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Monday, February 17, 2014

The IRS Scandal, Day 284

IRS Logo 2Legal Insurrection:  They’re From the IRS, and They’re Here to Help, by Neo-neocon:

At this point it’s tempting to regard the IRS as not-so-secret agents of the Obama administration and the Democrats. This is not paranoia. As Ed Rogers wrote in the WaPo, it is fact: 

Encouraged by the lack of a public backlash, an uninquisitive press, cover from the White House and an eager-to-please bureaucracy, the Democrats are boldly counting on the IRS to be their political and policy enforcer.This statement isn’t an overreach by the “vast right-wing conspiracy” or a phony crisis created by hecklers (like me) on the right — it goes back to the early stages of President Obama’s reelection campaign.

Rogers goes on to list some of the more egregious examples of what has occurred and how the administration has been emboldened by the fact that so far there have been few negative consequences to them for their actions.

The hue and cry that might have been expected – and to a certain extent came at first, when some of the revelations about Tea Party harassment were revealed – has been muted and blunted. So now the excesses are being further and more openly institutionalized. ...

I wonder, though, how much the IRS scandal has affected Obama’s and the Democrats’ ratings with the public. I can’t find any polls about the subject since last summer, but my guess is that it has had some part in the downturn. I certainly hope so; all Americans of any political stripe should be highly alarmed, although of course that isn’t happening. One of the most pernicious reasons is ignorance of history; some people say, “Oh, all administrations do this.”

No, they don’t – at least, not really like this in terms of extent and success. Nixon was excoriated for expressing a desire to do it in the Nixon tapes, and the assumption has been that he did do it. But in fact for the most part he failed at it. Why? Because the heads of the IRS at the time would not cooperate (see this for a background discussion).

Here’s a very short history of the efforts of other presidents. You can see that, except for the Nixon example, it seems that most of the presidents who were involved with any small success in such undertakings were Democrats. That’s no accident because, as “Nixon henchman Jack Caulfield astutely complained,…the IRS was a ‘monstrous bureaucracy…dominated and controlled by Democrats.’”

So Nixon is convicted in the eyes of the public for what appears to have been largely thought crime, whereas the Obama administration and its handmaidens such as Lois Lerner get off seemingly free (so far) for the actual crime. Obama’s much greater success compared to earlier efforts appears to be due to several factors: greater drive, boldness, and scope; public ignorance/apathy; the coverup attempts by much of the MSM; and the simpatico political persuasion of much of the IRS.

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February 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 16, 2014

WSJ: How to Figure Out Your Cost Basis

Wall Street Journal Tax Report:  How to Figure Out Your Cost Basis, by Laura Saunders:

Did you sell an investment held in a taxable account last year? If so, prepare for a struggle—or at least a brush—with a crucial but confusing area of the tax code. It goes by the name "cost basis," and it is the starting point for measuring profit or loss on the sale of an investment, whether it is a stock, bond, house, artwork or other asset. Many investors find it baffling. ...

Experts say the IRS rarely questions or audits cost-basis data, except in abusive tax shelters. To help the confused and discourage cheating, Congress passed a law in 2008 requiring financial firms to track cost basis for certain assets and report it both to customers and the IRS after a sale.

In the short run, these rules might add to taxpayers' confusion while they phase in. For now, they cover some assets but not others. If you are facing a cost-basis conundrum, here are some tips: ...

WSJ

February 16, 2014 in Tax | Permalink | Comments (0)

Top 5 Tax Paper Downloads

Worst Interview Faux Pas. Ever.

Jackson FishburneAnchor:  Did you get a lot of reaction to the Super Bowl commercial?

Samuel L. Jackson:  What Super Bowl commercial? ...

Anchor (flustered):  My mistake. ...

Jackson:  I'm not Laurence Fishburne. ...

Anchor:  That was my fault. My mistake. ...

Jackson:  We don't all look alike. ...

Co-anchor (trying to help):  He thought you were Bob Dylan.

February 16, 2014 in Legal Education, Tax | Permalink | Comments (2)

The IRS Scandal, Day 283

IRS Logo 2New York Post editorial:  Calling Lois Lerner:

The American people still need to hear from Lois Lerner. That’s a point that can’t be made often enough.

Remember her? She’s the IRS official who gave a statement before Congress declaring herself innocent of any wrongdoing — and then promptly took the Fifth.

Recently, Congress unearthed another IRS e-mail on which she was copied, talking about taking “off-plan” a discussion about how to harass the 501(c)(4) groups the IRS had targeted. Meanwhile, leaks from officials involved in the investigation claim the FBI has not found ­anything criminal.

That’s an amazing finding, given the statement by the American Center for Law and Justice, which represents the IRS targets, that the FBI hadn’t interviewed a single of the center’s 41 ­clients. ...

[W]e hope Congress is making clear that whatever happens with the Justice investigations, the American people need to get Lois Lerner back on that stand to answer questions under oath.

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February 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, February 15, 2014

Tom Perkins: Americans Should Get One Vote for Every Dollar of Taxes Paid

NY Times Dealbook (2013)New York Times Deal Book:  The Tom Perkins Theory of Taxation and Representation, by William Alden:

This time, Tom Perkins knew he was courting controversy.

Mr. Perkins, the 82-year-old venture capitalist who caused a stir last month when he said in a letter to the editor of The Wall Street Journal that protesters criticizing the wealthy were similar to Nazis, has fully embraced a new role as a spokesman for the beleaguered “1 percent.” In a conversation with a Fortune magazine editor at a San Francisco event on Thursday, Mr. Perkins spent an hour riffing on his position that the wealthiest Americans are being unfairly treated.

One major theme was taxation. Many wealthy businessmen argue that the rich pay too much in taxes. Mr. Perkins goes several steps further.

“The Tom Perkins system is: You don’t get to vote unless you pay a dollar of taxes,” he said at the end of the interview, explaining that he had spent some time formulating this theory. He cited Thomas Jefferson and Margaret Thatcher to provide ideological precedent.

“But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you should get a million votes,” he said. “How’s that?”  The remark drew laughter from some in the audience, who apparently thought the investor was joking. In a summary of the event, a Fortune reporter wrote: “Perkins later said offstage that what he meant was that, with 50 percent of registered U.S. voters not paying taxes, ‘we got ourselves into a mess.’”

(Hat Tip: Mike Talbert.)

February 15, 2014 in Tax | Permalink | Comments (6)

BC Law Prof's Cell Phone Tirade

CellMary Ann Chirba (Boston College) asked me to share her cell phone policy:

A chronic issue flared yet again today. With this message, I hope to extinguish it once and for all.

Continued cell phone use in class is absolutely unacceptable for many reasons. Here is the short list:

  • 1. It is distracting to your classmates and me.
  • 2. It is completely unprofessional. Try engaging in this behavior with your supervisor at work and see how well it goes over.
  • 3. It is rude. It is simply and undeniably rude.

I am extremely frustrated because I have never had to mention this more than once in past years.  We are up to 9 times this year - and these do not include the instances that I have seen but not mentioned.

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February 15, 2014 in Legal Education | Permalink | Comments (19)

UC-Berkeley Transactional Business Law Survey

From Eric Talley (UC-Berkeley):

SurveyWe write to ask two small (but important) favors of you that are directly related to law schools' pedagogical mission as well as the rapidly changing future of legal education.

As you may know, an ABA task force has recently proposed to establish minimum requirements within ABA-accredited law schools for "experiential" learning related to building practical skills and competencies. (Similar proposals are percolating up from state bar association task forces as well.)  We believe this endeavor to be an intriguing and important invitation for law schools to re-imagine how they deliver legal education, and on this basis we are generally supportive.  At the same time, a challenging question that the ABA and other task forces face is the question of what topics constitute "skills and competencies." Within business law, this challenge is perhaps greatest for attorneys whose practice is principally "transactional" in nature (in contrast to work that is oriented around litigation).  It is unclear how much input transactionally-oriented business law practitioners (attorneys, other professionals, educators) have had on the process of drafting the proposed guidelines, or whether there has been much systematic analysis of what topics constitute important "skills" for entering transactional attorneys.

To address these gaps, we have developed an on-line survey instrument to help gauge what sorts of core competencies established professionals in transactional practice areas consider important.  We hope the results of the survey will help both practitioners and legal educators assess (and if necessary, work to amend) the current proposed guidelines.  Although largely directed to practicing attorneys, the survey is also open to other professionals who work closely with practicing attorneys in transactional practices (such as bankers, accountants, financial advisers, etc.).

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February 15, 2014 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 282

IRS Logo 2

Washington Post:  The IRS, the Democrats’ Cat’s Paw, by Ed Rogers:

Encouraged by the lack of a public backlash, an uninquisitive press, cover from the White House and an eager-to-please bureaucracy, the Democrats are boldly counting on the IRS to be their political and policy enforcer.This statement isn’t an overreach by the “vast right-wing conspiracy” or a phony crisis created by hecklers (like me) on the right — it goes back to the early stages of President Obama’s reelection campaign. Remember the case of Romney supporter Frank Vandersloot? Before the 2012 campaign, he was publicly accused of having a “less-than-reputable record” by Team Obama and then found himself the target of IRS and Department of Labor audits. This was just one example of an individual who was persecuted because of his donation to a pro-Romney super PAC, but it served as a sufficient warning and no doubt had a chilling effect on others who were inclined to support the Republican nominee for president in 2012. And we now know that while this was going on, the IRS was actively suppressing conservative organizations seeking tax-exempt status because they opposed the president and the Democrats’ policy positions.

Lois Lerner, the government official at the center of the IRS scandal, took the fifth amendment in a high-profile congressional hearing, then quietly retired from the agencywith a taxpayer-funded pension. She hasn’t been heard from since. The Obama administration has gone into overdrive since the scandal broke to avoid any accountability, with the president famously telling Bill O’Reilly of Fox News only a few weeks ago that there was “not even a smidgen of corruption” in the IRS targeting of conservative groups. Comically, this is still an active and ongoing investigation by the Obama Department of Justice, so you would think the president wouldn’t be able to come to that conclusion quite yet. Of course, no one in the administration can comment on an active and ongoing investigation, so it is the perfect cover for self-preservation and is reassuring to those doing the Democrats’ bidding in the IRS and elsewhere.  Let’s also remember that the Justice Department’s farce of an investigation into the IRS targeting scandal is now being led by trial lawyer and Obama donor Barbara Bosserman. It’s so brazen, I almost admire their audaciousness. In politics, gall pays off.

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February 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, February 14, 2014

8th Circuit Oral Argument in Unsuccessful Faculty Candidate's Suit Claiming Discrimination by Iowa Law School Due to Her Conservative Views

Wagner 2Following up on Monday's post on Teresa Wagner's appeal to the 8th Circuit claiming she was denied a faculty position at the University of Iowa College of Law because of her conservative views:  Scott Johnson, The Wagner Case Oral Argument:

I attended the oral argument [32-minute audio] yesterday morning and spoke briefly with Ms. Wagner and her attorney on their way out of the courtroom afterwards. Here is my brief report. ...

The issue before the Court at this point is almost entirely procedural (with a Sixth Amendment overlay). The substantive issue that Peter Berkowitz writes about was vindicated by the Eighth Circuit in its 2011 decision reversing the dismissal of Ms. Wagner’s case on summary judgment.

Ms. Wagner’s counsel argued that whether the jury had been discharged for two minutes or two days, the magistrate judge’s actions following discharge were improper. He seeks reinstatement of the mistrial declaration and a new trial against the Dean (now the successor to Carolyn Jones, the original defendant). Ms. Wagner’s counsel has also raised an issue regarding the jury instructions, but it didn’t draw a single question and I don’t think it will play in the outcome of the appeal. ...

My favorite question during the oral argument was more of a statement, by Judge Beam. It came during the argument on behalf of the law school and was something like: “So, 49 Democrats and one Republican?” ...

The other two judges on the panel in Ms. Wagner’s appeal (Smith and Benton) are similarly good for Ms. Wagner. All three are Republicans. Judge Smith was on the panel that decided the first appeal in favor of Ms. Wagner. Judge Benton was incredibly thoughtful and well prepared. The panel on this appeal presents a sort of mirror image of the University of Iowa law school faculty.

My impression is that the best Ms. Wagner will come away with from the Court this time around is an order remanding the case to the district court for additional findings. I think it is less likely that the Court will reverse the district court decision outright and order a new trial than that it will affirm the district court. Of the three possibilities, my guess is that remand is the most likely.

Paul Mirengoff, Politically-Based Faculty Discrimination, a Test Case:

Today, the Eighth Circuit Court of Appeals heard oral argument in the case of Wagner v. Jones. ...  Teresa Wagner accuses the University of Iowa College of Law of violating her First and Fourteenth Amendment rights by refusing to hire her for its legal analysis, writing, and research program due to her strong pro-life views and activism. Her accusation is strongly supported by a comparison of her qualifications for the position and those of the two individuals selected by the law school. ...

The inference of discrimination arising from this comparison of credentials is bolstered by the fact that, at the time of the hiring decision, the law school had only one Republican on its 50-member faculty, and he had joined the faculty 25 years earlier. ... The law school’s stated reason for not hiring Wagner was that she “flunked” her interview by refusing to teach the “analysis” portion of the course. But, as Peter explains, faculty emails contradict this account. The law school conveniently destroyed its tape of the interview.

Wagner tried her case before a jury. The jury foreman told the Des Moines Register that “everyone in that jury room believed she had been discriminated against.” However, the jury could not agree as to whether the law school dean was exclusively responsible. The jury was thus declared “hung,” which should have meant a new trial. However, through manipulation described by Peter, the court contrived to convert this into a ruling in favor of the dean on the First Amendment count. It later dismissed the Fourteenth Amendment claim.  Let’s hope that the Eighth Circuit reverses and grants Wagner’s request for another trial.

Prior TaxProf Blog coverage:

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February 14, 2014 in Legal Education | Permalink | Comments (4)

Weekly Tax Roundup

February 14, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

February 14, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Avi-Yonah: Using the Federal Tax Code to Reduce Income Inequality

Reuven S. Avi-Yonah (Michigan), The Parallel March of the Ginis: How Does Taxation Relate to Inequality and What Can Be Done About it?:

The United States currently has one of the highest levels of inequality among industrialized economies. In addition, numerous scholars have shown that social mobility in the United States is significantly lower than it was in the period between 1945 and 1970, when inequality was also declining. The combination of these trends is dangerous because it risks transforming the US into a society where small elites capture most of the gains, a pattern in which growth cannot be sustained over time (Acemoglu and Robinson 2012, Zingales 2012). The level of inequality in the US after taxes and transfers are taken into account is much lower, but it is still higher than in most OECD countries and the trend is still for inequality to increase. This paper explores how the US tax system can be used to counter these trends and concludes that the key is not to increase taxes on the rich (although some reforms in this direction can be adopted), but instead to adequately fund and even strengthen the social safety net. The only way to do this in the medium to longer term is to adopt a broad-based federal consumption tax.

February 14, 2014 in Scholarship, Tax | Permalink | Comments (0)

Journal of Legal Education Symposium: Is Law School Worth It?

JLESymposium:  Is Law School Worth It?, 63 J. Legal Educ. 173-246 (2013):

February 14, 2014 in Legal Education | Permalink | Comments (4)

Last-Minute Valentine's Day Gift Advice From Saturday Night Live

February 14, 2014 in Legal Education, Tax | Permalink | Comments (0)

Professor Sues Law School for Failing to Accommodate His PTSD

National Law Journal:  Professor Alleges Law School Failed to Accommodate PTSD, by Karen Sloan:

ErlinderA law professor who was held captive in Rwanda for three weeks in 2010 has sued William Mitchell College of Law, claiming the school failed to accommodate the post-traumatic stress disorder that resulted from his ordeal.

Carl Peter Erlinder filed suit on Feb. 7 in U.S. District Court for Minnesota raising a litany of claims, including violations of the Family and Medical Leave Act, breach of contract and international infliction of emotional distress.

His suit claims that administrators disregarded the advice of his medical team and created a hostile work environment.

Dean Eric Janus placed Erlinder on administrative leave in January 2012 and banned him from campus, according to the complaint. Erlinder stopped receiving compensation from the law school 18 months ago.

February 14, 2014 in Legal Education | Permalink | Comments (0)

Kadet Posts Tax Comment Letters on SSRN

SSRN LogoJeffery M. Kadet (U. Washington) has posted on SSRN seven comment letters to the Senate Finance Committee in connection with the international tax reform discussion draft issued on November 19, 2013:

  1. Dec. 29, 2013
  2. Jan. 2, 2014
  3. Jan. 8, 2014
  4. Jan. 8, 2014
  5. Jan. 8, 2014
  6. Jan. 8, 2014
  7. Jan. 8, 2014

February 14, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 281

Thursday, February 13, 2014

Sanchirico Presents International Tax and Ownership Nationality Today at Indiana

SanchiricoChris William Sanchirico (Pennsylvania) presents As American as Apple Inc.: International Tax and Ownership Nationality at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

The ownership nationality of large US multinational companies plays an implicit but important role in the current debate over how such companies should be taxed. This paper identifies that role and investigates what is actually known about where these companies’ shareholders reside.

February 13, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Peroni Presents Formulary Apportionment in the U.S. Today at Northwestern

PeroniRobert J. Peroni (Texas) presents Formulary Apportionment in the U.S. International Income Tax System: Putting Lipstick on a Pig? (with J. Clifton Fleming (BYU)) at Northwestern today as part of its Tax Colloquium Series hosted by by Herbert Beller, Charlotte CraneDavid Cameron, Philip Postlewaite, Jeffrey Sheffield, and Robert Wootton:

[T]he authors argue that formulary apportionment and the current standard, arm's length transfer pricing, are just two shades of lipstick on the pig that is the US international tax system, with its twin features of deferral and cross-crediting. They conclude that formulary apportionment might be the less offensive shade, but in effect the whole discussion is a diversion from a broad reform that is sorely needed on the pig itself.

February 13, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 67, No. 1 (Fall 2013):

February 13, 2014 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Colleges Raised Record $33.8 Billion in 2013

VSE2013Council for Aid to Education, Colleges and Universities Raise $33.80 Billion in 2013:

Charitable contributions to colleges and universities in the United States increased 9 percent in 2013, according to the Voluntary Support of Education (VSE) survey, conducted by the Council for Aid to Education (CAE). At $33.80 billion, the total is the highest recorded in the history of the survey. In 2009, giving fell from $31.60 billion, which was then the historical high point, to $27.85 billion. Giving levels gradually recovered from that loss until reaching this year’s high.

COE

The top ten fundraising institutions accounted for 1 percent of the responding institutions and raised 17.3 percent of the contributions.

  1. Stanford ($931.57 million)
  2. Harvard  ($792.26 million)
  3. USC ($674.51 million)
  4. Columbia ($646.66 million)
  5. Johns Hopkins ($518.57 million)
  6. Pennsylvania ($506.61 million)
  7. Cornell ($474.96 million)
  8. NYU ($449.34 million)
  9. Yale University ($444.17 million)
  10. Duke ($423.66 million)

For state-by-state results, see here.  Press coverage:

February 13, 2014 in Legal Education | Permalink | Comments (1)

The Collapse of Big Law: A Cautionary Tale for Big Med

AtlanticThe Atlantic:  The Collapse of Big Law: A Cautionary Tale for Big Med:

The legal industry's obsession with performance metrics has contributed to its dramatic collapse. Could the same happen with physicians and hospitals?

Lawyers have something to teach doctors. But it is not how to avoid medical malpractice claims, protect patients’ rights, or negotiate better contracts with hospitals and insurance companies. Instead it is a cautionary tale—a tale of woe, really—about pitfalls the medical profession needs to guard against if it wants to avoid reprising the epidemic of de-professionalization and demoralization that has beset lawyers and the legal profession. 

Simply put, the law is not well. US law school applications are down by nearly half from eight years ago, and 85% of graduates now carry at least $100,000 in debt. More than 180 of the 200 US law schools are unable to find jobs for more than 80% of their graduates. Median starting salaries for those who do find work are down by 17%, and more than a third of graduates cannot find full-time employment. Tellingly, lawyers have higher rates of depression and alcoholism than the general population. 

When surveyed, about 6 in 10 lawyers say they would advise young people to avoid a legal career. Part of the problem is low public esteem for the law.  Compared to the 85% of Americans who say you can trust nurses, only 19% say you can trust lawyers. But this is more of a symptom than an explanation. To understand why public esteem for the legal profession has fallen so far, why so many lawyers are so unhappy, and what medicine can learn them, we must look deeper.

Part of the explanation is simply economic. Since the severe recession of 2008, the number of clients willing to pay top dollar for high-priced legal service has declined precipitously. Many of the nation’s largest law firms—those employing over 1,000 attorneys, often referred to as “Big Law”—have been forced to reduce their staffs.  In dozens of cases, they have had no choice but to merge or file for bankruptcy, economically unable to sustain their operations.

But look deeper still and other more fundamental problems emerge. One is the increasing popularity of law school rankings. In order to compete for students and tuition dollars, law schools do what they can to improve their standing, which means in part encouraging as many students as possible to apply and to take jobs with high-paying firms when they graduate. And for any school to move up in the rankings, another needs to move down.

An even more serious problem is the way law firms keep score. One prevalent measure is PPP, or profit per partner, introduced by The American Lawyer in 1985. When such statistics began to be published, firms that thought they were doing well suddenly discovered that they were being outperformed by peers.  Soon bidding wars ensued for top earners, who are sometimes referred to as “rainmakers.”

In one respect, ranking law schools by job placement rates and law firms by profits sounds like a good idea. It provides a seemingly fair and objective basis for prospective students, employers, and clients to assess performance. But such rankings have a tendency to bring out the worst in those they evaluate.

(Hat Tip: Tracey Roberts.)

February 13, 2014 in Legal Education | Permalink | Comments (1)

Infanti: Big (Gay) Love: Has the IRS Legalized Polygamy?

Big Love 2Anthony C. Infanti (Pittsburgh), Big (Gay) Love: Has the IRS Legalized Polygamy?, 92 N.C. L. Rev. Addendum ___  (2014):

Within days in December, a federal judge in Utah made news by loosening that state’s criminal prohibition against polygamy and the Attorney General of North Dakota made news by opining that a party to a same-sex marriage could enter into a different-sex marriage in that state without first obtaining a divorce or annulment. Both of these opinions raised the specter of legalized plural marriage. What discussions of these opinions missed, however, is the possibility that the IRS might already have legalized plural marriage in the wake of the U.S. Supreme Court’s decision last June in United States v. Windsor, which struck down section three of the federal Defense of Marriage Act (DOMA).

In exploring that possibility, this essay continues my work analyzing the shortcomings of the IRS’s implementation of the Windsor decision. The Secretary of the Treasury promised that IRS guidance would provide same-sex couples with “certainty and clear, coherent tax-filing guidance.” To the contrary, I have explained that the IRS’s guidance provides no more than the same veneer of clarity that DOMA did, because it leaves important questions unanswered, lays traps for the unwary, creates inequities, and entails unfortunate (and, hopefully, unintended) consequences. In this essay, I extend that analysis by explaining how ambiguity in the IRS’s guidance may also have unintentionally opened the door to recognizing plural marriage for federal tax purposes.

February 13, 2014 in Scholarship, Tax | Permalink | Comments (9)

Call for Tax Papers: University of Oxford

OxfordThe Oxford University Centre for Business Taxation has issued a call for papers for its annual symposium:

The symposium will take place at the Saïd Business School in Oxford, from Tuesday 24 – Friday 27 June, 2014. As ever, we welcome research on any topics related to business taxation in its broadest sense, including papers from economics, law and other disciplines, as well as interdisciplinary contributions. 

Submissions can be either completed but unpublished papers or extended abstracts (at least 2 pages) of work in progress that will be completed by the date of the conference. The deadline for submissions is 1 March 2014 and papers should be submitted using the electronic form.  

Selections will be completed, and invitations extended, by 15 March 2014.  

The programme will follow that of previous years; there will be a limited number of formal presentations, and plenty of time for informal interaction and private work, together with social events. This year we will also have two keynote presentations by Joel Slemrod (University of Michigan) and David Weisbach (University of Chicago).

Please forward this call to young scholars working in the area of business taxation. The author of the best paper presented by a young scholar will be awarded a prize. The only submission criterion for this section is that all authors of a paper must have gained their PhD within the last three years.

This year’s symposium convenor is John Vella. Please email John if you have any questions about the academic content of the symposium. If you have any questions regarding the logistics, please contact Clare.  

Accommodation will be organised for presenters and discussants, and the costs of accommodation, meals and social events will be met by the Centre. We have limited funds to reimburse travel costs, and we would like to target our support to participants who are unlikely to be able to attend without such help. If you need financial assistance with travel costs, then please make this known to us on the ‘additional info/comments’ section when you submit your paper/abstract.

February 13, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Bodie and Tamanaha Debate: Should Law Schools Fire Professors Who Do Not Write Post-Tenure?

PrawfsBlawg:  Should Law Schools Fire Professors Who Do Not Write Post-Tenure?, by Matt Bodie (St. Louis):

My general understanding of the law school scene is that law schools hire people to produce legal scholarship, give tenure to folks who produce legal scholarship, gives raises (of varying degrees) for producing legal scholarship, but never fire post-tenure for failing to produce legal scholarship. And that this is true from the schools with the highest scholarly reputations on down. But Brian Tamanaha has challenged my thinking, in a comment to a post yesterday:

Tenured law professors have three core duties (as stated in bylaws and in ABA and AALS regs): scholarship, teaching, and service. We are paid to do all three. You are suggesting that we only have the latter two duties because schools don't fire professors who fail to write.

Holmes recognized the difference between a right or obligation and the chance someone will bring legal action to enforce it. You are using the low probability of the latter to claim that professors do not have an obligation to write--and therefore are not paid to write. Anything we do outside of teaching and service, by your reasoning, is just compensated "free time." This does not follow.

To see why, imagine what would happen if a law school threatened to fire "for cause" a tenured law professor who has not written in the last 5 to 10 years. You are right that this has seldom occurred in the past, but do not assume it is non-existent (rather than quietly settled to avoid embarrassment). And it is certainly possible in the future given current financial pressures. A law school in this situation would have a very strong case for legal termination. That is why your position is wrong. ...

Brian TamanahaMy position is more nuanced than the passage you quote suggests. While teaching, writing, and service are our three core duties, I believe we can contribute in different ways. A professor who does not write can make up for this through extra teaching or by doing extraordinary service beyond normal committee work, like running an important program for the law school. I would certainly not advocate terminating a non-writing professor who carries a full work load in these other ways. In the book I label this an "alternative contribution system." This is the best way to get the most productivity out of all of us.

Matt Bodie I think there is agreement on the reality out there. But I also want to be clear that this reality puts scholarship on a very different footing than teaching and service. Professors cannot choose not to be teachers or committee members. Deans do not tell professors, "You know, I haven't seen you teach in the last few years -- maybe you could write some more to make up for it."

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February 13, 2014 in Legal Education | Permalink | Comments (2)

More Reviews of Tamanaha's Failing Law Schools

FailingTwo reviews of Brian Tamanaha (Washington U.), Failing Law Schools (University of Chicago Press, 2012)):

David Burk (Ph.D. Candidate, University of Chicago Department of Economic), Book Review, 63 J. Legal Educ. 349 (2013):

Failing Law Schools is not the right title for Professor Brian Tamanaha’s book. A better one might be, The Sad Fate of Poor Performers at Low-Ranked Law Schools. It is not as catchy, but gives a better idea of what the book is about. Better still would be to excise the sections about how law school is a bad deal, and call the remaining portion Why Law School is So Expensive and What to Do About It, because the book does a fine job of answering those questions

Michael Simkovic (Seton Hall Law School) & Frank McIntyre (Rutgers Business School), Populist Outrage, Reckless Empirics: A Review of Failing Law Schools, 108 Nw. U. L. Rev. Online 176 (2014):

The authors of The Economic Value of a Law Degree ... focus[] on problems with empirical claims in Failing Law Schools regarding outcomes for law graduates and also regarding law faculty compensation. The review also discusses Professor Tamanaha's proposals for reform of legal education in light of economic theory and the empirical economics literature, and finds reasons to doubt that Tamanaha's proposed reforms will have the effects he predicts.

Other reviews of Failing Law Schools:

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February 13, 2014 in Book Club, Legal Education, Scholarship | Permalink | Comments (11)

The IRS Scandal, Day 280

IRS Logo 2New York Times:  Left and Right Object to IRS Plan to Restrict Nonprofits’ Political Activity:

With time running short, both progressive and conservative advocacy groups are raising serious objections to new rules proposed by the Obama administration to rein in political activity by nonprofit organizations that are not required to disclose sources of their funding.

In a rare agreement between Tea Party and liberal activists, organizations across the political spectrum say new regulations drafted by the Internal Revenue Service to curb a surge in political spending and activity by nonprofits are far too broad. They fear that enforcement of the regulations would chill more neutral civic initiatives such as voter registration efforts and candidate forums.

A strong backlash from conservatives was anticipated after the I.R.S. made the recommended changes public in November. Many contend that the Obama administration is out to muzzle them, citing the heightened scrutiny the I.R.S. gave to nonprofit applications from Tea Party-affiliated groups. But groups associated with more liberal causes are also calling on the I.R.S. to substantially rethink or withdraw the proposal, criticizing it as overreaching, impractical and undemocratic.

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February 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, February 12, 2014

Mehrotra Presents Corporate Taxation and the Regulation of Early 20th Century American Business Today at Duke

MehrotraAjay K. Mehrotra (Indiana) presents Corporate Taxation and the Regulation of Early Twentieth-Century American Business (with Steven A. Bank (UCLA)) at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

In the early twentieth century, the taxation of modern business corporations became increasingly important to the development of American democracy. During that time, governments at all levels began to view business corporations not only as sources of badly needed public revenue, but also as potentially dangerous wielders of concentrated economic power. To combat the growing dominance of corporations, many fiscal reformers sought to use corporate taxation as a mode of regulatory governance. This paper explores the motives and intentions of fiscal reformers during critical junctures in the development of early twentieth-century U.S. corporate taxation. It seeks to explain how changing historical conditions shaped corporate tax law and policy. More specifically, this paper investigates why activists in the first half of the twentieth century turned to taxation in particular as a technique of corporate regulation. By focusing on the pivotal ideas and actions of key political economists, social commentators, and lawmakers, this paper attempts to answer the question: why did reformers see taxation as a viable form of public control over corporate power?

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February 12, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Oh Presents The Pivotal Politics of Temporary Tax Legislation Today at Toronto

OhJason Oh (UCLA) presents The Pivotal Politics of Temporary Tax Legislation at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Crucial to the debates surrounding temporary tax legislation are two types of uncertainty. Will the temporary provision be renewed when it is scheduled to expire? If it is renewed, will the temporary provision change? This article explicitly models the renewal of temporary legislation by extending a political science model of the legislative process. This allows a specification of the conditions under which such uncertainties are likely to be significant. Thus, we can begin to sort temporary provisions that are functionally permanent from those that are truly temporary. This has important consequences for several debates including how temporary legislation is scored for budgetary purposes.

February 12, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Judith Areen Named Executive Director of AALS

AreenAALS, Press Release:

The Association of American Law Schools has appointed Judith Areen of the Georgetown University Law Center to the position of Executive Director. Areen has been serving, since the fall of last year, as Interim Executive Director of the association. She follows Susan Prager, who served as Executive Director for five years and now leads Southwestern Law School in Los Angeles. Areen has been a long-time member of the Georgetown faculty, currently serving as the Paul Regis Dean Professor of Law.

Leo Martinez of the University of California, Hastings, President of the AALS during 2013 and the chair of the search committee, notes that "Judy Areen has a rare combination of expertise, experience, and stature. She is unquestionably the right person to lead the AALS in these uncommon times." This view is echoed by another search committee member and 2012 AALS President, Lauren Robel, Provost of Indiana University: "Judy Areen is a tireless leader with proven vision and integrity, as well as an overarching understanding of all the issues facing our member law schools."

Judy served for fifteen years as Executive Vice President for Law Affairs at Georgetown and Dean of its Law Center. Her service as dean was, by every measure, extraordinary. A former Georgetown colleague and past AALS president, Mark Tushnet of Harvard Law School, notes that "Areen is one of a handful of great law school deans in the past half century."

February 12, 2014 in Legal Education | Permalink | Comments (0)

The Upside of the Law School Crisis: Greater Diversity

Chronicle of Higher Education op-ed:  As Law Schools Struggle, Diversity Offers Opportunities, by Aaron N. Taylor (Professor, St. Louis; Assistant Director, Law School Survey of Student Enagement):

Legal education has been ground zero for practically all of the major challenges facing higher education: rising tuition, rising student debt, a contracted job market, and resulting questions about the utility and value of the degree. Unsurprisingly, there has been a steady drumbeat of bad publicity that has exposed the sausage-making side of law schools to unprecedented scrutiny.

As a result, applications are down more than a third in just three years. First-year enrollments are at their lowest levels in almost 40 years and down 24 percent since the rec­ord high just three years ago. Moreover, declining Law School Admission Test registrations, a proverbial canary, suggest those enrollment trends have yet to bottom out.

That has led colleges to lay off faculty and staff members and to revisit pricing strategies; a few have even gone as far as lowering tuition to attract more students—an unthinkable move during the boom. But lost in the din of negativity is a milestone that deserves cautious celebration: Law schools, as a whole, are more racially and ethnically diverse than ever.

Today, students of color account for 26 percent of all law students. Ten years ago, the proportion was 21 percent; 40 years ago, it was 10 percent. Unsurprisingly, the rate of increase has been uneven. Forty years ago, Asians accounted for less than 1 percent of the nation’s law students; today, they account for 7 percent. The increase among Hispanic law students has been similarly striking, going from 1.7 percent 40 years ago to 8 percent today. Over the same time, the proportion of black students has gone from 5 percent to 7.5 percent. ...

[T]oday’s record proportion of black and Hispanic law students, while far below where it needs to be, is a tentative bright spot among all the unfavorable trends. That bright spot, however, could evolve into a dim reality if law schools do not adapt. In their book The End of the Pipeline, the Pennsylvania State University professors Dorothy H. Evensen and Carla D. Pratt write about how the Socratic and case methods—pedagogical bastions of legal education—foster classroom environments that put students of color, women, and "nontraditional" students at a disadvantage. According to data from the Law School Survey of Student Engagement, students of color are less likely to report positive relationships with classmates; female students ask questions in class less frequently; and diverse perspectives are not as commonly expressed as we tend to believe. ...

An assessment of admissions policies is also critical to the reform discussion. A threshold question is: Do we appreciate the extent of our obligations? When our new classes show up, we are not merely enrolling students; we are enrolling future professionals and leaders. Do our admissions policies and, more important, the qualities we seek in students reflect that long view? And, lastly, do our admissions policies serve equitable ends?

LSAT scores and undergraduate grades play major roles in determining which applicants gain admission to law school. While those indicators do have some value in predicting student success, the value is focused on the first year of law school, an important but nonetheless fleeting period of time. Those indicators have little to no value in predicting longer-term outcomes, like subsequent grades, bar passage, or professional success. Therefore, when one considers the larger purpose of legal education—to prepare students to be ethical professionals and leaders—the folly of undue reliance on the LSAT and undergraduate grades becomes apparent.

February 12, 2014 in Legal Education | Permalink | Comments (3)

Entrikin: The Property Tax Netherworld Fueled by Contingency Fees and Champertous Agreements

J. Lyn Entrikin (Arkansas-Little Rock), Tax Ferrets, Tax Consultants, Bounty Hunters, and Hired Guns: The Property Tax Netherworld Fueled by Contingency Fees and Champertous Agreements, 89 Chi-Kent L. Rev. 289 (2014):

Contingency fee agreements between local tax assessors and contract auditors on the one hand, and property owners and private tax consultants on the other, create perverse financial incentives that undermine the integrity of state and local tax administration. When local governments engage outside auditors to identify undervalued or escaped taxable property, the practice raises serious due process and ethical concerns. As a matter of policy, diverting a share of property tax revenue to private third parties in consideration for outsourced tax assessment services undermines public accountability and reduces net property tax revenue for local government services. And when states allow private tax consultants to use contingency fee agreements to solicit clients seeking to reduce their share of local property taxes, they unwittingly divert substantial tax revenue to private entrepreneurs. The associated private transaction cost of seeking uniformity in local tax assessment unduly burdens the entire property tax system. Because contingency fee agreements with nonattorneys are generally unregulated by state law, honest taxpayers effectively subsidize not only property tax dodgers, but also contract auditors and private tax consultants.

February 12, 2014 in Scholarship, Tax | Permalink | Comments (0)

Johnson: The D.C. Circuit Rejects the IRS's Regulation of Tax Return Preparers

JohnsonTax Prof Blog op-ed:  The D.C. Circuit Rejects the IRS's Regulation of Tax Return Preparers, by Steve R. Johnson (Florida State):

On February 11, a unanimous panel of the D.C. Circuit upheld Loving v. IRS, 917 F. Supp. 2d 67 (D.D.C. 2013). In 2011, Treasury promulgated new regulations imposing CLE and certification requirements on hundreds of thousands of previously largely unregulated paid tax return preparers. Loving held those regulations invalid on the ground that they outstripped the authority granted the Treasury by the 1884 statute on which the regulations were said to be based. (The Government also asserted that the regulations are supported by the inherent authority of agencies to regulate practice before them. The district court rejected that alternative basis of authority, and the circuit court didn’t address it.)

The D.C. Circuit identified six not entirely independent grounds as reasons for concluding that the 1884 statute, as amended, does not authorize the regulations. These grounds include dictionary definitions of the key statutory terms, the history of the statute and its interpretation by Treasury/IRS, analysis of context (the broader framework of which this statute is a part), and various canons of construction.

This all played out in a Chevron context. Both the trial and appellate courts rejected the regulation under Chevron’s Step 1. The appellate court added that it would have held against the Government at Step 2 had the regulation survived Step 1. (Slip op. at 17.)

Here are some thoughts (in no particular order) about Loving:

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February 12, 2014 in Scholarship, Tax | Permalink | Comments (2)

Law School Clinic Rankings

National Jurist: Top Schools of Clinics:

University of Utah jumps onto the list of top schools for clinics as clinical opportunities at law schools continue to rise and law schools expand efforts to meet the needs of communities. ...

The National Jurist came up with the ranking using data from the ABA-LSAC Official Guide to ABA-Approved Law Schools, 2013 Edition. The magazine ranked law schools in order of most clinical opportunities by dividing the total number of full-time clinical course positions filled by the number of full-time students. ... The University of Utah jumped the highest in the ranking, compared to an identical study in The National Jurist two years ago.

NJ

February 12, 2014 in Law School Rankings, Legal Education | Permalink | Comments (3)

Hoffer & Walker: The Death of Tax Court Exceptionalism

Stephanie R. Hoffer (Ohio State) & Christopher J. Walker (Ohio State), The Death of Tax Court Exceptionalism:

Tax exceptionalism—the view that tax law does not have to play by the administrative law rules that govern the rest of the regulatory state—has come under attack in recent years. In 2011, the Supreme Court rejected such exceptionalism by holding that judicial review of the Treasury Department’s interpretations of the tax code is subject to the same Chevron deference regime that applies throughout the administrative state. The D.C. Circuit followed suit by rejecting the IRS’s position that its notices are not subject to judicial review under the Administrative Procedure Act (APA). This Article calls for the demise of another instance of tax exceptionalism: the United States Tax Court’s longstanding view that it is not governed by the APA.

In addition to presenting the legal case against Tax Court exceptionalism, the Article explores administrative law and tax policy considerations that favor the Tax Court following traditional administrative law, including consistent application of the law, efficient allocation of resources, horizontal and vertical equity, comparative agency expertise, and a proper separation of powers. Moreover, by following administrative law principles that may be more deferential to the IRS in a particular case, the Tax Court can establish a richer dialogue with the IRS to improve agency procedures and decision-making—thus advancing tax policy’s interest in protecting less sophisticated taxpayers while increasing economic efficiency. With a growing circuit conflict as to whether the Tax Court is bound by the APA, the Tax Court should reverse course now before the Supreme Court intervenes to declare the death of tax exceptionalism in yet another area of tax law.

February 12, 2014 in Scholarship, Tax | Permalink | Comments (1)

Schmidt: How Tax Law Made Modern America

AjayChristopher W. Schmidt (Chicago-Kent), How Tax Law Made Modern America (Jotwell), reviewing Ajay K. Mehrotra (Indiana), Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877-1929 (Cambridge University Press, 2013):

This book serves as a model for legal historians who are looking to integrate fine-grained, nuanced analyses of historical events and actors with the kind of big-picture ideas that most readily engage our fellow legal scholars. This is a book that illuminates a fundamental transformation of the American state, a transformation in whose shadow we obviously live today. This is also a book that takes ideas quite seriously. (Mehrotra begins one of his chapters with John Maynard Keynes’s quotation about “[p]ractical men” unknowingly being “the slaves of some defunct economist.”) But this book is not, in the end, a work of intellectual history or political theory. It is history in which ideas are important because they moved the machinery of politics and law. Understanding the roots of the policy changes examined in this book requires careful attention to the larger ideas that made the policy seem so urgent and necessary. We are thus witnesses to the complex interplay of ideology, legal development, politics, and social activism. Out of all this, as this book so effectively and smartly demonstrates, arose a new set of legal norms, political expectations, and societal sensibilities.

One of the most important contributions of Making the Modern American Fiscal State is the way in which Mehrotra conceptualizes the very idea of taxes. Taxing, in Mehrotra’s account, was not just a tool for raising revenues to fund whatever policy the government in power favored. It was not just a neutral means to a contested, ideological end. Taxing policy was itself a statement of substantive ideology; it was a discourse through which Americans could talk about their vision of government and civic responsibility. “Fiscal citizenship” is the nicely evocative label Mehrotra attaches to this idea. This is a rich, compelling, and convincing framework through which to think about taxing. And it is a perfect vehicle for telling the story of the rise of progressive taxation and thus the formation of the modern American state.

February 12, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 279

Tuesday, February 11, 2014

Albany Law School Turns to Tenured Faculty Buyouts, Tax Certificate Program for Non-Lawyers to Address Financial Crisis

Albany logoFollowing up on my prior post, Albany Law School Offers Buyouts to Eight Tenured Faculty:

Albany Business Review, Albany Law School Offers Buyouts to Faculty:

Albany Law School is offering buyouts to faculty so its payroll better matches the school's declining student enrollment.

While Albany Law School's enrollment decreased by about 200 students in the past ten years, the size of its faculty has remained steady at about 50 full-time faculty. Last week, the board began efforts to downsize, offering a voluntary buyout program for tenured and long-term contract faculty.

The board acknowledges that Albany Law School's situation marks a structural change, Nolan said, and will seek other reductions and new sources of revenue. The school may offer certificate programs to non-lawyers in areas like health care, tax and intellectual property law, said Penelope Andrews, dean and president of the law school.

Brooklyn Daily Eagle, Crisis at Albany Law School Brings Fight Into the Open:

The Albany School’s Board outlined a challenging future, stating, "A review of our declining bar passage statistics (we are now the second lowest law school in New York State for bar passage), combined with the extremely difficult employment market for our graduates, compels us to believe that we must focus on quality of applicants, not quantity. "To admit students in order to increase revenues due to projected operating deficits would be both unethical and in violation of ABA standards." ...

Penelope Andrews, dean and president of Albany Law School, ... said that any discussion of lowering standards is off the table. ... Andrews said the faculty and administration have engaged in discussions on how to reduce costs and increase revenues. She confirmed that one of the ideas floated was to admit more students, especially those on the "wait list" who are on the cusp of earning admission.  To her credit, Dean Andrews told Stashenko that admitting students for financial gain would be "irresponsible."

An unnamed Albany Law professor said a "small but vocal minority" of faculty want the school to lower its standards to boost its tuition revenues and lessen the chances of layoffs. "It is a very selfish, selfish endeavor," the professor said. "They are really trying to save their jobs, but they've ginned this up to make it look like we are denying academic rights."

Update

February 11, 2014 in Legal Education | Permalink | Comments (0)

D.C. Circuit Invalidates IRS's Regulation of Tax Return Preparers in the Absence of Statutory Authority

RTRPLoving v IRS, No. 13-5061 (D.C. Cir. Feb. 11, 2014):

In 2011, responding to concern about the performance of some paid tax-return preparers, the IRS issued new regulations. Among other things, the new regulations require that paid tax-return preparers pass an initial certification exam, pay annual fees, and complete at least 15 hours of continuing education courses each year. The IRS estimates that the new regulations will apply to between 600,000 and 700,000 tax-return preparers. 

As statutory authority for the new regulations, the IRS has relied on 31 U.S.C. § 330. Originally enacted in 1884, that statute authorizes the IRS to “regulate the practice of representatives of persons before the Department of the Treasury.” 31 U.S.C. § 330(a)(1). In the first 125 years after the statute’s enactment, the Executive Branch never interpreted the statute to authorize regulation of tax-return preparers. But in 2011, the IRS decided that the statute in fact did authorize regulation of tax-return preparers.

In this case, three independent tax-return preparers contend that the IRS’s new regulations exceed the agency’s authority under the statute. The precise question is whether the IRS’s statutory authority to “regulate the practice of representatives of persons before the Department of the Treasury” encompasses authority to regulate tax-return preparers. The District Court ruled against the IRS, relying on the text, history, structure, and context of the statute. We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers. We therefore affirm the judgment of the District Court. ...

In our view, at least six considerations foreclose the IRS’s interpretation of the statute. ... In our judgment, the traditional tools of statutory interpretation – including the statute’s text, history, structure, and context – foreclose and render unreasonable the IRS’s interpretation of Section 330. Put in Chevron parlance, the IRS’s interpretation fails at Chevron step 1 because it is foreclosed by the statute. In any event, the IRS’s interpretation would also fail at Chevron step 2 because it is unreasonable in light of the statute’s text, history, structure, and context. It might be that allowing the IRS to regulate tax-return preparers more stringently would be wise as a policy matter. But that is a decision for Congress and the President to make if they wish by enacting new legislation. The “role of this Court is to apply the statute as it is written – even if we think some other approach might accord with good policy.” Burrage v. United States, __ S. Ct. __ (2014) (internal quotation marks and brackets omitted). The IRS may not unilaterally expand its authority through such an expansive, atextual, and ahistorical reading of Section 330. As the Supreme Court has directed in words that are right on point here, the “fox-in-the-henhouse syndrome is to be avoided . . . by taking seriously, and applying rigorously, in all cases, statutory limits on agencies’ authority.” City of Arlington v. FCC, 133 S. Ct. 1863, 1874 (2013). We affirm the judgment of the District Court.

(Hat Tip:  Evelyn Brody, Michael Doran, Kirstin Hickman.)  Prior TaxProf Blog coverage:

February 11, 2014 in IRS News, Tax | Permalink | Comments (2)

Caron Presents Revitalizing the Estate Tax: Five Easy Pieces Today at Pepperdine

Caron 2012 PhotoPaul L. Caron (Pepperdine) presents Revitalizing the Estate Tax: Five Easy Pieces, 142 Tax Notes ___ (2014) (with James R. Repetti (Boston College)) at Pepperdine today as part of its Faculty Workshop Series:

In The Estate Tax Non-Gap, Why Repeal a Voluntary Tax?, 20 Stan. L. & Pol'y Rev. 153 (2009), we argued that, contrary to the state of the law over thirty-five years ago when George Cooper wrote his seminal article,  A Voluntary Tax? New Perspectives on Sophisticated Estate Tax Avoidance, 77 Colum. L. Rev. 161 (1977), taxpayers today generally “can reduce the value of assets subject to transfer tax in many instances only if they are willing to assume the risk that the reduction may be economically real and reduce the actual value of assets transferred to heirs or, alternatively, in narrow situations if they are willing to incur some tax risk.”  In Occupy the Tax Code: Using the Estate Tax to Reduce Inequality and Spur Economic Growth, 40 Pepp. L. Rev. 1255 (2013), we documented the dramatic increase in income and wealth inequality over the past thirty years and the accompanying adverse social consequences and long-term negative impact on economic growth.  We argued that tax policy historically has played an important role in reducing inequality and that the estate tax is a particularly apt reform vehicle in light of the role of inherited assets among the very rich and the adverse economic effects of such inherited wealth.  In this article, we advance five estate and gift tax reform proposals that will generate needed revenue, reduce inequality, and contribute to economic growth: (1) disallow minority discounts where the transferred asset or business is controlled by family before and after the transfer; (2) maintain parity between the unified credit exemption amount for the estate tax and gift tax; (3) reduce the wealth transfer tax exemptions to $3.5 million, increase the maximum tax rate to 45 percent, and limit the GST exemption period to 50 years; (4) restrict the ability of gifts made in trust to qualify for the gift tax annual exclusion; and (5) impose a lifetime cap on the amount that can be contributed to a Grantor-Retained Annuity Trust (“GRAT”).

February 11, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Brennan Presents Smooth Retirement Accounts Today at NYU

BrennanThomas J. Brennan (Northwestern) presents Smooth Retirement Accounts at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

I introduce the concept of "smooth retirement accounts" (SRAs) to provide a method for taxing retirement savings evenly over time. I contrast this with the back-loaded taxation of traditional accounts, and I use lifetime utility maximization models to demonstrate that future non-linear and uncertain tax brackets can distort savings incentives and portfolio allocations for for traditional account holders. I also contrast SRAs with the front-loaded taxation of Roth accounts, and I argue that SRAs would bring a reasonable portion of retirement account taxes into the current budget window without leading to the extreme result of Roth accounts that leave no tax receipts beyond the year of contribution. Because SRAs can eliminate investment and savings distortions for taxpayers, as well as help set government budgetary incentives correctly, I recommend that they be created by Congress as a replacement for the current choices of Roth and traditional accounts.

February 11, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Harvard Symposium: Intellectual Diversity and the Legal Academy

HarvardIntellectual Diversity and the Legal Academy (A Conference by the Harvard Federalist Society), 37 Harv. J.L. & Pub. Pol'y 137-98 (2013):

February 11, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Why Failing Well Is the Key to Success

Megan McArdle, The Up Side of Down: Why Failing Well Is the Key to Success (2014):

UpMost new products fail. So do most small businesses. And most of us, if we are honest, have experienced a major setback in our personal or professional lives. So what determines who will bounce back and follow up with a home run? If you want to succeed in business and in life, Megan McArdle argues in this hugely thought-provoking book, you have to learn how to harness the power of failure.

McArdle has been one of our most popular business bloggers for more than a decade, covering the rise and fall of some the world’s top companies and challenging us to think differently about how we live, learn, and work. Drawing on cutting-edge research in science, psychology, economics, and business, and taking insights from turnaround experts, emergency room doctors, venture capitalists, child psychologists, bankruptcy judges, and mountaineers, McArdle argues that America is unique in its willingness to let people and companies fail, but also in its determination to let them pick up after the fall. Failure is how people and businesses learn. So how do you reinvent yourself when you are down?

Dynamic and punchy, McArdle teaches us how to recognize mistakes early to channel setbacks into future success. The Up Side of Down marks the emergence of an author with her thumb on the pulse whose book just might change the way you lead your life. 

February 11, 2014 in Book Club, Legal Education, Tax | Permalink | Comments (2)

Feld: The Constitutionality of the Cash Parsonage Allowance

Tax Analysys Logo (2013)Alan L. Feld (Boston University), The Constitutionality of the Cash Parsonage Allowance, 142 Tax Notes 667 (Feb. 10, 2014):

Professor Zelinsky has made a valiant effort to defend the constitutionality of section 107(2), the provision that excludes from gross income cash housing allowances of a minister of the gospel. [The First Amendment and the Parsonage Allowance, 142 Tax Notes 413 (Jan. 27, 2014).].  A U.S. district court granted summary judgment to plaintiffs attacking the provision on First Amendment and Equal Protection grounds. Zelinsky criticizes the decision for failing to give due weight to the secular purposes of the exemption. Unfortunately, Zelinsky's argument is ultimately unpersuasive.

February 11, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (2)

Ryan: Are Inheritance Taxes Special?

JotwellKerry Ryan (St. Louis), Are Inheritance Taxes Special? (Jotwell) (reviewing Luc Arrondel & André Masson (both of the Paris School of Economics), Taxing More (Large) Family Bequests: Why, When, Where?):

As I write this review, I am blatantly aware of the maxim “we like what we know.” I like Luc Arrondel and André Masson’s (A&M) working paper (lots) because it touches on themes I have previously written about (the clash between family autonomy and equality of opportunity as the central normative tension underlying the federal wealth transfer taxes) or enjoyed in other legal scholars’ work (the failure of economic models to account for “life in all of its fullness”). The contribution to these subjects made by A&M is interesting for two reasons: 1) they are economists by trade and 2) they offer a distinctly interdisciplinary analysis of the conundrum of wealth transfer taxation.

February 11, 2014 | Permalink | Comments (0)

The Tax Treatment of American Olympic Medal Winners

The IRS Scandal, Day 278