchases are all done through the purchase and use of an in-app currency called Pokécoins. The whole thing might sound silly, but the app is already generating over $1.5 million in daily revenue for its developer, Niantic, Inc. The company will also soon be selling “sponsored partnerships” that allow companies to be listed more prominently in the game. The potential revenue streams look plentiful at this point. So what are the tax issues?

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July 19, 2016 in Tax | Permalink | Comments (0)

Johnston:  Donald Trump And Kids Named In $250m Tax Scam

Trump (2016)The Daily Beast:  Donald Trump and Kids Named in $250M Tax Scam, by David Cay Johnston:

Four Donald Trump-licensed real-estate developments are at the center of a huge income tax evasion scheme, according to allegations in a lawsuit unsealed Thursday afternoon by a judge in Manhattan.

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July 19, 2016 in Political News, Tax | Permalink | Comments (6)

Art Exhibit Visualizes Boggling Property Tax Disparities In NYC

City Lab, An Art Installation Visualizes the Boggling Tax Disparities Along Central Park:

New York City calculates property taxes for condos and co-ops using abyzantine formula mandated by the state. Which is all well and good, except that the formula underestimates the value of New York’s most valuable properties—some of the most valuable residences on Earth—meaning that the billionaires who own them pay a fraction of the property taxes that other New Yorkers pay.

Billionaires don’t pay property taxes in New York. While the property levy is New York City’s biggest source of revenue, it’s also inherently inefficient, assigning higher real property taxes to apartment-renters than to the universally maligned absentee foreign owners living in sky-gems alongBillionaires’ Row. The state’s formula deprives New York of millions in revenue each year; it calls into question why former New York Mayor Michael Bloomberg was so eager to see billionaires move to New York in the first place if they weren’t ever going to be charged a dime in property (or income) taxes.

This fundamental flaw in New York state tax code is in part the subject of a new show at the Storefront for Art and Architecture in New York. “Sharing Models: Manhattanisms,” which opens Friday, assembles 30 architectural models and drawings by 30 different international firms, each one tasked with analyzing a slice of Manhattan. For its part, SITU Studio, one of the firms participating in the Storefront show, took on a charge near and dear to this writer’s heart: inequitable property-tax distribution in New York.

CityLab

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July 19, 2016 in Tax | Permalink | Comments (0)

Gershon:  The Socio-Economics Of The Federal Estate Tax

I. Richard Gershon (Mississippi), The Socio-Economics of the Federal Estate Tax: Why Do so Many People Hate (or Love) this Centenarian?, 49 Akron L. Rev. 329 (2016):

The federal estate tax has faced many detractors during its almost 100 years of existence. While the tax affects only a very small percentage of estates, many have called for its repeal. This Essay discusses the socio-economic reasons why the estate tax should be maintained. The tax is an important source of revenue, and it helps to rectify the growing issue of wealth and income inequality in the United States.

See also Symposium, The Centennial of the Estate Tax: Perspectives and Recommendations, 57 B.C. L. Rev. 801-1078 (2016).

July 19, 2016 in Scholarship, Tax | Permalink | Comments (3)

Vassar Faculty Propose Reducing Teaching Load To 2-2, Freeing Up Time For Research, Student Mentoring

Vassar 3Inside Higher Ed, The Price of Cutting Course Loads:

Faculty members at Vassar College generally agree that teaching five classes per year makes it hard to keep up with research and the one-on-one interaction that students expect. Many professors also worry that students are taking on too many courses at one time. So a new proposal to address the issue -- shrinking the teaching load to four classes per year while adding a new student supervisory component, and cutting the number of units students need to graduate -- has attracted significant faculty support.

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July 19, 2016 in Legal Education | Permalink | Comments (0)

South Carolina Seeks To Hire A Tax Prof

South Carolina Logo (2016)The University of South Carolina School of Law invites applications for tenured, tenure-track, or visiting faculty positions to begin fall semester 2017:

The School of Law is interested in candidates who are qualified to teach in the areas of taxation and clinical legal education, but will also be considering candidates in a variety of other areas of need. The School of Law is also interested in candidates who can contribute to the diversity of our law school community.

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July 19, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Death Of Tax Court Judge Howard Dawson

Tax Court Logo 2Tax Court Press Release, The Honorable Howard A. Dawson, Jr., 1922-2016:

The Tax Court wishes to acknowledge the passing of Judge Howard A. Dawson, Jr., on July 15, 2016. Judge Dawson was the longest-serving judge in the history of the Tax Court, having been appointed in 1962 by President John F. Kennedy and remaining in service as a Senior Judge at the time of his death. ...

Judge Dawson was appointed by President Kennedy as Judge, Tax Court of the United States, on August 21, 1962, for a term ending June 1, 1970. He was reappointed on June 2, 1970, for a term ending June 1, 1985. He retired from active service on June 2, 1985, and served on recall as a Senior Judge from 1990 until his death.

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July 19, 2016 in Tax | Permalink | Comments (0)

Grewal:  Why Lenity Has No Place In The Income Tax

Andy Grewal (Iowa), Why Lenity Has No Place in the Income Tax Laws, 80 Mo. L. Rev. ___ (2016):

A controversy has emerged over how to interpret statutes under which the government can undertake either civil or criminal action against a person. Should courts interpret these statutes like any other civil statutes, and defer to agencies to resolve ambiguities? Or should courts treat these statutes like pure criminal provisions, and use the rule of lenity to resolve ambiguities in a defendant-friendly fashion?

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July 19, 2016 in Scholarship, Tax | Permalink | Comments (0)

Public College President Salaries, 2014-15

The IRS Scandal, Day 1167

IRS Logo 2The Hill, GOP Platform Calls for Impeachment of IRS Chief:

The Republican Party platform adopted Monday calls for Internal Revenue Service (IRS) Commissioner John Koskinen to be impeached and removed from office.

The commissioner "has lied to Congress, hidden evidence, and stonewalled investigations,” the platform states without explicitly using Koskinen's name. “He should be impeached by the House of Representatives and convicted by the Senate.”

The GOP platform calls the IRS “toxic” and says the agency “has become an ideological attack dog for the worst elements of today’s Democratic Party.”

Republicans are calling for the repeal of the “Johnson Amendment,” which bars nonprofits from endorsing political candidates.

“Places of worship for the first time in our history have reason to fear the loss of tax-exempt status merely for espousing and practicing traditional religious beliefs that have been held across the world for thousands of years, and for almost four centuries in America,” the platform states. “We value the right of America’s religious leaders to preach, and Americans to speak freely, according to their faith.”

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July 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, July 18, 2016

Is It Time For Authors To Leave SSRN?

ESSRNFollowing up on my previous post, Elsevier Acquires SSRN:  Authors Alliance, Is It Time for Authors to Leave SSRN?:

As feared, it now appears that SSRN is taking up restrictive and hostile positions against authors’ ability to decide when and how to share their work. Reports are surfacing that, without notice, SSRN is removing author-posted documents following SSRN’s own, opaque determination that the author must have transferred copyright, the publisher had not consented to the posting, or where the author has opted to use a non-commercial Creative Commons license. One author, Andrew Selbst, reported that SSRN refused his post even though the article’s credits reflected his retained copyright.

This policy fails to honor the rights individual authors have negotiated in order to put their work on services like SSRN. It misreads the Creative Commons licenses authors adopt in order to share their work. And it is a marked departure from the standard notice and takedown procedures typically used to remove user-uploaded copyright-infringing works from the web, eliminating both any apparent notice from the putative copyright owner and any clear recourse for the affected authors.

SSRN authors: you have not committed to SSRN. You can remove your papers from their service, and you can opt instead to make your work available in venues that show real commitment to the sharing, vetting, and refinement of academic work.

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July 18, 2016 in Legal Education, Scholarship | Permalink | Comments (4)