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Tuesday, April 28, 2015

Johnston: What Would Jesus Do About Tax Policy?

CaptureAl Jazeera:  What Would Jesus Do About Tax Policy?, by David Cay Johnston (Syracuse):

After years of study and debate, the ninth-largest Protestant denomination, the Presbyterian Church USA, has come out with a detailed report that ties the religious duty of believers and government tax policy [Tax Justice: A Christian Response to a Second Gilded Age].

[W]ho can organize people to push for changes in government policy that will reduce poverty and extreme inequality?

The University of Chicago Divinity School’s Myriam Renaud provided an answer recently:

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April 28, 2015 in Tax | Permalink | Comments (1)

Ohio State Law Grad Has $328,000 Of Student Loan Debt

Ohio State LogoABA Journal, Law Grad From Ill-fated Class of 2010 Had $328K in Student Debt and Worked Three Jobs:

The numbers were bad for law grad Hyatt Shirkey.

He graduated from Ohio State’s law school in 2010—a particularly tough year for Ohio law grads, according to a study by a law professor at the school, Deborah Jones Merritt. And he had $328,000 in student debt, according to the New York Times. TaxProf Blog noted the story.

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April 28, 2015 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 719

IRS Logo 2Examiner, IRS Attacks Conservative Groups But Silent on Clinton Foundation:

In the midst of the news media coverage of the Hillary Clinton emails, her private Internet server, her thumbing her nose at government regulations and allegations that her and her husband's "charity" was involved in shady deals, no one except for public-interest groups is asking about an IRS investigation. There are several allegations that the Clinton Foundation is nothing more than a sophisticated and elaborate political slush fund, according to news stories on Monday.

More than one group that was targeted by the IRS for daring to be conservative believes that if there ever was an organization that should be investigated and audited by the IRS it's the Clinton Foundation. The Clintons possess a talent for making incriminating documents disappear and Americans are warned to not hold their breath waiting for the IRS or the Justice Department investigate the Clintons and their arguably corrupt foundation.

However, the Clintons' home state of Arkansas has a young attorney general who does possesses the authority to launch a criminal investigation because the foundation claims the state of Arkansas as its headquarters. Attorney General Leslie Rutledge will likely be trashed by the Clinton machine

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April 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, April 27, 2015

InfiLaw Op-Ed On Charleston Law School's Deteriorating Financial Position

Infilaw CharlestonCharleston Post and Courier op-ed:  CSOL on Shaky Ground, by C. Peter Goplerud (President, InfiLaw Management Solutions):

I know that there are rumors and frustrations concerning the future of the Charleston School of Law. I, too, am very concerned and believe that it is in the best interests of the community and South Carolina Bar that, with or without InfiLaw, the school continues to survive. The CSOL was already in a fragile position when we signed the agreement almost two years ago to acquire it. Like most law schools, it was facing the challenging prospects of falling enrollment as legal employment and, as a result, law school applications were declining rapidly, just as they were throughout the nation.

Moreover, since 2010, the owners have taken $25 million in distributions, depriving the school of capital to withstand a downturn in the economy. Unlike schools affiliated with a university system, the Law School has no source of financial support other than tuition....

Unfortunately, our efforts to acquire the Law School ran into opposition based on arguments that we believed were either without basis in fact or clouded by bias against a business model that ironically is the same as that of the CSOL. ... [N]o serious or credible offer to acquire the Law School ever materialized, even though we allowed the school to consider such an offer by waiving our binding purchase agreement. And all the while, the situation at the CSOL has continued to deteriorate:

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April 27, 2015 in Legal Education | Permalink | Comments (0)

NY Times: Inversion Schadenfreude -- By Moving Overseas To Save Taxes, Mylan And Perrigo Lost Protections They Could Deploy To Fend Off Teva's Hostile Takeover

NY Times Dealbook (2013)New York Times Deal Book:  The Unintended Twist of Tax Inversions, by Steven Davidoff Solomon (UC-Berkeley):

Teva’s unsolicited $40 billion bid for the drug maker Mylan and Mylan’s own unsolicited offer for the rival Perrigo are sweet revenge for the United States taxpayer.

The reason is their flight from the United States in tax inversions has made both more exposed to hostile takeovers. Their executives may now rue the day they left the United States simply to save a few dollars in taxes.

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April 27, 2015 in Tax | Permalink | Comments (3)

Ryan Receives St. Louis Faculty Scholarship Award

RyanCongratulations to Kerry Ryan (St. Louis), who received the St. Louis Law School Faculty Award For Exceptional Legal Scholarship today for her article, EITC as Income (In)Stability?, 14 Fla Tax Rev. 583 (2014):

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April 27, 2015 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Love and Merit

New York Times op-ed:  Love and Merit, by David Brooks:

There are two great defining features of child-rearing today. First, children are now praised to an unprecedented degree. As Dorothy Parker once joked, American children aren’t raised; they are incited. They are given food, shelter and applause. That’s a thousand times more true today. Children are incessantly told how special they are.

The second defining feature is that children are honed to an unprecedented degree. The meritocracy is more competitive than ever before. Parents are more anxious about their kids getting into good colleges and onto good career paths. Parents spend much more time than in past generations investing in their children’s skills and résumés and driving them to practices and rehearsals.

These two great trends — greater praise and greater honing — combine in intense ways. Children are bathed in love, but it is often directional love. Parents shower their kids with affection, but it is meritocratic affection. It is intermingled with the desire to help their children achieve worldly success.

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April 27, 2015 in Legal Education | Permalink | Comments (3)

NY Times: Investors Race To Do Like-Kind Exchanges Of Art As Obama Proposes Closing Section 1031 Loophole

SunNew York Times, Tax Break Used by Investors in Flipping Art Faces Scrutiny:

Introduced in the 1920s to ease the tax burden of farmers who wanted to swap property, it soon became a tool for real estate investors flipping, say, office buildings for shopping malls.

Now, this little-known provision in the tax code, known as a like-kind exchange, has become a popular tactic for a new niche of investors: buyers of high-end art who want to put off — and sometimes completely avoid — federal taxes when upgrading their Diebenkorns for Rothkos. ..

The exchanges have become prevalent enough, and the cost to the government significant enough, that the Obama administration is seeking to eliminate them, a prospect causing no shortage of alarm in sectors of the art world. ...

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April 27, 2015 in Tax | Permalink | Comments (3)

NY Times: Finland Imposes Progressive Fines Based On Income; Millionaire Receives $58,000 Speeding Ticket

FinlandNew York Times, Speeding in Finland Can Cost a Fortune, If You Already Have One:

Reima Kuisla, a Finnish businessman, ... was recently fined 54,024 euros (about $58,000) for traveling a modest, if illegal, 64 miles per hour in a 50 m.p.h. zone. And no, the 54,024 euros did not turn out to be a typo, or a mistake of any kind. Mr. Kuisla is a millionaire, and in Finland the fines for more serious speeding infractions are calculated according to income. The thinking here is that if it stings for the little guy, it should sting for the big guy, too. ...

[T]he Finnish “day fine” system, also in use in some other Scandinavian countries, dates to the 1920s, when fines based on income were instituted for all manner of lesser crimes, such as petty theft and assault, and helped greatly reduce the prison population.

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April 27, 2015 in Tax | Permalink | Comments (1)

NY Times: Burdened With Debt, Law Grads Struggle in Job Market

NY Times Dealbook (2013)New York Times Deal Book:  Burdened With Debt, Law School Graduates Struggle in Job Market, by Elizabeth Olson:

About 20 percent of law graduates from 2010 are working at jobs that do not require a law license, according to a new study, and only 40 percent are working in law firms, compared with 60 percent from the class a decade earlier. To pay the bills, the 2010 graduates have taken on a variety of jobs, some that do not require admission to the bar; others have struck out on their own with solo practices. Most of the graduates have substantial student debt.

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April 27, 2015 in Legal Education | Permalink | Comments (7)

Carter: A Critique of Charitable Bequests

Elizabeth R. Carter (LSU), Tipping the Scales in Favor of Charitable Bequests: A Critique, 34 Pace L. Rev. 983 (2014):

This paper considers the public policy favoring testamentary bequests to charity and offers a critique of that policy.

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April 27, 2015 in Scholarship, Tax | Permalink | Comments (0)

After Public Shaming, Law Prof Tries To Reclaim Her Dignity

McElroyWashington Post op-ed:  After a Public Shaming, Reclaiming My Dignity, by Lisa T. McElroy (Drexel):

When a Web site broke the news on April 3 that, instead of posting an Internet link to an article about writing legal briefs, I had inadvertently sent my law school students a link to a porn site, I thought I could never recover. ...

Even before the story hit the Web, I was in terrible shape; when I learned a few days earlier what I had done, I was mortified.

As a law professor, I care deeply about students and their educational experience. As an employee, I care about my institution of learning. As a mother, I care about being a role model for my adolescent daughters.

Selfishly, I care about my dignity. ...

At first, when I learned what had happened, I was sure I had lost my dignity forever. Unsurprisingly, some students spread word of the incident through social media and anonymous e-mails to the media. Everyone was talking about me. Everyone was speculating about whether I watched porn, or used sex toys, or liked kinky sex. Some people were calling for my job and law license.

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April 27, 2015 in Legal Education | Permalink | Comments (9)

Findley: Why Doesn't Skills Training Improve Law Student Employment Outcomes?

Keith A. Findley (Wisconsin), Assessing Experiential Legal Education: A Response to Professor Yackee:

In his recent article [Does Experiential Learning Improve JD Employment Outcomes?], my colleague Jason Yackee offers some interesting data on comparative rates of law-related job placement for graduates of the top 100 U.S. law schools. In the end, his analysis in part reaches the entirely unsurprising conclusion that higher-ranked law schools are more successful at placing their graduates in full-time law-related jobs than are lower-ranked schools. More interestingly, and less obviously, his data also suggest that schools that offer more experiential learning opportunities do not have any greater success in placing their students in full-time law-related jobs than do schools with fewer clinical offerings. From this, he queries whether clinical legal education is worth the expense and opportunity costs that it represents to law schools.

In this response I focus on two important but largely overlooked questions that Yackee's data analysis (if correct) raises.

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April 27, 2015 in Legal Education | Permalink | Comments (7)

The IRS Scandal, Day 718

IRS Logo 2Breitbart, GOP Sen. Presses Obama Administration On Criminal Probe Of IRS Targeting of Conservatives:

On Tax Day, Senate Judiciary Committee Chairman Chuck Grassley (R-IA) pressed the Obama administration for an update on the criminal investigation into the alleged misconduct of IRS personnel in the handling of conservative organizations’ tax exempt status.

“It’s unclear whether all of these cases are open or closed,” Grassley said Wednesday. “The investigative agencies should account for their work. The scandal damaged the public trust in the IRS. Building back any of that trust requires investigation and accountability for any misconduct.”

In a letter to the Acting Deputy Attorney General Sally Quillian Yates and the Treasury Inspector General for Tax Administration J. Russell George, the Iowa lawmaker requested more information about the investigation — or lack thereof.

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April 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, April 26, 2015

What LSU Portends for the Future of Legal Education

LSU Logo (2016)Boston Globe, LSU to Draft Insolvency Plan as Jindal Cuts Loom:

Louisiana State University will draw up a financial exigency plan, equivalent to college bankruptcy, as $608 million in budget cuts proposed by Governor Bobby Jindal threaten to cripple the state’s higher-education system.

Exigency, declared when schools face insolvency, would allow the state’s flagship institution to restructure and fire tenured faculty.

TaxProf Blog op-ed:   What LSU Portends for the Future of Legal Education, by David Barnhizer (Cleveland State):

When we are trying to figure out what is going to happen with law schools we need to think through what is going to happen with universities. Regardless of what law schools do, if they become financial burdens on their host universities it can be expected that the universities will initiate actions. One is the bankruptcy variation such as reported in relation to LSU in the Boston Globe and the other is the closing of the law school in its entirety and termination of its faculty en masse. The latter approach may be as strategically cynical as closing a school for 3-5 years and then reopening as a new school after ridding the university of faculty during a period in which the demand for new law graduates may increase again.

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April 26, 2015 in Legal Education | Permalink | Comments (8)

The Top 5 Tax Paper Downloads

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

  1. [271 Downloads]  The U.S. Foreign Account Tax Compliance Act: American Legal Imperialism?, by Bruce W. Bean (Michigan State) & Abbey Wright Farnsworth
  2. [252 Downloads]  Recent Developments in Federal Income Taxation: The Year 2014, by Martin J. McMahon Jr. (Florida), Bruce A. McGovern (South Texas) & Ira B. Shepard (Houston)
  3. [217 Downloads]  Can Sharing Be Taxed?, by Shu-Yi Oei (Tulane) & Diane M. Ring (Boston College)
  4. [176 Downloads]  Using the 'Smart Return' to Reduce Tax Evasion, by Joseph Bankman (Stanford), Clifford Nass (Stanford) & Joel Slemrod (Michigan)
  5. [169 Downloads]  The Historical Origins of the Debt-Equity Distinction, by Camden Hutchison (Wisconsin)

April 26, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The Plight Of A Christian Professor At An Elite Law School

CLS 2Rod Dreher, The Post-Indiana Future for Christians:

I spent a long time on the phone last night with a law professor at one of the country’s elite law schools. This professor is a practicing Christian, deeply closeted in the workplace; he is convinced that if his colleagues in academia knew of his faith, they would make it very hard for him. ... I will call him Prof. Kingsfield, after the law professor in The Paper Chase. 

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April 26, 2015 in Legal Education | Permalink | Comments (29)

The IRS Scandal, Day 717

IRS Logo 2Pittsburgh Tribune-Review, The Gathering Storm: An IRS Defeat:

Attempting to obscure the extent of its alleged targeting of conservative groups, the Internal Revenue Service has been smacked with a serious setback in its court fight in Ohio.

A federal judge granted a motion compelling the IRS to list the 298 targeted organizations, which the IRS had identified for the Treasury Department inspector general. In a lawsuit filed in 2013, 10 conservative groups, through discovery, have been trying to pry free the list of all groups targeted by the IRS. This, in order to seek class certification and expand the lawsuit to "all the organizations on (ex-IRS official) Lois Lerner's hit list," writes Hans von Spakovsky of The Heritage Foundation. ...

The discernible rumbling of distant thunder portends the gathering storm that is going to rain down on the IRS.

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April 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, April 25, 2015

Class of 2014 Law School Job Placement Rankings

RankingsMatt Leichter, Class of 2014 Employment Report (Leaked Edition):

I’ve been peeking daily at the ABA’s employment summary Web page.  On Friday morning, the class of 2014 data appeared ...  Yet when I returned Friday afternoon, I found it was gone … But not before I downloaded the spreadsheet. ...  I’ve run the numbers, so I just have to leak the results.

58.7 percent of graduates held full-time jobs requiring bar passage, up from 55.9 percent for the class of 2013. However—and this is very important—the actual number of graduates in such jobs fell to 25,292 from 25,762 last year, about a 1.8 percent decline. [43,115 graduated from an ABA-accredited law school outside of Puerto Rico in 2014, compared to 45,824 in 2013, a 4.8% decline.]

Leichter 2

[Here is] the comparison table for each law school, sorted by their 2014 percentage of graduates in full-time bar-passage required jobs less school-funded positions:

Full-Time/Long-Term in Bar-Passage-Required Jobs
(Excluding Law-School-Funded Jobs)

RankLaw School’13’14Change
1. Pennsylvania 85.7% 91.4% +5.7%
2. Cornell 81.3% 90.1% +8.8%
3. Duke 85.1% 87.9% +2.8%
4. Columbia 88.3% 87.2% -1.1%
5. Chicago 86.5% 87.1% +0.6%
6. NYU 86.2% 86.0% -0.2%
7. Harvard 84.9% 85.5% +0.6%
8. UC-Berkeley 78.4% 85.4% +7.0%
9. Stanford 85.1% 85.0% -0.1%
10. Virginia 79.7% 84.8% +5.1%
11. Michigan 81.2% 81.8% +0.6%
12. New Mexico 73.7% 80.2% +6.5%
13. Kentucky 74.4% 80.2% +5.8%
14. Northwestern 77.5% 78.4% +0.9%
15. Iowa 76.3% 77.8% +1.5%
16. Boston College 64.0% 74.4% +10.4%
17. Minnesota 68.2% 73.7% +5.5%
18. Nebraska 66.1% 73.5% +7.4%
19. Vanderbilt 78.2% 73.2% -5.0%
20. Washington University 66.0% 72.9% +6.9%
21. Alabama 71.7% 72.5% +0.8%
22. Ohio State 60.4% 72.4% +12.0%
23. LSU 67.4% 72.4% +5.0%
24. Washburn 62.9% 72.3% +9.4%
25. Seton Hall 68.9% 72.3% +3.4%
26. UCLA 66.6% 71.7% +5.1%
27. Texas 75.1% 71.5% -3.6%
28. Georgia State 62.6% 71.2% +8.6%
29. Georgia 68.4% 70.6% +2.2%
30. Arizona State 61.8% 70.2% +8.4%
31. SMU 70.9% 69.7% -1.2%
32. Georgetown 72.4% 69.6% -2.8%
33. Yale 74.4% 69.6% -4.8%
34. Wake Forest 58.5% 69.5% +11.0%
35. Florida 66.4% 69.3% +2.9%
36. Mercer 65.6% 69.2% +3.6%
37. North Carolina 68.1% 68.7% +0.6%
38. Oklahoma 66.3% 68.5% +2.2%
39. Tulsa 58.0% 68.4% +10.4%
40. Idaho 62.4% 68.3% +5.9%
41. Miami 60.7% 68.2% +7.5%
42. BYU 64.6% 68.1% +3.5%
43. Kansas 64.2% 68.1% +3.9%
44. South Dakota 62.0% 67.9% +5.9%
45. Boston University 61.2% 67.9% +6.7%
46. Fordham 63.4% 67.8% +4.4%
47. Baylor 70.5% 67.6% -2.9%
48. Montana 69.1% 67.5% -1.6%
49. Florida State 69.6% 67.2% -2.4%
50. Colorado 67.0% 66.7% -0.3%

The bottom 10 law schools are:

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April 25, 2015 in Law School Rankings, Legal Education | Permalink | Comments (16)

Ring Presents Can Sharing Be Taxed? Today at Fordham

FordhamDiane M. Ring (Boston College) presents Can Sharing Be Taxed?, 93 Wash. U. L. Rev. ___ (2016) (with Shu-Yi Oei (Tulane)), at Fordham today as part of its conference on Sharing Economy, Sharing City: Urban Law and the New Economy:

The past few years have seen the rise of a new model of production and consumption of goods and services, often referred to as the “sharing economy.” Fueled by startups such as Uber and Airbnb, sharing enables individuals to obtain rides, accommodations, and other goods and services from peers via the Internet or mobile application in exchange for payment. The rise of sharing has raised questions about how it should be regulated, including whether existing laws and regulations can and should be enforced in this new sector or whether new ones are needed.

In this Article, we explore those questions in the context of taxation. We argue that, contrary to the claims of some commentators, the application of substantive tax law to sharing is mostly (though not completely) clear, because current law generally contains the concepts and categories necessary to tax sharing. However, tax enforcement and compliance may present challenges, as a result of two distinctive features of sharing. First, some sharing businesses tend to opportunistically pick the more favorable regulatory interpretation if there is ambiguity regarding which rule applies or whether a rule applies. This leads to compliance and enforcement gaps. Second, the “microbusiness” nature of sharing raises unique compliance and enforcement concerns. We suggest strategies for addressing these dual challenges, including lower information reporting thresholds, safe harbors and advance rulings to simplify tax reporting, and targeted enforcement efforts.

April 25, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Law School Dean’s Art Teaches Life Lessons For His Students

The Star, Law School Dean’s Art Pieces Translate Into Advice for the Audience:


A drove of horses, koi swimming in a pond, a ship basking in a warm orange glow — these are some of the works on display at Harmahinder Singh’s first solo art exhibition titled UNwritten Law Bespoke Art at the CODA Gallery in Taylor’s University.

At first impression, the piece with the horses can be interpreted as strength in teamwork but the explanation beside it describes something different.

The five internal forces of mankind — lust, anger, greed, worldly attachment and pride — must be held in check. Lose your head and chaos will follow. Either way, it represents positivity and thus, serves as a meaningful conversation piece.

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April 25, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 716

IRS Logo 2Forbes, IRS Forced To Release Names Of Targeted Groups, by Peter J. Reilly:

So we had another Tea Party decision on April 1 of all days. NorCal Tea Party Patriots is one of the ten organizations in a lawsuit against the IRS because of delays and intrusive scrutiny while they were applying for exempt status.  They want it to be a class action suit, but they need information from the IRS to determine what organizations should be in the class. ...

The IRS argued that it could not make those disclosures, because they would be in violation of Code Section 6103 which protects the confidentiality of returns and return information.  The judge went with NorCal on this one.

The Court concludes that the return information sought is directly related to the issue of class certification in this federal court proceeding. The names of the putative class member organizations and their control dates—the date which the putative class member organizations submitted their applications for tax exempt status to the IRS—are directly related to the issue of class certification. Plaintiffs seek the return information of the putative class members to prove to the Court that the Federal Rule of Civil Procedure 23(a) and 23(b) requirements such as typicality, commonality, and whether the IRS acted on a grounds that applied generally to the putative class are satisfied. ...

I’m beginning to despair of their ever being an end to the IRS Scandal on Day 714 by the TaxProf count, as I write this. I thought this latest decision might be a good opportunity to reach out to someone who might have a different view on the whole matter.

Frank Wolpe, Professor Emeritus at Bentley University has written a white paper about rebuilding the IRS. (download)

The paper identifies the ill-conceived massive 1998 structural reorganization and division (like salami-slicing) of field operations as a major cause of the IRS’s current legal battles and “downward slide.” In its 1998 aftermath, we were all left with an overly centralized Washington IRS National Office and an undermanaged array of field operations. That’s where the Tea Party scandal started; and, even more importantly, it need never be repeated. Indeed, such events must stop!

“With that recognition, change-makers can travel a 2015 bipartisan pathway to addressing a wrong-headed 1998 “solution” to a 1998 non-existent structural problem by introducing a 2015 proposal for a National Office consolidation (slimming down) coupled with a field operations decentralization (closer to customers and ending the practice of absentee senior management without local accountability).

Of course the notion that the scandal must have actually started in the Oval Office still has an irresistible grip in some circles, so a boring reorganization just won’t be satisfying.  So maybe it never will end.

Hans von Spakovsky of wrote:

The arguments in this case by the Justice Department are another example of how the IRS has been hiding behind Section 6103. That law was intended to prevent the IRS from publicly disclosing private tax information—such as its illegal disclosure of the tax returns of the National Organization for Marriage (the IRS agreed to pay National Organization for Marriage $50,000 to settle that case in June of 2014). But the IRS has been trying to use this law to prevent having to disclose its abusive treatment of taxpayers.

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April 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, April 24, 2015

Today Is Tax Freedom Day — Earlier In LA, MS & SD, Later In CT, NJ & NY

Tax Foundation logoToday is Tax Freedom Day, the day on which Americans will have earned enough money to pay all federal, state, and local taxes for the year:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2015, Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 24, or 114 days into the year.

This year, Americans will work the longest to pay federal, state, and local individual income taxes (43 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (12 days), and property taxes (11 days). The remaining 7 days are spent paying estate and inheritance taxes, customs duties, and other taxes.

Tax Freedom

Center on Budget and Policy Priorities, Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens:

The Tax Foundation released its annual "Tax Freedom Day" report today that, once again, can leave a strikingly misleading impression of tax burdens -- showing an average federal tax rate across the United States that's likely higher than the tax rate that 80 percent of U.S. households actually pay.

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April 24, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

April 24, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

ATPI Hosts Conference Today On Delivering Benefits To Low-income Taxpayers

ATPI Logo (2015)The American Tax Policy Institute hosts a conference today on Delivering Benefits to Low-income Taxpayers through the Tax System  organized by George Plesko (Connecticut) and Stephen Shay (Harvard) in Washington, D.C.:

Congress has increasingly tasked the IRS to deliver a range of benefits through the tax system. The tax system has become home to some of our most important social policies, including health care, work incentives and poverty relief. The program will bring together leading academics, policymakers and administrators from both the US and abroad to consider issues revolving around administration and design of these important policies.

Panel #1:  Creative Ways to Improve Targeting and Take-Up of Earnings-Related Tax Benefits

This panel will consider ways the US tax system can adapt to its increasing role as a provider of benefits to low-income workers. The three papers explore creative approaches for better targeting of EITC benefits, including using information from other provisions and compliance functions to identify nonparticipants, experimenting with providing the EITC in advance to Chicago, and a proposal to replace existing benefits with a work credit.

Moderator/Discussant:  Damon Jones (Chicago)
Panelists:  Day Manoli (Texas), Elaine Maag (Tax Policy Center), David Marzahl (Center for Economic Progress)

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April 24, 2015 in Conferences, Tax | Permalink | Comments (0)

LSAC: 2.6% Decline In Law School Applicants

Wall Street Journal, Law School Applicant Pool Still Shrinking:

The dramatic drop in law school applicants — a 40% decline between 2005 and 2014 — has many wondering when demand for a law degree will finally rebound.

Not this year, at least. The latest numbers released by the Law School Admission Council indicate that the downward spiral is still…spiraling.

As of April 17, 47,172 people have applied to go to an accredited U.S. law school this fall, according to LSAC, which administers the LSAT entrance exam. That’s a 2.6% fall-off compared to a year ago. Applications are down 4.7% from 2014.

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April 24, 2015 in Legal Education | Permalink | Comments (3)

Forman & Mann: Making The IRS Work

Florida Tax ReviewJonathan Barry Forman (Oklahoma) & Roberta F. Mann (Oregon), Making the Internal Revenue Service Work, 17 Fla. Tax Rev. ___ (2015):

This is an Article about how to redesign the federal tax system so that the Internal Revenue Service (IRS) can administer it more effectively given that Congress is only willing to let the IRS have around 82,000 employees and a $12 billion budget. As the IRS Oversight Board and the National Taxpayer Advocate frequently emphasize, the United States underinvests in the IRS, and that underinvesting means that taxpayer services are suffering and that tax enforcement has been significantly weakened.

With budget deficits for “as far as the eye can see” and the recent IRS troubles with tax-exempt political organizations, the prospects for increased funding for the IRS are remote. In this Article, we consider a variety of approaches that would make it easier for the IRS to raise and collect revenue, and we offer a number of recommendations for legislative and administrative changes. For example, we recommend simplifying the tax system, enhancing third-party reporting, and streamlining the tax-filing and dispute-resolution procedures.

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April 24, 2015 in Scholarship, Tax | Permalink | Comments (0)

Symposium: Teaching the Academically Underprepared Law Student

TUSSymposium, Teaching The Academically Underprepared Law Student,  53 Duq. L. Rev. 1-278 (2015):

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April 24, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 715

IRS Logo 2Breitbart, Did John McCain Know about IRS Targeting?:

When the IRS scandal broke, Sen. John McCain sent out a press release claiming to be shocked at the news. But was he?

Three years’ of IRS e-mail evidence continues to build against the federal government. The most interesting and possibly disturbing piece of information deals with the fact that Republican Senator McCain and Democrat Senator Carl Levin were both aware of the targeting eleven days before Lerner’s public admission of “inappropriate” actions.

E-mails reveal that staffers from McCain’s office met with IRS personnel for six hours, 11 days before Lerner’s public admission of “inappropriate” actions. ...

This revelation served as chilling confirmation of a suspicion Tea Party groups had all along: they were under fire from both sides of the establishment in Washington, D.C. Republicans and Democrats worked together to crush their common enemy, actual conservatives. ...

[W]hat about that six hour meeting? McCain has some serious explaining to do about just how much he knew about the targeting at the IRS. He’s certainly had his differences with the Tea Party and conservative Republicans in the past. And his positions on free speech and political action have more in common with liberals who prefer a one-way street over the marketplace of ideas.

Maybe, just maybe, Senator McCain did not mind the IRS’ attempts to stifle the First Amendment rights of Tea Party citizens. Maybe his shock at Lerner’s revelation was just as fake as the outrage from the White House.

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April 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, April 23, 2015

Crane Presents Uncovering A Meaning For 'Direct Tax' Today At Ohio State

CraneCharlotte Crane (Northwestern) presents Uncovering a Meaning for “Direct Tax” at Ohio State today in a tax colloquium sponsored its Law, Finance and Governance Program:

This paper argues that the references article I to “direct taxes” (which if “layed and collected” by Congress must be apportioned among the states) is a reference to taxes the burden of which can be traced to a particular location, and thus to a particular state. The paper looks to the history of the grant of the impost to the Confederation Congress to support this argument. It demonstrates that throughout the decade before 1787, those involved in financing the War distinguished the impost (which could not appropriately be credited to the state in which it was paid when reckoning whether that state had met its fiscal obligation to the Confederation) from those “direct taxes” (which should be so credited). This same distinction was embedded in the Constitution, to provide both for the final reckoning of those obligations of the states and for the ongoing support of the United States.

Erik Jensen (Case Western) is the discussant.

April 23, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Defeated North Carolina Law Student Body Presidential Candidate Challenges Election, Objects To Dean's Email Opposing His '25 By 2025' Platform

2016 U.S. News RankingsDaily Tar Heel, Student Contests Law School Election:

The loser of the Student Bar Association presidential election is challenging the results in the Student Supreme Court.

Former presidential candidate Billy Piontek claims the elections committee failed to hold a fair, unbiased election.

On April 14, Piontek filed the complaint about the tactics of the winning write-in candidates. Piontek also objected to an email Jack Boger, dean of the law school, sent to the student body that Piontek said disparaged his platform. ...

The night before the election, Boger emailed the classes of 2016 and 2017 to advise against supporting the “25 by 2025” plan that Piontek and other candidates pushed for. [North Carolina is currently ranked 34th by U.S. News.] The platform centered on elevating the law school’s U.S. News and World Report ranking into the top 25 schools by 2025.

In his email, Boger said the plan contradicted the school’s values and motto, “to be rather than to seem.”

Update:  From a North Carolina faculty member:

I just wanted to add a clarification re: your post on the UNC SBA election: 

In particular, the Daily Tar Heel story didn’t make clear what prompted Dean Boger to write his email.  Piontek had not just distributed the platform to all students, but he did so while stating that he and his slate were developing the plan with the faculty and administration.  The Dean initially resisted responding broadly, even though neither he nor anyone else in the administration had ever heard of the plan, much less was working on it.  However, after numerous emails and phone calls from faculty and students distressed that he may have embarked on a significant change in focus without any faculty input or discussion, he decided that he had to make clear that the administration had nothing to do with the plan.

April 23, 2015 in Legal Education | Permalink | Comments (1)

Should Professor With Lowest Student Evaluations Be Fired Each Year?

Survivor 2Chronicle of Higher Education, Iowa Legislator Wants to Give Students the Chance to Fire Underwhelming Faculty:

A bill circulating in the Iowa State Senate offers a novel (and cutthroat) way to hold professors accountable: putting their fates into students’ hands, Survivor-style. Every year the professor most disliked by students would be voted off the campus.

The bill, introduced by Sen. Mark Chelgren, a Republican, would require the state’s public universities to rate professors’ performance based solely on students’ evaluations of their teaching effectiveness. Professors whose evaluation scores didn’t reach a minimum threshold would be automatically fired by the university.

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April 23, 2015 in Legal Education | Permalink | Comments (1)

Bloomberg: Five Charts That Show You Should Apply to Law School This Year

Bloomberg, Five Charts That Show You Should Apply to Law School This Year:

Becoming a lawyer has never been a more obvious decision. ... It is still a perfect time to apply to law school, and here are five charts that prove it.

  1. Law schools need bodies.
  2. The Law School Admission Test is less competitive than it used to be.
  3. A good applicant has an excellent shot at getting in.
  4. When I say good applicant, I'm probably talking about you.
  5. The law job market is better than it looks.

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April 23, 2015 in Legal Education | Permalink | Comments (4)

Movie Night With Judge Kozinski Offers Behind The Curtain View Of 9th Circuit

Movie NightLos Angeles Times, After Court Adjourns, 9th Circuit Judge's Movie Nights Are a Hit:

It's movie night at the courthouse.

U.S. 9th Circuit Court of Appeals Judge Alex Kozinski, his identification and security tags hanging from his neck, greets dozens of people who have shown up early for a guided tour of the court's headquarters, an ornate columned building on the edge of San Francisco's seamy Tenderloin. ...

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April 23, 2015 in Legal Education | Permalink | Comments (1)

Life After Loving: IRS Regulation of Tax Preparers

Florida Tax ReviewAlex H. Levy (NYU), Believing in Life After Loving: IRS Regulation of Tax Preparers, 17 Fla. Tax Rev. 437 (2015):

Nearly anyone can be a tax preparer. There is no test to pass or code of ethics to follow. With few barriers to entry, the field of tax preparation has drawn unscrupulous players, many of whom prey on low-income families who claim the earned-income tax credit. In 2011, the IRS endeavored to regulate the anything-goes world of tax preparation. But a group of small-government activists at the Institute for Justice challenged the IRS’s regulations in federal court. And they won. The U.S. Court of Appeals for the D.C. Circuit struck down the regulations as beyond the IRS’s authority under section 330 of Title 31 of the United States Code. In the wake of that decision, Loving v. IRS, the only path forward for advocates of taxpayer protection is for Congress to explicitly empower the IRS to regulate swindlers posing as tax professionals.

This Article is, fundamentally, a story of political and judicial failure in the age of small government absolutism. In a different era, federal oversight of unscrupulous tax preparers would have represented the blandest kind of common sense. But the Institute for Justice was able to convince a panel of judges on what is widely regarded as the second most influential court in the country that IRS oversight of tax preparers is unlawful. The government’s litigation strategy proved bumbling and ill-considered; it was easily outmaneuvered by its ideologically-driven adversary.

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April 23, 2015 in Scholarship, Tax | Permalink | Comments (2)

Auerbach, Gamage Named to California Tax Reform Advisory Panel

SealCalifornia State Controller's Office, Council of Economic Advisors:

Within her first four months of taking office, State Controller Betty Yee created a Council of Economic Advisors to examine the many ideas for comprehensive tax reform in California.

Controller Yee and other elected officials have called for a tax system that is less vulnerable during economic downturns and is more sustainable, providing greater certainty from year to year. While numerous reform ideas have merit, Controller Yee believes that changes to the tax system must be examined as a whole with focus on fairness to taxpayers and practicality. A comprehensive reform should avoid locking in even more money for specific groups and instead provide a dependable source of revenue that avoids major disruptions to government services.

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April 23, 2015 in Legal Education, Tax | Permalink | Comments (3)

House Report: IRS ‘Deliberately’ Cut Customer Service to Make Tax Season Painful for Taxpayers

House LogoHouse Ways & Means Committee Majority Staff Report, Doing Less With Less: IRS’s Spending Decisions Harm Taxpayers (Apr. 22, 2015):

During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.

The IRS’s spending choices and mismanagement of resources raise serious questions about the nature and extent of the agency’s self-described budget crisis and its commitment to serving the taxpayer.

Press and blogosphere coverage:

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April 23, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (9)

Measuring Teaching Excellence: Shifting From Delivery Of Course Content To Impacting Student Lives

CTEInside Higher Ed, What Is Teaching Excellence?:

College and university faculty are expected to be excellent teachers. In public, college leaders emphasize to potential students and their parents that at their institution, teaching matters above all else. Colleges seem to unabashedly promote that the teaching done by their faculty is markedly better than at peer institutions -- or that the opportunities for close working relationships between students and faculty are unique to their campus. ...

There is no shortage of lip service from various academic ranks on the value of teaching excellence. ... But what exactly is teaching excellence? Institutional commitments, workshops, conferences and journals, all sharing the intent of improving teaching and content delivery, do not necessarily translate to a universal agreement on exactly what it is we are improving.

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April 23, 2015 in Legal Education, Teaching | Permalink | Comments (0)

The IRS Scandal, Day 714

IRS Logo 2Forbes, Before IRS Targeting, Lois Lerner Targeted At Federal Election Commission, by Robert W. Wood:

The IRS audits, sends bills, imposes penalties, files liens and levies. Yet incredibly, most of the money the IRS collects is self-assessed. We all fill out tax returns and voluntarily send in money. How much we believe in the system is critical to making it work. Sure, part of the reason we comply is our fear that we’ll be viewed as willful risking jail if we don’t. But there may be a correlation between how much people cheat and their faith that the tax system is impartial. That’s one reason the state of the IRS is so terribly important.

It is hard to believe that the IRS scandal is on day 711. More than two years on, we know that Lois Lerner got a pass on prosecution. She even got nice bonuses. And it seems clear that nothing more will happen. Democrats say that is as it should be, since as President Obama remarked that there is not even a smidgen of corruption at the IRS. But Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) spoke in support of Congressman Jim Renacci’s (R-OH) Prevent Targeting at the IRS Act, which passed unanimously along with several other measures to rein in the IRS. Rep. Roskam called the targeting insidious and poisonous. ...

There is arguably no part of the government more important than our tax system. Our country cannot exist without it. Our tax code and how we administer it could be improved. Yet it is still a system with integrity, one that is administered mostly on the honor system. IRS employees deserve better than the black eye they are getting over this mess. American taxpayers deserve better too.

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April 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, April 22, 2015

Closing The Books On My 25th Year Of Law Teaching

I taught my last Federal Income Tax and Tax Policy classes of the semester today, closing the books on my 25th (and best) year of law teaching. Thanks to the students who have put up with me through the years, including my hokey closing advice on the secret of life:

April 22, 2015 in Legal Education, Tax | Permalink | Comments (3)

Mazur: Taxing the Cloud

CloudsOrly Mazur (SMU), Taxing the Cloud, 103 Cal. L. Rev. 1 (2015):

Transacting business in the “cloud” has quickly gained popularity worldwide as the new method of providing information technology (IT) resources. Instead of purchasing or downloading software, we can now use the Internet to access software and other fundamental computing resources located on remote computer networks operated by third parties. These transactions offer companies lower operating costs, increased scalability, and improved reliability, but also give rise to a host of international tax issues. Despite the rapid growth and prevalent use of cloud computing, U.S. taxation of international cloud computing transactions has yet to receive significant scholarly attention. This Article seeks to fill that void by analyzing the U.S. tax implications of operating in the cloud from both doctrinal and policy perspectives. Such an analysis shows that the technological advances associated with the cloud put pressure on traditional U.S. federal income tax principles, which creates uncertainty, compliance burdens, liability risks for businesses, and a potential loss of revenue for the government. Applying the current law to cloud computing transactions also results in tax consequences that run counter to sound tax policy and may result in double taxation or complete nontaxation of cloud income.

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April 22, 2015 in Scholarship, Tax | Permalink | Comments (0)

Warren Buffett’s Nifty Tax Loophole

BuffettBarron's, Warren Buffett’s Nifty Tax Loophole:

Warren Buffett has backed higher individual tax rates–while ensuring that his vast wealth in Berkshire Hathaway is almost immune.

Warren Buffett is fond of saying his tax rate is lower than his secretary’s. He does not publicize his tax returns, but for the tax year 2010, he paid $6.9 million on taxable income of $39.8 million, according to partial disclosures he made in 2011.

What is astounding about those numbers is not the 17.3% tax rate, but that Buffett’s $39.8 million of taxable income is only about 0.05% of his reported net worth ($71 billion according to Forbes, which put him third on its list of the 400 wealthiest people in the world for 2015).

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April 22, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (4)

WaPo: Why Law Schools Are Losing Relevance — And How They’re Trying To Win It Back

Washington Post, Why Law Schools Are Losing Relevance — And How They’re Trying to Win It Back:

Law schools across the country are facing their lowest enrollment numbers in years, causing some to slash their budgets and revamp their programs in an effort to attract students worried about finding a job in a diminished legal industry.

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April 22, 2015 in Legal Education | Permalink | Comments (0)

20 Law Professors Elected To American Law Institute

ALI Logo (2015)Twenty law professors have been elected to membership in the American Law Institute:

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April 22, 2015 in Legal Education | Permalink | Comments (0)

Seto: The Problem of Law School Tuition

Seto (2014)TaxProf Blog op-ed:  The Problem of Law School Tuition, by Theodore P. Seto (Loyola-L.A.):

In a recent op-ed in the New York Law Journal, Dean Jeremy Paul of Northeastern writes about the future of legal education. Although he makes many good points, he avoids the single hardest question facing law schools going forward: what to do about tuition? Most schools have dealt with this temporarily by holding net tuition constant. (Net tuition is nominal tuition less scholarships.) But in the long run, the parade of horribles at the bottom of each law school's class will get worse if nominal tuition rises faster than the rate of average lawyer compensation, because the bottom of each class will absorb the brunt of any such disproportionate increase.

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April 22, 2015 in Legal Education | Permalink | Comments (11)

Practicing Law With Your Apple Watch

Apple WatchABA Journal, Smartwatches and Other Wearables Can Enhance the Practice of Law, Attorneys Say:

Smartwatches and other forms of wearable technology aren’t just for fitness enthusiasts or techies that can’t bear to be away from the Net.

In a Friday afternoon session at ABA Techshow, attorneys Rick Georges and Robert Sisson talked about how wearable technology has enhanced their ability to practice law on their own terms. Showing off their large collection of smartwatches, virtual reality devices and other gadgets, Georges and Sisson talked about their favorite devices while providing examples of how they used them in their practice. ...

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April 22, 2015 in Legal Education | Permalink | Comments (2)