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Editor: Paul L. Caron
Pepperdine University School of Law

Monday, November 2, 2015

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November 2, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 907

IRS Logo 2Breitbart, Sen. Tim Scott: IRS Has ‘Created a Culture of Discrimination’:

Sen. Tim Scott (R-SC) appeared on Saturday’s “America’s News HQ” on Fox News Channel, talking about the IRS scandal, saying the IRS has “created a culture of discrimination.”

Scott said people would “challenge the system immediately” if the scandal was over racial discrimination rather than discrimination over conservative groups.

“It’s very important for us to restore confidence in the IRS,” he said. “I was very frustrated with the fact that we continue to see people targeted. And imagine if this was racial targeting. We would explode with amazement and challenge the system immediately. We’ve had no such challenge in the IRS.”

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November 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, November 1, 2015

Law Schools' Rejection Of Ideological Diversity Has Adverse Consequences For Students And Faculty

New York Times op-ed:  Academia’s Rejection of Diversity, by Arthur C. Brooks (President, American Enterprise Institute):

One of the great intellectual and moral epiphanies of our time is the realization that human diversity is a blessing. It has become conventional wisdom that being around those unlike ourselves makes us better people — and more productive to boot.

Scholarly studies have piled up showing that race and gender diversity in the workplace can increase creative thinking and improve performance. Meanwhile, excessive homogeneity can lead to stagnation and poor problem-solving.

Unfortunately, new research also shows that academia has itself stopped short in both the understanding and practice of true diversity — the diversity of ideas — and that the problem is taking a toll on the quality and accuracy of scholarly work. This year, a team of scholars from six universities studying ideological diversity in the behavioral sciences published a paper in the journal Behavioral and Brain Sciences that details a shocking level of political groupthink in academia. The authors show that for every politically conservative social psychologist in academia there are about 14 liberal social psychologists.

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

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 paper returning to the list at #5:

  1. [306 Downloads]  Income Tax Deductions for Charitable Bequests of IRD, by Christopher R. Hoyt (UMKC)
  2. [286 Downloads]  2014 Developments in Connecticut Estate and Probate Law, by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid and Riege, Hartford)
  3. [272 Downloads]  Big Data and Tax Haven Secrecy, by Arthur J. Cockfield (Queen's University)
  4. [245 Downloads]  The One Hundredth Anniversary of the Federal Estate Tax: It's Time to Renew Our Vows, by Paul L. Caron (Pepperdine)
  5. [242 Downloads]  Breaking BEPS: The New International Tax Diplomacy, by Itai Grinberg (Georgetown)

November 1, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

RIP Grantland, 2011-2015

GrantlandESPN announced on Friday that it is shuttering Grantland, one of my two favorite website. My other favorite website, FiveThirtyEight, has a great post on memorable Grantland articles. My favorite is Bill Simmons' introduction of sports to his children:

I always assumed my kids would care … but you never know with this stuff. My son’s favorite celebrity right now? Michael Jackson. He loves Michael and werewolves, in that order, so you can only imagine how he feels about Thriller. I never, ever could have predicted this. That’s parenthood. You roll with the whims of your kids. At the same time, there had to be some trick for hooking my daughter on sports beyond the old standby of “taking her to games and seeing if she likes it.” After she turned 5, I asked a few friends with older children for tips. The same suggestion kept popping up: You can’t necessarily make them follow your team, but you can steer them away from your least favorite teams. Good advice. Even if it’s difficult to sway a Los Angeles native toward Boston teams playing 3,000 miles away — don’t rule me out, by the way — I could brainwash her to despise the Lakers (as covered in 2010’s “The Color Purple” column), any team with the words “New York” in its name, and the Lakers a second time just to be safe. After that? Her call. This seemed like a fair compromise. ...

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November 1, 2015 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 906

IRS Logo 2Tax bloggers on the House Republicans' articles of impeachment against IRS Commissioner John Koskinen:

Russ Fox (Taxable Talk):

While it is theoretically possible that the IRS scandal is all due to an extraordinary amount of coincidences, it’s far more likely that one individual ordered it. ...

My view of this is simple: Mr. Koskinen has become a mouthpiece of the Administration rather than an independent head of the IRS. New leadership and a resolution of the IRS scandal is needed before the people regain full confidence in the IRS. Mr. Koskinen has failed in that task. The IRS’s budget does need to be increased, but that’s not happening until Mr. Koskinen leaves the agency (and the scandal is resolved). The Wall Street Journal’s conclusion on the impeachment mirrors my thoughts:

Yet the exercise will have the salutary effect of reminding executive-branch officials that they are not a government unto themselves. The U.S. Attorney has refused to honor Congress’s contempt charge against Ms. Lerner for refusing to testify, the Justice Department has closed its investigations into IRS targeting without prosecutions, and the press corps winks at abuses of power when conservatives are the targets. With an executive who refuses to honor the normal separation of powers, Congress is obliged to use its authority to hold government accountable.

Joe Kristan (Tax Update Blog):

A resolution has been introduced to impeach IRS Commissioner Koskinen. While his conduct in office has been awful, I hope they don’t really try to make it happen. It could backfire, and even if he were impeached, there will never be a conviction. I would rather they spend the time and energy reducing the powers of all IRS commissioners by reducing the power of the IRS through tax reform.

Peter Reilly (Forbes):

Unless, like a sensible person, you have been shielding yourself from learning about developments in the interminable, never-ending IRS scandal, now on Day 902 by Tax Prof count, you are aware that impeachment articles against IRS Commissioner John Koskinen have been drawn up. ...

Mr. Koskinen came into the IRS after what I call the “core scandal”, delays and intrusive inquiries on tax-exempt application by Tea Party and similar groups. His “high crimes and misdemeanors” relate to IRS response to the investigation by the Committee on Oversight and Government Reform of the House of Representatives.  IRS employees in Martinsburg, West Virginia erased 422 backup tapes destroying as many as 24,000 Lois Lerner e-mails.  A couple of months later Mr. Koskinen testified that nothing had been destroyed.  He also testified that backup tapes from 2011 had been recycled.  Previously he had promised to provide all the Lois Lerner e-mails. He was slow in informing the Committee that there were problems with crashed hard drives and backup tapes.  Subsequently TIGTA investigators found more than 1,000 Lois Lerner e-mails that the IRS had missed in all its rooting around. ...

At any rate, I tend to think that the Koskinen impeachment might not play out that well for Republicans.  I could see Koskinen turning the tables on them in his defense in the Senate and making a case that Issa’s committee never was interested in finding out what actually happened, but was mainly looking for stupid remarks by Lois Lerner that could be played up by Fox News. ...

You will be able to find links to a wealth of commentary on the Tax Prof Blog – The IRS Scandal Day 902. If you have been following this you will probably not be surprised to learn that Elijah Cummings does not think the impeachment proposal is such a good idea. “Calling this resolution a stunt or a joke would be insulting to stunts and jokes."

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November 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, October 31, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Number of LSAT Test-Takers Increases 7.4%, The Fourth Consecutive (And Biggest) Increase

After five years of declines in the number of LSAT test-takers, the LSAC reports that the number of LSAT test-takers in September/October 2014 increased 7.4%, the fourth consecutive period with an increase:


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October 31, 2015 in Legal Education | Permalink | Comments (2)

Florida Coastal Dean Responds To New York Times Editorial On The Law School Crisis

Florida CoastalFlorida Coastal Law School, Dean Scott DeVito’s Response to New York Times Article:

In a recent editorial the New York Times made the claim that Florida Coastal School of Law is participating in a scam. As Dean of Florida Coastal School of Law, and a long-time reader of the Times, I was, to say the least, taken aback. After all, the Times is saying something demonstrably false and which had not been properly fact checked. I am taking this opportunity to provide the information the Times could have had if it had simply asked.

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October 31, 2015 in Legal Education | Permalink | Comments (14)

The IRS Scandal, Day 905

IRS Logo 2The Weekly Standard, A Good Start:

On October 27, the House of Representatives moved to impeach the commissioner of the Internal Revenue Service, John Koskinen. It may seem odd that Koskinen is being punished since he wasn’t commissioner when the IRS scandal broke two years ago. But make no mistake, Koskinen is a worthy candidate for impeachment.

To get to the bottom of the scandal—the deliberate slow-walking or outright denial of applications for tax-exempt status from conservative groups—Congress subpoenaed all the emails of the IRS’s Exempt Organizations Unit head, Lois Lerner. Koskinen, who was sworn in as commissioner on December 23, 2013, failed to act on this subpoena, and on March 4, 2014, the agency erased 422 backup tapes, destroying as many as 24,000 of Lerner’s emails, despite a congressional order mandating relevant IRS records be preserved.

Koskinen knowingly sat on the information that the emails had been destroyed for four months. When he finally offered an explanation of what had happened to the emails, it was buried on page seven of the third attachment to a letter sent to the Senate Finance Committee in a Friday news dump. Koskinen testified before Congress that he had personally confirmed that none of the IRS’s other email backup tapes was recoverable.

This was a lie. Employees from the inspector general’s office later drove to the IRS office in West Virginia, where the backup tapes were kept, and asked for whatever was there. They recovered 700 backup tapes, and with them 1,000 new emails from Lois Lerner. Finally, a Government Accountability Office report in July indicated that the agency had introduced no new safeguards to prevent the targeting of “organizations’ religious, educational, political, or other views” despite a clear mandate to do so. ...

The federal bureaucracy has always been bad at policing employees, but President Obama bears direct responsibility for the problem getting immeasurably worse. Last year, 47 of the 73 federal inspectors general signed a letter decrying the Obama administration for stonewalling their investigations and in some cases actively intimidating investigators. ...

To address the systemic problem, the GOP has to reclaim Congress’s oversight power and push for sweeping civil service reforms. Without them, no significant conservative policy overhaul will ever be implemented, and Americans will be increasingly subject to a complex web of unaccountable and unconstitutional administrative fiefdoms.

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

Friday, October 30, 2015

Senators From Both Parties Take On Law Schools For Failing Students

Bloomberg, Senators Take On Law Schools for Failing Students:

Law schools just made some new enemies. This week, lawmakers from both parties sharply criticized U.S. law schools for leaving students with overwhelming debt and degrees that may not get them jobs.

“We need to move away from a system that results in too many law school graduates twisting in the wind,” said Senator Chuck Grassley (R-Iowa) in an e-mailed statement. Putting law graduates in a position from which they might default on federal loans “isn’t good for the graduates, and it isn’t good for the taxpayers,” he added. 

Grassley said he was “troubled” by problems illustrated in a new report by Law School Transparency, an advocacy group. The report highlighted the large numbers of under-prepared students being accepted into law schools. Test scores have declined for the lowest-achieving students since 2010 at the majority of law schools. Padding classes with underqualified students, the report said, is “leaving thousands deep in debt with few prospects for employment that will enable them to pay off their debt.”...

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October 30, 2015 in Legal Education | Permalink | Comments (13)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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October 30, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Profs At Today's Yale Conference On Global Justice Post-2015

Global Justice

Tax Profs speaking at today's conference on Global Justice Post-2015 at Yale:

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

Florida Hosts 11th Annual International Tax Symposium

Florida Logo (GIF)The University of Florida Graduate Tax Program hosts its Eleventh Annual International Taxation Symposium today:

  • Walter Hellerstein (Georgia), A Hitchhiker’s Guide to the OECD’s International VAT/GST Guidelines, 18 Fla. Tax Rev. ___ (2016):  "The OECD’s International VAT/GST Guidelines, which are scheduled to be released in their consolidated form at the OECD’s Global Forum on VAT in Paris on November 5-6, 2015, are the culmination of nearly two decades of efforts to provide internationally accepted standards for consumption taxation of cross-border trade, particularly trade in services and intangibles. This article provides a roadmap to the Guidelines, especially for readers who may be unfamiliar with consumption tax principles, in general, or VATs in particular. Part II of the article provides the background to the Guidelines, describing the basic features of a VAT, the problems with which the Guidelines are concerned, and a brief history of the OECD’s efforts to address these problems. Part III discusses the Guidelines’ neutrality principles. Part IV discusses the general rules applicable to business-to-business (B2B) transactions. Part V discusses the general rules applicable to business-to-consumer (B2C) transactions. Part VI discusses specific rules for particular types of supplies. Part VII discusses the Guidelines’ recommendations designed to support a consistent interpretation of the Guidelines, including the use of mechanisms for mutual cooperation and exchange of information and other arrangements allowing tax administrations to work together. Part VIII concludes."

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

The Economist College Rankings: Alumni Earnings Above Expectations

American universities claim to hate the simplistic, reductive college rankings published by magazines like US News, which wield ever-growing influence over where students attend. Many have even called for an information boycott against the authors of such ratings. Among the well-founded criticisms of these popular league tables is that they do not measure how much universities help their students, but rather what type of students choose to attend each college. A well-known economics paper by Stacy Dale and Alan Krueger found that people who attended elite colleges do not make more money than do workers who were accepted to the same institutions but chose less selective ones instead—suggesting that Harvard graduates tend to be rich because they were already intelligent and hard-working before they entered college, not because of the education or opportunities the university provided.

On September 12th America’s Department of Education unveiled a “college scorecard” website containing a cornucopia of data about universities. The government generated the numbers by matching individuals’ student-loan applications to their subsequent tax returns, making it possible to compare pupils’ qualifications and demographic characteristics when they entered college with their salaries ten years later. That information offers the potential to disentangle student merit from university contributions, and thus to determine which colleges deliver the greatest return and why.

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October 30, 2015 in Law School Rankings, Legal Education | Permalink | Comments (8)

Slate: Desperate Law Schools Are Admitting Way Too Many Poorly Qualified Students

Slate (2015)Slate:  Desperate Law Schools Are Admitting Way Too Many Poorly Qualified Students, by Jordan Weissmann:

As their application numbers collapsed in recent years, a good number of law schools were forced to choose between their academic standards and their finances. With fewer qualified candidates to go around, some decided to shrink their enrollment numbers and forgo a bit of revenue rather than drastically relax their admission criteria. But many others took the path of least resistance, opening their doors to poorly qualified students willing to pay tuition.

As a result, a depressing number of law schools are now filled with students who may simply not belong there. According to a new study released this week by the advocacy group Law School Transparency, there were 37 institutions last year where at least half of all new students scored below a 150 on the Law School Admission Test, or LSAT, up from just nine such schools in 2010. Why is that significant? The group argues that students who fail to break the 150 mark face a "serious risk" of eventually failing their state bar exam once they graduate, which would leave them unable to actually practice law. ...

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October 30, 2015 in Legal Education | Permalink | Comments (7)

College Of Charleston Business School Joins Rankings Hall Of Shame; Average GMAT Score Was 539, Not 591

CharlestonBob Morse (U.S. News & World Report), Update to College of Charleston's 2016 Best Business Schools Ranking:

The College of Charleston recently advised U.S. News that it misreported data that were used in the 2016 Best Graduate Schools rankings. 

The misreported data resulted in the school's numerical rank, which U.S. News had calculated but had not published, being higher than it otherwise might have been in the 2016 Best Business Schools rankings. ...

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October 30, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 904

IRS Logo 2Canada Free Press, The Koskinen Impeachment: A Factual Necessity and a Likely Political Failure:

Pursuing impeachment against an agency leader is exceedingly rare, and a step beyond contempt charges, which is the tool House Republicans tried to use against both Lerner and former Attorney General Eric Holder in past disputes.

While impeachment is often thought of as a congressional weapon reserved for presidents, it can apply to “all civil officers of the United States,” on the grounds of treason, bribery or other “high crimes and misdemeanors.”

The charges against Koskinen should not be difficult to prove. They’re backed by plenty of documented detail. ...

Given the seriousness of Koskinen’s actions, combined with a Democratic administration’s refusal to enforce the law, you’d think this would be seen as an obvious and necessary case of Congress stepping in to provide accountability where the executive branch has utterly refused and/or failed to do so. But we all know that’s not how political/media narratives work these days. Even conservatives expect the Koskinen impeachment to be portrayed as ridiculous folly on the part of Republicans, because there is virtually no chance of getting 13 Senate Democrats to join with their 54 Republican colleagues to achieve the two-thirds vote necessary for conviction. ...

I’m sure Krauthammer is right about the politics because we’ve seen how this sort of thing has played out in other scenarios. The evidence against Koskinen will be convincing, but Democrats and the media will claim that because it all involves his defiance of congressional directives - and in their opinion Congress shouldn’t have been investigating in the first place - he really didn’t do anything wrong. They used the same argument in defense of Bill Clinton. Sure, he lied under oath and obstructed justice, but there never should have been an investigation in the first place. That is no legal defense of any kind, but they made it work as a political defense and they’ll try to do the same thing with Koskinen.

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

Thursday, October 29, 2015

Harvard Law School Launches 'Free the Law' Project To Digitize U.S. Case Law, Provide Free Access

Harvard Law Today, Harvard Law School Launches “Free the Law” Project with Ravel Law To Digitize US Case Law, Provide Free Access:

Harvard Law School, with the support of Ravel Law, a legal research and analytics platform, is digitizing its entire collection of U.S. case law, one of the largest collections of legal materials in the world. It will make the collection available online, for free, to anyone with an Internet connection.

New York Times, Harvard Law Library Readies Trove of Decisions for Digital Age:

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October 29, 2015 in Legal Education | Permalink | Comments (3)

Tax Code May Force Pfizer To Leave U.S. In Merger With Allergan

APWall Street Journal, Pfizer CEO Says U.S. Tax Regime Pushing Him to Seek Alternative:

Pfizer Chief Executive Ian Read said Thursday he won’t let potential political fallout deter him from pursuing a tax-reducing takeover that could move the company’s legal address outside the U.S., as Pfizer and rival Allergan confirmed they are in preliminary talks to combine.

In an interview with The Wall Street Journal, Mr. Read, while declining to comment about talks with Allergan, said he had a duty to increase or defend the value of his company, which he said is disadvantaged by the U.S. tax system.

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October 29, 2015 in Tax | Permalink | Comments (1)

Ted Cruz Releases Flat Tax Plan: 10% For Individuals, 16% For Businesses

Cruz 2Wall Street Journal op-ed:  A Simple Flat Tax for Economic Growth: A 10% Income Tax and a 16% Business Tax Would Put an End to the Eight Lean Years of Obama, by Ted Cruz:

Imagine 4.9 million new jobs. Imagine, instead of President Obama’s income stagnation, average wages rising 12.2% over the next decade. Capital investment rising 43.9%. And Americans at every level of the economy enjoying double-digit increases in after-tax income.

Imagine exports and manufacturing jobs booming. The trade deficit falling as the tax bias against American-made goods is eliminated. Imagine a 10% income tax. Every American filing his or her taxes on a postcard or an iPhone app. And abolishing the IRS as we know it.

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October 29, 2015 in Political News, Tax | Permalink | Comments (3)

Dean Allard Responds To New York Times Editorial On The Law School Crisis

NY Times Logo (2015)Law Deans on Legal Education Blog:  The New York Times Controversy, by Nicholas Allard (Dean, Brooklyn):

The time has come for the legal community — and law schools in particular — to press the reset button on the reputation of our profession. As Deans, we should not stand silent as those with biases and outdated or inaccurate information recycle myths and tired, predictable versions of their “wisdom” about our profession, law schools and the quality of newly minted lawyers. Over and over again.

The overarching challenge facing lawyers and the law school community across the country is that there is virtually no effective public counterweight to offset the worn perceptions repeated by high visibility media and others. We must, together, come to the defense of the value of law and lawyers, and make the compelling case for lawyers’ contribution to society in general and America’s national experiment in democracy, in particular. We need to highlight how valuable lawyers are to our nation’s leadership around the world, and the important role our law schools play in developing lawyers that will provide the legal expertise necessary to assure our nation’s stability in the future.

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October 29, 2015 in Legal Education | Permalink | Comments (15)

Oh: Will Tax Reform Be Stable?

Jason Oh (UCLA), Will Tax Reform Be Stable?:

Sustainability is essential to any reform’s success yet is hardly guaranteed. Future legislatures are not required to accept the internal coherence of prior legislation. In fact, Congress often makes changes that undo prior reform efforts. This Article offers an approach to studying the stability of reform proposals in taxation.

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

New Owner To Turn Charleston Law School Into Non-Profit, Ending Possibility Of Sale To Infilaw

Charleston LogoCharleston Regional Business Journal, New Co-Owner Plans to Make Law School Nonprofit:

The Charleston School of Law has a new owner and will become a nonprofit in the near future, essentially ending any possibility that The InfiLaw System will purchase the school.

Attorney J. Edward Bell, founding partner of Bell Legal Group, in Georgetown, said in a phone interview today that he paid an undisclosed price to become one of three co-owners of the school along with Robert Carr and George Kosko.

Bell said he will be inaugurated as president of the school on Thursday and will be managing partner of Charleston School of Law LLC, which owns the for-profit institution. ...

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October 29, 2015 in Legal Education | Permalink | Comments (3)

The Taxation Of Virtual Economies

Byron M. Huang (Tax LL.M. 2016, NYU), Walking the Thirteenth Floor: The Taxation of Virtual Economies, 17 Yale J.L. & Tech. 224 (2015):

Since the advent of the Internet and the subsequent proliferation of online game worlds, millions of people across the physical world have spent vast amounts of time, money, and energy on virtual realms and their virtual lives. Taxation of transactions involving virtual goods may have been laughable at the outset of virtual reality, but the idea now bears serious consideration due to the growth of online video games into a multi-billion dollar industry.

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

Simkovic Responds To New York Times Editorial On The Law School Crisis

NY Times Logo (2015)Michael Simkovic (Seton Hall), N.Y. Times Is Mistaken: Law Student Loans Are Safe and Profitable for the Government:

If the [New York Times] Editorial Board's accusations were true—if the “majority of law schools” really were running "“a scam” in which they load down their students with “crushing amounts of debt” which “they can’t repay”—Florida Coastal and other law schools should have among the highest default rates of any institutions of higher education in the country.

They don’t and they aren’t. ...

For the cohort entering repayment in 2012—the most recent year of data available*—the national 3-year cohort default rate on federal student loans was 11.8 percent.  The comparable figure for Florida Coastal was only 1.1 percent—more than 10 times lower. ...

Even low ranked law schools with allegedly “outrageously high” tuition generally have much lower student loan default rates than either the national average, or the average for institutions that grant bachelor’s or advanced degrees.

Simkovic 2

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October 29, 2015 in Legal Education | Permalink | Comments (43)

Crawford & Infanti: A Critical Research Agenda For Wills, Trusts And Estates

Bridget J. Crawford (Pace) & Anthony C. Infanti (Pittsburgh), A Critical Research Agenda for Wills, Trusts and Estates, 49 Real Prop. Tr. & Est. L.J. 317 (2014):

The law of wills, trusts, and estates could benefit from consideration of its development and impact on people of color; women of all colors; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. One can measure the law’s commitment to justice and equality by understanding the impact on these historically disempowered groups of the laws of intestacy, spousal rights, child protection, will formalities, will contests, and will construction; the creation, operation and construction of trusts; fiduciary administration; creditors’ rights; asset protection; nonprobate transfers; planning for incapacity and death; and wealth transfer taxation. This essay reviews examples of what the authors call “critical trusts and estates scholarship” and identifies additional avenues of inquiry that might be fruitfully pursued by other scholars who are interested in bringing an “outsider” perspective to their work in this area.

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

The IRS Scandal, Day 903

IRS Logo 2The Maddow Blog (MSNBC), GOP Begins Impeachment Process, But Not Against Obama:

For years, congressional Republicans have been very excited about the prospect of impeaching President Obama. At various times, GOP lawmakers have also considered impeaching then-Attorney General Eric Holder, Homeland Security Secretary Jeh Johnson, and EPA Administrator Gina McCarthy. Last week, one Republican congressman said he’s eager to impeach Hillary Clinton, and she hasn’t even won yet.

In each instance, far-right members of Congress have struggled to explain why, exactly, any of these officials actually deserve to be impeached, and Republicans never took their efforts beyond the rhetorical stage.

Yesterday’s actions, however, represent an escalation.

House Republicans filed papers Tuesday to begin impeachment proceedings against IRS Commissioner John Koskinen over the agency’s alleged campaign to revoke the tax-exempt status of tea party-affiliated groups.

The resolution – filed by Rep. Jason Chaffetz, R-Utah, chairman of the Oversight and Government Reform Committee, and 18 other members of the committee – accuses Koskinen of lying to Congress about agency emails that were found to be missing.

Just on the surface, it’s alarming that too many Republicans look at Congress’ impeachment power as if it were some kind of toy, to be pulled off the shelf and played with whenever it offers opportunities for entertainment.

But what’s also striking about this is the GOP lawmakers’ sense of timing. It was late last week that the Justice Department completed a lengthy and rigorous investigation into the imaginary IRS “scandal,” concluding that no laws were broken and no charges would be filed.

It’s against this backdrop that House Republicans have decided to pursue impeachment against the IRS commissioner who not only did nothing wrong, but who wasn’t even at the IRS at the time of the institution’s alleged misdeeds. ...

That doesn’t change the fact that this partisan tantrum is indefensible. Koskinen took on the job of improving the IRS out of a sense of duty – the president asked this veteran public official to tackle a thankless task, and Koskinen reluctantly agreed. For his trouble, Republicans want to impeach him, for reasons even they can’t rationalize.

It’s ridiculous, even by the low standards of this Congress.

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October 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, October 28, 2015

Kirchler Presents Cooperation Between Citizens And Tax Authorities Today At Toronto

Photo 3Erich Kirchler (University of Vienna) presents Cooperation Between Citizens and Tax Authorities at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

How to combat tax avoidance and evasion? The traditional command-and-control approach bases on the assumption that taxpayers take rational egoistic decisions. They consider the probability of audits and the severity of fines in cases of detected evasion and pay taxes only if audit probability is high, if the risk of detection of evasion is high, and if fines are high. Audits and fines are relevant, however, the effect is rather weak. To understand the motives for tax compliance it is necessary to understand taxpayers’ attitudes towards taxes and tax authorities, their knowledge and understanding of tax laws, their personal and social norms, and fairness concerns related to distributive and procedural justice. Besides the application of deterrence measures to combat tax evasion, it is necessary to establish a sense in society that tax evasion and tax avoidance are wrong.

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

NY Times: Dropbox For The Dead — Preserving Digital Assets For Your Family After You Are Gone

Safe Beyond 2New York Times:  Digital Messages for Loved Ones From Beyond the Grave, by Paul Sullivan:

The events shocked Mr. Hayardeny, a technologist who lives in Seattle, into thinking about his own mortality and how he wanted to prepare a legacy for his children. He is certainly not the first man in his 50s to get his affairs in order after losing relatives or friends.

But instead of turning to the traditional estate planning strategies — wills, trusts and beneficiary designation forms that lawyers and financial planners help clients pull together — Mr. Hayardeny is using a new system called SafeBeyond that keeps written and video wishes safe and private until its users are gone or until a set time. SafeBeyond, which likens itself to Dropbox for the hereafter, is one of several similar cloud-based systems. ...

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October 28, 2015 in Tax | Permalink | Comments (0)

Good Tax Hunting: How Robin Williams Restricted The Use Of His Likeness For 25 Years After His Death, Saving Estate Taxes

GoodForbes, Why Robin Williams Won't Be Making Millions Beyond The Grave:

When beloved actor Robin Williams died in August 2014, he left behind a $100 million estate—and a potential fortune in image licensing. But a clause filed in a trust agreement made public this year means his likeness won’t make money for decades to come.

Williams, best-known for films such as Mrs. Doubtfire and Good Morning, Vietnam, filed a deed to put a restriction on the use of his likeness for 25 years after his death. This prevents his name, photograph, voice or signature from being used in any film, advertisement or endorsement until 2039–and limits his future earnings.

The estates of entertainers featured on our list of Top-Earning Dead Celebrities are able to charge upwards of $500,000 for the use of their image in advertisements, with rare deals climbing into the seven figures. Some, such as James Dean and Bettie Page, also earn royalties from clothing sold with their name attached. Busy cultural icons including Dean and Page tally up a number of licensing deals which inch their posthumous paydays into the many millions.

By restricting the exploitation of his right of publicity, Williams, who died by suicide aged 63, has ensured no one cannot profit from his untimely death—at least not yet. ...

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October 28, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

Harper: NY Times Has 'Pulled A Loose Thread On The Legal Education Establishment’s Sweater'

NY Times Logo (2015)Steven J. Harper (Adjunct Professor, Northwestern; author, The Lawyer Bubble), Game-Changer?:

Almost overnight, a persistently sad situation finally has many legal educators squirming. And rightly so.

The problem has been years in the making, as has been the profession’s unwillingness to address it. Federal funding mechanisms have combined with lack of accountability and non-dischargeability in bankruptcy to block the effective operation of market forces in legal education. Well-intentioned policies have gone terribly awry; they actually encourage misbehavior among many law school deans.

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October 28, 2015 in Legal Education | Permalink | Comments (1)

Kades: Corrective Progressivity

Eric A. Kades (William & Mary), Corrective Progressivity:

In these times of widening inequality, regressive taxation is about the last thing needed in the United States. Yet that is exactly what we observe in every single state: overall state tax regimes (various combinations of income, property, and sales taxes) impose their highest rates on the poor and lower and lower rates as income increases. This article describes Corrective Progressivity (CP), a federal income tax mechanism to undo all of this variegated regressive state taxation in one fell swoop.

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October 28, 2015 in Scholarship, Tax | Permalink | Comments (2)

Pepperdine Symposium: The Impact Of King v. Burwell On Judicial Deference To IRS Determinations

KingSymposium, The Impact of King v. Burwell on Judicial Deference to IRS Determinations, 2015 Pepp. L. Rev. 1-81

In 2015, the Supreme Court heard the second major case surrounding the Affordable Care Act, King v. Burwell. The Court considered whether citizens of states that did not set up Health Insurance Exchanges were prohibited from obtaining a tax credit to offset the cost of health insurance premiums. The question arose from an apparent contradiction between the Affordable Care Act, which appeared to limit the credit to state-established Exchanges only, and an IRS regulation, which granted the Credit to state- or federal-established Exchanges. In its decision, the Court ruled it would not defer to the IRS regulations. The Chief Justice explained that this was because the IRS is not an expert in health care policy, which was at the heart of the regulations. This was surprising to many, especially because the Court’s conclusion agreed with the IRS regulations.

The authors in this Symposium discuss how the King Court may have reached its holding, the potential impacts of its ruling, whether the Chevron doctrine is eroding, and why tax scholars neglected to say more about this case.

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

Feldman: Don't Baby Law School Applicants

Bloomberg View:  Don't Baby Law School Applicants, by Noah Feldman (Harvard):

Should law schools admit students who are statistically uncertain to pass the bar on the basis of their standardized test scores? A growing conventional wisdom says no. The worry is that such students will build up large amounts of debt that they won't be able to pay back if they don't become lawyers.

This view assumes that it's up to the law schools to make the threshold decision paternalistically, “saving” naive college graduates from pursuing the dream of becoming lawyers when there’s no guarantee that they'll succeed. It treats standardized test scores as destiny and correlation-based studies as gospel.

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October 28, 2015 in Legal Education | Permalink | Comments (8)

New York Bar Exam Pass Rate Hits Historic Low

I Love New YorkWall Street Journal, New York Bar Exam Pass Rate Hits Historic Low:

New York just released the results of the July state bar exam, and they’re not pretty.

The passage rate for graduates of ABA-accredited schools who took the test for the first time was 79%, the lowest figure since at least 2004 [2004-2015 data]. That’s four percentage points below the July 2014 rate, and it’s more than an 11 percentage-point drop-off from 2008 when 90.5% of candidates in that grouping passed the exam.

The results out of New York, the state with the largest population of lawyers, follow an emerging national pattern and are certain to fuel debate in the legal and academic communities about whether law schools are setting admissions standards too low.

New York’s overall passage rate, including foreign-educated graduates, was 61%, according to the New York State Board of Law Examiners, which released the data Tuesday. That figure is the lowest recorded in the state in at least 35 years, according to the board.

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October 28, 2015 in Legal Education | Permalink | Comments (2)

Dean Yellen Responds To New York Times Editorial On The Law School Crisis

Law Deans on Legal Education Blog:  New York Times Attacks Legal Education ..... Again, by David Yellen (Dean, Loyola-Chicago):

I'm sure all of you have seen the NYT's dreadful editorial about legal education over the weekend. Of course there were truths in it, but it was remarkably sloppy. It ignores the many reforms taking place in legal education since the crisis began. It also ignores that because of scholarship competition for students, the actual net price of legal education is declining (just ask the budget manager at almost any law school). Whether or not law schools deserve any credit for these changes, the Times shows willful blindness towards these critical factors. In addition the Times strangely suggests that the federal government could "redirect" federal student loan dollars to the worthy cause of improving funding for legal services organization. This completely ignores the fact that lending money to law students is a profitable activity for the government. Even with income based repayment and a somewhat growing number of defaults, the federal government is not "investing" in legal education, it is generating revenue from it.

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October 28, 2015 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 902

House Resolution, Impeaching John Andrew Koskinen, Commissioner of the Internal Revenue Service, for high crimes and misdemeanors:

Resolved, That John Andrew Koskinen, Commissioner of the Internal Revenue Service, is impeached for high crimes and misdemeanors and that the following articles of impeachment be exhibited to the Senate:  

Articles of impeachment exhibited by the House of  Representatives of the United States of America in the name of itself and of the people of the United States of America, against John Andrew Koskinen, Commissioner  of the Internal Revenue Service, in maintenance and support of its impeachment against him for high crimes and misdemeanors.

Article I:  John Andrew Koskinen, in his conduct while Commissioner of the Internal Revenue Service, engaged in a pattern of conduct that is incompatible with his duties as an Officer of the United States. ...

Article II:  John Andrew Koskinen engaged in a pattern of deception that demonstrates his unfitness to serve as Commissioner of the Internal Revenue Service. Commissioner.  Koskinen made a series of false and misleading statements to Congress in contravention of his oath to tell the truth. ...

Article III:  John Andrew Koskinen, throughout his tenure as Commissioner of the Internal Revenue Service, has acted in a manner inconsistent with the trust and confidence placed in him as an Officer of the United States. ...

Article IV:  John Andrew Koskinen has failed to act with competence and forthrightness in overseeing the investigation into Internal Revenue Service targeting of Americans because of their political affiliations. ...

Wall Street Journal editorial, Impeaching the IRS Director: The House Acts to Remove John Koskinen for Breach of Trust:

The IRS targeting and muzzling of conservative groups during the 2012 presidential campaign is an outrage for which almost no one has been held accountable. Which brings us to the news that House Oversight Committee Chairman Jason Chaffetz introduced articles of impeachment on Tuesday against IRS Commissioner John Koskinen. ...

The last impeachment of a cabinet officer or agency head was War Secretary William Belknap in 1876. Then again, no Presidency in decades has treated Congress with the disdain that President Obama has. With rare exceptions he has also refused to dismiss officials when they fail at their most basic obligations. If the House votes to impeach Mr. Koskinen, the Senate then would need a two-thirds vote to convict in a trial, which is unlikely.

Yet the exercise will have the salutary effect of reminding executive-branch officials that they are not a government unto themselves. The U.S. Attorney has refused to honor Congress’s contempt charge against Ms. Lerner for refusing to testify, the Justice Department has closed its investigations into IRS targeting without prosecutions, and the press corps winks at abuses of power when conservatives are the targets. With an executive who refuses to honor the normal separation of powers, Congress is obliged to use its authority to hold government accountable.

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October 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, October 27, 2015

Masur Presents Toward A Pigovian State Today At Columbia

MasurJonathan Masur (Chicago) presents Toward a Pigovian State, 164 U. Pa. L. Rev. ___ (2015) (with Eric Posner (Chicago)), at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Most economists believe that the government should impose Pigovian taxes on firms that produce negative externalities like pollution, yet regulatory agencies hardly ever use their authority to create Pigovian taxes. Instead, they issue command-and-control regulations. Our major point is that, contrary to the conventional wisdom, regulators typically have legal authority to create Pigovian taxes — they just do not use it. While regulators may hesitate to impose Pigovian taxes for a range of political and symbolic reasons, we argue that these reasons do not justify this massive failure of regulatory efficiency. It is time for the regulatory state to take a Pigovian turn.

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

Lederman Presents Saving The IRS At Seattle

LedermanLeandra Lederman (Indiana) presented Saving the IRS yesterday at Seattle as part of its Faculty Workshop Series:

Our nation’s tax collector—still reeling from a highly publicized investigation into allegedly politically partisan targeting of Tea Party and other right-wing non-profit organizations—is in what one government organization has termed an “existential funding crisis.” During the 2015 tax season, over 60 percent of the taxpayers who called the Internal Revenue Service (IRS) could not get through. That figure is far below where it was even in 1997, when Congress held hearings showcasing taxpayer horror stories and required the IRS to restructure and significantly increase its focus on “customer service.”

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October 27, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Budget Deal Changes Partnership Tax Audits

Wall Street Journal, IRS Would More Easily Audit Large Partnerships Under Proposal; Provision in Budget Deal Would Make It Easier to Audit Private-Equity Firms, Hedge Funds:

The Internal Revenue Service would have an easier time auditing large partnerships, including private-equity firms and hedge funds, under a provision in the bipartisan budget deal announced late Monday night.

The proposal, built on ideas from both parties, would revamp a 33-year-old law that sets the rules for partnership audits and requires the IRS to pass additional taxes to each of the partners. That task has proven difficult for the IRS and has made the biggest and most complex multitiered partnerships extremely tough to audit.

A Government Accountability Office study last year found the IRS audited just 0.8% of large partnerships—those with at least 100 partners and $100 million in assets—compared with a 27.1% audit rate for corporations with at least $100 million in assets. Most of those partnership audits resulted in no additional taxes, and the GAO said it wasn’t sure whether that was because of high compliance or the agency’s inability to find noncompliance.

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October 27, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (0)

Computer vs. Lawyer? Many Law Firm Leaders Expect Computers To Win

American Lawyer LogoAmerican Lawyer:  Computer vs. Lawyer? Many Law Firm Leaders Expect Computers To Win:

Junior lawyers are used to feeling like cogs in a machine. According to a new report, a surprising number of law firm leaders expect to be able to replace them with actual machines—and soon.

In a large-scale survey released this month, 35 percent of law firm leaders said they could envision replacing first-year associates with law-focused computer intelligence within the next five to 10 years. That's up from less than a quarter of respondents who gave the same answer in 2011.

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October 27, 2015 in Legal Education | Permalink | Comments (5)

Cockfield: David Foster Wallace On Tax Policy

Pale KingArthur J. Cockfield (Queen's University), David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, 12 Pitt. Tax Rev. 89 (2015):

As one of the most highly acclaimed fiction writers of his generation, David Foster Wallace had many things to say on a seemingly endless variety of topics. In his last work, the unfinished novel The Pale King, he chose to elaborate on, of all things, tax policy and tax administration. Wallace directed tax topics at one of the novel’s main themes: true adulthood often involves overcoming boredom in the workplace to derive a sense of community and care for others. In a sense, the book serves as a guide on how to become a reasonably happy and fulfilled adult. This Essay integrates archival research from the Collected Works of David Foster Wallace at the Harry Ransom Center at the University of Texas at Austin.

Prior TaxProf Blog coverage:

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October 27, 2015 | Permalink | Comments (0)

NY Times: 1/3 Of Law Schools Admit Entering Classes With 25% Or More Students At Risk For Failing The Bar Exam

NY Times Logo (2015)Following up on yesterday's post, 2015 State of Legal Education: An In-Depth Look Into Law School Admissions Choices:  New York Times, Study Cites Lower Standards in Law School Admissions, by Elizabeth Olson:

As law schools across the country try to keep their classrooms full, many are admitting students with lesser qualifications, including those with a lower admissions test score — considered an important predictor of whether a graduate will earn the credentials to practice law.

About a third of the 204 accredited law schools had entering classes last year with at least 25 percent of the class consisting of “at risk” students, or those with law school admissions test scores of below 150, according to a new study by Law School Transparency, a nonprofit advocacy organization.

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October 27, 2015 in Legal Education | Permalink | Comments (4)

Obama Administration Accelerates College Financial Aid Planning To Sophomore Year Of High School

FAFSAWall Street Journal, College Aid Planning To Start One Year Earlier:

Attention, parents of high-school sophomores: There are financial steps you may want to take before year-end to help your child get more financial aid for the freshman year of college.

A recent executive order signed by President Barack Obama will change the rules for the Free Application for Federal Student Aid beginning with aid for the 2017-18 school year. Families will complete the form based on their “prior prior year” income instead of prior-year income as they do now.

That means that current high-school sophomores who graduate in 2018 will use 2016, not 2017, as the base year in reporting family and student income on their first Fafsa form. The government form is used in determining the amount of grants, loans and other forms of financial aid.

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October 27, 2015 in Legal Education | Permalink | Comments (1)

NY Times: Art Collectors Find Safe Harbor In Delaware’s Tax Laws

New York Times, Art Collectors Find Safe Harbor in Delaware’s Tax Laws:

This state is special because storage spots in most other states cannot offer the same tax advantages as Delaware. It is one of only five states without any sales or use tax, meaning that a Manhattan collector who might owe, say, $887,500 in sales tax on the purchase of a $10 million painting at Sotheby’s in New York, would owe nothing by shipping the art to Delaware directly after purchasing it.

Once there, art can be bought and sold within a storage space without any tax on the transactions for as long as it remains there.

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

Medical School Applicants, Enrollees Hit All-Time High

AAMCAssociation of American Medical Colleges, Medical School Applicants, Enrollees Reach New Highs:

The number of students enrolling in the nation’s medical schools has increased 25 percent since 2002, reaching an all-time high of 20,630 this year, according to data released today by the AAMC (Association of American Medical Colleges).

In addition, the total number of applicants to medical school rose by 6.2 percent to 52,550, exactly double the percentage increase from the previous year. First-time applicants—an important indicator of interest in medicine—increased by 4.8 percent to 38,460. ...

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October 27, 2015 in Legal Education | Permalink | Comments (1)