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Thursday, November 6, 2014

Toobin: Law Schools and the Legal One Percent

New Yorker (2014)The New Yorker:  The Legal One Per Cent, by Jeffrey Toobin:

After every recession since the Second World War, the legal profession swiftly and robustly recovered. Not this time. The market for lawyers shrank following the post-2008 recession, and no one thinks that it’s coming all the way back. What’s happened in the legal world represents a twist on developments in the larger economy. In law, as in the nation, the rich are getting richer and the poor are getting poorer. With lawyers, though, it’s the system of professional education that’s directly contributing to inequality.

In the legal world, the haves are doing better than fine. In 1985, average profits per partner in The American Lawyer’s list of leading law firms was $309,000 ($623,000 in current dollars); today, the profits per partner for roughly the same group is about $1.5 million. These numbers hide an even greater disparity. Those at the very top of the pyramid—firms such as Wachtell, Lipton, Rosen & Katz; Quinn Emanuel Urquhart & Sullivan; Cravath, Swain & Moore; and a handful of others—are thriving as never before, with annual profits per partner in the multimillions.

But those at the bottom of the pyramid—recent law-school graduates—are struggling. A recent article in The Atlantic recited the grim numbers: “­More than 180 of the 200 US law schools are unable to find jobs for more than 80% of their graduates.” Median starting salaries for those who do find work are down by seventeen per cent, and more than a third of graduates cannot find full-time employment.

The rational response to economic developments of this kind would be straightforward: in light of the plunging demand for new lawyers, there should be fewer law students attending fewer law schools. And, indeed, the number of people taking the LSAT has dropped by nearly forty per cent in just four years, as have law-school-application rates. The number of students starting law school has fallen by about fourteen per cent over roughly the same period. In other words, many of these prospective students are behaving as rational economic actors—steering away from a business with grim employment prospects.>/p>

But here’s where the perverse economics of legal education come in. Law schools continue to exploit the shrinking numbers of students whom they can persuade to apply. ...

 

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November 6, 2014 in Legal Education | Permalink | Comments (4)

Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

International Consortium of Investigative Journalists, Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg:

Pepsi, IKEA, FedEx and 340 other international companies have secured secret deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny European duchy, leaked documents show.

These companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, according to a review of nearly 28,000 pages of confidential documents conducted by the International Consortium of Investigative Journalists and a team of more than 80 journalists from 26 countries.

Big companies can book big tax savings by creating complicated accounting and legal structures that move profits to low-tax Luxembourg from higher-tax countries where they’re headquartered or do lots of business. In some instances, the leaked records indicate, companies have enjoyed effective tax rates of less than 1 percent on the profits they’ve shuffled into Luxembourg.

The leaked documents reviewed by ICIJ journalists include hundreds of private tax rulings – sometimes known as “comfort letters” – that Luxembourg provides to corporations seeking favorable tax treatment.

(Hat Tip: Bruce Bartlett, Mike Talbert.)

November 6, 2014 in Tax | Permalink | Comments (0)

Hayashi: Property Taxes and Their Limits: Evidence from New York City

Andrew T. Hayashi (Virginia), Property Taxes and Their Limits: Evidence from New York City, 26 Stan. L. & Pol'y Rev. 33 (2014):

I report evidence from New York City that property assessment caps on small residential properties represent a significant tax benefit that accrues to the most valuable properties and the wealthiest neighborhoods. Moreover, rather than benefiting the long-time homeowners on fixed incomes who are their putative targets, the largest benefits go to the properties that are most likely to have been recently sold and to be located in neighborhoods where cash incomes have increased the most.

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

The Earned Income Tax Credit and the Well-Being of American Families

Hilary W. Hoynes (UC-Berkeley), A Revolution in Poverty Policy: The Earned Income Tax Credit and the Well-Being of American Families, in Pathways: A Magazine on Poverty, Inequality, and Social Policy (Summer 2014):

EITC Cover 2Over the past 20 years, the safety net for families with children in the United States has been fundamentally transformed. The 1996 welfare reform led to a dramatic reduction in the amount of state cash assistance and to the elimination of the Aid to Families with Dependent Children (AFDC) program. At the same time, the amount of cash assistance given through the U.S. tax system increased substantially with the Earned Income Tax Credit (EITC).

The net result is an almost complete shift in the U.S. safety net for low-income families with children from out-of-work assistance to in-work assistance. In the midst of the slow recovery from the Great Recession, the EITC is now the largest cash transfer program for low-income families with children. The EITC cost roughly $59 billion in 2009, as compared with the $9 billion in Temporary Assistance to Needy Families (TANF) cash payments from the program that replaced AFDC.

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November 6, 2014 in Scholarship, Tax | Permalink | Comments (1)

TIGTA: Inadequate Inventory Controls Over Employee Mobile Devices Cost IRS Millions

TIGTA The Treasury Inspector General for Tax Administration yesterday released Wireless Telecommunication Device Inventory Control Weaknesses Resulted in Inaccurate Inventory Records and Unsupported Service Fees (2014-10-075):

In Fiscal Year 2013, the IRS spent more than $13.7 million on wireless telecommunication devices and maintained an inventory of more than 49,000 devices reported as being in use. Effective controls over the assignment of and inventory accounting for these devices is important to ensure proper stewardship of Government funds.

TIGTA’s previous work found that IRS processes for assigning and monitoring the use of devices were not adequate to ensure that employees have a business need for the devices. In addition, prior work found that the IRS paid for thousands of devices that were unused. The overall objective of this review was to assess the efficiency and effectiveness of the IRS’s inventory control for wireless aircards, cellular phones, and BlackBerry® smartphone devices.

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November 6, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

'Throwing Furniture Into the Fireplace to Keep Warm' Is Not a Viable Law School Survival Strategy

Thomas Jefferson LogoFollowing up on yesterday's post, NY Times: 'A Troubled Law School Is Like Dracula: Hard to Kill':  Steven J. Harper (Northwestern), Bullet Dodged? Or Redirected Toward You?:

For the past six months, Thomas Jefferson School of Law in San Diego seemed poised to become the first ABA-accredited law school to fail since the Great Recession began. For anyone paying attention to employment trends in the legal sector, the passage of six years without a law school closing somewhere is itself remarkable. It also says much about market dysfunction in legal education.

In his November 5 column in the New York Times, University of California-Berkeley law professor Steven Davidoff Solomon has a different view. Solomon argues that recent enrollment declines prove that a functioning market has corrected itself: “[T]he bottom is almost here for law schools. This is how economics works: Markets tend to overshoot on the way up, and down.”

Solomon urges that the proper course is to keep marginal law schools such as Thomas Jefferson alive for a while “and see what happens.” I disagree. ...

Throwing furniture into the fireplace to keep the house warm is not a viable long-run survival strategy. Consider future students and their willingness to borrow as the “furniture” and you have a picture of the Thomas Jefferson School of Law’s business plan.

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November 6, 2014 in Legal Education | Permalink | Comments (15)

Bar, Law Schools Try to Apply Brakes to NY's Rush to Adopt Uniform Bar Exam

New York Law Journal, Don't Rush Adoption of New Bar Exam, State Bar Cautions:

Citing serious concerns about a "rush" to adopt a nationally standardized bar exam, the New York State Bar Association is recommending that the court system delay the decision on adopting the Uniform Bar Exam (UBE) to allow further study on bar pass rates and the impact on test takers, particularly minority groups.

The state bar is also recommending that if the court system adopts the UBE or makes other major changes to the test, that changes be phased in with "fair advance and appropriate notice" to test takers. Specifically, the state bar seeks a two-year reprieve of the proposed change, if it's adopted, effectively delaying a new exam until 2017.

Further, the bar, during Saturday's House of Delegates meeting (Watch Webcast), authorized its president to take whatever action is necessary to ensure the revised bar exam does not take effect next summer.

The state court system last month circulated proposed rules on adopting the UBE to replace the current New York bar exam, starting in July 2015 (NYLJ, Oct. 7).

While the New York bar exam would retain a section specifically about New York law, the bulk of the two-day test would be the UBE, prepared by the National Conference of Bar Examiners, if the state Court of Appeals adopts the change.

Fourteen other states, mostly west of the Mississippi, use the UBE as the basis for their bar examinations. New York would be the first of the largest and most influential states to use the test.

UBE

The proposal would require all candidates to take the UBE, plus take and pass a separate New York law exam consisting of 50 New York-specific multiple choice questions given on the second day of the exam. It also would eliminate the five essay questions that test knowledge of New York-specific law in favor of the UBE essays.

Committee on Legal Education and Admission to the Bar,  Report of the New York State Board of Law Examiners  (BOLE) Proposed Change in New York to the Uniform Bar Exam:

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November 6, 2014 in Legal Education | Permalink | Comments (0)

Bloomberg BNA & KPMG Host Free Webcast Today on The Elections: What’s Next for U.S. Tax Policy?

CaptureBloomberg BNA and KPMG hoast a free webcast today (9:00 am- 12:30 pm EST) on The Elections: What’s Next for U.S. Tax?:

Tax extenders have languished for months and tax reform even longer. The discussion on corporate inversions persists. The OECD continues to move forward with the BEPS project. And ever-present budgetary matters, including the looming debt ceiling debate await action. You need to know what’s next after November 4. 

  • John Buckley (Former Chief of Staff, Joint Committee on Taxation)
  • George Callas (Majority Staff Director, Ways & Means Subcommittee on Select Revenue Measures)
  • Aruna Kalyanam (Democratic Tax Counsel, Ways & Means Subcommittee on Select Revenue Measures)
  • Kenneth Kies (Former Staff Director, Joint Committee on Taxation)
  • Cathy Koch (Chief Advisor to the Majority Leader, Tax and Economic Policy Committee)
  • Jim Lyons (Republican Tax Counsel, Senate Finance Committee)
  • Karen McAfee (Democratic Chief Tax Counsel, Ways & Means Committee)
  • Todd Metcalf (Democratic Chief Tax Counsel, Senate Finance Committee)
  • Warren Payne (Majority Policy Director, Ways & Means Committee)
  • Mark Prater (Deputy Staff Director, Republican Chief Tax Counsel, Senate Finance Committee)
  • Robert Stack (Deputy Assistant Secretary for Tax Policy, U.S. Treasury Department)
  • Russell Sullivan (Former Staff Director, Senate Finance Committee)

November 6, 2014 in Conferences, Tax | Permalink | Comments (0)

WSJ: Compliance Jobs Draw Law Grads

Wall Street Journal, Compliance Jobs Draw Law Grads:

As the number of jobs open for law-school graduates in big law firms has shrunk, some of these graduates are turning to careers in the growing area of compliance. “You see a lot of banks and companies ramping up compliance programs, and that presents a great opportunity for young lawyers,” said David Kelley, a partner at law firm Cahill Gordon. ...

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November 6, 2014 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 546

IRS Logo 2Forbes, IRS Memo Claims Forbes Story Influenced Tax Exempt Decision Involving Billionaire, by Janet Novack:

A newly uncovered Internal Revenue Service memo lends support to billionaire investor Peter R. Kellogg’s claim that the IRS tax exempt division may have improperly taken press coverage –and specifically a Forbes cover story–into account before making a decision that cost him a bundle.

Kellogg K +0.22% and IAT Reinsurance Co. Ltd, the Bermuda-based insurance company his family owns, are suing the IRS for refunds of $186 million in taxes and interest they paid after the IRS revoked IAT’s qualification as a tax exempt 501(c)(15) insurance company retroactively. The lead of a March 2001 Forbes cover story on the proliferation of edgy tax shelters exposed Kellogg’s use of IAT to shield hundreds of millions in capital gains from tax. At that time, promoters were pushing the 501(c)(15) ploy to small business owners, particularly car dealers, as a tax shelter. After the Forbes story appeared, the IRS listed the Producer Owned Reinsurance Company (PORC) as a potentially abusive tax shelter and began an enforcement project.

The surprising IRS memo is disclosed in filings in the U.S. Court of Federal Claims where Kellogg and the government are battling over whether internal IRS documents and IRS officials’ thought processes and motivations are subject to discovery and can be used as evidence in his refund suits. The memo, a January 2010 Appeals Case Memorandum (ACM) from three IRS appeals officers, argues the IRS should reconsider the Technical Advice Memoranda (TAMs) that retroactively revoked IAT’s tax exemption and that of another Kellogg owned insurance company.

The ACM asserts that originally the TAMs were favorable to Kellogg and that then Tax Exempt Commissioner Steven Miller was persuaded “to go adverse because of the ramifications” to the PORC project “to no-change the very taxpayer (Kellogg) that started this project because of the Forbes article.” The memo adds: “We believe a `fresh-look’ is needed as to the facts of these cases in applying the laws as is without regard to the outside publicity.’’

Miller went on to become Acting IRS Commissioner and resigned from the agency in May 2013 amid the ongoing controversy over IRS targeting of Tea Party and certain other groups for extra scrutiny in the tax exemption process. Internal IRS documents suggest that Tea Party groups were first flagged because of media attention to political groups’ use of the 501(c)(4) exemption. Lois Lerner, a central figure in the exempt scandal who has been held in contempt of Congress by the Republican controlled House, was particularly sensitive to criticism that the IRS was letting 501(c)(4) organizations get away with too much political activity.

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November 6, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, November 5, 2014

Tax Reform After the Midterm Election

Brookings Institution:  Tax Reform: One Shining Moment or “Blah, Blah, Blah”, by William G. Gale:

Given that prospects for tax reform were virtually nil before the election, the Republican recapture of the Senate has to have made prospects for tax reform better. But I still have the strong sense that tax reform will be a tough slog in the next Congress. ...

Rather than actually enacting tax reform, it seems much more likely that the sides will fight about whether to use dynamic scoring methods that account for macro economic feedback in response to tax changes. While it may seem obvious that the Republicans can implement such changes, given they will control both houses of Congress, it is nowhere near a slam dunk, as there appear to be a number of procedural obstacles that have to be dealt with. And dynamic scoring raises as many economic issues as it resolves.

It is a good bet that the new Republican Congress will continue to talk about tax reform. That is safe ground for Republicans generally. And, of course, seemingly impossible things do sometimes happen. But I wouldn’t bet on tax reform. 

November 5, 2014 in Tax | Permalink | Comments (0)

Why We Are Looking at the ‘Value’ of College (and Law School?) All Wrong

Washington Post:  Why We Are Looking at the ‘Value’ of College All Wrong, by Christopher B. Nelson (President, St. John's College):

As college admission deadlines loom, new lists and rankings proliferate along with reports questioning the “value” of a college education. The obsession with quantification is rooted in a habit of applying economic categories to everything. Yet education and economics are essentially incompatible. The lens of economics distorts our judgment about the true worth of higher education. ...

[T]he idea that a college or university is a purveyor of information is a misplaced economic metaphor. Education is not information transfer. The educated college graduate is not simply the same person who matriculated four years earlier with more information or new skills. The educated graduate is a different person—one who has developed the innate human capacity for learning, to the point of controlling it. The educated graduate is an independent learner, able to seek out answers to whatever questions arise, and able to direct his or her own learning in accordance with the challenges that life presents in the circumstances of his or her own life.

The maturation of the student—not information transfer—is the real purpose of colleges and universities. Of course, information transfer occurs during this process. One cannot become a master of one’s own learning without learning something. But information transfer is a corollary of the maturation process, not its primary purpose. This is why assessment procedures that depend too much on quantitative measures of information transfer miss the mark. It is entirely possible for an institution to focus successfully on scoring high in rankings for information transfer while simultaneously failing to promote the maturation process that leads to independent learning.

We need to move away from easy assessments that miss the point to more difficult assessments that try to get at the maturation process. The Gallup-Purdue Index Report entitled Great Jobs, Great Lives found six crucial factors linking the college experience to success at work and overall well-being in the long term:

  1. at least one teacher who made learning exciting
  2. personal concern of teachers for students
  3. finding a mentor
  4. working on a long-term project for at least one semester
  5. opportunities to put classroom learning into practice through internships or jobs
  6. rich extracurricular activities

We should turn all our ingenuity toward measuring factors like these, difficult as that task might be, and use these results to push back against easy assessments based on the categories of economics. Unless we stop taking the easy way, unless we get past our habit of interpreting everything in economic terms, we will never grasp the true value of a college education.

November 5, 2014 in Legal Education | Permalink | Comments (5)

WSJ: Ireland to Ramp Up Corporate Tax Avoidance by Replacing 'Double Irish' With 100% Amortization of IP on Way to 'Knowledge-Development Box'

DOuble IrishWall Street Journal, Ireland Moves to Close One Tax Break and Opens Another; Bill to End “Double Irish” Also Offers Corporate Tax Cuts on Intellectual Property:

As the Irish government moves to close one door to corporate tax avoidance, it is opening another.

Tucked into legislation to eliminate a much criticized tax structure known as the “Double Irish” is a separate provision that would allow companies to pay no corporate tax on profits earned from patents, licenses and other intellectual property.

The legislation, which would expand a current tax break that allows companies to shield 80% of that income, also proposes to add customer lists to the types of intellectual property that can be covered.

The expanded tax provision proposed in the Irish budget would give companies an incentive to make Ireland the home for their intellectual property—some of it now tied up in Double Irish structures—as well as give them a simpler means to shield some of the same income from taxes. ...

Last month, Ireland touted how the legislation would eliminate the Double Irish, a tax avoidance measure that uses a twist in Irish law to send royalty payments for intellectual property from one Irish-registered subsidiary to another that resides for tax purposes in a country with no corporate income taxes. While the total number of companies that use the structure isn’t publicly disclosed, hundreds have funneled tens of billions of dollars a year in profit to tax havens via Ireland, including many practitioners in the technology and pharmaceutical sectors, tax experts say.

The tax break could in theory benefit technology companies like Google Inc. or pharmaceutical firms like Gilead Sciences Inc., which have moved intellectual property into Irish corporate structures.

At least 249 companies used the provision in 2012, according to figures from Ireland’s tax office, the Revenue Commissioners, providing tax relief valued at €108 million ($135 million). But that total may understate the expanded provision’s potential scope. Companies have had little need to reduce the bite from Irish taxes for their intellectual property income when they could use structures like the Double Irish to escape such taxes altogether. ...

The expanded tax break is seen by proponents as a way to keep Ireland competitive as a destination for intellectual property as it prepares a longer-term package of regulations governing how such assets would be taxed. That package, referred to as the “knowledge development box,” has yet to be formalized.

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November 5, 2014 in Tax | Permalink | Comments (0)

Legal Education in Transition: Trends and Their Implications

Sheldon Krantz (Georgetown) & Michael A. Millemann (Maryland), Legal Education in Transition: Trends and Their Implications, 92 Neb. L. Rev. (2014):

This is a pivotal moment in legal education. Revisions in ABA accreditation standards, approved in August 2014, impose new requirements, including practice-based requirements, on law schools. Other external regulators and critics are pushing for significant changes too. For example, the California bar licensing body is proposing to add a practice-based, experiential requirement to its licensing requirements, and the New York Court of Appeals, New York’s highest court, is giving third-year, second semester students the opportunity to practice full-time in indigent legal services programs and projects. Unbeknown to many, there have been significant recent changes in legal education that have added practice-based courses, or practice-based components to courses, in all three years of legal education. Increasingly, law schools are reaching beyond the JD to establish projects in which graduates learn while practicing law. The innovations include first-year courses in which students engage in actual legal work to help provide legal services to clients; technology clinics in which students use or build state-of-the-art technology to help pro se litigants more effectively represent themselves; diversified experiential courses, including “practicums;” and post-JD “incubator,” “fellowship,” “residency,” “apprenticeship,” and “job corps” programs in which law graduates, and sometimes law students, practice and learn from practice. It is a dynamic period in which law schools, including through comprehensive strategic planning, should regain the leadership in facing the present and future challenges. The factors contributing to change — for example, the tough job market, reduced law school applications, interventions of regulators, U.S. News & World Report rankings and increased competition among law schools — are not likely to substantially change in the near future. Law schools are in, should be in, and will be in a period that calls for sustained innovation.

November 5, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS and The Case of the Cockamamie Killer

CaseDavid M. Brown, The Case of the Cockamamie Killer (2011):

You can't avoid death and taxes. Or is that murder and taxes? That would depend on who is doing the collecting.

When a colleague is slain in cold blood, tough-guy word processor and private detective Chak Charon investigates—and soon finds himself out of a job, abducted from his apartment, and audited within an inch of his life. He takes refuge in a lower-Manhattan boarding house and proceeds to discover a dirty little secret: that the Internal Revenue Service is developing a computer virus designed to scavenge the private financial data of unsuspecting citizens. (Scratch that. Let's say that a "rogue IRS agent" is developing the virus. As we keep hearing in the news, it is extremely difficult for the IRS to know anything about what is happening inside the IRS.)

Meet the sullen fast-food clerk who has trouble filling special orders...the department supervisor whose every gesture is by-the-book...the socially-conscious housemates of Grubgeous Street...the sulky, seductive hustler...the other sulky, seductive hustler...the power-lusting bureaucrat...the software-slinging private eye who won't take "Get lost!" for an answer.

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November 5, 2014 in Book Club, Tax | Permalink | Comments (1)

NY Times: 'A Troubled Law School Is Like Dracula: Hard to Kill'

NY Times Dealbook (2013)New York Times DealBook:  Worth Nothing, Failing Law Schools Are Kept on Life Support, by Steven Davidoff Solomon (UC-Berkeley):

A recent debt restructuring at Thomas Jefferson School of Law shows that a law school may be worth absolutely nothing. ...

It doesn’t take an economist to know that lower demand has hurt almost all law schools outside the top 10 terribly. Hardest hit are law schools in the lower tier, where law school applications have fallen even more rapidly. In this vein, the latest issues at Thomas Jefferson School of Law could be an object lesson in what happens once the boom times inevitably end. ... This sent shivers of delight through the law school critics, creating immediate speculation that the law school might be the first to “keel over.” ...

Thomas Jefferson got a sweetheart deal, but its creditors had no choice. If they shut down the law school, the only value left would be a law school building that would need to be repurposed and redesigned. Big lecture halls would need to be turned into offices at a significant expense.

There are lessons here for the entire law school system.

First, a closed law school is worth little, or most likely nothing, to creditors. The value is only in the revenue stream it produces and perhaps its building (you could say the books also, but these are increasingly fewer). And these days, that revenue stream is down 20 to 40 percent, meaning that if law schools were a for-profit business, most would be failures.

A troubled law school is like Dracula: hard to kill. Creditors will not do so because even keeping a struggling school alive means there is some possibility of repayment.

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November 5, 2014 in Legal Education | Permalink | Comments (1)

Acquittal of Ex-UBS Executive Deals Blow to DOJ in Tax Crackdown

Understanding and Surviving Life with a Law Student

CompanionAndrew McClurg (Memphis), The ‘Companion Text’ to Law School: Understanding and Surviving Life with a Law Student (West 2011):

This book equips the loved ones of law students ; parents, partners, friends, and relatives ; with all the information they need to understand and survive their student's journey through the world of legal education. Written by an award-winning professor with experience teaching thousands of law students, The "Companion Text" explains the essentials of legal education, including the first-year curriculum, the Socratic Method of teaching, and the single-exam format. It also explores the psyches of law students, including things you should never say to them, their sources of stress, and how law school can change personalities. The book addresses the impact of law school on outside relationships and gives tips for navigating relationships with law students. Filled with comments, anecdotes, and insights from real law students and their loved ones.

Al Sturgeon (Pepperdine), Things to Never Say to a Law Student:

Professor Andrew McClurg has written an excellent book for the family and friends of law students and granted me permission to share excerpts with you from time to time.

  1. “Don’t Worry, You’ll Do Fine”
  2. “Maybe You Weren’t Meant to Be in Law School”
  3. “Remember, It’s Only a Test”
  4. “Is That the Best You Could Do?”
  5. “Do You Really Have to Work on That Tonight?”
  6. “What Kind of Lawyer Do You Want to Be?”
  7. “Do You Have a Job Yet?”
  8. “Have You Heard the One About the Lawyer, the Shark, and the Pornographer?”

November 5, 2014 in Book Club, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 545

IRS Logo 2Breitbart:  Read: Jeanne Shaheen-IRS Memos on Conservative Group Targeting:

The IRS memos to and from incumbent Democratic Sen. Jeanne Shaheen (D-NH) indicate she was involved in the actual investigative activities targeting Tea Partiers.

The memos, obtained by Breitbart News and published here, show a series of letters Shaheen and other Democratic Senators exchanged with then IRS commissioner Doug Shulman and then IRS deputy commissioner for services and enforcement Steven Miller—not just the one memo published by The Daily Caller’s Patrick Howley late Monday evening right before the election.

The memos are responses to two different letters Shaheen and a whole group of Democrats such as Sen. Chuck Schumer (D-NY), Al Franken (D-MN), Michael Bennet (D-CO), and Tom Udall (D-NM), among others. The responses are directed specifically to Shaheen, seemingly indicating that she was the point person for the Senate Democrats’ efforts to leverage the IRS into targeting conservative and Tea Party groups. ...

The letters Shaheen and her Democratic colleagues sent to the IRS have long been public, but the detailed responses from the IRS to her are brand new—and came out just before the election. They seem to indicate that Shaheen was kept apprised of, and was involved in, the intricate layers of the IRS targeting of Tea Partiers—which has since been widely panned in the wake of several congressional investigations. Basically, the fact that Democratic senators – especially Shaheen – were deeply involved in the targeting scandal has always been suspected but never confirmed—until now.

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November 5, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, November 4, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at Minnesota

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Minnesota today as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy protections, should be publicly accessible. The ongoing global discussion of base erosion and profit shifting by multinational corporations has generated calls for greater tax transparency. Throughout this debate, participants have focused exclusively on the potential reactions of a corporation’s managers, shareholders and consumers to a corporation’s disclosure of its own tax return information. There is, however, another perspective: how would the ability of a corporation’s stakeholders and agents to observe other corporations’ tax return information affect the corporation’s compliance with the tax law?

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November 4, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Aggressive Planning Saves John Malone Billions in Taxes

Bloomberg:  Malone Gained Double Tax Break in Liberty Address Shift,  by Jesse Drucker:

MaloneShifting the address of his Liberty Global Inc. from Colorado to London last year didn’t just put billionaire John C. Malone in a position to reduce his company’s tax bill.

He also took precautions to avoid the capital-gains hit that the so-called inversion would trigger for him and other investors. The day before the deal was announced, Malone -- the company’s chairman and controlling shareholder -- transferred $600 million of his shares into a tax-exempt charitable trust. He avoided paying taxes on his remaining stake, worth about $260 million, by exploiting IRS regulations meant to block a different loophole.

All told, Malone escaped about $200 million in personal taxes, and Liberty Global’s U.S. shareholders together likely saved more than a billion dollars, according to data compiled by Bloomberg.

“He’s congenitally averse to paying taxes,” said Robert Willens, an independent tax accounting analyst in New York City.  

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November 4, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

The Unicap Regs and Trademark Royalties

Florida Tax ReviewGlenn Walberg (Vermont), Wrestling Control from the Unicap Regulations: The Irrelevance of Quality Control in Determining Capitalizable Trademark Royalties, 16 Fla. Tax Rev. 223 (2014):

Taxpayers generally must capitalize direct and indirect costs attributable to their production of inventory. Due to uncertainty about whether this requirement applies to sales-based trademark royalties, the regulations now clarify that these royalties are indeed capitalizable as indirect production costs. However, the regulations also let taxpayers allocate these sales-based costs entirely to cost of goods sold. So, to the relief of taxpayers, the regulations have the practical effect of permitting immediate cost recovery — similar to a business expense deduction — for sales-based royalties.

This Article questions the rationale for treating trademark royalties as capitalizable indirect costs. It argues that the regulations inappropriately rely on a licensor’s retention of control over product quality to link a licensed mark with inventory production and hence treat the associated royalties as production costs. The Article finds such reliance inappropriate because every valid trademark license involves a retention of control and the significance of control has diminished in modern trademark law and licensing practices. The Article further explains how this focus on control inadvertently makes all trademark royalties (including minimum and upfront royalties) capitalizable as indirect costs and therefore potentially allocable to ending inventory.

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November 4, 2014 in Scholarship, Tax | Permalink | Comments (0)

Avi-Yonah: What We Can Learn from the Tax Reform Act of 1986

Reuven Avi-Yonah (Michigan), Reinventing the Wheel: What We Can Learn from the Tax Reform Act of 1986:

This paper has suggested that as we consider tax reform in 2014 and thereafter, we should revert to some of the positive features of TRA 86, updated to reflect increasing globalization. Specifically:

  • The top individual rate, the KG rate and the dividend rate should be set at 28%;
  • The corporate rate should also be set at 28%;
  • Corporations should be taxed on global income with no deferral or exemption.

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November 4, 2014 in Scholarship, Tax | Permalink | Comments (0)

Corporate Inversions Could Mean Big Tax Bills For Shareholders

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November 4, 2014 in Tax | Permalink | Comments (0)

Bankman & Caron: Tax Scholarship in a Time of Fiscal Crisis

Joseph Bankman (Stanford) & Paul L. Caron (Pepperdine), California Dreamin': Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. ___ (2014):

This essay makes three claims about the current state of tax law and academic tax scholarship in America: (1) the federal budget imbalance, caused by the failure of both political parties to raise the tax revenues needed to fund the nation’s spending priorities, is unsustainable and threatens our nation’s future; (2) tax scholars need to shift our focus from technocratic work to systemic solutions to the existential threat posed by this fiscal gap; and (3) California’s response to its seemingly intractable budget problems provides a template for resolving the federal budget stalemate in Washington, D.C.

Two years ago, both California and the nation were imperiled by long-term, structural, budget imbalances. California has reduced that peril by raising (already high) personal tax rates on the wealthy. The political success of that approach suggests that at the national level, Americans might be willing to support higher rates to maintain government services and move toward fiscal solvency.

The fiscal crisis highlights a problem with the dominant conception of legal tax scholarship. Under that conception, scholarship is (or should be) apolitical and confined to subjects about which the writer can demonstrate mastery. Unfortunately, the most pressing problem in the field is inescapably political and requires the scholar to address some issues about which no one can master. If we hew to a restrictive definition of scholarship, we limit our voice on a subject about which we have much to say.

November 4, 2014 in Scholarship, Tax | Permalink | Comments (1)

2015 U.S. News Law Firm Tax Rankings: Skadden Is #1

Best Law FirmsU.S. News and Best Lawyers have released their fifth annual ranking of over 12,000 law firms in 120 practice areas, in both a national ranking and separate rankings of firms in 174 metropolitan areas (methodology). The rankings are based in part on 5.5 million evaluations of 52,488 lawyers collected by Best Lawyers in its most recent annual survey.

One law firm in each of the 120 practice areas was named the 2015 Law Firm of the Year. Skadden is the 2015 Law Firm of the Year in Tax.

The rankings group law firm practice areas in three tiers. Here are the 244 law firms ranked in tax:

Tier 1:

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November 4, 2014 in Tax | Permalink | Comments (1)

Thomas Jefferson Law School Budget Cuts

Thomas Jefferson LogoFollowing up on my recent posts (links below):  a law prof at another school passed along this summary of the conference call that Thomas Jefferson Dean Thomas Guernsey had with bondholders on March 21, 2014 outlining budget cuts at the law school.  Among the most draconian:

  • "As we’ve reported before, the school has taken dramatic cuts since 2012. The number of employees at the school declined from 139 to 102. We have reduced spending by 22% and believe the result is that we have a bare bones budget for the operation of the law school." (Conference call, at 32:50-33:10)
  • "We are projecting a significant decline in the number of full-time faculty that the law school will employ as the number of students declines and then levels off." (32:24-34:40) 
  • "We are projecting further personnel reductions planned over the next three years. . .We have assumed that benefits and salaries for those who work at the law school will not increase over the next four years, but that after that there will be a 2.5 percent annual growth. At some point, the continued inability to give salary increases is going to have obviously a negative impact on our ability to retain people." (33:28-34:05)
  • "A number of expenses we have reduced, these are just the ones that are $50,000 or more. Professional fees by more than $560,000. Student recruitment by more than $430,000. Library continuations by $125,000. Security by $89,000." (39:22-39:38)
  • "We are looking for other ways to improve. . . [A] bar preparation course [for] which we pay about $600,000 a year ends in 2016. We have no intention of renewing that. That leads to a $285,000 reduction in 2017." (39:47-40:13)
  • "As we’ve talked before, the law school has made significant budget cuts lately. We have reduced the overall FTE headcount by over 21% in the past year alone. As I’ve indicated, we have further reductions projected over the next three years. Significant salary and benefit concessions have been implemented. We froze salaries and wages since 2012. In August, soon after my arrival, we made a 5% across the board cut in salaries, with an additional 3% cut for the faculty. We eliminated the 401K matching, which was up to 3% of salary and that became effective on January, 2014. And we have eliminated paid sabbaticals." (38:26-39:14)

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November 4, 2014 in Legal Education | Permalink | Comments (5)

Pittsburgh IRS Agent Tried to Bribe Police After Being Arrested at Steelers Game

CBS Pittsburgh,  Police: Man Arrested For Kicking Heinz Field Barriers, Trying To Bribe Officers:

A man was arrested after injuring a woman by kicking a steel barrier at Heinz Field Sunday evening. According to police, 29-year-old Stephen Sapp was intoxicated at the time of the incident. ...

Sapp sustained some cuts in the struggle [with police] and was transported to UPMC Mercy Hospital for treatment. While at the hospital, Sapp allegedly tried to bribe officers to let him go. According to the criminal complaint, Sapp stated, “Listen, I know how this works. How much money will it take to make this go away and to let me go home today?”

The officers informed Sapp that he could not attempt to bribe them, but Sapp continued. “Look, I am an IRS agent and I can help you in other ways if you let me go home and make this go away.”

WTAE, IRS Confirms Worker Arrested at Heinz Field; Police: Stephan Sapp Kicked Out of Steelers Game, Gets Violent, Offers Bribe

November 4, 2014 in IRS News, Tax | Permalink | Comments (3)

The IRS Scandal, Day 544

IRS Logo 2Recent filings in the U.S. District Court for the District of Columbia in Judicial Watch v. IRS, No. 13-1559-EGS:

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November 4, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, November 3, 2014

Bankman & Shaviro: Piketty in America: A Tale of Two Literatures

PikettyJoseph Bankman (Stanford) & Daniel N. Shaviro (NYU), Piketty in America: A Tale of Two Literatures, 68 Tax L. Rev. ___ (2014):

Thomas Piketty’s widely-noted and bestselling book, Capital in the Twenty-First Century, does much to advance our empirical understanding of rising high-end wealth concentration, which is one of the central issues of our time. But its theoretical approach and policy recommendations differ sharply from those that have been prevalent in recent decades in the Anglo-American academic tax policy literature. We adjudicate this “confrontation” (insofar as it is one), and find that each approach in some respects both undermines and enriches the other. We find that the optimal tax response to wealth concentration is significantly more complicated than Piketty’s analysis recognizes. This is particularly true in the United States, where rising high-end wealth concentration has been driven by heterogeneous human capital, and where Piketty’s proposed wealth tax would face a substantial risk of being held unconstitutional.

November 3, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Weinzierl Presents The Promise of Positive Optimal Taxation Today at Loyola-L.A.

WeinzierlMatthew Weinzierl (Harvard Business School) presents The Promise of Positive Optimal Taxation at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

A prominent assumption in modern optimal tax research is that the objective of taxation is Utilitarian. I present new survey evidence that most people reject this assumption’s implications for several prominent features of tax policy, instead preferring tax policies based at least in part on a classic alternative objective: the principle of Equal Sacri…fice. I generalize the standard model to accommodate this preference for a mixed objective, proposing a method by which to make disparate criteria commensurable while respecting Pareto efficiency. Then, I show that optimal policy in this generalized model, calibrated to the survey evidence and U.S. microdata, is capable of quantitatively matching several features of existing tax policy that are incompatible in the conventional model but widely endorsed in the survey and reality, including the coexistence of substantial redistribution and limited tagging. Together, these fi…ndings demonstrate the potential of a positive theory of optimal taxation.

David Gamage (UC-Berkeley) is the commentator.

November 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Moretti & Wilson Present Taxation, Migration, and Innovation: The Effect of Taxes on the Location of Star Scientists Today at UC-Berkeley

MorettiWilsonEnrico Moretti (UC-Berkeley, Department of Economics) & Daniel Wilson (Federal Reserve Bank of San Francisco) present Taxation, Migration, and Innovation: The Effect of Taxes on the Location of Star Scientists at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

This paper estimates tax-induced mobility of star scientists. Surprisingly there is  little research on tax-induced mobility of “economically valuable” individuals.

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November 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

District Court Refuses to Dismiss Suspended Practitioner's Lawsuit Against IRS Office of Professional Responsibility

IRS Logo 2In press reports last month, Karen Hawkins, Director of the IRS Office of Professional Responsibility ("OPR"), was quoted as saying that although she first "laughed" at the argument in Sexton v. Hawkins that OPR lacked jurisdiction over a suspended practitioner (a tax lawyer with a tax LL.M.), after  Ridgely v. Lew (more here) "there are some judges out there that would buy that now."  Last Thursday, the Federal District Court in Nevada rejected the Government's motion to dismiss Sexton's complaint againt the OPR.   Sexton v. Hawkins, No. 2:13-cv-00893 (D NV Oct. 30, 2014).

November 3, 2014 in IRS News, New Cases, Tax | Permalink | Comments (0)

Law Firms Join Lobbyists to Defend Inversions

National Law Journal, 'Inversion' Finding Its Defenders; Lobbyists Line Up Behind Controversial Tax Tactic:

Law firms have joined a growing army of lobbying shops on Capitol Hill to ensure that AbbVie Inc., Walgreen Co. and other U.S. companies are part of the conversation about a controversial tax-lowering tactic.

Inversions

November 3, 2014 in Tax | Permalink | Comments (0)

Sullivan: The Tax Aspects of Immigration Reform

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), The Tax Aspects of Immigration Reform, 145 Tax Notes 463 (Nov. 3, 2014):

Against all odds, Obama, who would love to include immigration reform as part of his legacy, and Republican leaders in Congress, who want their party to be competitive in the 2016 presidential election and to show they can get things done, are likely to make a serious attempt at putting together a bipartisan, bicameral deal on immigration in 2015. The estimates presented in this article are based on numerous assumptions about which there is considerable uncertainty, so they can hardly be taken as gospel. But the central finding, concerning the large difference in the revenue effects between legal and unauthorized immigration, is difficult to dispute given the differences in average income levels and the fact that many currently unauthorized immigrants already pay tax. As Congress struggles to fix our broken immigration system, it is likely to consider many variations of S.744 and its components. Those proposals that allow a large influx of new legal immigrants — particularly immigrants with high skills—will significantly increase tax revenue. Providing new legal status for current unauthorized immigrants will not.

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November 3, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tax Section Programs at 2015 AALS Annual Meeting

AALS (2016)From AALS Tax Section Chair Miranda Fleischer (San Diego):

The AALS Tax Section is sponsoring two programs at this year’s AALS annual meeting, which will be held January 2 to 5, 2015 at the Marriott Wardman Park in Washington, D.C. We are also arranging an off-site dinner Friday night the 2nd; details to follow.

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November 3, 2014 in Conferences, Legal Education, Tax | Permalink | Comments (0)

Tax Profs' Brief in Direct Marketing Association v. Brohl

Brief of Interested Law Professors as Amici Curiae Supporting Respondent in Direct Marketing Association v. Brohl (Joseph Bankman (Stanford), Jordan Barry (San Diego), Barbara Fried (Stanford), David Gamage (UC-Berkeley), Andrew Haile (Elon), Alan Morrison (George Washington), Darien Shanske (UC-Davis), Kirk Stark (UCLA), John Swain (Arizona) & Dennis Ventry (UC-Davis)):

The petitioner in this case has framed the question presented as follows: “Whether the Tax Injunction Act bars federal court jurisdiction over a suit brought by non-taxpayers to enjoin the informational notice and reporting requirements of a state law that neither imposes a tax, nor requires the collection of a tax, but serves only as a secondary aspect of state tax administration.”

Amici agree with the respondent, the State of Colorado, that the Tax Injunction Act bars federal courts from enjoining the operation of the Colorado Statute at issue in this case because this lawsuit is intended to create the very kind of premature federal court interference with the operation of the Colorado use tax collection system that the TIA was designed to prevent. To assist the Court in understanding the application of the TIA to this case, amici (i) place the reporting requirements mandated by the Colorado Statute in the broader context of tax administration and (ii) explain the potential interaction between a decision on the TIA issue in this case and the underlying dispute concerning the dormant Commerce Clause.

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November 3, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 543

TaxProf Blog Weekend Roundup

Sunday, November 2, 2014

NY Times: State Tax Cuts on Trial on Tuesday, Especially in Kansas

New York Times editorial, Tax Cuts on Trial in Governors’ Races:

There is only so long a governor can do great damage to a state before voters start to demand a change. In Kansas, Gov. Sam Brownback, a Republican who has driven down his state’s credit rating and cratered its budget with ill-advised tax cuts, is paying a huge price in popularity for his actions. ...

Mr. Brownback is not the only Republican governor who is struggling this year because extreme policies have failed. Some of the country’s most damaging governors are caught in tossup races with Democrats, fighting for re-election even while President Obama’s unpopularity has hurt his party’s chances of retaining the Senate.

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November 2, 2014 in Tax | Permalink | Comments (0)

Duquesne Prof Sues Dean, Law School For Discrimination After Tenure Denial

National Law Journal, Law Professor Files Bias Suit Against Duquesne, Dean:

Hascall 2A Duquesne University School of Law professor, whose subjects include Islamic law, has sued the law school and its dean for age, gender and religious scholarship discrimination.

In a 98-page complaint detailing allegations of law school Dean Ken Gormley's deliberate actions to keep professor Susan Hascall from administrative positions and tenure, Hascall alleges the discrimination began around the time she started pointing out the law school's criteria for tenure differed from that of the overall university.

Hascall, an assistant professor of law, alleges in her complaint, Hascall v. Duquesne University of the Holy Spirit, that Gormley and others believed she had voted "no" to the faculty approving a "no confidence" vote of the university's president in the wake of his 2008 ouster of former law school Dean Don Guter. ...

Hascall alleged Gormley began denigrating her scholarship and committee work around the time she began disagreeing with him about inconsistencies in the law faculty handbook. Hascall alleged Gormley told other professors that Hascall was a "troublemaker," according to the complaint.

One of the main discrepancies Hascall said she took issue with was that the law school handbook did not allow for Hascall to select two of the outside professors to review her academic scholarship as part of the review and tenure process, according to the complaint.

Hascall alleged in the complaint that Gormley and others only included two of the three scholarly works she submitted to the reviewing professors, leaving out one on Shari'ah law.

[The three articles apparently are:

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November 2, 2014 in Legal Education | Permalink | Comments (1)

Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with a new #1 paper and a new paper debuting on the list at #5:

  1. [301 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  2. [297 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  3. [165 Downloads]  Home-Country Effects of Corporate Inversions, by Omri Y. Marian (Florida)
  4. [156 Downloads]  Rights Without Remedies, by Matthew L. M. Fletcher (Michigan State)
  5. [146 Downloads]  A World Turned Upside Down: Reflections on the 'New Wave' Inversions and Notice 2014-52, by Reuven S. Avi-Yonah (Michigan)

November 2, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 542

IRS Logo 2Press Release:  Wetumpka TEA Party Continues Call for Accountability After Unacceptable IRS Court Ruling:

AL-Becky Gerritson, President of the Wetumpka TEA Party, called Thursday's US District Court’s ruling to dismiss two lawsuits against the IRS by dozens of TEA Parties and other conservative groups , “outrageous” .

The IRS’s targeting of conservatives first came to the public’s attention in May of 2013, when Lois Lerner, then head of the IRS’s Tax Exempt Office, tried to minimize the seriousness of their despicable action when she answered a planted question from the audience while speaking to the American Bar Association. The targeting of conservatives began in 2009 and reached its height during the 2012 election cycle. Some conservative groups have still not received their well-deserved tax exempt status even to this day. In 2013 the Wetumpka TEA Party along with 40 other conservative groups filed a law suit with the American Center for Law and Justice, (ACLJ) against the IRS for its illegal targeting of conservatives.

“When you look at the allegations in our lawsuit along with evidence uncovered by Congressional committees and Judicial Watch, it is undeniable that the IRS is guilty of wrongdoing. However, Judge Walton basically said that since we finally received our tax status (after almost 2 years of waiting) that we now have no case. That’s like a judge telling a burglary victim, that even though she was robbed 2 years ago; since she does not currently have the thieves in her house, she has no case. This ruling is unbelievable! It’s so much more than just a delay of a tax exempt status; it’s about the IRS, a government agency, being used as a weapon against its citizens, i.e. violating our constitutional rights, invading our privacy, bullying and intimidating us, mishandling and leaking our confidential taxpayer information etc., not to mention the ensuing cover-up; and we cannot fight back…we have no recourse.”

Gerritson continued, “The judge did not base his decision on the merits of the case. In fact, he did not deny wrong doing by the IRS but dismissed the case on procedural grounds. He wrote in a footnote: "The court's opinion should not be interpreted as an assessment of the propriety of the alleged conduct by the defendants." It’s unfathomable that the IRS, one of the most feared government agencies in America, was able to engage in a massive, years-long illegal targeting scheme against everyday American’s and get away with it scot-free. This is a huge blow to Americans’ liberty. If the IRS was allowed to target and harass Americans on such a large scale with no repercussions then what will stop them in the future?”

Gerritson concluded by saying, “This isn’t over for us. We will not be silent. We commend and support the ACLJ‘s plan to appeal the ruling. We will continue to do everything we can to stand up for citizens’ rights, expose government’s abuse of power and hold them accountable for their actions.”

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November 2, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, November 1, 2014

Simkovic & McIntyre: The Economic Value of a Law Degree: $1 Million

Michael Simkovic (Seton Hall) & Frank McIntyre (Rutgers Business School), The Economic Value of a Law Degree, 43 J. Legal Stud. 249 (2014):

We investigate the economic value of a law degree and find that for most law school graduates, the present value of a law degree typically exceeds its cost by hundreds of thousands of dollars. The median and 25th-percentile earnings premiums justify enrollment. We track lifetime earnings of a large sample of law degree holders. Previous studies focused on starting salaries, generic professional degree holders, or the subset of law degree holders who practice law. We incorporate unemployment and disability risk and measure earnings premiums separately for men and for women. After controlling for observable ability sorting, we find that a law degree is associated with median increases of 73 percent in earnings and 60 percent in hourly wages. The mean annual earnings premium is approximately $57,200 in 2013 dollars. Values in recent years are within historical norms. The mean pretax lifetime value of a law degree is approximately $1 million.

From Michael Simkovic:

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November 1, 2014 in Legal Education, Scholarship | Permalink | Comments (7)

WSJ: How to Use a 401k to Pump Up a Roth IRA

Roth IRAWall Street Journal, How to Pump Up a Roth IRA: After-Tax Contributions to a 401(k) Plan Can Be Shifted Into a Tax-Free Roth, the IRS Says:

High-income earners have a new incentive to make after-tax contributions to a 401(k) plan: They can later shift those contributions into a Roth individual retirement account, tax-free.

Thanks to a recent Internal Revenue Service ruling [Notice 2014-54], eligible employees can now move after-tax contributions directly from their employer-sponsored retirement plan to a Roth account.

The potential tax savings are huge, depending on an investor’s tax rate in retirement. ... The latest decision gives people an easier way to distinguish pre- and after-tax contributions and maximize their potential tax savings. That could make it much easier for investors to move tens or hundreds of thousands of dollars they have had accumulating in their 401(k)s into a Roth IRA.

November 1, 2014 in IRS News, Tax | Permalink | Comments (1)

The 20 Most Beautiful College Campuses in America

Washington Examiner, Top 20 List of Most Beautiful Universities in America:

Beauty may be in the eyes of the beholder, but for independent educational consultants (IEC’s) asked this week to name the most beautiful universities in America there were a few clear favorites.

In an opinion poll circulated to members of the Independent Educational Consultants Association (IECA) and the Higher Education Consultants Association (HECA), the University of Virginia came out on top of almost 100 university campuses nominated for the honor.

Here are the Top 10:

1. Virginia
2. Princeton
2. Stanford
4. Duke
5. Yale
6. Colorado
7. Chicago
8. Pepperdine
Pepperdine Campus Photo 2 (2014)
8. William & Mary
10. Indiana
10. UCLA
10. University of Washington
10. Vanderbilt

November 1, 2014 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 541

IRS Logo 2Press Release:  ACLJ Files Suit Against IRS For Failing To Release Records Between IRS And U.S. Senator Jeanne Shaheen Of New Hampshire Who Demanded IRS Probe Conservative Organizations:

The American Center for Law & Justice (ACLJ) today filed a federal lawsuit in New Hampshire against the Internal Revenue Service (IRS) on behalf of the group, Citizens for a Strong New Hampshire, claiming the IRS is unlawfully delaying the release of records between the IRS and U.S. Senator Jeanne Shaheen (D-NH) who demanded the IRS investigate conservative organizations for engaging in "political activities."

Citizens for a Strong New Hampshire filed a request under the Freedom of Information Act (FOIA) demanding the IRS release the correspondence between the tax agency and Sen. Shaheen and Congresswoman Carol Shea-Porter (NH-01). The lawsuit was filed today in U.S. District Court for the District of New Hampshire, in Concord, NH. The lawsuit contends the IRS is unlawfully delaying the release of information until after next week's mid-term elections – a move that the complaint argues "has deprived Strong NH of the opportunity to obtain and effectively convey to the voting public vital information about those seeking re-election."

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November 1, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, October 31, 2014

Weekly Tax Roundup

October 31, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (1)

Weekly Legal Education Roundup

October 31, 2014 in Legal Education, Weekly Legal Education Roundup | Permalink | Comments (2)

Weekly SSRN Tax Roundup

October 31, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)