TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

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Saturday, June 21, 2014

The Unexpected Ceasefire in Washington’s Tax Wars

New York Times:  The Unexpected Ceasefire in Washington’s Tax Wars, by John Harwood:

[I]n the wake of the “fiscal cliff” deal between President Obama and Congress as 2012 turned into 2013, which restored the Clinton-era top rate, Washington has hit the pause button. 

“We’ve reached sort of a stasis,” said Senator Charles Schumer of New York, a Democrat who serves on the Finance Committee. “No one’s totally content with it, but they’re willing to let it lay there.”

The reasons are partly practical. The fiscal cliff deal materialized only because the looming expiration of all President Bush’s tax cuts forced Congress to act. House Republicans can block any new Democratic effort to raise rates; President Obama can veto any Republican effort to cut them.

But philosophical shifts have also played a role. In the Tea Party era, Mr. Norquist said, concern about debt and deficits has given spending reduction a “coequal” place with tax-cutting in Republican economic theology.

Increasing attention to income inequality has also sent some party intellectuals looking away from supply-siders’ longstanding focus on cutting marginal tax rates. “Having substantially cut top tax rates in the 1980s, our potential gains from fighting on the tax rate battlefield are now diminished,” read the tax chapter in Room to Grow, a recent report by the conservative Young Guns Network.

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June 21, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 408

IRS Logo 2

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June 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 20, 2014

Weekly Tax Roundup

 Weekly Roundup

June 20, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Roundup

June 20, 2014 in Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

June 20, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill concludes today with these papers as part of its Research Collaboration Symposium Part II:

Panel #6:  Reducing Inequality: Tax Avoidance and Capital Flight

  • Ofer Sitbon (PhD Candidate, College of Law & Business, Tel Aviv), Moderator
  • James Henry (Tax Justice Network), Kleptocracy and Human Rights
  • Stephen Cohen (Professor, Georgetown University), Does Swiss Bank Secrecy Violate International Human Rights?
  • Brigitte Alepin (Partner, Agora Fiscalité), The Foundation
  • Steven Dean (Professor, Brooklyn Law School), A Tax Regime to Catalyze Social Enterprise Crowdfunding
  • Lee Sheppard (Journalist, Tax Analysts) and John Christensen (Director, Tax Justice Network), Discussants

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June 20, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Caron Presents Law Professor Blogs Network 2.0: One Year Later Today at Harvard

I am presenting The Law Professor Blogs Network 2.0: One Year Later at Harvard Law School today as part of the 24th Annual Conference for Law School Computing:

LPBN LogoThe Law Professor Blogs Network is the nation's only network of legal blogs edited primarily by law professors. The network owns and operates over fifty legal blogs, edited by leading scholars and teachers who are committed to providing the web destination for law professors, practitioners, government and nonprofit lawyers, legal information professionals, and students in their respective fields. Since the launch of TaxProf Blog on April 15, 2004, the network’s influence has continued to grow. At last year's CALI Conference, I unveiled a major re-design of the network, intended to provide the premier legal blogging platform to our editors. The re-design was intended to (1) optimize each blog for viewing across a variety of platforms (desktop, laptop, tablet, and smart phone); (2) better integrate social media; (3) provide more robust analytics with richer and more accurate readership data; and (4) strengthen our partnership with Wolters Kluwer Law & Business/Aspen Publishers and provide additional avenues for monetization. This presentation will explore the progress that the network has made toward these goals over the past year and explain planned future innovations.  In addition, I will argue that blogs and social media can play a meaningful role in developing a faculty member's scholarly "brand" and that current primitive methods for ranking faculty scholarship -- reputation, publications, citations, and downloads -- need to be augmented by more sophisticated faculty performance analytics in the coming "big data" revolution. 

Update:  Enjoying a post-presentation dinner in Harvard Square with Jim Smith (Georgia), Jennifer Martin (St. Thomas), Jeff Lipshaw (Suffolk), and Mark Heffner (Roger Williams):

Photo

June 20, 2014 in Conferences, Legal Education, Scholarship | Permalink | Comments (0)

Brophy: Law School Rankings: Median LSAT, Full-Time J.D. Required Jobs, and Law Review Citations

Alfred L. Brophy (North Carolina), Ranking Law Schools with Lsats, Employment Outcomes, and Law Review Citations:

This paper returns to the perennially favorite topic of ranking law schools. Where U.S. News & World Report includes a wide variety of factors – some of which are criticized as irrelevant to what prospective students care about (or should care about) -- this paper looks to three variables. They are median LSAT score of entering students, which seeks to capture the quality of the student body; the percentage of the graduating students who are employed at 9 months following graduation at full-time, JD required jobs; and the number of citations to each school’s main law review. This paper rank orders each of those variables, then averages those ranks to obtain a new ranking; then it compares those new rankings to the U.S. News & World Report rankings.

Brophy

Alfred L. Brophy (North Carolina):  Ranking Law Schools Based on LSAT, Employment Outcome, and Citations

June 20, 2014 in Law School Rankings, Legal Education | Permalink | Comments (10)

ABA Approves Separation of Penn State-Dickinson Into Two Separate Law Schools

Penn State Logo (2013)The ABA yesterday approved the separation of Penn State-Dickinson into two independent law schools.

June 20, 2014 in Legal Education | Permalink | Comments (0)

NALP: Law Grads Continue to Struggle to Find Jobs

NALP New LogoNALP, For Second Year in a Row New Grads Find More Jobs, Starting Salaries Rise — But Overall Unemployment Rate Rises with Historically Large Graduating Class

Despite two years of growth in the number of jobs obtained by law school graduates, the overall employment rate for new law school graduates fell for the sixth year in a row, to 84.5%. Even though the total number of jobs obtainedby this class was somewhat higher than the number of jobs obtained by the previous class, and the number of employment opportunities funded by law schools increased, the Class of 2013 was also bigger, resulting in the employment rate for the Class of 2013 falling, but by just 0.2 percentage points from the 84.7% rate for the Class of 2012.

NALP 1

NALP 2

June 20, 2014 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 407

IRS Logo 2

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June 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, June 19, 2014

Florida State Symposium: One-Hundred Years of the Federal Income Tax

Florida State logoSymposium, One-Hundred Years of the Federal Income Tax, 41 Fla. St. U. L. Rev. 1-289 (2013):

June 19, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Rosenzweig: An Antigua Gambling Model for the International Tax Regime

Adam Rosenzweig (Washington University), An Antigua Gambling Model for the International Tax Regime, 44 Wash. U. J.L. & Pol'y 79 (2014):

The international tax world is facing a defining moment. While there is little agreement on anything within the field, there appears to be a growing consensus that the modern international tax regime — the so-called flawed miracle emerging from World War II — is irrevocably broken. As the countries of the world confront the challenges facing the international tax regime in the next century, new models for an institutional framework for international tax become increasingly crucial to its success. While significant progress has been made in developing underlying norms to serve as the basis for a modern international tax regime, less focus has been paid to building the institutions and structures necessary to implement these norms. To this end, this Essay proposes looking to the recent experience of the WTO in the Antigua Gambling case as a model for a new institutional framework for the new international tax regime. The Essay then proposes three potential ways to do so: (1) the creditable gross-withholding tax method, (2) the extraterritorial excise tax method, and (3) the WTO cross-retaliation method.

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June 19, 2014 in Scholarship, Tax | Permalink | Comments (0)

George & Yoon: The Labor Market for New Law Professors

Tracey E. George (Vanderbilt) & Albert Yoon (Toronto), The Labor Market for New Law Professors, 11 J. Empirical Legal Stud. 1 (2014) (more here):

Law school professors control the production of lawyers and influence the evolution of law. Understanding who is hired as a tenure-track law professor is of clear importance to debates about the state of legal education in the United States. But while opinions abound on the law school hiring process, little is empirically known about what explains success in the market for law professors. Using a unique and extensive data set of survey responses from candidates in the 2007-2008 legal academic labor market, we examine the factors that influence which candidates are interviewed and ultimately hired by law schools. We find that law schools appear open to non-traditional candidates in the early phases of the hiring process but when it comes to the ultimate decision — hiring — they focus on candidates who look like current law professors.

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June 19, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

IRS-TPC Research Conference: Advancing Tax Administration

TPC-IRSThe IRS and Tax Policy Center are hosting a research conference today on Advancing Tax Administration with these presentations and papers (webcast):

Opening

  • Welcome:  Eric Toder (Co-Director, Tax Policy Center), Rosemary Marcuss (Director, Office of Research, Analysis & Statistics, IRS)
  • Opening Remarks:  John Koskinen (Commissioner, IRS)

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June 19, 2014 in Conferences, Tax | Permalink | Comments (0)

Off to the CALI Conference at Harvard

CALI 2I am spending the next three days at the 24th Annual Conference for Law School Computing at Harvard Law School. The theme of this year's conference is "The Next Wave":

CALI has been around for over 30 years. In that time, it has pioneered technology in legal education and in applications that improve access to justice and has worked with the innovators and early adopters in those fields. And now, excitingly, the next wave is here. Technology isn’t just something for hard core Teknoids. It’s become accessible and accepted in the law school and legal environments.

We know that you need to be looking out for the next wave. Much like waves constantly coming into shore, waves of change are constantly hitting legal education. How you approach them matters. To some people they may feel like tsunamis that are going to destroy everything and their inclination is to run and hide from them. Some people are going to hold fast and then be gradually eroded away and altered by the constant wave action. And some people are going to want to swim out to meet the waves and ride in on them on a surf board.

I will be attending many of the wonderful sessions, as well as a meeting of the CALI Board of Directors (on which I serve as President).  CALI is doing important work on a variety of projects for faculty, including A2J Author, Classcaster, eLangdell, Free Law Reporter, InstaPoll, Lawdibles, Legal Education Commons, LibTour, MediaNotes, and Webinars and Online Courses, in addition to their bread and butter CALI lessons for students (Jim Maule has produced over 250 tax lessons, which I highly recommend).  In many ways, this is my favorite conference of the year, as it is the only gathering of law school faculty, librarians, and IT folks.  I am looking forward to reconnecting and breaking bread with friends in all three spheres.

June 19, 2014 in Conferences, Legal Education | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill continues today with these papers as part of its Research Collaboration Symposium Part I:

Panel #1:  Setting the Stage

  • William Stephenson (Editor in Chief, McGill Law Journal), Moderator
  • Kim Brooks (Dean, Schulich School of Law, Dalhousie University), Why Justice Matters for Tax Policy
  • Ignacio Saiz (Executive Director, Center for Economic and Social Rights), The Evolving Norms and Standards of Human Rights
  • Allison Christians (Professor, McGill Faculty of Law), Who Has Rights, What Rights, and Against Whom?

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June 19, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

5th Annual National Business Law Scholars Conference at Loyola-L.A

Loyola-L.A. Logo (2013)The 5th Annual National Business Law Scholars Conference kicks off today at Loyola-L.A.  The full schedule is here.

June 19, 2014 in Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 406

IRS Logo 2PrawfsBlawg:  IRS: "Sorry, Can't Produce" or a Bad Example of Hiding the Ball?, by Naomi Goodno (Pepperdine):

If this issue arose in federal court, under FRCP 26, parties are required at the outset to submit a "discovery plan" that includes how electronically stored information ("ESI") will be retained and exchanged in order to prevent unnecessary expense and waste. The FRCP requires the parties to take reasonable steps to preserve relevant ESI (a litigation hold) or face possible sanctions. Under Rule 37's so-called safe harbor provision, however, "absent exceptional circumstances, a court may not impose sanctions ... for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system." The IRS is hanging its hat on this safe harbor rule by arguing that, despite a good-faith effort, the emails were lost. Did the IRS, in fact, make a good faith effort?

While there is confusion among the courts on how to apply the good faith standard, there is precedent for a court to monetarily sanction the IRS if the court found that the IRS acted negligently when it lost the emails. The court would also have the authority to issue an adverse inference instruction (inferring that the lost evidence would have negatively impacted the IRS's position), if it determined that the IRS acted grossly negligent or willful.

An important fact which will probably be discussed during the next few hearings is whether the IRS violated its own electronic information retention policy. The IRS was put on notice of the investigation last year, and so had a duty to put a litigation hold on the emails at that time (the very essence of what "good faith" means). It seems that the general IRS retention policy of ESI was six months (although now it is longer), but emails of "official record" had to have a hard copy which would never be deleted. Whether these emails constituted an "official record" is hard to determine since Lerner won't testify to their content.

Even assuming the emails were lost before a litigation hold could be placed (or despite a litigation hold being in place), at the very minimum, it seems "good faith" means that the IRS should have notified Congress in February that it lost the emails. Rule 26 would have required Congress to do so. Indeed, such notice would have brought this issue to the forefront and could have saved a lot of money - the money it apparently has already cost to piece together some of the emails, and the money it will cost as the parties argue over whether the IRS negligently or willfully destroyed evidence. If the IRS had been upfront from the beginning, then subpoenas could have been issued months ago to other agencies who, as employers of the lost email recipients, might have copies of the missing emails.

If this discovery issue had arisen in federal court, the IRS would have likely been subject to monetary sanctions and possibly an adverse inference instruction. Shouldn't the IRS be held to these standards?

The Volokh Conspiracy:  The Missing 18 1/2 Minutes: Presidential Destruction of Incriminating Evidence, by Dave Kopel:

If one can imagine a modern-day President Frank Underwood, the lesson he might draw from the story of the 18 1/2 minute gap is that brazen destruction of highly incriminating evidence is the wisest political strategy. Even when the claim about how the evidence was destroyed was obviously false, there may be enough members of the President’s own party who will continue to look the other way, as long as they are not presented with a smoking gun. President Underwood might remember that Alexander Haig went on to become Secretary of State under Ronald Reagan. President Underwood might also tell the public that, as with Richard Nixon, many of his opponents were cynical partisan zealots. Like the mainstream media, anti-Nixon partisans had paid scant attention when Nixon’s predecessor, Democrat Lyndon Johnson, engaged in many of the same crimes and abuses as did Nixon. By the end of Johnson’s term in 1968, he was getting a lot of criticism from the press and from his own party for the Vietnam War, but not for his domestic violations of the U.S. Constitution and the U.S. Code.

In a two-party system, it is likely that the energy for investigations of a President of one party will come from the other party. Among the heroes of the story are the men like Baker, Richardson, and Ruckelsaus, who at a time when the Constitution was in danger, put the national interest above partisan interest.

Washington Post:  Democrats Should Want a Special Prosecutor for the IRS Scandal, by Ed Rogers:

In light of the Friday announcement that the IRS has lost an “untold” number of e-mails from Lois Lerner and six other IRS employees, it is safe to assume Lerner interrupted her taxpayer-funded retirement to hop on a cocktail table somewhere and do a fistpump. And you can bet there were high-fives at the Justice Department and thinly disguised giggles and thumbs-up at the White House.

The audacity of this takes stonewalling to a whole new level. It used to be that if you wanted to “stonewall,” you would just keep quiet. But this administration’s cronies will plead the fifth, conveniently not find evidence, drag their feet, shrug, cry partisanship and expect people to just get over it. ...

The corrosive effect of this diminishes America’s legal authority and makes for bad politics for the Democrats in November. How can the Democrats defend these “lost” e-mails? Who in a competitive 2014 race can keep a straight face and say they believe this president’s claims? If I were a Democrat, I would take Ways and Means Committee Chairman Dave Camp’s (R-Mich.) good advice and support a special prosecutor. It is the only way for Democrats to put distance between themselves and this grotesque violation of the public trust. 

They say where there’s smoke, there’s fire. Well, this is more than just a little smoke – Washington is choking on it. Democrats should want the political cover of supporting the appointment of a special prosecutor. They will need protection from the guffaws, disgust and outright retribution that will follow this scandal to the ballot box in November.

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June 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, June 18, 2014

Six Underreported Aspects of the Revised ABA Law School Accreditation Standards

Following up on Sunday's post, ABA Releases Revised Law School Accreditation Standards, Protocol for Reporting Placement Data:  Matt Leichter, Top 6 Underreported Changes to the ABA Accreditation Standards:

ABA Logo 2Just about all of the coverage has been on two topics: (a) the council’s decision to disallow course credit for paid externships, and (b) the rule allowing up to 10 percent of a law school’s entering class to forgo the LSAT under certain circumstances. I have nothing to add about the paid externship rule, but the LSAT requirement will be number one on the list. So…

  1. The 10 percent LSAT rule is not open ended
  2. Death to the full-time faculty calculation
  3. Goodbye dusty reporters in the library
  4. Hello office-sharing for professors
  5. No more [university] taxation without documentation
  6. Dishonor before death

June 18, 2014 in Legal Education | Permalink | Comments (0)

The Effect of CEO Narcissism on Corporate Tax Policies

Kari Joseph Olsen (University of Southern California, Marshall School of Business) & James Stekelberg (University of Arizona, Eller College of Management), CEO Narcissism and Corporate Tax Policies:

NarcissismWe examine the effect of CEO narcissism on corporate tax policies. Narcissism is a multifaceted personality trait associated with a propensity to cheat and engage in questionable behavior. Narcissists feel that they are above the law and are aggressive in pursuing what they believe is theirs. Narcissists also take more risks than do others and possess heightened sensitivities to the rewards of risk taking. Consistent with these predictions regarding the behavioral tendencies of narcissistic individuals, we document a positive association between CEO narcissism and various measures of corporate tax avoidance and tax risk. Our study contributes to the literature by documenting a setting in which the individual personality characteristics of the CEO can impact firm-level tax policies.

June 18, 2014 in Scholarship, Tax | Permalink | Comments (1)

2nd National Symposium on Experiential Education in Law

National Law Journal, Legal Educators Plot the Future of Real-World Learning:

AllianceExperiential learning is all the rage in law school, but legal educators are struggling to figure out how best to integrate such real-world training into their curricula and develop closer ties with the profession to advance the trend.

The Alliance for Experiential Learning in Law brought together 150 legal educators from 75 law schools last week to discuss what’s taking place right now and how best to expand the movement [agenda; handouts]. They gathered at Elon University School of Law in Greensboro, N.C., for three days to plot a course, and heard from educators in other professions about how they have advanced real-world learning.

“This is not just about clinical legal education,” Elon dean Luke Bierman said in his opening remarks. “This is not just about externships. It’s not just about simulations in classrooms. It’s about how to move all these things in a particular way, and how to think about how it fits into the enterprise of legal education and the goals we have for our students.”

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June 18, 2014 in Conferences, Legal Education | Permalink | Comments (0)

Judge Kroupa Retires From Tax Court

KroupaU.S. Tax Court Judge Diane L. Kroupa, whose 15-year term was scheduled to end on June 12, 2018, has retired from the Tax Court as of June 16, 2014.  She is 59 years old.  From her court bio:

B.S.F.S. Georgetown University School of Foreign Service, 1978; J.D. University of South Dakota Law School, 1981. Prior to appointment to the Court, practiced tax law at Faegre & Benson in Minneapolis, MN. Minnesota Tax Court Judge from 1995 to 2001 and Chief Judge from 1998 to 2001. Attorney-advisor, Legislation and Regulations Division, Office of Chief Counsel and served as attorney-advisor to Judge Joel Gerber, United States Tax Court, 1984-1985.

(Hat Tip: Ann Murphy.)

June 18, 2014 in Tax | Permalink | Comments (1)

22 Notable Corporate Tax Articles of 2013

Tax Analysys Logo (2013)Jordan M. Barry (San Diego), Karen C. Burke (Florida) & Monica Gianni (Florida), A Brief Review of Corporate Tax Articles of 2013, 143 Tax Notes 1314 (June 16, 2014):

June 18, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

McGill Symposium: Tax Justice and Human Rights

McGillThe three-day Tax Justice & Human Rights Symposium at McGill kicks off today with these papers by emerging scholars:

Panel A:  Samuel Singer (Associate, Stikeman Elliott), Moderator

Leyla Ates (PhD Candidate, University of Wisconsin and Inonu University, Turkey), Developing Countries and Globalization of Tax Law Making: Turkish Tax Law Reforms on Fighting Tax Evasion
Steven Dean (Professor, Brooklyn Law School), Discussant

Montano Cabezas (LLM Candidate, Georgetown University Law Center), Giving Credit Where it is Due: Rethinking the Corporate Tax Paradigm
Kim Brooks (Dean, Schulich School of Law, Dalhousie University), Discussant 

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June 18, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tax Analysts Hosts Conference Today on U.S. State Tax Considerations for International Tax Reform

TA 2Tax Analysts hosts a roundtable discussion on U.S. State Tax Considerations for International Tax Reform at the Ronald Reagan Building (1300 Pennsylvania Ave.) today at 9:00 - 11:00 a.m. EST in Washington, D.C.:

OECD officials leading the international tax reform project can learn much from the experience of state tax practitioners. The panel, comprising both state and international tax experts, will examine how the lessons learned by U.S. states can help shape the debate on international tax reform. Practitioners will also share their insight into how international tax rules may affect state tax positions.

  • Peter A. Barnes (Of Counsel, Caplin & Drysdale)
  • Christopher E. Bergin (President and Publisher, Tax Analysts) (moderator)
  • Joe Huddleston (Executive Director, Multistate Tax Commission)
  • Stephen P. Kranz (Partner, McDermott, Will & Emery)

June 18, 2014 in Conferences, Tax, Tax Analysts | Permalink | Comments (0)

The IRS Scandal, Day 405

IRS Logo 2USA Today op-ed:  Obama's Double Asterisks on IRS, by Glenn Harlan Reynolds (Tennessee):

I guess it's time to award President Obama a second asterisk. When charges came out that the IRS targeted Tea Party groups for harassment, the Wall Street Journal's James Taranto started calling Obama "President Asterisk." His point was that this illicit assistance tainted the election, the way an athlete's use of illegal performance-enhancers results in an asterisk on any records he sets.

Now it may be time for another asterisk. As Congress investigates the IRS chicanery, the IRS has responded to a request for emails to and from Lois Lerner, who spearheaded the Tea Party harassment, by saying, basically, that the dog ate its homework. Or, rather, the IRS claims, somewhat dubiously, that "a hard drive crash" on Lerner's computer led to the loss of emails to outside entities "such as the White House, Treasury, Department of Justice, FEC, or Democrat offices." You know, the very people she's accused of coordinating her harassment with.

With those emails missing, it'll be harder to prove whether Lerner's Tea Party harassment might have been at the behest of other wrongdoers, perhaps going as high as the Oval Office itself. But since government agencies seldom "lose" evidence that makes them look good, reasonable people might suspect that there's a cover-up going on. After all, nobody thought that the famous "18½ minute gap" on Richard Nixon's White House tapes contained anything positive about White House involvement in Watergate. ...

Targeting Americans is unforgivable; covering it up is worse, and if the IRS has made it impossible to target the individuals responsible, then the IRS as a whole should pay the price. That's not an ideal solution, but such misbehavior should not go unpunished.

Los Angeles Times:  The IRS Email Scandal: Where's the Outrage?, by Jonah Goldberg:

Congressional investigators are fuming over revelations that the Internal Revenue Service has lost a trove of emails to and from a central figure in the agency's tea party controversy."

That's the opening sentence of the Associated Press' story on the IRS' claim that it lost an unknown number of emails over two years relating to the agency's alleged targeting of political groups hostile to the president.

But note how the AP casts the story: The investigators — Republican lawmakers — are outraged. 

Is it really so hard to imagine that if this were a Republican administration, the story wouldn't be the frustration of partisan critics of the president? It would be all about that administration's behavior. With the exception of National Journal's Ron Fournier, who called for a special prosecutor to bypass the White House's "stonewalling," and former CBS correspondent Sharyl Attkisson, it's hard to find a non-conservative journalist who thinks this is a big deal.

Wall Street Journal editorial:  IRS Contempt of Congress:  The Agency Now Admits It Didn't Fully Comply With Subpoenas:

The IRS is now telling Congress that it has lost the emails of no fewer than seven IRS employees central to the targeting of conservative nonprofits, though that's only half the outrage. There's also the IRS's quiet admission that it has spent most of the past year willfully defying Congress.

After informing Congress on Friday that it can't find two years of email from former Director of Exempt Organizations Lois Lerner, House Ways and Means Chairman Dave Camp revealed Tuesday that the IRS can't produce records for six more employees whose hard drives also supposedly failed. These six happen to have been central to the IRS crackdown on conservative groups, and the lost emails were sent when the targeting took place, including in 2010 and 2011. The six include Nicole Flax, former chief of staff to former IRS Commissioner Steven Miller. ...

[T]he IRS has from the start been picking and choosing which of Ms. Lerner's emails it deigned to show Congress. And it did so despite knowing that Congress wanted everything. This IRS filter has delayed the investigation and denied Congress access to important information.

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June 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 17, 2014

Wealthy Clintons Use Residence Trusts to Limit Estate Tax They Back

Bloomberg:  Wealthy Clintons Use Trusts to Limit Estate Tax They Back, by Richard Rubin:

TrustBill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston. “The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.” ...

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June 17, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (2)

Medtronic Launches $43 Billion Covidien Buyout to Beat Possible Tax Inversion Ban

Record Numbers of Americans Are Renouncing Their U.S. Citizenship

Wall Street Journal, Expatriate Americans Break Up With Uncle Sam to Escape Tax Rules; Record Numbers Living Abroad Renounce U.S. Citizenship over IRS Reporting Requirements:

Chart1,001 U.S. citizens and green-card holders had renounced their allegiance in the first three months of the year, according to Andrew Mitchel, a lawyer in Centerbrook, Conn., who analyzes Treasury Department data. That figure puts 2014 on track to top last year's total of 2,999 renunciations, he said, which was the most since the government began disclosing the data. 

Helping boost the exodus, experts say, is a five-year-old U.S. campaign to hunt for undeclared accounts held by Americans abroad. Since 2009, the government campaign has collected more than $6 billion in taxes, interest and penalties from more than 43,000 U.S. taxpayers. Federal prosecutors have filed more than 100 criminal indictments, including the high-profile case of Beanie Babies inventor Ty Warner, who last year pleaded guilty to tax evasion involving secret Swiss bank accounts.

The tax dragnet has also swept up many middle-income Americans living abroad, prompting some to give up their U.S. citizenship. While people who renounce aren't freed of taxes due for past years, they don't want to risk sizable taxes and penalties for them and their children in the years ahead, experts say. Nearly 8,000 taxpayers have renounced U.S. citizenship in the past five years, Mr. Mitchel found, compared with fewer than 5,000 in the preceding decade. ...

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June 17, 2014 in Tax | Permalink | Comments (3)

Law Prof Lip Sync Battle


Check out this video of en epic lip sync battle with New Mexico 3L Thomas "Ty" Wood and law profs George Bach, Alex Ritchie, and Kevin Tu:

 

Note to Jimmy Fallon:  book these guys.  (Hat Tip:  Phil Bohl.)

June 17, 2014 in Legal Education | Permalink | Comments (2)

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 67, No. 3 (Spring 2014):

June 17, 2014 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Shaviro: Capital Levies: A Solution for the Sovereign Debt Problem?

Tax Analysys Logo (2013)Daniel Shaviro (NYU), Capital Levies: A Solution for the Sovereign Debt Problem?, 74 Tax Notes Int'l 1027 (June 16, 2014):

The following speech was delivered as the University of Luxembourg's "Distinguished Lecture" on May 15, 2014.

June 17, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Lipshaw: 'Retire and Teach' Amidst the Great Law School Retrenchment

Jeffrey M. Lipshaw (Suffolk), "Retire and Teach" Six Years On, 41 N. Ky. L. Rev. 67 (2014):

RetirementThis is a follow up to a 2007 essay I wrote about what it might take for a well-seasoned practitioner to join a law school faculty as a tenure track professor. Having now wended my way up (or down) that track for six years plus, my intended audience this time includes the original one, those seasoned veterans of the law practice trenches who may think but should never utter out loud the words “I would like to retire and teach,” but now also my colleagues in academia who are facing what looks to be the greatest reshuffling of the system in our generation. Much of what I said in the earlier essay still holds. This essay, however, includes (a) a more nuanced look at the strange hybrid creature that is the scholarly output of academic lawyers; (b) a more respectful appreciation of what it takes to become a good teacher, with some notes about what worked for me, and (c) an attempt to reconcile the interests in scholarship and the interest in teaching after the “Great Retrenchment” of the legal profession and legal education, with some brief thoughts about the opportunities that may bring for the aging but not ossifying academic aspirant.

June 17, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Law School Kills Brain Cells

Debra S. Austin (Denver), Killing Them Softly: Neuroscience Reveals How Brain Cells Die from Law School Stress and How Neural Self-Hacking Can Optimize Cognitive Performance, 59 Loy. L. Rev. 791 (2013):

BrainLaw is a cognitive profession and the legendary stressors in legal education and the practice of law can take a tremendous toll on cognitive capacity. Lawyers suffer from depression at triple the rate of non-lawyers. This article provides a groundbreaking synthesis on the neuroscience of achieving optimal cognitive fitness for all law students, law professors, and lawyers.

A number of innovative companies have instituted programs designed to enhance the bottom line. Research shows that perks such as onsite gyms, stress management classes, and mindfulness training produce vibrant workplaces and thriving employees. Forward-looking law schools have created wellness programs designed to relieve law student stress and improve well-being. This article explains the neurobiological reasons these programs enhance employee performance and improve student achievement.

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June 17, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 404

IRS Logo 2Wall Street Journal:  A Tale of Two Scandals, by Peggy Noonan:

[T]he Obama administration is experiencing what appears to be its own Eighteen-and-a-Half Minute moment. In a truly stunning development in the Internal Revenue Service scandal, the agency last week informed Congress that more than two years’ of Lois Lerner’s email communications with those outside that agency—from 2009 to 2011, meaning the key years at the heart of the targeting-of-conservatives scandal—have gone missing. Quite strangely. The IRS says it cannot locate them. The reason is that Lerner’s computer crashed....

I haven’t ever met a reporter or producer who wasn’t a conservative who didn’t believe the IRS scandal was the result of the bureaucratic confusion and incompetence of some office workers in Cincinnati who made a mistake.

But the IRS scandal is a scandal, and if you can’t see the relation between a strangely destroyed key piece of evidence in an ongoing scandal and what happened 41 years ago with a strangely destroyed key piece of evidence in an ongoing scandal, something is wrong not with the story but with your news judgment. (We won’t even go into the second story last week, that the IRS sent a big database full of confidential taxpayer information to the FBI.) ...

The mischief of the Nixon administration was specific to it, to its personnel. When Chuck Colson left, he left. All the figures in that drama failed to permanently disfigure the edifice of government. They got caught, and their particular brand of mischief ended.

But the IRS scandal is different, because if it isn’t stopped—if it isn’t fully uncovered, exposed, and its instigators held accountable—it will suggest an acceptance of the politicization of the IRS, and an expected and assumed partisanship within its future actions. That will be terrible not only for citizens but for the government itself.

And the IRS scandal will also have disfigured government in a new and killing way. IRS scandals in the past were about the powerful (Richard Nixon) abusing the powerful (Edward Bennett Williams). This scandal is about the powerful (Lois Lerner, et a.) abusing the not-powerful (normal, on-the-ground Americans such as rural tea-party groups). If it comes to be understood that this kind of thing is how the government now does business, it will be terrible for the spirit and reality of the country.

So many of those who decide what is news cannot, on this issue, see the good faith and honest concern of the many who make this warning. And really, that is tragic.

What are the implications of this claim? It means no one can see any emails Lerner sent to or received from other agencies and individuals, including the White House and members of Congress.

And what is amazing—not surprising, but amazing—is that if my experience of normal human conversation the past few days is any guide, very few people are talking about it and almost no one cares.

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June 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, June 16, 2014

Leiter's Top Ten Law Faculty (By Area) In Scholarly Impact, 2009-2013

Following up on Friday's post, The 10 Most-Cited Tax Faculty:  Brian Leiter (Chicago) has relased on his Law School Rankings website (a member of our Law Professor Blogs Network) an updated ranking of the 10 Most-Cited U.S. Law Faculty in 11 areas of specialization, as measured by citations during the past five years (2009-2013).

Interestingly, the 14 Tax Profs listed in the 10-Most Cited Tax Faculty and the related Highly Cited Scholars Who Work Partly in Tax lists are younger than their counterparts in the 10 other areas of specializations:  in tax, four are in their 40s, nine are in their 50s, and only one is in his 60s. 

Rank

Tax Prof

Citations

Age

1

Michael Graetz (Columbia)

400

69

 

David Weisbach (Chicago)

400

50

3

Reuven Avi-Yonah (Michigan)

350

56

4

Daniel Shaviro (NYU)

340

56

5

Leandra Lederman (Indiana)

290

47

 

Larry Zelenak (Duke)

290

58

7

Victor Fleischer (San Diego)

280

42

8

Edward Zelinsky (Cardozo)

270

58

9

Joseph Bankman (Stanford)

250

58

 

Edward McCaffery (USC)

250

55

 

Highly Cited Scholars Who Work Partly in Tax

 

 

 

Louis Kaplow (Harvard)

1100

57

 

Brian Galle (Boston College)

310

43

 

Kristin Hickman (Minnesota)

310

43

 

Mark Gergen (UC-Berkeley)

270

57

Prior TaxProf Blog coverage:

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June 16, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

President Obama Tells College Students Not to Go to Law School

The American Interest, Lawyer-in-Chief Warns Against Law School:

Potential lawyers take note: President Obama wants you to reconsider your career choice. We’ve seen lawyers and law professors warn off potential colleagues, and we’ve seen students start to take note of the dismal job market and back away from the profession. But Tuesday may be the biggest blow to the law school bubble we’ve seen yet, as Obama spoke candidly about the field’s prospects in a Tuesday chat with the founder of tumblr. WaPo reports:

"We have enough lawyers, although it’s a fine profession,” he told the crowd. “I can say that because I’m a lawyer."

When the President of the United States is telling 20 somethings not to enter his own profession, you know it’s in for a radical downsizing. Luckily, it seems law schools themselves are adjusting to this new reality. Some are cutting their class sizes, others are exploring reducing or eliminating the third year of law school. But these are only small starts, and only a small number of schools are considering them. Law schools need to do more to get in front of the market collapse and make radical changes before the changes are forced on them in a more painful way. If the President himself coming down against more lawyers doesn’t motivate them, we don’t know what will.

(Hat Tip: Glenn Reynolds.)

June 16, 2014 in Legal Education | Permalink | Comments (7)

NY Times: Piketty Protégé: $7.6 Trillion of World's Wealth Is Stashed in Tax Havens, Evading $200 Billion Taxes/Year

New York Times op-ed:  The True Cost of Hidden Money: A Piketty Protégé’s Theory on Tax Havens, by Jacques Leslie:

Gabriel Zucman is a 27-year-old French economist who decided to solve a puzzle: Why do international balance sheets each year show more liabilities than assets, as if the world is in debt to itself?

Over the last couple of decades, the few international economists who have addressed this question have offered a simple explanation: tax evasion. Money that, say, leaves the United States for an offshore tax shelter is recorded as a liability here, but it is listed nowhere as an asset — its mission, after all, is disappearance. But until now the economists lacked hard numbers to confirm their suspicions. By analyzing data released in recent years by central banks in Switzerland and Luxembourg on foreigners’ bank holdings, then extrapolating to other tax havens, Mr. Zucman has put creditable numbers on tax evasion, showing that it’s rampant — and a major driver of wealth inequality.

Mr. Zucman estimates — conservatively, in his view — that $7.6 trillion — 8 percent of the world’s personal financial wealth — is stashed in tax havens. If all of this illegally hidden money were properly recorded and taxed, global tax revenues would grow by more than $200 billion a year, he believes. And these numbers do not include much larger corporate tax avoidance, which usually follows the letter but hardly the spirit of the law. According to Mr. Zucman’s calculations, 20 percent of all corporate profits in the United States are shifted offshore, and tax avoidance deprives the government of a third of corporate tax revenues. Corporate tax avoidance has become so widespread that from the late 1980s until now, the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent, Mr. Zucman found, even though the tax rate hasn’t changed.

Mr. Zucman, an assistant economics professor at the London School of Economics, is part of a wave of data-focused economists led by his mentor, Thomas Piketty, of the Paris School of Economics. Mr. Zucman’s short book on tax evasion, The Missing Wealth of Nations, was a best seller in France last year.

Mr. Zucman’s tax evasion numbers are big enough to upend common assumptions, like the notion that China has become the world’s “owner” while Europe and America have become large debtors. The idea of the rich world’s indebtedness is “an illusion caused by tax havens,” Mr. Zucman wrote in a paper published last year [The Missing Wealth of Nations:  Are Europe and the U.S. Net Debtors or Net Creditors?]. In fact, if offshore assets were properly measured, Europe would be a net creditor, and American indebtedness would fall from 18 percent of gross domestic product to 9 percent.

[T]here is no economic, political or moral justification for tax evasion — it exists only because of the political influence that wealth buys. A society that fails to fight widespread tax evasion proclaims its own corruption.

Gabriel Zucman (London School of Economics), Tax Evasion on Offshore Profits and Wealth:

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. In the United States, corporations book 20% of their profits in tax havens -- a tenfold increase since the 1980s -- and tax avoidance reduces corporate tax revenues by up to a third. Globally, 8% of the world’s personal financial wealth is held offshore, costing more than $200bn to governments annually. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.

Figure 3

Figure 4

Figure 6

(Hat Tip: Francine Lipman, Mike Talbert.)

June 16, 2014 in Tax | Permalink | Comments (1)

Dean Ferruolo Criticizes Justice Scalia's Prescription for Law School Reform

Los Angeles Daily Journal Op-Ed:  Dean Reacts to Scalia on Law School, by Stephen C. Ferruolo (Dean, San Diego):

FerruoloIn his commencement speech at William & Mary Law School in May, Justice Antonin Scalia rejected the increasingly popular view (at least outside the legal academy) that law school should be cut to two years and spoke eloquently about the legal profession (the "learned in the law") but contributed little of substance to the debate of what should, and realistically can, be done to improve legal education.

Although I have been the dean of a law school for three years, my perspective on what is wrong with, and should be done about, legal education is informed by more than 20 years I spent in practice as a business attorney and partner in major national law firms. This experience of the business and economics of legal practice gives me a perspective different from legal academics or, with due deference, the justice (or, for that matter, the president, the lead advocate for reducing law school to two years). ...

Scalia proposes cutting costs by shrinking faculties, increasing teaching loads and reducing faculty salaries. These are not the easy fixes they may seem to be. And I say so as a business lawyer who spent years helping to manage national law firms, not as someone who has a vested interest in preserving academic privileges. ...

Unfortunately, Scalia does not address the impact of excessive regulation on the legal education system, as one might expect. Although he chides the January 2014 report of the ABA Task Force on the Future of Legal Education for its passing reference to the law-school-in-two-years proposal, he does not comment on any of the actual recommendations made by the Task Force to reform legal education and lower its costs. These recommendations include a welcome call for the repeal or substantial moderation of the restrictive accreditation standards, like those related to faculty status, that "increase costs without conferring commensurate v=benefits." Without such reforms, shrinking law school faculties might well become a disaster for the quality and relevance of legal education, as well as for efforts to expand access to legal education and increase the diversity of the legal profession.

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June 16, 2014 in Legal Education | Permalink | Comments (0)

Reviews of Ajay Mehrotra's Law, Politics, and the Rise of Progressive Taxation

Bill Adams Named Deputy Managing Director of ABA Section of Legal Education

ABA Press Release, William Adams is New Deputy Managing Director:

AdamsWilliam Adams, dean and vice chancellor at Western State College of Law is joining the ABA Section of Legal Education and Admissions to the Bar as deputy managing director. He replaces Scott Norberg, who held the position for the last three years and is returning to his faculty position at Florida International University College of Law at the end of the summer.  ...

Barry Currier, Managing Director for Accreditation and Legal Education, said, “We are very pleased that Bill Adams will join our staff.  He will carry on the good work done by Scott Norberg and others who have served in the Deputy Managing Director or Deputy Consultant role.  Beyond a deep general unders tanding of legal education and law schools garnered over his academic career, Bill brings to the position particular knowledge in a number of areas that are important to the work of our office right now and going forward, including non-J.D. degree programs; collaborative programs between U.S. and international law schools; experiential and clinical education programs; academic support programs and bar passage matters; diversity; career services and job placement; and learning outcomes and assessment. His perspective is also informed by his years in practice as a legal services lawyer. ”

June 16, 2014 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 403

IRS Logo 2National Journal:  Did The IRS Really Lose Lois Lerner's Emails? Let a Special Prosecutor Find Them, by Ron Fournier:

A sloppy mistake, the government calls it, but you couldn't blame a person for suspecting a cover-up -- the loss of an untold number of emails to and from the central figure in the IRS tea party controversy. And, because the public's trust is a fragile gift that the White House has frittered away in a series of second-term missteps, President Obama needs to act.

If the IRS can't find the emails, maybe a special prosecutor can. ...

The White House is stonewalling the IRS investigation. The most benign  explanation is that Obama's team is politically expedient and arrogant, which makes them desperate to change the subject, and convinced of their institutional innocence. That's bad enough. But without a fiercely independent investigation, we shouldn't assume the explanation is benign.

Roger Kimball, 18 1/2 Minutes vs. 2 Years: Which Is Worse?:

WoodsWriting yesterday about the IRS’s amazing loss of more than two years of Lois Lerner’s emails (“Where’d they go? They were here just a minute ago!”), I wondered in passing how the Extended White House Public Relations Office, e.g., the New York Times, MSNBC, et al. would handle the news. The Nixon White House, you’ll recall, found quite a lot of the morning’s scrambled on its collective countenance when 18 and 1/2 minutes of audio tape somehow went missing as the Watergate scandal unfolded around the president.

What a godsend to the guardians of our “Right to Know” Watergate was! Day after day, week after week, month after month, the front pages and editorial pages of our former Paper of Record were full of stern admonitions about that egregious abuse of executive power. You could not look at the paper without a synesthetic shudder: Reading it, you could almost hear them licking their chops as their prey—the dastardly Richard Nixon—came ever closer to his doom.

So how does the New York Times handle this extraordinary loss of two years’ worth of Lois Lerner’s emails? ... This will amaze you, I know, but it is true: the New York Times today devotes zero words to the story. Take a look at the front page here: Nothing. ... [A]bout the missing emails in one of the most disgusting political scandals in recent times, the deployment of the IRS with its virtually unlimited powers, against political opponents of the administration? Nothing. Nada. Rien.

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June 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, June 15, 2014

ABA Releases Revised Law School Accreditation Standards, Protocol for Reporting Placement Data

ABA Logo 2Following up on Monday's post, ABA: Law Schools Can Admit 10% of Students Without LSAT, Must Do Annual Audit of Placement Data, Can't Give Academic Credit for Paid Externships

ABA Section of Legal Education and Admission to the Bar Standards Review Committee, Final Revisions to the ABA Standards and Rules of Procedure for Approval of Law Schools:

At its meeting in March 2014, the Council approved the vast majority of the revisions that had been circulated for Notice and Comment. In addition, the Council approved several additional matters for Notice and Comment. After reviewing the comments received on the matters circulated for comment in March 2014, the Council made final determinations on the recommendations at its meeting on June 6, 2014.

The complete set of revisions is scheduled to be reviewed by the ABA House of Delegates in August 2014 in accordance with House Rule 45.9. The House may either concur with the Council’s decisions or refer a proposed change back to the Council for further consideration. Any reference back to the Council must include a statement setting forth the reasons for the referral. A decision by the Council is subject to a maximum of two referrals back to the Council by the House. The decision by the Council following the second referral is final.

The Standards and Rules will become effective immediately upon concurrence by the House of Delegates in August. Although the Standards will be effective in August, there will be a phase-in period for some Standards and a delay in implementation. A timeline and more detailed information about the implementation of the revised Standards and Rules of Procedure will be available this fall.

ABA Section of Legal Education and Admissions to the Bar, Protocol for Reviewing Law Graduate Employment Data, and Statement of Procedures for Collecting, Maintaining, and Reporting Law Graduate Employment Data (June 9, 2014):

I. Protocol for Reviewing Law Graduate Employment Data.
This Protocol addresses the review of law graduate employment data reported to the ABA or presented to the public. There will be four types of reviews:
(A) Standard 509 Website Compliance Review: All law schools accredited by the ABA will be subject to this type of review.
(B) Random School Review: At least 10 law schools each year will be selected at random for this type of review.
(C) Random Graduate Review: Random reviews will be conducted on a statistically sound sample of graduates drawn from the population of all graduates of ABA accredited law schools.
(D) “Red Flag” Review: Red Flag Reviews will be conducted of schools as provided in paragraph D below. ...

II. Statement of Procedures for Collecting, Maintaining and Reporting Law Graduate Employment Data.
This Statement sets forth instructions and guidelines for law schools in collecting, maintaining, reporting, and publishing graduate employment data. In order for the ABA to effectively review reported graduate employment outcomes data, law schools must maintain accurate, contemporaneous, and verifiable documentation that supports them.

III.  Timetable for Section Graduate Employment Data Reviews.

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June 15, 2014 in Legal Education | Permalink | Comments (4)

Walgreens' Planned Move From Illinois to Switzerland Would Save $4 Billion in Taxes

Americans for Tax Fairness, Offshoring America’s Drugstore Walgreens May Move its Corporate Address to a Tax Haven to Avoid Paying Billions in U.S. Taxes:

WalgreensWalgreens could cost taxpayers $4 billion in lost revenue over five years should the company decide to renounce its American corporate legal status and move its official address to Switzerland, a tax haven. The company is widely reported to be considering this move and says it will announce its intentions as soon as this summer. Walgreens is the nation’s largest pharmacy retailer with 8,200 stores and locations in all 50 states.

June 15, 2014 in Tax, Think Tank Reports | Permalink | Comments (10)

Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads on SSRN is the same as last week's list:

  1. [326 Downloads]  The New Flat Tax: A Modest Proposal for a Constitutionally Apportioned Wealth Tax, by John Thomas Plecnik (Cleveland State)
  2. [321 Downloads]  Just Say No: Corporate Taxation and Corporate Social Responsibility, by Reuven Avi-Yonah (Michigan)
  3. [227 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)
  4. [208 Downloads]  The Real Problem with Carried Interests, by Heather Field (UC-Hastings)
  5. [181 Downloads]  A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act, by Samuel Eisenberg (Stanford), Michael Wara (Stanford), Adele Morris (Brookings Institution), Marta Darby (Stanford) & Joel Minor (Stanford)

June 15, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 402

IRS Logo 2Wall Street Journal editorial:  The IRS Loses Lerner's Emails (And Other News That the Beltway Press Corps Won't Cover):

The IRS—remember those jaunty folks?—announced Friday that it can't find two years of emails from Lois Lerner to the Departments of Justice or Treasury. And none to the White House or Democrats on Capitol Hill. An agency spokesman blames a computer crash.

Never underestimate government incompetence, but how convenient. The former IRS Director of Exempt Organizations was at the center of the IRS targeting of conservative groups and still won't testify before Congress. Now we'll never know whose orders she was following, or what directions she was giving. If the Reagan White House had ever offered up this excuse, John Dingell would have held the entire government in contempt.

The suspicion that this is willful obstruction of Congress is all the more warranted because this week we also learned that the IRS, days before the 2010 election, shipped a 1.1 million page database about tax-exempt groups to the FBI. ...

New IRS Commissioner John Koskinen promised to cooperate with Congress. But either he is being undermined by his staff, or he's aiding the agency's stonewalling. And now that we know that Justice was canoodling with Ms. Lerner, its own dilatory investigation becomes easier to understand. Or maybe that was a computer crash too.&

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June 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, June 14, 2014

Hanlon: The Lose-Lose Tax Policy Driving Away U.S. Business

Wall Street Journal op-ed:  The Lose-Lose Tax Policy Driving Away U.S. Business, by Michelle Hanlon (MIT):

Apple issued $12 billion of U.S. debt in April, which gave the company a domestic cash infusion that allowed it to keep more earnings overseas. Last month Pfizer attempted to acquire AstraZeneca, a transaction that would have made Pfizer a subsidiary of the U.K.-based company. These were useful examples in the taxation classes I teach at MIT's business school, but the real-world implications of these decisions are troubling. Even worse, legislators have responded with proposals that seek to prevent companies from escaping the U.S. tax system.

The U.S. corporate statutory tax rate is one of the highest in the world at 35%. In addition, the U.S. has a world-wide tax system under which profits earned abroad face U.S. taxation when brought back to America. The other G-7 countries, however, all have some form of a territorial tax system that imposes little or no tax on repatriated earnings.

To compete with foreign-based companies that have lower tax burdens, U.S. corporations have developed do-it-yourself territorial tax strategies. They accumulate foreign earnings rather than repatriate the earnings and pay the U.S. taxes. This lowers a company's tax burden, but it imposes other costs. ...

In short, our international tax policy encourages U.S. multinational corporations to keep cash abroad, borrow more in the U.S. and invest more in foreign locations than they otherwise would. Everyone loses: The U.S. government gets little if any tax revenue from the foreign earnings, and shareholders and the U.S. economy are deprived of valuable resources. ...

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June 14, 2014 in Tax | Permalink | Comments (0)