TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, August 18, 2015

WSJ: How Etsy Crafted A Tax Strategy In Ireland

ETSYWall Street Journal, How Etsy Crafted a Tax Strategy in Ireland:

Etsy, the online marketplace for artisans, works to keep its business “mindful, transparent and humane,” but that became tricky when it crafted a new tax strategy.

The startup, which built its eBay-like marketplace in Brooklyn, has been so serious about authenticity that its founder made his own underwear. But as it geared up for its initial public offering, the company adopted some ideas from rival technology companies that have been aggressive about routing their inventions and earnings through low-tax jurisdictions overseas to minimize what they might owe to Uncle Sam.

Its advisers proposed a number of more-complex options, but the company passed on structures known by nicknames like the “Double Irish” or “Dutch Sandwich” that have become flash points in the broader debate about gaps in the corporate tax code, according to people familiar with the company.

What it did agree to, though, was to relocate some of its intellectual property to Dublin earlier this year. While that approach ranks as relatively straightforward in the business of tax avoidance, it has taken Etsy into the realm of legalistic corporate-speak and vague disclosure that its founders long railed against. Etsy briefly described the moves this way in a May earnings release: “Etsy’s revised corporate structure was implemented to more closely align with its global operations and future expansion plans outside the U.S.”

The questions Etsy grappled with as it planned its tax strategy show the difficulty of staying true to values proclaimed on its website that include running a “mindful, transparent and humane business” while maturing into a publicly traded company that must compete globally with rivals that are often less idealistic.

August 18, 2015 in Tax | Permalink | Comments (0)

What Law Schools Can Learn From Medical Schools

Law MedicineNeil W. Hamilton (St. Thomas) & Sarah Schaefer (St. Thomas), What Legal Education Can Learn from Medical Education About Competency-Based Learning Outcomes Including Those Related to Professional Formation (Professionalism), 29 Georgetown J. Legal Ethics ___ (2016):

Following the ABA’s August 2014 changes in the accreditation standards for law schools requiring the establishment (and assessment) of learning outcomes that include “competency” in knowledge of the law, legal analysis, legal research, problem-solving, effective communication and “the exercise of proper professional and ethical responsibilities,” every law school will now develop competency-based learning outcomes and a curriculum that help each student develop and be able to demonstrate both the listed core competencies and “other professional skills needed for competent and ethical participation as a member of the legal profession.” These accreditation changes require a greater emphasis on professional and ethical responsibilities and both the articulation of learning outcomes for each student on these responsibilities and assessment of the learning outcomes.

Medical education, following accreditation changes in 1999 that emphasized learning outcomes (and assessment) of core competencies is fifteen years in front of legal education in learning how most effectively to help students achieve competency-based learning outcomes including those emphasizing ethical responsibilities. This article analyzes what legal education can learn from medical education’s experience over these past fifteen years with competency-based learning outcomes, especially ethical competencies.

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

Tax Prof Baby

I am delighted to publicly welcome Rhema ("ray-ma"), daughter of my dear Pepperdine friend and tax colleague Khrista Johnson and her husband Alton.  Rhema was born on August 8 and checked in at 7 pounds, 11 ounces. 

Rhema

Khrista explains the origins of the name Rhema:

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August 18, 2015 in Legal Education, Tax, Tax Profs | Permalink | Comments (0)

NY Times: Black Lawyers Navigate A Rocky, Lonely Road To Partner

NY Times Dealbook (2013)New York Times Deal Book:  Many Black Lawyers Navigate a Rocky, Lonely Road to Partner, by Elizabeth Olson:

Only 5.6 percent of lawyers who hold top leadership positions at law firms are anything other than white, according to a study by the National Association for Law Placement. ... Fewer than 2 percent of law firm partners are black, according to the study, based on data collected in 2014; black women are even more uncommon in that rarefied air.

Law firms maintain that, despite their best efforts to recruit black associates over the last two decades, large numbers leave for better-paying, more secure jobs or for less quantifiable reasons, like family responsibilities. Only a handful persevere on the yearslong path to joining a firm’s lucrative leadership circle. ...

According to data tracking African-American representation, the percentage of black partners doubled in the early 2000s, then began sinking in 2008 as law firms adjusted to the recession’s fallout on their business. Minority lawyers were hit particularly hard by layoffs. Like the low percentage of black law firm partners, black associates — who accounted for 4 percent of all firm associates last year — have seen their share of the law firm jobs stagnate in recent years. ...

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August 18, 2015 | Permalink | Comments (0)

IRS Underestimated By 200% The Number Of Taxpayer Victims Of Identity Theft By Hackers Who Gained Access To Tax Returns Through IRS Website

ID TheftThree months ago, the IRS disclosed that hackers gained access on the IRS website to tax returns for 100,000 taxpayers (more here). Yesterday, the IRS disclosed that the true number is 330,000.

August 18, 2015 in IRS News, Tax | Permalink | Comments (0)

John Oliver's OurLadyOfPerpetualExemption.com

NYLJ Special Report: The New Normal In Law Schools

NYLJNew York Law Journal Special Law School Report, Arriving At a New Normal:

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

The IRS Scandal, Day 831

Monday, August 17, 2015

Simkovic Presents The Knowledge Tax Today At Loyola-L.A.

Simkovic 2Michael Simkovic (Seton Hall) presents The Knowledge Tax, 82 U. Chi. L. Rev. ___ (2015), at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Labor economists struggle to explain why the rates of return to higher education have remained much higher than the rates of return to other investments. This article proposes a novel explanation: distortionary taxation.

Economic theory suggests that when investments that are substitutes for one another are taxed inconsistently, investors are less likely to choose the investment option that is taxed more heavily. Unfavorable tax treatment of higher education relative to other forms of investment could create an undersupply of educated labor. This distortion would reduce economic growth and social welfare.

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August 17, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (12)

Cooley Law School Enrollment Shrinks 52%, Full-Time Faculty Shrinks 58%

Thomas Cooley Logo (2014)Detroit Free Press, Cooley Law School Enrollment Drops 52%:

More than 3,900 students were enrolled at Cooley Law School in 2010. That was the zenith. It’s been downhill since. Cooley’s enrollment for the 2014-15 academic year was 1,880. That’s a drop of 52%. ...

Law school enrollment has been declining nationwide since 2010, ABA data show. At Cooley, it has declined almost three times as fast.

During its years of explosive growth, Cooley opened three satellite campuses in Michigan and one near Tampa. Last year, administrators at the school, now known as the Western Michigan University Thomas M. Cooley Law School, closed its Ann Arbor campus and laid off faculty members in an effort to mitigate the losses. ...

Records from the ABA show 119 full-time faculty employed at Cooley in the spring of 2014 compared to 49 in the fall. ...

Cooley is one of the least selective law schools in the country. That is by design, [President and Dean Don LeDuc] said. The majority of Cooley’s students are part-time, and many are not considered traditional law school applicants. It’s Cooley’s commitment to proving an opportunity for these prospective students that sets it apart from its counterparts, he said. Among the pool of 2014 applicants, 85% received offers. [President LeDuc earned $675,626 in compensation in 2013, the last year figures are publicly available.] ,,,

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August 17, 2015 in Legal Education | Permalink | Comments (1)

IRS May Tax Free Employee Meals At Silicon Valley Tech Companies

ComfortSilicon Valley Business Journal, No More Free Meals for Tech Workers? IRS Advances Project That Could Tax On-Site Food Perks:

The idea that there’s no such thing as a free lunch could eventually ring true for Silicon Valley employees who get complimentary meals at work, as the Internal Revenue Service and Department of the Treasury have taken a step closer to potentially taxing such meals.

Last year, the IRS suggested in its Priority Guidance Plan that it was exploring modifying sections of the Tax Code concerning employer-provided meals that it believed were problematic. Two weeks ago, the agency suggested in its new annual Priority Guidance Plan that it has moved beyond exploring the possibility of making changes to actually starting a project that could change regulations on these meals. The move does not necessarily mean that the IRS will start taxing meals.

However, the guidance plan issued July 31 means the issue remains on the agency’s radar screen and it is devoting more time and resources to settling the question, which could indeed result in eventually taxing meals.

Silicon Valley companies like Google Inc., Yahoo Inc. and Facebook Inc., in addition to many non-tech companies, provide their employees with free meals and loads of snacks for convenience, and to keep them happy and at work. Google told the Silicon Valley Business Journal that in Mountain View alone, it serves 30,000 meals per day at its 30-plus campus cafés.

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August 17, 2015 in IRS News, Tax | Permalink | Comments (3)

ABA Seeks Comments On Law School Accreditation Standards

ABA Logo 2For academic year 2015-16, the Council of the ABA Section of Legal Education and Admission to the Bar has directed the Standards Review Committee to review the following Standards and Interpretations of the ABA Standards and Rules of Procedure for Approval of Law Schools:

  • Standard 205. NON-DISCRIMINATION AND EQUALITY OF OPPORTUNITY
  • Standard 206. DIVERSITY AND INCLUSION
  • Standard 305. FIELD PLACEMENTS AND OTHER STUDY OUTSIDE THE CLASSROOM
  • Interpretation 305-2. [Prohibition on granting credit for participation in a field placement program for which a student receives compensation.]

Comments can be submitted to JR Clark by September 11, 2015.

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

Welcome, Pepperdine Law School Class Of 2018

Launch Week 4

Welcome to the Pepperdine Law School Class of 2018, which begins their legal education today in a week-long introduction to law school and professional formation.  Law students today face a very difficult challenge, with tuition at record highs and the legal profession in turmoil.  Yet you are part of a class that is very strong academically and the most diverse in our history — kudos to Dean Shannon Phillips and her team for putting together such a gifted class in such tough circumstances.  Although this is only my third year at Pepperdine, I have experienced first hand what a very special place this is.  As you have already seen, you will be spending the next three years in a spectacularly beautiful campus and city.  You will begin to experience this week the faculty and staff's faith-fueled commitment to you and to your success that manifests itself in various ways, large and small, in daily life here.  You will hear a lot of advice and goal-setting this week in the wonderful program put together by Dean Danny DeWalt and his team.  My wish is that you will love your time at Peppperdine and that you will leave here in three years with a deep sense of your professional and personal calling in law and in life. I look forward to seeing many of you in my tax classes in your second and third year (and at the softball game on Friday and the dean's bible study on Wednesday nights).

Update:  My friend and colleague Al Sturgeon has further thoughts here.

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

Tax Papers At 2015 Big Ten Junior Law Faculty Conference

Big TenTax papers at last week's 2015 Big Ten Junior Law Faculty Conference at Indiana:

Margaret Ryznar (Indiana-Indianapolis), An Easy Solution to the Marriage Penalty:

The marriage penalty in the federal income tax continues to persist despite universal agreement that there is no place for it. This Article is modest yet revolutionary in its proposal to eliminate the marriage penalty: to create another tax filing status for two-income earning couples that earn an amount within a particular percentage of each other. This filing status would offer double the rates of single filers because it accommodates two incomes. Such a simple solution to the marriage penalty causes the least upheaval to the general legal framework that treats spouses as a single economic unit. It has the additional attributes of finally no longer penalizing a significant subset of women who work and marry.

Adam Thimmesch (Nebraska), Transacting in Data: Tax, Privacy, and the New Economy:

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

Appalachian Law School Enrolls 32 1Ls, Down 38% From 2014's 52 1Ls (And Down 78% From 2011's 145 1Ls)

Appalachian LogoFollowing up on yesterday's post, UConn Law School Enrolls 100 1Ls, Down 38% From 2014's 160 1Ls:  Appalachian Law School has enrolled 32 1Ls this year, down 38% from 2014's 52 1Ls (and down 78% from 2011's 145 1Ls).

Appalachian has lost 62% of its faculty since Fall 2014:  8 of the 13 faculty teaching there in Fall 2014 (plus their Director of Academic Success and Bar Preparation) are not teaching there in Fall 2015.  They have been replaced with visiting professors and adjuncts.

Prior TaxProf Blog coverage:

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August 17, 2015 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 830

IRS Logo 2 Forbes:  Gross Mismanagement At IRS, Says Senate Report, by Robert W. Wood:

After a long wait, the Finance Committee has released a bipartisan report on the IRS scandal. Since some private taxpayer information was at issue, there have been closed door sessions and interviews leading up to the report. The IRS wasn’t really targeting, it was just incompetent, the report seems to suggest. Top IRS managers did not stay informed about the applications involving possible political advocacy.

And management, top management at least, didn’t really monitor things. Lois Lerner was on top of the issues as early as 2010, but failed to tell her superiors, the report suggests. In fact, the report says that under Ms. Lerner’s leadership, the IRS Exempt Organizations unit launched seven initiatives to handle applications from Tea Party and other groups for tax-exempt status. Each of the seven initiatives failed.

That meant long delays—as long as five years—for some organizations awaiting decisions on IRS tax exemption applications. What’s more, the report says IRS employees handling exemption applications did not appear to be worried about delays or customer service. In some cases, organizations got tired of waiting and disbanded. For others, the delays meant forgone grants.

This report was delayed for over a year after the IRS belatedly informed the Senate Finance Committee that the IRS could not recover large numbers of potentially responsive documents. They were lost when Lois Lerner’s hard drive crashed in 2011. 

The report acknowledges that the IRS functioned in a politicized atmosphere following the the Supreme Court’s Citizens United decision. ...

“Undoubtedly,” the report says ”these events will erode public confidence and sow doubt about the impartiality of the IRS. The lack of candor by IRS management about the circumstances surrounding Lois Lerner’s missing emails may only serve to reinforce those doubts.” It is hard to argue with that.

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August 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, August 16, 2015

IRS: Identity Theft Victims Can Receive Tax-Free Data Protection Services

ID TheftIRS Announcement 2015-22

The IRS will not assert that an individual whose personal information may have been compromised in a data breach must include in gross income the value of the identity protection services provided by the organization that experienced the data breach. Additionally, the IRS will not assert that an employer providing identity protection services to employees whose personal information may have been compromised in a data breach of the employer’s (or employer’s agent or service provider’s) recordkeeping system must include the value of the identity protection services in the employees’ gross income and wages. The IRS will also not assert that these amounts must be reported on an information return (such as Form W-2 or Form 1099-MISC) filed with respect to such individuals. This announcement does not apply to cash received in lieu of identity protection services, or to identity protection services received for reasons other than as a result of a data breach, such as identity protection services received in connection with an employee’s compensation benefit package. This announcement also does not apply to proceeds received under an identity theft insurance policy; the treatment of insurance recoveries is governed by existing law.

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August 16, 2015 in IRS News, Tax | Permalink | Comments (1)

UConn Law School Enrolls 100 1Ls, Down 38% From 2014's 160 1Ls

UConn Law Logo (2015)Connecticut Law Tribune, Law Schools Look Ahead to New Year:

Summer's days are numbered, and new and returning law students are gearing up for their fall semesters at area law schools.

Law schools at the University of Connecticut, Yale University, Quinnipiac University and Western New England College are still recovering from the steep decline in prospective law students, as is the rest of the country, but that has not stopped the schools from providing new programs and course offerings. ...

One of the primary issues law schools are facing is declining enrollment, a trend that has been well documented over the past several years.

At UConn, that change took time to be noticeably felt and the incoming class this year is exactly 100 students, down from 160 students in 2014 [and 181 students in 2011], according to Jeanne LeBlanc, a UConn law school spokeswoman.

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August 16, 2015 | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

The IRS Scandal, Day 829

IRS Logo 2Renew America, True the Vote Still Pursuing IRS, Lois Lerner and Election Integrity:

Sometimes turn around IS fair play.

Especially when a fair count of legitimate votes is at issue.

IRS targets True the Vote and its founder-president Catherine Engelbrecht are still pursuing the Internal Revenue Service, Lois Lerner, now retired in disgrace, and election integrity.

True the Vote's latest weekly email declared:

Just When You Thought the IRS Targeting Scheme Couldn't Get More Twisted...

You would think that TTV would eventually become jaded after years of bombshells in the wake of Lois Lerner's infamous May 2013 admission to targeting organizations presumed to be conservative. In recent days, however, we have come to understand new wrinkles in the case that offer a whole new dimension of insight. The Wall Street Journalrecently reported that Lerner was working directly with the chief officer of the Wisconsin Government Accountability Board – the public entity charged with enforcing election and campaign finance laws – during the targeting period. According to the report, "Emails we've seen show that between 2011 and 2013 the two were in contact on multiple occasions, sharing articles on topics including greater donor disclosure and Wisconsin's recall elections ... This timing is significant because those were the years when the IRS increased its harassment of conservative groups and Wisconsin prosecutors gathered information that would lead to the John Doe probe that officially opened in September 2012." This revelation helps make sense of the fact that multiple IRS targets were questioned about what they knew of TTV's involvement in the 2012 Verify the Recall effort in Wisconsin. The hits just keep on coming."

The Wisconsin Supreme Court just terminated the John Doe probe as baseless in law and reason.

The obviously political IRS targeting of conservative organizations and Engelbrecht personally may have been motivated by the desire to have President Obama reelected, but don't expect the Obama Justice Department to pursue that.

Fortunately, True the Vote remains on the case.

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August 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, August 15, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Charleston Law School Denies Tenure To Three Deserving Candidates Due To Financial Exigency

Charleston LogoPost and Courier, Charleston School of Law Leaders Withhold Tenure:

Charleston School of Law owners announced Friday that they wouldn’t be offering tenure to non-tenured faculty members because the school is in a financial crisis.

In a  memo to eight non-tenured faculty members, school owners said there are three candidates who already have met the standards for tenure, but they will not get it because of the school’s financial problems. ...

School leaders in May laid off seven tenured faculty members, and two of them have filed breach-of-contract lawsuits against the school. [One has obtained a TRO reinstating her on the faculty.] ...

Law school owners and representatives from The InfiLaw System, a company trying to buy the school, have said one of the reasons the school is in a financial crisis is because the owners took $25 million in profit out of the school between 2010 and 2013.

The remarkable memo is here:

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August 15, 2015 in Legal Education | Permalink | Comments (0)

Property Taxes Are Highest In New Jersey, Illinois; Lowest In Hawaii, Alabama

The IRS Scandal, Day 828

IRS Logo 2 MSNBC, The Rachel Maddow Show/The MaddowBlog:

Fox News’ Martha MacCallum posed a question to Louisiana Gov. Bobby Jindal (R), which he seemed eager to answer. From the transcript:

MACCALLUM: On the same topic, let’s go to Governor Jindal. Carly Fiorina, also on the stage, said that she would go so far as to shut down the government over the issue of defunding Planned Parenthood. Would you do that? Would you be willing to shut down the government when it comes to defunding this group?

JINDAL: Well, a couple of things. Planned Parenthood had better hope that Hillary Clinton wins this election, because I guarantee under President Jindal, January 2017, the Department of Justice and the IRS and everybody else that we can send from the federal government will be going in to Planned Parenthood.

This generated no real follow-up, which is a shame because it was an amazing answer. According to Jindal, his administration would dispatch the Internal Revenue Service to target Planned Parenthood because, well, Bobby Jindal doesn’t like Planned Parenthood.

But there’s a small problem with idea: it’s brazenly illegal.

Remember, Richard Nixon, among other things, tried to use the IRS as a political weapon to target his political foes – and had he not resigned in disgrace, Nixon would have been impeached for having done so. More recently, Republicans and much of the Beltway media accused President Obama of using the IRS to punish far-right Tea Party groups. The allegations proved baseless, but for a short while, Republicans saw this as a devastating scandal involving an abusive, out-of-control White House using the IRS as a political weapon.

And yet, there was Jindal – according to some, one of the smarter GOP officials on the national scene – offering a striking example of a presidential candidate vowing to commit impeachable offenses before the election even happens.

Mother Jones, Bobby Jindal Thinks the IRS Shouldn't Be Used to Target Political Enemies, Except For His

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August 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, August 14, 2015

Weissenberger's Made to Measure Man: 'Outrageously Humorous Law School Academic Politics Interweave With Intrigue Of Nazi Stolen Art'

GlenMy dear friend and former Cincinnati colleague Glen Weissenberger, whose firing as Dean of DePaul Law School in 2009 sparked nationwide condemnation (links below), has published his first novel, Made to Measure Man (Aug. 11, 2015):

What happens when charming law school dean, Garth Matthews' predictable life is completely upended by his surprise receipt of a multimillion dollar award for his leadership? While Garth is intrigued by the hilarious, crotchety octogenarian matriarch of the Schmidhausen Foundation that created the award, Agnes, he is immediately romantically captivated by Agnes’ granddaughter, Julia, whose beauty and brilliance are accompanied by an enchanting mysterious quality. Romantic suspense and entertaining humor characterize the ten days of Garth’s life captured in Made to Measure Man in his adventures to find out more about this upcoming achievement award from the bestowing Zürich foundation, and more about the elusive Julia. Is the Schmidhausen Foundation involved in nefarious activities? What if the lovely, elegant Julia is not who she appears to be? And despite Garth’s being a man who is usually in control of his surrounding environment, what happens when he is drawn into the suspenseful world of art theft when he is actually considered a suspect? Outrageously humorous episodes of law school academic politics interweave with the intrigue of Nazi stolen art, and Garth travels from his home in Chicago to New York City to unravel these mysteries.

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August 14, 2015 in Book Club, Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Controversies In Tax Law: A Matter Of Perspective

Controversies in Tax Law CoverControversies in Tax Law: A Matter of Perspective (Anthony C. Infanti, ed. Ashgate 2015):

This volume presents a new approach to today’s tax controversies, reflecting that debates about taxation often turn on the differing worldviews of the debate participants. For instance, a central tension in academic tax literature - which is filtering into everyday discussions of tax law - exists between 'mainstream' and 'critical' tax theorists. This tension results from a clash of perspectives: Is taxation primarily a matter of social science or of social justice? Should tax policy debates be grounded in economics or in critical race, feminist, queer, and other outsider perspectives?

To capture and interrogate what often seems like a chasm between the different sides of tax debates, this collection comprises a series of pairs of essays. Each pair approaches a single area of controversy from two different perspectives - with one essay usually taking a 'mainstream' perspective and the other a 'critical' perspective. In writing their contributions, the authors read and incorporated reactions to each other’s essays and paid specific attention to the influence of perspective on both the area of controversy and their contribution to the debate. With contributions from leading mainstream and critical tax scholars, this volume takes the first step toward bridging the gap between these differing perspectives on tax law and policy.

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August 14, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Amidst 48% Decline In 1L Class, Charleston Law School Admissions Dean Abruptly Resigns

Charleston LogoSouth Carolina Lawyers Weekly, CSOL Dean of Admissions Abruptly Resigns; John Benfield Discusses His Decision to Leave Troubled Law School:

For the first time in the history of the Charleston School of Law, longtime associate dean for admissions John Benfield was not on campus on orientation day to greet incoming students.

Benfield’s abrupt departure, announced Aug. 3, came as a surprise to students and faculty who received the news late that afternoon in an email from the school’s dean, Andy Abrams. ...

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August 14, 2015 in Legal Education | Permalink | Comments (0)

Tax Court: German Lawyer Cannot Deduct Cost Of Obtaining A U.S. J.D.

Tax Court Logo 2The Tax Court held that a German lawyer could not deduct the cost of obtaining a J.D. from the University of San Diego Law School because the education did not maintain or improve skills required in his trade or business. The taxpayer had not established himself trade or business of practicing law in the United States, and the expenses were incurred in entering into a new trade or business. The court also upheld accuracy-related penalties under § 6662(a). O'Connor v. Commissioner, T.C. Memo. 2015-155 (Aug. 12, 2015).

August 14, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 827

IRS Logo 2 Politico, Lerner Slammed ‘Evil and Dishonest’ GOP Inquisitors:

At the height of the scandal over the IRS’ handling of political nonprofits, Lois Lerner privately let loose at her Republican tormentors, saying she invoked the Fifth Amendment because they had been “evil and dishonest” and accusing them of “hate mongering.”

A POLITICO examination of thousands of pages of emails and other material recently released by the Senate Finance Committee found previously unreported comments from Lerner, the central figure in the controversy, on everything from the inability of career IRS agents to handle “the sensitive stuff” to her views on the fiscal cliff.

When she was under investigation by Congress, she offered a blistering critique of her inquisitors. In a March 6, 2014, email, Lerner told a friend: “They called me back to testify on the IRS ‘scandal,’ and I too[k] the 5th again because they had been so evil and dishonest in my lawyer’s dealings with them.” ...

Republicans see a clear link between Lerner’s comments and the agency’s actions; Democrats don’t. The lack of ironclad proof that agents deliberately targeted groups because of political bias — or that they didn’t — means neither party can separate itself from the narrative it has held to for two years.

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August 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, August 13, 2015

Tax Court Petition: Can Boston Bruins (And Other Pro Sports Teams) Deduct 100% Of Meal Expenses At Away Games; Is Hotel A Team's 'Business Premises'?

BruinBloomberg BNA, Boston Bruins Raise Controversy by Arguing That Meals Are Deductible, Team Is "World Class", by Syd Gernstein:

[A] recent case filed in the U.S. Tax Court, Jacobs v. Commissioner, No. 19009-15 (petition filed July 27, 2015), caught my eye. 

At issue is whether the Boston Bruins hockey club may deduct 100% of the costs it incurred to provide its players and staff with meals while travelling to away games. The case poses the IRS and Tax Court with some fairly interesting questions concerning the deductibility of employee fringe benefits. ...

And, although it is not clear on the face of the Bruins’ Tax Court petition, I think it is this employer operated eating facility exception that the Bruins are going to rely on to argue that the meals are 100% deductible.

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August 13, 2015 in New Cases, Tax | Permalink | Comments (5)

Tax Lawyer Charged With Kidnapping, Attempted Murder

Tax LawyerAbove the Law, Attempted Murder Charge Puts A Real Crimp In Man’s Tax Law Practice:

A North Carolina tax attorney earned a suspension over some criminal charges he faces in neighboring South Carolina. Is it anything serious? Depends on how you feel about kidnapping and attempted murder.

So… yeah, pretty serious.

Tax attorneys, man. Why is it always the quiet ones who get in this kind trouble?

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August 13, 2015 in Tax | Permalink | Comments (0)

University Of Auckland Seeks To Hire A Tax Prof

AucklandThe University of Auckland, Faculty of Business and Economics, seeks to hire a Professor of Taxation in the Department of Commercial Law:

The position is intended for candidates with leadership experience, a relevant PhD and an international research portfolio. The candidate must demonstrate a strong commitment to excellence in research in taxation and will be able to demonstrate excellence in the teaching at undergraduate and postgraduate levels. Evidence of leadership in research, a significant international standing, high quality teaching and supervision at PhD level is required. Ideally, in addition to research and teaching in taxation law, the candidate would also be researching, teaching and supervising in company law.

The main purpose of this position is to:

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August 13, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Merritt: Kudos To California's 15-Credit Experiential Learning Requirement

California State Bar (2014)Deborah Jones Merritt (Ohio State), Kudos to California:

In February 2012, the California Bar Association appointed a task force to “examine whether the State Bar should develop a regulatory requirement for a pre-admission competency training program.” The group, dubbed the “Task Force on Admissions Regulatory Reform” (TFARR), oversaw hearings, deliberations, and consultations with key constituencies. It issued an initial report in 2013, which was adopted by the bar association’s board of trustees, then held a second round of hearings and deliberations to refine the recommendations for implementation.

That second report has been approved by the bar and awaits action by the California Supreme Court. What’s noteworthy about all of this? If approved, law graduates seeking to join the California bar will have to meet three new requirements. Law schools around the country will also have to help their California-bound students satisfy the first requirement: demonstrating completion of “15 units of practice-based, experiential coursework.”

I see both positives and negatives in the California proposal but, on balance, it’s a strong step forward. The proposal is a lengthy one, so I will explore it in several posts. To start, here are the features I find most appealing. ...

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August 13, 2015 in Legal Education | Permalink | Comments (0)

Republicans Seek To Ban Unions For IRS Employees

NTEUWashington Post, Republican Plan to Eliminate IRS Union, As It Elects New Leadership, Could Threaten Federal Unions Generally:

Republicans have an unwelcome gift for the retiring president of the National Treasury Employees Union (NTEU) and its newly elected officers.

A proposal by Senate Finance Committee Republicans would prohibit unions at the Internal Revenue Service. That would cut the labor organization’s membership in half.

If this attack is successful it would decimate NTEU and leave IRS staffers without union representation. More that than, it would weaken federal unions generally by making them all vulnerable to a similar assault.

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August 13, 2015 in IRS News, Tax | Permalink | Comments (9)

Texas Wesleyan Law Grads Sue Texas A&M Over Alumni Status

Texas A&M Law Logo (2015)Houston Chronicle, Texas Wesleyan Law Grads Sue A&M Over Alumni Status:

In one news release, for instance, university officials note that A&M law students have provided more than 120,000 hours of free legal services valued at more than $2.4 million.

But much of that work was done by alumni who earned degrees from Texas Wesleyan School of Law in Fort Worth, before A&M purchased the school in 2013. A&M did not previously have a law school.

While A&M has taken credit for their work, the school won't recognize them as A&M alumni, dozens of the graduates argue in a class-action lawsuit filed Tuesday. They contend the refusal of new degrees or alumni status makes it difficult to apply for jobs or take bar exams. ...

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August 13, 2015 in Legal Education | Permalink | Comments (1)

Revisions To ABA Accreditation Standards

ABA Logo 2Memorandum From Barry A. Currier (Managing Director of Accreditation and Legal Education), Adoption and Implementation of Revised Standards and Rules for Approval of Law Schools

At its meetings in June and July 2015, the Council approved changes to the ABA Standards and Rules of Procedure for Approval of Law Schools. The changes had been circulated for Notice and Comment and public hearings were held on April 30 and July 16, 2015. The following amended Standards and Rules of Procedure became effective upon concurrence by the ABA House of Delegates at its meeting on August 3-4, 2015:

  1. Definition (17) and Standard 106 [Separate Locations and Branch Campuses]
  2. Standard 105 [Acquiescence for Major Change in Program or Structure] and Rule 29(a) [Application for Acquiescence in Major Change]
  3. Standard 304 [Simulation Courses and Law Clinics]
  4. Standard 305(e)(6) and Interpretation 305-3 [Field Placements and Other Study Outside the Classroom]
  5. Standard 311(a) and Interpretation 311-1 [Academic Program and Academic Calendar]
  6. Standard 311(f) [Academic Program and Academic Calendar] and Standard 308(a) [Academic Standards]
  7. Interpretation 311-4 [Academic Program and Academic Calendar]
  8. Standard 502(b)(2) [Educational Requirements]
  9. Standard 505(b) [Granting of J.D. Degree Credit for Prior Law Study]
  10. Rule 27 [Application for Provisional or Full Approval] and Rule 28 [Reapplication for Provisional or Full Approval]
  11. Rule 29(d-g) [Application for Acquiescence in Major Change]
  12. Rule 30 [Major Changes Requiring a Reliable Plan]]

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August 13, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 826

IRS Logo 2 Investor's Business Daily op-ed, Jailtime For IRS' Political Hacks:

Corruption: After a year's stalling by the IRS, the Senate Finance Committee has released its bipartisan report, denouncing the tax-collection agency's partisanship and incompetence. When are these people going to jail?

The Senate report wasn't entirely satisfactory, given that its criticism was primarily in the compromise language of "gross mismanagement" to describe the agency's targeting of Tea Party dissident groups.

Using legal technicalities to silence and repress political dissent under the color of the nation's most feared enforcement agency isn't mismanagement. It's a crime.

It's incompatible with democracy and it shatters public confidence in the rule of law. It's the very crime the State Department is now condemning in Venezuela: the use of legal technicalities to halt popular opposition candidates from running for office. Until now, this kind of activity has had no precedent in our country, and it must be stopped before it becomes the standard.

This is far from mere incompetence or gross mismanagement. It was a highly competent operation to silence dissent. Yet no one has been sanctioned or punished, despite there being laws on the books dating back to the beginning of a professional civil service, that forbid and punish partisan motives in what should be impartial law. Already some observers believe the IRS swung the last election for the Democrats with these activities.

Not only did the IRS target Tea Party groups with unconscionable delays and intrusive questions, it went for their families, too. Young Bristol Palin learned yesterday that just being the daughter of former Alaska Gov. and Tea Party favorite Sarah Palin put her in the IRS' sights. Sarah Palin's father was targeted, too.

The agency also obstructed justice, first falsely claiming that its illegal targeting was only the work of rogue agents in its Cincinnati office. Then, as that lie fell apart, IRS moved to destroy evidence in the thousands of missing emails on IRS tax exempt organizations chief Lois Lerner's computer. Conveniently for them, it was declared lost forever in a hard drive crash — until it wasn't.

Now it's relying on its allies in the Senate and among anti-Tea Party Democrats in the House for cover, having them declare it incompetence, not a crime.

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August 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, August 12, 2015

McGinnis & Schanzenbach: It's Time To End Faculty Tenure

TenureWall Street Journal op-ed:  College Tenure Has Reached Its Sell-By Date, by John O. McGinnis (Northwestern) & Max M. Schanzenbach (Northwestern):

Wisconsin Gov. Scott Walker has come under fire from academics nationwide for calling on his state’s Board of Regents to reconsider the scope of tenure in its university system. Evaluations of faculty members “should be based on performance,” he said this summer, “they should be based on merit.”

With state universities struggling to keep up with rising costs and technological change, one would expect administrators and educators to at least consider proposals that would save money and encourage change.

Strong tenure protections impose significant costs on higher education. Although these costs were voluntarily created when universities adopted tenure in the first half of the 20th century, they were markedly increased in 1994 when Congress prohibited mandatory retirement for tenured faculty.

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August 12, 2015 in Legal Education | Permalink | Comments (1)

NY Times: Let's Keep The Cadillac Tax

New York Times editorial, Keep the Tax on High-End Health Plans:

Congress is under pressure to repeal an impending tax on the so-called Cadillac health plans offered by many employers. Scores of legislators from each party have endorsed separate bills to repeal it, and candidates for office, pressed by lobbyists from labor unions, business groups and insurers, may join the call for repeal. The tax should probably be adjusted by Congress to eliminate inequities, but outright repeal would be a mistake that would undermine the viability of the Affordable Care Act.

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August 12, 2015 in Tax | Permalink | Comments (0)

Barton: The Upside Of The Law School Crisis

GlassFollowing up on my previous post (here and here):  Chronicle of Higher Education,  The Upside of the Legal Profession's Crisis, by Benjamin H. Barton (Tennessee); author, Glass Half Full The Decline and Rebirth of the Legal Profession (Oxford University Press, 2015)):

Four different interlocking trends are squeezing American lawyers and law schools. First, after a 50-year ride of growth in size and profits, corporate law-firm revenues have slowed since 2008.Businesses have grown tired of paying ever-higher fees and are using insourcing, outsourcing, and computerization for more-straightforward legal work, though they have continued to pay more for true bet-the-company transactional and litigation work.

Second, computerization has started to squeeze ordinary lawyers. LegalZoom, Rocket Lawyer, and others are horning in on traditional areas of practice, like drafting incorporation papers and wills, and are also offering inexpensive legal-advice plans. Right now they are reaching only low-hanging fruit by offering simple legal documents or monthly legal-advice plans. As they grow in size, complexity, and acceptance, price competition will further stiffen. ...

Third, courts and legislatures have reined in litigation since the 1980s. Tort reform has limited class actions, damages, and fees, and tort law is less lucrative for the lawyers involved.

Last, there has been a 30-year decline in earnings for small firms and solo practitioners. ...

In 2008 hard times for corporate law firms finally brought public attention to the employment numbers for law graduates, and applications and attendance at law schools have fallen steeply since 2010. ... [T]roubled law schools will risk disaccreditation by admitting anyone they can and radically cutting costs rather than actually closing their doors. This could mean closing the law library or replacing the bulk of the tenured faculty with adjuncts. It would be inexpensive to run a skeleton law school that has few administrators and is taught by adjunct faculty. The question would then shift to how the A.B.A. might respond. It has never disaccredited a fully accredited American law school, and the legal and public-relations ramifications of such a move are unclear. ...

I think that after some rough sledding, the public, the profession, and the professoriate will all benefit from the law’s transformation. ...

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August 12, 2015 in Book Club, Legal Education | Permalink | Comments (6)

Oregon Symposium: Disruptive Innovation In Law And Technology

DisruptiveSymposium, Disruptive Innovation in Law and Technology, 93 Or. L. Rev. 831-934 (2015):

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August 12, 2015 in Legal Education, Scholarship | Permalink | Comments (2)

Graetz: The End Of Energy

GraetzMichael Graetz (Columbia), The End of Energy The Unmaking of America's Environment, Security, and Independence (Chapters 11 & 12) (MIT Press, 2011):

With the permission of MIT Press, this document includes Chapters 11 and 12 from my 2011 book, The End of Energy: The Unmaking of America’s Environment, Security, and Independence. These two chapters discuss some of the history and merits of taxes, subsidies, and regulation (including cap and trade) as mechanisms to implement policies to curb greenhouse gases. In light of the renewed interest in and discussion of command and control regulations and carbon taxes, these chapters may be useful to readers who do not have the book. The bibliographic material relating to these chapters is contained in the book and has been omitted here.

Description of the book:

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August 12, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (1)

WSJ: Number Of Academic Paper Co-Authors Skyrockets In Bid To Goose Citation Ranking — The Proliferation Of 'Kilo-Authors'

WSJWall Street Journal, How Many Scientists Does It Take to Write a Paper? Apparently, Thousands:

A Frenchman named Georges Aad may have the most prominent name in particle physics.

In less than a decade, Dr. Aad, who lives in Marseilles, France, has appeared as the lead author on 458 scientific papers. Nobody knows just how many scientists it may take to screw in a light bulb, but it took 5,154 researchers to write one physics paper earlier this year—likely a record—and Dr. Aad led the list.

His scientific renown is a tribute to alphabetical order. Almost every paper by “G. Aad et al.” involves so many researchers that they decided to always list themselves in alphabetical order. ...

[T]here has been a notable spike since 2009 in the number of technical reports whose author counts exceeded 1,000 people, according to the Thomson Reuters Web of Science, which analyzed citation data. In the ever-expanding universe of credit where credit is apparently due, the practice has become so widespread that some scientists now joke that they measure their collaborators in bulk—by the “kilo-author.” ...

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August 12, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Barnhizer: The Warrior Lawyer

WarriorDavid Barnhizer (Cleveland State), The Warrior Lawyer II: Using The Art of War and A Book of Five Rings to Gain Victory Through Disciplined Strategy (2015):

The force that ties all the pieces of law practice together into a coherent system is strategy—which can be understood as the ability to both plan and take action to achieve desired goals, or to at least significantly increase the probability of achieving a client’s goals. One of the main reasons for studying strategy is that it improves our ability to evaluate, diagnose, estimate risks and costs and resolve the problems and opportunities our clients bring to us. Sun Tzu's Art of War and Musashi's Book of Five Rings offer a unique strategic language. Sun Tzu’s Art of War is one of history's most widely read works on strategy. It has had significant influence on military strategy in Asia, including Japan and China. Sun Tzu and Musashi are like puzzle boxes with multi-layered expositions of strategic understanding the strategist can return to again and again. There is no finality to the insights. Musashi observes: "Really skillful people never get out of time, and are always deliberate, and never appear busy." This is the essence of the master strategist, whatever the discipline. The strategist is always in control of self. The Way of strategy offered by the combination of Sun Tzu's and Musashi's strategic thought is a methodology of greater awareness and effectiveness. Their insights as applied to the practice of law enable the strategist to perceive the world more sharply, extensively, and deeply.

August 12, 2015 in Book Club, Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 825

IRS Logo 2 Forbes:  Bristol Palin At Heart Of IRS Scandal - Who Knew?, by Peter J. Reilly:

What Does Bristol Plain Have To Do With The IRS Scandal?
The section of the report where this revelation is included is titled “Lois Lerner’s Management of the EO Examination Unit Reveal Her Political Bias Against Conservative Organization”. In the subsection “Lois Lerner Intervened in Audit Decisions Involving Political Organizations” we have

Teen Pregnancy Organization Affiliated With Bristol Palin
Another example of Lerner’s interest in conservative organizations occurred in 2011, when Lerner considered opening an audit of a group with ties to Bristol Palin.  There were reports that Palin received $332,500 in compensation from the Candie’s Foundation, a nonprofit organization that seeks to prevent teen pregnancy. Upon receiving an article containing this information, Lerner took the initiative to ask her senior advisors if the IRS should open an audit of the organization:

“Thoughts on the Bristol Palin issue? I’m curious that a [private foundation] can pay any amount to someone who is not a [disqualified person]? It is a [private foundation] right? Even if it were a [public charity] – would that be private benefit – what are the consequences? I’m asking because I don’t know whether to send to Exam as a referral”.

Lerner’s willingness to act on this particular news article – among many that reached her inbox each day – shows that she was paying close attention to conservative politicians and organizations. In its review of nearly 1,500,000 pages of documents provided by the IRS, Majority staff did not find any instances where Lerner referred a progressive organization for audit based on a news article.

Whatever her faults might be Lois Lerner is up on the intersection of pop culture with tax law, although there is some indication that she is either not a careful reader or discerning in her choices of where to read, because she clearly did not grasp what was going on. It seems that her inference was that the Palin clan had started a teen pregnancy foundation, since they had some experience with it. That was not at all what had happened.  You actually don’t have to go beyond forbes.com to get the story behind the story. ...

What Does This Say About Lois Lerner?
I think the Republicans have busted her on this one.  That email really is evidence of reflexive anti-conservatism. Certain liberals have a Pavlovian response to the Palin clan. The only thing that gets them to jump up and bark better is mention of the Koch brothers, but there does not seem to be anything funny about them.  Conservatives seem to have more triggers – Jesse Jackson, Hillary Clinton, Benghazi, but the same principle is at work.

What Does This Say About The Scandal?
So what we have is a reflexive anit-conservative appointed to head the IRS Exempt Group during the Bush administration by an IRS Commissioner appointed by Bush.  Is it possible that the big money Republicans figured that they had the IRS exempt group outgunned, but that a reflexive anti-conservative in that position would be tough on the more conservative part of the party. The other thing that the report mentions is that during the whole period of the scandal no audits of exempts were initiated over the political spending issue.  So the established dark money organizations were let off scot-free.  All the grief went to the Tea Party insurgents who were least able to cope with it.

Remember Lois Lerner Is Not The IRS
The other thing that comes out in the report is that Lois Lerner did not like the line IRS people who were doing the mundane work of the agency and they did not feel supported by her.

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August 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, August 11, 2015

Accounting Hiring, Enrollments Are At Record Levels

Journal of Accountancy, Hiring and Enrollments Reached Record Highs Last Year:

Unlike many in their Millennial cohort who face continued underemployment, accounting graduates find themselves in high demand from employers. Top students are often recruited, offered jobs during or after their internships, and enticed with signing bonuses.

According to the AICPA report Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, hiring at public accounting firms jumped 7% to reach record levels in 2013–14. Ninety-one percent of all firms said they expect to hire accounting graduates at the same or higher levels in 2015.

CPA

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August 11, 2015 in Tax | Permalink | Comments (2)