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Monday, September 29, 2014

Should Law Schools Adopt the Montessori Method?

Emily Grant (Washburn), The Pink Tower Meets the Ivory Tower: Adapting Montessori Teaching Methods for Law School, 66 Ark. L. Rev. ___ (2014):

MontessoriSome principles of teaching are timeless. Maria Montessori developed a methodology for teaching children over 100 years ago, nearly the same time Christopher Columbus Langdell was adapting the Socratic Method for teaching law students. Law school professors can incorporate Montessori’s ideas to foster a more robust educational environment for law students as they join a profession of life-long self-directed learners.

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September 29, 2014 in Legal Education, Scholarship, Teaching | Permalink | Comments (2)

The IRS Scandal, Day 508

IRS Logo 2New York Observer:  Eric Holder Runs from a Ticking Time Bomb: IRS Deadline Approaches Fast, Federal Judges are Furious—and Where’s Andrew Selka?, by Sidney Powell:

The surprise resignation of Eric Holder, the first Attorney General ever to be held in contempt of Congress, exploded in the news today. Holder has been under unrelenting assault for the most egregious politicization and abuse of power in the Department of Justice in history—exceeding that of John Mitchell and Alberto Gonzalez. He has made the Department of Obstructing Justice notorious. Federal judges are stepping in to end his stone walling of Congressional and other investigations on several fronts, and now he’s on the run.

Why now? What is about to blow up? ...

Mr. Holder is about to run out of stalling time on the cover-up in the IRS scandal. He has come under increasingly serious fire for refusing to appoint a real special prosecutor to investigate what the Inspector General of the Treasury has already determined to be improper targeting of conservative groups by IRS officials including Lois Lerner. That bomb could detonate any day now.

The IRS has stonewalled production of the relevant documents, suffered astonishing computer crashes, deliberately destroyed Lois Lerner’s Blackberry with no effort to retrieve the “missing” emails from it, and been deceitful and obstructionist in the lawsuit brought by Judicial Watch to obtain documents that would reveal the target selection process and how high up in the White House the knowledge or direction of it can be traced.

Judicial Watch recently requested additional discovery. Judge Emmet Sullivan, the federal judge in the District of Columbia, has just given the IRS until October 17 to file its response to that motion. Judge Sullivan has the power to appoint—and has previously—appointed a special prosecutor to investigate the Department of Justice. ...

Mr. Holder tasked Barbara Bosserman, a Civil Rights Division attorney, with the Department’s own purported investigation of the IRS abuses. Congress later learned that she had made substantial contributions to the President’s campaign and renewed its demand for Mr. Holder to name a special prosecutor.

As more of the IRS emails have come to light, they have revealed that Mr. Holder allowed a Justice Department lawyer, Andrew Strelka, to represent the IRS in opposing the lawsuit by Z Street—a group allegedly targeted for abusive treatment by the IRS because of its support for Israel. Mr. Strelka used to work with Lois Lerner, engaged in the political targeting himself, and maintained his close relationship with Ms. Lerner after he joined the Justice Department. Congressmen Issa’s and Jordan’s letter of August 25 to the Attorney General revealed that Mr. Strelka was privy to internal communications of the Exempt Office of the IRS long after he left that office. He was even advised immediately of the crash of Ms. Lerner’s hard drive—unlike Congress or any federal judge.

The letter notes: “Curiously, before his withdrawal from the case [forced by a story reporting this conflict], Strelka also completed a detail to the White House Counsel’s Office from December 2013 to June 2014—during which time the White House learned of Lois Lerner’s destroyed emails.”

The Congressional Committee on Government Oversight and Reform has intensified its inquiry into the Department’s conduct. The Congressmen told the Attorney General that their Committee staff should be contacted to arrange transcribed interviews of Mr. Strelka and Ms. Siegel by September 8. Mr. Strelka quickly and quietly left the Department. By September 5, the Department was stonewalling and refusing to assist the Committee in locating Mr. Strelka—who seems to be as missing as the IRS emails. As the Hill has reported, Rep. Jordan complains that the Justice Department “has declined to give Strelka’s contact information to the Oversight Committee and has reprimanded the panel for trying to get in touch with him directly.” Is this an out-take from House of Cards?

Congress also wants to talk to Nicole Siegel, a Department lawyer in the Office of Legislative Affairs. Turns out she also worked for Lois Lerner, shared Ms. Lerner’s views, and kept in touch. Hardly the disinterested person one should have in the Department office that responds to congressional inquiries on the IRS’s target selection.

Then there was the extraordinary accidental or mistaken call to Congressman Issa’s office by the Justice Department’s Office of Public Affairs. The call was intended for Rep. Elijah Cummings, the ranking minority member of the Oversight Committee, and sought to coordinate a leak of selected Committee documents to selected reporters so the Department could comment on them. The subject of the conversation and documents? None other than Andrew Strelka—regarding his representation of IRS Commissioner Koskinen in the Z-Street case. Meanwhile, other emails reveal extensive communications between Rep. Cummings’ staff and the IRS — referred to as an “executive branch agency” — in 2012 and 2013 regarding conservative group True the Vote.

As of September 12, the Department was still obstructing efforts to locate Mr. Strelka. Meanwhile, the Department’s own Inspector General Michael Horowitz testified before the House Judiciary Committee that the FBI and other components of the Department of Justice “have refused our requests for various types of documents. As a result, a number of our reviews have been significantly impeded.” Mr. Horwitz had already joined an unprecedented letter signed by 47 Inspector Generals for various agencies expressing serious concern that their jobs were being undermined and obstructed by multiple agencies of this presidency, including the Department of Justice.

Mr. Strelka can’t hide forever. Judge Bates is fed up with Department’s delays and ordered the list of documents Mr. Holder and Mr. Obama have been hiding for years now on their Fast and Furious scheme. Soon, Judge Sullivan could appoint a special prosecutor or demand production of the back-up server’s emails, or give Judicial Watch additional discovery after October 17.

One thing is for certain. Mr. Holder didn’t just wake up today and decide he wanted to go fishing. There are truths underlying this resignation that will be shocking when they surface. Mr. Holder will no longer have the shield of the Attorney General and the Department of Justice to protect him from congressional, grand jury, or other subpoenas. The next question is: Which criminal lawyer will he hire to defend him and how soon?

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September 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, September 28, 2014

Income Gains in the Obama Economic Recovery: +116% to Top 10%, -16% to Bottom 90%

New York Times:  The Benefits of Economic Expansions Are Increasingly Going to the Richest Americans, by Neil Irwin:

Economic expansions are supposed to be the good times, the periods in which incomes and living standards improve. And that’s still true, at least for some of us.

But who benefits from rising incomes in an expansion has changed drastically over the last 60 years. Pavlina R. Tcherneva, an economist at Bard College, created a chart that vividly shows how.

Income Growth

The Rich Are Getting Richer, Part the Millionth, by Kevin Drum:

It's a pretty stunning chart. The precise numbers (from Piketty and Saez) can always be argued with, but the basic trend is hard to deny. After the end of each recession, the well-off have pocketed an ever greater share of the income growth from the subsequent expansion. Unsurprisingly, there's an especially big bump after 1975, but this is basically a secular trend that's been showing a steady rise toward nosebleed territory for more than half a century. Welcome to the 21st century.

September 28, 2014 in Tax | Permalink | Comments (3)

Cass Sunstein's Ode to the Independent Bookstore: 'Church, House of Worship, Sacred Place'


Chicago Tribune:  A Treasure-Trove Beyond Words, by Cass Sunstein (Harvard):

I joined the faculty of the University of Chicago Law School in 1981. On the day after I moved to Hyde Park, a young English professor told me, in hushed tones, "The best thing about the University of Chicago is the Sem Co-op." He added, as if he were discussing a legendary priest, or a world leader, or perhaps a spy, "It's run by Jack Cella."

Of course I had no idea what a "Sem Co-op" might be, and I had never heard of Jack Cella — and I was properly intimidated by both. A week later, I discovered the Seminary Co-op Bookstore, and I was able to see, at his small desk on the right as you enter the store, the famous Jack Cella.

Hyde Park's Seminary Co-op Bookstore is not merely a bookstore. It is a community. It is a small town. It is a church, a sacred place. The air is cleaner there, and the people are more gracious, and they move more slowly. It is defined by quiet, and by gentleness, and by respect. No one disturbs anyone there. When they talk, they tend to whisper.

A confession: During my first years at the University of Chicago, I was a bit frightened whenever I entered the Seminary Co-op. I met Jack, or sort of met Jack, but I didn't know if he knew my name. When I saw him, I felt painfully shy. You could find the university's legendary professors there — the people who wrote the books that made it onto the celebrated Front Table (more on that in a minute). Wayne Booth might be there, or Marshall Sahlins, or Wendy Doniger, or David Tracy, or William Julius Wilson, or Gary Becker. (Would one say, "hello, Professor Becker"? "Hi there, Gary?" Nothing at all?)

The Seminary Co-op was a magnet. It was analogous to a great city as memorably described by Jane Jacobs: It was full of life-altering surprises, and unknown treasures, and whenever you turned a corner, you never knew what you would see. ...

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September 28, 2014 in Legal Education, Tax | Permalink | Comments (0)

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 on SSRN, with a new paper debuting on the list at #5.  The #1 paper is now #19 in all-time downloads among 10,329 tax papers:

  1. [3172 Downloads]  'Competitiveness' Has Nothing to Do with it, by Edward D. Kleinbard (USC)
  2. [333 Downloads]  2013 Developments in Connecticut Estate and Probate Law, by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid and Riege, Hartford)
  3. [252 Downloads]  Public Pressure and Corporate Tax Behavior, by Scott Dyreng (Duke), Jeffrey Hoopes (Ohio State) & Jaron Wilde (Iowa)
  4. [185 Downloads]  The OECD'S Flawed and Dated Approach to Computer Servers Creating Permanent Establishments, by Monica Gianni (Florida)
  5. [121 Downloads]  Rights Without Remedies, by Matthew L. M. Fletcher (Michigan State)

September 28, 2014 in Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 507

IRS Logo 2The Daily Signal:  Eric Holder’s 7 Worst Actions as Attorney General:

3. Failure to conduct a real, criminal investigation of the IRS targeting of conservative organizations and to enforce the contempt citation issued by the House of Representative against Lois Lerner.

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September 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, September 27, 2014

6th Annual Aspiring Law Profs Conference Today at Arizona State

Aspiring Law Profs 2Arizona State hosts the 6th Annual Aspiring Law Professors Conference today on Saturday, September 27 (details here):

  • Learn to succeed in the entry-level law teaching market
  • Obtain an insiders perspective on the appointments process from faculty with extensive hiring experience
  • Participate in a mock interview or mock job talk and gain feedback from law professors

I will be delivering the keynote address on Law School Rankings, Faculty Scholarship, and the Missing Ingredient. Previous keynote speakers were Brian Leiter (2009), Dan Filler (2010), Eugene Volokh (2011), Paul Horwitz (2012), and Christine Hurt (2013).

Update:  PrawfsBlawg:  ASU Aspiring Law Professors Conference, by Richard Chen (Pepperdine VAP)

September 27, 2014 in Conferences | Permalink | Comments (0)

NY Times: Profits Made in the USA, but Banked Overseas

New York Times:  Made in the U.S.A., but Banked Overseas, by Floyd Norris:

MadeImagine how frustrating it would be to have billions of dollars in cash but be unable to spend it as you wish unless you paid a large part to the Internal Revenue Service.

That could be your problem if you were running a large multinational corporation based in the United States.

Profitable companies that operate only in this country have some tax breaks available and so often pay considerably less than the statutory corporate tax rate of 35 percent. But they still face a significant tax bill.

It is a different story for United States companies that operate internationally.

“U.S. multinational firms have established themselves as world leaders in global tax avoidance strategies,” said Edward D. Kleinbard, a former chief of staff of Congress’s Joint Committee on Taxation who now teaches tax law at the Gould School of Law at the University of Southern California. In a recent article, he sarcastically added that those companies “are burdened by tax rates that are the envy of their international peers.”

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September 27, 2014 in Tax | Permalink | Comments (0)

Morgan Stanley on Income and Wealth Inequality

Morgan Stanley LogoWall Street Journal, Why Wall Street Cares About Inequality:

First, it was Standard & Poor’s. Now, Morgan Stanley weighs in on income inequality in a new report. Why are these Wall Street institutions, normally focused on macroeconomic issues directly related to gross domestic product forecasts, suddenly chiming in on the issue?

Morgan Stanley

Morgan Stanley 2

(Hat Tip: Bruce Bartlett.)

September 27, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 506

Friday, September 26, 2014

Shay Presents Tax Inversions -- The Problem and Possible Solutions Today at San Diego

Shay (2014)Stephen E. Shay (Harvard) presents Mr. Secretary, Take the Tax Juice Out of Corporate Expatriations, 144 Tax Notes 473 (July 28, 2014), at San Diego today as part of its Tax Law Speaker Series:

This article describes the principal tax benefits companies seek from expatriating and outlines regulatory actions that can be taken without legislative action to materially reduce the tax incentive to expatriate. These proposals for regulations are supported by existing statutory authority. They would be good policy and consistent with, or easily integrated with, publicly proposed tax reform proposals.

Prior TaxProf Blog coverage:

September 26, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Blair-Stanek Presents Crisis-Proofing Tax Law Today at Michigan State

Blair-Stanek (2013)Andrew Blair-Stanek (Maryland) presents Crisis-Proofing Tax Law at Michigan State today as part of its Junior Faculty Workshop:

Tax law should borrow from tort law’s doctrine of necessity to respond better to future financial crises. Tort law gives dock owners a “property rule” right to exclude unwanted boats. But when storms arise, dock owners are protected by only a “liability rule”: they cannot exclude an unwanted boat, but the boat’s owner must compensate the dock owner. This rule creates optimal incentives to minimize storm damage, while also preventing windfalls to boat owners.

Tax law also has both property rules and liability rules. When a taxpayer violates a tax-law requirement, the result is either additional tax proportionate to the harm (a liability rule) or a draconian penalty such as losing a favorable tax status entirely (a property rule).

During the 2008-09 financial crisis, a number of financially-distressed taxpayers found themselves unable to meet tax-law requirements protected by property rules. Failing these requirements would have pushed the taxpayers into financial death spirals. Several of the IRS’s ad hoc responses to the crisis unwittingly borrowed from tort law’s doctrine of necessity, moving from a draconian property rule to a proportional liability rule to prevent tax law from worsening the taxpayer’s situation. But other IRS responses simply moved from property rules to non-enforcement, resulting in large windfalls to some taxpayers, to the Treasury’s detriment. Counterintuitively, because non-enforcement created such windfalls, the IRS kept such responses so narrowly tailored that many taxpayers got no relief at all.

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September 26, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly Tax Roundup

September 26, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

September 26, 2014 in Legal Education, Weekly Legal Education Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

September 26, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Call For Tax Papers: Summer 2015 SEALS Annual Conference

SEALs Logo (2013)Jennifer Bird-Pollan (Kentucky) has issued a call for tax papers for the 2015 SEALS Annual Conference to be held July 27 - August 2 in Boca Raton, Florida:

Although summer 2015 seems miles away, it is already time to submit proposals for the next SEALS conference, to be held July 27 - August 2, 2015. As I have done in years past, I am happy to organize and submit for consideration panels and discussion sessions on tax topics. For the past several years we have had successful Tax Policy Discussion groups, consisting of 10 to 12 tax scholars presenting for only 5 to 10 minutes each, but then participating as a group in a larger discussion of issues in tax policy, broadly defined. In addition, there have been several tax panels each year, consisting of 4 to 5 panelists discussing a more narrow tax topic. If you are interested in participating in a Tax Policy Discussion Group, or if you have a paper you’d like to present as part of a panel, but are looking for others to join with you, please let me know. Proposals are due at the end of October, so if you could let me know of your potential interest by Friday, October 10, that would be great.

September 26, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Nine Law Schools Offer Online Tax LL.M. Degrees

National JuristAccording to the National Jurist and other sources, nine law schools now offer an online Tax LL.M. degree:

September 26, 2014 in Legal Education, Tax | Permalink | Comments (0)

The U.S. News Law School Rankings and the Rise of Transfer Students

Bruce M. Price (San Francisco) & Sara Star (Miller Starr Regalia, Walnut Creek CA), The Elephant in the Admissions Office: The Influence of U.S. News & World Report on the Rise of Transfer Students in Law Schools and a Modest Proposal for Reform, 49 U.S.F.L. Rev. ___ (2014):

U.S. News (2015)Students who perform well after the first year of law school are increasingly transferring to schools ranked higher by U.S. News to maximize their chances of getting a law firm job immediately following graduation. This phenomena raises two fundamental and understudied issues: how students make the decision to seek to transfer to a higher-ranked and higher-tier law school, and why such law schools are willing to admit transfer students into their second-year class who they were not willing to admit initially. The first issue we explore through interviews with students who transferred as well as those who could have transferred but chose not to. The second issue we explore by highlighting the persuasiveness of U.S. News as a determinant of law school status and the ways in which the magazine has spawned the growth and development of law school competition for transfer students. We conclude that the scale and magnitude of the phenomenon of transfer students is affecting significantly the practices and procedures of all law schools, and that this phenomenon is driven by U.S. News’s failure to account for the LSAT scores and UGPAs of students that both transfer into and out of law schools when determining rankings. We conclude with a modest proposal that the ABA and U.S. News should require law schools to provide the metrics of incoming transfer students and exclude the metrics of departed transfer students.

September 26, 2014 in Law School Rankings, Legal Education | Permalink | Comments (3)

Why is Thomas Piketty's 700-Page Book a Bestseller?

PikettyThe Guardian, Why is Thomas Piketty's 700-Page Book a Bestseller?:

Thomas Piketty is a French economist whose Capital in the Twenty-First Century has swept American discourse. Four experts – Brad DeLong, Tyler Cowen, Stephanie Kelton and Emanuel Derman – take on why that is.

There’s been a bizarre phenomenon this year: a young, little-known French economist has written a 700-page tome about economic inequality – dense with data, historical examples from France, and a few literary references to Jane Austen.

That’s not the strange part. This is: it’s a bestseller.

Somehow, Capital in the Twenty-First Century by Thomas Piketty has become a conversation piece among well-read people. Its graphic red-and-ivory cover is inescapable. Early in its launch, it hit No 1 on Amazon’s bestseller list and the paper version – a doorstop in punishing, heavy hardcover – sold out in major bookstores.

Piketty’s main argument is this: that invested capital – in the stock market, in real estate – will grow faster than income.

The implications of that are deep: to have invested capital, you must have money already. If you rely on income, as most people do, you will likely never catch up to the wealth of people who are already rich. The 1% and the 99% enshrined by Occupy are not an anomaly of our time, Piketty’s research suggests. It’s a structural feature of capitalism. Piketty’s work – which has been in progress for over a decade – is a natural pairing with the Occupy movement, which also questions the premises of capitalism.

You can see the appeal of such an argument, which has driven the book to become a cultural touchpoint. Seattle quoted Piketty in its minimum-wage law. The book has had so many reviews and articles that it’s possible for someone to feel as if they have read it even without cracking the cover.

Which raises the question: why this book? The themes that Piketty brings up have been enshrined in discussion about progressive economists for decades. No fewer than three Nobel Prize winners – Joseph Stiglitz, Paul Krugman and Robert Solow – have all devoted much of their careers to studying inequality. On Friday, 19 September, I moderated a panel at the Washington Center for Equitable Growth that included Solow as well as economists Brad DeLong, Tyler Cowen and Russ Roberts. For 90 minutes, they hammered out the implications of Piketty’s work -- and the discussion ended with much more to say.

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September 26, 2014 in Book Club, Tax | Permalink | Comments (3)

The IRS Scandal, Day 505

IRS Logo 2Washington Free Beacon:  Politico's Epic Fail in Their Lois Lerner Interview, by Larry O'Connor:

Unrepentant political hack Lois Lerner finally broke her 16-month silence by granting Politico an exclusive interview Monday. She was flanked by not one, but two lawyers running interference for any challenging questions from reporter Rachael Bade.

However, if Politico had been more diligent in approaching their “big get” with a reporter who was well versed in the charges against Lerner and the conflicting narratives that have been floated by the IRS, Department of Justice, and the administration since May 2013, they would have had a fantastic interview with a plethora of challenging moments that might have ended with Lerner’s lawyers shutting down the interview before it could end.

Instead, Lerner had the opportunity to tell her story without the benefit of a real challenge on the facts of the case and how they conflict with the carefully crafted narrative told to Ms. Bade during the headline-grabbing exclusive.

Probably the most glaring example of Politico letting Lerner lie about her involvement in the IRS scandal and the subsequent cover-up comes in one of Lerner’s rhetorical tricks involving the mysteriously crashed hard-drives that contained emails related to the scandal.

Lerner is allowed to pose a rhetorical question that Ms. Bade (and apparently her editors at Politico) cannot or refuse to answer for their readers:

“How would I know two years ahead of time that it would be important for me to destroy emails, and if I did know that, why wouldn’t I have destroyed the other ones they keep releasing?”

We, the reader, never hear Ms. Bade’s answer and her editors never research the issue in any real way to inform us of the facts behind Lerner’s supposed “gotcha” moment.

The truth is divulged in a Wall Street Journal analysis of evidence uncovered via a congressional investigation, not a puff piece bit of rah-rah “journalism.” (emphasis mine)

As to Ms. Lerner’s behavior, consider that House Ways & Means Chairman Dave Camp first sent a letter asking if the IRS was engaged in targeting in June, 2011. Ms. Lerner denied it. She engineered a plant in an audience at a tax conference in May 2013 to drop the bombshell news about targeting (maybe hoping nobody would notice?). She has subsequently asserted a Fifth Amendment right to silence in front of the only people actually investigating the affair, Congress. Now we learn that her hard drive supposedly defied modernity and suffered total annihilation about 10 days after the Camp letter arrived.

The answer to Lerner’s suggestion is pretty simple. “Ms. Lerner, there is a letter from Chairman Camp asking you about the tea party group targeting in June of 2011. Your hard drives ‘crashed’ ten days after you received that letter. Why are you pretending you didn’t learn about the targeting until 2013”

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September 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, September 25, 2014

Columbia Journal of Tax Law Publishes New Issue

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published  Vol. 5, No. 2:

September 25, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tax Man Uses Drones to Root Out Wealthy Tax Evaders

DroneThe Telegraph, Argentina Uses Drones to Root Out Wealthy Tax Evaders:

The Argentine government has used drones to catch out wealthy tax evaders who had not declared mansions and swimming pools.

Unmanned aircraft were dispatched over an upper class area of Buenos Aires and discovered 200 homes and 100 pools that had not been detailed on returns.

Tax officials said the drones took pictures of luxury houses standing on lots registered as empty.

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September 25, 2014 in Tax | Permalink | Comments (2)

Kahng: Tax, Incest, and Big (Gay) Love

Lily Kahng (Seattle), Next Up, Incest (Jotwell) (reviewing Anthony C. Infanti (Pittsburgh), Big (Gay) Love: Has the IRS Legalized Polygamy?, 92 N.C. L. Rev. Addendum ___ (2014)):

Big LoveGay marriage opponents love to fear monger about the slippery slope of extending marriage beyond the legal union between one man and one woman. They prophesy that if we allow marriage between two men or two women, we will descend into a Gomorrah of incest, adultery, polygamy, and animal love. In his essay, Big (Gay) Love: Has the IRS Legalized Polygamy?, Anthony Infanti makes subversive use of this repugnant meme to advance his view that tax results should not depend on marriage in the first place. ...

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September 25, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

A Nightmare Future of Higher-Ed

Minding the Campus:  A Nightmare Future of Higher-Ed, by Lee Kottner:

A favorite trope of science fiction dystopias is a classroom of students wearing metallic skull caps wired to a blinking, monolithic computer, and staring vacantly into space while the propaganda and “facts” that pass for knowledge and education are downloaded directly into their brains. That scenario may be coming soon to a college campus near you, if in a somewhat more refined manner.

Consider the state of higher education today. Since the late 1970s, the total of poorly paid untenured and contingent faculty has far outstripped the number of tenured faculty on college campuses all over the world and now accounts for roughly 76 % of faculty in U.S. higher education.

The shrinking number of tenured academics has been paralleled by a growing number of very well-paid administration positions, filled by MBAs or Educational Administration doctorates who have spent little or no time in the actual educational trenches. The current corporate administrative pattern emphasizes a profit model of efficiency, cost control, and knowledge delivery, which is fundamentally different from the academic and pedagogical model of knowledge creation, a messy, individualistic but often life-changing process. This new emphasis is evident in the constant rise of tuition (going to grandiose building projects and bloated administrative salaries mirroring the corporate world), increasing demands for the quantification and standardization of instruction, larger class sizes, and the devaluing of educators’ professionalism, expertise, mentoring, innovative pedagogy, and the kind of student-centered, highly personalized learning opportunities I had at my small liberal arts college in the 1980s.

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September 25, 2014 in Legal Education | Permalink | Comments (0)

McMahon: Rethinking Taxation of Privately Held Businesses

Martin J. McMahon Jr. (Florida), Rethinking Taxation of Privately Held Businesses:

This article proposes the repeal of current Subchapters K and S, as well as the removal from the ambit of Subchapter C of all privately held corporations and the replacement of the current tax regime for privately held business with a new regime under which all privately held businesses (including wholly owned corporations and limited liability companies, and unorganized sole proprietorships) would be taxed at the entity level under a uniform rate schedule, regardless of the form of organization. (All publicly traded companies, and their controlled corporate subsidiaries, would continue to be governed by all of the structural rules of Subchapter C (and any other relevant Code sections outside of Subchapter C.)) Nevertheless, the profits of privately held companies subject to the entity level tax would not be double taxed upon distribution. Rather, a single level tax, at the owners’ tax rates would be achieved by applying the imputation-credit model for corporate tax integration to all distributions (including profits of a sole proprietorship that have not been reinvested) to the equity owners of the entity. As a consequence of the abolition of pass-through taxation and the imposition of an entity-level tax, entity losses no longer could be passed through to the entity’s owners to offset positive income from other sources. This proposal emanates from decades-long problems with the administration of Subchapter K, governing the taxation of partnerships, and the incoherence of having three separate regimes—Subchapter C, Subchapter K, and Subchapter S—apply to closely held businesses depending of the form of organization and available elections. While it does not originate as a refinement of recent proposals to reduce the corporate tax rate and to clean up the base, its adoption would facilitate such a move. Because such a high percentage of U.S. business income is now earned by unincorporated business it would avoid increased distortions in the choice of business entity due solely to tax planning.

September 25, 2014 in Scholarship, Tax | Permalink | Comments (0)

Former AALS President: Thomas Jefferson Is 'The Canary in the Coal Mine of Legal Education,' Expects Six Law Schools to Close

Chronicle of Higher Education, As Law School Struggles to Stay Open, Some See ‘a Canary in the Coal Mine’:

Much has been written about the sky-high debts facing law-school graduates, who face difficult odds in landing jobs that will help pay off their loans. But students at Thomas Jefferson School of Law are among the first who are contemplating the possibility of a get-out-of-debt-free card that no one’s eager to cash in. 

It would apply only if the law school, which is struggling to restructure a $133-million debt, were to close—a prospect the private, stand-alone school in downtown San Diego is determined to avert. After failing to make a June payment, the school was given a reprieve until October 17 but ordered to pay an additional $2-million.  ...

The number of applicants to law schools accredited by the American Bar Association plummeted 45 percent from 2004 to 2014, according to preliminary figures released by the association. By 2013, first-year enrollment had slid about 18 percent, a devastating decline for schools, like Thomas Jefferson, that depend heavily on tuition.


As Thomas Jefferson struggles to remain afloat, Michael A. Olivas, a former president of the Association of American Law Schools, suggested it may be "a canary in the coal mine of legal education." The nation has too many law schools, said Mr. Olivas, who is also a professor of law at the University of Houston, and he expects some will close in the next several years. "I believe there will be, in all likelihood, about a half-dozen schools that are on anybody’s watch list," he said.

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September 25, 2014 in Legal Education | Permalink | Comments (8)

U.S. News Jobs Rankings: Lawyers #51 (Down From #33 Last Year)

Best Jobs 2U.S. News & World Report, The 100 Best Jobs:

All jobs aren’t created equal. In fact, some are simply better than the rest. U.S. News 100 Best Jobs of 2014 offer a mosaic of employment opportunity, good salary, manageable work-life balance and job security. Some careers offer just the right mix of these components – for instance, nearly 40 percent of our picks are health care jobs – but the list also includes strong showings from occupations in the social services and business sectors. And for the first time, our No. 1 pick is a technology job. Read more on how we rank the best jobs, and check out our complete list.

Best Jobs 451.  Lawyer (details here).  Consider this: 25 of our U.S. presidents have been lawyers. So it almost goes without saying that working in law holds a particular draw for us Americans. There will be the need for about 74,800 more professionals with Juris Doctor degrees by the year 2022.

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September 25, 2014 in Legal Education | Permalink | Comments (11)

U.S. and International Tax Rates of the S&P 100

Wallet HubWallet Hub, S&P 100 Tax Rate Report:

Concerns over the proper role of taxation lie at the very foundation of United States history. They haven’t gone away either. In fact, matters of tax reform are set to play a central theme in this year’s midterm elections, fueling partisan discussions of economic patriotism as well as debates over whether Main Street or millionaires should foot more or less of the bill.

In the spirit of advancing the discussion, WalletHub analyzed annual reports for the S&P 100 – the largest and most established companies on the stock market – in order to determine the rates at which they pay taxes at the state, federal and international levels as well as how their tax burdens compare to those of American individuals.


Table 2

The complete data on all S&P 100 companies are here.  For Tax Prof commentary on the corporate tax, see:

(Hat Tip: Bruce Bartlett.)

September 25, 2014 in Tax | Permalink | Comments (0)

ABA Announces Plan to Implement New Law School Accreditation Standards

ABA Logo 2ABA Section on Legal Education and Admission to the Bar Standards Review Committee, Implementation of New Standards and Rules for Approval of Law Schools:

At its meeting on Monday, August 11, 2014, in Boston, the ABA House of Delegates concurred in all of the proposed new Standards and Rules of Procedure for Approval of Law Schools with the exception of Interpretation 305-2. The Interpretation, which prohibits law schools from granting credit for field placement programs for which the student receives compensation, was referred back to the Council after the House heard strong testimony for and against the provision. Because the revised Standards proposed to continue the existing rule on this matter, the existing rule remains in place, pending further review by the Council.

In accordance with the Rules of Procedure, a decision by the Council to adopt, review, amend or repeal the Standards, Interpretations or Rules is subject to a maximum of two referrals back to the Council by the House. If the House refers a Council decision back to the Council twice, then the decision of the Council following the second referral will be final and will not be subject to further review by the House.

The revised Standards and Rules are legally effective as of the end of the ABA Annual Meeting on August 12, 2014. However, cognizant that law schools will need time to do the work that some of the changed Standards will require, the Council and the Section have established a transition and implementation plan. The revised Rules do not require a delay for implementation and are effective immediately.

September 25, 2014 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 504

IRS Logo 2Daily Caller:  500 Days After IRS Scandal Broke, Reporter Still Refuses To Pay His Taxes, by Patrick Howley:

This week the IRS conservative targeting scandal turned 500 days old. It’s been 500 days since we learned that Lois Lerner’s former agency targeted right-leaning groups applying for nonprofit status and audited ones that already exist. And it has been 500 days since I righteously decided to stop paying my taxes.

500 days later, the IRS still hasn’t produced emails from Lerner and the more than 20 other IRS employees whose computers allegedly crashed, whose Blackberries were thrown away and “upgraded,” and, in Lerner’s case, whose hard drive was “scratched” and destroyed. But we know that Lerner exchanged confidential taxpayer information on conservatives with top White House adviser Jeanne Lambrew during the 2012 election cycle. We know that Lerner and her White House-visiting underling Nikole Flax were involved in a “secret research project” involving conservative donor information that was approved by then-IRS commissioner Steven T. Miller. President Barack Obama first called the whole thing “outrageous.” Then he said there’s “not a smidgen of corruption.”

How much longer will this go on? New IRS chief John Koskinen said that “hard drive crashes continue as we speak.” Lerner is giving softball interviews with Politico about how conservatives (who she once called “assholes”) are trying to ruin her life. The White House has yet to be subpoenaed for the emails it exchanged with Lerner. Same goes for the Department of Justice. ...

500 days ago, we learned that the most powerful tax-collecting agency in the United States has been turned into a political weapon and their enemy is average hardworking American citizens. When people find out such a thing, it tends to lead to feelings of hopelessness. It makes people cynical. Important institutions have been corrupted and there’s nothing we can do about it because they claim that the computers crashed and that’s the end of it? And 500 days later, we still don’t have the emails?

This 500-day mark should be the point where we as Americans decide we’re not going to take it anymore, when we demand answers, when we try to get basic information out of our government so we can have just one tiny fragment of justice and decency and common sense back in our lives. But it doesn’t feel like it. It feels instead like the force of 315 million people shrugging. It feels like a country accepting that we’re circling the drain as a free-market democracy, putting their headphones in and going back to looking down at their not-at-all-private cell phones. 500 days of this. 500 days.

I did not pay my taxes this year. I will not pay my taxes until every single Lois Lerner email is released and the people who planned and carried out this governmental travesty are held accountable. So start watching that clock, John Koskinen, if you think you’re going to get my overdue money, and every day this goes on is another day I’m not giving you a dime (soon it will hit 619 days, one for every hard-earned dollar I “owe.”)

Go ahead and take me to court, federal government. I’m not giving you $619 I need so I can subsidize a fraction of a new salary bonus for some unethical bureaucrat who audited my friends and fellow countrymen. Your corruption cast a hopeless pall over this great but troubled country and its great but jaded people.

I will not pay, IRS. Because America already did.

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September 25, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, September 24, 2014

Columbia Journal of Tax Law's Tax Matters: Tax Inversions

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with three short pieces by tax practitions responding to a specific cutting-edge tax law issue posed by a tax academic.  This issue's prompt is by Robert Scarborough (Columbia):

United States taxation of worldwide income combined with a high corporate tax rate disadvantages US-headed multinational groups compared with groups with the same income mix but a non-US parent. The disadvantage has become more pronounced in recent years as more countries move to territorial systems and lower rates.

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September 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Michael 'The Situation' Sorrentino Has a Tax Situation

U.S. Department of Justice Press Release, Michael "The Situation" and Marc Sorrentino indicted for Tax Crimes Involving $8.9 Million Income:

The SituationTelevision personality Michael “The Situation” Sorrentino and his brother Marc Sorrentino are expected to appear in federal court this afternoon to face an indictment alleging they did not properly pay taxes on $8.9 million in income Michael Sorrentino received from promotional activities, U.S. Attorney Paul J. Fishman announced.

Michael Sorrentino and his brother Marc Sorrentino are charged with one count of conspiracy to defraud the United States. Marc and Michael Sorrentino also are charged with three and two counts, respectively, of filing false tax returns for 2010 through 2012. Michael Sorrentino faces an additional count for allegedly failing to file a tax return for 2011.

According to the indictment returned today:

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September 24, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

More Commentary on the Treasury Department's Action to Rein in Tax Inversions

Treasury Department SealFollowing up on yesterday's post, Treasury Department Takes Action to Rein in Tax Inversions:

New York Times editorial:  Cracking Down on Corporate Tax Games:

New rules from the Treasury Department are likely to slow the offensive practice that allows American companies to avoid taxes by merging with foreign rivals. Known as corporate inversions, these are complex, modern variations on the practices of yesteryear, when companies dodged their taxes by moving their addresses to post office boxes in the Caribbean. ...

The rules do not stop all abuses, including, for instance, earnings stripping. That is the practice in which a foreign parent deducts the company’s interest payments against the income generated by a United States subsidiary, thus lowering the American tax bill. Buried deep in the new rules is an indication that the Treasury Department plans to devise additional rules to stop the practice. The sooner the better.

Nor can the rules do what only Congress can do — namely pass a law to stop tax-motivated corporate inversions completely. That could be accomplished by simply mandating that any tax-deferred stashes held in foreign accounts become taxable as soon as a company inverts.

Everyday taxpayers face similar “taxable events” routinely. When you withdraw money from a tax-deductible retirement account, for instance, you owe tax. If you don’t withdraw the money, you owe tax when you reach a certain age. The reason corporations don’t face the same kinds of rules is that Congress doesn’t impose them.

New York Times DealBook:  Treasury Takes a Modest Step on Inversions, by Victor Fleischer (San Diego):

The Treasury Department’s notice of proposed regulations to curb so-called inversions is smart and narrowly tailored. The new rules would take away some — but not all — of the reasons that a company might want to give up United States citizenship.

Indeed, most proposed inversions are likely to go forward, especially those that make sense as a business matter above and beyond the tax benefits, some of which the new rules will curtail.

Companies still searching for a suitable foreign merger partner will find it harder make a match. And in some cases, the loss of tax benefits will mean the search is not lucrative enough to be worth the bother. ...

In sum, the proposed regulations will deter future inversions where the primary motivation is tax savings. Where there is a significant business reason for the merger, however, the new rules will most likely not affect the deal. Burger King’s proposed merger with Tim Hortons is a good example.

It is harder to predict what might happen with deals that appear to be mostly motivated by taxes, like Medtronic’s proposed merger with Covidien. The deal documents include an “out” if new rules would treat the inverted company as a United States corporation. But that is not the effect of the new rules. Instead, the rules would reduce the effectiveness of the inversion by denying access to Medtronic’s offshore cash.

Whatever happens with the inversions that have already been proposed, the new rules will help deter new deals that lack a real business purpose.

Wall Street Journal editorial, Can Jack Lew Add? Corporate Tax Revenue Is Rising Nicely Despite Inversions:

WSJMany economists are downgrading their expectations for U.S. growth. So naturally the Obama Treasury this week rolled out a plan to discourage investment in America.

The regulations are ostensibly to prevent so-called corporate inversions, in which U.S. companies acquire foreign firms and then relocate their legal headquarters offshore for tax purposes. But the practical impact will be to make it harder to make money overseas and then bring it back here.

For those who haven't studied this issue, Monday's Treasury announcement clarifies that the point is not to ensure that U.S. business profits will continue to be taxed. Such profits will be taxed under any of the inversion deals that have received so much recent attention. The White House goal is to ensure that the U.S. government can tax the foreign profits of U.S. companies, even though this money has already been taxed by the countries in which it was earned, and even though those countries generally don't tax their own companies on profits earned in the U.S. ...

Speaking of the legislature, even the White House admits that changes in tax law ought to involve Congress. So how does Mr. Lew's Treasury propose to change the rules on its own? Regular readers may be interested to know that the new Treasury plan does not include the so-called Section 385 gimmick we analyzed recently under which Mr. Lew would have magically reclassified debt as equity. But the sections of the law that Treasury cited on Monday in claiming the authority to rewrite business tax rules are still a unilateral diktat designed solely with an election in mind.

Mr. Lew was installed at Treasury as a political cipher, and he has delivered for the White House if not the economy. But outside of Washington we notice that no one is complaining about recent merger announcements involving foreign firms buying U.S. companies. These foreign firms don't suffer the same IRS penalty as U.S. businesses that want to take money earned elsewhere and invest it in the U.S. We're all for foreign investment, but should Washington be punishing U.S. companies that wish to do the same?

Additional press commentary:

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September 24, 2014 in Tax | Permalink | Comments (1)

How Appealing Partners With Above the Law

HAATLHoward Bashman’s wonderful appellate litigation blog, How Appealing, is partnering with Breaking Media's Above the Law, effective October 1, 2014.  For details of the arrangement, see:

Howard does not reveal the traffic numbers for How Appealing, but reports that Above the Law receives "7 million page views per month from over 1.1 million visitors."

(Hat Tip: Greg McNeal.)

September 24, 2014 in Legal Education | Permalink | Comments (0)

Lederman: Restructuring the U.S. Tax Court

Leandra Lederman (Indiana), Restructuring the U.S. Tax Court: A Reply to Stephanie Hoffer & Christopher Walker's 'The Death of Tax Court Exceptionalism', 99 Minn. L. Rev. Headnotes ___ (2014):

Stephanie Hoffer and Christopher Walker’s excellent Minnesota Law Review article, The Death of Tax Court Exceptionalism, analyzes the topical and important question of whether the Administrative Procedure Act (APA) governs the standard and scope of review the Tax Court applies to Internal Revenue Service (IRS) decisions. The APA contains provisions for court review of agency decisions but the Tax Court has repeatedly stated that the APA does not apply to it. As a result, the Tax Court has accorded less across-the-board deference to the IRS than APA standards call for.

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September 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Johnston Reviews Kleinbard's We Are Better Than This

David Cay Johnston (Syracuse), Book Review: Edward D. Kleinbard, We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014), 144 Tax Notes 1465 (Sept. 22, 2014):

KleinbardWe Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014) by Edward D. Kleinbard is a comprehensive, thoughtful, and informed volume on taxation and government spending.

This masterpiece of tax, fiscal, and economic policy is richly endowed with philosophical insights from Adam Smith's Theory of Moral Sentiments and holds the potential to change our often dogmatic and sometimes toxic public debate over how we tax ourselves and spend our tax dollars into a conversation about how to raise more money with less pain and spend in ways that will produce a happier America.

Kleinbard's book is especially useful in proposing a new way to measure capital incomes and a much smarter way to tax corporate profits. ...

The book challenges bedrock tax policy assumptions -- the marginal utility of income theory; the value of progressive taxation; the idea that regressive taxes are bad and should not be used to fund universal services like healthcare, education and infrastructure; the way we tax capital incomes, especially now that most businesses are pass-through entities, which he calls incoherent.

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September 24, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (1)

College Rankings by Billionaire Alumni

One BillionWEALTH-X and UBS Billionaire Census 2014:

Of the top 20 most popular schools for billionaires – in terms of the number of billionaires who have obtained their bachelor’s degree at these institutions – 16 were in the United States.



No. of Billionaires





























London School of Econ.



Moscow State U.



























ETH Zurich


September 24, 2014 in Law School Rankings, Legal Education | Permalink | Comments (3)

60 Minutes: Is It Too Easy to Become a Tax Preparer?

(Click here to view video directly on CBS to avoid interruption caused by blog's refresh rate.)

September 24, 2014 in IRS News, Tax | Permalink | Comments (0)

Dramatic Employment Gains at 19 Law Schools

National JuristNational Jurist (Sept/Oct 2014):  Employment Turnarounds: Despite a Tepid Job Market, Some Schools Have Made Dramatic Improvements in the Number of Graduates Finding Jobs:

While the nationwide employment rate for recent graduates has been largely flat during the past few years, some schools have bucked the trend and significantly improved their employment rates. Nineteen law schools improved their employment rate by 10% or more during the past two years, according to a formula created by The National Jurist ... using data from the ABA. ... The National Jurist calculates its employment rate using a formula that tracks full-time bar passage required employment at 100%, full-time-JD preferred employment at 70%, and ten other categories at percents from 60% to as low as 10% for non-professional, full-time positions.

Chart 2

September 24, 2014 in Law School Rankings, Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 503

IRS Logo 2The Volokh Conspiracy:  Targeting the Constitution, by Nicholas Quinn Rosenkranz (Georgetown):

It is now well known that the IRS targeted tea party organizations. What is less well known, but perhaps even more scandalous, is that the IRS also targeted those who would educate their fellow citizens about the United States Constitution.

According to the inspector general’s report (pp. 30 & 38), this particular IRS targeting commenced on Jan. 25, 2012 — the beginning of the election year for President Obama’s second campaign. On that date: “the BOLO [‘be on the lookout’] criteria were again updated.” The revised criteria included “political action type organizations involved in … educating on the Constitution and Bill of Rights.”

Grass-roots organizations around the country, such as the Linchpins of Liberty (Tennessee), the Spirit of Freedom Institute (Wyoming), and the Constitutional Organization of Liberty (Pennsylvania), allege that they were singled out for special scrutiny at least in part for their work in constitutional education. There may have been many more.

The tea party is viewed with general suspicion in some quarters, and it is not difficult, alas, to imagine the mindset of the officials who decided to target tea party organizations for special scrutiny. But federal officers swear an oath to “support and defend the Constitution of the United States against all enemies, foreign and domestic.” It is chilling to think that these same officials who are suspicious of the tea party are equally suspicious of the Constitution itself.

What is most corrosive about this IRS tripwire is that it is triggered by a particular point of view; it is not, as First Amendment scholars say, viewpoint-neutral. It does not include obfuscating or denigrating the Constitution; only those “involved in … educating on the Constitution” are captured by this criterion. This viewpoint targeting potentially skews every national debate about politics or government. And the skew in not strictly liberal; indeed, it should trouble liberals as much as conservatives. The ultimate checks on executive power are to be found in the United States Constitution. Insidiously, then, suppressing those “involved in … educating on the Constitution” actually skews national debate in favor of unchecked executive power. ...

“We the People” do not yet know who first decided to target “political action type organizations involved in … educating on the Constitution and Bill of Rights.” But there is at least one person who does know. Ironically, though, Lois Lerner, former director of the Exempt Organizations Division of the IRS, is making full use of her own constitutional education: “I have been advised by my counsel to assert my constitutional right not to testify …. One of the basic functions of the Fifth Amendment is to protect innocent individuals, and that is the protection I’m invoking today.”

Five years ago, Obama, our constitutional law professor-in-chief, presented his first, ringing Constitution Day proclamation: “To succeed, the democracy established in our Constitution requires the active participation of its citizenry. Each of us has a responsibility to learn about our Constitution and teach younger generations about its contents and history.” Quite so. Perhaps this year, Obama could explain why his IRS would target those who answered this call.

Legal Inusrrection:  Imperial Bureaucrat: Lois Lerner Denies Everything; Media Savvy Lerner Speaks to Politico, But Not Congress, by William Jacobson (Cornell):

The Politico article has been excoriated as a puff piece, and that it is. But it’s more. It’s a reflection of how savvy Lerner is, how she is able to manipulate not just tax exempt approvals, but also the congressional oversight system.

Lerner knows that to a large extent congressional oversight and findings of contempt are empty threats. So Lerner feels comfortable reading a statement professing her innocence while refusing to “testify,” and to spreading her word via Politico while never subjecting herself to proper cross-examination.

Lerner is the Imperial Bureaucrat, secure in the knowledge that she is all but untouchable in the warm embrace of a Democratic administration which sees not a smidgen of corruption despite the facts the administration itself has admitted or produced. ...

It’s said that in jest there is truth. Lerner joked how she hoped for a D.C. office job with a pro-Obama organizing group. ...

Why isn’t Lois Lerner worried now? Why is there no contrition? Why does she feel safe talking to Politico?

Because Lerner knows that the Imperial Bureaucracy will protect one of its Imperial Bureaucrats.

And that there will be a job out there for Lerner with Democratic operative groups once this has all blown over. After all, she has years of experience acting as a Democratic operative.

Reason:  Lois Lerner Claims the IRS Did Nothing Wrong. The Data Say Otherwise.:


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September 24, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, September 23, 2014

Schön Presents International Taxation of Risk Today at Columbia

SchoenWolfgang Schön (Max Planck Institute for Tax Law and Public Finance) presents International Taxation of Risk at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex Raskolnikov, David Schizer, and Wojciech Kopczuk:

The allocation of risk and of the income from risky investment and activities belongs to the central topics of international tax policy today. This fact is highlighted by the current BEPS initiative of G20 and OECD which casts doubt on the recognition of contractual risk allocation within multinational groups and its impact on profit allocation between separate entities within these groups. It is largely felt that “risk shifting” provides the basis for “profit shifting” by multinationals to the detriment of states and domestic competitors.

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September 23, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Columbia Journal of Tax Law's Tax Matters: FATCA

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with three short pieces by tax practitions responding to a specific cutting-edge tax law issue posed by a tax academic.  This issue's prompt is by Itai Grinberg (Georgetown):

In 2010 the United States Congress enacted sections 1471 to 1474 of the Internal Revenue Code, commonly known as “FATCA”.  Under FATCA, foreign financial institutions (“FFIs”) are generally required to report information on financial accounts of U.S. persons and foreign entities with significant U.S. ownership (“U.S. accounts”) to the IRS beginning in 2015, or be subject to a withholding tax on the gross amount of certain payments from U.S. sources and the proceeds from the disposition of certain U.S. investments. Compliance under FATCA regulations is complex and raises a series of conflict of law issues. To mitigate these conflict of law issues and facilitate FATCA implementation, the Treasury has held discussions with dozens of countries and entered into a series of intergovernmental agreements (“IGAs”).  So-called “Model I IGAs” allow the agreeing government to adopt its own rules requiring financial institutions within their jurisdiction to identify and report information relating to U.S. accounts.  Other IGAs require compliance with Treasury regulations, but with specified modifications (“Model II IGAs”).  Some countries will not enter into an IGA, and therefore, FFIs in those countries will be subject to FATCA as administered under Treasury regulations without any modification. Although IGAs facilitate FATCA implementation within specific jurisdictions by removing domestic legal impediments and simplifying other aspects of compliance for institutions in a given jurisdiction, they also may complicate compliance for multinational FFIs by giving rise to a patchwork of differing FATCA regimes.

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September 23, 2014 in Scholarship, Tax | Permalink | Comments (0)

Camp: 9th Circuit on 'Willful Attempts to Evade or Defeat Taxes' Under Bankruptcy Code § 523(a)(1)(C)

From Bryan Camp (Texas Tech), Hawkins v. Franchise Tax Board, No. 11-16276 (9th Cir. Sept. 15, 2014):

The bankruptcy court had refused to allow the discharge of certain tax debts, holding that the debtor’s actions pre-bankruptcy were “willful attempts to evade or defeat taxes” within the meaning of 11 U.S.C. § 523(a)(1)(C). The basis for the holding was that the debtor lived a life of luxury even in the face of overwhelming tax liabilities that had accrued because the Service disallowed losses from the taxpayer’s tax shelters. The bankruptcy court found that the debtors personal living expenses from January 2004 to September 2006 exceeded their earned income by up to $2.35 million during that period. The district court affirmed.

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September 23, 2014 in New Cases, Tax | Permalink | Comments (0)

SUNY-Buffalo Law School Dean Resigns Amidst Perjury Allegations in Lawsuit by Former Professor

Buffalo Art Voice, UB Law School Dean to Step Down Amid Charges of Perjury:

MutuaMakau Mutua will be stepping down as Dean of UB’s Law School effective December 19. He’ll then return to the law school faculty as SUNY Distinguished Professor and Floyd H. and Hilda L. Hurst Faculty Scholar. ...

Mutua was educated at the University of Nairobi, the University of Dar-es-Salaam and Harvard Law School. But the statement from UB doesn’t mention anything that was reported last month in The Star newspaper based in Nairobi, Kenya.

From The Star:

A Kenyan law professor based in US has been accused of committing perjury in an American court, his co-accused now wants the cases separated.

Makau Mutua, a human and civil rights activist, has been accused of lying in court. He is sued for allegedly irregularly laying off Jeffrey Malkan, a lecturer at Buffalo Law School where Mutua is a Dean. [Malkan was the former director of the law school’s Legal Research and Writing program.]

Evidence against Mutua is said to include sworn deposition testimony and sworn affidavits from seven tenured faculty members.

How embarrassing to all us local media outlets that this hometown story was broken over a month ago by a paper in Nairobi.

More details here and here.  The University's press release and other local and national press reports do not mention the lawsuit.

September 23, 2014 in Legal Education | Permalink | Comments (1)

Tax Prof Wedding: Victoria Haneman

Tax Prof Victoria Haneman (Concordia) married Jeff Stone yesterday.  Victoria reports:

Jeff and I moved to Idaho at the end of May 2014. We wanted to get married before the end of the tax year, and we also wanted to be married in our new home state. We did not, however, want to trouble our friends and family with having to fly all the way to Idaho to attend a ceremony. Jeff and I were married this afternoon by Idaho Supreme Court Justice Joel Horton, in a small private ceremony performed at the Court.  

Victoria Haneman

And to top things off, today is Victoria's birthday!

September 23, 2014 in Legal Education, Tax | Permalink | Comments (1)

Treasury Department Takes Action to Rein in Tax Inversions

Press and blogosphere coverage:

See also Steven M. Rosenthal (Tax Policy Center), Professor Shay Got It Right: Treasury Can Slow Inversions, 144 Tax Notes 1445 (Sept. 22, 2014).

(Hat Tip: Brian Davis.)

September 23, 2014 in IRS News, Tax | Permalink | Comments (0)

Boston College and Tax Analysts Host Conference on Reforming Entity Taxation

BCTABoston College and Tax Analysts are hosting a conference on Reforming Entity Taxation at Boston College on Friday, October 10:

Keynote Speaker:  Lee Sheppard (Tax Analysts)

Panel #1: Reforming Entity Taxation: Corporations

  • Papers: Mirit Eyal-Cohen (Alabama), Deborah Schenk (NYU), Dan Shaviro (NYU)
  • Moderator:  Jeremy Scott (Tax Analysts)
  • Commentator:  Brian Galle (Boston College)

Panel #2:  Reforming Entity Taxation: Partnerships

  • Papers:  Karen Burke (Florida), Andrea Monroe (Temple), Gregg Polsky (UNC)
  • Moderator:  Amy Elliot (Tax Analysts)
  • Commentator:  James Repetti (Boston College)

Panel #3: Reforming Entity Taxation: International

  • Papers:  Allison Christians (McGill), Robert Peroni (Texas), Martin Sullivan (Tax Analysts)
  • Moderator:  Sam Young (Tax Analysts)
  • Commentator:  Diane Ring (Boston College)

The conference is free and open to the public. To register, contact Ryan Hynes.

September 23, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tax Court Invites Applications to Attend Judicial Conference at Duke

DukeThe Tax Court announced on Friday that it will hold a judicial conference at the Duke Law School Center on Judicial Studies on May 20-22, 2015:

The Court’s judicial conference will provide an opportunity for taxpayer representatives, government representatives, and members of the Court to discuss current topics relevant to Tax Court litigation. In the interest of expanding the discussion and providing as diverse a conference community as possible, the Court encourages academics, clinicians, practitioners, and others who have a professional interest in Tax Court practice and procedure to apply to attend and participate in the 2015 Tax Court Judicial Conference.

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September 23, 2014 in Conferences, Tax | Permalink | Comments (0)

60 Minutes: The Tax Refund Scam

(Click here to view video directly on CBS to avoid interruption caused by blog's refresh rate.)

GAO, Additional Actions Could Help IRS Combat the Large, Evolving Threat of Refund Fraud (GAO-14-633) (Sept. 22, 2014)

September 23, 2014 in Tax | Permalink | Comments (0)