TaxProf Blog

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

Tuesday, September 12, 2017

2018 U.S. News College Rankings

US NewsU.S. News & World Report today released its 2018 College Rankings. Here are the Top 25 National Universities and Liberal Arts Colleges (along with their 2015-2017 rankings):

2018

Rank

 

National Universities

2017

Rank

2016

Rank

2015

Rank

1

Princeton

1

1

1

2

Harvard

2

2

2

3

Chicago

3

3

4

3

Yale

3

3

3

5

Columbia

5

4

4

5

MIT

7

7

7

5

Stanford

5

4

4

8

Penn

8

9

9

9

Duke

8

8

8

10

Cal-Tech

12

10

10

11

Dartmouth

11

12

11

11

Johns Hopkins

10

10

12

11

Northwestern

12

12

13

14

Brown

14

14

16

14

Cornell

15

15

15

14

Rice

15

18

19

14

Vanderbilt

15

16

17

18

Notre Dame

15

18

18

18

Washington (St. Louis)

19

15

15

20

Georgetown

20

21

21

21

Emory

20

21

21

21

UC-Berkeley

20

20

20

21

UCLA

24

23

23

21

USC

23

22

25

25

Carnegie Mellon

24

23

25

25

Virginia

24

26

23

Pepperdine is ranked #46 (tied with Lehigh, Miami, UC-Davis, Villanova, and Wisconsin).

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September 12, 2017 | Permalink | Comments (2)

Shobe: Private Benefits In Public Offerings — Tax Receivable Agreements In IPOs

Gladriel Shobe (BYU), Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, 71 Vand. L. Rev. ___ (2017):

Historically, an initial public offering was a process whereby a company sold all of its underlying assets to the public. A new tax innovation, the “tax receivable agreement” (TRA), creates private tax benefits in public offerings by allowing pre-IPO owners to effectively keep valuable tax assets for themselves while selling the rest of the company to the public.

Ten years ago, TRAs were almost never used in IPOs. Today they have become commonplace, changing the landscape of the IPO market in ways that are likely to become even more pronounced in the future. This Article traces the history of various iterations of TRAs and shows that a new generation of more aggressive TRAs has recently developed. Although TRAs were historically used only for a small subset of companies with a certain tax profile, the new generation of innovative and aggressive TRAs can be used by virtually any company conducting an IPO, making it likely that TRAs will continue to spread across the IPO market.

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September 12, 2017 | Permalink | Comments (0)

Why American Workers Pay Twice As Much In Taxes As Wealthy Investors

Bloomberg Politics, Why American Workers Pay Twice as Much in Taxes as Wealthy Investors:

Let’s say you and I are neighbors. You’re an emergency room doctor, and I don’t work, thanks to a pile of money my grandparents left me.

You spend your days and nights stitching up gunshot wounds and helping children survive asthma attacks. I’ve gotten really good at World of Warcraft, winning EBay auctions, and frying shishito peppers to just the right crispiness.

Let’s also say we both report $300,000 in income to the Internal Revenue Service this year. Who pays more in taxes?

You do, by a lot. You owe the IRS about $38,500 more, assuming each of us pays the maximum with no special deductions. I also have more flexibility to lower my burden with tax planning strategies and other tricks, and I get to skip about $24,000 in payroll taxes that you and your employer must fork over each year.

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September 12, 2017 in Tax | Permalink | Comments (6)

University Of North Carolina Law School's Civil Rights Center Closes Following Board Of Governors Vote

North Carolina LogoFollowing up on my previous posts (links below):  Legal Times, Civil Rights Center at UNC Law School Shut Down:

University leaders on Friday voted to strip the Center for Civil Rights at the University of North Carolina School of Law of its ability to litigate cases.

The move caps a months-long fight between the predominately Republican board of governors for the University of North Carolina and supporters of the center, who say the board’s push was motivated by politics.

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September 12, 2017 in Legal Education | Permalink | Comments (2)

Politico: The U.S. News Rankings Fuel Inequality

U.S. News Logo (2018)Politico, How U.S. News College Rankings Promote Economic Inequality on Campus:

America’s universities are getting two report cards this year. The first, from the Equality of Opportunity Project, brought the shocking revelation that many top universities, including Princeton and Yale, admit more students from the top 1 percent of earners than the bottom 60 percent combined. The second, from U.S. News and World Report, is due on Tuesday — with Princeton and Yale among the contenders for the top spot in the annual rankings.

The two are related: A POLITICO review shows that the criteria used in the U.S. News rankings — a measure so closely followed in the academic world that some colleges have built them into strategic plans — create incentives for schools to favor wealthier students over less wealthy applicants.

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September 12, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

How Perceived Influence Over Laws Affects Tax Evasion

Paul Mason (Baylor), Steven Utke (Connecticut) & Brian Williams (Indiana), Why Pay Our Fair Share? How Perceived Influence Over Laws Affects Tax Evasion:

We examine how the relation between taxpayers and their government affects tax evasion. Specifically, we examine how perceived influence over government policymaking affects taxpayers’ tax evasion decisions. We argue that taxpayers are less willing to comply with tax laws when they perceive the influence over their government to be unfavorable to them or the result of an unfair policymaking process.

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September 12, 2017 in Scholarship, Tax | Permalink | Comments (0)

Florida's 12 Law Schools Are Closed Through Wednesday

IrmaLegal Times, Florida's 12 Law Schools Closed Until Wednesday, At Least:

Florida's 12 law schools remained closed Monday as the remnants of Hurricane Irma churned northward out of the Sunshine State.

It was unlikely that any of those schools would reopen before Wednesday, and several have already announced class cancellations for the remainder of the week.

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September 12, 2017 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1587: Judicial Watch Says Trump Should Overrule His DOJ And Order A Full Review Of The IRS Scandal

IRS Logo 2

Town Hall, Judicial Watch: DOJ Giving Lerner a Pass is Bogus and Trump Should Order a Full Review of the Scandal:

Last week the Department of Justice, led by Attorney General Jeff Sessions, announced prosecutors will not pursue charges against former IRS official Lois Lerner. Lerner is infamous for her deliberate targeting of conservative tea party groups between 2010 and 2012 while leading the tax exempt department inside the agency.

The news was immediately met with outrage by House Ways and Means Chairman Kevin Brady, who said the failure to reopen the case against Lerner (which was closed without charges under the Obama administration) only proves that Washington bureaucrats are held to a much lower standard than every day Americans living outside the protective D.C. bubble. ...

Judicial Watch, which is still pursuing documents related to the IRS targeting scandal and has for years, proving Lerner was at the heart of the targeting, is buying none of it and calling on President Trump to intervene.

"I have zero confidence that the Justice Department did an adequate review of the IRS scandal. In fact, we’re still fighting the Justice Department and the IRS for records about this very scandal. Today’s [Friday's] decision comes as no surprise considering that the FBI collaborated with the IRS and is unlikely to investigate or prosecute itself," Judicial Watch President Tom Fitton released in a statement. "President Trump should order a complete review of the whole issue. Meanwhile, we await accountability for IRS Commissioner Koskinen, who still serves and should be drummed out of office."

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September 12, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Monday, September 11, 2017

Schmalbeck Presents Nonprofit Organizations And Political Campaigns At Northwestern

Schmalbeck (2016)Richard L. Schmalbeck (Duke) presented Nonprofit Organizations and Political Campaigns at Northwestern as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

This story involves three organizational forms, and two broad policy considerations. There are more than a score of different nonprofit organizational categories described in the IRC, but only three are relevant here: the organizations described in sections 501(c)(3), 501(c)(4), and 527. All are exempt from federal income taxes on any excess of revenue over expense that they might experience in any tax year. The first category (charitable organizations under section 501(c)(3)) allows use of deductible contributions to advance its programmatic ends, and also permits anonymous donations. The second (social welfare organizations under section 501(c)(4)) allows anonymous donations (but no deduction for contributions). The third (political organizations under section 527) is subject to rules that compel disclosure of the names of contributors and amounts of their contributions.

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September 11, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Brookings Symposium On Business Tax Reform

Contesting Tax Liability In A Collection Due Process Hearing

Broadly speaking, tax administration (as currently structured) consists of two main functions:  determining tax liability and collecting the tax liabilities so determined.   There is, however, some overlap because taxpayers sometimes have the opportunity during the tax collection process to get a re-determination of the underlying tax liability.  The main opportunity comes in the Collection Due Process (CDP) hearing.  This is an administrative hearing conducted by the IRS Office of Appeals and is subject to judicial review by the Tax Court.   Two recent Tax Court cases — Mohamed v. Commissioner (TC Sum. Op. 2017-69) and Bruce v. Commissioner (TC Memo. 2017-172) — illustrate just how narrow this opportunity is for taxpayers.  To me, they teach the take-home lesson that the best shot taxpayers have at getting the most favorable result is to respond early and often to tax notices.  Taxpayers who wait are the taxpayers who cry.  For a lesson that Mohamed teaches about tax return preparer penalties see Les Book's great post here.  More below the fold.

 

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September 11, 2017 in Bryan Camp, New Cases, Tax Practice And Procedure | Permalink | Comments (3)

 Low-Tax Texas Should Pay Its Fair Share Of Harvey Costs

Hurricane HarveyWashington Post op-ed:  Low-Tax Texas Should Pay Its Fair Share Of Harvey Costs, by Peter A. Barnes (Duke; Caplin & Drysdale) & H. David Rosenbloom (NYU; Caplin & Drysdale):

As the floodwaters from Hurricane Harvey recede, the humanitarian need for federal aid to help Texas and its residents is starkly evident. Lots of aid. Right now, or as soon as Congress can approve an appropriation.

Although members of Congress from New York and New Jersey complain about the hypocrisy of Texas requesting federal aid, given the fact that the Texas congressional delegation almost unanimously opposed the federal aid package for Hurricane Sandy in 2012, the grousing amounts to nothing. With the suffering in Texas visible on every news show, America is too good to withhold support as political payback.

But that doesn’t mean funding should be a gift. Not at all. The bulk of the federal money to help Texas residents rebuild their lives and communities should come in the form of a loan — perhaps a long-term loan at a favorable interest rate, but definitely a loan.

Here is why: Texas is avowedly a low-tax state.

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September 11, 2017 in Tax | Permalink | Comments (13)

Remembering September 11th At Pepperdine

Waves

Pepperdine to Honor 9/11 Victims with Waves of Flags Display:

From September 9 through September 25, Pepperdine’s Alumni Park will have on display the 10th annual Waves of Flags installation to commemorate the lives lost in the terror attacks of September 11, 2001.

Each year Waves of Flags features 2,977 full-size flags—2,887 American flags for each American life lost and 90 international flags representing the home countries of individuals from abroad who died in the 9/11 attacks.

The installation became a Pepperdine tradition in 2008 when the school’s College Republicans group organized to bring the tribute to the campus. ...

In addition to the Waves of Flags installation, Pepperdine is the permanent home of the Thomas E. Burnett, Jr., Heroes Garden, a public space for visitors to reflect and honor all those who live heroic lives, including namesake and Pepperdine alumnus Thomas Burnett (MBA ’95), a passenger on United Flight 93 who lost his life in the 9/11 attacks.

Heores Garden

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September 11, 2017 in Legal Education, Tax | Permalink | Comments (2)

Who Benefits From Corporate Tax Cuts?

FactCheck

FactCheck.org, Who Benefits From Corporate Tax Cut?:

In advocating for a corporate tax cut, Treasury Secretary Steven Mnuchin overstates the consensus when he says “most economists believe that over 70 percent of corporate taxes are paid for by the workers.”

In fact, who bears the brunt of corporate taxes — investors or labor —  is a matter of vigorous debate among economists who have studied it.

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September 11, 2017 | Permalink | Comments (0)

Law Schools Begin Classes In Fancy New, Upgraded Digs

Law.com, Law Schools Begin Classes in Fancy New, Upgraded Digs:

A new school year means a new look for several law schools.

Students at the University of South Carolina School of Law returned this fall to a brand new, $80 million building. The school is holding a dedication on Sept. 14 featuring U.S. Supreme Court Justice Samuel Alito.

Meanwhile, the University of Akron School of Law on Friday held a ribbon cutting Friday for its freshly renovated law campus, which cost $21 million and took two years to complete.

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September 11, 2017 in Legal Education | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, September 10, 2017

Bainbridge: Is Tax Avoidance Immoral? — A Catholic Perspective

Stephen Bainbridge (UCLA), Is Tax Avoidance Immoral? A Catholic Lay Perspective:

My friend and UCLA colleague Steven Bank [presented] a very interesting paper ... at a faculty colloquium, entitled When Did Tax Avoidance Become Respectable? ...

I'm neither a tax lawyer nor a theologian, but this got me to wondering what the Church taught on the subject. ... [A letter written by 11 heads of national Catholic Conferences says]:

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September 10, 2017 in Tax | Permalink | Comments (4)

Penn Law Students Try To Ban Amy Wax From Teaching Civil Procedure Due To Her Breakdown Of The Bourgeois Culture Op-Ed

WaxFollowing up on my previous posts:

National Lawyers Guild, Penn Law Chapter, Penn NLG Statement on Professor Amy Wax:

While we do not challenge Professor Wax’s right to express her views, we question whether it is appropriate for her to continue to teach a required first-year course. The Penn Law administration has long been aware that her bigoted views inevitably seep into her words and actions in the classroom and in private conversations with students. We call on the administration to consider more deeply the toll that this takes on students, particularly students of color and members of the LGBTQIA community, and to consider whether it is in the best interests of the school and its students for Professor Wax to continue to teach a required first-year class. Exposure to a diversity of viewpoints is an essential and valuable part of any educational experience, but no student should have to be exposed to bigotry or abuse in the classroom.

Since Professor Wax is, as usual, scheduled to teach Civil Procedure this fall, and we know that is unlikely to change, we offer ourselves as a resource for first-year students in Professor Wax’s class. 1Ls in Professor Wax’s class: whether you need someone just to listen, to help you figure out how to get through the semester, or to advocate on your behalf, Penn NLG has your back.

In 2015, Professor Wax received the University of Pennsylvania's Lindback Award for Distinguished Teaching (only three other Penn law professors have received the award in the past twenty years). 

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September 10, 2017 in Legal Education | Permalink | Comments (41)

Law Grad's GivnGo App Allows You To Round Up Your Purchases For Charity

GivnGo LogoOne of my former tax students, Arian Behboodi (J.D & M.B.A. 2017, Pepperdine), has created a very cool app, GivnGo.  The app allows a user to register a credit or debit card and the app rounds up your purchases to the next dollar and distributes the change to the charity or charities of your choice.  For example, if you spend $15.75, then the next dollar up is $16.00, so GivnGo distributes 25 cents to your charity. The app is available on iTunes.

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September 10, 2017 in Legal Education, Tax | Permalink | Comments (1)

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 #1 paper:

  1. [545 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  2. [536 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [268 Downloads]  Is Efficiency Biased?, by Zachary Liscow (Yale)
  4. [253 Downloads]  BEPS and European Union Law, by Sjoerd Douma (Leiden)
  5. [187 Downloads]  When Did Tax Avoidance Become Respectable?, by Steven Bank (UCLA)

September 10, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 9, 2017

This Week's Ten Most Popular TaxProf Blog Posts

ABA Tax Section Releases 17th Annual Law Student Tax Challenge Problem

ABAThe ABA Tax Section has released the J.D. Problem (rules; entry form) and LL.M. Problem (rules; entry form) for the 17th Annual Law Student Tax Challenge:

An alternative to traditional moot court competitions, the Law Student Tax Challenge asks two-person teams of students to solve a cutting-edge and complex business problem that might arise in everyday tax practice. Teams are initially evaluated on two criteria: a memorandum to a senior partner and a letter to a client explaining the result. Based on the written work product, six teams from the J.D. Division and four teams from the LL .M. Division receive a free trip (including airfare and accommodations for two nights) to the Section of Taxation 2018 Midyear Meeting, February 8-10, 2018 in San Diego, CA, where each team will defend its submission before a panel of judges consisting of the country’s top tax practitioners and government officials, including tax court judges. The competition is a great way for law students to showcase their knowledge in a real-world setting and gain valuable exposure to the tax law community. On average, more than 50 teams compete in the J.D. Division and more than 30 teams compete in the LL .M. Division.

IMPORTANT DATES

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September 9, 2017 in ABA Tax Section, Legal Education, Tax, Teaching | Permalink | Comments (0)

Return On Investment: The Core Challenge For Legal Education As 100 Law Schools Fail Department Of Education's Debt-To-Earnings Standard

Martin Pritikin (Dean, Concord), Return on Investment: The Core Challenge for Legal Education and the Legal Profession:

The legal community is facing a myriad of serious challenges ― historically low law school enrollments and bar passage rates, exploding tuition costs and associated student debt and a stagnant job market ― that, if not addressed, will put it in peril. ...

The big problem is return on educational investment, as those who would most logically serve the middle market can ill afford to do so. Annual tuition is about $50,000 at top-tier private law schools, where many graduates land $180,000 starting salaries. But the tuition is roughly the same at so-called “fourth-tier” law schools, where those lucky enough to secure employment typically make between $60,000 and $80,000. There’s a name for this economic model: it’s called broken.

Consider this: of the 205 law schools accredited by the American Bar Association, 199 are exempt from Department of Education requirements to report graduates’ debt-to-earnings ratios. Why? Because they operate as not-for-profits. As reported by the ABA Journal on January 11, 2017, of the six for-profit schools that recently reported their data for the first time, two failed outright and three others were found to be in the “zone,” that is, at risk of failing. Yet, based on available data, if the not-for-profits were subject to the same debt-to-earnings test, it appears at least half of them ― 100 schools ― would have failed as well. ...

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September 9, 2017 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1584: Trump’s DOJ Won’t Pursue Criminal Charges Against Lois Lerner

IRS Logo 2

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September 9, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Friday, September 8, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Sloan Speck (Colorado) reviews a new work by Lee Anne Fennell and Richard McAdams (Chicago), Inverted Theories.

Speck (2017)Since the early 1960s, the interdisciplinary turn in legal scholarship has been marked by academic lawyers’ engagement with, and adoption of, theoretical work from economics, anthropology, and philosophy, among other fields. In an important new article, Lee Anne Fennell and Richard McAdams argue for a novel reconsideration of how certain of these theories are deployed by law professors. Specifically, Fennell and McAdams identify a category of theories in which a central (and typically normative) claim “takes center stage,” while implausible or stylized assumptions that qualify this claim are minimized. For this type of theory, the footnotes supersede the headline, but readers are just skimming the large print. Fennell and McAdams argue that we should “turn the spotlight” on these “untrue assumptions” by inverting these theories, putting the footnotes first and downsizing the headline. Doing so will lead to more fruitful inquiry, both in terms of the questions we ask and the answers we find.

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September 8, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Should Law Schools Shift Scholarship Money From Merit (LSAT & UGPA Medians) To Need?

Deborah Jones Merritt (Ohio State) & Andrew Merritt, Agreements to Improve Student Aid: An Antitrust Perspective, 67 J. Legal Educ. ___ (2017):

Law schools tie much of their scholarship money to LSAT scores and undergraduate grades. By awarding substantial discounts to students with above-median indicators, schools attempt to climb the U.S. News ranking ladder. This practice, as many educators recognize, reduces access to legal education for low-income and minority students. As a result, many schools would like to shift at least some of their scholarship funds to need-based awards. Schools, however, struggle to make that change unilaterally; they worry about losing ground in the rankings race.

Could law schools act collectively to reform their scholarship practices? Could the ABA reshape those practices by adopting an accreditation standard that limits the award of “merit” based aid?

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September 8, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

My First 100 Days

100 DaysToday marks my 100th day as Dean of Pepperdine Law School.   Since my first day, I have loved working towards our shared goal to become the nation's premier Christian law school by combining academic and research excellence with a deep-rooted commitment to our Christian mission that welcomes people of all faiths and backgrounds.  When I sought the deanship, I laid out my three priorities in achieving that goal.

My top priority is to increase our students' return on their investment in a Pepperdine legal education in today's changed legal landscape.  As readers of this blog know, since 2010 law schools have suffered a 38% decline in applicants (and a 45% decline in applicants in the highest LSAT band Pepperdine seeks to attract), which has led to declining credentials in incoming classes and to declining bar passage and job placement results for graduates.  Most law schools have responded by reducing the size of their incoming classes.  This fall, with the full support of the university, Pepperdine reduced the size of our entering class by over 20% and increased our median LSAT (160) and UGPA (3.62).

We are right-sizing the law school in a financially sustainable way by paring our budget while investing in areas of excellence, ramping up our fundraising efforts, and expanding our non-J.D. enrollment in areas of our historic strength.  We are leveraging our #1 ranked (for 12 of the past 13 years) Straus Institute for Dispute Resolution by expanding our Masters and LL.M. degree programs. Last month, we launched a new LL.M. degree program in Entertainment, Media, and Sports Law to capitalize on the opportunities for our students in the Los Angeles market, the university's partnership with AEG, and our great faculty in those areas.  In addition, we are leveraging our faculty's nationally recognized strength in teaching through our new online master of legal studies program, which we launched in August with enrollment 67% higher than our projections.

We also have hit the ground running on my other priorities to:

  • Pursue ambitious and accountable excellence in everything we do
  • Build a community in which all students, faculty, and staff are loved, nurtured, and challenged to grow professionally, personally, and spiritually

Over the summer, my wife and I hosted 20 dinners with faculty and students, and will over the 2017-18 academic year host dinners for the entire first year class.  I met with staff departments to discuss the critically important ways they contribute to the school.  My Dean of Faculty, Associate Dean for Academic Affairs, Associate Dean for Research and Faculty Development and I met with each member of the faculty to discuss how we can support them to help achieve our shared ambitious goals for the school.

Pepperdine

I am proudest of simply working on a daily basis over these first 100 days with an amazing collection of faculty, students, administrators, and staff.  Mine has been an unusual journey to the deanship, and my biggest surprise is how much I enjoy the new aspects of my life in alumni relations, advancement, and university administration. In fact, I can honestly say that I have loved every minute of the job, except one:

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September 8, 2017 in Legal Education | Permalink | Comments (3)

Kleinbard: The Right Tax At The Right Time

Florida Tax Review  (2015)Edward Kleinbard (USC), The Right Tax at the Right Time, 20 Fla. Tax Rev. ___ (2017):

The companion paper to this (Capital Taxation in an Age of Inequality, 90 S. Cal. L. Rev. 593 (2017)) argues that a moderate flat-rate (proportional) income tax on capital imposed and collected annually has attractive theoretical and political economy properties that can be harnessed in actual tax instrument design. This paper continues the analysis by specifying in detail how such a tax might be designed.

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September 8, 2017 in Scholarship, Tax | Permalink | Comments (0)

Allison Christians Named Associate Dean For Research And Promoted To Full Professor At McGill

Christians (2018)The McGill Faculty of Law is pleased to announce that Allison Christians has been promoted to the rank of Full Professor, effective September 1.

Professor Christians, who was recently renewed as H. Heward Stikeman Chair of Tax Law, coincidentally began her term as Associate Dean (Research) at the Faculty on the very same date for a three-year mandate.

Her research and teaching focus on national and international tax law and policy issues, with emphasis on the relationship between taxation and economic development and on the role of government and non-government institutions and actors in the creation of tax policy norms.

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September 8, 2017 in Legal Education, Tax, Tax Profs | Permalink | Comments (1)

Steinbuch: Questionable Arguments About The LSAT's Role In Admissions And Bar Passage

Following up on my previous posts:

Robert Steinbuch (Arkansas-Little Rock), Questionable Arguments About Serious Statistics:

I write to continue the interesting discussion with Aaron Taylor regarding the proper role of the LSAT in law school admissions. ...

Unfortunately, Taylor confuses some simple statistical truths, both in general and regarding LSAT scores and bar passage, specifically: First, correlations can be explained through any of the following: causation, reverse causation, or "third" variables. Second, nobody actually thinks that LSAT scores cause bar outcomes or vice versa. After all, how can a score on one exam cause a score on another? And, third, LSAT scores demonstrably help predict bar success due to at least one underlying common causal factor of both, i.e., likely some measure of skill. Empirical analysis is complex, and clichés and truisms do nothing to simplify it....

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September 8, 2017 in Legal Education | Permalink | Comments (1)

Thursday, September 7, 2017

Hemel Presents In Defense Of The State And Local Tax Deduction Today At Boston College

HemelDaniel Hemel (Chicago) presents Easy on the SALT: In Defense of the Deduction for State and Local Taxes at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu Yi Oei:

Congressional Republicans and Trump administration officials have said that they plan to repeal the deduction for nonbusiness state and local taxes (SALT) as part of a comprehensive tax reform package. This essay critically examines the major arguments for repealing the SALT deduction. Repealing the deduction and using the resulting revenues to reduce federal rates across the board would likely lead to greater tax-induced deadweight loss overall. Repealing the deduction also would distort decisions about the financing of education and health care, which together account for more than half of all state and local government spending. Repeal would further encourage a shift from nonbusiness to business taxes at the state and local level, and potentially would result in more borrowing by subnational governments in the short and medium term.

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

Tax Prof Panel On A U.S. Perspective On Tax Compliance And Tax Privacy At Cambridge

CambridgeWilliam Byrnes (Texas A&M), Michael Hatfield (University of Washington), Leandra Lederman (Indiana-Bloomington), and Adam Thimmesch (Nebraska) participated in a panel on Tax Compliance and Tax Privacy: A U.S. Perspective at the 35th Cambridge International Symposium on Economic Crime yesterday at the University of Cambridge:

This panel of US tax academics explored cutting edge issues in tax compliance, information reporting, and tax privacy. The topics include recent developments in the behavioral economics and psychology of tax compliance, and the rapidly evolving use of technology and big data in tax enforcement and its impact on the privacy of taxpayers

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September 7, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

How Top U.S. Law Firms Get Away With Paying Women Less

Bloomberg Businessweek, How Top U.S. Law Firms Get Away With Paying Women Less:

In January 2014, the law firm Chadbourne & Parke hired Kerrie Campbell to work in its Washington office. After 27 years in the business, she’d finally reached the pinnacle of private law practice: partnership at a top-tier firm—a century-old stalwart of the elite New York bar. In a press release, Chadbourne said, “We are thrilled to welcome her.”

After two years, the thrill was gone. Chadbourne’s managing partner, Andrew Giaccia, and Abbe Lowell, its head of litigation, appeared together at Campbell’s office. Her time at the firm had been rocky. Still, she says she was shocked by what they had to say. The firm’s five-member, all-male management committee had decided that she didn’t “fit” at Chadbourne. She wasn’t being fired, exactly, but she ought to find a new job, they told her. To “incentivize” a swift departure, her compensation would be cut about 60 percent, to $9,000 a month, less than that of a first-year associate right out of law school. Giaccia and Lowell suggested that, to preserve her reputation, she leave quietly.

It felt like “someone smacking a baseball bat into your gut,” Campbell, 55, says. The firm denies her version of events.

Campbell—a “pit bull,” according to her son Tyler—did not leave quietly. She filed a sex-discrimination suit in August 2016 alleging that Chadbourne treated her like a second-class citizen, paid her much less than male partners, and—when she objected—showed her the door. Indignant, Chadbourne denied wrongdoing and lashed out. It said in court papers that Campbell lacked basic competence, alienated colleagues, and drank too much at firm social events—all accusations she denies.

For a profession dedicated to lofty concepts such as “equal protection” and “due process,” the practice of law has allowed unequal treatment of women to fester for decades. A 2016 survey of the 350 largest U.S. law firms found female partners on average received $659,000 in annual pay. Male partners, meanwhile, averaged $949,000, or 44 percent more.

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September 7, 2017 in Legal Education | Permalink | Comments (0)

Insights From Behavioral Economics Can Improve Administration Of The EITC

Leslie Book (Villanova), David Williams (Intuit) & Krista Holub (Intuit), Insights from Behavioral Economics Can Improve Administration of the EITC:

The IRS is a non-traditional but key player in delivering social benefits to the nation’s working poor. In fact, it administers one of the nation’s largest anti-poverty programs: the earned income tax credit (EITC). The EITC is generally praised for its role in reducing poverty and incentivizing low-wage work. While the credit has bipartisan support, the IRS continues to face strong criticism over EITC compliance issues.

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September 7, 2017 in Scholarship, Tax | Permalink | Comments (0)

California Bar Trustees Vote 6-5 To Give Supreme Court Three Bar Exam Cut Score Options: Keep It 144, Lower To 141.4 Or 139

California Bar ExamThe Recorder, State Bar Leaves Reducing Exam Score for Supreme Court to Resolve: Bar Leaders Offer Justices a Range of Lower Scores, or Keeping It At 144:

California state bar trustees on Wednesday punted the fate of the bar exam pass score to the California Supreme Court, offering the justices a range of choices on the controversial issue, from leaving the score at 144 to lowering it to 139.

The trustees’ 6-5 vote endorsing the range reflected the contentious nature surrounding the pass score, or cut score. California law school deans, which have seen their students’ pass rates plummet in recent years, have pleaded with the bar and the Supreme Court reduce the cut score—now the second highest in the nation behind Delaware — to as low as 135. The Committee of Bar Examiners, however, endorsed maintaining the 144 score while additional studies are completed.

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September 7, 2017 in Legal Education | Permalink | Comments (0)

Dealing With IRS Scammers (And How To Tell They Are Not Private Debt Collectors)

Readers will recall that Congress, in §32102 of the 2015 (FAST) Act, amended IRC §6306 to force the Service to outsource some collection inventory to private collection agencies.

Now, I have no doubt that readers of this blog are totally compliant in their taxes.   And if any happen to be delinquent in their taxes, I have no doubt they are not in the category of delinquent taxpayers who face collection from private collection agencies.   But I also suspect many readers have received questions about the program from clients, friends, family members, workplace colleagues, neighbors, and others.

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September 7, 2017 in Bryan Camp, Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Harvard Law School Unveils Memorial Honoring Slaves Who Enabled Its Founding

HLSHarvard Law Today, Harvard Law School Unveils Memorial Honoring Enslaved People Who Enabled Its Founding:

On September 5, at the opening of its Bicentennial observance, Harvard Law School unveiled a memorial to the enslaved people whose labor helped make possible the founding of the school.

The plaque, affixed to a large stone memorial placed at the Crossroads in the center of the Law School’s plaza, reads:

In honor of the enslaved whose labor
created wealth that made possible
the founding of Harvard Law School

May we pursue the highest ideals
of law and justice in their memory

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

The IRS Scandal, Day 1582: Is The IRS Scandal About To Break Wide Open?

IRS Logo 2PJ Media, Is the IRS Scandal About to Break Wide Open?:

Lost emails, destroyed hard drives, foot dragging, stonewalling, and a smirking, sneering IRS commissioner doing his best to obscure the truth -- this has largely been the response by the Internal Revenue Service to investigations by Congress and FOIA requests from conservative groups trying to discover the truth about the IRS targeting scandal.

But one federal judge appears to be just as curious as the rest of us about what exactly the IRS was up to when it targeted conservative groups for special scrutiny in approving their tax-exempt status. ...

Although the arrogance of the IRS is breathtaking, it looks like they may have more than they can handle with Judge Walton. With the agency already proving that it tried to hide documents directly related to a FOIA request, how much nonsense will Walton put up with? He better have a low tolerance for word games and shenanigans by the IRS.

More names means more witnesses to be deposed under oath. Perhaps some promises of immunity are in order so that the truth can be wrung out of an agency that has been used to target the political opponents of a president and materially affect the ability of conservative groups to exercise their rights.

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September 7, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, September 6, 2017

Thomas: Taxing the Gig Economy

Kathleen DeLaney Thomas (North Carolina), Taxing the Gig Economy, 166 U. Pa. L. Rev. ___ (2017):

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.

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

Law Schools With The Best Employment Rates

Following up on last week's post, The 49 Law Schools With The Most Improved Employment Rates: The National Jurist, Most Improved Employment Rates:

The National Jurist took into consideration all forms of post-graduation employment. The employment rates were weighted, giving the most heft to full-time jobs that require bar passage. Other jobs, such as J.D.-advantage jobs and positions in other professions, received less weight.

Employment

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September 6, 2017 in Law School Rankings, Legal Education | Permalink | Comments (1)

The (Lack Of) Human Touch In Collecting Taxes

The National Taxpayer Advocate Nina Olsen has a blog post here that is well worth your time to read.  It's about the Service's automated levy program called FPLP (Federal Levy Payment Program).  

One way the Service tries to collect unpaid taxes is by looking for people who owe the delinquent taxpayer money and snagging those payments.  That's called a levy.    FPLP is a computer program designed to snags payments owed by the federal government to delinquent taxpayers.  Now, some people consider it an irony that one hand of the federal government actually sends payments to many delinquent taxpayers who owe the federal government money. Notably, however, FPLP hits what are commonly viewed as "safety net" payments from Social Security and Federal Retirement programs.  So other people consider it an irony that one hand of the federal government would partially undo the safety net payments made by the other hand.

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September 6, 2017 in Bryan Camp, Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

What Law Students Say About Experiential Learning

David I. C. Thomson (Denver) & Stephen Daniels (American Bar Foundation), If You Build it, They Will Come: What Students Say About Experiential Learning:

In the Fall of 2013, soon after the reduction in applications that many law schools experienced in 2011-13, the University of Denver’s law school lead the way nationally in making a significant additional investment in experiential learning. Starting that fall, it provided the option for all incoming students to spend one entire year of law school in experiential learning courses and programs. While this commitment was being rolled out, the authors prepared a study of the impact of the program on enrollment and the educational experience of students. A three-year study — each year surveying 1Ls — also included follow up surveys of 2Ls and 3L/4Ls, with additional “look back” questions for the 3L/4L surveys. What we learned was that applicants chose Denver Law on several traditional factors (such as cost and location) but also strongly indicated that the experiential learning component was an important part of their decision. In the 3L/4L surveys, students reflected back on their law school education, and still ranked experiential learning as very important to them, while noting the importance of other practical concerns, such as employment outcomes for graduates.

Denver

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September 6, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

The 100 Most Influential People In Tax And Accounting

100 CoverI am honored to be included on the list of Accounting Today's 100 Most Influential People in Tax and Accounting for the twelfth consecutive year:

Not only is Caron’s blog one of the most important in tax — it hit an alltime high of 1.5 million page views a month in 2016 — its prominence also helped elevate him to his new position as dean of his law school; proof, if any was needed, that thought leadership really does pay off.

I am honored to be on the Top 100 list with such high-powered people in the tax and accounting worlds, including:

  • Karen Abramson (CEO, Wolters Kluwer Tax & Accounting)
  • Joe Baron (Managing Director, Thomson Reuters Tax & Accounting)
  • Wayne Berson (CEO, BDO)
  • Kevin Brady (Chair, U.S. House Ways & Means Committee)
  • James Doty (Chair, PCAOB)
  • Lynne Doughtie (Chair & CEO, KPMG)
  • Kimberly Ellison-Taylor (Incoming Chair, AICPA)
  • Cathy Engelbert (CEO, Deloitte)
  • George Farrah (Executive Director, Tax & Accounting, Bloomberg BNA)
  • J. Russell George (Treasury Inspector General for Tax Administration)

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September 6, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (1)

Would A 91% Top Tax Rate Bring Back A Flourishing Economy?

91%New York Times op-ed:  When the Rich Said No to Getting Richer, by David Leonhardt:

A half-century ago, a top automobile executive named George Romney — yes, Mitt’s father — turned down several big annual bonuses. He did so, he told his company’s board, because he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today). ...

Romney didn’t try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month.

The old culture of restraint had multiple causes, but one of them was the tax code. When Romney was saying no to bonuses, the top marginal tax rate was 91 percent. Even if he had accepted the bonuses, he would have kept only a sliver of them.

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September 6, 2017 in Tax | Permalink | Comments (3)

The Path To Lawyer Well-Being

Path 2National Task Force on Lawyer Well-Being, The Path to Lawyer Well-Being: Practical Recommendations For Positive Change:

To be a good lawyer, one has to be a healthy lawyer. Sadly, our profession is falling short when it comes to well-being. The two studies referenced above reveal that too many lawyers and law students experience chronic stress and high rates of depression and substance use. These findings are incompatible with a sustainable legal profession, and they raise troubling implications for many lawyers’ basic competence. This research suggests that the current state of lawyers’ health cannot support a profession dedicated to client service and dependent on the public trust.

The legal profession is already struggling. Our profession confronts a dwindling market share as the public turns to more accessible, affordable alternative legal service providers. We are at a crossroads. To maintain public confidence in the profession, to meet the need for innovation in how we deliver legal services, to increase access to justice, and to reduce the level of toxicity that has allowed mental health and substance use disorders to fester among our colleagues, we have to act now. Change will require a wide-eyed and candid assessment of our members’ state of being, accompanied by courageous commitment to reenvisioning what it means to live the life of a lawyer.

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September 6, 2017 | Permalink | Comments (0)

Macroeconomic And Distributional Effects Of U.S. Personal Income Tax Reforms

Macroeconomic and Distributional Effects of Personal Income Tax Reforms : A Heterogenous Agent Model Approach for the U.S (IMF Working Paper):

This paper assesses the macroeconomic and distributional impact of personal income tax (PIT) reforms in the U.S. drawing on a multi-sector heterogenous agents model in which consumers have non-homothetic preferences and sectors differ in terms of their relative labor and skill intensity. The model is calibrated to key characteristics of the US economy. We find that (i) PIT cuts stimulate growth but the supply side effects are never large enough to offset the revenue loss from lower marginal tax rates; (ii) PIT cuts do “trickle-down” the income distribution: tax cuts stimulate demand for non-tradable services which raise the wages and employment prospects of low-skilled workers even if the tax cut is not directly incident on them;

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

Tuesday, September 5, 2017

Hemel: Is Rothification Just A Budget Math Gimmick?

Daniel Hemel (Chicago), Is Rothification Just a Budget Math Gimmick?:

Trump administration officials and congressional Republican leaders are reportedly considering a proposal to “Rothify” retirement savings as part of a comprehensive tax reform package. The idea is that instead of excluding 401(k) contributions from taxable income in the year they’re made and then paying tax on withdrawals, individuals would pay tax on 401(k) contributions in the year they’re made and then be able to withdraw tax-free. The latter approach — already an option for individuals whose employers offer Roth 401(k) plans  —  would become mandatory with respect to some or all 401(k) savings. Similar changes on the IRA side would push individuals from traditional to Roth accounts.

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September 5, 2017 in Tax | Permalink | Comments (2)

FactChecking Trump’s Tax Speech

FactCheck LogoFactCheck.org, FactChecking Trump’s Tax Speech:

In a speech on changing the tax code, President Donald Trump offered some political spin on the facts.

  • Trump claimed “anywhere from $3 trillion to $5 trillion” of profits are left overseas by U.S. companies to avoid U.S. taxes. But his own press office cites an estimate of $2.6 trillion in a fact sheet posted online the day of his speech. The group that published that number told us $5 trillion “seems impossibly high.”

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September 5, 2017 in Political News, Tax | Permalink | Comments (0)