TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, April 3, 2017

Kane Presents The Global Battle To Capture MNE Profits At British Columbia

Kane (2015)Mitchell Kane (NYU) presented The Global Battle to Capture MNE Profits (with Joseph Bankman (Stanford) & Alan O. Sykes (Stanford)) at University of British Columbia Allard School of Law last Friday as part of its Tax Law and Policy Workshop Speaker Series:

This paper explores the various tools available to jurisdictions in their quest to capture MNE rents, including various forms of income and consumption taxation, government purchasing programs, price regulation, antitrust, and common trade instruments such as tariffs or quotas. Although the jurisdictional goal of rent capture might well be constant across the use of this vast array of instruments, the legal regulation of such actions is anything but that. Instead, there would appear to be important fissures in the tapestry of legal regulation.

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April 3, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Muller:  Don’t Use The Ballot To Get Trump’s Tax Returns

Trump Tax ReturnsNew York Times op-ed: Don’t Use the Ballot to Get Trump’s Tax Returns, by Derek Muller (Pepperdine):

Opponents of Donald Trump were outraged when, flouting recent tradition, he refused to disclose his tax returns during the 2016 presidential campaign. They remain outraged that he continues to decline to do so as president.

Now that political outrage is being channeled into legislation. Lawmakers in at least two dozen states have introduced bills that would compel presidential candidates to disclose their tax returns or be left off the ballot in 2020. The New Jersey Legislature recently passed such a bill, which sits on Gov. Chris Christie’s desk.

Mr. Christie should veto the bill, and other states should abandon their efforts. Making the disclosure of tax returns mandatory is bad policy and, in this form, probably unconstitutional.

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April 3, 2017 in Tax | Permalink | Comments (1)

If It’s A New Law Dean, It’s Likely A Woman

National Law Journal, If It’s a New Law Dean, It’s Likely a Woman:

March has been a good month for women law deans. Six of the eight new law deans appointed this month are women, with a seventh taking on an interim dean role for the coming academic year. As of now, well over half of the new deans taking the reins starting this summer are women—an unusual development given the long-standing dominance of men in the top job on law campuses. ...

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April 3, 2017 in Legal Education | Permalink | Comments (2)

David Kautter To Be Named Assistant Secretary For Tax Policy

KautterPolitico reports that David Kautter is slated to be named President Trump's Assistant Secretary for Tax Policy, succeeding Mark Mazur (who left the position in February to become Director of the Tax Policy Center) and Acting Assistant Secretary for Tax Policy Thomas West.  From his webpage at American University's Kogod Tax Center:

David Kautter is Managing Director of the Kogod Tax Center and Executive in Residence in the Department of Accounting and Taxation. He joins Kogod following a distinguished career as a partner at Ernst & Young LLP, where he held a number of key technical and leadership roles spanning over three decades.

Most recently, Kautter served as Ernst & Young's Director of National Tax, the chief operating executive for the firm's national tax practices.

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April 3, 2017 in IRS News, Tax | Permalink | Comments (0)

The Political Economy Of Administrative Bloat In American Higher Education

Fall 2Todd J. Zywicki (George Mason) & Christopher Koopman (George Mason), The Changing of the Guard: The Political Economy of Administrative Bloat in American Higher Education:

The cost of higher education in the United States has risen dramatically in recent years. Numerous explanations have been provided to explain this increase. This paper focuses on one contributing factor: The dramatic growth in the size and expense of non-academic administrators and other university bureaucrats, which has outpaced the growth of expenditures on academic programs. Given that university faculty are typically viewed as the constituency that primarily controls universities, this growth of non-academic employees and expenses appears to be anomalous. Some theories are provided to explain this transition.

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April 3, 2017 in Legal Education | Permalink | Comments (12)

NY Times:  Student Loan Forgiveness Program Approval Letters May Be Invalid

Department of Education LogoNew York Times, Student Loan Forgiveness Program Approval Letters May Be Invalid, Education Dept. Says:

More than 550,000 people have signed up for a federal program that promises to repay their remaining student loans after they work 10 years in a public service job.

But now, some of those workers are left to wonder if the government will hold up its end of the bargain — or leave them stuck with thousands of dollars in debt that they thought would be eliminated.

In a legal filing submitted last week, the Education Department suggested that borrowers could not rely on the program’s administrator to say accurately whether they qualify for debt forgiveness. The thousands of approval letters that have been sent by the administrator, FedLoan Servicing, are not binding and can be rescinded at any time, the agency said.

The filing adds to questions and concerns about the program just as the first potential beneficiaries reach the end of their 10-year commitment — and the clocks start ticking on the remainder of their debts. ...

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April 3, 2017 in Legal Education | Permalink | Comments (10)

TaxProf Blog Weekend Roundup

Sunday, April 2, 2017

NY Times:  Conservative Split Over Border Tax Imperils Tax Reform

New York Times, Conservative Split Over Import Tax Imperils Trump’s Overhaul:

[T]he political network overseen by Charles D. and David H. Koch, the billionaire conservative businessmen, ... [is] mounting a furious campaign against a new tax on imports proposed by House Republicans, imperiling what is supposed to be a centerpiece of the Republican tax overhaul effort.

Their opposition threatens yet another rupture with President Trump, some of whose advisers see the provision as a critical way to bring about tax reform while protecting American manufacturers.

The battle could not only jeopardize Mr. Trump’s second major legislative initiative, but also redefine the boundaries of conservative economic policy. Much like the failed repeal of the Affordable Care Act, the import tax is dividing conservatives, the business sector and some of the deepest-pocketed groups funding conservative politics. Along the way, it is exposing the broader ideological divide between nationalist policies embraced by Mr. Trump and the traditional small-government movement that his election ejected from the driver’s seat of Republican policy-making.

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April 2, 2017 in Tax | Permalink | Comments (0)

Another Banner Year For Lawyers (Especially In California)

BLS (2015)Stephen Diamond (Santa Clara), Another Banner Year For Lawyers, BLS Reports:

The Bureau of Labor Statistics (BLS) is out with its annual employment report and the news is, once again, very positive for lawyers. Lawyers’ incomes and employment numbers have increased steadily over the last two decades (except for a decline in incomes in 2008 at the onset of the financial crisis).

The BLS reports that the total number of lawyers employed as of May 2016 was 619,530 compared with 609,930 the year before. Lawyers’ mean income was $118,160 compared to last year’s wage of $115,820.

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April 2, 2017 in Legal Education | Permalink | Comments (5)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list. The #1 paper is now #99 in all-time downloads among 12,628 tax papers:

  1. [1,720 Downloads]  The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, by Michael J. Graetz (Columbia)
  2. [593 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)
  3. [459 Downloads]  Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, by Lily L. Batchelder (NYU)
  4. [387 Downloads]  Predicting Stock Market Prices with Physical Laws, by Jack Manhire (Texas A&M)
  5. [289 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)

April 2, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Restoring the Soul of the University: Unifying Christian Higher Education In A Fragmented Age

SoulPerry L. Glanzer (Baylor), Nathan F. Alleman (Baylor) & Todd C. Ream (Taylor), Restoring the Soul of the University: Unifying Christian Higher Education in a Fragmented Age (InterVarsity Press March 2017):

Has the American university gained the whole world but lost its soul?
In terms of money, prestige, power, and freedom, American universities appear to have gained the academic world. But at what cost? We live in the age of the fragmented multiversity that has no unifying soul or mission. The multiversity in a post-Christian culture is characterized instead by curricular division, the professionalization of the disciplines, the expansion of administration, the loss of community, and the idolization of athletics.

The situation is not hopeless. According to Perry L. Glanzer, Nathan F. Alleman, and Todd C. Ream, Christian universities can recover their soul — but to do so will require reimagining excellence in a time of exile, placing the liberating arts before the liberal arts, and focusing on the worship, love, and knowledge of God as central to the university.

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April 2, 2017 in Book Club, Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1424:  Conservatives Demand IRS Commissioner’s Head In White House Meeting

IRS Logo 2Daily Caller, Conservatives Demand IRS Commissioner’s Head In White House Meeting:

An off-the-record White House meeting with roughly two dozen conservative leaders Wednesday included explicit calls for President Trump to fire IRS Commissioner John Koskinen, according to a source in the room.

White House conservative liaison Paul Teller organized the meeting Wednesday between Trump staffers and leaders of conservative groups such as the Heritage Foundation and Judicial Watch.

Talk of Koskinen’s firing was part of a larger discussion on clearing out Obama-era personnel from the executive branch where possible, the source said. The broad consensus among attendees was that Trump needs to clean out Obama-era bureaucrats if he is going to be successful in pushing through his agenda.

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April 2, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, April 1, 2017

This Week's Ten Most Popular TaxProf Blog Posts

20th Annual Critical Tax Theory Conference At St. Louis

St. Louis (2016)St. Louis hosts the 20th Annual Critical Tax Theory Conference today:

Critical tax scholarship aims at looking beyond the language of the Code and regulations to examine what the tax law actually does. It has roots in critical legal studies generally, and therefore Critical tax scholars frequently ask why the tax laws are the way they are and what impact tax laws have on historically disempowered groups, such as people of color; women; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. But Critical tax scholarship is not limited either to those topics or to any particular methodology.

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April 1, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

WSJ:  IRS Crackdown On Bitcoin Exchange Fuels Privacy Worries

Bitcoin IRSWall Street Journal, IRS Crackdown on Bitcoin Exchange Fuels Privacy Worries:

The federal government is ramping up pressure on a leading digital-currency company to turn over a vast amount of its customer records as part of a tax-evasion probe, an effort that is raising privacy alarms.

The IRS is focusing on Coinbase, a popular exchange and “wallet” service for bitcoin, which has surged in value over the past year as a kind of digital alternative to gold.

Some consumers use bitcoin as a potentially faster, cheaper and more secure way to shop and transfer funds online. Its growing adoption, and perceived anonymity, has made the IRS more concerned about people using digital currency to evade paying taxes.

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April 1, 2017 in Tax | Permalink | Comments (0)

WSJ:  100 Colleges Offer Loan Repayment Assistance To Graduates, As Do 100 Law Schools

Student LoansWall Street Journal, Some Colleges Step Up to Ease Students’ Debt Burden: About 100 Mostly Liberal Arts Colleges Offer Help With Loan Repayments to Graduates:

When Natalie Dunn was a senior in high school, she was torn between two colleges — but only one offered anything close to a money-back guarantee. So she picked Adrian College over the less-expensive Central Michigan University. The private liberal-arts school promised it would cover some or all of her student-loan payments, depending on how much she earned after graduation, up to $37,000 a year in salary. ... 

About 100 schools — mostly liberal-arts colleges — are now offering a variant of this guarantee through an Indiana company called LRAP [Loan Repayment Assistance Program] Association, The company sells programs similar to insurance policies to schools for an average of about $1,300 per student, said LRAP President Peter Samuelson.

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April 1, 2017 in Legal Education | Permalink | Comments (0)

Tax Policy In The Trump Administration

Friday, March 31, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses the Tax Court's recent reminder about the limits of management fees in shifting income for tax planning purposes.

KristanManagement fees mismanaged.

In the misty dawn of time — well, in my early days in public accounting — I knew an old-school practitioner who used “management fees” between related companies as a tax planning cure-all. Too much taxable income? Pay a management fee to the commonly-controlled company that’s running a loss, or to the relative who needs some cash and who doesn’t have much income. Problems solved!

Like many bad tax ideas, that works fine if the IRS never finds out. A Tax Court case yesterday shows what happens when they do.

A home health care company operated as a C corporation. It was acquired by another corporation named Sacer Cor, but apparently never filed a consolidated return with its 100% owner. Whether that is because Sacer Cor might be an S corporation is never spelled out in the case. Either way, Sacer Cor and Home Team, the subsidiary, filed separate returns.

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March 31, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews a new working paper by Ben Meiselman (Michigan), Ghostbusting in Detroit:  Evidence on NonFilers from a Controlled Field Experiment.

Scharff (2017)As Ben Meiselman notes in the introduction to his new study of taxpayer compliance, there’s no marginal cost to making a tax authority’s written communication to a taxpayer more persuasive. In an era of likely increasing austerity in tax enforcement budgets at all levels of government, finding low-costs methods to increase compliance will become all the more important.  Field experiments have produced some information about effective messages, and Meiselman’s study adds to this research, but as I discuss after reviewing the paper’s findings, Meiselman’s account also raises questions about Detroit’s capacity to operate an income tax.

In the spring and early summer of 2016, Detroit sent both a postcard and a certified letter to 7,142 suspected “ghosts,” 2014 federal taxpayers with Detroit addresses who had failed to file a Detroit income tax return for that tax year.  A control postcard informed taxpayers that they would receive a letter in a few days about filing a tax return, and the subsequent letter informed the taxpayer that Detroit’s records indicated that she was a resident of Detroit and did not file a city tax return in 2014.

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March 31, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

NY Times:  Cincinnati Law Dean Put On Leave After Trying To Close Multi-Million Dollar Deficit By Increasing Teaching Loads, Cutting Summer Research Stipends And Salary Supplements Of Chaired Professors

UC BardNew York Times DealBook: Cincinnati Law Dean Is Put on Leave After Proposing Ways to Cut Budget, by Elizabeth Olson:

When Jennifer S. Bard took the reins of the University of Cincinnati College of Law in 2015, her chief mission was to overhaul the school’s troubled finances.

She proposed measures to cut costs, including expanding teaching loads, limiting travel expenses and curbing summer salary stipends for research. But faculty members pushed back.

After so much squabbling between the dean and the professors, the public university’s provost stepped in to mediate. Last week, Dr. Bard, who came from Texas Tech University’s law school, was stripped of her duties as dean and placed on leave — with no public explanation.

Internal faculty emails provide a window into why Cincinnati Law — and schools like it — have made few changes even as they face serious revenue shortfalls. Normally, such financial information never sees daylight, but a local newspaper, The Cincinnati Business Courier, published a string of emails after obtaining them through public records requests.

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March 31, 2017 in Legal Education | Permalink | Comments (15)

Weekly Legal Education Roundup

St. Louis Hosts Conference Today On Taxation And Migration

St. LouisSt. Louis hosts a conference today on Critical Issues in Comparative and International Taxation: Taxation and Migration:

As ever growing numbers of individuals seek economic and political refuge in Europe and North America, and as increasing numbers of individuals and businesses seek refuge from the tax burdens of their home jurisdictions in lower tax jurisdictions, the resulting immigration and emigration strain the national economies of affected countries causing them to modify their taxation rules and structures. This conference explores the effects of taxation on migration and the effects of migration on taxation.

Panel #1:  Migrant Tax Plight, Human Rights, and Hidden Wealth

Panel #2:  Combatting Expatriation

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March 31, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Using Google Scholar Citation Counts To Measure The Impact Of Law Faculty Scholarship

Google Scholar (2015)Gary Lucas, Jr. (Texas A&M), Measuring Scholarly Impact: A Guide for Law School Administrators and Legal Scholars:

Texas A&M University assesses its colleges and departments based partly on scholarly impact and using quantitative metrics. The law school’s dean has assigned me the task of identifying scholarly impact metrics for use in assessing the performance of our law faculty collectively and individually. This essay discusses the major issues that arise in measuring the impact of legal scholarship. It also explains important scholarly impact metrics, including the Leiter score and Google Scholar h-index, and the major sources of information regarding scholarly impact, including Google Scholar, Westlaw, Hein Online, SSRN, and bepress.

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March 31, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

Call For Papers: NTA 110th Annual Conference On Taxation

National Tax Association (2016)The National Tax Association has issued a Call for Papers for its 110th Annual Conference on Taxation to be held Nov. 9-11, 2017 in Philadelphia:

The 110th Annual Conference on Taxation will cover a broad range of topics including, but not limited to, taxation and tax policies; expenditure policies; government budgeting; intergovernmental fiscal relations; and subnational, national, and international public finance. The conference will focus, as always, on policy-relevant research bearing on taxation and government spending.

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March 31, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

IRS Releases FY 2016 Data Book

IRS Data BookIR-2017-69 (Mar. 30, 2017), IRS Releases FY 2016 Data Book:

The Internal Revenue Service today released the 2016 IRS Data Book, a snapshot of agency activities for the fiscal year.

The 2016 IRS Data Book describes activities conducted by the IRS from Oct. 1, 2015, to Sept. 30, 2016, and includes information about returns filed, taxes collected, enforcement, taxpayer assistance, the IRS budget and workforce as well as other data.

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March 31, 2017 in IRS News, Tax | Permalink | Comments (0)

Thursday, March 30, 2017

Batchelder Presents Accounting For Behavioral Biases In Business Tax Reform Today At Duke

BatchelderLily Batchelder (NYU) presents Accounting for Behavioral Biases in Business Tax Reform: The Case of Expensing at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

One of the fundamental questions in business tax reform is whether to allow firms to immediately expense investments or require economic cost recovery. The conventional view is that expensing would generate stronger growth effects holding revenues constant. This view is rooted in traditional models of corporate finance that assume firms look at the net present value of expected tax payments when incorporating taxes into investment decisions. But this traditional view ignores the possibility that firms focus on more salient measures of taxes as well. If so, they may respond less to expensing than this theory suggests because expensing does not lower their financial accounting tax liability and, all else equal, requires a higher statutory rate.

This paper considers whether firms undervalue expensing due to a focus on these non-economic tax metrics and, if so, what this implies about business tax reform if the goal is to increase US investment. It develops a framework for what cost recovery rules are optimal, and then uses new and existing data to parameterize this framework, holding constant long-run revenues and the relative tax treatment of debt and equity. 

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March 30, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Roberts Presents A Structural Examination Of Energy Tax Subsidies At Vanderbilt

RobertsTracey M. Roberts (Cumberland) presented Picking Winners and Losers: A Structural Examination of Tax Subsidies to the Energy Industry, 41 Colum. J. Envtl. L. 63 (2016), at Vanderbilt yesterday as part of its Faculty Workshop Series:

The shibboleth that “government should not be picking winners and losers” has dominated the public discourse over renewable energy subsidies. This way of framing the debate ignores the nation’s long history of support for fossil fuels and obscures the economic theory behind the subsidies. This article contributes to the discussion in four ways.

First, the article examines the situations in which government intervention in a market economy may be justified and then evaluates the tax subsidies to both fossil fuels and renewable energy resources in light of that theory.

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March 30, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Blair-Stanek:  Crises And Tax

Andrew Blair-Stanek (Maryland), Crises and Tax, 67 Duke L.J. ___ (2017):

How can law best mitigate harm from crises like storms, epidemics, and financial meltdowns? This Article uses the law-and-economics framework of property rules and liability rules to analyze crisis responses across multiple areas of law, focusing particularly on the Internal Revenue Service’s numerous actions to battle the 2008-09 financial crisis.

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March 30, 2017 in Scholarship, Tax | Permalink | Comments (0)

Trade Group: IRS Wastes 22% Of Its Budget ($2.76 Billion) On Information Technology

IRS Logo 2International Association of IT Asset Managers,  IT Waste at the Internal Revenue Service:

IRS IT Spending/Waste By The Numbers:

  • $11.2 billion - Total IRS budget in 2016. 
  • 79,890 - Total IRS employees as of FY2015.
  • $4,600-$4,900 - Average amount spent per employee on IT in the private sector.
  • $37,051 - Average amount spent per employee on IT at the Department of Treasury.
  • $31,000 - According to IAITAM, private sector-style IT Asset Management protocol implementation would save roughly $31,000 per employee at the IRS. 
  • More than three times – How much the potential ITAM-related savings per employee stack up in comparison to the average $9,118 federal income tax bill for Americans.
  • 22 percent - Total potential ITAM-related savings would add up to $2.76 billion
    or nearly one quarter of the total 2016 IRS budget.

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March 30, 2017 in IRS News, Tax | Permalink | Comments (12)

Wayne State Moves To Fire Five Underperforming Tenured Professors; President Seeks 'Accountability For Individuals And Excellence For The University'

Wayne State TenureDetroit News, Wayne State: 5 Professors ‘Not Doing Anything,’ Should Lose Tenure:

In a move rarely seen in academia, Wayne State University is trying to fire multiple faculty members depicted as abusing their tenure by doing as little work as possible.

Hearings to revoke tenure start Wednesday for the first of five WSU medical school professors who allegedly are performing poorly in research, scholarship or teaching. Another five professors, including some outside the 996 faculty members in the medical school, also may face dismissal proceedings, university officials said.

Only two other times in WSU’s 149-year history has the university begun proceedings to take away a professor’s tenure, which is an indefinite appointment. In both cases, the faculty member prevailed.

But this is the first time the university is attempting to terminate several professors. They will lose their jobs if tenure is revoked. ...

Already, the university announced in August that 37 medical school faculty could lose their positions through retirement or termination for underperforming in their academic assignments — which has led to the departure of two dozen faculty.

WSU President M. Roy Wilson told The Detroit News that the dismissal hearings are aimed at accountability for individuals and excellence for the university. The professors facing the hearings are “grossly underperforming” and “not doing anything,” he said, making it difficult to move the university toward its mission as a premier urban research institution.

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March 30, 2017 in Legal Education | Permalink | Comments (7)

NY Times:  Pages From Trump’s Tax Returns Raise A Decade’s Worth of Questions

Trump Tax ReturnsNew York Times, Pages From Trump’s Tax Returns Raise a Decade’s Worth of Questions:

Like or loathe Donald J. Trump, you have to give him this: He’s done more to shine a spotlight on the loopholes and fundamental unfairness of the tax code than any other American president.

In doing so, he’s made a powerful case for tax reform, though perhaps not quite along the lines he has in mind.

This, of course, has happened despite Mr. Trump’s strenuous efforts to conceal his returns, reneging on a campaign promise to release them at some point, and defying a decades-long tradition in which presidential candidates have made public, at minimum, their recent tax returns.

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March 30, 2017 in Tax | Permalink | Comments (16)

David Han, Derek Muller, And Victoria Schwartz Are Awarded Tenure At Pepperdine

HMS

Congratulations to my good friends and colleagues David Han, Derek Muller, and Victoria Schwartz, who received official notification yesterday that they have been awarded tenure by the Pepperdine Board of Regents.   For links to their fantastic recent scholarship, see below the fold:

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March 30, 2017 in Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 1421: More On A Hidden Cause Of The IRS Scandal

Cause of ActionFox News, IRS Still Allowed to Target Political Groups, According to Watchdog Org:

The IRS is still able to target certain political groups despite being publicly exposed for the unfair practice more than five years ago, according to a new report by a watchdog group.

A rule in place at the IRS allows the federal agency to delay the applications of non-profit groups looking for tax-exempt status, claims the Washington-based Cause of Action in its report, A Hidden Cause of the IRS Targeting Scandal. The IRS admitted in 2013 that leading up to the 2012 election the agency unfairly targeted right-leaning groups as well as those with “Tea Party” or “patriot” in their name. More than five years after the practice was exposed, Cause of Action says the IRS has not made changes to end the practice. “The regulation that allows them to do this is still there,” John Vecchione, executive director of Cause of Action told Fox News. “It’s bureaucratic inertia until someone makes a change.”

The findings claims the IRS is able to target these groups while still complying with its own rules. Cause of Action claims changing this practice would be a simple and quick fix. “The IRS has the authority to change its internal policy at any moment, which means it can remove the problematic rules at its discretion,” the authors of the report said in their findings. “Doing so would eliminate the agency procedure than enabled the targeting scandal. To date, the agency has not made the required changes to its rules.”

Officials for the IRS refute the report’s claims. “The IRS strongly disputes the report and any suggestion or allegation that Exempt Organizations is targeting taxpayers,” reads a statement provided to Fox News. “The IRS emphasizes that this point has been confirmed by independent third parties, including the Treasury Inspector General for Tax Administration.”

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March 30, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, March 29, 2017

O’Brien Presents Canada’s International Investment Agreements and Direct Taxation Today At Toronto

O'BrienMartha O’Brien (University of Victoria Faculty of Law) presents Canada’s International Investment Agreements and Direct Taxation at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The General Framework
The promotion of international trade and investment has been a central policy goal of Canadian federal and provincial governments for many years. From the signing of the Canada-United States Free Trade Agreement (CUSFTA) in 1988, the inclusion of Mexico in the North American Free Trade Agreement (NAFTA) in 1993, and the conclusion of numerous BITs and other free trade agreements that include investment chapters (referred to as international investment agreements or “IIAs”) through the 1990s and 2000s, Canada has a record of actively pursuing bilateral and multilateral trade and investment agreements.

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March 29, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

New Lawyers 2010 to 2017: Lower LSATS, Lower Bar Passage … More DUIs

NCBEKeith Lee (Hamer Law Group, Birmingham, AL), New Lawyers 2010 to 2017: Lower LSATS, Lower Bar Passage…More DUIs??:

The National Conference of Bar Examiners (NCBE) recently released a large data dump indicating a downward trend in a number of areas. The numbers are troubling if you’re concerned about the future of the profession.

What are the trends in LSAT scores at the 25th percentile?

  • Law Schools with increasing 25th percentile LSAT scores: 6
  • Law Schools with flat 25th percentile LSAT scores: 5
  • Law Schools with decreasing 25th percentile LSAT scores: 183 ...

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March 29, 2017 in Legal Education | Permalink | Comments (8)

AALS Call For Papers:  The Challenges And Opportunities Of Exotic Hybrids

AALS (2018)The AALS Section on Agency, Partnership, LLCs and Unincorporated Association, in conjunction with the AALS Sections on Taxation, Securities, and Business Associations, have issued a Call for Papers for a program on The Challenges and Opportunities of Exotic Hybrids—Series LLCs, Up-C’s and Master Limited Partnerships at the 2018 AALS Annual Meeting in San Diego:

Business entity structures continue to evolve as legal innovations mature into recognized business association forms. For example, variants on LLC and limited partnership forms can be used to maximize asset protection, leverage tax advantages, access capital markets, and achieve other business objectives. The program will introduce attendees to several “exotic” hybrid structures and discuss the challenges and opportunities associated with each. The program will be informative — inviting subject matter experts to educate audience members — and exploratory, critically examining the tax, governance, private ordering, securities, and policy implications of new entity structuring tools.

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March 29, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

NY Times Op-Ed:  Why Steven Mnuchin Wants A Stronger IRS (And Trump Should Too)

Trump IRSNew York Times op-ed: Why Steven Mnuchin Wants a Stronger I.R.S., by Dennis J. Ventry Jr. (UC-Davis):

President Trump’s Treasury secretary, Steven Mnuchin, knows that investing in the Internal Revenue Service yields significant returns — he said as much during his confirmation hearings. And he’s right: Every dollar spent on the agency returns $4 in revenue for the federal government, and as much as $10 when invested in enforcement activities.

Mr. Mnuchin’s boss doesn’t seem to care, but he should. And not just because the I.R.S. more than pays for itself. Cutting funds for the I.R.S., which has already endured years of budget cuts, would make it impossible for the president to pay for things he says he cares about, including infrastructure, Social Security and the military.

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March 29, 2017 in Tax | Permalink | Comments (3)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through March 1, 2017) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

66,153

Reuven Avi-Yonah (Mich.)

12,003

2

Michael Simkovic (S. Hall)

35,620

Lily Batchelder (NYU)

8575

3

Paul Caron (Pepperdine)

32,790

Michael Simkovic (S. Hall)

4717

4

D. Dharmapala (Chicago)

30,008

D. Dharmapala (Chicago)

4135

5

Louis Kaplow (Harvard)

27,810

Michael Graetz (Columbia)

2928

6

Vic Fleischer (San Diego)

23,507

Ed Kleinbard (USC)

2813

7

James Hines (Michigan)

22,666

Richard Ainsworth (BU)

2711

8

Ed Kleinbard (USC)

22,244

Dan Shaviro (NYU)

2368

9

Richard Kaplan (Illinois)

21,776

William Byrnes (Texas A&M)

2353

10

Ted Seto (Loyola-L.A.)

21,706

Paul Caron (Pepperdine)

2305

11

Richard Ainsworth (BU)

20,033

Louis Kaplow (Harvard)

2292

12

Katie Pratt (Loyola-L.A.)

19,898

Robert Sitkoff (Harvard)

2076

13

Robert Sitkoff (Harvard)

18,633

David Weisbach (Chicago)

1949

14

David Weisbach (Chicago)

18,469

Steven Bank (UCLA)

1871

15

Brad Borden (Brooklyn)

17,978

David Gamage (Indiana)

1836

16

Carter Bishop (Suffolk)

17,918

Omri Marian (UC-Irvine)

1822

17

Chris Sanchirico (Penn)

17,387

Jeff Kwall (Loyola-Chicago)

1795

18

Jen Kowal (Loyola-L.A.)

17,255

Francine Lipman (UNLV)

1663

19

Francine Lipman (UNLV)

17,279

Yariv Brauner (Florida)

1624

20

Dan Shaviro (NYU)

16,833

Jordan Barry (San Diego)

1555

21

Bridget Crawford (Pace)

16,705

Brian Galle (Georgetown)

1540

22

Dennis Ventry (UC-Davis)

16,394

Christopher Hoyt (UMKC)

1502

23

David Walker (Boston Univ.)

15,568

Vic Fleischer (San Diego)

1465

24

Steven Bank (UCLA)

14,590

Brad Borden (Brooklyn)

1450

25

Gregg Polsky (Georgia)

13,712

Bridget Crawford (Pace)

1406

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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March 29, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Muller:  More Students Are Receiving More Scholarship Money To Attend Law School

Following up on Saturday's post, Average Inflation-Adjusted Student Debt Declined At 71% Of Law Schools Over Past Three Years:  Derek Muller (Pepperdine), The Percentage of Law School Enrollees Receiving Scholarships Continues to Climb:

While law schools have been raising their tuition, often quicker than inflation... , they may well be increasing scholarship awards at an even faster pace. ... The figures below include all schools from reporting years 2012 to 2016, which reference academic years 2011 to 2015.

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March 29, 2017 in Legal Education | Permalink | Comments (2)

Newman:  Should Olympic Medals Be Taxed?

Olympic RingsJoel S. Newman (Wake Forest), Should Olympic Medals Be Taxed?:

Ronda Rousey won the Bronze Medal in judo at the Beijing Olympics in 2008. She was the first American woman to do so. The medal itself would have brought her a measly four bucks, if she had been crass enough to sell it. Her reward from the United States Olympic Committee for her unique accomplishment was, as she put it, “Ten grand and a handshake.” A few months after she came home from Beijing, she was living in her car.

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March 29, 2017 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1420: A Hidden Cause

Cause of ActionCause of Action, Sensitive Case Reports: A Hidden Cause of the IRS Targeting Scandal:

Executive Summary:
Beginning in February 2010, the Internal Revenue Service (“IRS’) singled out certain non-profit organizations for extra scrutiny when they applied for tax-exempt status. Numerous subsequent congressional investigations and media reports demonstrated that the targeting involved invasive questioning and years-long delays, and focused disproportionately on right-leaning groups, especially those with “Tea Party” in their name. These reports, however, have almost entirely overlooked a hidden cause of the targeting scandal,which remains in effect today. As a result, American taxpayers are at risk for similar treatment in the future.

Contrary to the conventional storyline, there exists an institutional policy that was the first impetus in prompting IRS employees to target groups based on their political viewpoints. That policy is embodied in an internal IRS rule—which is still on the books—that singles out applications from any group interested in issues that might garner attention from either the media or Congress. In such cases, the merits of the application are ignored as IRS employees develop “Senstive Case Reports” for consideration by those above them in the IRS hierarchy. The result is a process that interferes with the unbiased review of applications for tax-exempt status designed to apply to all eligible organziations, regardless of their political viewpoints or affiliations.

Seven years after the targeting scandal began, the rule that enabled this inexcusable behavior still exists. Until that rule is removed from the internal manual used by all IRS employees, targeting of politcal opponents will remain a very real threat. Fortunately, removing the offending provisions is a simple process that can be started at any time and completed without the need for new legislation or formal notice-and-comment rule-making.

Findings:

  • Targeting was—and is—IRS policy, not a violation of it.
  • The employees who initiated the targeting cited an internal “Sensitive Case Report” process that singled out applications that might attract media or congressional attention.
  • Sensitive Case procedures remain in effect today.
  • The IRS has the authority to change its internal policy at any moment, which means it can remove the problematic rules at its discretion. Doing so would eliminate the agency procedure that enabled the targeting scandal. To date, the agency has not made the required changes to its rules.

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March 29, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, March 28, 2017

Yale Presents Mutual Fund Tax Overhang Today At Georgetown

Yale (Ethan) (2017)Ethan Yale (Virginia) presents Mutual Fund Tax Overhang at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

The built-in-gain in a mutual fund’s portfolio is referred to as “tax overhang.” Tax is imposed on investors who buy shares in mutual funds with tax overhang even though the gain accrued before their investment. The consequence is accelerated tax, increasing the shareholders’ effective tax rate. This article (1) explains why this occurs and why it is a problem, (2) describes the magnitude of the problem, (3) describes and illustrates avoidance strategies funds use to avoid the bad effects of tax overhang, (4) argues that reform is warranted, and (5) describes and evaluates the options for reform.

March 28, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Mason Presents A U.S. Perspective On State Aid Today In Luxembourg

Mason (2016)Ruth Mason (Virginia) presents A U.S. Perspective on State Aid at the University of Luxembourg today:

Tax Rulings as State Aid FAQ, 154 Tax Notes 451 (Jan. 23, 2017):

In this report, the first in a series of reports on EU state aid, Mason provides background on state aid law as it applies to income taxes, including the legal standard, recovery mechanism, and case selection by the Commission.

State Aid Special Report — Part 2: Legitimate Expectations, 154 Tax Notes 615 (Jan. 30, 2017):

In this report, the second in a series of reports on EU state aid, Mason evaluates the claims Treasury’ made in its White Paper that recovery in the recent tax ruling cases would violate taxpayers’ legitimate expectations that those rulings did not constitute state aid.

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March 28, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Brooklyn Symposium:  Reconsidering The Tax Treaty

Brooklyn Logo (2016)Symposium, Reconsidering the Tax Treaty, 41 Brook. J. Int'l L. 967-1301 (2016):

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March 28, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Leff:  Tax Benefits Of Government-Owned Marijuana Stores

CannabisBenjamin M. Leff (American), Tax Benefits of Government-Owned Marijuana Stores, 50 U.C. Davis L. Rev. 659 (2016):

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

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

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March 28, 2017 in Scholarship, Tax | Permalink | Comments (0)

ABA Places Arizona Summit Law School On Probation Following 25% Bar Pass Rate

Arizona Summit Logo (2015)Following up on my previous post, ABA Places Charlotte Law School On Probation, Censures Valparaiso:  the ABA has placed Arizona Summit Law School on probation:

The Council determined that the Law School's admissions practices, academic program (including its academic standards and academic support), and outcomes (graduation and bar passage) have resulted in the Law School now being in a position where only immediate and substantial action can bring about sufficient change to put the Law School on a realistic path back to being in compliance within the time allowed by the Standards and Rules of Procedure.

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March 28, 2017 in Legal Education | Permalink | Comments (3)

Society Of American Law Teachers Opposes ABA Proposal To Allow Adjuncts To Teach More Law School Courses

SALT LogoFollowing up on last week's post, ABA Proposes To Eliminate Requirement That More Than 50% Of Law Teaching Be Performed By Full-Time Faculty:  National Law Journal, ABA May Open Door to More Adjunct-Taught Classes:

The American Bar Association is considering deep-sixing a rule requiring full-time faculty to teach at least half of every law school’s upper-level courses—a proposal likely to ruffle the feathers of professors who fear it would allow schools to essentially outsource the second and third year to adjuncts.

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March 28, 2017 in Legal Education | Permalink | Comments (1)

NY Times Op-Ed:  How To Con Black Law Students

ASBCNew York Times op-ed: How to Con Black Law Students: A Case Study, by Elie Mystal (Above the Law):

This month, Bethune-Cookman, a historically black university in Daytona Beach, Fla., announced an “affiliation” deal with Arizona Summit Law School, a for-profit institution in Phoenix. A joint scholarship program will send Bethune-Cookman students and students from other historically black colleges to the law school. Other programs, including intensive LSAT prep classes, have been announced as part of the deal.

Bethune-Cookman doesn’t have a law school, so it makes sense that it would want to partner with an accredited institution. But there’s a problem: Arizona Summit, formerly known as the Phoenix School of Law, may be accredited, but only 25 percent of its graduates passed the Arizona bar exam on their first try last year.

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March 28, 2017 in Legal Education | Permalink | Comments (0)

Magbanua’s Attorneys Chide Prosecutors' Fishing Expedition To Determine Who Is Paying Her Attorneys' Fees In Markel Murder Case

MagnaubaTallahassee Democrat, Magbanua's Attorneys: State on a 'Fishing Expedition':

Katherine Magbanua’s attorneys say prosecutors are on a fishing expedition to figure out who is paying her legal fees.

Last month, Assistant State Attorney Georgia Cappleman set out to figure out whether the former in-laws of slain Florida State University law professor Dan Markel were paying for two Miami lawyers defending Magbanua, who is suspected of being the conduit in the murder-for-hire plot.

Cappleman said the money trail leads to co-conspirators in the case. But in a Friday court filing, Magbanua’s attorneys Tara Kawass and Christopher DeCoste say prosecutors are doing so on the basis of “conjecture rather than proof.” They want Leon Circuit Court Judge James Hankinson to deny the request. A case management conference is scheduled for May 1. ...

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March 28, 2017 in Legal Education | Permalink | Comments (3)

Monday, March 27, 2017

Viswanathan Presents Tax Compliance In A Decentralizing Economy Today At Pepperdine

Viswanathan (2017)Manoj Viswanathan (UC-Hastings) presents Tax Compliance in a Decentralizing Economy at Pepperdine today as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine:

Tax compliance in the United States has long relied on information from centralized intermediaries—the financial institutions, employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities, consumers and businesses are not. New technologies, such as the on-demand sharing platform economy (companies such as Airbnb, Uber, and Instacart) and the blockchain (the platform on which Bitcoin is based) are providing new, decentralized options for exchanging goods and services. Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance.

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March 27, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)