TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, May 26, 2016

Chicago Is #1 In Law Grad Employment; Five California Law Schools Are In The Bottom Ten

National Law Journal (2016)National Law Journal, Chicago Law School Jumps to No. 1 in Full-Time Jobs After Graduation; California Schools Show High Percentage of Underemployed J.D.s.:

The University of Chicago Law School had a strong year on the employment front. It sent a higher percentage of 2015 graduates into full-time legal jobs than any other law school—nearly 91 percent according to The National Law Journal’s analysis of the latest employment data from the ABA. ...

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May 26, 2016 in Legal Education | Permalink | Comments (1)

Hemel Reviews Taxing The Rich: A History Of Fiscal Fairness In The United States And Europe

TaxingFollowing up on last week's postDaniel Hemel (Chicago), Taxation as Compensation (reviewing   Kenneth F. Scheve (Stanford) & David Stasavage (NYU), Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (Princeton University Press, 2016)):

According to Scheve and Stasavage . . . , “the story of taxing the rich has more to do with politics” than with fiscal constraints . . . . For Scheve and Stasavage, “politics” specifically means rhetoric: their answer to the “why” question focuses on the types of tax fairness arguments that advocates for redistribution have employed. Scheve and Stasavage direct their attention (and ours) to three particular tax fairness claims. The first is what they call the “equal treatment” argument: “the fairest system involves equal treatment for all” (p. 6). The second is what they describe as “the ability to pay doctrine”: each additional dollar of taxation represents less of a sacrifice for someone earning $10 million a year than for someone earning $10,000, and so a progressive tax system imposes a roughly equal burden on the rich as on the poor even while the rich pay much more in dollar terms. The third type of argument is “compensatory”: “taxing the rich more heavily than the rest serves to correct or compensate for some other inequality in government action” (p. 5). According to Scheve and Stasavage, the last type of argument is the only one that historically has justified highly progressive rate structures. ...

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May 26, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee holds a hearing today on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part II.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

  • Nina Olson (National Taxpayer Advocate, IRS) (testimony)

May 26, 2016 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1113

IRS Logo 2New York Post editorial, The IRS Boss Is Just Begging To Be Impeached:

Four years after the IRS hobbled conservative groups by targeting them for extra scrutiny, the agency’s still playing politics.

No wonder Congress is looking to impeach its boss, John Koskinen.

At a House Judiciary Committee hearing Tuesday, Republican lawmakers gave specific reasons for their move: his lies under oath, his flouting of a congressional subpoena — and his repeated defiance.

Koskinen’s response? Ha! He didn’t even bother to show up.

Koskinen was supposed to “fix” the IRS after the scandal erupted over targeting conservatives. Yet his real purpose seemed to be running interference, covering up information and shielding the agency (and Team Obama) from consequences.

Shockingly, he and his agency are continuing that pattern to this day: A lawsuit filed Monday by the Cause of Action Institute accuses the IRS and its boss of refusing to preserve official business electronic communications, as required by law.

Bloomberg View editorial, Impeaching IRS Director A Sham:

Pity John Koskinen, who agreed to take one of the worst jobs in America and is now being punished for it.

In 2013, President Barack Obama asked Koskinen to take over at the Internal Revenue Service amid budgetary chaos, deteriorating morale and a simmering scandal. House Republicans, still angry about that scandal -- and about the concept of taxation generally -- are now trying to impeach him.

Their case is weak, and the ultimate loser in this sorry spectacle won't be Koskinen.

Start with the scandal. An inspector general report in 2013 found that IRS employees had been improperly scrutinizing conservative groups seeking tax-exempt status. This was wrong, and blame was duly apportioned. The agency's boss resigned, a top deputy retired, and the director of the offending unit was placed on leave and declared in contempt of Congress. Half a dozen congressional committees vowed to fumigate every pixel of offending detail. One managed to produce an 8,000-page report. The Justice Department investigated (and found no evidence of criminality).

But you have to get up pretty early in the morning to outfox the House Oversight and Government Reform Committee. Representative Jason Chaffetz of Utah, the committee's chairman, has made a professional specialty of berating civil servants. He appears to view Koskinen -- who, recall, joined the agency after this scandal -- as obstructing further investigation.

The specific allegations Chaffetz has adduced hardly add up to high crimes and misdemeanors. At worst, they portray mild bureaucratic ineptitude. And removing Koskinen from office stands no chance in legislative reality. Nothing's shaking on Shakedown Street, as they used to say.

Actually impeaching Koskinen -- a punishment not invoked against an executive-branch appointee since Ulysses S. Grant occupied the White House -- probably isn't the objective anyway. The point is to embarrass the IRS. And congressional Republicans have already done a fine job of that by slashing the agency's budget while helping to vastly expand its responsibilities, with predictably frustrating results.

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May 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, May 25, 2016

Graetz:  Essays On International Taxation

GraetzMichael J. Graetz (Columbia), Follow the Money: Essays on International Taxation (Yale May 2016) (free download (PDF, EPUB (iPad, Noble), MOBI (Kindle)), book (amazon)):

Publicity about tax avoidance techniques of multinational corporations and wealthy individuals has moved discussion of international income taxation from the backrooms of law and accounting firms to the front pages of news organizations around the world. In the words of a top Australian tax official, international tax law has now become a topic of barbeque conversations. Public anger has, in turn, brought previously arcane issues of international taxation onto the agenda of heads of government around the world.

Despite all the attention, however, issues of international income taxation are often not well understood. In this collection of essays, written over the past two decades, renowned tax expert Michael J. Graetz reveals how current international tax policy came into place nearly a century ago, critiques the inadequate principles still being used to make international tax policy, identifies and dissects the most prevalent tax avoidance techniques, and offers important suggestions for reform. This book is indispensable for anyone interested in international income taxation.

Praise for Follow the Money:

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May 25, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (2)

PolitiFact:  Hillary's Claims About Trump's Tax Returns Are 'Mostly False'

More On Canaries In The Law School Coal Mine

CanaryFollowing up on my previous posts on canaries in the law school coal mine:

Jeremy R. Paul (Dean, Northeastern), Saving the Canary, 66 Syracuse L. Rev. ___ (2016):

It’s hard not to admire Rick’s turn of phrase observing that law schools resemble the canary in the coal mine because downward pressure on tuition increases, with potentially harmful consequences, is hitting law schools just a few years ahead of when it will batter our partners around campus [Richard A. Matasar, The Canary in the Coal Mine: What the University Can Learn from Legal Education, 45 McGeorge L. Rev. 161 (2013)]. Yet faculty members throughout the country wonder why things seem suddenly out of control. ...

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May 25, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

Bird-Pollan:  Why Tax Wealth Transfers? A Philosophical Analysis

Jennifer Bird-Pollan (Kentucky), Why Tax Wealth Transfers? A Philosophical Analysis, 57 B.C. L. Rev. ___ (2016):

The one-hundredth anniversary of the estate tax provides an ideal moment to reflect on the role of wealth transfer taxation in the larger scheme of the U.S. tax system. Wealth and income inequality are at historically high levels, and the responses to these issues are often reduced to a simplistic political dichotomy of “right” versus “left.” The multitude of views of the American people cannot be reduced to such simple generalities without losing important nuances. This Article identifies three general categories of political philosophical viewpoints that are commonly endorsed by both politicians and everyday Americans, and then examines the current estate tax from within the perspective of those positions.

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May 25, 2016 in Scholarship, Tax | Permalink | Comments (1)

2d Annual Mid-Career Tax Professors Workshop Concludes At UC-Davis

UC Davis Logo (2016)Panel #5:  Issues in Enforcement and Inter-Governmental Relations

David Gamage (UC-Berkeley), Tax Cannibalization and Fiscal Federalism in the United States, 110 Nw. U. L. Rev. ___ (2016)
Commentator: Adam Rosenzweig (Washington University)

Dennis Ventry (UC-Davis), Stitches for Snitches: Lawyers as Whistleblowers, 50 U.C. Davis L. Rev. ___ (2017)
Commentator: Will Foster (Arkansas)

Darien Shanske (UC-Davis), State Fiscal Constitutions and the Common Law of Public Finance
Commentator: Jake Brooks (Georgetown)

Panel #6:  Insurance and Employee Benefits

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May 25, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On Perspectives On The Need For Tax Reform

Ways & Means (2016)The House Ways & Means Committee holds a hearing today on Perspectives on the Need for Tax Reform:

This hearing will focus on perspectives and considerations that drive the need for tax reform, in particular economic growth, business expansion and job creation, simplicity and burden reduction, and other key motivators. The hearing is part of the Subcommittee’s ongoing effort to lay the foundation for legislative action on comprehensive tax reform in 2017.

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May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

Former Tax Lawyer Jo Ann Rooney Named President Of Loyola Chicago

LoyolaJo Ann Rooney (J.D. 1987, Suffolk; LL.M. (Tax) 1991, Boston University), has been named the first lay President of Loyola University Chicago.  She worked as a tax lawyer for several years in the 1990s in Rhode Island and Massachusetts, before serving as CFO, COO, and in-house tax counsel for a financial services firm from 1994-2002.  She became President of Spalding University (2002-2010) and Mount Ida College (2010), and then worked in a variety of positions in the U.S. Defense Department (2011-2012) before becoming Managing Director of the Huron Consulting Group (Chicago) (2012-2016).

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May 25, 2016 | Permalink | Comments (0)

House Holds Hearing On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee held a hearing yesterday on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part I.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

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May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

House Holds Hearing Today On Protecting Small Businesses From IRS Abuse

Ways & Means (2016)The Oversight Subcommittee of the House Ways & Means Committee holds a hearing today on Protecting Small Businesses from IRS Abuse, Part II:

[T]he Subcommittee will hold a follow-up hearing to Protecting Small Businesses from IRS Abuse, where members examined how the Internal Revenue Service wrongly used its authority to seize taxpayer dollars and harm small businesses. Despite continued oversight, the Internal Revenue Service (IRS) and Department of Justice (DOJ) have failed to answer the Subcommittee’s questions about how they will help those who were hurt by the agencies’ former policies. At the hearing next week, Members will hear from people whose bank accounts were seized years ago and who are still trying to get their money back. Members will also hear from the IRS and DOJ about what the agencies are doing to address IRS abuse and help those who have been harmed by it.

Panel #1:

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May 25, 2016 in Congressional News, IRS News, Tax | Permalink | Comments (2)

The IRS Scandal, Day 1112

IRS Logo 2Washington Post, Republicans Detail Case Against IRS Chief in Hearing Democrats Call a Sham:

House Republicans on Tuesday reprised their probe into four-year-old missteps by the Internal Revenue Service, making a detailed case why Commissioner John Koskinen should be impeached in a colorful hearing that underscored conservatives’ suspicion of the agency.

The two-and-a-half hour hearing, on accusations that Koskinen lied under oath to lawmakers and flouted a congressional subpoena, also was a reminder of a bitterly divided Congress. Few Democrats showed up for the proceeding before the House Judiciary Committee, but those who did said Republicans were wasting taxpayers’ time and grandstanding on an old issue that would go nowhere.

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May 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, May 24, 2016

Morse:  Safe Harbors, Sure Shipwrecks

Safe HarborSusan C. Morse (Texas), Safe Harbors, Sure Shipwrecks, 49 U.C. Davis L. Rev. 1385 (2016):

In law, a safe harbor describes behavior that will not be penalized, and leaves other facts that fall outside the safe harbor to be judged case-by-case. A sure shipwreck, as I call it, is the mirror image. It describes behavior that violates the law as a matter of rule, and leaves other conduct to be judged by a standard. Prior literature analyzes rules and standards at length. But it has largely missed safe harbors and sure shipwrecks, even though these hybrids are everywhere in statutory, regulatory and case law.

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

Leff:  Tax Benefits Of Government-Owned Marijuana Stores

CannabisBenjamin M. Leff (American), Tax Benefits of Government-Owned Marijuana Stores, 50 U.C. Davis L. Rev. ___ (2016):

Over a year ago (March 7, 2015), a little store called the Cannabis Corner opened up in the small town of North Bonneville, Washington, about an hour by car from Portland, Oregon. The Cannabis Corner is the first marijuana store to be operated by a “public development authority,” an independent entity created by a state or local government. Public development authorities are generally exempt from federal income taxes under section 115 of the Internal Revenue Code. For a marijuana business, this exemption is especially valuable because section 280E of the Code currently prevents marijuana businesses from deducting many of the ordinary expenses other businesses regularly deduct, resulting in extremely high federal income taxes.

This Article is the first to address whether independent governmental affiliates that sell marijuana are exempt from federal income tax under section 115 of the Internal Revenue Code.

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

Airbnb, Other Peer-To-Peer Companies Pay Out Billions Beneath IRS’s Radar

ShortchangedFollowing up on yesterday's post, The Tax Code Is Out Of Step With Today's On-Demand Platform Economy:  Bloomberg, Airbnb, Others Pay Out Billions Beneath IRS’s Radar, Study Finds:

The IRS has been so slow to adapt to the rapidly emerging peer-to-peer economy that billions of dollars in taxable income a year are probably going unreported every year, according to a study being delivered to Congress this week.

More than 2.5 million Americans earned income via on-demand platforms like Airbnb Inc., Etsy Inc. and Lyft Inc. in 2014, and the companies generated an estimated $15 billion in revenues. But the companies don’t withhold taxes on the income they pay to people who provide services or sell items via their platforms.

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May 24, 2016 in Tax | Permalink | Comments (0)

Duff:  Four Alternatives To The Estate And Gift

David G. Duff (British Columbia), Alternatives to the Gift and Estate Tax, 57 B.C. L. Rev. ___ (2016):

Following the near death experience of the federal gift and estate tax in 2010, the hundredth anniversary of the tax represents an ideal moment to reflect on the role of this tax and whether an alternative approach might be more desirable and sustainable. This Article examines four prominent alternatives to the current tax: an annual wealth tax, taxing unrealized gains at death, including gifts and inheritances in income, and a lifetime accessions tax that would apply to the cumulative value of gifts and inheritances received by individuals over their lifetimes.

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

Trump Eschews Using Voter Analytics In His Campaign, Will Rely Instead On Personality, Rallies To Win Presidency

FiveThirtyEight, Trump’s Scorning Of Data May Not Hurt Him, But It’ll Hurt The GOP:

Big DataData doesn’t win elections; candidates do. Presumptive Republican nominee Donald Trump bet on that idea last week when he announced his plan to rely on his personality and rallies in the general election instead of collecting data on voters. Trump has a point: The effect of “big data” and improved analytics on elections is often overhyped. Even David Plouffe — the architect of President Obama’s 2008 and 2012 campaigns, the most data-savvy in history — agreed that Obama’s “data processing machine” was not responsible for his wins.

But Republicans are worried, and for good reason: Trump’s assumption that the sole value of data is to win more votes is too narrow. His decision to limit the role of data probably won’t be the deciding factor in the 2016 election, but data organization and access are an investment in the future of the party. A presidential campaign presents a rare opportunity to cultivate the next generation of talent and collect a ton of new data on voters, and Trump’s refusal to do so means that Republicans may need to wait until 2020 or beyond to even the playing field with Democrats. ...

Democrats now hold a substantial expertise advantage in digital data-driven campaigning, and the GOP admitted as much in their 2012 election post-mortem. John McCain hired only 15 data staffers in 2008, compared with Obama’s 131. To his credit, Mitt Romney increased the number of data hires to 87 in 2012. (Obama had 342). In 2016, Republicans were positioned to build on this effort and narrow the analysis gap between the parties, pivoting off of two consecutive losses into an innovative data strategy — just like in 1964 and 2004.

But Republicans seem set to squander the opportunity. Trump currently employs as few as two staffers dedicated to data, according to reports.

Chart 2

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May 24, 2016 in Political News, Tax | Permalink | Comments (5)

Above The Law Top 50 Law School Rankings

ATLAbove the Law, 2016 Top 50 Law School Rankings:

We welcome you to the fourth annual installment of the Above the Law Top 50 Law School Rankings. These are the only rankings to incorporate the latest ABA employment data concerning the class of 2015. The premise underlying our approach to ranking schools remains the same: that given the steep cost of law school and the new normal of the legal job market, potential students should prioritize their future employment prospects over all other factors in deciding whether and where to attend law school. The relative quality of schools is a function of how they deliver on the promise of gainful legal employment. 

The Top 10:

  1. Yale
  2. Stanford
  3. Chicago
  4. Penn
  5. Harvard
  6. Virginia
  7. Duke
  8. Northwestern
  9. Cornell
  10. UC-Berkeley

Methodology:

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May 24, 2016 in Law School Rankings, Legal Education | Permalink | Comments (6)

Senate Holds Hearing Today On Debt Versus Equity: Corporate Integration Considerations

Senate LogoThe Senate Finance Committee holds a hearing today on Debt versus Equity: Corporate Integration Considerations:

  • John Buckley (Former Chief Tax Counsel, House Ways & Means Committee)
  • Jody K. Lurie (Vice President, Janney Montgomery Scott (Philadelphia))
  • John McDonald (Partner, Baker & McKenzie (Chicago))
  • Alvin C. Warren, Jr. (Professor, Harvard Law School)

In connection with the hearing, the Joint Committee on Taxation has released Overview Of The Tax Treatment Of Corporate Debt And Equity (JCX-45-16):

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May 24, 2016 in Congressional News, Tax | Permalink | Comments (0)

Merritt:  Job Prospects For Doctors And Lawyers

Law and MedicineDeborah Jones Merritt (Ohio State), Doctors and Lawyers:

Medicine and law are highly regarded professions; talented students used to eagerly seek entry to both of these fields. But now applications to law schools are falling while those to medical schools are rising. What’s behind that phenomenon? Let’s take a look at employment trends in these two professions over the last forty years. ...

The Bureau estimates that the economy will generate 99,300 new jobs for doctors between 2014 and 2024, but just 43,800 for lawyers. The medical profession will add even more new jobs each year (9,930) than it did in the 1980’s (8,800). The number of new lawyering jobs, in contrast, will sink to just 4,380 positions per year. That’s less than a quarter of the positions added annually during the 1980’s and not much higher than the average number of jobs added between 2008 and 2014.

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May 24, 2016 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 1111

IRS Logo 2The House Judiciary Committee holds a hearing today on Examining the Allegations of Misconduct Against IRS Commissioner John Koskinen, Part I:

At the hearing, members of the House Judiciary Committee will examine the findings of the House Oversight and Government Reform Committee’s investigation of IRS Commissioner Koskinen. The House Oversight and Government Reform Committee has investigated the targeting of conservative groups for several years and many of the Committee’s members have found that Commissioner Koskinen failed to comply with a congressional subpoena which resulted in destruction of key evidence, made false statements during his sworn congressional testimony, and did not notify Congress that Lois Lerner’s emails were missing.

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May 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, May 23, 2016

Fast-Talking Dean Speeds Up Graduation Ceremony By Hitting 15 NPM (Names Per Minute)

Inside Higher Ed, When You Need a Fast-Talking Dean:

These days, many colleges and universities graduate so many people at a single commencement that the tradition of reading graduates' names is long gone. For smaller colleges, the tradition lives on. But many in the audience care only about the name of their child or loved one and lose patience waiting for those with names at the end of the alphabet.

Hamilton College may have found the perfect solution. Its dean of the faculty, Pat Reynolds, has been timed, and he reads the names of the nearly 500 graduates faster than any of his predecessors in the last 25 years. Hamilton knows this because an emeritus professor of biology, Ernest Williams, has been timing the reading of names for that long. And he certifies that Reynolds -- who some years gets in about 15 names a minute -- is far speedier than any of the five other deans Williams timed.

Dean Reynolds is good, but after sitting through my first Pepperdine outdoor graduation ceremony under the Southern California sun last Friday, I think John Moschitta has a real future as a commencement speaker:

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

Hayashi Reviews Marian's The State Administration Of International Tax Avoidance

Jotwell (Tax) (2016)Andrew Hayashi (Virginia), Putting a Face to International Tax Avoidance, JOTWELL (May 20, 2016) (reviewing Omri Marian (UC-Irvine), The State Administration of International Tax Avoidance, 7 Harv. Bus. L. Rev. ___ 2016)):

The world of international tax avoidance is a colorful one. There are the legal structures, with names like the “Double Irish Dutch Sandwich,” the exotic locales, like Bermuda and the Cayman Islands, and the identity crises presented by “hybrid” entities and financial instruments. But rarely does international tax avoidance have a human face and one could be forgiven for getting the impression that falling effective corporate tax rates are as inevitable as water flowing downhill. Corporations, acting in the interests of their shareholders, maximize their after-tax profits. States, acting in the best interests of their residents, set tax policies that are incongruous with the policies of other states. The “bad actors,” if there are any in this story, are corporate aggregates of one sort or another, multinational corporations and tax haven countries.

But the LuxLeaks scandal has given us one human face that stands out from the crowd of aggregates. This is the face of Marius Kohl or “Monsieur Ruling,” the former head of the Luxembourg agency, who gave rulings to taxpayers on the tax treatments of their proposed transactions. In The State Administration of International Tax Avoidance, Omri Marian does a wonderful job of explaining how this one bureaucrat acted to facilitate massive tax avoidance by engaging in “arbitrage manufacturing.” Marian argues that rogue individuals pose an ongoing threat to international tax cooperation. His paper clearly explains how arbitrage can be manufactured, documents how it was done in Luxembourg, and draws from the LuxLeaks episode an important lesson about the need to integrate micro reforms of tax administration into the macro project of international tax harmonization efforts. ...

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May 23, 2016 in Scholarship, Tax | Permalink | Comments (1)

Pomona College Adds Diversity As A Tenure Requirement

PomonaInside Higher Ed, Diversity as a Tenure Requirement:

Pomona College's faculty has voted to change the criteria for tenure to specifically require candidates to be "attentive to diversity in the student body."

While many colleges and universities encourage faculty members to support diversity efforts, and a few have encouraged tenure candidates to reference such work, Pomona's requirement may go farther in that it applies to all who come up for tenure. The faculty voted overwhelmingly this month to approve the change. At Pomona, the faculty controls the tenure criteria, so the vote is final, although there is a grandfather clause exempting those already in the tenure-review process.

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May 23, 2016 in Legal Education | Permalink | Comments (2)

Report:  The Tax Code Is Out Of Step With Today's On-Demand Platform Economy

KogodTax Policy Center, Kogod School of Business, American University,  Shortchanged: The Tax Compliance Challenges of Small Business Operators Driving the On-Demand Platform Economy

The last time Congress enacted substantial tax reform—in 1986—only 8.2% of American households owned personal computers. Today, more than 87% of American adults own a mobile phone and on-demand platforms like Uber, Etsy, Lyft, Airbnb, HomeAway, Amazon, and TaskRabbit have become household names by connecting businesses and consumers. Although millions of Americans are engaging in the on-demand platform economy every day as sellers and service providers, the tax compliance challenges this new frontier presents have gone relatively unnoticed. At the same time, these challenges will grow with this fastest growing segment of the labor economy— creating unnecessary and ongoing burdens for the small business operators who power the on-demand economy. 

This report, in keeping with the mission of the Kogod Tax Policy Center to conduct non-partisan research on tax issues specific to small businesses and entrepreneurs, identifies the tax compliance challenges the on-demand economy presents for its small business operators. Having spent more than a year investigating this growing problem, we report that:

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May 23, 2016 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Peter Thiel's Advice To Graduates: 'My Ambition To Be A Lawyer Was Less A Plan For The Future Than An Alibi For The Present'

Peter Thiel (Co-founder, PayPal), Commencement Address at Hamilton College (May 22, 2016):

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

Thank you so much for the kind introduction. It’s a tremendous honor to be here.

Like most graduation speakers my main qualification would seem to be that I am one of the few people who are even more clueless about what is going on in your lives than your parents and your professors.

Most of you are about 21 or 22 years old, you’re about to begin working. I haven’t worked for anybody for 21 years. But if I try to give a reason for why it makes sense for me to speak here today I would say it’s because thinking about the future is what I do for a living. And this is a commencement. It’s a new beginning. As a technology investor, I invest in new beginnings. I believe in what hasn’t yet been seen or been done.

This is not what I set out to do when I began my career. When I was sitting where you are, back in 1989, I would’ve told you that I wanted to be a lawyer. I didn’t really know what lawyers do all day, but I knew they first had to go to law school, and school was familiar to me.

I had been competitively tracked from middle school to high school to college, and by going straight to law school I knew I would be competing at the same kinds of tests I’d been taking ever since I was a kid, but I could tell everyone that I was now doing it for the sake of becoming a professional adult.

I did well enough in law school to be hired by a big New York law firm, but it turned out to be a very strange place. From the outside, everybody wanted to get in; and from the inside, everybody wanted to get out.

When I left the firm, after seven months and three days, my coworkers were surprised. One of them told me that he hadn’t known it was possible to escape from Alcatraz. Now that might sound odd, because all you had to do to escape was walk through the front door and not come back. But people really did find it very hard to leave, because so much of their identity was wrapped up in having won the competitions to get there in the first place.

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May 23, 2016 in Legal Education | Permalink | Comments (8)

2d Annual Mid-Career Tax Professors Workshop Kicks Off Today At UC-Davis

UC Davis Logo (2016)Panel #1:  Tax Administration

Susie Morse (Texas), Regulating by Example
Commentator: Emily Cauble (DePaul)

Sarah Lawsky (Northwestern), Picturing the Code
Commentator: David Gamage (Berkeley)

Will Foster (Arkansas), Uncoupling Competence
Commentator: Dennis Ventry (UC-Davis)

Panel #2:  International

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

Simkovic Presents What Can We Learn from Credit Markets At ALI

ALI Logo (2015)American Law Institute 93rd Annual Meeting:

[On] the last day of the Annual Meeting ... Young Scholar Medal Recipient Michael Simkovic of Seton Hall University School of Law presented What Can We Learn from Credit Markets. He opened with a quote from, Oliver Wendell Holmes from his address entitled The Path of the Law: “For the rational study of the law, the blackletter man may be the man of the present, but the man of the future is the man of statistics and the master of economics”:

My research uses economic analysis to explore how laws affect financial markets and how courts and regulators can use financial information to make legal and policy decisions. ...

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May 23, 2016 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

University of Iowa President Says Law School Enrollment Decline Has Stabilized At -30%

Iowa Logo (2016)Following up on my previous posts:

KCRG, University of Iowa President Weighs in Law School Enrollment:

Earlier this month, the University of Iowa College of Law graduated one of its smallest classes in recent memory, about 100 students.

That's nearly half of what it used to be more than four years ago. ...

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May 23, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1110

IRS Logo 2USA Today op-ed:  When Leaders Cheat, Followers ... Follow, by Glenn Reynolds (Tennessee):

The trust that underlies a law-abiding society is rotting away thanks to double-dealing in Washington.

The state is “a gang of thieves writ large,” economist Murray Rothbard is said to have remarked. I’ve always viewed that sort of comment with a bit of skepticism. But now I’m beginning to wonder.

I wonder more when I read things like this report from the Washington Examiner: “The CIA's inspector general is claiming it inadvertently destroyed its only copy of a classified, three-volume Senate report on torture, prompting a leading senator to ask for reassurance that it was in fact ‘an accident.’”

Here’s a hint: It very likely wasn’t.

Is that unfair? I mean, it could have been an accident, right? Yeah it could have been. But it wasn’t. Accidents like that just don’t happen — or, when they do, they’re generally not accidents. And it’s right for people who have custody of evidence to know that any convenient “accidents” will give rise to the presumption that they had something pretty awful to hide, and that they hid it.

But, of course, the CIA’s “accident” was only the latest in a long rash of “accidental” losses of incriminating information in this administration. The IRS — whose Tea Party-targeting scandal is now over 1,100 days old without anyone being charged or sent to jail — seems to have a habit of ”accidentally” destroying hard drives containing potentially incriminating evidence. It has done so in spite of court orders, in spite of Congressional inquiries and in spite of pretty much everyone’s belief that these “accidents” were actually the deliberate, illegal destruction of incriminating evidence to protect the guilty.

Then there’s Hillary’s email scandal, in which emails kept on a private unsecure server — presumably to avoid Freedom of Information Act disclosures — were deleted. Now emails from Hillary’s IT guy, who is believed to have set up the server, have gone poof.

“Destroy the evidence, and you’ve got it made,” said an old frozen dinner commercial. But now that appears to be the motto of the United States government.

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May 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, May 22, 2016

Symposium:  Legal Education In A Time Of Change

UNLV Logo (2016)Symposium, Legal Education in a Time of Change: Challenges and Opportunities,  16 Nev. L.J. 143-274 (2015):

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May 22, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (4)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper new papers debuting on the list at #4 and #5:

  1. [372 Downloads]  The Panama Papers and Tax Morality, by Usman W. Chohan (University of New South Wales)
  2. [327 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  3. [264 Downloads]  New Prominence Of Tax Basis In Estate Planning, by Paul L. Caron (Pepperdine) & Jay A. Soled (Rutgers)
  4. [161 Downloads]  How Income Taxes Should Change during Recessions, by Zachary D. Liscow (Yale) & William A. Woolston (Stanford)
  5. [151 Downloads]  The Missing Tax Benefit of Donor-Advised Funds, by John R. Brooks (Georgetown)

May 22, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Late To The Ball:  Finding My (Tennis) Bliss

LateWall Street Journal:  A Sport for Life, Learned Late,  by Jason Gay:

Gerry Marzorati, author of the new book Late to the Ball, is trying to prove an avid tennis fan can become a successful tennis player in his mid-50s and beyond.

I don’t want to give the impression that Late to the Ball is a hardcore tennis book. Well, it sort of is: If you love tennis, you will geek out at Marzorati’s travels to supercamps, stroke gurus, and the Jedi-sounding United States Tennis Congress. But at its heart, Late to the Ball is a soulful meditation on aging, companionship and the power of self-improvement. I know that sounds like the kind of cheesy thing people say on the cover of book jackets. But it’s really true.

“The book was an opportunity to ponder these questions,” said Marzorati, a well-regarded writer and editor who retired last year from the New York Times, an adorable community newspaper which I believe publishes several times a week. Immersing himself in tennis, he said, was a way to test if it was possible, later in life, to “really fall in love with something—something you didn’t think was going to happen again.”

This is a common life crossroads, the author believes. Marzorati gave an example: former President George W. Bush’s recent immersion in oil painting. “I completely understand what he’s doing,” Marzorati said. “I know what he’s thinking, how much pleasure it gives him, and that he really wants to get better at it.”

I, too, picked up tennis in my mid-50s when I left Cincinnati for Pepperdine.  But I have found my tennis bliss and can now compete with the best Pepperdine faculty players, but not from "tennis gurus" or "supercamps."   This 2-minute video harkens back to John Wooden's life lesson about the importance of properly tying your sneakers and changed my (tennis) life:

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May 22, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1109

IRS Logo 2The Maddow Blog:  Republicans Get Serious About Impeachment, But Not Obama’s, by Steve Benen:

Quick quiz: when was the last time the U.S. Congress actually impeached an appointed executive branch official? It was 1876 – 140 years ago – when the House impeached Ulysses S. Grant’s War Secretary, William Belknap, over corruption allegations.

Nearly a century and a half later, House Republicans appear eager to give Belknap some company. The Washington Post reported yesterday:

Rep. Jason Chaffetz (R-Utah) introduced a resolution on Wednesday to censure IRS Commissioner John Koskinen, raising the stakes in the GOP war against the tax collector days before a hearing on whether to impeach him.

The four-page resolution seeks Koskinen’s resignation or removal by President Obama and calls on the IRS chief to forfeit his federal pension.

Chaffetz, the far-right chairman of the House Oversight Committee, explained in a statement yesterday, “I view censure as a precursor to impeachment.” He added a few weeks ago, “My foremost goal is impeachment and I’m not letting go of it.”

No, of course not. That might be responsible.

By any sane metric, the idea of congressional impeachment against the IRS commissioner is bonkers. House Republicans are apparently still worked up about an IRS “scandal” that doesn’t exist, and though Koskinen wasn’t even at the agency at the time of the alleged wrongdoing, GOP lawmakers want to impeach him because they disapprove of his handling of the imaginary controversy. ...

[G]iven the fact that Koskinen hasn’t actually committed any impeachable offenses, it’s hard not to get the impression that many House Republicans want to impeach someone, anyone, just for the sake of being able to say they impeached someone. ...

I continue to believe much of this is borne of partisan frustration: Republican investigations into Benghazi and other manufactured “scandals,” including the IRS matter itself, have effectively evaporated into nothing. That’s deeply unsatisfying to GOP hardliners, who remain convinced there’s Obama administration wrongdoing lurking right around the corner, even if they can’t see it, find it, prove it, or substantiate it any way.

Unwilling to move on empty handed, impeaching the IRS chief will, if nothing else, make Republican lawmakers feel better about themselves.

But that doesn’t change the fact that this partisan tantrum is indefensible. Koskinen took on the job of improving the IRS out of a sense of duty – the president asked this veteran public official to tackle a thankless task, and Koskinen reluctantly agreed. For his trouble, Republicans want to impeach him, for reasons even they’ve struggled to explain.

It’s ridiculous, even by the low standards of this Congress.

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May 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, May 21, 2016

This Week's Ten Most Popular TaxProf Blog Posts

The 10 Most-Cited Tax Faculty

Brian Leiter (Chicago) has updated his ranking of the Ten Most-Cited Tax Faculty to now cover the 2010-2014 period (2009-2013 data here):

Rank

Tax Prof

Citations

Age

1

David Weisbach (Chicago)

420

53

2

Michael Graetz (Columbia)

410

72

3

Reuven Avi-Yonah (Michigan)

360

59

4

Daniel Shaviro (NYU)

350

59

5

Lawrence Zelenak (Duke)

310

58

6

Leandra Lederman (Indiana)

300

50

7

Edward Zelinsky (Cardozo)

280

66

8

Victor Fleischer (San Diego)

270

45

9

Edward McCaffery (USC)

260

58

10

Joseph Bankman (Stanford)

230

61

Leiter also lists four highly-cited scholars who work partly in tax:

Rank

Tax Prof

Citations

Age

1

Louis Kaplow (Harvard)

1150

60

2

Brian Galle (Georgetown)

380

44

3

Kristin Hickman (Minnesota)

360

46

4

Mark Gergen (UC-Berkeley)

280

60

In our article, Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83, 120-22 (2006), Bernie Black (Northwestern) and I examined the Top 25 tax faculty as measured by SSRN downloads, a practice I update monthly on TaxProf Blog.  Five of the most-cited tax faculty (Avi-Yonah, Fleischer, Kaplow, Shaviro, Weisbach) also are five of the most-downloaded tax faculty.

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May 21, 2016 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Small Bar Prep Company Files $50 Million Antitrust Action Again BARBRI, 11 Law Schools

LogosWall Street Journal, Bar Prep Company Accused of Boxing Out Smaller Rival:

The nation’s largest bar exam-prep company is facing allegations that it elbowed a smaller rival out of the market, capitalizing on special relationships with law schools that it had nurtured with donations and gifts.

BARBRI and several [11] law schools [Cardozo, Columbia, Duke, Emory, Fordham, Georgetown, Harvard, NYU, St. John's, UC-Berkeley, USC] were named in a federal antitrust lawsuit brought by LLM Bar Exam, a company that prepares foreign lawyers to sit for the bar exam in the United States. The complaint, which was filed in Manhattan on Thursday, alleges an illegal monopoly and asks for $50 million in damages. ...

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May 21, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1108

IRS Logo 2Forbes:  IRS Commissioner's Smidgen Of Impeachment, by Robert W. Wood:

The House Judiciary Committee meets May 24, 2016 to consider IRS Commissioner John Koskinen. As Don Corleone said to the Heads of the Five Families, “How did things ever get so far?“ President Obama was less than convincing with his famous “not even a smidgen of corruption” remark about the IRS to Fox News in 2014. There were just some folks down at the IRS who were “confused” about how to implement the law governing tax-exempt groups. “Confused” sounded better than the one about the rogue IRS employees in Cincinnati. 

Now, House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT) introduced House Resolution 737 to censure IRS Commissioner Koskinen. The resolution offers Congressional condemnation and disapproval for what it claims is the IRS Commissioner’s pattern of conduct. It says that is inconsistent with the trust and confidence placed in him as an Officer of the United States. The resolution formally censures Mr. Koskinen, urges his resignation or removal, and even requires him to forfeit all rights to his government pension and other federal benefits. ...

This has been a long battle. Indeed, Chairman Chaffetz and 51 members of Congress sent a letter to President Obama in July of 2015 calling for the IRS Commissioner’s removal. On October 27, 2015, Chairman Chaffetz introduced H.J. Res. 494  to begin proceedings to impeach Koskinen. Referred to the House Judiciary Committee, it currently has 69 co-sponsors. The Committee even released a video with a timeline of key events in the IRS targeting scandal.

House Republicans still want action. Some of the anti-IRS movement is arguably due to the seething animosity some Republicans still have over the targeting, and the way the IRS chief handled it. A raft of scandals involving the IRS, poor and even evasive responses to Congress, bungled approaches to security, and a seeming diffidence to the public and concerned legislators have not won the IRS any friends. For Republicans, the IRS Commissioner has been a lightning rod. ...

Despite all the hoopla, Commissioner Koskinen is still probably safe. In the meantime, Republicans have pushed to pass laws slashing IRS power. President Obama has said he will veto bills that cut back on IRS budgets or power. Supporters say that the goal of such laws is to help improve customer service, prevent fraud, and ensure taxpayer dollars are being spent appropriately.

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May 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, May 20, 2016

Congratulations, Pepperdine Law School Class of 2016!

Graduation

May 20, 2016 in Legal Education | Permalink | Comments (2)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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

Weekly Student Tax Note Roundup

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May 20, 2016 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Fordham Symposium:  We Are What We Tax

Fordham Law ReviewSymposium, We Are What We Tax, 84 Fordham L. Rev. 2413-2753 (2016):

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

Ten Ways To Tell You May Be Sitting Next To An Economist On An Airplane

PassengersThe Economist, Ten Ways to Tell You Might be Sitting Next to an Economist:

An academic economist was taken off a plane last week after a fellow passenger became suspicious. He was feverishly scribbling what she thought was "terrorist code" or foreign lettering into a notebook. It turned out that Guido Menzio, an Italian economist from the the University of Pennsylvania, was working on some differential equations for a model on menu costs and price dispersion. Thankfully, Mr Menzio was allowed back on his flight. But passengers can't be too careful. Here are ten ways to tell you might be sitting next to an economist; police have also released pictures of two prime suspects (see above). 

1. He refuses to listen to the safety announcement because "in the long run, we're all dead" ...

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May 20, 2016 in Legal Education | Permalink | Comments (2)

McGinnis:  The Case Against Disclosing Presidential Candidates’ Tax Returns

John O. McGinnis (Northwestern), The Case Against Disclosing Candidates’ Tax Returns:

I have previously expressed very substantial reservations about Donald Trump’s candidacy, but decline to join in the criticism about his refusal to release his tax returns. While a norm has developed suggesting that citizens have a right to see tax returns of presidential candidates and indeed candidates for some other offices, it is a bad norm. It invades privacy, discourages some people from entering politics, distracts from policy issues, and harms the prospects of those with complex financial affairs. ...

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May 20, 2016 in Tax | Permalink | Comments (2)

Too Many Lawyers? Report Faults Firms For Resisting Layoffs

American Lawyer LogoAmerican Lawyer, Too Many Lawyers? Report Faults Firms for Resisting Layoffs:

Should law firm leaders be firing more lawyers? That seems to be the takeaway of a report released Wednesday by the legal consultancy Altman Weil.

Nearly 60 percent of the 356 law firm leaders surveyed for the report said that overcapacity is hurting their firm’s profitability. The problem is more pronounced among firms with 250 lawyers or more, with 75.6 percent of them citing overcapacity as a drag on profits, the report said.

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May 20, 2016 in Legal Education | Permalink | Comments (8)