TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, May 31, 2016

TaxProf Blog Holiday Weekend Roundup

Monday, May 30, 2016

Memorial Day Tax Resources For U.S. Armed Forces (And Their Families, Employers)

IwaContinuing a TaxProf Blog Memorial Day tradition, I want to pass along links to the Tax Information for Members of the U.S. Armed Forces material maintained on the IRS web site:

The tax laws provide some special benefits for active members of the U.S. Armed Forces, including those serving in combat zones. For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel may qualify for certain tax deadline extensions because of their service in a combat zone.

For dozens of links to military tax resources, see below the fold.

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May 30, 2016 in Tax | Permalink | Comments (0)

Former Assistant Dean For Bar Prep/Academic Success Sues Law School For Gender Discrimination, Says 'All-Female Management Team' Made Him Fall Guy For Poor Bar Results Caused By Systemic Problems At School

MoueryOrlando Sentinel, Ex-Law School Official Alleges Discrimination After He Was Fired From Job:

A man who was fired from his job at an Orlando law school accused the university of discrimination because he was a man in senior leadership when students struggled to pass the bar exam, according to a lawsuit filed this week.

David Mouery, the former assistant dean for bar preparation and academic success, said Barry University singled him out and disciplined him after the test results were released last year, court documents said.

He sued Barry University for gender discrimination and retaliation in Orange County Circuit Court. ...

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May 30, 2016 in Legal Education | Permalink | Comments (8)

Talking The Talk Or Walking The Walk Of Legal Education Reform

Educating Tomorrow's Lawyers (2016)Keith R. Lee (Hamer Law Group, Birmingham, AL), Ten Years of IAALS: Walking the Walk with Legal Education Reform:

There is lots of talk about making changes in legal education at law schools. That's no surprise, law professors love to talk. If they loved practicing law, they'd be lawyers. Instead, ensconced in the ivory tower, safe from the perils of the real world, they leisurely debate what should happen to those poor souls (law students) who must leave the hallowed halls of law school, and actually go out in the world to practice law.

If you can't tell, I'm not particularly sympathetic or supportive.

Since we're talking about legal education, here's a hypothetical:

A 10-mile bicycle race is going to take place one year hence. There are two competitors, Adam and Barbara.

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May 30, 2016 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 1117

IRS Logo 2Congressional Research Service, Impeachment and Removal (R44260):

The impeachment process provides a mechanism for removal of the President, Vice President, and other “civil Officers of the United States” found to have engaged in “treason, bribery, or other high crimes and misdemeanors.” The Constitution places the responsibility and authority to determine whether to impeach an individual in the hands of the House of Representatives. Should a simple majority of the House approve articles of impeachment specifying the grounds upon which the impeachment is based, the matter is then presented to the Senate, to which the Constitution provides the sole power to try an impeachment. A conviction on any one of the articles of impeachment requires the support of a two-thirds majority of the Senators present.

Should a conviction occur, the Senate retains limited authority to determine the appropriate punishment. Under the Constitution, the penalty for conviction on an impeachable offense is limited to either removal from office, or removal and prohibition against holding any future offices of “honor, Trust or Profit under the United States.” Although removal from office would appear to flow automatically from conviction on an article of impeachment, a separate vote is necessary should the Senate deem it appropriate to disqualify the individual convicted from holding future federal offices of public trust. Approval of such a measure requires only the support of a simple majority.

Key Takeaways of This Report

  • The Constitution gives Congress the authority to impeach and remove the President, Vice President, and other federal “civil officers” upon a determination that such officers have engaged in treason, bribery, or other high crimes and misdemeanors.
  • A simple majority of the House is necessary to approve articles of impeachment.
  • If the Senate, by vote of a two-thirds majority, convicts the official on any article of impeachment, the result is removal from office and, at the Senate’s discretion, disqualification from holding future office.
  • The Constitution does not articulate who qualifies as a “civil officer.” Most impeachments have applied to federal judges. With regard to the executive branch, lesser functionaries—such as federal employees who belong to the civil service, do not exercise “significant authority,” and are not appointed by the President or an agency head—do not appear to be subject to impeachment. At the opposite end of the spectrum, it would appear that any official who qualifies as a principal officer, including a head of an agency such as a Secretary, Administrator, or Commissioner, is likely subject to impeachment.
  • Impeachable conduct does not appear to be limited to criminal behavior. Congress has identified three general types of conduct that constitute grounds for impeachment, although these categories should not be understood as exhaustive: (1) improperly exceeding or abusing the powers of the office; (2) behavior incompatible with the function and purpose of the office; and (3) misusing the office for an improper purpose or for personal gain.
  • The House has impeached 19 individuals: 15 federal judges, one Senator, one Cabinet member, and two Presidents. The Senate has conducted 16 full impeachment trials. Of these, eight individuals—all federal judges—were convicted by the Senate.

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May 30, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, May 29, 2016

How Will I Know?  IRS Claims Whitney Houston's Estate Undervalued Her Right Of Publicity By $11.5 Million

WhitneyFollowing up on my previous posts (links below) on the IRS's battle with the estate of Michael Jackson over the value of the singer's publicity rights:  Hollywood Reporter, Whitney Houston Estate Challenges $11 Million Tax Bill:

The heirs of late pop star Whitney Houston are now in Tax Court over what the Internal Revenue Service claims is owed in estate taxes.

In a May 23 petition, now sealed and first reported by Bloomberg, the Whitney Houston estate objected to the determination that $22.6 million has been underreported, which the IRS claims means that more than $11 million is owed, including $3 million in penalties.

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May 29, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #4 and #5:

  1. [429 Downloads]  The Panama Papers and Tax Morality, by Usman W. Chohan (University of New South Wales)
  2. [366 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  3. [293 Downloads]  New Prominence Of Tax Basis In Estate Planning, by Paul L. Caron (Pepperdine) & Jay A. Soled (Rutgers)
  4. [162 Downloads]  'Death Tax' Politics, by Michael J. Graetz (Columbia)
  5. [156 Downloads]  Supercharged IPOs, the Up-C, and Private Tax Benefits in Public Offerings, by Gladriel Shobe (BYU)

May 29, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Report:  Harvard Law Prof Hid Far Left Views To Chair Hiring Committee And 'Heavily Influence Hiring Critical Race Theorists'

Harvard Law School (2016)Daily Caller, Leaked Document Shows Harvard Students, Profs Planning To Make School Even More Liberal:

Leaked notes from an alleged meeting between Harvard Law School (HLS) professors and student activists shows them planning how to coordinate their efforts in order to take the school in a more institutionally left-wing direction.

The notes also suggest that at least one professor at Harvard may be concealing the full extent of his liberal views in order to be appointed to positions where he can shape the university’s politics more decisively.

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May 29, 2016 in Legal Education | Permalink | Comments (9)

The IRS Scandal, Day 1116

IRS Logo 2Bloomberg BNA, Conservative Group's IRS Targeting Claim Can Move Forward:

A conservative organization arguing the IRS targeted its application for tax-exempt status based on its political views demonstrated that its claim of unconstitutional targeting has merit, and can continue in federal district court.

The U.S. District Court for the Northern District of Texas on May 25 rejected the government's motion to dismiss Freedom Path Inc.'s First Amendment claim that the Internal Revenue Service subjected the group's applications for tax-exempt status to higher scrutiny, flagging groups that had “conservative sounding names.”

Freedom Path v. Lois Lerner, No. 3:14-CV-1537-D (N.D. TX May 25, 2016):

Freedom Path alleges that the federal defendants have denied its rights guaranteed by the First Amendment by targeting its application for tax-exemption and subjecting it to heightened scrutiny because of Freedom Path’s conservative viewpoint. Freedom Path points to the federal defendants’ “policy and practice of submitting [to Freedom Path] the unconstitutionally and overly intrusive requests for information” that caused an unreasonable delay in the determination of Freedom Path’s tax-exempt status.

The federal defendants contend that the conduct complained of in count IV has been remedied, and that Freedom Path’s claims are therefore moot. According to the federal defendants, the IRS no longer engages in heightened scrutiny nor issues improper requests for information. ...

Freedom Path complains that its application for tax-exemption has been unconstitutionally targeted and subjected to heightened scrutiny. Freedom Path also alleges that the IRS sent it inappropriate and unconstitutional requests for information.

Although the federal defendants have adduced some evidence that the IRS no longer uses BOLO lists and that the IRS has made efforts to train its employees on how to issue proper information requests, Freedom Path has demonstrated that its general complaints of unconstitutional targeting, heightened scrutiny, and improper requests for information still present a live controversy.

The cases on which the federal defendants rely—True the Vote and Linchpins of Liberty—were decided under distinguishable facts. In True the Vote the court held that the plaintiff’s allegations of unconstitutional targeting and heightened scrutiny were moot because the IRS had granted the plaintiff tax-exempt status.  Accordingly, the plaintiff’s injury claim was moot. ... In Linchpins of Liberty the plaintiff specifically complained of the use of BOLO lists, but it also alleged that the IRS was no longer using the lists. The termination of the complained-of conduct (the use of BOLO lists) therefore rendered the claim moot. In contrast, Freedom Path’s allegations in count IV are not limited to the use of BOLO lists, it has not pleaded that the BOLO lists are no longer in use, and its application for tax-exempt status has not been granted. The allegations of count IV are not moot. ...

The federal defendants contend that Freedom Path lacks constitutional standing, which requires that a litigant establish three elements: (1) an injury-in-fact that is concrete and actual or imminent, not hypothetical; (2) a fairly traceable causal link between the injury and the defendants’ actions; and (3) that the injury will likely be redressed by a favorable decision. ... The federal defendants maintain that Freedom Path lacks standing to bring the claims asserted in counts IV, VI, VII, and VIII because it has not alleged impending, future injury that is real and immediate rather than conjectural or hypothetical. ...

Freedom Path responds that it primarily complains of injury from the “multi-pronged offensive” and “larger pattern” of viewpoint discrimination in the application of Revenue Ruling 2004-6. It cites Z Street, Inc. v. Koskinen, 44 F.Supp.3d 48 (D.D.C. 2014), aff’d, 791 F.3d 24 (D.C. Cir. June 19, 2015), to demonstrate that it has no other recourse against defendants for their illegal scheme. ... Freedom Path alleges that while it awaits the determination of its tax-exempt status, it must “continue curtailing similar speech [to the Leader advertisement] in the future.” ...

Freedom Path has sufficiently pleaded future harm to establish injury in fact. ... It alleges that it will curtail its publication of advertisements similar to the Leader advertisement and that it has ceased raising funds and undertaking advocacy work because of uncertainty about how the IRS will apply Revenue Ruling 2004-6. The court denies the federal defendants’ motion to dismiss counts IV, VI, VII, and VIII based on alleged lack of standing.

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May 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, May 28, 2016

Memorial Day Weekend In Our Pepperdine Neighborhood (And On CBS News)

Car

Amazingly, no one was hurt when a car flew into our neighborhood pool at 6:00 p.m. tonight.

Update #1:  I finally made it on CBS News — not as a tax expert, but as a photographer:

Update #2:

May 28, 2016 in Legal Education, Tax | Permalink | Comments (3)

This Week's Ten Most Popular TaxProf Blog Posts

Study Shatters Myth That Millionaires Migrate To Low Tax States

Cristobal Young (Stanford), Charles Varner (Stanford), Ithai Z. Lurie (U.S. Treasury Department, Office of Tax Analysis) & Richard Prisinzano (U.S. Treasury Department, Office of Tax Analysis), Millionaire Migration and Taxation of the Elite: Evidence from Administrative Data, 81 Am. Sociological Rev. 421 (2016):

All StatesA growing number of U.S. states have adopted “millionaire taxes” on top income-earners. This increases the progressivity of state tax systems, but it raises concerns about tax flight: elites migrating from high-tax to low-tax states, draining state revenues, and undermining redistributive social policies. Are top income-earners “transitory millionaires” searching for lower-tax places to live? Or are they “embedded elites” who are reluctant to migrate away from places where they have been highly successful? This question is central to understanding the social consequences of progressive taxation. We draw on administrative tax returns for all million-dollar income-earners in the United States over 13 years, tracking the states from which millionaires file their taxes. Our dataset contains 45 million tax records and provides census-scale panel data on top income-earners. We advance two core analyses: (1) state-tostate migration of millionaires over the long-term, and (2) a sharply-focused discontinuity analysis of millionaire population along state borders. We find that millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance.

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May 28, 2016 in Scholarship, Tax | Permalink | Comments (8)

Missouri Law School Dean Resigns Day After Lawsuit Filed Seeking Public Records Of Law Prof Running For Attorney General

MyersABC17 News, MU Law School Dean Says Decision to Step Down Not Linked to Lawsuit:

The dean of the University of Missouri Law School [Gary Myers, right] says his decision to step down is not related to the lawsuit filed this week related to the state's Sunshine Law.

This comes after a former state representative [Kevin Elmer] filed a lawsuit against Josh Hawley over an apparent unfulfilled open records request. Hawley is an MU law professor who running for Missouri Attorney General. Myers was also named in the suit.

Dean Myers apparently raised concerns to the university nearly three weeks after Elmer requested the records. Myers thought a request for Hawley's tenure application would threaten "the integrity of the University's tenure procedures," and hoped the system would keep in mind "these important institutional considerations" when sorting through the documents. ...

The lawsuit claims the university allowed Hawley to first review his emails before letting the UM System's custodian of records, Paula Barrett, begin processing Elmer's request. While some email correspondences may be exempt from public record, such as personal student information, the lawsuit claims the university broke the law by allowing Hawley that review.

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May 28, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1115

IRS Logo 2Roll Call op-ed:  Impeachment of IRS Chief Is a Serious Misstep, by Stephen M. Ryan (McDermott Will & Emery, Washington, D.C.):

On November 9, 2017, well into the Clinton or Trump Administration, IRS Commissioner John Koskinen’s term will expire. Koskinen, like FBI Director James Comey, is a Senate-confirmed executive who has a term of office making him independent of the president’s term. Koskinen will be lauded at that time as a man of integrity who not only kept the IRS on life support while under constant attack but who provided the necessary leadership and integrity to drive the agency forward to better serve taxpayers.

Impeachment of federal office holders is reserved for those who commit high crimes or misdemeanors. Unfortunately, the House of Representatives seems determined to have a go at Koskinen for reasons that are political and unworthy of impeachment. ... Koskinen is an exemplary public official. He should be getting an award for his service, not this type of attention. He has not done anything wrong personally. Impeachment in the absence of crimes or unethical behavior, none of which has occurred here, is a dangerous precedent that has not been part of the U.S. experience and could dissuade experienced, competent executives like Koskinen from accepting appointment to senior management positions within government. ...

In essence, the claim is he failed to respond to lawfully issued congressional subpoenas and engaged in “a pattern of deception” in statements pertaining to the IRS production of emails, and failed to act with competence in overseeing the investigation into IRS’s treatment of conservative groups. The proponents’ case that Koskinen committed high crimes and misdemeanors depends upon issues he did not control. But Koskinen wasn’t even at the IRS when the scandal occurred, and he certainly was not leading the search for documents to respond to congressional requests. Republican members of Congress are rightfully upset that IRS employees in West Virginia magnetically erased hundreds of backup tapes in March 2014, destroying some of former IRS official Lois Lerner’s emails. While IRS recycling the backup tapes was dumb as a bag of hammers, Koskinen did not engage in that activity.

Can these alleged transgressions by the IRS be attributed to the new commissioner or rise to the level of an impeachable offense by him or contempt of Congress? Clearly, the answer is no. ...

Koskinen is what he appears to be — an exemplary public servant who heads an agency in disarray; while his 76-year-old peers are fishing or golfing. People with Koskinen’s skill-set are incredibly hard to find in public service. One can only hope that this impeachment resolution — and the personal nature of its assertions — won’t cause others to turn away from public service, depriving the government of the seasoned, competent executives that it desperately needs.

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May 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, May 27, 2016

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Penn State Law Faculty 'Discontent' Amidst Failed Dean Search, Two Year 'Downward Descent (From #51) Into Rankings Oblivion (#86)'

Penn State Logo (2016)Kimberly Krawiec (Duke), Rumblings of Discontent at Penn State Law:

Penn State Law’s dean search has been unsuccessful (announced to the faculty by the provost) and that at least some faculty have been unhappy with the search process and a perceived lack of faculty input. ... [T]he complaints apparently include search committee composition, a lack of openness and communication during the search process, the way in which candidates were vetted, and whether (or the extent to which?) faculty are polled on their views of candidates. Some of the discontent may also stem from the law school’s recent rankings drop. As Above the Law reported in March:

Penn State, fresh off separating its campuses into two separate law schools, continues its downward descent into oblivion by losing another 15 spots in the rankings, following up on a 20-spot drop just last year. To think, Penn State was once so close to being ranked as a Top 50 school.

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May 27, 2016 in Law School Rankings, Legal Education | Permalink | Comments (1)

GAO:  IRS's 1950s Computer System Is Federal Government's Oldest, Putting Taxpayer Information At Risk

GAO (2016)Government Accountability Office, Federal Agencies Need to Address Aging Legacy Systems (GAO- 16-696T):

Federal legacy IT investments are becoming increasingly obsolete: many use outdated software languages and hardware parts that are unsupported. Agencies reported using several systems that have components that are, in some cases, at least 50 years old. For example, ... the Department of the Treasury uses assembly language code—a computer language initially used in the 1950s and typically tied to the hardware for which it was developed.  ... The following table provides examples of legacy systems across the federal government that agencies report are 30 years or older and use obsolete software or hardware, and identifies those that do not have specific plans with time frames to modernize or replace these investments.

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May 27, 2016 in Gov't Reports, IRS News, Tax | Permalink | Comments (4)

Oyez Supreme Court Media Project Leaves Chicago-Kent For Cornell, Justia

OyezNational Law Journal, 'Oyez Project' New Home Will Keep Supreme Court Audio Free to Public:

After months of uncertainty about its future, the Oyez Project, a free repository of more than 10,000 hours of U.S. Supreme Court oral-argument audio and other court resources, has found a new home.

The project’s founder, Jerry Goldman, who is retiring soon, told The National Law Journal on Tuesday that a newly minted arrangement with Cornell University’s Legal Information Institute and Justia, the online publisher of legal information, will keep Oyez alive. ...

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May 27, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1114

IRS Logo 2Wall Street Journal editorial, Instant Document Destruction at the IRS:

Has the Internal Revenue Service been systematically evading federal record-keeping laws? On Monday the Cause of Action Institute sued the IRS and commissioner John Koskinen for refusing to preserve electronic employee communications that concern official business.

Cause of Action says that in 2010 the IRS struck a little-noticed agreement with the National Treasury Employees Union not to record employees’ instant messages. The watchdog group also says that in response to its Freedom of Information Act requests for text messages sent by senior IRS officials, the agency replied that due to “routine system housekeeping” and “spacing constraints,” IRS text messages are retained for only 14 days before they are deleted.

Both actions appear to violate the Federal Records Act that requires agencies to preserve all relevant documents. The agency says it retains emails, at least those that don’t disappear in mysterious computer crashes. But if employees can send text messages and not save them, they can avoid records retention. “No agreement with a union or any other party can supersede Americans’ right to know how the IRS makes decisions,” says Cause of Action. “In addition, the IRS is violating the law by regularly deleting all employee text messages as a matter of convenience.”

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May 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, May 26, 2016

Blank Presents The Timing Of Tax Transparency Today In Sweden

Blank (2016)Joshua Blank (NYU) presents The Timing of Tax Transparency, 90 S. Cal. L. Rev. ___ (2017), at the Stockholm Centre for Commercial Law at Stockholm University in Sweden today at an event hosted by Teresa Simon-Almendal, Peter Melz and Roger Persson-Osterman (all of Stockholm University):

Fairness in the administration of the tax law is the subject of intense debate in the United States. As recent headlines reveal, the Internal Revenue Service has been accused of failing to enforce the tax law equitably in its review of tax-exempt status applications by political organizations, the international tax structures of multinational corporations, and the estate tax returns of millionaires, among other areas. Many have argued that greater “tax transparency” would better empower the public to hold the IRS accountable and the IRS to defend itself against accusations of malfeasance. Mandatory public disclosure of taxpayers’ tax return information is often proposed as a way to achieve greater tax transparency. Yet, in addition to concerns regarding exposure of personal and proprietary information, broad public disclosure measures pose potential threats to the taxing authority’s ability to enforce the tax law.

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May 26, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Curve: Life At Manhattan Law School

Curve 2Jeremy Blachman (J.D. 2005, Harvard; author, Anonymous Lawyer) & Cameron Stracher (J.D. 1987, Harvard; Levine Sullivan Koch & Schulz, New York), The Curve (2016):

The students at Manhattan Law School, a decrepit institution on the edge of the toxic Gowanus Canal in Brooklyn, are geographically-challenged and mad as hell – in debt up to their eyeballs and fighting over the few legal jobs left for those who are far outside the Ivy League. Our hero, Adam Wright, is a newly minted professor with high hopes and low expectations. But nothing has prepared him for a classroom of digitally distracted students, a rebellion of grade grubbers, a Law Journal staff at the helm of a school-wide scam, and a corrupt administration that runs the school as if it were a personal ATM. Adam regrets leaving his lucrative corporate law firm for the wilds of academia, until he finds an ally in the brilliant and fetching Laura Stapleton, a colleague with her own troubling secrets.

Now the two professors may just have to save legal education ... or join their students in the unemployment line … or worse.

With its colorful cast of eccentrics and law school misfits, a satirical plot that – without too much of a stretch – could be ripped from the headlines, and a proven author duo who know this world and have six previous books between them, The Curve continues Ankerwycke’s trend of publishing high quality/highly readable legal fiction with an edge.

The Curve is a hugely entertaining and deeply felt novel that satirizes the current state of higher education and reads like a cross between Dangerous Minds and The Paper Chase.

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May 26, 2016 in Book Club, Legal Education | Permalink | Comments (2)

Oberlin Students Demand Abolition Of Midterms, Grades Lower Than C

OberlinThe Week, Oberlin Students Want to Abolish Midterms and Any Grades Below C:

Students at Oberlin College are asking the school to put academics on the back burner so they can better turn their attention to activism. More than 1,300 students at the Midwestern liberal arts college have now signed a petition asking that the college get rid of any grade below a C for the semester, and some students are requesting alternatives to the standard written midterm examination, such as a conversation with a professor in lieu of an essay.

The students say that between their activism work and their heavy course load, finding success within the usual grading parameters is increasingly difficult.

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May 26, 2016 in Legal Education | Permalink | Comments (10)

Dan Markel Killing Investigated As Murder for Hire, 5-6 More Arrests Expected

GarciaFollowing up on this morning's post, Man Arrested In Murder Of Dan Markel:  Tallahassee Democrat, Markel Killing Investigated as Murder for Hire, More Arrests Expected:

Law enforcement officials are investigating Florida State University law professor Dan Markel’s death as a murder for hire, according to two sources close to the investigation.

The sources add that more arrests are expected.

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May 26, 2016 in Legal Education | Permalink | Comments (6)

Man Arrested In Murder Of Dan Markel

GarciaUpdateDan Markel Killing Investigated As Murder for Hire, 5-6 More Arrests Expected

Tallahassee Democrat, Man Faces Murder Charge in Dan Markel's Death:

A man has been arrested in connection with the July 2014 shooting death of Florida State University law professor Dan Markel.

Sigfredo Garcia [right], 34, was arrested in Broward County Wednesday, according to the Tallahassee Police Department.

Garcia is charged with first-degree murder and possession of cocaine. The State Attorney's Office In Tallahassee approved an arrest warrant for him Wednesday.

He is being held in the Broward County Jail after being arrested by the Hallandale Beach Police Department.

Garcia has a criminal history, according to Miami-Dade County records, that includes strong arm robbery, burglary, drugs and concealed weapons violations.

TPD, which provided information about the arrest in a 12:11 a.m. email, is holding a press conference at 11:30 a.m. today to provide details.

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May 26, 2016 in Legal Education | Permalink | Comments (0)

Chicago Is #1 In Law Grad Employment; Five California Law Schools Are In The Bottom Ten

National Law Journal (2016)National Law Journal, Chicago Law School Jumps to No. 1 in Full-Time Jobs After Graduation; California Schools Show High Percentage of Underemployed J.D.s.:

The University of Chicago Law School had a strong year on the employment front. It sent a higher percentage of 2015 graduates into full-time legal jobs than any other law school—nearly 91 percent according to The National Law Journal’s analysis of the latest employment data from the ABA. ...

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May 26, 2016 in Legal Education | Permalink | Comments (1)

Hemel Reviews Taxing The Rich: A History Of Fiscal Fairness In The United States And Europe

TaxingFollowing up on last week's postDaniel Hemel (Chicago), Taxation as Compensation (reviewing   Kenneth F. Scheve (Stanford) & David Stasavage (NYU), Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (Princeton University Press, 2016)):

According to Scheve and Stasavage . . . , “the story of taxing the rich has more to do with politics” than with fiscal constraints . . . . For Scheve and Stasavage, “politics” specifically means rhetoric: their answer to the “why” question focuses on the types of tax fairness arguments that advocates for redistribution have employed. Scheve and Stasavage direct their attention (and ours) to three particular tax fairness claims. The first is what they call the “equal treatment” argument: “the fairest system involves equal treatment for all” (p. 6). The second is what they describe as “the ability to pay doctrine”: each additional dollar of taxation represents less of a sacrifice for someone earning $10 million a year than for someone earning $10,000, and so a progressive tax system imposes a roughly equal burden on the rich as on the poor even while the rich pay much more in dollar terms. The third type of argument is “compensatory”: “taxing the rich more heavily than the rest serves to correct or compensate for some other inequality in government action” (p. 5). According to Scheve and Stasavage, the last type of argument is the only one that historically has justified highly progressive rate structures. ...

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May 26, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee holds a hearing today on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part II.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

  • Nina Olson (National Taxpayer Advocate, IRS) (testimony)

May 26, 2016 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1113

IRS Logo 2New York Post editorial, The IRS Boss Is Just Begging To Be Impeached:

Four years after the IRS hobbled conservative groups by targeting them for extra scrutiny, the agency’s still playing politics.

No wonder Congress is looking to impeach its boss, John Koskinen.

At a House Judiciary Committee hearing Tuesday, Republican lawmakers gave specific reasons for their move: his lies under oath, his flouting of a congressional subpoena — and his repeated defiance.

Koskinen’s response? Ha! He didn’t even bother to show up.

Koskinen was supposed to “fix” the IRS after the scandal erupted over targeting conservatives. Yet his real purpose seemed to be running interference, covering up information and shielding the agency (and Team Obama) from consequences.

Shockingly, he and his agency are continuing that pattern to this day: A lawsuit filed Monday by the Cause of Action Institute accuses the IRS and its boss of refusing to preserve official business electronic communications, as required by law.

Bloomberg View editorial, Impeaching IRS Director A Sham:

Pity John Koskinen, who agreed to take one of the worst jobs in America and is now being punished for it.

In 2013, President Barack Obama asked Koskinen to take over at the Internal Revenue Service amid budgetary chaos, deteriorating morale and a simmering scandal. House Republicans, still angry about that scandal -- and about the concept of taxation generally -- are now trying to impeach him.

Their case is weak, and the ultimate loser in this sorry spectacle won't be Koskinen.

Start with the scandal. An inspector general report in 2013 found that IRS employees had been improperly scrutinizing conservative groups seeking tax-exempt status. This was wrong, and blame was duly apportioned. The agency's boss resigned, a top deputy retired, and the director of the offending unit was placed on leave and declared in contempt of Congress. Half a dozen congressional committees vowed to fumigate every pixel of offending detail. One managed to produce an 8,000-page report. The Justice Department investigated (and found no evidence of criminality).

But you have to get up pretty early in the morning to outfox the House Oversight and Government Reform Committee. Representative Jason Chaffetz of Utah, the committee's chairman, has made a professional specialty of berating civil servants. He appears to view Koskinen -- who, recall, joined the agency after this scandal -- as obstructing further investigation.

The specific allegations Chaffetz has adduced hardly add up to high crimes and misdemeanors. At worst, they portray mild bureaucratic ineptitude. And removing Koskinen from office stands no chance in legislative reality. Nothing's shaking on Shakedown Street, as they used to say.

Actually impeaching Koskinen -- a punishment not invoked against an executive-branch appointee since Ulysses S. Grant occupied the White House -- probably isn't the objective anyway. The point is to embarrass the IRS. And congressional Republicans have already done a fine job of that by slashing the agency's budget while helping to vastly expand its responsibilities, with predictably frustrating results.

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May 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, May 25, 2016

Graetz:  Essays On International Taxation

GraetzMichael J. Graetz (Columbia), Follow the Money: Essays on International Taxation (Yale May 2016) (free download (PDF, EPUB (iPad, Noble), MOBI (Kindle)), book (amazon)):

Publicity about tax avoidance techniques of multinational corporations and wealthy individuals has moved discussion of international income taxation from the backrooms of law and accounting firms to the front pages of news organizations around the world. In the words of a top Australian tax official, international tax law has now become a topic of barbeque conversations. Public anger has, in turn, brought previously arcane issues of international taxation onto the agenda of heads of government around the world.

Despite all the attention, however, issues of international income taxation are often not well understood. In this collection of essays, written over the past two decades, renowned tax expert Michael J. Graetz reveals how current international tax policy came into place nearly a century ago, critiques the inadequate principles still being used to make international tax policy, identifies and dissects the most prevalent tax avoidance techniques, and offers important suggestions for reform. This book is indispensable for anyone interested in international income taxation.

Praise for Follow the Money:

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May 25, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (2)

PolitiFact:  Hillary's Claims About Trump's Tax Returns Are 'Mostly False'

More On Canaries In The Law School Coal Mine

CanaryFollowing up on my previous posts on canaries in the law school coal mine:

Jeremy R. Paul (Dean, Northeastern), Saving the Canary, 66 Syracuse L. Rev. ___ (2016):

It’s hard not to admire Rick’s turn of phrase observing that law schools resemble the canary in the coal mine because downward pressure on tuition increases, with potentially harmful consequences, is hitting law schools just a few years ahead of when it will batter our partners around campus [Richard A. Matasar, The Canary in the Coal Mine: What the University Can Learn from Legal Education, 45 McGeorge L. Rev. 161 (2013)]. Yet faculty members throughout the country wonder why things seem suddenly out of control. ...

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May 25, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

Bird-Pollan:  Why Tax Wealth Transfers? A Philosophical Analysis

Jennifer Bird-Pollan (Kentucky), Why Tax Wealth Transfers? A Philosophical Analysis, 57 B.C. L. Rev. ___ (2016):

The one-hundredth anniversary of the estate tax provides an ideal moment to reflect on the role of wealth transfer taxation in the larger scheme of the U.S. tax system. Wealth and income inequality are at historically high levels, and the responses to these issues are often reduced to a simplistic political dichotomy of “right” versus “left.” The multitude of views of the American people cannot be reduced to such simple generalities without losing important nuances. This Article identifies three general categories of political philosophical viewpoints that are commonly endorsed by both politicians and everyday Americans, and then examines the current estate tax from within the perspective of those positions.

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May 25, 2016 in Scholarship, Tax | Permalink | Comments (1)

2d Annual Mid-Career Tax Professors Workshop Concludes At UC-Davis

UC Davis Logo (2016)Panel #5:  Issues in Enforcement and Inter-Governmental Relations

David Gamage (UC-Berkeley), Tax Cannibalization and Fiscal Federalism in the United States, 110 Nw. U. L. Rev. ___ (2016)
Commentator: Adam Rosenzweig (Washington University)

Dennis Ventry (UC-Davis), Stitches for Snitches: Lawyers as Whistleblowers, 50 U.C. Davis L. Rev. ___ (2017)
Commentator: Will Foster (Arkansas)

Darien Shanske (UC-Davis), State Fiscal Constitutions and the Common Law of Public Finance
Commentator: Jake Brooks (Georgetown)

Panel #6:  Insurance and Employee Benefits

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May 25, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On Perspectives On The Need For Tax Reform

Ways & Means (2016)The House Ways & Means Committee holds a hearing today on Perspectives on the Need for Tax Reform:

This hearing will focus on perspectives and considerations that drive the need for tax reform, in particular economic growth, business expansion and job creation, simplicity and burden reduction, and other key motivators. The hearing is part of the Subcommittee’s ongoing effort to lay the foundation for legislative action on comprehensive tax reform in 2017.

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May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

Former Tax Lawyer Jo Ann Rooney Named President Of Loyola Chicago

LoyolaJo Ann Rooney (J.D. 1987, Suffolk; LL.M. (Tax) 1991, Boston University), has been named the first lay President of Loyola University Chicago.  She worked as a tax lawyer for several years in the 1990s in Rhode Island and Massachusetts, before serving as CFO, COO, and in-house tax counsel for a financial services firm from 1994-2002.  She became President of Spalding University (2002-2010) and Mount Ida College (2010), and then worked in a variety of positions in the U.S. Defense Department (2011-2012) before becoming Managing Director of the Huron Consulting Group (Chicago) (2012-2016).

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May 25, 2016 | Permalink | Comments (0)

House Holds Hearing On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee held a hearing yesterday on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part I.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

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May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

House Holds Hearing Today On Protecting Small Businesses From IRS Abuse

Ways & Means (2016)The Oversight Subcommittee of the House Ways & Means Committee holds a hearing today on Protecting Small Businesses from IRS Abuse, Part II:

[T]he Subcommittee will hold a follow-up hearing to Protecting Small Businesses from IRS Abuse, where members examined how the Internal Revenue Service wrongly used its authority to seize taxpayer dollars and harm small businesses. Despite continued oversight, the Internal Revenue Service (IRS) and Department of Justice (DOJ) have failed to answer the Subcommittee’s questions about how they will help those who were hurt by the agencies’ former policies. At the hearing next week, Members will hear from people whose bank accounts were seized years ago and who are still trying to get their money back. Members will also hear from the IRS and DOJ about what the agencies are doing to address IRS abuse and help those who have been harmed by it.

Panel #1:

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May 25, 2016 in Congressional News, IRS News, Tax | Permalink | Comments (2)

The IRS Scandal, Day 1112

IRS Logo 2Washington Post, Republicans Detail Case Against IRS Chief in Hearing Democrats Call a Sham:

House Republicans on Tuesday reprised their probe into four-year-old missteps by the Internal Revenue Service, making a detailed case why Commissioner John Koskinen should be impeached in a colorful hearing that underscored conservatives’ suspicion of the agency.

The two-and-a-half hour hearing, on accusations that Koskinen lied under oath to lawmakers and flouted a congressional subpoena, also was a reminder of a bitterly divided Congress. Few Democrats showed up for the proceeding before the House Judiciary Committee, but those who did said Republicans were wasting taxpayers’ time and grandstanding on an old issue that would go nowhere.

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May 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, May 24, 2016

Morse:  Safe Harbors, Sure Shipwrecks

Safe HarborSusan C. Morse (Texas), Safe Harbors, Sure Shipwrecks, 49 U.C. Davis L. Rev. 1385 (2016):

In law, a safe harbor describes behavior that will not be penalized, and leaves other facts that fall outside the safe harbor to be judged case-by-case. A sure shipwreck, as I call it, is the mirror image. It describes behavior that violates the law as a matter of rule, and leaves other conduct to be judged by a standard. Prior literature analyzes rules and standards at length. But it has largely missed safe harbors and sure shipwrecks, even though these hybrids are everywhere in statutory, regulatory and case law.

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May 24, 2016 in Scholarship, Tax | Permalink | Comments (0)

Leff:  Tax Benefits Of Government-Owned Marijuana Stores

CannabisBenjamin M. Leff (American), Tax Benefits of Government-Owned Marijuana Stores, 50 U.C. Davis L. Rev. ___ (2016):

Over a year ago (March 7, 2015), a little store called the Cannabis Corner opened up in the small town of North Bonneville, Washington, about an hour by car from Portland, Oregon. The Cannabis Corner is the first marijuana store to be operated by a “public development authority,” an independent entity created by a state or local government. Public development authorities are generally exempt from federal income taxes under section 115 of the Internal Revenue Code. For a marijuana business, this exemption is especially valuable because section 280E of the Code currently prevents marijuana businesses from deducting many of the ordinary expenses other businesses regularly deduct, resulting in extremely high federal income taxes.

This Article is the first to address whether independent governmental affiliates that sell marijuana are exempt from federal income tax under section 115 of the Internal Revenue Code.

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May 24, 2016 in Scholarship, Tax | Permalink | Comments (0)

Airbnb, Other Peer-To-Peer Companies Pay Out Billions Beneath IRS’s Radar

ShortchangedFollowing up on yesterday's post, The Tax Code Is Out Of Step With Today's On-Demand Platform Economy:  Bloomberg, Airbnb, Others Pay Out Billions Beneath IRS’s Radar, Study Finds:

The IRS has been so slow to adapt to the rapidly emerging peer-to-peer economy that billions of dollars in taxable income a year are probably going unreported every year, according to a study being delivered to Congress this week.

More than 2.5 million Americans earned income via on-demand platforms like Airbnb Inc., Etsy Inc. and Lyft Inc. in 2014, and the companies generated an estimated $15 billion in revenues. But the companies don’t withhold taxes on the income they pay to people who provide services or sell items via their platforms.

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May 24, 2016 in Tax | Permalink | Comments (0)

Duff:  Four Alternatives To The Estate And Gift

David G. Duff (British Columbia), Alternatives to the Gift and Estate Tax, 57 B.C. L. Rev. ___ (2016):

Following the near death experience of the federal gift and estate tax in 2010, the hundredth anniversary of the tax represents an ideal moment to reflect on the role of this tax and whether an alternative approach might be more desirable and sustainable. This Article examines four prominent alternatives to the current tax: an annual wealth tax, taxing unrealized gains at death, including gifts and inheritances in income, and a lifetime accessions tax that would apply to the cumulative value of gifts and inheritances received by individuals over their lifetimes.

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May 24, 2016 in Scholarship, Tax | Permalink | Comments (0)

Trump Eschews Using Voter Analytics In His Campaign, Will Rely Instead On Personality, Rallies To Win Presidency

FiveThirtyEight, Trump’s Scorning Of Data May Not Hurt Him, But It’ll Hurt The GOP:

Big DataData doesn’t win elections; candidates do. Presumptive Republican nominee Donald Trump bet on that idea last week when he announced his plan to rely on his personality and rallies in the general election instead of collecting data on voters. Trump has a point: The effect of “big data” and improved analytics on elections is often overhyped. Even David Plouffe — the architect of President Obama’s 2008 and 2012 campaigns, the most data-savvy in history — agreed that Obama’s “data processing machine” was not responsible for his wins.

But Republicans are worried, and for good reason: Trump’s assumption that the sole value of data is to win more votes is too narrow. His decision to limit the role of data probably won’t be the deciding factor in the 2016 election, but data organization and access are an investment in the future of the party. A presidential campaign presents a rare opportunity to cultivate the next generation of talent and collect a ton of new data on voters, and Trump’s refusal to do so means that Republicans may need to wait until 2020 or beyond to even the playing field with Democrats. ...

Democrats now hold a substantial expertise advantage in digital data-driven campaigning, and the GOP admitted as much in their 2012 election post-mortem. John McCain hired only 15 data staffers in 2008, compared with Obama’s 131. To his credit, Mitt Romney increased the number of data hires to 87 in 2012. (Obama had 342). In 2016, Republicans were positioned to build on this effort and narrow the analysis gap between the parties, pivoting off of two consecutive losses into an innovative data strategy — just like in 1964 and 2004.

But Republicans seem set to squander the opportunity. Trump currently employs as few as two staffers dedicated to data, according to reports.

Chart 2

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May 24, 2016 in Political News, Tax | Permalink | Comments (5)

Above The Law Top 50 Law School Rankings

ATLAbove the Law, 2016 Top 50 Law School Rankings:

We welcome you to the fourth annual installment of the Above the Law Top 50 Law School Rankings. These are the only rankings to incorporate the latest ABA employment data concerning the class of 2015. The premise underlying our approach to ranking schools remains the same: that given the steep cost of law school and the new normal of the legal job market, potential students should prioritize their future employment prospects over all other factors in deciding whether and where to attend law school. The relative quality of schools is a function of how they deliver on the promise of gainful legal employment. 

The Top 10:

  1. Yale
  2. Stanford
  3. Chicago
  4. Penn
  5. Harvard
  6. Virginia
  7. Duke
  8. Northwestern
  9. Cornell
  10. UC-Berkeley

Methodology:

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May 24, 2016 in Law School Rankings, Legal Education | Permalink | Comments (6)

Senate Holds Hearing Today On Debt Versus Equity: Corporate Integration Considerations

Senate LogoThe Senate Finance Committee holds a hearing today on Debt versus Equity: Corporate Integration Considerations:

  • John Buckley (Former Chief Tax Counsel, House Ways & Means Committee)
  • Jody K. Lurie (Vice President, Janney Montgomery Scott (Philadelphia))
  • John McDonald (Partner, Baker & McKenzie (Chicago))
  • Alvin C. Warren, Jr. (Professor, Harvard Law School)

In connection with the hearing, the Joint Committee on Taxation has released Overview Of The Tax Treatment Of Corporate Debt And Equity (JCX-45-16):

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May 24, 2016 in Congressional News, Tax | Permalink | Comments (0)

Merritt:  Job Prospects For Doctors And Lawyers

Law and MedicineDeborah Jones Merritt (Ohio State), Doctors and Lawyers:

Medicine and law are highly regarded professions; talented students used to eagerly seek entry to both of these fields. But now applications to law schools are falling while those to medical schools are rising. What’s behind that phenomenon? Let’s take a look at employment trends in these two professions over the last forty years. ...

The Bureau estimates that the economy will generate 99,300 new jobs for doctors between 2014 and 2024, but just 43,800 for lawyers. The medical profession will add even more new jobs each year (9,930) than it did in the 1980’s (8,800). The number of new lawyering jobs, in contrast, will sink to just 4,380 positions per year. That’s less than a quarter of the positions added annually during the 1980’s and not much higher than the average number of jobs added between 2008 and 2014.

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May 24, 2016 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 1111

IRS Logo 2The House Judiciary Committee holds a hearing today on Examining the Allegations of Misconduct Against IRS Commissioner John Koskinen, Part I:

At the hearing, members of the House Judiciary Committee will examine the findings of the House Oversight and Government Reform Committee’s investigation of IRS Commissioner Koskinen. The House Oversight and Government Reform Committee has investigated the targeting of conservative groups for several years and many of the Committee’s members have found that Commissioner Koskinen failed to comply with a congressional subpoena which resulted in destruction of key evidence, made false statements during his sworn congressional testimony, and did not notify Congress that Lois Lerner’s emails were missing.

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May 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)