TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, November 23, 2015

Bottom 50% Earn 11% Of Income, Pay 3% Of Income Taxes; Top 1% Earn 19% Of Income, Pay 38% Of Income Taxes

Tax Foundation logoFollowing up on my previous post, Income Inequality Decreased Significantly in 2013:  Tax Foundation, Summary of the Latest Federal Income Tax Data, 2015 Update:

The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2013, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles. The data demonstrates that the U.S. individual income tax continues to be progressive, borne mainly by the highest income earners. ...

High-Income Americans Paid the Majority of Federal Taxes
In 2013, the bottom 50 percent of taxpayers (those with AGIs below $36,841) earned 11.49 percent of total AGI. This group of taxpayers paid approximately $34 billion in taxes, or 2.78 percent of all income taxes in 2013. In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $428,713 and above), earned 19.04 percent of all AGI in 2013, but paid 37.80 percent of all federal income taxes.

In 2013, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $465 billion, or 37.80 percent of all income taxes, while the bottom 90 percent paid $372 billion, or 30.20 percent of all income taxes.

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November 23, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Amidst 32% Enrollment Decline, Gonzaga Law School Offers Buyouts To All 17 Tenured Faculty (4 Accept)

Gonzaga LogoInlander, Why Gonzaga University School of Law Offered Buy-Outs to its Tenured Professors:

From 2011 to 2014, GU's School of Law has seen its application pool deplete by 36 percent. Enrollment has dropped by 28 percent in that same time.

As a result, the administration has offered buy-outs to all of its tenured professors. So far, four of the 17 faculty members have taken the offer. Law school dean Jane Korn does not anticipate the need to cut any more positions.

"Nationally, since 2011, applications to law schools have dropped around 40 percent," Korn says. "Every dean had to make a decision to lower standards or take a budget hit, and we decided to take the budget hit."

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November 23, 2015 in Legal Education | Permalink | Comments (12)

Death Of Matthew Rosen, Co-Head Of Skadden's Tax Practice

RosenNew York Times Obituary (Nov. 20, 2015):

The partners, attorneys and staff of Skadden, Arps, Slate, Meagher & Flom mourn the passing of our partner and friend Matthew Rosen. A co-head of our tax practice, Matthew was a rare kind of lawyer -- one of the very finest tax practitioners of his generation and an unsurpassed mentor of the generations growing up under him. He led by example and will be remembered as always supporting new talent and the expansion of the practice into new spheres. Matthew joined our New York tax team in 1979 and, building upon the culture of camaraderie he inherited, enhanced the tightly knit group's reputation exponentially. Matthew handled every aspect of tax work and developed various types of financial instruments. He was repeatedly ranked among the top practitioners of his field.

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November 23, 2015 in Obituaries, Tax | Permalink | Comments (0)

Harvard Law Students React To Vandalism On Portraits Of Black Law Profs

Harvard Crimson, Police Investigate Vandalism on Portraits of Black Law Professors, by Andrew M. Duehren :

Black tape, stuck systematically across the portraits of black law professors, spurred on Thursday a police investigation into vandalism and a pronouncement from the dean of Harvard Law School that the school has a “serious problem” with racism.

New York Times, A Lesson at Harvard Law, by Charles Fried (Harvard):

Instead of dignifying with inflated philosophical bloviation the grim nastiness of the anonymous vandal(s) who pasted strips of black tape on the portraits of African-American professors, Harvard Law students responded with wit and human warmth: They put along the frames of those same portraits hundreds of colored Post-it notes bearing messages of affection and gratitude.

These young men and women teach us all a valuable lesson.

Harvard Crimson, Supportive Sticky Notes After Law School Vandalism, by Jennifer Y. Yao:

Harvard 2

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November 23, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 928

IRS Logo 2Leader & Times, Koskinen Needs to be Impeached, So Does Lynch and Numerous Others:

IRS Commissioner John Koskinen is in the sights of Rep. Jason Chaffetz, who is chairman of the powerful House Oversight Committee, which has been investigating the IRS for more than two years. Chaffetz said Koskinen has failed to comply with a congressional subpoena, allowed documents to be destroyed and misled the public.

The committee’s call for impeachment falls on the heels of a report from the U.S. Justice Department that said it “found no evidence that Lois Lerner or any IRS official acted based on political, discriminatory, corrupt or other inappropriate motives that would support a criminal prosecution.”

What a crock.

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November 23, 2015 in IRS Scandal | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, November 22, 2015

Prof Sues Dean, Law School For Access To Admissions Data

UALRArkansas Online, Law School Violates Open-Records Act, Suit Says:

The man helping to write a book on the state Freedom of Information Act says the dean of the University of Arkansas at Little Rock law school is not complying with the open-records law in a lawsuit filed against the university Tuesday.

Law professor Robert Steinbuch sued both the university and Michael Schwartz, dean of the William H. Bowen School of Law, in a Pulaski County court, stating Schwartz failed to turn over public records that Steinbuch is seeking to research student admissions.

The records are a spreadsheet showing individual test scores, college grade-point average, law school grade-point average, race, gender and age for all students who graduated from the law school and took the bar exam over a seven-year period.

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November 22, 2015 in Legal Education | Permalink | Comments (0)

Choose To Be Grateful. It Will Make You Happier.

GratefulNew York Times Sunday Review:  Choose to Be Grateful. It Will Make You Happier, by Arthur C. Brooks (President, American Enterprise Institute):

For many people, gratitude is difficult, because life is difficult. Even beyond deprivation and depression, there are many ordinary circumstances in which gratitude doesn’t come easily. This point will elicit a knowing, mirthless chuckle from readers whose Thanksgiving dinners are usually ruined by a drunk uncle who always needs to share his political views. Thanks for nothing.

Beyond rotten circumstances, some people are just naturally more grateful than others. A 2014 article in the journal Social Cognitive and Affective Neuroscience identified a variation in a gene (CD38) associated with gratitude. Some people simply have a heightened genetic tendency to experience, in the researchers’ words, “global relationship satisfaction, perceived partner responsiveness and positive emotions (particularly love).” That is, those relentlessly positive people you know who seem grateful all the time may simply be mutants.

But we are more than slaves to our feelings, circumstances and genes. Evidence suggests that we can actively choose to practice gratitude — and that doing so raises our happiness. ...

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November 22, 2015 in Legal Education, Tax | Permalink | Comments (3)

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:

  1. [403 Downloads]  Income Tax Deductions for Charitable Bequests of IRD, by Christopher R. Hoyt (UMKC)
  2. [360 Downloads]  Big Data and Tax Haven Secrecy, by Arthur J. Cockfield (Queen's University)
  3. [311 Downloads]  2014 Developments in Connecticut Estate and Probate Law, by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid and Riege, Hartford)
  4. [223 Downloads]  Too Big to Tax? Vanguard and the Arm’s Length Standard, by Reuven Avi-Yonah (Michigan)
  5. [199 Downloads]  2015 Trying Times: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)

November 22, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

50% Of Law Grads Who Failed California Bar Would Have Passed In A Different State

CaliforniaDerek Muller (Pepperdine), California Bar Exam Takers Are Far More Able Than Others Nationwide But Fail at Much Higher Rates:

The California July 2015 bar results were recently released, reflecting a modest drop in scores, slightly less than other jurisdictions this year. The overall pass rate dropped from 48.6% in July 2014 to 46.6%. The first-time pass rate dropped from 61% to 60%. And among California ABA-accredited schools, the first time rate also dropped a point to 68%.

California is one of the rare jurisdictions that also discloses its statewide mean scaled MBE score. The NCBE discloses the nationwide mean scaled MBE score, which has dropped fairly significantly over the last couple of years. But California has consistently outperformed the nationwide cohort, sometimes rather dramatically. ...

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November 22, 2015 in Legal Education | Permalink | Comments (2)

Remand: Pepperdine Law School's Global Justice Program In Uganda

My wife and I spent a wonderful Saturday night in Santa Monica, having dinner with some bigwigs and watching a preview of the forthcoming documentary Remand, detailing Pepperdine Law School's work in reforming Uganda's criminal justice system.


Watch the trailer:

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November 22, 2015 | Permalink | Comments (0)

The IRS Scandal, Day 927

IRS Logo 2The Blaze, Legal Experts: ‘Utterly Irresponsible’ Not to Conduct IRS Impeachment Probe:

While bringing impeachment charges against Internal Revenue Service Commissioner John Koskinen could seem an audacious move, some constitutional law experts believe it’s the only responsible step for members of Congress to take.

“Impeachment is a remedy to deal with grave offense in the abuse of office — whether or not someone committed private wrongs that warrant being put in jail,” Andrew McCarthy, former chief assistant U.S. attorney in New York, told TheBlaze. “If there have been abuses of power committed by public officials, it would be irresponsible to leave them there.” ...

“Impeachment is one of the few checks the legislature has on executive power. High crimes and misdemeanors don’t have to be felonies,” John Eastman, a law professor and director of the Center for Constitutional Jurisprudence at Chapman University. “When a public official won’t comply with the law, it is the only option left. If Congress doesn’t conduct proper oversight, they are part of the problem.” ...

Though Koskinen was not involved in the targeting scandal itself, his actions likely prevented the truth from surfacing, said David Rivkin, who formerly served as a deputy director in the Reagan Justice Department and as a legal adviser in White House Counsel’s office

“He didn’t cause this, but just as prosecutors bring a case to send a message, this could be done to make a point,” Rivkin, now a partner at the Washington law firm Baker Hostetler LLP., told TheBlaze. “There is a broader narrative in the context of how this administration has violated separation of powers.”

Rivkin said that the purpose of impeachment is not to punish — or even fire — a public official. Rather, it’s to protect the public trust. “If Congress does nothing, it is de facto approval,” Rivkin said. “It would be utterly iresponsible and utterly dangerous to civil liberties and the balance of powers for the House to do nothing.”

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November 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, November 21, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Dexter Presents A Tax Expenditure Approach to Reparations Today At Duke

DexterBobby Dexter (Chapman) presents The Hate Exclusion: Moral Tax Equity for Damages Received on Account of Race, Sex, or Sexual Orientation Discrimination, 13 Pitt. Tax Rev. ____ (2016), at the Duke Law School Center on Law, Race and Politics conference today on The Present and Future of Civil Rights Movements:  Race and Reform in 21st Century America:

Scholars on both sides of the reparations literature divide commonly contemplate some form of federal monetary outlay.  At the same time, given both the absence of such an outlay and the dire prognosis that such largesse is forthcoming, tax scholars rarely contribute to traditional reparations literature.  With this Article, Professor Dexter introduces the notion that reparations take the form of narrowly-tailored federal tax expenditures.

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November 21, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

NTA 108th Annual Conference on Taxation

Cover2The three-day National Tax Association 108th Annual Conference on Taxation concludes today in Boston.  Today's highlights:

Fiscal Federalism, Multilateralism, and Tax Law Design

  • Session Chair:  Daniel Shaviro (NYU)
  • Daniel Schaffa (Michigan), Federal Collection of State Individual Income Taxes
  • Eric Kades (William & Mary), Corrective Progressivity
  • David Gamage (UC-Berkeley) & Darien Shanske (UC-Davis), Fiscal Federalism from the Subnational Government Perspective: Tax Reform for the U.S. States
  • Itai Grinberg (Georgetown), The New International Tax Diplomacy
  • Discussants:  Brian Galle (Georgetown), Daniel Shaviro (NYU)

Tax Forms, Publications, and Compliance

  • Session Chair:  Leigh Osofsky (Miami)
  • Kathleen Thomas (North Carolina), User-friendly Taxpaying
  • Leigh Osofsky (Miami) & Joshua Blank (NYU), Simplexity and the Tax Law
  • Samara Gunter (Colby College), Your Biggest Refund, Guaranteed? Tax Filing Method and Reported Tax Liability
  • Joseph Bankman (Stanford), Using the ‘Smart Return’ to Reduce Tax Evasion
  • Discussants:  Larry Zelenak (Duke), Kristin Hickman (Minnesota)

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November 21, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 926

IRS Logo 2Wisconsin State Journal, GAB Chief Inquired with IRS About Campaign Coordination:

The head of the Government Accountability Board was told in early 2013 by a top Internal Revenue Service official — who later resigned amid controversy — that the IRS's criminal division might investigate the type of coordination at the heart of a now-halted John Doe investigation, according to testimony released Friday.

Government Accountability Board executive director Kevin Kennedy testified in an ongoing lawsuit that he inquired with Lois Lerner, a personal friend and head of the IRS division overseeing tax-exempt organizations, in general terms about coordination between a non-profit organization and a political campaign.

"If you have facts that show that a candidate and candidate's campaign director are engaging in these kind of communications and these are the activities that are being directed, does this seem like it might be something that might be an issue with the IRS?" Kennedy said, recalling what he asked Lerner. "Her response was, 'Yes, but that would probably be criminal, and I wouldn't have much to do with that other than making sure the paperwork got over to the other side.'"

Such coordination between Gov. Scott Walker's campaign and the Wisconsin Club for Growth was the focal point of a John Doe investigation that the Wisconsin Supreme Court halted in July saying the case had no basis in law.

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November 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, November 20, 2015

Law School Rankings By New BigLaw Partners

Following up on my previous posts on law school rankings by the number of BigLaw Partners by Ted Seto (Loyola-L.A.), Rob Anderson (Pepperdine), and Edward Adams (Minnesota) (NY Times coverage):  Bloomberg BNA, The Law Schools New Big Law Partners Attended:

How much weight does a prestigious law degree hold when it comes to climbing the ranks at a large law firm? ...

Over the past several months, a number of law firms have announced new classes of partners for the upcoming year, and we thought it would be a fruitful exercise to take a look at who these lawyers are and where they come from. ... Big Law Business reviewed the legal education of 299 lawyers who were elected partners at AmLaw 100 and 200 firms, effective between Oct. 1 and Jan. 2016.

Here are the Top 31 law schools:

1.     Harvard:  21 new partners
2.     NYU:  15
3.     Michigan:  10
4.     Georgetown, Northwestern:  9
6.     Virginia:  8
7.     Chicago, Columbia, UC-Berkeley:  7
10.   Boston College:  6
11.   Boston University, Fordham, George Washington, Illinois, UCLA, Vanderbilt:  5
17.   American, Brooklyn, Cardozo, Case Western, Penn, Stanford, St. Louis, Texas, USC, Yale:  4
27.   Chicago-Kent, Georgia, Notre Dame, San Diego, Tennessee:  3

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November 20, 2015 in Law School Rankings, Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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November 20, 2015 in Scholarship, Tax | Permalink | Comments (0)

Women, African-American Lawyers Make Little Progress At Big Law Firms

NALP New LogoNALP, Women, Black/African-American Associates Lose Ground at Major U.S. Law Firms:

Women and Black/African-Americans show declines in representation at major U.S. law firms, according to the latest law firm demographic findings from the National Association for Law Placement (NALP). NALP's recent analyses of the 2015-2016 NALP Directory of Legal Employers (NDLE) — the annual compendium of legal employer data published by NALP — shows that although women and minorities continue to make small gains in their representation among law firm partners in 2015, the overall percentage of women associates has decreased over the majority of the last five years, and the percentage of African-American associates has declined each year since 2009. 

New York Times:  Women and Blacks Make Little Progress at Big Law Firms, by Elizabeth Olson:

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November 20, 2015 in Legal Education | Permalink | Comments (1)

Treasury, IRS Issue New Rules To Curb Tax Inversions

Florida Coastal Law Grad Seeks Supreme Court's Help To Discharge $260,000 Student Loan Debt In Bankruptcy

Florida CoastalFollowing up on my previous post, 7th Circuit: Florida Coastal Law Grad Cannot Discharge $260,000 Student Loan Debt In Bankruptcy: Patrick Gregory (Bloomberg BNA), Law School Debt, 'Hopelessness' and the Supreme Court:

Mark Tetzlaff has close to $300,000 in law school debt and is seeking the U.S. Supreme Court’s help in getting it discharged in bankruptcy (Tetzlaff v. Educ. Credit Mgmt. Corp., petition for cert. filed, 84 U.S.L.W. 3222 (U.S. Oct. 15, 2015) (No. 15-485)).

Courts including the U.S. Courts of Appeals for the Seventh and Eighth circuits are split on what constitutes “undue hardship” that makes a debtor eligible for such a discharge. The U.S. Court of Appeals for the First Circuit is also considering this issue.

Tetzlaff has fallen on hard times, James M. Wilton of Ropes & Gray LLP, Boston, who represents Tetzlaff, told Bloomberg BNA. He has massive debt and is “10 years from retirement age,” Wilton said.

The issue of law school debt has been getting more attention recently. Lawmakers on both sides of the aisle have “sharply criticized U.S. law schools” for burdening students with crushing debt and non-marketable degrees, according to Bloomberg Business.

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November 20, 2015 in Legal Education | Permalink | Comments (5)

NTA 108th Annual Conference on Taxation

Cover2The three-day National Tax Association 108th Annual Conference on Taxation continues today in Boston.  Today's highlights:

International Corporate Tax Policy

U.S. Wealth Inequality Measurement

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November 20, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Wake Forest Symposium: Revisiting Langdell — Legal Education Reform And The Lawyer’s Craft

Wake 4Wake Forest Law Review Symposium, Revisiting Langdell: Legal Education Reform and the Lawyer’s Craft:

Embracing the inseparability of legal doctrine and legal practice sheds much light on the lawyer’s craft, on useful law school curriculum reform, and on what the bar might reasonably expect from law schools. Through this unified lens, the Symposium will look beyond Langdell’s “Socratic” method focused on redacted appellate cases and will explore a richer theoretical understanding of legal education and scholarship and the lawyer’s craft. To paraphrase Kant, the Symposium will explore how doctrine without practice is empty, how practice without doctrine is blind, and how, as a correlate of this separate emptiness and blindness, the humanities play a critical role in law and legal education and scholarship.

The Symposium will expand upon Harold Lloyd (Wake Forest), Exercising Common Sense, Exorcising Langdell: The Inseparability of Legal Theory, Practice and the Humanities, 49 Wake Forest L. Rev. 1213 (2014).

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November 20, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 925

IRS Logo 2WND, IRS Target: 'Justice in Their Hands Is a Mockery':

On Friday, [Oct. 23,] the Justice Department announced it was closing its investigation of former IRS official Lois Lerner and would not be filing any charges, chalking up the scandal instead to mismanagement.

However, the head of one of the grassroots organizations that endured unwarranted scrutiny by the IRS says the decision is simply more proof of a “lawless administration” that is making a “mockery” of justice. ...

True the Vote is one group that endured years of IRS harassment over its application for tax-exempt status. Its president, Catherine Englebrecht, is disgusted but not surprised by the Justice Department’s announcement.

“This is a lawless administration,” she said in an interview with WND and Radio America. “They write the rules and then play by those if they choose to follow. It is certainly not a surprise at all that they’ve chosen to try to wipe the slate clean of the IRS scandal, as they have so many other scandals. They don’t look to police themselves. They’re not interested in the better interests of their fellow countrymen. They’re interested in the survival of their party.”

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November 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, November 19, 2015

Osofsky Reviews Oh's Will Tax Reform Be Stable?

JotwellLeigh Osofsky (Miami), A New Tax Policy Criterion: Stability (Jotwell) (reviewing Jason Oh (UCLA), Will Tax Reform Be Stable?):

Fairness, efficiency, simplicity, and revenue-raising capability (not necessarily in that order) have long been the hallmarks of good tax policy. In a forthcoming article, Will Tax Reform Be Stable?, Jason Oh introduces a new criterion: stability. Oh persuasively argues that certain tax reform may be more or less stable than others, and contends that it is possible to analyze and predict stability. Moreover, as Oh explains, understanding stability is essential in order to determine the durability of any good (or bad) tax reform.

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November 19, 2015 in Scholarship, Tax | Permalink | Comments (1)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2015)The Pittsburgh Tax Review has published Vol., 12, No. 2 (Spring 2015):

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November 19, 2015 in Scholarship, Tax | Permalink | Comments (0)

$23 Billion In Annual Federal Tax Credits For Higher Education Have No Effect On College Attendance

NBER, Who Benefits From Federal Tax Credits For Higher Education?:

Researchers find that tax credits for higher education have little or no effect on college attendance; the credits are essentially transfer payments - and not primarily to the needy.

In 2014, the federal government spent about $23 billion on three programs offering tax credits to households paying for higher education. In The Returns to the Federal Tax Credits for Higher Education (NBER Working Paper No. 20833), George B. Bulman [UC-Santa Cruz] and Caroline M. Hoxby [Stanford] find that the credits have little or no effect on college-going in the U.S. The credits do not affect whether students enroll at all, whether they attend four-year colleges, how expensive their colleges are, or the scholarships and grants they receive. The authors conclude that the tax credits are primarily "a transfer from some individuals to others." ...

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November 19, 2015 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

McMahon: Gendering the Marriage Penalty

InfantiStephanie Hunter McMahon (Cincinnati), Gendering the Marriage Penalty, in Controversies in Tax Law: A Matter of Perspective (Anthony C. Infanti, ed. Ashgate 2015):

In 1969 Congress amended the Internal Revenue Code to create a marriage penalty. The penalty was not felt by all married couples: Only those couples in which spouses earned roughly equal amounts and who filed joint tax returns paid a penalty. Thus, the 1969 change in law had a gendered effect of discouraging some wives from earning income, but the alternative was not without its own gendered results. If gender marks the impact of the 1969 legislation, was gender what motivated the change in law? It would be easy to assume that at the end of the 1960s, a socially conservative legislature reacted to a developing women’s movement. From the legislative debates, sexism certainly pervaded congressional discussion of women’s role in the family and the economy. However, this only tells part of the story and does so by focusing on the result that remains of interest today. Economic forces were a larger part of the story.

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November 19, 2015 in Scholarship, Tax | Permalink | Comments (0)

NY Court: Ethics Rules Bar Whistleblower Suit By Former Vanguard Tax Lawyer Alleging Mutual Fund Giant Evaded $1 Billion in Taxes

VanguardFollowing up on my previous posts (links below): Philadelphia Inquirer, Danon Barred From Whistleblower's Cut in Vanguard NY Case:

A New York State Supreme Court justice has ruled that a former Vanguard Group tax lawyer cannot expect to collect a whistleblower's cut of potential back state taxes owed by the mutual-fund giant because he was employed by Vanguard at the time he secretly filed the complaint.

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November 19, 2015 in New Cases, Tax | Permalink | Comments (0)

NTA 108th Annual Conference on Taxation

Cover2The three-day National Tax Association 108th Annual Conference on Taxation kicks off today in Boston.  Today's highlights:

Alan Auerbach (UC-Berkeley), Presidential Address

Topics in Business Taxation:

  • Session Chair:  Diane Ring (Boston College)
  • Mirit Eyal-Cohen (Alabama), Taxing Economies of Scale
  • Shu-Yi Oei (Tulane) &  Diane Ring (Boston College), Regulation by Crowd
  • David Hasen (Colorado), Taxation and Innovation
  • Jacob Nussim (Bar-Ilan), Taxation and Innovation
  • Discussants:  Shu-Yi Oei (Tulane), Diane Ring (Boston College), Jacob Nussim (Bar-Ilan)

Charitable Giving of High-Income Households

  • Session Chair:  Jon Bakija (Williams)
  • Brian Galle (Georgetown), Law and the Problem of Restricted Spending Philanthropy
  • Brian Galle (Georgetown) & Benjamin Marx (Illinois), Do Private Foundation Donors Care About State Law?
  • Nicolas Duquette (USC), Philanthropy, Inequality, and the Income Tax: High-Income Households’ Charitable Giving 1917–2012
  • Jon Bakija (Williams) & Brian Raub (IRS), How Estate Taxation Affects Charitable Donations and Wealth Accumulation: Evidence from the Divergence in Estate Tax Rates across States After 2001
  • Discussants:  Yair Listokin (Yale), Chistine Exley (Harvard)

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November 19, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Chicago-Kent Symposium: Nonprofit Oversight Under Siege

Chicago-KentChicago-Kent hosts a symposium today on Nonprofit Oversight Under Siege:

The View from the U.S.:

  • Evelyn Brody (Chicago-Kent) & Marcus Owens (Loeb & Loeb, Washington, D.C.), Exile to Main Street: The I.R.S.’s Diminished Role in Overseeing Tax-Exempt Organizations 
  • Linda Sugin (Fordham), Politics, Disclosure, and State Law Solutions for 501(c)(4) Organizations
  • Lloyd Hitoshi Mayer (Notre Dame), Fragmented Oversight of Nonprofits in the United States: Does It Work? Can It Work?

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November 19, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Inaugural International Conference on Taxpayer Rights Concludes Today In Washington, D.C.


The two-day inaugural International Conference on Taxpayer Rights concludes today in Washington, D.C. (agenda):

The National Taxpayer Advocate of the Internal Revenue Service is convening the Inaugural International Conference on Taxpayer Rights in Washington, D.C. This ground-breaking conference will present panelists from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration.

Today's speakers include:

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November 19, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Clausing: The Effect Of Profit Shifting On The Corporate Tax Base In The U.S. And Beyond

Kimberly A. Clausing (Reed College), The Effect of Profit Shifting on the Corporate Tax Base in the United States and Beyond:

This paper estimates the effect of profit shifting on corporate tax base erosion for the United States. Using Bureau of Economic Analysis survey data on U.S. multinational corporations over the period 1983 to 2012, the analysis estimates the sensitivity of foreign incomes to tax burdens for major foreign direct investment destinations. Controlling for a host of other variables as well as country fixed effects, I find that taxable income is very sensitive to corporate tax rates. Estimates of tax sensitivity are used together with data on reported foreign income to calculate how much “extra” income is booked in low-tax countries due to profit shifting;

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November 19, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 924

IRS Logo 2Family Security Matters, Why Lois Lerner and the IRS Scandal Are Not Unique:

Bottom Line Up Front:  Political appointees run the nation's bureaucracies.  Former political appointees who are "burrowed" into the system bolster political ideology and decisions.  Furthermore, those who are hired and promoted by the appointee and/or former appointee in charge of an organization are most probably of similar political ilk.

The IRS scandal was felt heavily by those of us who are retired from federal service.  After having spent decades within the bowels of federal bureaucracies - decades that, for us, were not defined at all by politics - the intentional targeting of Americans of ANY political persuasion came as a horrific shock. 

In our day, civil servants would NEVER have targeted political opponents of the ruling administration. Even if a rogue employee had tried, such actions would never have been tolerated.  Warnings against any defiance of the limitations imposed by the Hatch Act of 1939 kept virtually all civil servants from holding much more than personal political opinions expressed only in private.  Politics were certainly not discussed in the office, let alone acted upon.  Until recently, federal employees were decidedly "non-partisan."

The evidence surrounding the Lois Lerner case has shown us how different our government has become. The initial shock that came with revelations of the extent to which government officials within the IRS had been able to intervene in and delay the processing of specific tax-exempt requests (virtually all of which were from conservative organizations) gave way to outrage following testimony to Congress about the "loss" of emails and other files pertinent to the investigation.  When combined with the disreputable conduct associated with the VA, ATF, EPA, DoE, DoD, GSA, and the highest levels of the State Department, is it any wonder that Americans feel exasperated and retired federal workers feel estranged from the very government they had so long served? 

Question:  What has changed?  Answer:  The manner in which political appointees are filtered into the bureaucracies. ...

This is yet another dilemma that the next President will inherit.  If the process does indeed encourage institutionalized political bias, something must be done about it.  Hopefully the next administration will find a way to end the overt expression of bias by employees who see themselves as political avengers, and terminate the practice that gave us the IRS scandal.

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November 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (10)

Wednesday, November 18, 2015

Inaugural International Conference on Taxpayer Rights Kicks Off Today In Washington, D.C.


The two-day inaugural International Conference on Taxpayer Rights kicks off today in Washington, D.C. (agenda):

The National Taxpayer Advocate of the Internal Revenue Service is convening the Inaugural International Conference on Taxpayer Rights in Washington, D.C. This ground-breaking conference will present panelists from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration.

Today's speakers include:

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November 18, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Mazur: Transfer Pricing Challenges In The Cloud

CloudOrly Mazur (SMU), Transfer Pricing Challenges in the Cloud, 52 B.C. L. Rev. ___ (2016):

Cloud computing - the provision of information technology resources in a virtual environment - has fundamentally changed how companies operate. Companies have quickly adapted by moving their businesses to the cloud, but international tax standards have failed to follow suit. As a result, taxpayers and tax administrations confront significant tax challenges in applying outdated tax principles to this new environment. One particular area that raises perplexing tax issues is the transfer pricing rules. The transfer pricing rules set forth the intercompany price a cloud service provider must charge an affiliate using its cloud services, which ultimately affects in which jurisdiction the company’s profits are taxed. This Article argues that the fundamental features of cloud computing exacerbate some of the more difficult transfer pricing problems that already exist.

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November 18, 2015 in Scholarship, Tax | Permalink | Comments (0)

Law Prof Perspectives On The Student Protests

Richard A. Epstein (Chicago), Spineless Leadership at Yale (Hoover Institution):

Students ... want universities to protect them from any unpleasant thought or idea that may upset them. They of course can lash out against others from their “safe spaces,” but everyone else must back-peddle or face the consequences.

This approach is ruinous to the intellectual and moral development of students, and leaves them ill-prepared for life’s challenges. If only on educational grounds, it is critical to rise up and challenge these students by insisting that the exchange of views, often hostile and disagreeable, is essential for the cultural and intellectual health of a university. ...

As an alumnus of Yale, I want its president to resist with all of the words at his command the groundless charges brought against it by righteous students and commentators. But Salovey unfortunately lacks the courage to tell the critics that their indictment of the university is deeply flawed [Salovey statement]. By assuming a position of weakness, Yale is inviting its harshest critics, both inside and outside the school, to tee off against faculty and students with whom they disagree. The only way to get responsible discourse is to stand up for what you hold dear in the face of reckless charges. There is a desperate need for reconciliation at Yale, but the institution can only begin to heal if its critics face the same relentless scrutiny that they heap on the university.

Jeannie Suk (Harvard), A New Family Feeling On Campus (The New Yorker):

I often informally ask my students, at Harvard Law School, what their most important ideals are and how they hope to fulfill them in their lives and careers. In the past several years, I’ve been touched to hear a significant plurality of students name a priority that I didn’t hear much when I began teaching, nearly a decade ago: their close relationships with their parents. As a forty-two-year-old parent myself, I’m gratified by the idea that my own children might feel, as young adults, that our bond was so sustaining as to be central to their visions of their lives. But I’m struck that this theme was not on my agenda when I was a student, twenty years ago, and I don’t recall it being important to my peers, either.

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November 18, 2015 in Legal Education | Permalink | Comments (6)

Ex-IRS Official, Successor Clash Over Tax-Free Spinoffs; Darden, Yahoo! Caught By IRS's Sudden Shift

IRSSThe Deal, Ex-IRS Official, Successor Clash Over Tax-Free Spinoffs; Darden, Yahoo! and Other Firms Planning Splits Caught by Dramatic IRS Policy Shift:

When William Alexander left the IRS to take a position at Skadden in January his departure was cited privately by some IRS watchers as another example of Washington's revolving door between government and the private sector.

At the IRS, Alexander, in the position of associate chief counsel, was a central figure in the agency's decision over the years to let operating companies complete tax free REIT and other spinoffs. Bolstered by IRS rulings, activist hedge funds have increased efforts in recent years to have companies with extensive real estate conduct tax free spinoffs, arguing that the moves extract shareholder value at operating companies with misrepresented assets.

It is in this context that Skadden lawyers were hired to advise Yahoo!, which ultimately came to the conclusion in January that it would conduct a tax-free spinoff of its 15% stake in Chinese e-commerce giant Alibaba. ...

However, those plans were cast in doubt when Alexander's replacement at the IRS, Bob Wellen, led the agency to issue a notice in September that has since chilled new spinoff activity. The notice and subsequent remarks made by Wellen have also raised serious questions about whether existing spinoffs in the works will ultimately be treated as tax-free.

"It is a sea change in attitudes," said Robert Willens, president of tax and accounting consulting firm Robert Willens LLC. "Bill Alexander was very permissive of tax-free spinoffs and Wellen has turned against everything Bill stood for. They couldn't be more diametrically opposed to each other." ...

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November 18, 2015 in IRS News | Permalink | Comments (1)

Elizabeth Warren Delivers Major Speech Today On International Corporate Tax Reform

National Press Club:

U.S. Senator Elizabeth Warren, D-Mass., will speak about corporate international tax reform at the National Press Club on Wednesday, Nov. 18.

The livestream begins at 1:00 p.m. ET: The text of the speech will be available here beginning at 12:40 p.m. ET.

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

November 18, 2015 in Tax | Permalink | Comments (3)

Church Of The Flying Spaghetti Monster Treated As 'Religion,' Adherent Issued Driver's License Photo Wearing A Colander

MassBoston Globe, Woman Allowed to Wear Spaghetti Strainer in Mass. License Photo:

A woman who identifies herself as a Pastafarian, a follower of a religion that teaches that an airborne “spaghetti monster” could have created the universe, has succeeded in her bid to wear a colander on her head in her driver’s license photo.

Lindsay Miller claims the spaghetti strainer is a sign of her devotion to the Church of the Flying Spaghetti Monster.

In August, the Lowell resident was denied a renewed license by the Massachusetts Registry of Motor Vehicles, she said, for wearing the metal cookware. ...

According to the RMV’s website, drivers are barred from wearing hats or head covers in their photos, unless the clothing items are “for medical or religious reasons.”

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November 18, 2015 in Tax | Permalink | Comments (9)

Law Schools Need To Be More Fox, Less Hedgehog

HedgehogDaniel J. Myers (Provost, Marquette University), Of Foxes, Hedgehogs, and Marquette Law School:

It has become an accepted truism in academia that there are two fundamental intellectual styles: the fox and the hedgehog. The ancient Greek poet Archilochus observed that “the fox knows many things, but the hedgehog knows one big thing.” Following Sir Isaiah Berlin’s famous interpretation of the line, we have come to believe that intellectual pursuits (and careers) are characterized by either a singular, coherent, abiding focus or a collection of approaches and ideas that are seemingly unconnected, eclectic, and even disorganized. ...

While hedgehogs and foxes sometimes cast aspersions toward one another of being either myopic or unfocused, they usually are content to ignore one another and go about their pursuits (or pursuit, in the case of the pure hedgehog) without worrying about the failings of the other. At times, however, some can recognize the value of both styles: the fox can bring in novel insights from flitting around the disciplines, while the hedgehog uses those outsights to bear down on the fundamental problem monopolizing its gaze.

Law schools, like most academic divisions, have a natural tendency to operate more like hedgehogs than foxes, and this tendency is reinforced by an administrative structure that sets the law school in a somewhat peripheral functional location at a university.

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November 18, 2015 in Legal Education | Permalink | Comments (0)

One Law School’s Change In Fortune: Southern Illinois

SIUKyle McEntee (Law School Transparency), One Law School’s Change In Fortune:

The New York Times chose to highlight Southern Illinois University when it reported on our investigation late last month. I objected to the focus on SIU because it had relatively affordable tuition, above-average job rates, and a very high bar passage rate in 2013. With many more egregious examples to choose from, I didn’t think SIU merited special attention. Still, July 2015 bar exam outcomes drive home why SIU found its way into our report in the first place, and why high bar pass rates from even a couple of years ago can be very deceiving to prospective students. It also demonstrates that even respectable state schools are not immune to the pressures that have driven so many law schools to admit far too many at-risk students.

SIU2Between 2010 and 2014, as with many law schools, the school’s admissions profile changed drastically. The school earned an “extreme risk” label for its 2014 entering class based on a bottom quartile LSAT score of 144 (22.9 percentile). The chart below plots SIU’s LSAT numbers for each of the last five entering classes for which we have data. The 25th, 50th, and 75th percentile LSAT scores are plotted on top of the national LSAT distribution curve. From this you can see that the school’s 75th percentile in 2014 was its 25th percentile in 2010.

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November 18, 2015 in Legal Education | Permalink | Comments (1)

University Of New South Wales Issues Call for 2016 Tax Research Fellows

ATax (2015)The School of Taxation and Business Law (TBL) at the University of New South Wales, Australia, will offer three Research Fellowships ($5,000) in taxation, business law and related disciplines in 2015. Research Fellows normally spend four weeks working at TBL on a mutually agreed area of research. The application deadline is February 28, 2016.  See more details here.

Fellowship duties:

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November 18, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 923

IRS Logo 2Politico, Under the Radar:

President Barack Obama's public comments appearing to prejudge the outcome of Justice Department investigations don't affect the decisions in those inquiries, Attorney General Loretta Lynch said Tuesday.

In her first appearance before the House Judiciary Committee since taking office in April, Lynch was questioned by panel chairman Rep. Bob Goodlatte (R-Va.) about remarks Obama made last year declaring there was "not even a smidgen of corruption" in the IRS's handling of applications from nonprofit groups and a statement the president made last month that former Secretary of State Hillary Clinton's private email set-up posed no national security problem.

"With respect to the president's comments, they have no influence or bearing on how the department manages these matters," Lynch said.

Goodlatte tried a couple of times to get Lynch to comment on whether it was unwise for Obama to make such comments while an investigation was pending, but she declined to do so.

"I really don’t have a comment on the president’s expression of his view," Lynch said.

Washington Examiner, Gowdy on IRS Probe: How Much More Evidence Could You Need?:

Rep. Trey Gowdy blasted the Justice Department for stating last month that there was "no evidence" of criminal intent in the Internal Revenue Service's targeting of conservative groups.

"Never do you have direct evidence of intent," Gowdy, a former prosecutor, said during a House Judiciary Committee hearing Tuesday.

The South Carolina Republican cited numerous examples of "circumstantial evidence," all of which resulted in discrimination against Tea Party nonprofits, regardless of the tax agency's intent.

Gowdy noted Lois Lerner, former head of the IRS tax-exempt unit, had sent several emails that indicated she harbored a bias against conservatives.

Washington Examiner, Jordan Blasts Attorney General on IRS Investigation:

Rep. Jim Jordan pressed Attorney General Loretta Lynch Tuesday on why the head of the IRS has not faced consequences for misleading Congress about the status of documents.

"That sure looks like [IRS Commissioner] John Koskinen and the Internal Revenue Service concealed information and destroyed information," Jordan said after outlining a timeline that suggests employees under Koskinen deleted requested emails after he had promised to provide them to lawmakers.

The Ohio Republican noted IRS employees had erased back-up tapes containing the emails of Lois Lerner, former head of the tax agency's nonprofit unit, after receiving three separate preservation orders and two subpoenas for the tapes.

"With respect to the matter that you've raised, we did review the issues surrounding Ms. Lerner's emails and the backup tapes," Lynch told Jordan during a House Judiciary Committee hearing Tuesday. "We are looking for evidence of criminal intent."

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November 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, November 17, 2015

Hassett Presents The Response Of Deferred Executive Compensation To Changes In Tax Rates Today At Columbia

HassettKevin A. Hassett (American Enterprise Institute) presents The Response of Deferred Executive Compensation to Changes in Tax Rates (with Aspen Gorry (Utah State), Glenn Hubbard (Dean, Columbia Business School) & Aparna Mathur (American Enterprise Institute)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore deferral by estimating how executives’ choice of compensation between current and deferred income depends on changes in tax policy.

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November 17, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Law Schools Are Admitting More At-Risk Students

National JuristNational Jurist, Law Schools Admitting More At-Risk Students, Study Says:

Law schools are accepting more at-risk students which will likely lead to lower bar passage rates in the near future, according to a study by Law School Transparency. 

“The bargain is clear: take larger, riskier classes now to survive and deal with the accreditation challenges, angry alumni, and bad press that follow later,” the report states.

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November 17, 2015 in Legal Education | Permalink | Comments (0)

After 58% Decline In Enrollment, Seton Hall Law School Adapts To New Market

Seton Hall, Law Schools Rebound From Years of Declining Enrollment:

As fewer people enroll in law school, institutions across the country have been forced to adapt to a legal marketplace hurt by fewer jobs, outsourcing and the impact of the Internet.

Seton Hall and Rutgers University law schools, like many of those elsewhere, have reduced the number of students they admit, offered larger scholarships or grants, and readjusted their programs so students are better-prepared for the competitive and evolving job market. ...

At Seton Hall, the average class size of incoming students has steadily shrunk in recent years. In 2010, the Seton Hall law program peaked with an incoming class of 360 students. The next year, the school enrolled only 271. By 2013, the acceleration of class size reduction, which was averaging about 70 students less each year, had slowed. The school's most recent incoming class totaled 152 students, 17 students fewer than in 2014.

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November 17, 2015 in Legal Education | Permalink | Comments (11)

Polsky Comments On The Disguised Payments For Services Proposed Regs

Gregg D. Polsky (North Carolina), Comments on the Proposed Regulations on Disguised Payments for Services:

On July 23, 2015, the Internal Revenue Service (IRS) and Treasury Department (Treasury) issued proposed regulations under section 707(a)(2)(A) of the Internal Revenue Code (the Code) relating to disguised payment-for-services transactions between partnerships and partners. These are my comments on the proposed regulations.

My overall conclusions are as follows. I support the proposed regulations and urge that they be finalized as quickly as possible with some relatively minor clarifications. The proposed regulations are faithful to the statutory text, legislative purpose, and legislative history of section 707(a)(2)(A). Furthermore, the proposed regulations represent a very reasonable approach to the necessary task (given the clear statutory directive in section 707(a)(2)(A)) of distinguishing between disguised payments for services, on the one hand, and bona fide partnership allocations and distributions, on the other hand. I also support the positions explained in the preamble regarding the government’s view of the current scope of Rev. Proc. 93-27 and the stated intention to revise Rev. Proc. 93-27 to carve out profits interests received in lieu of fixed fees.

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November 17, 2015 in Scholarship, Tax | Permalink | Comments (0)