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Tuesday, August 12, 2014

George Washington Seeks to Hire a Tax Prof

George Washington Law Logo (2014)The George Washington University Law School is seeking to hire a tenure-track or tenured tax professor in a variety fields, including tax:

The George Washington University Law School may make one or more full-time faculty appointments in subject areas that may include Corporate Finance, Intellectual Property, Health Law, and/or Tax, among others. In addition, it is possible that we will make one or more faculty appointments in clinical teaching. Appointments will be for either tenure-track or tenured positions.  ...

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August 12, 2014 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Kinder Morgan Abandons MLP Structure It Pioneered, Sticking Investors With Big Tax Bill

New York Times, Kinder Morgan’s Reorganization Puts Master Limited Partnerships in Question, by David Gelles:

KinderWhat happens when the pioneer of an industry abandons its own legacy?

When Kinder Morgan announced on Sunday that it was consolidating its four related pipeline companies into one, executives and bankers from Houston to New York, particularly those in the merger and energy sectors, were stunned.

With the move, Kinder Morgan, a $100 billion empire that transports much of America’s oil and natural gas, was abandoning the master limited partnership structure it helped popularize. Largely because of Kinder Morgan’s success, the partnerships have become increasingly popular for energy companies. The structure allows them to pass all profits along to their investors as dividends, and pay no corporate taxes (though the investors are subject to taxes on the distributions).

But now, with Kinder Morgan restructuring as a traditional corporation, questions have emerged about what will happen to the many other master limited partnerships. If Kinder Morgan no longer wants to be one, does the structure still make sense for other companies?

Adding to the sense of uncertainty was the Treasury Department, which said on Monday that it was examining whether the partnerships were depriving the government of needed tax revenue. Although the partnerships have mostly managed to fly under the radar, the renewed focus on the corporate tax code and its loopholes is putting the structure under new scrutiny.

Despite the move by Kinder Morgan, and saber-rattling from Washington, master limited partnerships are for the most part seen as safe for now.

August 12, 2014 in Tax | Permalink | Comments (1)

Benshalom: Mechanisms to Promote Global Wealth Redistribution

Ilan Benshalom (Hebrew University of Jerusalem, Faculty of Law), How to Redistribute? A Critical Examination of Mechanisms to Promote Global Wealth Redistribution, 64 U. Toronto L.J. 317 (2014):

The literature on global redistributive justice deals primarily with the important, yet unresolved issues of why global wealth redistribution may be morally justified or beneficial. However, philosophers and economists who address these issues often do not address the question of how such redistribution should take place. This article seeks to rectify this deficiency and argues that, if a certain level of global wealth distribution is morally justified and, more importantly, beneficial, the question of how it should be promoted is far from trivial. In this context, the analysis opens a new discussion of what form of redistributive measures should be adopted in a multistate reality.

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

ABA Approves Changes to Law School Accreditation Standards

National Law Journal, ABA Delegates Approve Law School Reforms:

ABA Logo 2The ABA’s governing body on Monday endorsed an extensive package of law school reforms designed to increase students’ clinical and distance-learning opportunities.

Standards for law schools would require students to take a minimum of six hours in a legal clinic or other “experiential” environment; encourage 50 hours of pro bono service; and allow students to take up to 15 credit hours of distance courses, up from 12. Students won’t be limited to 20 hours of outside work per week anymore.

To protect accreditation, law schools would have to shift toward assessments that focus on student outcomes—including bar-exam results and employment—rather than qualifications of incoming students or other factors.

“J.D. programs will remain a rigorous study of the law,” former Arizona Supreme Court Justice Ruth McGregor assured the ABA House of Delegates, which voted on the reforms during the ABA's annual meeting in Boston. “It will basically remain a three-year program.”  ...

While most of the changes were unanimously approved by voice vote, disagreement arose over two aspects of the reform package.

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August 12, 2014 in Legal Education | Permalink | Comments (1)

Zelinsky: Wynne and the Double Taxation of Dual Residents

Tax Analysys Logo (2013)Edward A. Zelinsky (Cardozo), Wynne and the Double Taxation of Dual Residents, 73 State Tax Notes 259 (July 28, 2014):

Zelinsky discusses Maryland State Comptroller of the Treasury v. Wynne [431 Md. 147 (2013), cert. granted (May 27, 2014)]. He writes that the U.S. Supreme Court should decide the case narrowly and in a way that does not prevent it from ruling later that the dormant commerce clause requires tax credits to abate the double taxation of individuals who are residents of two or more states but lack the ability to vote in a state that taxes them as residents on their worldwide income.

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

Olson: Rat Out Your Employer On Taxes. Win Cash Rewards!

Reason:  Rat Out Your Employer On Taxes. Win Cash Rewards!, by Walter Olson (Cato Institute):

VanguardA former employee has filed a lawsuit charging that Vanguard Group, the gigantic ($2 trillion under management) and very successful mutual fund company, provides services to the funds it manages at "artificially low," "at-cost" prices, which may be beneficial to investors in those funds but (the suit argues) results in lowering the federal and state income taxes it pays. 

New York's False Claims Act, under which the employee is suing, entitles him to a generous share of any tax proceeds as well as attorneys’ fees if successful.

The Philadelphia Inquirer and Wall Street Journal have more; the complaint is here courtesy of TaxProf. The company denies wrongdoing, and the general question of transfer pricing on which the claim hinges is very well aired in the tax and accounting literature, which makes it seem unlikely that auditors would have neglected the issue.

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August 12, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 460

IRS Logo 2Biz Pac Review:  Sharyll Attkisson’s Impressive Account of How Watergate Would Play Out in Obama Era:

Sharyl Attkisson, the former CBS News reporter who left the network complaining because of liberal bias, offered a sobering account of Sunday how she thinks Watergate would play out today in the Age of Obama.

And it sounds awfully familiar.

Appearing on ABC’s “This Week,” Attkisson described what has basically been the pattern for every scandal of the Obama years – dubbed “phony scandals” by all the president’s men.

“I think that we’ve gone backwards since that time when we really felt empowered as journalists,” Attkisson said. “And all I can think is: What would happen today during a Nixon-type scandal?”

“Nixon would basically refuse to turn over tapes to Congress,” she said, in an apparent allusion to the IRS simply “losing” emails key to investigations of its targeting conservative groups.

“His aides would refuse to testify to Congress, or would take the Fifth, or would like to Congress with a fair amount of immunity,” Attkisson continued, describing the refusal of former IRS official Lois Lerner to testify before Congress and the stonewalling other administration officials have engaged in.

The Hill op-ed:  More Lost Emails — When Will Democrats Have Enough?, by Rick Manning (Citizens for Limited Government):

Twenty different Obama administration officials have lost or destroyed a portion of their email traffic. Email traffic that was, in some cases, under subpoena or in others requested as part of a larger inquiry into the conduct of the executive branch. ...

The brazenly contemptuous stonewall-and-erase-evidence approach to congressional inquiries preferred by the Obama administration is perhaps this president's greatest affront to our constitutional system of government.

When you have records going missing across an administration, it is impossible to conclude anything other than it is a coordinated and condoned cover-up, and not just a series of incompetent, coincidental keystrokes wiping out information.

The conclusions get even uglier when you realize that the IRS dismissed the government contractor responsible for maintaining back-up files of their emails concurrent with Lois Lerner and her band mysteriously having their computers flatline.

The question is, where are the Democrats in the face of this obvious malfeasance?

During the Watergate scandal that brought down the presidency of Richard Nixon, a few Republicans came forward and urged the president to come clean. Yet, the silence is deafening from Democrats in both the House and Senate in the wake of this obvious obstruction of the congressional oversight function.

Where are the patriots on the Democratic side, who are willing to stand up to an executive branch that has declared them inconsequential?

National Review op-ed:  Stonewaller-in-Chief: We’re Transparent, but Don’t Ask For Any Documents, Says the Obama White House, by John Fund:

The most valuable lesson I’ve learned in reporting about Washington is a simple one: watch what politicians do, not what they say. There can be no better illustration of this than Obama’s summit meeting with African leaders last week. He used the meeting as an opportunity to tout the positive role inspectors general can play in fighting corruption in government agencies; at the same time that he was speechifying about this, some two-thirds of President Obama’s own inspectors general wrote a scathing letter to Congress complaining that his administration was placing “serious limitations” on their ability to do their jobs.

Wall Street Journal editorial:  Justice's IRS Connection: The Lawyer Who Had Tax-exempt Cases Coming and Going:

It was fishy enough when Democratic donor Barbara Bosserman was appointed to lead the Justice Department investigation of IRS targeting of conservative groups. Now there are new questions about Justice's staffing choice on one of the private lawsuits brought against the IRS.

We've been telling you about the pro-Israel group Z Street, which sued the IRS in 2010 on grounds that the agency engaged in viewpoint discrimination when it singled out 501(c) groups with Israel-related missions for additional scrutiny. The case has been handled by Justice Department trial attorney Andrew Strelka, who previously worked in the IRS office run by Lois Lerner that handled tax-exempt applications. ...

[R]ecently Mr. Strelka was withdrawn as the Justice Department's counsel of record on the Z Street case. A review of court dockets showed that he has also withdrawn from two other cases involving tax-exempt groups, including Judicial Watch's suit against the IRS. ...

If Mr. Strelka had personal knowledge of the processing of tax-exempt applications for groups like Z Street while he was assigned to the IRS, he should have recused himself from handling the case at Justice.

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August 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, August 11, 2014

Virginia Tax Review Publishes New Issue

Virginia Tax Review 2The Virginia Tax Review has published Vol. 33, No. 3 (Winter 2014):

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

ABA Task Force Debates Financing of Legal Education at its First Meeting

ABA Journal, Task Force on Legal-ed Financing Mulls Causes of Rising Tuition at its First-ever Public Hearing:

ABA Logo 2At its first public hearing, the ABA's new Task Force on the Financing of Legal Education spent much of its time trying to determine exactly what is leading to increases in law school tuition, and debilitating debt loads being carried by so many law students.

The task force, chaired by former Detroit mayor and onetime ABA President Dennis Archer, met over a day and a half Saturday and Sunday during the ABA's Annual Meeting in Boston. Its aim is to examine the cost of legal education for students, and to explore student lending and how law schools are being financed. Beginning with the public hearing, the task force is delving into how law schools use merit scholarships, tuition discounts and need-based financial aid.

Witnesses sought to frame core issues and problems, each from their own perspectives. And task force members pushed each of them to back up their statements with data or anything besides anecdotes. ...

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August 11, 2014 in Legal Education | Permalink | Comments (1)

GiveWell Considers Funding Tax Reform

Give WellGiveWell is considering selecting tax reform as one of the causes to fund:

Tax policy, like macroeconomic policy, has theoretically huge economic stakes and a good deal of attention from intellectuals. We see it as having substantially more attention from funders and nonprofits, and (likely as a consequence) fewer gaps in the work done by intellectuals (particularly with regard to developing workable policy proposals). We also see less room for impact from new academic research on related matters, as the main bottleneck to improved policy seems to be politics (in particular, resistance from groups like Americans for Tax Reform to changes that would involve new taxes or reduced tax expenditures) rather than knowledge. We have done a shallow investigation of this area and will be writing it up in the future.

As part of its due diligence, GiveWell has interviewed two experts:

August 11, 2014 in Tax | Permalink | Comments (0)

Task Force of Mayors Assails Growing Income Inequality

The United States Conference of Mayors, Income and Wage Gaps Across the U.S.:

Report coverThe Wage Gap in the US:

  • The US has regained the 8.7 million jobs that were lost during the Great Recession, and employment has surpassed its pre-­‐recession peak of 138.4 million jobs in 2008.
  • Average annual wage of jobs lost in 2008-­‐09 was $61,637, and average wage of job gains through the second quarter of 2014 equaled $47,171. This wage gap of 23% is significantly larger than that of the earlier recession and recovery (2000-­‐2006), and implies $93 billion in lower wage income.
  • In comparison, the wage gap following the 2000-­‐2003 recession was 12%. Wages earned in advancing sectors fell $27 billion short of the annual wages lost in the declining sectors over 2000-­‐2003.
  • Extensive job losses in high-­‐wage manufacturing ($63K) and construction ($58K) sectors were replaced by jobs in the lower wage sectors of hospitality ($21K), health care ($47K), and administrative support ($37K). 

The Income Distribution in the US:

  • The 2012 household median income of $51,017 was, in real terms, the lowest since 1995. The median was greater in the West ($55,157), and Northeast ($54,627), than in the South ($48,033) and Midwest ($50,479).
  • The highest-­‐earning 20% of households saw their share of income rise from 43.6% in 1975 to 51.0% in 2012. Most of this gain was among those in the highest 5% of income, which rose from 16.5% in 1975 to 22.3% in 2012, a gain of $490 billion in 2012.
  • Each of the lower quintiles experienced a declining share of income since 1975. The lowest two quintiles, or 40% of households, received just 6.6% of all US income gains since 2005, and 9.5% of gains since 1995.
  • The highest 20% of households captured 60.6% of total income gains from 2005 to 2012, and the top 5% received 27.6% of total gains.
  • In 2012 the 80th percentile (the lowest income in the top 20%) income of $104,906 was more than double (2.04x) the median. That ratio has increased from 1.73 in 1975.

August 11, 2014 in Tax | Permalink | Comments (0)

Schler: International Mismatches on Hybrid Instruments

Tax Analysys Logo (2013)Michael L. Schler (Cravath, New York), OECD vs. D/NI: International Mismatches on Hybrid Instruments, 75 Tax Notes Int'l 485 (Aug. 11, 2014):

Michael L. Schler discusses technical and policy issues, as well as unexpected results, that arise under the OECD's proposals to eliminate mismatches of income and deduction resulting from hybrid instruments.

August 11, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

A Moment of Simple Justice: Law School

August 11, 2014 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 459

TaxProf Blog Weekend Roundup

Sunday, August 10, 2014

NY Times: A Corporate Tax Break That’s Closer to Home

New York Times:  A Corporate Tax Break That’s Closer to Home, by Gretchen Morgenson:

Rage is rising over American corporations that chop their tax bills by acquiring entities in lower-tax countries. Medtronic, AbbVie and Mylan have all announced such plans — known as inversions — in recent months. And Walgreen was poised to relocate to Switzerland after it completes its purchase of Alliance Boots, but did an about-face last week in the face of widespread denunciation.

Some in Congress have proposed legislation to shut the door on this tax-savings tactic. But across town at the Internal Revenue Service, officials have recently opened the window to another. They did so in a ruling disclosed late last month by Windstream Holdings, a telecommunications company based in Little Rock, Ark.

The ruling allows Windstream to spin off its copper and fiber network into a real estate investment trust, or REIT. That sounds pretty ho-hum until you realize it means that Windstream won’t have to pay hundreds of millions of dollars in taxes. ...

How did the I.R.S. conclude that a telecom network is a real estate asset? As with all things tax-related, the details are somewhat complicated. ...

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August 10, 2014 in Tax | Permalink | Comments (0)

Byrnes: Charity and the Jurisprudential Lessons from History

William Byrnes IV (Thomas Jefferson), The Development of Charity: Jurisprudential Lessons from History:

This article describes the ancient legal practices, codified in Biblical law and later rabbinical commentary, to protect the needy. The ancient Hebrews were the first civilization to establish a charitable framework for the caretaking of the populace. The Hebrews developed a complex and comprehensive system of charity to protect the needy and vulnerable. These anti-poverty measures, including regulation of agriculture, loans, working conditions, and customs for sharing at feasts, were a significant development in the jurisprudence of charity.

The article begins with a brief history of ancient civilizations, providing context for the development of charity by exploring the living conditions of the poor. The second half of the article provides a searching analysis of the rabbinic jurisprudence that established the jurisprudence of charity. This ancient jurisprudence is the root of the American modern philanthropic idea of charitable giving exemplified by modern equivalent provisions in the United States Tax Code.

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August 10, 2014 in Scholarship, Tax | Permalink | Comments (0)

Top 5 Tax Paper Downloads

The IRS Scandal, Day 458

Saturday, August 9, 2014

Princeton and Wellesley May Re-inflate Grades

P-WPrinceton and Wellesley are considering reversing actions they took a decade ago to curb grade inflation:  Princeton capped A-range grades at 35%, and Wellesley imposed a mandatory B+ median in introductory (100) level and intermediate (200) level courses with at least 10 students:

Princeton, Report from the Ad Hoc Committee to Review Policies Regarding Assessment and Grading:

Princeton

Wellesley, The Effects of an Anti-Grade-Inflation Policy at Wellesley College:

Wellesley

 Wellesley

Update:  The Economist, What the Ivies Can Learn From Wellesley

August 9, 2014 in Legal Education | Permalink | Comments (6)

Retirement of John Dean, First African-American Tax Court Judge

John F. Dean has retired after twenty years as a Special Trial judge on the U.S. Tax Court.  He was the first African-American Judge on the Tax Court.

Tax Court Logo 2b. Washington, District of Columbia. Graduated, B.S., Michigan State University, 1970; Columbus School of Law; J.D., Catholic University of America, 1975; M.L.T., Georgetown University Law Center, 1985. Admitted to District of Columbia Bar, 1975, Supreme Court of the United States, Federal District Courts, Northern District of Texas, District of Maryland, and United States Tax Court. Employed by the Office of Chief Counsel for the Internal Revenue Service, Dallas District Counsel, 1975-78; Baltimore District Counsel, 1978-86; Office of Associate Chief Counsel, International, 1986-94. Adjunct Professor of Law, Howard University, 1999 to present; Vice Chair, Judicial Counsel of the Washington Bar Association, 2002-03. Appointed Special Trial Judge, United States Tax Court, on August 7, 1994.

August 9, 2014 in Tax | Permalink | Comments (0)

Robert Redford Sues New York Over $1.6 Million Tax Bill; Can State Tax Nonresident on Sale of Interest in Nonresident LLC?

The IRS Scandal, Day 457

IRS Logo 2George Will, The Reason for Watergate:

June 17, 1971, was four days after The New York Times began publishing the leaked "Pentagon Papers," the classified Defense Department history of U.S. involvement in Vietnam. Nixon worried that further leaks would reveal his role in sabotaging negotiations that might have shortened the war. This fear caused Nixon to create the "the plumbers" and to direct an aide to devise other proposals such as the one concerning Brookings. This aide suggested using the IRS against political adversaries, but added:"The truth is we don't have any reliable political friends at IRS. ... We won't be ... in a position of effective leverage until such time as we have complete and total control of the top three slots at IRS." Forty years later, the IRS has punished conservative groups, and evidence that might prove its criminality has been destroyed. Happy anniversary.

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August 9, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, August 8, 2014

Weekly Tax Roundup

Weekly Roundup

August 8, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

August 8, 2014 in Legal Education, Weekly Legal Education Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

August 8, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

August 8, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

NY Times, WSJ Disagree Over Obama's Authority to Stop Corporate Inversions

New York Times Dealbook:  How Obama Can Stop Corporate Expatriations, for Now, by Victor Fleischer (San Diego):

The Obama administration has broad legal authority to stop corporate inversions.

Professor Stephen E. Shay recently published an article in the trade journal Tax Notes, calling on the Obama administration to take unilateral action to impede the surge of tax-motivated corporate expatriations without waiting for Congress to pass new legislation. Professor Shay, a professor of practice at Harvard Law School and former deputy assistant secretary for international tax affairs at the Treasury Department, argued that the Treasury Department has the legal authority to reduce the incentives to give up United States citizenship. This could be done, he said, by limiting the deductions for interest payments that an American subsidiary pays its foreign parent company, and by ensuring that profits of overseas subsidiaries will continue to be subject to American taxes. ...

Robert Willens, an influential tax commentator, dismissed Professor Shay’s article in a bulletin to clients as merely “interesting reading with little, if any, practical significance.” Mr. Willens noted that Treasury has never been able to set workable regulations under Section 385 of the tax code, one of the key sections Professor Shay suggested as legal authority. Mr. Willens also explained that rules limiting interest deductions may cause some consternation among the nation’s trading partners. “If these weapons were so readily available,” he concluded, “it stands to reason that they would have already been utilized.”

The dispute boils down to law versus politics. There is no question that Professor Shay gets the law right. To be sure, there are limits on what the Treasury Department can do. It is limited in its ability to define who is, and who is not, a United States corporation; those rules are fixed by statutory language. But Professor Shay has nudged the Treasury to focus on related legal questions — what constitutes debt versus equity, and what is the definition of United States property under Section 956 — where the law is unclear and the Treasury Department has broad authority to interpret those rules in a manner consistent with the legislative framework of the tax code. ...

Of course, it is possible that Mr. Willens has the politics right. The fact that the Obama administration has the legal authority to change the incentives of inversions does not necessarily mean that it will. It must consider the reaction of Britain and our other trading partners. It should think about whether investors have settled expectations about deals that have already been announced. But I see no obvious reason that the Treasury Department should feel constrained by these political issues.

Wall Street Journal editorial, Obama's Tax Law Rewrite: Where's the Law That Gives Jack Lew the Power to Raise Taxes?:

Let's focus today on tax inversions, which allow corporations to relocate overseas in a way that reduces their tax liability. Mr. Obama has conceded these are legal, and as recently as July 16 Mr. Lew told CNBC that "we have looked at the tax code. There are a lot of obscure provisions that we do not believe we have the authority to address this inversion question through administrative action. If we did, we would be doing more."

But lo, on Tuesday a spokeswoman announced that Treasury "is reviewing a broad range of authorities for possible administrative actions" to limit inversions "as well as approaches that could meaningfully reduce the tax benefits after inversions take place."

Hello? That sure sounds like rewriting tax law by executive fiat, which violates the Constitution's separation of powers. The rewrite is all the more legally suspicious since no one at Treasury or the Justice Department seems to have been aware of this power before Mr. Obama began denouncing the "unpatriotic tax loophole." From where does Mr. Lew derive this power to act like a one-man Ways and Means Committee? ...

[A]n [Office of Legal Counsel] precedent is directly relevant to tax policy. President George H.W. Bush campaigned in 1988 on cutting the capital-gains tax, but Democratic Majority Leader George Mitchell used a filibuster to block it in the Senate as the economy stumbled.

As Mr. Bush sought re-election in 1992, these columns urged him to use what we believed was his unilateral authority to index the capital gains tax for inflation—a way to boost the economy by other means. Our legal argument was that the term "cost" as written by Congress in the tax code is ambiguous and doesn't mean the "purchase price" of a stock as interpreted in Treasury regulations.

The White House counsel's office wrote a lengthy memo explaining Mr. Bush's legal power to do this. But the Treasury's legal department disagreed, the Justice Department was asked for its opinion, and the OLC lawyers sided with Treasury. Mr. Bush declined to act, the economy took longer to recover, and Bill Clinton won the 1992 election.

So now we have a President in an election year looking for a way to raise taxes on corporations after he couldn't get Congress to agree. Has anyone asked Treasury's career lawyers or the Office of Legal Counsel? Someone should. And when the next President arrives in 2017, one of his first acts should be to release publicly all of the OLC memos making the legal case for Mr. Obama's many illegal acts, assuming there are any.

August 8, 2014 in Tax | Permalink | Comments (0)

Council of the ABA Section on Legal Education Meets Today

ABA Logo 2The Council of the ABA Section on Legal Education and Admission to the Bar meets today in Boston:

Open Session Agenda

A. June 2014 Open Session Minutes

B. Review and Approve Revised Internal Operating Practices (IOPs)
1.  Revised IOPs
2.  Explanation of Revisions

C. Report on Standards Transition Plan

D.  Budget
1.  Consider revised budget, based on ABA budget outcome, hiring, revision to travel budget, technology and set school fees

E. Affiliate Reports
1.  AALL
2.  ALWD
3.  CLEA
4.  LSAC
5.  NALP Update
6.  NALP Class of 2013 Selected Findings
7.  NCBE
8.  SALT

F. Data Policy Committee Report (Strickman)
1. Minor adjustments to AQ
2. Beta testing of employment outcomes protocol

G. Rport on Student Loans Forgiveness Work Group

H. Committee Reports
1.  BOG Liaison
2.  Law Student Division
3.  Young Lawyers
4.  House of Delegates
5.  Managing Director
6.  Chairperson

August 8, 2014 in ABA Tax Section, Legal Education | Permalink | Comments (0)

1911 College Rankings (U.S. Government Edition)

Chronicle of Higher Education, How Did the Federal Government Rate Your College a Century Ago?:

1911As Vox’s Libby Nelson notes in a chronicle of the 1911 ratings, the Association of American Universities actually asked the government to devise them. Kendric Charles Babcock, the top higher-education official in the U.S. Bureau of Education, itself a division of the Interior Department, undertook the task. Few were happy with the result. (Anyone surprised?) President William Howard Taft later killed it.

So how did your college stack up more than a century ago? A few things to keep in mind: The four tiers of colleges were based on how prepared their graduates were for graduate school. Also, the asterisks in Class II were used to distinguish its stronger colleges, the equivalent of a “plus” in a paper grade.

1

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August 8, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

94% of Academic Economists Admit to Unacceptable Research Practices, Including Sex for Co-authorship and Promotion

Inside Higher Ed, Sex, Lies, Economists:

SLVA small proportion of European economists have confessed to “acceptance or offering of sex” in exchange for co-authorship or promotion, as well as owning up to fabricating or manipulating data.

A survey of about 400 economists, conducted among members of the European Economic Association on an anonymous basis, is analyzed in the article Scientific Misbehavior in Economics, currently in press for the journal Research Policy.

Ninety-four percent of respondents reported having engaged in at least one “unaccepted research practice,” the paper says.

London School of Economics, Scientific Misbehavior in Economics: Unacceptable Research Practice Linked to Perceived Pressure to Publish:

Almost every economist reports having engaged in at least one practice considered unacceptable by peers. For example, one third of the participants admit to having cherry-picked results – the selective presentation of empirical results that confirm one’s argument is rejected by 84%. Even though 64% consider it unacceptable to divide one’s work into small units to maximize the number of publications, 20% confess salami slicing. Strategic behavior in the publication process is considered unjustifiable by two thirds. However, 39% admit that they have taken into account suggestions of referees or editors even though they thought that they were wrong. Even 60% report that they have cited strategically to raise publication prospects.

research practice

August 8, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 456

Thursday, August 7, 2014

Kleinbard: 'Competitiveness' Has Nothing to Do With Inversions

Edward D. Kleinbard (USC), 'Competitiveness' Has Nothing to Do With It:

The recent wave of corporate tax inversions has triggered interest in what motivates these tax-driven transactions now. Corporate executives have argued that inversions are explained by an "anti-competitive" U.S. tax environment, as evidenced by the federal corporate tax statutory rate, which is high by international standards, and by its "worldwide" tax base. This paper explains why this competitiveness narrative is largely fact-free, in part by using one recent articulation of that narrative (by Emerson Electric Co.’s former vice-chairman) as a case study.

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August 7, 2014 in Scholarship, Tax | Permalink | Comments (2)

Oei & Ring: Human Equity? Regulating the New Income Share Agreements

Shu-Yi Oei (Tulane) & Diane M. Ring (Boston College), Human Equity? Regulating the New Income Share Agreements:

A controversial new financing phenomenon has recently emerged. New “income share agreements” (“ISAs”) enable an individual to raise funds by pledging a percentage of her future earnings to investors for a certain number of years. These contracts, which are offered by entities such as Fantex, Upstart, Pave, and Lumni, raise important questions for the legal system: Are they a form of modern-day indentured servitude or an innovative breakthrough in human financing? How should they be treated under the law?

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August 7, 2014 in Scholarship, Tax | Permalink | Comments (0)

Desai: Tax Withholding, Statutes and Constitutional Law

Anuj C. Desai (Wisconsin), What a History of Tax Withholding Tells Us About the Relationship between Statutes and Constitutional Law, 108 Nw. U. L. Rev. 859 (2014):

In this Article, I explain what a seemingly obscure statute, the Current Tax Payment Act of 1943, can tell us about the relationship between statutes and constitutional law. I use William Eskridge and John Ferejohn’s notion of a “superstatute” as a lens through which to view this relationship. A “superstatute,” in Eskridge and Ferejohn’s conception, is a statute that has small “c” constitutional emanations, emanations that both affect interpretations of the large “C” Constitution and are entrenched against subsequent legislative change. To better understand the precise contours of the notion of a superstatute, I look at the Current Tax Payment Act of 1943, which instituted the system of federal tax withholding for wage income. I describe the history of federal income tax withholding leading up to the passage of that Act, explaining in turn how that history sheds light on the underlying notion of a superstatute.

August 7, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tenured Florida A&M Prof Sues Law School, Claiming Gender Discrimination in Pay

Tampa Tribune, FAMU’s Law School Hit with Discrimination, Unequal Pay Lawsuit by Female Professor:

Florida AM LogoJennifer Smith, an associate professor hired in 2004, ... accuses [Florida A&M Law School] of eight violations of federal and state law on equal pay and gender discrimination, her suit says. She seeks unspecified damages, a promotion to full professor, attorney fees and other relief.

Her complaint says the law school “consistently hired men at considerably higher rates than women,” with male associate professors “paid considerably more” than females. Smith says she was granted tenure in 2010, but has been repeatedly turned down for promotion to full professor ever since, starting that same year.

Smith’s complaint says that an administrator “sabotaged” her promotion by replacing the good recommendations in her file with bad ones and then called other university officials to further torpedo any promotion. She says her treatment was in part retaliation for submitting public record requests to the school for professor-pay information.

Her complaint also reveals she lodged a workplace-violence complaint against the same administrator, saying that person “made some threatening comments about her.” Smith’s complaint quotes from a September 2012 ABA report on the law school that cited faculty concerns about an “inhospitable environment for women, lesbians and gay faculty members.”

August 7, 2014 in Legal Education | Permalink | Comments (4)

Nebraska 'Sovereign Citizen' Convicted of Filing False Liens Against Federal Officials and Federal Tax Crimes

U.S. Department of Justice press release, Nebraska “Sovereign Citizen” Convicted of Filing False Liens Against Federal Officials and Federal Tax Crimes:

DOJ Logo (2013)A federal jury in Omaha, Nebraska, found Donna Marie Kozak guilty on Friday of conspiracy to file and filing false liens against two U.S. District Court judges, the U.S. Attorney for the District of Nebraska, two Assistant U.S. Attorneys and an Internal Revenue Service (IRS) special agent, the Justice Department announced.

The federal jury also convicted Kozak of filing a false claim against the United States for $660,000 and for corruptly endeavoring to obstruct the due administration of the internal revenue laws.  Kozak was remanded into custody pending sentencing.  The maximum prison term for each false lien charge is 10 years,  five years for the false claim charge and three years for the obstructing the IRS charge.  Many of the offenses have an additional 10 years of potential imprisonment because they were committed while Kozak was on pretrial release.

Based on the evidence introduced at trial and court filings, Kozak, a former member of the so-called sovereign citizen group “Republic for the united States of America,” engaged in a conspiracy to retaliate against federal officials involved in the criminal investigation and prosecution of David and Bernita Kleensang, associates of Kozak who were convicted of federal tax crimes in 2012.  Kozak initially retaliated against the federal judge who presided over the Kleensang trial by filing a false lien against her for $19 million with the Boyd County, Nebraska, clerk’s office.  After a federal grand jury indicted Kozak for filing the false lien and for federal tax crimes, she filed five $18 million false liens against federal officials at the Washington County, Nebraska, register of deeds office while on pretrial release.

The evidence introduced at trial and court filings also showed that since the late 1990s, Kozak has engaged in a long series of fraudulent schemes to obstruct the internal revenue laws.  These included placing her property in sham trusts, establishing a sham charitable foundation, sending harassing correspondence to IRS employees and filing bogus tax returns, trust returns, private-foundation returns and other false documents with the IRS.  In 2008, she filed a tax return based on fictitious income and tax withholdings on Form 1099-OID statements that claimed a refund of $660,000.

Above the Law, Tax Fraud, Tax Protestors, and the Most Awesome Willfulness Doctrine in Federal Criminal Law Today

August 7, 2014 in IRS News, Tax | Permalink | Comments (0)

Taylor: Closing the Gap Between Private Letter Rulings and Regulations

Tax Analysys Logo (2013)Willard Taylor (Sullivan & Cromwell & NYU), Closing the Gap Between Private Letter Rulings and Regulations, 144 Tax Notes 597 (Aug. 4, 2014):

In this article, Taylor summarizes and comments on proposed regulations that would redefine real property for real estate investment trusts, and he argues that there should be more (and earlier) guidance on these and similar issues to close the gap between private letter rulings and published guidance affecting REITs and publicly traded partnerships in the natural resources sector.

August 7, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Seto Reviews Tahk's Public Choice Theory & Earmarked Taxes

JotwellTheodore P. Seto (Loyola-L.A.), An Empirical Test of Public Choice Theory (Jotwell) (reviewing Susannah Camic Tahk (Wisconsin), Public Choice Theory & Earmarked Taxes, 68 Tax L. Rev. ___ (2015)):

In 1980, James Q. Wilson, in The Politics of Regulation, predicted that laws with diffuse costs and concentrated benefits would be relatively easy to enact, but that laws with concentrated costs and diffuse benefits would be relatively hard to enact and, once enacted, hard to maintain. This hypothesis, one of the pillars of public choice theory, has long been asserted without empirical verification. ...  In Public Choice Theory & Earmarked Taxes, Susannah Camic Tahk provides the first rigorous empirical support for Wilson’s hypothesis.

Her study explores the histories of 1497 state-level earmarked taxes between 1997 and 2005. Earmarked taxes, in general, produce more concentrated benefits than taxes the proceeds of which flow into a state’s general fund. Thus, we would expect earmarked taxes to perform strongly as revenue generators. And, indeed, Tahk finds that the earmarked taxes in her sample raised 58.39% more revenue in 2005 than in 1997—a larger percentage increase than any major federal tax over the same period. ...

It is hard to overstate the importance of this accomplishment.

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August 7, 2014 in Scholarship, Tax | Permalink | Comments (1)

Death of Cynthia Beerbower

Dayton Daily News Obituary:

Cynthia Gibson Beerbower passed away on July 26, 2014, in her South Kensington home in London. She was 65. ...

Cynthia received her BA, magna cum laude, from Mount Holyoke College in 1971, her JD from Boston University Law School in 1974 and her LLB from the University of Cambridge in 1976. At Cambridge, she was a member of Newnham College. She married John E. Beerbower in 1971. John, a 1966 graduate of Oakwood High School and also a panelist of the Dayton Daily News Youth Forum the year ahead of Cynthia, became a partner at the law firm of Cravath, Swaine & Moore in New York City in 1980.

After admission to the New York Bar, Cynthia was an associate at the New York City law firm of Simpson, Thacher & Bartlett, where she was elected a partner in 1981. She specialized in tax. At the time, she was one of only a handful of women partners at Wall Street law firms. In 1993, she joined the first Clinton administration, serving first as International Tax Counsel under Secretary Lloyd Benson and then as Deputy Assistant Secretary for Tax Policy under Secretary Robert Rubin. She left government service in late 1996.

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August 7, 2014 in IRS News, Obituaries, Tax | Permalink | Comments (0)

Cooper & Ivimey: 2013 Developments in Connecticut Trusts & Estates Law

Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid and Riege, Hartford), 2013 Developments in Connecticut Estate and Probate Law, 88 Conn. Bar J. ___ (2014):

This Article provides a summary of recent developments impacting Connecticut estate planning and probate practice. Part I discusses 2013 legislative developments. Part II surveys selected 2013 case law relevant to the field.

August 7, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 455

IRS Logo 2National Review:  No, the IRS Did Not Target Progressives Like It Targeted Conservatives:

NPR’s politics blog has published a chart — compiled from a House Ways and Means staff analysis — of the different levels of IRS targeting between conservative and progressive groups. Bottom line? Far more conservative groups faced IRS scrutiny, they faced more questions, and were approved at a much lower rate than progressives. The chart is based on the IRS’s now-discredited “BOLO” (be on the lookout) lists.

Chart 1

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August 7, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, August 6, 2014

Record Numbers of Americans Are Renouncing Their U.S. Citizenship

International Tax Blog:  2014 Second Quarter Published Expatriates, by Andrew Mitchel:

Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the second quarter of 2014.  The number of published expatriates for the quarter was 576.  The number of published expatriates for the first half of 2014 has been 1,577 (1,001 + 576).  Last year there was a record setting 2,999 published expatriates.

Renounce

(Hat Tip: Laura Saunders.)

August 6, 2014 in Tax | Permalink | Comments (3)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review The Pittsburgh Tax Review has published Vol. 11, No. 2 (Spring 2014):

August 6, 2014 in Scholarship, Tax | Permalink | Comments (0)

Infanti: The House of Windsor: Accentuating the Heteronormativity in the Tax Incentives for Procreation

Anthony C. Infanti (Pittsburgh), The House of Windsor: Accentuating the Heteronormativity in the Tax Incentives for Procreation, 89 Wash. L. Rev. ___ (2014):

Following the Supreme Court’s decision in United States v. Windsor, many seem to believe that the fight for marriage equality at the federal level is over and that any remaining work in this area is at the state level. Belying this conventional wisdom, this essay continues my work plumbing the gap between the promise of Windsor and the reality that heteronormativity has been one of the core building blocks of our federal tax system. Eradicating embedded heteronormativity will take far more than a single court decision (or even revenue ruling); it will take years of work uncovering the subtle ways in which heteronormativity pervades our federal tax laws and of identifying means of eliminating that heteronormativity. To further this work and in keeping with the theme of this symposium issue, “Compensated Surrogacy After Windsor,” this essay explores the unremitting heteronormativity of the federal tax incentives for procreation as they apply to compensated surrogacy, which is the only practical option for gay couples wishing to procreate.

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August 6, 2014 in Scholarship, Tax | Permalink | Comments (0)

Taxpertise: Murder, Mayhem, Romance, Comedy and Tax Tips, For Artists Of All Kinds

Bonnie Lee (IRS Enrolled Agent), Taxpertise: A Novella For The Creative Mind -- Murder, Mayhem, Romance, Comedy and Tax Tips, For Artists Of All Kinds (2014):

TaxpertiseYou've heard of starving artists. Many of them are starving because they fork out too much money in taxes. And why does that happen? Because most artists hate numbers and consequently don't deal with them too well. I was asked to write a tax book specifically for artists but my first thought was, "Would anyone actually read it?" I pictured artists with insomnia purchasing this book as a sleep aid. Yet there is so much valuable information that can help whose who hate numbers and keep more dollars in their pockets that I was forced to rethink the approach so I can reach out and help them. And so I chose a format that would be entertaining: a Novella.

Kim Stillwell is a single, gorgeous, 34-year-old tax professional. When Luke Hunter, a rock musician, becomes a client, her heart goes into a spin! It's love at first sight, but she doesn't trust her feelings. While preparing his tax returns and organizing his home office, she remains professional, yet the romantic stirrings continue and seem to be reciprocated. Then the murder of Dominic Rodriguez, Luke's previous bookkeeper, throws their budding romance into mistrust and turmoil.

Follow their adventures and gain valuable knowledge through the tax tips offered at the end of each chapter. Even those have a humorous edge!

August 6, 2014 in Book Club, Tax | Permalink | Comments (0)

A Field Study of a Fat Tax and its Unintended Consequences

Brian Wansink, Andrew S. Hanks, John Cawley & David Just (all of Cornell), From Coke to Coors: A Field Study of a Fat Tax and its Unintended Consequences:

Fat TaxCould taxation of calorie-dense foods such as soft drinks be used to reduce obesity? To address this question, a six-month field experiment was conducted in an American city of 62,000 where half of the 113 households recruited into the study faced a 10% tax on calorie-dense foods and beverages and half did not. The tax resulted in a short-term (1-month) decrease in soft drink purchases, but no decrease over a 3-month or 6-month period. Moreover, in beer-purchasing households, this tax led to increased purchases of beer. To behavior scholars, this underscores the importance of investigating unexpected substitutions. To public health officials and policy makers, this presents an important empirical result and more generally points toward wide ranging contributions that marketing scholarship can make in their decisions.

August 6, 2014 in Scholarship, Tax | Permalink | Comments (0)

Christians: Regulating Return Preparers -- A Global Problem for the IRS

Tax Analysys Logo (2013)Allison Christians (McGill), Regulating Return Preparers: A Global Problem for the IRS, 75 Tax Notes Int'l 391 (Aug. 4, 2014):

The IRS is in charge of a juggernaut of a tax system, the likes of which there truly is no equal in the world. And as all too often appears to be the case, in the enthusiasm to improve the functioning of this regime, its authors and enforcers appear to have forgotten that this unique system is perfectly global in reach, thanks to its unique inclusion of citizens and others with legal residence status no matter where in the world they live.

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August 6, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tahk: Public Choice Theory and Earmarked Taxes

Susannah Camic Tahk (Wisconsin), Public Choice Theory & Earmarked Taxes, 68 Tax L. Rev. ___ (2015):

The Article draws on public choice theory to argue that the manner in which the federal income tax distributes its costs and its benefits undergirds the massive fiscal crises that the federal government is now experiencing. Then, this Article offers recent historical evidence on 1500 state-level taxes to develop a way out of the current tax lawmaking paralysis at the federal level. At present, the federal income tax spreads its benefits widely among large yet diffuse groups, which makes the income tax easy to undermine and difficult to improve. The Article proposes, however, that restructuring the manner in which the federal income tax allocates its costs and benefits can circumvent its self-destructive shortcomings. For this purpose, state-level tax laws offer useful templates. In particular, states "earmark" tax revenues for specific purposes. That arrangement gives rise to fundamentally different tax lawmaking dynamics than those operating at the federal level. To understand how and why these dynamics succeed, the Article presents evidence on the cost-benefit structure of all state-level earmarked taxes from the 1997-2005 historical period. Analysis of this evidence demonstrates that how state-level earmarked taxes laws assign their costs and benefits relates to how revenue-productive and durable these tax laws are. This conclusion furnishes federal tax policymakers with a promising way of revising the federal income tax code to overcome its current defects. The analysis also opens new lines of research at the neglected intersection of public choice theory and scholarship on legal reform.

August 6, 2014 in Scholarship, Tax | Permalink | Comments (0)

More Tax Inversion News

Bloomberg News, Obama Let Delphi Avoid Taxes in Tactic President Assails, by Zachary R. Mider:

President Barack Obama says U.S. corporations that adopt foreign addresses to avoid taxes are unpatriotic. His own administration helped one $20 billion American company do just that.

As part of the bailout of the auto industry in 2009, Obama’s Treasury Department authorized spending $1.7 billion of government funds to get a bankrupt Michigan parts-maker back on its feet -- as a British company.

August 6, 2014 in Tax | Permalink | Comments (4)