TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Tuesday, August 5, 2014

ABA Tax Section Seeks Pro Bono Tax Counsel

The ABA Tax Section seeks a Pro Bono Tax Counsel:

ABA Tax Section Logo (2012)The Pro Bono Counsel works closely with Tax Section members and staff to develop and grow pro bono programs for the Tax Section. Responsibilities include program development and management, advertising, writing and editing, and recruitment.

The Pro Bono Counsel also administers the Christine A. Brunswick Public Service Fellowship through the Public Service Fellowship Committee as well as the Janet Spragens Pro Bono Award through the Pro Bono Award Committee. The Pro Bono Counsel will cultivate relationships with the Tax Court, Armed Forces, IRS, the low income taxpayer community, Tax Section members, and other ABA entities.

Does substantive legal work and may manage a grant funded project or provide substantive support to an ABA entity. May manage that entity. May be supervised by another attorney and frequently supervises more junior attorneys and/or other staff. Includes legal research, writing, speaking, provision of technical assistance, and may include grant development and/or fundraising.

August 5, 2014 in ABA Tax Section, Tax, Tax Prof Jobs | Permalink | Comments (0)

Hawley: The Jurisdictional Question in Hobby Lobby

Erin Morrow Hawley (Missouri), The Jurisdictional Question in Hobby Lobby, 123 Yale L.J. Forum ___ (2014):

Hobby LobbyBurwell v. Hobby Lobby Stores may well be the biggest case of the term. And by its own rules, the Supreme Court lacked jurisdiction. An obscure statute, the Anti-Injunction Act of 1867 (“the AIA”), imposes a pay-first requirement for federal tax challenges. The deeply held conventional wisdom is that the AIA is a jurisdictional statute, and there is a good argument that the AIA applies to the contraception mandate. As we learned from National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (2012), the best evidence of whether Congress intended the AIA to apply is the text. The mandate at issue in Hobby Lobby, 26 U.S.C. § 4980D, expressly refers to the employer assessment as a tax—24 times. In light of NFIB, the Supreme Court’s failure to address the AIA was a serious mistake.

(Hat Tip: Josh Blackman.)

August 5, 2014 in Scholarship, Tax | Permalink | Comments (0)

NPR Debate: Corporate Tax Inversions

NPR 2NPR -- The Diane Rehm Show, Debate Over Corporate Tax 'Inversions':


A growing number of American companies are re-incorporating overseas for lower tax rates. But critics say it’s a loophole that ends up costing taxpayers. Join us for debate over IRS rules for U.S. companies.

  • Edward Kleinbard (Professor of Law, USC)
  • Chris Edwards (Economist, Cato Institute)
  • John McKinnon (Reporter, Wall Street Journal)
  • Sander Levin (Ranking Member, House Ways & Means Committee)

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

Joint Tax Committee Releases Tax Expenditure Estimates for 2014-2018

The Joint Committee on Taxation yesterday released Estimate of Federal Tax Expenditures for Fiscal Years 2014-2018 (JCS-97-14):

Joint Tax CommitteeTax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or explicit choices made in fashioning legislation. This report1 on tax expenditures for fiscal years 2014-2018 is prepared by the staff of the Joint Committee on Taxation. ...  As in the case of earlier reports, the estimates of tax expenditures in this report were prepared in consultation with the staff of the Office of Tax Analysis in the Department of the Treasury (“the Treasury”).

The Joint Committee staff has made its estimates (as shown in Table 1) based on the provisions in Federal tax law enacted through June 30, 2014. Expired or repealed provisions are not listed unless they have continuing revenue effects that are associated with ongoing taxpayer activity. Proposed extensions or modifications of expiring provisions are not included until they have been enacted into law. The tax expenditure calculations in this report are based on the January 2014 Congressional Budget Office (“CBO”) revenue baseline and Joint Committee staff projections of the gross income, deductions, and expenditures of individuals and corporations for calendar years 2013-2018.

Continue reading

August 5, 2014 in Congressional News, Tax | Permalink | Comments (0)

The Most Educated Places in America

NerdWallet, The Most Educated Places in America:

Certain cities in the U.S. have populations with higher levels of educational attainment than others. This often depends on what prominent industries are located in these places—cities that offer more technical occupational opportunities tend to draw more skilled and educated members of the labor force.

NerdWallet crunched the numbers to find the most educated places in America. We looked at increasing levels of educational attainment among the populations of 1,990 places across the U.S., from residents with at least a high school diploma to those with a doctorate or professional degree. ... We calculated the overall score for each place by weighting the following factors:

  1. Percentage of population with at least a high school diploma or associate’s degree: 40% of the overall score.
  2. Percentage of population with at least a bachelor’s degree: 30% of the overall score.
  3. Percentage of population with a master’s degree: 10% of the overall score.
  4. Percentage of population with a doctorate degree: 10% of the overall score.
  5. Percentage of population with a professional degree: 10% of the overall score.

Nerd

(Hat Tip: Bill Turnier.)

August 5, 2014 in Legal Education | Permalink | Comments (10)

Senate Finance Committee Unanimously Approves Tax Court Nominee Pugh

PughThe Senate Finance Committee on Friday unanimously approved the nomination of Cary Douglas Pugh to the U.S. Tax Court: (June 6, 2014):

Cary Douglas Pugh is currently Counsel in the tax department at Skadden, Arps, Slate, Meagher & Flom, L.L.P., a position she has held since 2005. From 2002 to 2005, Ms. Pugh was the Special Counsel to the Chief Counsel of the Internal Revenue Service. From 1999 to 2002, Ms. Pugh served as Tax Counsel for the Senate Committee on Finance, where she was responsible for advising committee members on individual and corporate tax issues. Ms. Pugh was an associate at Vinson & Elkins, L.L.P. from 1995 to 1999 and Judicial Clerk to the Honorable Jackson L. Kiser on the U.S. District Court for the Western District of Virginia from 1994 to 1995. Ms. Pugh received a B.A. from Duke University, an M.A. from Stanford University, and a J.D. from the University of Virginia School of Law.

Pugh will join the Tax Court once she is confirmed by the full Senate, along with pending nominees Tamara Ashford and L. Paige Marvel.

August 5, 2014 in Congressional News, Tax | Permalink | Comments (0)

Reynolds: Public Servants Acting as Public Masters

USA Today op-ed:  Public Servants Acting as Public Masters, by Glenn Reynolds (Tennessee):

"Nothing could be further from the truth. I mean, we wouldn't do that." That was CIA Director John Brennan's answer in March when Sen. Dianne Feinstein, D-Calif., charged the CIA with breaking into computers used by Senate investigators looking into CIA misconduct.

It turns out that the CIA would do that — and, in fact, had done so. Brennan's reassurances were false, and CIA spooks had been hacking into the committee investigators' computers looking for documents they thought the investigators shouldn't have, violating a promise not to. So, first Brennan broke a promise. Then, he either lied, or showed that he doesn't control his own agency, which in many ways would be worse.

Brennan has apologized, but his apology won't be the end of things. We're already seeing bipartisan calls for his removal, from Sens. Mark Udall, D-Colo., Martin Heinrich, D-N.M., and Sen. Rand Paul, R-Ky. The White House is hanging tough so far, but we're now hearing comparisons made to the speed with which Brennan's predecessor, Gen. David Petraeus, was cut loose over an extramarital affair. Does this mean that the White House views spying on, and lying to, members of Congress as less serious than an affair?

The answer to that, alas, is probably "yes." Contempt for Congress, and for separation of powers and historical understandings about the roles of the executive and legislative branches, has been a hallmark of the Obama administration. It's not surprising that in such an atmosphere, CIA operatives would feel comfortable snooping on the Senate, and that a CIA director would feel confident issuing blanket denials when questioned. ...

Alas, as with the IRS' stonewalling of investigations into its targeting of Obama's political opponents, consequences for offenders seem hard to come by in the face of an administration that has no shame. Probably the best that Congress can do is to punish the entire CIA by using its budgetary power to make employees' lives worse: Cutting back on bonuses, raises, conferences, and other perks. Where the IRS is involved, there's some talk of abolishing most of it in favor of a national sales tax that would require much less bureaucracy and provide fewer opportunities for abuse, but that's unlikely to go anywhere anytime soon.

The sad truth is that when you elect irresponsible people into positions of power, you get irresponsible government. President Obama oozes contempt for Congress, and for longstanding unwritten political accommodations among the branches, at every opportunity. It's unsurprising that his underlings feel — and act — consistently with that view.

If the American electorate votes more responsibly next time, things will get better. Until then, alas, elections have consequences, and this is one of them.

August 5, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 453

IRS Logo 2Washington Post:  Lois Lerner’s Conservative Bashing: Smoking Gun or Just Cause for Investigation?:

The Federal Eye received lots of feedback in recent days about an article analyzing the e-mails in which former Internal Revenue Service official Lois Lerner described conservative talk-show hosts as “__holes.”

In that piece, we noted that career federal employees are allowed to have political views, as long as those views don’t influence their work or affect elections. We also noted that Lerner’s comments represent only circumstantial evidence rather than rock-solid proof that she used her authority to silence conservatives.

Some readers objected to our rationale. ...

To be clear, the point of last week’s article was not to suggest that authorities shouldn’t investigate Lerner for potential wrongdoing. It was to say that Republicans haven’t proven definitively whether the former IRS official used her position to slow down the proliferation of conservative advocacy groups. ...

Did Lerner’s unit use inappropriate techniques to scrutinize such groups? The answer is yes, according to the agency’s inspector general, who said in a report last year that the IRS selected groups for review based on their names and policy positions.

The next question, then, is whether those actions were part of an effort to target conservative groups while going easy on left-leaning organizations. In other words, did Lerner’s political views — such as those expressed in her e-mails — cause her to become less than impartial in her work? ...

[M]any of the facts in this case look bad for Lerner. Her IRS division used inappropriate screening techniques that largely affected conservatives. She was a registered Democrat who used offensive terms to describe firebrand right-wingers. She expressed a desire to work for an advocacy group founded by President Obama’s allies. And she invoked her Fifth Amendment rights instead of testifying before Congress about her involvement in the targeting behavior.

Regardless, that’s all circumstantial evidence. It makes Lerner a prime candidate for investigation, and it’s great campaign fodder for the midterm elections, but it does not prove that she violated the rules of professionalism by trying to hinder conservative groups. Republicans need direct evidence to confirm that theory, which is part of the reason they want an independent prosecutor to look into the case. It’s also why they are so frustrated with Lerner’s missing e-mails.

Continue reading

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

Memorial Tributes to Dan Markel (1972-2014)

Markel[Continually Updated]  Memorial tributes to Dan Markel, D’Alemberte Professor of Law at Florida State and founder of PrawfsBlawg, who was shot and killed in his home in Tallahassee on July 18.

August 5, 2014 in Legal Education | Permalink | Comments (2)

Monday, August 4, 2014

2015 Princeton Review's Best 379 Colleges

PrincetonThe Princeton Review today released The Best 379 Colleges -- 2015 Edition.  According to the press release, the book contains 62 rankings based on surveys completed by 130,000 students at the 379 schools (343 per school) (methodology here), including these categories:

  • Best (Bard) classroom experience
  • Best (Reed), worst (New Jersey Institute of Technology) professors
  • Most (U.S. Military Academy), least (McGill) accessible professors
  • Best (Bowdoin) quality of life
  • Most (Vanderbilt), least (Marywood) happy students
  • Students love (Claremont McKenna) their school
  • Most (Colgate), least (University of Dallas) beautiful campus
  • Best (Elon), worst (U.S. Merchant Marine Academy) run school
  • Most liberal (Sarah Lawrence), most conservative (Texas A&M) students
  • Most (BYU),  least (Vassar) religious
  • Students study the most (Harvey Mudd), least (North Dakota)
  • Most (Pomona), least (Spelman) financial aid
  • Most (Stanford), least (College of the Ozarks) LGBT-Friendly
  • Most (George Mason), least (Furman) race/class interaction
  • Best (Chicago), worst (Clarkson) library
  • Best (Virginia Tech), worst (U.S. Merchant Marine Academy) food
  • Best (Washington University), worst (U.S. Merchant Marine Academy) dorms
  • Biggest (Syracuse), least (BYU) party school
  • Most (Skidmore), least (U.S. Coast Guard Academy) marijuana on campus
  • Most (Iowa), least (BYU) hard liquor on campus
  • Most (Penn State), least (BYU) beer on campus

I am considering demanding a recount: Pepperdine is ranked as only the second most beautiful campus. Really?

Pepperdine Campus Photo

August 4, 2014 in Book Club, Law School Rankings, Legal Education | Permalink | Comments (2)

Georgia State Seeks to Hire a Tax Clinician

Georgia State LogoGeorgia State seeks to fill a full-time assistant professor, clinical teaching position in its Low-Income Taxpayer Clinic:

The clinical faculty appointment would be non-tenure track, with faculty status, a renewable contract, and job security commensurate with tenured faculty.  Clinical faculty have voting rights and serve on faculty committees at the College of Law.  The appointment could begin at the commencement of the 2015-2016 academic year or as early as January 2015.

The Clinical Professor will primarily assist in the operation and administration of the Tax Clinic and will have limited teaching responsibilities. The Clinical Professor will supervise students in all aspects of Tax Clinic client representation.  The preferred applicant should have a law degree, a strong academic background, practical tax experience, and a proven record of, or demonstrated potential for, student supervision, successful teaching, professional engagement, and service to the community. Experience working in a law school tax clinic, while not a prerequisite for the position, is highly desirable.

The deadline for applications is November 30, 2014.  Applications should be submitted to Professor Ronald Blasi.

August 4, 2014 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Law: The Only Job With an Industry Devoted to Helping People Quit

The Atlantic:  The Only Job With an Industry Devoted to Helping People Quit, by Leigh McMullan Abramson:

Life After LawI went to law school because I didn’t know what to do after college and I'm bad at math. Law school seemed like a safe, respectable path and gave me an easy answer to what I was going to do with my life. And, as part of the millennial generation obsessed with test scores and academic achievement, I relished the spoils of a high LSAT score, admission to an Ivy League law school, and a job offer from a fancy corporate law firm.

I spent my first year as lawyer holed up in a conference room sorting piles of documents wearing rubber covers on my fingertips that looked like tiny condoms. Eventually, I was trusted with more substantive tasks, writing briefs and taking depositions. But I had no appetite for conflict and found it hard to care about the interests I was serving. I realized I had never seriously considered whether I was cut out to be a lawyer, much less a corporate litigator. After a few years, I just wanted out, but I had no idea where to begin.

I knew that I was not alone. Law-firm associate consistently ranks at the top of unhappy-professions lists and despite starting salaries of $160,000, law firms experience significant yearly associate attrition. What I didn’t realize was that the plight of burnt-out attorneys, particularly those at law firms, has recently spawned an industry of experts devoted to helping lawyers leave law. Attorneys now have their choice of specialized career counselors, blogs, books, and websites offering comfort and guidance to wannabe ex-Esqs.

“Law is the only career I know that has a sub-profession dedicated to helping people get out of it,” says Liz Brown, author of the help manual, Life After Law: Finding Work You Love with the J.D. You Have, published last year.

Continue reading

August 4, 2014 in Book Club, Legal Education | Permalink | Comments (0)

NPR: Tax Extenders Bill Killed by Politics on Capitol Hill

NPR -- It's All Politics,  A Tax Bill Killed By The Push And Pull Of Politics On The Hill:

NPRA few months back, Sen. Ron Wyden, a Democrat from Oregon, brought a bill to the floor that basically offered tax incentives to businesses and individuals. Those incentives are called tax extenders.

They include big stuff and small stuff — tax breaks for wind farms, tax breaks for schoolteachers who buy their own supplies. Tax breaks for rum producers in Puerto Rico, people who make movies, race track owners, even some breaks for people who bike to work. In other words, something for every lawmaker to take home.

This should have been a slam dunk. And at first, it was. Ninety-six senators gathered in the chamber shortly after Wyden's speech, and all voted in favor of moving the bill forward. But two days later, this bill, with 96 out of 100 supporters, was stopped cold. To anyone watching, it might have looked like some special kind of insanity.

But Howard Gleckman, a senior fellow with the tax policy center at the Urban Institute, says look closer.

Continue reading

August 4, 2014 in Congressional News, Tax | Permalink | Comments (1)

The 50 Most Impressive Law School Buildings in the World

The 50 Most Impressive Law School Buildings in the World:

Durham-Law-SchoolFrom stunning examples of Gothic revival to Brutalism’s giant box-like constructions, the world’s most impressive law school buildings span decades and even centuries. With modern marvels like Frank Gehry’s Loyola Law campus and the new University of Sydney Faculty of Law building, and traditional structures like Yale Law’s Sterling Law Building, these architectural giants were chosen for their ingenuity, aesthetic beauty, and commitment to creating an environment that honors the history and study of law. Many of these buildings house some of the world’s most prestigious and selective law programs, and a number of them set a precedent for green building standards and solutions. [Photo: #1 Durham Law School, Durham, UK. The top-ranked U.S. law school building is Thomas Jefferson.]

(Hat Tip: Francine Lipman.)

August 4, 2014 in Law School | Permalink | Comments (3)

L.A. Times on Tax Inversions

Los Angeles Times: Close Loopholes That Let U.S. Firms Avoid Taxes by Using Inversions, by Michael Hiltzik:

It's both endearing and infuriating to watch American corporate executives wring their hands about how the injustices of the U.S. tax code are forcing them — forcing them! — to reincorporate overseas through the procedure known as inversion.

Endearing, because one wants to sympathize with the pain felt by a homegrown CEO having to move a homegrown American company's headquarters to Ireland, Switzerland or some other foreign clime, just to remain competitive.

Infuriating, because they're so full of it. ...

Defenders of inversions say they don't really affect the American company's U.S. taxes — that's the claim made recently in the Wall Street Journal by Miles White, chairman of Abbott Laboratories, which is conniving with Mylan on its inversion deal.

But like much that's said about inversions, that's misleading, says Edward D. Kleinbard, a USC law professor whose role as a former chief of staff to the Congressional Joint Committee on Taxation certifies him as one of our leading experts on the corporate tax.

Continue reading

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

ABA Releases Memo on Compliance With Standard 509

Memorandum From Barry Currier (Managing Director, ABA Section on Legal Education and Admissions to the Bar) to Deans of ABA-approved Law Schools, Compliance With Standard 509 (July 14, 2014):

This memorandum revises, updates, and replaces the memorandum we issued in August 2013 regarding compliance with Standard 509. As you will recall, current Standard 509, titled “Required Disclosures,” took effect in August, 2013. There were no further changes to this Standard as the Council concluded the comprehensive review of the ABA Standards and Rules of Procedure.

This memorandum addresses the form, manner and time frame for publishing certain information as required by Standard 509, and provides other guidance regarding compliance with the Standard. Attached is a chart that summarizes the requirements of the Standard.

Standard 509 divides the information that a law school must publish on its website into two categories: (1) that for which the Council prescribes a particular form, manner and time frame of publication [Standard 509(b)]; and (2) that which schools must disclose in a readable and comprehensive manner [Standard 509(c)]. Each of these categories is addressed below. Additionally and importantly, all information reported, publicized or distributed by a law school is subject to the overriding mandate of Standard 509(a) that it be “complete, accurate and not misleading to a reasonable law school student or applicant.”

ABA 1

ABA 2

August 4, 2014 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 452

TaxProf Blog Weekend Roundup

Sunday, August 3, 2014

ABA Poised to Adopt Sweeping Changes to Law School Accreditation Standards This Week

National Law Journal, Legal Education Due For a Makeover: ABA's House of Delegates Prepares to Vote on a Sweeping Revision of its Accreditation Standards:

To protect their accreditation, law schools will be under pressure to more closely assess student achievement and provide students with more practical skills training under a slate of legal education reforms headed for final consideration by the ABA House of Delegates.

Faculty tenure would remain sacrosanct, and students still would be barred from earning both money and course credit for externships under draft standards headed for a vote by the delegates on Aug. 11.

"If there was a theme to what the comprehensive review accomplished, it moved legal education into a 21st century model in two ways," said Loyola University Chicago School of Law Dean David Yellen, who spent four years on the committee reviewing the standards. "One is by requiring schools to assess their achievement in student learning. The second is requiring more practical skills training." ...

One of the most substantive proposed changes involves "student leaning outcomes." Each law school would define its mission — what it is attempting to teach — and would measure how well it succeeds. Administrators would have plenty of ­leeway in defining their learning goals, but would now be judged less on the nuts-and-bolts of running a law school and more on results of those efforts. ...

Second, every law graduate would have to complete a minimum of six credits of "experiential learning" — clinics, externships or simulation courses. [The Clinical Legal Education Association] unsuccessfully lobbied for 15 credits but has accepted the compromise. Right now, the requirement is a single hour's credit. ...

[T]he review might be best remembered for what didn't change.

Continue reading

August 3, 2014 in Legal Education | Permalink | Comments (3)

Top 5 Tax Paper Downloads

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

  1. [329 Downloads]  What Would Yale Do If It Were Taxable?, by Patrick Geddes (Aperio Group), Lisa Goldberg (UC-Berkeley) & Stephen Bianchi (UC-Berkeley)
  2. [289 Downloads]  Guide to FATCA Compliance (Chapter 1, Background and Current Status of FATCA) (LexisNexis 2d ed. 2014), by William Byrnes (Thomas Jefferson), Denis Kleinfeld, & Alberto Gil Soriano
  3. [249 Downloads]  Sales Suppression as a Service (SSaaS) & the Apple Store Solution, by Richard Ainsworth (Boston University)
  4. [214 Downloads]  Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World, by Richard L. Kaplan (Illinois)
  5. [155 Downloads]  Unconstitutional Perpetual Trusts, by Steven Horowitz (Sidley Austin, Chicago) & Robert Sitkoff (Harvard)

August 3, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

NY Times: How the Government Exaggerates the Cost of College

New York Times:  How the Government Exaggerates the Cost of College, by David Leonhardt:

The government’s official statistic for college-tuition inflation has become somewhat infamous. It appears frequently in the news media, and policy makers lament what it shows.

No wonder: College tuition and fees have risen an astounding 107 percent since 1992, even after adjusting for economywide inflation, according to the measure. No other major household budget item has increased in price nearly as much.

But it turns out the government’s measure is deeply misleading.

For years, that measure was based on the list prices that colleges published in their brochures, rather than the actual amount students and their families paid. The government ignored financial-aid grants. Effectively, the measure tracked the price of college for rich families, many of whom were not eligible for scholarships, but exaggerated the price – and price increases – for everyone from the upper middle class to the poor.

Here’s an animation that explains the difference succintly. It shows the government’s estimate of how college costs have changed since 1992 — and, for comparison, toggles between the changes in the colleges' published prices and actual prices, according to the College Board, the group that conducts the SAT.

NY Times 1

NY Times 2

Continue reading

August 3, 2014 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 451

Saturday, August 2, 2014

NY Times: Socrates Takes a Back Seat to Business and Tech in Some Law Schools

New York Times:  This Is Law School? Socrates Takes a Back Seat to Business and Tech, by John Schwartz:

Like a number of law schools looking to the future of a challenging profession, [Michigan State] is pushing its students to understand business and technology so that they can advise entrepreneurs in coming fields. The school wants them to think of themselves as potential founders of start-ups as well, and to operate fluidly in a legal environment that is being transformed by technology.

Michigan State professors don’t just teach torts, contracts and the intricacies of constitutional law. They also delve into software and services that sift through thousands of cases to help predict whether a client’s case might be successful or what arguments could be most effective. They introduce their students to programs that search through mountains of depositions and filings, automating tasks like the dreary “document review” that was once the baptism of fire and boredom for young associates. ...

With the marketplace shifting, schools have increasingly come under fire for being out of touch.

Continue reading

August 2, 2014 in Legal Education | Permalink | Comments (0)

WSJ: Inversions Cut Corporation's Taxes, Raise Shareholders' Taxes

Wall Street Journal Tax Report:  An 'Inversion' Deal Could Raise Your Taxes: Shareholders Are Likely to Owe Capital-Gains Tax, by Laura Saunders:

U.S. companies are busy buying overseas firms in deals that reduce their tax payments. Ironically, though, these mergers could saddle shareholders with higher tax bills.

In an "inversion," a U.S. firm merges with a foreign one, and shifts much of its income abroad. For corporations, the goal is simple: to exchange the U.S.'s steep corporate tax rate, which runs as high as 35%, for a much lower one elsewhere. Take AbbVie, a U.S. pharmaceutical firm that plans to merge with Irish drug firm Shire this year. Once the deal is consummated, the combined company will be taxed as a U.K. corporation with an estimated rate of about 13% by 2016. Other U.S. companies that have considered or are pursuing inversions are Pfizer, Medtronic, Walgreen, Chiquita Brands International, Applied Materials, Salix Pharmaceuticals, Mylan and Auxilium Pharmaceuticals.

Shareholders in companies pursuing inversions are likely to owe capital-gains tax if the deals occur, but, unlike with other taxable mergers, they won't receive any cash payment to help cover it.  The deals are taxable because the U.S. company, although it will ultimately control the foreign firm, is technically the one that's being acquired, says Robert Willens, an independent tax adviser in New York. The U.S. firm's shareholders will receive new shares to replace their old ones. That exchange is considered taxable by the IRS. ...

 WSJ

Here are three tax-minimizing strategies for investors coping with inversions.

Prospective Law Students Care More About Rankings Than Financial Aid

Kaplan LogoNational Law Journal, Pedigree Still Matters to Prospective Law Students:  "A survey of prelaw students found that nearly 40 percent would choose a top-tier law school at full cost rather than a less prestigious institution offering a scholarship."

Wall Street Journal, Survey: For Many, Law School Rankings Matter More Than Aid:  "Students contemplating a legal career still place a high premium on law school rankings—with some reporting they would rather attend a top school even if they got no financial aid at all."

Kaplan Test Prep Survey, For Pre-Law Students, a Law School’s Ranking May Matter More Than its Financial Aid Package in Choosing Where to Attend:

A new Kaplan survey of over 600 pre-law students finds that a law school’s ranking continues to factor significantly into their decision where to enroll – in many cases, even more than financial aid and ability to pay. When asked which law school admissions scenario they’d prefer to be in, Kaplan found the following:

  • Mid-Tier School, Some Aid:  A plurality (46%) of those surveyed said they’d rather be accepted by a mid-tier law school, where they’d receive a half-scholarship.
  • Top-Tier Law School, Zero Aid:  39% said they’d prefer to be accepted by a top tier law school, where’d they’d receive no financial aid at all.
  • Lower-Tier Law School, Full Aid: Just 16% said they’d prefer to be accepted by a lower ranked law school and receive a full ride scholarship.

August 2, 2014 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 450

IRS Logo 2Fox News:  Lois Lerner Ripping ‘Crazies’ on Right: Why Some Media Folks Don’t Care, by Howard Kurtz:

The new batch of Lois Lerner emails may or may not be a smoking gun. But they’re something of a Rorschach test for the media.

For the former IRS official to be branding conservative commentators as “crazies” and “a--holes” is a telling moment in this scandal—but some in the media could care less.

To be sure, this investigation has dragged on a long time without proving a link between the White House and the Cincinnati office’s targeting of advocacy groups, especially on the right, for special scrutiny of their tax-exempt status. Critics say that conservative outlets such as Fox have tried to keep the story alive.

But the administration has done a decent job of bringing the story back to the headlines. The IRS acknowledged that it could not find two years’ worth of lost emails written or received by Lerner, who pleaded the Fifth when summoned by Congress. And the commissioner, William Koskinen, sounded downright arrogant when he showed up on the Hill.

Now the Republicans have found three emails in which Lerner disparaged conservatives.

What did the New York Times give the story? One measly paragraph, written by the AP, in a roundup column.

How much airtime did the story get that night on ABC’s “World News”? None.

The messages don’t prove that Lerner deliberately targeted Tea Party groups for special scrutiny, or that higher-ups knew about it. But they reveal a whole heckuva lot about her state of mind.

To give it short shrift suggests a certain eye-rolling attitude toward the IRS story, or perhaps a tacit view that some conservatives are kinda nuts.

Imagine a swirling controversy about a Bush administration official who was alleged to be out to get liberal groups. Emails surface in which the person rips, say, pundits on MSNBC or other liberal activists. Wouldn’t the press go crazy that such a biased individual was in charge of investigations? Wouldn’t there be analyses and op-ed columns and followup stories?

Continue reading

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

Friday, August 1, 2014

NY Times Debate: Should More Students Forego Law School and Apprentice to Become Lawyers?

NY Times Room for DebateNew York Times Room for Debate: Do-It-Yourself Lawyers:

Law school isn’t the only route to becoming a lawyer. In states that allow it, a tiny fraction of the tens of thousands of people who take state bar exams were trained as apprentices, with no other legal education. It’s a difficult approach, the bar exam failure rate is high, but the costs are low.

Should such a do-it-yourself approach, with the help of lawyers as mentors, be more widely used to avoid excessive debt and create different perspectives on the law?

Commentary:

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

Weekly Tax Roundup

August 1, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

August 1, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

August 1, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Dhammika Dharmapala Leaves Illinois for Chicago

Dharmapala (2014)Dhammika Dharmapala is leaving his tenured position at Ilinois for a tenured position at Chicago, beginning in the 2014-15 academic year:

He serves on the Board of Directors of the American Law and Economics Association, and formerly served on the Board of Directors of the National Tax Association. Until recently, he was Editor-in-Chief of the peer-reviewed journal International Tax and Public Finance. He has previously held postdoctoral or visiting positions at Harvard, Michigan, Georgetown, and the Australian National University. His PhD thesis (in Economics at the University of California at Berkeley) was awarded the National Tax Association’s Outstanding Doctoral Dissertation Award. His scholarship, which spans the fields of taxation, the economic analysis of law, and corporate finance and governance, has been published in leading scholarly journals in law, economics and finance. It has also been cited in various media outlets, including the New York Times, the Washington Post, Bloomberg Businessweek, and The Economist.

Dhammika suffered serious injuries in a racially-motivated knife attack in Champaign-Urbana in 2011.

For the six other Tax Prof lateral moves for 2014-15, see here.

August 1, 2014 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

Subscribing to TaxProf Blog

SubscribeWe offer three ways to have TaxProf Blog content automatically delivered to your computer, tablet, or smart phone:

RSS Feeds:  You can subscribe to one of three different feeds to receive TaxProf Blog posts via your RSS reader:

Email:  You can subscribe to receive TaxProf Blog posts via email through one of three approaches:

  • FeedBlitz:  Enter your email address here to receive TaxProf Blog posts via email, delivered to you either daily, every 12 hours, every 8 hours, every 4 hours, or hourly (at your option).
  • TaxProf Blog Tax Email Service:  Email me to be added to my twice daily (during the week) and once daily (on the weekend) emails to the TaxProf Discussion Group with titles and links to recent TaxProf Blog posts on tax topics.
  • TaxProf Blog Legal Education Email Service:  Email me to be added to my email distribution list with titles and links to recent TaxProf Blog posts on legal education topics.

August 1, 2014 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Support TaxProf Blog by Shopping on Amazon

Amazon-associatesTaxProf Blog participates in the amazon.com affiliate program. You can help support TaxProf Blog at no cost to you by making purchases through Amazon links on the blog and through the "Shop Amazon" tab on the header at the top of the blog:

Header

and the search box in the right column of the blog:

Amazon Search

August 1, 2014 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Professors With Last Names Beginning With ABCs Get More Citations Than XYZs

ABCInside Higher Ed, 'Do ABCs Get More Citations Than XYZs?':

Want to up your citation stats? Try changing your name – but make sure it starts with an “A,” “B,” or “C.” That’s what a new paper in Economic Inquiry suggests [Do ABCs Get More Citations Than XYZs?]. The study, by Wei Huang, a Ph.D. candidate in economics at Harvard University, says that researchers whose last names begin with A, B, or C who are listed first as authors in articles in a variety of science journals receive, on average, one to two more citations than their peers whose names start with X, Y, or Z.

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

The IRS Scandal, Day 449

IRS Logo 2New York Observer:  Did The White House Know About the IRS Emails? The IRS, the President, and his No. 1 Muse: Kathryn Ruemmler, by Sidney Powell:

The president’s longest serving White House counsel, Kathryn Ruemmler, was, until her sudden departure for Latham & Watkins, “a regular presence in the Situation Room and the Oval Office, making legal judgments and helping coach other senior officials on how to discuss them publicly,” according to the Washington Post. Our first article, “All The President’s Muses,” described Ms. Reummler’s outsized role in the aftermath of the Benghazi tragedy. It’s undisputed she starred in the president’s expansive use of executive powers, increased secrecy and recent Supreme Court reversals.

With the near daily revelations from the IRS, the question becomes, what exactly might Ms. Ruemmler know?

The Inspector General of the Treasury confirmed that the IRS targeted the president’s political opposition with audits, harassment and denials of tax-exempt status. Patrick Howley reported from congressional hearings that even more IRS computers surrounding Lois Lerner and the White House had crashed. Now the IRS is claiming that the number is greater than seven (the prior count) but fewer than 20. There may be emails on back-up devices, but the IRS still claims it isn’t sure.

The burning question is: have they looked in the White House? ...

Ms. Ruemmler’s recent midnight departure from the White House left her actions largely unscrutinized. Yet, she was squarely in the middle of the IRS controversy from the very beginning. As she told the Wall Street Journal, “The White House really sees everything, and you touch everything.” ...

As White House counsel, Ms. Ruemmler led the president in all federal appointments. Her fingerprints are all over the president’s attempt to appoint Mary Smith, a colleague from Ms. Ruemmler’s days in President Clinton’s Counsel’s office, to head the powerful Tax Division of the Department of Justice. Senator Grassley blocked that confirmation, leaving the White House “very upset.” In response, Lois Lerner suggested auditing Senator Grassley.

Not long ago, the president said he knew nothing about the IRS target-hunting. Roger Aronoff reported that both the White House Chief of Staff and White House Counsel Ms. Ruemmler knew about the targeting of conservative groups at least a month before (the now infamous) Ms. Lerner “planted a question” regarding the IRS’ abusive actions. “President Obama later claimed on national television that in terms of the IRS scandal, there wasn’t a ‘smidgeon of corruption’ in his administration, and blamed the whole episode on ‘bone-headed decisions’ of bureaucrats.”

Ms. Ruemmler claimed she did not tell the president—prompting even some Democrats, including Lanny Davis, a prominent Democratic crisis manager, to call for her resignation more than a year ago. Yet, she remained safely in place.

“Either Ruemmler was incredibly incompetent or the White House is lying about when Obama knew of the scandal,” writes Ed Morrissey at Hot Air. “We got a big hint . . . when Obama changed the context of a question about his awareness of the scandal to his awareness of the IG report, which is pointedly not the same thing.” ...

In an incredible stroke of luck, the emails on multiple computers that might reveal IRS agents’ communications with the White House were precisely the ones that mysteriously disappeared.

That lucky streak continued when by mere happenstance Ms. Ruemmler left the White House shortly before IRS Commissioner Koskinen was forced to admit that thousands of emails between Ms. Lerner, the White House and others were “missing.” ...

These IRS emails are today’s White House Watergate tapes. Who and how many people in the White House were recipients or senders? Surely, their computers haven’t crashed, too. How could 155 visits by a key IRS agent be missed by White House Counsel—the president’s fiercest protector?

So what did Ms. Ruemmler know and when did she know it?

Continue reading

August 1, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, July 31, 2014

Details Emerge in Murder of Dan Markel

Markel[Continually Updated]  More details are emerging in the July 18 murder of Dan Markel, D’Alemberte Professor of Law at Florida State and founder of PrawfsBlawg, as the result of a shooting in his home:

I have collected links to the many tributes to Dan here.

Dan Markel Memorial Fund To Benefit His Sons, Benjamin Amichai Markel and Lincoln Jonah Markel:

Markel

July 31, 2014 in Legal Education | Permalink | Comments (0)

Memorial Tributes to Dan Markel (1972-2014)

Markel[Continually Updated]  Memorial tributes to Dan Markel, D’Alemberte Professor of Law at Florida State and founder of PrawfsBlawg, who was shot and killed in his home in Tallahassee on July 18.

July 31, 2014 in Legal Education | Permalink | Comments (0)

Texas Wesleyan Law Grads File Complaint With ABA, Seek Reissued Texas A&M Diplomas

Texas Lawyer, Texas Wesleyan Law Grads Want Aggie Status, File Complaint With ABA:

Texas A&M Law LogoA dozen graduates of Texas Wesleyan University School of Law, unhappy with how Texas A&M University has treated them since it acquired the law school in 2013, have lodged a complaint with the American Bar Association.

The complaint, sent on July 25 to the ABA, comes two weeks after 500 TWU School of Law alumni submitted a petition to TAMU officials asking the university to "reissue" diplomas under the Texas A&M University School of Law name. The petition was sent to the university president, board of regents and others.

In the complaint to the ABA, the Texas Wesleyan alumni write that they want to be recognized as alumni of Texas A&M University School of Law "with all of the rights and benefits" given to graduates of the law school. ... They allege in the complaint that the TAMU School of Law is out of compliance with standards that require the law school to report accurate and nonmisleading information about the school. The TWU School of Law graduates note in the complaint that TAMU School of Law lists bar passage statistics from 2010, 2011 and 2012, which apply to TWU School of Law, and also publicizes pro bono statistics that include hours done by TWU School of Law alumni.

Continue reading

July 31, 2014 in Legal Education | Permalink | Comments (2)

Jon Stewart and Stephen Colbert on Tax Inversions

NY Times: The Lawyer’s Apprentice: How to Learn the Law Without Law School

New York Times, The Lawyer’s Apprentice: How to Learn the Law Without Law School:

LawyerWhen Chris Tittle meets new people and the topic turns to his work, he sometimes fishes in his pockets and produces a business card that reads “Abraham Lincoln.” Below the 16th president’s name in smaller type the card reads, “Just kidding, but I hope to follow in some of his footsteps.”

Mr. Tittle, who sports the kind of full beard more often associated with folk-rock bands than future junior partners, is working toward becoming a lawyer under an obscure California rule that allows people to “read law” much as Lincoln did, studying at the elbow of a seasoned lawyer. “There is very little that would entice me to go $100,000 or more into debt for a credential,” said Mr. Tittle, who is in his first year of a four-year program of practical study.

California is one of a handful of states that allow apprenticeships like Mr. Tittle’s in lieu of a law degree as a prerequisite to taking the bar and practicing as a licensed lawyer. In Virginia, Vermont, Washington and California, aspiring lawyers can study for the bar without ever setting foot into or paying a law school. New York, Maine and Wyoming require a combination of law school and apprenticeship.

The programs remain underpopulated. Of the 83,986 people who took state or multistate bar exams last year, according to the National Conference of Bar Examiners, only 60 were law office readers (so-called for the practice of reading legal texts as preparation). But at a time when many in legal education — including the president, a former law professor — are questioning the value of three years of law study and the staggering debt that saddles many graduates, proponents see apprenticeships as an alternative that makes legal education available and affordable to a more diverse population and could be a boon to underserved communities. ...

Before the prevalence of law schools in the 1870s, apprenticeships were the primary way to become a lawyer. “Stop and think of some of the great lawyers in American history,” said Daniel R. Coquillette, a law professor at Boston College who teaches and writes in the areas of legal history and professional responsibility. “John Adams, Chief Justice Marshall, Abraham Lincoln, Thomas Jefferson. They didn’t go to law school at all.” ...

[T]here are obstacles. None of the states help prospective law readers locate a supervising lawyer, and finding one willing to take on the responsibility of educating a new lawyer can be difficult. Bar passage rates for law office students are also dismal. Last year only 17 passed — or 28 percent, compared with 73 percent for students who attended schools approved by the American Bar Association.

“The ABA takes the position that the most appropriate process for becoming a lawyer should include obtaining a J.D. degree from a law school approved by the ABA and passing a bar examination,” said Barry A. Currier, managing director of accreditation and legal education for the group.

Continue reading

July 31, 2014 in Legal Education | Permalink | Comments (8)

Oei: Taxing Bankrupts

Shu-Yi Oei (Tulane), Taxing Bankrupts, 55 B.C. L. Rev. 375 (2014):

When a debtor goes bankrupt and limited assets have to be divided between competing creditors, should unpaid taxes owed to the government be paid before the debts owed to other creditors? While the contemporary trend has been towards a reduction of such "priority" for tax debts in bankruptcy, this Article defends the award of tax priority. Insofar as bankruptcy protection transfers the risk of financial distress from a debtor to her creditors, the tax priority debate should be understood as a fight about how much debtor default risk the government should have to assume relative to other creditors. This Article argues that the government’s share of debtor default risk should be limited through the grant of tax priority because, contrary to the claims of priority’s critics, the government is constrained in its ability to diversify against such risk, via either substantive tax policy or changes in tax administration. Therefore, greater bankruptcy risk exposure can compromise the government’s ability to perform other important functions. In sum, tax priority serves as an important structural limit on the government’s bankruptcy risk burden and safeguards the myriad important functions of government.

July 31, 2014 in Scholarship, Tax | Permalink | Comments (0)

NY Governor Suspends 40 Tax Preparers for Not Filing Their Own Returns

New York Times, Governor’s Office Suspends 40 Tax Preparers for Not Filing Own Returns:

The governor’s office announced on Wednesday that it had suspended 40 tax preparers who, despite their profession, did not file personal income taxes.

The suspensions are part of a larger effort to regulate the tax preparation industry in the state, which serves over 7 million people and has been tarnished by examples of incompetence and fraud. The 40 people named in this round of suspensions were accused of a more mundane transgression: not filing their state income taxes in 2011 and 2012. ...

Continue reading

July 31, 2014 in Tax | Permalink | Comments (0)

Forbes: America's Top Colleges (Return on Investment)

Forbes 2Forbes, Ranking America's Top Colleges 2014:

For the seventh year, Forbes has partnered with the Washington, D.C.-based Center for College Affordability and Productivity (CCAP) for America’s Top Colleges. The Forbes list of 650 schools distinguishes itself from competitors by our belief in “output” over “input.” We’re not all that interested in what gets a student into college, like our peers who focus heavily on selectivity metrics such as high school class rank, SAT scores and the like. Our sights are set directly on ROI: What are students getting out of college? ...

Methodology:
Student Satisfaction (25%):  Professor ratings (RateMyProfessor) (10%), actual (12.5%) and predicted (2.5%) freshman-to-sophomore retention rates
Post-Graduate Success (32.5%):  Salary of alumni (Payscale.com) (10%), America’s Leaders List (22.5%)
Student Debt (25%):  Average federal student loan debt load (10%), student loan default rates (12.5%) and predicted vs. actual percent of students taking federal loans (2.5%)
Graduation Rate (7.5%):  Actual graduation rate (5%) and the actual vs. predicted rate (2.5%)
Academic Success (10%):  Students who win prestigious scholarships and fellowships (7.5%) or go on to earn a Ph.D. (2.5%)

Here are the Top 25 colleges, with their corresponding U.S. News & World Report ranking:

  1. Williams (1 Liberal Arts "LA")
  2. Stanford (5 National Universities "NU")
  3. Swarthmore (3 LA)
  4. Princeton (1 NU)
  5. MIT (7 NU)
  6. Yale (3 NU)
  7. Harvard (2 NU)
  8. Pomona (4 LA)
  9. U.S. Military Academy (17 LA)
  10. Amherst (2 LA)
  11. Haverford (9 LA)
  12. Pennsylvania (7 NU)
  13. Brown (14 NU)
  14. Bowdoin (4 LA)
  15. Wesleyan (17 LA)
  16. Carleton (7 LA)
  17. Notre Dame (18 NU)
  18. Dartmouth (10 NU)
  19. Northwestern (12 NU)
  20. Columbia (4 NU)
  21. Cal-Tech (10 NU)
  22. Davidson (9 LA)
  23. Duke (7 NU)
  24. Chicago (5 NU)
  25. Tufts (28 NU)

July 31, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

NY Times: Is It Time to Stop Obsessing About Income Inequality?

New York Times:  Income Inequality and the Ills Behind It, by Eduardo Porter:

Is it time to stop obsessing about inequality?

Perhaps it was President Obama’s speech last December, calling the nation’s vast income gap “the defining challenge of our time.” The American publication of the French economist Thomas Piketty’s blockbuster Capital in the Twenty-First Century must have helped.

Whatever the reason, suddenly inequality seems to be not only at the top of the liberal agenda, but in the thoughts of concerned American voters.

Yet amid the denunciations of inequity as the major evil of our era, persistent voices — mostly but not exclusively from the political right — have been nibbling away at the concern over distribution that is taking over the zeitgeist. ... [T]he critique does add up to a coherent argument: The income gap cleaving society between the rich and the rest may, in fact, be a red herring.

CowenIt is not only that the accumulation of income at the apex of the pyramid of success is not the nation’s main problem. There is little we can do to redress it anyway. “The returns to growth are going to people in other countries, most notably China, and generally to people with high I.Q., no matter where they live,” said Tyler Cowen, a professor of economics at George Mason University and a contributor to the Economic View column in The New York Times. “I don’t really know how you could undermine this dynamic, short of wrecking the world. Trying to deny that logic is going to fail or worse, backfire.”

Mr. Cowen, who describes himself as a libertarian with a lowercase “l,” is the author of Average Is Over: Powering America Beyond the Age of the Great Stagnation (Dutton, 2013), which posits that technology and globalization have essentially split the labor market in two: high and low earners. Far fewer stable jobs are left over in the middle to support what through much of the 20th century we called the middle class.

In his view, the defining challenge of our era is that workers in the bottom half of the distribution can no longer trust that their living standard will double every generation. “The right moral question is ‘are poor people rising to a higher standard of living?’ Inequality itself is the wrong thing to look at,” he told me. The real problem is slow growth.

(Hat Tip: Mike Talbert.)

July 31, 2014 in Tax | Permalink | Comments (4)

The Research Productivity of New PhDs in Economics

John P. Conley (Vanderbilt University) & Ali Sina Önder (University of Bayreuth), The Research Productivity of New PhDs in Economics: The Surprisingly High Non-Success of the Successful:

Our evidence shows that only the top 10–20 percent of a typical graduating class of economics PhD students are likely to accumulate a research record that might lead to tenure at a medium-level research university. Perhaps the most striking finding from our data is that graduating from a top department is neither necessary nor sufficient for becoming a successful research economist. Top researchers come from across the ranks of PhD-granting institutions, and lower-ranked departments produce stars with some regularity, although with lower frequency than the higher-ranked departments. Most of the graduates of even the very highest-ranked departments produce little, if any, published research. Indeed, we find that PhD graduates of equal percentile rank from certain lower-ranked departments have stronger publication records than their counterparts at higher-ranked departments. In our data, for example, Carnegie Mellon’s graduates at the 85th percentile of year-six research productivity outperform 85th percentile graduates of the University of Chicago, the University of Pennsylvania, Stanford, and Berkeley.

Econ

July 31, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 448

IRS Logo 2House Ways & Means Committee Press Release, Camp Sends More Evidence of Criminal Wrongdoing to DOJ (July 30, 2014):

Today, Ways and Means Committee Chairman Dave Camp (R-MI) sent additional evidence to the Department of Justice (DOJ) regarding the April 9, 2014 criminal referral letter which laid out evidence of possible criminal wrongdoing by former IRS employee Lois Lerner uncovered through the Committee’s investigation.

In releasing the letter, Camp stated, “Despite the serious investigation and evidence this Committee has undertaken into the IRS’s targeting of individuals for their beliefs, there is no indication that DOJ is taking this matter seriously.  In light of this new information, I hope DOJ will aggressively pursue this case and finally appoint a special counsel, so the full truth can be revealed and justice is served.”

In the letter to DOJ, Chairman Camp revealed:

Lerner had a bias against conservatives:

A newly discovered email exchange from Ms. Lerner’s official IRS email account, dated November 9, 2012, directly demonstrates Ms. Lerner’s deep animus towards conservatives, which she refers to as “---holes.”   Lerner further illustrates her disgust with conservatives, even suggesting they will ruin the country.  In her email, Lerner states: “So we don't need to worry about alien teRrorists. (sic) It's our own crazies that will take us down.”  This email shows that Ms. Lerner’s mistreatment of conservative groups was driven by her personal hostility toward conservatives.

Lerner used her personal email for official business, including taxpayer information:

The Committee also found that Lerner used her personal email for official business, including confidential return information.  The Committee believed that further investigation, using resources available to the Department of Justice, could reveal whether there was unauthorized disclosure of taxpayer information in violation of the law.  A newly discovered email from February 22, 2012 shows an exchange between Ms. Lerner and an IRS IT professional regarding a “Virus on Home PC.”  In the exchange, Ms. Lerner indicates that she kept work information on her home computer, some of which may have been lost.  She further states that her computer may have been “simply hacked because my password was too simple.”  This exchange further raises concerns that taxpayer information may have been leaked.  

Continue reading

July 31, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, July 30, 2014

Experts Assess Whistleblower's Lawsuit Challenging Vanguard's Tax Structure

Following up on Saturday's post, Former Vanguard Tax Lawyer Files Whistleblower Suit Alleging Mutual Fund Giant Became Low-Cost Leader by Evading $1 Billion in Taxes:  Philadelphia Inquirer, Vanguard's Singular Model Is Under Scrutiny:

VanguardVanguard Group stands atop the mutual fund business, and credits its "unique" structure: The largest mutual fund company is owned, not by for-profit investors, but by more than 100 of Vanguard's own mutual funds, which are owned by millions of clients. Vanguard says this frees managers to "focus on keeping costs as low as possible," passing savings to clients through lower fees for investment advice and other support services.

Vanguard's singular model is now under scrutiny. One of Vanguard's own tax lawyers has blown a whistle on its practices. In his lawsuit filed under seal in the New York State Court for Manhattan before he was fired by Vanguard in 2013, Daniel Danon alleges Vanguard's low costs are based on "illegal" income tax avoidance.

Vanguard denies wrongdoing. The company, based in Malvern, said Danon's complaint "is without merit" and promises to "vigorously defend" against it in court. Vanguard traces its client-owned structure to its founding in 1975. Government regulators have had almost 40 years to complain, if there were a problem.

Still, corporate tax lawyers [Stanley Kull, David Shakow, Lee Sheppard, Robert Willens] and mutual fund industry observers contacted by The Inquirer say that Danon is basing his arguments on well-known provisions of federal tax law - and that his insider analysis, if upheld by courts and adopted by the IRS, could provoke changes, and perhaps reduce Vanguard's cost advantage in the marketplace.

July 30, 2014 in Tax | Permalink | Comments (0)

House May Vote This Year to Repeal Estate Tax

Bloomberg, House May Vote This Year to Repeal Estate Tax, Camp Says:

Form 706Republicans are considering voting this year to repeal the U.S. estate tax, said House Ways and Means Chairman Dave Camp. Camp, a Michigan Republican, told reporters in the Capitol today that many recently elected U.S. House members haven’t had a chance to vote on the issue. He said no final decisions have been made. “It’s been a long time since we’ve had a vote on total repeal,” he said. “Obviously, I don’t believe death should be a taxable event.”

The measure would probably pass the House, given that more than half of the House members are co-sponsoring a repeal bill. President Barack Obama and many Democrats favor going in the other direction and expanding the estate tax, so the proposal stands little chance of becoming law.  

July 30, 2014 in Tax | Permalink | Comments (0)

Are Academic Law Libraries Doomed?

Law LibraryFollowing up on my previous post, WSJ: Law Libraries Are Doomed: Kenneth J. Hirsh (Cincinnati), Like Mark Twain: The Death of Academic Law Libraries Is an Exaggeration:

At the 2013 CALI Conference on Law School Computing, Professor James Milles, professor and former library director of the SUNY Buffalo Law School, presented his draft paper positing that academic law libraries are doomed [Legal Education in Crisis, and Why Law Libraries are Doomed]. The author presented his contrasting viewpoints in the same session. This paper is based on his presentation and has been updated to account for adoption of the revised law school accreditation standards approved by the ABA Council on Legal Education and Admissions to the Bar in 2014. While the author agrees with the underlying observations set out by Professor Milles, he envisions a scenario where law libraries, and more importantly librarians, remain an essential part of law school life.

July 30, 2014 in Legal Education | Permalink | Comments (0)