TaxProf Blog

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

Thursday, April 20, 2017

Tenured Faculty Sue To Stop Closure Of Whittier Law School

WhittierFollowing up on yesterday's post, Whittier Law School To Close, Will Not Admit A 1L Class This Fall:  several tenured faculty have filed this lawsuit to enjoin the law school's closing:

Since 1985, the Law School has been fully accredited by the American Bar Association (the "ABA").  In 1996, the College acquired a 14-acre campus in Costa Mesa on which the Law School has operated continuously. Throughout that time, the Law School has remained a highly profitable part of the College. The Law School tuition revenues have covered all of the Law School's operating expenses, including servicing all debt on its 14-acre campus. And the lion's share of all residual Law School tuition revenues has been appropriated each year by the College-purportedly to cover overhead services allegedly provided by the College to the Law School.

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April 20, 2017 in Legal Education | Permalink | Comments (13)

The IRS Scandal, Day 1442:  Editorial Calls For Firing IRS Commissioner Koskinen

IRS Logo 2Washington Examiner, Fire IRS chief John Koskinen:

President Trump needs a win. The public would benefit from reassurance about the institutions of government. Luckily, both can be achieved with a single action. Trump should dismiss IRS Commissioner John Koskinen.

By telling the taxman he's fired, the president would re-energize his young administration. More importantly, he would also significantly reform the most loathed agency in Washington. Tax Day provides a perfect chance for this sort of principled populism. ...

So long as Koskinen stays in his job, taxpayers have no such assurance. He was brought in by President Obama to clean up the IRS in 2013, but has succeeded only in making the agency more corrupt. A political crook and a liar, Koskinen has no place working in the Trump administration. ...

But Koskinen set himself above the rules. Trump vows to drain the swamp, and the IRS boss is an especially capable and devious swamp monster. House Republicans have tried shaming, censuring, and even threatening to impeach him. But each time, he's found a way to survive.

The failure of past lawmakers provides Trump a perfect opportunity. As the head of an administrative agency, Koskinen serves at the pleasure of the president. A word from Trump would send him packing and bring closure to the controversy.

A principled power move, firing Koskinen would also provide the White House with a needed influx of political capital. What's more, it would signal the beginning of a new era of good government during the Trump era.

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April 20, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, April 19, 2017

Whittier Law School To Close, Will Not Admit A 1L Class This Fall

WhittierA Message from the Whittier College Board of Trustees:

The Board of Trustees has been greatly concerned by the challenges affecting our law program in recent years and, in 2015, the Board appointed a subcommittee to explore options for the future of the Law School. These have included working with the administration and faculty to redirect resources and efforts to improve student outcomes and right-size the operation in a manner to achieve enhanced academic viability. The Board invited a faculty task force to assess the educational program and considered faculty plans for improvement. The Board also entered into conversations with entities capable of investing in, merging with, or acquiring the Law School.

We believe we have looked at every realistic option to continue a successful law program. Unfortunately, these efforts did not lead to a desired outcome.

Accordingly, on April 15, 2017 the Board voted not to enroll new 1L classes at the Law School beginning this fall. We are committed to ensuring that students currently enrolled will have an opportunity to complete their degree in a timely fashion. At the appropriate time, the program of legal education will be discontinued.

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April 19, 2017 in Legal Education | Permalink | Comments (7)

President Trump Threatens Law Schools' $350 Million Revenue From Foreign LL.M. Students

Trump LLMNational Law Journal, Will Law Schools’ LL.M Programs Suffer from Trump’s ‘America First’ Stance?:

Law school administrators say concerns are growing from foreign students about how the myriad immigration and travel policies emerging from Washington could impact their plans to obtain LL.M degrees in the United States.

The advanced law degree programs bring in about $350 million annually to the more than 100 U.S. law schools that offer them, with around 10,000 foreign students coming here each year to pursue an LL.M.

LL.M faculty are worried that those lucrative programs could lose their luster should the United States gain a reputation as unwelcoming to foreigners, and they say some LL.M applicants are grappling with whether they want to come to such a place.

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April 19, 2017 in Legal Education | Permalink | Comments (13)

Steve Ballmer Launches USAFacts To Track Government Spending And Taxing

USAFactsWashington Post, Tax Transparency in the Age of Trump:

Steve Ballmer, former CEO of Microsoft and current owner of the Los Angeles Clippers, is doing a significant public service. According to an article in the New York Times, Ballmer has funded a project to compile where every cent of government money is raised and spent at the federal, state and local levels. By clicking on USAFacts.org, anyone will be able to discover how much is raised in corporate versus sales or income taxes; how much money goes to their school district and what percentage is spent on teacher versus administrative salaries; how much the government spends on treating some specific categories of disease, such as depression; how much goes to diplomatic services versus the military. And so on. One hopes that Ballmer’s old friends at Xbox could turn all this data into an entertaining and instructive video game called “Taxes Versus Spending.”

Ballmer hopes that public debate will be strengthened by the availability of a common set of accurate data, perhaps echoing Daniel Patrick Moynihan’s saying that one is “entitled to his own opinion, but not his own facts.”

New York Times Deal Book: Steve Ballmer Serves Up a Fascinating Data Trove, by Aaron Ross Sorkin:

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April 19, 2017 in Tax | Permalink | Comments (0)

The IRS Will Issue Tax Refunds This Year In Forever Stamps Rather Than Cash

Forever 2The Onion, IRS Announces Refunds Will Come In Form Of Forever Stamps This Year:

Stating that the policy change represented the kind of reform taxpayers have long demanded, the IRS announced Tuesday that all refunds for the 2016 fiscal year will be disbursed in the form of Forever stamps. “Persons anticipating a refund will receive a ream of Forever stamps equal to the expected amount within six to eight weeks of filing their taxes,” said IRS commissioner John Koskinen, explaining that someone with a $500 tax refund, for example, will receive an envelope containing 1,020 stamps, or roughly 51 booklets of the 49-cent postage.

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April 19, 2017 in IRS News, Tax | Permalink | Comments (5)

NYU Tax Law Review Publishes New Issue

NYU Law (2016)The Tax Law Review has published a new issue (Vol. 69, No. 4 (Summer 2016)):

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

Bill Henderson: Goodbye, But Not Farewell; Jerry Organ Joins TaxProf Blog

HOABA Journal, Legal Industry-Focused Blog to Go Dark: Prof Plans New Site Focused on Legal Productivity:

The Legal Whiteboard, a blog with data-focused posts about U.S. law schools and the legal profession, is coming to an end April 30, editor Bill Henderson posted there Monday.

“I am shutting down The Legal Whiteboard so I can make a more ambitious investment in online publishing. For the next year or so, and perhaps longer if the experiment works, virtually all of my professional efforts outside of teaching will be focused on building an online publication for my core research on the legal industry,” wrote Henderson, a professor at Indiana University Maurer School of Law.

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April 19, 2017 | Permalink | Comments (0)

The IRS Scandal, Day 1441:  Lois Lerner Remains Relevant On Tax Day

IRS Logo 2Forbes: Lois Lerner, Former IRS Official, Remains Relevant On Tax Day, by Robert W. Wood:

President Trump is still facing a big backlash over his tax returns. Despite big protests, he has not released them, and there is no sign that he will. As this Tax Day passes, it seems unlikely that public cries for his tax returns are going away anytime soon. Yet curiously, some people on the right seem to be as upset with a now barely uttered name from the IRS’s past, Lois Lerner. Ms. Lerner was the former IRS official at the center of the targeting scandal. That mostly forgotten issue has nothing to do with Trump's tax returns, and it is unlikely to garner the kind of popular outcry that has been triggered over Trump's returns.

Even so, some observers cannot let go of the IRS targeting scandal. Partisan treatment from the IRS is worrisome. Some claim that Lois Lerner got off easy in the IRS scandal, and want it reopened. In fact, House Ways and Means Committee Chairman Kevin Brady and Tax Policy Subcommittee Chairman Peter Roskam sent a letter to Attorney General Jeff Sessions asking the Department of Justice to re-open a probe of her conduct. ...

IRS Commissioner John Koskinen is still at the helm of the agency, and there is no sign that he will be replaced. In addition to Ms. Lerner’s own conduct, there were numerous gaffes or glitches over the course of several years. To outsiders, the IRS seemed to behave in ways that no taxpayer engaged in a tax audit would be allowed to act. Taken as a whole, the IRS made itself look at least sloppy. For example, as recently as 2016, despite a court order to preserve documents, the IRS wiped the hard drive of an important IRS official, Mr. Samuel Maruca involved in hiring an outside law firm. Senate Finance Committee Chairman Orrin Hatch wrote a letter to the IRS complaining about the strange deal and its big fees.

The deal had nothing to do with Lois Lerner or targeting. Yet, the fact that the IRS wiped Mr. Maruca's hard drive was a reminder of Lois Lerner and all that came with her. ...

In March 2014, nine months after receiving a congressional subpoena to preserve and turn over the information, the IRS deleted approximately 24,000 Lerner emails and destroyed Lerner’s hard drive. Many emails were lost forever when 422 backup tapes were wiped clean despite a preservation order and subpoena. The House Oversight Committee report said the IRS failed to take even simple steps to ensure compliance with the order. On Tax Day, some taxpayers might wonder if the IRS would be likely to accept similar taxpayer arguments.

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April 19, 2017 | Permalink | Comments (6)

Tuesday, April 18, 2017

Galle Presents Design And Implementation Of A Charitable Regulation Regime Today At Georgetown

Galle (2016)Brian Galle (Georgetown) presents Design and Implementation of a Charitable Regulation Regime at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

Charitable organizations are often billed as private alternatives to the governmental provision of public goods (Weisbrod 1975). Yet in developed countries many aspects of charities are subject to government dictate, or at least oversight. Government rules may circumscribe, or at least incentivize, the organizational structure of the firm, the rights and obligations of its stakeholders, what activities it will engage in or not, how much it will spend or save, even to whom it will communicate and the content of those communications. In a federated system such as the United States, a single multi-state firm might be answerable to literally dozens of separate regulators.

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

WSJ:  How $100 Of Your Taxes Are Spent

Wall Street Journal, How $100 of Your Taxes Are Spent:

With April 18 nearly here, U.S. taxpayers are likely asking themselves: Where exactly are my tax dollars going?

To answer the question, here is a “Taxpayer Receipt” showing how each $100 of taxes was spent, both for 2016 and five years earlier. It was prepared by the Committee for a Responsible Federal Budget, a nonpartisan nonprofit group in Washington that monitors federal spending. The group’s three chairmen are Republican Mitch Daniels, Democrat Leon Panetta and independent Tim Penny.

Looking at the list of expenditures, it is clear why some say the U.S. is a giant insurance company with an army. Half of all spending goes for Social Security benefits and health programs such as Medicare and Medicaid, while another 20% is for defense and military benefits.

WSJ

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April 18, 2017 in Tax | Permalink | Comments (5)

Sen. Flake Releases Report on 'Outlandish Tax Rackets'

Flake

Sen. Jeff Flake (R-AZ), Tax Rackets: Outlandish Loopholes to Lower Tax Liabilities (press release):

As Tax Day approaches and Congress considers long-overdue tax reforms, the report is intended to highlight loopholes that create fake markets for unnecessary or unwanted goods and services; encourage more borrowing, spending, and taxing by local governments; and shift the tax burden to the middle class. ...

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April 18, 2017 in Congressional News, Tax | Permalink | Comments (1)

Columbia Symposium:  The House GOP Better Way To Tax Reform

Better WaySymposium, The Better Way Plan, 8 Colum. J. Tax L. 113-308 (2017):

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April 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

BYU And Pepperdine Are The Most Ideologically Balanced Faculties Among The Top 50 Law Schools (2013)

Adam Bonica (Stanford), Adam S. Chilton (Chicago), Kyle Rozema (Northwestern) & Maya Sen (Harvard), The Legal Academy's Ideological Uniformity:

Ideology

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April 18, 2017 in Legal Education, Scholarship | Permalink | Comments (8)

Chodorow:  The IRS's Use Of Private Debt Collectors Will Not End Well (Again)

Slate (2017)Slate:  The IRS Is Using Private Debt Collectors Again. And It May Not End Well, by Adam Chodorow (Arizona State):

Last year, Congress authorized the Internal Revenue Service to use private debt collectors to go after unpaid tax liabilities — and this month, if you are one of the unfortunate, you may have already had the pleasure first-hand. The U.S. Treasury hopes to assign up to 1,000 delinquent accounts a month to each of four different companies, which will be able to keep 25 percent of the tax bills they collect.

We’ve been here before — twice, in fact — and the government actually lost money. It is not at all clear why this time should be different. And even if the program does save the government money, as its proponents promise, turning over delinquent tax accounts to private debt collectors raises a host of issues that should give us pause. ...

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April 18, 2017 in IRS News, Tax | Permalink | Comments (3)

Monday, April 17, 2017

Perry Fleischer Presents The Libertarian Case For A Universal Basic Income Today At NYU

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents Atlas Nods: The Libertarian Case for a Universal Basic Income (with Daniel Hemel (Chicago)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler: :

Proposals for a universal basic income are generating interest across the globe, with pilot experiments underway or in the works in Finland, Kenya, the Netherlands, and the city of Oakland, California. Surprisingly, many of the most outspoken supporters of a universal basic income have been self-described libertarians — even though libertarians are generally considered to be antagonistic toward redistribution and a universal basic income is, at its core, a program of income redistribution. What explains such strong libertarian support for a policy that seems so contrary to libertarian ideals?

This Article seeks to answer that question. We first show that a basic safety net is not only consistent with, but likely required by, several strands of libertarianism. We then explain why libertarians committed to limited redistribution and limited government might support a system of unconditional cash transfers paid periodically. Delivering benefits in cash, rather than in-kind, furthers autonomy by recognizing that all citizens —  even poor ones — are the best judges of their needs. Decoupling such transfers from a work requirement acknowledges that the state lacks the ability to distinguish between work-capable and work-incapable individuals. Providing payments periodically, rather than through a once-in-a-lifetime lump sum grant, ensures that all individuals can receive a minimum level of support over lifespans of variable lengths, while also allowing individuals to adjust payment flows through financial market transactions.

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April 17, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Female Professors Outperform Men in Service, To Their Professional Detriment

Inside Higher Ed, Female Professors Outperform Men in Terms of Service — To Their Possible Professional Detriment:

Women shoulder a disproportionately large workload at home in ways that might disadvantage them professionally. But are female professors also “taking care of the academic family” via disproportionate service loads? A new study [Faculty Service Loads and Gender: Are Women Taking Care of the Academic Family?] says yes and adds to a growing body of research suggesting the same.

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April 17, 2017 in Legal Education | Permalink | Comments (3)

Thomas Brennan Named Stanley Surrey Professor of Law At Harvard Law School

Harvard Law School, Focus and Perspective in Taxation: Tom Brennan receives the Stanley S. Surrey Professorship of Law:

In a lecture marking his appointment as the Stanley S. Surrey Professor of Law at Harvard Law School, Tom Brennan ’01 delivered a talk titled “Focus and Perspective in Taxation.”

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April 17, 2017 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Camp:  Are We Ready For A Federal Ready Return System?

Camp (2017)TaxProf Blog op-ed:  Are We Ready for a Federal Ready Return System? Or Who Ya Gonna Call?, by Bryan T. Camp (Texas Tech):

This is the time of year where thoughtful people raise what seems like a very basic question: why does preparing taxes have to be so complicated? For example, in a recent New York Times op-ed [Filing Taxes in Japan Is a Breeze. Why Not Here?], Mr. T.R. Reid opines that our government should be able to what governments in other countries do: pre-populate tax forms. Mr. Reid says that in these other countries (Japan and the Netherlands are the two he cites),

[t]he taxpayer just has to check the numbers. If the agency got something wrong, there’s a mechanism for appeal. Our own Internal Revenue Service could do the same for tens of millions of taxpayers. For most families, the I.R.S. already knows all the numbers — wages, dividends and interest received, capital gains, mortgage interest paid, taxes withheld — that we are required to enter on Form 1040.

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April 17, 2017 in IRS News, Tax | Permalink | Comments (2)

Horwitz:  Why Full-Time Law Profs Should Support The ABA's Proposal To Permit Adjunct Profs To Teach More Courses

ABA Section On Legal Education (2016)Following up on my previous posts:

Paul Horwitz (Alabama), The Legal Academy Becomes More Like the Rest of the Academy, Part XVIIII:

Via TaxProf Blog and the ABA Journal comes the news that the ABA's Council of the Section of Legal Education and Admissions to the Bar has proposed a rule change to the current ABA standard requiring that more than half of all credit hours offered by accredited law schools be taught by full-time, and hence generally "academic," faculty. The proposal would reduce the required number to one third. Some observations: ...

2)  This is a proposal driven by real or perceived economic necessity, and a desire to legitimate changes that either are already happening — or that might need to happen if law schools are to remain afloat while cutting to the bone. ...

3)  On the whole and as an initial matter, I favor the proposal. In a now-ancient book review of Brian Tamanaha's Failing Law Schools [What Ails the Law Schools?, 111 Mich. L. Rev. 955 (2013)], I wrote approvingly of Tamanaha's proposal that we "pare down ABA accreditation requirements that force law schools into a single educational model," so that some schools can maintain the traditional and more "elite" model while others offer a "cheaper and more practically oriented model."

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April 17, 2017 in Legal Education | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, April 16, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Gene Nichol Criticizes 'Nakedly Ideological' Attack On UNC Center For Civil Rights, Calls Out 'Cowardly' Dean, Provost, And Chancellor

North Carolina LogoFollowing up on my previous posts:

News & Observer op-ed: Julius Chambers Warned That Conservatives Would Oppose UNC’s Civil Rights Center, by Gene Nichol (North Carolina):

The law school in Chapel Hill is a storied institution. It has produced remarkable North Carolina leaders like Frank Graham, Bill Friday, Terry Sanford, Bill Aycock, Suzie Sharp, Jim Hunt and Henry Frye. But, at bottom, it’s a school for lawyers. And none doubt UNC’s greatest lawyer was Julius Chambers.

When I came to Carolina to become dean in 1999, one of my principal goals, ratified by the faculty and Chancellor Michael Hooker, was to establish a civil rights center. It would link powerfully to the state’s history, focus on its continuing challenges, provide otherwise unattainable experiences for students, and, I hoped, be led by America’s greatest civil rights lawyer, then N.C. Central chancellor, Julius Chambers.

It took eighteen months to talk Chambers into coming. I visited him eight times during his last year at Central. The first four he said no. The next couple, he bent a little, saying he’d think about it. On the last visit, he was serious. He began by asking, “do you have some kind of death wish?” This is North Carolina, he explained. “They won’t let you open a center to represent poor black people.” And if they do, “and if we do our work, they’ll close us down.” I was naïve. He wasn’t.

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April 16, 2017 in Legal Education | Permalink | Comments (21)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite 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, #4, and #5:

  1. [327 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)
  2. [307 Downloads]  Destination-Based Cash Flow Taxation, by Alan Auerbach (UC-Berkeley), Michael P. Devereux (Oxford), Michael Keen (IMF) & John Vella (Oxford)
  3. [299 Downloads]  Background and Current Status of FATCA, by William Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  4. [203 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  5. [195 Downloads]  The First McGee Annual Report on the Best and Worst States for Business, by Robert W. McGee (Fayetteville State University)

April 16, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 1438:  Sessions Is Noncommittal On GOP Request To Reopen DOJ Probe Of Lois Lerner

IRS Logo 2WND, Sessions 'Will Evaluate' Request to Probe IRS Boss: GOP Lawmakers Charge Lois Lerner Criminally Targeted Tea Party:

Attorney General Jeff Sessions was noncommittal when asked in an interview whether he would fulfill a request by Republican lawmakers to review evidence that former IRS official Lois Lerner engaged in criminal misconduct by targeting tea-party and conservative groups for their political beliefs.

“Are you inclined to open an investigation of Lois Lerner and the IRS?” asked Boston talk-radio host Howie Carr Thursday.

Sessions hesitated.

“Well, I would, I’m, uh, interested in that letter,” he said.

“We’re going to respond to it, and I think it would be appropriate to review certain cases, and we’ll evaluate this one for possible review,” the attorney general said.

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April 16, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, April 15, 2017

UC-Berkeley, Former Law School Dean Settle All Litigation Over Alleged Sexual Harassment; Sujit Choudhry Agrees To Pay $100,000, Resign From Tenured Faculty In Spring 2018

ChoudryFollowing up on my previous posts (links below): National Law Journal, Berkeley Law, Ex-Dean Settle Suits Over Alleged Sexual Harassment:

UC Berkeley has reached a settlement with ousted law school dean Sujit Choudhry, ending a tumultuous saga that erupted last year after his former executive assistant sued him for sexual harassment. The settlement terminates the university's ongoing disciplinary action against Choudhry, and resolves the civil lawsuit brought by his former assistant, Tyann Sorrell.

The former law dean will pay $50,000 to Sorrell's attorneys and another $50,000 to a charity of Sorrell's choice under the terms of the deal. He will also be allowed to remain a tenured professor while on sabbatical until spring 2018, at which point he will resign. ”It was important that the world understand that he [is] a tenured professor in good standing," Choudhry's lawyer, William Taylor of Zuckerman Spaeder, told The Recorder Friday evening.

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April 15, 2017 in Legal Education | Permalink | Comments (2)

Tax Policy In The Trump Administration

Groups Representing 40% Of Harvard Law Students Endorse David Wilkins For Dean

WilkinsHarvard Law Record, HLS Affinity Groups Endorse Professor Wilkins for Dean:

Thank you for including student input in your search for the next Dean of Harvard Law School. We write you as student leaders from the Asian Pacific American Law Students Association (APALSA), Harvard Black Law Students Association (HBLSA), Harvard African Law Association (HALA), Lambda, La Alianza, Middle East Law Students Association (MELSA), Native American Law Students Association (NALSA), Queer Trans People of Color (QTPOC), South Asian Law Students Association (SALSA), and Women’s Law Association (WLA). It is difficult to calculate the number of unique individuals we represent due to the intersecting identities of some of our members, but our combined membership totals at least 700 students, which is about 40% of the J.D. student body.

Collectively, we wholeheartedly offer our endorsement of Professor David Wilkins, a scholar, a researcher, an innovator, and a member of the Harvard Law School faculty. While we do not know the list of candidates under your consideration, we sincerely believe that Professor Wilkins has demonstrated a strong commitment to innovative legal thought, a deep understanding of the legal profession and legal education, and an unwavering commitment to equality and justice in the rule of law. His lived experience and nuanced understanding of the power of discourse puts him in a unique position to lead Harvard Law School into arguably one of the most crucial chapters in our school’s two-hundred-year history.

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April 15, 2017 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1437: Lois Lerner Fears For Her Life, Asks Federal Court To Seal Her Upcoming Deposition Testimony

IRS Logo 2Washington Times, Lois Lerner Demands Secrecy, Blames Death Threats Over IRS Tea Party Targeting:

Former IRS senior executive Lois G. Lerner told a federal court this week that she faces the possibility of death threats if her role in the tax agency’s tea party-targeting becomes public, and asked a judge to forever seal her upcoming deposition in a class-action lawsuit brought by hundreds of groups that were targeted.

Mr. Lerner and Holly Paz, another figure from the IRS tea party targeting, told the judge they’ve already faced “harassment and death threats” before, and said they fear another media firestorm if their version of events from the tea party targeting were to become public.

The two women said they are willing to testify, but said they could be putting “their lives in serious jeopardy.”

“Mss. Lerner and Paz have demonstrated that the public dissemination of their deposition testimony would expose them and their families to harassment and a credible risk of violence and physical harm,” they said in documents submitted by their lawyer to Judge Michael R. Barrett. ...

The class action lawsuit involves 428 groups who were snared by the IRS targeting procedures. That case, which is being heard in a federal court in Ohio, is in the discovery phase, and Ms. Lerner and Ms. Paz are supposed to give testimony. ...

Meanwhile, in Washington, D.C., two cases brought by tea party groups are proceeding. A judge on Wednesday granted limited discovery in those cases, ordering the IRS to detail its past and current approval processes for tax-exempt organizations. Judge Reggie B. Walton also said the groups could depose Tamera L. Ripperda, a former IRS employee who ran the Cincinnati office that processed the applications. The groups also can depose the unnamed IRS employee who currently holds that same post.

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April 15, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (11)

Friday, April 14, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a recent Tax Court decision denying limited partner status to law firm partners.

KristanLaw firm partners find the limits of “limited.”

In the beginning, there were general partnerships and limited partnerships.

But the lawyers came down and said, “Come, let us go down and confuse their language so they will not understand each other.” Thus LLCs, LLP, LLLPs, PLCs, PLLCs, and so forth were loosed upon the firmament.

But the IRS self-employment tax regulations, in their wisdom, ignored this, and continued to speak only of general partnerships and limited partnerships. And thus a Mississippi law firm ended up in Tax Court.

In the simple world of the old regulations, general partners in a service firm pay self employment tax on all of their K-1 income, and limited partners don’t. The Mississippi law firm practiced as a “PLLC,” short for “professional limited liability company.” Under the tax law, it was treated as a partnership. The “limited liability” thing makes it sound like a limited partnership. On the advice of their tax preparer, they treated their “guaranteed payments” — what non-partners call wages and bonuses — as self-employment income, and their residual income on their K-1s as income not subject to self-employment tax. According the Tax Court opinion, “the guaranteed payments were commensurate with local legal salaries as determined by a survey of legal salaries in the area.”

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April 14, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a recent article by David P. Hariton (Sullivan & Cromwell), Planning for Border Adjustments: A Practical Analysis, Tax Notes, February 20, 2017.

Gamage (2017)The House Republicans’ proposal for a destination-based cash-flow tax (DBCFT) continues to inspire fascinating discussions among tax policy experts.  Important advances in our knowledge about how destination-based taxes can work, or fail to work, are occurring in real time through these discussions.  This will be my third blog entry praising a recent piece of scholarship as one of the best analyses of the DBCFT to date (see here and here for my previous entries).  Nevertheless, I hope I retain credibility in declaring Hariton’s new article to be essential reading for anyone hoping to understand how the DBCFT, or any other similar proposal reliant on federal-level border adjustments, might work in practice.

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April 14, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Charlotte Law School Dean Resigns After Three Weeks On The Job

Charlotte Logo (2016)Following up on my previous posts (links below):  Charlotte Observer, Seen as Last Hope, Charlotte School of Law Dean Resigns Three Weeks Into Job:

Scott Broyles, whose appointment as dean of Charlotte School of Law temporarily reunited students, faculty and alumni behind the struggling school, unexpectedly resigned Thursday morning after three weeks on the job.

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April 14, 2017 in Legal Education | Permalink | Comments (1)

Harvard Business Review:  How Gender Bias Corrupts Performance Reviews, And What To Do About It

Harvard Business Review LogoHarvard Business Review:  How Gender Bias Corrupts Performance Reviews, and What to Do About It, by Paola Cecchi-Dimeglio (Harvard Law School):

The annual performance review already has many strikes against it. Harried managers end up recalling high and low points on the fly; employees often get unclear direction.

Here’s another flaw: Women are shortchanged by these reviews. In my forthcoming book on gender bias in the workplace, cowritten with journalist Kim Kleman, we present scores of successful interventions I have used in large domestic and international professional services firms to level the playing field for women in appraisals and promotions, among other areas. One of my findings, using content analysis of individual annual performance reviews, shows that women were 1.4 times more likely to receive critical subjective feedback (as opposed to either positive feedback or critical objective feedback).

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April 14, 2017 in Legal Education | Permalink | Comments (2)

Aprill:  Section 501(C)(3) Organizations, Single Member LLCs, And Fiduciary Duties

Ellen P. Aprill (Loyola-L.A.), Section 501(C)(3) Organizations, Single Member Limited Liability Companies, and Fiduciary Duties, 52 ABA Real Prop., Prob. & Tr. J. ___ (2017):

Tax-exempt organizations, including section 501(c)(3) organizations and their philanthrocapitalists, use single member limited liability companies (SMLLCs) for a variety of purposes. Exempt section 501(c)(3) nonprofit organizations (which, for convenience, I will refer to as charities) that have a number of facilities, be they schools, hospitals, or real estate investments, may form a separate SMLLC for each of them, primarily to protect other assets from liability. Charities may wish to place activities with a high risk of tort liability, such as an overnight summer camp, in its own SMLCC. SMLLCs may be used to isolate unrelated business activities from related activities. They may be used to isolate risky investments from more conservative ones. Philanthrocapitalists may structure donations through SMLLCs. They may use them to control aspects of the tax exempt entity’s activities, as according to press reports, the Koch Brothers may do with some of their noncharitable tax-exempt entities.

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April 14, 2017 in Scholarship, Tax | Permalink | Comments (0)

NYU Hosts 8th Annual Tax Movie/TV Night

Thursday, April 13, 2017

Hanna Presents The Theory And Reality Of Business Tax Reform Today At Georgetown

HannaChristopher Hanna (SMU; Senior Policy Advisor for Tax Reform, Senate Finance Committee) presents The Theory and Reality of Business Tax Reform at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

The last several years has seen a lot of discussion among policymakers as to reforming the tax code. On the individual side, there is very little agreement on what form tax reform should take. For example, some policymakers would like to eliminate a number of exclusions, deductions and credits thereby broadening the income tax base and coupling that with a reduction in the individual statutory tax rates. Others would like to shift the current tax system to a consumption-based tax system through, for example, enactment of a value-added tax or an exemption of capital income from the tax base. Some policymakers would simply like to retain the current individual income tax system, particularly after the enactment of a higher individual statutory tax rate as part of the fiscal cliff deal in early 2013.

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April 13, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Gamage & Ross Present At Final Indiana Tax Policy Workshop Of The Semester

Indiana (2016)Two Indiana-Bloomington faculty are presenting papers today at the final Indiana Tax Policy Workshop of the semester:

David Gamage, Tax Cannibalization and State Government Tax Incentive Programs, 82 State Tax Notes 197 (Oct. 17, 2016) (with Darien Shanske (UC-Davis)):

States and localities offer businesses an enormous amount of tax incentives to locate within their jurisdictions despite: 1) the mass of evidence that suggests that these incentives are not particularly effective and, 2) substantial doubts about their constitutionality.

In this essay, we develop a new critical perspective on state tax incentives. We argue that offering these incentives permits states to offer lower taxes to more mobile businesses while keeping their overall corporate tax rates high. This is arguably not the best choice for the states, but it is definitely not the best choice for the federal government. Because the states share the corporate income tax base with the federal government, higher overall state corporate income tax rates results in more cannibalization of federal corporate income tax revenue.

Justin Ross, The Impact of State Taxes on Pass-Through Businesses: Evidence from the 2012 Kansas Income Tax Reform (with Jason DeBacker (Middle Tennessee State), Bradley Heim (Indiana) & Shanthi Ramnath (U.S. Treasury Department, Office of Tax Analysis)):

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April 13, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

ABA:  Are Record Low Multistate Bar Exam Scores The Result Of Declining Law School Admissions Standards?

MBEFollowing up on my previous post, Muller: February 2017 MBE Bar Scores Collapse To All-Time Record Low:  ABA Journal, Multistate Bar Exam Scores Drop to Lowest Point Ever; Is There a Link to Low-end LSAT Scores?:

The average score on the multistate bar exam in February 2017 dropped by another point, reaching the lowest level since the exam was first administered in 1972.

Erica Moeser, president of the National Conference of Bar Examiners, confirms that the average score was 134.1, compared to an average score of 135 in February 2016.

The decline likely portends another drop in overall bar passage rates, according to the blog Excess of Democracy, which broke the news after finding the information in statistics released by the state of Pennsylvania. Above the Law and TaxProf Blog note the blog post. ...

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April 13, 2017 in Legal Education | Permalink | Comments (7)

64% Of Law Grads Want Law Schools To Raise Admissions Standards; 58% Say Their Debt Load Is 'Unmanageable'

KaplanKaplan Bar Review Survey, Law School Graduates Want Law Schools to Raise Their Admissions Standards:

Law schools might want to reconsider who they let in … according to their own alumni. A new Kaplan Bar Review survey of nearly 350 recent law school graduates shows that almost two-thirds (64 percent) think law schools should raise their academic standards — which would include higher LSAT scores and GPAs — when deciding who gets in.

These results come at a time of both introspection and infighting among law schools about who’s to blame for the low bar passage rates for some state bar-specific exams and the lowest Multistate Bar Examination scores in recorded history. In recent years, many law schools have begun to admit students with lower LSAT scores and GPAs than they previously had because of the multiyear slump in applications. In addition, to boost application numbers and diversify the pool of prospective students, a handful of law schools now allow applicants to submit scores from the GRE [more here] — the exam traditionally used for graduate schools and more recently business schools— instead of the LSAT, though the jury is still out on what the results may be. ...

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April 13, 2017 in Legal Education | Permalink | Comments (4)

NY Times:  Democrats See Opening In Tax Reform Fight — Trump’s Own Deductions

New York Times, Democrats See Opening in Tax Overhaul Fight: Trump’s Own Deductions:

When Donald J. Trump was crafting his campaign tax plan last year, one of his top economic advisers proposed an idea that would have made it harder for real estate moguls to use mountains of debt to make deals. Mr. Trump, who made his fortune as a property developer and earned the nickname “the king of debt,” scoffed at the suggestion.

“He hated that idea,” said Stephen Moore, the Heritage Foundation economist who counseled Mr. Trump during the campaign.

The proposal to scale back interest deductions for companies did not make the cut.

As President Trump focuses his attention on overhauling America’s tax code, he has considered turning to the other side of the aisle to reach a bipartisan deal. But an obstacle has already surfaced, dimming the chances that a “grand bargain” will be achieved: Democrats are sounding the alarm that reshaping the tax code presents Mr. Trump’s biggest conflict of interest yet.

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April 13, 2017 in Tax | Permalink | Comments (0)

Tax March: How A Law Professor Sparked A Global Event To Demand Trump's Returns

TaubThe Guardian, Tax March: How a Law Professor Sparked a Global Event to Demand Trump's Returns:

Inspired by the Women’s March in January, law professor Jennifer Taub ‘impulsively’ called for action. Now people from New York to Tokyo are preparing to take to the streets.

Donald Trump’s adviser Kellyanne Conway accidentally inspired a law professor and a comedian to convince thousands of people to take to the streets this Saturday to demand that the president release his tax returns.

The day after attending January’s Women’s March in Boston, Jennifer Taub was proudly looking at photos and coverage online when a video of Conway popped up. Conway, Trump’s former campaign manager, declared that Trump was “not going to release his tax returns” and that voters didn’t care.

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April 13, 2017 in Legal Education, Tax | Permalink | Comments (7)

Adler:  Law School Faculties Need More Intellectual Diversity

Jonathan H. Adler (Case Western), Law School Faculties Need More Intellectual Diversity:

There is something about judicial nominations that brings out the worst in U.S. Senators. Judging from the academic debate over the nomination of Judge Neil Gorsuch to the Supreme Court, it seems to bring out the worst in legal academics too.

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April 13, 2017 in Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 1435: House GOP Tax Writers Ask Attorney General To Reopen Criminal Investigation Of Lois Lerner

IRS Logo 2Letter from Kevin Brady (Chair, Ways & Means Committee) & Peter Roskam (Chair, Subcommittee on Tax Policy) to Attorney General Sessions (Apr. 12, 2017):

On April 9, 2014, the House Committee on Ways and Means voted to send a letter to the Department of Justice referring former IRS Exempt Organizations Division Director Lois G. Lerner for criminal prosecution.  As indicated in the attached letter, the Committee’s nearly three-year investigation uncovered evidence of willful misconduct on the part of Ms. Lerner.  Despite this fact, and for what many believe were purely partisan reasons, the prior Administration refused to review Ms. Lerner’s misconduct.  For the reasons described below, I respectfully request the Department of Justice to take a fresh look at the evidence presented in the attached referral in order to restore taxpayers’ trust in the IRS.

In particular, the Committee found that Ms. Lerner used her position to improperly influence IRS action against conservative organizations, denying these groups due process and equal protection rights under the law.  The Committee also found she impeded official investigations by providing misleading statements in response to questions from the Treasury Inspector General for Tax Administration.  Finally, Lerner risked exposing, and may actually have disclosed, confidential taxpayer information, in apparent violation of Internal Revenue Code section 6103 by using her personal email to conduct official business. 

As you know, your predecessor brought no charges against Ms. Lerner or any other IRS employees involved in the improper targeting of organizations applying for tax-exempt status. 

Disturbingly, in February 2014, while the investigation by the Department of Justice (DOJ) was ongoing, President Obama stated there was “not a smidgeon of corruption” at the IRS, preempting a fair investigation in which he had political equities.  It is clear that when the DOJ announced in October 2015 that it would not bring charges against Lois Lerner, the agency was following President Obama’s signal on how he wanted the investigation to be handled. 

Taxpayers deserve to know that the DOJ’s previous evaluation was not tainted by politics.  Again, I respectfully request that the Department of Justice to take a fresh look at the evidence presented in the attached referral in order to assure the American people that DOJ’s prior investigation was handled fairly and to restore taxpayers’ trust in the IRS.

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April 13, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, April 12, 2017

NY Times:  Can Trump And Congress Solve The Rubik’s Cube Of Tax Reform?

Rubik's Cube 2New York Times:  Can Trump and Congress Solve the Rubik’s Cube of Tax Reform?, by Neil Irwin:

As Congress and the Trump administration turn their sights on overhauling the tax code, it’s a good time to think about the great three-dimensional brain twister of the 1980s, the Rubik’s Cube.

That’s partly because the first and last time there was a comprehensive rewrite of the tax code, it was 1986. But there is more than that.

What makes trying to solve a Rubik’s Cube so exasperating is that every rotation you make to align the colors on one side messes up something on one of the other sides. Nothing moves in isolation; everything affects everything else, and rarely for the better.

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April 12, 2017 in Tax | Permalink | Comments (0)

Dirty Secrets: How Tax Havens Destroy the Economy

Dirty SecretsRichard Murphy (City University, London), Dirty Secrets: How Tax Havens Destroy the Economy (2017):

The Panama Papers were a reminder of how the superrich are allowed to hide their wealth from the rest of us. Dirty Secrets uncovers the extent of the corruption behind this crisis and shows what needs to be done in the face of this unregulated spread of rampant greed.

Tax havens, we are often told, are part of the global architecture of capitalism, providing a freedom from regulation necessary to make markets work. In this book, leading authority Richard Murphy uncovers the truth behind this lie. The fact of the matter is that this increasingly popular practice threatens the foundations of democracy, sowing mistrust and creating a regime based upon opacity.

As Murphy shows, how we manage our economy is a political decision, and one that can be changed. Dirty Secrets proposes ways to regulate tax havens and what the world might look like without them.

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April 12, 2017 in Book Club, Scholarship, Tax | Permalink | Comments (1)

Kleinbard:  What ‘Tax Reform' Really Means

The Hill op-ed:  What ‘Tax Reform' Really Means, by Edward Kleinbard (USC):

Like April flowers, talk of tax reform is blooming everywhere. The difficulty, though, is that when politicians these days say "tax reform," what they're really suggesting, and what people hear, is "tax cuts."

That's a big problem, because the truth is that the U.S. is already following a path of collecting inadequate tax revenues to fund the government we have, much less the one we need — and cutting out small programs like Meals on Wheels won't change that.

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April 12, 2017 in Tax | Permalink | Comments (3)

The Debate Over The Impact Of Different MBE Cut Scores In Different States

MBESuzanne Darrow Kleinhaus (Touro), UBE-Shopping: An Unintended Consequence of Portability? (Mar. 2016):

Getting our students ready for the UBE, may require more than just learning the law; it also means learning in which jurisdiction you should take it. While there is not much that is new about the UBE’s individual components — the Multistate Essay Examination (MEE), the Multistate Performance Test (MPT) and the Multistate Bar Examination (MBE) — what is new is that where you take the UBE may make the difference between passing and failing. This is possible because of the convergence of bar exam test practices of “portability,” “relative grading,” and “scaling” of scores.

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April 12, 2017 in Legal Education | Permalink | Comments (1)

Hemel:  The Quick And Easy Way To See Trump’s Tax Returns

Trump Tax ReturnsWashington Post op-ed: There’s a Quick and Easy Way to See Trump’s Tax Returns, by Daniel Hemel (Chicago):

State lawmakers across the country are pursuing creative methods to force President Trump to release his federal income tax returns before he can run for reelection in 2020. Unfortunately for citizens interested in greater presidential transparency, those efforts are likely to fail.

There is, however, a much easier way for state lawmakers to force the disclosure of Trump’s tax information: publishing the state tax returns already in their possession, which would reveal much of the same information appearing in his federal documents. ...

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April 12, 2017 in Tax | Permalink | Comments (4)

University Of Wisconsin Faculty Survey Finds Widespread Bullying: Does Reward System Breed 'Academic Assholes'?

Wisconsin

Inside Higher Ed, Madison Faculty Survey Finds Widespread Bullying:

Some 35 percent of faculty members who completed a survey on work-life issues at the University of Wisconsin at Madison reported having been bullied by colleagues within the last three years, The Cap Times reported. “The measure of incidence of hostile and intimidating behavior is rather surprising,” reads a new report on survey results prepared by the Women in Science and Engineering Leadership Institute at Madison.

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April 12, 2017 in Legal Education | Permalink | Comments (4)