TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, September 17, 2015

More Bar Exam Carnage?

The IRS Scandal, Day 861

IRS Logo 2Real Clear Politics, Descent Into Lawlessness, by Victor Davis Hanson (Stanford):

In the eight-plus since the [Scooter] Libby trial, the Obama administration has blown up the law as we have known it for centuries. ...

Just as scary is the application of the law on the basis of the perceived politics of a suspect.

IRS bureaucrat Lois Lerner was exposed as a rank partisan whose office gave particular scrutiny to would-be tax-exempt groups deemed opponents of Obama's re-election efforts. She invoked the Fifth Amendment and refused to testify before a congressional committee about her actions at the IRS. Lerner has never been indicted.

Almost everything former Secretary of State Hillary Clinton has stated about her improper use of a private email account and server has been proven false. A State Department staffer who worked on Clinton's private server plans to invoke the Fifth Amendment to avoid testifying before a congressional committee about his role in privatizing Clinton's email.

But like Lerner, Clinton has escaped an indictment or jailing.

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September 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, September 16, 2015

Milligan Presents A Reset For The Child Tax Benefit System Today At Toronto

MilliganKevin Milligan (British Columbia) presents A Reset for the Child Tax Benefit System at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

There is a logical foundation for differential treatment of families with children under our tax system. However, trying to make good on this principle of special tax treatment for children has resulted in overwhelming complexity. For example, a family in British Columbia in 2012 had to assess its eligibility for ten separate child-focused tax measures. These benefits cross paths, conflict and confuse. The way forward, I suggest, is to rationalize the cornucopia of credits into one delivery method (I propose a refundable tax credit), to remove overlap by consolidating existing measures into fewer programs, and finally to impose a seriously simplified structure on the whole system.

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September 16, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Rosen Presents Artificial Intelligence And Predicting Tax Evasion Today at Cornell

RosenJacob Rosen (MIT) presents Tax Noncompliance Detection Using Co-Evolution of Tax Evasion Risk and Audit Likelihood at Cornell at 4:00 p.m. EST (live stream here) as part of its Joint Department of Information Science Colloquium Series:

We detect tax law abuse by simulating the co-evolution of tax evasion schemes and their discovery through audits. Tax evasion accounts for billions of dollars of lost income each year. When the IRS pursues a tax evasion scheme and changes the tax law or audit procedures, the tax evasion schemes evolve and change into undetectable forms. The arms race between tax evasion schemes and tax authorities presents a serious compliance challenge. Tax evasion schemes are sequences of transactions where each transaction is individually compliant. However, when all transactions are combined they have no other purpose than to evade tax and are thus non-compliant.

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September 16, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Heritage: The Redistributive State — The Allocation Of Government Benefits, Services, And Taxes In The United States

Heritage Foundation, The Redistributive State: The Allocation of Government Benefits, Services, and Taxes in the United States:

Each year, families and individuals pay taxes to the government and receive back a wide variety of services and benefits. A fiscal deficit occurs when the benefits and services received by one household or a group of households exceed the taxes paid. When such a deficit occurs, other households must pay, through taxes, for the services and benefits of the group in deficit. Thus, government functions as a redistributive mechanism for transferring resources between groups in society.

This paper examines fiscal balance in the United States by income class. It estimates the distribution of the full array of government benefits and services including cash and near cash benefits, means-tested aid, education services, and general social services. It also estimates the distribution of all direct and indirect taxes used to finance government expenditure.

Heritage 2

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September 16, 2015 in Tax, Think Tank Reports | Permalink | Comments (0)

When It Rains In L.A.

We got some much-needed rain yesterday in Los Angeles:

September 16, 2015 in Legal Education, Tax | Permalink | Comments (1)

WSJ: IRS Raises Red Flag On Real Estate Spinoffs

Spinoff 2Wall Street Journal, IRS Raises Red Flag on Real-Estate Spinoffs:

Activist investors have been clamoring for companies to spin off real estate and unlock the value hidden in their headquarters, stores and land. This week, U.S. tax authorities weighed in with a message of their own: Not so fast.

In new guidance [Notice 2015-59], the IRS signaled its discomfort with a range of corporate spinoffs, specifically calling out deals in which companies split their real estate and other physical assets from their mainstream operations. The agency said it was concerned that some of these transactions may violate rules meant to ensure that companies don’t disguise dividends and other taxable transactions as spinoffs to avoid paying taxes.

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September 16, 2015 in IRS News, Tax | Permalink | Comments (0)

Senate Holds Hearing Today On Identity Theft, Tax Refund Fraud, And The IRS's Authority To Regulate Paid Tax Return Preparers

Senate LogoThe Senate Finance Committee holds an Open Executive Session today at 10:00 EST to consider an Original Bill to Prevent Identity Theft and Tax Refund Fraud.  Among the bill's twenty provisions is a grant of authority to the Treasury Department and the IRS authority to regulate paid tax return preparers (at a cost of $135 million over ten years).

September 16, 2015 in Congressional News, Tax | Permalink | Comments (0)

The NFL And Law Schools: Growing Millennials Into Lions

Lion King 2Wall Street Journal, How the Rams Built a Laboratory for Millennials:

The St. Louis Rams conquered the defending NFC champion Seattle Seahawks on Sunday in the early surprise of the season. Their spectacular special teams and run defense, which stuffed Seattle star Marshawn Lynch on a fourth down in overtime, had something to do with it.

So did their innovative plan for teaching millennials.

The Rams have the youngest team in the NFL. Like most workplaces, the Rams were inundated with employees whose habits were vastly different from those of their the bosses. As coach Jeff Fisher put it: “Our players learn better with two phones and music going and with an iPad on the side,” he said. “That’s new.”

Fisher, along with general manager Les Snead, knew something had to be done. The average age of the Rams roster is 24.1, according to Pro Football Reference. ...

Snead’s conundrum was obvious: You are, he said, taking young people who in most fields would be entering an entry-level job with little pressure and putting them in a job where they have to perform at a high level under often intense public scrutiny.

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September 16, 2015 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 860

IRS Logo 2The Spectrum op-ed:  With Koskinen at Helm, IRS Cannot be Trusted, by Jason Chaffetz (Chair, House Committee on Oversight and Government Reform):

Having lied to Congress, destroyed documents under subpoena, and targeted people based on their political beliefs, the IRS and its commissioner John Koskinen want a bigger budget. ...

The commissioner’s lack of regard for his legal obligations is unquestionably a serious matter. In fact, earlier this summer, 52 members of Congress sent a letter to the President urging him to immediately fire the commissioner. ...

Koskinen came before Congress and made promises. He assured us he would comply with a congressional subpoena seeking Lois Lerner’s emails. Not only did he fail to keep that promise, we later learned he did not look in earnest for the information.

After Koskinen complained of the extensive cost and effort being undertaken to locate the documents, the Treasury Inspector General for Tax Administration (TIGTA) learned from employees at a West Virginia data center that no one had ever even asked for backup tapes of Lois Lerner’s emails

In addition to lying to Congress, Koskinen allowed documents under subpoena and subject to an internal preservation notice to be destroyed. On March 4, 2014 (coincidentally, the same day President Obama told the country there was not a “smidgeon of corruption” at IRS), backup tapes containing up to 24,000 Lois Lerner emails were destroyed.

But even more serious than the commissioner’s misdeeds is the fact that the American people can no longer trust the IRS. ...

As long as Koskinen is at the helm, with his track record of lies, obfuscation and deceit, we cannot be confident in the IRS.

More money will not make the IRS less political. It will not make the agency more trustworthy. It will only empower an agency that has already gotten far off track. Until they have a leadership change, they will simply have to learn to prioritize their resources. Instead of spending money on bonus checks, union activities and parody videos, perhaps they could focus their energy on earning back the trust of the American people by focusing on fraud prevention and improving customer service.

Meanwhile, I will continue to demand documents, solicit testimony and keep digging until we get to the truth and fix this broken agency.

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September 16, 2015 | Permalink | Comments (1)

Tuesday, September 15, 2015

Forbes: Estate Tax Hits 100th Birthday And Paul Caron Calls For Many Happy Returns

Forbes:  Estate Tax Hits 100th Birthday And Paul Caron Calls For Many Happy Returns, by Peter J. Reilly:

As the Jeb Bush tax plan, which calls for the elimination of the estate tax was announced, I did not see anyone remark last week that September 8 was the 100th anniversary of the estate tax .  For that I needed Paul Caron’s recent article titled The One Hundredth Anniversary of The Federal Estate Tax: It’s Time to Renew Our Vows [57 B.C. L. Rev. ___ (2016)] (requires a download).  Paul Caron is a law professor at Pepperdine University.  He is also with his TaxProfBlog more or less the dean of the tax blogosphere.

In his article Professor Caron likens the country’s relationship to the estate tax to a marriage.  A somewhat rocky marriage.  Remember that trial separation back in 2010.  Professor Caron makes a case for retaining the estate tax, lowering the exemption and closing some of the loopholes. He notes that the estate tax is now in something of a tattered state raising a historically low percentage of federal revenue 0.6% and reaching a historically low number of decedents 0.2%.  And Professor Caron believes that the federal government needs to be raising more not less revenue. ...

The reforms he advocates were discussed in some detail in an article co-authored with James Repetti — Revitalizing the Estate Tax: 5 Easy Pieces [142 Tax Notes 1231 (2014)]. ...  Some of what they are looking for is contained in the Responsible Estate Tax Act that was introduced by Bernie Sanders.  Wow.  Bernie Sanders was at Liberty University this week, maybe he would also get a welcome at Pepperdine.

But I Thought Paul Caron Was A Conservative!

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September 15, 2015 in Legal Education, Tax | Permalink | Comments (4)

Posner: Divergent Paths — The Academy And The Judiciary

PosnerRichard A. Posner (Judge, U.S. Court of Appeals for the Seventh Circuit; Senior Lecturer in Law, University of Chicago Law School), Divergent Paths: The Academy and the Judiciary (forthcoming Harvard University Press, 2016):

Judges and legal scholars talk past one another, if they have any conversation at all. Academics couch their criticisms of judicial decisions in theoretical terms, which leads many judges―at the risk of intellectual stagnation―to dismiss most academic discourse as opaque and divorced from reality. In Divergent Paths, Richard Posner turns his attention to this widening gap within the legal profession, reflecting on its causes and consequences and asking what can be done to close or at least narrow it.

The shortcomings of academic legal analysis are real, but they cannot disguise the fact that the modern judiciary has several serious deficiencies that academic research and teaching could help to solve or alleviate. In U.S. federal courts, which is the focus of Posner’s analysis of the judicial path, judges confront ever more difficult cases, many involving complex and arcane scientific and technological distinctions, yet continue to be wedded to legal traditions sometimes centuries old. Posner asks how legal education can be made less theory-driven and more compatible with the present and future demands of judging and lawyering.

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September 15, 2015 in Book Club, Legal Education, Scholarship | Permalink | Comments (3)

Stanford B-School Dean Resigns Amidst Lawsuit By Fired Prof Alleging Dean Had Affair With His Wife (Also A B-School Prof)

Stanford 3San Jose Mercury News,  Stanford Business School Dean Steps Down Amid Sex Scandal, Lawsuit:

After months in the shadows, a high-stakes drama of sex and betrayal among the loftiest echelons of Stanford University burst into the open Monday, as the school announced that Garth Saloner would step down as dean of the Graduate School of Business.

The shocking announcement came shortly before a bombshell news report linking the South African-born economist to a wrongful termination suit by a former Stanford professor whose wife was allegedly having an affair with Saloner.

With salacious details of an office romance, the bitter fallout from the firing and allegations of fear and revenge inside the business school's inner sanctum, the dean's resignation could have tongues wagging like The Farm's never seen before. ...

The news came just after publication online of a lengthy article by Oakland-based journalist Ethan Baron in Poets & Quants, a news website devoted to the coverage of business schools. In the article, which Baron told this newspaper he'd been working on since last winter, he presents a long and troubling narrative of marital infidelity, titillating emails, and bitter infighting among members of Stanford's elite business faculty.

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September 15, 2015 in Legal Education | Permalink | Comments (4)

NY Times: Jeb Bush Bites The Tax Hand That Feeds His Campaign

NY Times Dealbook (2013)New York Times Deal Book: The Surprising Target of Jeb Bush’s Tax Plan — Private Equity, by Andrew Ross Sorkin:

Earlier this year, Henry R. Kravis, the private equity investor, held a $100,000 a plate fund-raising dinner for Jeb Bush at his Park Avenue apartment in Manhattan. The guest list was a who’s who of private equity and real estate executives, including Jerry I. Speyer, the billionaire New York property owner.

The dinner raised more than $4 million.

That’s why Mr. Bush’s tax reform plan — unveiled last week and a likely topic of discussion at Wednesday night’s Republican debate — was such a surprise. Mr. Bush’s proposal seems to take a direct shot at the very people who filled the tables that night to support him.

In a departure from Republican orthodoxy, his new tax proposal calls for raising taxes — and closing a longtime loophole — on carried interest, which represents investment gains largely from private equity and hedge funds. (In this regard, Mr. Bush was following his Republican rival Donald Trump, who has been criticizing the carried-interest provision for weeks.)

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September 15, 2015 in Political News, Tax | Permalink | Comments (0)

Pepperdine Tax Symposium: The Impact Of King v. Burwell On Judicial Deference To IRS Determinations

PLR Impact of King v BurwellFollowing up on our previous two tax symposia (links below), the Pepperdine Law Review and Essays & Reviews Editor Brady Cox have assembled a glittering array of participants for an online symposium to be published on October 28: The Impact of King v. Burwell on Judicial Deference to IRS Determinations:

Previous Pepeprdine Law Review tax symposia:

Pepperdine 2

September 15, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

University Of Florida Law School Seeks To Hire A Tax Prof

Florida Logo (GIF)The University of Florida Levin College of Law is seeking to fill a tenure-track position from among a variety of subjects, including tax:

The University of Florida Levin College of Law is seeking to hire one tenure-track position.  The candidate should be entry-level or early junior lateral, and should have core scholarly agenda and teaching package in one of the following fields:  Business/Corporate, Intellectual Property, or Tax. 

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September 15, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

NY Times: Stanford Tries To Topple Harvard, MIT As Nation's Premier Economics Department

SHMNew York Times:  How Stanford Took on the Giants of Economics, by Neil Irwin:

The center of gravity for economic thought in the United States has long been found along the two miles in Cambridge, Mass., that run between Harvard University and M.I.T. But there is new competition for that title, and it is quite a bit farther west.

Stanford University has lured an all-star lineup of economists to Palo Alto, Calif., in the last few years — and fended off Harvard’s and the Massachusetts Institute of Technology’s attempts to woo Stanford economists. The newest Stanford professors include a Nobel laureate — Alvin E. Roth, formerly of Harvard — but the shift is more noticeable among top young economists. Of the 11 people who have won the John Bates Clark Medal for best economist under age 40 since 2000, four are now at Stanford, more than at any other university. Two of them joined in the last few months: the inequality researcher Raj Chetty, who came from Harvard, and Matthew Gentzkow, who left the University of Chicago.

Stanford’s success with economists is part of a larger campaign to stake a claim as the country’s top university. Its draw combines a status as the nation’s “it” university — now with the lowest undergraduate acceptance rate and a narrow No. 2 behind Harvard for the biggest fund-raising haul — with its proximity to many of the world’s most dynamic companies. Its battle with Eastern universities echoes fights in other industries in which established companies, whether hotels or automobile makers, are being challenged by Silicon Valley money and entrepreneurship. 

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September 15, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 859

IRS Logo 2Forbes: IRS Gets Sued Over Bonuses To Lois Lerner, by Robert W. Wood:

For more than two years, the IRS targeting scandal has been one dissembling excuse after another. Rogue employees in Cincinnati! Oops, the emails are gone! Lois won’t testify! We can’t be expected to perform with the IRS budget being slashed! IRS can’t hand over anything without violating taxpayer confidentiality. Lois’s dog did it! This was a spontaneous demonstration to a video!

You name it, we’ve heard it. So I was delighted to read that the mysterious IRS bonuses are the subject of a FOIA suit. On June 20, 2013, weeks after the targeting story broke from Lois Lerner herself (before she took the Fifth), the IRS paid out $70 million in bonuses. Ms. Lerner received $42,000, part of her $129,300 in bonuses. Former Commissioner Miller (!) received $100,000. If anyone can get to the bottom of the CIA-like IRS, it is Tax Analysts, which has a long tradition of suing the agency. 

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September 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, September 14, 2015

September 14, 1985


Thirty years ago today, I married the love of my life.  We raised two incredible children, together. We found our faith, together.  We launched and progressed in our careers as lawyers, together.  We made our homes in Boston, Cincinnati, and Malibu, together.  We mourned the death of my parents, together.  We have remained faithful to each other, together.  I do not know what our remaining years will bring, but I do know one thing:  we will face them together.

Our anniversary celebration perfectly captures the essence of my beautiful wife:  after a full day of work (and her daily swim), she is making a home cooked meal tonight for sixteen Pepperdine undergraduates as we kick off our fall semester house group.  Today, and every day, I rejoice in the wife of my youth (Proverbs 5:18).

Update:  Our house group dinner:


September 14, 2015 in Legal Education, Tax | Permalink | Comments (14)

Altshuler Presents Lessons The U.S. Can Learn From Other Countries’ Territorial Systems Today at Loyola-L.A.

AltshulerRosanne Altshuler (Rutgers) presents Lessons the United States Can Learn from Other Countries’ Territorial Systems for Taxing Income of Multinational Corporations (with Stephen Shay (Harvard) & Eric Toder (Urban Institute)) at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.

Theodore Seto (Loyola-L.A.) is the commentator.

September 14, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Zidar Presents State Taxes And Spatial Misallocation Today At UC-Berkeley

ZidarOwen Zidar (Chicago) presents State Taxes and Spatial Misallocation (with Pablo Fajgelbaumat (UCLA), Eduardo Morales (Princeton) & Juan Carlos Suarez Serrato (Duke)) at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

There is substantial dispersion in the distribution of tax rates across U.S. states, and proposals to reform state tax systems abound. What are the effects of the state tax structure on aggregate outcomes and the distribution of economic activity? We build a general-equilibrium model that accommodates several types of spatial interactions among states and realistic heterogeneity in state tax structures. We estimate key model elasticities from data on the distribution of economic activity and state finances from 1980-2010, and using the estimated model we measure the spatial misallocation caused by state taxes.

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September 14, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Sunstein: In Praise Of Law Reviews (And Jargon-Filled, Academic Writing)

Cass Sunstein (Harvard), In Praise of Law Reviews (And Jargon-Filled, Academic Writing), 114 Mich. L. Rev. ___ (2016):

Many people, including many lawyers and judges, disparage law reviews (and the books that sometimes result from them) on the ground that they often deal with abstruse topics, of little interest to the bar, and are sometimes full of jargon-filled, excessively academic, and sometimes impenetrable writing. Some of the objections are warranted, but at their best, law reviews show a high level of rigor, discipline, and care; they have a kind of internal morality. What might seem to be jargon is often a product of specialization, similar to what is observed in other fields (such as economics, psychology, and philosophy). Much academic writing in law is not intended for the bar, at least not in the short-term, but that is not a problem: Such writing is meant to add to the stock of knowledge. If it succeeds, it can have significant long-term effects, potentially affecting what everyone takes to be “common sense.”

The Legal Whiteboard:  "In Praise of Law Reviews (And Jargon-Filled, Academic Writing)", by William Henderson (Indiana):

Sunstein has written a remarkably thoughtful and balanced essay that I would encourage any fairminded lawyer, law student, and law professor to read. ...

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September 14, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Call for Tax Papers And Panels: Law & Society Annual Meeting

LSA 2Neil H. Buchanan (George Washington) has issued his annual call for tax papers and panels for next year's annual meeting of the Law & Society Association in New Orleans (June 2-5, 2016):

For the Twelfth consecutive year, I will organize sessions for the the Law, Society, and Taxation group (Collaborative Research Network 31).

Although there is an official call for papers, please remember that you are not bound by the official theme of the conference.  I will give full consideration to proposals in any area of tax law, tax policy, distributive justice, interdisciplinary approaches to tax issues, and so on.

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September 14, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Shaviro: Automatic Indexing And Current Policy

Daniel Shaviro (NYU),  The More it Changes, the More it Stays the Same?: Automatic Indexing and Current Policy:

This projected chapter addresses issues associated with automatically indexing fiscal policies, such as those in the U.S. income tax and Social Security systems. Under indexing, a statistical measure - pertaining, for example, to inflation, wage levels, life expectancy, or income inequality - is used to determine changes to nominal legal rules that then take effect automatically. One possible reason for favoring automatic indexing is that it may keep the underlying policy, by some metric, "the same" as empirical circumstances change. While indexing often makes sense, from the standpoint of a policymaker whose long-term preferences it would keep in place barring further legislative action, identifying the set of "current policies" that one might want to perpetuate (or change) can be surprisingly difficult. 

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September 14, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 858

IRS Logo 2Washington Examiner, DOJ Declares War on Donald Trump and Other Businessmen Not Corrupt Politicos:

Arguably the most corrupt and abusive administration in recent history is now declaring war on American corporations and their executives in a scheme to separate private-sector entities from their money and incarcerate top businessmen such as Donald Trump. In an announcement on Thursday, a Department of Justice official said her agency will emphasize the prosecution of top corporate executives instead of the DOJ practice of simply prosecuting and fining businesses. ...

Deputy Attorney General Sally Yates, who authored a memo outlining the rules for federal prosecutors, announced the updated guidelines during her guest lecture at New York University Law School on Thursday. She noted that President Barack Obama authorized the Justice Department's new guidelines that will now prioritize the prosecution of individual corporate executives for offenses involving white-collar crime. Sadly, not one journalist asked Ms. Yates how the American people can trust the DOJ when there is evidence that the Internal Revenue Service (IRS) -- especially Lois Lerner -- colluded with the DOJ to pursue non-profit organizations that were decidedly right-of-center especially those calling themselves Tea Party.

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September 14, 2015 in Legal Education | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, September 13, 2015

NY Times on College Rankings, Tuition, And Value

The Top 5 Tax Paper Downloads

New Law Offers Better Work-Life Balance Than Big Law

Disruptive 2Harvard Business Review:  Law Firms’ Grueling Hours Are Turning Defectors into Competitors, by Joan C. Williams (UC-Hastings):

In this latest flurry of debate about working long hours, some have intimated that overwork is inevitable in highly competitive industries such as law, finance, and high tech.

But that’s just not true.

We’ve all heard by now that productivity decreases with overwork, while attrition and health care costs increase. What you may not have heard is that businesses who drive people relentlessly create competitors who poach top talent by offering a more humane way to work.

A new study from the Center for WorkLife Law reports on this phenomenon in the legal profession. The report identifies over 50 entrepreneurial businesses that offer lawyers jobs with better work-life balance than large law firms offer. Big Law, meet New Law.

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September 13, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 857

Saturday, September 12, 2015

This Week's Ten Most Popular TaxProf Blog Posts

How The IRS Wrongly Allows Stock Buybacks To Evade The Dividend Tax

Wanling Su (Yale) & Rahul K Gorawara (Yale), How the IRS Wrongly Allows Stock Buybacks to Evade the Dividend Tax:

In 1976, the Internal Revenue Service (IRS) took the stance that public companies may evade the dividend tax through stock buybacks so long as at least one shareholder elects not to participate in the buyback [Rev. Rul. 76-385]. The IRS has since overlooked $5.7 trillion in dividends disguised as buybacks — $553 billion in 2014 alone.

Figure 11

The IRS’s stance on buybacks is not as well-founded as presumed by the tax bar. This Article walks through three approaches to statutory interpretation — textualism, public interest, and substance over form. Each yields the same conclusion: The IRS is wrong.

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September 12, 2015 in Scholarship, Tax | Permalink | Comments (3)

‘Prudent Innovation’ In Law Schools

Legal RebelsABA Journal Legal Rebels:  ‘Prudent Innovation’ in Law School — Colorado Moves Forward, by Paul Lippe (Founder & CEO, OnRamp Systems):

To oversimplify a bit, there seem to be five schools of thought in response to the “disruption” taking place in law:

  • Denial. It’s just a blip, and things will return to normal.
  • Nostalgia. Things used to be better in the autonomous, professional, non-market-driven legal world of yore.
  • Consensus. I will change when everyone else changes: Until then, any change is too scary.
  • Constraints. I would change, but there are so many constraints, it’s impossible.
  • Prudent Innovation. Let’s try what seems to be working in other places if it has a reasonable chance of success and is consistent with our mission, and see what we can learn.

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September 12, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 856

Russ Fox (Taxable Talk), Sergeant Schultz to the Rescue!:

Back in the 1960s there was a television show called Hogan’s Heroes. The comedy was set in a prisoner-of-war camp in Germany during World War II. One of the characters on the show was Sergeant Schultz. Here’s an excerpt via YouTube:

Schultz’s famous line was, “I know nothing, I see nothing,….” That’s what it feels like when we deal with answers from the IRS and the Obama Administration. ...

[S]ooner or later the truth will come out. There’s a pattern in this administration, and it’s one of secrecy, denials, and cover-up. Maybe it’s all innocent, but to me it’s failing the smell test. I try hard to avoid pushing one political view over another in this blog, but there is one thing that is clear to all but the most partisan Obama Administration supporters: The administration that promised to be the most transparent in history is likely the most opaque in history. Even Sergeant Schultz could have done better.

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September 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, September 11, 2015

September 11th Remembrance At Pepperdine


Eighth Annual Waves of Flags Display Honors 9/11 Victims:

On Friday, September 11, 2015, the expansive lawn of Pepperdine University’s Alumni Park will once again be home to the University’s annual installation of Waves of Flags.

Waves of Flags will feature a display of 2,977 flags in total–2,887 American flags for each American life lost and 90 various international flags representing the home countries of those from abroad who died in the 9/11 attacks.

The installation became a Pepperdine tradition in 2008 when the College Republicans, inspired by a similar display, wanted to bring the tribute to the University. Now in its eighth year, Waves of Flags has become a significant service project for the Pepperdine community. ...

Waves of Flags serves as a tribute in addition to The Heroes Garden, a public space to reflect and honor those who sacrificed their lives on 9/11, including Pepperdine alumnus Thomas E. Burnett, a passenger on United Flight 93.

Heores Garden

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September 11, 2015 in Legal Education, Tax | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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September 11, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Journal Of Legal Education Symposium: Igniting Law Teaching

Journal of Legal Education (2014)Conference Papers, Igniting Law Teaching, 64 J. Legal Educ. 542-687 (2015) (10-minute TED Talks here):

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September 11, 2015 in Conferences, Legal Education, Structuring a Tax Workshop Series | Permalink | Comments (0)

Kahn & Bromberg: The Deduction For Illegal Expenses

Florida Tax ReviewDouglas A. Kahn (Michigan) & Howard Bromberg (Michigan), The Tax Provisions Denying a Deduction for Illegal Expenses and Expenses of an Illegal Business Should Be Repealed, 18 Fla. Tax Rev. ___ (2016):

The federal income tax law denies a deduction for illegal expenses, for any expense (legal or otherwise) of an illegal business that is trafficking in controlled substances, for losses incurred by an unlawful business, and for bribes, kickbacks and rebates connected with the Medicare or Medicaid program. In this article, the authors first describe the current treatment of those items by the tax law. The authors explain that the current treatment constitutes a penalty for the taxpayer whose deduction is denied, and then explain why that penalty is a bad policy and conflicts with the traditional purposes and goals of punishing wrongful behavior.

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September 11, 2015 in Scholarship, Tax | Permalink | Comments (0)

NY Times Debate: Can Companies Excel Without Making Workers Miserable?

NY Times Room for DebateNew York Times Room for Debate:  Can Companies Excel Without Making Workers Miserable?:

Amazon is getting a lot of heat these days for its “bruising workplace.” Meanwhile Yahoo’s Marissa Mayer announced that she plans to take limited time away from work during her pregnancy with twins and after giving birth — a move work-life balance advocates claimed set a bad example, especially at a time when work policies and benefits in some competitive industries are finally becoming more generous.

Can companies excel without making workers miserable?

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September 11, 2015 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 855

IRS Logo 2WALB News Editorial, IRS Misdeeds:

U.S. Senator Johnny Isakson didn't hold back his criticism of the Internal Revenue Service, after a bipartisan report confirmed the IRS targeted conservative political groups, and worked for their union on government time.

Isakson said he was outraged, and so are we.

The world's biggest collection agency targeted conservative groups for exercising their First Amendment rights. The IRS was influenced by the political beliefs of individual IRS employees, to try to limit political speech by individuals, and tax-exempt organizations.

Then the IRS lied to Congress about whether it targeted political organizations, and obstructed the Congressional investigation.

When a government agency as powerful as the IRS gets on a political witch hunt, the citizens are in danger. 

The people who did wrong at the IRS need to be fired. We have plenty of honest Americans who need work.

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September 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, September 10, 2015

More On The NY Times Op-Ed: Too Many Law Students, Too Few Legal Jobs

NY TimesThe American Lawyer:  The Intractable Crisis in Legal Education, by Steven J. Harper (Adjunct Professor, Northwestern; author, The Lawyer Bubble):

To understand why the crisis in legal education persists, take a look at how law deans and professors are wishing it away.

My August 25 Op-Ed in The New York Times went viral. It became number one on the Times’ “most-emailed” list. It rose to the top-five in “most viewed,” “most shared on Facebook,” and “most tweeted.” Within hours of publication, it generated more than 600 comments.

It also produced letters to the editor, three of which the Times chose to publish on September 2. Two are from law professors whose responses reveal why the current crisis in legal education is so intractable. 

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September 10, 2015 in Legal Education | Permalink | Comments (17)

Quantifying Legislative Uncertainty: A Case Study In Tax Policy

Jason Oh (UCLA) & Christopher Tausanovitch (UCLA), Quantifying Legislative Uncertainty: A Case Study in Tax Policy, 69 Tax L. Rev. ___ (2016):

Whether a legislature will or will not enact law is often uncertain. This Article offers an empirical model for quantifying that uncertainty, and it develops this argument in the context of federal income tax rates. Specifically, we estimate a model of legislator preferences on tax rates and show that the political process can be well understood in terms of the preferences of key legislators. We use our statistical model to quantify the uncertainty of tax rates and forecast the direction of likely rate changes in the future.

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September 10, 2015 in Scholarship, Tax | Permalink | Comments (1)

Tax Law and Racial Economic Justice: Black Tax

Black TaxAndre L. Smith (Widener-Delaware), Tax Law and Racial Economic Justice: Black Tax (2015):

No study of Black people in America can be complete without considering how openly discriminatory tax laws helped establish a racial caste system in the United States, how they were designed to exclude blacks from lucrative markets and the voting franchise, and how tax laws extracted and redistributed vast sums of black wealth. Not only was slavery nearly a 100% tax on black labor, so too was Jim Crow apartheid and tax laws specified the peculiar institution as “negro slavery.” The first instances of affirmative action in the United States were tax laws designed to attract white men to the South. The nineteenth-century Federal Tariff indirectly redistributed perhaps a majority of the profits from slavery from the South to the North and is the principle reason the Confederate states seceded. The only constitutional amendment obtained by the Civil Rights Movement is the Twenty-Sixth Amendment abolishing poll taxes in federal elections. Blending traditional legal theory, neoclassical economics, and a pan-African view of history, these six interrelated essays on race and taxes demonstrate that, even in today’s supposedly post-racial society, there is no area of human activity where racial dynamics are absent.

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September 10, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Quit Lit: Professors Who Leave Academe Pen Blistering Departure Op-Eds

Quit 3Inside Higher Ed, Public Good-byes:

Like most breakups, those between higher education and the academics who choose to leave it typically happen quietly. But as in romance, sometimes these breakups become very public affairs -- usually when an academic decides to reflect on the decision in a blog or other medium. The genre, called “quit lit,” has been around for several years, at least according to social media. And it’s enjoying a resurgence of sorts, thanks to some recent high-profile Dear John letters.

Oliver Lee Bateman, an assistant professor of history at the University of Texas at Arlington, attracted lots of attention this week with his Vox column called “I have one of the best jobs in academia. Here’s why I’m walking away.”

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September 10, 2015 in Legal Education | Permalink | Comments (1)

Law Grad Placement Data

Matt Leichter has updated his annual charts on NALP placement data.  Here is the chart on the percentage of law grads employed by status:


September 10, 2015 in Legal Education | Permalink | Comments (4)

Welcome To The Tax Prof Blogosphere: Tracey Roberts' Taxonomer

TaxonomerWelcome to the Tax Prof blogosphere, Tracey M. Roberts (UC-Hastings) and Taxonomer: Tax, Terra, and Taxonomies: Seeing the Forests and the Trees.  From her inaugural post:

The goals of this blog are (1) to share research on tax and the environment, (2) to share information about how to make teaching and learning easier, and (3) to promote systems-thinking. 

September 10, 2015 in Tax | Permalink | Comments (1)

Suffolk Law School Cuts Library Budget By 50%, Provides Students Free Course Materials Through LexisNexis Digital Library

LexisNexisLexisNexis Press Release, Suffolk University Law School Chooses LexisNexis Digital Library:

LexisNexis® Legal & Professional today announced Suffolk University Law School has chosen LexisNexis® Digital Library solution to transform its law library into a mobile, highly accessible and more comprehensive resource for users, as well as a more cost-efficient asset for the university.

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September 10, 2015 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 854

IRS Logo 2Las Vegas Review-Journal editorial, Justice Department Needs to Hold IRS Accountable:

In March 2013, then-U.S. Attorney General Eric Holder launched a criminal investigation into the actions of IRS employees — most notably Lois Lerner, then-director of the agency's Exempt Organizations Division — who deliberately delayed and denied nonprofit status to conservative political groups to diminish their influence on the 2012 election. Twenty-nine months later, Lerner has since stepped down, Loretta Lynch has since replaced Holder, and the Justice Department has yet to say much of anything about its investigation. Perhaps last week's revelation that Lerner used a second alias email account to do government business will speed things up.

The discovery is but the latest development from a Freedom of Information Act lawsuit by Judicial Watch, which has been prodding the IRS to release Lerner's emails for more than two years and is seemingly the only entity interested in finding out what really happened.  ...

Even before this latest news, there seemed to be more than enough evidence to indict Lerner. She already had conceded that people within her division had carried out "absolutely inappropriate" actions. Shortly after news of the scandal broke, she invoked her right against self-incrimination by declining to testify in front Congress, and she then conveniently retired from her post.

If, however unlikely, Lerner herself is not part of a cover-up, a 2½-year investigation would seemingly clear that up. The longer this episode drags on, however, the more questions are raised, the more it seems there truly is something to hide, and the more likely it appears the Obama administration will do nothing about it.

It's important to remember why this scandal matters so much in the first place. This isn't just executive branch employees running roughshod over Americans' rights, which already happens too often to begin with. No, this is our nation's federal tax collection agency using taxpayer resources and its considerable powers to actively influence the outcome of national elections. ...

New Attorney General Lynch has had four months to move this investigation along. So far, however, all she seems intent on doing, like Mr. Holder before her, is moving the goalposts. Has she decided on her own to drag her feet? Or is she acting at the request of someone else? It's been 29 months since Mr. Holder's announcement. Is the Justice Department simply stalling until President Barack Obama is safely out of office?

Enough delays. It's time for the Justice Department to take action and hold the IRS accountable.

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September 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)