TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, December 16, 2016

Muller:  The Complete Collapse Of Bar Passage Rates In California

California (2016)Following up on my previous posts (links below) on the July 2016 California Bar Exam carnage: Derek Muller (Pepperdine), The Collapse of Bar Passage Rates in California:

My colleague Paul Caron has helpfully displayed the data of the performance of California law schools in the July 2016 California bar exam. It's worth noting that the results aren't simply bad for many law schools; they represent a complete collapse of scores in the last three years.

The chart here shows the performance of first-time California bar test-takers who graduated from California's 22 ABA-accredited law schools in the July 2013, 2014, 2015, and 2016 administrations of the exam.

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December 16, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1317:  Koskinen Says He Is Willing To Serve Another Term As IRS Commissioner If Trump Wants To Reappoint Him

IRS Logo 2Bloomberg BNA, IRS Chief Would Continue to Lead Agency If Trump Were to Ask:

Internal Revenue Service Commissioner John Koskinen said he would be willing to remain in the agency’s top job if President-elect Donald Trump were to re-appoint him.

“I’ve never said no. That’s part of my problem,” he told reporters at an event sponsored by George Washington University Law School and the IRS. “It’s an honor to be the commissioner.”

President Barack Obama appointed Koskinen, 77, to the job in 2013. His term ends next November. Members of the conservative House Freedom Caucus tried to impeach Koskinen during his term, saying he improperly withheld evidence during investigations into the agency’s handling of organizations applying for tax-exempt status. Moderate Republicans and Democrats said the effort was unwarranted.

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December 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, December 15, 2016

Buchanan Reviews Phillips' Registered Savings Plans And Middle Class Canada: A Performative Theory Of Tax Policy

Jotwell (2016)Neil H. Buchanan (George Washington), Telling the Middle Class How to Be Middle-Class: Tax Incentives for Saving (JOTWELL) (reviewing Lisa Philipps, Registered Savings Plans and the Making of Middle Class Canada: Toward a Performative Theory of Tax Policy, 84 Fordham L. Rev. 2677 (2016)):

Analyses of tax policy are typically based on a familiar cost-benefit framework. There are important debates about which costs and benefits should be included (and which are measurable), but the standard formula is simple: (1) Describe the policy goal; (2) Present the costs and benefits of a policy that is meant to achieve that goal; and (3) Conclude that the policy is good or bad, depending on whether benefits exceed costs or vice versa.

In her important new article, Professor Lisa Philipps uses a Canadian tax policy debate to show that this approach is fundamentally misleading.

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December 15, 2016 in Scholarship, Tax | Permalink | Comments (0)

Death Of Tim Edgar (Osgoode Hall)

EdgarRemembering Osgoode Hall Law School Professor Tim Edgar:

The York University community mourns the loss of Osgoode Hall Law School Professor Tim Edgar (LLM '88) who died Dec. 9 after a long illness. A small family memorial service in London, Ontario will be held later this month.

“Tim was an exceptional tax scholar, a wonderful colleague, and a dedicated teacher,” said Osgoode Dean Lorne Sossin. “Colleagues will remember Tim as a careful, thoughtful, and engaged person and for his many contributions during his time at the law school.”

Edgar joined the Osgoode faculty in 2011 after a long career at Western Law School where he taught tax law and policy for 21 years. He published articles on taxation in the Canadian Tax Journal, New Zealand Journal of Taxation Law and Policy, Virginia Tax Review, SMU Law Review and other periodicals.

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December 15, 2016 in Legal Education, Obituaries, Tax | Permalink | Comments (4)

165 Law Schools Have Reduced The Size Of Their 1L Classes Since 2011, 53 By 33% Or More

ABA Section On Legal Education (2016)Following up on my last post, ABA Releases 2016 Standard 509 Information Reports For All 204 Law Schools: J.D. Enrollment Fell 2.6%, Non-J.D. Enrollment Increased 4.5%: Keith Lee mines the 2011-2016 1L matriculant data and includes great charts, sorted alphabetically and by percentage changes in 2016 from 2011 and 2015.

165 schools decreased the size of their 1L classes from 2011 to 2016, including 53 by 33% or more. 12 law schools had decreases of at least 50%:

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December 15, 2016 in Legal Education | Permalink | Comments (4)

ABA Releases 2016 Standard 509 Information Reports For All 204 Law Schools: J.D. Enrollment Fell 2.6%, Non-J.D. Enrollment Increased 4.5%

ABA Section On Legal Education (2016)The ABA Section of Legal Education and Admissions to the Bar today released Standard 509 Information Reports for all 204 law schools, along with this data overview:

ABA-approved law schools are required to post their Standard 509 Information Reports on their websites under their ABA Required Disclosures, annually by December 15. The 2016 reports should now be available on each school’s website. The ABA Section of Legal Education and Admissions to the Bar website provides access to that information for all law schools, including downloadable spreadsheets of aggregate data that the law schools report. The Section is also providing spreadsheets on a school-by-school basis that report applicant data and LSAT and UGPA information for each school’s 1L matriculants, changes in the 1L classes on a school-by-school basis, and a report on 1L enrollment by gender and race/ethnicity (to come). Over the next several months, the ABA Section of Legal Education and Admissions to the Bar intends to produce and publish additional reports about this data.



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December 15, 2016 in Legal Education | Permalink | Comments (0)

Citi:  Demand For Law Firm Services Grew 0.3% In 2016 And Will Remain Tepid In 2017

CHAmerican Lawyer, Citi Report Claims Growth Will Remain Slow in 2017:

The legal industry can expect to see low single-digit growth in revenue and profitability next year, just as it did in 2016, according to a report released Tuesday by Citi Private Bank’s law firm group and Hildebrandt Consulting. ... The report, which is released annually, noted that demand for law firm services grew by 0.3 percent in the first three quarters of this year, while expenses grew by 3.4 percent during the same time period, thanks in part to the rise in associate pay. Still, firms were able to raise revenue by 3.7 percent, largely because lawyer rates grew by 3.2 percent. ...

We expect that, similar to 2010-16 performance levels, 2017 will see low single-digit growth in industry revenue and profitability.

Citi Private Bank & Hildebrandt Consulting, 2017 Client Advisory:

Chart 2

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December 15, 2016 in Legal Education | Permalink | Comments (0)

Bernstein:  It Will Take More Than Faster Growth To Reverse Inequality

Following up on my previous post, Piketty, Saez & Zucman: Economic Growth in the United States — A Tale of Two Countries:  Washington Post: It Will Take More Than Faster Growth to Reverse Inequality, by Jared Bernstein:

It’s not the heat growth, it’s the humidity inequality. ...

[Y]ou’ve got Trump advisers and Cabinet designees going on about how their agenda will double the growth rate, from 2 percent to 4 percent. I don’t see how they get there, especially if they’re banking on trickle-down growth effects from their big, regressive tax cut, but my point today is something different.

From the perspective of the living standards of the middle class and the poor, growth is necessary. But it is not sufficient.

The theory of the case is very simple. If GDP, or aggregate income growth, speeds up but the gains mostly go to those at the top of the scale, then there’s less income left for middle- and lower-income households. In a seasonal sports analogy, growth does an end run around the middle class on its way up to a few percentiles at the top of the income scale.

The next two figures give you a sense of the problem. Both are from important new research by inequality scholars, Thomas Piketty (yep, that guy), Emmanuel Saez and Gabriel Zucman, wherein they’ve assigned all of the U.S. national income, including labor, capital, fringe benefits, taxes and government transfers, to adults in the population going back a bunch of years.

The first figure makes the point that, yes, growth has slowed in recent decades (first two bars), but inequality of growth has been a much larger factor in terms of how much, or little, of that reduced growth reached different income classes. Overall growth in the first 34-year period, before taxes, was 95 percent (1946-80), but it slowed by a third in the latter period, a significant downshift.

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December 15, 2016 in Tax | Permalink | Comments (7)

Anderson:  The Top Ten Myths About the Bar Exam

Robert Anderson (Pepperdine), Top Ten Myths About the Bar Exam:

Myth #1. Bar exam difficulty is similar across all jurisdictions.
The fact is that the difficulty of passing the bar varies greatly from state to state. A person could pass the bar with a significant margin to spare in one state and still fail by a significant margin in another. The difficulty of most state bars is scaled to a passing score based on the Multistate Bar Exam. California and Delaware have the highest required scores to pass, and most other states have much lower scores. To give an illustration, in the California July 2016 bar only 43% passed. If they had taken the bar in New York, 70% would have passed.

Myth #2. The New York bar exam is a very difficult exam compared to other states.

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December 15, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1316:  IRS Commissioner Koskinen Says Resignation Did Not Come Up In Meeting With Trump Transition Team

IRS Logo 2The Hill, IRS Chief: Resignation Didn't Come Up in Meeting With Trump Team:

IRS Commissioner John Koskinen says he met with members of President-elect Donald Trump's transition team last week, but the subject of whether Trump would ask him to resign was not discussed.

"In none of that conversation did anything come up about my tenure," Koskinen said in an interview with Tax Analysts published Wednesday. "It was really focused on the agency, its challenges and what it would take to allow it to improve its operations, its outreach to taxpayers."

Many Republican lawmakers have been critical of Koskinen and have accused him of engaging in misconduct during congressional investigations into IRS handling of Tea Party groups' tax-exempt status. Earlier this month, the House Freedom Caucus tried to force a floor vote on impeaching Koskinen, but the effort failed and the House voted to refer the impeachment resolution to the Judiciary Committee.

Koskinen's term ends in November 2017. He reiterated to Tax Analysts that he plans to finish his term but would step aside if the incoming president requested him to do so. "I have not considered resigning," he said. "I've made it clear, particularly to the employees who care a lot about this, that I am committed to finishing out my term, which, as you know, ends next November. Although as I also made it clear, I serve at the pleasure of the president. And the president-elect will make whatever decisions he thinks are best going forward."

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December 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, December 14, 2016

Is Malcolm Gladwell Right: Do 50% Of Harvard Law Students Take Drugs To Enhance Their Academic Performance?

MHLSBloomberg Law, Is ‘More Than 50%’ of Harvard Law School on Drugs?:

Malcolm Gladwell, the author of Blink, The Tipping Point, and Outliers, was a guest [on Lance Armstrong's podcast] in October. Armstrong and Gladwell’s conversation turned to performance enhancing drugs and therapeutic use exemptions. Gladwell commented on how debates about high performance in sports parallel debates about high performance in society. By way of example, he pointed to extraordinarily high uses of drugs like Adderall among students at elite universities. From there, Gladwell went on to speculate about students at Harvard Law School…

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December 14, 2016 in Legal Education | Permalink | Comments (9)

Trump's Cabinet Will Reap Hundreds Of Millions In Tax Savings Under I.R.C. § 1043 On Sales To Avoid Conflicts Of Interest

Trump (President Elect)Following up on my previous posts (links below): Wall Street Journal, Trump’s Nominees Stand to Reap Tens of Millions of Dollars in Potential Tax Deferrals:

President-elect Donald Trump’s top personnel picks stand to delay paying tens of millions of dollars in personal taxes on investment gains when they take up their posts, according to a Wall Street Journal analysis of corporate filings and other financial disclosures.

The potential tax benefits are the result of a longstanding federal policy designed to let incoming appointees sell their shares and other assets, to avoid conflicts of interest in their new jobs, without racking up huge tax bills.

The tens of millions of dollars in possible tax deferrals are a conservative estimate; the actual benefit is likely much greater. That is because the Journal’s analysis only includes paper gains on shares of publicly traded companies, where the appointee has recently been an officer, director or major shareholder. A number of the candidates—including Commerce Secretary appointee Wilbur Ross and Mr. Trump’s Treasury pick, Steven Mnuchin—derive large portions of their wealth from closely held investment vehicles about which there is scant financial information in the public domain, but which they’d likely need to divest.

“It’s a great thing for the nominees,” says Robert Willens, a tax professor at Columbia Business School. “They get to diversify their portfolios on a tax-free basis.” He estimated that the total tax savings for the appointees likely will add up to hundreds of millions of dollars. ...

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December 14, 2016 in Political News, Tax | Permalink | Comments (3)

What Law Prof Learned In Suing His Law School For Admissions Data

Arkansas Little RockFollowing up on my previous posts (links below): Robert Steinbuch (Arkansas-Little Rock), The Value of Data and Litigation:

I recently sued my law school (the UALR-Bowen School of Law) to get access to admissions and bar-passage data. I wasn’t planning on doing that, but it became necessary after the administration refused my Freedom of Information Act request about these matters. After I filed suit, the school gave me the data I wanted. When I examined that data, I discovered a set of uncomfortable facts that was difficult to reconcile with the narrative that my law school had presented.

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December 14, 2016 in Legal Education | Permalink | Comments (7)

Oxfam:  The Dangerous Race To The Corporate Tax Bottom

OxfamOxfam, Tax Battles: The Dangerous Race to the Bottom on Corporate Tax (summary) (methodology):

Collecting tax is one of the key means by which governments are able to address poverty and inequality. But big business is dodging tax on an industrial scale, depriving governments across the globe of the money they need to address poverty and invest in healthcare, education and jobs. This report exposes the world’s worst corporate tax havens — extreme examples of a destructive race to the bottom on corporate tax which has seen governments across the globe slash corporate tax bills in an attempt to attract business. It calls on governments to work together to put a stop to this before it is too late.

Table 1

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December 14, 2016 in Tax, Think Tank Reports | Permalink | Comments (7)

Mark Mazur To Replace Len Burman As Director Of Tax Policy Center

MazurWall Street Journal, Treasury Tax Policy Chief to Lead Tax Policy Center Think Tank:

The top tax policy expert at the U.S. Treasury Department will take over the Tax Policy Center, the nonprofit Washington think tank best known for its analyses of political and congressional tax proposals.

Mark Mazur, assistant secretary for tax policy, will become the center’s director on Feb. 1, the group announced today. The Tax Policy Center is a project of the Urban Institute and Brookings Institution, and it operates a model that allows policymakers to see the impact of tax plans on different income groups.

Mr. Mazur, an economist, has had a long career in the government, including a stint as the Internal Revenue Service’s director of research, analysis and statistics. President Barack Obama nominated him to his current job, which he has held since 2012.

Tax Vox:  Mark Mazur to Take Over as TPC Director, by Leonard E. Burman:

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December 14, 2016 in Tax, Think Tank Reports | Permalink | Comments (2)

Country-By-Country Tax Reporting And Global Inequality

Tax Justice NetworkTax Justice Network, Country-By-Country Reporting: How Restricted Access Exacerbates Global Inequalities in Taxing Rights:

Fully public country-by-country reporting would enable a dramatic shift in the accountability of both multinationals and tax jurisdictions. Estimates of the losses due to tax avoidance imply that lower-income countries would benefit disproportionately, as this transparency would offer powerful leverage against the current, highly unequal global distribution of taxing rights over multinationals. The OECD’s welcome adoption of the Tax Justice Network’s original proposal is, however, critically undermined by the decision to impose multiple limits on access to the data. This paper explores these limits, and demonstrates how the resulting unequal access is likely to exacerbate, rather than ameliorate that inequality in taxing rights.

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December 14, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

Does The Prosecution Believe (And Can It Prove) That Wendi Adelson (And Not Charlie Or Donna) Hired Katherine Magbanua And Sigfredo Garcia To Kill Dan Markel?

AdelsonFollowing up on Sunday's post, Judge Denies Bond For Katherine Magbanua, Charged With First Degree Murder In Killing Of Dan Markel:  commenters to several websites claim that the prosecution at the bond hearing said in "closing arguments [that] 'Wendi Adelson' hired [Katherine Magbanua] and [Sigfredo Garcia] to commit the murder. No mention of Donna or Charlie [Adelson]. This was important because of all the speculation prior that Wendi was unaware and this murderous act was carried out on her behalf without her knowledge. The prosecution made a crystal clear point that Wendi ordered the hit."

Prior TaxProf Blog coverage:

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December 14, 2016 in Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 1315:  Bureaucratic Bumbling Or Targeting Of Conservatives?

IRS Logo 2Forbes: IRS Says Fixing Up Your Own House Is Not Charity, by Peter J. Reilly:

Got a run down old house that needs some spiffing up? Here is an idea. Get it designated an historic landmark. Then you can form a not-for-profit and get grants to do some renovations. Since it is an historic landmark, you'll have to let people see it sometimes. ...

[I]t did not end well for the organization (Let's call it This Really Old House (TROH))) that was the subject of Private Letter Ruling 201648020. ...

[T]he gatekeeper sorting the wheat from the chaff is the IRS Tax Exempt and Government Entities Division, sometimes referred to as EO. There are also state agencies of greater or less ferocity, usually the Attorney General rooting out phony charities, but mainly we seem to rely on IRS EO to prevent the charitable sector from being overrun by the less than charitable. The reliance was probably never that reasonable, but the developments over the last few years have made things much worse.

At its very heart the interminable IRS scandal, now on Day 1312 by TaxProf count was about exempt status applications.  Applications from Tea Party and similar organizations were held up and applicants were asked intrusive question.  Here is the thing. I am the last agnostic on the IRS scandal.  Was it bureaucratic bumbling or targeting of conservatives? I never found the targeting argument persuasive, but both Joe Kristan and George Will did, which gives me pause.

Regardless of whether it was bumbling or targeting, the end result has not been good for the integrity of the charitable sector. The IRS has streamlined the process and now many, possibly most applications are receiving no scrutiny thanks to the new Form 1023-EZ. You can find commentary to the effect that the corrupt IRS is still persecuting the Tea Party. I really think the only way out of the mess is to turn the vetting of exempt status over to a different agency. In the states supervision of not for profits generally falls under the Attorney General, not the revenue department. Maybe they are on to something.

The targeting believers will never accept that the IRS has been punished enough or that enough will be done to protect against future targeting, so taking the job away from the IRS might be the only way out of a downward spiral.

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December 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, December 13, 2016

NY Times:  GOP Embraces Alan Auerbach's Destination-Based Corporate Tax, Paving Way For Fundamental Tax Reform

ABNew York Times: New Approach to Corporate Tax Law Has House G.O.P. Support, by Steve Lohr:

President-elect Donald J. Trump has vowed to protect and create American manufacturing jobs, even threatening high tariffs on imports to help achieve that goal. So far, though, his plan seems to lean heavily on one-at-a-time deals, like the one struck late last month to save jobs at the Carrier plant in Indianapolis.

But proponents of a more far-reaching approach say it could achieve many of Mr. Trump’s goals without tariff walls or presidential jawboning: a sweeping overhaul of the corporate tax system that embraces a concept endorsed by House Republican leaders in their blueprint for tax reform, announced in late June.

“It would be the biggest change in business tax law ever in the United States,” said Martin A. Sullivan, the chief economist at Tax Analysts, a nonprofit tax research organization and publisher. “It might actually work, and I don’t think it’s a partisan issue.”

A central idea is that goods would be taxed based on where they were consumed rather than where they were produced, meaning that imports would be taxed by Washington while exports would not. Tax experts call this a destination-based consumption tax.

This would be a sharp departure for the United States in a number of ways, but taxing imports but not exports is in step with nearly all of America’s trading partners, which have so-called value-added taxes. The import-and-export tax treatment is known as border adjustment.

The proposed overhaul would have other changes. The cost of capital investments would be deducted immediately rather than depreciated over years, but interest costs would no longer be deductible.

The package of ideas has evolved over years, mainly in academic circles. Its principal intellectual champion in the United States is Alan Auerbach, an economist at the University of California, Berkeley. Mr. Auerbach’s goal, he said, is to transform the economics of the corporate tax system so that “incentives will align with the national interest.”

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December 13, 2016 in Tax | Permalink | Comments (3)

Former Tenured Prof Sues Atlanta's John Marshall Law School For Racial Discrimination

FulcherFollowing up on my previous posts (links below): National Law Journal, Another Racial Bias Suit Filed Against Atlanta's John Marshall Law School:

For the second time in four years, a female African-American former professor at Atlanta's John Marshall Law School has sued the institution for racial discrimination.

In a suit filed Dec. 8 in U.S. District Court for the Northern District of Georgia, plaintiff Patrice Fulcher claims she was continually denied promotions and pay raises by several of the school's deans during her eight years teaching there. She alleges that women, and African-American women in particular, are routinely relegated to teaching legal skills courses instead of doctrinal courses despite being qualified and are paid less than similarly situated white male professors.

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December 13, 2016 in Legal Education | Permalink | Comments (0)

Corporate Welfare Won’t Create Jobs

Americans for Tax FairnessNew York Times op-ed: Corporate Welfare Won’t Create Jobs, by Frank Clemente (Executive Director, Americans for Tax Fairness):

The recent deal to keep some 800 workers employed at a Carrier plant in Indiana rather than see those jobs shipped to Mexico proved great news for the workers and a public relations bonanza for President-elect Donald J. Trump.

What it didn’t prove — even though the incoming president used the occasion to promote his proposal for a huge tax giveaway to corporations — is that cutting corporate taxes will save or create many American jobs. It won’t. ...

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December 13, 2016 in Tax | Permalink | Comments (1)

July 2016 California Bar Exam Results:  Nine Law Schools (Including UC-Hastings) Are At Risk Of Failing ABA's Proposed New Bar Passage Accreditation Standard

California State BarThe California State Bar has released school by school data on the July 2016 California Bar Exam.  Here are the results for first time test takers for the 21 California ABA-approved law schools, along with each school's U.S. News ranking (California and overall):

Bar Pass

Rank (Rate)



US News Rank

CA (Overall)

1 (91%)


1 (2)

2 (88%)


4 (19)

3 (84%)


2 (8)

4 (82%)


3 (17)

5 (81%)


5 (28)

6 (72%)


6 (30)

6 (72%)


8 (65)

8 (71%)

San Diego

10 (74)

9 (70%)


8 (65)

10 (66%)

Santa Clara

11 (129)


Statewide Ave. (CA ABA-Approved)

11 (61%)


13 (144)

11 (61%)


Tier 2

13 (57%)


12 (136)

14 (51%)


7 (50)

15 (42%)

Western State

Tier 2

16 (38%)


Tier 2

17 (36%)

San Francisco

Tier 2

18 (31%)

Golden Gate

Tier 2

18 (31%)

La Verne

Tier 2

18 (31%)

T. Jefferson

Tier 2

21 (22%)


Tier 2

The Recorder, By the Numbers: How California Law Schools Fared on the Bar Exam:

Just five of 21 California law schools accredited by the American Bar Association had at least 75 percent of their graduates pass the July bar exam, a proposed new benchmark rate that in coming years could spell trouble for some institutions.

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December 13, 2016 in Law School Rankings, Legal Education | Permalink | Comments (10)

The Dangers Of Echo Chambers On Campus: 'We Liberals Preach Inclusion Of People Who Don’t Look Like Us — So Long As They Think Like Us'

New York Times:  The Dangers of Echo Chambers on Campus, by Nicholas Kristof:

After Donald Trump’s election, some universities echoed with primal howls. Faculty members canceled classes for weeping, terrified students who asked: How could this possibly be happening?

I share apprehensions about President-elect Trump, but I also fear the reaction was evidence of how insular universities have become. When students inhabit liberal bubbles, they’re not learning much about their own country. To be fully educated, students should encounter not only Plato, but also Republicans.

We liberals are adept at pointing out the hypocrisies of Trump, but we should also address our own hypocrisy in terrain we govern, such as most universities: Too often, we embrace diversity of all kinds except for ideological. Repeated studies have found that about 10 percent of professors in the social sciences or the humanities are Republicans.

We champion tolerance, except for conservatives and evangelical Christians. We want to be inclusive of people who don’t look like us — so long as they think like us.

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December 13, 2016 in Legal Education | Permalink | Comments (10)

NY Times:  State Ballot Access Laws Should Provide Antidote To Donald Trump’s Tax Secrecy

TrumpNew York Times editorial, An Antidote to Donald Trump’s Secrecy on Taxes:

President-elect Donald Trump refused to release his tax returns during the campaign and there is no sign that he will, ever. He broke longstanding tradition and set a terrible precedent for future presidential candidates.

Good government groups have been wringing their hands about what to do. Now comes an excellent idea from a New York State senator, Brad Hoylman, a Democrat from Manhattan, that would could force candidates to disclose their tax returns by making it a requirement for getting on the ballot.

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December 13, 2016 in Tax | Permalink | Comments (1)

This Is Your Brain on Law School

BrainAbigail A. Patthoff (Chapman), This is Your Brain on Law School: The Impact of Fear-Based Narratives on Law Students, 2015 Utah L. Rev. 391:

Law students regularly top the charts as among the most dissatisfied, demoralized, and depressed of graduate student populations. As their teachers, law professors cannot ignore the palpable presence of this stress in our classrooms – unchecked, it stifles learning, encourages counterproductive behavior, and promotes illness. Yet, in the name of persuasion, professors frequently, and perhaps unwittingly, introduce additional fear into the classroom as a pedagogical tool via a common fear-based narrative: the cautionary tale. By taking lessons from existing social science research about “fear appeals” – scare tactics designed to frighten the listener into adopting a particular behavior – this article suggests that we can actively manage one source of law student anxiety by more thoughtfully using cautionary tales.

December 13, 2016 in Legal Education, Scholarship | Permalink | Comments (3)

The IRS Scandal, Day 1314: How The Trump Administration Can Stop IRS Abuse of Political Groups

IRS Logo 2Jewish Press:  How the Trump Administration Can Stop IRS Abuse of Political Groups, by Jerome M. Marcus:

For more than six years, the Internal Revenue Service has been trying to fend off accusations that its process for granting tax-exempt status discriminated against applicants expressing political views at odds with those of the Obama administration. This discrimination against political viewpoints the Democrats disapprove of is a clear, even astonishing, violation of the First Amendment. For that reason, the IRS has lost many more of these battles than it has won. It’s lost battles not only in court against the victimized non-profits; it’s even lost against the Treasury Department’s own inspector general, which conducted a detailed study and concluded that many of the most serious accusations of discrimination were true.

In its court battles the IRS has been represented by the Justice Department, whose job it is to represent federal agencies when they are sued. No one will be shocked to learn that under the Obama administration, and Attorneys General Eric Holder and Loretta Lynch, DOJ lawyers have used every tool at their disposal to defeat the IRS’s accusers even when those accusers are agreeing with Treasury’s inspector general. That means that, according to the Obama administration’s own inspector general report, those victimized non-profits are right in claiming that they were discriminated against because of their political views.

That litigation strategy needs to change.

Upon President Trump’s inauguration, the Justice Department will get a new boss: Jeff Sessions, President Trump’s nominee for Attorney General. The moment he takes office, General Sessions should direct the Justice Department lawyers—all of whom report to him—to change their litigation stance to reflect an important adage about how government lawyers should do business: “the government wins when justice is done.”

It’s time to see that justice is done in these cases.

Up until now, the government’s strategy has been to make the IRS cases take as long as possible and to resist every demand for discovery—the process by which litigants can request that their adversaries produce documents, or provide testimony, revealing what was really going on inside the IRS.

I represent the plaintiff in one of these cases—Z STREET v. Koskinen—which challenges the IRS’s six year delay in processing the application for tax-exempt status by an organization whose views on the Middle East were at odds with President Obama’s. In discovery, we’ve asked for information about how the IRS went about deciding what to do with (and to) our organization. But the IRS has produced virtually nothing that sheds light on its decision-making process. Other organizations in court against the IRS have been given the same treatment by the Justice Department’s litigation teams.

All of the members of those government lawyer teams report to the U.S. Attorney General. That means that when the new sheriff arrives in town he can give new orders on how these cases ought to be handled.

Attorney General Sessions should direct these lawyers to stop resisting discovery, and to stop trying to prevent the litigants—and the public—from finding out what the IRS was really doing to all of these organizations for all these years. This is not a matter of political payback, like the question whether Hillary Clinton ought to be prosecuted for what many think are her misdeeds, at the State Department and with the Clinton Foundation. It’s just a matter of letting the truth be told. Z STREET, like many of the plaintiffs in the other cases against the IRS, is not seeking money damages. We just want to know the truth about what the IRS was doing to us, and why, and at whose direction.

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December 13, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, December 12, 2016

NY Times:  The ‘H-Bomb’ Fizzles—The Harvard Brand Takes A Hit

Harvard (2016)New York Times, The ‘H-Bomb’ Fizzles: The Harvard Brand Takes a Hit:

There exists a species of person — typically a well-groomed overachiever — who, when asked where he or she went to college, rather than state its name directly, will provide a Russian nesting doll set of geographical responses.

In New England. Massachusetts. Well, Boston. Um … Cambridge.

Finally, sotto voce, with an apologetic wince or sheepish smile, anticipating the word’s being volleyed back in an affected Boston Brahmin accent: Harvard.

For decades, circumspect students and alumni of the nation’s oldest university have played “this unbearable little game,” said William Deresiewicz, author of Excellent Sheep: The Miseducation of the American Elite & the Way to a Meaningful Life. “They’re coy, because they don’t want to destroy our egos, but they can’t wait for the moment they drop the ‘H-bomb.’” ...

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December 12, 2016 | Permalink | Comments (19)

WSJ:  Estate Planning Strategies For The Trump Administration

Trump (President Elect)Wall Street Journal Tax Report: Strategies for Playing Trump’s New Estate-Tax Plans, by Laura Saunders:

The American estate tax turned 100 this year. It probably won’t live to see 101.

Both President-elect Donald Trump and Republicans in the House of Representatives have issued proposals to end the tax, and Senate Finance Committee Chairman Orrin Hatch (R., Utah) has opposed it as well. Launched in 1916, the tax was first imposed to help finance World War I and more recently was meant to limit concentrations of wealth.

“Estate-tax repeal seems virtually certain,” says Michael Graetz, an estate-tax expert who was a Treasury official during the administration of George H.W. Bush and now teaches at Columbia University’s law school.

Under current law, about 0.2% of Americans who die in 2017, or about 5,200 people, are expected to have taxable estates, according to the Tax Policy Center in Washington. This small sliver is far below the high-water mark of 7.7% in 1976, when the estate-tax exemption was $60,000.


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December 12, 2016 in Tax | Permalink | Comments (5)

University Of Wisconsin Gives Administrators Final Say Over Five-Year Post-Tenure Reviews; Underperforming Faculty Will Be Placed In Remediation Program, Leading To Termination If Performance Does Not Improve

WisconsinChronicle of Higher Education, Wisconsin Regents Approve Post-Tenure Policies Condemned by Faculty:

University of Wisconsin system regents on Thursday approved a new policy mandating that administrators conduct “independent, substantive reviews” of tenured faculty members every five years, The Journal Sentinel reports. While top administrators already have authority over post-tenure reviews, faculty critics have worried aloud that the change — which makes administrators’ duties in the area explicit — will make it easier for professors to be fired.

Wisconsin State Journal, Changes to UW Faculty Reviews Give Administrators Final Say on Performance:

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December 12, 2016 in Legal Education | Permalink | Comments (5)

More On The Proposed Estate Tax Valuation Discount Regulations

Sloshed Santas Enjoy Tax Deduction For Participating In NYC Pub Crawl: 'Bringing Arts Events To Underserved Communities'

SantaConNew York Post, SantaCon Protesters and Revelers Clash During Bar Crawl:

SantaCon’s drunken Kris Kringles found coal in their stockings Saturday morning in the form of neighborhood activists jeering the annual Manhattan bar crawl.

Two protesters were ticketed — for using megaphones without a permit — at about 11 a.m. as about 1,000 Santas gathered around the Flatiron Building to begin their boozy trek through Gramercy, East Village and Midtown.

“I saw a sex act in Aisle Four of Duane Reade!” one yelled as Santas showered him with boos. “You guys are doing a bad thing, and it makes everyone sad.” ...

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December 12, 2016 in Tax | Permalink | Comments (0)

ABA's Proposed 75% Bar Passage Requirement Ignores Key Problem: Failure To Tie Student Loans To Job Outcomes

American Lawyer LogoThe American Lawyer:  The ABA Raises the Wrong Bar, by Steven J. Harper (Adjunct Professor, Northwestern; author, The Lawyer Bubble):

[I]n October, ...  the ABA's Section of Legal Education and Admissions to the Bar recommended a rule change that it thought was monumental. It's actually far too little coming far too late. The new rule would require at least 75 percent of a law school's graduates to pass a state bar exam within two years of receiving their degrees. The current standard requires a 75 percent pass rate within five years. Since 2000, only four law schools have faced difficulty under the current standard, and all were restored to full accreditation.

Plummeting national bar passage rates coupled with growing student debt for degrees of dubious value are the culmination of a dysfunctional market in legal education. That dysfunction is taking a cruel toll on a generation vulnerable to exploitation by elders who know better. Sooner or later, we'll all pay the price.

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December 12, 2016 in Legal Education | Permalink | Comments (26)

The IRS Scandal, Day 1313: The Koskinen-Trump Connection

IRS Logo 2Politico Morning Tax, Now That's Going Way Back:

Trump and Koskinen might decide that it’s best for the IRS chief to move along — but apparently they’ll do so after more than four decades worth of history. A New York Times article from May 1975 discusses the efforts of the president-elect, then a 28-year-old developer, to buy a hotel. The assets management company representing the bankrupt company that owned the hotel was represented by a 35-year-old executive — yup, John Koskinen.

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December 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, December 11, 2016

Death Of Hope Lewis (Northeastern), Age 54

Hope LewisNortheastern Mourns Loss of Hope Lewis, Law Professor and Human Rights Scholar:

Pro­fessor Hope Lewis, a member of the School of Law’s fac­ulty since 1992, died Tuesday after a long ill­ness. She was 54.

Born on May 14, 1962, Lewis was a grad­uate of the Bronx High School of Sci­ence, Har­vard Col­lege, and Har­vard Law School. A pas­sionate cham­pion of the poor and dis­ad­van­taged, Lewis focused her teaching and schol­arly work on human rights and eco­nomic rights in the global economy. She co-​​founded the law school’s Pro­gram on Human Rights and the Global Economy and served as the fac­ulty director of the law school’s Global Legal Studies program.

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December 11, 2016 in Legal Education, Obituaries | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. [652 Downloads]  Aggressive Tax Planning & the Ethical Tax Lawyer, by Heather M. Field (UC-Hastings)
  2. [339 Downloads]  The Up-C Revolution, by Gregg D. Polsky (Georgia) & Adam H. Rosenzweig (Washington University)
  3. [302 Downloads]  Estate Planning for Digital Assets: Assigning Tax Basis and Value to Digital Assets, by Elizabeth Ruth Carter (LSU)
  4. [280 Downloads]  IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385, by David S. Miller (Proskauer, New York) & Janicelynn Asamoto Park (Proskauer, New York)
  5. [185 Downloads]  Were Trump's Fake Losses Legal as Tax Deductions?, by Calvin H. Johnson (Texas)

December 11, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

A Special Christmas Dinner

Yet another reason why I love Pepperdine:  last night, my wife and I were delighted to host a Christmas dinner in our home for two Muslim families. We were one of about a dozen Pepperdine families participating in an effort organized by a Pepperdine professor to build bridges of respect, understanding, and friendship between Muslims and Christians. In June, Muslim families hosted Pepperdine families for Iftar dinners during the Muslim holy month of Ramadan.

Photo 1

December 11, 2016 | Permalink | Comments (3)

Judge Denies Bond For Katherine Magbanua, Charged With First Degree Murder In Killing Of Dan Markel

MagnaubaTallahassee Democrat, Judge Denies Bond For Katherine Magbanua, One of Three Charged With FSU Law Professor Dan Markel's Murder:

Katherine Magbanua will remain in jail, for now.

At a day-long Friday bond hearing, prosecutors fought to keep the 31-year-old mother of two, believed to a key orchestrator in the shooting of Florida State law professor Dan Markel, in jail until her Feb. 27 trial.

Leon Circuit Judge James Hankinson sided with them, denying Magbanua’s motion for pretrial release.

The third person charged in Markel’s death, Magbanua sat quietly, whispering with her Miami attorneys, Christopher DeCoste and Tara Kawass, while her brother Erik Magbanua, who testified Friday, sat in the courtroom. ...

A mountain of evidence in the murder case was presented at the hearing.

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December 11, 2016 in Legal Education | Permalink | Comments (10)

The IRS Scandal, Day 1312: Impeachment Averted, But Will Koskinen Resign Or Be Fired By President Trump?

IRS Logo 2Politico Morning Tax, Impeachment Averted:

There’s not a ton of bipartisanship in the House these days, but lawmakers apparently made an exception for quashing a Freedom Caucus effort to impeach IRS Commissioner John Koskinen.

In the end, only 72 House Republicans voted to essentially bring the impeachment resolution to the floor. ... But while almost 350 House members decided to refer the resolution to a Judiciary Committee that hasn’t been gung ho on impeachment so far, that shouldn’t necessarily be viewed as an endorsement of Koskinen — who avoids becoming the first executive branch official since Reconstruction to be impeached. Top Republicans like House Ways and Means Chairman Kevin Brady made it clear they were no fans of Koskinen’s work, but that using time for impeachment proceedings might be unnecessary because they don’t expect the IRS chief to stay on under President-elect Donald Trump. (Koskinen's term ends next November, no matter what.)


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December 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, December 10, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Hamilton By Harvard Economics Students

Continuing my obsession with interest in Hamilton (links below):

(Click on Vimeo button on bottom right to view video directly on Vimeo to avoid interruption caused by blog's refresh rate.)

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December 10, 2016 in Legal Education | Permalink | Comments (0)

The Tax Implications Of Trump’s Disposal Of His Businesses

Trump (President Elect)Following up on Wednesday's post, Could President Trump Sell His Businesses, Tax-Free?: Bloomberg Law, Tax Implications of Trump’s Business Decisions: A Primer:

Donald Trump must confront major tax issues when deciding what to do with his real estate empire and other businesses in order to avoid conflicts of interest as he assumes the presidency.

What will happen if he decides to divest his businesses or simply pass them outright to his children?

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December 10, 2016 in Tax | Permalink | Comments (0)

Fall 2017 Law School Applicants Down 5.1%

LSACLSAC, Three-Year ABA Volume Comparison:

As of 12/02/16, there are 81,710 applications submitted by 14,892 applicants for the 2017–2018 academic year. Applicants are down 5.1% and applications are down 1.7% from 2016–2017. Last year at this time, we had 28% of the preliminary final applicant count.


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December 10, 2016 in Law School Rankings, Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1311:  The IRS 'Scandal' Was Part Of GOP's Strategy To Bog Down Obama Administration

IRS Logo 2Salon, Tom Cotton and Trey Gowdy Vow Vigilance Over the Trump Administration — No, Seriously, Stop Laughing:

Considering how the Republican Party has fallen in line behind Donald Trump over the last few months, does anyone seriously think that this will ever amount to anything? The Chicago Tribune recently reported on Thursday:

Sen. Tom Cotton, R-Ark., and Rep. Trey Gowdy, R-S.C. . . . agreed that House and Senate committees must keep close tabs on Donald Trump’s new government starting next year — not because they want to stick it to a man that neither originally endorsed for president, but because doing so would help rebalance power between the three branches of government.

Sure thing. And I’ve got a bridge over the Potomac to sell you. ...

[A]fter the partisanship of the last eight years, why would anyone give Gowdy or Cotton the benefit of the doubt? Gowdy can complain all he wants about the deeply unfair perception, as he put it in remarks on Tuesday to a room full of Cotton’s fundraisers, that any subpoenas sent to Hillary Clinton or contempt-of-Congress votes held on former IRS bureaucrat Lois Lerner were “politicized.” But that perception existed because the investigations that Congress conducted into the Benghazi tragedy and the IRS “scandal” were in fact part of the GOP strategy to bog down the Obama administration and harm Clinton’s presidential ambitions.

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December 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Friday, December 9, 2016

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses the estate tax advantages of cash basis farming.

KristanDeath takes all, but leaves the deductions.

Cash-basis accounting and the rule that adjusts the basis of inherited assets to their date-of-death value confounded the IRS in Tax Court yesterday.

Most businesses that produce things have to capitalize their input costs into the costs of their inventory. They wait to get the benefit of the costs on their tax returns as part of the cost of goods sold when they sell the inventory.

Farmers get a better deal. Assuming they are non-corporate farmers who are active in the business, they get to deduct their input costs when paid. This “cash basis” accounting allows farmers to buy seed, feed, and fertilizer at in December to reduce their taxable income, even when they don’t plan to use it until they plant next year’s crop or feed next year’s livestock. The tax planning opportunities are obvious, and jealously guarded by farm state congressmen.

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December 9, 2016 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new paper by Edward D. Kleinbard (USC), The Right Tax at the Right Time.

HemelEdward Kleinbard’s newest paper lays out the case for a “Dual Business Enterprise Income Tax,” or “Dual BEIT,” as an alternative to the existing patchwork of federal taxes on business income. Readers familiar with Kleinbard’s past work know that he is a powerful analyst and a crystal-clear writer, and this paper is no exception. For reasons I explain below, I am not sure that a Dual BEIT is the “right tax” for our time, but all can agree that Kleinbard’s proposal is an important contribution to the business tax policy debate.

In a prior paper, Kleinbard explained why he thinks the United States should tax capital income annually at a flat rate; the latest installment explains why he thinks a Dual BEIT is the best way to achieve that result. In brief, a Dual BEIT would consist of a flat-rate entity-level tax on profits and a flat-rate investor-level tax on “normal returns.”

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December 9, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

The 10 Most Underrated Law Schools In America

American Lawyer LogoFollowing up on last week's post, Law School Rankings By Job Placement:  American Lawyer, 10 Most Underrated Law Schools in America:

I've culled the data (I only considered schools ranked No. 50 or worse on U.S. News & World Report) to come up with the 10 most underrated law schools in the land:


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December 9, 2016 | Permalink | Comments (3)

TEDx Talk:  Tax Policy, Climate Change, And Innovation

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

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December 9, 2016 in Tax | Permalink | Comments (0)