TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, September 8, 2015

Zelinsky: John Oliver, Televangelists, And The IRS

John OliverOxford University Press Blog:  John Oliver, Televangelists, and the Internal Revenue Service, by Edward Zelinsky (Cardozo):

John Oliver’s sardonic spoof of televangelists raises important issues that deserve more than comic treatment. Oliver’s satire was aimed both at the televangelists themselves and at the IRS. In Oliver’s narrative, the IRS acquiesces to televangelists’ abuse by granting their churches tax-exempt status and failing to audit these churches. The law defines the term “church” vaguely. The IRS’s allegedly lackadaisical approach, Oliver tells us, permits televangelical preachers to live luxurious lives replete with private planes and tax-free cash, financed by naive and exploited believers.

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September 8, 2015 in IRS News, Tax | Permalink | Comments (3)

Law Prof Jobs Are Drying Up

Following up on my previous post, Law School Entry-Level Faculty Hiring Down Only 4%:  National Law Journal, Law Prof Jobs Drying Up:

NLJThe entry-level law-teaching market — which has always been highly competitive — has constricted dramatically over the past four years, and legal educators said it's not likely to fully recover anytime soon.

The number of new law professors hired at American Bar Association-accredited law schools fell nearly 55 percent between 2011 to 2015, according to data compiled by Sarah Lawsky, a professor at the University of California, Irvine School of Law. Just 70 people snagged tenure-track teaching jobs last year, compared with 155 in 2011, Lawsky's data shows. (The Association of American Law Schools (AALS) organizes the hiring conference but does not track the number of resulting hires, said spokesman James Greif. Lawsky's data, which she posts on the law professor blog PrawfsBlawg, is the most comprehensive available. Lawsky cautions that her numbers are close but not complete.)

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September 8, 2015 | Permalink | Comments (6)

Economics Prof Works To Flesh Out Ben Carson's Biblically Inspired Flat Tax

Ben Carson 3Bloomberg:  Ben Carson's Economist Seeks Tax System Overhaul, by Richard Rubin:

Get Thomas Rustici talking about the current state of U.S. economic policymaking, and the adjectives start flowing: Corrupt, worst, wasteful, bloated, dangerous. 

And at least one important person is listening. Rustici, a professor at George Mason University in Virginia, is now the senior economic adviser to Ben Carson, the retired neurosurgeon and Republican presidential candidate who is surging in polls nationally and in Iowa. 

It's up to Rustici to figure out the details of Carson's big-picture policies—balance the budget, impose a Biblically inspired flat tax—and he's got plenty of ideas. In his first interview since joining the campaign, he outlined some of them.

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September 8, 2015 in Political News, Tax | Permalink | Comments (2)

Longtime Montana Law Prof Forced To Retire Early Due To Budget Cuts

RenzMissoulian, Longtime UM Law Professor Forced to Retire Early Because of Budget Cuts:

After 14 years in private practice, including several working on high-profile environmental cases for a firm based in Chicago, [Jeff] Renz returned to the law school at UM to teach. He's been on an annual contract since 1993.

At the end of this semester, the teacher and director of the criminal defense clinic will retire. His departure is linked to the budget crunch at UM, and he appears to be the only contracted professor whose annual employment isn't being renewed because of money. ...

The cut at the law school comes despite the fact it is on solid financial footing and steady enrollment, Renz said.

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September 8, 2015 in Legal Education | Permalink | Comments (3)

Death Of Law Prof Dennis Greene, Sha-Na-Na Co-Founder

Sha Na NaWHIO, Sha-Na-Na Co-founder Dennis Greene Was Beloved Law Professor:

Dennis Greene, law professor at the University of Dayton and former member of the band Sha-Na-Na, has died, university officials have confirmed.

Greene died Saturday after a brief illness, according to a statement from the university. He was 66.

Greene had taught at UD since 2001, specializing in constitutional and entertainment law.

As a founding member of the retro-rock group Sha-Na-Na, Greene performed at Woodstock in 1969 and was featured singing with the group in the movie Grease (1978).

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September 8, 2015 in Legal Education, Obituaries | Permalink | Comments (2)

The IRS Scandal, Day 852

IRS Logo 2Post and Courier editorial, Report: Shocking IRS Behavior:

There’s plenty to be shocked by in the thousands of pages of the Senate Finance Committee’s bipartisan report on the IRS scandal.

But the most shocking is that employees who reviewed applications from organizations seeking tax-exempt status were told to sit on any of them aspiring to educate the public on “the Constitution and Bill of Rights.”

The IRS official in charge of this decision was Lois Lerner, who has refused to testify before Congress on the grounds of possible self-incrimination, a privilege guaranteed by the Bill of Rights. Talk about irony.

Ms. Lerner apparently was concerned in 2011 that applications with “Tea Party” in their self-description were to be given extra scrutiny and, in effect, put on ice. According to the Senate report, of 290 applications from conservative groups received by the IRS from 2010 to early 2012, only one had been approved by the time of the 2012 presidential election. ...

The exhaustive report by the Senate Finance Committee found no evidence that the crackdown was directed by any outside authority. But Lois Lerner is reported to have expressed views hostile to conservatives and favorable to the Democratic Party and the labor movement.

There is evidence that two applications from the Occupy movement were also mishandled. But of the groups with politically identifiable positions whose applications for tax-exempt status were taken out of the normal approval process, centralized and subjected to long delays, 83 percent were conservative and only 17 percent were liberal. All evidence points to a decided bias in IRS treatment of conservative groups. ...

The Senate Judiciary Committee report makes it clear why the administration wouldn’t want the full truth about the IRS scandal to emerge.

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September 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Holiday Weekend Roundup

Monday, September 7, 2015

Carter: Big Law Associates Need A Nap

NapBloomberg View:  Big Law Associates Need a Nap, by Stephen L. Carter (Yale):

Why do we tell high schoolers to get a good night’s sleep before taking their SATs? Because we know instinctively what cognitive scientists tell us repeatedly: The brain can’t function at a high level without rest. Some researchers think the upper bound may be around six hours.

Yet we’re working harder than ever. In a recent blog post for the Harvard Business Review, INSEAD’s Gianpiero Petriglieri reminds us of the punishing harm we do to our bodies. He cites data suggesting that “working long hours damages our health, productivity, and families.”

Which brings us to lawyers.

Lawyers pretty much run the country. Maybe the reason they run the place so badly is that they’re always exhausted.


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September 7, 2015 in Legal Education | Permalink | Comments (1)

Labor Day, The Minimum Wage, And The Earned Income Tax Credit

Labor Day 2Joe Kristan (Tax Update Blog), Labor Day and the Earned Income Tax Credit:

[Y]ou may want to ponder the hot “labor” issue of the moment — the minimum wage and its alternatives. ... Many economists argue that an increased Earned Income Tax Credit is a better way to support the working poor.   For example, in The minimum wage versus the earned income tax credit for reducing poverty, Cornell University economist Richard V. Burkhauser states:

Introducing or increasing a minimum wage is a common policy measure aimed at reducing poverty. But the minimum wage is unlikely to achieve this goal. While a minimum wage hike will increase the wage earnings of some poor families and lift them out of poverty, some workers will lose their jobs, pushing their families into poverty. In contrast, improving the earned income tax credit can provide the same income transfers to the working poor at far lower cost. Earned income tax credits effectively raise the hourly wages only of workers in low- and moderate-income families, while increasing labor force participation and employment in those families.

The argument for a perfect earned income tax credit is compelling, but the credit is far from perfect. It is estimated that around 25% of the Earned Income tax credit paid out is paid improperly, including billions in fraud. Earned income tax credit fraud is a big part of the business of corrupt preparers. Many other taxpayers who could properly claim it fail to because of its complexity.

Even if the waste and fraud problem could be solved or overlooked, a properly-functioning EITC is still a poverty trap. The credit phases out as incomes rise, creating a high effective marginal tax rate on each additional dollar earned by a low-income family. It provides help at low income levels, but it discourages improving those income levels.

Implicit 2

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September 7, 2015 in Tax | Permalink | Comments (1)

Labor Day And Lawyers

Labor DaySteven J. Harper (Adjunct Professor, Northwestern; author, The Lawyer Bubble), Labor Day:

Labor Day marks the end of summer. It’s also a time to reflect on our relationship with work. Lawyers should do that more often. In that regard, some big law leaders will find false comfort in their 2015 Am Law Midlevel Associates Survey ranking.

In a recent New York Times Op-Ed, Rethinking Work, Swarthmore College Professor Barry Schwartz suggests that the long-held belief that people “work to live” dates to Adam Smith’s 1776 statement in “Wealth of Nations”: “It is in the interest of every man to live as much at his ease as he can.”

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September 7, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 851

IRS Logo 2Waterbury Republican American editorial, Silence on IRS Scandal:

Aug. 28, U.S. District Court Judge Amy Berman Jackson, who was appointed by President Obama, ordered the Internal Revenue Service to reveal any requests the Obama White House made for confidential taxpayer information. The case in which Judge Jackson ruled dates to 2010, when then-White House economics adviser Austan Goolsbee made comments that suggested he was familiar with the tax records of Koch Industries Inc., a generous financial backer of conservative causes. The U.S. Treasury Inspector General for Tax Administration (TIGTA) investigated the possibility that Koch information was improperly obtained, but the Obama administration didn't cooperate when Koch and conservative legal group Cause of Action filed freedom-of-information requests for the TIGTA report. Cause of Action sued.

Possible improper acquisition of taxpayer information and the effort to keep a lid on things are the kinds of malfeasance the news media are supposed to spotlight. However, since Judge Jackson issued her order, the mainstream media have failed to cover the issue. This is a betrayal of the journalism profession, and is indicative of liberal bias.

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September 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, September 6, 2015

Education Debt Burdens Students, Economy; Elite Schools Lobby Against Proposal To Cap Graduate School Loans

Los Angeles Times, Soaring Student Loan Debt Poses Risk to Nation's Future Economic Growth:

LA 2Students around the country — and often their parents — have racked up so much college debt since the recession that it now threatens the nation's economic growth.

The debt weighs down millions of Americans who might otherwise buy homes or start businesses. And the financial horror stories of debt-saddled students, combined with continued increases in tuition, could deter others from attending college and could produce a less-educated workforce.

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September 6, 2015 in Legal Education | Permalink | Comments (3)

The Top 5 Tax Paper Downloads

IRS Agent Charged With Sexual Battery During Audit

IRS Logo 2Breitbart, IRS Agent Charged With Sexual Battery During Audit:

A 36-year old IRS agent is facing charges of sexual battery by an authority figure.

The Tennessean reports that Samuel Garza, an IRS agent, was arrested by the Williamson County (Tennessee) Sheriff’s Office on Thursday, “after authorities say he sexually assaulted a woman while he was performing an audit on a Fairview, Tennessee business.”

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September 6, 2015 in IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 850

IRS Logo 2Orange County Register editorial, IRS Scandal: Time to Fish or Cut Bait:

Four months ago, Loretta Lynch was sworn in as U.S. attorney general, replacing the feckless Eric Holder.

We think that’s more than sufficient time for Ms. Lynch to have completed her onboarding. The no-longer-new AG should get on with the business Mr. Holder left in her inbox.

That includes, first and foremost, the long-awaited decision as to whether the Justice Department will bring criminal charges against IRS employees who targeted Tea Party and other preponderantly conservative nonprofit groups for inordinate scrutiny when they applied for tax-exempt status.

In March 2013, Mr. Holder announced that he was opening a criminal investigation of what seemed to us an obvious abuse of power by a politically motivated IRS staff – most notably, Lois Lerner, who was at the time director of the agency’s Exempt Organizations Division.

Well, 29 months have passed, and the Justice Department hasn’t brought closure to its IRS investigation.

If we didn’t know better, we’d suspect that senior Justice officials are intentionally stalling, delaying a decision on prosecuting Ms. Lerner and others complicit in the IRS scandal until President Obama is safely out of office.

Perhaps we perceive a cover-up where none exists. The best way for Attorney General Lynch to disabuse us of that notion – along with the millions of Americans who think something rotten at 950 Pennsylvania Ave. (Justice Department headquarters) – is to announce whether Ms. Lerner, et al. will be prosecuted.

Indeed, we think there is ample evidence to indict Ms. Lerner, who has acknowledged “absolutely inappropriate” actions by her division, while casting blame upon low-level “front-line people” who worked for her.

But it seems Ms. Lerner was at the center of the scandal. Just this past week, in fact, we learned that she had a secret email account at IRS – named after her dog, “Toby Miles” – which she used to conduct official government business. ...

Whatever the case may be, the Justice Department needs to stop stalling and get to the bottom of the IRS scandal.

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September 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, September 5, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Tax Court: Snow Day Is A Legal Holiday For Tax Filing Purposes

Snow DayGuralnik v. Commissioner, No. 4358-15L (Sept. 3, 2015):

[I]n the case at hand the closing of both District and Federal government offices, specifically including the Tax Court, because of a winter snowstorm, together with the fact that the Tax Court does not maintain an after-hours "drop-box" and does not presently allow petitions to be filed electronically, means that the Tax Court's clerk's office was inaccessible on the day of the winter snowstorm. Under such circumstances we find it inconceivable that Congress would have intended, absent a specific statutory provision requiring otherwise, to bar a taxpayer who fails to anticipate on a Friday that the Government will decide to close a filing office on the first workday of the following week on account of a snowstorm. See In re Swine Flu Immunization Prod. Liab. Litig., 880 F.2d at 1445; United Mine Workers v. Dole, supra. Because there is no such specific statutory provision requiring otherwise, we will deny respondent's motion, as supplemented.

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September 5, 2015 in New Cases, Tax | Permalink | Comments (0)

NY Times: Our Declining Friendships With Our Co-Workers: Bad For Us, Bad For Our Employers

FriendsNew York Times Sunday Review:  Friends at Work? Not So Much, by Adam Grant (University of Pennsylvania, Wharton School):

Once, work was a major source of friendships. We took our families to company picnics and invited our colleagues over for dinner. Now, work is a more transactional place. We go to the office to be efficient, not to form bonds. We have plenty of productive conversations but fewer meaningful relationships.

In 1985, about half of Americans said they had a close friend at work; by 2004, this was true for only 30 percent. ...

We may start companies with our friends, but we don’t become friends with our co-workers. "We are not only 'bowling alone,'" Jeffrey Pfeffer, a professor at Stanford, observes, "we are increasingly ‘working alone.’ ”

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September 5, 2015 in Legal Education, Tax | Permalink | Comments (4)

The IRS Scandal, Day 849

IRS Logo 2Kay Bell (Don't Mess With Taxes), Lois Lerner Used Her Dog's Email to Conduct Business:

Lois Lerner, the linchpin in the continuing investigation into the Internal Revenue Service's questionable review of Tea Party groups' applications for tax-exempt 501(c)(4) status, used a second, personal email account to conduct tax agency business.

The account was established for "Toby Miles," which reportedly is the name of Lerner's dog.

National Review says Toby is the dog's name, and Miles is the surname of Lerner's husband, Michael Miles.

Really, Ms. Lerner? Your dog? 

So far, we don't know if "Toby" discussed any 501(c)(4) requests. But still, this does not look good.

Worse, it looks amateurish.

Worst of all, it's more fuel on the fire that is the IRS house slowly burning down while Congressional Republicans dance a jig to the accompanying fiddling.

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September 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, September 4, 2015

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

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September 4, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Utah Law School Celebrates Opening Of New Building With Audacious Goal: 100% Bar Passage, 100% Professional Employment

100%Utah Law School celebrated the opening of its new $62.5 million building with Dean Robert Adler announcing an audacious goal:

The University of Utah S.J. Quinney College of Law announced a new initiative this week to reach a goal of 100 percent bar passage and 100 percent professional employment placement among its law school graduates. ...

Adler said the initiative builds on the law school’s already high bar passage rate of 90 percent and professional employment rate of 92 percent —numbers that are significantly higher than other national averages across the country among law students.

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

North Carolina Central Law School Seeks To Hire A Tax Clinic Director

NCCNorth Carolina Central University School of Law invites applications from entry-level and lateral candidates for the position of Assistant or Associate Clinical Professor/Supervisor of the Low Income Taxpayer Clinic:

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September 4, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Manolakas: The Taxation Of Artists And The Acquirers Of Art

Tax ArtistChristine Manolakas (McGeorge), The Taxation of Artists and the Acquirers of Art: The Many Shades of Grey, 43 AIPLA Q.J. 69 (2015):

The United States has the largest art market in the world with estimated sales of $25 billion in 2014. This booming business involves artists, collectors, dealers and hobbyists – all of which are subject to the federal income tax. However, not all artists and acquirers of art are treated equally under the Internal Revenue Code.

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September 4, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 848

IRS Logo 2Powerline, Obama’s Stonewall Tactics: A Case Study:

The Obama administration has proved to be the least transparent in our modern history. To an unprecedented degree, the administration is staffed by scofflaws who flout their legal obligations. When confronted with requests for information, let alone actual investigations, Obama’s habitual response is to stonewall. This strategy has been remarkably successful in avoiding accountability, in part because legal processes are so slow.

We have seen this pattern dozens of times. One instance, which is highlighted by a federal court order issued on Friday, illustrates how the administration has operated from the beginning of Obama’s term in office.

The story, which we have written about several times, begins in August 2010. Austin Goolsbee, who directed Obama’s Economic Recovery Advisory Board and later chaired his Council of Economic Advisers, delivered a press briefing in which he discussed corporate income taxes. He casually asserted that Koch Industries, one of America’s largest privately-owned companies, doesn’t pay any income taxes:

So in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multibillion dollar businesses. So that creates a narrower base because we’ve literally got something like 50 percent of the business income in the U.S. is going to businesses that don’t pay any corporate income tax.

If Koch Industries is an S corp, then its owners (principally Charles and David Koch) pay individual income taxes on the company’s profits, making them by far the largest individual taxpayers in the United States. Be that as it may, one of two things must be true: either Goolsbee had illegally accessed Koch Industries’ tax returns, or he made it up. So Koch asked the administration whether someone had been illegally scrutinizing its tax returns. The administration refused to answer.

That led to a Freedom of Information Act request, which was served by a group called Cause of Action on October 9, 2012. ...

Cause of Action wanted to know whether Goolsbee, whose office fell within the Executive Office of the President, or someone working under him, had asked for taxpayer “return information.” The administration eventually produced a handful of irrelevant documents and a comprehensive list of objections. Obama’s key objection was that the IRS is legally prohibited from producing documents responsive to requests 3 and 4 because doing so would violate the taxpayer’s–Koch Industries’–privacy.

The fact that a legal position is ludicrous never prevents the Obama administration from asserting it. Having exhausted its administrative remedies, Cause of Action commenced a FOIA lawsuit against the IRS. Cause of Action and the IRS made cross-motions for summary judgment, briefing on which was completed in August 2014. On Friday, almost exactly one year later, Federal Judge Amy Jackson issued an order in which she overruled the Obama administration’s claim that it couldn’t say whether the White House had broken the law by accessing taxpayer information:

Congress amended section 6103 in 1976 “in the wake of Watergate and White House efforts to harass those on its ‘enemies list,’” in order to “restrict[] government officers and employees from revealing ‘any return’ or ‘return information,’” id. at 611, and its “core purpose” is to “protect[] taxpayer privacy.” Id. at 615. So, this Court questions whether section 6103 should or would shield records that indicate that confidential taxpayer information was misused, or that government officials made an improper attempt to access that information.

The IRS argues that “section 6103’s definition of ‘return information’ . . . makes no distinction based on the purpose for which a person might seek disclosure of the documents.” Def.’s Reply at 15. But accepting this argument would require a finding that even requests for return information that could involve a violation of section 6103 constitute “return information” that is exempt from disclosure under FOIA Exemption 3 and section 6103. The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit.

So someday–not any time soon–the IRS will finally be forced to answer the question that Koch Industries asked it five years ago, in 2010. The Obama administration’s strategy is always the same–stonewall, assert every possible theory, no matter how frivolous, and try to run out the clock. Whether an honest answer to the question will be given, years after the fact, is of course another question.

The Obama administration’s lawlessness is perhaps its most repellent legacy.

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September 4, 2015 in IRS News, IRS Scandal | Permalink | Comments (1)

Thursday, September 3, 2015

More On Law School Tuition Discounting

Following up on last week's post,  Average Private Law School Tuition Discount Approaches 50%: preLaw, Which Law Schools Discount Tuition the Most?:

What you see is not what you get when it comes to law school tuition. In fact, the average law school discounts its published tuition price by an estimated 25 percent through grants and scholarships, according to a detailed analysis by preLaw magazine.

Law schools are giving away so much money as of late, that scholarships totaled $1.12 billion in 2013-14, which is 36 percent more than in 2010-11. ...

Here are the private law schools with the 20 biggest tuition discounts:

Tuition Discount

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September 3, 2015 in Legal Education | Permalink | Comments (2)

ABA Names Tanina Rostain 2015 Legal Rebel

Legal RebelsTanina Rostain (Georgetown) has named a 2015 Legal Rebel by the ABA Journal:

Professor Tanina Rostain has made a 180-degree turn in her work on the ethics of lawyering. For nearly 20 years she pushed to reform organizational pressures that increasingly had lawyers bending and breaking rules on behalf of corporate clients. (Think dodgy tax shelters.) Now she’s focused on the essence of law as an institution that is supposed to help people. (Think access to justice.)

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September 3, 2015 in Legal Education, Tax | Permalink | Comments (0)

Registration Is Open For Inaugural International Conference on Taxpayer Rights


Registration is now open for the Inaugural International Conference on Taxpayer Rights in Washington, D.C. on November 18-19, 2015 (agenda):

The National Taxpayer Advocate of the Internal Revenue Service is convening the Inaugural International Conference on Taxpayer Rights in Washington, D.C. This ground-breaking conference will present panelists from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration.

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September 3, 2015 in Conferences, Tax | Permalink | Comments (0)

Business Insider: Why Law School Is A Waste Of Money Unless You Get Into A Top School

Brewer: Etsy, Tax Dodging, And B Corp Status

ETSYCass Brewer (Georgia State), "Dodging" Taxes and B Corp Status:

There has been a growing controversy surrounding Etsy’s much-publicized B Corp status and Etsy’s recent move to save (“dodge”???) taxes by using an Irish subsidiary. Stories have appeared in Bloomberg Business, the WSJ, and even The Irish Times. The advocacy group, Americans for Tax Fairness, requested in an August 28, 2015, letter to B Lab that Etsy’s B Corp designation be made “contingent upon its elimination of the use of its subsidiary in Ireland to dodge taxes” (emphasis added). The pressure on Etsy apparently has been so strong that Chad Dickerson, Etsy’s CEO, felt the need to publish a blog post defending the company’s tax strategy.

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September 3, 2015 in Tax | Permalink | Comments (1)

Law Schools With The Lowest Student Debt

Student Loans

Following up on my previous post, 2016 U.S News Law School Rankings: Average Student Debt:  U.S. News & World Report, 10 Law Schools That Leave Grads With the Least Debt:

SchoolAve. DebtU.S. News Rank
1. BYU $54,203 34 (tie)
2. Hawaii $56,266 82 (tie)
3. N.C. Central $58,061 Not Ranked
4. Nebraska $62,985 56 (tie)
5. Arkansas $63,541 75 (tie)
6. North Dakota $64,818 138 (tie)
7. Tennessee $66,201 52 (tie)
8. Wyoming $67,087 108 (tie)
9. Missouri $67,289 59 (tie)
10. Alabama $69,440 22 (tie)

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September 3, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

NY Times: Too Many Law Students, Too Few Legal Jobs?

NY TimesFollowing up on last week's post, NY Times Op-Ed: Too Many Law Students, Too Few Legal Jobs:  New York Times letters to the editor:

Jeremy Paul (Dean, Northeastern):

Steven J. Harper unfairly assesses the number of American law students based on employment statistics rather than on the more salient fact that so many Americans cannot afford legal services. No one would say we had an oversupply of medical students if millions of Americans resorted to self-medication and treatment because they could not pay for a doctor. More of our citizens are representing themselves in court on important matters, like divorce, than at any time in recent memory.

Law schools throughout the country are responding with incubator programs aimed at helping law graduates open small law practices to serve clients of modest means. And studies show that a law degree remains a sound investment even if graduates take more time to find a first job or if that first job does not require passing the bar.

Perhaps instead of painting with a broad accusatory brush, Mr. Harper should offer his own solutions for expanding legal services to all. That’s the valuable mission of the many law schools he castigates so cavalierly.

Milan Markovic (Professor, Texas A&M Law School):

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September 3, 2015 | Permalink | Comments (4)

The IRS Scandal, Day 847

IRS Logo 2Wall Street Journal, Miles From Nowhere: An Update on the IRS Scandal, by James Taranto:

Hillary Clinton is not the only official of the Obama administration to have engaged in email shenanigans. While we were away last week, as the Washington Times reported, a court filing from the Internal Revenue Service revealed that “Lois Lerner had yet another personal email account used to conduct some IRS business”: ...

“In addition to emails to or from an email account denominated ‘Lois G. Lerner‘ or ‘Lois Home,’ some emails responsive to Judicial Watch’s request may have been sent to or received from a personal email account denominated ‘Toby Miles,’ ” ... 

At first we wondered why Lerner would use a masculine pseudonym. Then we realized Toby is an epicene name and we’d been thinking of Toby Flenderson, the officious bureaucrat from NBC’s “The Office.” At any rate, Fox News appears to have come up with the explanation: “Two sources told Fox News that Toby Miles is the name of Lerner’s dog.” Confusingly, Lerner’s canine shares a surname with her husband, and Fox adds that “Lerner’s husband Michael Miles also reportedly may have been linked to the account.” ...

This week, as blogger William Jacobson reports, yet another fake Lerner email address came to light:

In . . . an August 31, 2015 Status Report, the IRS revealed that Lerner also used “a second personal email account” that, unlike the Toby Miles account, “does not appear to be associated with a denomination; only the email address itself appears.” The IRS refuses to disclose the email address for either the Toby Miles or the newly discovered account. ...

Why Lerner needed so many email addresses is something of a mystery, but she’s not alone among Obama administration officials. ...

The Washington Times reports on yet another thwarted IRS attempt to evade public scrutiny:

A federal judge Friday ordered the IRS to turn over the records of any requests from the White House seeking taxpayers’ private information from the tax agency, delivering a victory to a group that for two years has been trying to pry the data loose.

It’s not clear that there were any such requests—but Judge Amy Berman Jackson said the IRS cannot just refuse to say so by citing taxpayer confidentiality laws, known as section 6103 of the tax code.

Richard Pollock, then of the Washington Examiner, explained the background in a 2013 piece:

Treasury Department investigators completed but never released a 2011 law enforcement probe of White House economic advisor Austan Goolsbee, The Washington Examiner has learned.

The investigation by the Treasury Department Inspector-General for Tax Administration was sparked by Goolsbee’s remarks during an Aug. 27, 2010, White House news briefing in which he appeared to possess confidential tax information on Koch Industries, the private conglomerate controlled by the Koch brothers, Charles and David. ...

Six senators requested an investigation of Goolsbee’s remark under Section 6103 of the Internal Revenue Code, which protects taxpayers’ privacy. The IRS conducted the probe, then refused to reveal its findings, including to the senators and the Kochs—because, it said, they included taxpayer information that was confidential under Section 6103.

A group called Cause of Action filed the FOIA lawsuit seeking, among other things, “any communications by or from anyone in the Executive Office of the President constituting requests for taxpayer or ‘return information’ ” protected by Section 6103. Again, the IRS balked, saying such requests were private under Section 6103. That was the claim Judge Jackson rejected. ...

Whether the IRS is concealing misconduct is unknown; it’s possible, for instance, that the Goolsbee report found nothing amiss and its suppression was a product of mere bureaucratic monomania. Similarly, it’s possible Mrs. Clinton actually did turn over printouts of all her work-related emails to the State Department, but we may never know. In any case, it’s unreasonable for government officials to expect us to trust their assurances when they take such pains to prevent their verification.

On a happier note, it’s worth mentioning that the judges in both these cases were Democratic appointees. Emmet Sullivan was nominated by Bill Clinton in 1994 and Amy Jackson by Barack Obama in 2011. Independence and integrity are not dead, at least in the judicial branch.

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September 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, September 2, 2015

The 100 Most Influential People In Tax And Accounting

Top 100I am honored to be included on the list of Accounting Today's 100 Most Influential People in Tax and Accounting for the tenth year in a row:

In the years since Caron was one of the few pioneering tax bloggers, a veritable host of others have sprung up, but none can match his authority, his comprehensive approach, or his willingness to doggedly, persistently pursue the long-term unfolding of the scandal around the IRS's targeting of conservative groups.

Accounting Today also quoted me in a sidebar on "The Quest for Work-Life Balance":

I fear that I have achieved work-life balance because work is my life! But seriously, it is a gift to be able to do a job that you love, so that the time you spend does not feel like “work.”

I am flattered to be on the Top 100 list with such high-powered people in the tax and accounting worlds, including:

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September 2, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

U.S. News Law School Rankings 'Echo Chamber' Affects Peer Reputation, Lawyer/Judge Reputation, Selectivity & Tuition, But Not Employers

2016 U.S. News RankingsJeffrey Evans Stake (Indiana) & Michael Alexeev (Indiana), Who Responds to U.S. News & World Report's Law School Rankings?, 12 J. Empirical Legal Stud. 421 (2015):

U.S. News & World Report (USN&WR) publishes annual rankings of ABA‐approved law schools. The popularity of these rankings raises the question of whether they influence the behavior of law teachers, lawyers and judges, law school applicants, employers, or law school administrators. This study explores some indicia of USN&WR influence. Using data purchased from USN&WR, we attempt to determine whether USN&WR might have influenced (1) law faculty members who respond to the USN&WR survey of law school quality, (2) lawyers who respond to USN&WR surveys, (3) law school applicants choosing a school, (4) employers who hire law school graduates, and (5) administrators who set tuition.

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September 2, 2015 in Law School Rankings, Legal Education | Permalink | Comments (5)

NY Times: Why Students With The Smallest Debts Have The Larger Problem

Student LoansNew York Times:  Why Students With Smallest Debts Have the Larger Problem, by Susan Dynarski (Michigan):

Politicians who complain about college costs frequently cite two numbers: one trillion and seven million. Student borrowers owe more than $1 trillion, and seven million borrowers are in default, according to the latest Department of Education data.

It’s natural for people listening to the politicians to connect the two facts with a causal arrow: More debt leads to more default. But the reality is surprising: Borrowers who owe the most are least likely to default.

The reason for this strange pattern? The biggest borrowers tend to become the highest earners.

In particular, borrowing is highest for those who go to graduate school. Forty percent of new loans go to graduate students. Among those earning law and medical degrees in 2012, median debt (undergraduate and graduate school) is $141,000 for lawyers and $162,000 for doctors.

Those holding graduate degrees tend to handle higher debt because they earn more. Over the past 50 years, workers with graduate degrees have enjoyed the largest gains of any education group, with their inflation-adjusted earnings nearly doubling since 1964. Some struggle, of course: The Department of Education estimates that 7 percent of graduate borrowers default. But this default rate is far lower than the 22 percent rate for those who borrow only for their undergraduate studies.


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September 2, 2015 in Legal Education | Permalink | Comments (3)

Repatriation Tax Holiday: Wrong In 2004, Wrong Now

Tax HolidayOxford University Press Blog:  Wrong Again, by Richard S. Grossman (Wesleyan):

Unlike fine wine, bad ideas don’t improve with age.

One such idea is the Invest in Transportation Act, co-sponsored by Sens. Barbara Boxer (D-CA) and Rand Paul (R-KY), which would institute a temporary tax cut on profits brought back to the United States by American firms from their overseas operations and use the proceeds to fund investment in transportation infrastructure.

It sounds great. The US corporate tax rate is 35 percent, much higher than rates in other countries, which gives American companies an incentive to keep their overseas profits off-shore and out of the hands of the IRS. The Boxer-Paul proposal would provide firms with a limited-time offer: bring overseas profits home and pay taxes at the bargain rate of only 6.5 percent.

Everyone wins. Firms get to repatriate their profits, which can be used to invest in the United States and create jobs. The government collects more tax, since 6.5 percent of something is greater than 35 percent of nothing. And politicians get to put money into desperately needed transportation infrastructure without having to vote to raise taxes.

Unfortunately, we have been to this rodeo before and wound up with a few hoof-prints on our collective backside as a result.

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September 2, 2015 in Advice for Erwin Chemerinsky, Tax | Permalink | Comments (0)

Tax Prof Moves, 2015-16

Moves VAP Hires

  • Hayes Holderness (McDermott, Will & Emery, New York) to Illinois
  • Clint Wallace (Caplin & Drysdale, New York) to NYU

Entry Level Hires

Lateral Moves

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September 2, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

McMahon, McGovern & Shepard: 2014 Federal Income Tax Developments

Florida Tax ReviewMartin J. McMahon Jr. (Florida), Bruce A. McGovern (South Texas) & Ira B. Shepard (Houston), Recent Developments in Federal Income Taxation: The Year 2014, 17 Fla. Tax Rev. 97 (2015):

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during 2014 — and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted — unless one of us decides to go nuts and spend several pages writing one up. This is the reason that the outline is getting to be as long as it is.

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September 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

Arsenault: It's Time To Solve The Great GRAT Caper

Steven J. Arsenault (Charlotte), Grantor Retained Annuity Trusts: After $100 billion, It's Time to Solve the Great GRAT Caper, 63 Drake L. Rev. 373 (2015):

A Grantor Retained Annuity Trust (GRAT) is one of the most popular of a number of estate planning strategies that employs an estate-freeze technique. The taxpayer transfers appreciating assets to a beneficiary immediately. The transferred assets are valued using actuarial valuation techniques based on an assumed rate of return specified in the Internal Revenue Code. The transfer has the effect of removing the assets from the taxpayer’s gross estate for estate tax purposes, thus “freezing” the value of those assets for transfer tax purposes. The future appreciation of the assets is transferred to the beneficiary but is never subject to any transfer taxes.

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September 2, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 846

IRS Logo 2Wall Street Journal editorial, The Off-Grid Administration: The Many Ways Obama Officials Have Ducked Public Accountability:

In a famous remark two years ago during a Google Plus Hangout, President Obama boasted that “this is the most transparent administration in history.” This is belied by Administration officials, from Hillary Clinton on down, who have run their communications off the government grid. A bipartisan consensus has long held that a healthy democracy requires a significant measure of government transparency. That is why since 1950 Washington has operated under the Federal Records Act, which requires the government to preserve documents about its decisions.

Since the 1960s the government has been subject to the Freedom of Information Act (FOIA), giving citizens the right to view those records. In 2009 the National Archives issued rules requiring agencies to preserve employee work on nonofficial accounts in a government record-keeping system. Then came the Obama Administration, whose modus operandi has been to hide from this legal regime. ...

Last Monday the IRS was forced to acknowledge to a federal court that it recently discovered that Lois Lerner (of political targeting fame) used a second, private email to conduct government work. The account was set up under the name “ Toby Miles,” and the IRS still can’t account for its contents.

It has been two years since Congress first subpoenaed Ms. Lerner’s emails. In 2013 when Mrs. Lerner was still directing the IRS’s Exempt Organizations unit, she cautioned colleagues to be careful what they said on email; then she inquired whether the agency’s instant-messaging system was archived. Told it wasn’t, she responded by email: "Perfect."

Last week a federal court subpoenaed former EPA official Phillip North after a complaint by a mining concern called the Pebble Partnership. Mr. North worked from inside the EPA with outside activists to scuttle Pebble’s proposed Alaskan mining project, and he did so on private email.

The Lerner and North cases also highlight the Administration’s sloppy, or willfully obstructionist, approach to recordkeeping. Recall the crash of Ms. Lerner’s hard drive, and the IRS’s claim for months it had no backup of her work. Treasury’s Inspector General would later find some. Mr. North’s hard drive also crashed, and Pebble claims that key North emails and documents have gone missing from EPA’s official record. ...

Government officials need some modicum of privacy to get work done. But this Administration’s evasion goes way past a reasonable standard of conduct. Why shouldn’t the public conclude that officials serving in the Obama Administration are flouting the disclosure system because they are engaged in practices they wish to hide from public knowledge and debate?

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September 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, September 1, 2015

Bankman Presents Using The 'Smart Return' To Reduce Tax Evasion At Alabama

Bankman (2014)Joseph Bankman (Stanford) presented Using the 'Smart Return' to Reduce Tax Evasion (with Clifford Nass (Stanford) & Joel Slemrod (Michigan)) at Alabama yesterday as part of its Faculty Colloquium Series:

Tax evasion costs government over 400 billion dollars a year. We suggest enforcement efforts can be strengthened by redesigning the tax return to take advantage of social psychology research, and industry experience with data-driven systems. To illustrate the potential of this approach, in this paper we propose three categories of changes that merit testing through pilot studies. The first involves changing the wording on existing returns to increase the psychological cost of evasion and increase the perceived expectation of detection. The second builds appeals to morality in the return itself through the use of a short phrase containing a "self-relevant" noun. The third uses on-line "conversational agents" to ask adaptive questions.

September 1, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

WaPo: How Student Loans Help Keep Expensive Law Schools In Business

Student LoansWashington Post, How Student Loans Help Keep Expensive Schools in Business:

Income inequality bedevils the United States, as does debt, of the public and private varieties. Under the circumstances, you’d think that the federal government’s priorities would not include channeling billions of dollars in cheap credit for the benefit of highly paid lawyers who train more lawyers.

Yet that is essentially what happens each year through the student loan program known as Grad PLUS. 

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September 1, 2015 in Legal Education | Permalink | Comments (2)

Fired Employee Claims Arizona Summit Law School Inflated LSAT, Bar Passage Data

Arizona Summit Logo (2015)Following up on my previous post:  National Law Journal, Ex-Law School Employee in Fraud Case Fires Back:

A former graduate and employee of Arizona Summit Law School is claiming that she has ample grounds to sue for discrimination and fraud despite the school’s arguments that her lawsuit is meritless.

Plaintiff Paula Lorona in court papers on Aug. 27 responded to Arizona Summit’s motion to dismiss her lawsuit, refuting the school’s assertion that she failed to state any claims. Lorona claims, among other things, that the school misrepresented the academic credentials of its students and overstated their success on the bar exam.

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September 1, 2015 in Legal Education | Permalink | Comments (2)

TIGTA: IRS Could Not Verify 40% Of $15 Billion Of Affordable Care Act Tax Credits Due To Lack Of Data From Health Insurance Exchanges

TIGTAThe Treasury Inspector General for Tax Administration today released Affordable Care Act: Interim Results of the Internal Revenue Service Verification of Premium Tax Credit Claims (2015-43-057):

The Affordable Care Act created the refundable Premium Tax Credit (PTC) to assist eligible taxpayers with paying their health insurance premiums. Individuals may elect to have the PTC paid directly to their health insurance provider as partial payment for their monthly premiums (referred to as the Advance Premium Tax Credit (APTC)) or receive the PTC as a lump sum credit on their annual Federal income tax return. According to the IRS, almost $11 billion in APTCs was paid to insurers in Fiscal Year 2014.

The Consolidated and Further Continuing Appropriations Act of 2015 requires a report no later than June 1, 2015, on the IRS’s reconciliation of APTCs paid to taxpayers and the Department of Health and Human Services use of IRS information to reduce fraud and overpayments. The objective of this review was to provide selected information related to the processing of PTC claims during the 2015 Filing Season. TIGTA plans to issue the final results of its analysis later in Calendar Year 2015.

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September 1, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

EEOC: Denver Law School Is Underpaying Female Faculty, Who May Recover $1.2 Million In Damages

Denver Logo (2015)Denver Post, EEOC Accuses DU Law School of Discriminating Against Women Professors:

University of Denver's law school could have to pay $1.2 million in damages to its female faculty members

The federal commission that investigates discrimination in the workplace has threatened to sue the University of Denver's law school over what the commission calls a "continuing pattern" of paying female professors less than their male colleagues.

In a letter sent to the university on Friday, the director of the Equal Employment Opportunity Commission's office in Denver wrote that an EEOC investigation found a gender pay gap among the school's legal faculty dating back to at least 1973. The commission concluded that the university knew about the gap by 2012, "but took no action to ameliorate this disparity, in effect intentionally condoning and formalizing a history of wage disparity based on sex."

MarshThe EEOC's investigation came after longtime DU law school Professor Lucy Marsh filed a complaint with the commission more than two years ago. Marsh's attorney on Monday provided a copy of the letter to The Denver Post.

Marsh said the law school could have to pay as much as $1.2 million in total damages to its female law professors, in addition to paying them salaries going forward equal to what their male colleagues in similar positions are paid.

"I think it's wonderful," Marsh said Monday. "I am delighted that the EEOC has seen this as a big, systematic problem, and they are going after the big problem."

In a statement, the law school defended its merit-based pay structure and blamed Marsh for her lower salary, saying she showed, "sub-standard performance in scholarship, teaching and service."

"In this era of cost containment and assessment we stand by our historical system of evaluation and merit pay," DU's chancellor, Rebecca Chopp, said in the statement. ...

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September 1, 2015 in Legal Education | Permalink | Comments (2)

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September 1, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Charleston Law School President Resigns After Less Than Three Months On The Job

Charleston LogoCharleston Regional Business Journal, Charleston School of Law President Resigns:

Joseph Harbaugh’s tenure as president of Charleston School of Law is expected to end after less than four months on the job.

The interim president submitted his letter of resignation to the school’s owners, Robert Carr and George Kosko, on Thursday, citing “personal circumstances.” Harbaugh’s contract was supposed to end Dec. 15. ...

Harbaugh, the former dean of the University of Richmond School of Law and Nova Southeastern University Law Center, was named president of Charleston School of Law on June 5.

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September 1, 2015 in Legal Education | Permalink | Comments (0)