TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, January 25, 2017

Charlotte Law School Reopens: 33% Of Students Have Transferred, Prof Says 42% Bar Pass Rate Would Have Been In 20s But For Payments To Students Not To Take Bar

Charlotte Logo (2016)Charlotte Business Journal, Charlotte Law President Talks Enrollment, Layoffs — And the Future:

Charlotte Law President Chidi Ogene said in an interview with the Charlotte Business Journal that the education department’s decision was a “precipitous and extreme step” given that numerous schools have been placed on probation but not had funding pulled by the education department. He notes Charlotte Law is taking steps to address the ABA’s concerns regarding compliance with first-time bar passage rates and admission indicators. “We don’t have an answer to suggest why Charlotte is being treated in a way that’s very, very different than any other higher-education systems,” Ogene adds.

The loss of federal funds has forced Charlotte Law to make difficult choices, Ogene says.

Final enrollment figures for the spring semester won’t be available until later this week. But initial reports show that roughly 230 students have transferred — a 33% drop — from the about 700 students taking classes last fall. ...

WFAE, Law School Official: Bar Passage Would Have Been in 20s If Not For Paying Students Not To Take Exam:

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January 25, 2017 in Legal Education | Permalink | Comments (1)

Louisville Dean Finalists Include 5-Year Interim Dean And Associate Dean With Experience Addressing 50% Enrollment Decline

LouisvilleFollowing up on my previous posts on the troubles at Louisville Law School (links below):  The Provost at the University of Louisville has announced the four finalists for the law school deanship.  Two things jumped out at me:

First, one of the candidates is the Interim Dean, who has been in that position for five years.  I am not aware of any other interim dean that has served so long in that capacity in light of ABA Accreditation Standard 203 and Interpretation 203-3.  (Earlier this month, I blogged the selection of Rachel Janutis as Dean Of Capital University Law School following three years of service as interim dean.)  Not coincidentally, Louisville is scheduled for its seven-year ABA accreditation visit in Fall 2017, by which time presumably a permanent dean will be in place.

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January 25, 2017 in Legal Education | Permalink | Comments (2)

Tuesday, January 24, 2017

Batchelder Presents Accounting For Behavioral Biases In Business Tax Reform At NYU

BatchelderLily Batchelder (NYU) presented Accounting for Behavioral Biases in Business Tax Reform: The Case of Expensing at NYU yesterday as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

One of the fundamental questions in business tax reform is whether to allow firms to immediately expense investments or require economic cost recovery. The conventional view is that expensing would generate stronger growth effects holding revenues constant. This view is rooted in traditional models of corporate finance that assume firms look at the net present value of expected tax payments when incorporating taxes into investment decisions. But this traditional view ignores the possibility that firms focus on more salient measures of taxes as well. If so, they may respond less to expensing than this theory suggests because expensing does not lower their financial accounting tax liability and, all else equal, requires a higher statutory rate.

This paper considers whether firms undervalue expensing due to a focus on these non-economic tax metrics and, if so, what this implies about business tax reform if the goal is to increase US investment. It develops a framework for what cost recovery rules are optimal, and then uses new and existing data to parameterize this framework, holding constant long-run revenues and the relative tax treatment of debt and equity. 

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January 24, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Speck Presents Expertise And International Tax Norms Today At Georgetown

SpeckSloan Speck (Colorado) presents Expertise and International Tax Norms at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

This paper explores how a particular framework for understanding international taxation — a framework driven by so-called international tax neutrality norms — developed among economists and legal academics in the 1960s and subsequently became entrenched among public-sector policymakers. The neutrality norm framework marks a turn from the instrumental use of international taxation in the 1950s toward an efficiency-oriented approach towards international taxation. Although some scholars question the usefulness of this turn towards efficiency, the neutrality norm framework continues to dominate discussions about international tax policy today. This paper traces the intellectual history of the neutrality norm framework: how it emerged in the late 1950s, and how it became a durable framework for understanding international tax policy.

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January 24, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tax Havens And The Transparency Wave Of International Tax Legislation

Robert T. Kudrle (Minnesota), Tax Havens and the Transparency Wave of International Tax Legislation, 37 U. Pa. J. Int'l L. 1153 (2016):

Tax havens have posed an increasingly important challenge to the world economy, yet they receive little attention in the international economic law and policy literature. This relative neglect springs largely from taxation’s tangential connection with the major structures of international economic governance. But a highly developed treaty regime has been in place for decades. The first wave of legalization aimed at relief from double taxation grew from an influential template for bilateral tax treaties promulgated by the League of Nations and the OECD. Developments outside that regime, particularly the growth of tax havens, generated the need for a second wave that began with a 1998 OECD report proposing cooperative action to combat both tax avoidance and evasion.

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January 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

Speck:  Tax Planning And Policy Drift

Sloan G. Speck (Colorado), Tax Planning and Policy Drift, 69 Tax L. Rev. 549 (2016):

This Article proposes a framework for analyzing how private-sector legal interpretations influence public policy. Political scientists and legal scholars use the terms “bureaucratic drift” and “legislative drift” to describe how administrative agencies and future legislative coalitions affect public policy enacted by Congress. This Article identifies a third category of policy drift: “planning drift.” Planning drift describes deviations from an enacting legislature’s policy preferences that result from private experts’ interpretations of existing law. After Congress enacts a statute, the first people to interpret and apply the new legislation generally are not regulators or judges, but instead are private experts, such as lawyers, acting in the service of their clients. Although these experts’ interpretations do not have legal authority in a formal sense, this Article elaborates mechanisms through which these interpretations shape the course of public policy. Specifically, these interpretations give private experts a first-mover advantage in the interpretation of new legislation and affect the substance of subsequent legislative and bureaucratic interventions. Where private experts’ legal interpretations distort legislative policy preferences, Congress may have an incentive to limit planning drift. From Congress’s perspective, however, planning drift is not always undesirable.

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January 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

Columbia Journal Of Tax Law Publishes New Issue

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published Vol. 8, No. 1:

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January 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

The U.K.'s Threat To Weaponize Tax Is No Bluff

Bloomberg View:  The U.K.'s Threat to Weaponize Tax Is No Bluff, by Mark Gilbert:

The U.K. government is threatening to give its post-Brexit economy a shot in the arm by reducing corporate taxes to become a sort of "Singapore-on-Thames," a tax haven on the perimeter of the European Union. EU officials are dismissive of the idea; but they may be whistling past a graveyard.

At a rate of 20 percent, the U.K. currently ranks in the 11th lowest tax bracket in the EU, level with Finland and Estonia, lower than France or Germany but higher than Ireland, Poland and the Czech Republic:

Bloomberg

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January 24, 2017 in Tax | Permalink | Comments (3)

California Bar Exam Carnage Extends To Out-Of-State Law Schools

California (2016)Following up on my previous posts (links below): Daily Record, How Out-of-State Schools Fared on California Bar Exam:

Newly released data for California’s July 2016 bar exam reveal a strong performance from graduates of most top-tier, out-of-state law schools, while pass rates for students from other programs fell behind.

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January 24, 2017 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1356: Reflections On The End Of My Daily Coverage

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Peter J. Reilly (Forbes), TaxProf Calls An End To Day By Day IRS Scandal Coverage:

Paul Caron, the TaxProf, dean of the tax blogosphere has called the end of an era.  We were all distracted with the inauguration, an admittedly important even, but given the number of peaceful transitions of power we have had since 1800, well 1860 anyway, not really that remarkable.  Professor Caron declared that he was ending daily coverage of the IRS scandal with Day 1352.

His announcement is particularly meaningful to me. Check out the lead paragraph:

In response to inquiries from Peter J. Reilly (Forbes) and Brian Leiter (University of Chicago Law School), I previously discussed when I would stop my daily coverage of the IRS Scandal.

Professor Caron explained

My answer is the same as it has been throughout the scandal: I will stop when the daily commentary in the press and blogosphere on the scandal (from both the right and the left) ends. At several points in the scandal, as I was running out of content, a new chapter would unfold and my daily coverage would continue.

At any rate, his mention of me in this context gives me a sense of having really arrived in the tax blogosphere after over seven years since my very first post. ...

I remain the last IRS scandal agnostic. Frankly, I don't think you needed a big conspiracy to account for the IRS getting its works gummed with exempt applications from groups calling themselves a party but claiming they were mostly not political.  On the other hand, both Joe Kristan and George Will think there is a scandal and that is a tough pair to be dismissive of. ...

In October 2015 I wrote two posts in which I indicated that the quality of the TaxProf's series was being diluted, by the addition of extraneous matter. ... The core scandal had been about difficulties processing applications for exempt status. Conservative groups were not getting their exempt status revoked for single statements.

There were quite a few strands of stories that were legitimately connected to the core scandal. Lois Lerner's emails, the congressional investigations, emails lost on servers, how quickly Koskinen moved the investigation on are examples. But extraneous material started creeping in. ...

It seems that the IRS Scandal even more than usual is something that is viewed through ideological glasses. ...

I reached out for some comments on the closing of the day by day scandal coverage.  Joe Kristan refereed me to his post, which ironically became Day 1353.

Thanks to TaxProf Paul Caron for staying on this undercovered story. The IRS and Lois Lerner admitted the targeting on Day 1. People have been trying to walk that back ever since, either by moving the goal posts (“the President was never implicated”) or by pretending the targeting never happened. The tax agency taking on itself the task of targeting political organizations is scarier than it doing so at the bidding of the White House.

Now we wait to see whether the new President will disarm the IRS, or wield it.

Robert Flach, the Wandering Tax Pro wrote me:

I did not follow the professor's coverage. I agreed with you that he "jumped the shark" way back. I felt he was truly beating a dead horse.

I personally strongly oppose the Tea Party and the religious right - but I am also no fan of the Commissioner and felt he mismanaged the IRS. ...

Paul Streckfus of the EO Tax Journal wrote me:

It's probably time, even if Lois Lerner is the gift that keeps on giving. What's interesting is whether Trump wants to keep the scandal alive. The wild card is the House Freedom Caucus. They probably expect Sessions to open another investigation of Lois Lerner. If so, Caron may have stopped his countdown too soon!

The scandal has really devastated the IRS exempt function.  The groundwork for the next scandal has been laid in this one. The next scandal will be about how nobody is watching exempt organizations creating a playground for scoundrels.

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January 24, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, January 23, 2017

A 'Snow Day' In Malibu

Snow DayAfter a weekend of historic rains in Southern California, Pepperdine cancelled classes today, throwing a monkey wrench into the planned inaugural presentation by Adam Chodorow in our 2017 Tax Policy Workshop Series.  Since my wife and I had already purchased the food for the post-presentation lunch, we opened up our home for lunch with hardy students who ventured to campus and faculty who live on campus.  We ended up having a delightful break in our workdays, reminiscent of the glorious "snow" days of a boy growing up in Boston and of a father raising two children in Cincinnati.  I previously blogged how the wonder of snow days gives way as we grow older, captured by my amazing daughter in this touching article for her high school newspaper:

I almost wish I didn't have these snow days off school.  It was depressing sitting in my house all day, working away to meet adult-like goals rather than simply enjoying the unexpected free time to play in the snow or sled like I did when I was younger. ...

And so the sleds lay dormant in our garage.  Each member of the family worked quietly and separately in different rooms.  Our driveway even lacked the telltale crunched-in snow footprints left by excited children running around in the snow.  Now, the snow seems more of a nuisance than an actual blessing. ...

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January 23, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (1)

Trump Won't Release Tax Returns, Despite Online Petition With Over 275,000 Signatures; WikiLeaks Hopes To Acquire And Publish Them

Holderness Presents The Unexpected Role Of Tax Salience In State Competition For Businesses At Washington U.

Holderness (2017)Hayes Holderness (Illinois VAP, moving to Richmond) presented The Unexpected Role of Tax Salience in State Competition for Businesses, 84 U. Chi. L. Rev. ___ (2017), at Washington University last week as part of its Faculty Workshop Series:

Competition among the states for mobile firms and the jobs and infrastructure they can bring is a well-known phenomenon. However, in recent years, a handful of states have added a mysterious new tool to their kit of incentives used in this competition. Unlike more traditional incentives, these new incentives — which this Article brands “customer-based incentives” — offer tax relief to a firm’s customers rather than directly to the firm. The puzzle underling customer-based incentives is that tax relief provided to the firm’s customers would seem more difficult for the firm to capture than relief provided directly to the firm — strange, as a state’s primary goal is to subsidize the firm’s investment in the state.

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January 23, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Lederman Presents Does Enforcement Crowd Out Voluntary Tax Compliance? Today At Florida

LedermanLeandra Lederman (Indiana-Bloomington) presents To What Extent Does Enforcement Crowd Out Voluntary Tax Compliance? at Florida today as part of its Tax Policy Colloquium Series:

Tax collectors generally use enforcement methods, such as audits and the imposition of penalties, to deter noncompliance with tax laws. Although this approach is consistent with most economic modeling of tax compliance, some scholars caution that enforcement may backfire, “crowding out” taxpayers’ intrinsic motivations to pay taxes to such an extent that they reduce their tax payments. This article analyzes the existing evidence to determine if and when this occurs. Field studies suggest that enforcement tools, such as audits, are effective deterrents, generally greatly increasing tax collections.

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January 23, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pepperdine Tax Policy Workshop Series (Spring 2017)

Here is the schedule for my Spring 2017 Pepperdine Tax Policy Workshop Series:

I will of course blog each professor's paper on the day of their presentation.  Southern California professors and practitioners are welcome to attend any of the sessions (11:00 a.m. - 12:30 p.m.) — just let me know.

Pepperdine Law School (2016)

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January 23, 2017 in Colloquia, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Charlotte Law School Rejects Feds' Demand That It Close Immediately And Let Teach-Out Partner Florida Coastal Take Over Classes; Hopes For 'Fairer Hearing' From Trump Administration

Charlotte DOECharlotte Observer, Details Emerge in Nasty Fight Between Feds and Charlotte School of Law:

Charlotte School of Law said this week it rejected a government agreement that would have restored millions of dollars in federal loans because the terms betrayed its students’ futures.

On the same day of that statement, a group of students filed the third class-action lawsuit accusing the school of already doing similar damage.

The contradictory allegations add to the deepening uncertainty swirling around the uptown school as it prepares to reopen Monday. No one knows for sure how many students will show up. ...

On Wednesday, the education department accused the school of reneging on a deal that would have restored some of the lost student loans. ...

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January 23, 2017 in Legal Education | Permalink | Comments (0)

Tulane Seeks To Hire A Tax Visitor

Tulane (2015)Tulane Law School invites applications for a one-semester tax visiting position in Fall 2017:

Our specific needs for the Fall 2017 semester include basic income tax and corporate tax. Applicants must possess a J.D. from an ABA-accredited law school, strong academic credentials, and at least three years of relevant law-related experience; prior teaching experience is strongly preferred. Applicants should submit a letter of interest, CV, and the names and contact information of three references through Interfolio. For additional information, please contact Onnig Dombalagian.

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January 23, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, January 22, 2017

It's Time For A New Law School In Charlotte: University Of North Carolina-Charlotte Or Wake Forest

UNCWFFollowing up on my previous posts (links below): Charlotte Agenda, Charlotte Needs a Law School. It’s Time to Start a New One (Or Recruit One):

Our city needs to have a law school. And with Charlotte School of Law on the ropes, it’s time to get going on starting a new one. ... It’s time to start building a new law school — or recruiting an existing one to move to Charlotte. Here are two options. One’s likely, the other is more of a long shot.

UNC Charlotte opens up a law school

This isn’t a new idea. The university explored opening a school of law back in 2008. Of course, the economy promptly tanked, and demand for law school and lawyers along with it. That’s still fairly true — law school applications remain near historic lows.

But there are still plenty of people here in Charlotte who are looking to move up in their careers, find a new job and boost their earning power through law school without uprooting their families to do it. Major Charlotte employers are still hungry for talent with law backgrounds. These are the populations a UNC Charlotte law school could serve.

UNC Charlotte doesn’t need to build a flagship, nationally competitive law school flying students in from around the world to be effective. And the university already knows how to fill this niche. Their Professional MBA program ranks among the country’s best by U.S. News.

Wake Forest moves its law school to Charlotte

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January 22, 2017 in Legal Education | Permalink | Comments (3)

President Obama's Lack Of Scholarly Chops Prevents Him From Being Hired As Law Prof At Columbia, Kansas; But 'Professor Of Practice' Is A Possibility

Obama

Chronicle of Higher Education, Prof. Barack Obama Needs a New Job, So We Sent Around His Academic Résumé:

It can be tough out there for an academic who’s been out of the game for so long, and Mr. Obama probably hasn’t updated his curriculum vitae in a while. So we did it for him.

We’ve noticed the former senior lecturer at the University of Chicago Law School padding his academic résumé in the waning days of his presidency. Mr. Obama went on a bit of a spree in the final weeks, publishing articles in Science, The New England Journal of Medicine, and his old grad-school haunt, the Harvard Law Review.

Mr. Obama is no fool. He remembers that publication is the coin of the realm. Since he didn’t put his name to any scholarly articles during his earlier academic career — minding his political ambitions, he played his cards close to the vest back then — he needed to make up for lost time.

But we didn’t just update Mr. Obama’s résumé for him. We also sent it around to a handful of law professors who have served on appointment committees, and asked them to provide feedback. Set aside the specific benefits of having a former president on the faculty, we said, and focus on the his merits as a once and future academic. ...

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January 22, 2017 in Legal Education | Permalink | Comments (9)

This Week's Ten Most Popular TaxProf Blog Posts

Pastor Calls For Church Transparency With IRS Form 990

StopPeter J. Reilly (Forbes), Pastor Calls For Church Transparency With IRS Form 990:

Reverend Frank B Jones is taking aim at the lack of financial transparency in churches. He has started a petition drive to require churches to play by the same rules as other not-for-profits and file Form 990 with the IRS every year. The title of the petition Expose The Prosperity Preachers give you a pretty good sense of what his agenda is:

American citizens are being financially deceived with governmental approval. When the U.S. government allows churches and religious organizations to operate without giving full financial disclosure, those churches and organizations can, and many do, exploit and deceive their members. The government has demanded full disclosure from all other charities, but has allowed churches and other religious organizations to operate in absolute financial secrecy. It is time for the United States congress to pass laws requiring all churches and religious organizations to file the annual IRS Form 990. ...

In his book Stop The Prosperity Preachers Reverend Jones goes on at some length about how the exemption from 990 filing facilitates clergy con artists:

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January 22, 2017 in Tax | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3 and #5:

  1. [1,345 Downloads]  Problems with Destination-Based Corporate Taxes and the Ryan Blueprint, by Reuven S. Avi-Yonah (Michigan; moving to UC-Irvine) & Kimberly A. Clausing (Reed College)
  2. [367 Downloads]  A Guide to the GOP Tax Plan — The Way to a Better Way, by David A. Weisbach (Chicago)
  3. [190 Downloads]  Destination-Based Cash-Flow Taxation: A Critical Appraisal, by Wei Cui (British Columbia)
  4. [175 Downloads]  The Right Tax at the Right Time, by Edward Kleinbard (USC)
  5. [133 Downloads]  The Other Eighty Percent: Private Investment Funds, International Tax Avoidance, and Tax-Exempt Investors, by Omri Marian (UC-Irvine)

January 22, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 21, 2017

Deans Boise & Morriss:  Why We Still Support The ABA's Proposed 75% Bar Passage Requirement

Boise Morriss PhotoTaxProf Blog op-ed:  Why We Still Support The ABA's Proposed 75% Bar Passage Requirement, by Craig M. Boise (Dean, Syracuse) & Andrew P. Morriss (Dean, Texas A&M):

Indiana Law Dean Austen Parrish recently responded to our TaxProf Blog response to his column on the ABA’s proposed 75% bar passage rule. While we don’t want to suggest deans spend their days writing op-eds, we do think a bit of further comment is merited.

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January 21, 2017 in Legal Education | Permalink | Comments (6)

Tax Policy In The Trump Administration

Pratt:  The IRS's Startling Arguments In O’Donnabhain

Katherine Pratt (Loyola-L.A.), The Tax Definition of “Medical Care:” A Critique of the Startling IRS Arguments in O’Donnabhain v. Commissioner, 23 Mich. J. Gender & L. 313 (2016):

This Article critiques the startling arguments made by the Internal Revenue Service (“IRS”) in O’Donnabhain v. Commissioner, a case in which the issue was whether a person diagnosed with gender identity disorder (“GID”) could take a federal tax deduction for the costs of male-to-female medical transition, including hormone treatment, genital surgery, and breast augmentation.

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January 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

ABA Tax Section Midyear Meeting

ABAThe ABA Tax Section Midyear meeting concludes today in Orlando. The full program is here.  Tax Profs with speaking roles include:

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January 21, 2017 in ABA Tax Section, Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1353: Will The Trump IRS End, Or Embrace, Targeting Of Disfavored Groups?

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Joe Kristan (Tax Update Blog), Obama’s Tax Policy: How Much Will Survive?:

Obama tax policy was a sharp break from the Bush years. The Trump years, in turn, will likely veer off the Obama path in many areas. Here’s my list of the big developments in tax policy during the Obama years, and my guesses as to how they will fare under Trump. ...

IRS Scandal.  IRS exempt organizations official Lois Lerner blew open the Tea Party scandal by planting a staged question at a May 2013 conference. The modified limited hangout failed to contain the scandal, which still is working through courtrooms 1351 days later. Commissioner Koskinen’s apathetic and clumsy response to the admission that right-leaning organizations were targeted for special scrutiny on their exemption applications (and remember, this was admitted at the start, only to be walked back later) sowed distrust, and appropriations reductions, that cripple the agency still.

I would be surprised if Koskinen stays in office much past tomorrow. The real question is whether the new administration reverses the weaponization of the IRS, or just adopts it.

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January 21, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, January 20, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) describes how the Tax Court's treatment of a plastic surgeon's claim that his interest in a surgery center was a passive activity, distinct from his medical practice.

KristanPlastic surgeon gets his passive loss reconstructed

Losing for Winning.  A plastic surgeon convinced the Tax Court that his interest in a surgery center was “passive,” defeating an IRS attempt to group it with his medical practice. But the IRS got a partial win out of the deal.

The surgeon, who we will refer to as Dr. H., performed much of his surgery on an outpatient basis. He could not perform surgery requiring general anesthesia in his office. Hospital surgery space was scarce so he began plans to build a surgery center to accommodate patients needing anesthesia, but not an overnight hospital stay.

He dropped the plans when he was approached by a group of other surgeons asking him to invest in a surgery center, MBJ, that they were building. He ended up with a 1/8 interest in it. Tax Court Judge Buch explains how that works:

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January 20, 2017 in New Cases, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new article by Linda Sugin (Fordham), Invisible Taxpayers, 69 Tax L. Rev. 617 (2016).

Gamage (2017)Linda Sugin’s new article engages with important problems related to the taxpayer standing doctrine.  Sugin persuasively and powerfully critiques what she calls “the broad no-taxpayer-standing rule” that prevents most taxpayers from accessing the court system to challenge tax benefits awarded to other taxpayers.  As Sugin explains, “the broad no-taxpayer-standing rule” operates even when important constitutional values are at stake and even when tax benefits are awarded through administrative discretion rather than by an act of Congress. 

Sugin partially rests her analysis on arguing that tax fairness consists of more than just economic fairness.  As she elaborates:

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January 20, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Should President Trump Release His Tax Returns?

TrumpNew York Times op-ed:   Why Americans Care About Trump’s Tax Returns, by Ron Wyden (D-OR):

In his news conference on Wednesday, President-elect Donald J. Trump claimed that the American public did not care that he had not released his tax returns, as has been routine for every presidential nominee since Watergate. He could not be more wrong. ...

The reason is simple. Without these returns, Americans cannot know whether he is using the presidency to enrich himself and his family. Americans won’t know whether a policy he proposes primarily benefits steelworkers in Pennsylvania or lines his own pocket. ...

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January 20, 2017 in Political News, Tax | Permalink | Comments (9)

Tax Partner's Appearance With Trump Was PR Windfall Out Of When Harry Met Sally: Tax Clients Will Flock To Morgan Lewis Saying 'I'll Have What He Had' Referring To Trump's 'Orgasmic Success'

American Lawyer, Morgan Lewis Partner Basks in Trump's Spotlight—Is That a Good Thing?:

Harry SallySheri Dillon of Morgan, Lewis & Bockius. The tax partner name-dropped not only her firm but her colleague Fred Fielding during a press conference for President-elect Donald Trump on Wednesday. She talked about how Trump engaged her firm, which worked on his matters, their legal opinions and even referred to legal files set out on the stage.

Nick Gaffney, managing partner of Zumado Public Relations in San Francisco, which works for law firms, called the moment of a corporate lawyer talking tax next to Trump on live television "incredibly unusual," "beautiful" and "the best thing ever" from a law firm public relations perspective.

He said he could only remember one other time when a law firm name appeared as prominently before such a large audience. It was 60 years ago, when President Richard Nixon delivered his "Checkers speech" and read a legal opinion from Gibson Dunn. "I would milk this for four years," said Gaffney, whose firm has not represented Morgan Lewis. "No matter what your take is on this administration, you’re going to have to do business with [the government]."

Allan Ripp of Ripp Media, a New York-based public relations consultant who works for law firms regularly, fleshed out the upside for the firm. "The Morgan Lewis shout-out recalls the classic scene from 'When Harry Met Sally,'" he said. "Now, you can imagine big corporate clients going to Morgan Lewis and telling their tax lawyers, 'I'll have what he had!' referring to Trump's orgasmic success."

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January 20, 2017 in Tax | Permalink | Comments (1)

Lawyer Presidential Campaign Contributions: 97% To Clinton, 3% To Trump

TrumpAmerican Lawyer, For Many Big Law Trump Donors, 'Stigma' Kept Support Below the Radar:

It was no secret during the presidential race that Donald Trump trailed Hillary Clinton in financial donations from the legal industry. Lawyers and firms gave Clinton and affiliated groups more than $39.3 million, while they gave Trump and his groups $1.4 million, according to the Center for Responsive Politics.

But many partners at the nation's largest law firms did back the president-elect—even if they opted to keep their support unusually private.

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January 20, 2017 in Legal Education, Political News | Permalink | Comments (4)

Grewal:  The Foreign Emoluments Clause And The Chief Executive

Following up on Tuesday's post, Can Trump Deduct Donations Of Emoluments To The U.S. Treasury?:  Andy Grewal (Iowa), The Foreign Emoluments Clause and the Chief Executive:

The 2016 Presidential election brought widespread attention to a part of the Constitution, the Foreign Emoluments Clause, that had previously enjoyed a peaceful spot in the dustbin of history. That clause generally prohibits U.S. Officers from accepting "emoluments" from foreign governments, absent Congressional consent. Several commentators believe that President Trump will inevitably run into this prohibition, given the global business dealings of the Trump Organization. They read “emolument” as referring to any payment received from a foreign government, such that a diplomat’s payment of a room reservation fee at the Trump Hotel establishes a potentially impeachable offense.

This Article argues that the commentators have interpreted emoluments far too broadly. Numerous legal authorities show that that term, as used in the Foreign Emoluments Clause, refers to payments from a foreign government made in connection with the performance of services (office-related payments), rather than any and all payments from a foreign government.

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January 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1352: The End Of My Daily Coverage

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In response to inquiries from Peter J. Reilly (Forbes) and Brian Leiter (University of Chicago Law School), I previously discussed when I would stop my daily coverage of the IRS Scandal:

My answer is the same as it has been throughout the scandal: I will stop when the daily commentary in the press and blogosphere on the scandal (from both the right and the left) ends. At several points in the scandal, as I was running out of content, a new chapter would unfold and my daily coverage would continue. Currently, the scandal has gone mostly quiet and I have only a few posts left in the queue. So it may be that my daily coverage will end soon, and will be resumed if and when the scandal heats up again.

With Donald Trump's inauguration, I am ending my daily coverage as the scandal again has gone mostly quiet.  I will continue to sporadically blog the scandal when there is news about it (indeed, I have a post in the queue for tomorrow).  But I will no longer provide coverage each day.  I hope readers have found my coverage useful, and will continue to come here for updates on the scandal.

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January 20, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (20)

Thursday, January 19, 2017

Bankman Presents The Global Battle To Capture MNE Profits Today At Duke

Bankman (2016)Joseph Bankman (Stanford) presents Collecting the Rent: The Global Battle to Capture MNE Profits (with Mitchell Kane (NYU) & Alan O. Sykes (Stanford)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

This paper explores the various tools available to jurisdictions in their quest to capture MNE rents. As we shall see the arsenal is an expansive one, including various forms of income and consumption taxation, government purchasing programs, price regulation, antitrust, and common trade instruments such as tariffs or quotas. ...

The paper is organized as follows. In part I we define terms and outline some legally relevant sources of MNE economic rent. Part II covers the basic descriptive analysis of how jurisdictions may seek to capture economic rent through the tax system. To aid analysis here we will work with three stylized, illustrative MNEs, which we will refer to simply as Computer, Pharma, and Coffee. These are meant to capture in a simple way the fact that MNE rents are likely to have different origins across different sectors and that different sectors are thus likely to present different challenges to jurisdictions seeking to capture such rents.

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January 19, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hemel Presents Federalism As A Safeguard Of Progressivity Today At Indiana

HemelDaniel Hemel (Chicago) presents Federalism as a Safeguard of Progressivity at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

This article considers the distributional consequences of the Supreme Court’s federalism jurisprudence over the past quarter century, focusing specifically on the anti-commandeering and state sovereign immunity doctrines. The first of these doctrines prevents Congress from compelling the states to administer federal programs; the second prohibits Congress from abrogating state sovereign immunity outside a limited class of cases. Each of these doctrines vests the states with a valuable entitlement protected by a property rule and allows the states to sell the entitlement back to Congress for a price. In this respect, the doctrines have an intergovernmental distributional effect, shifting wealth from the federal government to the states.

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January 19, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Charlotte Law School Fires Two-Thirds Of Faculty And Staff, Abandons Teach-Out Plan As Negotiations With Department Of Education Collapse; Classes Begin Jan. 23

Blair-Stanek:  Just Compensation As Transfer Prices

Andrew Blair-Stanek (Maryland), Just Compensation as Transfer Prices, 58 Ariz. L. Rev. 1077 (2016):

This Article proposes using eminent domain to fight both transfer-pricing abuse and the deadweight losses created by intellectual property. IP creates deadweight losses, because the exclusive rights granted to IP owners allow them to charge higher prices that keep some customers out of the market entirely. IP also allows multinational corporations to avoid taxes on a massive scale, by transferring their IP to tax havens for artificially low prices.

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January 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

Shu-Yi Oei Leaves Tulane For Boston College

OeiShu-Yi Oei, Hoffman F. Fuller Professor of Tax Law at Tulane, has accepted a lateral offer from Boston College, beginning Fall 2017. Here are Shu-Yi's recent publications:

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January 19, 2017 in Legal Education, Scholarship, Tax, Tax Prof Moves | Permalink | Comments (1)

Number Of LSAT Test-Takers Rises 7.6% In Latest Administration, 2.8% For The 2016-17 Cycle Thus Far

LSAT (2015)After registering the first increase in LSAT test-takers in six years in the 2015-16 cycle, LSAC reports that the number of test-takers was up 7.6% in the third test administration (December) of the 2016-17 cycle.  This is the largest year-over-year test administration growth since December 2009.  Total test-takers in 2016-17 are up 2.8% over the comparable period in 2015-16.

LSAC

ABA Journal, Number of LSAT Tests Administered Jumps Nearly 8 percent; Is Optimism Or Scheduling the Reason?:

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January 19, 2017 in Legal Education | Permalink | Comments (1)

94 Law School Deans Ask ABA To Postpone Proposed 75% Bar Passage Requirement

AALS (2018)AALS Deans Steering Committee 2017:

We write as a group of deans of ABA-accredited law schools to urge the Council of the ABA Section on Legal Education & Admissions to the Bar to withdraw for the time being the proposed change to ABA Standard 316, the standard proposing a stronger and simpler requirement for bar passage to maintain accreditation. Failing that, we urge the ABA House of Delegates at its February meeting in Miami to recommit this proposal to the Council for further scrutiny. More specifically, we urge postponement for one year for additional consideration and study. This issue is simply too important to be rushed unnecessarily.

We believe this Council action requires further consideration and scrutiny in light of significant issues raised by member deans and by legal education organizations, and, more recently, by the results of the July 2016 administration of the California bar examination.  [19 of the 21 ABA-approved California law school deans signed the letter.  The two who did not sign the letter are deans of schools that fell below the 75% threshold on the July 2016 California bar exam (UC-Davis 72%; Chapman 57%).]

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January 19, 2017 in Legal Education | Permalink | Comments (10)

The IRS Scandal, Day 1351:  Two Federal Judges Order Five Officials To Preserve Emails Sought In FOIA Lawsuits; Judicial Watch Fears Another Lois Lerner Situation As Obama Administration Leaves Power

IRS Logo 2

Politico, Judge Orders 4 Homeland Security Officials to Preserve Private-Account Emails:

A federal judge has ordered four current or former top officials at the Department of Homeland Security, including Secretary Jeh Johnson, to preserve emails in their private accounts that may be responsive to a Freedom of Information Act lawsuit.

U.S. District Court Judge Randolph Moss issued the order Wednesday morning to Johnson, former Deputy Secretary Alejandro Mayorkas, former chief of staff Christian Marrone, and former General Counsel Stevan Bunnell, telling them to copy relevant messages to thumb drives.

Moss said the Justice Department indicated that all four men agreed to preserve any responsive messages that might be in their private accounts, but he still granted the preservation order sought by the conservative group Judicial Watch, which said it feared the government might lose easy access to the records as Obama appointees ship out.

“Given the Department’s representation, the Court has no reason to doubt that the four individuals have agreed to comply fully with their obligations to preserve any potentially responsive emails and that they have every intention of doing so,” wrote Moss, an appointee of President Barack Obama.

“Nonetheless, out of the abundance of caution, the Court will order an additional preservation step to minimize the risk of any inadvertent loss of potentially responsive emails. Specifically, the Court will order the individuals to copy any emails from the relevant time period in any private email accounts that might contain responsive materials onto portable thumb drives, to be kept in the individuals’ personal possessions,” the judge added. “Copying the emails to a physical drive will minimize the risk that any responsive email might be inadvertently deleted.” ...

In a separate Judicial Watch case before another judge, the Justice Department indicated Wednesday that one of its top officials has no record of an email he apparently sent to a top Clinton campaign official in May 2015 previewing an upcoming congressional hearing and an expected DOJ filing in a court case related to Clinton’s emails.

Assistant Attorney General for Legislative Affairs Peter Kadzik sent the message with the subject line “Heads Up” to Clinton campaign chairman John Podesta. Clinton campaign aides said the communication was routine, but Donald Trump’s campaign has alleged it showed improper collusion between Justice and the Clinton camp. The contact is one focus of a Justice inspector general investigation announced last week.

The message from Kadzik to Podesta was one of tens of thousands of messages that were hacked from Podesta’s account and posted online by WikiLeaks during the campaign in an effort U.S. intelligence agencies have concluded was part of a Russian government-led drive to influence the U.S. presidential election and bolster Trump’s chances. ...

U.S. District Court Judge Emmet Sullivan issued a preservation order Wednesday at Judicial Watch’s request and instructed the government to report by this morning on its efforts to comply.

Before It's News, Federal Judge Orders DHS Officials to Not Destroy Email:

Even though the judge says the doesn’t doubt their intent, of course he does. He’d have to have been utterly brain dead to not see what is going on from Lois Lerner to Hillary Clinton and beyond. Even as this was happening, another federal judge was discovering that the word of an Obama official that they’d complied with the law wasn’t worth a whole lot.

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January 19, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, January 18, 2017

Charlotte Law School To File Teach-Out Plan With ABA To Protect Students As School Shuts Down

Charlotte Logo (2016)Following up on my previous posts (links below):  ABA Journal, Teach-Out Plan for Charlotte School of Law in the Works:

Charlotte School of Law will file a teach-out plan, which the council of the ABA’s Section of Legal Education and Admissions to the Bar will review, managing director Barry A. Currier told the ABA Journal on Tuesday.

The U.S. Department of Education website for federal loans describes teach-out plans as “a written course of action a school that is closing will take to ensure its students are treated fairly with regard to finishing their programs of study.”

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January 18, 2017 in Legal Education | Permalink | Comments (3)

Rostain Presents Lessons From The Tax Shelter Wars At University Of British Columbia

RostainTanina Rostain (Georgetown) delivered the J. Donald Mawhinney Lectureship in Professional Ethics at the University of British Columbia Allard School of Law on Lessons from the Tax Shelter Wars: Tax Advice, Organizational Wrongdoing, and Enforcement Challenges:

The turn of the 21st Century saw the development of an enormous tax shelter industry in the United States. Aided by prestigious law firms, tax professionals at major accounting firms — including KPMG, Ernst & Young, and PricewaterhouseCoopers — created a widespread market in abusive shelters, which allowed corporate and individual taxpayers to eliminate billions of dollars in taxes owed. As tax shelter activity proliferated, government authorities were faced with increasingly complex regulatory challenges and were ultimately forced to resort to criminal prosecutions to stem the tide of tax shelter activity.

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January 18, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Call For Proposals: Association For Mid-Career Tax Law Professors

The Association for Mid-Career Tax Law Professors (“AMT”) has issued a Call for Proposals:

MCThe AMT organizing committee — Jennifer Bird-Pollan (Kentucky), Miranda Fleischer (San Diego), Will Foster (Arkansas), Brian Galle (Georgetown), and Susie Morse (Texas) — welcomes proposals for our annual conference.

AMT is a recurring conference intended to bring together relatively recently-tenured professors of tax law for frank and free-wheeling scholarly discussion. Our third annual meeting will be held on Monday and Tuesday, May 22 and 23, 2017, on the campus of the University of Arkansas School of Law in Fayetteville, Arkansas. We’ll begin early on Monday and adjourn by noon on Tuesday.

2015 Conference at Ohio State (Day 1, Day 2)
2016 Conference at UC-Davis (Day 1, Day 2)

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January 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Just 8 Men Own The Same Wealth As Half The World

Oxfam

OxFam, An Economy for the 99%: It’s Time to Build a Human Economy That Benefits Everyone, Not Just the Privileged Few:

New estimates show that just eight men [Jeff Bezos, Michael Bloomberg, Warren Buffett, Larry Ellison, Amancio Ortega Gaona, Bill Gates, Carlos Slim Helú, Mark Zuckerberg] own the same wealth as the poorest half of the world. As growth benefits the richest, the rest of society – especially the poorest – suffers. The very design of our economies and the principles of our economics have taken us to this extreme, unsustainable and unjust point.

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January 18, 2017 in Tax, Think Tank Reports | Permalink | Comments (3)

Law Schools Have Shed 1,460 Full-Time Faculty (16.1%) Since 2010

Matt Leichter has published the 2016 edition of his Which Law Schools Are Shedding Full-Time Faculty?  Law schools have shed 1,460 full-time faculty (16.1%) since 2010, and 261 full-time faculty (3.3%) since last year.

149 law schools have shed full-time faculty since 2010, with 20 law schools shedding 20 or more full-time faculty:

FULL-TIME FACULTY (FALL)
RANK SCHOOL ’10 ’15 ’16 ANNUAL CHANGE NET CHANGE
1. WMU Cooley 101 44 41 -3 -60
2. American 104 91 52 -39 -52
3. John Marshall (Chicago) 75 45 27 -18 -48
4. Florida Coastal 69 37 24 -13 -45
5. George Washington 106 70 69 -1 -37
6. St. Louis 65 45 34 -11 -31
7. Catholic 56 32 27 -5 -29
8. Seton Hall 59 37 32 -5 -27
8. Vermont 55 27 28 +1 -27
8. Seattle 66 47 39 -8 -27
11. Widener (Delaware) 50 31 24 -7 -26
11. New York Law School 71 48 45 -3 -26
13. McGeorge 63 34 39 +5 -24
14. Pace 47 30 25 -5 -22
14. Cleveland State 39 19 17 -2 -22
16. Santa Clara 65 45 44 -1 -21
16. DePaul 56 32 35 +3 -21
16. Hofstra 60 34 39 +5 -21
19. Nova 60 48 40 -8 -20
19. New England 40 26 20 -6 -20

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January 18, 2017 in Law School Rankings, Legal Education | Permalink | Comments (6)

Tax Policy Center:  Are Entrepreneurs Overtaxed?

Tax Polcy Center Logo (2017)Tax Policy Center, Are Entrepreneurs Overtaxed?:

Entrepreneurs play a critical role in developing new products, inventing new production techniques, creating jobs, and strengthening our economy. As lawmakers focus on tax reform, it is timely to ask whether America’s tax system treats entrepreneurs appropriately and whether reforms could improve economic performance.

Policy discussions often emphasize how taxes affect incentives to work, save, invest, innovate, and launch new ventures. Because successful entrepreneurs sometimes amass substantial wealth, discussions also consider how the tax burden is shared across people of different means. These considerations are important, but incomplete. Policymakers should also consider the special characteristics of income from entrepreneurial activity.

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January 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)