TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, April 12, 2017

The Debate Over The Impact Of Different MBE Cut Scores In Different States

MBESuzanne Darrow Kleinhaus (Touro), UBE-Shopping: An Unintended Consequence of Portability? (Mar. 2016):

Getting our students ready for the UBE, may require more than just learning the law; it also means learning in which jurisdiction you should take it. While there is not much that is new about the UBE’s individual components — the Multistate Essay Examination (MEE), the Multistate Performance Test (MPT) and the Multistate Bar Examination (MBE) — what is new is that where you take the UBE may make the difference between passing and failing. This is possible because of the convergence of bar exam test practices of “portability,” “relative grading,” and “scaling” of scores.

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April 12, 2017 in Legal Education | Permalink | Comments (1)

Hemel:  The Quick And Easy Way To See Trump’s Tax Returns

Trump Tax ReturnsWashington Post op-ed: There’s a Quick and Easy Way to See Trump’s Tax Returns, by Daniel Hemel (Chicago):

State lawmakers across the country are pursuing creative methods to force President Trump to release his federal income tax returns before he can run for reelection in 2020. Unfortunately for citizens interested in greater presidential transparency, those efforts are likely to fail.

There is, however, a much easier way for state lawmakers to force the disclosure of Trump’s tax information: publishing the state tax returns already in their possession, which would reveal much of the same information appearing in his federal documents. ...

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April 12, 2017 in Tax | Permalink | Comments (4)

University Of Wisconsin Faculty Survey Finds Widespread Bullying: Does Reward System Breed 'Academic Assholes'?

Wisconsin

Inside Higher Ed, Madison Faculty Survey Finds Widespread Bullying:

Some 35 percent of faculty members who completed a survey on work-life issues at the University of Wisconsin at Madison reported having been bullied by colleagues within the last three years, The Cap Times reported. “The measure of incidence of hostile and intimidating behavior is rather surprising,” reads a new report on survey results prepared by the Women in Science and Engineering Leadership Institute at Madison.

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April 12, 2017 in Legal Education | Permalink | Comments (4)

Amidst 71% Enrollment Decline, Florida Coastal Seeks To Avoid Fate Of Its Sister Law Schools Arizona Summit And Charlotte

Florida Coastal (2017)Jacksonville Daily Record, Florida Coastal School of Law Making Changes:

InfiLaw owns three for-profit law schools in the U.S.

Arizona Summit Law in Phoenix and Charlotte Law School in North Carolina were placed on probation in November by the American Bar Association, and Charlotte in December became the first law school in history to lose access to student loan programs administered by the U.S. Department of Education.

At issue are admission standards, quality of education and how relatively few of the schools’ graduates pass the Bar exam on their first attempt.

That leaves Florida Coastal School of Law, and the local legal education provider is taking steps to avoid sanction by the ABA.

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April 12, 2017 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1434:  How To Prevent The Next IRS Targeting Scandal

IRS Logo 2Tax Revolution Institute, How to Prevent the Next IRS Targeting Scandal:

We now know beyond a doubt that the Internal Revenue Service targeted and denied the nonprofit status of hundreds of organizations — mostly Tea Party and constitutionalist groups, but also those across the spectrum like Coffee Party USA — just in time for the 2012 presidential election. What we don’t know is whether anyone will be punished for this grand-scale corruption. ...

The 695-page release (PDF) of documents on April 4 — acquired thanks to a Freedom of Information Act request from Judicial Watch — is the final nail in the coffin, if there were any doubters still around. The fact that these documents remained under wraps during congressional hearings is itself worthy of condemnation.

Judicial Watch President Tom Fitton says there is no wonder why the IRS was reluctant to release these files: “The new smoking-gun documents contain admissions by the Obama IRS that it inappropriately targeted conservative groups.” Further, even when coming under scrutiny, “the abuse continued — as the Obama IRS tried to force conservative applicants to give up their First Amendment rights in order to finally get their applications granted.” ...

Not only will going after a few visible individuals not root out the bad faith, “American taxpayers are at risk for similar treatment in the future” — as noted by the Cause of Action Institute, another DC-based watchdog. CAI asserts that the targeting of politically relevant nonprofits with Special Case Reports (PDF) was and remains standard procedure. Their case rests on the little-known nonprofit red flags from Part Seven of the Internal Revenue Manual for IRS employees, which include whether the group might “generate significant publicity or controversy.” ... [W]e have to change incentives for the IRS and find solutions that go beyond the normal partisan brinkmanship. ...

What is politically plausible remains to be seen, be that a reworking of IRS procedures by the Congress or a more fundamental tax reform that places revenue collection in the hands of state governments. Perhaps the former can be an intermediate step before the latter.

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April 12, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, April 11, 2017

Shaviro Presents The Relationship Between 'Legally Defensible' Tax Planning And Social Justice Today At Northwestern

Shaviro (2015)Daniel Shaviro (NYU) presents Interrogating the Relationship between 'Legally Defensible' Tax Planning and Social Justice at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

This article, prepared for presentation on September 23, 2016 at a conference at NYU Law School, organized by the Center for Human Rights and Global Justice and entitled Human Rights and Tax in an Unequal World, mainly takes the form of a dialogue between two fictional individuals. The conclusions that the discussants reach (insofar as they are able to agree) can be summarized as follows:

Large-scale tax avoidance by wealthy individuals and large companies that is legally defensible under relevant national tax laws can nonetheless have major adverse effects on social justice and/or public morale. However, its legal defensibility complicates analyzing its ethical implications, as compared to the more straightforward case of committing tax fraud. Legal defensibility also complicates the analysis of the extent to which human rights advocates should focus on such desiderata as “good corporate tax behavior” and the ethics of tax professionals.

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April 11, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Davis Polk Invites Back Women Lawyers Who Left Firm To Raise Children

Davis PolkDavis Polk Revisited:

We are strongly committed to our lawyers throughout their professional careers, including those who have had an extended break from the legal profession.

Davis Polk Revisited is a re-entry program that reintegrates former Davis Polk lawyers who wish to return to full-time legal careers. It provides Davis Polk alumni with the opportunity to return to the firm and receive the training, CLE and reintegration support they need to resume their careers. The program is open to alumni who have three or more years of Davis Polk experience and who have been away from the legal profession for at least two years.

Wall Street Journal Law Blog, Davis Polk Welcomes Back Female Lawyers Who Took Break From Law:

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April 11, 2017 in Legal Education | Permalink | Comments (3)

Universal Clinical Legal Education: Necessary And Feasible

ClinicalRobert R. Kuehn (Washington University), Universal Clinical Legal Education: Necessary and Feasible, 53 Wash. U. J.L. & Pol'y ___ (2017):

Although bar officials and most legal educators agree that law students need to learn not just to “think like a lawyer” but also the professional skills needed to “do like a lawyer,” legal education lags far behind other professions in the clinical training it provides its graduates. The justification usually given for such lack of training is the claim that it is not financially feasible for law schools to ensure that every student graduate with a clinical experience.

This Essay challenges this mistaken justification.

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April 11, 2017 in Legal Education | Permalink | Comments (1)

Trump And A Populist Tax Agenda

Jay A. Soled (Rutgers), James Alm (Tulane) & Kathleen DeLaney Thomas (North Carolina), Trump and a Populist Tax Agenda?, 154 Tax Notes 1131 (2017):

In this article, the authors argue that President Trump should urge Congress to institute a carryover tax basis rule for marketable securities applicable upon death.

April 11, 2017 in Scholarship, Tax | Permalink | Comments (0)

Henderson:  U.S. News Eliminates The Rankings Advantage Of The GRE, But Harvard Has Started A 'Quant' Arms Race For Diverse Students Who Will Thrive In A Transformed, Tech-Driven, Disrupted Legal Profession

GRE.USNEWS.LSATThe Legal Whiteboard: The GRE and the Revised US News Ranking Methodology, by William Henderson (Indiana):

When I initially learned that Harvard Law would start accepting the GRE as an alternative to the LSAT, I viewed it through the prism of the US News & World Report ranking and concluded that it was a very good thing for Harvard and all of legal education. Aggressive rankings management has led to tremendous over-reliance on the LSAT. By using on the GRE, I reasoned, Harvard would have sufficient test score information to assess a candidate's intellectual capacity while also obtaining the freedom to use other admissions methods to explore the larger and more diverse universe of candidates who are destined to become great leaders and lawyers.  

My thinking is crudely sketched out in the diagram below.

Hls_strategy

If Harvard Law was trying to get around U.S. News rankings formula, the USN chief strategy officer, Bob Morse, saw it coming.  ...

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April 11, 2017 in Law School Rankings, Legal Education | Permalink | Comments (3)

Dodging The Taxman: Firm Misreporting And Limits To Tax Enforcement

Dina Pomeranz (Harvard), Paul Carrillo (George Washington) & Monica Singhal (Harvard), Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement:

Reducing tax evasion is a key priority for many governments, particularly in developing countries. A growing literature has argued that the ability to verify taxpayer self-reports against reports from third parties is critical for modern tax enforcement and the growth of state capacity. However, there may be limits to the effectiveness of third-party information if taxpayers can make offsetting adjustments on less verifiable margins. We present a simple framework to demonstrate the conditions under which this will occur and provide strong empirical evidence for such behavior by exploiting a natural experiment in Ecuador. We find that when firms are notified by the tax authority about detected revenue discrepancies on previously filed corporate income tax returns, they increase reported revenues, matching the third-party estimate when provided. Firms also increase reported costs by 96 cents for every dollar of revenue adjustment, resulting in minor increases in total tax collection.

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April 11, 2017 in Scholarship, Tax | Permalink | Comments (0)

Lipshaw:  Beyond Legal Reasoning — A Critique Of Pure Lawyering

LipshawJeffrey Lipshaw (Suffolk), Beyond Legal Reasoning: A Critique of Pure Lawyering (Routledge 2017):

The concept of learning to ‘think like a lawyer’ is one of the cornerstones of legal education in the United States and beyond. In this book, Jeffrey Lipshaw provides a critique of the traditional views of "thinking like a lawyer: or "pure lawyering" aimed at lawyers, law professors, and students who want to understand lawyering beyond the traditional warrior metaphor. Drawing on his extensive experience at the intersection of real world law and business issues, Professor Lipshaw presents a sophisticated philosophical argument that the "pure lawyering" of traditional legal education is agnostic to either truth or moral value of outcomes. He demonstrates pure lawyering’s potential both for illusions of certainty and cynical instrumentalism, and the consequences of both when lawyers are called on as dealmakers, policymakers, and counsellors.

This book offers an avenue for getting beyond (or unlearning) merely how to think like a lawyer. It combines legal theory, philosophy of knowledge, and doctrine with an appreciation of real-life judgment calls that multi-disciplinary lawyers are called upon to make. The book will be of great interest to scholars of legal education, legal language and reasoning as well as professors who teach both doctrine and thinking and writing skills in the first year law school curriculum; and for anyone who is interested in seeking a perspective on ‘thinking like a lawyer’ beyond the litigation arena.

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April 11, 2017 in Book Club, Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1433: House Oversight Committee Republicans Call On President Trump To Fire Commissioner Koskinen

IRS Logo 2Townhall, House Oversight Committee: President Trump, Remove IRS Commissioner John Koskinen:

Republicans on the House Oversight Committee, including Chairman Jason Chaffetz, have sent a letter to the White House demanding IRS Commissioner John Koskinen be removed from office.

"By applying additional rigorous scrutiny and unjustifiable, interminable delays to their applications for tax-exempt status, our own government betrayed the fundamental principles of liberty, free speech and democracy for partisan political reasons," the letter states. "So long as the IRS commissioner is a man who has misled the people, destroyed evidence, and failed his legal duties to the people's representatives in Congress, the IRS is not 'controlled by the people.'  For that reason, we request you immediately remove Koskinen." 

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April 11, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, April 10, 2017

Kleinbard Presents Capital Taxation In An Age Of Inequality Today at Pepperdine

Kleinbard (2015)Edward Kleinbard (USC) presents Capital Taxation In An Age Of Inequality, 90 S. Cal. L. Rev. ___ (2017), at Pepperdine today as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine:

The standard view in the U.S. tax law academy remains that capital income taxation is both a poor idea in theory and completely infeasible in practice. But this ignores the first-order importance of political economy issues in the design of tax instruments. The pervasive presence of gifts and bequests renders moot the claim that the results obtained by Atkinson and Stiglitz (1976) counsel against taxing capital income in practice.

Taxing capital income is responsive to important political economy exigencies confronting the United States, including substantial tax revenue shortfalls relative to realistic government spending targets, increasing income and wealth inequality at the top end of distributions, and the surprising persistence of dynastic wealth. It also responds to a new strand of economic literature that argues that “inclusive growth” leads to higher growth.

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Cullen Presents Political Alignment And Tax Evasion Today At NYU

CullenJulie Berry Cullen (UC-San Diego), presents Political Alignment and Tax Evasion at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

We explore whether the decision to evade federal personal income taxes depends on the taxpayer’s level of approval of government. We first demonstrate using survey data the positive association between political alignment with the current president and the respondent’s trust in the administration and support for government taxation and spending. We then show using IRS tax return data and county-level fixed effects regressions that the larger the typical share of county residents who vote for the president’s party the smaller the tax gap across a variety of tax gap measures. Responses are concentrated in income components that are more likely to be invisible to the government, such as small business income. Our results provide realworld evidence that a positive outlook on government lowers tax evasion.

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Lawsky Presents Formalizing The Tax Code Today At UC-Irvine

Lawsky (2017)Sarah Lawsky (Northwestern) presents Formalizing the Code, 70 Tax L. Rev. ___ (2017), at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

The Internal Revenue Code is notoriously complex, both substantively and structurally. This article examines one source of structural complexity in the Internal Revenue Code: dependency among sections that stems from defined terms. In particular, the article examines what it describes as the problem of “definitional scope”: when the structure of the Code leaves unclear to what a term refers. The article provides examples of problematic definitional scope and then suggests a general solution: that those who draft tax legislation should “formalize” the proposed statutory language—translate it into logical terms—prior to its enactment. To illustrate this proposal, the article provides formalizations of two provisions of the Internal Revenue Code.

April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hayashi Presents A Theory Of Facts And Circumstances Today At UNLV

HayashiAndrew Hayashi (Virginia) presents A Theory of Facts and Circumstances at UNLV today as part of its Faculty Enrichment Series:

The legal consequences of an action often depend on information that only the actor knows, such as her intentions. This information is often inferred from the observable “facts and circumstances” attending the actor’s conduct, which creates a seemingly unresolvable tension in legal design. On the one hand, the unstructured nature of these analyses gives free rein to the factfinder’s judgment about which facts justify an inference to the hidden information. On the other hand, if the law were to specify in advance the facts that would be used to draw that inference it would provide a roadmap for actors to strategically adjust their conduct to manipulate the factfinder’s conclusions. I argue that this tension can be resolved by applying insights from the economics literature on asymmetric information.

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Polsky Presents Elite Tax Professionals Behaving Badly Today At Washington & Lee

Polsky (2015)Gregg Polsky (Georgia) presents Elite Tax Professionals Behaving Badly: The Sad and Sordid Management Fee Waiver Saga at Washington & Lee today as part of its Faculty Workshop Series:

For at least the past 15 years, many private equity fund managers have used a technique—known as a management fee waiver—to try to claim what is effectively their weekly paycheck as a capital gain. Recently, the Treasury and IRS explained that, at least in the government’s view, the vast majority of fee waivers do not actually provide the claimed tax result. Recent reports of significant audit activity relating to fee waivers suggest that the fee waiver saga may finally be coming to an end, but not before billions of tax revenues that are beyond the statute of limitations have been lost forever.

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Johnson Presents Who Wins A Tax Case If There Is A Tie: The Taxpayer Or The Revenue Authority? Today At Minnesota

Johnson (Steve)Steve R. Johnson (Florida State) presents Who Wins If There’s A Tie: The Taxpayer or the Revenue Authority? at Minnesota today as part of its Perspectives on Taxation Lecture Series:

In baseball, if the runner touches the base at the same time as the baseman catches the ball or tags the runner, the runner is safe. In other words, a tie goes to the runner. State and federal tax controversies also can involve close calls, either because the facts supporting the two sides are balanced or because the law is unsettled. When that happens, when the case is close, should the court hold for the taxpayer or the revenue bureau? Courts have answered this question differently in different eras and in different jurisdictions.

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fleischer Presents Tax Reform: The State of Play Today At UCLA

Fleischer (2016)Victor Fleischer (San Diego; Co-Chief Tax Counsel, Senate Finance Committee Democrats) presents Tax Reform: The State of Play at UCLA today as part of its Business Law Breakfast Series.  Vic's talk will discuss several aspects of the House Republicans' tax reform blueprint, A Better Way for Tax Reform:

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April 10, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, April 9, 2017

McMahon & McGovern:  2016 Federal Income Tax Developments

Florida Tax Review  (2015)Martin J. McMahon Jr. (Florida) & Bruce A. McGovern (South Texas), Recent Developments in Federal Income Taxation: The Year 2016, 20 Fla. Tax Rev. 131 (2017):

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the most recent twelve months—and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail, and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted—unless one of us decides to go nuts and spend several pages writing one up. This is the reason that the outline is getting to be as long as it is.

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April 9, 2017 in Scholarship, Tax | Permalink | Comments (0)

2017 Religious Law School Rankings

WSJ:  Companies Offer Free Tax Preparation So They Can Harvest And Monetize Your Personal Data

Free


Wall Street Journal, The Real Reason Everyone Offered You Free Tax Prep This Year:

The tax-preparation business isn’t really about taxes anymore. It’s about charging millions of Americans little or nothing for tax preparation as a way to get at their other information.

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April 9, 2017 in Tax | Permalink | Comments (0)

Cooley Law School Enrollments (68%), Revenues (49%) Fall, Tuition Rises 48% (To $50,790); 60% Of Faculty Terminated, Dean's Pay Cut 20% (To $537,000)

Thomas Cooley Logo (2014)Lansing State Journal, Where Did All the Cooley Students Go?:

Law school enrollment fell by 25% nationwide between 2010 and 2016. Cooley’s enrollment fell more than 60%, dropping from a peak of 3,931 students in 2010 to fewer than 1,300 last year, according to data Cooley submitted to the American Bar Association.

Cooley

At its peak in 2010, Cooley brought in more than $123 million. By 2014, the most recent year for which tax records are available, revenue had plummeted to $63 million. ... Cooley responded by laying off more than half [60%] of its full-time faculty and closing its Ann Arbor campus.

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April 9, 2017 in Legal Education | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 paper is now #96 in all-time downloads among 12,640 tax papers:

  1. [1,756 Downloads]  The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, by Michael J. Graetz (Columbia)
  2. [612 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)
  3. [399 Downloads]  Predicting Stock Market Prices with Physical Laws, by Jack Manhire (Texas A&M)
  4. [317 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)
  5. [278 Downloads]  Destination-Based Cash Flow Taxation, by Alan Auerbach (UC-Berkeley), Michael P. Devereux (Oxford), Michael Keen (IMF) & John Vella (Oxford)

April 9, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 8, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Using The Tax Law To Punish Sanctuary Cities And States

Kate's LawTaxProf Blog op-ed:  Taxing Kate’s Law Sanctuary Perpetrators, Robert Feinschreiber & Margaret Kent:

It’s time for America to tax sanctuary perpetrators — city or state — that defy the federal government. We suggest that the federal government impose its tax regime on these jurisdictions.

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April 8, 2017 in Tax | Permalink | Comments (5)

Muller:  February 2017 MBE Bar Scores Collapse To All-Time Record Low

MBEDerek Muller (Pepperdine), February 2017 MBE Bar Scores Collapse to All-Time Record Low in Test History:

On the heels of the February 2016 multistate bar exam (MBE) scores reaching a 33-year low, including a sharp drop in recent years, and a small improvement in the July 2016 test while scores remained near all-time lows, we now have the February 2017 statistics, courtesy of Pennsylvania (PDF). After a drop from 136.2 to 135 last year, scores dropped another full point to 134. It likely portends a drop in overall pass rates in most jurisdictions. This is the lowest February score in the history of aggregated MBE results.

Muller 2

April 8, 2017 in Legal Education | Permalink | Comments (6)

Pepperdine Law Review Symposium:  The Supreme Court, Politics And Reform

Symposium

The United States Supreme Court has long been criticized for injecting politics into its decision-making instead of adhering to the rule of law. Yet the recent events surrounding President Barack Obama’s nomination of Merrick Garland to the Court, and the successful gamble of the Senate Republicans to refuse to hold confirmation hearings in hopes that the presidential election would allow their party to fill the seat, has cast this criticism into even starker relief.

But has the confirmation process become so dysfunctional and contentious because the Court itself has become unduly political? Or has the Court become unduly political because of external political pressures? Or has the Court remained faithful to the rule of law while political tempests attempt to threaten its independence as an institution of laws? And if for whatever reason the Court has become unduly political, what reforms can best address this problem? At this symposium, renowned legal scholars, and past and present judges, will explore these questions which remain critical to maintaining a proper separation of powers in our constitutional system.

We hope you can join us for this important and exciting debate that will feature lead presenters Akhil Amar (Yale), Erwin Chemerinsky (Dean, UC-Irvine), Michael McConnell (Stanford), Richard Posner (U.S. Court of Appeals for the Seventh Circuit), and Mark Tushnet (Harvard). A LiveStream of the symposium is available here.

Opening Address (8:45 a.m. PST):  Michael McConnell (Stanford)

Presentation (9:45 a.m.):  Hon. Richard Posner (U.S. Court of Appeals for the Seventh Circuit)
Respondents:  Jennifer Chacon (UC-Irvine), Deanell Tacha (Dean, Pepperdine)

Presentation (11:00 a.m.):  Mark Tushnet (Harvard)
Respondents:  Paul Finkelman (Pittsburgh), Robert Pushaw (Pepperdine)

Luncheon Address: (12:00 p.m.):  Erwin Chemerinsky (Dean, UC-Irvine)

Presentation  (1:45 p.m.):  Akhil Amar (Yale)
Respondents:  Rebecca Brown (USC), Douglas Kmiec (Pepperdine)

Break-Out Sessions (3:45 p.m.):

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April 8, 2017 in Conferences, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1430: At Least 1 Top Republican in Congress Really Likes Commissioner Koskinen

IRS Logo 2Salt Lake City Tribune, At Least 1 Top Republican in Congress Really Likes IRS Head: Orrin Hatch:

At least one powerful Republican in Congress really likes IRS Commissioner John Koskinen. Utah's Orrin Hatch might be the only one.

Hatch gave Koskinen a warm welcome at a Senate hearing Thursday, a day after House Republicans asked President Donald Trump to fire him. "I personally appreciate the work that you have done over the years," Hatch, the Senate's senior Republican and chairman of the powerful Finance Committee, told Koskinen. "I appreciate the service you have given to this wonderful country."

At the other end of the spectrum is another Utah Republican. Rep. Jason Chaffetz has been Koskinen's most fervant detractor, repeatedly seeking his resignation and even calling for his impeachment. Chaffetz not only relentlessly pursued the IRS leader from his perch as House Oversight and Government Reform chairman, but he even testified against him as a witness before the House Judiciary Committee, claiming Koskinen has misused his power, lied and withheld records.

Unprompted, Hatch said he has a good relationship with Koskinen. It's an influential statement of support because Hatch serves as Senate president pro tem — making him third in line to succeed the president. Hatch also led the Senate Finance Committee investigation of allegations the IRS targeted conservative groups for audits, and said Koskinen cooperated.

But Hatch's backing may not be enough to counter the ire against Koskinen from other Republicans, some of whom want him to step down before his five-year-term ends in November.

On Wednesday, 15 GOP members of the House Ways and Means Committee said trust in the IRS has hit rock bottom. They said that under Koskinen, the IRS destroyed evidence when Congress was investigating the tax agency for inappropriately singling out conservative groups for extra scrutiny. ...

Koskinen said he has not heard from anyone in the Trump administration about stepping down.

But in tense exchange at Thursday's hearing, Sen. Pat Roberts, R-Kan., asked Koskinen if he intends to finish his term. "It gives me no pleasure and some degree of sadness," Roberts said. "I have been disappointed in your record at the agency."

Koskinen replied, "I regret that you're disappointed in the performance." Koskinen went on to defend his record. He said the IRS has implemented every recommendation from every investigation into the IRS handling of conservative groups. He said no one at the tax agency hindered any of the investigations.

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April 8, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, April 7, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a recent Tax Court case holding that an employer of a independent contractor reclassified as an employee is not liable for failing to withhold taxes if the employee pays the taxes on her own. 

KristanThe Coyote Bags the Roadrunner.

Battles over whether a given worker is an employee or an independent contractor have been going on since before the Coyote and the Road Runner began their epic conflict, with the IRS usually playing the winning Road Runner role. Yesterday the anvil landed on the Road Runner.

The IRS prefers that workers be treated as employees because that makes it easier to collect their taxes. Employers have to collect half of the Social Security and Medicare taxes on employee wages, and they have to withhold and remit income taxes. Independent contractors have to pay all of these on their own when they file their schedule Cs and Schedule SEs. While businesses have to send 1099s to independent contractors, the IRS likes having employers do most of the collecting. It’s becoming a big issue in the “gig economy.”

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April 7, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new article by Shu-Yi Oei (Tulane), The Offshore Tax Enforcement Dragnet

Glogower (2016)In the late 1980’s, the tuna-eating public grew concerned with the ensnarement of dolphins in tuna nets.   Fisheries responding by changing harvest methods to avoid dolphin bycatch, and affixing “dolphin-safe tuna” labels to tuna cans.  The reassured public returned to their tuna sandwiches with clear consciences, evidently untroubled by the incongruity of canning and consuming one majestic ocean-dweller, while safeguarding another.  One wonders if an alternate society, with different preferences, would feel just as strongly about the ethics of eating tuna-safe dolphins.

Similarly, the U.S. government flings its net over the seas, and drags tax avoiders out of the murky depths of foreign financial institutions.  Shu-Yi Oei’s new work argues that FATCA and other initiatives designed to prevent offshore tax evasion by wealthy tax-avoiders have ensnared unintended bycatch, including recent immigrants to the U.S. who still hold assets in their home country, Americans expats living (and saving) abroad, and “accidental Americans” unaware of their U.S. citizenship.

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April 7, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Weekly Legal Education Roundup

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April 7, 2017 in Legal Education, Weekly Legal Education Roundup | Permalink | Comments (3)

Hemel Presents The Federalist Safeguards of Progressive Taxation Today At Duke

HemelDaniel Hemel (Chicago) presents The Federalist Safeguards of Progressive Taxation, 93 NYU L. Rev. ___ (2017), at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

This essay considers the distributional consequences of the Supreme Court’s federalism jurisprudence over the past quarter century, focusing specifically on the anticommandeering, anti-coercion, and state sovereign immunity doctrines. The first of these doctrines prevents Congress from compelling the states to administer federal programs; the second prevents Congress from achieving the same result through offers that for practical purposes the states cannot refuse; the third prohibits Congress from abrogating state sovereign immunity outside a limited class of cases. These doctrines vest the states with valuable entitlements and allow the states to sell those entitlements back to Congress for a price. In this respect, the doctrines have an intergovernmental distributional effect, shifting wealth from the federal government to the states.

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April 7, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mann Presents Using Tax Law To Control Obesity Today At Lewis & Clark

Lewis & ClarkRoberta Mann (Oregon) presents Controlling the Environmental Costs of Obesity today at the symposium on 21st Century Food Law: What's On Our Plates? at Lewis & Clark:

Obesity is increasingly viewed as a major health problem across the world. Obesity presents both external and internal costs. Obesity alone may be responsible for some $2 trillion in medical costs and lost productivity, representing significant external costs. Internal costs occur because people make eating and drinking choices without being aware of the eventual damage to their health. Obesity also carries environmental costs. Consumption of certain energy dense foods made from corn and soy (including meat) increases soil erosion and water pollution from fertilizer use. Governmental policy encourages the production of such crops. Being overweight decreases physical activity and personal mobility, leading to increased use of motor vehicles. Environmental factors such as sprawl and transportation policy affect obesity rates. When people cannot walk or take public transportation to work, they spend more time in their cars. They have less time to exercise and prepare healthy meals. Hence, both obesity’s effect on the environment and the environment’s effect on obesity lead to increased carbon emissions and exacerbate climate change. Taxes can potentially control both the external and internal costs of obesity.

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April 7, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (7)

NY Times:  100,000 Taxpayers Compromised In Hack Of FAFSA Tool At IRS

FAFSAIRSFollowing up on my previous post, As Deadlines Approach For College Financial Aid & Income-Based Loan Repayment, IRS Leaves Parents, Students & Graduates In Lurch By Taking Down Online Tax Return Data Retrieval Tool:  New York Times, Up to 100,000 Taxpayers Compromised in Fafsa Tool Breach, I.R.S. Says:

The Internal Revenue Service said on Thursday that the personal data of as many as 100,000 taxpayers could have been compromised through a scheme in which hackers posed as students using an online tool to apply for financial aid.

The breach may be the most extensive since 2015, when thieves gained access to the tax returns of over 300,000 people by using stolen data and filed fraudulent returns to get refunds.

The possibility of an attack became known in early March after the I.R.S. shut down its Data Retrieval Tool, which families used to import tax information to Fafsa, the Free Application for Federal Student Aid, on the Education Department’s website. The shutdown, at the height of financial aid application season, caused outrage among parents and students trying to fill out the complicated Fafsa forms.

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April 7, 2017 in IRS News, Tax | Permalink | Comments (3)

The IRS Scandal, Day 1429:  Commissioner Koskinen Says He Will Finish Term Despite GOP Calls To Step Down Immediately

IRS Logo 2The Hill, IRS Chief Says He's Committed to Finishing His Term:

IRS Commissioner John Koskinen on Thursday said he is committed to finishing his term, one day after Republicans on the House Ways and Means Committee called for his removal.

“I signed up for a term that ends in November,” Koskinen said at a Senate Finance Committee hearing. “Where I come from, if you sign up for a commitment, you complete that commitment.”

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April 7, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Thursday, April 6, 2017

Oh Presents Are Progressive Tax Rates Progressive Policy? Today At Indiana

OhJason Oh (UCLA) presents Are Progressive Tax Rates Progressive Policy?, 92 NYU L. Rev. ___ (2017), at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Why do income tax systems across the world consistently feature progressive marginal rates? The existing literature tells a political story focusing on the top of the rate schedule and the preferences of the poor and middle class. According to this standard view, higher rates at the top result from the poor and middle class using the political process to “soak the rich.” However, this explanation is inconsistent with research showing that public policy is generally more responsive to the preferences of the rich. Explaining marginal rate progressivity as a universal (and exceptional) triumph of the poor and middle class rings hollow.

This Article resolves this tension in the extant literature by showing how progressive marginal rates are in fact consistent with the preferences of the rich.

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April 6, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

George Washington Law School Applications Jump 9%, Thanks To A 'Trump Bump'?

GWT

The GW Hatchet, Law School Application Numbers Rise With Waived Fees, ‘Trump Bump’:

Applications to the law school jumped up by 9 percent for this year’s admissions cycle as the school received the second largest number of applications nationwide, a law school spokeswoman said last week.

A 9-percent increase means more than 7,500 students applied to the law school this year – up from about 6,900 a year ago and the largest pool since 2011. Faculty and experts said the school’s decision to waive its application fee coupled with President Donald Trump’s administration sparking an increased interest in law, likely contributed to the increase. ...

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April 6, 2017 in Legal Education | Permalink | Comments (2)

LSAT Test-Takers Rose 3.3% In Fall 2017 Admissions Cycle, But Law School Applicants Are Down 1.9%

The number of LSAT test-takers rose 3.3% in 2016-17, on the heels of last year's 4.1% increase, which followed five consecutive years of declines.  The 5.4% increase in February's final test of this year's cycle is the largest February increase since 2009.

LSAT

Matt Leichter, LSAT Tea-Leaf Reading: February 2017 Edition:

Leichter 2

LSAC also has announced that "As of 3/31/17, there are 319,072 applications submitted by 47,916 applicants for the 2017–2018 academic year. Applicants are down 1.9% and applications are up 0.3% from 2016–2017. Last year at this time, we had 87% of the preliminary final applicant count."

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April 6, 2017 in Legal Education | Permalink | Comments (0)

FAIR Seeks Revocation Of The Southern Poverty Law Center’s Tax Exemption Due To Its Anti-Trump Electioneering

SPLCPress Release, FAIR Files Formal Exhaustive Complaint with the IRS: SPLC Violated Its Tax Exempt Status Repeatedly in the Last Election Cycle Alleges FAIR:

According to a formal legal complaint filed today with the Internal Revenue Service (IRS), the Southern Poverty Law Center (SPLC) openly and repeatedly violated its non-profit tax status nearly 50 times during the 2016 presidential election cycle, participating in communication activities prohibited by the IRS in a “flagrant, continued and intentional campaign” targeting then-Presidential candidate Donald J. Trump and other Republican candidates. The complaint was filed by the Federation for American Immigration Reform (FAIR) through its legal affiliate the Immigration Reform Law Institute (IRLI). Copies are available here.

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April 6, 2017 in IRS News, Tax | Permalink | Comments (1)

Under Pressure From Feds, ABA Cracks Down On Four Law Schools (Arizona Summit, Ave Maria, Charlotte, Valparaiso)

ABA Section On Legal Education (2016)Inside Higher Ed, ABA Cracks Down on Low Performing Law School in Wake of Criticism from Feds:

During the last year, the American Bar Association has cracked down on four law schools [Arizona Summit, Ave Maria, Charlotte, Valparaiso] — two of which are for-profits.

A tightened job market for law school graduates has helped draw the ABA's attention to some of the lowest-performing institutions it accredits. Less academically prepared students, who are gaining easy access to these law schools, face large student debt loads and slim chances of finding employment, according to experts.

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April 6, 2017 in Legal Education | Permalink | Comments (0)

TIGTA:  91% Of Taxpayers Whose Bank Accounts Were Seized By The IRS Had Acquired The Cash Legally

TIGTAThe Treasury Inspector General for Tax Administration yesterday released Criminal Investigation Enforced Structuring Laws Primarily Against Legal Source Funds and Compromised the Rights of Some  Indiviuals and Businesses:

The Currency and Foreign Transactions Reporting Act of 1970, referred to as the Bank Secrecy Act, requires U.S. financial institutions to file reports of currency transactions exceeding $10,000. ... In October 2014, a new policy was instituted by IRS Criminal Investigation (CI) that it would no longer pursue the seizure and forfeiture of funds related to legal source structuring. In the same month the policy changed, the New York Times reported that CI had been seizing funds in structuring investigations without filing a criminal complaint. Property owners were left to prove their innocence, and many gave up trying. This audit was initiated to evaluate the IRS’s use of seizures against property owners suspected of structuring transactions to avoid Bank Secrecy Act reporting requirements.

Most of the seizures for structuring violations involved legal source funds from businesses. While current law does not require that the funds have an illegal source (e.g., money laundering or criminal activity other than alleged.

Washington Post, The IRS Took Millions From Innocent People Because of How They Managed Their Bank Accounts, Inspector General Finds:

The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents' suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.

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April 6, 2017 in Gov't Reports, IRS News, Tax | Permalink | Comments (11)

Fleming, Peroni & Shay:  The Transition Tax Issue

J. Clifton Fleming Jr. (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Harvard), Getting from Here to There: The Transition Tax Issue, 154 Tax Notes 69 (Mar. 27, 2017):

If there is fundamental U.S. international income tax reform, regardless of the reform option chosen, the United States must decide how to handle the $2.4 trillion to $2.6 trillion of previously untaxed foreign income accumulated by U.S. multinational corporations. In this report, Fleming, Peroni, and Shay argue that the proper approach is to treat the income as a subpart F inclusion in the year before the effective date of fundamental reform and to tax it at regular rates with an option to make the payments in installments that bear market-rate interest.

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April 6, 2017 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1428:  Fifteen Ways & Means Committee Republicans Urge Trump To Fire Commissioner Koskinen

IRS Logo 2Letter From 15 House Ways & Means Committee Republicans to President Trump (Apr. 5, 2017) (press release):

As members of the House Ways and Means Committee, we believe it is imperative that the Internal Revenue Service (IRS) work for the best interest of all taxpayers, and that the taxpayers in tum have confidence in the IRS's ability to fairly administer the tax code. This trust is at the core of our system of voluntary tax compliance . Trust in the IRS is hitting rock-bottom under IRS Commissioner John Koskinen . Not only was key evidence relevant to this Committee's investigation destroyed under his watch, but he also misled Congress in the process, intentionally degraded customer service at the agency, and has since lost the trust of the American people. We believe that trust cannot be fully restored under Commissioner Koskinen's leadership. For this reason, we are writing to request the removal of John Koskinen as Commissioner of the IRS and to request that a new leader be put in place as soon as possible.

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April 6, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, April 5, 2017

Ex-Cincinnati Law Dean Challenges Her Removal: 'Faculty Unwilling To Put Student Needs Ahead Of Their Own' Is Not Adequate Ground. But Is There More To The Story?

UC BardAmerican Lawyer, Fired (And Lawyered) Up:

Two weeks ago, we told you about the former dean of the University of Cincinnati College of Law, who was removed from her position, she says, for doing exactly what she was brought on to do: cut spending. At the time, Jennifer Bard made that claim in the press herself, but now she's hired a lawyer, Marjorie Berman of New York firm Krantz & Berman, to do the talking. Berman said the university violated its own internal rules when it pushed Bard out of the dean job on March 22 and placed her on leave while it investigates her leadership of the law school. "The interim provost placed Dean Bard on administrative leave without the slightest factual basis for doing so,” said Marjorie Berman, an attorney with New York firm Krantz & Berman. “Administrative leave implies conduct requiring an immediate separation, that the university well knows does not exist here. Faculty unwilling to put the needs of the students and the law school ahead of their own does not constitute such conduct.” University spokesman Greg Vehr did not respond to requests for comment yesterday.

National Law Journal, Ex-Cincinnati Law Dean Claims Her Removal Was Improper:

The former dean of the University of Cincinnati College of Law says she was improperly removed from that position two weeks ago and placed on administrative leave after clashing with some faculty over proposed budget cuts.

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April 5, 2017 in Legal Education | Permalink | Comments (4)

Harrison:  Academic Freedom And The Scheduling Of Law School Classes

Florida Logo (GIF)Jeffrey Harrison (Florida), Those Bastards!!:

Yes, it's that time of year again — teaching schedules for the  next two semesters. And, as usual, when I filled in the form asking for my preferences, I gave the Deans all kinds of options. I am willing to teach Monday-Wednesday at 1-2 or Monday-Wednesday 1:05-2:05.  Mornings are out! I spend the morning reading the Times until my massage at 11. Lunch is at noon.  But what do they give me? Monday-Wednesday 2-3. These people do not know who I am. Do they have me mixed up with someone who went to a state school?

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April 5, 2017 in Legal Education | Permalink | Comments (1)

Helfand:  Making Faith-Based Institutions Inclusive — The Pepperdine Example

HelfandInside Higher Education op-ed:  Making Faith-Based Institutions Inclusive, by Michael A. Helfand (Pepperdine):

When people meet me for the first time, it doesn’t take long for them to realize that I am an Orthodox Jew. The most obvious giveaway is the yarmulke on my head. Of course, this isn’t by itself surprising — and being an Orthodox Jew doesn’t make me particularly unique. What does surprise people is when they learn I teach at Pepperdine University School of Law, part of a university that is affiliated with the Church of Christ.

This surprise frequently comes in the form of the following conversation, often at an academic conference. Someone will see my institutional affiliation on my name tag and ask me, “How are things at Pepperdine?” When I respond enthusiastically, my interlocutor will follow up by asking, “But how do they treat you" — or “But are you OK,” almost expecting me to unburden my soul with all the horrors of being a committed Orthodox Jew at a Christian university.

These repeated interactions frequently lead me to reflect on the extraordinary distance between these prevailing perceptions and my own lived reality. Put succinctly, I cannot imagine working in a more supportive and rewarding academic environment than what I have experienced at Pepperdine. To be sure, my comfort with faith-based higher education presumably also has a lot do with my own education; I spent many years at Yeshiva University, the largest Orthodox Jewish university in the United States. And my area of research is law and religion, which means my substantive work dovetails nicely with the intersection of faith and knowledge that lies at the heart of many faith-based universities. But these experiences and interests have also given me a window into how faith-based universities successfully promote religious diversity.

From my vantage point, the reason why Pepperdine has proven fertile ground for cultivating religious diversity among its faculty alongside its continued commitment to its core Christian mission is because it conveys to its entire faculty that we are valued because of and not despite the university’s faith-based mission. ...

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April 5, 2017 in Legal Education | Permalink | Comments (1)