TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, October 12, 2016

The IRS Scandal, Day 1252

IRS Logo 2USA Today editorial, Impeachment Won't Reform IRS:

You have to give a band of conservative Republicans known as the House Freedom Caucus credit for one thing: No matter how bad one of their ideas is, they never quit.

Right now, they’re battling the Obama administration, House Democrats, their own leadership and Republican moderates to push a futile and absurd effort to impeach IRS Commissioner John Koskinen. ...

While the allegations against Koskinen are serious, wiser Republicans know they are not the stuff of impeachment. In fact, the underlying issue that has driven impeachment goes back years: the agency’s misuse of its immense powers to target conservative groups. It occurred before Koskinen was even at the agency.

He was brought in to clean up the mess after revelations in 2013 that the agency’s tax-exempt division had singled out conservative organizations, including Tea Party groups, because of their political beliefs. The IRS sent the groups burdensome inquiries and delayed their applications for tax exemption, actions that President Obama acknowledged were “intolerable and inexcusable.”

Congress investigated, and high-level officials were forced out. The FBI also investigated but found no criminal wrongdoing, a finding Republicans have found hard to swallow.

Certainly, the public deserves to know exactly what happened, see the relevant records, and be convinced that it won't happen again. Instead, Koskinen’s “cleanup” has raised more suspicions. It has been marred by disappearing emails and bungled searches for backups. Federal court rulings excoriated the agency for secrecy.

A few months ago, the agency was still stonewalling. In March, the 6th U.S. Circuit Court of Appeals  blasted the IRS for resisting “at every turn” a judge’s orders to disclose a list  of the groups targeted. And just last month, a federal appeals court in the nation’s capital revived a lawsuit against the IRS by conservative groups that had been targeted. A three-judge panel cited the agency’s own admission that two groups still had not gotten their tax exemption, years  after seeking it. The IRS’ excuse? Because the groups had sued the agency.

Republicans have good reason to want the IRS to come clean and release any documents that shed light on what happened. But impeachment of a man who wasn't even there when the scandal occurred? No. ...

There are plenty of things the IRS needs — more money to provide better customer service and combat ID fraud, a simpler tax code to administer, and reforms to ensure it will never again target anybody for political beliefs. Republicans would do better to turn to the serious work of governing than to press a frivolous impeachment vote.

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October 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, October 11, 2016

Zelenak Presents Tax-Free Basis Step-Up At Death And The Charitable Deduction Of Unrealized Appreciation Today At Columbia

Zelenak (2016)Lawrence Zelenak (Duke) presents The Tax-Free Basis Step-Up at Death, the Charitable Deduction for Unrealized Appreciation, and the Persistence of Error at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

This essay recounts, as a study in the remarkable persistence of some early errors even when the errors were promptly recognized and addressed, the legislative and administrative histories of the tax-free basis step-up at death and the charitable deduction for unrealized appreciation.

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October 11, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Presidential Campaign Tax News

WSJ:  Law Firms Demote Partners as Pressure Mounts Over Profits

WSJ 2Wall Street Journal, Law Firms Demote Partners as Pressure Mounts Over Profits:

Faced with client pressure to keep down costs and industry competition to achieve the highest profits, law firms now frequently assess which lawyers are worthy enough for the top rungs of partnership. Those who don’t bill enough hours or bring in enough business are quietly asked to leave or demoted from the so-called equity tier.

In a survey of law firm leaders from late last year by legal trade publication the American Lawyer, 56% said they planned to take away equity from partners in the coming year, and 67% said they planned to ask partners to leave. ...

Law firms have been demoting and cutting partners since even before the recession, say consultants and others close to the industry. Initial rounds focused on the truly dead weight—partners who enjoyed the title and prestige but didn’t pull in enough revenue.

Demand for legal services never fully bounced back after the downturn, causing firms to trim even further. These days, even partners with strong legal skills and a few clients aren’t making the grade. ... The past year and a half has seen “pervasive” trimming of partners at the nation’s top 100 law firms, said legal consultant Peter Zeughauser.

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October 11, 2016 in Legal Education | Permalink | Comments (3)

Kahn & Kahn:  The Fallacious Objections To The Tax Treatment Of Carried Interest

Florida Tax Review  (2015)Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State), The Fallacious Objections to the Tax Treatment of Carried Interest, 18 Fla. Tax Rev. ___ (2016):

Carried interest is the term used to describe a profits interest in a partnership that invests in entities. A managing partner typically will receive a 20% profits interest in exchange for managing the investments of the partnership. The complaint against the treatment of carried interest is aimed at the characterization of the managing partner's share of the partnership's subsequent capital gains. The contention is that since the managing partner receives her share of the partnership's income for services performed, she should be taxed at ordinary income tax rates rather than the preferentially lower capital gains rate.

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October 11, 2016 in Scholarship, Tax | Permalink | Comments (1)

Hit Man Implicates Wendi Adelson In Dan Markel's Murder

Rivera WendiFollowing up on my previous post, Prosecutors Zero In On Adelson Family After Plea Deal With Hit Man, Arrest Of Accomplice In Markel Murder:  the Tallahassee Democrat has published an explosive 99-minute video of the prosecutors' interview of hit man Luis Rivera.  Rivera states (beginning at 11:06:17 of the video) that he and hit man Sigfredo Garcia saw Wendi Adelson walking the children in front of Dan Markel's home the day before the murder and that Wendi was making sure that the hit men were there to kill Dan before he left on a flight the following day:

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October 11, 2016 in Legal Education | Permalink | Comments (46)

The Practical Tax Lawyer Issues Call For Articles

Practical Tax LawyerThe Practical Tax Lawyer, published by ALI-CLE and supported by the ABA Tax Section, has issued a call for "how-to" or “intro to” sorts of articles that are oriented towards the general practitioner:

We especially welcome articles that help practitioners think about how to deal with any recent changes in the law, regulations, or IRS litigating position that might affect a tax practice. PTL articles tend to be very short (3,000-5,000 words).

Here are the submission deadlines for each issue:

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October 11, 2016 in Scholarship, Tax | Permalink | Comments (0)

Being A Scholar In The Digital Era

ScholarJessie Daniels (CUNY) & Polly Thistlethwaite (CUNY, Being a Scholar in the Digital Era: Transforming Scholarly Practice for the Public Good (University of Chicago Press 2016):

What opportunities, rather than disruptions, do digital technologies present? How do developments in digital media not only support scholarship and teaching but also further social justice? Written by two experts in the field, this accessible book offers practical guidance, examples, and reflection on this changing foundation of scholarly practice. It is the first to consider how new technologies can connect academics, journalists, and activists in ways that foster transformation on issues of social justice. Discussing digital innovations in higher education as well as what these changes mean in an age of austerity, this book provides both a vision of what scholars can be in the digital era and a road map to how they can enliven the public good.

Inside Higher Ed, The Tech-Enabled Scholar:

Q: On the topic of metrics: as you point out, few (if any) academic departments use altmetrics in tenure and promotion cases. We’ve seen the same sort of hesitancy when it comes to evaluating digital scholarship more broadly. Do you feel that colleges have been right to wait it out while these evaluation methods mature, or should they have taken a more active role?

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October 11, 2016 in Book Club, Legal Education, Scholarship | Permalink | Comments (0)

Donald Trump And Hillary Clinton: I've Had The Time of My Life

The IRS Scandal, Day 1251: Bill O'Reilly Calls For A Special Prosecutor

IRS Logo 2Fox News, O'Reilly: Enough Evidence of Corruption in DOJ for an Independent Prosecutor:

In his Talking Points Memo tonight, Bill O'Reilly said a major scandal could erupt in the Justice Department.

He explained that many Americans believe the fix was in during investigations into the IRS' targeting of conservative groups and Hillary Clinton's private email server.

O'Reilly noted that former IRS official Lois Lerner was never held legally accountable for allegedly targeting right-wing groups for audits, and Attorney General Eric Holder subsequently refused to explain why.

Meantime, the number of immunity deals the DOJ granted in the Clinton email investigation is "strange to say the least," O'Reilly said.

"The FBI and the Justice Department have a lot of explaining to do on the email front," O'Reilly stated.

"Talking Points believes there is now enough evidence of corruption in the Justice Department that an independent prosecutor should be appointed. We all know Mr. Obama is not going to do that. But he should. We need honest government."

Media Matters, O’Reilly Uses Old, Repeatedly Debunked Right-Wing Myths To Call For “Independent Prosecutor” Of “Corrupt” DOJ:

Fox News host Bill O’Reilly used debunked right-wing myths to claim there is “enough evidence of corruption in the Justice Department” to warrant appointing an “independent prosecutor” for the FBI and the DOJ, citing the closed investigation relating to Democratic presidential nominee Hillary Clinton’s use of private email as secretary of state, and the long-debunked IRS targeting pseudo-scandal. ...

O’Reilly also alleged there was corruption regarding the investigation into the IRS allegedly targeting right-wing organizations, complaining that then-IRS head Lois Lerner "was never really held legally accountable." But a congressional investigation revealed that progressive groups were also subjected to the same kind of scrutiny as conservative groups, evidence which Fox News itself ignored when it first came to light. And months before that, in June 2013, the congressional investigation found the culprit behind the increased scrutiny of organizations applying for tax-exempt status: not Lois Lerner, but a Cincinnati-based IRS manager who told investigators that he “instructed his team of screeners” to look for cases of political-sounding groups applying for tax-exempt status, and that “he took this action on his own.”

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October 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Monday, October 10, 2016

Tokić Presents Taxing Greed Today At Loyola-L.A.

 (LTokicGenevieve Tokić (Northern Illinois) presents Taxing Greed at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katherine Pratt:

Appeals to greed in support of various tax proposals have become increasingly commonplace in response to a populist mood in politics. References to ensuring that the greedy rich “pay their fair share” sate a populist attitude towards wealth and wealth accumulation, and may be used to garner political support for a policy or proposal. However, there has been little academic consideration of the role of greed in the law, and in the tax law in particular. This paper seeks to fill that hole by taking a close look at the concept of greed.

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October 10, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Yale Symposium On Seminole Rock:  The Past, Present, And Future Of Deference To Agency Regulatory Interpretations

Yale Notice & CommentThe Yale Journal on Regulation's Notice & Comment Blog, an affiliate of our Law Professor Blogs Network, hosted an online symposium on Reflections on Seminole Rock: The Past, Present, and Future of Deference to Agency Regulatory Interpretations with contributions from twenty-five contributors, including three Tax Profs:

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October 10, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

New Research On Inequality: ‘Whatever You Thought, It’s Worse’

Washington Post Wonkblog, Striking New Research on Inequality: ‘Whatever You Thought, It’s Worse’:

Social mobility, the amount that a typical American moves up or down the economic ladder from where their parents and grandparents stood, has became a major focus of political discussion, academic research and popular outrage in the years since the global financial crisis. While Americans have traditionally seen their country as a place where anyone can make through hard work and a stroke of luck, data collected in the past decade have shown otherwise.

Compared with many European countries, for example, few Americans end up with an income or educational level that is substantially different than their parents. Research by economists from Harvard and Berkeley found that fewer than 10 percent of people in the bottom fifth of the wealth distribution will make it into the top fifth [Raj Chetty (Stanford), Nathaniel Hendren (Harvard), Patrick Kline (UC-Berkeley), Emmanuel Saez (UC-Berkeley), Nicholas Turner (U.S. Treasury Department), Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility]. Things weren't much better for the middle class: Only about 20 percent of people in the middle fifth would rise into the top fifth over the course of their lives.

Now, new research suggests that social mobility in America may be even more limited than researchers have realized. In a new paper, Joseph Ferrie of Northwestern University, Catherine Massey of the University of Michigan and Jonathan Rothbaum of the U.S. Census Bureau draw on a newly constructed dataset about American families reaching back to 1910 [Do Grandparents and Great-Grandparents Matter? Multigenerational Mobility in the US, 1910-2013]. Unlike past studies, which have mainly compared parents and children, the new work adds data on grandparents and great-grandparents to show just how fixed the fortunes of many Americans have become.

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October 10, 2016 in Scholarship, Tax | Permalink | Comments (8)

33% Of $800 Million California Film Tax Credits Went To Projects That Would Have Been Made In The State Anyway

Following up on my previous post, Starstruck States Squander $10 Billion In Film Tax Incentives Producing Minimal Economic Returns:  California Legislative Analyst's Office, California's First Film Tax Credit Program:

Figure 1California provides tax incentives for qualified film and television productions to be made in the state. The first film tax credit program was adopted in 2009 and provided $800 million ($100 million per year over eight years) in credits to selected feature films and television projects. In 2014, the Legislature created a new film tax credit program that increased the available amount of tax credits to $330 million per year—beginning in the 2015–16 fiscalyear—and modified the program in various ways.

In this report, as required by law, we evaluate the economic effects and the administration of the first film tax credit program passed in 2009. We find that about one–third of the film and television projects receiving incentives under this program would probably have been made in California anyway. We suspect that this level of “windfall benefits” to some credit recipients may be low compared to other tax credits, which would suggest that the first film tax credit program targeted the types of production vulnerable to being filmed outside the state relatively well.

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October 10, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

Call for Proposals:  2017 Pepperdine Law Review Symposium On The Supreme Court, Politics And Reform

Pepperdine Law Review
Announcement and Call for Proposals
2017 Pepperdine Law Review Symposium: The Supreme Court, Politics and Reform

On April 8, 2017, the Pepperdine Law Review will hold its annual symposium on the question of whether the political deadlock over the Merrick Garland nomination provides a stark indication the U.S. Supreme Court has become an unduly political institution, and, if so, what internal and external reforms might address this problem. We invite all interested scholars to submit a relevant proposal to present at the symposium and be considered for publication in a special edition of our law review.

COMMENTATORS:  Confirmed lead commentators include:

  • Akhil Amar (Yale)
  • Erwin Chemerinsky (Dean, UC-Irvine)
  • Michael McConnell (Stanford)
  • Hon. Richard Posner (U.S. Court of Appeals for the Seventh Circuit)
  • Deanell Tacha (Pepperdine)
  • Mark Tushnet (Harvard)

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October 10, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

Trump's Accountant/Lawyer Committed 'Grievous' Violation Of Legal And Professional Ethics In Discussing His Tax Returns With Media

Following up on Saturday's post, Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius:  National Review, Confidentially Yours:  Even a Scoundrel Like Trump Deserves Ethical Legal Representation:

Is there anyone concerned at the ugly turn the election has taken with the release of a few pages of Donald Trump's taxes from 1995? The ugliness is not that Trump's taxes have been revealed, per se, but that it was done, in part it appears, by getting an elderly lawyer to violate his duty of confidentiality to his client. One might say that Trump deserves what he gets. But in this age of ever-eroding privacy, it is alarming when the official rules meant to guard privacy come under assault. ...

Mr. Mitnick has committed a grievous violation of legal and professional ethics.

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October 10, 2016 in Political News, Tax | Permalink | Comments (6)

Journal Of Legal Education Symposium:  The Future Of Legal Scholarship

Journal of Legal Education (2014)Symposium, The Future of Legal Scholarship, 66 J. Legal Educ. 7-110 (2016):

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October 10, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 1250

IRS Logo 2World Tribune, Unforgiven: IRS Has Not Only Continued Its War on Tea Party Groups, But Taken It Public:

After admitting it targeted tea party groups for special scrutiny in 2013, the IRS promised to process the groups’ applications in a timely fashion.

Three years later, tea party groups say the tax agency has begun a new round of harassment.

The IRS has sent a new set of “prodding questions” to the groups, demanding still more information, according to an Oct. 4 report by The Washington Times.

The IRS also publicly released one of the sets of questions it sent to the Texas Patriots Tea Party (TPTP), which made public secret taxpayer information that is supposed to be protected, the group’s lawyer said. ...

Two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.

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October 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 9, 2016

How to Fix Law School

Fix ItAry Rosenbaum (J.D. American, Tax LL.M. Boston University), How to Fix Law School:

I enjoyed law school as much as I enjoyed the preparation for my colonoscopy, it was that good. My time at the American University Washington College of Law (WCL) wasn't a great experience because I felt like I was hoodwinked into going and was promised a bill of goods that they failed to deliver. ...

Time hasn't been kind to my waistline and WCL.

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October 9, 2016 in Legal Education | Permalink | Comments (4)

‘Informed By What I Am’: Judges Talk Faith, Duty And The Law, ‘Informed by What I Am’: Judges Talk Faith, Duty and the Law:

Over the past eight years, President Barack Obama has boosted diversity on the federal bench with his judicial picks. This month he added a name to his list of barrier-busting nominees: Abid Qureshi, believed to be the first Muslim tapped for a federal judgeship. ...

[A]sk judges if their faith factors in their work and most provide a two-part response. They say they don’t apply religious doctrine to cases. However, they acknowledge that religion can inform their sense of justice, empathy and values. Studies have shown a correlation between judges’ religious affiliations and decisions on abortion, gay rights, religious freedom and other hot-button issues. ...

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October 9, 2016 in Legal Education | Permalink | Comments (1)

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 #1 (and already #47 in all-time downloads among 12,250 tax papers):

  1. [2,543 Downloads]  Families Facing Tax Increases Under Trump's Latest Tax Plan, by Lily L. Batchelder (NYU)
  2. [241 Downloads]  Transfer Pricing Money: The Chevron Case, by Richard J. Vann (Sydney) & Graeme S. Cooper (Sydney)
  3. [182 Downloads]  Financial Advisers Can't Overlook the Prudent Investor Rule, by Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard)
  4. [176 Downloads]  Law and Macroeconomics: The Law and Economics of Recessions, by Yair Listokin (Yale)
  5. [168 Downloads]  Taxation and Human Rights: A Delicate Balance, by Reuven Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan)

October 9, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

New York City Law Firm Launched To Serve Legal Needs Of Religious Institutions And Individuals

FaithWall Street Journal, Law Firm for Churches Launches in New York City:

A new law firm has opened its doors near Times Square founded on the faith that churches, synagogues, mosques and other religious institutions in New York City could use some legal help.

Nelson Madden Black LLP, as the firm is called, says it’s the first private law firm based in the city that’s “dedicated to the legal representation of religious institutions and individuals.” Announcing its launch this week, the firm said it will offer a “full spectrum of litigation, transactional and advisory legal services” to clients of all faiths.

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October 9, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1249

IRS Logo 2Bill Moyers & Company, This Week in Political Money: Billionaire Backs IRS Impeachment:

The Republican Party is waging war on the IRS (again). The cause du jour is impeachment of the agency’s head, John Koskinen, who was in that role when employees at the IRS destroyed records sought during a previous congressional crusade against the agency.Koskinen says he knew nothing about it, but Republicans want to hold him accountable anyway.

The “Impeach Koskinen” caucus is backed by the 45Committee, a political nonprofit funded by billionaire Todd Ricketts, a major GOP donor whose family owns the Chicago Cubs.Politico reported on Monday that 45Committee was spending more than $1 million on a week of advertising. Federal Communications Commission records compiled using the Center for Responsive Politics’ new political ad watch tool and reviewed by show ad buys on several television stations in two swing states: Florida and Nevada.

Drumming up anger at the IRS could help turn out conservative voters in these key states, where there are also Senate races that could help determine control of Congress’ upper chamber. But it could also backfire. Some GOP senators have been hoping to put off the impeachment push until after the election, worried that another crusade to demonize an Obama-appointed bureaucrat might not play well with moderates in the party.

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October 9, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, October 8, 2016

Amidst Declining Enrollment And Budget Deficits, Minnesota Law School Dean Seeks To Shift Narrative

Minnesota LogoFollowing up on my previous posts (links below) on the enormous financial difficulties at the University of Minnesota Law School: Minnesota Daily, New University Law School Dean Aims to Refocus School's Goals:

Amid declining enrollment and budget deficits at the University of Minnesota’s Law School, the new dean wants to shift the narrative.

Since taking over leadership at the law school in July, Garry Jenkins has pushed aside stories about mending declining enrollment to focus on curriculum and job placement instead.

Applications to the University’s law school dropped by nearly 50 percent between 2010 and 2015, and first-year enrollments fell by over 30 percent, leading to a loss of tuition revenue for the school.


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October 8, 2016 in Legal Education | Permalink | Comments (1)

This Week's Ten Most Popular TaxProf Blog Posts

Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius

The Daily Beast, Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius:

This past week, Donald Trump's campaign surrogates attempted to argue that the candidate is a "genius" for turning a nearly $1 billion loss into a tax avoidance strategy for up to 18 years. But now the accountant who compiled Trump's 1995 tax return — and helped verify it for The New York Times — has refuted that narrative in a series of interviews. Jack Mitnick, who handled Trump's taxes until 1996, told Inside Edition on Tuesday, “I did all the tax preparation. He never saw the product until it was presented to him for signature." Pushing back at Trump's own suggestion that he "brilliantly" used tax laws to his own advantage, Mitnick added, “I’m the one who did all the work."

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October 8, 2016 in Political News, Tax | Permalink | Comments (7)

Indiana Tech Law School's In-State Bar Passage Rate Doubles—To 16.67%

Indiana Tech (2016)Following up on my previous posts:

Above the Law, Law School’s Abysmal Bar Exam Pass Rate Improves To… 23.1 Percent:

Last month, after the scoring of the state bar exam was completed, the charter class of Indiana Tech Law School posted what was accurately described as the “worst bar exam results ever.” Out of 12 graduates who had taken the Indiana bar exam, only one of them passed. At the time, the overall pass rate for Indiana Tech Law graduates was 8.33 percent, and a school spokesperson refused to confirm the overall pass rate because five graduates were appealing their scores on the exam.

With the appeals process having concluded this week, the Indiana Lawyer now reports that an additional graduate of Indiana Tech passed the state bar exam on the first try, bringing the school’s passage rate to 16.7 percent.

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October 8, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1248

IRS Logo 2The Atlantic, The Conservative Crusade Against the IRS Commissioner:

Feeling wrung out by the grossness of the presidential race, the hurricane buffeting the East Coast, and the nationwide epidemic of scary clowns? Buck up, camper, and at least be thankful that you are not IRS Commissioner John Koskinen.

Heading the most loathed agency in the federal government takes a psychic toll on a good day. But the past 17 months or so have been a pig pile of lousy days for Koskinen, as conservatives have led a multi-pronged crusade to publicly humiliate him, drive him from office, and strip him of his pension. On September 21, shortly before Congress fled town for the remainder of election, Koskinen had to go before the House Judiciary Committee for a formal impeachment hearing.

Then, last week, the dark-money group 45Committee announced that it was dropping more than $1 million on ads lobbying for the commissioner’s ouster. “Call the House of Representatives and tell them to vote to impeach Commissioner Koskinen now,” urges the spot, which presents impeachment as the last, best hope for beating back “the arrogance of the Obama administration.”

What did Koskinen do to deserve all this? It’s complicated. The roots of conservatives’ outrage lie in the 2013 revelation that the IRS had improperly scrutinized Tea Party groups (among others) seeking tax-exempt status. An FBI probe found no evidence of “enemy hunting.” But conservatives have been super miffed at the agency ever since.

“The government went after people for their political beliefs,” fumes Rep. Jim Jordan, head of the House Freedom Caucus, which has made Koskinen’s impeachment a pet cause. ‘This is not just any old agency,” Jordan reminded me. “This is the IRS. Most people get a letter from the IRS, they sit down, wipe their brow, and their resting heart rate suddenly gets higher. Now we know that they systematically targeted people for their political persuasion.” ...

The Treasury Department’s Inspector General ruled the loss of the tapes an unintentional screw up. Conservatives have decided nonetheless that Koskinen must go. The commissioner has been hauled before multiple committees multiple times in both chambers of Congress. House Republicans have accused him of arrogance, dishonesty, obstruction, foot-dragging, and being generally unhelpful in their investigation. Last October, Rep. Jason Chaffetz, head of the Government Oversight and Reform Committee, introduced a resolution to begin impeachment proceedings. ...

At this point, Jordan doesn’t much care whether the destruction of the backup tapes was part of a cover up or simply the result of incompetence. “No one is saying this was all intentional,” Jordan assured me. “But where was the gravity of the situation?” He also acknowledges that Koskinen is not at fault for the original targeting offense. Impeachment advocates, however, really feel that someone’s head needs to roll. “It was political speech they targeted,” marveled Jordan. “And for no one to be held accountable?”

Even so, impeaching a public official is like going nuclear: a measure reserved for the very worst transgressions. ...

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October 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, October 7, 2016

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new article by Edward A. Zelinsky (Cardozo), The Political Process Argument for the Supreme Court to Overrule Quill, 82 Brook. L. Rev. (forthcoming 2017).

HemelIn Quill Corp. v. North Dakota, 504 U.S. 298 (1992), the Supreme Court held that states cannot collect sales tax from out-of-state vendors who lack a “physical presence” within the state. While the constitutional justification for Quill’s holding was questionable from the outset, Quill’s future is suddenly in doubt as well. In a concurring opinion last year, Justice Kennedy called on the Court to reconsider Quill, and Alabama and South Dakota have both taken steps to generate a test case since then.

The pragmatic case for overruling Quill is clear. Quill drives a hole in state budgets: by one estimate, states lost more than $23 billion in sales tax revenue on transactions with out-of-state vendors in 2012 alone. Moreover, Quill puts vendors with a brick-and-mortar presence at a disadvantage vis-à-vis remote competitors, leading (arguably) to unfairness and (almost certainly) to inefficiency. Perhaps the best that can be said in Quill’s favor is that it’s up to Congress—not the courts—to fix this mess. Because Quill was decided under the dormant Commerce Clause, Congress has the power to overturn it via legislation. In a provocative new article, Edward Zelinsky considers whether Quill’s fate should be left to the political process.

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October 7, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Goldilocks Meets Private Equity: Taxing Carried Interest Just Right

Tax Polcy Center Logo (2017)Donald Marron (Tax Policy Center), Goldilocks Meets Private Equity: Taxing Carried Interest Just Right:

Controversy rages about how to tax carried interest. One view sees carry as compensation that should be taxed like other labor income. Another sees carry as a reward for financial risk-taking that should be taxed like capital income. A third sees carry as creating a costly tax arbitrage. In this paper, Donald Marron shows how we can reconcile these three views. Current practice taxes carry too little. Treating it as labor income without other reforms taxes it too much. To tax carried interest just right, it should be labor income for managers and deductible against ordinary income for investors.

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October 7, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

65% Of Admissions Offices Want Some Law Schools To Close; 52% Want ABA Stripped Of Its Accreditation Power

KaplanKaplan Test Prep Survey, Law Schools Show Continued Optimism, but Fragile Recovery Leads Most to Favor the Closure of Existing JD Programs and Limiting New Ones:

This past admissions cycle, the legal education community saw something they haven’t seen since 2009: an increase in the number of law school applications and LSAT® takers. This momentum is reflected in continued optimism that Kaplan Test Prep finds in its 2016 survey of law school admissions officers.* Of the 111 law schools from around country that participated in the annual survey, 92 percent say that they are feeling “more optimistic about the state of legal education” than they did one year ago.  That optimism leads 78 percent of respondents to express confidence that their law school will see another increase in applications for the 2016-2017 application cycle — a far cry from the 46% who expressed such confidence, when Kaplan conducted its 2014 survey.

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October 7, 2016 in Legal Education | Permalink | Comments (0)

Weekly Legal Education Roundup

Princeton Review's Best 172 Law Schools (2017 Edition)

Princeton ReviewThe Princeton Review has published the 2017 edition of The Best 172 Law Schools (press release) (FAQs) (methodology):

The Princeton Review tallied its lists based on its surveys of 19,400 students attending the 172 law schools [an average of 113 per school]. The 80-question survey asked students to rate their schools on several topics and report on their experiences. Some ranking list tallies also factored in school-reported data.

Best Professors:  Based on student answers to survey questions concerning how good their professors are as teachers and how accessible they are outside the classroom.

  1. Boston University
  2. Virginia
  3. Chicago
  4. Duke
  5. Stanford
  6. Washington & Lee
  7. Pepperdine
  8. St. Thomas (Minnesota)
  9. Charleston
  10. Georgia

Best Quality of Life:  Based on student answers to survey questions on: whether there is a strong sense of community at the school, whether differing opinions are tolerated in the classroom, the location of the school, the quality of social life at the school, the school's research resources (library, computer and database resources). 

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October 7, 2016 in Law School Rankings, Legal Education | Permalink | Comments (1)

6th Annual NYU/UCLA Tax Policy Symposium:  Tax Policy And Upward Mobility

NYU UCLA (2016)The Sixth Annual NYU/UCLA Tax Policy Symposium on Tax Policy and Upward Mobility takes place today at UCLA:

This year’s symposium will showcase recent research regarding social mobility and examine how federal, state, and local tax policies promote or frustrate the ability of individuals to climb the income ladder in American society. 

Raj Chetty (Stanford) & Miles Corak (Ottawa), Overview of Research on Upward Mobility
Discussant:  Alan Auerbach (UC-Berkeley)

Susan Dynarski (Michigan), Tax Benefits for College Attendance (with Judith Scott-Clayton (Columbia))
Discussant:  Deborah Schenk (NYU)

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October 7, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

University Of Washington Hosts 2016 Tax Symposium

University of Washington Logo (2016)The University of Washington hosts its Fourth Annual Tax Symposium today:

Panel #1:  Taxpayer Information Rights:

  • Michael Hatfield (Washington), Cybersecurity, Privacy, and Taxpayer Information
  • Adam Thimmesch (Nebraska), Tax Privacy Framework
  • Filip Debelva (KU Leuven, Belgium), Privacy and Confidentiality in Exchange of Information Procedures: Some Uncertainties, Many Issues, but Few Solutions
  • Shannon McCormack (Washington) (moderator)

Panel #2:  Compliance and Administration – Part 1:

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October 7, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1247

IRS Logo 2Forbes: The IRS: A Law Unto Itself, by Bill Archer:

Americans have long had an uneasy relationship with the nation’s tax collector. In the early 1990s, investigative reporter David Burnham wrote an excellent book, “A Law Unto Itself: The IRS and the Abuse of Power” which catalogued a lengthy and continuing history of the Internal Revenue Service’s (IRS) misconduct and mistreatment of taxpayers. This history of misconduct will once again come under close examination later this week as the IRS Commissioner John Koskinen testifies before Congress’ Judiciary Committee to explain the agency’s actions. ...

[R]ecent events make it clear the IRS remains abusive towards taxpayers and often unaccountable. Prior to a 2013 Treasury Inspector Report that would highlight damning IRS misconduct, the IRS head of the tax-exempt organizations group attempted to sneak in an apology for inappropriately flagging conservative organization exemption applications for additional scrutiny. Lois Lerner claimed the practice was initiated by low-level workers in Cincinnati. As we now know, that story was false; scrutiny of the conservative groups was directed by Lerner and other high level IRS officials. The IRS to this day continues to stonewall investigations in an attempt to cover their tracks of misconduct.

In early August, the U.S. Court of Appeals for the District of Columbia in True the Vote, Inc. v. IRS delivered a stinging rebuke to the IRS for attempting to dismiss a lawsuit over an organization’s exemption application. The IRS argued the case was moot because following the 2013 scandal the IRS (it claimed) had ceased its misconduct. The court wrote: “ Parallel to Joseph Heller’s catch, the IRS is telling the applicants in these cases that ‘we have been violating your rights and not properly processing your applications. You are entitled to have your applications processed. But if you ask for that processing by way of a lawsuit, then you can’t have it.’ We would advise the IRS: if you haven’t ceased to violate the rights of the taxpayers, then there is no cessation.”

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October 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, October 6, 2016

Fleming Presents Defending Worldwide Taxation Today At Vienna University

FlemingJ. Clifton Fleming, Jr. (BYU) presents Defending Worldwide Taxation and Addressing Inversions with a Shareholder-Based Definition of Corporate Residence, 2016 BYU L. Rev. ___ (with Robert Peroni (Texas) & Stephen Shay (Harvard)), at the Institute for Austrian and International Tax Law at Vienna University of Economics and Business:

This article argues that a principled, efficient, and practical definition of corporate residence is necessary even if some form of corporate integration is adopted, and that such a definition is a key element in designing either a real worldwide or a territorial income tax system as well as a potential restraint on the inversion phenomenon. The article proposes that the United States adopt a shareholder-based definition of corporate residence that is structured as follows:

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October 6, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Common Claims About Proposition 13

How Hillary Clinton And Donald Trump Would Tax The 1 Percent

Vox, How Hillary Clinton and Donald Trump Would Tax the 1 Percent, in One Chart:

On Monday, Marc Goldwein of the Committee for a Responsible Federal Budget shared an updated analysis of how each candidate’s tax plans would affect the top 1 percent of American income earners:


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October 6, 2016 in Political News, Tax | Permalink | Comments (1)

Wendi Adelson: 'Ill-Fated Romance Took Me To Tallahassee, Love For My Children Kept Me There Despite More Lucrative Job Offers Elsewhere'

AdelsonAs prosecutors in the Dan Markel murder "zero in" on the Adelson family and Hurricane Matthew targets Florida, a reader sent me an item that I have not seen reported elsewhere:  Wendi Adelson's Truman Scholar profile, published three months before Dan was killed.  This excerpt is especially chilling:

A Clinical Professor and the Director of the Medical Legal Partnership at FSU’s College of Law, Wendi, who is a native Floridian, had this to say about what informed her decision to become a lawyer and how she arrived at Florida State University:

I screwed up fantastically and ended up with a dream job as a clinical law professor. I fell in love with the wrong man, and he got a job in Tallahassee. I had wanted to be in DC or become a foreign service officer, or in the previous few years, live closely to my family in South Florida. So, ill-fated romance took me to Tallahassee, and love for my children keeps me here.

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October 6, 2016 in Legal Education | Permalink | Comments (28)

Pepperdine Law School Dean Search

Pepperdine Law SchoolAs I blogged in April, Pepperdine Law School Dean Deanell Tacha has extended her five-year term to continue serving through our ABA Re-Accreditation visit this month and will retire on December 31, 2016.  She has sent this letter to various leaders in legal education reflecting on her time at Pepperdine and inviting nominations to succeed her as dean of this very special law school:

This is a bittersweet moment in my life. After 5½ wonderful years as Dean of the Pepperdine University School of Law, I have decided it is time to yield this leadership position and return to my home state of Kansas. I know, some would question the judgment of trading the ocean for the plains, but it is right for me!

I write today to ask your assistance in helping Pepperdine choose the right successor to build on our progress and secure Pepperdine’s unique place as one of the nation’s premiere Christian law schools.

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October 6, 2016 in Legal Education | Permalink | Comments (0)

Aprill & Mayer:  The Relationship Between The Trump Foundation And Trump’s Tax Returns

AM4TaxProf Blog op-ed:  Assigning a Tax Lesson: The Relationship between the Trump Foundation and Trump’s Tax Returns, by Ellen P. Aprill (Loyola) & Lloyd Hitoshi Mayer (Notre Dame):

As the debate between the Vice Presidential candidates Wednesday night made clear, Donald Trump’s refusal to release his tax returns remains an important campaign issue. The extraordinary tax losses that Donald J. Trump reportedly had in 1995 emphasize the need for him to fully disclose his tax returns for all years from then forward. Without disclosure of his federal income tax returns, we cannot begin to evaluate fully his claim on Tuesday that he has “legally” and “brilliantly” complied with all of our complicated tax laws.

The ongoing tax issues relating to his foundation came to light only because of the required disclosure of those returns. Those issues — and the foundation’s failure to register to solicit charitable contributions that has now resulted in a cease and desist order from the New York Attorney General — seem to demonstrate a woeful ignorance of the applicable law or a complete disregard of it, either of which would be of even greater concern if also reflected in his personal and business tax positions. And at least one issue raised by the foundation’s tax filings can be resolved only with full disclosure of Mr. Trump’s personal tax situation.

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October 6, 2016 in Political News, Tax | Permalink | Comments (4)

2016 International Tax Competitiveness Ranking: U.S. Is 5th From The Bottom

ITCPress Release:

[T]he Tax Foundation released the third annual International Tax Competitiveness Index. Once again, the United States ranks among the bottom 5 countries with the 5th least competitive tax system in the OECD. Only Greece, Portugal, Italy, and France have less competitive tax codes. On the other end of the spectrum, Estonia takes the number one spot once again, with New Zealand and Latvia having the second and third most competitive tax systems, respectively.

Table 5

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October 6, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

The IRS Scandal, Day 1246

IRS Logo 2Washington Times. IRS Subjects Tea Party Groups to New Round of Scrutiny, Publicizes Tax Return Data:

The IRS‘ battle against holdout tea party groups is heating up again, after the tax agency promised it would begin processing their long-delayed applications, but sent a new round of prodding questions demanding still more information.

More jarringly, the IRS then publicly released one of the sets of questions it sent to the Texas Patriots Tea Party — a move the group’s lawyer says puts secret taxpayer return information, supposed to be protected, out in the public.

Tax experts say the IRS may be on safe legal ground, since the filing was made as part of a court case, and that’s one of the few narrow exceptions to strict IRS privacy laws.

Still, the move to release the information has inflamed an already tense class action legal battle between the IRS and tea party groups who feel the agency is still targeting them more than three years after it promised to cease. “The IRS has taken the unprecedented step of publicly filing actual return information,” said Edward Greim, who is handling the case on behalf of more than 400 groups targeted by the IRS. He said the questions asked by the IRS show the agency has not ceased the intrusive questioning that landed it in trouble in the first place back in 2013. Mr. Greim said releasing the letter is proof that the IRS can’t be trusted to fairly handle the cases. ...

In addition to the TPTP, two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.

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October 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, October 5, 2016

Fleischer Presents The Libertarian Case For A Universal Basic Income Today At Northwestern

Fleischer (Miranda)Miranda Perry Fleischer presents The Libertarian Case for a Universal Basic Income (with Daniel Hemel (Chicago)) at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Imagine a society in which each member regardless of need, receives an unconditional basic income – perhaps $1,000 a month, perhaps more, perhaps less. This idea (known as a universal basic income, or “UBI”) is garnering support around the globe and across the political spectrum, from the conservative thinker Charles Murray to the entrepreneurs of Silicon Valley to the social democratic state of Finland. Tax law scholars will recognize this concept as a variation of the negative income tax. Despite this obvious overlap and the UBI’s growing popularity among policymakers, the UBI has not attracted widespread attention from legal scholars in recent years. This Article begins to fill that gap by examining the theoretical underpinnings of a UBI and analyzing how those underpinnings illuminate relevant design questions.

Notably, this Article argues that a nuanced exploration of libertarian theory justifies the provision of a UBI on normative – and not simply pragmatic – grounds. We ground this argument in libertarian ideals for three reasons. ...

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October 5, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (6)

Merrill Presents Innovation Boxes: BEPS And Beyond Today At Pennsylvania

MerrillPeter Merrill (PricewaterhouseCoopers; former Chief Economist, Joint Committee on Taxation) presents Innovation Boxes: BEPS and Beyond at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

Over the last 15 years, 16 countries have adopted intellectual property (IP) or patent box regimes, including three G7 countries. This paper explains the IP box concept, outlines recent U.S. IP box proposals with a focus on the Boustany-Neal discussion draft, and explains changes adopted in 2015 to the Organisation for Economic Co-operation and Development (OECD) standards for determining whether IP boxes should be treated as “harmful preferential tax regimes.” \

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October 5, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

NY Times:  When It Comes To Tax Avoidance, Donald Trump’s Just A Small Fry

USP ShellGamesNew York Times: When It Comes to Tax Avoidance, Donald Trump’s Just a Small Fry, by Andrew Ross Sorkin:

Not paying taxes “makes me smart,” Donald J. Trump said last week. His surrogates called him “a genius” for his recently revealed tax avoidance strategies.

Well, if they are right, the executives running corporate America are absolute virtuosos.

An exhaustive study being released on Tuesday by a group of researchers shows in detail how Fortune 500 companies have managed to shelter trillions of dollars in profits offshore from being taxed. Mr. Trump’s efforts pale by comparison. Worse, the companies have managed to hide many of their tax havens completely, in many cases reporting different numbers to different government agencies to obfuscate exactly how they’ve avoided Uncle Sam.

And, yes, it is all legal.

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October 5, 2016 in Tax | Permalink | Comments (0)

California State University Issues Call For Tax Papers

Cal StateThe Bookstein Institute for Higher Education in Taxation at California State University, Northridge, in collaboration with the School of Business at Pacific Lutheran University, has issued a Call for Papers for The 2017 Tax Development Conference to be held at California State University, Northridge on Saturday, April 29, 2017:

The conference aims to bring together tax professors at business schools to facilitate the exchange of ideas and promote collaboration. Papers on any aspect of tax research, practice, or classroom pedagogy should be submitted electronically to Fabio Ambrosio no later than February 17, 2017. Papers at any stage (other than those already accepted for publication) are invited.

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October 5, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Prosecutors Zero In On Adelson Family After Plea Deal With Hit Man, Arrest Of Accomplice In Markel Murder

Adelson FamilyNational Law Journal, Police Zero In On Murdered Law Prof’s In-laws, Experts Say:

Prosecutors likely hope that by arresting Magbanua and charging her as an accomplice in Markel’s murder—not with a lesser crime such as accessory to murder—she will strike a deal and implicate Charlie Adelson and perhaps his mother, Donna Adelson, as the architects of the murder, said Charles Rose III, a law professor at Stetson University College of Law.

“They’re trying to get her to roll,” Rose said, noting it’s a common tactic to try and cut a deal with the least culpable person in a criminal enterprise. “They’ve put Katherine between a rock and a hard place. They’re trying to get her to provide the piece of information the prosecutors don’t yet have that will get an indictment of the Adelsons.”

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October 5, 2016 in Legal Education | Permalink | Comments (5)