TaxProf Blog

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

Sunday, July 23, 2017

The Top Five New Tax Papers

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [585 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan Blattmachr (Milbank, New York)
  2. [341 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [297 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  4. [207 Downloads]  The Case Against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)
  5. [162 Downloads]  Targeting Corporate Inversions — Are We Doing the Right Thing?, by Doron Narotzki (Akron)

July 23, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 22, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Do Taxes Affect Marriage? Lessons From History

Edward G. Fox (NYU), Do Taxes Affect Marriage? Lessons from History:

This Article investigates the effect of taxes on marriage formation using a natural experiment generated by the income tax’s halting movement from individual taxation of married couples to joint taxation. The 1948 Revenue Act was the first to explicitly adopt joint taxation. Under the Act, married couples were taxed like two individuals, except each was assigned half of the couple’s joint income. This income splitting blunted the progressivity of the tax code, usually reducing the couple’s taxes. The 1948 Act, however, only affected common law states. Married couples in community property states in practice already enjoyed joint taxation with income splitting under Poe v. Seaborn (1930). The 1948 Act thus presents an unusually good opportunity to study the impact of taxes on marriage because it offers substantial exogenous state-by-state variation in tax incentives to marry.

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

ABA Censures Texas Southern Law School Following Gender Discrimination Complaint By Associate Dean

Thurgood Marshall Logo

Texas Lawyer, ABA Fines, Publicly Censures Law School for Noncompliance With Anti-Discrimination Standard:

Texas Southern University Thurgood Marshall School of Law was publicly censured and must pay $15,000 for not complying with an American Bar Association standard that prohibits schools from discriminating against faculty members.

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July 22, 2017 in Legal Education | Permalink | Comments (0)

Going Cashless? Bad for Tax Cheats, Privacy, Poor

Bloomberg, Going Cashless? Bad for Tax Cheats, Privacy, Poor:

Do we need cash? Humans have used all sorts of things to exchange items of economic value -- rare metals, strings of shells and even sunken boulders. Those objects have gotten more ephemeral, with paper money replacing most coins, and digital forms increasingly supplanting paper. Could physical cash go away entirely? Economists see great payoffs in a cashless society: lower transaction costs, new tools to manage economic growth and an end to tax evasion and money laundering. Critics see an end to privacy, frightening new powers for tyrants and costs that would fall disproportionately on the poor. The giant, if unintended, experiment that followed India’s attempt to withdraw 86 percent of cash in circulation showed one thing clearly: The end of cash is not likely to be a neat or simple process.

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July 22, 2017 in Tax | Permalink | Comments (1)

Friday, July 21, 2017

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new draft article by Regina Herzlinger (Harvard Business School) and Barak D. Richman (Duke Law), Evaluating Changes to the Income Tax Code to Create Consumer-Driven Health Insurance Competition.

Gamage (2017)The intersections between taxation and health policy have become increasingly important to political debates in Washington. A gorilla in the room for most of these discussions is the tax exclusion for employer provided health insurance. This exclusion has been widely criticized. Yet reformers have had little success in attempting to limit this exclusion.

In their new draft article, Herzlinger and Richman (hereinafter “HR”) model how reforming the exclusion for employer provided health insurance might affect employee pay and health care costs. HR argue for making changes to the tax laws surrounding the exclusion so that employees could choose to what extent they want to take advantage of the exclusion or instead receive increased take home pay (which would be taxable). HR estimate that giving workers this option would increase after-tax incomes by $46-48 billion annually, while reducing income inequality and “likely” controlling health care costs.

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July 21, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

IRC § 457A, Literal Income And Substitution Effects, And The Kübler-Ross Five Stages Of Taxes

Matt Levine (Bloomberg), Tax Bills and Libor Witnesses:

There is a widespread belief that taxes discourage economic activity. If you tax cigarettes, that will reduce smoking; if you tax labor income, that will reduce work; if you tax capital gains, that will reduce savings; if you tax estates, that will reduce death. This is standard Econ 101 reasoning, but that doesn't mean that it's universally valid. You can't rule out the possibility that someone, somewhere, will think "Higher taxes? That just means that I need to work more hours to pay them!" That someone is literally Steven A. Cohen:

Mr. Cohen, who ran SAC Capital before it pleaded guilty to criminal insider-trading charges in 2013, is nearing a launch of a new firm to manage as much as $20 billion, The Wall Street Journal earlier reported.

He has set that target, which would exceed the $16 billion managed at peak by SAC, partly because he wants to generate income to help pay the large tax bill, a person close to him said.

The "large tax bill" is the one that is coming due soon on offshore deferred compensation: Hedge fund managers used to be able to defer that income indefinitely, but Congress closed that loophole in 2008, and gave the managers until next year to pay taxes on previously deferred compensation....

Another widespread belief about taxes is that they encourage wasteful gamesmanship and structuring to avoid them. (That's how the offshore compensation came into being in the first place.) And that is still true. Here is a wonderful quote from a tax lawyer in his role as spiritual counselor:

“These are smart, aggressive people who don’t want to pay more than they have to and writing a huge check can be quite demoralizing," said Jonathan Brenner, a tax partner at Caplin & Drysdale. “Most recognize they’ve had a good run and now have to pay the piper, though not after first asking six different ways if there’s some silver bullet” to eliminate or reduce the taxes.

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July 21, 2017 in Tax | Permalink | Comments (3)

Ohio State Bar Association Futures Commission Report 2017

Thimmesch:  Online Shopping And Tax Privacy

Adam Thimmesch (Surly Subgroup): Online Shopping and Tax Privacy

The privacy implications of online commerce are complicated and fascinating. On the one hand, it allows individuals to protect their privacy by shopping for sensitive items without the knowing glances of store clerks, fellow patrons, or those passing by. On the other hand, it creates a digital trail that can connect them to a particular vendor or purchase in perpetuity. This can occur with respect to items that are politically, medically, or sexually sensitive and with respect to items that they’d just prefer to keep a secret. (For example, if you forget to browse in private mode, you might find that your wife’s Facebook feed now includes ads for the items that you were searching out for her birthday. Woops. Sorry dear.)

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July 21, 2017 in Tax | Permalink | Comments (0)

Thursday, July 20, 2017

Schizer:  Border Adjustments And The Conservation Of Tax Planning

David M. Schizer (Columbia), Border Adjustments and the Conservation of Tax Planning, 155 Tax Notes  1451 (June 5, 2017):

In this article, Schizer argues that U.S. corporate and shareholder taxes need to be reformed, and the corporate rate should be much lower. In reforming this dysfunctional regime, according to Schizer, Congress should keep both of these taxes as a form of built-in redundancy; if one tax is avoided, the other can still be collected.

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

Ousted Cincinnati Dean Jennifer Bard Named Penn State Visiting Professor

BardPress Release, Jennifer Bard to Join Penn State Law, College of Medicine as Visiting Professor:

Jennifer S. Bard, an internationally recognized expert in the fields of law, public health and bioethics, will join the faculties of Penn State Law and the Penn State College of Medicine this summer for a one-year appointment as a visiting professor of law and medicine.

Bard is a professor of law at the University of Cincinnati College of Law where she also holds an appointment as professor in the Department of Internal Medicine at the University of Cincinnati College of Medicine. She served as dean of Cincinnati Law from 2015 to 2017.

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July 20, 2017 in Legal Education | Permalink | Comments (0)

10 Things To Know About Tax Practice

Above the Law: 10 Things to Know About Tax Practice:

Today’s topic: tax law.

1. What do you do in a typical day?

A typical day usually begins with reading daily tax publications. There are always many changes and developments to keep up with in tax law. It’s a challenge to stay on top of new regulations, IRS guidance, and other changes, but it also presents an opportunity for younger lawyers to know as much about a specific issue as more experienced lawyers.

Junior associates often spend a fair amount of time researching discrete issues. Although more senior lawyers spend less time on research, tax lawyers throughout their careers devote more of their time to research than lawyers in other practice areas. Despite the thousands of pages in the Internal Revenue Code and Treasury Regulations, there are still a lot of unanswered questions about how the tax rules apply to any given situation. Associates at large firms may also spend time reviewing tax disclosures in securities offerings, reviewing and negotiating the tax representations and other tax-related provisions in merger or other acquisition agreements, reviewing and negotiating the tax provisions in loan agreements, or drafting tax opinions.

As tax lawyers gain experience, they usually become more involved in tax structuring for joint ventures, acquisitions, dispositions, investment funds, or financial products, and provide more expert advice directly to clients on discrete tax issues. 

2. Who do you work with?

...

July 20, 2017 in Tax | Permalink | Comments (1)

Allard:  The California Bar Exam Is The Tip Of The Lawyer Licensing Iceberg

Allard (2018)TaxProf Blog op-ed:  California Bar Exam Developments: Tip of the Iceberg, by Nicolas W. Allard (Dean, Brooklyn):

Legal climate change is starting to dramatically crack the frozen status quo of the antiquated bar exam and testing industry. Now we should collectively move forward with determination and deliberateness to address bar exam reform comprehensively and thoughtfully.

The recent initiatives of the California Supreme Court to take back control of licensing and admitting new lawyers, like a huge ice shelf breaking off in Antarctica, signals that there are much larger concerns that will force an overhaul of legal testing and licensing practices eventually everywhere.

Traditional bar exam and licensing practices have outlived their sell-by date. In their present state they are increasingly hard, if not impossible, to justify as serving the best interests of the profession or the public.

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July 20, 2017 in Legal Education | Permalink | Comments (2)

Ventry:  Lawyers As Whistleblowers

Dennis J. Ventry, Jr. (UC-Davis), Stiches for Snitches: Lawyers as Whistleblowers, 50 U.C. Davis L. Rev. 1455 (2017):

This Article challenges the prevailing wisdom that ethics rules forbid lawyers from blowing the whistle on a client’s illegal conduct. While a lawyer is not free to disclose confidential information in every jurisdiction for every legal violation, the ethics rules in all jurisdictions permit disclosure of confidential information pertaining to a client’s illegal activities under certain conditions. Proving the lie of the prevailing wisdom, this Article examines a high profile case in the state of New York that ruled a lawyer whistleblower violated the state’s ethics rules by revealing confidential information to stop his employer-client from engaging in a tax fraud of epic proportions. The Article argues that the court undertook a deficient analysis of New York ethics rules pertaining to permissive disclosure of confidential client information. Even if the whistleblower had violated his ethical obligations, the New York False Claims Act (the statute under which he brought his action) expressly protects disclosure of confidential employer information made in furtherance of the statute. In addition to New York’s statutory shield, federal courts across the country have developed a public policy exception safeguarding whistleblowers for disclosing confidential information that detects and exposes an employer’s illegal conduct.

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

Wendi Adelson Named Executive Director Of The Immigration Partnership & Coalition Fund

AdelsonFollowing up on yesterday's post, On Three Year Anniversary Of Dan Markel's Murder, Wheels Of Justice Continue To Turn Slowly:  Gates Cambridge, Press Release:

A Gates Cambridge Scholar has been named executive director of an organisation focused on raising funds to finance existing legal services for undocumented individuals with no criminal background in the US.

Wendi Adelson has been appointed head of the Immigration Partnership & Coalition (IMPAC) Fund.

Prior to IMPAC, Adelson served as a law clerk to the Honorable Adalberto Jordan on the United States Court of Appeals for the Eleventh Circuit from 2015 to 2016 and for seven years was a law professor specialising in immigration at Florida State University.

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July 20, 2017 in Legal Education | Permalink | Comments (2)

Wednesday, July 19, 2017

Liscow & Woolston:  How Income Taxes Should Change During Recessions

Zachary D. Liscow (Yale) & William A. Woolston (Stanford), How Income Taxes Should Change During Recessions, 70 Tax L. Rev. ___ (2017):

This paper offers recommendations for how the design of labor income taxes should change during recessions, based on a simple model of a recessionary economy in which jobs are rationed and some employees value working more than others do. The paper draws two counter-intuitive conclusions for maximizing social welfare.

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

A Portrait Of Asian Americans In The Law

A Portrait of Asian Americans in the Law:

Published by Yale Law School and the National Asian Pacific American Bar Association, A Portrait of Asian Americans in the Law is a systematic analysis of how Asian Americans are situated in the legal profession. ... We address five broad sets of questions:

  1. How are Asian Americans distributed across law schools and the legal profession? In what sectors and positions are they overrepresented or underrepresented?
  2. What factors influence how Asian Americans are distributed in the legal profession? What motivations or aspirations do Asian Americans have when they decide to attend law school? What incentives and obstacles—familial, societal, financial, or professional— affect the career decisions of Asian American law students and lawyers? What stereotypes do they face in navigating the legal profession? In what ways do they seek to counter or assimilate to those stereotypes?
  3. Are Asian American lawyers satisfied with their careers? With what aspects of their careers are they most satisfied? Least satisfied? Does their career satisfaction vary over the course of their career?
  4. To what extent have Asian Americans achieved positions of leadership that enable them not only to practice and implement the law, but also to shape the law and the legal profession?
  5. To what extent do Asian American lawyers experience mental health challenges? How do they compare on this dimension to the profession as a whole? How often do Asian American lawyers seek treatment?

Figure 2A

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July 19, 2017 in Legal Education | Permalink | Comments (0)

Tax Court Denies Billionaire's $33m Charitable Deduction; Did University Of Michigan 'Rent Its Brand To Brazen 10:1 Tax Avoidance Scheme'?

Michigan LogoForbes, Billionaire Miami Dolphins Owner Gets Shut Out At Tax Court:

Billionaire Stephen Ross, owner of the Miami Dolphins, who thanks to a $200 million donation (largest in the history of the school) was described as Leader, Visionary, Philanthropist, Wolverine by the Universtiy of Michigan. ... Mr. Ross got his start in real estate based on his knowledge of federal tax garnered as a tax attorney for Coopers and Lybrand. ... I have to wonder whether the name of his flagship Related Companies is a tax geek joke.

Forbes, Billionaire Stephen Ross And The Ten For One Charitable Deduction:

The brazenness of the charitable plan with the University of Michigan designed to benefit Wolverine Billionaire Stephen Ross revealed in the Tax Court RERI Holdings I  decision is stunning.

The bare bones of the plan are that RERI, whose principal investor was Mr. Ross, bought an asset (call it "the thing") which it donated to the University of Michigan toward a $5 millon pledge that Mr. Ross had made.  Under the gift agreement UM had to hold onto "the thing" for two years, then sell it.  The amount that UM received would be credited to Mr. Ross's pledge. Round numbers RERI acquired "the thing" for $3 million.  When it came time to sell it UM had it appraised at $6 million.  UM sold it to a partnership for $2 million under pressure from Mr. Ross who threatened to count that amount towards his pledge, if they ended up getting less.  How large was the charitable deduction taken by RERI, of which Ross was the principal investor? That would be $33,019,000.

Mr. Ross is a prominent philanthropist.  It is tough to characterize this particular transaction as philanthropic as the claimed tax savings dwarf the amount out of pocket or the amount netted by the University of Michigan.  You have to wonder to what extent University development officers knew what was going on. Was University of Michigan seeking charitable donations or renting its brand to a tax avoidance scheme?

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July 19, 2017 in Celebrity Tax Lore, Legal Education, New Cases, Tax | Permalink | Comments (0)

How Can Law Schools Lure Back Smart Applicants?

160+ LSATLaw.com, Law Schools Are Losing Smart Applicants. How Do They Lure Them Back?:

Law school has lost its allure. Enrollment at American Bar Association-accredited law schools has plummeted 25 percent since 2010 and several law schools have or soon will close up shop for lack of demand [emphasis added].

Why? It’s a combination of factors including rising tuition, a stagnant job market and the perception that better options exist elsewhere.

So what’s it going to take to lure back would-be lawyers—especially those with the high Law School Admission Test scores that schools covet? (Applicants with LSAT scores of 160 or above are down a whopping 45 percent over the past six years.)

We asked 11 leaders from the legal academy, the bench and law firms to tell us how law schools can make up those recruiting losses and appeal once again to top prospects. Their perspectives vary, but a few overarching themes emerged.

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July 19, 2017 in Legal Education | Permalink | Comments (5)

Davis:  The Tax-Immigration Nexus

Tessa R. Davis (South Carolina), The Tax-Immigration Nexus, 94 Denv. L. Rev. 195 (2017):

Tax and immigration law have a shared interest in defining community. In order to implement a tax, we must know who belongs to the taxable community. At the same time, immigration law must define and administer the requirements for membership in the national community. Despite the differing objectives of tax and immigration law — raising revenue and deciding who may enter, remain, and become a citizen in the United States — each of these regimes uses a concept of citizenship to define their respective communities.

Starting from this common thread of the relevance of citizenship to both immigration and tax law, this Article draws upon social theory on citizenship to explore the many links between these seemingly disparate areas of law. Examination of these connections — what this Article calls the tax-immigration nexus — reveals that both areas of law draw upon the other to define citizenship. The interplay of tax and immigration citizenship yields important insights for tax law and policy.

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

On Three Year Anniversary Of Dan Markel's Murder, Wheels Of Justice Continue To Turn Slowly

Markel SuspectsWCTV, Markel Shooting Reaches Third-Year Anniversary:

Three years ago, on July 18, 2014, FSU law professor Dan Markel was gunned down in his own driveway.

The shocking shooting and subsequent allegation that it's a murder for hire are still unraveling in court.

Accused trigger man Sigfredo Garcia and accused go between Katherine Magbanua are still awaiting trial. Accused getaway driver Luis Rivera accepted a plea deal and is expected to testify against them both. ...

Assistant State Attorney Georgia Cappleman is responsible for proving it all.

Attorneys for Garcia, Magbanua and the ex-wife's family have repeatedly called the plot a "theory" and a '"fishing expedition."

Neither the ex-wife nor any of her family members has been charged with a crime and their attorneys have previously denied any involvement.

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

Tuesday, July 18, 2017

Morriss:  Legal Education Through The Lens Of The U.S. News Law School Rankings

2018 U.S. News Law 2Andrew P. Morriss (Dean, Texas A&M), Legal Education Through the Blurry Lens of US News Law School Rankings, 20 Green Bag 2d 253 (2017):

The Chinese Characters in the title of this piece are the closest thing to the apocryphal “Chinese curse” of “may you live in interesting times.” The closest actual proverb is “Better to be a dog in a peaceful time, than to be a human in a chaotic period. This seems a fitting metaphor for what has been going on in legal education since 2008, when things began to get “interesting.” That the attribution of the English version of the curse is apocryphal and that I’ve taken the “true” meaning from Wikipedia (although I did check with a native Chinese-speaking friend, who assures me that Wikipedia is accurate on this point) is a good metaphor for rankings and their impact on legal education. Applicants, law review editors, alumni, and many more people rely on US News’s law school rankings to evaluate law schools, as secure in their knowledge that these are a valid source of information on relative merit as are those people who confidently attribute the “may you live in interesting times” version of the curse to a non-existent Chinese language source are in theirs.

Just as the apocryphal curse bears a resemblance to an actual proverb about dogs and peaceful times, so the US News rankings reflect — if through rather blurry glass — where legal education is. With the caveats that there are many bad things that have come from rankings, and from the illusory precision of US News rankings in particular, and that a great deal of what the rankings reflect is a fairly stable pecking order, as well as having tortured this metaphor as far as I can, let’s look at the data that US News uses and see what it reveals about where legal education is headed.

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July 18, 2017 in Law School Rankings, Legal Education | Permalink | Comments (1)

Panama Papers Update: Pakistani Corruption Case Hinges On A Font (#FontGate)

CalibriBBC News: Pakistani Corruption Case Hinges on a Font

Doubt has been cast on a key document at the centre of a corruption inquiry in Pakistan because of the use of a particular typeface. And Twitter users are poking fun at Prime Minister Nawaz Sharif and his daughter Maryam Nawaz using the hashtag #FontGate.

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July 18, 2017 in Tax | Permalink | Comments (0)

Hamilton, The Play Has Caused A Boon At Hamilton, The College

HamChronicle of Higher Education, Before the Musical, There Was the College:

Hamilton, that is. The popularity of the musical about the life of Alexander Hamilton has apparently rubbed off on the liberal-arts college in upstate New York, which has seen applications rise in the past year, says David Wippman, Hamilton’s president. The college was named for the once-forgotten founding father, who was a trustee of the Hamilton-Oneida Academy (renamed Hamilton College in 1812), and the college's mascot, “Alex,” is a representation of Hamilton in his Continental Army uniform. Although it’s not something he can quantify, Mr. Wippman says the hit musical “certainly hasn’t hurt,” and it’s been a boon for alumni: As the show tours the country, the college buys blocks of tickets so Hamilton alums can attend.

For more on my obsession with interest in Hamilton, see here and:

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July 18, 2017 in Legal Education | Permalink | Comments (1)

Anderson:  College Majors That Produce The Highest (And Lowest) LSATs And UGPAs

Following up on my previous posts (links below): Robert Anderson (Pepperdine), Law School Admissions and College Majors:

For US News purposes, a GPA is a GPA, whether the GPA comes from a B.A. in French or a B.S. in Electrical Engineering. Conventional wisdom suggests that GPAs in humanities disciplines may not be equivalent to GPAs in STEM fields, but there is little data that compares the two.

In looking at this question, I recently came across this Law School Admission Council resource that provides admissions data by college majors for 2014-2015 and 2015-2016. The report contains the mean GPA and LSAT score for over 100 college majors, along with acceptance rates and "yield" rates. I collected this data and made the following chart that shows the relationship of undergraduate GPA and LSAT for dozens of college majors. Undergraduate GPAs are along the left axis and LSAT scores are along the bottom axis. The size of the circles represent the number of applicants. ...

Anderson

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July 18, 2017 in Legal Education | Permalink | Comments (8)

Reforming U.S. Corporate Taxes

Veronique de Rugy (Mercatus Center), Reforming US Corporate Taxes:

The United States has fallen far behind other developed countries when it comes to corporate tax reform. In contrast to other developed nations, the United States has declined to reform the way it taxes corporations. Consequently, it now has the highest statutory corporate income tax rate of the G20 countries. The federal government needs to lower the corporate income tax rate-a reform that will improve the competitiveness of American businesses and encourage economic growth.

MC

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July 18, 2017 in Tax, Think Tank Reports | Permalink | Comments (9)

The Toxic University: Zombie Leadership, Academic Rock Stars And Neoliberal Ideology

ToxicJohn Smyth (University of Huddersfield), The Toxic University: Zombie Leadership, Academic Rock Stars and Neoliberal Ideology (2017):

This book considers the detrimental changes that have occurred to the institution of the university, as a result of the withdrawal of state funding and the imposition of neoliberal market reforms on higher education. It argues that universities have lost their way, and are currently drowning in an impenetrable mush of economic babble, spurious spin-offs of zombie economics, management-speak and militaristic-corporate jargon. John Smyth provides a trenchant and excoriating analysis of how universities have enveloped themselves in synthetic and meaningless marketing hype, and explains what this has done to academic work and the culture of universities — specifically, how it has degraded higher education and exacerbated social inequalities among both staff and students. Finally, the book explores how we might commence a reclamation. It should be essential reading for students and researchers in the fields of education and sociology, and anyone interested in the current state of university management.

Inside Higher Education, ‘The Toxic University’:

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July 18, 2017 in Book Club, Legal Education | Permalink | Comments (0)

Monday, July 17, 2017

NY Times:  The Lawyer, The Addict

New York Times, The Lawyer, the Addict:

In July 2015, something was very wrong with my ex-husband, Peter. His behavior over the preceding 18 months had been erratic and odd. He could be angry and threatening one minute, remorseful and generous the next. His voice mail messages and texts had become meandering soliloquies that didn’t make sense, veering from his work travails, to car repairs, to his pet mouse, Snowball.

I thought maybe the stress of his job as a lawyer had finally gotten to him, or that he was bipolar. He had been working more than 60 hours a week for 20 years, ever since he started law school and worked his way into a partnership in the intellectual property practice of Wilson Sonsini Goodrich & Rosati, a prominent law firm based in Silicon Valley. ...

Peter, one of the most successful people I have ever known, died a drug addict, felled by a systemic bacterial infection common to intravenous users.

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

Brooks Reviews Christians' BEPS And The New International Tax Order

Jotwell (Tax) (2016)Kim Brooks (Schulich School of Law), What’s Up: BEPS and the New International Tax Order (JOTWELL) (reviewing Allison Christians (McGill), BEPS and the New International Tax Order, 2017 BYU L. Rev. ___ (2017):

It’s easy to underestimate the value of a good “what’s up” article. If you’ve been doing that, then you should take a look at BEPS and the New International Tax Order for a reminder of their value.

“What’s up” articles are the salve of the academy. They take a rapidly changing field of inquiry or policy space or legal doctrine and they encapsulate the state of play in a way that brings out and makes assessable the highlights.

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

Conflicts Of Interest, Disclosure, And The Moonlighting Law Prof

MoonlightingFollowing up on my previous post, WSJ: Paying Law Professors — Inside Google’s Academic Influence Campaign:  Jeffrey L. Harrison (Florida) & Amy R. Mashburn (Florida), Moonlighting Sonate: Conflicts, Disclosure, and the Scholar/Consultant:

Although the impact of conflicting interests is of constant concern to those in legal education and other fields, a recent scholarly article [Robin Feldman (UC-Hastings), Mark Lemley (Stanford), Jonathan Masur (Chicago) & Arti Rai (Duke), Open Letter on Ethical Norms in Intellectual Property Scholarship, 29 Harv. J.L. & Tech. 339 (2016)] and an extensive analysis in the New York Times [Think Tank Scholar or Corporate Consultant? It Depends on the Day] suggest the problem is more pressing than ever. In the context of legal scholarship the problem arises when a professor is, in effect, employed by two entities.

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

ABA Meets To Consider Elimination Of 49% Adjunct Professor Cap And Use Of GRE In Law School Admissions

ABA Section On Legal Education (2016)The Standards Review Committee of the ABA Section of Legal Education and Admission to the Bar met July 14-15 in Chicago.  Here are the agenda and meeting materials.  

The ABA Journal reports on comments received on proposed changes to Standard 403(a) to eliminate the requirement that more than 50% of law teaching be performed by full-time faculty. Here are links to all of the comments:

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July 17, 2017 in Legal Education | Permalink | Comments (5)

Seattle Lawmakers Pass Tax On Highest Earners; Mayor Eager To Be Sued

TaxReuters: Seattle Lawmakers Pass Tax on Highest Earners; Mayor Eager to be Sued 

Seattle's city council unanimously passed a pioneering income tax on the city's highest earners on Monday, a measure that has become a clarion call for Democrats there even though it is likely to face a swift legal challenge over violating state law.

The measure created a 2.25 percent tax rate on individuals earning above $250,000 and married couples jointly earning above $500,000. The tax will add roughly $140 million in new annual revenue and affect fewer than 20,000 residents in the city of more than 660,000, supporters say.

The proposal has become a rallying cry for Democrats and activists in the liberal-leaning city who used local opposition to Republican President Donald Trump to advance long sought-after local policies.

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July 17, 2017 in Tax | Permalink | Comments (3)

Harvard Law School Task Force On Academic Community And Student Engagement Issues Report; Students Protest Excessive Faculty Influence

Harvard Law School (2016)Harvard Law School Task Force on Academic Community and Student Engagement:

A working group of twelve Harvard Law School faculty, alumni, and students have examined the student experience in four core areas: (1) institutional culture, (2) curriculum, (3) mentoring, and (4) institutional supports. After gathering student input, advice and counsel from related law school offices, and research on the practices of peer institutions, the Task Force has submitted a report of their findings to Dean John Manning.

Harvard Crimson, Law School Task Force Releases Findings, Students Dissent:

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July 17, 2017 | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, July 16, 2017

Did 'Trump Bump' Cause Surge Of LSAT Test-Takers?

Following up on Thursday's post, Fall 2018 Law School Admissions Season Opens With A Bang: LSAT Test-Takers Increased 19.8% In June, The Biggest Jump In 8 Years:  Law.com, Number of LSAT Test-Takers Surges. Is It a Trump Bump?:

The hoped-for law school “Trump Bump” might actually have legs.

The number of people who took the Law School Admission Test in June climbed nearly 20 percent over last year — the largest percentage increase for any individual LSAT administration since September 2009. ...

Professors and deans speculated this spring that turmoil in Washington — and more specifically President Trump’s so-called Muslim ban and the high-profile response of lawyers who flocked to airports to help those affected — would prompt more people to consider law school. The June LSAT, which is widely viewed as the first of the 2018 admissions cycle, offered the first real test of the Trump Bump theory. ...

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July 16, 2017 in Legal Education | Permalink | Comments (2)

Tax Court Denies Business Expense Deductions To Minister/Author Due To Lack Of Profit Motive

Tax Court (2017)Forbes, IRS Rejects Minister Tax Write-Offs For Lack Of Profit Motive:

The U.S. Tax Court has agreed with the IRS that a minister and author could not deduct business expenses. Why? He was not engaged in a trade or business for profit. To top it off, the reverend also wasn't allowed any deductions under the more liberal hobby loss rules, because he had no gross income from these activities. The case is Lewis v. Commissioner, involving a minister and author named Willie Lewis. He occasionally performed weddings, attended meetings, and conducted seminars. On his 2011 tax return, he claimed business expenses from these activities. The IRS said no, assessed more taxes, and added penalties. So Mr. Lewis went to Tax Court.

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July 16, 2017 in New Cases, Tax | Permalink | Comments (0)

Gerken:  Law Schools (And Law Students) Have Much To Teach Universities About Campus Free Speech

Yale LogoTime op-ed:  Campus Free Speech Is Not Up for Debate, by Heather Gerken (Dean, Yale):

In this, the summer of our discontent, many college presidents are breathing a sigh of relief that they made it through a politically fraught spring without their campuses erupting. Nobody wants to be the next Middlebury or Claremont McKenna, where demonstrations disrupted controversial speakers.

Law deans, in sharp contrast, have reason to be cheery. Their campuses have been largely exempt from ugly free-speech incidents like these. Charles Murray, the controversial scholar whose speech drew violent reaction at Middlebury, has spoken at Yale Law School twice during the past few years. Students and faculty engaged with him, and students held a separate event to protest and discuss the implications of his work. But he spoke without interruption. That's exactly how a university is supposed to work.

There may be a reason why law students haven't resorted to the extreme tactics we've seen on college campuses: their training. Law school conditions you to know the difference between righteousness and self-righteousness. That's why lawyers know how to go to war without turning the other side into an enemy. People love to tell lawyer jokes, but maybe it's time for the rest of the country to take a lesson from the profession they love to hate.

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July 16, 2017 in Legal Education | Permalink | Comments (1)

The Top Five New Tax Papers

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3 and #5:

  1. [552 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan G. Blattmachr (Milbank, New York)
  2. [276 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  3. [244 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  4. [191 Downloads]  The Case against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)
  5. [138 Downloads]  Taxation, Competitiveness, and Inversions: A Response to Kleinbard, by Michael Knoll (Pennsylvania)

July 16, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 15, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Financial Times:  Ten Ways HMRC Can Tell If You’re A Tax Cheat

HMRCFinancial Times: Ten Ways HMRC Can Tell if You’re a Tax Cheat:

HMRC has come under intense pressure to show it can be tough on tax evasion. Here are 10 ways, some high-tech, some very traditional, that HMRC can use to check if you are cheating.

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July 15, 2017 in Tax | Permalink | Comments (0)

Rodriguez:  Changing Law Schools

Daniel B. Rodriguez (Dean, Northwestern), Changing Law Schools:

Last fall, 203 ABA accredited law schools opened their doors to a new class of would-be lawyers. Next month, that number will drop to 202, as Whittier Law School in Costa Mesa, California announced in April that it would shut down, making it the first fully accredited law school to do so in three decades. Whittier’s closing was a blow to the legal academy, and of course to the esteemed alumni from this established law school. When coupled with news of decreasing law school applications across the board, declining LSAT scores, and state bar passage rates at an all-time low, it put the finishing touches on the “law school train wreck” story that reporters have been reveling in for years.

But the resulting debate — law schools are failing! No, everything’s fine! — buries the truly important question: How can law schools, the very institutions that teach a discipline reliant on precedent, tradition, and entrenched rules become dynamic and innovative change-makers? And I don’t just mean throwing “innovation” in the title of a course or an academic center. How can we convince top students that if you want to change the world — be it through social justice or disruptive technology — you need to start with a legal education?

To start, let’s talk about those “top” students: Data released in June by the Law School Admission Council found that while the number of applicants to law school for the 2017-2018 school year dropped by only 0.5 percent, the number of applicants who scored [160 or more] on the LSAT has decreased [45] percent since 2010, as Paul Caron, Dean of Pepperdine University School of Law, wrote on his TaxProf Blog. These are the students with credentials who would likely be admitted to top law schools, perhaps even with merit scholarships. ...

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July 15, 2017 in Legal Education | Permalink | Comments (1)

Tax Low To Get High: Governments Should Keep Weed Taxes Down

National Post op-ed:  Tax Low to Get High: Governments Should Keep Weed Taxes Down, by Arthur Cockfield (Queen’s University):

With the introduction of draft legislation to legalize marijuana by July 2018, the Liberal government is moving forward on its election promise. But as lawmakers polish the legislation to promote the best policy outcomes, they face a key challenge — they must ensure that any new tax measures encourage marijuana producers, distributors and sellers to become tax-compliant.

In terms of tax policy, Finance Minister Bill Morneau has wisely urged his provincial counterparts to keep taxes low on legal pot. As discussed in a report by the Office of the Parliamentary Budget Officer, if taxes are too high, then consumers will continue to use the black market. That’s a problem given more than 300 organized crime groups in Canada currently generate roughly $7 billion a year in illegal weed.

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July 15, 2017 in Tax | Permalink | Comments (1)

Friday, July 14, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by Itai Grinberg (Georgetown), The New International Tax Diplomacy, 104 Geo. L.J. 1137 (2016).

Glogower (2016)Itai Grinberg’s fascinating and important new work addresses the thorny question of how best to coordinate and implement international tax norms.

International tax avoidance by multinationals has generated public attention across the globe, and ushered in a new era of cross-border coordination in the area of international tax law, most prominently through the OECD’s Base Erosion and Profit Shifting (BEPS) project.  Grinberg’s new work identifies, and evaluates, the BEPS project’s increasing reliance on the institutional and procedural frameworks used for coordinating international financial law, and considers the consequences of this approach for the overall success of the BEPS project.

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July 14, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

NY Times:  California Supreme Court Moves To Make Bar Exam Easier To Pass

California Bar ExamFollowing up on Wednesday's post, California Supreme Court Strips Authority Of Bar Examiners To Set Cut Score; Lower Cut Score May Apply Retroactively To July Test-Takers:  New York Times, California Supreme Court Moves to Make Bar Exam Easier to Pass:

California has long had a reputation for having one of the most difficult bar exams in the country. Now, with passage rates sagging, the state will make it easier to pass the test, which is required to be licensed as a practicing lawyer.

The California Supreme Court, the ultimate authority over the bar exam, has decided to change the way the certification score is set. The court has not yet decided where the threshold will be set, but the changes will take effect in January.

The move follows a sometimes furious debate in California legal circles over whether the state’s passing score, or “cut score” — 144 — was unrealistic. ...

Last year, just 62 percent of first-time test takers passed the California bar exam, compared with 83 percent in New York.

And only 51 percent of the graduates of the University of California Hastings College of the Law passed the state’s exam in July 2016. That result, the school’s dean, David L. Faigman, wrote the California Committee of Bar Examiners last December, was “outrageous and constitutes unconscionable conduct on the part of a trade association that masquerades as a state agency.”

“The cut score is almost everything,” said Robert Anderson, a professor of corporate law at Pepperdine School of Law in California, who did a study of the 10 most difficult state exams in 2013. That study concluded that “California’s is probably the most difficult” in the country. “If California changed its minimum score to 133, which is the same as New York’s, then I would say, California’s is easy,” he added. (Delaware’s passing score is 145.)

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July 14, 2017 in Legal Education | Permalink | Comments (2)

Tesla’s Sales Stall In Hong Kong As Tax Breaks End. Could The U.S. Be Next?

TeslaWashington Post: Tesla’s Sales Stall in Hong Kong as Tax Breaks End. Could the U.S. be Next? 

Tesla’s sales appear to be stalling in Hong Kong.

According to data from the city’s transportation department that was analyzed and first reported by the Wall Street Journal, not a single newly purchased Tesla model was registered in April after the government in March announced changes to the tax benefits customers can get from buying the electric cars. ...

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July 14, 2017 in Tax | Permalink | Comments (0)

Dean Andy Morriss On Law School Innovation

MorrissFollowing up on my previous post, Andy Morriss Steps Down As Texas A&M Law School Dean To Lead New School Of Innovation:  Law.com, Law Dean Who Helped Texas School Shine Takes on 'Innovation' Role:

Andrew Morriss oversaw the transformation and dramatic rise in the rankings of the former Texas Wesleyan School of Law into the Texas A&M School of Law. He was the first dean hired by Texas A&M after it bought in 2013, and since then the school has steadily risen from U.S. News & World Report’s unranked tier to claim the No. 92 spot—an almost unheard of ascent.

Now, the university has a new challenge for Morriss: heading up a brand new School of Innovation at its main campus in College Station, a gig he will assume Aug. 1.

Legal academics generally aren’t known as innovators. After all, modern law school largely follows the case method format pioneered by Christopher Columbus Langdell at Harvard Law School more than 120 years ago. But Morriss introduced a steady stream of changes at the Fort Worth law school intended to make it more competitive and relevant in today’s legal market.

We spoke with Morriss about what a school of innovation is, the changes at Texas A&M’s law school, and the need for legal educators to embrace new ways of teaching and structuring their law schools. His answers have been edited for length.

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July 14, 2017 in Legal Education | Permalink | Comments (2)