TaxProf Blog

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

Friday, March 2, 2018

President Trump To Name Michael Desmond IRS Chief Counsel

DesmondBNA is reporting that President Trump plans to appoint Michael J. Desmond IRS Chief Counsel and Treasury Department Assistant General Counsel:

After serving as a law clerk for a Federal judge in Los Angeles, Mike began his career in tax controversy as a Trial Attorney with the Attorney General’s Honors Program at the Tax Division of the U.S. Department of Justice. After the Justice Department, Mike worked at a boutique tax firm in Washington, D.C., where he was elected partner in 2004. In this capacity he represented clients ranging from Fortune 100 companies to partnerships and individuals. Mike returned to government in 2005, serving as Tax Legislative Counsel in the U.S. Department of Treasury through 2008. As Tax Legislative Counsel, Mike was the Department’s senior legal advisor on domestic tax issues, testifying before Congress and working with senior IRS officials including the IRS Commissioner and Chief Counsel on a broad range of tax policy, legislative and regulatory matters. Following his tenure at the Treasury Department, Mike spent several more years as a partner in a global law firm [Bingham McCutchen] before starting his own practice in January 2012.

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March 2, 2018 in IRS News, Tax | Permalink | Comments (0)

Olson Presents The State Of The IRS Today At Minnesota

Olson (2018)Nina Olson (National Taxpayer Advocate) presents The State of the IRS at Minnesota today as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

Drawing from her 2017 Annual Report to Congress, Ms. Olson will talk about problems facing the IRS and the implications for tax compliance and enforcement, including:

  • IRS funding and personnel cuts
  • Declining audit rates
  • Flawed implementation of congressional mandates requiring the use of private debt collectors and the denial of passports to certain U.S. citizens with substantial tax debts

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March 2, 2018 in Colloquia, IRS News, Tax | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

NY Times: Spreadsheets at Dawn — The New Tax Battle Is All About Data

New York Times, Spreadsheets at Dawn: The New Tax Battle Is All About Data:

The new Republican tax cut is providing a powerful weapon for the law’s supporters and detractors, as well as investors and analysts, who are mining data on how companies are spending their windfalls in a battle to sway the behavior of voters and executives alike.

In the two months since President Trump signed the $1.5 trillion tax bill into law, a vast arsenal of spreadsheets has begun to capture, in real time, the effect of the tax cut as it works its way through corporate balance sheets. Traders are compiling data to find value in a volatile stock market. Advocates of corporate responsibility are hoping to shame companies into passing more of their savings on to employees or charities. Partisans are using it to sway public opinion.

None of the data, as of yet, yield anywhere close to a full picture of how the tax cuts are flowing through corporate boardrooms and into the American economy. But that has not stopped politicians and organizations from using it to advance their goals.

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March 2, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

University Of Minnesota Study: Enhanced Individualized Feedback In One Core 1L Class Improves Student Performance In Other Classes

Minnesota LogoDaniel Schwarcz (Minnesota) & Dion Farganis (J.D. 2017, Minnesota), The Impact of Individualized Feedback on Law Student Performance, 67 J. Legal Educ. 139 (2017):

For well over a century, first-year law students have typically not received any individualized feedback in their core "doctrinal" classes other than their final exam grades. Although this pedagogical model has long been assailed by critics, remarkably limited empirical evidence exists regarding the extent to which enhanced feedback improves law students' outcomes. This Article helps fill this gap by focusing on a natural experiment at the University of Minnesota Law School.

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March 2, 2018 in Legal Education, Scholarship, Teaching | Permalink | Comments (2)

NY Times, WSJ: Who Wins From The Corporate Tax Cuts?

WSJWall Street Journal, Boom in Share Buybacks Renews Question of Who Wins From Tax Cuts:

U.S. companies are buying back their shares at an aggressive pace, stirring debates in Washington and on Wall Street about how savings from corporate tax cuts are being used and who benefits most.

Share buybacks announced by large U.S. companies have exceeded $200 billion in the past three months, more than double the prior year, according to a Wall Street Journal analysis of data for S&P 500 companies. Among the biggest: Cisco at $25 billion, Wells Fargo at about $21 billion, PepsiCo at $15 billion, AbbVie and Amgen at $10 billion apiece, and Alphabet Inc. at $8.6 billion.

Announced buybacks surged in December as lawmakers in Washington finished writing a bill to cut U.S. taxes by $1.5 trillion over a decade, and continued at a robust pace in January and February. ...

The early moves are spurring a political debate about whether the tax cut is working; the full answer won’t be fully understood for months or years as the new money moves through the economy. ...

House Minority Leader Nancy Pelosi (D., Calif.) has labeled bonuses “crumbs” compared with the size of the corporate tax cuts.

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March 2, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Hamilton At Pepperdine

Hamilton Lecture Photo

It was my pleasure to speak with Pepperdine alum ('90) Charles Eskridge (Quinn Emanuel, Houston) to students, staff, and faculty about each of the 46 songs in Hamilton.  We divided the workload as follows:  Charles covered 45 songs, I covered one song — can you guess which one?

For more on my obsession with interest in Hamilton, see here and:

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

Thursday, March 1, 2018

Gamage Presents Tax Reform To Help The Working And Middle Class Today At Illinois

Gamage (2019)David Gamage (Indiana) presents Tax Reform to Help the Working and Middle Class at Illinois today as part of its Faculty Workshop Series:

This project argues that future tax reform ought to be designed so as to provide much greater tax benefits for those in the working and middle class, both as compared to the law prior to the recent 2017 tax legislation and (especially) as compared to the new law after that recent legislation. This project will develop this argument both at the level of “why” and at the level of “how”. In doing so, this article will evaluate both policy and political feasibility. However, political feasibility will not be evaluated based on the current President or Congress. Instead, the political feasibility dimension will be evaluated primarily in terms of what might feasibly be campaigned on by candidates in upcoming election cycles and then later enacted if a new President and Congress—with different priorities—takes office in 2020 or in a subsequent election cycle.

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March 1, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Ring Presents Silos And First Movers In The Sharing Economy Tax Debates Today At Indiana

Ring (2017)Diane Ring (Boston College) presents Silos And First Movers In The Sharing Economy Debates at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Over the past few years, a significant global debate has developed over the classification of workers in the sharing economy either as independent contractors or as employees. While Uber and Lyft have dominated the spotlight lately, the worker classification debates extend beyond ridesharing companies and affect workers across a variety of sectors. Classification of a worker as an employee, rather than an independent contractor, can carry a range of implications for worker treatment and protections under labor law, anti-discrimination law, tort law, and tax law, depending on the legal jurisdiction. The debates, at least in the United States, have been incomplete due to the failure of policy makers and advocates to consider the scope and interconnectedness of the worker classification issues across the full sweep of legal arenas. There is time, however, to remedy the incompleteness of these policy conversations before worker classification decisions ossify and path dependence takes hold.

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March 1, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Dyreng Presents Tax Avoidance And Tax Incidence Today At Duke

DyrengScott Dyreng (Duke) Tax Avoidance and Tax Incidence (with Martin Jacob (WHU–Otto Beisheim School of Managemen), Xu Jiang (Duke) & Maximilian A. Müller (WHU–Otto Beisheim School of Managemen)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

We examine corporate tax avoidance in a setting where shareholders might not bear the entire economic burden of the corporate tax because the firm’s market power allows it to pass the burden to workers or consumers. Depending on the model conditions, tax avoidance increases or decreases in market power. Using empirical analyses, we find that high market power firms avoid less tax than low market power firms. We also find empirical support for the model conditions underlying this result.

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March 1, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Knoll Presents What Is Tax Discrimination And How Can It Be Prevented? Today At UCLA

KnollMichael Knoll (Pennsylvania) presents What Is Tax Discrimination and How Can It Be Prevented? A Simple Solution to a Complex Problem (with Ruth Mason (Virginia)) at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

Numerous tax discrimination cases are working their way through the judicial systems of the European Union and the United States. Prior cases, which have forced many states to change long-standing tax policies, have attracted intense criticism from commentators and even jurists for being unprincipled and illogical. In a series of articles we have written over the last several years, we have developed a straight-forward approach to tax discrimination that courts can use to resolve tax discrimination claims and that states can use to design and implement tax systems that raise revenue without discriminating.

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March 1, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

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March 1, 2018 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Should Law Schools Shift Scholarship Money From Merit (LSAT & UGPA Medians) To Need?

Deborah Jones Merritt (Ohio State) & Andrew Merritt, Agreements to Improve Student Aid: An Antitrust Perspective, 67 J. Legal Educ. 17 (2017):

Law schools tie much of their scholarship money to LSAT scores and undergraduate grades. By awarding substantial discounts to students with above-median indicators, schools attempt to climb the U.S. News ranking ladder. This practice, as many educators recognize, reduces access to legal education for low-income and minority students. As a result, many schools would like to shift at least some of their scholarship funds to need-based awards. Schools, however, struggle to make that change unilaterally; they worry about losing ground in the rankings race.

Could law schools act collectively to reform their scholarship practices? Could the ABA reshape those practices by adopting an accreditation standard that limits the award of “merit” based aid?

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March 1, 2018 | Permalink | Comments (3)

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March 1, 2018 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Dagan: International Tax Policy — Between Competition And Cooperation

International TaxTsilly Dagan (Bar-Ilan University, Israel), International Tax Policy: Between Competition and Cooperation (Cambridge University Press 2017):

Bringing a unique voice to international taxation, this book argues against the conventional support of multilateral co-operation in favour of structured competition as a way to promote both justice and efficiency in international tax policy. Tsilly Dagan analyses international taxation as a decentralised market, where governments have increasingly become strategic actors. While many of the challenges of the current international tax regime derive from this decentralised competitive structure, Dagan argues that curtailing competition through centralisation is not necessarily the answer. Conversely, competition—if properly calibrated and notwithstanding its dubious reputation—is conducive, rather than detrimental, to both efficiency and global justice. International Tax Policy begins with the basic normative goals of income taxation, explaining how competition transforms them and analysing the strategic game states play on the bilateral and multilateral level. It then considers the costs and benefits of co-operation and competition in terms of efficiency and justice.

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March 1, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Anxiety Psychoeducation For Law Students: A Pilot Program At Stanford & Yale

Stanford YaleIan Ayres (Yale), Joseph Bankman (Stanford), Barbara Fried (Stanford) & Kristine Luce (Stanford), Anxiety Psychoeducation for Law Students: A Pilot Program, 67 J. Legal Educ. 118 (2017):

Many law students experience anxiety, which can impair academic performance and reduce quality of life. The authors developed a brief psychoeducation program designed to help law students cope with anxiety. The program was based on the cognitive behavioral model of anxiety and was offered to first-year students at Stanford and Yale Law School. Class attendance was voluntary and consisted of two one- to two-hour meetings. Student response was measured by anonymous online surveys. Virtually all the students thought the material was worthwhile and should be taught as a part of the curriculum. Students reported using many of the techniques described to reduce anxiety, and many students reported a decline in anxiety. Student comments were almost uniformly positive.

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

Hasen: Rules, Standards And Detection

David Hasen (Florida), Rules, Standards and Detection:

Regulators can adjust penalties to compensate for incomplete monitoring of rule-governed regulated parties, but these adjustments often are unavailable when regulated parties are subject to legal standards. Incomplete monitoring consequently invites greater noncompliance under standards than under rules. A similar logic may apply to the use of complicated rules instead of simple ones.

This paper develops a model that clarifies some of the specific tradeoffs that regulators face in designing standards regimes under incomplete monitoring.

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March 1, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, February 28, 2018

Prichard Presents China, International Taxation And The Global System Today at Toronto

MunkWilson Prichard (Toronto) presents China, International Taxation and the Global System (with Martin Hearson (London School of Economics)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

There has been mounting interest in China’s role in shaping global economic governance, but conclusions have been guided by a small set of empirical cases. We offer an analysis of Chinese engagement with the reform of international tax rules, in order to shed light on the broader factors shaping Chinese global governance strategies. We argue that China has pursued a dual track strategy: it has adopted a cooperative and moderately reformist position at the OECD, but has pushed a potentially more radical agenda at the UN, and through domestic policy positions that quietly – but substantially — challenge OECD conventions. In doing so if has rhetorically signalled a desire to represent broader developing country interests, yet in practice appears guided primarily by narrower national interests, which often — but not always — overlap with those of developing countries more broadly.

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February 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

McMahon Presents Tax As Part Of A Broken Budget Process Today At Indiana

McMahonStephanie McMahon (Cincinnati) presents Tax as Part of a Broken Budget: Good Taxes are Good Cause Enough at Indiana today as part of its Faculty Workshop Series:

The federal budget is a myth.  Despite being a myth, Congress uses the budget to limit its choices by linking its revenue-raising and spending powers and to threaten itself and the public with the federal debt ceiling.  Through its self-imposed limits, Congress puts tremendous pressure on how it defines its budget.  The budget process generally assumes its tax provisions will raise revenue when the law becomes effective.  However, many tax provisions are not self-executing.  The Treasury Department and the IRS as a bureau of the department must create guidance to operationalize the Internal Revenue Code.  Consequently, limiting the production of tax guidance that implements tax statutes is problematic because their projected revenue is used to balance the budget.Nevertheless, guidance is under attack on the grounds that its issuance fails to comply with the Administrative Procedure Act (APA). 

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February 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Tyranny Of Metrics

MetricsFollowing up on my previous post, The Tyranny Of Metrics: 'Not Everything That Is Important Is Measurable, And Much That Is Measurable Is Unimportant':  Inside Higher Ed, 'The Tyranny of Metrics':

These days colleges boast about their admissions rankings, their graduation rates, their faculties’ achievements and much more. Many say that the statistics are a tool to promote accountability and improvement.

Jerry Z. Muller disagrees. His new book, The Tyranny of Metrics (Princeton University Press 2018), critiques not only higher education but many parts of society that rely on metrics.

"Gaming the metrics occurs in every realm: in policing, in primary, secondary and higher education; in medicine, in nonprofit organizations; and, of course, in business," Muller writes. "And gaming is only one class of problems that inevitably arise when using performance metrics as the basis of reward and sanction. There are things that can be measured. There are things that are worth measuring. But what can be measured is not always what is worth measuring; what gets measured may have no relationship to what we really want to know."

Q: Some colleges, government agencies and businesses promote tools to evaluate faculty productivity -- number of papers written, number of citations, etc. What do you make of this use of metrics?

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February 28, 2018 in Book Club, Legal Education | Permalink | Comments (1)

Aprill: Tax Status of Public Universities

Ellen P. Aprill (Loyola-L.A.), Tax Status of Public Universities, 154 Tax Notes 539 (Jan. 22, 2018):

New section 4960 imposes a 20% excise tax on certain organizations not subject to income tax if any their five highest paid employees have annual compensation above $1 million. (It also imposes the tax on “excess parachute payments,” as defined in the statute.) In December, 2017, I wrote a blog post arguing that, whatever the Congressional intent, the language of the statute did not reach states and their political subdivisions or their integral parts. The blog post emphasized state universities, although the reasoning applied to other governmental entities as well. Professor Douglas Kahn of University of Michigan took issue with my position on the basis that the new section does apply to section 501(c)(3) organizations. This piece is my response to him.

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February 28, 2018 in Scholarship, Tax | Permalink | Comments (1)

Median Private Law School Tuition Discount: 28% (Average Scholarship: $20,129)

Which Schools Are Discounting Tuition the Most?, Nat'l Jurist, Vol. 27, p. 13, Winter 2018:

The National Jurist analyzed ABA grant and scholarship data, using the number of scholarships per school, the percentage of students receiving scholarships and the scholarship amount at the 25th, 50th and 75th percentiles to estimate an average grant amount. With an average, it then determined the average tuition discount per school.

The median private law school discounted tuition by 28.3 percent, with an average scholarship of $20,129. That was up from 25.4 percent from two years earlier and significantly higher than 2010, when it was an estimated 16 percent.

Here are the 20 private law schools with the highest tuition discounts:

NJ Top 20

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February 28, 2018 in Law School Rankings, Legal Education | Permalink | Comments (2)

NY Times: Trump’s Tax Cuts In Hand, Companies Spend More On Themselves Than On Wages

New York Times, Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages:

President Trump promised that his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.

Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares.

Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.

But the purchases can come at the expense of investments in things like hiring, research and development and building new plants — the sort of investments that directly help the overall economy. The buybacks are also most likely to worsen economic inequality because the benefits of stocks purchases flow disproportionately to the richest Americans. ...

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February 28, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

Buchanan: Law Schools Need Faculty To Both Teach And Write In All Major Fields

Neil Buchanan (George Washington), Do Law Faculties Need to Cover the Range of Fields in Scholarship or Only in Teaching?:

[T]he decline in potential students’ interest in attending law school inevitably led to a marked decline in law faculty hiring. ... I am interested in the question of whether law schools should commit themselves to maintaining a faculty whose scholarship covers the full range of intellectual areas that are typically part of the law school curriculum.

This question can be applied to any area of law: Does it matter whether a law school has no one on its faculty who writes about criminal law? Or human rights law? Or legal history? Answering that question is surprisingly challenging.

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February 28, 2018 in Legal Education | Permalink | Comments (1)

2017 IFA International Tax Student Writing Award; Call For Entrants In 2018 Competition

IFA Logo (2015)The winner of the International Fiscal Association's 2017 International Tax Student Writing Competition is David Maranjan (Virgina), What’s in a Name? XILINX, ALTERA, and Why Using “Arm’s Length” as a Catchall is Causing Problems for Treasury,  47 BNA Tax Mgmt. Int'l J. ___ (2018)
Faculty Sponsor:  Ruth Mason

2018 IFA International Tax Student Writing Competition:
Subject: Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.
Open to: All students during the 2017-18 academic year pursuing a graduate degree. Any appropriate papers written in fall 2017 or spring and summer 2018.
Submission Deadline:  September 30, 2018.
Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in Feb 2019.

Here are the recent winners:

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February 28, 2018 in Scholarship, Tax, Teaching | Permalink | Comments (0)

Tuesday, February 27, 2018

Goldin Presents Complexity And Take-Up Of The Earned Income Tax Credit Today At NYU

Goldin (2017)Jacob Goldin (Stanford) presents Tax Benefit Complexity and Take-Up of the Earned Income Tax Credit at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Tax benefits like the Earned Income Tax Credit (EITC) represent an important source of income to their recipients, but millions of those who are eligible to claim tax benefits fail to do so. One possible explanation is that the rules governing most tax benefits are extraordinarily complex. I consider efforts to increase tax benefit take-up in light of this complexity. A key fact in thinking about this issue is that the vast majority of tax filers today prepare their taxes with assisted preparation methods (APMs) like software or professional assistance. Because APMs eliminate most of the barriers to claiming tax benefits for which one is eligible, I ague that efforts to increase benefit take-up should focus on inducing benefit-eligible individuals to file a tax return using an APM. In contrast, efforts aimed at increasing awareness of a benefit (of the type widely employed by governments and nonprofits) are less likely to be successful, except to the extent they themselves induce an increase in tax filing.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Mathur Presents The Elasticity Of Taxable Income Today At Georgetown

Mathur (2018)Aparna Mathur (American Enterprise Institute), The Elasticity of Taxable Income in the Presence of Intertemporal Income Shifting (with Aspen Gorry (Clemson Business School) & R. Glenn Hubbard (Dean, Columbia Business School)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

Knowing the elasticity of taxable income (ETI) is crucial for understanding the effects of taxation on taxpayer behavior and consequently on tax revenues. Previous research has found that high-income individuals are most sensitive to tax policy changes. However, these individuals have more opportunity to defer income to future tax bases by altering the composition of their compensation. This paper considers the taxable income elasticity when individuals can shift income across tax bases and thereby defer taxation. We decompose the elasticity of taxable income into a real response as well as an income shifting response. We measure the tax rate on deferred income by the expected tax gain from deferring income using stock options as developed by Hall and Liebman (2000). Our results demonstrate that income shifting is an important component of previous estimates of the ETI. Because shifted income is taxed at future dates, this income shifting decreases the welfare loss from personal income taxation associated with previous estimates.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mason Presents Why State Aid Needs Discrimination At Houston

Mason (2016)Ruth Mason (Virginia) presented Why State Aid Needs Discrimination at Houston yesterday as part of its Distinguished Speaker Series:

In August 2016, the European Union’s (EU) Commission dropped a bombshell: it would require Ireland to collect more than $14.5 billion in back taxes from Apple under anti-subsidy rules that most American tax lawyers had never even heard of—the state-aid rules. Suspicions that certain EU Member States colluded with large multinationals to help them evade other states taxes suggests the need for a supra-national authority that could curb harmful state tax practices.

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February 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Borden: Choice-Of-Entity Decisions Under The New Tax Act

Bradley T. Borden (Brooklyn), Choice-of-Entity Decisions Under the New Tax Act:

This short article illustrates how the 2017 Tax Cuts and Jobs Act taxes $500,000 of ordinary income depending upon whether it is earned by a corporation, a passthrough as qualified business income (QBI), or a passthrough as income from a specified service trade or business (SSTB). The article shows that the effective tax rate on QBI, which qualifies for the 20% QBI deduction, will rival the effective tax rate on income earned and distributed by a corporation. Tax on income from an SSBT will be higher than the same income from a QBI, but, if the owner of the SSBT plans to withdraw most of the earnings from the SSTB, a passthrough entity will often provide a lower effective tax rate than a corporation. The choice between passthrough entity and corporation will be affected by the amount of income that the owner withdraws from the business and the amount of income the business generates. Lower-income SSTBs may qualify for the QBI deduction, reducing the effective tax rate on passthrough income, and enhancing the attractiveness of the passthrough entity. Conversely, the effective tax rate on passthrough income increases as business income moves into the millions of dollars, triggering the application of the highest marginal rates. The choice-of-entity preference for businesses with that level of income may move toward corporations, especially if the owners do not withdraw all of the business’s income.

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February 27, 2018 in Scholarship, Tax | Permalink | Comments (1)

2019 U.S. News Law School Rankings

US NewsRobert Morse (Chief Data Strategist, U.S. News & World Report) announced today that the new 2019 law school rankings will be released on Tuesday, March 20. Here is my coverage of the current 2018 law school rankings:

February 27, 2018 in Law School Rankings, Legal Education | Permalink | Comments (0)

NY Times: Well-Heeled Investors Reap The Republican Tax Cut Bonanza

New York Times editorial, Well-Heeled Investors Reap the Republican Tax Cut Bonanza:

After President Trump signed the Republican tax cut into law, companies put out cheery announcements that they were giving workers bonuses because of their expected windfalls from the tax reductions. The president and Republican lawmakers quickly held up these news releases as vindication for their argument that cutting the top federal corporate tax rate to 21 percent, from 35 percent, would boost workers’ incomes even as it added $1.5 trillion to the debt that future generations would have to pay off.

Now corporate announcements and analyst reports confirm what honest observers always said — this claim is pure fantasy. As executives tell investors what they intend to do with their tax savings and their spending plans are tabulated into neat charts and graphs, the reports jibe with what most experts said would happen: Companies are rewarding their stockholders.

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February 27, 2018 in Tax | Permalink | Comments (2)

Net Tuition Trends By LSAT Category, 2010-2014: Net Tuition Rose In Highest (165+) And Lowest (<145) Bands, Fell In Middle (145-164) Bands

Jerry Organ (St. Thomas), Net Tuition Trends by LSAT Category from 2010 to 2014 with Thoughts on Variable Return on Investment , 67 J. Legal Educ. 51 (2017):

The “macro” discussion of legal education highlights that law school is expensive. This general point fails to highlight the extent to which differences exist at a “micro” level due both to geography and LSAT profile. First, some regions of the country are more expensive than others. Second, where one is on the LSAT distribution profile influences the average net tuition because of scholarship patterns associated with institutional efforts to preserve or improve ranking. As a result, law school is not equally expensive across the entire LSAT distribution.

This article begins in Section I by briefly summarizing the geographic differences in tuition, which are not insignificant. Then, in Section II, this article briefly describes a dynamic net tuition model I developed for calculating net tuition trends by LSAT category and describes the results of that dynamic net tuition model. The results demonstrate that the variability of average net tuition by LSAT category increased significantly between 2010 and 2014 after accounting for inflation, with two LSAT categories seeing increases of 9.1% and 11.9% and four seeing decreases ranging from 2.8% to 13%. Section III looks at various outcome measures—specifically, bar passage rates, “bad news” employment outcomes, and imputed average first-year income—and demonstrates that, on average, the short-term return on investment varies significantly depending upon where someone is in the LSAT distribution. Section IV concludes with some thoughts on what this might mean for prospective law students and for law schools.

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February 27, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

WSJ Op-Ed: The Story Behind The IRS’s Exemption From Regulatory Oversight,

Wall Street Journal op-ed:  The Story Behind the IRS’s Exemption From Oversight, by Susan E. Dudley & Sally Katzen:

Americans may differ on whether we have too much or too little regulation, but we should all agree that regulations should be transparent, accountable and based on a reasoned analysis that they are necessary and appropriate. The Treasury Department, especially the Internal Revenue Service, appears to have fallen short of these expectations, by expanding a narrow exemption to evade the good-government requirements that generally apply to federal regulators. As a result, Treasury risks imposing high-impact regulations that are neither accountable nor transparent.

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February 27, 2018 in Tax | Permalink | Comments (0)

Monday, February 26, 2018

Glogower Presents Taxing Inequality Today At BYU

Glogower (2016)Ari Glogower (Ohio State) presents Taxing Inequality at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The argument proceeds in three main parts. The Article first interrogates the justifications in the literature for a wealth tax and introduces a new justification grounded in the relative economic power theory which explains how inequality generates social and political harm. This theory formalizes the problem of inequality and has specific implications for the way that economic inequality should be measured and constrained. In particular, this theory implies that economic inequality should be measured by differences in economic spending power during the taxing period.

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February 26, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Amidst Declining 1L Enrollments, Competition For Transfer Students Heats Up

Crain's Cleveland Business, Law Schools Get Creative With Their Pitches:

The competition for top undergrads among U.S. law schools is so intense that administrators at Case Western Reserve University School of Law are trying to recruit first-year law students at other universities.

It's a new tactic for Case this year — and a clear sign of the times.

U.S. law schools, which have faced dwindling student ranks in the years following the last recession, are beginning to see enrollment trends flip back in their favor.

Despite optimism in the outlook for the legal field, the fight to draw not only a sizable group of students, but the best of the bunch, is far from over — as a message from Case law school's associate dean of admissions to potential transfers shows.

That email was received mid-month by several students at Cleveland-Marshall College of Law. Besides touting the school's merits, Case tells recipients "special privileges" are reserved for them should they reapply, including a waiving of the $40 application fee, an "expedited" review and consideration for one of their "generous" scholarships.

Case's law school co-deans, Jessica Berg and Michael Scharf, said the emails were sent to students with high LSAT scores and GPAs who applied to the school in the past, but didn't matriculate. They said there isn't one university or geographic region being targeted.

Cleveland-Marshall dean Lee Fisher said that while messages like that are rare, they're not to be totally unexpected. "Of course, I hope that none of you transfer to Case or to any other law school, but if you are considering transferring for any reason, I have a request," wrote Fisher in a direct email response to students. "Please give me the opportunity to speak with you before you make any decision."

Like increasingly aggressive or imaginative recruiting efforts, more direct contact with law school deans seems to be a trend among schools looking to attract and retain students in today's climate. And it's just one in a litany of ways schools are reworking themselves to not only prep law-minded academics for changing careers, but keep their ranks — and the schools themselves — viable.

Total enrollment in U.S. law schools remains at one of its lowest points in more than 40 years. According to stats from the American Bar Association, total nationwide J.D. enrollment as of fall 2017 stood at 110,156 students. That's 25% less than the collective number of students in fall 2010, when enrollment last peaked. In Northeast Ohio, law schools are seeing comparable impacts, according to ABA data.


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February 26, 2018 in Legal Education | Permalink | Comments (0)

Artificial Intelligence Software Is More Accurate, Faster Than Expert Lawyers In Reviewing Contracts

AILMashable, An AI Just Beat Top Lawyers at Their Own Game:

The nation's top lawyers recently battled artificial intelligence in a competition to interpret contracts — and they lost.

A new study, conducted by legal AI platform LawGeex in consultation with law professors from Stanford University, Duke University School of Law, and University of Southern California, pitted twenty experienced lawyers against an AI trained to evaluate legal contracts. Competitors were given four hours to review five non-disclosure agreements (NDAs) and identify 30 legal issues, including arbitration, confidentiality of relationship, and indemnification. They were scored by how accurately they identified each issue.

Unfortunately for humanity, we lost the competition — badly.

The human lawyers achieved, on average, an 85 percent accuracy rate, while the AI achieved 95 percent accuracy. The AI also completed the task in 26 minutes, while the human lawyers took 92 minutes on average. The AI also achieved 100 percent accuracy in one contract, on which the highest-scoring human lawyer scored only 97 percent. In short, the human lawyers were trounced.

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February 26, 2018 in Legal Education | Permalink | Comments (2)

NY Times: Washington’s Fight Over Taxes Is Only Just Beginning

New York Times, Washington’s Fight Over Taxes Is Only Beginning:

Never mind that “once in a generation” tax bill that just passed last year. Congress is headed for years more of big fights over taxes, particularly those for individuals.

That tax battle is a byproduct of America’s polarized political climate and of the go-it-alone choices Republicans made to speed the 2017 law through Congress in less than two months.

It is already complicating tax planning for companies and workers around the country, particularly in high-tax states like New York, Maryland and California, where lawmakers are actively pursuing workarounds for some provisions of the new federal law that limit state and local income and property tax deductions.

It’s only going to get messier.

“This legal regime is very unstable; Congress has created many, many problems,” both in the substance of the bill and the exclusion of Democrats in enacting it, said Rebecca Kysar, a professor and tax expert at Brooklyn Law School. “All of those dynamics are going to make for a very uncertain landscape going forward.” ...

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February 26, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Updated LSAC Data On The Quantity And Quality Of Law School Applicants

Continuing my partnership with LSAC President (and former University of Washington Dean) Kellye Testy (see links below), here are updated data from LSAC on the quantity and quality of law school applicants:


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February 26, 2018 in Legal Education | Permalink | Comments (1)

Lesson From The Tax Court: Underwater Debtors

Tax Court (2017)Last week’s lesson was about the tax consequences to the borrower when the lender cancels the debt. This week’s case looks at the other side of the transaction to teach a lesson about what constitutes debt. Section 166 allows a lender who gives up trying to get back borrowed money to deduct the bad debt, effectively treating current income as a return of the lost capital. Similarly, a lender who sells debt to a third party for less than basis can calculate a loss under §1001 and may be able to treat that loss as a long-term capital loss.

But to have either a bad debt under §166 or a loss under §1001, there must be a “debt” in the first place. That is the lesson from last week’s case of Michael J. Burke and Jane S. Burke v. Commissioner, T.C. Memo. 2018-18. There, the taxpayer attempted to take both long-term and short-term capital losses in 2010 and 2011 through a mix of §166 deductions and claimed capital losses from sale of debt at less than basis. The alleged bad debts arose in connection with a scuba diving business in Belize. On audit, the IRS disallowed the deductions, creating a deficiency in taxes totaling some $444,000. The dispute was whether the Burkes had “debt” to lose. Judge Holmes’ opinion does a deep dive into the meaning of “debt” and shows why the taxpayer’s arguments here were all wet. If you think I’ve gone overboard in my water metaphors, Judge Holmes’ opinion is drenched with them. Makes for a splashy opinion.

More below the fold.

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February 26, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Former Davis Polk Tax Partner Dana Trier Quits Position As Deputy Assistant Secretary For Tax Policy

Wall Street Journal, Treasury Official, Critical of Parts of Tax Law, Quits:

A Treasury Department official deeply involved in implementing the new tax law left the government unexpectedly this week.

Dana Trier, a retired New York attorney praised by fellow tax lawyers in both parties, was a deputy assistant secretary for tax policy, putting him near the center of administration decision-making about how to write the crucial and highly technical rules stemming from the new Tax Cuts and Jobs Act.

Accountants, tax lawyers and businesses have been watching his actions and speeches closely for clues on how the Trump Administration will enforce complex new deductions for pass-through businesses, restrictions on business interest deductions and other matters. ...

Tax-focused publications had previously written about some of Mr. Trier’s remarks that were critical of parts of the new tax law, including a speech earlier this month in San Diego at a conference sponsored by the American Bar Association’s Tax Section. ... In San Diego, Mr. Trier had said people looking at pieces of the new law sometimes asked him whether lawmakers could have reasonably meant to write it the way they did. “We’re going to have trouble with about half the legislation if we apply that standard,” said Mr. Trier, whose name rhymes with clear.

Late Friday, Mr. Trier, 69 years old, said he and Assistant Secretary David Kautter agreed that he should leave. “Between these public comments and the constant friction with the bureaucratic elements of the government, I really just think…it was time to go,” Mr. Trier said. “I have enough of a big ego to think that they’ve lost something when they’ve lost me, but I think they can do it.”

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February 26, 2018 in IRS News, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 25, 2018

New Tax Law Ignites White House Power Struggle

Treasury OMBFollowing up on last week's post, Tax Reform and IRS Resistance:  Politico, Tax Law Ignites White House Power Struggle:

A political battle over the fate of hundreds of regulations and other guidance for the new tax law may soon land on President Donald Trump’s desk, forcing him to choose between two of his favorite Cabinet members.

At stake is who has ultimate authority to shape the nuances of the tax cuts and other rules as part of the $1.5 trillion Republican tax overhaul: Treasury Secretary Steven Mnuchin and the IRS have that power now, but White House budget director Mick Mulvaney and some of his GOP allies in Congress want the Office of Management and Budget to have the final say.

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February 25, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Two More Law Schools Admit 1Ls Based On GRE Rather Than LSAT

 GREFlorida State and Pace are the latest law schools to accept the GRE in lieu of the LSAT, joining: Arizona, Brooklyn, BYU, Cardozo, Columbia, George Washington, Georgetown, Harvard, Hawaii, John Marshall, Northwestern, St. John's, Texas A&M, Wake Forest, and Washington University. In addition, two law schools allow the GRE in limited circumstances: Chicago (admissions committee may grant LSAT waiver) and UCLA (students enrolled in, or applying to, another UCLA graduate program).

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February 25, 2018 in Legal Education | Permalink | Comments (0)

NY Times Op-Ed: The Misguided Drive To Measure 'Learning Outcomes'

Here at Texas Tech University School of Law we are gearing up for our ABA site inspection.  In the past few years the ABA has required law schools to create "Learning Outcomes."  Here's the language from Section 3.02:

A law school shall establish learning outcomes that shall, at a minimum, include competency in the following:
(a) Knowledge and understanding of substantive and procedural law;
(b) Legal analysis and reasoning, legal research, problem-solving, and written and oral communication in the legal context;
(c) Exercise of proper professional and ethical responsibilities to clients and the legal system; and
(d) Other professional skills needed for competent and ethical participation as a member of the legal profession.

This is the first year that the site teams will be evaluating a law school's compliance with the new standard.  We knew it was coming and I have been on a committee for the past three years that has been trying to translate this standard into operation. While I believe we have done a good job with it, I also believe the standard to be of questionable value. 

I read with pleasure this New York Times op-ed by Molly Worthen, The Misguided Drive to Measure 'Learning Outcomes'.  I especially like its concluding line:  "[T]here's just no app for that." 

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February 25, 2018 in Bryan Camp, Legal Education, Teaching | Permalink | Comments (7)

The Top Five New Tax Papers

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

  1. [32,284 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1899 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [985 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [679 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College)
  5. [447 Downloads]  The Tax Lifecycle Of A Single Member LLC, by F. Philip Manns Jr. (Liberty) & Timothy M. Todd (Liberty)

February 25, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 24, 2018

This Week's Ten Most Popular TaxProf Blog Posts

College Consultant Charged $1.5 Million To Get Student Admitted To Ivy League College

Ivy CoachInside Higher Ed, $1.5 Million to Get Into an Ivy:

In 2005, Inside Higher Ed reported that a leading private college consultant was charging $9,999 each to 10 attendees for a weekend "boot camp" on college admissions. The idea that parents would pay that kind of money for a few days of advice stunned and appalled many.

These days, $9,999 may be pocket change in the world of elite college consulting. A lawsuit filed last week by Ivy Coach revealed that it charged a woman in Vietnam $1.5 million to help her daughter apply to 22 elite colleges, as well as seven top boarding schools she sought to attend in high school, before applying to college. The fee was worth it, the lawsuit says. In December, an (unnamed) Ivy League institution granted the daughter early admission.

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February 24, 2018 in Legal Education | Permalink | Comments (9)

WSJ: Pass-Through Businesses Are Rethinking Their Status In Wake Of The New Tax Law

WSJWall Street Journal, Pass-Through Businesses Are Rethinking Their Status in Wake of Tax Law:

As business owners pore through the new tax law, many are asking themselves a fundamental question: Will changing how their company is structured cut their tax bills?

“This is one of the most pressing issues for taxpayers and business owners,” said Mark Everson, vice chairman of tax-consulting firm Alliantgroup LP. “They are looking carefully now at how they are legally organized.” 

For many entrepreneurs, the big question is whether to operate as a C corporation, which pays its own taxes to the Internal Revenue Service, or as a pass-through company, which pays tax through individual rather than corporate returns. Pass-through businesses include S corporations, sole proprietorships and limited liability companies.

The clock is ticking. Many business owners have until March 15 to make an election that would be retroactive to the beginning of 2018.

The rethinking of corporate structures is one byproduct of the new tax bill, which cuts the corporate tax rate to 21%, down from a top rate of 35%, though owners pay a second tax on profits distributed as dividends. ..,

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February 24, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Gelbach: On Amy Wax’s Credibility And Conduct

Penn (2017)Folowing up on Wednesday's post, Penn Dean Denies Amy Wax's Claim That He Asked Her To Take Leave Due To Controversial Op-Ed:  The Daily Pennsylvanian op-ed:  On Amy Wax’s Credibility and Conduct, by Jonah B. Gelbach (Penn):

In the Evidence class I’m teaching, we’ve just finished discussing “impeachment” — how to challenge a witness’s credibility. Sometimes a trial lawyer may ask a witness about past conduct, because reasonable jurors may doubt a witness’s truthfulness today if they determine the witness has behaved deceitfully in the past.

That came to mind Tuesday when The Daily Pennsylvanian asked me to write a guest column about Professor Amy Wax’s recent Wall Street Journal op-ed. ...

Professor Wax’s WSJ op-ed characterizes conversations with several colleagues — and the Dean, who she claims caved to “pressure” to “banish” her by asking her “to take a leave of absence.” A news article in the DP quotes the law school’s spokesperson stating the Dean discussed Professor Wax’s regular sabbatical leave, which is one form of leave of absence under Penn’s policies.

I wasn’t involved in whatever communications occurred between Professor Wax and either Dean Theodore Ruger or our other colleagues. But her record of selective editing and behavior that contradicts her claimed principles have led me to distrust whatever Professor Wax won’t document in full. ...

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February 24, 2018 in Legal Education | Permalink | Comments (1)