TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, January 13, 2016

Why Are There So Few Conservative/Libertarian Law Profs, Even Though They Are More Productive Scholars Than Liberal Law Profs?

James Cleith Phillips (Ph.D. Candidate, UC-Berkeley), Why are There So Few Conservatives and Libertarians in Legal Academia? An Empirical Exploration of Three Hypotheses, 39 Harv. J.L. & Pub. Pol'y ___ (2016):

There are few conservatives and libertarians in legal academia.

Graph 3

Why? Three explanations are usually provided: the Brainpower, Interest, and Greed Hypotheses. Alternatively, it could be because of Discrimination. This paper explores these possibilities by looking at citation and publication rates by law professors at the 16 highest-ranked law schools in the country. Using regression analysis, propensity score matching, propensity score reweighting, nearest neighbor matching, and coarsened exact matching, this paper finds that after taking into account traditional correlates of scholarly ability, conservative and libertarian law professors are cited more and publish more than their peers.

Graph 6

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January 13, 2016 in Legal Education, Scholarship | Permalink | Comments (11)

Is the Law School Crisis Affecting Harvard?

Harvard Law School Logo (2014)Bloomberg, Is the Law School Crisis Affecting Harvard?:

Harvard Law School accepted 55 students who transferred from other schools in 2015, according to data recently released by the American Bar Association. In the four prior years, the school never took in more than 35 transfer students. Harvard Law is one of the most exclusive law schools in the country, with its pick of the very best future lawyers in America. It's not a huge school, either; class sizes generally hover at 560. Why did Harvard decide to accept so many additional transfer students last year? ...

Other schools’ current students are a safer bet than new applicants. If Harvard was not confident that it could draw enough good students from the incoming crop of law applicants to maintain enrollment numbers and test scores, it might look to students who were already at the top of classes at other schools.

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January 13, 2016 in Legal Education | Permalink | Comments (6)

Tait:  The Secret Economy Of Charitable Giving

Allison Anna Tait (Richmond), The Secret Economy of Charitable Giving, 95 B.U. L. Rev. 1663 (2015):

Charitable giving is big business. In 2009, the Internal Revenue Service reported close to 100,000 private foundations, almost double the number from fifteen years earlier. Some of these charitable trusts, like the Gates Foundation, are multi-billion dollar enterprises. Trust instruments and other governing documents set forth the terms that control these gifts. Because charitable trusts can exist in perpetuity, however, changing circumstances sometimes render the terms difficult to fulfill. Courts can apply cy pres, a doctrine that allows for the modification of gift restrictions, but in the past courts have tended to apply cy pres narrowly and privilege donor intent above all other considerations. Recent reforms, however, have moved courts toward a more flexible application of the doctrine. In this Article, I analyze certain high-profile cases that have driven these reforms—including the presumption of general charitable intent, the recognition of “wasteful” as a criterion, and the deployment of deviation—and explain how these reforms represent positive change. Moreover, I provide a theoretical grounding to account for the correctness of these reforms.

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January 13, 2016 in Scholarship, Tax | Permalink | Comments (0)

Cruz, Rubio Spar Over Taxes

Tax And Twitter

A Progressive Way To End Corporate Taxes

New York Times op-ed:  A Progressive Way to End Corporate Taxes, by Dean Baker (Center for Economic and Policy Research):

Just about every American chief executive has the same dream: to get out from under the corporate income tax. For many, that means lobbying Congress to change the tax code. But for a growing number, it also involves increasingly creative — and successful — tricks to avoid their liability.

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January 13, 2016 in Tax | Permalink | Comments (1)

Graetz:  Farewell To Ken Gideon

GideonFollowing up on yesterday's post, Death Of Ken Gideon:  Michael Graetz (Columbia), Farewell To Ken Gideon:

During 1990 and 1991, Ken Gideon and I spent two long, dog-type years cheek by jowl at the Treasury when Ken was Assistant Secretary of Tax Policy and I served as his deputy. This period included, of course, preparation for and the negotiations over the bipartisan 1990 Budget Act which put the nation’s finances on a path to its first budget surpluses in a generation and ultimately cost George Herbert Walker Bush reelection. Ken Gideon possessed deep knowledge of the tax system, an awesome intellect, impressive judgment, and unquestionable integrity. He knew how to run an office and how to make decisions. Ken also understood perfectly the power of his office and its limits. His time at Treasury produced prodigious regulations, broad in scope and of vast impact. As I learned well, Ken Gideon had wide-ranging interests and was a great companion for conversation.

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January 13, 2016 in Obituaries, Tax | Permalink | Comments (0)

Johnson & Sheffrin:  Rethinking The Sales Tax Food Exclusion With SNAP Benefits

Anna Johnson (Tulane) & Steven M. Sheffrin (Tulane), Rethinking the Sales Tax Food Exclusion With SNAP Benefits, 79 State Tax Notes 149 (Jan. 11, 2016):

Most states either totally or partially exclude food at home from the general sales tax. This exclusion generates a debate between tax policy analysts with their emphasis on broad base, low-rate tax systems against the advocates for the poor who argue that the exemption for food is necessary on distributional grounds. States that do tax food at home are often singled out as having particularly regressive and punitive tax systems. What is missing from this debate is a serious discussion of the consequences of non-taxability of benefits under the Supplemental Nutritional Assistance Program (food stamps). We present evidence that the SNAP program effectively reaches the vast majority of the poor thus making the taxability of food at home much less important for individuals in lower income tiers.

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January 13, 2016 in Scholarship, Tax | Permalink | Comments (0)

2016 Niche College Rankings

NicheNiche has ranked 1,164 colleges and universities using this methodology. Here are the Top 25:

  1. Stanford
  2. MIT
  3. Yale
  4. Harvard
  5. Rice
  6. Penn
  7. Duke
  8. Brown
  9. Cal-Tech
  10. USC
  11. Princeton
  12. Washington University
  13. Notre Dame
  14. Columbia
  15. Bowdoin
  16. Texas
  17. Vanderbilt
  18. Georgetown
  19. Williams
  20. Chicago
  21. Michigan
  22. Dartmouth
  23. Cornell
  24. Carleton
  25. Virginia

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January 13, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 979

IRS Logo 2Wall Street Journal editorial, An IRS Class Action: A Judge Certifies That a Suit For Some 200 Groups Can Proceed:

The case against the IRS for targeting conservatives isn’t over after all. On Tuesday a federal judge in Ohio certified a class-action lawsuit against the IRS by conservative groups whose applications for tax-exempt status were slow-rolled between 2010 and 2013.

The lawsuit by the  NorCal Tea Party Patriots was filed in May 2013, shortly after the targeting came to light. It will represent more than 200 groups. In July 2014 Judge Susan Dlott dismissed parts of the lawsuit but allowed key portions to go forward. Those include claims that the IRS engaged in retaliation and viewpoint discrimination in violation of the First Amendment, and that the tax agency violated Section 6103 of the U.S. Code, which protects confidential taxpayer return information.

A class action isn’t our favorite legal method, but it fits this case because it appears the IRS targeted groups based on common criteria and treated them similarly—putting them through unprecedented scrutiny and delay. Judge Dlott, a Bill Clinton appointee, has become frustrated by IRS and Justice Department stonewalling. ...

The law firm representing the tax-exempt groups, Kansas City-based Graves Garrett, will now move on to discovery on the merits, with the ability to ask IRS officials what they did and why. The Obama Administration can appeal the class certification and no doubt it will try. But there’s still plenty of time to find out what Justice and the IRS are so committed to hide.

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January 13, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, January 12, 2016

Ari David Glogower, NYU VAP, To Join Ohio State Tax Faculty

GlogowerAri David Glogower, Acting Assistant Professor of Tax Law at NYU, will join the Ohio State tenure-track tax faculty in August 2016:

Before joining the NYU School of Law faculty, Ari Glogower worked as a tax associate in the New York office of Debevoise & Plimpton, LLP, where he advised on mergers, acquisitions, separations, private equity and joint ventures. Ari also has expertise with the Foreign Account Tax Compliance Act (FATCA) and related taxpayer compliance programs.

Ari received an LL.M. in taxation from NYU School of Law, a J.D. (magna cum laude) from NYU School of Law, and a B.A. (with honors) from Yale University. During law school, Ari was an editor for the Tax Law Review and the NYU Environmental Law Journal. Before law school, Ari taught mathematics in Jackson, Mississippi and founded a tutoring business.

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January 12, 2016 in Legal Education, Scholarship, Tax, Tax Prof Moves | Permalink | Comments (1)

Hillary Clinton Proposes 4% Income Tax Surcharge On Incomes Over $5 Million

Miller:  A Comprehensive Mark-to-Market Tax For The Top 0.1%

David S. Miller (Cadwalader, New York), A Comprehensive Mark-to-Market Tax for the 0.1% Wealthiest and Highest-Earning Taxpayers:

This essay proposes a comprehensive mark-to-market tax for the 0.1% wealthiest and highest-earning taxpayers. Publicly-traded securities would be subject to an annual mark-to-market tax. Nontraded assets would be subject to a “deemed mark-to-market” tax: They would not be subject to tax until sale or other disposition (including gift, donation, or death), but at that time, the taxpayer would be taxed at an amount that would leave the taxpayer with the value he or she would have had if the asset appreciated constantly over its holding period, had been subject annually to a mark-to-market tax, and the taxpayer had sold a portion of the asset each year to pay the tax. Taxpayers would be permitted to annually mark their nontraded assets to market, and deposit an amount of tax based on that valuation. This deposit would accrue at the after-tax yield of the asset for purposes of a credit against the tax due upon a sale. Thus, a taxpayer that reports gain and deposits tax each year based on the ultimate annual yield of an asset would not owe any additional tax with respect to that asset at maturity. Losses would remain on a realization basis, but losses would be deemed to have accrued over the taxpayer’s holding period based on the asset’s yield, could be used to offset deemed gain, and could be carried forward indefinitely.

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January 12, 2016 in Scholarship, Tax | Permalink | Comments (1)

Belgium’s Tax Break to Multinational Companies Is Ruled Illegal

New York Times, Belgium’s Tax Break to Multinational Companies Is Ruled Illegal:

The European Commission said on Monday that a corporate tax break that Belgium granted to at least 35 companies, amounting to total reductions equivalent to about $765 million, was illegal.

The commission, the executive arm of the European Union, did not immediately identify the companies that benefited from the tax break. But one of the companies known to have used the technique is a Belgian subsidiary of the international brewing giant Anheuser-Busch InBev. Although Belgium’s official corporate tax rate is 34 percent, the subsidiary paid a rate of only about 4 percent on annual profit of about 60 million euros, or $65.5 million, in 2013.

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January 12, 2016 in Tax | Permalink | Comments (0)

Tales Of Tax Reform

TalesJ. Roger Mentz (former Assistant Secretary of the Treasury (Tax Policy)), Tales of Tax Reform (2015):

Politicians of all stripes are calling for tax reform. It sounds great: lower the tax rates, get rid of all of the “special interest” provisions, make our tax law simple, fair and an engine for economic growth. Some pundits even suggest that tax reform is “low-hanging fruit” that can easily be accomplished. But is this so? How would we know whether it will be that easy and straightforward? One way of learning about what a legislative tax reform process would entail is to explore what happened in 1986, when fundamental tax reform was enacted by Congress and signed into law by President Reagan. This book investigates how this legislative success was accomplished, and what lessons can be learned for those government officials who seek to enact tax reform today. This book is written by J. Roger Mentz, the Treasury Department Assistant Secretary for Tax Policy from December 1985 through July 1987. Mr. Mentz was the point person for the Reagan Administration on tax reform, which was the number one legislative priority for President Reagan in his second Administration. These “tales” or stories describe what really happened in the tax reform legislative process and what elements would need to come together for a successful reformation of the Internal Revenue Code today.

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January 12, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (3)

Law Schools Have Shed 1,206 Full-Time Faculty (13.3%) Since 2010

Matt Leichter has published the 2015 edition of his Which Law Schools Are Shedding Full-Time Faculty?  Law schools have shed 1,206 full-time faculty (13.3%) since 2010, and 249 full-time faculty (3.1%) since last year.

142 law schools have shed full-time faculty since 2010, with 21 law schools shedding 20 or more full-time faculty:

FULL-TIME FACULTY (FALL)
RANK SCHOOL ’10 ’14 ’15 ANNUAL CHANGE NET CHANGE
1. WMU Cooley 101 49 44 -5 -57
2. Penn State (Dickinson Law) 57 47 19 -28 -38
3. George Washington 106 72 70 -2 -36
4. Florida Coastal 69 36 37 1 -32
5. SUNY Buffalo 54 48 24 -24 -30
5. John Marshall (Chicago) 75 56 45 -11 -30
7. Pacific, McGeorge 63 36 34 -2 -29
8. Vermont 55 26 27 1 -28
9. Hofstra 60 42 34 -8 -26
10. Arizona Summit [Phoenix] 32 15 7 -8 -25
11. Hamline 34 14 10 -4 -24
11. Catholic 56 38 32 -6 -24
11. DePaul 56 39 32 -7 -24
14. Syracuse 60 51 37 -14 -23
14. New York Law School 71 57 48 -9 -23
14. Texas 103 80 80 0 -23
17. Seton Hall 59 38 37 -1 -22
17. California-Berkeley 90 72 68 -4 -22
19. Cleveland State 39 23 19 -4 -20
19. Santa Clara 65 54 45 -9 -20
19. St. Louis 65 46 45 -1 -20

49 law schools have added full-time faculty since 2010, with 13 law schools adding 10 or more full-time faculty:

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January 12, 2016 in Legal Education | Permalink | Comments (15)

Here’s What Happened When A Law School Dean Challenged A U.S. News Ranker

2016 U.S. News RankingsBlake Edwards (Bloomberg BNA), Here’s What Happened When a Law School Dean Challenged a U.S. News Ranker:

On Saturday, at the American Association of Law Schools’ annual meeting in New York, the AALS’s Section for the Law School Dean hosted a panel on law school rankings. There were at least a couple hundred people in attendance. Many in the room, including the moderators, directed their frustration at Robert Morse, Chief Data Strategist for U.S. News.

When the meeting was opened up for questions, Nebraska Law School Dean Susan Poser stepped up to the microphone. “I don’t know anything about schools except the one I went to and the one I’m at now,” Poser said. “How do you justify asking us to rank the prestige of other schools, and how do you justify giving this component such a large weight?”

When Posner finished her question, the crowd broke into eager applause. Morse smiled and waited patiently before defending the rankings.

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January 12, 2016 in Law School Rankings, Legal Education | Permalink | Comments (7)

Death Of Ken Gideon

GideonSkadden, In Memoriam — Kenneth Gideon:

Skadden mourns the death of our friend and partner Ken Gideon, who died January 10. He was 69.

One of the nation's top tax lawyers, Ken brought a rare breadth of expertise to his practice. Initially a corporate attorney, he rose to the highest levels of the tax bar, serving as chief counsel for the Internal Revenue Service and assistant secretary of the Treasury for tax policy before joining our firm in 2000. At Skadden, Ken litigated tax disputes and provided guidance regarding novel transactions and issues relating to tax law and planning, advising clients such as FedEx, Regions Financial Corp. and Transocean in major, precedent-setting victories.

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January 12, 2016 in Obituaries, Tax | Permalink | Comments (3)

Joint Tax Committee Releases List Of Expiring Federal Tax Provisions, 2016-2025

Joint Tax CommitteeThe Joint Committee on Taxation has released its annual List of Expiring Federal Tax Provisions 2016-2025 (JCX-1-16):

This document ... prepared by the staff of the Joint Committee on Taxation, provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2016-2025 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law).

For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at a statutorily specified date, the provision expires completely or reverts to the law in effect before the present-law version of the provision. A suspension or deferral of the effective date of a provision is not considered an expiration. Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year.

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January 12, 2016 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 978

IRS Logo 2Rep. Jim Jordan Press Release, Jordan Questions Justice Department Assistant Attorney General About IRS Scandal:

Congressman Jim Jordan (R-Ohio) questioned Assistant Attorney General Peter Kadzik from the U.S. Department of Justice during a hearing today before the House Committee on Oversight and Government Reform about the rate and quality of document production by federal agencies, and about the IRS targeting scandal.

Rep. Jordan questioned Kadzik about Justice Department delays in delivering requested documents to the Oversight committee, and also about the Justice Department’s investigation of the IRS and its decision to not prosecute anyone for its targeting of conservative organizations.

During his questioning, Rep. Jordan expressed frustration over the Justice Department’s failure to provide documents to the Oversight committee, even though the department’s investigation of the IRS has concluded. The Justice Department refused to provide case files related to its investigation, instead pointing to a congressional briefing on the subject planned for next week.

Rep. Jordan: “We … sent you a letter on December 1, the Chairman and I, and we requested in that letter all documents that pertain to the [IRS] investigation and we have yet to receive a single document. Why is that?” 

Kadzik: “We also received your letter yesterday requesting the file.” 

Jordan: “That’s a follow-up letter. We sent the first letter over a month ago.”

Kadzik: I understand, but producing an entire investigation or prosecution file presents particular issues with respect to our law enforcement sensitivities and prosecutorial responsibilities.”

Jordan: “We’ve heard that for three-and-a-half years. I’ve had two different FBI directors, I’ve had Mr. Holder, assistant Attorney General Mr. Cole, give me that exact same answer for three-and-a-half years. And their answer added one other word: ‘ongoing’ investigation. And now the investigation is over. And it’s been over at least since October 23 according to what you just testified and according to the eight-page letter you sent us on October 23. And now you’re telling us you can’t give us any documents and you’re just giving us the same answer?”

Federal News Radio, Oversight Committee Critical of Agencies’ Effort to Fill Document Requests:

How many people with visas have overstayed their time in the United States? What information was included in more than 10,000 files related to the Office of Personnel Management data breach? Is there a paper trail leading to the decision not to pursue criminal charges against IRS officials for targeting conservative groups?

Those are questions members of the House Committee on Oversight and Government Reform have been asking — in some cases — for more than a year, but a lack of documentation from federal agencies have prevented complete answers from being given.

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January 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, January 11, 2016

Baylor Seeks To Hire A Tax Prof

BaylorBaylor Law School is seeking to fill a tenure-track tax faculty position as an Assistant Professor:

RESPONSIBILITIES:
1. Teach courses in the areas of basic tax principles, taxation of business entities (partnerships and corporations) and advanced business topics, such as finance and investment structures. ...

SUBMISSION DEADLINE: Applications will be reviewed beginning January 29, 2016 and will be accepted until the position is filled. To ensure full consideration, complete applications must be submitted by February 28, 2016.

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January 11, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

ACTEC Issues Request For Proposals For $20k Grant To Host T&E Symposium

ACTECThe Legal Education Committee of the American College of Trust and Estate Counsel (ACTEC) requests proposals for a $20,000 grant to host an academic symposium on trust and estate law during the 2017-18 academic year:

The ACTEC Foundation Symposium is intended to be the premier academic symposium on trust and estate law in the United States. The goals of the symposium are to stimulate development of scholarly work in trust and estate law, bridge the gap between the academic community and practitioners, provide opportunities for junior academics to present papers and interact with more senior academics, provide an opportunity for trust and estate professors to interact with each other, involve academics from other disciplines in discussions of trust and estate topics, and strengthen ACTEC’s image as the leading organization for trust and estate lawyers, both practitioners and academics.

The grant associated with this RFP is contingent on approval by the ACTEC Foundation.

RFPs are due by Monday, May 2, 2016, and will be considered by the Symposium Subcommittee of the ACTEC Legal Education Committee at ACTEC’s Summer Meeting in Boston, Massachusetts, in June 2016. Please submit RFPs (RFP content and guidelines are set forth below) to:

Nancy A. McLaughlin
Professor of Law, University of Utah SJ Quinney College of Law
Co-Chair, ACTEC Legal Education Committee
nancy.mclaughlin@law.utah.edu

Electronic submissions are fine (subject line of email should read “ACTEC Symposium RFP”).

I. RFP Content

The RFP should provide the following information.

A. Theme. The theme of the symposium should be related to trust and estate law, defined to include any topic related to the gratuitous transfer of property (e.g., probate law, trust law, elder law, transfer tax law). A broad theme permits a wide range of papers and is more likely to be successful. Past themes have included Trust Law in the 21st Century (Cardozo 2005); Inheritance Law in the 21st Century (UCLA 2008); Philanthropy Law in the 21st Century (Chicago-Kent 2009); The Uniform Probate Code: Remaking of American Succession Law (Michigan 2011); and The Role of Federal Law in Private Wealth Transfer (Vanderbilt 2014). The theme of the most recent symposium, which took place at Boston College Law School in October 2015, was The Centennial of the Estate Tax: Perspectives and Recommendations (articles will be published in the Boston College Law Review May 2016 symposium edition).

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

The Great Clinton-Sanders Tax Divide

Hillary BernieThe Atlantic, The Great Clinton-Sanders Tax Divide:

On Thursday Hillary Clinton released the much-anticipated details of her paid family-leave plan, and those details are further evidence of a stark divide between her and Bernie Sanders on the topic of taxes. The candidates agree on a lot of things, but on taxes Clinton’s and Sanders’s positions represent markedly different visions of society.

The gulf between the two Democrats on taxes is perhaps most evident in the debate over paid family leave. Sanders supports the FAMILY Act, which would require employees and employers to each contribute just 0.2 percent of wages, an average of roughly $2 per person, per week. Only wages up to $113,700 would be taxed, meaning the maximum contribution possible—even for the highest earners—would be $227.40 per year. Clinton, on the other hand, would rely on increased taxes on only the wealthiest Americans to fund paid leave. According to her campaign website, “American families need paid leave, and to get there, Hillary will ask the wealthiest Americans to pay their fair share. She’ll ensure that the plan is fully paid for by a combination of tax reforms impacting the most fortunate.”...

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January 11, 2016 in Political News, Tax | Permalink | Comments (0)

Symposium On Law School Survival

January 11, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

Schizer Named President Of America’s Voices In Israel

Schizer (2016)The Jewish Press, Columbia Law School's Former Dean to Head America's Voices in Israel:

America’s Voices in Israel (AVI), founded by Malcolm Hoenlein, has appointed David Schizer, the Dean Emeritus of Columbia Law School, as its new President. AVI organizes week-long missions to the Jewish State, which have been attended by prominent headline-makers, including leading journalists, prime-time media and Hollywood TV stars, as well as religious and political leaders in the Latino and African- American communities. Participants have described these missions as “fascinating” and even “life-changing,” while the Israeli government has also recognized the value of these trips. During the course of AVI’s week-long treks, visitors meet with a wide variety of politicians and academics. They offer a broad range of perspectives, since these missions are non-partisan.

“America’s Voices in Israel plays a vital role in educating prominent Americans about Israel,” Professor Schizer said. “Once they visit this remarkable country, they develop a more informed and sophisticated understanding of the extraordinary promise, as well as the complex challenges, that define life in Israel today. AVI provides new visitors with a once-in-a-lifetime opportunity. I am honored to be involved.”

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January 11, 2016 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Smith:  How Bad Tax Policy Helped Kill Mike Brown

Smith (2015)TaxProf Blog op-ed:   How Bad Tax Policies Helped Kill Mike Brown, How “Starving the Beast” Created the Black Lives Matter Movement, by Andre L. Smith (Widener-Delaware):*

Hyper-aggressive enforcement of municipal codes for the purpose of collecting more fees from poor, predominately black people in places like Ferguson, Missouri, stems fairly directly from insufficient tax revenue on the federal, state and local level. In a very real sense, bad tax policy spawned the Black Lives Matter Movement. Researchers from the Institute of Policy Studies, Bob Lord and Karen Dolan, make the connection in Will Any Presidential Candidate Connect Federal Tax Policy and Police Killings?

“Starving the Beast” as some conservatives have called it is designed to reduce the size of government by depriving those institutions of revenue they need to implement well-functioning school systems and social programs. Bad for poor people, obviously, reducing the size of government helps give well-to-do people a greater advantage in society in at least two ways, by saving them tax dollars as well as giving their privately educated kids a greater advantage over those who rely on public schooling. The wealthy can get along just fine in the short run without anti-poverty programs and other governmental services, except that in the long run all of us have will have to deal with declining domestic tranquility.

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January 11, 2016 in Tax | Permalink | Comments (7)

A Framework for Thinking About Law School Affordability

AGAccess Group:  A Framework for Thinking About Law School Affordability, by Sandy Baum (George Washington):

Rapid rises in tuition, dramatic growth in average debt levels in recent years, and a weakening of the job market for lawyers all raise questions about whether and for whom going to law school is a sound financial decision. Regardless of their motivation for studying law, people enroll expecting to be able to live at a higher standard of living than would have been possible without this education, even after repaying the debt they incur. Understanding what makes law school “affordable” for students in different circumstances requires thinking about how well the investment in this professional training pays off.

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January 11, 2016 in Legal Education | Permalink | Comments (4)

Many Law Students Are Hiding Depression, Drug And Alcohol Use

BE-Dec2015-AbridgedBloomberg Business, Study: Future Lawyers Are Hiding Depression and Drug and Alcohol Use:

Some law students fear that getting help for addiction and mental health problems will hurt their chances of becoming lawyers.

Some of America’s future lawyers are hiding drug, alcohol, and depression problems instead of seeking help, a new report shows [Helping Law Students Get the Help They Need: An Analysis of Data Regarding Law Students' Reluctance to Seek Help and Policy Recommendations For a Variety of Stakeholders]. Law students with addiction and mental health issues may be afraid to report the problems because they think that doing so would jeopardize their chances of being admitted to the bar or getting a good job after graduating, according to the study, which was conducted by a law professor, a dean of law students, and the programming director of a nonprofit focused on lawyers' mental health. It was published last month in the Bar Examiner, an industry magazine.

“Students who probably need to seek help are profoundly reluctant to, because they don’t perceive seeking help as being beneficial to their bar admission process,” said Jerome Organ, a law professor at the University of St. Thomas in Minnesota and one of the report’s authors. Organ suggested that the effect of untreated addiction or depression in lawyers could affect their ability to serve clients. “If I am dealing with mental health issues that are untreated, and I am not taking care of myself, I’m probably not going to be able to take care of someone else well.”

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January 11, 2016 in Legal Education | Permalink | Comments (5)

The IRS Scandal, Day 977

IRS Logo 2Government Executive, Lawmaker: Every Agency Could Easily Find at Least 5% of Fat to Trim:

The top oversight role for Congress in relation to federal agencies is rooting out the people doing dumb things, a House Republican said on Thursday.

Rep. Jason Chaffetz, R-Utah, chairman of the House Oversight and Government Reform Committee, said at an event hosted by the Brookings Institution the government tries to do too many things while rewarding its employees with too many bonuses. ...

He noted that several agency leaders have testified to his committee that they are struggling to fire their worst employees and would like more power to do so.

For one federal official, Chaffetz is attempting to take the firing into his own hands. The watchdog leader introduced articles of impeachment against Internal Revenue Service Commissioner John Koskinen in October, and has been working “behind the scenes” to move that process forward.

“Mr. Koskinen better lawyer up,” Chaffetz said. “It’s about to get ugly.”

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January 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, January 10, 2016

Law Firms Risk Obsolescence By Following Kodak's Path

KodakNew York Times: Law Firms Risking Obsolescence, Report Says, by Elizabeth Olson:

As the legal industry faces sluggish demand for services, weakened pricing power and falling productivity, a new report is warning that the country’s law firms are failing to make “bold, proactive changes.”

The report, compiled annually by the Center for the Study of the Legal Profession at the Georgetown University Law Center, said that firms needed to overcome resistance to change and even shake up the partnership structure if they are to thrive. Comparing the situation to the Eastman Kodak Company’s refusal to face major changes in the photography industry, the report found that the legal industry was ignoring recent transformations in its marketplace, at its peril.

Georgetown Law Center for the Study of the Legal Profession, 2016 Report on the State of the Legal Market:

Chart 1

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January 10, 2016 in Legal Education | Permalink | Comments (6)

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 #3:

  1. [293 Downloads]  The Three Causes of Inversions: Reflections on Pfizer/Allergan and Notice 2015-79, by Reuven Avi-Yonah (Michigan)
  2. [173 Downloads]  The Effect of Profit Shifting on the Corporate Tax Base in the United States and Beyond, by Kimberly A. Clausing (Reed College)
  3. [169 Downloads]  Conservation Easements and the Valuation Conundrum, by Nancy A. McLaughlin (Utah)
  4. [153 Downloads]  Transfer Pricing Challenges in the Cloud, by Orly Mazur (SMU)
  5. [104 Downloads]  Are Corporate Inversions Good for Shareholders?, by Anton Babkin (Wisconsin), Brent Glover (Carnegie Mellon) & Oliver Levine (Wisconsin)

January 10, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Job Prospects Are Bleak For Most Humanities PhDs, But Demand For Economists Is Surging

Inside Higher Ed, Humanities Job Woes:

Market looks tight and getting worse for job seekers in English, foreign languages, history and philosophy. But a major social science field -- economics -- is doing a lot of hiring. 

Business Insider, There Are a Lot of Job Openings for Economists with PhDs:

There were about 3,309 job openings for economists in 2015, an increase of 258 openings from the year before.

Econ 2

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January 10, 2016 | Permalink | Comments (0)

The IRS Scandal, Day 976

IRS Logo 2Boston Herald: Citizens Are No Longer Equal Under Obama, by Adriana Cohen:

Disgraced former IRS chief Lois Lerner is enjoying her “Get Out of Jail Free” card care of the Obama administration.

Who’s surprised she won’t face charges given the fact that most Americans believe the White House was in on allegations the IRS targeted Tea Party and conservative groups 
applying for nonprofit status?

It gets worse. During the “investigation,” IRS head John Koskinen stonewalled big time, refusing to provide Congress with information including Lerner’s “missing” emails. Sound 
familiar?

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

Saturday, January 9, 2016

This Week's Ten Most Popular TaxProf Blog Posts

This Lawsuit Could Destroy America’s Worst Law Schools

Thomas Jefferson Logo (2015)Following up on my recent posts (links below):  

Wall Street Journal Law Blog, Law School Accused of Duping Students to Face Trial:

Judges haven’t looked too kindly at lawsuits brought by disgruntled former law-school students accusing their alma maters of deceptive marketing. Of the more than a dozen complaints accusing schools of misrepresenting their post-graduation employment data, most have been thrown out of court.

But at least one is headed for trial.

A California judge in San Diego ruled that false-advertising claims made against Thomas Jefferson School of Law by four former students are strong enough to get the plaintiffs their day in court.

The struggling, debt-burdened graduates sued Thomas Jefferson in 2011, claiming that the private law school in San Diego lured them with phony data about the employment outcomes of their graduates and demanding restitution.

Thomas Jefferson defended its data and argued that the plaintiffs were exaggerating the degree to which the former students relied on the job figures when they were deciding whether to enroll. Lawyers for the law school noted that the students didn’t have a lot of choice about where to go to law school since Thomas Jefferson was the only one that accepted them.

Superior Court Judge Joel M. Pressman, who issued the ruling, rejected that argument. “[T]he fact that TJSL was the only school accepting plaintiffs does not render the employment statistics immaterial. Plaintiffs still had a choice in accepting and attending TJSL,” he wrote in a decision handed down just before the New Year.

Daily Caller, This Lawsuit Could Destroy America’s Worst Law Schools:

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January 9, 2016 in Legal Education | Permalink | Comments (17)

Today's AALS Annual Meeting Tax Highlights

AALS (2017)Today's tax highlights at the 2016 AALS Annual Meeting in New York:

Section on Nonprofit and Philanthropy Law Program
The Philanthropic Sector and Radical Reform

Reforming the philanthropic sector is always in the news. Most legal proposals, however, are incremental in nature and attempt to fix one discrete problem at a time (for example, proposals to cap the value of the charitable deduction or limit deductions for conservation easements and car donations). This panel will discuss what radically reforming the philanthropic sector might look like, both legally and in practice. What is the role of the sector and what does it mean for it to be more effective? Should the standards for tax exemption be stricter? Should foundations, donor advised funds, or endowments be subject to increased payout requirements and limited life spans? How should donors and foundation managers allocate resources and prioritize projects? How do the limits on international giving affect the sector’s impact? Would any other large-scale structural changes enhance the sector?

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January 9, 2016 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 975

IRS Logo 2Joe Kristan (Tax Update Blog), Taxpayer Advocate: Koskinen Demoralizes IRS, IRS Breaks Law. Koskinen Replies: Give Me More Money!:

It’s getting bad when the IRS won’t even talk to its own Taxpayer Advocate. Nina Olson, the head of the IRS Taxpayer Advocate office, ripped the state of the IRS and Commissioner Koskinen’s management in a speech to the AICPA annual tax conference yesterday, Tax Analysts reports  (my emphasis, $link):

Olson said that IRS Commissioner John Koskinen’s oft-repeated mantra — that instead of doing more with less in budget-constrained times, the agency was going to do less with less — was demoralizing the IRS workforce and further eroding customer service.

“What my local taxpayer advocates are telling me is that they have never seen so much resistance to their own work” from the IRS, Olson said. She recounted the story of a local TAS employee who asked the IRS in October to release a taxpayer’s refund that had been held up since February. “The response that [TAS] got back was . . . ‘We have thousands of these cases; get in line,’” Olson said, adding that it was the first time she’d heard such a response from the IRS in her 15 years at the TAS.

The feeling at the IRS that there are some jobs it won’t do because Congress didn’t provide funding, Olson said, “works its way down to the employees, so that they feel like, ‘Well, I’m going to do just this, and I’ve got so much work that I’m only going to be able to get this done.'” ...

Ms. Olson says the IRS mistreatment of the TAS office has risen to the level of lawbreaking:

Olson also protested that the IRS is refusing to grant her and her staff access to taxpayers’ administrative files unless they sign agreements barring them from sharing any of the files’ information, even with the taxpayer. Olson noted that she is bound by the same privacy laws as other IRS employees and said she is entitled to access under section 6103.

“My position is that the IRS in those instances has violated the law,” Olson said. “And I do not say that lightly.”

You have problems with the IRS breaking the law? Well, to coin a phrase, get in line.

Commissioner Koskinen responded later in a speech to the same group, in which he did what he always does: ask for more money. “Most of Koskinen’s prepared remarks at the conference were a repeat of his concerns about the IRS’s deteriorating budget position.”

But this Commissioner will never get a budget increase out of this Congress. His glib, arrogant and obstructionist response to the Tea Party scandal, full of denials of the existence of information that subsequently surfaced, has destroyed his credibility. There’s no hope that the IRS will get improved funding as long as he is around to spend it.

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January 9, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, January 8, 2016

Blank & Osofsky Present Simplexity And The Tax Law Today At Florida

BOJoshua Blank (NYU) and Leigh Osofsky (Miami) present Simplexity and the Tax Law at Florida today as part of its Tax Colloquium Series hosted by Yariv Brauner:

In recent years, federal government agencies have increasingly attempted to use plain language in written communications with the public. The Plain Writing Act of 2010, for instance, requires agencies to incorporate “clear and simple” explanations of rules and regulations into their official publications. In the tax context, as part of its “customer service” mission, the Internal Revenue Service bears a “duty to explain” the tax law to hundreds of millions of taxpayers who file tax returns each year. Proponents of the plain language movement have heralded this form of communication as leading to simplicity in tax compliance, more equitable access to federal programs and increased open government.

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January 8, 2016 in IRS News, Tax | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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January 8, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

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January 8, 2016 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Tax Section Program At AALS Annual Meeting

AALS (2017)Today's highlight at the 2016 AALS Annual Meeting in New York:

Section of Taxation Program
Advising Taxpayers in the 21st Century: Ethical Challenges

Fundamental ethical principles do not generally change, but the context in which tax advisers must assess their duties does. Changes in the business, economic and political world pose challenges for tax advisers who must interpret their ethical duties and obligations in new circumstances. In the second decade of the 21st century we see: (1) tremendous internationalization of business (a taxpayer need not be a multinational to engage in cross border commerce); (2) backoffice functions regularly performed offshore; (3) increasing audit activity outside the U.S.; (4) global focus on information sharing and disclosure; (5) new interest in whistleblowing; (6) the rise of social media; (7) increasing interest by bar associations in pro bono obligations; and (7) and the growing role of electronic technology. These developments generate broader questions regarding: (1) the risks and benefits of advances in technology and communication; (2) how to advise clients in the face of increasing disclosure and reporting requirements; (3) the implications of a multinational legal practice; (4) the tensions at play in tax planning, minimization, and avoidance; and (5) ethical obligations to foreign jurisdictions. Drawing upon a range of experiences and perspectives, this panel will explore the pressing ethical challenges facing the contemporary tax adviser.

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January 8, 2016 in Conferences, Legal Education, Tax | Permalink | Comments (0)

Only 1/3 Of Law Students Pay Full Tuition

Matt Leichter, Full-Time Students Paying Full Tuition Fell ~5 Percentage Points in 2014:

Once upon a time, more than half of law students at the typical law school paid full tuition. ... Now, only about a third of law students at the average law school pay full tuition. ...

 Chart 3

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January 8, 2016 in Legal Education | Permalink | Comments (3)

The New Yorker:  The Inversion Train

New Yorker (2014)The New Yorker, Why Firms Are Fleeing:

The biggest corporate deal of 2015 was also, in the view of many, the shadiest: Pfizer’s $160-billion merger with the Irish drug company Allergan. It’s a “tax inversion”—Pfizer will in effect be reconstituting itself as an Irish company, in order to lower its taxes—and that’s why so many people found it so offensive. Hillary Clinton said that ending inversions wasn’t just about fairness but about “patriotism”; Donald Trump called the deal “disgusting.” It’s got to make you wonder when even Trump finds your moneymaking schemes repugnant.

Meanwhile, the inversion train seems only to be picking up speed. Such deals were once exceedingly rare—according to the Congressional Research Service, there was just one in the nineteen-eighties—but there have been more than fifty in the past decade, most since 2009. Although in the past couple of years both the Treasury Department and the I.R.S. have issued new rules designed to make inversions more difficult, the trend continued apace in 2015. It’s a predictable, if dismaying response both to the current U.S. tax code and to the changing nature of big corporations.

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January 8, 2016 in Tax | Permalink | Comments (1)

WSJ:  What Happens After You Beat The IRS In An Audit?

NTAWall Street Journal, What Happens After You Beat the IRS in an Audit:

Getting audited by the Internal Revenue Service—and losing—is devastating. You have to pay more in taxes, and, perhaps scared of a repeat defeat, you’re likely to report much more income in future years.

Once bitten, twice shy.

But getting audited by the IRS and winning the fight with the taxman is a completely different experience, according to a study released this week by the IRS’s National Taxpayer Advocate. Self-employed taxpayers who got audited and came out unscathed reported less income in future years, an average of 35% lower three years after the audit, the study says. Having learned where the edge is, they seem to skate closer to it.

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January 8, 2016 in Tax | Permalink | Comments (1)

The IRS Scandal, Day 974

IRS Logo 2Wall Street Journal editorial, An IRS Retreat on Charity: The Agency Pulls its Proposal to Sweep Up Small-Donor Records:

It’s not every day we can celebrate a less intrusive Internal Revenue Service. But charities and the people who support them will be happy to learn that the IRS has withdrawn its proposal to collect more donor information, including Social Security numbers.

In September the IRS and Treasury Department proposed to give charities the “option” of filing detailed reports on everyone who contributes more than $250 to a charity. The IRS was calling it “voluntary,” which in government means the agency hasn’t gotten around to requiring it yet. We reported on the legitimate fear that new reporting would be required of every nonprofit—including the conservative organizations that the IRS helped muzzle in the 2012 presidential election. [More here, here, here, and here.]

Amazingly enough, in this case the IRS appears to have listened to concerns from the taxpayers who pay their salaries. On Thursday the IRS said it is withdrawing its proposal after receiving “a substantial number of public comments.” Many of the comments “questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers for purposes of the specific-use information return,” said the IRS. The legitimate anger of average citizens was amplified by stalwart IRS watchdogs like Rep. Jim Jordan (R., Ohio) on Capitol Hill.

One year after Republicans took control of the Congress, and one year before President Obama leaves the White House, the pendulum is beginning to swing against IRS abuse of taxpayers. Coming on the heels of other reforms in the year-end tax and spending bills—including a ban on new IRS rules limiting political activity—Thursday’s news is reason to cheer.

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January 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, January 7, 2016

Chodorow:  Taxes Are The Biggest Threat To Bitcoin (And Other Virtual Currencies)

BitcoinThe Conversation:  Quest to Find Bitcoin’s Founder Highlights Currency’s Biggest Threat: The Taxman, by Adam Chodorow (Arizona State):

[H]ow will [bitcoin and other virtual currencies be treated for tax purposes? This is a question I have been exploring for the last decade, both with regard to virtual currencies designed to be used solely online, such as for World of Warcraft, and those designed for use in the real world, such as bitcoin. [Ability to Pay and the Taxation of Virtual Income, 75 Tenn. L. Rev. 695 (2008); Tracing Basis Through Virtual Spaces, 95 Cornell L. Rev. 283 (2010); Death and Taxes and Zombies, 98 Iowa L. Rev. 1207 (2013); Death and Taxes: What It Would Mean for the IRS If Scientists Defeat Mortality (2015); Should Martians Pay U.S. Taxes? (2015).]

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January 7, 2016 in Tax | Permalink | Comments (0)

The Triumph Of Email: 'The Best Thing You Can Do Is Destroy It Quickly, As If Every Email Were A Rabid Bat Attacking Your Face'

AtlanticThe Atlantic, The Triumph of Email: Why Does One of the World’s Most Reviled Technologies Keep Winning?:

Email, ughhhh. There is too much of it, and the wrong kind of it, from the wrong people. When people aren’t hating their inboxes out loud, they are quietly emailing to say that they’re sorry for replying so late, and for all the typos, and for missing your earlier note, and for forgetting to turn off auto-reply, and for sending this from their mobile device, and for writing too long, and for bothering you at all.

For an activity that’s so mundane, email seems to be infused with an extraordinary amount of dread and guilt. Several studies have linked frequent email-checking with higher levels of anxiety. One study found that constant email-checkers also had heart activity that suggested higher levels of cortisol, a hormone associated with stress—until they were banned from their inboxes.

In the mobile Internet age, checking email is simultaneously a nervous tic and, for many workers, a tether to the office. A person’s email inbox is where forgotten passwords are revived; where mass-mailings are collected; and where pumpkin-pie recipes, toddler photos, and absurd one-liners are shared. The inbox, then, is a place of convergence: for junk, for work, for advertising, and still sometimes for informal, intimate correspondence. Email works just the way it’s supposed to, and better than it used to, but people seem to hate it more than ever.

Over the course of about half a century, email went from being obscure and specialized, to mega-popular and beloved, to derided and barely tolerated. With email’s reputation now cratering, service providers offer tools to help you hit “inbox zero,” while startups promise to kill email altogether. It’s even become fashionable in tech circles to brag about how little a person uses email anymore.

Email wasn’t always like this. We weren’t always like this. What happened? ...

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January 7, 2016 in Legal Education, Tax | Permalink | Comments (1)