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Tuesday, June 24, 2014

Hoffer & Walker: Kuretski, the Tax Court, and the Administrative Procedure Act

HWResponding to Sunday’s op-ed by Patrick Smith and Monday's op-ed by Kristin Hickman on Friday’s D.C. Circuit opinion in Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014):  TaxProf Blog op-ed:  Kuretski, the Tax Court, and the Administrative Procedure Act, by Stephanie Hoffer (Ohio State) & Christopher J. Walker (Ohio State):

Friday’s decision in Kuretski v. Commissioner is perhaps the first major opinion penned by Judge Sri Srinivasan—a recent Obama appointee considered by many to be on the short list for the Supreme Court.  In a well-written opinion, the D.C. Circuit rejects a constitutional challenge to the President’s removal power of judges on the United States Tax Court.  To reach this conclusion, the court has to grapple with the Tax Court’s puzzling position in the modern administrative state, concluding that the Tax Court is not an Article III (judicial branch) court but a court established under Article I (legislative branch) that actually exercises Article II (executive branch) powers.  Or as Judge Srinivasan writes (at 20) for the court:

We have explained that Tax Court judges do not exercise the ‘judicial power of the United States’ pursuant to Article III.  We have also explained that Congress’s establishment of the Tax Court as an Article I legislative court did not transfer the Tax Court to the Legislative Branch.  It follows that the Tax Court exercises its authority as part of the Executive Branch.

No doubt many tax and administrative law professors will weigh in on the constitutional issues (early coverage here, here, and here).  Here, however, we focus on Kuretski’s impact on the relationship between the Tax Court and the Administrative Procedure Act (“APA”).  Patrick Smith, for instance, worries that Kuretski could open the door for the argument that “APA judicial review provisions simply do not apply in Tax Court proceedings.”  But we agree with the contrary position reached by Kristin Hickman (Minnesota) and write separately to show our math for this conclusion. 

At the outset, it is important to underscore that Smith’s worry is already a reality.  As we explain in a forthcoming paper, The Death of Tax Court Exceptionalism, 99 Minn. L. Rev. ___ (2014), the Tax Court has declared that “[t]he APA has never governed proceedings in the Court (or in the Board of Tax Appeals).”  In other words, the Tax Court refuses to apply the APA’s default standard (abuse of discretion) and scope (administrative record) of review.  Instead, it considers the default in both contexts to be de novo, and only departs from de novo review when it determines that the Internal Revenue Code suggests more deferential review.

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June 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Kuretskis' Counsel Responds to Smith and Hickman Op-eds on Treating the Tax Court as Part of the Executive Branch

SamahonResponding to Sunday’s op-ed by Patrick Smith and Monday's op-ed by Kristin Hickman on Friday’s D.C. Circuit opinion in Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014):  TaxProf Blog op-ed:  Kuretskis' Counsel Responds to Smith and Hickman Op-eds on Treating the Tax Court as Part of the Executive Branch, by Tuan Samahon (Villanova; Counsel for Peter and Kathleen Kuretski):

I am one of the professors who serve as counsel for the taxpayers, the Kuretskis.  I wanted to comment on the op-eds by Patrick Smith and Kristin Hickman on the possible consequences of the D.C. Circuit’s opinion from last Friday.

First, Patrick Smith expresses concern that the Tax Court may not be able to conduct Administrative Procedure Act court review of the IRS if the Tax Court, now according to the Kuretski opinion, exercises executive power.  Professor Hickman is skeptical of this effect of the opinion. She notes that congressional statutory definitions may not always jibe with constitutional ones. 

Neither of their op-eds, though, included the following passage from the opinion showing what the panel thought about potential collateral consequences on other laws.  Judge Srinivasan wrote:

And while we have no need to reach the issue here, Congress, in establishing those entities [i.e., the Article I Tax Court and the Article I Court of Appeals for the Armed Forces] as a “court” rather than an “agency,” perhaps also exempted them from statutes that apply solely to executive “agencies.” Cf. Megibow v. Clerk of the U.S. Tax Court, No. 04- 3321, 2004 U.S. Dist. LEXIS 17698, at *13-22 (S.D.N.Y. Aug. 31, 2004) (Tax Court is a “court of the United States” and not an “agency” under the Administrative Procedure Act, 5 U.S.C. § 551(1)), aff’d, 432 F.3d 387 (2d Cir. 2005) (per curiam).  [slip op. at 26]

This dictum seems to lean toward Professor Hickman’s view.

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June 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Law Profs React to Steve Bainbridge: 'Law Teaching Is Walking Off a Cliff and Nobody Seems to Give a Damn'

These law profs react to yesterday's post, Bainbridge: 'The Profession I Love--Law Teaching--Is Walking Off a Cliff and Nobody Seems to Give a Damn'

  • Steve Bainbridge (UCLA)
  • Andy Grewal (Iowa)
  • Jeff Harrison (Florida)
  • Doug Kahn (Michigan)
  • Michael Livingston (Rutgers)
  • Henry Manne (George Mason)
  • Jim Maule (Villanova)
  • Ted Seto (Loyola-L.A.)
  • Tom Smith (San Diego)
  • Daniel Sokol (Florida)

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June 24, 2014 in Legal Education | Permalink | Comments (5)

The IRS Scandal, Day 411

IRS Logo 2Real Clear Politics:  Halperin on IRS Scandal: If This Was A GOP Admin, "This Story Would Be A National Obsession":

Mark Halperin:  Because when any government agency, particularly one as powerful as the IRS, engages in something that even people sympathetic to the admission says looks weird and suspicious, it's incumbent on all of the national media to aggressively ask more questions. The Republicans in Congress are asking questions. I think with a different administration, one that was a Republican administration, this story would be a national obsession, and, instead, it's getting coverage here and a few other places. But it deserves a lot more questions.

Washington Post op-ed by Jonathan Turley (George Washington):

As federal agencies have grown in size and scope, they have increasingly viewed their regulatory functions as powers to reward or punish citizens and groups. The Internal Revenue Service offers another good example. Like the patent office, it was created for a relatively narrow function: tax collection. Yet the agency also determines which groups don’t have to pay taxes. Historically, the IRS adopted a neutral rule that avoided not-for-profit determinations based on the content of organizations’ beliefs and practices. Then, in 1970, came the Bob Jones University case. The IRS withdrew the tax-exempt status from the religious institution because of its rule against interracial dating on campus. The Supreme Court affirmed in 1983 that the IRS could yank tax exemption whenever it decided that an organization is behaving “contrary to established public policy” — whatever that public policy may be. Bob Jones had to choose between financial ruin and conforming its religious practices. It did the latter.

There is an obvious problem when the sanctioning of free exercise of religion or speech becomes a matter of discretionary agency action. And it goes beyond trademarks and taxes. ... When agencies engage in content-based speech regulation, it’s more than the usual issue of “mission creep.” As I’ve written before in these pages, agencies now represent something like a fourth branch in our government — an array of departments and offices that exercise responsibilities once dedicated exclusively to the judicial and legislative branches. Insulated from participatory politics and accountability, these agencies can shape political and social decision-making. To paraphrase Clausewitz, water, taxes and even trademarks appear to have become the continuation of politics by other means.

Real Clear Politics op-ed:  An Arrogant and Lawless IRS, by Michael Gerson:

Noted management expert and IRS Commissioner John Koskinen was apparently called out of retirement -- like the Ted Williams of evasive, unapologetic bureaucrats -- to destroy what is left of his agency's credibility. ...

In recent congressional testimony, Koskinen admitted that the emails were irretrievably gone; that the "backup tapes" had been erased; and that Lerner's hard drive was apparently destroyed in an aggressive act of recycling. With that settled, Koskinen expressed his "hope that the investigations ... can be concluded in the very near future."

It is a mix of arrogance and delusion that seems designed to incense Republicans. Koskinen had delayed informing Congress of the lost emails for months, even while assuring members they would be provided. "It was my decision that we complete the investigation," he said, "so we could fully advise you as to what the situation was." Translation from management-speak: We wanted to get our story straight before we advised you of anything. Koskinen complained about the breadth of subpoenas and the "piecemealing out" of information.

Translation: We will provide you what we want when we want. "Every email," Koskinen assured the House Ways and Means Committee, "has been preserved that we have." Except the ones they don't have -- and somehow snuffed out, tied to an anvil and thrown into the ocean. ...

[T]he IRS has managed to feed anti-government sentiments by inhabiting anti-government stereotypes. It has undermined respect for authority. And it doesn't seem even to understand the damage it has done.

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June 24, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, June 23, 2014

WSJ: Odds Improve for New Law Grads

Following up on Friday's post, NALP: Law Grads Continue to Struggle to Find Jobs:  Wall Street Journal, Big Law Firms Resume Hiring; Odds Improve for New Graduates, Though Levels Remain Soft, by Jennifer Smith:

Entry-level hiring at major law firms is ramping back up from the recession-era doldrums. But students with their hearts set on a job at a big firm still face plenty of competition. The class of 2013 was the largest crop yet, releasing 46,776 graduates into a job market already awash with unemployed lawyers.

The chances of landing a job at a large law firm have improved from the hiring nadir a few years back, when sputtering demand for legal services triggered layoffs and cutbacks. Of class-of-2013 law graduates working in private practice about nine months after graduation, 20.6% landed a job at a firm with more than 500 lawyers, according to the National Association for Law Placement. Such positions accounted for 16.2% of law-firm jobs held by 2011 graduates. But the total number of such jobs taken by the class of 2013 remains far lower than for the class of 2009: 3,980 positions compared with 5,156.

The employment outlook for new lawyers is expected to brighten some over the next few years, as plunging law-school enrollments will ease the glut of new graduates—"the pig working its way through the snake," in the words of one law-firm manager. Of 2013 graduates, 64.4% had jobs for which bar passage was required, according to the NALP, and 51.1% of employed graduates were working in private practice.

For now, the hiring picture at major firms varies widely. This fall, the group of first-year associates joining New York's elite Cravath, Swaine & Moore LLP will be about the same size as the starting class from 2009. "I would say we're back," said William Fogg, managing partner of the firm's corporate department.

Roughly 20 big law firms, including WilmerHale, have boosted the size of their first-year class since 2009, according to Chambers Associate, a legal publication aimed at law students. "The trend indicates recovery, but we are very unlikely to see hiring at prerecession levels any day soon," said Antony Cooke, the guide's editor. Indeed, other firms have ratcheted back their starting and summer classes as much as 50% over the same time period.

WSJ

June 23, 2014 in Legal Education | Permalink | Comments (1)

Tamara Ashford, Awaiting Senate Confirmation as Tax Court Judge, Named Acting Assistant Attorney General for the Tax Division

AshfordOn June 6, Eric Holder named Tamara W. Ashford Acting Assistant Attorney General for the Tax Division.  Ms. Ashford was the Deputy Assistant Attorney General for Appellate and Review in the Tax Division.  She was nominated by President Obama in September 2013 to be a a Judge on the U.S. Tax Court and is awaiting confirmation by the Senate following her unanimous approval by the Senate Finance Committee

June 23, 2014 in Tax | Permalink | Comments (0)

WSJ: Offshore Accounts: What to Do Now Before FATCA Kicks in on July 1?

Wall Street Journal Tax Report:  Offshore Accounts: What to Do Now, by Laura Saunders:

The federal government's campaign to track down money held by U.S. taxpayers in foreign countries shifts into high gear July 1.

That is when the main provisions of the Foreign Account Tax Compliance Act, known as Fatca, come into force.

The law, which Congress passed in 2010, is pushing tens of thousands of foreign banks and other financial institutions to disclose information about U.S. customers. It will make life more complex and expensive for many U.S. taxpayers with financial ties abroad, affecting everything from retirement savings to investments to divorce settlements.

WSJ

"Fatca is an ambitious effort to root out wealthy U.S. taxpayers hiding money offshore and put an end to tax evasion as a profitable line of business for banks," says Michael Graetz, a Columbia University law professor and former top U.S. Treasury Department official. "But U.S. authorities need to make an effort to avoid catching innocent middle-class citizens in its net." ...

[M]ore than 77,000 banks and other financial firms abroad have agreed, effective July 1, to report data on U.S. accounts, including 784 in Singapore, 13 in Albania and four in Chad.

WSJ 2

Until then, here is a rundown of issues you need to know about—whether you are a U.S. citizen living or working abroad, a foreign citizen working in the U.S., a U.S. resident with assets abroad or a green-card holder living abroad.

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June 23, 2014 in Tax | Permalink | Comments (0)

University of Oxford Hosts Conference Today on Tax Competition and BEPS

OxfordThe Oxford University Centre for Business Taxation hosts a conference today on Tax Competition and BEPS.  United States Tax Profs presenting papers include:

  • Alan Auerbach (UC-Berkeley), Fundamental Issues in the Allocation of Profit
  • Dhammika Dharmapala (Illinois), What is the Scale of Base Erosion and Profit Shifting?: "The issue of tax-motivated income shifting within multinational firms – or “base erosion and profit shifting” (BEPS) – has attracted increasing global attention in recent years. This paper provides a survey of the empirical literature on this topic. Its emphasis is on reviewing and elucidating what is known about the magnitude of BEPS. It begins by outlining a simple conceptual framework that helps to clarify aspects of governments’ responses to the BEPS phenomenon and the potential role of the initiative on BEPS currently being undertaken by the OECD. The paper then discusses different empirical approaches to identifying income-shifting, describes existing data sources, and summarizes the findings of the empirical literature. A major theme that emerges from this survey is that in the more recent empirical literature, which uses new and richer sources of data, the estimated magnitude of BEPS is typically much smaller than that found in earlier studies. The paper seeks to provide a framework within which to conceptualize this magnitude and its implications for policy. It concludes by highlighting the importance of existing legal and economic frictions as constraints on BEPS, and by discussing possible ways in which future research might model these frictions more precisely."
  • Michael Graetz (Columbia), Prospects for Successful Multilateral Agreements 

June 23, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Hickman: Kuretski v. Commissioner: A Fun and Fascinating Bit of Academic Folderol?

Hickman 2014 2Following up on yesterday's op-ed on Friday's D.C. Circuit opinion in Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014):  TaxProf Blog op-ed:  Kuretski v. Commissioner: A Fun and Fascinating Bit of Academic Folderol?, by Kristin Hickman (Minnesota):

For decades, the Supreme Court and nearly everyone else have regarded statutory for cause removal provisions as protecting government officials from presidential influence.  The D.C. Circuit was never going to turn that understanding on its head by finding Tax Court judges impermissibly influenced by the for cause removal provision of 26 U.S.C. § 7443(f).  Still, in Kuretski, the D.C. Circuit managed to turn a creative but relatively specious argument into an opportunity to say something fun and academically interesting, if ultimately not too practically consequential, about the Tax Court and separation of powers principles.

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June 23, 2014 in Tax | Permalink | Comments (0)

Bainbridge: 'The Profession I love--Law Teaching--Is Walking Off a Cliff and Nobody Seems to Give a Damn'

Stephen Bainbridge (UCLA), How Not to Win Friends and Influence People at a Law Professor Conference:

Announce that empirical legal scholarship is the dumbest idea in the legal academy in the last 20 years. And that most law & PhD. folks are only in law for the law school paychecks. As I just did. Yikes. ...

The shift towards "Law and [fill in the blank with a PhD field]" has been a problem for a long time and a major factor in the separation of the legal academy from the profession and the bench. In today's environment, that trend is unsustainable. We are, after all, in the business of training LAWYERS who will spend their time practicing law not running regressions. ...

I see the profession I love--law teaching--walking off a cliff and nobody seems to give a damn. And, yes, that makes me angry.

Usha Rodrigues (Georgia), The "Law and" Question:

I'm not singing Steve's tune, but I will hum a few bars. ...

In the comments to his post Steve laments that "the legal academy is not producing scholarship that is relevant to the bench and bar or that our graduates (especially at the T14 schools) are coming out of school better versed in theory than professional skills."  This is a problem.  Even than for the general law prof, for  "Law and"s I  think that practice is vital.

To put it bluntly, Harvard/Yale/Chicago/Columbia/Stanford can hire whoever they want, because they're in the business of pedigreeing elite students.  They can hire professors who haven't practiced law and who  write about theoretical topics.  It doesn't effect their students' job prospects.   All the other law schools have lemming-like followed their lead, accepting without question that the way up the USN&WR rankings is to look as much like possible as the T5.  That worked fine during boom times, but in this legal market, it  seems a lot like walking off a cliff.

June 23, 2014 in Legal Education | Permalink | Comments (17)

The IRS Scandal, Day 410

PolitiFact:  Donna Brazile: No Conspiracy Here, IRS Targeted Liberals, Too:

Half True 2The IRS "also investigated liberal groups, groups that had progressive in their name. ... The IRS was basically looking at everybody." Donna Brazile on Sunday, June 22nd, 2014 in comments on CNN's "State of the Union." ...

Brazile is echoing comments Democrats have made for a year. But is she right and the IRS was "basically looking at everybody"?

This question was essentially answered last year by the Treasury Inspector General for Tax Administration, who investigated the IRS’s handling of tax exempt requests between 2010 and 2012. ...

The investigation ultimately found the Cincinnati office used inappropriate criteria to single out certain cases. Over the course of two years, 298 total cases were sent to D.C. for greater scrutiny. According to the investigation, 72 of those groups had the name "tea party," 13 had "Patriot" and 11 had "9/12." The other 202 cases were listed as "other." In 160 of these cases, the application remained open between 206 and 1,138 days, while 108 were approved.

Democrats said 202 is a lot of "other." And later it came out that the word "progressive" was also used to flag applications on another IRS "Be on the Lookout" list.

George also noted that while 16 groups with "progressive" in the name showed up among the 298 cases, that represented just 30 percent of all "progressive" applications. That is in stark contrast to groups with "tea party," "patriot," or "9/12" in their name, of which 100 percent saw their applications held up. ...

So some progressive and liberal groups may have been flagged, and others may have ended up getting swept in the searches run by the Cincinnati office because their names had certain buzz words or phrases, but they didn’t get put through the ringer, at least on par with tea party groups.

Our ruling

Brazile, who did not respond to an email, said the IRS was "looking at everybody" including liberal groups and progressive groups. Yes, some progressive groups did have their tax-exempt status applications flagged as the IRS reviewed whether nonprofit groups were engaging in political activities.

But it wasn’t to the same degree as tea party and other conservative groups, nor did it result in the same actions. The list targeting tea party groups resulted in delayed processing that in some cases lasted almost three years and inquiries into their donors. Further, the inspector general found tea party groups were systematically singled out as part of an office-wide effort, while progressive groups were not.

Weighing all of this, we rate Brazile’s comments Half True.

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June 23, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, June 22, 2014

Using Altmetrics to Measure the Impact of Faculty Scholarship

AltmetricsI am heading back to San Diego after three great days at the 24th Annual Conference for Law School Computing at Harvard Law School.  In my talk on Friday, I argued that "blogs and social media can play a meaningful role in developing a faculty member's scholarly 'brand' and that current primitive methods for ranking faculty scholarship -- reputation, publications, citations, and downloads -- need to be augmented by more sophisticated faculty performance analytics in the coming 'big data' revolution."  In a presentation yesterday,  Katie Brown (Charlotte) explored some of those alternative metrics in Are The Scientists on to Something With Altmetrics? New Tools for Assessing and Tracking Scholarly Impact:

As scientific authors and researchers vie for tenure and funding they are including altmetrics to their CV's and tenure packets. Why the inclusion? They feel these alternative metrics disclose the full impact their work has with their colleagues, students and the public. Altmetrics, a term first coined in a tweet, involves "the creation and study of new metrics based on the Social Web for analyzing and informing scholarship". Often, altmetrics are providing tangible evidence of what is read, discussed, saved and recommended, as well as cited, in a particular area. They are also diverse in product, platform and audience. Products include articles, datasets, software, blogs, videos, and more. Some platforms are institutional repositories and online communities where the audience is going to be beyond the academy and include practitioners, clinicians and the general public. Scientists in growing number are providing this data to demonstrate their value in the profession and I believe these metrics will allow law librarians to do the same thing. Many law librarians are already online participating in scholarly conversations through blogs, SSRN, comments and Tweets. Why not track it so you can show others the valuable digital footprint you left behind? Additionally, altmetrics instruction may also be a valuable service that we can provide to our primary users.

Katie's PowerPoint slides are available here, and the video of her talk will be posted here by the end of the month.  In the meantime, check out these presentations on altmetrics (click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate):

 

June 22, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

Smith: Reflections on Kuretski's Holding That the Tax Court Is Part of the Executive Branch

SmithTaxProf Blog op-ed: Reflections on Kuretski v. Commissioner, by Patrick J. Smith (Ivins, Phillips & Barker, Washington, D.C.):

In Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014), a unanimous panel of the D.C. Circuit rejected a challenge to a Tax Court decision that was based on the argument that the power given to the President by section 7443(f) of the Internal Revenue to remove Tax Court judges for “inefficiency, neglect of duty, or malfeasance in office” is a constitutionally impermissible infringement on the judicial power exercised by the Tax Court.  The D.C. Circuit held that this removal power does not violate the constitutional separation of powers between the executive branch and the judiciary because, in the D.C. Circuit’s view, the Tax Court is part of the executive branch.

This holding undoubtedly has many significant consequences beyond the specific issue in the case.  One very worrisome potential implication is the effect this holding could have on the application of the judicial review provisions of the Administrative Procedure Act when the Tax Court in deficiency proceedings is considering a challenge by a taxpayer to the validity of IRS action such as the issuance of regulations.  The APA judicial review provisions (5 U.S.C. §§ 701 to 706) apply when a court reviews agency action. 

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June 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

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 on SSRN, with a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [243 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)
  2. [221 Downloads]  The Real Problem with Carried Interests, by Heather Field (UC-Hastings)
  3. [192 Downloads]  A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act, by Samuel Eisenberg (Stanford), Michael Wara (Stanford), Adele Morris (Brookings Institution), Marta Darby (Stanford) & Joel Minor (Stanford)
  4. [171 Downloads]  Sales Suppression as a Service (SSaaS) & the Apple Store Solution, by Richard Ainsworth (Boston University)
  5. [128 Downloads]  The Relationship between China's Tax Treaties and Indirect Transfer Antiavoidance Rules, by Qiguang Hardy Zhou (Baker & McKenzie, Shanghai City, China)

June 22, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 409

IRS Logo 2Tax Analysts Blog:  The Coverup Is Usually Worse Than the Crime, by Christopher Bergin:

[D]o we have a coverup at the IRS? Has a crime been committed? I don’t know. What I do know is that I am deeply disturbed by all this.

Maybe it’s just sloppy record-keeping, which would be bad enough. Most of the government’s business is now conducted digitally, and those records need to be properly handled. Or is it worse? Is the IRS deliberately keeping things from the public? Excuse my cynicism, but the IRS’s penchant for secrecy is what led Tax Analysts, using the new Freedom of Information Act, to sue the agency in the 1970s to force it to release private letter rulings. There have been several subsequent lawsuits to pry records that should have been public out of the agency’s hands. ...

[T]he real problem here is that the IRS can’t make this story go away, and that starts smelling like a coverup. I know tax professionals who are now starting to think the worst and who are having trouble getting behind the IRS. And I am one of them. ...

The exempt organization issue is now more than just fodder for conservative blogs. The IRS and the Treasury Department need to start being square with the American people and their Congress. Even if you hate the IRS -- and I do not -- a wounded and compromised tax collector (whether or not most of its wounds are self-inflicted) does no good for the country.

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

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June 22, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, June 21, 2014

Johnson: Reflections on United States v. Clarke

Johnson (Steve)TaxProf Blog op-ed:  Reflections on United States v. Clarke, by Steve R. Johnson (Florida State):

On June 19, the Supreme Court decided United States v. Clarke, 2014 WL 2765284, vacating & remanding  517 Fed. Appx. 689 (11th Cir. 2013).  Clarke involves the ability of a party challenging an IRS summons to obtain an evidentiary hearing to probe whether the IRS issued the summons in bad faith.  Unique among the circuits, the 11th Circuit’s position was that even a bare allegation of bad faith was sufficient to entitle the taxpayer or other target to a hearing at whether it could question IRS officials about their motives.  In an opinion authored by Justice Kagan, the Supreme Court rejected that view, holding instead that the taxpayer/target is entitled to a hearing only “when he points to specific facts or circumstances plausibly raising an inference of bad faith.”  *2.

The outcome of the case isn’t a surprise.  A unanimous Court needed only a short opinion (operatively only four pages) to dispose of the view of the outlier circuit.  But if powerhouse college football and basketball programs sometimes schedule “breather” games against East Podunk State, perhaps the Supreme Court too is allowed occasionally to pencil in an easy one.

To say that the result of Clarke is unsurprising, however, does not imply that the decision is bereft of significance.  I offer eight thoughts below.

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June 21, 2014 in Scholarship, Tax | Permalink | Comments (0)

Burk: Are English PhDs (and JDs) 'Underused' Rather Than 'Overproduced'?

The Faculty Lounge:  Self-Delusion Spreads from Professional to Graduate Education; Consternation Curiously Absent, by Bernard A. Burk (North Carolina):

I want to be clear at the outset:  I love literature.  I was an English major, and I’ve never regretted it for a moment.  I seriously considered pursuing a Ph.D. in English.  I could not have a deeper faith in the liberal arts as a path to the betterment of all mankind.

So imagine my dismay at some recent reportage in the Chronicle of Higher Education.  Graduate programs in languages and literature are suffering troubles all too familiar to the readers of these pages:  In these straitened times, the tenure-track academic appointments for which a doctoral degree is the traditional and necessary preparation are available for only about 60% of the recipients of doctorates in language or literature (a number chillingly reminiscent of the 56%-57% of the last two law-school graduating classes who managed to find a full-time, long-term job requiring a law license within 9-10 months of graduation, though when you exclude school-funded and self-employed positions as well as a few other confounders and irrelevancies, that number is closer to 53%).  The Modern Language Association (a trade group for college and graduate educators and scholars in language and literature analogous to AALS) recently released a report conceding “[w]e are faced with an unsustainable reality.”

The solution?  Simple—dismiss the “reality” as “wrong”:

"The discourse of Ph.D. overproduction is wrong," said Russell A. Berman, who led the task force that wrote the report and is a professor of comparative literature and German studies at Stanford University. "What we need instead is a broadened understanding of career paths.” 

As the Chronicle explains, the MLA believes that language and literature departments should urge upon students considering graduate degrees

what else they could do with a language or literature Ph.D.  Career options off the tenure track . . . include teaching at community colleges and high schools, working at cultural institutions such as heritage museums and libraries, and putting skills to use in the private sector.  "The subject matter may, in fact, be far from literature," Mr. Berman said, "but the rich professional formation acquired during the course of doctoral study can be put to good use.”

The Chronicle also reports that the MLA “is taking a stance similar to the American Historical Association, whose executive director has said that history Ph.D.’s are not being overproduced but underused.”

If you’re feeling a certain frisson of déjà vu, you don’t need a doctorate in French to understand why.  The MLA appears to be arguing that you should pursue a doctorate in language or literature (median time to completion nine years, by the way) because it will make you a better high school teacher.  If you think this is silly, you’re right.  If you think this is silly, but still believe that people unsure of their desire to practice law or do something clearly and directly law-related should attend law school because (as comp lit Prof. Berman put it to the Chronicle) “the rich professional formation acquired during the course of [law] study” is (as I lampooned it in a past post) “ideal preparation for any line of work, a thoughtful life, the vicissitudes of holy matrimony, Monty Python’s Argument Clinic, or the searching examination that can be expected from St. Peter when the matriculant finally reaches the pearly gates,” you are engaging in the kind of wishful thinking that would earn your contempt if you observed it in a colleague or a student. ...

The fact that a doctorate in English, or a law degree, will provide its holders with thoughts or perspectives on unrelated work uncommon for others without their benefit does not mean that someone would rationally pursue either (or both, given that they’re apparently both ideal preparation for everything) in order to secure work unrelated to the discipline studied. ...

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June 21, 2014 in Legal Education | Permalink | Comments (1)

The Unexpected Ceasefire in Washington’s Tax Wars

New York Times:  The Unexpected Ceasefire in Washington’s Tax Wars, by John Harwood:

[I]n the wake of the “fiscal cliff” deal between President Obama and Congress as 2012 turned into 2013, which restored the Clinton-era top rate, Washington has hit the pause button. 

“We’ve reached sort of a stasis,” said Senator Charles Schumer of New York, a Democrat who serves on the Finance Committee. “No one’s totally content with it, but they’re willing to let it lay there.”

The reasons are partly practical. The fiscal cliff deal materialized only because the looming expiration of all President Bush’s tax cuts forced Congress to act. House Republicans can block any new Democratic effort to raise rates; President Obama can veto any Republican effort to cut them.

But philosophical shifts have also played a role. In the Tea Party era, Mr. Norquist said, concern about debt and deficits has given spending reduction a “coequal” place with tax-cutting in Republican economic theology.

Increasing attention to income inequality has also sent some party intellectuals looking away from supply-siders’ longstanding focus on cutting marginal tax rates. “Having substantially cut top tax rates in the 1980s, our potential gains from fighting on the tax rate battlefield are now diminished,” read the tax chapter in Room to Grow, a recent report by the conservative Young Guns Network.

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June 21, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 408

IRS Logo 2

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June 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 20, 2014

Weekly Tax Roundup

 Weekly Roundup

June 20, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Roundup

June 20, 2014 in Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

June 20, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill concludes today with these papers as part of its Research Collaboration Symposium Part II:

Panel #6:  Reducing Inequality: Tax Avoidance and Capital Flight

  • Ofer Sitbon (PhD Candidate, College of Law & Business, Tel Aviv), Moderator
  • James Henry (Tax Justice Network), Kleptocracy and Human Rights
  • Stephen Cohen (Professor, Georgetown University), Does Swiss Bank Secrecy Violate International Human Rights?
  • Brigitte Alepin (Partner, Agora Fiscalité), The Foundation
  • Steven Dean (Professor, Brooklyn Law School), A Tax Regime to Catalyze Social Enterprise Crowdfunding
  • Lee Sheppard (Journalist, Tax Analysts) and John Christensen (Director, Tax Justice Network), Discussants

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June 20, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Caron Presents Law Professor Blogs Network 2.0: One Year Later Today at Harvard

I am presenting The Law Professor Blogs Network 2.0: One Year Later at Harvard Law School today as part of the 24th Annual Conference for Law School Computing:

LPBN LogoThe Law Professor Blogs Network is the nation's only network of legal blogs edited primarily by law professors. The network owns and operates over fifty legal blogs, edited by leading scholars and teachers who are committed to providing the web destination for law professors, practitioners, government and nonprofit lawyers, legal information professionals, and students in their respective fields. Since the launch of TaxProf Blog on April 15, 2004, the network’s influence has continued to grow. At last year's CALI Conference, I unveiled a major re-design of the network, intended to provide the premier legal blogging platform to our editors. The re-design was intended to (1) optimize each blog for viewing across a variety of platforms (desktop, laptop, tablet, and smart phone); (2) better integrate social media; (3) provide more robust analytics with richer and more accurate readership data; and (4) strengthen our partnership with Wolters Kluwer Law & Business/Aspen Publishers and provide additional avenues for monetization. This presentation will explore the progress that the network has made toward these goals over the past year and explain planned future innovations.  In addition, I will argue that blogs and social media can play a meaningful role in developing a faculty member's scholarly "brand" and that current primitive methods for ranking faculty scholarship -- reputation, publications, citations, and downloads -- need to be augmented by more sophisticated faculty performance analytics in the coming "big data" revolution. 

Update:  Enjoying a post-presentation dinner in Harvard Square with Jim Smith (Georgia), Jennifer Martin (St. Thomas), Jeff Lipshaw (Suffolk), and Mark Heffner (Roger Williams):

Photo

June 20, 2014 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

Brophy: Law School Rankings: Median LSAT, Full-Time J.D. Required Jobs, and Law Review Citations

Alfred L. Brophy (North Carolina), Ranking Law Schools with Lsats, Employment Outcomes, and Law Review Citations:

This paper returns to the perennially favorite topic of ranking law schools. Where U.S. News & World Report includes a wide variety of factors – some of which are criticized as irrelevant to what prospective students care about (or should care about) -- this paper looks to three variables. They are median LSAT score of entering students, which seeks to capture the quality of the student body; the percentage of the graduating students who are employed at 9 months following graduation at full-time, JD required jobs; and the number of citations to each school’s main law review. This paper rank orders each of those variables, then averages those ranks to obtain a new ranking; then it compares those new rankings to the U.S. News & World Report rankings.

Brophy

Alfred L. Brophy (North Carolina):  Ranking Law Schools Based on LSAT, Employment Outcome, and Citations

June 20, 2014 in Law School Rankings, Legal Education | Permalink | Comments (10)

ABA Approves Separation of Penn State-Dickinson Into Two Separate Law Schools

Penn State Logo (2013)The ABA yesterday approved the separation of Penn State-Dickinson into two independent law schools.

June 20, 2014 in Legal Education | Permalink | Comments (0)

NALP: Law Grads Continue to Struggle to Find Jobs

NALP New LogoNALP, For Second Year in a Row New Grads Find More Jobs, Starting Salaries Rise — But Overall Unemployment Rate Rises with Historically Large Graduating Class

Despite two years of growth in the number of jobs obtained by law school graduates, the overall employment rate for new law school graduates fell for the sixth year in a row, to 84.5%. Even though the total number of jobs obtainedby this class was somewhat higher than the number of jobs obtained by the previous class, and the number of employment opportunities funded by law schools increased, the Class of 2013 was also bigger, resulting in the employment rate for the Class of 2013 falling, but by just 0.2 percentage points from the 84.7% rate for the Class of 2012.

NALP 1

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June 20, 2014 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 407

IRS Logo 2

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June 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, June 19, 2014

Florida State Symposium: One-Hundred Years of the Federal Income Tax

Florida State logoSymposium, One-Hundred Years of the Federal Income Tax, 41 Fla. St. U. L. Rev. 1-289 (2013):

June 19, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Rosenzweig: An Antigua Gambling Model for the International Tax Regime

Adam Rosenzweig (Washington University), An Antigua Gambling Model for the International Tax Regime, 44 Wash. U. J.L. & Pol'y 79 (2014):

The international tax world is facing a defining moment. While there is little agreement on anything within the field, there appears to be a growing consensus that the modern international tax regime — the so-called flawed miracle emerging from World War II — is irrevocably broken. As the countries of the world confront the challenges facing the international tax regime in the next century, new models for an institutional framework for international tax become increasingly crucial to its success. While significant progress has been made in developing underlying norms to serve as the basis for a modern international tax regime, less focus has been paid to building the institutions and structures necessary to implement these norms. To this end, this Essay proposes looking to the recent experience of the WTO in the Antigua Gambling case as a model for a new institutional framework for the new international tax regime. The Essay then proposes three potential ways to do so: (1) the creditable gross-withholding tax method, (2) the extraterritorial excise tax method, and (3) the WTO cross-retaliation method.

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June 19, 2014 in Scholarship, Tax | Permalink | Comments (0)

George & Yoon: The Labor Market for New Law Professors

Tracey E. George (Vanderbilt) & Albert Yoon (Toronto), The Labor Market for New Law Professors, 11 J. Empirical Legal Stud. 1 (2014) (more here):

Law school professors control the production of lawyers and influence the evolution of law. Understanding who is hired as a tenure-track law professor is of clear importance to debates about the state of legal education in the United States. But while opinions abound on the law school hiring process, little is empirically known about what explains success in the market for law professors. Using a unique and extensive data set of survey responses from candidates in the 2007-2008 legal academic labor market, we examine the factors that influence which candidates are interviewed and ultimately hired by law schools. We find that law schools appear open to non-traditional candidates in the early phases of the hiring process but when it comes to the ultimate decision — hiring — they focus on candidates who look like current law professors.

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June 19, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

IRS-TPC Research Conference: Advancing Tax Administration

TPC-IRSThe IRS and Tax Policy Center are hosting a research conference today on Advancing Tax Administration with these presentations and papers (webcast):

Opening

  • Welcome:  Eric Toder (Co-Director, Tax Policy Center), Rosemary Marcuss (Director, Office of Research, Analysis & Statistics, IRS)
  • Opening Remarks:  John Koskinen (Commissioner, IRS)

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June 19, 2014 in Conferences, Tax | Permalink | Comments (0)

Off to the CALI Conference at Harvard

CALI 2I am spending the next three days at the 24th Annual Conference for Law School Computing at Harvard Law School. The theme of this year's conference is "The Next Wave":

CALI has been around for over 30 years. In that time, it has pioneered technology in legal education and in applications that improve access to justice and has worked with the innovators and early adopters in those fields. And now, excitingly, the next wave is here. Technology isn’t just something for hard core Teknoids. It’s become accessible and accepted in the law school and legal environments.

We know that you need to be looking out for the next wave. Much like waves constantly coming into shore, waves of change are constantly hitting legal education. How you approach them matters. To some people they may feel like tsunamis that are going to destroy everything and their inclination is to run and hide from them. Some people are going to hold fast and then be gradually eroded away and altered by the constant wave action. And some people are going to want to swim out to meet the waves and ride in on them on a surf board.

I will be attending many of the wonderful sessions, as well as a meeting of the CALI Board of Directors (on which I serve as President).  CALI is doing important work on a variety of projects for faculty, including A2J Author, Classcaster, eLangdell, Free Law Reporter, InstaPoll, Lawdibles, Legal Education Commons, LibTour, MediaNotes, and Webinars and Online Courses, in addition to their bread and butter CALI lessons for students (Jim Maule has produced over 250 tax lessons, which I highly recommend).  In many ways, this is my favorite conference of the year, as it is the only gathering of law school faculty, librarians, and IT folks.  I am looking forward to reconnecting and breaking bread with friends in all three spheres.

June 19, 2014 in Conferences, Legal Education | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill continues today with these papers as part of its Research Collaboration Symposium Part I:

Panel #1:  Setting the Stage

  • William Stephenson (Editor in Chief, McGill Law Journal), Moderator
  • Kim Brooks (Dean, Schulich School of Law, Dalhousie University), Why Justice Matters for Tax Policy
  • Ignacio Saiz (Executive Director, Center for Economic and Social Rights), The Evolving Norms and Standards of Human Rights
  • Allison Christians (Professor, McGill Faculty of Law), Who Has Rights, What Rights, and Against Whom?

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June 19, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

5th Annual National Business Law Scholars Conference at Loyola-L.A

Loyola-L.A. Logo (2013)The 5th Annual National Business Law Scholars Conference kicks off today at Loyola-L.A.  The full schedule is here.

June 19, 2014 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 406

IRS Logo 2PrawfsBlawg:  IRS: "Sorry, Can't Produce" or a Bad Example of Hiding the Ball?, by Naomi Goodno (Pepperdine):

If this issue arose in federal court, under FRCP 26, parties are required at the outset to submit a "discovery plan" that includes how electronically stored information ("ESI") will be retained and exchanged in order to prevent unnecessary expense and waste. The FRCP requires the parties to take reasonable steps to preserve relevant ESI (a litigation hold) or face possible sanctions. Under Rule 37's so-called safe harbor provision, however, "absent exceptional circumstances, a court may not impose sanctions ... for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system." The IRS is hanging its hat on this safe harbor rule by arguing that, despite a good-faith effort, the emails were lost. Did the IRS, in fact, make a good faith effort?

While there is confusion among the courts on how to apply the good faith standard, there is precedent for a court to monetarily sanction the IRS if the court found that the IRS acted negligently when it lost the emails. The court would also have the authority to issue an adverse inference instruction (inferring that the lost evidence would have negatively impacted the IRS's position), if it determined that the IRS acted grossly negligent or willful.

An important fact which will probably be discussed during the next few hearings is whether the IRS violated its own electronic information retention policy. The IRS was put on notice of the investigation last year, and so had a duty to put a litigation hold on the emails at that time (the very essence of what "good faith" means). It seems that the general IRS retention policy of ESI was six months (although now it is longer), but emails of "official record" had to have a hard copy which would never be deleted. Whether these emails constituted an "official record" is hard to determine since Lerner won't testify to their content.

Even assuming the emails were lost before a litigation hold could be placed (or despite a litigation hold being in place), at the very minimum, it seems "good faith" means that the IRS should have notified Congress in February that it lost the emails. Rule 26 would have required Congress to do so. Indeed, such notice would have brought this issue to the forefront and could have saved a lot of money - the money it apparently has already cost to piece together some of the emails, and the money it will cost as the parties argue over whether the IRS negligently or willfully destroyed evidence. If the IRS had been upfront from the beginning, then subpoenas could have been issued months ago to other agencies who, as employers of the lost email recipients, might have copies of the missing emails.

If this discovery issue had arisen in federal court, the IRS would have likely been subject to monetary sanctions and possibly an adverse inference instruction. Shouldn't the IRS be held to these standards?

The Volokh Conspiracy:  The Missing 18 1/2 Minutes: Presidential Destruction of Incriminating Evidence, by Dave Kopel:

If one can imagine a modern-day President Frank Underwood, the lesson he might draw from the story of the 18 1/2 minute gap is that brazen destruction of highly incriminating evidence is the wisest political strategy. Even when the claim about how the evidence was destroyed was obviously false, there may be enough members of the President’s own party who will continue to look the other way, as long as they are not presented with a smoking gun. President Underwood might remember that Alexander Haig went on to become Secretary of State under Ronald Reagan. President Underwood might also tell the public that, as with Richard Nixon, many of his opponents were cynical partisan zealots. Like the mainstream media, anti-Nixon partisans had paid scant attention when Nixon’s predecessor, Democrat Lyndon Johnson, engaged in many of the same crimes and abuses as did Nixon. By the end of Johnson’s term in 1968, he was getting a lot of criticism from the press and from his own party for the Vietnam War, but not for his domestic violations of the U.S. Constitution and the U.S. Code.

In a two-party system, it is likely that the energy for investigations of a President of one party will come from the other party. Among the heroes of the story are the men like Baker, Richardson, and Ruckelsaus, who at a time when the Constitution was in danger, put the national interest above partisan interest.

Washington Post:  Democrats Should Want a Special Prosecutor for the IRS Scandal, by Ed Rogers:

In light of the Friday announcement that the IRS has lost an “untold” number of e-mails from Lois Lerner and six other IRS employees, it is safe to assume Lerner interrupted her taxpayer-funded retirement to hop on a cocktail table somewhere and do a fistpump. And you can bet there were high-fives at the Justice Department and thinly disguised giggles and thumbs-up at the White House.

The audacity of this takes stonewalling to a whole new level. It used to be that if you wanted to “stonewall,” you would just keep quiet. But this administration’s cronies will plead the fifth, conveniently not find evidence, drag their feet, shrug, cry partisanship and expect people to just get over it. ...

The corrosive effect of this diminishes America’s legal authority and makes for bad politics for the Democrats in November. How can the Democrats defend these “lost” e-mails? Who in a competitive 2014 race can keep a straight face and say they believe this president’s claims? If I were a Democrat, I would take Ways and Means Committee Chairman Dave Camp’s (R-Mich.) good advice and support a special prosecutor. It is the only way for Democrats to put distance between themselves and this grotesque violation of the public trust. 

They say where there’s smoke, there’s fire. Well, this is more than just a little smoke – Washington is choking on it. Democrats should want the political cover of supporting the appointment of a special prosecutor. They will need protection from the guffaws, disgust and outright retribution that will follow this scandal to the ballot box in November.

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June 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, June 18, 2014

Six Underreported Aspects of the Revised ABA Law School Accreditation Standards

Following up on Sunday's post, ABA Releases Revised Law School Accreditation Standards, Protocol for Reporting Placement Data:  Matt Leichter, Top 6 Underreported Changes to the ABA Accreditation Standards:

ABA Logo 2Just about all of the coverage has been on two topics: (a) the council’s decision to disallow course credit for paid externships, and (b) the rule allowing up to 10 percent of a law school’s entering class to forgo the LSAT under certain circumstances. I have nothing to add about the paid externship rule, but the LSAT requirement will be number one on the list. So…

  1. The 10 percent LSAT rule is not open ended
  2. Death to the full-time faculty calculation
  3. Goodbye dusty reporters in the library
  4. Hello office-sharing for professors
  5. No more [university] taxation without documentation
  6. Dishonor before death

June 18, 2014 in Legal Education | Permalink | Comments (0)

The Effect of CEO Narcissism on Corporate Tax Policies

Kari Joseph Olsen (University of Southern California, Marshall School of Business) & James Stekelberg (University of Arizona, Eller College of Management), CEO Narcissism and Corporate Tax Policies:

NarcissismWe examine the effect of CEO narcissism on corporate tax policies. Narcissism is a multifaceted personality trait associated with a propensity to cheat and engage in questionable behavior. Narcissists feel that they are above the law and are aggressive in pursuing what they believe is theirs. Narcissists also take more risks than do others and possess heightened sensitivities to the rewards of risk taking. Consistent with these predictions regarding the behavioral tendencies of narcissistic individuals, we document a positive association between CEO narcissism and various measures of corporate tax avoidance and tax risk. Our study contributes to the literature by documenting a setting in which the individual personality characteristics of the CEO can impact firm-level tax policies.

June 18, 2014 in Scholarship, Tax | Permalink | Comments (1)

2nd National Symposium on Experiential Education in Law

National Law Journal, Legal Educators Plot the Future of Real-World Learning:

AllianceExperiential learning is all the rage in law school, but legal educators are struggling to figure out how best to integrate such real-world training into their curricula and develop closer ties with the profession to advance the trend.

The Alliance for Experiential Learning in Law brought together 150 legal educators from 75 law schools last week to discuss what’s taking place right now and how best to expand the movement [agenda; handouts]. They gathered at Elon University School of Law in Greensboro, N.C., for three days to plot a course, and heard from educators in other professions about how they have advanced real-world learning.

“This is not just about clinical legal education,” Elon dean Luke Bierman said in his opening remarks. “This is not just about externships. It’s not just about simulations in classrooms. It’s about how to move all these things in a particular way, and how to think about how it fits into the enterprise of legal education and the goals we have for our students.”

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June 18, 2014 in Conferences, Legal Education | Permalink | Comments (0)

Judge Kroupa Retires From Tax Court

KroupaU.S. Tax Court Judge Diane L. Kroupa, whose 15-year term was scheduled to end on June 12, 2018, has retired from the Tax Court as of June 16, 2014.  She is 59 years old.  From her court bio:

B.S.F.S. Georgetown University School of Foreign Service, 1978; J.D. University of South Dakota Law School, 1981. Prior to appointment to the Court, practiced tax law at Faegre & Benson in Minneapolis, MN. Minnesota Tax Court Judge from 1995 to 2001 and Chief Judge from 1998 to 2001. Attorney-advisor, Legislation and Regulations Division, Office of Chief Counsel and served as attorney-advisor to Judge Joel Gerber, United States Tax Court, 1984-1985.

(Hat Tip: Ann Murphy.)

June 18, 2014 in Tax | Permalink | Comments (1)

22 Notable Corporate Tax Articles of 2013

Tax Analysys Logo (2013)Jordan M. Barry (San Diego), Karen C. Burke (Florida) & Monica Gianni (Florida), A Brief Review of Corporate Tax Articles of 2013, 143 Tax Notes 1314 (June 16, 2014):

June 18, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill kicks off today with these papers by emerging scholars:

Panel A:  Samuel Singer (Associate, Stikeman Elliott), Moderator

Leyla Ates (PhD Candidate, University of Wisconsin and Inonu University, Turkey), Developing Countries and Globalization of Tax Law Making: Turkish Tax Law Reforms on Fighting Tax Evasion
Steven Dean (Professor, Brooklyn Law School), Discussant

Montano Cabezas (LLM Candidate, Georgetown University Law Center), Giving Credit Where it is Due: Rethinking the Corporate Tax Paradigm
Kim Brooks (Dean, Schulich School of Law, Dalhousie University), Discussant 

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June 18, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tax Analysts Hosts Conference Today on U.S. State Tax Considerations for International Tax Reform

TA 2Tax Analysts hosts a roundtable discussion on U.S. State Tax Considerations for International Tax Reform at the Ronald Reagan Building (1300 Pennsylvania Ave.) today at 9:00 - 11:00 a.m. EST in Washington, D.C.:

OECD officials leading the international tax reform project can learn much from the experience of state tax practitioners. The panel, comprising both state and international tax experts, will examine how the lessons learned by U.S. states can help shape the debate on international tax reform. Practitioners will also share their insight into how international tax rules may affect state tax positions.

  • Peter A. Barnes (Of Counsel, Caplin & Drysdale)
  • Christopher E. Bergin (President and Publisher, Tax Analysts) (moderator)
  • Joe Huddleston (Executive Director, Multistate Tax Commission)
  • Stephen P. Kranz (Partner, McDermott, Will & Emery)

June 18, 2014 in Conferences, Tax, Tax Analysts | Permalink | Comments (0)

The IRS Scandal, Day 405

IRS Logo 2USA Today op-ed:  Obama's Double Asterisks on IRS, by Glenn Harlan Reynolds (Tennessee):

I guess it's time to award President Obama a second asterisk. When charges came out that the IRS targeted Tea Party groups for harassment, the Wall Street Journal's James Taranto started calling Obama "President Asterisk." His point was that this illicit assistance tainted the election, the way an athlete's use of illegal performance-enhancers results in an asterisk on any records he sets.

Now it may be time for another asterisk. As Congress investigates the IRS chicanery, the IRS has responded to a request for emails to and from Lois Lerner, who spearheaded the Tea Party harassment, by saying, basically, that the dog ate its homework. Or, rather, the IRS claims, somewhat dubiously, that "a hard drive crash" on Lerner's computer led to the loss of emails to outside entities "such as the White House, Treasury, Department of Justice, FEC, or Democrat offices." You know, the very people she's accused of coordinating her harassment with.

With those emails missing, it'll be harder to prove whether Lerner's Tea Party harassment might have been at the behest of other wrongdoers, perhaps going as high as the Oval Office itself. But since government agencies seldom "lose" evidence that makes them look good, reasonable people might suspect that there's a cover-up going on. After all, nobody thought that the famous "18½ minute gap" on Richard Nixon's White House tapes contained anything positive about White House involvement in Watergate. ...

Targeting Americans is unforgivable; covering it up is worse, and if the IRS has made it impossible to target the individuals responsible, then the IRS as a whole should pay the price. That's not an ideal solution, but such misbehavior should not go unpunished.

Los Angeles Times:  The IRS Email Scandal: Where's the Outrage?, by Jonah Goldberg:

Congressional investigators are fuming over revelations that the Internal Revenue Service has lost a trove of emails to and from a central figure in the agency's tea party controversy."

That's the opening sentence of the Associated Press' story on the IRS' claim that it lost an unknown number of emails over two years relating to the agency's alleged targeting of political groups hostile to the president.

But note how the AP casts the story: The investigators — Republican lawmakers — are outraged. 

Is it really so hard to imagine that if this were a Republican administration, the story wouldn't be the frustration of partisan critics of the president? It would be all about that administration's behavior. With the exception of National Journal's Ron Fournier, who called for a special prosecutor to bypass the White House's "stonewalling," and former CBS correspondent Sharyl Attkisson, it's hard to find a non-conservative journalist who thinks this is a big deal.

Wall Street Journal editorial:  IRS Contempt of Congress:  The Agency Now Admits It Didn't Fully Comply With Subpoenas:

The IRS is now telling Congress that it has lost the emails of no fewer than seven IRS employees central to the targeting of conservative nonprofits, though that's only half the outrage. There's also the IRS's quiet admission that it has spent most of the past year willfully defying Congress.

After informing Congress on Friday that it can't find two years of email from former Director of Exempt Organizations Lois Lerner, House Ways and Means Chairman Dave Camp revealed Tuesday that the IRS can't produce records for six more employees whose hard drives also supposedly failed. These six happen to have been central to the IRS crackdown on conservative groups, and the lost emails were sent when the targeting took place, including in 2010 and 2011. The six include Nicole Flax, former chief of staff to former IRS Commissioner Steven Miller. ...

[T]he IRS has from the start been picking and choosing which of Ms. Lerner's emails it deigned to show Congress. And it did so despite knowing that Congress wanted everything. This IRS filter has delayed the investigation and denied Congress access to important information.

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June 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 17, 2014

Wealthy Clintons Use Residence Trusts to Limit Estate Tax They Back

Bloomberg:  Wealthy Clintons Use Trusts to Limit Estate Tax They Back, by Richard Rubin:

TrustBill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston. “The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.” ...

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June 17, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (2)

Medtronic Launches $43 Billion Covidien Buyout to Beat Possible Tax Inversion Ban

Record Numbers of Americans Are Renouncing Their U.S. Citizenship

Wall Street Journal, Expatriate Americans Break Up With Uncle Sam to Escape Tax Rules; Record Numbers Living Abroad Renounce U.S. Citizenship over IRS Reporting Requirements:

Chart1,001 U.S. citizens and green-card holders had renounced their allegiance in the first three months of the year, according to Andrew Mitchel, a lawyer in Centerbrook, Conn., who analyzes Treasury Department data. That figure puts 2014 on track to top last year's total of 2,999 renunciations, he said, which was the most since the government began disclosing the data. 

Helping boost the exodus, experts say, is a five-year-old U.S. campaign to hunt for undeclared accounts held by Americans abroad. Since 2009, the government campaign has collected more than $6 billion in taxes, interest and penalties from more than 43,000 U.S. taxpayers. Federal prosecutors have filed more than 100 criminal indictments, including the high-profile case of Beanie Babies inventor Ty Warner, who last year pleaded guilty to tax evasion involving secret Swiss bank accounts.

The tax dragnet has also swept up many middle-income Americans living abroad, prompting some to give up their U.S. citizenship. While people who renounce aren't freed of taxes due for past years, they don't want to risk sizable taxes and penalties for them and their children in the years ahead, experts say. Nearly 8,000 taxpayers have renounced U.S. citizenship in the past five years, Mr. Mitchel found, compared with fewer than 5,000 in the preceding decade. ...

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June 17, 2014 in Tax | Permalink | Comments (3)

Law Prof Lip Sync Battle


Check out this video of en epic lip sync battle with New Mexico 3L Thomas "Ty" Wood and law profs George Bach, Alex Ritchie, and Kevin Tu:

 

Note to Jimmy Fallon:  book these guys.  (Hat Tip:  Phil Bohl.)

June 17, 2014 in Legal Education | Permalink | Comments (2)