TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, June 9, 2016

Logue Responds To Galle's In Praise Of Ex Ante Regulation

Kyle Logue (Michigan), In Praise of (Some) Ex Post Regulation: A Response to Professor Galle, 69 Vand. L. Rev. En Banc 97 (2016):

Professor Brian Galle recently argued [In Praise of Ex Ante Regulation, 68 Vand. L. Rev. 1715 (2015)] that the growing consensus that ex post regulation is superior to ex ante regulation on efficiency grounds has been overstated by scholars, including me, and that ex ante regulation has advantages that have been ignored or underemphasized.

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June 9, 2016 in Scholarship, Tax | Permalink | Comments (0)

Graetz & Greenhouse:  The Burger Court And The Rise Of The Judicial Right

Burger CourtMichael J. Graetz (Columbia) & Linda Greenhouse (New York Times), The Burger Court and the Rise of the Judicial Right (June 7, 2016).  From Columbia Law School:

Early reviews are extolling the insights of The Burger Court and the Rise of the Judicial Right, the new book by Columbia Law School Professor Michael J. Graetz and Pulitzer Prize-winning journalist Linda Greenhouse. Graetz—the author of seven books, an eminent scholar and teacher, and a former official in the U.S. Treasury Department—is the Columbia Alumni Professor of Tax Law. He has argued before the Supreme Court. For nearly 30 years, Greenhouse covered the Supreme Court for The New York Times

The Burger Court and the Rise of the Judicial Right, published today by Simon & Schuster, challenges the accepted portrayal of the Supreme Court from 1969 to 1986 as pragmatic and accommodating, a moderate or transitional period when “nothing much happened.” On the contrary, explain Graetz and Greenhouse, American law moved to the right with President Richard Nixon’s four appointments to the Supreme Court, including Chief Justice Warren Burger. A new conservative majority reacted to the previously liberal Court under Chief Justice Earl Warren, curbing and rolling back landmark rulings on civil rights and civil liberties, while granting a First Amendment right to “commercial speech,” which would enable businesses to invoke the Constitution in opposition to government regulation. The Burger Court and the Rise of the Judicial Right shows how the Court reached its most lasting decisions, laying a legal foundation for the conservative Rehnquist and Roberts Courts. ...

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June 9, 2016 in Book Club, Legal Education, Scholarship, Tax | Permalink | Comments (1)

University Of Washington Combats Salary Compression ('Loyalty Tax') With Faculty Vote On Retention Bonuses To Star Professors

UWInside Higher Education, University of Washington Plan Seeks to Alleviate Faculty Salary Compression:

Salary compression — when assistant professors make close to what associate and full professors make due to changes in the market between their points of hire — is a problem across academe. But fixing it is a complicated undertaking that some institutions avoid. ...

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June 9, 2016 in Legal Education | Permalink | Comments (2)

AAUP Handbook:  Best Practices In Peer Review

AAUP Handbook, Best Practices in Peer Review (2016):

AAUPThe purpose of this document, written by the AAUP’s Acquisitions Editorial Committee, is to articulate a set of practices that comprise a rigorous process of peer review. The Committee acknowledges, however, that the peer review process is highly complex, involves many individuals, and must be responsive to the norms of the appropriate fields. Thus, while the steps discussed below are recognized as generally acceptable best practices, this document is not intended to prescribe the conduct of an acceptable peer review in every case. Moreover, though strong peer reviews are necessary for moving forward with a project, they form only one part of a broad range of factors, including considerations of fit and budget, that together lead to a publishing decision.

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June 9, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

University Of Chicago Dean Resigns Amid 10% Budget Cuts Imposed On Academic Departments

University of ChicagoCrain's Chicago Business, Dean Steps Down Amid U of C Budget Pressures:

The dean of the humanities division at the University of Chicago quit with a year left in her term today, underscoring pressures on scholars to cut costs and initiate layoffs at the Hyde Park campus.

Martha Roth, an ancient Near East scholar and dean for nine years, only hinted at the financial challenge in an email disclosing her resignation, effective June 30:

A colleague said she cited in a meeting last week an administration mandate to slice spending by 8 percent, on top of previous reductions [of 2 percent], in the fiscal year that begins next month.

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June 9, 2016 in Legal Education | Permalink | Comments (5)

NY Times:  Two Williams & Connolly Tax Lawyers Ordered To Testify In Client’s Tax Evasion Case Under Crime Fraud Exception To Attorney-Client Privilege

WilliamsNew York Times Deal Book, Lawyers Ordered to Testify on Client’s Tax Evasion Case:

It is not every day that two prominent lawyers are brought before a federal grand jury and directed to provide documents and testimony about conversations they had with a wealthy client.

But that is what happened with two partners at Williams & Connolly, the prestigious Washington law firm, who are representing Morris E. Zukerman, a former Morgan Stanley banker and oil investor. Last month, Mr. Zukerman was accused of failing to pay $45 million in income and sales taxes on works of art and profits from the sale of an oil company.

A series of court filings in Mr. Zukerman’s pending criminal case in Federal District Court in Manhattan shines a light on the often-unseen role lawyers can play in nonpublic tax investigations by the Internal Revenue Service and federal prosecutors. In the filings, federal prosecutors in Manhattan raised the prospect of potential conflict of interest for the two lawyers, who are trying to negotiate a plea deal for Mr. Zukerman.

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June 9, 2016 in Tax | Permalink | Comments (0)

Law Grad Responds To Fundraising Appeals From 'Greedy' Law School: 'Go To Hell, You Parasite'

Minneapolis Star-Tribune op-ed:  Law School Fundraising: What Have You Ever Done For Me?, by Robert G. Larson III (J.D. 2010, William Mitchell (now Mitchell Hamline)):

To my greedy law school:

No. Stop asking. I’m not going to give you any money. Ever. So you can stop sending those fundraising letters every few months, begging for more of my hard-earned cash.

I’m not blaming you for the collapse of the legal job market. ...  I’m blaming you because you lied to us. You reported employment statistics — even back in 2007, when things were decidedly rosier — that led prospective students to believe that a huge portion of your graduates walked out of your hallowed halls and right into lucrative associate positions at fancy law firms. The reality, as we now know, is that you were counting everyone with any kind of job at all — from the guy working just a few hours per week at the 7-Eleven to the girl who took your perennial temporary position in the student affairs office — as employed, for the purposes of bragging about postgraduation employment. ...

I truly, deeply regret attending law school. Full of youthful optimism, I tried to better my life through education, and was slapped down hard. Despite assurances to the contrary, the things I learned haven’t helped me in the slightest. ...

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June 9, 2016 in Legal Education | Permalink | Comments (26)

House Holds Hearing Today On The Need To Control Automatic Spending And Unauthorized Programs

HouseThe House Budget Committee holds a hearing today at 9:30 a.m. EST on The Need to Control Automatic Spending and Unauthorized Programs with these witnesses:

  • Lily Batchelder (NYU)
  • Stuart Butler (Brookings Institution)
  • David Walker (Former Comptroller General of the United States)

June 9, 2016 in Congressional News, Tax | Permalink | Comments (0)

Tax Foundation:  Options For Reforming America’s Tax Code

TF_Options_for_Reforming_Americas_Tax_CodeTax Foundation, Options For Reforming America’s Tax Code:

There is a widespread consensus among Americans across the political spectrum that the U.S. tax system is overly complex, inefficient, uncompetitive, and due for an overhaul. However, Congress has not passed a comprehensive tax reform bill in three decades. As a result, many lawmakers have set their sights on the 2017 legislative session as an opportunity to hammer out a tax reform deal.

Because so many parts of the U.S. tax code are in need of change, any tax reform bill considered by Congress is likely to be hundreds of pages long and contain dozens of distinct provisions. As a result, lawmakers and voters may be unsure of the effects of each separate tax change on federal revenue collections, the tax burden borne by different groups of Americans, and the growth of the U.S. economy.

To assist lawmakers in assembling tax reform bills over the coming months, and to help the American public in understanding the tax changes being proposed, we have assembled this book: Options for Reforming America’s Tax Code.

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June 9, 2016 in Tax, Think Tank Reports | Permalink | Comments (4)

Merritt:  Lessons For Online Legal Education

Deborah Merritt (Ohio State), Lessons for Online Legal Education:

An increasing number of law schools are creating online courses, certificate offerings, and degree programs. As newcomers to online education, we should look to existing programs for inspiration. One of those is Harvard Business School’s successful CORe program, an online certificate course in business basics. I wrote about CORe’s suitability for law students several weeks ago. Here, I examine three lessons that the program offers to law schools interested in online education.

1.  Evaluate Your Expertise From New Perspectives. ... We tend to think of creating majors, minors, and degree programs. Creating a useful course for students majoring in something else falls outside our typical worldview. Yet this approach is just what online education demands: categorizing our expertise by subject rather than course or degree program; exploring new audiences, again looking outside of traditional concentrations; and finding a match between the two.

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June 9, 2016 in Legal Education | Permalink | Comments (0)

Thimmesch:  State Taxing Power After Direct Marketing Association v. Brohl

Adam B. Thimmesch (Nebraska), State Taxing Power after Direct Marketing Association v. Brohl, 80 State Tax Notes 299 (Apr. 25, 2016):

The Tenth Circuit Court of Appeals’ recent decision in Direct Marketing Association v. Brohl marked another entry into the ongoing saga regarding the scope of state taxing power over remote vendors. That decision, along with the U.S. Supreme Court’s decision in an earlier iteration of the litigation, has predictably increased the debates regarding the meaning and validity of the Court’s long-standing physical presence rule and the merits of congressional intervention.

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June 9, 2016 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1127

Wednesday, June 8, 2016

Wendi Adelson Discusses Her Ex-Husband Dan Markel's Murder: Transcript And Commentary

AdelsonFollowing up on yesterday's post on Wendi Adelson's discussion of the murder of her ex-husband Dan Markel on the Writing Class Radio Podcast:

David Lat provides a transcript and commentary on Wendi's story and other remarks in:

The Murder Of Dan Markel: Wendi Adelson Speaks (Part 1):

Before we dig into the podcasts, a macro-level observation: I view this as additional evidence that Wendi Adelson did not know about, and was not involved in, the murder of Dan Markel. ... [I]f Wendi knew about or was involved in Dan’s murder and then wrote about it for a class and spoke about it on a podcast, she would have to be stupid, insane, or both. ...

That said, there are aspects of the podcast that some listeners might find chilling or insensitive. And in an interesting twist, Wendi herself at times acknowledges the creepiness factor. The resulting podcast is rich and has so many layers to it; I’ve listened to it about a half-dozen times now. I’m going to discuss some highlights below, but do yourself a favor and listen to the original during your commute or while at the gym. You won’t regret it.

David Lat (Above the Law), The Murder Of Dan Markel: Wendi Adelson Speaks (Part 2):

I am far from a member of “Team Wendi” — in my opinion, she acted abominably in the divorce (more on that later) — but as I’ve written before, I don’t think she was involved in Dan’s murder or had advance knowledge of it (although it’s possible she at some point in the past two years acquired such knowledge)

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June 8, 2016 in Legal Education | Permalink | Comments (0)

IRS Reopens Transcript Service With More Rigorous e-Authentication, But 70% Of Taxpayers Will Be Unable To Access Their Accounts; TIGTA Identifies Additional 600,000 Taxpayer Victims In Hack Of Prior System

ID TheftFollowing up on my previous posts on security problems with the IRS website (links below):

IR-2016-85, IRS Launches More Rigorous e-Authentication Process and Get Transcript Online (June 7, 2016):

With the assistance of top digital experts at U.S. Digital Service and other security authorities, the Internal Revenue Service today launched a more rigorous e-authentication process for taxpayers that will significantly increase protection against identity thieves impersonating taxpayers to access tax return information through the IRS Get Transcript online service.  This enhanced authentication process will also provide a foundation for additional IRS self-help services in the future.

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June 8, 2016 in IRS News | Permalink | Comments (0)

Johnston:  Who's Getting Richer? Hardly Anyone.

David Cay Johnston (Syracuse), Who's Getting Richer? Hardly Anyone:

The latest federal income data show what looks on the surface like robust economic gains, with Americans reporting 4.6% more income in 2014 than 2013. But that’s misleading.

My analysis of the official data reveals that just beneath the shiny surface lies an ugly picture. A few Americans are seeing their incomes soar, and the top 15% or so are doing well overall. Meanwhile, the vast majority tread water or slowly sink, an economic reality that has fueled support for both Donald Trump and Senator Bernie Sanders.

This disparity, which I have been documenting for more than two decades, reflects government policies that subtly take from the many and redistribute upward to the already very rich few; the downward pressure on wages due to globalization; and the decline of unions, which had given workers bargaining power so they enjoyed a larger share of business revenues.

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June 8, 2016 in Tax | Permalink | Comments (1)

WSJ:  Foreign Students In U.S. Colleges Cheat Five Times More Than Domestic Students

WSJ 3Wall Street Journal, Foreign Students Seen Cheating More Than Domestic Ones:

A flood of foreign undergraduates on America’s campuses is improving the financial health of universities. It also sometimes clashes with a fundamental value of U.S. scholarship: academic integrity.

A Wall Street Journal analysis of data from more than a dozen large U.S. public universities found that in the 2014-15 school year, the schools recorded 5.1 reports of alleged cheating for every 100 international students. They recorded one such report per 100 domestic students.

Students from China were singled out by many faculty members interviewed. “Cheating among Chinese students, especially those with poor language skills, is a huge problem,” said Beth Mitchneck, a University of Arizona professor of geography and development.

In the academic year just ending, 586,208 international undergraduate students attended U.S. colleges and universities, according to the Department of Homeland Security. More than 165,000 were from China. South Korea and Saudi Arabia were the source of nearly 50,000 each and India of about 23,500.

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June 8, 2016 in Legal Education | Permalink | Comments (4)

AEI Hosts Panel Discussion On U.S. Corporate Tax Reform in 2017

AEI (2016)American Enterprise Institute, U.S. Corporate Tax Reform in 2017: Exploring the Options:

On June 7 at AEI, two expert panels discussed business- and shareholder-level taxation in pursuit of solving current problems with corporate taxation.

The Senate Finance Committee’s Christopher H. Hanna remarked that tax reform efforts almost exclusively promote efficiency and economic growth and that the US tax system is largely obsolete.

On the first panel, Columbia University’s David M. Schizer voiced the popular sentiment that the corporate tax rate must be reduced. Columbia Business School’s R. Glenn Hubbard argued that one type of tax could not alone address the income shifting problem. The University of Southern California’s Edward D. Kleinbard encouraged focusing on the effective tax rate rather than statutory rates, while Alan J. Auerbach of the University of California, Berkeley, suggested removing incentives for companies to go offshore rather than cutting the corporate rate.

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June 8, 2016 in Conferences, Tax | Permalink | Comments (0)

Caron:  The One Hundredth Anniversary Of The Federal Estate Tax — It's Time To Renew Our Vows

Paul L. Caron (Pepperdine), The One Hundredth Anniversary of the Federal Estate Tax: It's Time to Renew Our Vows, 57 B.C. L. Rev. 823 (2016):

September 8, 2016 will mark the one hundredth anniversary of the federal estate tax. As with many longstanding marriages, America’s commitment to the estate tax has waxed and waned through the years. Our ardor built slowly, growing from the honeymoon years (impacting less than 1% of decedents with an inflation-adjusted exemption of around $1 million and a 10% top rate on estates over $100 million, raising less than 1% of all federal tax revenues) to a mid-marriage peak (impacting more than 7% of decedents with a $350,000 exemption and a 77% top rate on estates over $160 million, raising nearly 10% of federal tax revenues). But our passion has steadily cooled since then, culminating in a one year trial separation in 2010 and today’s withered estate tax (impacting less than 0.2% of decedents with a $5.4 million exemption and a 40% top rate on estates over $6.4 million, raising less than 0.6% of federal tax revenues).

Yet the initial reasons for our commitment to the estate tax – to raise revenue during a time of war, enhance the progressivity of the tax system, and curb concentrations of wealth – are even more compelling today than they were in 1916. This Article argues that we should rededicate ourselves to the vibrant estate tax of our youth.

June 8, 2016 in Scholarship, Tax | Permalink | Comments (3)

WSJ:  Student Loans Increasingly Backfire, Leaving Borrowers Worse Off For Going To School

Wall Street Journal, College Loan Glut Turns Sour:

The U.S. government over the last 15 years made a trillion-dollar investment to improve the nation’s workforce, productivity and economy. A big portion of that investment has now turned toxic, with echoes of the housing crisis.

The investment was in “human capital,” or, more specifically, higher education. The government helped finance tens of millions of tuitions as enrollment in U.S. colleges and graduate schools soared 24% from 2002 to 2012, rivaling the higher-education boom of the 1970s. Millions of others attended trade schools that award career certificates.


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June 8, 2016 in Legal Education | Permalink | Comments (8)

IRS Closes Door On REIT Spin-Offs

REITWall Street Journal, IRS Shuts Down Remaining Channels for REIT Spinoffs:

The Internal Revenue Service shut down an apparent gap in a tax law that otherwise could have allowed companies across industries to continue spinning off their property holdings into tax-advantaged real-estate investment trusts.

The December law was written in response to a wave of deals by retailers, hotels and others that sought the tax-beneficial status of being a real-estate investment trust, or REIT. The law banned companies created in tax-free spinoffs from electing REIT status for 10 years after the transaction. But the law didn’t prevent spun-off companies from merging into an existing REIT, among other possible workarounds.

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June 8, 2016 in IRS News, Tax | Permalink | Comments (0)

Most Stock Buybacks Should Be Taxed As Dividends

Wanling Su (Yale) & Rahul K. Goravara (Yale), What Is a Dividend?:

What is a dividend? It is a trillion dollar question. One on which the Internal Revenue Service (IRS) and the courts profoundly disagree.

The Tax Code defines a dividend as “any distribution of property made by a corporation to its shareholders.” Corporations found a way around this definition and thus the dividend tax. It involves buying back their own stock. A buyback can act like a dividend in substance, distributing cash to shareholders without changing anyone’s stake in the corporation.

This reading has been taken for granted by scholars. We argue the Tax Code provisions are not simple. In fact, the IRS misinterprets them. Most buybacks should actually be taxed as dividends.

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June 8, 2016 in Scholarship, Tax | Permalink | Comments (0)

Northeastern Fund-Raising Pitch To Alums: Donate, Win $1,000 Student Loan Repayment

Northeastern 2Inside Higher Ed, Northeastern Criticized for Fund-Raising Pitch:

Northeastern University is getting grief on social media for a text it sent encouraging alumni to donate and to win a chance at having the university pay back $1,000 in their student loans.

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June 8, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1126

IRS Logo 2Wall Street Journal:  The IRS’s Ugly Business as Usual, by Kimberly A. Strassel:

‘How much has really changed?’ a judge asks. Answer: not much. The scandal goes on.

Amid the drama that is today’s presidential race, serious subjects are getting short shrift. No one is happier about this than Barack Obama. And no agency within that president’s administration is more ecstatic than the Internal Revenue Service.

That tax authority’s targeting of conservative nonprofits ranks as one of the worst federal scandals in modern history. It is topped only by the outrage that no one has been held to account. Or perhaps by the news that the targeting continues to this day.

That detail became clear in an extraordinary recent court hearing, in front of a panel of judges for the D.C. Circuit Court of Appeals. The paired cases in the hearing were Linchpins of Liberty, et al. v. United States of America, et al. and True the Vote Inc. v. Internal Revenue Service, et al. They involve several conservative nonprofits—there are 41 in Linchpin—that were, as they said, rounded up and “branded” by the IRS. The groups are still suffering harm, and they want justice. 

A lower-court judge had blithely accepted the IRS’s claim that the targeting had stopped, that applications for nonprofit status had been approved, and that the matter was therefore moot.

The federal judges hearing the appeal, among them David B. Sentelle and Douglas H. Ginsburg, weren’t so easily rolled. In a series of probing questions the judges ascertained that at least two of the groups that are party to the lawsuit have still not received their nonprofit approvals. The judges determined that those two groups are 501(c)(4) social-welfare groups, which are subject to far less scrutiny than 501(c)(3) charities, yet are still being harassed by the IRS five years later. The judges were told that not only are the groups still on ice, but that their actions are still being “monitored” by the federal government.

The hearing also showed the degree to which the IRS has doubled down on its outrageous revisionist history, and its excuses. IRS lawyers again claimed that the whole targeting affair came down to bad “training” and bad “guidance.” They blew off a Government Accountability Office report that last year found the IRS still had procedures that would allow it to unfairly select organizations for examinations based on religious or political viewpoint. The lawyers’ argument: We wouldn’t do such a thing. Again. Trust us.

More incredibly, the IRS team claimed that the fault for some of the scandal rests with the conservative groups, for not pushing back hard enough during the targeting. ...

At one point, an incredulous Judge Sentelle noted that the IRS might be more believable if it had ever shown “a bit more contrition.” He said: “The Court would have to be awfully ignorant not to recognize that there has likely been an egregious violation of the First Amendment rights of American citizens by the IRS, and the IRS to this day seems very resistant to acknowledgment of that.”

An IRS lawyer rolled out the defense used by former agency official Lois Lerner that the targeting was just the unfortunate use of “inappropriate” criteria, but Judge Sentelle reminded the lawyer of the IRS’s vindictiveness. He noted that on one occasion the IRS simply shelved the application of an organization that had sued it. The agency “came to Court not having done anything to eliminate” the problem, he said, so “It’s just hard to find the IRS to be an agency we can trust, isn’t it?”

Judge Sentelle said there is a “pretty good case” that “egregious violations of the Constitution” had been committed, and he dared an IRS lawyer to “stand there with a straight face” and say otherwise. Judge Ginsburg, who spent the hearing catching out the IRS’s conflicting statements, at one point simply asked: “How much has really changed?”

Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.

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June 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, June 7, 2016

Harvard Seeks To Hire A Tax Clinician

Harvard Law School (2016)Attorney Fellow, Harvard Law School Federal Tax Clinic:

Duties & Responsibilities. The Legal Services Center of Harvard Law School (LSC) seeks to hire a Clinical Fellow in the Federal Tax Clinic. The Clinic—through which Harvard Law students receive hands-on lawyering opportunities—provides direct legal representation in tax controversies to low-income taxpayers. The Clinic’s docket includes cases before the IRS, in Federal Tax Court, and in the U.S. Circuit Courts of Appeal. Many of the Clinic’s cases raise cutting-edge issues regarding tax procedure and tax law. The Fellow will work closely with Visiting Clinical Professor of Law T. Keith Fogg, who directs the Clinic. The Fellow’s responsibilities will include screening cases for merit and law reform opportunities, representing clients, helping to manage the Clinic’s docket, contributing to community outreach and engagement efforts, and supporting the Clinic’s teaching mission. The position represents a unique opportunity to join Harvard Law School’s clinical program, to work in a dynamic public interest and clinical teaching law office, and to develop lawyering and clinical teaching skills. Salary is commensurate with experience. The position is for an initial one-year appointment. The possibility of reappointment depends on the availability of funding and Law School and project requirements.

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June 7, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Harrison:  The Donald Trump Chair And Professor Of Law

Jeffrey Harrison (Florida), The Donald Trump Chair and Professor of Law:

Trump UniversityMany law professors hold this esteemed position. It is for those who sell nothing to unsuspecting buyers. Here is what I mean. There was a fellow at a law school at which I once taught. He was up for tenure and that meant class visitation. The visits took place over a 2 week period. Near the end of that time, a student asked me why Professor Trump was giving the exact same lecture every day. Yes, he had one particular presentation he had down pat and he went to that one whenever a visitor appeared. ...

All of us have minor Trump appointments in the form of confercating -- going to conferences that are actually vacations. I am happy to say that the new dean at my school has a rule that you actually must do something at a conference before the School will fund it. God forbid! Great idea but there is still the moral hazard of a 5 minute minute panel appearance or recycling the very same work you reported on 23 other times. ...

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June 7, 2016 in Legal Education | Permalink | Comments (1)

Christians:  Tax Treaty Practice in Canada

Allison Christians (McGill), While Parliament Sleeps: Tax Treaty Practice in Canada, 10 J. Parl. & Political L. 15 (2016):

Canada’s Parliament plays little but a perfunctory role in the adoption of tax treaties, even though these agreements have significant impact on Parliamentary autonomy over core national budgetary matters as well as core legal and administrative functions. This article argues that Canada’s tax treaty process reflects a studied and intentional preference against public engagement in international fiscal policy, and that this stance has a negative impact on the rule of law.

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June 7, 2016 in Scholarship, Tax | Permalink | Comments (0)

Should You Go To Law School?

Business Insider, Only a Small Percentage of Law School Graduates Actually Make Big Money — Here's a Simple Way to Tell If You'll Be One of Them:

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June 7, 2016 in Legal Education | Permalink | Comments (4)

IRS:  Fines Paid To FINRA Are Not Tax Deductible

FinraWall Street Journal, IRS Says Fines Paid to Finra Aren’t Tax-Deductible:

The Internal Revenue Service has ruled that fines and penalties paid to the securities industry’s self-regulatory organization shouldn’t be considered tax-deductible, a stance that could cost financial firms that settle matters with the regulator. [C.C.A. 2016-23-006 (May 2, 2016)]

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June 7, 2016 in IRS News, Tax | Permalink | Comments (0)

Pay To Play Hits Law School 'Rankings'

Newsweek 2Above the Law, Schools Touting Appearance In ‘Best Law Schools’ Sponsored Content Article:

If your school is paying to be hailed as one of the “Best Law Schools [of] 2016,” then it’s probably not one of the actual “Best Law Schools of 2016.” And yet, a few law schools appear to be banking on some less-than-diligent prospective students who might take a passing reference in a sponsored article as genuine praise. Moreover, the schools are actively patting themselves on the back for these accolades that they actually paid for in the first place! ...

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June 7, 2016 in Law School Rankings, Legal Education | Permalink | Comments (2)

Wendi Adelson Discusses Her Ex-Husband Dan Markel's Murder

AdelsonWendi Adelson told the story of her ex-husband Dan Markel's murder as a student in the Writing Class Radio Podcast (iTunes), hosted by Andrea Askowitz (executive producer & teacher; author, My Miserable, Lonely, Lesbian Pregnancy) & Allison Langer (producer/CEO & student; photographer):


David Lat (Above the Law), The Murder Of Dan Markel: Wendi Adelson Speaks (Part 1):

Before we dig into the podcasts, a macro-level observation: I view this as additional evidence that Wendi Adelson did not know about, and was not involved in, the murder of Dan Markel. ... [I]f Wendi knew about or was involved in Dan’s murder and then wrote about it for a class and spoke about it on a podcast, she would have to be stupid, insane, or both. ...

That said, there are aspects of the podcast that some listeners might find chilling or insensitive. And in an interesting twist, Wendi herself at times acknowledges the creepiness factor. The resulting podcast is rich and has so many layers to it; I’ve listened to it about a half-dozen times now. I’m going to discuss some highlights below, but do yourself a favor and listen to the original during your commute or while at the gym. You won’t regret it.

David Lat (Above the Law), The Murder Of Dan Markel: Wendi Adelson Speaks (Part 2):

I am far from a member of “Team Wendi” — in my opinion, she acted abominably in the divorce (more on that later) — but as I’ve written before, I don’t think she was involved in Dan’s murder or had advance knowledge of it (although it’s possible she at some point in the past two years acquired such knowledge)m

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June 7, 2016 in Legal Education | Permalink | Comments (10)

Washington University Seeks To Hire A Tax Clinician

Washington U. Law School Logo (2014)Washington University School of Law seeks to hire a Staff Attorney for its Low Income Taxpayer Clinic:

The Low Income Taxpayer Clinic, through its second- and third-year law students, provides free legal assistance to low income taxpayers on income tax disputes with the Internal Revenue Service. The Staff Attorney is expected to assist the clinic’s co-directors in supervising and monitoring the work of the students, handle matters relating to the day-to-day administration of the clinic law office and its cases, and assume primary responsibility for clinic cases that begin or are not concluded during the academic year.

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June 7, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

The Secret Tax That Targets Families Affected By Death Or Disability

Time op-ed:  The Secret Tax That Targets Families Affected By Death or Disability, by Sens. Rob Portman (R-OH), Angus King (I-ME) & Chris Coons (D-CT):

The grief and pain of losing of a child is unimaginable. The strength and durability of character of those forced to pick up the pieces in the months and years following such a loss is an inspiration. We believe it’s our responsibility as lawmakers to do everything we can to support families in these situations.

This commitment to making difficult days a little easier is why the federal government forgives student loan debt for families of children who have died or Americans who have become permanently disabled. This same commitment should extend to the tax burden that comes with that loan forgiveness. ...

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June 7, 2016 in Tax | Permalink | Comments (0)

BigLaw First Year Associate Salaries Jump To $180,000 (From $160,000)

Wall Street Journal Law Blog, A Closer Look at Cravath’s New Salary Scale:

As The Wall Street Journal reports, Cravath is bumping first-year pay up to $180,000 from its nearly decade-long perch at $160,000. If history is any guide, this will trigger other firms to match. Here’s the full new pay scale, according to an internal Cravath memo reviewed by the Wall Street Journal:

Class of 2015 — $180,000
Class of 2014 — $190,000
Class of 2013 — $210,000
Class of 2012 — $235,000
Class of 2011 — $260,000
Class of 2010 — $280,000
Class of 2009 — $300,000
Class of 2008 — $315,000

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June 7, 2016 in Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 1125

IRS Logo 2Wall Street Journal editorial, The IRS Hit List: The Agency Finally Discloses the Groups It Politically Targeted:

Three years on, the Internal Revenue Service has finally handed over its list of the organizations the agency’s tax-exempt division targeted for their political views. All it took to shake the disclosure from the agency were dozens of lawsuits and a federal appeals-court order.

In a court filing last month, the IRS produced a list of 426 groups that were singled out for special scrutiny and in some cases had approval of their application for tax-exempt status delayed. ... The list doesn’t include 40 groups that have already opted out of the suit, so the actual number targeted is 466. The lawsuit’s goal is to find out how the targeting occurred and to seek damages for “viewpoint discrimination,” among other legal violations.

The IRS hasn’t explained why its number is so much higher than the 298 groups that Treasury Inspector General Russell George identified in his 2013 audit that disclosed the targeting. The latest list also contains more liberal groups than Mr. George’s original report mentioned.

Mark Meckler, president of Citizens for Self Governance, which is financing the NorCal lawsuit, suspects this is more proof of IRS misbehavior: “I think what more discovery will show is that once the IRS came under fire, it started adding [liberal] names to obfuscate what it was doing.”

The agency wouldn’t have turned over even these names if not for the Sixth Circuit Court of Appeals, which in March excoriated the IRS for stonewalling on NorCal’s discovery request and ordered the list’s release. The Senate voted to confirm IRS Commissioner John Koskinen in 2013 only after he promised to clean up the agency, yet on his watch the bureaucracy has resisted efforts by Congress and the courts to investigate the scandal. In this case, and others, the tax agency has earned all of the public enmity that comes its way.

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June 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, June 6, 2016

The Tax Consequences Of John Oliver's Forgiveness Of $15 Million Of Medical Debt

Washington Post, John Oliver Just Made Talk Show History by Forgiving Nearly $15 million Worth of Debt:

John Oliver is known for demystifying complicated issues to get his “Last Week Tonight” audience riled up. He’s explained major problems with credit reports and the bizarrely undemocratic side of primaries and caucuses. In that way, last night’s episode devoted to debt buyers wasn’t all that different. He started out, in his entertainingly enraged way, by explaining how banks sell debt to other business for pennies on the dollar. Those companies have little knowledge of those owing money, but they can be terrifyingly predatory, taking advantage of consumers’ fear of legal action. Some of these debts are erroneous; some are “zombie debts” that have already been paid. And yet, debt collectors will persist, even employing dirty tactics to get cash.

But Oliver did more than educate last night. He explained to his viewers that he undertook the surprisingly easy task of starting a debt buying company, Central Asset Recovery Professional, Inc. — “or CARP, for the bottom-feeding fish,” he explained. No sooner had he set up a CARP web site, but another debt buyer was offering to sell Oliver nearly $15 million worth of medical debt for less than $60,000.

So CARP bought the debt of nearly 9,000 people — just so Oliver could forgive it. According to the host, this is the largest one-time giveaway ever on television, beating out Oprah Winfrey’s famous “you get a car! You get a car!” episode, which cost that show $8 million.

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate. The most relevant discussion begins at 17:15.)

What are the tax consequences?

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June 6, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (3)

Sen. Hatch Calls For Closer IRS Scrutiny Of Private Museums

Senate LogoFollowing up on my previous posts:

Senate Finance Committee press release, Hatch Concludes Review into Tax-Exempt Private Museums, Notes Concerning Findings:

Senate Finance Committee Chairman Orrin Hatch (R-Utah) recently concluded a review into private, non-profit museums that enjoy tax-exempt status with a letter sent to Internal Revenue Commissioner (IRS) John Koskinen summarizing the findings of the inquiry. The review, launched in November 2015, sought answers from 11 private foundations designed to assess whether the public interest was being met and whether operations of the foundations merited the substantial tax benefits afforded to their collector-founders through the tax code.

In the letter, Hatch noted that some of the private museums welcome up to half a million guests per year at no charge, but others are not readily available to the public, including many that require advanced reservations and hold short public hours. Hatch went on to detail how many of the responses showed that founding donors continue to play an active role in management of the museum, and some of the museums occupy property owned by donors, including, in some cases, their own private residence.

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June 6, 2016 in Congressional News, Tax | Permalink | Comments (2)

Trump:  Wall Needed To Prevent Mexicans From Swarming Across Border, Enrolling In Law School

New YorkerThe New Yorker:  Trump: Mexicans Swarming Across Border, Enrolling in Law School, and Becoming Biased Judges, by Andy Borowitz:

Unless the United States builds a wall, Mexicans will swarm across the border, enroll in law school en masse, and eventually become biased judges, Donald J. Trump warned supporters on Monday. ...

While Trump offered no specific facts to support his latest allegations, he said that he had heard about the threat of incoming Mexican judges firsthand from border-patrol agents. “They see hundreds of these Mexicans, and they’re coming across the border with lsat-prep books,” he said. “It’s a disgrace.”

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June 6, 2016 in Legal Education | Permalink | Comments (3)

Swiss Voters Reject Guaranteed $2,500 Monthly Income, 77% To 23%

BasicFollowing up on Saturday's post, The Politics Of A Universal Basic Income: WSJ For, NY Times Against:  on Sunday, Switzerland voters defeated a national referendum calling for a guaranteed $2,500 monthly income by a 77% to 23% vote:

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June 6, 2016 in Tax | Permalink | Comments (0)

Poll:  Majority Of Law Schools Are Not Racing To Follow Arizona In Replacing LSAT With GRE

Kaplan Test Prep Survey, The GRE® Tries to Break the LSAT’s® Lock on Law School Admissions, but Most Admissions Officers Are Cool to It (pie charts here):

A majority (56 percent) of law schools have no plans to adopt the University of Arizona James E. Rogers College of Law’s controversial new policy allowing applicants to submit GRE scores instead of LSAT scores, according to a recently conducted Kaplan Test Prep survey of admissions officers at 125 law schools across the United States.* Just 14 percent say it’s something they plan to adopt, while 56 percent say it’s something they don’t plan to do. The remaining 30 percent say they are unsure. The University of Arizona’s law school announced their decision to begin accepting the GRE earlier this year after conducting research with Educational Testing Service, the GRE’s administrator. The validity of this research is now being evaluated by the American Bar Association, the organization that accredits the nation’s 200 plus law schools.


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June 6, 2016 in Legal Education | Permalink | Comments (1)

FASAB Issues Exposure Draft On Tax Expenditures

FASAB LogoNews Release, FASAB Issues Exposure Draft On Tax Expenditures

The chairman of the Federal Accounting Standards Advisory Board (FASAB), D. Scott Showalter, announced today that FASAB is seeking input on the proposed Statement of Federal Financial Accounting Standards entitled Tax Expenditures: Management’s Discussion and Analysis and Disclosure Requirements.

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June 6, 2016 in Tax | Permalink | Comments (0)

Hemel:  Should Companies Be Required To Include Their Effective Tax Rate On Consumer Labels?

LabelDaniel Hemel (Chicago), Calories, Vitamin D, and Tax Rates:

The FDA’s new nutritional labeling rules require manufacturers to make a number of changes to their packaging: they must print calorie content in larger font; they must disclose “added sugars”; and they must include Vitamin D and potassium on the list of vitamins and minerals. Here’s an outside-the-box (or on-the-box?) idea: why not require food manufacturers to disclose their effective tax rates too? The rate could be calculated as the ratio of taxes paid over pre-tax GAAP income, and printed right below carbohydrates and proteins.

Why stop at food labels? After all, when it comes to corporate tax avoidance, food processors are far from the worst offenders. According to data compiled by Aswath Damodaran at NYU’s Stern School of Business, the average effective tax rate for firms in the food processing sector in the United States is 24.6%, lower than the market-wide average (29.12%) but quite a bit higher than air transport (3.54%), oil and gas distribution (11.12%), and hotels and gaming (12.05%). We could, for example, require manufacturers of textiles, apparel, and footwear to disclose their effective tax rates alongside the information they already must include on labels (e.g., fiber content, country of origin, and care instructions). We could require pharmaceutical firms to disclose their effective tax rates alongside adverse reaction warnings. We could require distributors of beer, wine, and liquor to disclose effective tax rates alongside alcohol by volume (ABV). And so on.

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June 6, 2016 in Tax | Permalink | Comments (2)

Update On Murder-For-Hire Investigation Into Dan Markel's Death

TallahasseeTallahassee Democrat, Markel, Adelson Sparred Up to the End:

Florida State University law professor Dan Markel returned home from a September 2012 business trip to find his wife of six years, his two young boys and most of the couple’s possessions gone from his Betton Hills home.

While he was away, his then-wife and fellow FSU College of Law professor Wendi Adelson, moved out of the house, taking the toddlers with the help of her parents. Divorce paperwork dated Sept. 5, 2012, before Markel had left for his trip, sat on what used to be the couple’s shared bed. She left no address where she and the children were, court filings said. ...

Two years later, Tallahassee Police and FBI investigators point to the couple’s sparky divorce and her wealthy family’s eagerness to move the children to South Florida as the motive for the crime. In the arrest affidavit for 34-year-old Sigfredo Garcia, a North Miami man charged with first-degree murder in Markel’s death, details of the divorce are listed under the heading “Motive for Murder.”

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June 6, 2016 in Legal Education | Permalink | Comments (0)

Death Of Phil Mann

MannPhillip L. Mann (Miller & Chevalier, Washington, D.C.) passed away over the weekend at the age of 76.  From his 2012 ABA Tax Section Distinguished Service Award:

This year’s tribute is made to honor the extraordinary contribution of Phil Mann through his commitment to sound tax law and policy, to fair and effective administration of the tax system, and to the importance of the role of the Tax Section.

Phil was born and raised in the town of Alva, a dot on Oklahoma’s western panhandle. Phil initially attended the University of Oklahoma and upon transferring to the University of Texas after a year, he proceeded to graduate in five years, obtaining both a Bachelor of Business Administration degree and his LL.B. in 1962, at the age of 22. At UT, Phil converted to become a lifelong Texan, especially relishing the successes of the Darrell Royal football teams during his college days.

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June 6, 2016 in ABA Tax Section, Tax | Permalink | Comments (1)

BYU Prof Told Not To Give Extra Credit To Physiology Students Who Drink His Urine

Fox13, BYU Student Believes She Drank Professor’s Urine for Extra Credit:

A classroom prank some BYU students say crossed the line. A student drank what she thought was her professor's urine as part of a lesson on kidney function. The student got extra credit for slugging back a small vial. ... [Professor Jason] Hansen gave us this statement about the class lesson earlier in the week.

The exercise we did in class where we used fake urine to illustrate principles of hydration and dehydration.  The color of your urine dictates how well your body conserves water.  The darker the urine, the more your body is trying to conserve water.  The fake urine was used to illustrate that purpose.  Furthermore, physicians used to drink urine to determine various metabolic diseases by the taste, including determining how sweet it was for as diagnosis of diabetes.  In class, we used the fake urine for this purpose.  I asked a student if they were willing to try some of the fake urine.  She agreed. I agreed that we would both try it.  I have done this in the past with no complaints.  Later, usually the next class, I tell them that it was fake.   This is usually a fun way to teach this concept to the class and was not intended to offend anyone.  After getting your email on Saturday, I did send a message to everyone letting them know that it was indeed fake.

Wednesday, Hansen's department chair at BYU confirmed that, while the demonstration does teach some critical aspects of kidney function, they've asked the professor not to repeat the exercise.

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June 6, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1124

IRS Logo 2Washington Times, IRS Finally Reveals List of Tea Party Groups Targeted for Extra Scrutiny:

More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.

The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS.

But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.

The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. ...

Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.

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June 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, June 5, 2016

Snow Day Excuses Late Tax Court Petition Filing

Snow DayAs the West Coast bakes in record heat:  Guralnik v. Commissioner, 146 T.C. No. 15 (June 2, 2016):

On February 13, 2015, P sent his petition to this Court via Federal Express First Overnight service, which was not then a “designated delivery service” under I.R.C. sec. 7502(f)(2). P’s petition was required to be filed “within 30 days of a determination under this section.” I.R.C. sec. 6330(d)(1).

On the last date for timely filing of the petition, Tuesday, February 17, 2015, all Federal Government offices in the District of Columbia, including the Tax Court, were officially closed on account of Winter Storm Octavia. For that reason, P’s petition could not be delivered to the Court on that day. P’s petition was delivered to the Court and filed on Wednesday, February 18, 2015, when the Court reopened for business.

Fed. R. Civ. P. 6(a)(3)(A) provides that, “if the clerk’s office is inaccessible * * * on the last day for filing * * *, then the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday.” Tax Court Rule 25(a), dealing with computation of time, does not address how time shall be computed when the Clerk’s Office is inaccessible. Tax Court Rule 1(b), however, provides: “Where in any instance there is no applicable rule of procedure, the Court or the Judge before whom the matter is pending may prescribe the procedure, giving particular weight to the Federal Rules of Civil Procedure to the extent that they are suitably adaptable to govern the matter at hand.”

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June 5, 2016 in New Cases, Tax | Permalink | Comments (1)

More On The Accreditation Battle Over Canada's First Christian Law School

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 #4:

  1. [465 Downloads]  The Panama Papers and Tax Morality, by Usman W. Chohan (University of New South Wales)
  2. [397 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  3. [310 Downloads]  New Prominence Of Tax Basis In Estate Planning, by Paul L. Caron (Pepperdine) & Jay A. Soled (Rutgers)
  4. [179 Downloads]  Following the Money: Lessons from the Panama Papers, Part 1: Tip of the Iceberg, by Lawrence Trautman (American)
  5. [176 Downloads]  'Death Tax' Politics, by Michael J. Graetz (Columbia)

June 5, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Sunstein:  The World According to Star Wars—Lessons On Faith, Fathers & Feminism

SunsteinCass Sunstein (Harvard), The World According to Star Wars (May 31, 2016):

There’s Santa Claus, Shakespeare, Mickey Mouse, the Bible, and then there’s Star Wars. Nothing quite compares to sitting down with a young child and hearing the sound of John Williams’s score as those beloved golden letters fill the screen. In this fun, erudite, and often moving book, Cass R. Sunstein explores the lessons of Star Wars as they relate to childhood, fathers, the Dark Side, rebellion, and redemption. As it turns out, Star Wars also has a lot to teach us about constitutional law, economics, and political uprisings.

In rich detail, Sunstein tells the story of the films’ wildly unanticipated success and explores why some things succeed while others fail. Ultimately, Sunstein argues, Star Wars is about freedom of choice and our never-ending ability to make the right decision when the chips are down. Written with buoyant prose and considerable heart, The World According to Star Wars shines a bright new light on the most beloved story of our time.

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June 5, 2016 in Book Club, Legal Education, Scholarship | Permalink | Comments (1)