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Monday, June 22, 2015

Harrison: The State Of Florida Only Needs One Law School

Florida 2Gainesville Sun op-ed:  The State of Florida Only Needs One Law School, by Jeffrey L. Harrison (Florida):

The state of Florida operates four law schools. Last year, the schools sent out a total of 2,577 letters of acceptance to applicants and 701, or about 31 percent, accepted the invitation. ...

Florida’s publicly supported law schools operate expensive programs to compete against each other for the very same students. Does it sound like football? Sure, but football is a product that generates revenue, especially when the state’s schools compete against each other. ...

What we have is different departments of the state that do the same thing, competing with each other on the dime of people who get nothing back. If you were a business, would you open a store across the street from the other store you own in order to lure your own customers away? Let’s hope not.

It’s time for the irrational way that Florida delivers legal education to change. There can be four campuses but one set of admissions guidelines, one acceptance letter per applicant, one admissions office, one PR department and one diploma that does not distinguish among campuses.

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June 22, 2015 in Legal Education | Permalink | Comments (5)

Sanchirico: Tax Inertia And Business Tax Reform

Chris William Sanchirico (Pennsylvania), Tax Inertia: A General Framework with Specific Application to Business Tax Reform (appendix):

A surprising degree of bipartisan consensus has lately formed in the United States around two propositions of business tax reform: that something should be done about the “lockout” of US multinationals’ foreign earnings; and that the corporate income tax rate should be reduced. This paper questions whether these two propositions are really consistent. In the process of attempting to provide an answer, it develops a framework for relating and measuring various forms of “tax inertia”: tax-based disincentives to alter investments. Applying this framework, the paper concludes that the current agreement on business tax reform is substantially in disagreement with itself. 

June 22, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 774: The D.C. Circuit Continues To Chip Away At The Anti-Injunction Act

Hickman 2014 2TaxProf Blog op-ed:  Z Street v. Koskinen: The D.C. Circuit Continues To Chip Away At The Anti-Injunction Act, by Kristin E. Hickman (Minnesota):

In Z Street v Koskinen, the D.C. Circuit considered the justiciability of a claim raised by Z Street, a nonprofit organization, that the IRS delayed considering Z Street’s application for tax exempt status under IRC § 501(c)(3) based solely upon the fact that Z Street’s activities contradicted government policy vis a vis Israel, and that the IRS thus violated Z Street’s First Amendment rights. IRC § 7428 allows an organization to seek declaratory judgment if the IRS fails to act upon its exemption application within 270 days. Z Street brought its challenge 32 days short of that date, prompting the IRS to claim that the Anti-Injunction Act, § 7421 precluded Z Street’s suit until the 270-day period for relief under IRC § 7428 had elapsed. 

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June 22, 2015 in IRS News, IRS Scandal, New Cases, Tax | Permalink | Comments (0)

How To Cut Law School Tuition By 35%: Cap Overhead Tax At 15%, Cut Faculty Salaries By 20%, Eliminate Sabbaticals And Summer Stipends, Increase Teaching Loads to 3/3

Jay Sterling Silver (St. Thomas), Responsible Solutions: Reply to Tamanaha and Campos, 2 Tex. A&M L. Rev. 215 (2014):

The following five measures will help curb the forces that drive up law school tuition annually, substantially reduce tuition, and limit the number of newly minted attorneys cast into a contracting legal job market. At the same time, the measures will help preserve the considerable private, pedagogical good in the present model as well as the public good of competent legal representation and the independent critique of law and the legal system. ...

The first measure would tighten, rather than loosen, the ABA accreditation standards to prevent university administrations, through an inflated “overhead” formula, from subsidizing university shortfalls or other poor performing programs. Presently, ABA Standard 202 governing law school resources requires only that a university give an accounting of the law school revenues it diverts to other programs; take all you want, just tell us what you took. Standard 202 should be supplanted by language clearly limiting the central university's take to actual overhead expenses, and requiring an independent accounting to ensure accuracy. Doing so would lower tuition and disincentivize universities with law schools from raising tuition as high as possible each year, and those without law schools from opening new ones up as revenue centers.

The second measure would tighten the ABA Standards to require start-up law schools to show, prior to a grant of provisional accreditation, that their graduates will serve an underserved population and will not exacerbate lawyer unemployment. ...

The third is to cut the salaries of full-time faculty and deans by twenty percent and do away with sabbaticals and research stipends. ...

The fourth measure is to increase teaching loads by one course per semester-- meaning the vast majority of law professors will teach three courses per semester, rather than the two that represents the current course load at most law schools. ...

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June 22, 2015 in Legal Education | Permalink | Comments (6)

30% Of Law School Deans (And 40% Of New Deans) Are Women

NLJNational Law Journal, Rise in Number of Women Deans at U.S. Law Schools:

Since 1989, women who run law schools have dined together during an annual American Bar Association workshop for leaders in legal education. Tradition dictates that each attendee talk about her greatest success and failure during the year. They share support and ideas.

When Katherine Broderick assumed the deanship of the University of the District of Columbia David A. Clarke School of Law in 1998, the 14 female law deans could fit at a relatively small table. Today, 59 women run American Bar Association-accredited law schools, comprising 30 percent of all law deans. That's up from under 21 percent in 2008, according to a survey of law faculty by the Association of American Law Schools (AALS).

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

TaxProf Blog Weekend Roundup

Sunday, June 21, 2015

A Bittersweet Father's Day

IMG_1386

My father died nearly eight years ago, and I find myself thinking of him more and more with each passing year.   My eulogy at his funeral did not fully capture the towering presence he was in my life, and he remains so in death.  Al Sturgeon (Pepperdine) captures my thoughts this Father's Day, including this wonderful song from Chet Atkins:

 

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June 21, 2015 in Legal Education, Tax | Permalink | Comments (1)

Forgiveness In Charleston (And Beyond)

Incredible stories of forgiveness arising out of the horrific Charleston church shooting

It brought to mind my previous post on the powerful song by Matthew West (click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate):

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June 21, 2015 in Legal Education, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

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

  1. [357 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [281 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [180 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [164 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [143 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (U.S. Treasury Department)

June 21, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 773

IRS Logo 2Fox, The IRS Mystery Man Calling the Shots:

When it comes to the targeting of conservative groups by the Internal Revenue Service, the media has focused its attention on Lois Lerner, who oversaw the tax agency’s Exempt Organizations Unit. But they may want to pay more attention to William Wilkins, the IRS chief counsel, whose office, according to sources, had unprecedented involvement in applications for tax exempt status and the special scrutiny of conservative applications.

Wilkins is one of just two of the tax agency’s roughly 90,000 employees who was appointed by the White House, according to reports.  He came to the IRS in 2009 from Wilmer Cutler Pickering Hale and Dorr LLP, where he had worked as a lobbyist since 1988. At WilmerHale, as the firm is now called, he was part of the tax practice group and as part of his responsibilities he advised nonprofit organizations on tax compliance. Prior to that, Wilkins served as staff counsel to the Democratic side of the Senate Finance Committee from 1981 to 1988.

Tom Fitton, president of Judicial Watch, who is suing the IRS to force the issuance of emails related to the tax exempt scandal, is highly critical of Wilkins. He says, “The counsel’s office was up to its neck in tea party targeting. I don’t understand why he is still there.” Wilkins also led the defense team of former Obama pastor Jeremiah Wright and Trinity United Church of Christ in 2008, when it faced an IRS probe regarding its tax exempt status.

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June 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, June 20, 2015

This Week's Ten Most Popular TaxProf Blog Posts

ABA Task Force On The Financing Of Legal Education Issues Final Report

ABA Logo 2The ABA Task Force on the Financing of Legal Education yesterday released its final 62-page report with three recommendations:

  1. Help students take full advantage of the current federal loan programs by mandating enhanced financial counseling and "plain English" disclosures of loan repayment programs;
  2. Serve transparency, accountability, and better planning by mandating that the ABA collect detailed data for each law school on expenditures, revenue, and financial aid (including discounting information and proportions of need vs. merit-based aid) and make all of the data publicly available; and
  3. Develop new ways of balancing responsible curricula and pedagogies, cost-effectiveness, and alternative revenue streams by strongly encouraging and supporting experimentation and innovation among law schools.

The ABA House of Delegates will vote on the adoption of the task force's recommendations at its Aug. 3-4 meeting in Chicago.

National Law Journal, ABA Task Force: Bring Law School Costs Down:

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June 20, 2015 in Legal Education | Permalink | Comments (0)

Law School Financial Aid Rankings

Business Insider, The 25 US Law Schools That Offer the Best Financial Aid:

The online graduate school guide GraduatePrograms.com polled over 10,000 former and current law school students to find out which US schools offer the best financial aid packages and the smoothest application processes.

They rated their schools on a scale from 1-10, 10 being the strongest. The scores were then averaged and ranked to determine the top law schools for financial aid.

BI

Pepperdine is #21, with a 7.40 financial aid score.

Methodology:

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June 20, 2015 in Law School Rankings, Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 772: D.C. Circuit Refuses To Dismiss Z Street's Claim That The IRS Delayed Tax-Exempt Status Due To Its Pro-Israel Views

SmithTaxProf Blog op-ed: D.C. Circuit Opinion in Z Street v. Koskinen Denies Application of Anti-Injunction Act in Suit over Delay in Processing Application for Tax Exemption, by Patrick J. Smith (Ivins, Phillips & Barker, Washington, D.C.):

On Friday, June 19, 2015, the D.C. Circuit issued its opinion in Z Street v Koskinen.  In this suit, an organization that had filed an application for tax-exempt status with the IRS brought suit against the IRS in U.S. district court alleging that the IRS was delaying processing of the application because the organization’s activities related to Israel and because, according to the organization’s allegations, the IRS has an “Israel Special Policy” requiring delayed processing for such organizations if their views on Israel do not coincide with the policies of the Obama Administration.  The government filed a motion to dismiss, relying primarily on the argument that the suit was barred by the Anti-Injunction Act.  Based on the procedural posture, the district court assumed the truth of the organization’s allegations, and denied the motion, holding that the suit was not about assessment or collection of taxes but rather about allegations of unconstitutional discrimination in the processing of the application for tax-exempt status.

The oral argument in the case took place on May 4 of this year, and during this oral argument the panel of three D.C. Circuit judges was clearly extremely hostile to the position taken by the IRS and the Justice Department on behalf of the IRS.  A significant part of the questioning by the judges related to the Supreme Court’s recent decision in Direct Marketing Association v. Brohl, 135 S. Ct. 1124 (2015).  The judges on the panel suggested in their questions to the attorney representing the IRS that the Direct Marketing decision would strongly support the conclusion that the Anti-Injunction Act should not apply under the circumstances of this case. 

As I discussed in a recent Tax Notes article, Challenges to Tax Regulations: the APA and the Anti-Injunction Act, while the Direct Marketing decision related to the Tax Injunction Act, which imposes limitations on the types of suits relating to state taxes that may be heard in federal district court, while the Anti-Injunction Act imposes limitations on the types of suits relating to federal taxes that may be brought in federal district court, nevertheless, because of the strong similarities between these two provisions, and because the Supreme Court in Direct Marketing relied on these parallels to read the words “assessment,” “collection,” and “levy” in the Tax Injunction Act in a narrow, technical way, based on the meaning these words have in the Internal Revenue Code, the narrow reading the Court gave the Tax Injunction Act in Direct Marketing would suggest that the Anti-Injunction Act should be given a similarly narrow reading, contrary to the broad reading given to the Anti-Injunction Act in the 1974 Supreme Court decision Bob Jones University v. Simon, 416 U.S. 725 (1974).

However, while the opinion issued by the D.C. Circuit in Z Street affirmed the district court and held that the Anti-Injunction Act did not apply to bar the suit, nevertheless, the tone of the opinion was much milder than might have been expected based on the tone of the oral argument.  In addition, while the opinion noted that the court’s conclusion “finds support in” the Direct Marketing decision, it was not on this basis that the court decided the Anti-Injunction Act did not apply.  Instead, the court relied on the Supreme Court’s 1984 decision in South Carolina v. Regan, 465 U.S. 367 (1984), which held that the Anti-Injunction Act does not apply to bar a suit in cases where the party bringing the suit has no alternative way of bringing its challenge to IRS action in court.  The court held this principle applied in this case because the alternative remedies suggested by the government, a tax refund suit, or a challenge in Tax Court under section 7428 for a determination relating to qualification for tax-exempt status, would not give the organization a way to make its challenge to the delay in processing its application on allegedly unconstitutional grounds.

Thus, while the outcome in the case is welcome, this decision is somewhat disappointing in that it leaves for another day a determination of the effect of the Direct Marketing decision on the scope of the Anti-Injunction Act and the Bob Jones decision.  The court notes that while the D.C. Circuit’s earlier en banc decision in Cohen v. United States, 650 F.3d 717 (D.C. Cir. 2011) (en banc), rejected the IRS position that because of the Anti-Injunction Act, the only way to litigate tax issues is through the types of tax litigation specifically authorized in the Internal Revenue Code, such as tax refund suits and Tax Court deficiency actions, nevertheless, the Cohen decision, which preceded the Direct Marketing decision by several years, also noted that the Anti-Injunction Act means that a suit’s “implications” for assessment and collection must be considered. 

Another currently pending D.C. Circuit case, Florida Bankers Association v. Treasury, No. 14-5036 (D.C. Cir.), is likely to address more directly the issue of what Direct Marketing means for the Anti-Injunction Act.  I discussed the Anti-Injunction Act issue in this case in my recent Tax Notes article, and I discussed the merits issue in the case in two earlier Tax Notes articles.  Although the briefing and the oral argument in this case preceded the issuance of the Direct Marketing decision, nevertheless, the plaintiffs filed a submission with the D.C. Circuit after the Direct Marketing decision notifying the court of the relevance of this case.  This case involves a challenge to the validity of IRS regulations requiring banks to file information returns with the IRS reporting interest earned by non-resident aliens on accounts at the reporting banks.  In addition to arguments on the merits, the government argues the suit is barred by the Anti-Injunction Act.  The district court held the Anti-Injunction Act did not apply, both because the case involves information reporting regarding income that would not in any event be subject to U.S. tax and because the penalty that would be imposed on the banks for failing to comply with the reporting requirements was not sufficient to implicate the Anti-Injunction Act because none of the banks had violated this requirement and none had indicated an intention to do so.

During the D.C. Circuit oral argument, one of the judges on the panel, Judge Brett Kavanaugh, who wrote the opinion in Loving v IRS, 742 F.3d 1013 (D.C. Cir. 2014), holding invalid the IRS regulations imposing restrictions on tax return preparers, was particularly interested in the Anti-Injunction Act issue.  The fact that there has been a somewhat long delay since the oral argument without the opinion in this case being issued (over four months, compared to six weeks between oral argument and opinion in Z Street), suggests that the opinion when it comes out should illuminate the D.C. Circuit’s view on the significance of the Direct Marketing decision for the Anti-Injunction Act.  There is no overlap in the panels between Z Street and Florida Bankers.

Prior TaxProf Blog coverage:  

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June 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 19, 2015

Atanassov Presents Corporate Income Taxes, Financial Constraints And Innovation Today At Northwestern

SearleJulian Atanassov (Oregon) presents Corporate Income Taxes, Financial Constraints and Innovation (with Xiaoding Liu (Oregon)) at the Eighth Annual Conference on Innovation Economics today at Northwestern's Searle Center on Law, Regulation, and Economic Growth:

We examine exogenous changes in state corporate income taxes over the 1988-2006 period and find that tax decreases significantly boost both the quantity, measured by the number of patents, and the quality, measured by citations per patent, of innovative output, while tax increases have little impact on innovation. Most of the impact of tax changes on innovation occurs two or more years after the tax change, which alleviates concerns of reverse causality. Further tests examine the channels through which tax decreases affect innovation. We document that tax decreases have stronger impact on innovation for more financially constrained firms, for firms with weaker governance and for firms that engage in tax avoidance to a greater extent. The latter result suggests that, after a tax decrease, firms can allocate more resources to innovative activities rather than to tax avoidance. We conduct numerous additional tests to demonstrate that our results are not spurious and subject to endogeneity biases.

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

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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June 19, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

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June 19, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

WSJ: 'Mindfulness' Movement Sweeps Through Law Schools, Legal Practice — 'I Love Me'

MindfulnessFront page article in the Wall Street Journal:  Lawyers Go Zen, With Few Objections:

Soft winds of change are rustling through the legal profession. ... It has swept through University of Miami School of Law, whose students this year completed a homework project by deliberately losing an argument.

And this spring it breezed past a verdant bluff above the Hudson River, where dozens of law professors, litigators and judges spent three days meditating and pacing trails under a blanket of silence and the tutelage of a Buddhist priest.

It wasn’t too long ago when attorneys were caricatured as Rambo types who scorched civility and professionalism to win at all costs.

But that was before the “mindfulness” movement.

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June 19, 2015 in Legal Education | Permalink | Comments (3)

Should Law Students Get A Lower Student Loan Interest Rate?

Student LoansBloomberg, Is the Government Charging Some People Too Much for Student Loans?:

For young people with good jobs, repaying student loans has probably never been easier. In the past four years a growing number of companies have begun offering to refinance people’s federal loans, which generally means buying the debt and then collecting payments from borrowers at a much lower interest rate than the government was charging.

The companies—which include startups and traditional banks alike—say this is an attractive business opportunity because certain graduates are bound to pay back their loans on time. Buying their debt now and collecting small, but virtually guaranteed, payments over time can be a profitable enterprise.

For the people whom these companies target—often graduate school alums—the deal has few drawbacks. Those who refinance public loans through a private company like Social Finance or CommonBond pay less interest over the long haul. They also give up the right to enter into government repayment plans, but it’s unlikely these particular folks would need to rely on such programs, which are aimed at struggling grads.

Sounds like a win-win scenario for all players, except for two: the U.S. government and, by extension, the taxpayer. As Bloomberg reported last week, the boom in student debt refinancing for a few could be bad for the masses. Taking the least risky borrowers—the ones with good jobs and high incomes—out of the pool of those who are repaying student loans makes that pool more risky overall.

Imagine a doomsday scenario (which is unlikely to occur, but still interesting) where private lenders manage to pluck every solvent borrower out of the group of students and graduates indebted to the government. That would leave the rest of us, who finance the loan program and perhaps count on college loans for ourselves or our children, dependent on a set of (theoretically) unreliable people to replenish the government’s coffers. Not fun.

So should the government get in on the refinancing game? Some say yes. The U.S. Department of Education, says Michael Simkovic, a law professor at Seton Hall University, is overcharging certain borrowers, given how unlikely they are to stop paying the debt back. He says it would make more sense to give lower interest rates to people who major in lucrative fields, or those who go to graduate school for certain professional degrees.

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June 19, 2015 in Legal Education | Permalink | Comments (3)

Douglas O'Donnell To Replace Heather Maloy As Commissioner, Large Business And International Division (LB&I)

MaloyHeather C. Maloy, Commissioner of the Large Business and International Division (LB&I), will leave her position at the IRS on July 10, 2015. Douglas W. O'Donnell, Deputy Commissioner (International), will become the new Commissioner of the Large Business and International Division:

Since November 2009, Heather has served as the Division Commissioner in the Large Business and International Division (LB&I) and has been responsible for providing executive leadership to the LB&I workforce as it accomplished its mission of ensuring tax compliance of corporations, subchapter S corporations and partnerships with assets greater than 10 million and delivery of service wide tax administration services for individuals in the area of international tax matters. During her tenure, she oversaw the successful expansion of the Compliance Assurance Process (CAP), championed the development, issuance and implementation of the Uncertain Tax Positions (UTP) and provided critical leadership to implement the new Foreign Account Tax Compliance Act (FATCA). During the summer of 2013, she acted as the Deputy Commissioner for Services and Enforcement.

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June 19, 2015 in IRS News, Tax | Permalink | Comments (2)

Crespi: The 'Tax Bomb' Facing Lawyers Who Enroll In Income-Based Student Loan Repayment Plans Is Even Bigger

IBRFollowing on last week's post, The 'Tax Bomb' Facing Lawyers Who Enroll In Income-Based Student Loan Repayment Plans:  Greg Crespi (SMU) reports that he has

substantially revised and greatly improved my IBR “tax bomb” draft paper that I sent to you on June 7, in response to a lot of very helpful feedback from other scholars and practitioners, and I have replaced my prior SSRN posting with this new draft (attached) .  This new draft has a much more accurate assessment of the actually quite limited significance of the DOE’s new REPAYE Plan (more limited than I had previously realized), and now includes significantly larger and probably much more accurate projections of the size of the problem.  I now project that by 2038 approximately 20,000+ lawyers will be impacted each year by this IBR or PAYE debt forgiveness tax liability (see p. 80-81), with an annual aggregate tax bill imposed upon these lawyers of approximately $800 million to $900 million (see p. 82-83).  According to SSRN many of your readers have downloaded my draft, and you may want to give them a heads-up as to this new and improved  draft with its more dramatic predictions as to the 2032 and later tax implications for high-debt law school graduates of the IBR program.

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

The IRS Scandal, Day 771

IRS Logo 2Investor's Business Daily, IRS' Latest Email Excuse Draws It Closer To Rogue Agency Status:

Lawlessness:  On Day 768 of the IRS scandal targeting political dissidents, the tax agency said it has more emails to release. Only it can't release them until September because it must ensure there are no duplicates. Baloney.

Missing yet another court-ordered deadline on June 12, the Internal Revenue Service has failed to release 6,400 new emails found on the hard drive of Lois Lerner, former tax exempt organization chief, pertaining to the agency's admitted targeting of administration critics. ...

Now, instead of that dog-ate-my-homework claim, the excuse is that the IRS only wants to make sure there are no duplicates in the bunch, a peculiar fastidiousness given how the agency has stopped answering most taxpayer phone calls .

Let's cut to the chase here: The IRS is obstructing justice because it doesn't want the truth to come out . The agency has been caught red-handed targeting opponents of the Obama administration, including the tea party, pro-Israel groups and conservative news media.

It purposely delayed issuances of tax-exempt status to nonprofit groups and held investigations entirely outside its own mandate.

What the IRS is hiding is bound to be the work of malicious political operatives cloaking themselves as impartial civil servants, plotting among themselves against their political enemies through email.

The stiff-arms given by the IRS at every juncture — from Lerner's invoking her Fifth Amendment right against self-incrimination at a House hearing to this latest claim about preventing duplicates — is consistent with that scenario.

As a result, the IRS is moving closer and closer to rogue status — an agency so contemptuous of the law and confident of its impunity that it's becoming a law unto itself.

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June 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, June 18, 2015

Rand Paul Announces 'The Fair And Flat Tax': 14.5% Rate For Individuals & Businesses

RandWall Street Journal op-ed:  Blow Up the Tax Code and Start Over, by Rand Paul (R-KY):

Apply a 14.5% flat tax to personal income and to businesses. Cut deductions. Watch the economy roar.

Some of my fellow Republican candidates for the presidency have proposed plans to fix the tax system. These proposals are a step in the right direction, but the tax code has grown so corrupt, complicated, intrusive and antigrowth that I’ve concluded the system isn’t fixable.

So on Thursday I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this “The Fair and Flat Tax.”

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June 18, 2015 in Tax | Permalink | Comments (10)

NY Times: Put Lawyers Where They’re Needed

Liberated LawyeringNew York Times op-ed:  Put Lawyers Where They’re Needed, by Theresa Amato: (author, Liberated Lawyering: How Lawyers Can Change the World (forthcoming 2016)):

Millions of Americans lack crucial legal services. Yet enormous numbers of lawyers are unemployed. Why can’t the supply of lawyers match the demand? ...

To create the entire sector of sustainable, affordable legal service providers that the legal profession needs will take much more entrepreneurship. There’s no shortage of lawyers to bridge the justice gap. For the last four years, less than 60 percent of law-school graduates have found full-time jobs requiring a bar qualification.

The problem is twofold. First, school fees have consistently outpaced inflation over the last 30 years, and on average, 86 percent of law students graduate with six-figure debt. Without help, the drag of this debt makes it near-impossible for willing graduates to take lower-paying legal services jobs.

Second, even for those graduates who are able to serve those who lack affordable legal representation, the jobs are few and much fought-for — despite the often less than chic locales. Recent graduates rarely have the training or resources to create jobs for themselves. ...

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June 18, 2015 in Book Club, Legal Education | Permalink | Comments (5)

Two Computer Monitors Just Don't Cut It Anymore

Monitor 2PC World, How to Create an Insane Multiple Monitor Setup With Three, Four, or More Displays:

Studies have shown that dual monitors can increase productivity [sometimes], but the jury’s still out on whether adding even more monitors means even more productivity. That aside, having multiple monitors (and I’m talking three, four, five, or even six) is just…awesome, and something you totally need in your life.

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

William Byrnes Leaves Thomas Jefferson For Texas A&M

ByrnesWilliam H. Byrnes, IV, Associate Dean for Graduate and Distance Education Programs in International Tax and Financial Services at Thomas Jefferson Law School (and co-editor of our International Financial Law Prof Blog), has accepted a position as Executive Professor of Law and Associate Dean for Special Projects at Texas A&M Law School:

William Byrnes is a leading tax and financial crimes expert who has published numerous books and articles. Professor Byrnes pioneered online legal education twenty years ago and created the first online LL.M. offered by an ABA accredited law school. He is formerly an Associate Dean at Thomas Jefferson School of Law. He currently serves on the Executive Committee of the AALS Section on International Legal Exchange. As a tax attorney, he was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand. He brings a unique set of qualifications, having successfully run distance education programs and built an international network that supports them.

June 18, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (2)

Fennell: Do Not Cite Or Circulate

DNCCLee Anne Fennell (Chicago), Do Not Cite or Circulate, 18 Green Bag 2d 151 (2015):

This short essay ponders why legal scholars attach formulations such as "Do Not Cite or Circulate" to draft works. It argues against the practice in most circumstances, particularly for work posted on the internet.

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

North Carolina Senate Cuts $3 Million From UNC Law School Budget: 'The Gene Nichol Transfer Amendment'

North Carolina LogoWRAL News, Senate GOP Docks UNC Law $3M:

A last-minute amendment by Senate leaders Wednesday docked the UNC Chapel Hill School of Law budget by $3 million. Democrats say it's political payback for the school's employment of legislative critic Gene Nichol. ...

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June 18, 2015 in Legal Education | Permalink | Comments (4)

TIGTA: IRS Budget Cuts Had Minimal Impact On Tax Collections

Washington Examiner, Watchdog: IRS Cuts Had Minimal Impact on Tax Collections:

The government watchdog released a report Wednesday indicating that the ability of the IRS to collect taxes hasn't been hurt too dramatically by sharp budget cuts the agency has seen since 2010.

The Treasury Inspector General for Tax Administration's report said tax collection has softened somewhat, but data in the report shows that revenues haven't fallen that far in some cases, and that some revenues have increased over the last few years. ...

[T]he report showed that ACS collections were $3.2 billion in 2010, when there were 2,817 ACS workers, and $3.1 billion in 2014, when there were 2,234 ACS workers. The report admitted that's "slightly less" in collections after a more than 20 percent cut to the workforce. While collections fell to $2.8 billion in 2012, collections have actually been rising since then, and have been nearly flat over the entire period, even as the number of workers have fallen.

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June 18, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (2)

Wal-Mart Has $76 Billion In Undisclosed Overseas Tax Havens

TheWalmartWeb-June-2015-FINALBloomberg:  Wal-Mart Has $76 Billion in Undisclosed Overseas Tax Havens, by Jesse Drucker & Renee Dudley:

Wal-Mart Stores Inc. owns more than $76 billion of assets through a web of units in offshore tax havens around the world, though you wouldn’t know it from reading the giant retailer’s annual report.

A new study has found Wal-Mart has at least 78 offshore subsidiaries and branches, more than 30 created since 2009 and none mentioned in U.S. securities filings. Overseas operations have helped the company cut more than $3.5 billion off its income tax bills in the past six years, its annual reports show.

The study, researched by the United Food & Commercial Workers International Union and published Wednesday in a report by Americans for Tax Fairness, found 90 percent of Wal-Mart’s overseas assets are owned by subsidiaries in Luxembourg and the Netherlands, two of the most popular corporate tax havens.

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June 18, 2015 in News, Tax | Permalink | Comments (1)

Simkovic: Understanding Student Loans

Michael Simkovic (Seton Hall), Understanding Student Loans (1 of 2):

A shorthand approach sometimes used to compare the cost and benefits of higher education—comparing student loan balances at graduation to first year earnings—can be seriously misleading.  The implication of this approach is that student loans have to be repaid in full shortly after graduation, and that graduates’ low initial earnings will persist for the rest of their lives.  

This is an apples to oranges comparison.  An investment in education pays dividends throughout one’s life. First-year earnings are one small, unrepresentative, slice of lifetime earnings. Comparing a lifetime investment to one year of expected returns on it feeds ignorance about how student loans and lifetime earnings actually work.  It thus risks misleading prospective students into making financially disastrous decisions to underinvest in education. ...

Because the benefits of education accrue over the course of a career—perhaps 40 years or more—and earnings typically do not peak until middle age, the costs of education should ideally also be spread over a similar time frame. 

Simkovic

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June 18, 2015 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 770

Wednesday, June 17, 2015

2014-15 SALT Survey Of Law Professor Salaries

SALTThe Society of American Law Teachers has released its 2014-15 Law Professor Salary Survey (June 2015).  82 law schools responded to the survey with data on median base salaries for three faculty ranks (assistant professor, pre-tenure associate professor, and tenured professor (both associate and full)) and median summer stipends.  Here are the data for the 11 Top 60 law schools that responded to the survey:

School (Rank)

Ass’t

Pre-Tenure Assoc

Tenured (Assoc/Full)

Summer

Iowa (22)

134,550

184,800

15,000

Georgia (31)

121,400

144,000

180,765

27,500

Ohio State (34)

121,800

175,002

12,500

Florida (47)

112,240

125,742

158,000

26,757

Wake Forest (47)

125,363

127,506

179,215

13,000

Pepperdine (52)

149,000

164,500

13,500

Tennessee (52)

100,700

137,390

17,000

Nebraska (56)

102,964

109,592

154,764

11,000

Case Western (59)

126,250

141,400

196,400

8,500

Missouri (59)

101,821

143,932

10,000

UC-Hastings (59)

126,250

137,842

180,004

12,000

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

NY Times: Carly Fiorina Shows Us Just How Weird America’s Tax System Is

Fiorina

New York Times:  Carly Fiorina Shows Us Just How Weird America’s Tax System Is, by Josh Barro:

Last week, Carly Fiorina’s presidential campaign made an offer to reporters that was tantalizing to me, but probably to few other people on the planet: If we came in person to her campaign headquarters in Virginia, we could review her state income tax returns.

Ms. Fiorina had already put her and her husband’s federal income taxes for 2012 and 2013 online, along with a disclosure of financial assets that is much more detailed than required by law. (Ms. Fiorina, a former chief executive of Hewlett-Packard, and her husband have a net worth of precisely $58,954,494.88, according to her disclosure forms.) But I was mostly interested in the Fiorinas’ state income tax returns because they demonstrate a distinct — and distinctly annoying — feature of American taxes: the way states clamber over one another, trying to tax the same income, often generating a lot of paperwork but not much revenue.

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June 17, 2015 in Tax | Permalink | Comments (1)

Pasquale: The New York Times’ Curious War On Traditional Higher Education

Frank Pasquale (Maryland), The New York Times’ Curious War on Traditional Higher Education:

It’s a strange position for America’s “paper of record” to take. Despite its largely traditionally-college-educated readership, the New York Times is constantly publishing articles attacking the value of university degrees. Tom Friedman dismisses them as expensive merit “badges” oft-unrelated to the exact qualifications needed for jobs. The ubiquitous Tyler Cowen blasts ed sector costs and inefficiencies, despite international acclaim for US universities. The author of The End of College has had a high-profile platform at the Times‘s Upshot blog.

All three men tend to characterize traditional college degrees as mere signals, barely (if at all) related to the actual skills, habits, and qualities of mind and character that lead to successful, fulfilling lives. I’ve never seen them grapple with the extensive empirical literature on why education increases earnings. Nor do they tend to respond much to the hard data that their colleague David Leonhardt provides on the costs and benefits of college.

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

BigLaw L.A. Divorce Gets Nasty As Ex-Wife (Sullivan & Cromwell, Finance) Cross-Examines Former Husband (Irell & Manella, Tax)

PixAbove the Law, Biglaw Divorce Gets Nasty As Ex-Wife Cross-Examines Former Husband:

It’s hard to imagine a scenario where this was a good idea.

Hydee Feldstein, a retired Sullivan & Cromwell [finance] partner, decided to cross-examine her ex-husband Peter Gregora, a former tax litigator at Irell & Manella, in their contentious divorce case — a case where Feldstein alleges Gregora stole nearly $20 million from her. They say a lawyer representing herself has a fool for a client. Well, Feldstein has outside counsel — indeed counsel from two firms, Miller & Ayala LLP and the Rudd Law Firm — yet it was Feldstein who cross-examined her ex in open court. After reading the resulting train wreck, perhaps there are fools on all sides of Feldstein’s defense. ...

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June 17, 2015 | Permalink | Comments (0)

Kentucky Law Prof Retires After 50 Years: 'Shame On Us' For Explosion In Law School Tuition

LawsonLexington Herald-Leader, After 50 Years at UK, Professor Who Wrote Much of Kentucky Law and Investigated UK Athletics Is Retiring:

Robert Gene Lawson, who is retiring July 1, wrote much of Kentucky law and taught thousands of the people who practice it.

Lawson spent 50 years as a professor at the University of Kentucky College of Law, and he was dean twice. Among his students were U.S. Senate Majority Leader Mitch McConnell, Gov. Steve Beshear, U.S. Reps. Andy Barr and Ed Whitfield, and most of the Kentucky Supreme Court. ...

The son of a coal miner, Lawson was born in 1938 in a tiny Logan County, W.Va., community almost entirely owned by Island Creek Coal Co. His father urged him to escape the coal camp through an education. He worked his way through tuition-free Berea College and then earned a law degree at UK in 1963.

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June 17, 2015 in Legal Education | Permalink | Comments (9)

IRS-TPC Research Conference Today On Improving Tax Administration Through Research-Driven Efficiencies

TPC-IRSThe IRS and Tax Policy Center are hosting a research conference today on Improving Tax Administration Through Research-Driven Efficiencies with these presentations and papers:

Session 1Innovative Methods for Improving Resource Allocation

Estimating Marginal Revenue/Cost Curves for Correspondence Audits
Ron Hodge, Alan Plumley, Kyle Richison, and Getaneh Yismaw (IRS, RAS), and Nicole Khoury, Matt Olson, and H. Sanith Wijesinghe (MITRE Corporation)

Examining the TDA Collectability Curve: How Does the Aging of TDA Delinquencies Impact Dollars Collected?
Joe Saldana, Jeff Wilson, and Tom Beers (IRS, Taxpayer Advocate Service)

Analysis of Flow-Through Entities Using Social Network Analysis Techniques
Rahul Tikekar, Ririko Horvath, and Larry May (IRS, RAS), Ashish Agarwal and Shannon Chen (University of Texas at Austin)


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

University Of California Bans Microagressions By Faculty (Support For Color Blindness, Meritocracy; Denial of Racism/Sexism/Heterosexism)

University of California (2015)Eugene Volokh (UCLA), UC Teaching Faculty Members Not to Criticize Race-based Affirmative Action, Call America ‘Melting Pot,’ and More:

One of the latest things in universities, including at University of California (where I teach) is condemning “microaggressions,” supposed “brief, subtle verbal or non-verbal exchanges that send denigrating messages to the recipient because of his or her group membership (such as race, gender, age or socio-economic status).” Such microaggressions, the argument goes, can lead to a “hostile learning environment,” which UC — and the federal government — views as legally actionable. This is stuff you could get disciplined or fired for, especially if you aren’t a tenured faculty member.

But of course this concept is now being used to suppress not just, say, personal insults or discrimination in hiring or grading, but also ideas that the UC wants to exclude from university classrooms. Here, from the UC Office of the President, Academic and Personnel Programs department’s site (promoted, for instance, here, here, and here), are some of what the UC wants to see stamped out, in classrooms and presumably elsewhere as well: ...

Tool: Recognizing Microaggressions and the Messages They Send

[Theme:] Color Blindness[:] Statements that indicate that a White person does not want to or need to acknowledge race.

[Microaggression Examples:] “There is only one race, the human race.”
“America is a melting pot.”
“I don’t believe in race.” …

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June 17, 2015 in Legal Education | Permalink | Comments (9)

New Mexico Appoints Two Internal Candidates To Lead Law School As Co-Deans

PhotoPress Release, Mathewson, Pareja Appointed Co-deans at UNM School of Law:

After a rigorous internal search, University of New Mexico Provost Chaouki Abdallah announced today the appointment of co-deans at the UNM School of Law. Alfred Mathewson and [Tax Prof] Sergio Pareja, both professors at the UNM School of Law, begin as co-deans Aug. 1, 2015.

“The more I learned about the needs of the UNM School of Law, the more my conviction grew that no one person can address the full spectrum of challenges of this period,” Abdallah said. “The combination of Professors Mathewson and Pareja in this role will provide the best possible combination of skills and support to assure success of this critically important and prestigious part of UNM.” ...

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

Hiring Partners Reveal New Attorney Readiness For Real World Practice

Sponsored by LexisNexis

LexisNexisLaw Schools and individual faculty are in the process of revising their curriculum and classes to address the demand for more practice-ready graduates. But what are the most desired research, writing and transactional skills and how can law schools develop these skills most effectively? An independent survey was conducted by 5 Square Research, Inc. and funded by LexisNexis®, to answer these questions and more. 

The result is a new white paper, Hiring Partners Reveal New Attorney Readiness for Real World Practice, which shares the responses of 300 hiring partners and associates from small to large law firms practicing in litigation and transactional law. 

Key findings include:

  • 96% believe that newly graduated law students lack practical skills related to litigation and transactional practice.
  • 66% deem writing and drafting skills highly important with emphasis on motions, briefs and pleadings
  • Newer attorneys spend 40% – 60% of their time conducting legal research
  • 88% of hiring partners think proficiency using “paid for” research services is highly important
  • Students lack advanced legal research skills in the areas of statutory law, regulations, legislation and more…
  • The most important transactional skills include business and financial concepts, due diligence, drafting contracts and more…
  • A law firm spends approximately $19,000 per year, on average, to train a new associate

This study reveals the most important and most lacking practical skills desired by legal employers and will help inform law schools of the specific content and tasks they can integrate into applicable classes and experiential learning programs pursuant to employer demand and the new ABA standards.

Read the full article with charts, Hiring Partners Reveal New Attorney Readiness for Real World Practice, or view this Executive Overview Prezi*.  

*Chrome or Firefox is best for viewing Prezi

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

The IRS Scandal, Day 769

IRS Logo 2Judicial Watch Press Release, IRS Finds New Lois Lerner Emails:

Judicial Watch President Tom Fitton made the following statement in response to the IRS’ court filing Friday about 6,400 newly discovered emails from Lois Lerner’s account:

Late Friday afternoon, the Obama IRS finally complied with Judge Emmet Sullivan’s June 4 order requiring the IRS to provide answers by June 12 on the status of the Lois Lerner emails the IRS had previously declared lost. Judicial Watch raised questions about the IRS’ handling of the missing emails issue in a court filing on June 2, 2015, demanding answers about Lois Lerner’s emails, which had been recovered from backup tapes.

Our review of the seven-page filing shows that the IRS remains intent on stonewalling Judicial Watch and Judge Sullivan. Indeed, contrary to false representations to the court and Congress that the emails were lost and unrecoverable, the IRS finally admits that it has as many as 6,400 new Lois Lerner emails but won’t promise to turn them over to Judicial Watch. Even though the Treasury Inspector General for Tax Administration already identified and removed emails that are duplicates, the IRS is in ‘the process of conducting further manual deduplication of the 6,400’ emails, rather than reviewing them in response to Judicial Watch’s Freedom of Information Act requests that are more than two years old now. Our legal team will continue pursuing all necessary and available legal options to hold the IRS accountable for its flagrant abuse of power.

Plaintiff's Response to Defendant's June 12, 2015 Response (No. 1:13-cv-1559-EGS, June 12, 2015):

1.  Defendant Internal Revenue Service (“IRS”) does not refute in its seven-page Response that the Treasure Inspector General for Tax Administration (“TIGTA”) was able to locate the Lois Lerner backup tapes within one day of its investigation or that the IRS never requested the backup tapes from its technicians before declaring that the emails were lost forever.

2.  IRS has still not disclosed whether TIGTA has produced to the IRS all emails it forensically recovered and when the IRS expects to produce them to Plaintiff in response to the FOIA requests submitted more than two years ago.

3.  Rather, it affirmed that the “Service is in the process of conducting further manual duplication of the 6,400 forensically-recovered emails to supplement the automated duplication conducted by TIGTA.” This is after TIGTA had already identified and removed emails that are duplicates of the recovered emails or those which the IRS had already produced to Congressional Committees. According to its Response, the IRS does not intend to begin producing any of the 6,400 emails until after it has completed its review and production of the Lerner emails that were not forensically recovered. ...

4.  The IRS has a statutory duty to search for and produce documents responsive to Plaintiff’s FOIA requests in the shortest amount of time. 5 U.S.C. § 552(a)(6)(A); Order, Jason Leopold v. U.S. Department of State, Case No. 15-0123-RC (D.D.C. May 27, 2015) (DKT No. 17) (ordering the State Department to start producing Hillary Clinton’s emails every thirty days, rather than waiting to produce them at one time in January 2016).

5.  Plaintiff’s counsel is not concerned about receiving duplicate emails in this case. Lois Lerner’s emails are at the heart of Plaintiff’s FOIA requests. Plaintiff has waited more than two years to receive them and the IRS should start producing them now.

6.  Also, the IRS’s uncited statement that it is premature for TIGTA to publically disclose the status of its investigation in greater detail is directly contradictory to Congressman Chaffetz’s statement on June 12, 2015 that TIGTA is preparing to release the conclusion of its investigation about the Lois Lerner’s emails in the next several days. The fact that TIGTA’s conclusion of its investigation is expected in the next few days indicates (1) that the investigation is complete and (2) the report is basically in final form.

7.   Judicial Watch respectfully requests that the Court order the IRS to start producing any non-exempt, responsive emails contained within the 6,400 emails immediately and disclose whether they are all or a subset of the recovered emails from the 1,268 backup tapes.

8.  Further, Judicial Watch respectfully requests that the Court order the IRS to file monthly status reports about its progress of the production of non-exempt, responsive emails that were placed in the Congressional database two years ago, the 6,400 recovered emails and any additional emails that may be recovered by TIGTA from the 1,268 backup tapes.

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June 17, 2015 in IRS News, IRS Scandal | Permalink | Comments (1)

Tuesday, June 16, 2015

U.S. Charitable Giving Hits Record High

WSJWall Street Journal, Charitable Giving in U.S. Continues to Rise:

Mirroring growth in the domestic economy, charitable giving by Americans rose to a record $358.38 billion last year, surpassing a previous high of $355.17 billion in 2007, according to a closely watched annual report.

The study from the Giving USA Foundation, a Chicago-based nonprofit, uses data from the Internal Revenue Service and the Bureau of Economic Analysis among other sources, and looks at all donations—from individuals to corporations, to churches and museums.

In inflation-adjusted dollars, total giving rose 5.4% over 2013, according to the report. As a percentage of gross domestic product—widely considered a factor in how much donors give to charity—giving was 2.1%. ...

Last year was the fifth straight year of growth for the charitable sector. ... About half of individual giving comes from 4% of the population. ...

Organizations devoted to the arts, health, animals and the environment saw the greatest gains in donations last year, with only giving to international-affairs causes dropping. Experts attributed that decline to the lack of a large international disaster, like a typhoon or earthquake, which typically draws American givers.

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June 16, 2015 in Tax | Permalink | Comments (0)

Walker: Inside Agency Statutory Interpretation

Christopher J. Walker (Ohio State), Inside Agency Statutory Interpretation, 67 Stan. L. Rev. 999 (2015):

The Constitution vests all legislative powers in Congress, yet Congress grants expansive lawmaking authority to federal agencies. As positive political theorists have long explored, Congress intends for federal agencies to faithfully exercise their delegated authority, but ensuring fidelity to congressional wishes is difficult due to asymmetries in information, expertise, and preferences that complicate congressional control and oversight. Indeed, this principal-agent problem has a democratic and constitutional dimension, as the legitimacy of administrative governance may well depend on whether the unelected bureaucracy is a faithful agent of Congress. Despite the predominance of lawmaking by regulation and the decades-long application of principal-agent theory to the regulatory state, we know very little about how federal agencies interpret statutes.

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June 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

Exclusive Hedge Fund Turbocharged Retirement Plan With Deft Tax Maneuvering

RenBloomberg:  How an Exclusive Hedge Fund Turbocharged Retirement Plan, by Richard Rubin & Margaret Collins:

It’s one of the sweetest employee perks in the hedge-fund world: a chance to invest in Medallion, the wildly profitable fund created by market legend James Simons.

Now, with deft legal maneuvers and a blessing from Washington, the firm Simons started is giving its employees an even richer opportunity -- a tax-advantaged, fee-free ticket to one of the world’s top-performing hedge funds.

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June 16, 2015 in Tax | Permalink | Comments (2)

The Law Student's Guide To Meaningful Employment

RoadmapNeil W. Hamilton (St. Thomas), Roadmap: The Law Student's Guide to Preparing and Implementing a Successful Plan for Meaningful Employment (2015):

Professor Neil Hamilton, former interim dean of St. Thomas University School of Law, has developed a ground-breaking template for law students to use throughout all three years of law school in order to be fully prepared to find employment upon graduation. Hamilton established the core competencies desired by law firms, corporate legal departments, and governmental law departments, to demonstrate what competencies each student should be developing. Through a combination of one-to-one mentoring and student-driven growth plans, each student identifies specific competencies and career goals then demonstrates progress over the final five semesters before graduation. Hamilton’s method is already in use at several law schools, with spectacular results―both increased employment rates and elevated student understanding of the student’s role and path in obtaining employment.

This is the book for law students who want to take control of their law school education, and ensure a positive outcome upon graduation.

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June 16, 2015 in Book Club, Legal Education | Permalink | Comments (1)

Tax Malpractice Claims Are 1% Of All Legal Malpractice Claims

Tom Baker (Pennsylvania) & Rick Swedloff (Rutgers-Camden), Liability Insurer Data as a Window on Lawyers’ Professional Liability, 5 UC Irvine L. Rev. ___ (2015):

Using the best publicly available data on lawyers’ liability claims and insurance – from the largest insurer of large law firms in the U.S., the American Bar Association’s Standing Committee on Professional Liability, and a summary of large claims from a leading insurance broker – this article reports the frequency of lawyers’ liability claims, the distribution and cost of claims by type of practice, the disposition of claims, and lawyers liability insurance premiums from the early 1980s to 2013. Notable findings include remarkable stability over thirty years in the distribution of claims by area of practice among both small and large firms, a large percentage of claims (64-70%) involving de minimus expense (less than $1000) in the small firm market, and in the large firm market a declining rate of “real claims” per 1000 lawyers, a declining rate of real average gross loss per claim, and stable real premiums per lawyer since the early 1990s. Because of data limitations, however, these results cannot be confidently generalized. Further advances in the understanding of lawyers’ liability and insurance will require qualitative research.

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June 16, 2015 in Tax | Permalink | Comments (2)

Weichsel: Alternative Perspectives On The Proposed Yahoo Spin-Off

WeichselTaxProf Blog op-ed:  Alternative Perspectives on the Proposed Yahoo Spin-Off, by Stuart Weichsel (Kern Augustine Conroy & Schoppmann, New York):

There has been much discussion in the press (e.g., here and here) regarding how Yahoo! will proceed with its proposed tax-free spinoff of its shares is Alibaba (worth about $40 billion) and its shares in Yahoo Japan (worth about $7 billion), each valuation before any US corporate income tax is paid.

If Alibaba is dropped into a Spinco and distributed in a purported tax-free  distribution like TripAdvisors and Liberty Broadband, Yahoo is running a $14 billion federal tax risk.   Distributing Yahoo Japan would also run a $2.5 billion tax risk. 

There are two alternative transactions that run much less tax risk.

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June 16, 2015 in Tax | Permalink | Comments (0)