TaxProf Blog

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

Monday, February 19, 2018

TaxProf Blog Weekend Roundup

Sunday, February 18, 2018

WSJ: Admissions Officers Personally Deliver Acceptances To Applicants (Sometimes With A Dog)

ButlerWall Street Journal, Who’s at the Door? College Officials Delivering Your Acceptance in Person (Sometimes With a Dog):

Admissions officers are traveling hundreds of miles with a live animal to inform high-school seniors they have been accepted to a college—and to urge them to enroll. It’s not just the star athletes or scholarship winners who get the treatment. It is pretty much anyone, a tactic driven by competition to snag the declining number of college-bound high-school students.

One of the hardest working college salesmen is Trip, a 6-year-old English bulldog with doleful, dark eyes. His predecessors are retired.

On road trips, he paces himself with long naps in the back seat of the school’s car while it shuttles him from Butler University in Indiana to prospective students’ homes in Boston, Milwaukee, Orlando and Chicago. Occasionally he hitches an airplane ride if his visits coincide with road games for the school’s nationally ranked basketball team. ...

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February 18, 2018 in Legal Education | Permalink | Comments (4)

Religious Organizations Should Not Lose Their Tax-Exempt Status Based On Public Policy, Post-Obergefell

Sally Wagenmaker (Wagenmaker & Oberly, Chicago), Why Religious Organizations Shouldn't Lose Tax-Exempt Status Based on Public Policy, Post-Obergefell:

Since the U.S. Supreme Court issued its historic same-sex marriage decision in Obergefell v Hodges in June 2016, the question has been raised whether religiously-affiliated organizations could lose their Section 501(c)(3) tax-exempt status or not, based on the “fundamental public policy” doctrine as used in the Court’s 1983 decision in Bob Jones University v. United States. Several significant considerations come into play: the value and place of religious liberty freedoms within our country’s constitutional framework and shifting cultural context; the IRS’s role as arbiter of Section 501(c)(3) recognition; and the “tax subsidy” theory that accompanies tax-exempt status, particularly whether it should affect religious Section 501(c)(3) organizations.

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February 18, 2018 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Cincinnati Law School Dean's Son Subject Of Racist Taunts At High School Basketball Game

Cincinnati Enquirer:  We're All Better Than This Racist Crap Going on at Our Area High Schools, by Paul Daugherty:

Standing at the free throw line Friday night at Elder High School, St. Xavier senior basketball player Bobby Jefferson was no more than 30 feet from the Elder students who chanted this at him:

“He can’t read.’’

Later, Jefferson would also hear:

“(He) smokes crack.’’

And:

“(He’s) on welfare.’’ ...

For the record, Bobby Jefferson is an African-American, headed to Dartmouth College next fall. ...

What the heck is going on with us? What are we doing?

Have we suddenly lost our minds and misplaced our collective conscience?

I’ve lived here 30 years. Today is the first day I’m embarrassed about that.

First, we had kids in a recreational league wearing jerseys bearing the words “Knee Grow’’ and “Coon’’. Now, we have students at Elder, disgracing themselves, their families and their school. When might it stop, when do the angels of our better natures reappear?

Elder High School is better than this. Its students are better. Their parents who raised them are better, the city in which they live is better. We’re all better than the racist crap we’ve had to put up with from our high school kids the last few weeks. ...

Mina Jefferson, Bobby’s mother [and Associate Dean, Chief of Staff, and Director of the Center for Professional Development at the University of Cincinnati College of Law] was in the stands Friday night. She listened to the slurs for more than a half, until St. X coach Jimmy Lallathin beseeched the referees to do something. That’s when an Elder coach told the students to cool it.

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February 18, 2018 in Legal Education | Permalink | Comments (4)

The Top Five New Tax Papers

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

  1. [32,029 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1831 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [964 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [645 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College)
  5. [427 Downloads]  The Tax Lifecycle Of A Single Member LLC, by F. Philip Manns Jr. (Liberty) & Timothy M. Todd (Liberty)

February 18, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 17, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Treasury Proposes Repeal Of 298 Tax Regulations

RegsTreasury Proposes Repeal of Nearly 300 Outdated Tax Regulations:

The U.S. Department of the Treasury today proposed repealing 298 tax regulations that are unnecessary, duplicative or obsolete and force taxpayers to navigate needlessly complex or confusing rules. President Trump issued an Executive Order on April 21, 2017, directing Treasury to review tax regulations to ensure a simple, fair, efficient, and pro-growth tax system. Today’s actions are a direct result of that review.

“We continue our work to ensure that our tax regulatory system promotes economic growth,” said Secretary Steven T. Mnuchin. “These 298 regulations serve no useful purpose to taxpayers and we have proposed eliminating them. I look forward to continuing to build on our efforts to make the regulatory system more efficient and effective.”

The regulations proposed to be repealed fall into three categories:

  1. Regulations interpreting provisions of the Code that have been repealed;
  2. Regulations interpreting provisions that have been significantly revised and the existing regulations do not account for these revisions; and
  3. Regulations that are no longer applicable.

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February 17, 2018 in IRS News, Tax | Permalink | Comments (2)

Ave Maria Law School Is Now In Compliance With Accreditation Admissions Standard

Ave Maria Logo (2018)ABA Journal, ABA Removes Remedial Actions Requirements for Ave Maria School of Law:

Finding that Ave Maria School of Law is now in compliance with an accreditation standard addressing admissions, the council of the ABA’s Section of Legal Education and Admissions to the Bar has removed requirements of specific remedial actions.

The council decision was recently posted on the Legal Education Section’s website. Public notice about the law school’s compliance with Standard 501(a) and 501(b) was first given in August 2016, after the council affirmed an accreditation committee finding that the law school was not in compliance with the standard. ...

“The ABA seems to have decided that schools should not be admitting significant numbers of extremely high-risk students, which I have defined as students with an LSAT of 144 or below, with correspondingly low grades,” David Frakt, a Florida lawyer and a frequent critic of the accreditation process, told the ABA Journal. “I assume that when Ave Maria submitted its reliable plan to improve their admissions profile that they promised to bring their bottom 25 percent up to 145. Now that they have done that, there is no need to continue the interim monitoring.” ...

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February 17, 2018 in Legal Education | Permalink | Comments (2)

Leonard Silverstein, Founder Of The BNA Tax Management Portfolio Series, Dies At 96

SliversteinWashington Post, Leonard Silverstein, Washington Tax Lawyer and Arts Patron, Dies at 96:

Leonard L. Silverstein, a Washington lawyer and arts patron who started a series of prominent tax-law guidebooks and became a member of the city’s cultural and fundraising firmament, died Feb. 14 at his home in Bethesda, Md. He was 96. ...

As a young, Harvard-educated legal adviser to the Treasury Department, Mr. Silverstein helped shape the Internal Revenue Code of 1954, a massive overhaul of the federal income tax system. In 1959, he created Tax Management Porfolios, authoritative texts for the nation’s accounting firms and which today are part of the Bloomberg media empire.

The next year, he co-founded Silverstein and Mullens, a firm specializing in tax law and estate planning. In 2000, it became a division of what is now the Pittsburgh-based Buchanan Ingersoll & Rooney. Until his death, Mr. Silverstein worked at the merged operation. Among his clients were Fortune 500 companies in fields as disparate as aerospace and entertainment. ...

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February 17, 2018 in Obituaries, Tax | Permalink | Comments (1)

Friday, February 16, 2018

Lawsky Presents A Logic For Statutes Today At Richmond

Lawsky (2017)Sarah Lawsky (Northwestern) presents A Logic for Statutes, 21 Fla. Tax Rev. ___ (2018), at Richmond today as part of its Faculty Colloquy Series:

Case-based reasoning is, without question, a puzzle. When students are taught to “think like lawyers” in their first year of law school, they are taught case-based common-law reasoning. Books on legal reasoning are devoted almost entirely to the topic. How do courts reason from one case to the next? Is case-based reasoning reasoning from analogy? How should case-based reasoning be modeled? How can it be justified?

In contrast, rule-based legal reasoning (as exemplified in much statutory reasoning) is taken as simple in legal scholarship. Statutory interpretation — how to determine the meaning of words in a statute, the relevance of the lawmakers’ intent, and so forth — is much discussed, but there is little treatment of the structure of statutory reasoning once the meaning of the words is established. Once the meaning of terms is established, statutory reasoning is considered, roughly speaking, to be deductive reasoning.

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February 16, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Shaviro's A Requiem For The Destination-Based Cash Flow Tax

This week, Erin Scharff (Arizona State) reviews a new working paper by Daniel Shaviro (NYU), Goodbye To All That:  A Requiem for the Destination-Based Cash Flow Tax.  

Scharff (2017)In teaching tax policy, I tend to focus on the core tax policy ideas of efficiency, fairness, and administrability, and I explicitly side step questions of government spending.  In thinking about the 2017 tax legislation, and, especially after reading Shaviro’s latest working paper, I question whether such debates can be so neatly self-contained.  The story Shaviro tells of the demise of the Destination-Based Cash Flow Tax (DBCFT) proposal is, in part, a story about what happens when tax policy gets debated in that vacuum.  Policy debates overly-focused on the right choice of tax instrument inherently obscure the debate about revenue sufficiency and the potential need for multiple tax instruments. 

I was privileged to hear Shaviro present an earlier draft of this paper at this fall’s National Tax Association conference, before we all were quite certain where the 2017 tax legislation was heading (or whether it would head anywhere at all.)  In the paper (as in the presentation), Shaviro is quite critical of the DBCFT proposal.  For Shaviro, the chief advantage of the DBCFT was the packaging of the idea as corporate tax reform, and its failure to be adopted in 2017 suggests “wholly discarding the DBCFT as a discussion vehicle for its underlying policy ideas.” 

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February 16, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Villanova Hosts Colloquium Today On Tax And The Sharing Economy

Villanova Logo (2015)Villanova hosts a colloquium today on Tax and the Sharing Economy:

As described by the World Economic Forum, a “sharing economy” focuses on the sharing of underutilized assets, monetized or not, in ways that improve efficiency, sustainability and community. Well-known examples include Airbnb, Uber and Lyft.

The gathering of renowned scholars is designed to foster free-flowing discussion and to encourage fresh perspectives on challenging issues. Colloquium participants, led by Villanova Law professors Les Book and Joy Sabino Mullane, include:

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February 16, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Ciraolo Presents The Impact of Global Tax Enforcement Today At San Francisco

CiraolaCaroline D. Ciraolo (Kostelanetz & Fink, Washington, D.C.; former Acting Assistant Attorney, U.S. Department of Justice Tax Division) presents The Impact of Global Tax Enforcement at San Francisco today as part of the E. L. Wiegand Visiting Fellow Lecture Series:

Countries around the world are calculating their respective tax gaps and increasing their investment in civil tax enforcement as information regarding offshore tax evasion takes center stage with the surge of whistleblowers and data leaks. At the same time, law enforcement officials are reviewing information obtained from various sources to identify individuals and entities engaged in tax evasion and to pursue criminal investigations. With this looming threat of discovery, taxpayers are considering voluntary disclosure programs to avoid the increasingly severe consequences of non-compliance.

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February 16, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tenure Report Haiku

This is the time of year when tenure decisions get finalized at most institutions. Usually, law faculty vote their recommendations in the Fall semester and then the tenure packages work their way through the various levels of review. Final approval by the relevant governing body happens sooner or later during the Spring Semester, depending on how bulbously bureaucratic the institution is. It will likely happen here at Texas Tech later rather than sooner.

Here at Tech Law the law faculty recommended promotion and tenure for seven professors last fall, a record number. I was chair of the tenure committee for one of them, my colleague Robert Sherwin.

Rob’s a pretty amazing guy. In addition to serving as the Director of Tech Law’s Advocacy Programs, Rob personally coaches anywhere between six to ten advocacy teams a year. And he teaches doctrinal courses. And he is creating a serious body of scholarship on litigation subjects.

It’s the scholarship part that I want to focus on for just a paragraph. I am not sure that his scholarship would be fully appreciated at some institutions because it is heavily doctrinal. You can see for yourself at his SSRN page. But here at Tech Law we take a big-tent approach to scholarship and doctrinal is all right by us. Rob writes to help courts or legislatures solve problems in the law. That is a worthy enterprise. And one of Rob’s articles, a careful exploration of problematic language in anti-SLAPP legislation, led the National Conference of Commissioners on Uniform State Laws to select him as Reporter of the Drafting Committee on the Anti-SLAPP Legislation Act. Few of us academics get this kind of opportunity to have such a direct effect on law. The Tech Law faculty are quite proud of Rob for this.  Other faculties may not share that appreciation. They have a much narrower vision of what it means to be a legal scholar.  

So Rob’s tenure decision was never really in doubt. In fact, in writing Rob’s Tenure Report, each of the three members of his tenure committee vied with each other to see who could use the most superlative superlative to describe Rob’s teaching, scholarship, and service. This was the winner: “if contemporary moot court had a Nick Saban (the University of Alabama’s wildly successful football coach), it would be Rob Sherwin.”

When it came time for the faculty meeting, I was given the last slot to present Rob’s tenure report. That’s kinda like going 30th in the Giant Slalom. After the other six candidates were presented to the faculty, I decided enough was enough. So in lieu of the usual, I offered to summarize our report to the faculty in one of three forms: a haiku, a doggerel, or a limerick. Being the sophisticated faculty they are, my colleagues asked for the haiku.

It’s below the fold. 

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February 16, 2018 in Bryan Camp, Legal Education, Scholarship | Permalink | Comments (0)

IRS To Block Hedge Fund Tax Dodge In New Law

Bloomberg, New Hedge-Fund Tax Dodge Triggers Wild Rush Back Into Delaware:

Wall Street’s fast-money crowd is returning to well-trodden ground to elude Trump-era tax laws: Delaware.

Since late 2017, hedge fund managers have created numerous shell companies in the First State, corporate America’s favorite tax jurisdiction. These limited liability companies share a common goal: dodging new tax rules for carried-interest profits through a bit of deft legal paperwork.

Wall Street Journal, U.S. to Block Tax-Law Loophole on ‘Carried Interest’:

Treasury Secretary Steven Mnuchin said the government will act within two weeks to block a hedge-fund maneuver around part of the new tax law.

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February 16, 2018 in Tax | Permalink | Comments (0)

Thursday, February 15, 2018

Zucman Presents Tax Evasion And Inequality Today At UCLA

Zucman (2018)Gabriel Zucman (UC-Berkeley) presents Tax Evasion and Inequality (with Annette Alstadsæter (Norwegian University of Life Sciences) & Niels Johannesen (University of Copenhagen)) at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

This paper estimates the size and distribution of tax evasion. We combine random audits, tax amnesties, and leaks from offshore financial institutions matched to wealth records in Scandinavia. Tax evasion rises sharply with wealth: 3% of personal taxes are evaded on average, versus 25%–30% in the top 0.01% of the wealth distribution. A model of the supply of evasion services can explain this gradient. Taking tax evasion into account increases inequality substantially. After using tax amnesties, evaders do not seem to increase legal tax avoidance, suggesting that fighting evasion can allow governments to collect more taxes from the wealthy.

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February 15, 2018 | Permalink | Comments (0)

Polsky Presents Choice-of-Entity Decisions By Silicon Valley Start-Ups Today At Villanova

Polsky (2018)Gregg Polsky (Georgia) presents Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups at Villanova today as part of its John F. Scarpa Center on Law and Entrepreneurship speaker series:

Perhaps the most fundamental role of a business tax advisor is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most tax practitioners across the United States consistently recommend flow-through entities, such as LLCs and S corporations, to their clients. In contrast, a discrete group of highly sophisticated tax professionals, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially plausible explanations, all of which they ultimately conclude are not wholly persuasive. The puzzle therefore remains.

This article attempts to finally solve the puzzle by examining two factors that have been either vastly underappreciated or completely ignored in the existing literature.

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February 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Glogower Presents Taxing Inequality Today At Indiana

Glogower (2016)Ari Glogower (Ohio State) presents Taxing Inequality at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The argument proceeds in three main parts. The Article first interrogates the justifications in the literature for a wealth tax and introduces a new justification grounded in the relative economic power theory which explains how inequality generates social and political harm. This theory formalizes the problem of inequality and has specific implications for the way that economic inequality should be measured and constrained. In particular, this theory implies that economic inequality should be measured by differences in economic spending power during the taxing period.

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February 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Sanchirico Presents Optimal Redistributional Instruments In Tax Policy And Law & Economics Today At Duke

SanchiricoChris William Sanchirico (Pennsylvania) presents Optimal Redistributional Instruments in Tax Policy and Law & Economics at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

The literature on optimal redistributional instruments begins with the assumption that society has some preference for equality, leaving the precise degree unspecified. It then asks: How should society pursue that preference? More specifically, what kinds of policy instruments — whether categorized as “taxes,” “transfers,” “public goods,” “government programs,” “regulations,” or “legal rules” — should be informed by society’s distributional objectives? This paper reviews and assesses three strands of the literature on optimal redistributional instruments.

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February 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Political Discrimination In The Law Review Selection Process

Adam S. Chilton (Chicago ), Jonathan S. Masur (Chicago) & Kyle Rozema (Chicago), Political Discrimination in the Law Review Selection Process:

The career trajectories of law professors and the dissemination of knowledge depend on the publication decisions of law review editors. However, these publication decisions are shrouded in mystery, and little is known about the factors that affect them. In this article, we investigate one potentially important factor: political ideology. To do so, we match data on the political ideology of student editors from 15 top law reviews over a twenty-year period to data on the political ideology of the authors of accepted articles. We find that editors accept articles in part because of shared political ideology with authors. That is, conservative editors are more likely to accept articles written by conservative authors, and liberal editors are more likely to accept articles written by liberal authors.

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February 15, 2018 in Legal Education | Permalink | Comments (0)

Reagan’s ‘Party Of Ideas’ Is Down To Just One: Tax Cuts

New York Times op-ed:  Reagan’s ‘Party of Ideas’ Is Down to Just One: Tax Cuts, by Mike Lofgren (author, The Deep State: The Fall of the Constitution and the Rise of a Shadow Government (2017)):

It is a sign of our slide toward banana republic status when the president of the United States, leader of the world’s foremost democracy, publicly brands Democrats who failed to applaud his State of the Union address as un-American and treasonous. The largely partisan audience was fine with it.

What has become of the Republican Party, which I once served on Capitol Hill and which I now consider a dangerous extremist movement on a par with the ruling Fidesz party in neo-fascist Hungary? Where did its principles go? What became of Ronald Reagan’s “party of ideas”?

One by one, those ideas were tossed aside for expediency and power — except the tax cut. A time traveler from the Reagan era would no longer recognize the Republican Party, but most Republican politicians feel no embarrassment supporting policies they once condemned. ...

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February 15, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (3)

Bill Henderson Launches The Institute For The Future Of Law Practice

Bill Henderson (Indiana), The Institute for the Future of Law Practice:

I am pleased to introduce readers to the Institute for the Future of Law Practice (IFLP), a new nonprofit collaboration between law schools, law firms, corporate legal departments. ...

IFLP (“i-flip”) will be hosting training bootcamps in May 2018 in Chicago (at Northwestern Law) and Boulder (at Colorado Law). The bootcamps are designed to prep law students for sophisticated legal and business work settings. Each student admitted to the program is paired with a legal employer for either a 10-week summer internship or a 7-month field placement. All internships and field placements are paid. The IFLP program currently includes four law schools — NorthwesternColoradoIndiana, and Osgoode Hall (Toronto) — though the plan is to build an infrastructure that will support and serve a significantly larger number of law students, law schools, and legal employers. ...

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February 15, 2018 in Legal Education | Permalink | Comments (0)

Americans Who Owe > $50k In Back Taxes Will Lose Their Passports

Wednesday, February 14, 2018

Wells: Reform Of Corporate Distributions In Subchapter C

Bret Wells (Houston), Reform of Corporate Distributions in Subchapter C, 37 Va. Tax Rev. 365 (2018):

Subchapter C’s corporation distribution provisions contain significant complexity aimed at obsolete bail-out concerns that needlessly create schizophrenic outcomes in today’s context. Subchapter C’s corporation distribution provisions were designed in an era when dividends were taxed at a different rate than were long-term capital gains, but now in this era it is important to note that Section 1(h)(11) provides that dividends received by individuals generally are taxed at the same rate as long-term capital gains, and the American Taxpayer Relief Act of 2012 made this tax rate parity permanent. Thus, unlike most of the US income tax history, individuals now are entitled to receive the same preferential tax rate for qualified dividends as long-term capital gains. When one examines subchapter C’s provisions that deal with corporate distributions in light of this relatively new reality, the statutory picture reveals significant complexity aimed at obsolete bail-out concerns that now only serve to create schizophrenic outcomes in today’s context.

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February 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

California Law Firm Revenues, Lawyer Salaries Are Booming

California LawyerThe Recorder, California Firms Lead in Revenue, Demand Growth in 2017, Citi Says:

Law firm revenue was up in both Northern and Southern California in 2017, outpacing most other regions surveyed in a recent report from Citi Private Bank’s Law Firm Group.

The gross revenue for Northern California firms increased by 7.2 percent in 2017, which was the highest among the 11 geographic regions analyzed, said John Wilmouth, senior client adviser in Citi’s law firm group. Southern California firms saw gross revenue growth of 5.9 percent, good enough for fourth-best in the country when compared to other regions.

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February 14, 2018 in Legal Education | Permalink | Comments (0)

WSJ: The New Tax Law

ABA Approves Online JDs At Syracuse, Southwestern

Syracuse SouthwesternFollowing up on yesterday's post, ABA Proposes To Double (To 30) The Number Of Credits Law Students Can Earn Online, Including 10 For 1Ls

National Law Journal, ABA Set to Loosen Restrictions on Online Law Classes:

The [ABA Council of the Section of Legal Education and Admissions to the Bar] granted a variance this month to Syracuse University College of Law, which announced plans in 2016 to launch an online J.D. program. The ABA denied the school’s initial request for a variance, but the new approval means Syracuse can move forward with a planned launch in January 2019.

The program will combine live online lectures with self-paced online classes, several weeklong campus sessions and a legal externship, said Nina Kohn, associate dean for research at Syracuse. Students can complete their law degree over the course of 10 semesters.

Southwestern Law School Blog, ABA Grants Southwestern a Rare and Coveted Blended Education Variance:

Southwestern Law School announced today that the American Bar Association (ABA) granted the school a variance to add an ABA-accredited hybrid-online J.D. program to its curriculum.

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February 14, 2018 in Legal Education | Permalink | Comments (0)

Florida Offers 7-8 Graduate Tax Program 85% Tuition Scholarships To Serve As Student Editors Of The Florida Tax Review

UFFTRFollowing up on last week's post, Northwestern Offers 6-8 Graduate Tax Program Tuition Scholarships To Serve As Student Editors Of The Tax Lawyer:  Press Release, UF Law Tax Students Can Receive Up To 85% Tuition Discount as Editors of Florida Tax Review:

Students in the University of Florida Graduate Tax Program have the opportunity to receive up to an 85% tuition discount through a combination of tuition waivers and scholarship funds by becoming an editor of the Florida Tax Review.

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February 14, 2018 in Legal Education, Tax | Permalink | Comments (0)

Simkovic: Taxing Limited Liability

Michael Simkovic (USC), Limited Liability and the Known Unknown:

Limited liability is a double-edged sword. On the one hand, limited liability may help overcome investors’ risk aversion and facilitate capital formation and economic growth. On the other hand, limited liability is widely believed to contribute to excessive risk taking and externalization of losses to the public. The externalization problem can be mitigated imperfectly through existing mechanisms such as regulation, mandatory insurance, and minimum capital requirements. These mechanisms could be more effective if information asymmetries between industry and policymakers could be reduced. Private businesses will typically have better information about industry-specific risks than policymakers.

A charge for limited liability entities—resembling a corporate income tax but calibrated to risk levels—could have two salutary effects. First, a well-calibrated limited liability tax could help compensate the public fisc for risks and reduce externalization. Second, a limited liability tax could force private industry actors to reveal information to policymakers and regulators, thereby dynamically improving the public response to externalization risk.

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February 14, 2018 in Scholarship, Tax | Permalink | Comments (6)

8th Circuit Rejects Unsuccessful Iowa Legal Writing Faculty Candidate's Claim Of Discrimination Due To Her Conservative Views

WagnerFollowing up on my previous posts (links below):  Teresa MANNING, formerly known as Teresa R. Wagner, Plaintiff-Appellant v. Carolyn JONES, Dean, Iowa College of Law (in her official and individual capacities), Defendant-Appellee. Gail B. Agrawal, Dean, Iowa College of Law (in her official and individual capacities), Defendant, 875 F.3d 408 (8th Cir. 2017):

Teresa Manning repeatedly applied without success to teach legal analysis and writing at the University of Iowa College of Law. She contends that, during the process attending her first application, an associate dean advised her not to tell the faculty, only one of whom was a registered Republican, that a conservative law school had once offered her a full-time teaching position. Manning's résumé, meanwhile, made plain her affiliation with conservative groups. Claiming that the dean of the College of Law had rejected her applications due to political discrimination in violation of the First Amendment, Manning sued the dean under 42 U.S.C. § 1983.

This is our third pass at this case. See Wagner v. Jones, 664 F.3d 259 (8th Cir. 2011) (Wagner I); Wagner v. Jones, 758 F.3d 1030 (8th Cir. 2014) (Wagner II). After the second remand, Manning proceeded to trial before a jury, where the dean defended herself by asserting, among other things, that Manning's applications had been rejected on their merits. The jury found that Manning did not establish that the dean had discriminated against her on the basis of her politics, and the district court denied her motion for a new trial. On appeal, Manning contests only the denial of her new-trial motion, and we affirm.

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February 14, 2018 in Legal Education | Permalink | Comments (0)

WSJ: New Tax Law Haunts Companies That Did Inversion Deals

Wall Street Journal, New Tax Law Haunts Companies That Did ‘Inversion’ Deals:

The new U.S. tax law has something in store for some “inverted” companies, which signed mergers overseas that lowered their U.S. taxes: higher taxes.

Companies that engineered so-called inversion deals in recent years have been able to reduce their tax rates and take certain deductions by shifting their tax homes to other nations. Now, provisions in the new tax code restrict some of those deductions, like the interest payments American subsidiaries pay on loans from overseas parents, according to tax experts and companies. ...

Overall, the new restrictions are estimated to raise tens of billions of dollars in tax revenue, though not all of it will come from inverted companies. Tax experts and companies say the law will reduce the advantages of the corporate relocations, but probably not enough to bring companies back to the U.S.

Top 10

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February 14, 2018 in Tax | Permalink | Comments (0)

Tuesday, February 13, 2018

Williamson Presents Why Americans Are Proud To Pay Taxes Today at NYU

Read My LipsVanessa S. Williamson (Brookings Institution) presents Read My Lips: Why Americans Are Proud to Pay Taxes (Princeton University Press 2017) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Conventional wisdom holds that Americans hate taxes. But the conventional wisdom is wrong. Bringing together national survey data with in-depth interviews, Read My Lips presents a surprising picture of tax attitudes in the United States. Vanessa Williamson demonstrates that Americans view taxpaying as a civic responsibility and a moral obligation. But they worry that others are shirking their duties, in part because the experience of taxpaying misleads Americans about who pays taxes and how much. Perceived "loopholes" convince many income tax filers that a flat tax might actually raise taxes on the rich, and the relative invisibility of the sales and payroll taxes encourages many to underestimate the sizable tax contributions made by poor and working people.

Americans see being a taxpayer as a role worthy of pride and respect, a sign that one is a contributing member of the community and the nation. For this reason, the belief that many Americans are not paying their share is deeply corrosive to the social fabric. The widespread misperception that immigrants, the poor, and working-class families pay little or no taxes substantially reduces public support for progressive spending programs and undercuts the political standing of low-income people. At the same time, the belief that the wealthy pay less than their share diminishes confidence that the political process represents most people.

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February 13, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Trump Tax Cut: The Art Of The Scam

New York Times op-ed:  The Art of the Scam, by Mark Schmitt (New America):

Most American workers this month will see their take-home pay go up, some a little and a few quite a bit, as the new tax act takes effect and less money is withheld for federal income taxes.

But for many, the gift will be short-lived. Because the law was rushed and written in a partisan frenzy, withholding may not be accurate and you might owe money to the I.R.S. next year. You might even be advised to file new forms so that more money is withheld — and then the forms and withholding amounts are likely to change again later in the year and then again every year thereafter as the cuts for individuals head toward expiration.

This messy uncertainty, not abstractions like an increase in the federal deficit, will be the lived experience of Trump economic policy for most American households. It might seem like just a bureaucratic complication, but this episode could point progressives toward a persuasive economic message, one that reflects the economic realities of the middle class and the striving of people in struggling small communities as well as those in tech-driven metropolises.

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February 13, 2018 in Tax | Permalink | Comments (2)

FBI, IRS Raid Dallas Offices Of Tax Lawyer Joe Garza

Garza 2Dallas Morning News, FBI and IRS Raid Dallas Offices of Tax Planning Attorney, Say Neighboring Tenants:

A team of FBI and IRS agents on Tuesday searched a North Dallas office building, authorities said. ... Brint Ryan, who has an office in the building, said about 40 agents were at the offices of Garza & Harris.

Joe B. Garza is a Dallas tax planning attorney known for his “aggressive” tax shelters.  ... Garza’s website says he has negotiated and closed “more than $300 million of debt transactions” and “over $1 billion of tax exempt bond transactions as bond counsel for the state of Texas.” ...

But Garza’s promotion of certain shelters has resulted in costly adverse tax rulings against his clients, according to court records. Garza promoted and sold to clients a variety of the notorious “Son of Boss” tax shelter, which the IRS ruled was abusive if used to create artificial tax losses that could offset other income, according to federal court records. 

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February 13, 2018 in Tax | Permalink | Comments (0)

ABA Proposes To Double (To 30) The Number Of Credits Law Students Can Earn Online, Including 10 For 1Ls

ABA Section On Legal Education (2016)ABA Accreditor For Law Schools Recommends Expanding Distance Learning Opportunities:

The Council of the Section of Legal Education and Admissions to the Bar, the American Bar Association’s accreditor of law schools, is proposing a new rule for distance education that would nearly double the number of credits law students can earn in distance learning courses before graduating. [Summary of Actions of the Section’s Council at its Meeting February 9 10, 2018]

Under the proposal, Standard 306, which concerns distance learning allowed in J.D. programs, would change from an absolute number to a percentage of whatever credits a law school requires for graduation. If adopted, law schools could allow one-third of its required credits be taught online. The current rule limits the number of such credits to 15.

ABA standards now require at least 83 credit hours for graduation although most schools require more, with the usual range being between 86 and 90 credits. As proposed, the revised standard would effectively raise the number of credits for distance learning to at least 28 credit hours and, in many cases, 30 credit hours. Those courses would continue to be subject to other requirements of the standards.

In addition, the proposal would change the current standard’s prohibition on distance learning courses in the first year and allow a school to include up to 10 credits of online courses in the required 1L curriculum.

The proposal would retain the current provision that a course does not become a distance learning course for counting purposes unless more than one-third of the work in the course is done online. Law schools could still be granted variances for more extensive online learning. Currently, three law schools have been granted variances for experimental distance learning programs – Mitchell Hamline School of Law, Southwestern Law School and, during the closed session of this council meeting, Syracuse University College of Law. To date, only Mitchell Hamline has enrolled students in its program.

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February 13, 2018 in Legal Education | Permalink | Comments (2)

Bill Belichick's Five Leadership Lessons

BelichekCNBC, 5 Lessons Bill Belichick's New England Patriots Can Teach You About Leadership:

After following this team for 15 years, there are five lessons from this organization that I continue to embrace in my daily life.

Lesson #1:  Do your job. But stay flexible enough to take on new jobs quickly 
"Do your job" is something Belichick says constantly to refocus his team's efforts on the field. It means complete your assignments, execute to the best of your ability and trust that your teammates will do the same. In a company, that is the only way a team can be successful.

But the Patriots take it a step further. With the Patriots your job may change from week to week. ...

In life, the only thing that is certain in the future is that things will change.

The Patriots are built to embrace change. Your team should be too. 

Lesson #2:  Play the long game ...
When evaluating players, Belichick cares only about their future potential production. He often cuts popular veterans and replaces them with more cost-effective options that will benefit the team for a longer period of time. ...

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February 13, 2018 in Legal Education | Permalink | Comments (2)

Former Yale President: CEOs Should Invest Tax Cut Windfall In Workers' Human Capital, Not Bonuses And Buybacks

New York Times op-ed:  How C.E.O.s Should Spend Their Tax Cuts, by Richard Levin (Former President, Yale: Former CEO, Coursera):

Companies are wrestling with how to allocate the windfall from the recent tax act. It’s a nice problem to have.

Home Depot, JetBlue and Pfizer have announced plans to pass tax savings on to shareholders through stock buybacks. Apple, AT&T, Comcast, Verizon and Walt Disney are distributing one-time bonuses to their employees. BNY Mellon, FedEx and JPMorgan Chase are raising wages. Walmart and US Bancorp are giving bonuses and raising wages. Boeing, Southwest Airlines and Wells Fargo have increased their charitable donations. And a few companies, perhaps fewer than the White House expected, have joined with Amazon to announce ambitious programs of capital investment that will create jobs and increase productivity.

Neglected in the public discussion is yet another strategy, with large potential benefits for every company and for the nation as a whole: investing in human capital. Lost in the noise was Boeing’s announcement that it will spend $100 million on work force development, training and education, and Disney’s investment of $50 million to cover tuition payments for its hourly employees. ...

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February 13, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (4)

Western Michigan-Cooley Seeks Confidential ABA Law School Accreditation Records Dating Back To 2010

Thomas Cooley Logo (2017)Following up on my previous posts (links below):  Law.com, Cooley Law School Seeks Confidential ABA Accreditation Records:

A Michigan law school suing the American Bar Association over its uncertain accreditation status wants access to years of internal records pertaining to how the ABA evaluates law schools.

But the ABA is pushing back, arguing in court papers that releasing such an extensive array of confidential records is unwarranted and will undermine its accreditation efforts and complicate its law school oversight.

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February 13, 2018 in Legal Education | Permalink | Comments (0)

$10,000 Prize For Best Employee Benefits Simplification Proposal

First Annual Employee Benefits Simplification Prize:

The American College of Employee Benefits Counsel hereby invites academics, practitioners, and any others interested in the employee benefits system to submit proposals to simplify employee benefits law. The $10,000 prize for the winning submission will be awarded at the College’s annual black-tie dinner to be held in Fall 2018. For a submission to be eligible for the prize, it must be submitted, in accordance with the procedures outlined below, on or before April 1, 2018.

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February 13, 2018 in Tax | Permalink | Comments (0)

Monday, February 12, 2018

Thomas Presents Taxing The Gig Economy Today At BYU

Thomas (2017)Kathleen Delaney Thomas (North Carolina) presents Taxing the Gig Economy,  166 U. Pa. L. Rev. ___ (2017), at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce compliance burdens for this new generation of business owners, while simultaneously enhancing the government’s ability to collect tax revenue.

First, Congress should create a “non-employee withholding” regime that would allow online platform companies such as Uber to withhold taxes for their workers without being classified as employers. Second, the Article proposes a “standard business deduction” for gig workers, which would eliminate the need to track and report business expenses.

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February 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Bank Presents When Did Tax Avoidance Become Respectable? Today At UC-Irvine

Bank (2016)Steven Bank (UCLA) presents When Did Tax Avoidance Become Respectable?, 70 Tax L. Rev. ___ (2018), at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

No matter how many tax scandals are revealed in the media — and there have been many in the past year, involving a diverse set of taxpayers ranging from Donald Trump to Apple — what is most remarkable is that, by and large, the public has considered them relatively non-scandalous. This was not always the case. During the 1930s, even the most innocuous tax avoidance maneuvers, such as buying tax-exempt bonds, were attacked as morally suspect. When did that change and why? This Article offers a novel attempt to gauge the respectability of tax avoidance — using a unique, hand-collected dataset of newspaper advertisements for tax planning services in prominent national papers between 1930 and 1970 — and concludes that a shift occurred after World War II. The Article then explains the reason for this shift, suggesting that a combination of extremely high rates, a broadened base of taxpayers subject to that rate, and a deterioration of the wartime consensus for the rate structure laid the foundation for the respectability of tax avoidance in the 1950s and 1960s.

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February 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Jones Day Is Again The #1 U.S. Law Firm Brand

Jones DayAcritas' US Law Firm Brand Index 2018:

Acritas’ Seventh AannualUS Law Firm Brand Index Sees Jones Day Extend Its Lead Against the Market, Increasing the Gap Against the Rest of the Leading Brands to an Extent Not Seen Since 2014.

Acritas’ US Law Firm Brand Index 2018 is compiled from analysis of an extract of data from the Sharplegal US survey dataset. All data is derived from 601 interviews with respondents, in $1 billion+ revenue organizations across the US, who have senior responsibility for buying legal services. It also includes the views of a further 176 non-US-based senior counsel who were asked which firms they used for their US-based legal needs.

Jones Day is the strongest law firm brand in the US for the second consecutive year after surpassing five-year leader Skadden last year. While Skadden has strengthened its brand this year, Jones Day has seen a larger gain and increased its lead on the market.

Here are the Top 10 (the full Top 20 are here):

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February 12, 2018 | Permalink | Comments (0)

Prosecutors Admit They Are No Closer To Arresting Other Suspects In Dan Markel's Murder

SuspectsWTXL, State Attorney Pushing to Try Dan Markel Murder Suspects Together:

Two suspects in the murder of FSU professor Dan Markel had their first appearances Friday morning, facing new charges. ...

"I would like to try them together. I do intend to move forward on that. I don't know if I'll be successful with that," said Georgia Cappleman, the assistant state attorney. "In fact, the judge has indicated a little bit that I may be not be, so I don't know the answer to that question, but we'll leave that up to the court."

The judge set bond for both defendants at $200,000 each, despite the objection of Garcia's attorney.

Prosecutors say the new charges don't indicate they're any closer to arresting anyone else.

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February 12, 2018 in Legal Education | Permalink | Comments (0)

Lesson From The Tax Court: Arguments Are Not Evidence

Tax Court (2017)One common error my students make is to confuse asserting an argument with supporting the argument. For example, a student on my Civil Procedure exam might write “We will argue that the Plaintiff’s domicile is in Texas and not Oklahoma.” That sentence tells me only that an argument exists. It does not support the argument with an explanation about why Plaintiff’s domicile might be thought to be in Texas. I try to teach my students they must connect assertions with the evidence necessary to show why the assertions are true. So I feel like a failure when I read exam answers like that. I think most profs have similar feelings when grading.

Lawyers sometimes make a similar error when representing clients in court: they make assertions and even spin a plausible story, but neglect to support those assertions or the story with credible evidence. To be fair, sometimes an attorney has no choice: the client may simply not have provided the needed information, and the attorney must nonetheless argue something! But arguments are not evidence.

Last week’s decision in Brandon Brown and Christi Cloaninger Brown v. Commissioner, T.C. Sum. Op. 2018-6 (Feb. 5, 2018), teaches this lesson. Sure, it’s “just” an S case, but even if those cases are not formal precedent, they can still teach valuable lessons. Here, the case is also a nice illustration of when it makes sense to use the §7463 Small Case procedures and how the burden shift in §7491(a) can sometimes actually be important.

I’ll consider each lesson below the fold.

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February 12, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (0)

2018 Applicant Pool Projection Update: Good News For Highly-Ranked Law Schools

Applicant Pool Projection Remains at 61,000 to 63,000

Two months ago, I posted a blog with projections for the 2018 application cycle based on the initial Current Volume Report from the LSAC. I am writing now to update the applicant pool projection and provide some further analysis regarding the composition of the applicant pool.

The applicant pool remains up nearly 10% over last year as of late January. As of January 19, there were 29,287 applicants at a point in time when 48% of the final applicant count had been received last year. That extrapolates to approximately 61,000 applicants. As of February 3, there were 35,974 applicants at a point in time when 58% of the final applicant count had been received last year. That extrapolates to approximately 62,000 applicants. So, at the moment, we probably still can anticipate a total applicant pool for the year in a range from 61,000 to perhaps 63,000, depending upon exactly how things unfold over the coming months.

A total applicant pool of 61,000-63,000 would be the largest applicant volume since the 2011-2012 admissions cycle, which saw a total applicant pool of roughly 67,900. For the last four years, the applicant pool has hovered around 55,000-56,000. (Note that due to changes in LSAC reporting on total applicant pool starting in 2016, the comparisons with prior years are not exactly apples to apples.)

Fall 2018 First-Year Class May Be 40,000-41,000

If the percentage of applicants who become matriculants remains around 66% for the current admissions cycle (roughly the average over the last several years as show in Table 1), the entering class in fall 2018 would be between 40,000 and 41,000 first-year students (up roughly 10%).

Improvement in Strength of Applicant Pool (and Matriculants)

While the increasing size of the applicant pool is certainly good news for law schools, for highly-ranked law schools there is some even better news buried in the details of the Current Volume Report. From 2010 to 2017, while the overall applicant volume declined from roughly 87,900 to roughly 56,000, the “composition” of the entering class profile also shifted. During this period, the percentage of applicants and matriculants with a high LSAT of 165 or higher declined, with the percentage of applicants dropping from over 14% to less than 12%, and the percentage of matriculants dropping from just over 18% to just over 15%.

TABLE 1 -- Percentage of Applicants and Matriculants with a High LSAT Score of 165 or Higher from 2010-2017 Based on National Decision Profile Data

Admis. Cycle

Total Apps.

Apps. at 165 and Higher

% of Apps. at 165 or Higher

Total Matrics

Matrics as % of Apps.

Matrics at 165 and Higher

Matrics at 165 or Higher as % of Apps. at 165 or Higher

% of Matrics at 165 or Higher

2009-10

87900

12177

13.9%

52500

59.7%

9477

77.8%

18.1%

2010-11

78500

11190

14.3%

48700

62%

8952

80%

18.4%

2011-12

67900

9226

13.6%

44500

65.5%

7571

82%

17%

2012-13

59400

7532

12.7%

39700

66.8%

6054

80.4%

15.2%

2013-14

55700

7577

13.6%

37900

68%

6189

81.7%

16.3%

2014-15

54500

6667

12.2%

37100

68.1%

5505

82.6%

14.8%

2015-16

56500

7240

12.8%

37100

65.7%

5780

79.8%

15.5%

2016-17

56200

6546

11.6%

37400

66.5%

5688

86.9%

15.2%

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February 12, 2018 in Jerry Organ, Law School Rankings, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1740: Former AG Eric Holder Says DOJ Should Not Have Apologized For IRS Targeting Of Tea Party Groups

IRS Logo 2Following up on my previous posts:

Washington Times, Eric Holder: DOJ Wrong to Apologize to Tea Party Groups For IRS Scandal:

Former Attorney General Eric H. Holder Jr. said the Trump administration was wrong to have apologized to tea party groups snared in the IRS’s targeting scandal, saying it was another example of the new team undercutting career people at the Justice Department who’d initially cleared the IRS of wrongdoing. “That apology was unnecessary, unfounded and inconsistent, it seems to me, with the responsibilities that somebody who would seek to lead the Justice Department should have done,” Mr. Holder said.

He’d ordered a criminal probe into the IRS’s handling of tea party applications after the 2013 revelation by an inspector general that the tax agency had subjected conservative groups to intrusive and inappropriate scrutiny when they applied for nonprofit status.

That probe eventually cleared the IRS, saying that while there was bungling, there was no ill intent. the probe specifically cleared former IRS senior executive Lois G. Lerner, saying rather than a problem, she was actually a hero, reporting bad practices when she spotted them.

The Justice Department reversed that finding, though, in settlements reached with tea party groups over the last year that singled Ms. Lerner out as having approved of the intrusive behavior and yet hidden the practices from her supervisors in Washington.

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February 12, 2018 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

TaxProf Blog Weekend Roundup

Sunday, February 11, 2018

Anderson: A New Method Of Law Faculty Compensation — Scholarly Residuals From Citations

Robert Anderson (Pepperdine), Scholarly Residuals for Faculty Compensation:

In many law schools and other university departments, faculty are recruited, evaluated, and granted tenure largely based on their research productivity and influence. That system works reasonably well to motivate faculty members prior to tenure, but degrades after that. The best faculty members often are recruited by other institutions and have little incentive to stay other than a "match" by the home institution. Some other faculty members embark on a decades-long "transition" to retirement. One problem is that the compensation of faculty is often not adjusted directly, regularly, and contemporaneously according to scholarly performance to create optimal incentives to maximize output and tie faculty members to the original institution.

In this post, I outline a proposal for compensating faculty based on scholarly productivity and influence based on a "scholarly residuals" model. The model is loosely based on the residuals concept in the entertainment industry, compensating faculty each time their work is cited as creators and performers in films and TV shows are compensated when the film or show subsequently appears. The proposed system will (1) create strong monetary incentives for performance, (2) tie compensation more transparently to performance, and (3) enhance a school's ability to retain productive faculty members. Although there is merit in also tying compensation to teaching performance and service responsibilities, I leave those matters aside in this post. ...

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February 11, 2018 in Legal Education, Scholarship | Permalink | Comments (9)