TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, July 10, 2015

The IRS Scandal, Day 792

IRS Logo 2Wall Street Journal editorial, Wisconsin’s Friend at the IRS: Emails Show a Common Cause in Restricting Political Speech:

Wisconsin’s campaign to investigate conservative tax-exempt groups has always seemed like an echo of the IRS’s scrutiny of conservative groups applying for tax-exempt status. It turns out that may be more than a coincidence.

Former IRS tax-exempt director Lois Lerner ran the agency’s policy on conservative groups. Kevin Kennedy runs the Wisconsin Government Accountability Board (GAB) that helped prosecutors with their secret John Doe investigation of conservative groups after the 2011 and 2012 recall elections of Governor Scott Walker and state senators.

Emails we’ve seen show that between 2011 and 2013 the two were in contact on multiple occasions, sharing articles on topics including greater donor disclosure and Wisconsin’s recall elections. The emails indicate the two were also personal friends who met for dinner and kept in professional touch. “Are you available for the 25th?” Ms. Lerner wrote in January 2012. “If so, perhaps we could work two nights in a row.”

This timing is significant because those were the years when the IRS increased its harassment of conservative groups and Wisconsin prosecutors gathered information that would lead to the John Doe probe that officially opened in September 2012. ...

These interconnections matter because they reveal that the use of tax and campaign laws to limit political speech was part of a larger and systematic Democratic campaign. Speaking at the University of Wisconsin in 2010, President Obama sent his own political message to investigators.

“Thanks to a recent Supreme Court decision, [Republicans] are being helped along this year, as I said, by special interest groups that are allowed to spend unlimited amounts of money on attack ads. They don’t even have to disclose who’s behind the ads,” he said. “You’ve all seen the ads. Every one of these groups is run by Republican operatives. Every single one of them—even though they’re posing as nonprofit groups with names like Americans for Prosperity, or the Committee for Truth in Politics.”

Conservative nonprofits like the Wisconsin Club for Growth and Wisconsin Manufacturers and Commerce were later subpoenaed and bound by secrecy orders as their fundraising all but ceased. Liberals worked together to turn the IRS and the GAB into partisan political weapons.

Continue reading

July 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, July 9, 2015

Brown: Jeb Bush Pays Too Much In Taxes. So Do The Rest Of Us.

JebFollowing up on my previous posts:

Washington Post op-ed:  Jeb Bush Paid Too Much in Taxes. So Did the Rest of Us., by Dorothy Brown (Vice Provost, Emory):

When we think of Jeb Bush—grandson of a U.S. Senator, son and brother of former presidents—it’s pretty easy to classify him right away as a political stand-in for the one percent; a wealthy and connected former two-term governor who few us would compare to an average Joe. And based on what he makes in a year, he is, indeed, a one-percenter. But when it comes to paying taxes, Bush isn’t like a lot of his one-percent compatriots—he’s actually not unlike the rest of us. Most of his income has, over time, come from his labor, and not capital gains. Pretty much the case for most Americans. ...

Continue reading

July 9, 2015 in Political News, Tax | Permalink | Comments (2)

IRS Retroactively Cracks Down On 'Basket Options' Tax Strategy Used By Renaissance, Other Hedge Funds

RenaissanceFollowing on my previous posts (links below):  Bloomberg, IRS Fights Hedge-Fund Tax Maneuver Once Used by Renaissance:

The government Wednesday labeled the “basket options” strategy of converting short-term capital gains and ordinary income into lighter-taxed long-term gains as a “listed transaction.

Continue reading

July 9, 2015 in Tax | Permalink | Comments (0)

Hasen: How I Learned to Stop Worrying and Love Our Homeowner Tax Rules

David Hasen (Colorado), How I Learned to Stop Worrying and Love Our Homeowner Tax Rules:

This short essay reviews the tax benefits available from home ownership. Sample calculations are provided. Fatalism is noted.

July 9, 2015 in Scholarship, Tax | Permalink | Comments (0)

The New Regulatory Regime In Legal Education

Sarah Valentine (CUNY), Flourish or Founder: The New Regulatory Regime in Legal Education, 44 J. Law & Educ. ___ (2015):

There is a new regulatory regime in legal education. Outside regulators, whether nationwide or state specific, are seeking to alter the education and training provided by U.S. law schools. These new mandates build on decades of work distilling how best to provide a professional legal education. Law schools have long fought outside reform; we do so now at our peril. This Article explores the current reforms, places them in historic context, and then articulates how legal educators should engage with the reforms to recenter student learning. Contrary to the prevailing wisdom, this Article argues that law schools can flourish if we embrace the regulatory reforms and may founder if we continue to resist them.

July 9, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through July 1, 2015) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):







Reuven Avi-Yonah (Michigan)


Reuven Avi-Yonah (Michigan)



Paul Caron (Pepperdine)


Ed Kleinbard (USC)



Michael Simkovic (Seton Hall)


Michael Simkovic (Seton Hall)



Louis Kaplow (Harvard)


D. Dharmapala (Chicago)



D. Dharmapala (Chicago)


Gregg Polsky (N. Carolina)



Vic Fleischer (San Diego)


Paul Caron (Pepperdine)



James Hines (Michigan)


Richard Ainsworth (BU)



Ted Seto (Loyola-L.A.)


Omri Marian (Florida)



Richard Kaplan (Illinois)


Robert Sitkoff (Harvard)



Ed Kleinbard (USC)


Louis Kaplow (Harvard)



Katie Pratt (Loyola-L.A.)


Jeff Kwall (Loyola-Chicago)



Carter Bishop (Suffolk)


Katie Pratt (Loyola-L.A.)



Richard Ainsworth (BU)


Brad Borden (Brooklyn)



Dennis Ventry (UC-Davis)


David Gamage (UC-Berkeley)



Jen Kowal (Loyola-L.A.)


William Byrnes (Texas A&M)



Robert Sitkoff (Harvard)


Dan Shaviro (NYU)



Chris Sanchirico (Penn)


Jen Kowal (Loyola-L.A.)



Brad Borden (Brooklyn)


Dick Harvey (Villanova)



David Weisbach (Chicago)


James Hines (Michigan)



Francine Lipman (UNLV)


Chris Sanchirico (Penn)



Bridget Crawford (Pace)


Joe Bankman (Stanford)



David Walker (BU)


Carter Bishop (Suffolk)



Dan Shaviro (NYU)


Vic Fleischer (San Diego)



Herwig Schlunk (Vanderbilt)


Ruth Mason (Virginia)



Wendy Gerzog (Baltimore)


David Weisbach (Chicago)


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

Continue reading

July 9, 2015 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

California’s Practical Skills Plan Alarms Out-of-State Deans, May Hurt Students Who Want To Be Tax Lawyers

Welcome to CaliforniaNational Law Journal, California’s Practical-Skills Plan Alarms Out-of-State Deans:

The State Bar of California is pushing forward with a proposal to require candidates for admission to the profession to have completed 15 credit hours of practical training, over objections from deans around the country.

The idea is to ensure that new lawyers are ready to practice law. But the Association of American Law Schools’ Deans Steering Committee warned the proposed rule would stifle curricular experimentation, limit the flexibility students now enjoy in choosing courses, and create a confusing patchwork of differing state requirements.

Moreover, the repercussions would be felt well beyond the Golden State, since so may graduates want to practice there, the group said in a written statement.

Continue reading

July 9, 2015 in Legal Education | Permalink | Comments (0)

Ellen Aprill Chairs Loyola-L.A. Dean Search Committee

Loyola-L.A. Logo (2013)Tax Prof Ellen Aprill is chairing Loyola-L.A.'s dean search committee. For more details, see here.

July 9, 2015 in Legal Education, Tax | Permalink | Comments (0)

Tax Foundation Seeks To Fill Several Positions

The IRS Scandal, Day 791

IRS Logo 2New York Post editorial, The IRS Scandal Just Got Even Worse:

So the Obama IRS wasn’t just persecuting right-leaning nonprofits — it was out to prosecute them, too. And with the help of the Obama Department of Justice and FBI.

Via Freedom of Information Act lawsuits, the watchdog group Judicial Watch just got evidence of the plot. A “DOJ Recap” on an Oct. 8, 2010 meeting tells how officials from the three agencies discussed “several possible theories to bring criminal charges under FEC law” against groups “posing” as tax-exempt nonprofits.

As part of the project, the IRS handed the FBI 21 computer disks with 1.23 million pages of confidential IRS returns from 113,000 nonprofit 501(c)(4) groups — nearly every 501(c)(4). This, though federal law generally bans the IRS from sharing such data.

The evidence shows “that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” noted Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his re-election. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information.”

The IRS scandal surfaced years ago — and for all the administration talk of a full investigation, this huge news is only surfacing now, and only thanks to Judicial Watch.

The news of FBI and Justice involvement in the IRS scandal makes the need for some special prosecutor to probe this mess even more obvious.

After all, as Judicial Watch’s Fitton asks: “How can the Justice Department and the FBI investigate the very scandal in which they are implicated?”

Continue reading

July 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Wednesday, July 8, 2015

2016 Vault Law Firm Tax Rankings

VaultVault has released its annual ranking of the Top 100 Law Firms, based on prestige as voted on by associates (methodology here). The Top Tax Practices are:



Home City

% Vote



New York



Davis Polk

New York



Cleary Gottlieb

New York



Wachtell Lipton

New York



Baker & McKenzie





New York



McDermott Will & Emery




Sullivan & Cromwell

New York



Caplin & Drysdale




Simpson Thacher

New York



Kirkland & Ellis




Latham & Watkins

New York



Weil Gotscal

New York.



Miller & Chevalier




Sidley Austin




Mayer Brown



For the sixth year in a row, Skadden is #1. The city rankings are:

Continue reading

July 8, 2015 in Law Firm Tax Rankings, Tax | Permalink | Comments (1)

More On The Resignation Of LSU Law School Dean/Chancellor

LSU Logo (2016)Following up on Monday's post, LSU Law School Dean/Chancellor Steps Down Due To 'Major Policy Differences With Vocal Segment Of Faculty'; Tax Prof Claims Retaliation After She Filed Sexual Misconduct Complaint Against Faculty Colleague:  Kyle Alagood, a 2015 LSU graduate, has posted the letter signed by 25 of the 31 tenured and tenure-track LSU faculty (other than administrators), including Tax Profs Elizabeth Carter and Philip Hackney, requesting a change in leadership at the law school:

Continue reading

July 8, 2015 in Legal Education | Permalink | Comments (0)

WSJ: The Tax Inversion Wave Keeps Rolling

Wall Street Journal, The Tax Inversion Wave Keeps Rolling:

When Horizon Pharma completed its takeover of a small, closely held Irish drug company last fall, its timing was fortuitous.

Horizon, formerly of Illinois, closed its deal with Dublin-based Vidara Therapeutics International Ltd. in September three days before U.S. regulators cracked down on these tax-beneficial corporate migrations known as inversions. Had the pair been slower to the altar, they would have been subject to tighter rules that make such overseas mergers more difficult and less lucrative.

Having squeaked through where others failed— AbbVie, for example, abandoned its $54 billion takeover of Shire in the wake of the new rules—Horizon is now pressing its tax advantages through deal making, following a well-worn path laid by other corporate inverters before it.

Their deals show that, despite Washington’s efforts last year to protect the U.S. corporate tax base, revenue keeps trickling out. Since the Treasury rules went into effect last fall, 55 U.S. companies have been sold to or targeted by foreign buyers, many of those acquirers formed by inversions themselves, according to FactSet.


Horizon and other inverted companies are using their new, lower tax rates to turbocharge corporate takeovers. Applying those rates, often in the midteens, to profits of companies in the U.S., with a federal corporate rate of 35%, can yield extra savings on top of those traditionally wrung from mergers. Moreover, unlike the U.S., Ireland and most other countries only tax profits earned in-country, giving companies the freedom and incentive to shift income to still-lower-tax jurisdictions.

July 8, 2015 in Tax | Permalink | Comments (0)

Senate Finance Committee Releases Reports From Bipartisan Tax Working Groups

Senate Logo The Senate Finance Committee today released reports from the committee's five bipartisan tax working groups:

The reports offer policy options and recommendations for ‎the Committee to consider as part of comprehensive tax reform.

On January 15, 2015, to coincide with the kickoff of a series of tax reform hearings, the Finance Committee Chairman and Ranking Member announced the formation of bipartisan tax reform working groups. 

In March, after five tax reform hearings, the Committee announced it would ask stakeholders and the public to submit ideas to the bipartisan working groups. The Committee released those submissions on April 29, 2015.

Continue reading

July 8, 2015 in Congressional News, Tax | Permalink | Comments (0)

IRS Whistleblower Office Issues Annual Report To Congress: Claims Up 37%, Awards Paid Down 17%

Estate of Former Detroit Pistons Owner Settles $2.8 Billion Gift, Estate & GST Deficiency Claim For 11 Cents On The Dollar

DavidsonFollowing up on my previous post, IRS Hits Estate of Former Detroit Pistons Owner With $2 Billion Tax Bill:  the IRS settled for $320 million of the $2.8 billion in gift, estate, and Generation-skipping taxes it sought from the estate of William Davidson, the former owner of the Detroit Pistons. Estate of Davidson v. Commissioner, No. 13748-13 (July 6, 2015).

Born in Detroit, Davidson built Auburn Hills-based Guardian Industries into one of the world’s leading makers of glass, automotive and building products. He went on to own the Detroit Pistons, the WNBA’s Detroit Shock and NHL’s Tampa Bay Lightning. He died March 13, 2009, at age 86, with a net worth estimated at more than $3 billion.

Continue reading

July 8, 2015 in New Cases, Tax | Permalink | Comments (0)

Tax Non-Compliance Detection Using Co-Evolution Of Tax Evasion Risk And Audit Likelihood

Erik Hemberg (MIT), Jacob Rosen (MIT), Geoff Warner (MITRE Corp.), Sanith Wijesinghe (MITRE Corp.) & Una-May O’Reilly (MIT), Tax Non-Compliance Detection Using Co-Evolution of Tax Evasion Risk and Audit Likelihood:

We detect tax law abuse by simulating the co-evolution of tax evasion schemes and their discovery through audits. Tax evasion accounts for billions of dollars of lost income each year. When the IRS pursues a tax evasion scheme and changes the tax law or audit procedures, the tax evasion schemes evolve and change into undetectable forms. The arms race between tax evasion schemes and tax authorities presents a serious compliance challenge. Tax evasion schemes are sequences of transactions where each transaction is individually compliant. However, when all transactions are combined they have no other purpose than to evade tax and are thus non-compliant. Our method consists of an ownership network and a sequence of transactions, which outputs the likelihood of conducting an audit, and requires no prior tax return or audit data. We adjust audit procedures for a new generation of evolved tax evasion schemes by simulating the gradual change of tax evasion schemes and audit points, i.e. methods used for detecting non-compliance. Additionally, we identify, for a given audit scoring procedure, which tax evasion schemes will likely escape auditing. The approach is demonstrated in the context of partnership tax law and the Installment Bogus Optional Basis tax evasion scheme. The experiments show the oscillatory behavior of a co-adapting system and that it can model the co-evolution of tax evasion schemes and their detection.

(Hat Tip: Tom Bruce.)

July 8, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 790

IRS Logo 2Judicial Watch Press Release, New Documents Reveal DOJ, IRS, and FBI Plan to Seek Criminal Charges of Obama Opponents:

Judicial Watch today released new Department of Justice (DOJ) and Internal Revenue Service (IRS) documents that include an official “DOJ Recap” report detailing an October 2010 meeting between Lois Lerner, DOJ officials and the FBI to plan for the possible criminal prosecution of targeted nonprofit organizations for alleged illegal political activity.

The newly obtained records also reveal that the Obama DOJ wanted IRS employees who were going to testify to Congress to turn over documents to the DOJ before giving them to Congress. Records also detail how the Obama IRS gave the FBI 21 computer disks, containing 1.25 million pages of confidential IRS returns from 113,000 nonprofit social 501(c)(4) welfare groups  – or nearly every 501(c)(4) in the United States – as part of its prosecution effort. According to a letter from then-House Oversight Committee Chairman Darrell Issa (R-CA) to IRS Commissioner John Koskinen, “This revelation likely means that the IRS – including possibly Lois Lerner – violated federal tax law by transmitting this information to the Justice Department.”

The documents were produced subsequent to court orders in two Judicial Watch Freedom of Information Act (FOIA) lawsuits: Judicial Watch v. Internal Revenue Service (No. 1:14-cv-1956) and Judicial Watch v. Department of Justice (No. 1:14-cv-1239).

The new IRS documents include a October 11, 2010 “DOJ Recap” memo sent by IRS Exempt Organizations Tax Law Specialist Siri Buller to Lerner and other top IRS officials explaining an October 8 meeting with representatives from the Department of Justice Criminal Division’s Public Integrity Section and “one representative from the FBI” to discuss the possible criminal prosecution of nonprofit organizations for alleged political activity. ...

“These new documents show that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” said Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?”

Continue reading

July 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Tuesday, July 7, 2015

Hayashi Reviews Liscow's Critique Of Kaplow & Shavell: When Legal Rule Design Should Incorporate Equity As Well As Efficiency

JotwellAndrew Hayashi (Virginia),  Equity and Efficiency in Rule Design (Jotwell) (reviewing Zachary D. Liscow (J.D. 2015, Yale), Note, Reducing Inequality on the Cheap: When Legal Rule Design Should Incorporate Equity as Well as Efficiency, 127 Yale L.J. 2478 (2014)):

Great arguments aren’t always right, but they should be bold, persuasive, and force the scholarly community to respond by testing the arguments’ logic and limitations. In recent years, there are few arguments that have been more generative of thoughtful scholarship than Kaplow and Shavell’s claim that income redistribution should be done solely through the system of taxes and transfers and that legal rules should be chosen solely for their efficiency properties [Why The Legal System Is Less Efficient Than The Income Tax In Redistributing Income, 23 J. Legal Stud. 667 (1994)]. This conclusion is instinctively repugnant to many scholars outside of the law and economics tradition, and surprising to many within it. Yet, first rank economists that they are, Kaplow and Shavell’s logic, at least under the assumptions of the model they use to make their argument, is unassailable.

But, what Kaplow and Shavell’s logic proves and what it has often been taken to prove are two very different things. Although many excellent scholars have offered incisive critiques of the Kaplow and Shavell result, Zach Liscow’s recent note in the Yale Law Journal does as fine a job as I’ve seen of both identifying the reason for this difference and arguing from within a welfarist framework that equitable considerations should apply to legal rules too. The note is admirable in its accessibility, clarity, and rigor. I would include it on the reading list for any law and economics or tax policy seminar that addressed the merits of redistribution through the tax and transfer system.

Continue reading

July 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

For The 10% Of Law Students Able To Snag A Summer Associate Position, The Living Is Easy (And Remunerative: $3,000/Week)

SummerWall Street Journal, For Summer Law Interns, the Livin’ Is Easy:

Ah, to be a law-firm summer associate. For several thousand lucky law students, it’s the season to be courted by the nation’s top firms.

Full-time work in the industry can be grueling. But in a sharp divergence from the fate of interns in medical schools and at investment banks, the entry level is pretty cushy.

At Silicon Valley-based Wilson Sonsini Goodrich & Rosati, 55 summer associates spent a weekend kayaking, hiking and biking on California’s Monterey Peninsula. Back at work they are visiting the offices of Twitter Inc. and the firm’s other technology clients. ...

Other firms are treating their summer associates to chartered helicopter tours, disc-jockey lessons and cooking classes, balanced with mock-deposition sessions, presentations on firm practices and research assignments. At some firms, a saying goes that in the hierarchy, there are partners, then summer associates and then everybody else.

Continue reading

July 7, 2015 in Legal Education | Permalink | Comments (0)

50-State Fiscal Condition Ranking

Mercatus Center (George Mason University), Ranking the States by Fiscal Condition:

In new research for the Mercatus Center at George Mason University, Senior Research Fellow Eileen Norcross ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, including unfunded pensions and health care benefits. The study, which builds on previous Mercatus research about state fiscal conditions, provides information from the states’ audited financial reports in an easily accessible format, presenting an accurate snapshot of each state’s fiscal health.


Continue reading

July 7, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Property Tax Is The Most Efficient Tax

Property TaxNew York Times:  The Inevitable, Indispensable Property Tax, by Josh Barro:

If you’re a homeowner, you probably don’t like paying property taxes. But economists like property taxes for the same reason taxpayers hate them: They’re hard to avoid.

A 2008 study by researchers at the Organization for Economic Cooperation and Development looked at a number of countries and found that taxes on real property caused the least drag on gross domestic product per dollar of revenue raised. Next came sales taxes, personal income taxes and corporate income taxes. In other words, property taxes were the best way to collect revenue without hurting the economy too much.

Continue reading

July 7, 2015 in Tax | Permalink | Comments (2)

Haneman: The Collision Of Student Loan Debt And Joint Marital Taxation

Student LoansVictoria J. Haneman (Concordia), The Collision of Student Loan Debt and Joint Marital Taxation:

Students presently graduating from college represent perhaps the most indebted generation of young adults in the history of the United States, which may be attributed to the fact that interest-bearing debt plays a primary role in ensuring that our children pursue higher education. The long-term consequences of student loan borrowing, and its impact on this generation of borrowers, both remain to be seen. To assist borrowers with the burden of loan repayment, the federal government has developed two income based repayment programs. This Article focuses upon one important detail of the program that has largely escaped the focus of the media and scholars: the ability of a borrower to file separate tax returns and qualify for income based repayment on the basis of his or her income alone.

Continue reading

July 7, 2015 in Legal Education, Scholarship, Tax | Permalink | Comments (1)

Taxation And Tax Policy Roundtable Today At Netanya College School Of Law (Israel)

  • NetanyaYariv Brauner (Florida): Arm's Length Transfer Pricing
  • David Elkins (Netanya), Allocative Efficiency, Transactional Fairness, and Distributive Justice in International Taxation: A (Not So) Radical Proposal For Reform
  • Mirit Eyal-Cohen (Alabama), Through the Lens of Innovation
  • Assaf Lichovsky (Tel Aviv), Tax Law and Social Norms in Mandatory Palestine and Israel
  • Tamir Shanan (College of Management) & Chen Avidov, Tax Appeal Procedure - How Courts Consider Tax Appeals

July 7, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Obama Administration Refuses To Follow Law Banning Government Contracts To Companies Who Engaged In Tax Inversions

Bloomberg:   U.S. Sided With Tax-Avoiding Companies Over Contracting Ban, by Zachary Mider:

The Obama administration quietly handed a victory to U.S. companies that avoid taxes by claiming a foreign address, suggesting that virtually all of them are still eligible for government contracts.

The Department of Homeland Security last year endorsed a legal memorandum that argued in part that a 2002 law banning such companies from federal contracts was invalid, according to a copy of the memo obtained by Bloomberg News. Although President Barack Obama later began publicly criticizing the tax maneuvers known as inversions, there’s no sign that he has reversed the department’s decision.

The March 2013 memo was submitted to Homeland Security by one of the country’s largest inverted companies, the manufacturer Ingersoll-Rand Plc. The company argued in part that U.S. trade agreements with foreign governments invalidated the law that would prohibit it from winning federal contracts.

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

UC-San Diego Sues USC Over Recruitment Of Prominent Professor

UCSDUSCLos Angeles Times:

Though universities commonly recruit or poach faculty from one another, lawsuits arising from those recruitments are rare. This lawsuit, formally filed by the UC regents, accuses USC and the other defendants of going beyond normal recruitment to commit a variety of illegal acts, including contract interference, computer crimes and civil conspiracy. ...

Continue reading

July 7, 2015 in Legal Education | Permalink | Comments (0)

Vik Amar Leaves Money On The Table, Takes Less Salary As Illinois Dean

AmarFollowing up on yesterday's post, Vik Amar Named Dean At Illinois Law School:  News-Gazette, UI's Next Law Dean Outlines Priorities:

The new dean for the University of Illinois College of Law thinks the cost of a legal education is a problem, and he's putting his own money behind that premise.

Vikram David Amar, 52, a constitutional law expert and senior associate dean for academic affairs at the University of California-Davis School of Law, was announced Monday as the next dean and Iwan Foundation Professor of Law at the 118-year-old UI law school. He succeeds Bruce Smith, who stepped down in 2014 after five years as dean. Law Professor John Colombo has served as interim dean since then.

Amar pledged to make affordability a priority and insisted that his salary be lower than what other law schools have recently offered candidates. He will earn a total of $324,900 annually, less than the $326,651 that Smith was paid in 2013-14. He also declined a summer stipend, typically about $25,000, a college official said.

Continue reading

July 7, 2015 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 789

IRS Logo 2New York Times, I.R.S. Expected to Stand Aside as Nonprofits Increase Role in 2016 Race:

As presidential candidates find new ways to exploit secret donations from tax-exempt groups, hobbled regulators at the Internal Revenue Service appear certain to delay trying to curb widespread abuses at nonprofits until after the 2016 election.

In a shift from past elections, at least eight Republican presidential candidates, including leading contenders like Jeb Bush and Senator Marco Rubio of Florida, have aligned with nonprofit groups set up to raise hundreds of millions of dollars. Hillary Rodham Clinton’s supporters are considering a similar tactic.

Some of these so-called social welfare nonprofit groups are already planning political initiatives, including a $1 million advertising campaign about Iran by a tax-exempt group supporting Mr. Rubio.

The groups are able to carry out many of the same political activities as candidates and their affiliated “super PACs” but do not have to disclose where they get their money, allowing total anonymity for donors.

While the nonprofit groups are supposed to limit their political activity, the I.R.S. appears powerless to stop the onslaught of money coursing through them.

The tax agency remains deeply wounded by the scandal that began two years ago over its scrutiny of nonprofits tied to the Tea Party and other political causes, both conservative and liberal.

“It’s anything goes for the next couple of years,” said Paul Streckfus, a former nonprofit specialist at the I.R.S. who now edits a newsletter on tax-exempt groups. “The whole system has really collapsed.”

Under an exemption established more than a century ago, the nonprofit groups — known as 501(c)(4) organizations for the section of the tax code that created them — are supposed to be devoted to “social welfare,” with an aim “to further the common good and general welfare of the people of the community.” But there is disagreement over just how much politicking the nonprofits can do.

I.R.S. officials concede that the rules are vague and difficult to enforce. Audits for excessive campaign work are extremely rare, even for groups spending huge chunks of their budgets to support candidates. Complaints about abuses can languish for years, records show.

The Treasury Department recently squashed speculation that new rules would soon be put into effect to limit the political activity of nonprofits. The I.R.S. commissioner, John Koskinen, drew criticism this year when he said nonprofits could spend up to 49 percent of their money on political activities. Watchdog groups have said Congress meant for those groups to work “exclusively” on social welfare and not politics.

The I.R.S. put out its first proposal for regulating nonprofits’ political work in 2013, just as the controversy was building over the targeting of Tea Party groups. Both liberals and conservatives attacked the move as chilling political speech, and the agency shelved the proposed rules.

“Because of the way the I.R.S. has been attacked, they’ve become extremely hesitant to act,” said Miriam Galston, a campaign finance specialist at George Washington University who believes tougher restrictions are needed.

Bloomberg View:  Why Nonprofits Get Away With Campaigning, by Noah Feldman (Harvard):

Nonprofit groups are supposed to exist to promote the public welfare, not to run political campaigns. IRS rules say that tax-exempt 501(c)(4) organizations, which are allowed to campaign consistent with their welfare-promoting missions, can’t have politicking as their primary activity. But because those rules aren’t being enforced, presidential campaigns now feature such nonprofits.

Why is this happening? And what -- if anything -- can be done to stop it?

The source of the problem isn’t IRS laziness. It’s a deeper difficulty in defining the interaction between money and free speech in the logic of the First Amendment, one that’s gotten much worse in the era of Citizens United and the U.S. Supreme Court’s gradual subversion of campaign-finance laws. The solution, if there is one, is going to have to come from the courts.

Continue reading

July 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, July 6, 2015

After Board Closes UNC Law School Poverty Center, Gene Nichol Launches New Poverty Research Fund

North Carolina LogoFollowing up on my previous post, North Carolina Senate Cuts $3 Million From UNC Law School Budget: 'The Gene Nichol Transfer Amendment': WRAL, Nichol Opens New Research Project at UNC Law:

The Center on Poverty at UNC School of Law may have been shuttered this week, but its work will continue. That was the message Friday from former Center director Gene Nichol, announcing the opening of a new venture in the same arena.

Nichol will lead the new North Carolina Poverty Research Fund, according to a post he wrote on the Fund's website.

"The purpose of the Fund is to carry forward earlier efforts by the Center on Poverty, Work & Opportunity to explore, document, research, and publish about the immense challenges of economic hardship in North Carolina," Nichol wrote on the Fund's site. "Thanks to the generosity of various North Carolina foundations, and engaged and committed citizens from across the state and nation, the Fund allows us to hire student, faculty and post-doctorate scholars to assist in probing the causes of, and solutions to, economic injustice in the Tar Heel state – and to publish, extensively, the fruits of our research."

In a post on Facing South, the website of the Institute for Southern Studies, Nichol wrote, "Donors have indicated repeatedly that they are unwilling to see the crucial work of the Poverty Center driven from the halls of the university. The Fund will assure that it continues, and that it continues in Chapel Hill. Censorship has [a] poor track record. It won't prevail here either."

Gene Nichol, UNC Poverty Center Closes, NC Poverty Research Fund Opens

July 6, 2015 in Legal Education | Permalink | Comments (1)

Lipshaw: Law Schools Whose Rankings Are Helped (Or Hurt) By Their Law Reviews

Following up on last week's post, 2015 Brophy Law School Rankings: Median LSAT, Full-Time J.D.-Required Jobs, And Law Review Citations:  

Jeff Lipshaw (Suffolk), Playing With Al Brophy's Alternative Law School Rankings - Student Centered vs. Student/Scholarship Centered Results:

Al did two analyses, one using only the student variables (LSAT and employment - the "2 var" rank) and one using all three (the "3 var rank").  His Table 2 shows the relative 2 var and 3 var rank for each school, but his comparison are all as against USNWR.  I was interested in "law review lift" versus "law review drag."   So I made a list from Al's Table 2, arbitrarily taking a difference of ten or more as the cutoff.

After the jump, you can see a list of [38] schools whose ranking with their law reviews improves by ten spots or more (law review lift) or [36 schools] whose ranking drops by ten spots or more when the law review gets included (law review drag).  I'll leave it to you to theorize about meaning, if any.

Continue reading

July 6, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

The Tax Underpinnings Of The Greek Financial Crisis

Greek Flag (2013)Washington Post, Why Greece and Germany Just Don’t Get Along, in 15 Charts:

Despite a crisis that has sometimes threatened the global economy — and maybe today, still does — Greece and Germany have just not been able to get along. Both certainly understand the ramifications: for Greece, years more of what has already become a Great Depression; and for Germany, its reputation as the linchpin of Europe. ...

The Germans insist on a tough austerity program in order to continue aiding Greece. Syriza says it understands the need to get the country's financial house in order, but demands the flexibility to do so in a way that it feels is right. Whether Greece's voters have truly had enough of Germany's mandates will be revealed Sunday. Here's a guide to the data on why Germany and Greece are such different countries, among the factors that have made it difficult for them to see eye-to-eye on the most important questions facing Europe. ...


Continue reading

July 6, 2015 in Tax | Permalink | Comments (2)

Last-Minute Publishing Opportunity: American University Law Review

American 3The American University Law Review would like to invite authors to submit their complete or nearly complete articles for possible publication in Volume 65.2 of the Law Review.  We are beginning production on this volume shortly and are interested in acquiring one additional article to add to the outstanding pieces that we are already featuring in the issue. Because of the short amount of time we have prior to entering production, we are hoping to receive your submissions no later than Friday, July 10th, 2015.

Continue reading

July 6, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Vik Amar Named Dean At Illinois Law School

AmarIllinois Press Release:

The University of Illinois has named Vikram David Amar as the next dean of the College of Law, pending approval from the University’s Board of Trustees at their July 15 meeting. Amar will assume the deanship, and also become the Iwan Foundation Professor of Law, on August 16. For the last several years, Amar has been the senior associate dean for academic affairs and a professor of law at the University of California, Davis School of Law. ...

During his seven years as associate dean at UC Davis, Amar has been extensively involved in faculty hiring, tenure, and promotions; clinical programming; admissions; career services; and curricular development. In addition to teaching at Davis, Amar has been a professor of law at UC Hastings and a visiting professor of law at UC Berkeley and UCLA. 

Continue reading

July 6, 2015 in Legal Education | Permalink | Comments (1)

Congratulations, Team USA!

July 6, 2015 in Legal Education, Tax | Permalink | Comments (0)

LSU Law School Dean/Chancellor Steps Down Due To 'Major Policy Differences With Vocal Segment Of Faculty'; Tax Prof Claims Retaliation After She Filed Sexual Misconduct Complaint Against Faculty Colleague

LSU Logo (2016)The Advocate, LSU Law Center Chancellor Jack Weiss to Step Down in August, Cites 'Major Policy Differences With a Vocal Segment of the Faculty':

Jack Weiss, head of the LSU Paul M. Hebert Law Center, is stepping down as law chancellor and dean in August in the wake of conflicts with faculty, some of whom had advocated for his ouster.

“I am proud of the many positive developments at the Law Center during my eight years as chancellor and look forward to submitting the progress of the Law Center during those years to the judgment of history,” Weiss said in a statement.

“Unfortunately, however, major policy differences with a vocal segment of the faculty have made it difficult, if not impossible, for me to continue to lead the Law Center on a day-to-day basis and to implement my vision for the Law Center’s future.”

Weiss, who was out of the country Friday, said in an email he’s heard that a small number of faculty gathered signatures on a document expressing disapproval with him and submitted it to LSU’s provost in May. But he said he’s neither seen the document nor heard specifically what claims those faculty members made against him.

Continue reading

July 6, 2015 in Legal Education | Permalink | Comments (0)

ABA Proposes Changes To Rules On Reporting Law School-Funded Jobs

ABA Logo 2Memorandum From Barry Currier (Managing Director, ABA Section of Legal Education and Admission to the Bar), ABA Employment Questionnaire Reporting of Law School-Funded Position – Continuing Matter and Invitations to Comment Further (June 30, 2015):

At its July 31, 2015 meeting in Chicago, the Council of the Section of Legal Education and Admissions to the Bar will consider additional proposals to reform the reporting of law school/university-funded positions in the annual ABA Employment Questionnaire. The pending proposals are attached to this memorandum. One is a revised report and recommendations from the Data Policy and Collection Committee to the Council (Attachment A), and the second is a proposed amendment to the Committee’s prior recommendations by Dean Paul Mahoney, a member of the Council (Attachment B). 

Continue reading

July 6, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 788

TIGTATreasury Inspector General for Tax Administration Report of Investigation, Exempt Organization Data Loss and Potential Obstruction of Justice:

The investigation determined that there were six possible sources to examine in order to potentially recover the missing e-mails. These sources were LERNER's crashed hard drive, the backup or disaster recovery tapes, a decommissioned Microsoft (MS) Exchange 2003 e-mail server, the backup tapes for the decommissioned e-mail server, LERNER's BlackBerry, and loaner laptop computers that may have been assigned to her while her laptop was being repaired. An examination of four of these sources, the backup or disaster recovery tapes, the decommissioned Exchange 2003 e-mail server, LERNER's BlackBerry, and the loaner laptops produced e-mail that the IRS had not previously produced to Congress, DOJ or TIGTA. The investigation also determined that once it was discovered that there was a gap in the IRS' production of LERNER's e-mail, the IRS did not fully identify as a source or perform recovery attempts for e-mail on the following electronic media, all of which the IRS had in their possession: backup or disaster recovery tapes, the decommissioned Exchange 2003 e-mail server, the backup tapes for the decommissioned e-mail server or the loaner laptop computers.  ...

The investigation also revealed that on or about March 4, 2014, one month after the IRS realized it was missing some of LERNER's e-mails, IRS employees in the IRS Enterprise Computing Center in Martinsburg, West Virginia (Martinsburg), magnetically erased 422 backup tapes that are believed to have contained LERNER's e-mails that were responsive to Congressional demands and subpoenas. However, the investigation did not uncover evidence that the IRS and its employees purposely erased the tapes in order to conceal responsive e-mails from the Congress, the DOJ and TIGTA. 

The investigation revealed that the backup tapes were destroyed as a result of IRS management failing to ensure that a May 22, 2013, e-mail directive from the IRS Chief Technology Officer (CTO) concerning the preservation of electronic e-mail media was fully understood and followed by all of the IRS employees responsible for handling and disposing of e-mail bStephen MANNING, former IRS Deputy Chief Information Officer, Strategy and Modernization.ackup media.  ...

When interviewed, [Terence MILHOLLAND, IRS Chief Technology Office] was asked if he knew that e-mail backup tapes from a decommissioned e-mail server had been degaussed in March 2014, MILHOLLAND stated that he was not aware of this, and he advised that he was "blown away" at the revelation. He further stated that IRS IT senior management was ultimately responsible. MILHOLLAND also stated that his May 2013 e-mail directive would have applied to preserving the NCFB backup tapes and that the organization that sent them to be destroyed would also be responsible for their destruction.

Continue reading

July 6, 2015 in Congressional News, Gov't Reports, IRS News, IRS Scandal, Tax | Permalink | Comments (4)

TaxProf Blog Holiday Weekend Roundup

Sunday, July 5, 2015

Fleischer: Jeb Bush Tax Returns Recall Old Days Of Shelters

NY Times Dealbook (2013)New York Times Deal Book:  Jeb Bush Tax Returns Recall Old Days of Shelters, by Victor Fleischer (San Diego):

Jeb Bush’s tax returns take us back to the time when it was a point of pride for high-income earners to buy a piece of a Panamanian gold mine, a Hollywood movie, a Texas oil well or a California alpaca farm. The point was not to make money but to use the artificial tax losses from a partnership to shelter one’s true salary from tax.

Mr. Bush released 33 years of returns on Tuesday, and his effective tax rate of 40 percent in 2013 contrasts notably with that of the last Republican presidential nominee, Mitt Romney, who disclosed an effective rate of 13.9 percent in 2010. After releasing his returns, Mr. Bush joked that he “apparently didn’t take full advantage” of deductions.

Mr. Bush should be careful when throwing stones; he did not always pay tax at such a high rate. In the 1980s, before the Tax Reform Act of 1986 changed many of the rules related to tax shelters, Mr. Bush’s dealings in real estate allowed him to pay almost no income tax, even when he earned considerable wages and had little to no risk of economic loss on his investments.

Continue reading

July 5, 2015 in Political News, Tax | Permalink | Comments (1)

Will Christian Colleges (And Law Schools) Lose Their Tax Exemption After Obergefell?

White House Same Sex MarriageFollowing up on my previous post, Will Supreme Court's Same-Sex Marriage Decision Cost BYU Its Tax Exemption?:  Inside Higher Ed, The Supreme Court Ruling and Christian Colleges:

Friday's Supreme Court decision that states must authorize and recognize gay and lesbian marriages could create major legal challenges for religious colleges -- primarily evangelical Christian colleges that bar same-sex relationships among students and faculty members. Or the decision may not create much of a legal challenge at all. Or it may create challenges, but not soon.

Legal experts are divided. But the question of whether same-sex marriage as a national right changes the legal status of Christian colleges is no longer just theoretical.

Continue reading

July 5, 2015 in Legal Education, New Cases | Permalink | Comments (14)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's:

  1. [385 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [317 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [189 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [181 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [167 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (U.S. Treasury Department)

July 5, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 787

Saturday, July 4, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Tax Like It Is July 4, 1776

1776Wall Street Journal op-ed:  What Life Was Like in 1776, by Thomas Fleming (Former President, Society of American Historians; Author, What America Was Really Like in 1776 (2012)):

Americans [in 1776] had the highest per capita income in the civilized world, paid the lowest taxes—and were determined to keep it that way. ...

In the northern colonies, according to historical research, the top 10% of the population owned about 45% of the wealth. In some parts of the South, 10% owned 75% of the wealth. But unlike most other countries, America in 1776 had a thriving middle class.

Tax Foundation:  Tax Facts for Independence Day 2013:

Taxpayers across the country will celebrate the 237th anniversary of American independence on July 4th this year. As students of history will remember, one of the chief complaints of the American colonists against the British government in 1776 was unfair and burdensome taxation (including 18th century tax breaks for big business). With that in mind, the Tax Foundation presents a few facts for Independence Day that highlight the changing American tax system.

Continue reading

July 4, 2015 in Book Club, Tax | Permalink | Comments (7)

Lima Declaration On Tax Justice And Human Rights

OxfamOver 100 organizations have signed the Lima Declaration on Tax Justice and Human Rights:

We come together as a broad-­based community of experienced advocates, practitioners, activists, scholars, jurists, litigators and others committed to advancing tax justice through human rights, and to realizing human rights through just tax policy.

Continue reading

July 4, 2015 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 786

IRS Logo 2Wall Street Journal, Lois Lerner for President:

[G]et a load of this report from

Catherine Duval, the attorney in charge of the Internal Revenue Service’s email production to Congress, has changed jobs: She now manages the State Department’s email production to Congress, Rep. Trey Gowdy (R-S.C.) told a hearing of the House Oversight and Government Reform Committee on Thursday, June 25.

Meanwhile, members of the Oversight Committee last week accused the IRS of destroying some of Lois Lerner’s emails despite a subpoena and an order to preserve them.

“There was a preservation order in place, there’s a subpoena in place, they’ve never complied with it; we’ve had testimony from the IRS commissioner that we would get all this only to find out they’ve been degaussing these tapes and they destroyed evidence,” said Rep. Jason Chaffetz (R-Utah) at the June 25 hearing.

Which gives us an idea: Why doesn’t Lois Lerner jump into the race for the Democratic presidential nomination? At least she believes in something.

Continue reading

July 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, July 3, 2015

Two Fired Tenured Profs Sue Charleston Law School

Charleston 2Charleston Regional Business Journal, Fired Professors Sue Charleston Law School:

Two former tenured faculty members at the Charleston School of Law say they were fired as retaliation for opposing The InfiLaw System purchase of the school. They’re now suing the school and its owners, Robert Carr and George Kosko.

Nancy Zisk and Allyson Haynes Stuart, along with five other faculty members, were terminated from the school on May 22.

Zisk and Stuart each filed similar lawsuits [Zisk complaint; Stuart complaint] within the past week against Charleston School of Law LLC, saying the owners cited “a state of financial exigency due to continuing reductions in student enrollment” and the faculty members’ high salaries as reasons for their termination.

Both plaintiffs claim the owners have not proved the school is in a financial exigency, or state of emergency, and say the owners have ignored the requirements of their tenured statuses.

Continue reading

July 3, 2015 in Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Continue reading

July 3, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)