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Sunday, August 2, 2015

Tax Panel Today At SEALS

SEALs Logo (2013)The Southeastern Association of Law Schools 2015 Annual Conference concludes today in Boca Raton, FL with this tax panel:

Workshop on Tax Law
Discussion Group:  Tax Policy
This discussion group is broadly concerned with issues of taxation. Discussants will address individual income tax, corporate income tax, state and local tax, estate and gift tax, tax expenditure policy, international tax, and entitlements. While these disparate themes might seem only loosely related, a common thread of the difficulties of balancing equity, simplicity, incentives, and transparency runs through all of them. These scholars will grapple with the central tax topics of the day and address the looming concerns that must be dealt with by all levels of government.

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August 2, 2015 in Conferences, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [290 Downloads]  Capital Accounts in LLCs and in Partnerships: Powerful Default Rules and Potential Tax Significance, by Donald Weidner (Dean, Florida State)
  2. [140 Downloads]  How I Learned to Stop Worrying and Love Our Homeowner Tax Rules, by David Hasen (Colorado)
  3. [131 Downloads]  Safe Harbors, Sure Shipwrecks, by Susan Morse (Texas)
  4. [129 Downloads]  The International Tax Regime — A Centennial Reconsideration, by Reuven Avi-Yonah (Michigan)
  5. [95 Downloads]  Reforming REIT Taxation (Or Not), by Brad Borden (Brooklyn)

August 2, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 815

IRS Logo 2Forbes:  19 Facts On IRS Targeting President Obama Can't Blame On Republicans, by Robert W. Wood:

On The Daily Show, President Obama blamed Republicans for the IRS scandal:

“You’ve got this back office, and they’re going after the Tea Party. Well, it turned out, no, Congress had passed a crummy law that didn’t give people guidance in terms of what it was they were trying to do. They did it poorly and stupidly. The truth of the matter is that there was not some big conspiracy there. They were trying to sort out these conflicting demands. You don’t want all this money pouring through non-for- profits, but you also want to make sure everybody is being treated fairly.”

Really, Mr. President? For effect, perhaps he should reprise his testy “not even a smidgen of corruption” remark to Fox News. The President keeps claiming there is no evidence the IRS was used for political targeting. You be the judge:

[List of 19 facts about the targeting scandal.]

Washington Examiner, IRS Back Under Fire on Tea Party Targeting:

A series of new revelations Wednesday and Thursday put the Internal Revenue Service back under fire for its alleged efforts to curtail the power of conservative nonprofits.

First, the Government Accountability Office uncovered evidence that holes in the tax agency's procedure for selecting nonprofit groups to be audited could allow bias to seep into the process.

Then, during a heated House Ways and Means Committee hearing Thursday morning, lawmakers exposed the lack of safeguards that could prevent IRS officials from going after groups with which they disagreed.

Meanwhile, the conservative watchdog Judicial Watch released documents Wednesday that suggested the IRS targeted the donors of certain tax-exempt organizations.

The controversies focused renewed scrutiny on the embattled agency, which has been fending off allegations of discrimination against conservatives since 2013.

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

Saturday, August 1, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Hillary Clinton Releases Her 2007-2014 Joint Tax Returns Reporting $139 Million Income; 99% Of Charitable Contributions Went To Clinton Family Foundation

Clinton 3Hillary Clinton late Friday afternoon released her 2007-2014 tax returns, showing that she and Bill reported $139.1 million in adjusted gross income, paid $43.9 million in taxes (a 31.6% tax rate), and made $15 million (10.8% of their AGI) of charitable contributions, $14.9 million of which went to the Clinton Family Foundation and the Clinton Global Initiative.

I previously blogged the Clintons' tax returns for prior years:

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August 1, 2015 in Political News, Tax | Permalink | Comments (6)

Tax Panel Today At SEALS

SEALs Logo (2013)The Southeastern Association of Law Schools 2015 Annual Conference continues today in Boca Raton, FL with this tax panel:

Workshop on Tax Law
International and Corporate Taxation
Tax planning today takes place against a backdrop of weak tax institutions, uncertain economic prospects, globalization, and change. Our panel examines how innovation, change, and uncertainty affect a range of tax issues. Topics include possible reforms to the international tax system, specifically transfer pricing and the foreign tax credit, how tax innovations interact with corporate governance, how small business lobbies for its issues, and how the tax code addresses technological changes.

  • Jennifer Bird-Pollan (Kentucky) (moderator)
  • Christine Allie (Widener-Delaware)
  • Rifat Azam (Radzyner School of Law, Herzliya, Israel)
  • Cliff Fleming (BYU)
  • Omri Marian (UC-Irvine)
  • Orly Mazur (SMU)
  • Amir Pichhadze (Michigan)
  • Cristina Trenta (Orebro University, Sweden)

Tax Profs at dinner:

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August 1, 2015 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 814

IRS Logo 2New York Post editorial, Obama’s Pathetic Attempt to Spin the IRS Scandal:

No sooner did President Obama claim last week the IRS scandal was just a mirage than new evidence emerged to show it was anything but.

The conservative group Judicial Watch says documents it obtained “confirm” the agency targeted the donors of certain tax-exempt organizations. And the Government Accountability Office faulted IRS procedures, saying they failed to prevent bias in the selection of nonprofits for audits. That’s key, since the agency has been accused of targeting conservative groups. ...

Of course, the biggest scandal of all is that Team Obama has managed to stonewall and leave the public hanging. And that no one has been held accountable.

Forbes:  President Obama Challenges IRS Scandal Narrative, by Peter J. Reilly:

So the latest in the interminable IRS scandal now on Day [810] by TaxProf Count is that President Obama has said in an interview with Jon Stewart on the Daily Show that there is no scandal involving the targeting of conservatives.  What he sees as scandalous is the underfunding of the IRS which allows people to avoid paying taxes they legitimately owe and the complexity of the Tax Code which allows multinational corporations to entirely avoid paying federal income tax.

The President’s explanation of the targeting scandal is that Congress had passed a crummy law that did not give good guidance and that people did a poor job of trying to sort out conflicting demands.   After all government is a human enterprise.

The President’s statement has drawn some sharp reaction.  The Daily Caller headline is “Obama Lies To Jon Stewart’s Face About IRS”. I had to check this out. ...

Supporters of the scandal narrative can, of course, point out many particulars that are not addressed in the President’s statement – hard drives, the TIGTA report that indicated inappropriate criteria were used.  On the other hand they have yet to come up with that really great smoking gun piece of evidence that links the President to all the tsoris that Lois Lerner and the Cincinnati gang that couldn’t sort straight dished out to Tea Party applicants for exempt status. Too bad that the President watched the Watergate hearings when he was a kid and knows better than to have damning tapes like the one I imagined back in January.

If the smoking gun is actually ever found, this interview might go down in history as Obama’s “I did not have sexual relation with that woman” moment.

Wall Street Journal, Notable & Quotable: Contempt and the IRS; A Federal Judge Asks Why the IRS Commissioner Shouldn’t be Held in Contempt for Failing to Comply with a Court Order to Produce Lois Lerner’s Emails.

From a hearing before U.S. District Court Judge Emmet G. Sullivan in Washington on Wednesday. The judge is questioning Justice Department attorney Geoffrey Klimas about his explanation of why the government hadn’t filed a motion for him to reconsider his order to produce the emails of former IRS official Lois Lerner being sought by the watchdog group Judicial Watch:

The Court: Wait a minute. Why would it have been inappropriate if you said it’s clear that the Court had issued an oral order? And we’ve said that—I’ve said that four times. If it was clear that there was an order outstanding, why would it have been inappropriate for the government to file a motion to reconsider that clear oral order? I don’t get it.

Mr. Klimas: To clarify, it was our understanding that there was a directive from the Court that was going to be followed up with a written order. It appears—

The Court: An order to be followed up by an order?

Mr. Klimas: It appears that the understanding was misplaced.

The Court: So you needed two orders to have a clearly enforceable order? You don’t need two orders to have a clearly enforceable order, do you?

Mr. Klimas: No, Your Honor.

The Court: So there’s no reason for not complying. This is ridiculous. This is absurd. I thought you were going to say that you didn’t think the Court had issued an oral order, but that’s not what you’re saying. It’s clear from the transcript that the Court had clearly ordered rolling production on a weekly 11 a.m. basis. So why shouldn’t the Court hold the Commissioner of the IRS in contempt for not having complied with a clearly enforceable order?

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

Friday, July 31, 2015

Clintons Reaped Millions From Foreign Bank After Hillary Intervened In UBS Tax Case To Reduce IRS's Requested Disclosures Of Americans' Offshore Accounts By 91%

Wall Street Journal, UBS Deal Shows Clinton’s Complicated Ties; Donations to Family Foundation Increased After Secretary of State’s Involvement in Tax Case:

FruitfulA few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts.

If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court.

Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS, an outcome that drew criticism from some lawmakers who wanted a more extensive crackdown.

From that point on, UBS’s engagement with the Clinton family’s charitable organization increased. Total donations by UBS to the Clinton Foundation grew from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014, according to the foundation and the bank.

The bank also joined the Clinton Foundation to launch entrepreneurship and inner-city loan programs, through which it lent $32 million. And it paid former president Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.

There is no evidence of any link between Mrs. Clinton’s involvement in the case and the bank’s donations to the Bill, Hillary and Chelsea Clinton Foundation, or its hiring of Mr. Clinton. But her involvement with UBS is a prime example of how the Clintons’ private and political activities overlap.

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July 31, 2015 in Political News, Tax | Permalink | Comments (2)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

WSJ: Law Schools Fight ABA Over How Graduates’ Jobs Are Counted

Wall Street Journal, Law Schools Fight Bar Association Over How Graduates’ Jobs Are Counted:

As law schools slowly recover from the worst legal job market in decades, they are fighting with their main overseer over what exactly counts as a job.

Some schools have been paying to place graduates at nonprofit and government organizations until they find permanent jobs. The positions help improve schools’ standings in the job-placement metrics that figure heavily in a widely watched national ranking, but they may not be as meaningful to students hoping to put their degrees to work.

WSJ

Now, the American Bar Association’s accrediting arm is further tightening the rules on how such jobs are counted. After telling schools this spring they will have to report the fellowships separately from positions found on the open market, it is going further by proposing that these jobs not fully count unless they are expected to last a year and pay an annual salary of at least $40,000. Otherwise, they get tallied in a short-term category.

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July 31, 2015 in Legal Education | Permalink | Comments (3)

Fleischer: How to Tax Gordon Gekko

GreedNew York Times Deal Book:  How to Tax Gordon Gekko, by Victor Fleischer (San Diego):

The plot of Oliver Stone’s 1987 movie Wall Street revolves around the betrayal of Bud Fox by his mentor and hero, Gordon Gekko.

Bud persuades his father, a maintenance foreman at Bluestar Airlines, to vouch for him and secure union concessions that are critical to a buyout plan. But Gekko betrays Bud and puts in motion a plan to strip the company’s assets, raid the overfunded pension plan and liquidate the company. Bud retaliates by getting his friends at Jackson Steinem to dump the stock. Gekko is forced to sell at a loss. Bud faces down Gekko, wearing a wire as part of a plea deal with federal authorities.

It’s a heck of a good story that captured the spirit of Wall Street in the 1980s.

Political speechwriters also try to capture the spirit of the times. But it seems that Hillary Rodham Clinton's team is three decades behind.

The story on Wall Street today is asset management, not corporate raiders.

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July 31, 2015 in Tax | Permalink | Comments (0)

Tax Panels Today At SEALS

SEALs Logo (2013)The Southeastern Association of Law Schools 2015 Annual Conference continues today in Boca Raton, FL with these tax panels:

Workshop on Tax Law
Tax Policy
What strategies should government use to create tax policy that results in a just result? How can states create tax laws that motivate the kinds of economic behavior they want? What is the right way to think about the taxable unit? What strategies can governments employ through the tax code to promote environmental sustainability? The panelists will consider a variety of issues related to tax policy in all of its forms.

  • Neil Buchanan (George Washington) (moderator)
  • Tessa Davis (South Carolina)
  • Anu Ghai (Lafayette College)
  • Shu-Yi Oei (Tulane)
  • Del Wright (Valparaiso)

Workshop on Tax Law
State and Local Tax and Policy Panel

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July 31, 2015 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 813

IRS Logo 2Wall Street Journal editorial, The Taxman’s Politics: New Evidence That IRS Bias May Have Extended to Tax Audits:

The Obama Administration has made a two-year career of dismissing concern about IRS policies targeting conservative tax-exempt groups. That evasion just got harder. New information shows the agency may have shown similar bias in tax audits.

A new Government Accountability Office report says protocols in place at the IRS Exempt Organizations unit made it possible for groups to be unfairly targeted for audit “based on the organization’s religious, educational, political, or other views.” That’s our emphasis. The report also shows a process that allowed reviewers to wield significant discretion over whether certain groups were selected for scrutiny. ...

The IRS is dismissing the findings as hypothetical. At a House Ways and Means hearing Thursday, IRS Commissioner John Koskinen told Rep. Peter Roskam that “at this point we do not have indications that anyone improperly was selected for an exam.” But information from Treasury Inspector General for Tax Administration J. Russell George suggests IRS audit selection has already led to improperly selected audits.

In fiscal years 2013 through 2015, Mr. George initiated 102 internal investigations based on complaints by tax-exempt groups and individuals who say they were unfairly targeted for audit. It’s not public how many of those 102 may have been improperly targeted. But according to the House Ways and Means Committee, 12 presented facts so egregious that the IRS referred them to the Justice Department for criminal prosecution. Not for tax evasion, mind you, but for improper conduct by IRS employees.  

A criminal referral is a big step, suggesting the audit selections met a high bar of evidence that IRS employees may have knowingly violated the law when choosing an audit target. Thursday’s hearing also included testimony from groups that believe they were improperly audited. ...

Mr. Koskinen, the IRS director, has already shown through his previous stonewalling that his assurances can’t be trusted. We hope Congress keeps digging into the growing evidence of a politicized tax agency.

New York Times editorial, The I.R.S. Gives Up on ‘Dark Money’:

The federal government has all but surrendered to the powerful, rich donors whose anonymous contributions threaten to undermine the 2016 elections. The commissioner of the Internal Revenue Service, John Koskinen, signaled as much on Thursday when he told a House committee that there would be no change in the tax code in 2016 to end its growing abuse by political operatives using nonprofit “social welfare” institutions to disguise the identities of affluent campaign contributors.

“I don’t want people thinking we are trying to get these regs done so we can influence the election,” Mr. Koskinen declared later to reporters. The statement was remarkable for blessing further procrastination at the I.R.S., whose clear obligation is to enforce existing law in a way that would end the current flood of “dark money” financing politics. The commissioner said the earliest that tighter rules could take effect would be 2017. The I.R.S. has been increasingly timorous on this issue ever since House Republicans opened partisan hearings into complaints that I.R.S. officials have been biased against conservative political groups that claim tax exemptions as nonprofit social welfare groups.

The fact is, the I.R.S. should be dedicated to enforcing the law against phony social welfare claims by all political schemers, from the right or the left. This abuse of the tax law mushroomed after the Supreme Court’s reckless Citizens United decision in 2010 that ended limits on campaign spending by corporations and unions. Since 2006, when only $5.2 million was spent by exempt organizations that do not disclose donors, spending increased 60-fold, to more than $300 million in the 2012 presidential cycle, according to the Center for Responsive Politics. An even bigger infusion is expected in 2016 from big-money donors shielded by the social welfare fiction. ...

It is a gross insult to taxpayers to make them underwrite the brazen evasions of campaign operatives bundling dark money. The abuse is compounded by the latest I.R.S. retreat from its responsibility.

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July 31, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, July 30, 2015

Law Grad Employment, Salaries Inch Up

NALP, Employment Rate of New Law Graduates Up for the First Time Since 2007:

The overall employment rate for the Class of 2014 was 86.7% of graduates for whom employment statuswas known, the first year that the rate has increased since 2007. Despite the increase of more than 2 percentage points compared to the prior year, and an increase in the rate of employment in jobs requiring bar passage for the first time since 2007, these positive indicators are tempered by several factors. First, the number of jobs found by graduates was down by about 1,200 compared with 2013. Second, the number of graduates declined after reaching a record high in 2013, and was down by almost 3,000 according to the ABA. Thus the employment rate could increase even as the number of jobs declined. Third, the report timing was changed from February 15 to March 15 (from nine months to ten months following the typical May graduation).

NALP

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July 30, 2015 in Legal Education | Permalink | Comments (3)

Senate Holds Hearing Today On The Impact Of The U.S. Tax Code On The Market For Corporate Control And Jobs

Senate LogoThe Senate Permanent Subcommittee on Investigations held a hearing today on Impact of the U.S. Tax Code on the Market for Corporate Control and Jobs:

The hearing explored the impact of the U.S. corporate tax code on foreign acquisitions of U.S. businesses and the ability of U.S. businesses to expand by acquisition.

In connection with the hearing, the majority staff released a 133-page report, which examines the tax motivations behind acquisitions and mergers by Valeant Pharmaceuticals, Burger King, and InBev.

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July 30, 2015 in Congressional News, Tax | Permalink | Comments (0)

Simkovic: The Student Loan Marriage Penalty

Michael Simkovic (Seton Hall), Student Loan Marriage Penalty:

How should marriage affect legal determinations of ability to pay, and therefore obligation to pay?  These are questions that tax scholars have long debated.  Similar issues are now being debated in higher education circles because of the growth of income-based student loan repayment plans. ...

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July 30, 2015 in Legal Education, Tax | Permalink | Comments (0)

Avi-Yonah: The Case For A Destination-Based Corporate Tax

Reuven S. Avi-Yonah (Michigan), The Case for a Destination-Based Corporate Tax:

In 1993, I published a paper advocating a destination-based corporate income tax (DBCT) (Avi-Yonah, 1993). Under DBCT, multinational enterprises (MNEs) would be treated as unitary businesses and taxed based on where they sell their goods or services, i.e., on a destination basis rather than (as in current corporate taxes) primarily on an origin basis. I have subsequently elaborated on this proposal with Kim Clausing and Mike Durst (Avi-Yonah, Clausing and Durst, 2009).

In recent years, DBCT has attracted some support by economists, such as Alan Auerbach and Mike Devereaux (Auerbach, Devereux and Simpson, 2008; Devereux and de la Feria, 2014). While the economists tend to advocate a cash flow DBCT, i.e., a corporate tax that is more consumption than income based because MNEs will be allowed to expense capital outlays, both types of taxes apply to corporate rents in the same way. Moreover, the economists’ proposals raise similar issues as mine, e.g., in regard to compatibility with treaties or with WTO rules.

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July 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tax Panel Today At SEALS

SEALs Logo (2013)The Southeastern Association of Law Schools 2015 Annual Conference continues today in Boca Raton, FL with this tax panel:

Workshop on Tax Law
The United States Tax Court – A Constitutional and Administrative Conundrum
The 2014 decision of the DC Circuit in Kuretski has focused attention on the constitutional location of the U.S. Tax Court in the federal government. In resolving a separation of powers challenge stemming from the President's power to remove a Tax Court judge for cause under I.R.C. § 7443(f), Kuretski held that the Tax Court is part of the Executive Branch. Yet, Congress established it as a court of record under Article I in 1969, when it ended the Tax Court's status as an independent agency. Moreover, in Freytag, the Supreme Court said the Tax Court exercises judicial power. This panel will discuss the various options for where the Tax Court resides in the constitutional scheme.

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July 30, 2015 in Conferences, Tax | Permalink | Comments (0)

Lucre For Ex-Chancellor, Dean at California, Texas

UCBTSacramento Bee, UC Paid Former President Mark Yudof $546,000 in the Year After He Resigned:

University of California paid former president Mark Yudof $546,000 in 2014 – the year after he stepped down from his post, according to salary data released by the UC system this week. ...

At UC Berkeley, Yudof co-instructed one class for one semester in 2014, according to a faculty profile page on the university’s website. The class met once a week for three hours.

Yudof benefited from a UC policy that allows high-ranking administrators to receive a year of pay if they are preparing to teach again. He took that pay and taught for two semesters, co-instructing another class in spring 2015. He retired from teaching in June, officials said, and no longer draws a salary from UC Berkeley. Berkeley Law’s website lists Yudof as a professor emeritus.

UC spokeswoman Dianne Klein said in an email that “when UC presidents leave to teach at a UC campus, they customarily receive a year of sabbatical pay under regents’ policy. Yudof’s sabbatical pay lasted from Sept. 2013 to Sept. 2014.” Yudof’s sabbatical pay came directly from state funds, she said.

Yudof reaffirmed that information in an email, saying, “for 2013-14, I was receiving my (president’s office) compensation for a leave to prepare to re-enter teaching. This is the typical arrangement for presidents and chancellors who leave administration and prepare to begin teaching again.” Yudof said he also received pay for his teaching at UC Berkeley in the 2014-15 academic year.

WatchDog.org, Powers to Get Top Salary at UT Law:

Bill Powers, the disgraced former president of the University of Texas, will be the highest paid faculty member at the School of Law this year, according to the terms of his contract.

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July 30, 2015 in Legal Education | Permalink | Comments (3)

Mann: The Tax Policy Implications Of Economists/Policymakers Miscommunication

Roberta F. Mann (Oregon), Economists are from Mercury, Policymakers are from Saturn: The Tax Policy Implications of Communication Failure, 5 Wm. & Mary Pol'y Rev. 50 (2013):

SaturnPolicymaking lawyers and economists are different types of people who come together in the policymaking realm. Sometimes policymakers rely on economic analysis to make decisions. Sometimes policymakers use economic analysis to support decisions already made. In particular, economic analysis has played a large role in the formation of tax and budgetary policy. However, there is a problem. Not only do economists and lawyers communicate differently, they think, perceive, react and respond differently. They almost seem to be from different planets, speaking different languages. While both lawyers and economists use “stories” to persuade, economic analysis cloaks the story in a complex mathematical model, opaque to those without training in economic theory. The results of economic modeling can obscure the decisions that policymakers and the public need to make — about the direction of the tax system, the nation, and the economy. This article examines the roles economists and lawyers play in the development and implementation of the income tax system. 

July 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 812

IRS Logo 2Wall Street Journal, Federal Judge Threatens to Hold IRS Chief in Contempt:

A federal judge threatened to hold Internal Revenue Service Commissioner John Koskinen in contempt of court on Wednesday, after the agency didn’t comply with an order to provide documents in a case about its alleged targeting of conservative groups. 

Washington Times, Obama Digs In, Refuses to Fire IRS Commissioner:

President Obama has no intention of firing IRS Commissioner John Koskinen, the White House said Wednesday in response to Republican lawmakers calling for his ouster.

Mr. Koskinen “is a man of the highest integrity,” said White House deputy press secretary Eric Schultz, who called him “the right person to lead this agency.”

Senate Judiciary Subcommittee on Oversight, Federal Agency Action, Federal Rights and Federal Courts Hearing:

Panel #1:  John Koskinen (IRS Commissioner)

Panel #2:

  • Cleta Mitchell (Foley & Lardner, Washington , D.C. ) (Testimony)
  • Stephen Spaulding (Common Cause Washington , D.C. ) (Testimony)
  • Edward Greim (Graves Garret, Kansas City) (Testimony)
  • Lawrence Noble (George Washington University Law School) (Testimony)
  • Toby Marie Walker (Waco Tea Party, Waco , TX) (Testimony)
  • Diana Aviv (Independent Sector, Washington , D.C. ) (Testimony)
  • Jenny Beth Martin (Tea Party Patriots, Woodstock , GA) (Testimony)
  • Gregory Colvin (Public Citizen, Washington , D.C. ) (Testimony)
  • Jay Sekulow (American Center for Law and Justice, Washington , D.C.) (Testimony)

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July 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, July 29, 2015

NPR: Should Law Schools Pay If Students Don't Get Jobs?

NPRNPR Marketplace, Should Law Schools Pay If Students Don't Get Jobs?:

Law school doesn't look like a great deal for many students. Tuition keeps going up, which means bigger loans to pay off.

But the job market for lawyers remains weak. At lower-tier schools, less than half of students end up with jobs as attorneys, according to a recent report from an American Bar Association Task Force.

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July 29, 2015 | Permalink | Comments (7)

Senate Permanent Subcommittee on Investigations Shifts Focus From Business To Government

Senate LogoBloomberg, Senate Body Shifts Focus After Years Probing Apple, Goldman, UBS, by Jesse Drucker & Richard Rubin:

A U.S. Senate investigative subcommittee, which has used its power for more than a decade to scrutinize corporations and financial institutions for wrongdoing, is shifting its focus to keeping tabs on the government.

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July 29, 2015 in Congressional News, Tax | Permalink | Comments (0)

Jack Manhire Leaves IRS To Join Texas A&M Law School

ManhireTexas A&M Press Release, Jack Manhire Leaves IRS, Treasury to Join Texas A&M Law:

John T. (“Jack”) Manhire, Jr., former Chief of Legal Analysis for the IRS Office of Professional Responsibility and National Program Chair, Executive Education for the U.S. Treasury Executive Institute, has accepted a position as Director of Program Development at Texas A&M University School of Law.

Some of his prior positions include Director of Technical Analysis & Guidance (Policy and Procedure) for the IRS Taxpayer Advocate Service, and Attorney-Advisor (Tax) to the IRS National Taxpayer Advocate. Before entering full-time government service, he practiced law privately for over a decade, primarily in the field of federal tax controversies, and was Division Chief, Tax Law for the U.S. Coast Guard Auxiliary National Office.

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July 29, 2015 in IRS News, Tax, Tax Prof Moves | Permalink | Comments (6)

Right, Left Agree: Ivy League Stiffs Conservative Supreme Court Justices

Ivy League (2014)National Law Journal, Professor Says Ivy League Stiffs Conservative Justices:

Are the nation’s Ivy League schools giving short shrift to conservative U.S. Supreme Court justices when they confer honorary degrees? A survey by one law professor suggests the answer is yes, and that the reason is ideology.

Of the 14 honorary degrees bestowed by Ivy League institutions to living justices, 12 went to those on the high court’s left side, said conservative legal scholar John McGinnis of Northwestern University School of Law. The two exceptions, from Brown and Yale, went to Justice Sandra Day O’Connor, a moderate conservative, he said.

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July 29, 2015 in Legal Education | Permalink | Comments (2)

Kadet: Attacking Profit Shifting — The Approach Everyone Forgets

Jeffery M. Kadet (University of Washington), Attacking Profit Shifting: The Approach Everyone Forgets, 148 Tax Notes 193 (July 15, 2015):

Kadet uses hypothetical but realistic examples to show how the IRS could combat profit shifting by directly taxing the effectively connected income of controlled foreign corporations. He also urges Treasury to update the ECI regulations as soon as possible to reflect current technology and modern business models and practices. 

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July 29, 2015 in Scholarship, Tax | Permalink | Comments (0)

Mayer: Limits on State Regulation of Religious Organizations

Lloyd Hitoshi Mayer (Notre Dame), Limits on State Regulation of Religious Organizations: Where We Are and Where We Are Going:

The breadth of activities and organizational forms among religious organizations rivals that of nonprofits generally, and religious organizations are vulnerable to the same types of problems that justify state regulation and oversight of nonprofits. Such problems include excessive compensation, improper benefits for board members and other insiders, misleading or fraudulent fundraising, employment discrimination, unsafe working conditions, consumer fraud, improper debt collection, and many others. Religious organizations are different, however, in that under federal and state law they enjoy unique protections from state regulation.

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July 29, 2015 | Permalink | Comments (0)

Why All Attorneys Should Learn About Entrepreneurship In Law School

EntJ. Mark Phillips (Belmont), Entrepreneurial Esquires in the New Economy: Why All Attorneys Should Learn About Entrepreneurship in Law School, 8 J. Bus. Entrepreneurship & L. 59 (2014):

As the legal industry continues to recover from the shock of the recent recession, it finds itself in a fundamentally different place than it was ten years ago, with even more tumultuous change on the horizon. Economic pressure coupled with continued technological innovation has increased attorney unemployment levels, shifted law firm business models, and changed the expectations of legal clientele. Yet, despite this radically shifting market place, legal education has remained fundamentally unchanged. This article examines the current state of the legal industry through an entrepreneurial lens and juxtaposes it with the current state of legal education. In doing so, this article sets forth three key claims:

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July 29, 2015 in Legal Education, Scholarship | Permalink | Comments (7)

The IRS Scandal, Day 811

IRS Logo 2Judicial Watch Press Release, IRS Produces Recovered Lerner Emails:

Judicial Watch released 906 pages of newly recovered Lois Lerner emails from the IRS that are believed to recently have been recovered by the IRS’ internal watchdog – the Treasury Inspector General for Tax Administration (TIGTA).  The IRS released the emails under a court order by U.S. District Court Judge Emmet Sullivan.  The new documents show that Lois Lerner and other top officials in the Exempt Organizations Unit of the Internal Revenue Service (IRS), including soon-to-be Acting IRS Commissioner Steve Miller, closely monitored and approved the controversial handling of tax-exempt applications by Tea Party organizations.  The documents also show that at least one group received an inquiry from the IRS in order to buy time and keep the organization from contacting Congress. ...

“These recovered Lois Lerner emails had to be dragged out of the Obama IRS, which is still resisting a federal court order requiring disclosure of Lerner’s ‘lost’ emails,” said Judicial Watch President Tom Fitton.  “This material shows that the IRS’ cover-up began years ago.  We now have smoking-gun proof that top officials in the Obama IRS unlawfully harassed taxpayers just to keep them from complaining to Congress about IRS’ targeting and abuse.  No wonder the Obama IRS has had such little interest in preserving or finding Lois Lerner’s emails.”

Americans for Tax Reform, IRS Used Instant Messaging System to Hide Internal Communications:

The IRS used a “wholly separate” instant messaging system that automatically deleted office communications, according to documentation released by the House Oversight Committee on Monday. The system appears to have been purposefully used by agency officials responsible for the targeting of conservative non-profits, in order to evade public scrutiny.

MSNBC (The Maddow Blog), House Republicans Pretend IRS ‘Scandal’ Still Exists:

It’s been about two years since Republicans and much of the Beltway media thought it had finally uncovered a real White House “scandal.” According to the narrative, the Obama administration used the Internal Revenue Service to “target” conservatives, which represented an outrageous abuse of power.

For about a week, it looked like a serious, proper controversy, worthy of outrage. Soon after, however, the whole thing collapsed – the tax agency scrutinized liberal, conservative, and non-ideological groups, effectively ending the story. Every allegation, including conspiracy theories about White House involvement, evaporated into nothing. For two years, GOP lawmakers looked for evidence of wrongdoing, and for two years they found no proof to bolster their apoplexy.

It came as a bit of a surprise, then, to see 21 House Republicans hold a press conference late yesterday, trying anew to breathe life into a discredited story. ...

Just so we’re clear, these House Republicans still haven’t uncovered any evidence of official wrongdoing, and they didn’t accuse Koskinen of having any role in “targeting” anyone. Rather, the GOP lawmakers are convinced Koskinen hasn’t done enough to help them find evidence to substantiate allegations that fell apart two years ago.

Or put another way, they want to fire the IRS guy who replaced the other IRS guy who was fired over a “scandal” that never really existed in the first place. ...

[Y]yesterday’s press conference appeared to be an example of House Republicans throwing a tantrum just for the sake of throwing a tantrum – they still have no evidence of an actual scandal and they offered literally nothing new yesterday other than their own misplaced outrage.

This isn’t even a close call. Cummings pointed to the recent release of a report from the IRS inspector general’s office, which made explicitly clear to the Oversight Committee that there’s just nothing here. Republicans accused Lois Lerner of deliberately crashing a hard drive; the inspector general found the opposite. Republicans said back-up tapes were intentionally destroyed; the inspector general found the opposite. Republicans said Koskinen tried to hide information from Congress; the inspector general found the opposite. Republicans said the IRS hid damaging emails; the inspector general found the opposite.

Why GOP lawmakers even bothered with yesterday’s press conference is something of a mystery. Maybe they were bored. Maybe someone needed a pretense for a new fundraising letter. Whatever the reasoning, there’s still no reason to take any of this nonsense seriously.

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July 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Tuesday, July 28, 2015

Hickman: The Tax Court Delivers An APA-Based Smackdown

Hickman 2014 2TaxProf Blog op-ed:   Altera Corp. & Subs. v. Commissioner: The Tax Court Delivers An APA-Based Smackdown, by Kristin Hickman (Minnesota):

Since the Supreme Court decided the Mayo Foundation case in 2011, the government has done everything it can to limit the scope of the Supreme Court’s 2011 Mayo Foundation decision.  Even though the Mayo Foundation Court declined “to carve out an approach to administrative review good for tax law only” and otherwise signaled fealty to general administrative law norms in the tax context, the IRS and the Department of Justice have repeatedly pursued a narrow construction of Mayo Foundation, and the Tax Court has often been happy to play along.  Not today.

In Altera Corp. & Subs. v. Comm’r,, 145 T.C. No. 3 (July 27, 2015) the Tax Court unanimously invalidated regulations under Section 482 requiring participants in qualified cost-sharing arrangements to include stock-based compensation costs in the cost pool in order to comply with the arm’s length standard, on grounds that the regulations were not the product of reasoned decisionmaking as required by Administrative Procedure Act (APA) § 706(2)(A) and Motor Vehicle Manufacturers Association of the United States v. State Farm Mutual Automobile Insurance Co.,, 463 U.S. 29 (1983), known in administrative law circles as State Farm.  From top to bottom, the Altera opinion reads like a treatise on general administrative law requirements and norms.  Without delving into the policy details of the regulation at issue, the following paragraphs summarize the Tax Court’s opinion and its potential implications.

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July 28, 2015 in New Cases, Scholarship, Tax | Permalink | Comments (2)

Boston College Seeks To Hire A Tax Prof

Boston College Law School Logo (2014)Boston College Law School:

BOSTON COLLEGE LAW SCHOOL expects to make two faculty appointments in fields that might include constitutional law and/or taxation. Hiring rank would be dependent on the background and experience of the applicant. Applicants must possess a J.D. or equivalent degree and outstanding academic credentials. Relevant experience in private practice, government service, or a judicial clerkship is strongly preferred.

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July 28, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

More On Hillary Clinton's Capital Gains Tax Plan

HillaryFollowing up on Sunday's post, Hillary Clinton's Capital Gains Tax Plan

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July 28, 2015 in Political News, Tax | Permalink | Comments (0)

Sanchirico & Shuldiner: The Deferral Effects Of Passing Through Foreign Subsidiaries’ Passive Income

Chris William Sanchirico (Pennsylvania) & Reed Shuldiner (Pennsylvania), The Deferral Effects of Passing Through Foreign Subsidiaries’ Passive Income:

The immediate U.S. taxation of foreign subsidiaries’ passive, but not active income is a scenario of increasing practical importance. This paper builds on Alvin Warren’s recent analysis of this partially deferral-tempering case. It clarifies some of the legal and economic mechanics behind Warren’s formula. It also makes several points de novo. It highlights the conceptual relationship between passive-income pass-through and delayed realization of accrued gains. It points out that delayed realization inside the subsidiary effectively deactivates passive-income pass-through. And it describes when it does and does not matter that the parent takes interim distributions from the subsidiary, as when it uses such distributions to pay its interim pass-through tax liability.

July 28, 2015 in Scholarship, Tax | Permalink | Comments (0)

Brunson & Herzig: Tax Exemption, Public Policy, And Discriminatory Fraternities

SigmaFollowing up on my previous post, Using the Tax Law to Combat Racist Fraternities and Sororities:  Samuel D. Brunson (Loyola-Chicago) & David Herzig (Valparaiso), Tax Exemption, Public Policy, and Discriminatory Fraternities, 35 Va. Tax Rev. ___ (2015):

In this Essay, Professors Herzig and Brunson make the normative argument that the I.R.S. should reject tax-exemptions of discriminatory social clubs. They look to current Supreme Court jurisprudence to demonstrate a willingness of the Court to import a public policy rule into the social club rules. Alternatively, if this position is untenable under traditional administrative law principles, they propose a statutory fix.

July 28, 2015 in Scholarship, Tax | Permalink | Comments (1)

2nd National Symposium On Experiential Education In Law

ElonSecond National Symposium on Experiential Education In Law, 7 Elon L. Rev. 1-430 (2015)

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July 28, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Baltimore, Boston Launch Legal Practice Incubators For Recent Law School Graduates

IncubatorThree Boston (Boston College, Boston University, and Northeastern) and two Baltimore (Baltimore, Maryland) law schools have launched legal practice incubators, bringing the total number of law schools participating in such programs to over 30.

Baltimore:  "In Baltimore, each school will contribute three graduates who have passed the Maryland bar exam for the inaugural cohort. The participants will spend 12 to 18 months getting their practices off the ground. Tobin said the schools would look for graduates who aspire to solo or small-firm practices and have an entrepreneurial bent. The law schools will provide office space, telephones and equipment, as well as malpractice insurance and bar dues. The graduates will get access to Westlaw, which provides free services to legal incubators."

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July 28, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 810

IRS Logo 2Jason Chaffetz, Chair of the House Committee on Oversight and Government Reform, and 20 Republican members of the committee, have sent this 32-page letter to President Obama, requesting that he remove IRS Commissioner John Koskinen for obstructing the congressional investigation into the IRS's targeting of conservative groups by (1) failing to comply with a congressional subpoena, (2) failing to testify truthfully, and (3) failing to preserve and produce up to 24,000 emails relevant to the investigation.

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

Wall Street Journal op-ed:  The Stonewall at the Top of the IRS, by Ron DeSantis (Chair, House Oversight and Government Reform Subcommittee on National Security) & Jim Jordan (Chair, House Oversight and Government Reform Subcommittee on Health Care, Benefits and Administrative Rules):

Internal Revenue Service Commissioner John Koskinen needs to go.

When it was revealed in 2013 that the IRS had targeted conservative groups for exercising their First Amendment rights, President Obama correctly called the policy “inexcusable” and pledged accountability. He even fired the then-acting IRS commissioner because he said it was necessary to have “new leadership that can help restore confidence going forward.”

Unfortunately, Commissioner Koskinen, who took over in the wake of the IRS targeting scandal, has failed the American people by frustrating Congress’s attempts to ascertain the truth. A taxpayer would never get away with treating an IRS audit the way that IRS officials have treated the congressional investigation. Civil officers like Mr. Koskinen have historically been held to a higher standard than private citizens because they have fiduciary obligations to the public. ...

If the president doesn’t remove Mr. Koskinen from his post, then Congress should remove him through impeachment. The impeachment power is a political check that, as Alexander Hamilton wrote in Federalist No. 65 in 1788, protects the public against “the abuse or violation of some public trust.”

Supreme Court Justice Joseph Story echoed Hamilton in 1833 when he distinguished impeachable offenses from criminal offenses, noting that they “are aptly termed political offenses, growing out of personal misconduct or gross neglect, or usurpation, or habitual disregard for the public interests . . . They must be examined upon very broad and comprehensive principles of public policy and duty.”

John Koskinen has violated the public trust, breached his fiduciary obligations and demonstrated his unfitness to serve. Mr. President, it’s time for Commissioner Koskinen to go. If you don’t act, we will.

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July 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, July 27, 2015

WSJ: Why Cigna-Anthem And Aetna-Humana Mergers Are Partially Tax-Free, But Not ACE-Chubb Merger

LogosWall Street Journal, Three Mergers, But One Isn’t Tax Free:

This is a tale of three similar mergers with very different tax consequences for shareholders.

One is the $48.4 billion Cigna purchase by Anthem announced Friday. Another is the $34.1 billion combination of two health-care giants, Aetna and Humana, announced July 3. And the final deal is the $28.3 billion merger of two insurance giants, ACE and Chubb, announced July 1.

At first glance, the deals look alike—and like several other mergers this year. In all three, the shareholders of the acquired firms, Cigna, Humana and Chubb, will turn in their current holdings in exchange for about half cash and half shares, assuming regulators approve the deals. The cash payments will generally be taxable as capital gains if the investor’s holdings are in taxable accounts, rather than in tax-sheltered retirement plans such as IRAs or 401(k)s.

There is a big difference between the deals, however. Humana and Cigna shareholders won’t owe tax on their receipt of Aetna and Anthem shares, while Chubb shareholders will owe tax on their receipt of ACE shares.

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July 27, 2015 in Tax | Permalink | Comments (0)

Debate: Is It Time To End Faculty Tenure?

TenureLubbock Avalanche-Journal Debate, Is It Time for Tenure to End?:

This week, Arnold Loewy and Donald May debate the merits of tenure. Donald has been a candidate for Congress and writes an independent blog on lubbockonline.com and Arnold is the George Killiam Professor of Law at Texas Tech University School of Law.

Donald: Tenure strengthens liberals’ campus stranglehold

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July 27, 2015 | Permalink | Comments (2)

McCubbins & Seljan: The Effect Of Proposition 13 On Municipal Revenue Sources

Prop 132Colin H. McCubbins (Stanford) & Ellen Seljan (Lewis & Clark), Staying at Home: The Effect of Proposition 13 on Municipal Revenue Sources:

The effects of California's Proposition 13 are far reaching in both California state and municipal government finance. For local governments, who relied most heavily on property taxes to fund infrastructural development and public services, the effects were especially pronounced. Previous findings have indicated that this has caused local governments to substitute away from property taxes towards uncapped revenue sources, such as sales taxes and charges and fees. To better understand the effects of Proposition 13 on local government finance, we leverage a peculiarity in the letter of the law: homes are reassessed upon sale. As such, we test the effects of high homeowner mobility on local government finances. We find that in municipalities with greater mobility have larger proportions of their revenue generated by property taxes, indicating that as more houses are reassessed, local governments are shifting their revenue burdens back towards property taxes.

July 27, 2015 in Scholarship, Tax | Permalink | Comments (1)

U.S. Tax Court Podcast

PodcastU.S. Tax Court Podcast:

The U.S. Tax Court Podcast features Rik Thakrar of Thakrar Law and Lee Wilson of the Wilson Firm. Rik and Lee both practice in the U.S. Tax Court and frequently discuss various cases and tax related issues that arise in their practice. This weekly podcast is a look into these discussions with an emphasis on giving the listener a sense of what it’s like to practice in the U.S. Tax Court. Please leave us a question or comment here.

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July 27, 2015 in Tax | Permalink | Comments (1)

L.A. Times: 90% Of Students Drop Out Of Unaccredited Law Schools In California

Los Angeles Times, Nearly 9 in 10 Students Drop Out of Unaccredited Law Schools in California:

Nearly 9 out of 10 students at California's unaccredited law schools dropped out, according to a Times investigation based on recent state bar data. ...

LA Times

California is one of a handful of states in the nation that allow students from unaccredited institutions to take the bar exam. The 22 schools offer four-year programs and are required to register with the state bar, but they are held to few academic standards. Most of the schools are operated by small companies or individuals. ...

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July 27, 2015 in Legal Education | Permalink | Comments (3)

Tax Prof Summer Camp

The IRS Scandal, Day 809

IRS Logo 2Rasmussen Reports, Voters Aren’t Buying Obama’s Story About IRS Scandal:

President Obama told comedian Jon Stewart earlier this week that the Internal Revenue Service didn’t target Tea Party and other conservative groups on his watch and that a lack of funding by Congress was to blame for any problems at the tax-collecting agency. But voters still think something criminal was going on and are even more suspicious of what the president knew about it.

Fifty-two percent (52%) of Likely U.S. Voters continue to believe the IRS broke the law when it targeted the groups, according to the latest Rasmussen Reports national telephone survey. Just 24% say the IRS didn’t break the law when it went after Tea Party and other conservative groups, while just as many (24%) are not sure.

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July 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, July 26, 2015

Hillary Clinton's Capital Gains Tax Plan

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 #1 paper and a new paper debuting on the list at #5:

  1. [226 Downloads]  Capital Accounts in LLCs and in Partnerships: Powerful Default Rules and Potential Tax Significance, by Donald J. Weidner (Dean, Florida State)
  2. [200 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  3. [132 Downloads]  How I Learned to Stop Worrying and Love Our Homeowner Tax Rules, by David Hasen (Colorado)
  4. [109 Downloads]  Safe Harbors, Sure Shipwrecks, by Susan C. Morse (Texas)
  5. [107 Downloads]  The International Tax Regime — A Centennial Reconsideration, by Reuven S. Avi-Yonah (Michigan)

July 26, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

WSJ: Advice For Parents With Children Living At Home After College

BasementWall Street Journal, They’re Back! How to Cope With Returned College Grads, by Rob LaZebnik (Writer, The Simpsons):

Congratulations. Two months ago, your kid graduated from college, bravely finishing his degree rather than dropping out to make millions on his idea for a dating app for people who throw up during Cross Fit training. If he’s like a great many of his peers, he’s moved back home, where he’s figuring out how to become an adult in the same room that still has his orthodontic headgear strapped to an Iron Man helmet.

Now we’re deep into summer, and the logistical challenges of your grad really being home are sinking in. You’re constantly juggling cars, cleaning more dishes and dealing with your daughter’s boyfriend, who not only slept over but also drank your last can of Pure Protein Frosty Chocolate shake.

But the real challenge here is a problem of your own making. You see, these children are members of the Most-Loved Generation: They’ve grown up with their lives stage-managed by us, their college-acceptance-obsessed parents. Remember when Eva, at age 7, was obsessed with gymnastics…for exactly 10 months, which is why the TV in your guest room sits on top of a $2,500 pommel horse?

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July 26, 2015 in Legal Education, Tax | Permalink | Comments (21)