TaxProf Blog

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

Tuesday, July 10, 2018

Anthony Bourdain's Estate Planning Lessons For All Of Us

Forbes, How Anthony Bourdain's Estate Plan Reflected The Two Most Important Parts Of His Life:

Ever since his untimely death, the press and the public hasn't been able to get enough of Anthony Bourdain. His name caused another commotion this week when his will was probated in New York. The New York Post’s Page Six headline read “Anthony Bourdain Worth Only $1.21M at the Time of His Death.” Social media responded immediately as the actual dollar amount just didn’t seem right.  How could Bourdain’s net worth be so much less than the public previously speculated?

While a man’s worth is quite subjective, Bourdain, by all accounts, was an American success story. Though he often admitted that he’d lived paycheck to paycheck well into his 40s, by having an estate valued in excess of $1 million, Bourdain could be considered in the top 3% of all Americans in terms of wealth. In his case, the estate plan reflected two interesting aspects of the man and what he truly valued.

Estate Planning Is About Protecting Those You Love
Bourdain was thorough in making provisions for his only child as the bulk of his estate will pass to her. ...

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July 10, 2018 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

University Slammed For 'Mansplaining" Ad

Brown: Proposing A Single, Simpler Test For Cash Equivalency

ABA Tax LawyerFred B. Brown (Baltimore), Proposing a Single, Simpler Test for Cash Equivalency, 71 Tax Law. 543 (2018):

Under the cash method of accounting, generally taxpayers include income items that are received in the form of cash, checks, and property, in the year in which they are received. Under the cash equivalency doctrine, a promise to pay an amount in the future, even though it is a property right, generally will be included upon receipt only if the promise to pay constitutes a cash equivalent.

Whether an obligation is a cash equivalent is generally determined based on common law standards developed by the courts with some assistance from the Service. As a consequence, the current approach to cash equivalency suffers from the lack of a uniform standard. There is also uncertainty in applying the particular tests, given the fact-intensive, imprecise inquiry that is required. In addition, the current standards for cash equivalency may also present liquidity difficulties for taxpayers.

To address these problems, this article proposes a single test for determining whether an obligation calling for future payments is a cash equivalent.

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July 10, 2018 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Monday, July 9, 2018

The Future Of JD Admissions: 91% OF MBA Programs Accept GRE, Many Offer Math Boot Camps For Incoming Students

GREWall Street Journal, M.B.A. Programs Try Catering to Liberal-Arts Types—With Math Camp:

Business schools are making greater accommodations for applicants who have analyzed more sonnets than spreadsheets.

As many flagship M.B.A. programs struggle to attract a broader array of young professionals, some schools, including Carnegie Mellon University, Yale University and Columbia University, are helping former English literature and political-science majors prepare for math-intensive coursework before their first semesters.

M.B.A. admissions offices historically limited applicants to the quant-heavy Graduate Management Admission Test for admission. But some 91% of U.S. business schools surveyed by Kaplan Test Prep last fall accept the Graduate Record Examination, an entrance exam used mainly for social-science and humanities master’s programs. That is up from 24% of schools in 2009. The same survey found that 67% of schools said offering the GRE option has increased enrollment of students from backgrounds outside the traditional pre-M.B.A. tracks of finance, consulting and other business-related fields.

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July 9, 2018 in Legal Education | Permalink | Comments (0)

Australia, Canada, England, Netherlands & U.S. Launch The J5: Joint Chiefs Of Global Tax Enforcement

J5Joint Chiefs of Global Tax Enforcement:

About Us
The Joint Chiefs of Global Tax Enforcement (known as the J5) are committed to combatting transnational tax crime through increased enforcement collaboration. We will work together to gather information, share intelligence, conduct operations and build the capacity of tax crime enforcement officials.

The J5 comprises the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), HM Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

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July 9, 2018 in IRS News, Tax | Permalink | Comments (0)

Rate My Professors Drops 'Hotness' Rating 72 Hours After Vanderbilt Prof Started Social Media Outcry

RateEdge for Scholars, I Killed the Chili Pepper on Rate My Professors:

I did not kill the chili pepper on RateMyProfessors. You did.

Today we had small but important victory in getting the folks at RateMyProfessors to take down the chili peppers students use to evaluate professors’ ‘hotness.’ Within 72 hours of being called out by 14,000 academics and students, they pulled a thorn from the side of women in education. I am grateful that MTV and Viacom recognized that telling students that evaluating professors based on their looks has aged poorly. In the age of #MeToo, #TimesUp and #MeTooSTEM, we know better, so we must do better.

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July 9, 2018 in Legal Education | Permalink | Comments (7)

NY Times: Government Work Done, Tax Policy Writers Decamp To Lobbying Jobs

New York Times, Government Work Done, Tax Policy Writers Decamp to Lobbying Jobs:

Six months after Republicans pushed a $1.5 trillion tax overhaul through Congress, many of the most influential players who worked behind the scenes on the legislation are no longer on Capitol Hill or in the Trump administration.

They are now lobbyists.

The two-way street between lobbying and lawmaking is well worn in Washington. But after President Trump’s campaign pledge to “drain the swamp,” there was some speculation that the so-called special interests might be sidelined. And while the frenetic two-month sprint last year to pass the tax legislation left some lobbyists marginalized, the businesses now scrambling to navigate the changes are increasingly recruiting the people who wrote it.

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July 9, 2018 in Congressional News, IRS News, Tax | Permalink | Comments (0)

Lesson From The Tax Court: Naked Assessments!

Tax Court (2017)The Notice of Deficiency (NOD) is almost always clothed with a presumption of correctness. Some might say “cloaked” or “shrouded” are a better terms because what the presumption does is shield all that happened prior to the NOD from judicial scrutiny. Courts will generally not go behind the NOD to examine how the IRS came up with its numbers unless and until the taxpayer gives the court a good reason to disbelieve the NOD (or successfully invokes §7491(a), the provision that shifts the burden of production from the taxpayer to the IRS).

It is easy to apply the presumption of correctness in situations where the NOD is simply denying deductions or exclusions. That is because the taxpayer already bears the burden of proving an entitlement to deductions and exclusions. So if the taxpayer cannot come up with the proof, then too bad, so sad.

It is more difficult to apply the presumption in situations where the NOD asserts that the taxpayer failed to report gross income. In that situation, the IRS must have some basis for the assertion of omitted income. That is, the presumption of correctness does not allow the IRS to just make up numbers. In the seminal case of United States v. Janis, 428 U.S. 433 (1976), the Supreme Court said that “where the assessment is shown to be naked and without any foundation” then the burden shifts to the IRS to show facts that link the taxpayer to the alleged omitted income. I really love the delightfully mixed metaphor the Fifth Circuit used in Carson v. Commissioner, 560 F.2d 693, 696 (5th Cir. 1977): "The tax collector's presumption of correctness has a herculean muscularity of Goliath-like reach, but we strike an Achilles' heel when we find no muscles, no tendons, no ligaments of fact."

Two recent Tax Court cases teach a lesson on what “ligaments of fact” suffice to prevent an NOD from being “naked and without any foundation.” In both of these omitted income cases, the IRS was able to produce enough facts to get back the presumption, but in very different ways. The cases are: Gerald Nelson v. Commissioner, T.C. Memo. 2018-95 (June 28, 2018); and Mohammad Najafpir v. Commissioner, T.C. Memo. 2018-103 (July 3, 2018).

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July 9, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Autopsy Report Reveals New Details In Dan Markel's Murder

Markel 3WXTL, Autopsy Report Released in Dan Markel Case Reveals New Details:

There are new details about how Florida State University Law Professor Dan Markel died.

WTXL obtained a copy of the autopsy report, which concludes Markel's cause of death was gunshot wounds of the face and head. ... The autopsy report shows Markel was shot two times, in intermediate range, which means between six and 30 inches away. According to the Pathologist, he was shot once in the forehead, and once in the left cheek. He concluded that these bullets caused massive hemorrhaging and bleeding.

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July 9, 2018 in Legal Education | Permalink | Comments (2)

Private Tax Collection Agencies Lose Money While Going After the Poor

Washington Post, Private Tax Collection Agencies Lose Money While Going After the Poor:

In its zeal to privatize important parts of the government, the Republican-controlled Congress directed the Internal Revenue Service to use private debt collectors for certain tax delinquencies, a program that began last year.

The Obama administration cautioned against the use of bill collectors before legislation authorizing the program passed in 2015. Those warnings went unheeded.

Now, the program is losing money and unfairly hitting the poor.

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July 9, 2018 in IRS News, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, July 8, 2018

Henderson: Using Deliberative Leadership To Meet The Challenges Facing Legal Education (And The Legal Profession)

SmoothWilliam Henderson (Indiana), Studying Leadership Before the Big Test, Part I:

This is a two-part series on leadership. For lawyers and legal educators, the big test is now. ...

After the financial crisis in 2008-09, bleak job numbers and high debt loads gave rise to the scam blog movement followed by relentless negative coverage in the New York Times and Wall Street Journal.  With so much bad press and a weak entry-level job market, applications went into a free-fall. In the fall of 2012, Brian Tamanaha published Failing Law Schoolsfollowed by Steve Harper’s The Lawyer Bubble in the spring of 2013.

Law professors and law school deans were unprepared for the depth and magnitude of the change. Moreover, there was evidence that things might get worst, as lawyers were now discussing the likelihood of a permanent market shift in how law was being practiced. Through decades of prosperity and growth, we had been conditioned to believe that an endurable normal would eventually return.  But what if that wasn’t true? How would we know? Could the old guard be counted upon to make the call? If not, what then?

These questions were very much on my mind. Thus, in the fall of 2014, I convened a small, diverse group of Indiana Law alumni to discuss the topic of leadership. ... I asked the group for their help in creating a course on leadership at  Indiana Law. Everyone agreed to pitch in, but they scuttled the proposed name. How about “Deliberative Leadership?,” offered one seasoned alum who was CEO of a large company. “Before anyone agrees to lead,” he explained, “They should reflect on leadership in a deep and deliberate way.”  ...

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July 8, 2018 in Legal Education | Permalink | Comments (0)

362,000 Americans Will Be Denied Passports Due To Unpaid Taxes

Passport IRSWall Street Journal, Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes:

At least 362,000 Americans with overdue tax debts will be denied new or renewed passports if they don’t settle these debts, the Internal Revenue Service says.

Recently IRS officials have provided new details on the enforcement of a law Congress passed in late 2015. It requires the IRS and State Department to deny passports or revoke them for taxpayers who have more than $51,000 of overdue tax debt. Enforcement began in February.

An IRS spokesman says the 362,000 people are current tax debtors who are affected by the law. The IRS is sending their names in batches to the State Department, a process the tax agency aims to finish by year’s end. A State Department spokesman confirmed that it has already denied passports to some debtors.

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July 8, 2018 in IRS News | Permalink | Comments (1)

Buckles: Unashamed Of The Gospel Of Jesus Christ — Public Policy And Public Service By Evangelicals

A new article by Tax Prof Johnny Rex Buckles (Houston), Unashamed of the Gospel of Jesus Christ: On Public Policy and Public Service by Evangelicals, 41 Harv. J.L. & Pub. Pol'y 813 (2018):

Congressional committee hearings considering nominees for federal office have increasingly featured extensive scrutiny of, and even hostility toward, nominees who are more than nominally religious. Congressional interrogations of the religiously orthodox raise important questions of law, public policy, and religion in our constitutional democracy. The exchange between Senator Bernie Sanders and Russell Vought, then-nominee for Deputy Director of the White House Office of Management and Budget and an evangelical Christian, is especially instructive. Focusing on this exchange as a springboard for discussion, this Article analyzes the constitutional and policy implications of congressional probing into the religious faiths of nominees. The issues raised by the Sanders-Vought exchange are recurring, and they potentially affect not just evangelical nominees, but also historically orthodox believers, in general.

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July 8, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. [291 Downloads]  IRC Section 678 and the Beneficiary Deemed Owner Trust (BDOT), by Edwin Morrow
  2. [261 Downloads]  Introduction to Tax Policy Theory, by Allison Christians (McGill)
  3. [243 Downloads]  Higher Education Savings and Planning: Tax and Nontax Considerations, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  4. [239 Downloads]  Code Sec. 1031 after the 2017 Tax Act, by Brad Borden (Brooklyn)
  5. [179 Downloads]   The International Provisions of the TCJA: A Preliminary Summary and Assessment, by Reuven Avi-Yonah (Michigan)

July 8, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 7, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Wisconsin Supreme Court Reinstates Tenured Marquette Professor After He Was Fired For Blog Post

McAdamsWall Street Journal editorial, Marquette’s Black Eye:

Wisconsin’s Supreme Court has given Marquette University a bracing refresher on contracts and academic freedom. In a decision overturning a lower court’s dismissal of the case, the court on Friday ruled that Marquette breached its contract with political science professor John McAdams when it disciplined him “for exercising his contractually protected right of academic freedom.”

The case stems from a blog post by Mr. McAdams about a graduate instructor who had told a Marquette student that opinions against same-sex marriage would not be tolerated in her ethics class. The university says Mr. McAdams proved himself unfit by naming the graduate instructor, Cheryl Abbate, and linking to her publicly available website in his post on the encounter, so it suspended him. Even after losing the case Friday, the university continues to accuse Mr. McAdams of having used his blog to intentionally expose “her name and contact information to a hostile audience that sent her vile and threatening messages.”

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July 7, 2018 in Legal Education, Tax | Permalink | Comments (3)

Ventry: Free File Providers Scam Taxpayers; Congress Shouldn't Be Fooled

IRS Free File (2018)The Hill op-ed:  Free File Providers Scam Taxpayers; Congress Shouldn't Be Fooled, by Dennis J. Ventry, Jr. (UC-Davis):

In April, the House unanimously passed the Taxpayer First Act, including a provision to codify the IRS Free File Program.

Making Free File a permanent part of the tax law would mean that the IRS and its private-sector Free File partners — organized as the Free File Alliance (FFA) and including Intuit and H&R Block — would no longer periodically renegotiate the terms and conditions of the program. 

For that reason alone — i.e., preventing the IRS from verifying that FFA companies deliver free tax filing services as promised — codifying Free File is a terrible idea. 

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July 7, 2018 in IRS News, Tax | Permalink | Comments (3)

How Small Business Tax Expenditures Impact Women Business Owners

AUTax Policy Center (Kogod School of Business, American University), Billion Dollar Blind Spot: How the U.S. Tax Code's Small Business Expenditures Impact Women Business Owners:

This report, in keeping with the mission of the Kogod Tax Policy Center (KTPC) to conduct non-partisan policy research on tax and compliance issues specific to small businesses and entrepreneurs, provides an initial assessment of how the Code’s tax expenditures targeted to help small businesses grow and access capital impact women-owned firms. The results are eye-opening.

  • We report that while women-owned firms have increased to total more than one-third of all U.S. firms, the majority of women business owners are small businesses operating in service industries and they continue to have challenges growing their receipts and accessing capital.
  • At the same time, three of the four tax expenditures we assessed that Congress targeted to help small businesses grow and access capital are so limited in design that they either (i) explicitly exclude service firms, and by extension, the majority of women-owned firms; or (ii) could effectively bypass women-owned firms who are not incorporated or who are service firms with few capital-intensive equipment investments altogether.

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July 7, 2018 in Tax, Think Tank Reports | Permalink | Comments (0)

Friday, July 6, 2018

Weekly SSRN Tax Article Review And Roundup: Stevenson Reviews Satterthwaite's Entrepreneurs’ Legal Status Choices And The C Corporation Survival Penalty

This week, Ariel Jurow Stevenson (NYU; moving to San Diego) reviews a new work by Emily Satterthwaite (Toronto), Entrepreneurs’ Legal Status Choices and the C Corporation Survival Penalty (2018).

StevensonThe persistent popularity of the C corporation among closely-held firms is a puzzle. C corporations combine an inflexible governance structure with unnecessary tax cost, imposing a double tax on owners and trapping losses within the entity. Despite these costs and the availability of flexible pass-through forms, the C corporation remains inexplicably common among new firms.

In her recent article, Emily Satterthwaite explores this puzzle by parsing panel data from the Kauffman Firm Survey, which administered in-depth questionnaires to several thousand new businesses from 2004-2011. Her article asks two primary questions. First, given potentially higher entity costs, what is the relationship between the C corporate form and firm survival rate? Second, what types of entrepreneurs choose to form C corporations in spite of their potentially higher costs? The Kauffman survey’s breadth allows Satterthwaite to control for owner demographics, industry, financing source, state fixed effects and other exogenous and endogenous variables that might bias the models’ conclusions. The result is a well-defined, rigorous, and cautious argument.

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July 6, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Outstanding Student Loan Debt Hits $1.5 Trillion, Women Hold Most Of It

American Association of University Women, Women’s Student Debt Crisis in the United States:

Right now about 44 million borrowers in the United States hold about [$1.5 trillion] in outstanding student loans. The scale of outstanding student loans and an increasing share of borrow­ers who fail to repay have made many Americans aware that student debt is a challenge for society and for individual borrowers. Yet despite the fact that women represented 56 percent of those enrolled in American colleges and universities in fall 2016, many people do not think of student debt as a women’s issue. This report reveals that women also take on larger student loans than do men. And because of the gender pay gap, they have less disposable income with which to repay their loans after graduation, requiring more time to pay back their student debt than do men. As a result, women hold nearly two-thirds of the outstanding student debt in the United States — almost $900 billion as of mid-2018.

Women 2

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July 6, 2018 in Legal Education | Permalink | Comments (5)

Thursday, July 5, 2018

Caveat IRS: Problems With Abandoning The Full Charitable Deduction Rule To Prevent State Circumvention Of The New $10k S&L Tax Cap

Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford), Daniel Hemel (Chicago), Darien Shanske (UC-Davis), Kirk Stark (UCLA), Dennis Ventry(UC-Davis) & Manoj Viswanathan (UC-Hastings), Caveat IRS: Problems with Abandoning the Full Deduction Rule, 88 State Tax Notes 547 (May 7, 2018):

Several states have passed — and many more are considering — new tax credits that would reduce tax liability based on donations made by a taxpayer in support of various state, local or non-profit programs. In general, taxpayer contributions to qualifying organizations — including public charities and private foundations, as well as federal, state, local, and tribal governments — are eligible for the federal charitable contribution deduction under section 170. In a previous article, we explained how current law supports the view that qualifying charitable contributions are deductible under section 170, even when the donor derives some federal or state tax benefit by making the donation. We referred to this treatment as the “full deduction rule.”

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July 5, 2018 in Scholarship, Tax | Permalink | Comments (2)

NY Times Op-Ed: Why Are Women (But Not Men) Ph.D.-Shamed?

JuliaNew York Times op-ed:  Women, Own Your ‘Dr.’ Titles, by Julia Baird:

It had never occurred to me to add “Ph.D.” to my name on Twitter until I was slammed for mentioning that I had one.

In February, I was tweeting about the media’s different treatment of the private lives of male and female politicians when someone snarled back: “And you have evidence of this or are you just being a bitter old sexist?”

“Yes, I have written a Ph.D. on the subject,” I replied. “So it’s Doctor Bitter Old Sexist, mate."

The response blew me backward. Not from those who got the joke, but from those who took offense at the fact that I said I had an advanced degree in history. ...

I was fascinated to discover that some viewed the degree not as a sign of expertise but as a provocation, a pretension. I was repeatedly told on social media that I was an elitist snob, that Ph.D.s were worthless and did not prove anything, that five years of research were simply my “opinion,” that no one cared, that doctorates were no sign of intelligence and that I should be ashamed of myself. I immediately changed my name on Twitter to “Dr. Julia Baird.”

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July 5, 2018 in Legal Education | Permalink | Comments (9)

Johnston: How To Make Trump’s Tax Returns Public

Trump Tax ReturnsNew York Times op-ed:  How to Make Trump’s Tax Returns Public, by David Cay Johnston:

On June 14, the New York State attorney general, Barbara Underwood, filed a civil complaint against President Trump and his three oldest children, accusing them of “persistently illegal conduct” in using the Donald J. Trump Foundation as “little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality."

Ms. Underwood believes there is abundant evidence to bring criminal charges against Mr. Trump as well. She made that position very clear in the letters she sent to the Internal Revenue Service and the Federal Election Commission in Washington recommending “further investigation and legal action." ...

A state or county criminal investigation that begins with abuse of the Donald J. Trump Foundation need not be limited to violations of charity and election law. It can also examine his personal and business tax filings and, in the process, lawfully put his tax returns in the public record.

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July 5, 2018 in Tax | Permalink | Comments (9)

Law Grads' Bar Exam Fears

With the approach of the bar exam in three weeks, several law grads have taken to Whisper to share their insecurities. Many are sad, depressing, and/or scary:

Whisper 9

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July 5, 2018 in Legal Education | Permalink | Comments (5)

Wednesday, July 4, 2018

A Feminist Critique Of Indiana Law School's Dean Photo

Following up on yesterday's light-hearted post on Indiana University Law School's photo of their Dean, Austin Parrish, in an Austin Powers pose:

IU

On Feminist Law Professors, Tax Prof Bridget Crawford (Pace) asks @IUMaurerLaw, Is This Dean Photo with “Sexy” and “Shag” Really a Good Idea?:

At first I thought, “Oh, looks like Dean Parrish is a guy who knows that marketing can be fun. Well done.”  But then I looked at the words in the background, including “Sexy” and “Cheeky Shag.”  In the #MeToo and #TimesUp era, does IU Maurer really want to promote its dean (and school) with words like “Sexy” and “Cheeky Shag”?

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July 4, 2018 in Legal Education | Permalink | Comments (19)

Wells: The 2017 Tax Act's Fascinating Change To The Tax Consequences Of Alimony

Wells (2018)Following up on yesterday's post, NY Times: For Wealthy Americans, There Will Never Be A Better Time To Get Divorced Due To New GOP Tax Law:  Tax Prof Blog op-ed:  The 2017 Tax Act's Fascinating Change to the Tax Consequences of Alimony, by Bret Wells (Houston):

The act repealed §61(a)(8) that included alimony as part of the enumerated listing of items of gross income, but the listing is not exhaustive. The flush language of §61(a) includes in gross income all income from whatever source derived.

So, under general principles, is alimony income from whatever source derived?

The legislative history cites Gould v. Gould and says that alimony is not taxable under general principles. But, that 1917 decision pre-dates the Supreme Court’s later and a more modern formulation of gross income as articulated in Glenshaw Glass. In addition, at a fundamental level, Gould v. Gould is inconsistent with United States v. Davis. If Davis announced "general principles" and is only supplanted to the extent of the subsequent statutory enactment of Section 1041, then does Davis impliedly negate Gould v. Gould?

In the end, I take it that alimony is not income because the legislative history to the 2017 Tax Act says so, but that seems to put a lot of emphasis on legislative history over statutory text that actually appears in the Code.

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July 4, 2018 | Permalink | Comments (1)

Small Class Size Closes Performance Gap For Women

Inside Higher Ed, Class Size Matters:

Do smaller classes help reduce performance gaps in science fields? Yes, according to a new study in BioScience [Do Small Classes in Higher Education Reduce Performance Gaps in STEM?]. Researchers looked at the impact of class size on undergraduates in 17 introductory biology courses at four different institutions: California State University Chico, Cornell University, the University of Puget Sound and the University of Minnesota in the Twin Cities. Analyzing exam scores, nonexam assessments and final course grades from 1,836 students, the researchers found that smaller class sizes effectively closed the performance gap for women. More specifically, they found that while women underperformed on high-stakes exams compared with their male counterparts as class size increased, women received higher scores than men on other kinds of assessments.

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July 4, 2018 in Legal Education | Permalink | Comments (0)

Tax Law, Employment Law, And Economic Incentives In The Gig Economy

Abi Adams, Judith Freedman & Jeremias Prassl (Oxford), Rethinking Legal Taxonomies for the Gig Economy: Tax Law, Employment Law, and Economic Incentives, 34 Oxford Rev. Econ. Pol'y 475 (2018):

Recent labour market changes, from an increase in the number of individuals running their own business to the fragmentation of traditional employment relationships into short-term, intermittent work for multiple engagers (“gigs”) have brought a host of challenges for regulators. The law struggles not least because long-established taxonomies used in tax and employment law are coming under increasing pressure. Legal regulation in these areas divides the labour market into a number of predetermined categories, to which benefits and obligations (rights and duties) are then attached. The tests determining into which category an individual falls are unclear and too easily manipulated. In particular, there is a real lack of clarity as to how categories in employment and tax law should map onto each other.

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July 4, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, July 3, 2018

Zucman: The World Cup Of Tax Evasion — If Ronaldo Can’t Beat Uruguay, The Least He Can Do Is Pay Taxes

New York Times op-ed:  If Ronaldo Can’t Beat Uruguay, the Least He Can Do Is Pay Taxes, by Gabriel Zucman (UC-Berkeley):

Ronaldo, who plays for Real Madrid, had acknowledged evading 14.7 million euros (about $17.1 million) in taxes between 2011 and 2014. That’s enough to pay for 800 full-time Spanish primary-school teachers for one year or to treat 1,000 patients with breast cancer.

And Ronaldo is far from an isolated case. In 2017, his archrival, Lionel Messi of Argentina — who plays for FC Barcelona — was given a 21-month prison sentence (which was changed to $2.5 million in fines) for the same crime.

In both cases, the Spanish authorities found the players guilty of dodging taxes on the income derived from their image rights. These rights — which they, like many other professional athletes, had transferred to shell companies in exotic tax havens — account for a large part of their income. For the top players on the planet, such rights can amount to many millions of dollars a year.

That some of the world’s most famous athletes could defraud tax authorities seems at first incomprehensible: They should know that their tax returns will be closely scrutinized, and being labeled tax evaders certainly does not enhance the value of their image or their popularity with fans.

But as the cases of Ronaldo, Messi and many wealthy individuals caught in recent leaks such as the Panama Papers and Paradise Papers illustrate, tax evasion is pervasive among the rich, deserving athletes or idle rentiers alike. Why? Not because they are evil people or impervious to the consequences of their actions, but because they are wooed by a global tax evasion industry. ...

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July 3, 2018 | Permalink | Comments (0)

ABA Moves To Dismiss Florida Coastal's Lawsuit Alleging Arbitrary Enforcement Of Accreditation Standards

Florida Coastal (2017)ABA Journal, Dismiss Florida Coastal Suit, ABA Says; Case Not 'Ripe' For Review:

The American Bar Association has filed a motion for summary judgment to dismiss the lawsuit brought by Florida Coastal School of Law, arguing that the accreditation dispute is not appropriate for federal court litigation.

On Sunday, the ABA filed a motion to dismiss with the U.S. District Court for the Middle District of Florida arguing that, because the ABA’s Council of the Section of Legal Education and Admissions to the Bar has yet to rule on Coastal’s appeal, the matter is not “ripe” for federal court. According to the motion to dismiss, the Council is expected to consider the appeal during its Aug. 2 meeting.

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July 3, 2018 in Legal Education | Permalink | Comments (0)

LeBron James' Move To The Lakers Could Cost Him $21 Million In Extra State Income Taxes

Forbes, LeBron James' Move To Lakers Could Cost Him $21 Million In Extra State Income Taxes:

The $154 million question is: How much is the move to LA really costing James? As with any tax question, the answer is simple: It depends. On a lot of factors.

About the only fact we know is that his salary this season will be $35.7 million. The rest is fuzzy. Will he become a California resident? He owns a house out there, so it seems to make sense that he would be a resident after he signs his four-year deal. Not so fast — California has some of the most liberal residency laws in the country. Rather than focusing on days spent in the state, California focuses more on domicile and the temporary/permanent nature of one’s stay there. ...

Should he become a California tax resident, this move will cost him $5.2 million this year on salary and endorsement income, not to mention higher taxes on investment income. This would end up being over $21 million in additional state income taxes over the life of the contract.

The Hill, Nunes to LeBron: Brace yourself for California's Taxes

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July 3, 2018 in Celebrity Tax Lore, Tax | Permalink | Comments (6)

Best Law School Dean Photo, Ever: Indiana's Austen Parrish

NY Times: For Wealthy Americans, There Will Never Be A Better Time To Get Divorced Due To New GOP Tax Law

New York Times, ‘Hurry Up and Get a Divorce’? For the Rich, There’s an Incentive:

For the wealthiest Americans, there may never be a better time to get divorced.

A change in the new Republican tax law will eliminate a tax break for alimony payments that are finalized after Dec. 31, prompting financial planners and lawyers to warn wealthy clients that if they have been contemplating filing for divorce, they better act fast.

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July 3, 2018 in Tax | Permalink | Comments (4)

Curricular Changes In Legal Research Instruction: An Empirical Study

Caroline Osborne (Washington & Lee) & Stephanie Miller (Washington & Lee), Curricular Changes in Legal Research Instruction: An Empirical Study:

This article examines components of curricular design of a legal research class as impacting student performance. Expertise of instructor and use of the inverted, or flipped, classroom are specifically explored. Eight years of exam performance on an oral legal research midterm is used to measure student performance and success of various components of curricular design.

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July 3, 2018 in Scholarship, Tax | Permalink | Comments (0)

The IRS Can Save American Health Care

Wall Street Journal op-ed:  The IRS Can Save American Health Care, by Regina Herzlinger (Harvard Business School) & Joel Klein (Oscar Health):

Health care is fast becoming an unsustainable expense for American families. ... Health care in the U.S. suffers symptoms of what Justice Louis Brandeis once termed the problem of “Other People’s Money.” ... Employer-based coverage subtly drives up health-care costs by enhancing the bargaining power of medical providers. ...

The solution is simple: The Internal Revenue Service should give all workers the chance to purchase health insurance with pretax dollars—just as employers do—using Health Reimbursement Arrangements. Companies would give employees a fixed amount of money in these HRAs to go out and buy the best plans for their families on the ObamaCare exchanges. The plans there would be subject to the Affordable Care Act’s requirements on essential health benefits and cost-sharing limits. Employees could use this tax-free money only for the purchase of health insurance, but would pocket any leftover savings as taxable income.

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July 3, 2018 in Tax | Permalink | Comments (1)

A New Approach For Hiring Entry-Level Lawyers: Project Work

Lawyer Exchange, A New Approach for Hiring Entry-Level Lawyers:

While the legal profession remains in a state of change in today’s market, the ways that entry-level lawyers are hired has not really changed – until now! Traditionally, on the candidate side of the hiring process, law students primarily rely on working as either a summer associate or law clerk in hopes of being hired later as an associate, while entry-level lawyers seeking employment search job boards. On the employer side of entry-level lawyer hiring, some firms hire summer associates or law clerks in hopes of them becoming associates, some firms wait until post-law school to hire, and some firms don’t hire entry-level associates at all. The approaches to entry-level lawyer hiring vary and some reasons exist for the variation (i.e. firm size, practice areas, etc.). However, a new approach for hiring entry-level lawyers is needed – one that would benefit many firms and the lawyers they hire....

The new approach for hiring entry-level lawyers is to incorporate project work as part of the hiring process. Project work is a great way to identify candidates for a lawyer position. By incorporating project work into the hiring process, hiring becomes an active, real-time process that truly reflects the position needing to be filled, as lawyers and firms have opportunities to actually work together like they would after hiring. By incorporating project work as part of the hiring process, firms can benefit from the competitive advantages inherent in hiring methods like summer associate programs.

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July 3, 2018 in Legal Education | Permalink | Comments (1)

Monday, July 2, 2018

 Cryptocurrency And The Shifting IRS Enforcement Model

Dashiell C. Shapiro (Wood LLP, San Francisco), Cryptocurrency and the Shifting IRS Enforcement Model, 1 Stan. Blockchain L. & Pol'y ___ (2018):

This Article reviews the IRS’s previous enforcement models, and considers how these have shifted in recent decades. The IRS has increasingly moved away from a purely punitive system towards one that focuses on customer service, the theory being that a procedurally fair system will increase taxpayer satisfaction and voluntary compliance. Given the IRS’s steady shift to a more holistic tax enforcement approach, the Author believes that the IRS is likely to take a broad-based approach to cryptocurrency tax enforcement.

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July 2, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Impact Of International Tax Reform On Ireland

Figure 1IMF, The Impact of International Tax Reform on Ireland, in Ireland: Selected Issues 18-44 (June 2018):

1.  Over the last two decades, the Irish stock of inbound foreign direct investment (FDI) has risen dramatically from roughly 60 percent of GDP to 275 percent (Figure 1). Several features of Ireland’s economy, including a skilled, English-speaking workforce, membership in the European Union (EU), and a probusiness institutional environment, help attract investment. In addition, Ireland’s relatively low and stable corporate income tax (CIT) rate on active trading income has played a key role in attracting foreign capital.

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July 2, 2018 in Scholarship, Tax | Permalink | Comments (0)

Self-Plagiarism (And The First And Second Laws Of Textual Physics)

June is my intense writing month, by and large, and I just finished up a draft that I described here.

If you are like me, and have been at this for a while, you probably have developed a theme that pervades your work. Mine has to do with how people, and lawyers especially, make tough judgments in the face of uncertainty. Not tough judgments (although they may be) in adjudication, but what to do when your nicely developed lawyerly rationality can give you five good reasons for doing A and five equally good reasons for not doing A. A perfect example was Meryl Streep as Katharine Graham deciding whether to publish the Pentagon Papers (I rented The Post last night), you either take the leap or you don't.  Not to decide is to decide.

Sometimes a sentence or a paragraph or a long footnote from a previous piece seems like it fits in the new one. It's so easy to copy and paste and - voila! - you've written 200 words - a nice chunk of the day's quota. At least at some point in the drafting of Persistence, I did that. Is it okay?  (Spoiler alert: as far as I know I made it okay under even the most stringent standards.) Thoughts on self-plagiarism follow the break.

 

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July 2, 2018 in Jeff Lipshaw, Legal Education, Scholarship | Permalink | Comments (3)

New Corporate Tax Goal: Beat The BEAT

BEATWall Street Journal, New Corporate Tax Goal: Beat the BEAT:

Multinational companies are trying to beat a new tax called the BEAT.

The BEAT is the Base Erosion and Anti-Abuse Tax, a complex minimum tax meant to prevent the world’s biggest corporations from shifting profits from the U.S. to other countries. Turned from idea into law last year as part of the tax-code revamp, the BEAT is now frustrating corporate executives and spurring fresh tax-avoidance strategies.

Western Union, Accenture and Conduent, among others, have told investors that they could be hit by the tax, which penalizes corporations for large cross-border payments made to related foreign affiliates.

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July 2, 2018 in Tax | Permalink | Comments (0)

Malcolm Gladwell: 'SSRN Is The Greatest Website On The Internet — Page Six For Dorks'

SSRN Logo (2018)Malcolm Gladwell's 12 Rules For Life (beginning at 11:55):

SSRN:  in my opinion, the greatest website on the Internet. ... [In a prior episode,] I talked about my love of law review articles. Well, where do you think I read law review articles? Not in law reviews — are you kidding? Why would I wait two years for some dusty publications to put something out? I read them on SSRN because that's where everyone posts their articles the minute they finish. In Manhattan, for years the most important source of gossip was Page Six of the New York Post. SSRN is Page Six for dorks.

Gladwell made these observations in connection with the paper, Pulling the Goalie: Hockey and Investment Implications:

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July 2, 2018 in Legal Education | Permalink | Comments (1)

Lesson From The Tax Court: The One Return Rule

Tax Court (2017)Sometimes I get irritated. When I do I speak in short sentences. Really short. So when I read Judge Buch’s opinion in the recent case of Gary Gaskin and Jessie Gaskin v. Commissioner, T.C. Memo. 2018-89 (June 20, 2018), I was struck by his frequent use of short sentences. Really short. Kinda like he was really irritated. And why wouldn’t he be? Mr. Gaskin had filed admittedly fraudulent tax returns but now wanted to contest the fraud penalties! Mr. Gaskin thought he should escape fraud penalties because he had later filed amended returns that had, in his view, cured the fraud.  Judge Buch's opinion teaches an important lesson we should all learn. I call it the “one return rule.” It’s a short lesson. You will find it below the fold.

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July 2, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (2)

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July 2, 2018 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Muller: Federal Judicial Clerkship Report Of Recent Law School Graduates

Derek Muller (Pepperdine), Federal Judicial Clerkship Report of Recent Law School Graduates, 2018 Edition:

This Report offers an analysis of the overall hiring of recent law school graduates into federal judicial clerkships between 2015-2017 for each law school. It includes an overall hiring report, regional reports, overall hiring trends, an elite hiring report, and trends concerning judicial vacancies.

Here are the ten law schools with federal judicial clerkship rates of over 10%:

Top 10

Pepperdine is 5th among the 21 ABA-accredited California law schools:

California

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July 2, 2018 in Legal Education, Scholarship | Permalink | Comments (8)

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July 2, 2018 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 1, 2018

Merritt: The Strange Case Of The Case Method

Deborah J. Merritt (Ohio State), The Strange Case of the Case Method:

The case method is legal education’s signature pedagogy. Law professors point to the method with pride, and that pride has considerable foundation. In theory, the case method accomplishes at least five pedagogic goals:

  1. It demonstrates that law is not static; law evolves through judicial interpretation. On some topics, students also see how the law evolves through legislation and administrative regulations.
  2. It teaches students how to read and synthesize judicial interpretations. Depending on the subject, students also learn how to read statutes and harmonize them with judicial opinions.
  3. It prepares students to advocate for changes in the law–primarily in the courts, but with some approaches that can be used with legislators and other decision-makers.
  4. It develops critical thinking skills (careful reading, analogical reasoning, identification of patterns and distinctions) that are transferable to many other contexts.
  5. It instructs students on the doctrinal principles discussed in the cases and accompanying statutes.

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July 1, 2018 in Legal Education | Permalink | Comments (0)