TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, November 22, 2016

Fleming, Peroni & Shay:  Two Cheers For The Foreign Tax Credit

J. Clifton Fleming Jr. (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Harvard), Two Cheers for the Foreign Tax Credit, Even in the BEPS Era, 91 Tulane L. Rev. 1 (2016):

Reform of the U.S. international income taxation system has been a hotly debated topic for many years. The principal competing alternatives are a territorial or exemption system and a worldwide system. For reasons summarized in this article, we favor worldwide taxation if it is real worldwide taxation – i.e., a non-deferred U.S. tax is imposed on all foreign income of U.S. residents at the time the income in earned. This approach is not acceptable, however, unless the resulting double taxation is alleviated. The longstanding U.S. approach for handling the international double taxation problem is a foreign tax credit limited to the U.S. levy on the taxpayer’s foreign income. Indeed, the foreign tax credit is an essential element of the case for worldwide taxation. Moreover, territorial systems often apply worldwide taxation with a foreign tax credit to all income of resident individuals plus the passive income and tax haven income of resident corporations. Thus, the foreign tax credit is actually an important feature of many territorial systems.

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November 22, 2016 in Scholarship, Tax | Permalink | Comments (0)

Sandy Levinson Receives Hateful Postcard

Sandy Levinson (Texas), who is visiting at Harvard Law School this semester, received this hateful postcard in the mail:

Sandy Levinson

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November 22, 2016 in Legal Education | Permalink | Comments (10)

How Republicans Plan To Spend Like Crazy Without Running Up Debt

Bloomberg, How Republicans Plan to Spend Like Crazy Without Running Up Debt:

When Washington argues about fiscal policy, it’s really fighting over models. By the time the White House produces its budget, its Office of Management and Budget has already modeled what it hopes that budget will do. Majorities in Congress send their budget resolutions to their own preferred think tanks for modeling, too. Then, by statute, bills that come out of most committees must receive a “score”—a modeled result—from the Congressional Budget Office and, for revenue bills, the Joint Committee on Taxation. The CBO and the JCT have a reputation for straight-backed probity, but congressional staffers quietly haggle with both institutions over footnotes.

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November 22, 2016 in Tax | Permalink | Comments (2)

Tax Policy In The Trump Administration

The IRS Scandal, Day 1293: WSJ— Has The Obama Administration Been 'Long On Dignity And Short On Scandal'?

IRS Logo 2Wall Street Journal: A Crisis of Authority—II, by James Taranto:

[I]n a lengthy series of interviews, both pre- and postelection, with the New Yorker’s David Remnick, Obama has been quite fretful—torn, as at that press conference, between his duty as a lame-duck president to respect the office and the man who will soon hold it, and his anguish at what amounts to a repudiation of authority. ...

Remnick himself described the Obama presidency as “two terms long on dignity and short on scandal.” The IRS? The State Department scandal that arguably sank Mrs. Clinton’s campaign? Again, the memory hole.

In Lima on Sunday the president himself declared: “I am extremely proud of the fact that over eight years we have not had the kinds of scandals that have plagued other administrations.” That’s either delusional or very carefully worded: To our knowledge no other administration has used the IRS to punish ordinary citizens for dissent, nor faced FBI findings that the secretary of state treated classified information in an “extremely careless” fashion.

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November 22, 2016 in IRS News, IRS Scandal | Permalink | Comments (4)

Monday, November 21, 2016

Shaviro Presents The Mapmaker’s Dilemma In Evaluating High-End Inequality Today At NYU

Shaviro (2015)Daniel Shaviro (NYU) presents The Mapmaker’s Dilemma in Evaluating High-End Inequality at NYU today as part of its High-End Inequality Colloquium Series (more here):

The last thirty years have witnessed rising income and wealth concentration among the top 0.1 percent of the population, leading to intense political debate regarding how, if at all, policymakers should respond. Often, this debate emphasizes the tools of public economics, and in particular optimal income taxation. However, while these tools can help us in evaluating the issues raised by high-end inequality, their extreme reductionism — which, in other settings, often offers significant analytic payoffs — here proves to have serious drawbacks.

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November 21, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Financial Times Special Section On Law Schools:  
The Admissions Collapse Continues

Financial Times (2017)Financial Times, Law School Admissions Collapse Continues: They Are Being Forced to Innovate or Face Being Left Behind:

Since 2010, US law schools have experienced a drop in student admissions to a level not seen since 1973, when there were 53 fewer schools than today (204). The number of first-year students entering law school in 2015 dropped to just above 37,000 compared to 52,000 in 2010, according to figures released by the American Bar Association. The latest enrolment numbers are due in December.

FT Chart 2

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November 21, 2016 in Legal Education | Permalink | Comments (6)

National Taxpayer Advocate:  The IRS Is Out Of Touch With The People It Serves

Taxpayer Advocate (2016)Accounting Web, Nina Olson: IRS Out of Touch with the People it Serves:

National Taxpayer Advocate Nina Olson minced few words in a recent assessment of the future of the IRS and its current interactions with taxpayers: The agency’s growing disconnect from the people it serves will lead to its failure.

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November 21, 2016 in IRS News, Tax | Permalink | Comments (4)

#AcademicHumblebrags

HumblebragInside Higher Ed, Academic Humblebrags:

Consider the humblebrag, a seemingly modest utterance that’s actually a boast. ...

  • Gosh, if I don’t send in that manuscript to Oxford by this fall, they’re gonna kill me!
  • You know, if it weren’t for all the grateful letters that I’ve gotten from students over the years, I’d’ve given up teaching a long time ago.
  • I’m sure plenty of people could have delivered the keynote address at this conference, but I’m the one who got suckered into it.
  • Never mind all my publications. The teaching award I got this year makes me realize what really matters in life.

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November 21, 2016 in Legal Education | Permalink | Comments (0)

ATPI Conference:  Improving The Tax System Using Advances In Social Knowledge And Technology

ATPI Logo (2014)The American Tax Policy Institute sponsored a conference on Improving the Tax System Using Advances in Social Knowledge and Technology at Skadden's Washington, D.C. office on Friday:

Panel 1:  How behavioral economics relates to and might be taken into account in developing tax policy and administration

  • James Alm (Tulane) (Panel Chair)
  • Mike Hawkins (HM Revenue & Customs)
  • Steven M. Sheffrin (Tulane)
  • Eric LoPresti (Taxpayer Advocate Service, IRS)

Panel 2:  Using social science to improve the tax system and promote voluntary compliance

  • Susan C. Morse (Texas) (Panel Chair)
  • Joseph Bankman (Stanford)
  • John Guyton (Office of Research, Applied Analytics & Statistics, IRS)
  • Ronald Hodge (Office of Research, Applied Analytics & Statistics, IRS)
  • Kathleen DeLaney Thomas (North Carolina)

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November 21, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Law Profs Weigh In On The Hamilton/Pence/Trump Controversy

The IRS Scandal, Day 1292: Boston Herald Editorial—IRS Scandal Belies President Obama's Claim That His Has Been A Scandal-Free Administration

IRS ScandalBoston Herald editorial, Scandal 'Free' Obama:

“I am very proud of the fact that we will — knock on wood — leave this administration without significant scandal.” — President Obama at his Nov. 14 news conference.

Ah, the lie oft repeated . . .

Define scandal. Or perhaps “significant scandal.”

Well, let’s start with the IRS scandal — or is there another word for what happens when public officials in one of government’s most sensitive departments make decisions based on ideology. Let’s see, how about when any organization with the words “tea party” in its name applies for tax-exempt status? Lois Lerner, who headed the tax exempt division resigned.

But guess that’s only a “significant scandal” for those groups still waiting to hear back from the IRS. ...

No scandal here, folks. Just move along.

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November 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

TaxProf Blog Weekend Roundup

Sunday, November 20, 2016

NY Times:   After Critical Inspector General Report, IRS Cracks Down On Bitcoin Users

Bitcoin IRSNew York Times, Bitcoin Users Who Evade Taxes Are Sought by the IRS:

The IRS is on the hunt for people who used Bitcoin to evade taxes.

The tax agency sent a broad request on Thursday to Coinbase, the largest Bitcoin exchange in the United States, asking for the records of all customers who bought virtual currency from the company from 2013 to 2015.

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November 20, 2016 in IRS News, Tax | Permalink | Comments (0)

129 College Presidents Send Letter Asking President-Elect Trump To Condemn 'Harassment, Hate And Acts Of Violence'

Trump (President Elect)Inside High Ed:

Dear President-elect Trump,

As do you, we “seek common ground, not hostility; partnership, not conflict.” In order to maintain the trust required for such productive engagement, it is essential that we immediately reaffirm the core values of our democratic nation: human decency, equal rights, freedom of expression and freedom from discrimination. As college and university presidents, we commit ourselves to promoting these values on our campuses and in our communities, and we stand alongside the business, nonprofit, religious and civic leaders who are doing the same in organizations large and small.

In light of your pledge to be “President for all Americans,” we urge you to condemn and work to prevent the harassment, hate and acts of violence that are being perpetrated across our nation, sometimes in your name, which is now synonymous with our nation’s highest office. In our schools, on job sites and college campuses, on public streets and in coffee shops, members of our communities, our children, our families, our neighbors, our students and our employees are facing very real threats, and are frightened.

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November 20, 2016 in Legal Education, Political News | Permalink | Comments (15)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 paper is now #19 in all-time downloads among 12,340 tax papers:

  1. [4,594 Downloads]  Families Facing Tax Increases Under Trump's Latest Tax Plan, by Lily L. Batchelder (NYU)
  2. [522 Downloads]  Aggressive Tax Planning & the Ethical Tax Lawyer, by Heather M. Field (UC-Hastings)
  3. [299 Downloads]  The Up-C Revolution, by Gregg D. Polsky (Georgia) & Adam H. Rosenzweig (Washington University)
  4. [271 Downloads]  Estate Planning for Digital Assets: Assigning Tax Basis and Value to Digital Assets, by Elizabeth Ruth Carter (LSU)
  5. [223 Downloads]  IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385, by David S. Miller (Proskauer, New York) & Janicelynn Asamoto Park (Proskauer, New York)

November 20, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Law Prof Submits Letter With 12,000 Lawyer Signatures Opposing President-Elect Trump's Selection Of Stephen Bannon As White House Strategist

Leong 2

Daily Kos, Over 12,000 Lawyers Sign Letter Opposing Steve Bannon:

Later today, a letter with over 12,000 signatures of attorneys from all over the country will be delivered to key members of Congress. The letter, originally drafted by University of Denver law professor Nancy Leong, has garnered such a huge number of signatures in just 60 hours of being online.  Leong drafted the letter because “Bannon is on a different level.  His website has enabled white supremacists and his public comments show he does not respect the democratic institutions that we as lawyers have sworn to uphold.”

The letter has signers from all types of legal work and all different political persuasions. As Leong described it, “It’s not a partisan issue to support our democratic institutions and oppose a white supremacist, and I hope that what this communicates to vulnerable communities is lawyers have your back in opposing this.”

Bloomberg Law, Meet the Law Prof Who Found 10,000+ Lawyers Opposed to Bannon:

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November 20, 2016 in Legal Education, Political News | Permalink | Comments (10)

The IRS, Day 1291:  Federal Judge—‘Strong Showing’ That IRS Discriminated Against Tea Party Groups

Saturday, November 19, 2016

This Week's Ten Most Popular TaxProf Blog Posts

After Battles With Conservatives, Michael Hunter Schwartz To Step Down After 4 Years As Arkansas Dean

Hunter SchwartzFollowing up on my previous posts (links below):  Arkansas Times, UALR Law Dean Stepping Down in June:

Michael Schwartz, dean of UALR's Bowen School of Law, has announced he's stepping down as dean June 30 to go to a full-time teaching position. He's held the position since July 2013.

Schwartz found himself enmeshed in several controversies at the law school, engendered by conservative activists. One involved faculty member Rob Steinbuch's effort to dislodge student records to determine whether under-qualified black students were gaining admittance. Steinbuch filed suit for records after Schwartz provided redacted copies of some material he sought to analyze bar exam performance. Steinbuch also accused two other faculty members of retaliating against him for seeking the information. He called them "race police."

More recently, Schwartz has been derided by conservatives on the web for providing on-campus counseling to students upset by the presidential election. ...

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November 19, 2016 in Legal Education | Permalink | Comments (8)

NY Times:  How To Give An IRA To Children Without Giving Up Control

New York Times: How to Give an I.R.A. to Children Without Giving Up Control, by Paul Sullivan:

Most people spend whatever they have saved in their individual retirement accounts in the years after they stop working. If they’re fortunate, they have enough to last.

But the few who have amassed such large retirement accounts that they will never exhaust them have a concern common to many wealthy parents: What happens to the money when they die and their children inherit it?

A trusteed I.R.A. is a relatively easy way for parents to control how, when and why their children receive the distributions from their retirement accounts.

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November 19, 2016 in Tax | Permalink | Comments (2)

Reynolds:  Universities' Reactions To Presidential Election Constitute Microaggressions Against Students Who Voted For Trump

Following up on last Saturday's post, Law Schools React To Donald Trump's Election:  USA Today op-ed: 'Tolerant' Educators Exile Trump Voters From Campus, by Glenn Reynolds (Tennessee):

One of the more amusing bits of fallout from [the presidential] election has been the safe-space response of many colleges and universities to the election of the “wrong” candidate. But on closer examination, this response isn’t really amusing. In fact, it’s downright mean.

Donald Trump’s substantial victory, when most progressives expected a Hillary Clinton landslide, came as a shock to many. That shock seems to have been multiplied in academe, where few people seem to know any Trump supporters — or, at least, any Trump supporters who’ll admit to it.

The response to the shock has been to turn campuses into kindergarten. The University of Michigan Law School announced a “post-election self-care” event with “food” and “play,” including “coloring sheets, play dough (sic), positive card-making, Legos and bubbles with your fellow law students.” (Embarrassed by the attention, UM Law scrubbed the announcement from its website, perhaps concerned that people would wonder whether its graduates would require Legos and bubbles in the event of stressful litigation.) ...

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November 19, 2016 in Legal Education, Political News | Permalink | Comments (9)

The IRS Scandal, Day 1290:  Linchpins Of Liberty Seeks Declaratory Relief That IRS Violated Their First Amendment Rights

IRS Logo 2 Notice Regarding Declaratory Relief to Which plaintiffs Are Entitled, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

Based on the applicable law, and the Government’s admissions, there can be no dispute that Plaintiffs are entitled to a declaration that the IRS violated their First Amendment rights by:

(1) engaging in viewpoint-based discrimination when it targeted Plaintiffs’ tax-exempt applications for heightened scrutiny, significantly delayed the processing of those applications, and issued irrelevant and unnecessary demands for information—all because of Plaintiffs’ political-sounding names and/or policy positions (i.e., viewpoints); and

(2) demanding that Plaintiffs disclose such information as donor names, the type of conversations and discussions members and participants had during organizational activities, and the political affiliations of Plaintiffs’ officers and directors, all without any government interest, let alone a substantial or sufficiently important one, as the Government has admitted the accuracy of TIGTA’s finding that such information demands were entirely irrelevant and unnecessary.

United States’ Motion for Summary Judgment as to Remaining CLaims and Supporting Statement of Points and Authorities, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

No one disputes that the IRS used certain criteria and engaged in other conduct in processing applications for tax-exempt status that it should not have done, both as found by TIGTA and acknowledged by the IRS itself. Whether what went wrong rises to the level of a constitutional injury is an issue that this Court has yet to decide, and the United States has not conceded that legal point. But something having gone wrong in the processing of applications, whether it constitutes a constitutional injury or not, the point remains that what happened next is exactly what should have happened: an independent oversight body (TIGTA) became involved and conducted an extensive investigation of what happened, it made its recommendations to correct the objectionable conduct, and the IRS implemented all of those recommendations. And all of that took place with the additional and intense scrutiny of Congress exercising its oversight function. Something having gone wrong in the first place, the process to correct that problem worked as it was supposed to, leaving no need for the Court to grant declaratory or injunctive relief.

The fact that the IRS has acted on Plaintiffs’ applications leaves no live or ongoing issues to be resolved as to Plaintiffs’ claims, which centered on the application process. And, as described, the IRS has permanently changed its procedures that gave rise to Plaintiffs’ claims. As a result, Plaintiffs are not entitled to the declaratory and injunctive relief that they seek.

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November 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, November 18, 2016

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses the importance of keeping good mileage records if you plan on deducting expenses incurred in the business use of a car (even an Aston Martin).

KristanThere is no short form mileage log for an Aston Martin.

All business. A California aerospace consultant visited his clients in a suitably space-age vehicle — an Aston Martin Vantage. Paleolithic vehicle recordkeeping blew up his car deductions on the launch pad.

The consultant claimed $21,747 in vehicle operating expenses on his 2012 return, along with $21,636 in depreciation expense for the Vantage. That’s a lot of deduction, but then again the Vantage is a lot of car. And, of course, the taxpayer said the car was used 100% for business. And he had proof! Well, sort of. Tax Court Judge Nega takes up the story (my emphasis):

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November 18, 2016 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new article by David Kamin (NYU), Getting Americans To Save: In Defense of (Reformed) Tax Incentives, Tax Law Review (forthcoming 2017).

HemelTax-preferred retirement accounts are hugely popular among participants but widely panned by academics who study saving behavior. The two principal criticisms are (1) that tax incentives such as 401(k)s and IRAs aren’t effective at encouraging individuals to save more, and (2) that these incentives amount to “upside-down” subsidies that deliver the largest benefits to wealthy Americans in the highest tax brackets. In an excellent new article, David Kamin carefully considers these criticisms and concludes that the case against tax-preferred retirement accounts is overstated. “[B]ased on the available evidence,” Kamin writes, “tax incentives probably should be used to help correct failures in people’s saving decisions—correcting the ‘internality’ that people impose on themselves because of their biases.”

Kamin begins by canvassing the empirical evidence suggesting that a substantial fraction of American workers are “under-saving” for retirement. He goes on to evaluate the evidence that tax incentives can encourage individuals to save more. On this point, research results vary widely, with some studies finding that tax incentives have little or no effect and others finding that tax incentives play an important role in boosting rates of saving.

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November 18, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

Weekly Legal Education Roundup

Shaviro Presents Fixing U.S. International Taxation Today At San Francisco

FixingDaniel N. Shaviro (NYU) presents Fixing U.S. International Taxation (Oxford University Press, 2014) at the University of San Francisco Graduate Tax Program as part of its Tax Lecture Series:

International tax rules, which determine how countries tax cross-border investment, are increasingly important with the rise of globalization, but the modern U.S. rules, even more than those in most other countries, are widely recognized as dysfunctional. The existing debate over how to reform the U.S. tax rules is stuck in a sterile dialectic, in which ostensibly the only permissible choices are worldwide or residence-based taxation of U.S. companies with the allowance of foreign tax credits, versus outright exemption of the companies' foreign source income.

In Fixing U.S. International Taxation, Daniel N. Shaviro explains why neither of these solutions addresses the fundamental problem at hand, and he proposes a new reformulation of the existing framework from first principles. He shows that existing international tax policy frameworks are misguided insofar as they treat "double taxation" and "double non-taxation" as the key issues, conflate the distinct questions of what tax rate to impose on foreign source income and how to treat foreign taxes, and use simplistic single-bullet global welfare norms in lieu of a comprehensive analysis.

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November 18, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

What American Law Professors Forgot And What Trump Knew

Law ProfessorsChicago Tribune op-ed: What American Law Professors Forgot and What Trump Knew, by Stephen B. Presser (Northwestern; author, Law Professors and the Shaping of American Law (West 2016)):

It was lonely being a Donald Trump supporter in the legal academy. Of my thousands of colleagues teaching law in this country, I don't think more than a few dozen believed that he would have made a better president than Hillary Clinton, and not more than a handful of us were willing to go public with our support.

It has always been a risk to be a Republican teaching in a law school, where many teachers see a thin line between support for the GOP and bigotry or insanity. And yet, enough Americans liked what they saw in Trump to give him a smashing Electoral College victory.

How did it come about that law professors grew so out of touch with much of America?

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November 18, 2016 in Legal Education, Political News | Permalink | Comments (10)

Pomona President Denies Wrongdoing As IRS Complaint Filed Against College For Funding Anti-Trump Student Protesters

PomonaFollowing up on Wednesday's post, Pomona College May Have Violated 501(c)(3) Tax Status To Fund Anti-Trump Student Protesters:  The Claremont Independent, President Oxtoby Denies Wrongdoing as IRS Complaint Filed Against Pomona College, by Matthew Reade & Ross Steinberg:

The Claremont Independent has learned that a concerned individual has lodged a complaint with the IRS in response to Pomona College’s promotion and funding of an anti-Trump rally.

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November 18, 2016 in Legal Education, Political News | Permalink | Comments (3)

TIGTA: IRS Exposed 28 Million Taxpayers To Identity Theft By Sending Unencrypted Email

Washington Times, IRS Exposed Taxpayers’ Info Through Shoddy Emails, Audit Shows:

A surprising number of IRS employees are sending unencrypted emails containing personal taxpayer information to private accounts, putting that information at risk of being stolen, the agency’s inspector general said Thursday.

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November 18, 2016 in Gov't Reports, IRS News, Tax | Permalink | Comments (3)

Law Students Protest SNAILS In The Library: Students Not Actually In Law School

SnailThe Gauntlet, U of C Law Students Raise Concerns Over Other Faculties Using Library:

There’s a problem with SNAILS in the Bennett Jones Law Library in Murray Fraser Hall — but not the kind you’re probably thinking of.

According to Students’ Union law representative Mark Shearer, some University of Calgary law students have recently complained about a high number of “Students Not Actually In Law School” (SNAILS) studying in the Bennett Jones library.

In Canada and the United States, “SNAILS” is a popular term used by law students to describe non-law students. “It’s kind of an unfortunate term but the acronym seems to work quite well,” Shearer said. ...

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November 18, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1289:  Federal Judge To IRS—‘Strong Showing’ Of Discrimination Against Tea Party Group

IRS Logo 2USA Today, Judge to IRS: ‘Strong Showing’ on Tea Party Bias Claim:

A federal judge ruled this month in a lawsuit in the ongoing IRS-Tea Party saga that there was "a strong showing" that the agency had discriminated against conservative groups because of their political stances.

And U.S. District Court Judge Michael R. Barrett wrote in a decision that a particular group suing the IRS "has made a strong showing of a likelihood of success" on its claim that its free speech rights were violated by the delay in processing the application.

He ordered the IRS to continue processing the application from the group, called the Texas Patriots Tea Party, even as the IRS fights the group’s lawsuit.

"The Government appears not to see the forest through the trees when it uses the existence of this lawsuit as grounds to continue the delay that is the subject of this lawsuit," Barrett wrote in his Nov. 4 decision. "The evidence strongly suggests that the IRS initiated the delay" because the Texas group was affiliated with the tea party. ...

The latest ruling could set a precedent in the ongoing saga over alleged unfair treatment of such organizations and make it easier for them to go through the non-profit application process, lawyers in the case say. That's because it could force the IRS to speed up and reconfigure how it determines whether such groups can get nonprofit status throughout its system, and not just for the individual Texas group.

"We are suing in part for what we think is a violation of our First Amendment right to free speech, and we feel this ruling gives us that," said Kansas City-based lawyer Eddie Greim who is one of the lead lawyers for the Tea Party groups in the case. "If it holds up, this could establish the basic principle that the IRS will be judged on in the future."

The IRS declined comment on the case Thursday, citing its policy not to discuss any litigation against the agency.

The Texas Patriots lawsuit reached class action status in January and now includes several other conservative groups. A total of four lawsuits against the IRS are still alive nationally, including two filed in Washington, D.C. The latest ruling involves the Texas organization alone.

All the suits were filed shortly after IRS officials in 2013 acknowledged they had singled out conservative-leaning "public interest" groups for extra attention while reviewing their applications for nonprofit status. Such a designation allows people to donate with no tax penalty, and such groups can conduct some political activity as long as it is not "the majority" of their actions.

Conservative groups claimed that the slow process put a chill on such contributions during the 2012 election cycle, raising the possibility that the scrutiny was a way to slow down fundraising and campaigning by conservatives by the Obama administration.

That led to a major scandal and several investigations by Congress, the Justice Department and even with the IRS itself. It also caused the resignations or firings of several top IRS officials, including then-Commissioner Steven Miller as well as other administrators tied to the targeting.

An FBI and Justice Department investigation found in 2015 that the IRS's nonprofit approval system was rife with mismanagement and poor judgment, but that there wasn't enough evidence to prove that IRS agents acted in political ways or should be criminally prosecuted.

But the IRS completely stopped processing the Texas group's nonprofit application that was originally filed in 2012 once the suit was filed, saying it had lost jurisdiction because of the ongoing case.

Barrett ruled that process should continue, but also that the IRS could use neither the previous process it used for such conservative groups nor the expedited replacement system the agency offered after the scandal broke. ...

It's unclear how these cases will be handled by the incoming Trump administration, although one conservative watchdog group is asking that investigations into the scandal be resumed once President-elect Trump takes office. ...

Judicial Watch this week released more than a thousand new documents obtained through a Freedom of Information Act lawsuit that show officials in Cincinnati and Washington knew IRS agents in Cincinnati were targeting conservative groups by their party affiliations and by "guilt by association." ...

"We're getting document after document showing the IRS both in Washington and Cincinnati knew that people were doing things outside the rules," Judicial Watch's Finton said. "If they were asking inappropriate questions based on guilt by association or party affiliations, then I don't know what more you need to show that something inappropriate was going on, if not illegal."

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November 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Thursday, November 17, 2016

After Denying Provisional Accreditation, ABA Gives Reprieve To Dallas Law School

UNT 2Following up on my previous posts on the ABA's denial of provisional accreditation to Dallas Law School (links below):  the ABA Section of Legal Education and Admissions to the Bar announced today that it is sending the school’s application back to the accreditation committee for additional review:

In light of the law school’s appearance and the new evidence offered, the Council adopted a motion that remanded the matter to the Accreditation Committee for further consideration in accordance with the provisions of Rule 25(b)(4), and directed a fact finder, in accordance with Rule 9, to visit the law school to review and verify the new evidence, in particular, the reliable plan submitted by the school. The fact finder shall submit a report to the Accreditation Committee. The Council directed that the fact finder and the Accreditation Committee particularly focus their attention on all matters related to admissions and finances (Standards 501(a), (b), and (c); Standard 202(a) and the reliable plan related to these matters.

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November 17, 2016 in Legal Education | Permalink | Comments (2)

Century Foundation Conference:  Paying For Progress—A Tax Reform Agenda For The Next President

CennturyThe Century Foundation hosts a conference today on Paying for Progress: A Tax Reform Agenda for the Next President:

Panel 1:  A Federal Budget for Equity and Fairness

  • Josh Bivens (Economic Policy Institute)
  • Jane Gravelle (Congressional Research Service)
  • Christian Dorsey (Economic Policy Institute) (moderator)

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November 17, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Indiana Dean:  The ABA's Troubling Focus On The Bar Exam

ABA Section On Legal Education (2016)Indiana Lawyer: A Troubling Focus by the ABA on the Bar Exam, by Austen Parrish (Dean, Indiana):

For those in legal education, the bar exam has oddly emerged as a key focus. The ABA’s Council of the Section of Legal Education and Admissions recently recommended a new accreditation standard. If the ABA’s House of Delegates approves it in February, law schools with a bar pass rate below 75 percent over a two-year period could lose their accreditation. This proposal has teeth, particularly as the pass rate in many states has plummeted. In Indiana, the pass rate fell to 64 percent from 75 percent just one year ago.

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November 17, 2016 in Legal Education | Permalink | Comments (10)

Will Indiana Tech Law School Donors Get Refunds?

Indiana Tech (2016)ABA Journal, Will Indiana Tech Law School Donors Get Refunds?:

After making five-figure scholarship donations to Indiana Tech School of Law, some attorneys are wondering what will happen with their money.

Eric Welch, a Muncie lawyer with his own firm, told Indiana Lawyer that he was “very disappointed” with the law school’s Oct. 31 announcement that it would close. He pledged $20,000 to the law school in 2013, to endow scholarships, and hopes that his donation will be returned.

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November 17, 2016 in Legal Education | Permalink | Comments (2)

ABA Places Charlotte Law School On Probation, Censures Valparaiso

CVFollowing up on my previous post, Ave Maria's Admissions Policies Violate ABA Standards, Law School Required To Take Immediate Remedial Action:  ABA Section of Legal Education and Admissions to the Bar, Statement on Accreditation Actions Regarding Charlotte School of Law and Valparaiso University School of Law:

At its October 20-22, 2016, meeting, the Council of the ABA Section of Legal Education and Admissions to the Bar conducted separate hearings on appeals by Charlotte School of Law (Charlotte) and Valparaiso University School of Law (Valparaiso) of decisions from the Accreditation Committee that each school was out of compliance with certain ABA Accreditation Standards. The Council’s decisions were communicated to the schools on Monday, November 14, 2016 and have been made public on November 15.

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November 17, 2016 in Legal Education | Permalink | Comments (9)

These Professors Make More Than A Thousand Bucks An Hour Peddling Mega-Mergers

Pro PublicaProPublica, These Professors Make More Than a Thousand Bucks an Hour Peddling Mega-Mergers:

The economists are leveraging their academic prestige with secret reports justifying corporate concentration. Their predictions are often wrong and consumers pay the price.

If the Government ends up approving the $85 billion AT&T-Time Warner merger, credit won’t necessarily belong to the executives, bankers, lawyers, and lobbyists pushing for the deal. More likely, it will be due to the professors.

A serial acquirer, AT&T must persuade the government to allow every major deal. Again and again, the company has relied on economists from America’s top universities to make its case before the Justice Department or the Federal Trade Commission. Moonlighting for a consulting firm named Compass Lexecon, they represented AT&T when it bought Centennial, DirecTV, and Leap Wireless; and when it tried unsuccessfully to absorb T-Mobile. And now AT&T and Time Warner have hired three top Compass Lexecon economists to counter criticism that the giant deal would harm consumers and concentrate too much media power in one company.

Today, “in front of the government, in many cases the most important advocate is the economist and lawyers come second,” said James Denvir, an antitrust lawyer at Boies, Schiller.

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November 17, 2016 in Legal Education | Permalink | Comments (0)

Former Law School Dean Accused Of Sexual Harassment Drops Racial Discrimination Lawsuit Against UC-Berkeley

The IRS Scandal, Day 1288:  Top IRS Official Says Agency Targeted Conservative Groups Based on ‘Guilt By Association’ And ‘Party Affiliation’

IRS Logo 2Judicial Watch Press Release, New Documents Reveal Top Obama IRS Official Admitted Cincinnati Office Targeted Groups Based on ‘Guilt by Association’:

Judicial Watch announced today that it has obtained 1593 pages of new documents from the Internal Revenue Service (IRS), including notes from a 2011 interoffice meeting revealing a top IRS official admitted that Cincinnati office agents were targeting organizations requesting tax exempt status based on “guilt by association” and “party affiliation.” According to former IRS Director of the Office of Rulings and Agreements Holly Paz, “they think they know what the org is really doing, rather than looking at actual activities.” ...

“This further confirms the IRS knew about abuses years before they were exposed. President Trump needs to reopen the criminal investigation of the IRS as soon as he is sworn into office,” said Judicial Watch President, Tom Fitton.

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November 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (10)

Wednesday, November 16, 2016

Burman Presents Is U.S. Corporate Income Double-Taxed? Today At Pennsylvania

Burman (2016)Leonard E. Burman (Tax Policy Center) presents Is U.S. Corporate Income Double-Taxed? (with Kimberly Clausing (Reed College)) at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

Every public finance student learns that corporations are subject to two levels of taxation—at the company level through the corporate income tax and the individual level through taxation of dividends and capital gains. Though observers frequently lament this double taxation of equity-financed corporate investment, double taxation is not important per se; the issue is the overall level of tax. (Most investors would prefer two 10 percent taxes to a single 30 percent tax.) Still, the overall effective tax rate depends on both corporate and individual income taxes.

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November 16, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Shanske Presents Equitable Apportionment In The Age Of Single Sales Factor Apportionment Today At Northwestern

ShanskeDarien Shanske (UC-Davis) presents What is Equitable Apportionment For in the Age of Single Sales Factor Apportionment? A Study of the Evolution of State Corporate Income Taxes at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Over 40 states impose a corporate income tax. Each of these states use a formula to apportion the share of a multistate corporation’s income to the state. All of these states also permit both the government and the taxpayer to challenge the result of the formula if the results “do not fairly represent the extent of the taxpayer’s business activity in this State.” This is equitable apportionment. Needless to say, terms such as “fair” invite dispute, but it seemed there was at least some sense of how equitable apportionment was to work, at least until recently.

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November 16, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pomona College May Have Violated 501(c)(3) Tax Status To Fund Anti-Trump Student Protesters

PomonaThe Claremont Independent: Pomona College May Have Violated 501(c)(3) Tax Status to Fund Anti-Trump Protesters, by Matthew Reade & Ross Steinberg:

By funding the transportation of students to and from anti-Trump rallies in the Los Angeles area with tuition dollars, Pomona College’s Draper Center for Community Partnership may have violated IRS regulations prohibiting tax-exempt educational institutions from engaging in partisan political activity. ...

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November 16, 2016 in Legal Education, Political News, Tax | Permalink | Comments (5)

Access Group Legal Education Research Symposium

Access GroupAccess Group Legal Education Research Symposium:

[T]he Access Group Legal Education Research Symposium offers law school deans, administrators, faculty and researchers from across the nation the opportunity to engage in thought-provoking discussions on the most critical issues facing legal education today.

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November 16, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

What's Happened To The University? A Sociological Exploration Of Its Infantilisation

University 2Wall Street Journal:  Free Thought Under Siege, by Daniel Shuchman (reviewing Frank Furedi, What's Happened to the University? A Sociological Exploration of its Infantilisation (Routledge 2016)):

Rancorous trends such as microaggressions, safe spaces, trigger warnings and intellectual intolerance have taken hold at universities with breathtaking speed. Last year’s controversy over Halloween costumes at Yale led to the departure of two respected faculty members, and this year made the fall festival a flashpoint of conflict at campuses across the country. The recent explosion in the number of university administrators, coupled with an environment of perpetual suspicion—the University of Florida urges students to report on one another to its “Bias Education and Response Team”—drives students who need to resolve normal tensions in human interaction to instead seek intervention by mediators, diversity officers, student life deans or lawyers.

As Frank Furedi compellingly argues in this deeply perceptive and important book, these phenomena are not just harmless fads acted out by a few petulant students and their indulgent professors in an academic cocoon. Rather, they are both a symptom and a cause of malaise and strife in society at large. At stake is whether freedom of thought will long survive and whether individuals will have the temperament to resolve everyday social and workplace conflicts without bureaucratic intervention or litigation.

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November 16, 2016 in Book Club, Legal Education | Permalink | Comments (4)

ABA Tax Section Publishes November 2016 Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 36 Tax Times No. 1 (Nov. 2016):

FROM THE CHAIR
Boston Meeting Successes, and More to Come
We had a great joint meeting in Boston with the Real Property, Trust and Estate Law Section at the end of September. There were approximately 1,100 in attendance, and I was inspired by the enthusiasm about the activities of the Tax Section for the coming year. We have a lot of work to do, and we are going to have a good time doing it.

PEOPLE IN TAX
Interview with Anne-Marie Rábago
By Tom Greenaway, KPMG LLP, Boston, MA
Anne-Marie Rábago recently joined the State Bar of Texas as Director of the Texas Opportunity & Justice Incubator in Austin. We interviewed her at the Joint Fall Meeting in Boston to talk about the incubator movement and the access to justice gap.

AT COURT
Implications of Bitcoin Not Being Actual Currency: The Espinoza Case
By Joni Larson, Professor, Indiana Tech Law School, Fort Wayne, IN
Bitcoin is not the first virtual currency. It has, however, garnered significant attention by being embroiled in several scandals. Through the lens of the Espinoza case, this article examinations the tax implications of selling bitcoin.

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November 16, 2016 in ABA Tax Section, Tax | Permalink | Comments (0)

Muller:  The Coming Reckoning For Non-JD Legal Education, As Enrollments Soar And Bar Passage Rates Hover At 30% For Foreign LLMs

Derek Muller (Pepperdine), The Coming Reckoning for Non-JD Legal Education:

As JD enrollment falls and non-JD enrollment increases at law schools, leading to a dramatic increase in the percentage of legal education focused on a non-JD student body, it's worth considering what non-JD legal education looks like, where it's going, and what the future may hold. It's a story of some unusual and under-discussed factors that portend a coming reckoning....

As I've noted before, one in ten students enrolled in law schools in the United States are not part of a JD program, a number likely to continue to rise:

 

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November 16, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1287:  Koskinen Urges Trump Transition Team To Name New IRS Commissioner Soon

IRS Logo 2The Hill, IRS Chief Urges Trump Team to Consider Replacement Soon:

The head of the IRS said Tuesday it’s in the best interest of Donald Trump’s presidential transition team to act early when mulling options for his potential replacement.

“One of my concerns for a little while has been, whoever won, they need to understand that, no matter what happens, my term runs out next November,” IRS Commissioner John Koskinen told reporters after an American Institute of CPA's conference Tuesday.

He said Trump's team would be best served by making sure they have someone to put through the confirmation process by mid-spring in order to prevent a leadership drop off next November. ...

He said that he hopes meetings with the Trump’s transition team will begin soon.

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November 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, November 15, 2016

Dynarski Presents Tax Benefits Of College Attendance Today At Columbia

DynarskiSusan Dynarski (Michigan) presents Tax Benefits of College Attendance at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

National efforts to promote college enrollment are increasingly delivered through tax-based assistance, including tax credits and deductions for tuition and fees, tax-advantaged college savings plans, and student loan interest deductions. This paper outlines the main tax-based student aid programs and describes their history and growth over time. We then provide an economic perspective on tax-based student aid, and an assessment of their impact on student behavior. We conclude with a discussion of what the tax system does particularly well and what it does particularly poorly in comparison to traditional Department of Education-based student aid programs, and highlight opportunities for productive reform. 

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

Viard Presents Progressive Consumption Taxation: The X-Tax Revisited At NYU

PCT 2Alan Viard (American Enterprise Institute) presented Progressive Consumption Taxation: The X Tax Revisited (2012) at NYU yesterday as part of its High-End Inequality Colloquium Series (more here) hosted by Robert Frank (Cornell) and Dan Shaviro (NYU):

The United States is alone among industrialized countries in having no broad-based consumption tax at the national level. Yet, economic analysis suggests that consumption taxation is likely to be superior to income taxation, because it does not penalize saving and investment. This book proposes to completely replace the income tax system with a progressive consumption tax. This approach avoids the problems arising from the adoption of a consumption tax alongside the income tax and also avoids the distributional problems posed by regressive consumption taxes, such as the VAT.

This book argues that the Bradford X tax, developed by the late David Bradford, offers the best form of progressive consumption taxation. The X tax modifies the VAT, so that it no longer imposes a flat-rate tax on all consumption. It splits the value-added tax base, which equals aggregate consumption, into two components, wages and business cash flow. The X tax achieves progressivity by applying graduated tax rates to wages and a high flat tax rate to business cash flow, which reflects consumption financed from wealth accumulated prior to the reform and from above-normal business investment returns, which largely accrue to well-off households.

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