TaxProf Blog

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

Tuesday, March 7, 2017

The Future Of TaxProf Blog

Pepperdine Law School (2016)ABA Journal, Popular Blogger and Scholar Tapped as Pepperdine Law Dean; He Plans to Keep Blogging:

Paul L. Caron, a professor at Pepperdine School of Law, has been selected as its new dean. The tax law scholar also blogs at TaxProf Blog, and owns and publishes the Law Professor Blogs Network.

Besides tax matters, the Tax Prof Blog also has many posts on various challenges in legal education. In 2016, National Jurist named Caron the third most influential person in legal education.

Caron has not shied away from posting about controversial topics in legal education, including bar passage rates in California and elsewhere. When asked if he plans to continue blogging as dean, Caron said yes.

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March 7, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (14)

Fleischer Presents Tax Reform: The State of Play Today At Georgetown

Fleischer (2016)Victor Fleischer (San Diego; Co-Chief Tax Counsel, Senate Finance Committee Democrats) presents Tax Reform: The State of Play at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg.  Vic's talk will discuss several aspects of the House Republicans' tax reform blueprint, A Better Way for Tax Reform:

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March 7, 2017 in Colloquia, Tax | Permalink | Comments (0)

New York:  A Tax Haven For Art Collectors?

NYFollowing up on my previous posts (links below):  Wall Street Journal, A New Tax-Free Way to Store Art:

New York could become the latest tax haven for art collectors.

A pair of art shippers who for years watched collectors buy works in the city—only to store them tax-free in warehouses in Delaware or Switzerland—have won the right to turn a former parking lot in Harlem into a foreign-trade zone.

The shippers, Tom Sapienza and Kevin Lay, plan to open a 110,000-square-foot facility, called Arcis, that can store as much as $2.5 billion worth of art duty-free. Collectors will be able to buy art in New York, or anywhere in the world, and store it in Arcis’s four-story warehouse indefinitely without having to pay local or state taxes—although taxes will be due once the art leaves the site. Moving new purchases into storage can give collectors and dealers time to save up to pay the taxes later rather than right away—or time to resell the work while it’s in storage and thereby pass on the sales tax to someone else. Collectors can also choose to ship their work internationally and avoid paying local taxes altogether.

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March 7, 2017 in Tax | Permalink | Comments (0)

Seto:  Does The Income Tax Cause Parents To Spend Too Much Time With Their Children?

Theodore Seto (Loyola-L.A.), Does the Income Tax Cause Parents to Spend Too Much Time with Their Children?: Rethinking Mirrlees:

In 1971, James Mirrlees published An Exploration in the Theory of Optimum Income Taxation, one of the most influential tax papers ever written. Unpacked, Mirrlees’ claim can be restated as follows: Assume that our undistorted decisions about how to allocate our time between paid and unpaid activities are welfare-maximizing. If so, any distortion of those decisions by the tax system is welfare-reducing. Unless the supply of labor is inelastic or income effects predominate, taxing income from labor will cause taxpayers to spend less time engaged in paid activities and more time in unpaid activities than would be welfare-maximizing. Because of the declining marginal utility of money, redistribution from high-income to low-income individuals is generally welfare-enhancing. Nevertheless, at some point the welfare losses from taxing labor income to effect redistribution outweigh the welfare gains produced by redistribution. This, in turn, (1) limits the overall amount of welfare-enhancing redistribution we can effect by taxing income from labor and (2) requires flat or declining marginal tax rates on such income.

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March 7, 2017 in Scholarship, Tax | Permalink | Comments (2)

NLJ:  Law School Rankings By Graduates In BigLaw Jobs

2017National Law Journal, The 2017 Go-To Law Schools:

New associate hiring ticked up slightly in 2016, with the country’s largest 100 law firms bringing on 3,521 new law school graduates. Among the 50 law schools most popular with those employers, 24 percent of last year’s graduates landed associate jobs—up one percent over the previous year.

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March 7, 2017 in Law School Rankings, Legal Education | Permalink | Comments (4)

Auerbach & Devereux:  The Case For A Border-Adjusted Tax

New York Times op-ed: The Case for a Border-Adjusted Tax, by Alan Auerbach (UC-Berkeley) & Michael Devereux (Oxford):

The American corporate tax system is broken. Faced with one of the highest tax rates in the world, many multinational corporations in the United States move their operations and reported profits offshore or undertake “inversions” to relinquish their American tax nationality. Elaborate regulatory and enforcement measures have been unable to stop this. Vilifying companies for their behavior hasn’t worked, either.

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March 7, 2017 in Tax | Permalink | Comments (0)

Kahng's The Taxation Of Women In Same-Sex Marriages Wins UCLA Dukeminier Award

The article by Lily Kahng (Seattle), The Not-So-Merry Wives of Windsor: The Taxation of Women in Same Sex Marriages, 101 Cornell L. Rev. 325 (2016), has been selected for UCLA Law School’s Dukeminier Award, which each year recognizes the best sexual orientation and gender identity legal scholarship published during previous year.

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March 7, 2017 in Scholarship, Tax | Permalink | Comments (1)

New Pepperdine Law School Dean Is 'Just A Mundane Tax Guy'

My News L.A., Presidential Sex Scandal Prosecutor Long Gone From Pepperdine: New Dean’s Just a Tax Law Guy:

While Pepperdine University announced Monday that a tax law expert has been named dean of its law school, it was a far more mundane selection this time around than when the Malibu campus hired an earlier dean who had been Bill Clinton’s special prosecutor involving presidential sex scandals.

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March 7, 2017 in Legal Education, Tax | Permalink | Comments (2)

Monday, March 6, 2017

Paul Caron Named Dean Of Pepperdine Law School

Caron (2014)Press Release, Paul L. Caron Announced as Duane and Kelly Roberts Dean of the School of Law:

Paul L. Caron has been named the Duane and Kelly Roberts Dean of the Pepperdine School of Law. Caron, currently associate dean for research and faculty development and professor of law, will formally begin his responsibilities as dean on June 1, 2017.

“Since his first days as a distinguished visiting scholar through his selection as a tenured professor and now his candid and strategic participation in this search process, I have admired Professor Caron for his keen intellect, generous outreach to others, and his sterling reputation within the national legal community,” says Pepperdine president Andrew K. Benton. “It will be a privilege to work side-by-side with him to advance the Pepperdine School of Law, an entity we both hold in high esteem. He will be, I believe, a remarkable law dean.”

Caron came to the School of Law in 2010 as the D & L Straus Distinguished Visiting Professor of Law. He joined the School of Law tenured faculty in 2013 as professor of law and assumed the role of associate dean for research and faculty development in 2015. Previously Caron served as the associate dean of faculty and the Charles Hartsock Professor of Law at the University of Cincinnati College of Law.

“Paul Caron is a highly regarded scholar and wonderful mentor to our law school students,” says Pepperdine provost Rick R. Marrs. “He has a comprehensive knowledge of legal education in our country and a compelling vision for the place of our law school in that landscape. I eagerly anticipate working with him as he helps us achieve our goal to move the law school toward national prominence, providing our students with the highest educational experience and empowering them to become leaders in their communities.”

A widely respected expert in tax law, Caron has written over 50 books and scholarly articles and is the publisher and editor of Tax Prof Blog, the most popular tax blog on the Internet. He is also the owner and publisher of the Law Professor Blogs Network of more than 50 blogs in other areas of law edited by law professors around the country. He was named the third most influential person in legal education by the National Jurist in 2016 and has been listed as one of the 100 most influential people in tax and accounting every year since 2006 by Accounting Today.

"I am honored to be chosen as the next dean of this great law school at this important point in its history, following in the footsteps of Deanell Tacha, Ken Starr, Richard Lynn, and Ron Phillips," shares Caron. "I look forward to building on their work to advance Pepperdine's unique position in legal education by combining academic and research excellence with a deep-rooted commitment to our Christian mission that welcomes people of all faiths and backgrounds."

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March 6, 2017 in Legal Education, Tax, Tax Profs | Permalink | Comments (29)

Scharff Presents Hyper Preemption Today At Pepperdine

Scharff (2017)Erin Scharf (Arizona State) presents Hyper Preemption: A Reordering of the State-Local Relationship at Pepperdine today as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine:

The role of cities in our federalist system is once again in the news.  President Donald Trump’s executive order purporting to cut federal funding for “sanctuary cities” was a newspaper headline across the country.  However, this federal-municipal showdown is part of a much larger story about the changing regulatory role of cities.  Even as cities cast themselves as defiant against conservative federal policies, many are finding themselves in a much weaker position with respect to state policymaking.

Already, state legislators across the country are introducing bills that would cut state funding to local governments implementing “sanctuary city” policies. Such efforts are among the many preemption bills pending in statehouses across the country. Local governments, as creature of state law, are required to conform to state law, and legislatures have used this power to block municipal regulatory policies. 

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March 6, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Dyreng Presents Trade-offs In The Repatriation Of Foreign Earnings Today At NYU

DyrengScott D. Dyreng (Duke) presents Trade-offs in the Repatriation of Foreign Earnings (with Kevin S. Markle (Iowa) & Jon C. Medrano (Iowa)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

We examine repatriations of foreign earnings that have been designated as indefinitely reinvested. U.S. firms can repatriate foreign earnings without an immediate tax cost when there is a domestic loss, which frees the earnings to be used domestically. But using the domestic loss to offset repatriation taxes reduces financial accounting income, and removes a real option to tax deferral. We show that firms are more likely to repatriate indefinitely reinvested foreign earnings in domestic loss years, but they are less likely to repatriate when financial reporting incentives are strong.

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March 6, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Lederman Presents Does Enforcement Crowd Out Voluntary Tax Compliance? Today At Northwestern

LedermanLeandra Lederman (Indiana-Bloomington) presents To What Extent Does Enforcement Crowd Out Voluntary Tax Compliance? at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Tax collectors generally use enforcement methods, such as audits and the imposition of penalties, to deter noncompliance with tax laws. Although this approach is consistent with most economic modeling of tax compliance, some scholars caution that enforcement may backfire, “crowding out” taxpayers’ intrinsic motivations to pay taxes to such an extent that they reduce their tax payments. This article analyzes the existing evidence to determine if and when this occurs. Field studies suggest that enforcement tools, such as audits, are effective deterrents, generally greatly increasing tax collections.

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March 6, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Black Law Prof Files Discrimination Complaint Over Tenure Denial: 'When Dr. King Called Sunday At 11 A.M. The Most Segregated Hour In America, He Could Have Just As Easily Referred To Law Faculty Meetings 50 Years Later'

JonesDiverse Issues in Higher Education, Renowned Black Law Professor Files Complaint Against Campbell University for Discrimination:

A Black law professor who gained national exposure for having predicted Donald J. Trump’s election victory in an eight-month series of 2016 television appearances and Harvard Law Record articles, has filed federal civil rights charges against Campbell University.

In documents obtained by Diverse, associate professor of law Amos Jones alleges a pattern of discrimination and retaliation in hiring and promotion amid a Whites-dominated tenure pattern at the 40-year-old, Raleigh, North Carolina, school historically related to the Baptist State Convention of North Carolina.

“I was punished because, on February 20, I approached Dean [J. Rich] Leonard and his Associate Dean Timothy Zinnecker with a respectful written request that they enter my classrooms and restore order among the students per our School’s code of conduct and the ethics of our profession — that is, to condemn the racial discrimination that several students had expressly written into my Fall 2016 evaluations by derogating me for being Black and being involved with a Black church,” Jones alleged in a U.S. Equal Employment Opportunity Commission (EEOC) filing.

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March 6, 2017 in Legal Education | Permalink | Comments (1)

Yin:  Congressional Authority To Obtain And Release Tax Returns

Trump Tax ReturnsFollowing up on my previous posts (links below):  George K. Yin (Virginia), Congressional Authority to Obtain And Release Tax Returns, 154 Tax Notes 1013 (Feb. 20, 2017):

President Trump’s continuing refusal to release his tax returns despite the contrary common practice of presidents over the last 40 years has spurred interest in finding alternative ways to obtain the information. This article describes the authority of Congress, under section 6103(f)(1) and (4)(A), to obtain, inspect, and disclose the confidential tax information of any taxpayer, including the president, without the taxpayer’s consent. The authority may be exercised by any one of three tax committees: the House Ways and Means Committee, the Senate Finance Committee, and the Joint Committee on Taxation.2

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March 6, 2017 in Scholarship, Tax | Permalink | Comments (1)

University Of Houston, South Texas Law Schools Settle Naming Rights Dispute


Following up on my previous post, Law School Naming Rights Settlement Falls Apart, As University Of Houston, South Texas Head To Mediation:

Houston Chronicle, Houston's Rival Law Schools Reach Agreement in Naming Dispute:

Dueling Houston law schools reached a settlement Thursday in a federal trademark spat over the name and branding at the older institution.

After hitting an impasse in settlement talks earlier this year, the University of Houston and South Texas College of Law Houston hammered out a draft agreement after two days of mediation this week before U.S. Magistrate Judge Dena Hanovice Palermo.

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March 6, 2017 | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, March 5, 2017

Brunson:  Taxing Utopia

UtopiaSamuel D. Brunson (Loyola-Chicago), Taxing Utopia, 47 Seton Hall L. Rev. 137 (2017): 

Nineteenth-century American religious movements challenged many aspects of American society. Although their challenges to mainstream America’s vision of sex and marriage remain the best-known aspects of many of these groups, their challenges to traditional American economics are just as important. Eschewing individual ownership of property, many of these new Christian movements followed the New Testament model of a body of believers that held all property in common.

In the early twentieth century, these religious communal groups had to contend with something new: an income tax. Communalism did not fit into the individualistic economic system envisioned by the drafters of the income tax. So Congress designed a special tax regime, now codified in section 501(d) of the Internal Revenue Code, which exempts religious communal holding companies from tax, while imputing the holding companies’ income to the members of the group. Section 501(d) provides communitarian groups with flexibility to reflect their unusual economics.

There exist, however, a number of problems with the design and implementation of section 501(d). This Article will survey the three principal problems.

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March 5, 2017 in Scholarship, Tax | Permalink | Comments (0)

State May Ban UNC Center For Civil Rights From Engaging In Litigation

North Carolina LogoIn 2015, over faculty opposition (more here), the state defunded the University of North Carolina Law School's Center on Poverty, Work and Opportunity, which Gene Nichol quickly re-launched as the North Carolina Poverty Research Fund with private donations. The state now is considering banning the law school's Center for Civil Rights and other academic centers from providing legal representation to clients in litigation:

The Herald Sun, Proposal Would Bar UNC Schools From Providing Legal Representation:

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March 5, 2017 | Permalink | Comments (11)

PwC’s Other Debacle: A Tax Boondoggle That Has Ballooned Out Of Control

PWCO199Huffington Post, PwC’s Other Debacle: A Tax Boondoggle That Has Ballooned Out Of Control:

If I mention the Oscars, will people read this long story on tax policy run amok? Let’s find out.

On Sunday night at the Oscars, PricewaterhouseCoopers had one job: hand the correct card to presenters who would go on stage and announce the winner of the category.

When it comes to the line of work it is most known for, the company’s objective is equally simple: make sure the client pays the lowest tax bill possible. On that front, PwC tends to be a bit better at its job. But if House Speaker Paul Ryan (R-Wis.) and the Trump administration have anything to say about it, one of the more ludicrous ways the company meets its numbers will no longer be available.

With the help of PwC, one of the Big Four accounting firms, a growing number of U.S. corporations have taken advantage of a tax break called the “domestic production deduction.” The obscure provision is meant to encourage U.S. manufacturing, except for the most part these companies aren’t actually manufacturing anything. They are instead relying on a poorly worded ― or brilliantly worded, depending on your perspective ― 2004 law, known as Section 199, that created what is now an out-of-control tax break. It was written by a PwC partner.

Companies are not required to disclose if they have used a particular tax break except under rare circumstances, but the IRS, in some of its public filings and court documents, has revealed the general nature of some of those claims. Others have been included in public documents when the tax break has led to a big enough windfall that investors need to know about it, and still others have emerged in unrelated court filings. The picture that emerges from interviews and a review of the paper trail is one of a loophole that has grown so large that it is barely recognizable as anything other than a giveaway to companies that can afford the sophisticated tax prep that companies like PwC can provide. ...

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March 5, 2017 in Tax | Permalink | Comments (4)

Two Harvard Law School Administrators Charged With Embezzling Over $100k Intended For Students With Disabilities To Purchase Personal items, Including Sex Toys

Harvard Law School (2016)Harvard Crimson, Former Law School Employees Accused of Stealing More Than $100,000:

Two former Harvard Law School administrators face felony charges after allegedly stealing funds from a Law School account while employees there several years ago. The defendants, Margaret DeMarco and Darris Saylors, have both been charged with two counts of larceny over $250.

DeMarco worked as the Director of Student Affairs at the Law School between 2008 and 2013, and now works as the Associate Director of the Center for Women's Entrepreneurial Leadership at Babson College. Saylors worked as a manager of student programs at the Law School and now works as the Assistant Director of the University of Chattanooga Honors College.

Daily Mail, Harvard Administrators Are Accused of Embezzling $110,000 Meant For Disabled Students and Spending It on Luxuries Including Sex Toys:

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March 5, 2017 in Legal Education | Permalink | Comments (3)

The Top 5 Tax Paper Downloads

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

  1. [1,440 Downloads]  The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, by Michael J. Graetz (Columbia)
  2. [764 Downloads]  A Guide to the GOP Tax Plan — The Way to a Better Way, by David A. Weisbach (Chicago)
  3. [412 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)
  4. [382 Downloads]  Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, by Lily L. Batchelder (NYU)
  5. [297 Downloads]  Predicting Stock Market Prices with Physical Laws, by Jack Manhire (Texas A&M)

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

Saturday, March 4, 2017

This Week's Ten Most Popular TaxProf Blog Posts

NY Times:  U.S. Agents Raid Caterpillar Over Offshore Tax Practices

CaterpillarNew York Times, U.S. Agents Raid Caterpillar Over Offshore Tax Practices:

Federal agents raided three Caterpillar buildings near its Illinois headquarters on Thursday, company and law enforcement officials said, in an escalation of an inquiry into the heavy equipment manufacturer’s offshore tax practices.

Caterpillar has been dogged by accusations that it slashed its domestic tax bill by shifting corporate profits from the United States to a subsidiary in Switzerland. A 2014 congressional investigation concluded that a scheme to move cash between the company’s American and foreign subsidiaries cut its tax bill in the United States by $2.4 billion over 13 years.

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March 4, 2017 in Tax | Permalink | Comments (0)

AALS Refuses To Address Political Imbalance Of Law School Faculties

AALS (2018)Following up on my previous post, 28 Conservative/Libertarian Law Profs Demand That AALS Address Political Imbalance Of Law School Faculties:  Randy Barnett (Georgetown), AALS Executive Committee Responds to Our Letter Concerning Faculty Diversity:

[A]s we noted in our letter to the Executive Committee, we appreciate the efforts that were made to provide a more balanced program at the AALS Annual Meeting. But we also asked for two specific action items to address the current radical imbalance of law school faculties, neither of which is addressed in the Executive Committee’s response to our letter.

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March 4, 2017 in Legal Education | Permalink | Comments (20)

Colinvaux:  The Importance Of A Participatory Charitable Giving Incentive

Roger Colinvaux (Catholic), The Importance of a Participatory Charitable Giving Incentive, 154 Tax Notes 605 (2017):

Leading tax reform proposals contemplate a charitable deduction claimed by just five percent of taxpayers. Such a limited deduction would fatally undermine the foundations of a giving incentive that has fostered an altruistic and pluralistic society through its broad-based participation and would seriously harm the charitable sector. Section 501(c)(3) would recede in importance as setting the standard for a public benefit organization. More gifts would go to private benefit and political organizations. The article argues that a charitable deduction for the few should be rejected.

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March 4, 2017 in Scholarship, Tax | Permalink | Comments (2)

Trump Should Retain Funding For The Legal Services Corporation

LSCMinneapolis Star Tribune op-ed: The Trump Budget: Keep Civil Legal Aid Off the Chopping Block, by Robert K. Vischer (Dean, St. Thomas (Minnesota)):

Early drafts indicate that the Trump administration’s forthcoming budget may propose the elimination of the primary funding agency for civil legal aid in this country. Far from being a prudent candidate for elimination, legal aid is a government initiative that promotes individual empowerment and self-reliance — two values that loomed large in President Trump’s campaign and still garner support across the partisan divide. A populist focus on American greatness should bring a renewed commitment to remedy our nation’s scandalous failure to provide the working poor with meaningful access to our civil justice system.

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March 4, 2017 in Legal Education | Permalink | Comments (1)

Friday, March 3, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a Tax Court case illustrating the importance of complying with the technical requirements for deducting gifts of long-term capital gain property to charity. 

KristanAircraft donation fails to clear runway.

Sometimes it’s easier to land an airplane in the fog than to land a charitable deduction.

When you donate appreciated long-term capital gain property to charity, you can get a deduction for the full fair market value, even if your cost is much less than that. You never have to include the appreciation in income. That makes such donations a great tax planning tool. It also gives taxpayers incentive to value such donations aggressively.

To rein in abuses, Congress required donations of property to be carefully documented with appraisals when claimed deductions exceed $5,000. Only publicly-traded securities are excepted from this rule. The appraisal has to meet requirements as to form and appraiser qualifications. The taxpayer has to file Form 8283 with the return claiming the charitable deduction, and the appraiser has to sign it. The taxpayer also has to get a letter from the charity acknowledging the deduction and stating whether goods or services were received for the contribution by the time the return for the contribution year is due.

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March 3, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews a new article by Andrew Hayashi (Virginia) and Daniel Patrick Murphy (Virginia), Savings Externalities in a Second-Best World (Virginia Law and Economics Research Paper No. 2017-03):

Scharff (2017)We live in a brave new world of indefinitely low interest rates.  When I teach my basic tax students classic tax shelter cases, they are often shocked by the interest rates then available to the taxpayer. For many of my students, who began college well after 2008, the idea of significant interest income from a savings account is quite foreign. 

Hayashi and Murphy’s fascinating new paper explores the ways this new world of the Lower Zero Bound might affect our appraisal of savings incentives in the tax code and beyond, and along the way, they make a case for considering macroeconomic consequences of tax policy more broadly, following some recent work by Yair Listokin, among others.

Their paper begins by providing a concise overview of two traditional justifications for tax-induced savings and savings default interventions.  As they write, “private savings are invested by institutions where they are deposited and investment leads to increased economic growth, which is good for everyone.”  The second justification is rooted in the now familiar behavioral economic insight that many of us are grasshoppers, and not ants.  (Those reading carefully might note the paper’s second footnote is a citation to Aesop, which always makes me wonder how classical economic assumptions ruled for so long.) 

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March 3, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Khan Academy Offers Free LSAT Prep; Is Free Bar Exam Prep Next?

KALSATMBEThe Khan Academy and the Law School Admission Council have announced a partnership to offer free official online practice materials for the LSAT:

Aspiring law school students will soon have access to free online practice materials for the LSAT from Khan Academy and the Law School Admission Council, the maker of the test.

Today the organizations announced a new partnership to make personalized LSAT practice widely available to all, absolutely free. ...

 “The Law School Admission Council is committed to providing students an opportunity to learn the skills they need most to do well on the LSAT and succeed in law school,” said Athornia Steele, interim president of the Law School Admission Council. “We think those skills will have a positive long-term impact on their careers."

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

NY Times:  Trump's Budget Proposes Deep Cuts In Already Depleted IRS

IRS Logo 2New York Times, Under Trump, an Already Depleted I.R.S. Could Face Deep Cuts:

President Trump has a rocky history with the Internal Revenue Service, which he has complained audits him with unfair ferocity. Now he wants to significantly cut the tax agency’s funding at a time when it has already been bleeding staff and struggling to keep up with a flood of returns ahead of Tax Day.

The plans, revealed this week in documents associated with the White House budget outline, put Mr. Trump at odds with his Treasury secretary, Steven Mnuchin, who has argued that the I.R.S. needs more money and a larger staff.

Another round of cuts, tax experts say, could put one of the few federal departments that pays for itself on life support. “This is an agency that has had every last drop squeezed out of it,” said Dennis J. Ventry Jr., a member of the I.R.S. advisory council and a law professor at the University of California, Davis. “I don’t know how it’s going to sustain itself.”

The White House budget office has proposed a 14.1 percent cut to the I.R.S. for the fiscal year that begins in October, reducing the agency’s budget to $9.65 billion; six years ago, it stood at $12.1 billion ($13.6 billion when adjusted for inflation).

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March 3, 2017 in IRS News, Tax | Permalink | Comments (4)

Crawford:  The Supreme Court's Estate Planning Jurisprudence

Bridget J. Crawford (Pace), The Supreme Court's Estate Planning Jurisprudence (Foreword), 42 ACTEC L.J. 1 (2016):

This short essay introduces a special issue of the ACTEC Law Journal devoted to the estate planning jurisprudence of the Supreme Court of the United States.

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

How High Are Corporate Income Tax Rates In Your State?

Thursday, March 2, 2017

Speck Presents Expertise And International Tax Norms Today At Duke

SpeckSloan Speck (Colorado) presents Expertise and International Tax Norms at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

This paper explores how a particular framework for understanding international taxation — a framework driven by so-called international tax neutrality norms — developed among economists and legal academics in the 1960s and subsequently became entrenched among public-sector policymakers. The neutrality norm framework marks a turn from the instrumental use of international taxation in the 1950s toward an efficiency-oriented approach towards international taxation. Although some scholars question the usefulness of this turn towards efficiency, the neutrality norm framework continues to dominate discussions about international tax policy today. This paper traces the intellectual history of the neutrality norm framework: how it emerged in the late 1950s, and how it became a durable framework for understanding international tax policy.

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March 2, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Christians Presents Human Rights At The Borders Of Tax Sovereignty Today At Indiana

Christians (2017)Allison Christians (McGill) presents Human Rights at the Borders of Tax Sovereignty at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Tax scholarship typically presumes the state' s power to tax and therefore rarely concerns itself with analyzing which relationships between a government and a potential taxpayer normatively justify taxation, and which do not. This paper presents the case for undertaking such an analysis as a matter of the state' s obligation to observe and protect fundamental human rights.

It begins by examining existing frameworks for understanding how a taxpayer population is and ought to be defined. It then analyzes potential harms created by an improperly expansive taxpayer category, and those created by excluding from consideration those beyond the polity even if directly impacted by the tax regime. It concludes that a modified membership principle is a more acceptable framework for normative analysis of the jurisdiction to tax, even while acknowledging the overwhelming weight of existing perceptions about the bounds of the polity and the state-citizen relationship as significant barriers to acceptance.

March 2, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours

J.P.MorganBloomberg, JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours:

At JPMorgan Chase & Co., a learning machine is parsing financial deals that once kept legal teams busy for thousands of hours.

The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation.

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March 2, 2017 in Legal Education | Permalink | Comments (7)

2017 Joint Economic Report

Joint Economic Committee, The 2017 Joint Economic Report (Feb. 28, 2017) (279 pages):

Chapter 8: The Missing Chapter on Tax Reform…...........….149
The Connection between Tax Reform and Economic Growth...149
A Lost Opportunity for Pro-Growth Reform................................150
The Highest Corporate Tax Rate in the Developed World ........151
International Tax Systems .........................................................153
Passthrough Businesses and the Individual Tax Rate...............155
Double Taxation of Savings and Investment .............................157
Cost Recovery and Investment .................................................161
Should Death Be a Taxable Event?...........................................163
The Cost of Unnecessary Complexity........................................165
Recommendations ....................................................................167

March 2, 2017 in Congressional News, Tax | Permalink | Comments (0)

Beyond The Cut Score: Piercing The Veil Of The California Bar Exam's Validity

California Bar ExamFollowing up on my previous post, California’s New Bar Exam Format And ABA’s Proposed 75% Bar Passage Requirement Will Adversely Impact Diversity, Women, And Access To The Legal Profession:

The Recorder op-ed: Beyond the Cut Score: Piercing the Veil of the California Bar Exam's Validity, by Dennis Saccuzzo & Nancy Johnson:

In July 2016, California's bar pass rate fell to 43.1 percent, a 32-year low for July bar exams. In December, the chief justice of the California Supreme Court, Tani Cantil-Sakauye, expressed her concern about California's falling bar pass rate, but said that she wanted to wait and see what happens to scores when the new, shortened format is administered in July 2017, with its scoring and format changes.

More recently, Elizabeth Rindskopf Parker, the executive director of the California State Bar, stated she had no good answer for California's unusually high cut score for the MBE. She had been testifying before the California Assembly Judiciary Committee following a Feb. 1, 2017, letter from nearly all of California's ABA law school deans to the California Supreme Court requesting that the cut score be lowered. As disconcerting as is this inability to justify the cut score, here we identify even deeper concerns about the validity of the test itself and its ability to make reliable pass/fail decisions, revealed in the bar's own statistical studies to justify the changes being implemented in July.

As we previously noted on the TaxProf Blog, the justification for the changes to the California bar is heavily based on conclusions by Klein and Bolus, statistical consultants for the California Bar.

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March 2, 2017 in Legal Education | Permalink | Comments (1)

Morse:  A Transition Tax On Deemed Repatriated Foreign Earnings

Susan C. Morse (Texas), Taxing the $2.5 Trillion, 154 Tax Notes 247 (Jan. 9, 2017):

This article discusses a transition tax on deemed repatriated foreign earnings. It argues for a simple, rough-justice design and no offset for foreign tax credits.

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March 2, 2017 in Scholarship, Tax | Permalink | Comments (0)

NALP:  Summer Associate Hiring Was Flat in 2016

NALPAmerican Lawyer, Summer Associate Hiring Was Flat in 2016:

The law firm summer associate hiring market looks to be cooling off.

Summer associate hiring held steady in 2016, according to the latest data from the National Association for Law Placement (NALP), ending two consecutive years of growth.

Some firms increased the number of offers they extended to law students for summer associate positions, but half said they made fewer offers than in 2015, the first time in four years that a majority reduced offers.

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March 2, 2017 in Legal Education | Permalink | Comments (1)

Journal of Legal Tax Research Publishes New Issue

AAAThe American Accounting Association has published the Fall 2016 issue of the Journal of Legal Tax Research (Vol. 14, No. 2):

  • Nancy B. Nichols (James Madison University) & Blaise M. Sonnier (University of Colorado (Colorado Springs)), The Consequences of Wynne and a Proposed Congressional Response,  ATA Journal of Legal Tax Research: Fall 2016, Vol. 14, No. 2, pp. 1-25. Abstract: The U.S. Supreme Court's decision in Comptroller of the Treasury of Maryland v. Wynne held that Maryland's individual income tax law violates the Dormant Commerce Clause of the U.S. Constitution because it failed to grant a full credit against both the state and county income tax for income taxes paid to other states. The extension of the Dormant Commerce Clause and the application of the internal consistency test to individual income taxes may lead to taxpayer challenges in other states with individual income taxes. We identify four possible tax regimes that meet the internal consistency test under Wynne and provide an example of the impact of each regime on state and local government revenue in both the resident and nonresident state. We then review current state and local tax regimes, focusing on the 14 states with local income taxes and those that do not grant a tax credit for out-of-state local taxes paid by residents. We evaluate whether those tax regimes may be subject to challenge based on the Wynne decision. Finally, we suggest three policy options that Congress should consider to lessen the budgetary impact of Wynne on county and municipal governments and to allocate the cost of government based on income.

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March 2, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, March 1, 2017

Alarie Presents Using Machine Learning To Predict Outcomes In Tax Law Today At Toronto

Alarie (2017)Benjamin Alarie (Toronto) presents Using Machine Learning to Predict Outcomes in Tax Law (with Anthony Niblett (Toronto) & Albert H. Yoon (Toronto)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Recent advances in artificial intelligence and machine learning have bolstered the predictive power of data analytics. Research tools based on these developments will soon be commonplace. For the past two years, the three of us have been working on a project called Blue J Legal. We started with a view to understanding how machine learning techniques can be used to better predict legal outcomes. In this paper, we report on our experiences so far. The paper is set out in four parts.

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March 1, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Lindgren:  'Things At Chicago-Kent Are Even Worse Than I Suspected'

Chicago-KentFollowing up on yesterday's post, More Law Prof Debate On Ideological Discrimination In Faculty Hiring At Chicago-Kent, Other Law Schools:

Jim Lindgren (Chicago-Kent, 1990-96; Northwestern, 1996-present):

So things at Chicago-Kent are even worse than I suspected.

In a prior posting, I noted that Chicago-Kent in the years ending in 1990 hired on both sides of the political spectrum (a period essentially bracketed by the hiring of Randy Barnett and myself). Asked to name how many Chicago-Kent faculty appointed after I was hired in 1990 who voted for Republicans in any of the last three elections, Ralph Brill names “Dale, Fred, Fred, Phil, Gerry, and, perhaps on some issues, Jeff.”

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March 1, 2017 in Legal Education | Permalink | Comments (6)

Death Of Virginia ('Ginny') Darden Meeks


From Kristin Gutting (Charleston):

Professor Virginia (“Ginny”) Darden Meeks
(June 2, 1969 – February 23, 2017)

After a hard-fought battle with triple negative breast cancer, on February 23, 2017, the Charleston School of Law, the legal profession, and to be honest, the world, lost a truly beautiful soul, Professor Virginia (“Ginny”) Darden Meeks [obituary]. I (along with many) lost a great friend and colleague that constantly inspired me to be a better person and whose memory will continue to inspire me. I met Ginny soon after moving to Charleston when I began teaching at the Charleston School of Law. Ginny graduated from the University of North Carolina and was a die-hard Tar Heel fan. She earned her law degree at the University of South Carolina and her Masters of Law in Estate Planning at the University of Miami. She was an estate planning attorney at a boutique tax firm in Charleston. She was well-respected within the community and was always helping others. She provided pro bono legal services to individuals in need and several area nonprofit organizations, including the Center for Heirs’ Property Preservation and Lowcountry Lab Rescue. Ginny also served as a committee member for several professional and civic organizations, including the Grace Church Cathedral, the Charleston County Bar Association, and the South Carolina Bar Association. Within in five minutes of speaking to her, I knew I was in the presence of someone truly special.

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March 1, 2017 in Legal Education, Obituaries, Tax | Permalink | Comments (2)

Zelinsky:  Churches' Lobbying And Campaigning — A Proposed Statutory Safe Harbor For Internal Church Communication

Edward A. Zelinsky (Cardozo), Churches' Lobbying and Campaigning: A Proposed Statutory Safe Harbor for Internal Church Communications, 68 Rutgers L. Rev. ___ (2017):

President Trump, reiterating the position he took during the presidential campaign, has recently reaffirmed his pledge to “get rid of and totally destroy the Johnson Amendment,” the provision of the Internal Revenue Code which prohibits tax-exempt institutions from participating in political campaigns. The Code also bars tax-exempt institutions, including churches, from substantial lobbying activities.

Rather than the blanket repeal of the Johnson Amendment proposed by President Trump, I argue for a statutory safe harbor for the internal communications of churches.

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

Law School Applicants From Top Colleges Increased 1% In 2016 (But Down 48% Since 2010)

Keith Lee, Top University Students Avoiding Law School 2017 Edition:

Back in 2013, I was the first person to notice students graduating from the top universities in the country were avoiding law school in droves. ... For the first time since 2010, the total number of graduates from the nation’s top universities increased instead of continuing to decline. From 1,916 to 1,939, a 1.20% increase. 

Top University

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

NY Times:  Harvard Law Review Elects Its First Black Woman President

HLRUmanaNew York Times, After 130 Years, Harvard Law Review Elects a Black Woman President:

It has been 27 years since the first black man, an older student by the name of Barack Obama, was elected president of the prestigious Harvard Law Review. It has been even longer — 41 years — since the first woman, Susan Estrich, was elected to the position. Since then, subsequent presidents have been female, Hispanic, Asian-American, openly gay and black.

Only now, for the first time in the history of the venerable 130-year-old journal, is the president a black woman.

ImeIme (pronounced “Ah-MAY-may”) Umana, 24, the third-oldest of four daughters of Nigerian immigrants, was elected on Jan. 29 by the review’s 92 student editors as the president of its 131st volume. ...

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

Will Trump’s Tax Records Be The Next Pentagon Papers?

Trump Tax ReturnsFollowing up on my previous posts (links below):  Peter Dreier (Occidental College), Will Trump’s Tax Records Be the Next Pentagon Papers?:

A broad coalition of activists—which so far includes the leaders of the January women’s marches that galvanized five million people in cities across the country,, the American Federation of Teachers, the Indivisible Project (which has inspired more than 7,000 local groups to organize, including protests at local town halls sponsored by members of Congress), Americans For Tax Fairness, the Center for Popular Democracy (a network of local community organizing groups), and Our Revolution (the organization built from Bernie Sanders’s presidential campaign)—are planning a massive Tax March on April 15 to demand that Trump release his tax returns. They intend to walk from the U.S. Capitol to the White House, passing both Trump’s hotel and the IRS building. They also expect to organize marches in more than 60 cities across the country.

Marches, lawsuits, and demands from members of Congress can keep the issue in the public eye but they may not be enough to actually produce Trump’s tax documents. Perhaps the only way we’ll ever see his returns is if a courageous IRS employee, or one of Trump’s own lawyers or accountants, leaks them to the media, just as Daniel Ellsberg helped to bring down Richard Nixon by releasing the secret Pentagon Papers to The New York Times in 1971. ...

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March 1, 2017 in Tax | Permalink | Comments (11)

Manhire Presents Peer-Based Leadership And Effective Listening For Lawyers (And Law Professors) At Texas A&M

Following up on his previous presentation, Why Lawyers (And Law Professors) Eat Last: A Workshop On Selfless Service, Jack Manhire (Texas A&M) presented The Force Is Strong With This One: Peer-Based Leadership and Effective Listening for Lawyers at Texas A&M yesterday as part of the Professionalism and Leadership Program (PLP) and the Professionalism and Academic Workshop Series (PAWS):

Continuing the theme on “how to lead without a rank,” this presentation will teach you the Jedi mind trick of effective listening that you can use with clients, employers, colleagues, and even children and spouses. The session builds on earlier topics from Breaking Implicit Bias, Resilience, and Why Lawyers Eat Last. You will learn why most lawyers have conversations backwards and how you can build trust in record time by doing it the correct way. This is for intermediate and advanced students only, as master-level secrets will be revealed.

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