TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, May 25, 2016

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)

Monday, May 23, 2016

Fast-Talking Dean Speeds Up Graduation Ceremony By Hitting 15 NPM (Names Per Minute)

Inside Higher Ed, When You Need a Fast-Talking Dean:

These days, many colleges and universities graduate so many people at a single commencement that the tradition of reading graduates' names is long gone. For smaller colleges, the tradition lives on. But many in the audience care only about the name of their child or loved one and lose patience waiting for those with names at the end of the alphabet.

Hamilton College may have found the perfect solution. Its dean of the faculty, Pat Reynolds, has been timed, and he reads the names of the nearly 500 graduates faster than any of his predecessors in the last 25 years. Hamilton knows this because an emeritus professor of biology, Ernest Williams, has been timing the reading of names for that long. And he certifies that Reynolds -- who some years gets in about 15 names a minute -- is far speedier than any of the five other deans Williams timed.

Dean Reynolds is good, but after sitting through my first Pepperdine outdoor graduation ceremony under the Southern California sun last Friday, I think John Moschitta has a real future as a commencement speaker:

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May 23, 2016 in Legal Education | Permalink | Comments (1)

Hayashi Reviews Marian's The State Administration Of International Tax Avoidance

Jotwell (Tax) (2016)Andrew Hayashi (Virginia), Putting a Face to International Tax Avoidance, JOTWELL (May 20, 2016) (reviewing Omri Marian (UC-Irvine), The State Administration of International Tax Avoidance, 7 Harv. Bus. L. Rev. ___ 2016)):

The world of international tax avoidance is a colorful one. There are the legal structures, with names like the “Double Irish Dutch Sandwich,” the exotic locales, like Bermuda and the Cayman Islands, and the identity crises presented by “hybrid” entities and financial instruments. But rarely does international tax avoidance have a human face and one could be forgiven for getting the impression that falling effective corporate tax rates are as inevitable as water flowing downhill. Corporations, acting in the interests of their shareholders, maximize their after-tax profits. States, acting in the best interests of their residents, set tax policies that are incongruous with the policies of other states. The “bad actors,” if there are any in this story, are corporate aggregates of one sort or another, multinational corporations and tax haven countries.

But the LuxLeaks scandal has given us one human face that stands out from the crowd of aggregates. This is the face of Marius Kohl or “Monsieur Ruling,” the former head of the Luxembourg agency, who gave rulings to taxpayers on the tax treatments of their proposed transactions. In The State Administration of International Tax Avoidance, Omri Marian does a wonderful job of explaining how this one bureaucrat acted to facilitate massive tax avoidance by engaging in “arbitrage manufacturing.” Marian argues that rogue individuals pose an ongoing threat to international tax cooperation. His paper clearly explains how arbitrage can be manufactured, documents how it was done in Luxembourg, and draws from the LuxLeaks episode an important lesson about the need to integrate micro reforms of tax administration into the macro project of international tax harmonization efforts. ...

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May 23, 2016 in Scholarship, Tax | Permalink | Comments (1)

Pomona College Adds Diversity As A Tenure Requirement

PomonaInside Higher Ed, Diversity as a Tenure Requirement:

Pomona College's faculty has voted to change the criteria for tenure to specifically require candidates to be "attentive to diversity in the student body."

While many colleges and universities encourage faculty members to support diversity efforts, and a few have encouraged tenure candidates to reference such work, Pomona's requirement may go farther in that it applies to all who come up for tenure. The faculty voted overwhelmingly this month to approve the change. At Pomona, the faculty controls the tenure criteria, so the vote is final, although there is a grandfather clause exempting those already in the tenure-review process.

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May 23, 2016 in Legal Education | Permalink | Comments (2)

Report:  The Tax Code Is Out Of Step With Today's On-Demand Platform Economy

KogodTax Policy Center, Kogod School of Business, American University,  Shortchanged: The Tax Compliance Challenges of Small Business Operators Driving the On-Demand Platform Economy

The last time Congress enacted substantial tax reform—in 1986—only 8.2% of American households owned personal computers. Today, more than 87% of American adults own a mobile phone and on-demand platforms like Uber, Etsy, Lyft, Airbnb, HomeAway, Amazon, and TaskRabbit have become household names by connecting businesses and consumers. Although millions of Americans are engaging in the on-demand platform economy every day as sellers and service providers, the tax compliance challenges this new frontier presents have gone relatively unnoticed. At the same time, these challenges will grow with this fastest growing segment of the labor economy— creating unnecessary and ongoing burdens for the small business operators who power the on-demand economy. 

This report, in keeping with the mission of the Kogod Tax Policy Center to conduct non-partisan research on tax issues specific to small businesses and entrepreneurs, identifies the tax compliance challenges the on-demand economy presents for its small business operators. Having spent more than a year investigating this growing problem, we report that:

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May 23, 2016 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Peter Thiel's Advice To Graduates: 'My Ambition To Be A Lawyer Was Less A Plan For The Future Than An Alibi For The Present'

Peter Thiel (Co-founder, PayPal), Commencement Address at Hamilton College (May 22, 2016):

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

Thank you so much for the kind introduction. It’s a tremendous honor to be here.

Like most graduation speakers my main qualification would seem to be that I am one of the few people who are even more clueless about what is going on in your lives than your parents and your professors.

Most of you are about 21 or 22 years old, you’re about to begin working. I haven’t worked for anybody for 21 years. But if I try to give a reason for why it makes sense for me to speak here today I would say it’s because thinking about the future is what I do for a living. And this is a commencement. It’s a new beginning. As a technology investor, I invest in new beginnings. I believe in what hasn’t yet been seen or been done.

This is not what I set out to do when I began my career. When I was sitting where you are, back in 1989, I would’ve told you that I wanted to be a lawyer. I didn’t really know what lawyers do all day, but I knew they first had to go to law school, and school was familiar to me.

I had been competitively tracked from middle school to high school to college, and by going straight to law school I knew I would be competing at the same kinds of tests I’d been taking ever since I was a kid, but I could tell everyone that I was now doing it for the sake of becoming a professional adult.

I did well enough in law school to be hired by a big New York law firm, but it turned out to be a very strange place. From the outside, everybody wanted to get in; and from the inside, everybody wanted to get out.

When I left the firm, after seven months and three days, my coworkers were surprised. One of them told me that he hadn’t known it was possible to escape from Alcatraz. Now that might sound odd, because all you had to do to escape was walk through the front door and not come back. But people really did find it very hard to leave, because so much of their identity was wrapped up in having won the competitions to get there in the first place.

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May 23, 2016 in Legal Education | Permalink | Comments (8)

2d Annual Mid-Career Tax Professors Workshop Kicks Off Today At UC-Davis

UC Davis Logo (2016)Panel #1:  Tax Administration

Susie Morse (Texas), Regulating by Example
Commentator: Emily Cauble (DePaul)

Sarah Lawsky (Northwestern), Picturing the Code
Commentator: David Gamage (Berkeley)

Will Foster (Arkansas), Uncoupling Competence
Commentator: Dennis Ventry (UC-Davis)

Panel #2:  International

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May 23, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Simkovic Presents What Can We Learn from Credit Markets At ALI

ALI Logo (2015)American Law Institute 93rd Annual Meeting:

[On] the last day of the Annual Meeting ... Young Scholar Medal Recipient Michael Simkovic of Seton Hall University School of Law presented What Can We Learn from Credit Markets. He opened with a quote from, Oliver Wendell Holmes from his address entitled The Path of the Law: “For the rational study of the law, the blackletter man may be the man of the present, but the man of the future is the man of statistics and the master of economics”:

My research uses economic analysis to explore how laws affect financial markets and how courts and regulators can use financial information to make legal and policy decisions. ...

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May 23, 2016 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

University of Iowa President Says Law School Enrollment Decline Has Stabilized At -30%

Iowa Logo (2016)Following up on my previous posts:

KCRG, University of Iowa President Weighs in Law School Enrollment:

Earlier this month, the University of Iowa College of Law graduated one of its smallest classes in recent memory, about 100 students.

That's nearly half of what it used to be more than four years ago. ...

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May 23, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1110

IRS Logo 2USA Today op-ed:  When Leaders Cheat, Followers ... Follow, by Glenn Reynolds (Tennessee):

The trust that underlies a law-abiding society is rotting away thanks to double-dealing in Washington.

The state is “a gang of thieves writ large,” economist Murray Rothbard is said to have remarked. I’ve always viewed that sort of comment with a bit of skepticism. But now I’m beginning to wonder.

I wonder more when I read things like this report from the Washington Examiner: “The CIA's inspector general is claiming it inadvertently destroyed its only copy of a classified, three-volume Senate report on torture, prompting a leading senator to ask for reassurance that it was in fact ‘an accident.’”

Here’s a hint: It very likely wasn’t.

Is that unfair? I mean, it could have been an accident, right? Yeah it could have been. But it wasn’t. Accidents like that just don’t happen — or, when they do, they’re generally not accidents. And it’s right for people who have custody of evidence to know that any convenient “accidents” will give rise to the presumption that they had something pretty awful to hide, and that they hid it.

But, of course, the CIA’s “accident” was only the latest in a long rash of “accidental” losses of incriminating information in this administration. The IRS — whose Tea Party-targeting scandal is now over 1,100 days old without anyone being charged or sent to jail — seems to have a habit of ”accidentally” destroying hard drives containing potentially incriminating evidence. It has done so in spite of court orders, in spite of Congressional inquiries and in spite of pretty much everyone’s belief that these “accidents” were actually the deliberate, illegal destruction of incriminating evidence to protect the guilty.

Then there’s Hillary’s email scandal, in which emails kept on a private unsecure server — presumably to avoid Freedom of Information Act disclosures — were deleted. Now emails from Hillary’s IT guy, who is believed to have set up the server, have gone poof.

“Destroy the evidence, and you’ve got it made,” said an old frozen dinner commercial. But now that appears to be the motto of the United States government.

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May 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, May 22, 2016

Symposium:  Legal Education In A Time Of Change

UNLV Logo (2016)Symposium, Legal Education in a Time of Change: Challenges and Opportunities,  16 Nev. L.J. 143-274 (2015):

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May 22, 2016 in Conferences, Legal Education, Scholarship | Permalink | Comments (4)

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 a new #1 paper new papers debuting on the list at #4 and #5:

  1. [372 Downloads]  The Panama Papers and Tax Morality, by Usman W. Chohan (University of New South Wales)
  2. [327 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  3. [264 Downloads]  New Prominence Of Tax Basis In Estate Planning, by Paul L. Caron (Pepperdine) & Jay A. Soled (Rutgers)
  4. [161 Downloads]  How Income Taxes Should Change during Recessions, by Zachary D. Liscow (Yale) & William A. Woolston (Stanford)
  5. [151 Downloads]  The Missing Tax Benefit of Donor-Advised Funds, by John R. Brooks (Georgetown)

May 22, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Late To The Ball:  Finding My (Tennis) Bliss

LateWall Street Journal:  A Sport for Life, Learned Late,  by Jason Gay:

Gerry Marzorati, author of the new book Late to the Ball, is trying to prove an avid tennis fan can become a successful tennis player in his mid-50s and beyond.

I don’t want to give the impression that Late to the Ball is a hardcore tennis book. Well, it sort of is: If you love tennis, you will geek out at Marzorati’s travels to supercamps, stroke gurus, and the Jedi-sounding United States Tennis Congress. But at its heart, Late to the Ball is a soulful meditation on aging, companionship and the power of self-improvement. I know that sounds like the kind of cheesy thing people say on the cover of book jackets. But it’s really true.

“The book was an opportunity to ponder these questions,” said Marzorati, a well-regarded writer and editor who retired last year from the New York Times, an adorable community newspaper which I believe publishes several times a week. Immersing himself in tennis, he said, was a way to test if it was possible, later in life, to “really fall in love with something—something you didn’t think was going to happen again.”

This is a common life crossroads, the author believes. Marzorati gave an example: former President George W. Bush’s recent immersion in oil painting. “I completely understand what he’s doing,” Marzorati said. “I know what he’s thinking, how much pleasure it gives him, and that he really wants to get better at it.”

I, too, picked up tennis in my mid-50s when I left Cincinnati for Pepperdine.  But I have found my tennis bliss and can now compete with the best Pepperdine faculty players, but not from "tennis gurus" or "supercamps."   This 2-minute video harkens back to John Wooden's life lesson about the importance of properly tying your sneakers and changed my (tennis) life:

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May 22, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1109

IRS Logo 2The Maddow Blog:  Republicans Get Serious About Impeachment, But Not Obama’s, by Steve Benen:

Quick quiz: when was the last time the U.S. Congress actually impeached an appointed executive branch official? It was 1876 – 140 years ago – when the House impeached Ulysses S. Grant’s War Secretary, William Belknap, over corruption allegations.

Nearly a century and a half later, House Republicans appear eager to give Belknap some company. The Washington Post reported yesterday:

Rep. Jason Chaffetz (R-Utah) introduced a resolution on Wednesday to censure IRS Commissioner John Koskinen, raising the stakes in the GOP war against the tax collector days before a hearing on whether to impeach him.

The four-page resolution seeks Koskinen’s resignation or removal by President Obama and calls on the IRS chief to forfeit his federal pension.

Chaffetz, the far-right chairman of the House Oversight Committee, explained in a statement yesterday, “I view censure as a precursor to impeachment.” He added a few weeks ago, “My foremost goal is impeachment and I’m not letting go of it.”

No, of course not. That might be responsible.

By any sane metric, the idea of congressional impeachment against the IRS commissioner is bonkers. House Republicans are apparently still worked up about an IRS “scandal” that doesn’t exist, and though Koskinen wasn’t even at the agency at the time of the alleged wrongdoing, GOP lawmakers want to impeach him because they disapprove of his handling of the imaginary controversy. ...

[G]iven the fact that Koskinen hasn’t actually committed any impeachable offenses, it’s hard not to get the impression that many House Republicans want to impeach someone, anyone, just for the sake of being able to say they impeached someone. ...

I continue to believe much of this is borne of partisan frustration: Republican investigations into Benghazi and other manufactured “scandals,” including the IRS matter itself, have effectively evaporated into nothing. That’s deeply unsatisfying to GOP hardliners, who remain convinced there’s Obama administration wrongdoing lurking right around the corner, even if they can’t see it, find it, prove it, or substantiate it any way.

Unwilling to move on empty handed, impeaching the IRS chief will, if nothing else, make Republican lawmakers feel better about themselves.

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

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

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May 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, May 21, 2016

This Week's Ten Most Popular TaxProf Blog Posts

The 10 Most-Cited Tax Faculty

Brian Leiter (Chicago) has updated his ranking of the Ten Most-Cited Tax Faculty to now cover the 2010-2014 period (2009-2013 data here):

Rank

Tax Prof

Citations

Age

1

David Weisbach (Chicago)

420

53

2

Michael Graetz (Columbia)

410

72

3

Reuven Avi-Yonah (Michigan)

360

59

4

Daniel Shaviro (NYU)

350

59

5

Lawrence Zelenak (Duke)

310

58

6

Leandra Lederman (Indiana)

300

50

7

Edward Zelinsky (Cardozo)

280

66

8

Victor Fleischer (San Diego)

270

45

9

Edward McCaffery (USC)

260

58

10

Joseph Bankman (Stanford)

230

61

Leiter also lists four highly-cited scholars who work partly in tax:

Rank

Tax Prof

Citations

Age

1

Louis Kaplow (Harvard)

1150

60

2

Brian Galle (Georgetown)

380

44

3

Kristin Hickman (Minnesota)

360

46

4

Mark Gergen (UC-Berkeley)

280

60

In our article, Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83, 120-22 (2006), Bernie Black (Northwestern) and I examined the Top 25 tax faculty as measured by SSRN downloads, a practice I update monthly on TaxProf Blog.  Five of the most-cited tax faculty (Avi-Yonah, Fleischer, Kaplow, Shaviro, Weisbach) also are five of the most-downloaded tax faculty.

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May 21, 2016 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Small Bar Prep Company Files $50 Million Antitrust Action Again BARBRI, 11 Law Schools

LogosWall Street Journal, Bar Prep Company Accused of Boxing Out Smaller Rival:

The nation’s largest bar exam-prep company is facing allegations that it elbowed a smaller rival out of the market, capitalizing on special relationships with law schools that it had nurtured with donations and gifts.

BARBRI and several [11] law schools [Cardozo, Columbia, Duke, Emory, Fordham, Georgetown, Harvard, NYU, St. John's, UC-Berkeley, USC] were named in a federal antitrust lawsuit brought by LLM Bar Exam, a company that prepares foreign lawyers to sit for the bar exam in the United States. The complaint, which was filed in Manhattan on Thursday, alleges an illegal monopoly and asks for $50 million in damages. ...

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May 21, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1108

IRS Logo 2Forbes:  IRS Commissioner's Smidgen Of Impeachment, by Robert W. Wood:

The House Judiciary Committee meets May 24, 2016 to consider IRS Commissioner John Koskinen. As Don Corleone said to the Heads of the Five Families, “How did things ever get so far?“ President Obama was less than convincing with his famous “not even a smidgen of corruption” remark about the IRS to Fox News in 2014. There were just some folks down at the IRS who were “confused” about how to implement the law governing tax-exempt groups. “Confused” sounded better than the one about the rogue IRS employees in Cincinnati. 

Now, House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT) introduced House Resolution 737 to censure IRS Commissioner Koskinen. The resolution offers Congressional condemnation and disapproval for what it claims is the IRS Commissioner’s pattern of conduct. It says that is inconsistent with the trust and confidence placed in him as an Officer of the United States. The resolution formally censures Mr. Koskinen, urges his resignation or removal, and even requires him to forfeit all rights to his government pension and other federal benefits. ...

This has been a long battle. Indeed, Chairman Chaffetz and 51 members of Congress sent a letter to President Obama in July of 2015 calling for the IRS Commissioner’s removal. On October 27, 2015, Chairman Chaffetz introduced H.J. Res. 494  to begin proceedings to impeach Koskinen. Referred to the House Judiciary Committee, it currently has 69 co-sponsors. The Committee even released a video with a timeline of key events in the IRS targeting scandal.

House Republicans still want action. Some of the anti-IRS movement is arguably due to the seething animosity some Republicans still have over the targeting, and the way the IRS chief handled it. A raft of scandals involving the IRS, poor and even evasive responses to Congress, bungled approaches to security, and a seeming diffidence to the public and concerned legislators have not won the IRS any friends. For Republicans, the IRS Commissioner has been a lightning rod. ...

Despite all the hoopla, Commissioner Koskinen is still probably safe. In the meantime, Republicans have pushed to pass laws slashing IRS power. President Obama has said he will veto bills that cut back on IRS budgets or power. Supporters say that the goal of such laws is to help improve customer service, prevent fraud, and ensure taxpayer dollars are being spent appropriately.

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May 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, May 20, 2016

Congratulations, Pepperdine Law School Class of 2016!

Graduation

May 20, 2016 in Legal Education | Permalink | Comments (2)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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May 20, 2016 in Scholarship, Tax | Permalink | Comments (0)

Weekly Student Tax Note Roundup

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May 20, 2016 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Fordham Symposium:  We Are What We Tax

Fordham Law ReviewSymposium, We Are What We Tax, 84 Fordham L. Rev. 2413-2753 (2016):

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May 20, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Ten Ways To Tell You May Be Sitting Next To An Economist On An Airplane

PassengersThe Economist, Ten Ways to Tell You Might be Sitting Next to an Economist:

An academic economist was taken off a plane last week after a fellow passenger became suspicious. He was feverishly scribbling what she thought was "terrorist code" or foreign lettering into a notebook. It turned out that Guido Menzio, an Italian economist from the the University of Pennsylvania, was working on some differential equations for a model on menu costs and price dispersion. Thankfully, Mr Menzio was allowed back on his flight. But passengers can't be too careful. Here are ten ways to tell you might be sitting next to an economist; police have also released pictures of two prime suspects (see above). 

1. He refuses to listen to the safety announcement because "in the long run, we're all dead" ...

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May 20, 2016 in Legal Education | Permalink | Comments (2)

McGinnis:  The Case Against Disclosing Presidential Candidates’ Tax Returns

John O. McGinnis (Northwestern), The Case Against Disclosing Candidates’ Tax Returns:

I have previously expressed very substantial reservations about Donald Trump’s candidacy, but decline to join in the criticism about his refusal to release his tax returns. While a norm has developed suggesting that citizens have a right to see tax returns of presidential candidates and indeed candidates for some other offices, it is a bad norm. It invades privacy, discourages some people from entering politics, distracts from policy issues, and harms the prospects of those with complex financial affairs. ...

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May 20, 2016 in Tax | Permalink | Comments (2)

Too Many Lawyers? Report Faults Firms For Resisting Layoffs

American Lawyer LogoAmerican Lawyer, Too Many Lawyers? Report Faults Firms for Resisting Layoffs:

Should law firm leaders be firing more lawyers? That seems to be the takeaway of a report released Wednesday by the legal consultancy Altman Weil.

Nearly 60 percent of the 356 law firm leaders surveyed for the report said that overcapacity is hurting their firm’s profitability. The problem is more pronounced among firms with 250 lawyers or more, with 75.6 percent of them citing overcapacity as a drag on profits, the report said.

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May 20, 2016 in Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 1107

IRS Logo 2Wall Street Journal:  The IRS’s Ugly Business as Usual: ‘How Much Has Really Changed?’ A Judge Asks. Answer: Not Much. The Scandal Goes On., by Kimberley A. Strassel:

Amid the drama that is today’s presidential race, serious subjects are getting short shrift. No one is happier about this than Barack Obama. And no agency within that president’s administration is more ecstatic than the Internal Revenue Service.

That tax authority’s targeting of conservative nonprofits ranks as one of the worst federal scandals in modern history. It is topped only by the outrage that no one has been held to account. Or perhaps by the news that the targeting continues to this day.

That detail became clear in an extraordinary recent court hearing, in front of a panel of judges for the D.C. Circuit Court of Appeals. The paired cases in the hearing were Linchpins of Liberty v. United States and True the Vote v. Internal Revenue Service. They involve several conservative nonprofits—there are 41 in Linchpin—that were, as they said, rounded up and “branded” by the IRS. The groups are still suffering harm, and they want justice.

A lower-court judge had blithely accepted the IRS’s claim that the targeting had stopped, that applications for nonprofit status had been approved, and that the matter was therefore moot.

The federal judges hearing the appeal, among them David B. Sentelle and Douglas H. Ginsburg, weren’t so easily rolled. In a series of probing questions the judges ascertained that at least two of the groups that are party to the lawsuit have still not received their nonprofit approvals. The judges determined that those two groups are 501(c)(4) social-welfare groups, which are subject to far less scrutiny than 501(c)(3) charities, yet are still being harassed by the IRS five years later. The judges were told that not only are the groups still on ice, but that their actions are still being “monitored” by the federal government.

As one lawyer for the plaintiffs noted, despite the IRS’s claim that it got rid of its infamous targeting lists, there is “absolutely no showing” that the agency has in fact stopped using the underlying “criteria” that originally “identified and targeted for mistreatment based on political views.”

The hearing also showed the degree to which the IRS has doubled down on its outrageous revisionist history, and its excuses. IRS lawyers again claimed that the whole targeting affair came down to bad “training” and bad “guidance.” They blew off a Government Accountability Office report that last year found the IRS still had procedures that would allow it to unfairly select organizations for examinations based on religious or political viewpoint. The lawyers’ argument: We wouldn’t do such a thing. Again. Trust us.

More incredibly, the IRS team claimed that the fault for some of the scandal rests with the conservative groups, for not pushing back hard enough during the targeting. In response to complaints that the groups had been forced to hand over confidential information (information the IRS now refuses to destroy), one agency lawyer retorted: “They didn’t have to give the information to the IRS if they thought it was inappropriate, they could have said so.” Really. ...

An IRS lawyer rolled out the defense used by former agency official Lois Lerner that the targeting was just the unfortunate use of “inappropriate” criteria, but Judge Sentelle reminded the lawyer of the IRS’s vindictiveness. He noted that on one occasion the IRS simply shelved the application of an organization that had sued it. The agency “came to Court not having done anything to eliminate” the problem, he said, so “It’s just hard to find the IRS to be an agency we can trust, isn’t it?”

Judge Sentelle said there is a “pretty good case” that “egregious violations of the Constitution” had been committed, and he dared an IRS lawyer to “stand there with a straight face” and say otherwise. Judge Ginsburg, who spent the hearing catching out the IRS’s conflicting statements, at one point simply asked: “How much has really changed?”

Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.

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May 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 19, 2016

LSAT Is Poor Predictor Of Law School Grades: 6 LSAT Points = 0.1 LGPA

LSAT (2015)Alexia Brunet Marks (Colorado) & Scott A. Moss (Colorado), What Predicts Law Student Success? A Longitudinal Study Correlating Law Student Applicant Data and Law School Outcomes, 13 J. Empirical Legal Stud. 205 (2016):

Despite the rise of "big data" empiricism, law school admission remains heavily impressionistic; admission decisions based on anecdotes about recent students, idiosyncratic preferences for certain majors or jobs, or mainly the Law School Admission Test (LSAT). Yet no predictors are well-validated; studies of the LSAT or other factors fail to control for college quality, major, work experience, etc. The lack of evidence of what actually predicts law school success is especially surprising after the 2010s downturn left schools competing for fewer applicants and left potential students less sure of law school as a path to future success. We aim to fill this gap with a two-school, 1400-student, 2005-2012 longitudinal study. After coding non-digitized applicant data, we used multivariate regression analysis to predict law school grades ("LGPA") from many variables: LSAT; college grades ("UGPA"), quality, and major; UGPA trajectory; employment duration and type (legal, scientific, military, teaching, etc.); college leadership; prior graduate degree; criminal or discipline record; and variable interactions (e.g., high-LSAT/low-UGPA or vice-versa).

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May 19, 2016 in Legal Education, Scholarship | Permalink | Comments (4)

Elkins:  The Merits Of Tax Competition In A Globalized Economy

David Elkins (Netanya), The Merits of Tax Competition in a Globalized Economy, 91 Ind. L.J. 905 (2016):

Since the turn of the current century, leading transnational organizations and academic scholarship have identified tax competition among countries as one of the scourges of the international tax regime. Both the EU and the OECD have warned that tax competition erodes the tax bases of Member States and impedes their ability to provide essential services. Commentators have argued that unrestrained competition is driving tax rates on mobile sources of income to (or close to) zero, a process that jeopardizes the very existence of the welfare state, exacerbates problems of global poverty, and deprives developing countries of funds that they desperately need in order to improve their physical infrastructure and human capital. Tax competition is also said to misallocate economic resources by driving investment to where the tax rate is lowest rather than to where the return on investment is highest.

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May 19, 2016 in Scholarship, Tax | Permalink | Comments (0)

Private College Tuition Discounts Hit All-Time High Of 49%

49%National Association of College and University Business Officers, Tuition Discounts at Private Colleges Continue to Climb:

The gap between the sticker price on a private college education and the amount most students actually pay continues to widen, according to new data from the National Association of College and University Business Officers (NACUBO).

In the 2015 NACUBO Tuition Discounting Study, 401 private, nonprofit colleges reported another year of record-breaking tuition discount rates for 2015-16, topping last year's previous highs. For academic year 2015-16, the average institutional discount rate—or the percentage of total gross tuition and fee revenue institutions give back to students as grant-based financial aid—was an estimated 48.6 percent for first-time, full-time freshmen and 42.5 percent for all undergraduates. In other words, these private colleges put about 42 cents on every dollar of tuition and fee revenue toward scholarships and grants.

NACUBO

For student recipients, those funds went further than ever before. About 88 percent of first-time, full-time freshmen and 77.6 percent of all undergraduates were awarded aid, which averaged roughly half the cost of tuition and fees for both cohorts.

 

May 19, 2016 in Legal Education | Permalink | Comments (0)

Book:  Bureaucratic Oppression And The Tax System

ABA Tax LawyerLeslie Book (Villanova), Bureaucratic Oppression and the Tax System, 69 Tax Law. ___ (2016):

Observers of the Internal Revenue Service’s administration of the earned income tax credit (EITC) have leveled one main criticism, that the Service has been unable to reduce stubbornly high error rates. Congress has generally focused attention on this problem with many legislative initiatives, including unprecedented (for the tax system) penalties for improper claims, special due diligence rules for preparers submitting returns with EITC claims, and a lessening of pre-assessment right to judicial review of Service rejections of EITC claims.

In this Article I wish to shift attention to the Service’s poor service to EITC claimants. In particular, I wish to broaden the inquiry to reflect the insights of nontax scholars who have looked at the ways that administrative agencies interact with low-income individuals who rely on benefits that agencies administer.

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May 19, 2016 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Sugin:  Rhetoric And Reality In The Tax Law Of Charity

Linda Sugin (Fordham), Rhetoric and Reality in the Tax Law of Charity, 84 Fordham L. Rev. 2607 (2016):

The rhetoric of public purposes in charity law has created the mistaken impression that charity is public and fulfills public goals, when the reality is that charity is private and cannot be expected to solve the problems that governments can solve. The rhetoric arises from a combination of charity-law history and tax expenditure analysis. The reality follows the money and control of charitable organizations. On account of the mismatch of rhetoric and reality, the tax law of charity endorses an entitlement to pre-tax income and (ironically) creates a bias against taxation. This article reorients the project of defining public and private in the tax law by starting from a normative theory of government responsibility.

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May 19, 2016 in Scholarship, Tax | Permalink | Comments (0)

TPC Study Fuels New Congressional Push To Integrate Corporate And Shareholder Taxes

Wall Street Journal, Fewer Shareholders Pay U.S. Taxes on Dividends: New Study Is Bolstering Drive to Shift Tax Burden From Corporations to Investors:

WSJ 2A new study showing that a shrinking fraction of shareholders of U.S. corporations pay taxes on dividends is bolstering a drive to revamp the corporate tax system. [Steven Rosenthal & Lydia Austin, The Dwindling Taxable Share of U.S. Corporate Stock, 151 Tax Notes 923 (May 16, 2016)]

The specter of double taxation, which animates complaints about today’s U.S. corporate tax code, is receding, according to a new study from the Tax Policy Center. Tax-exempt and tax-preferred entities—such as 401(k) plans and other retirement accounts—own more than 75% of U.S. corporate stock, nearly opposite the prevailing pattern from 50 years ago, the study said.

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May 19, 2016 in Congressional News, Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Rutgers Faculty Rebels Against Use Of Metrics To Assess Their Scholarly Performance

AAFollowing up on my previous post:  Inside Higher Ed, Refusing to Be Measured:

The faculty of the Graduate School at Rutgers University in New Brunswick took a stand against Academic Analytics on Tuesday, resolving that administrators shouldn’t use proprietary information about faculty productivity in decisions about divvying up resources among departments, or those affecting the makeup of the faculty, graduate teaching assignments, fellowships and grant writing. They also demanded to view their personal data profiles by Sept. 1. The vote was 114 to 2.

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May 19, 2016 in Legal Education | Permalink | Comments (4)

Knoll & Mason:  Is The Philadelphia Wage Tax Unconstitutional?

Michael S. Knoll (Pennsylvania) & Ruth Mason (Virginia), Is the Philadelphia Wage Tax Unconstitutional? And If It Is, What Can and Should the City Do?, 164 U. Pa. L. Rev. Online 163 (2016):

Philadelphia has a complex and antiquated tax system that has long been criticized for driving employers and jobs away from Philadelphia by making it expensive to conduct business in the City. The centerpiece of the Philadelphia tax system is the Philadelphia wage tax, which raised more than $1.6 billion in 2014. That tax has been challenged as unconstitutional in light of the Supreme Court’s 2015 decision in Wynne v. Comptroller of Maryland, which struck down a structurally similar Maryland tax.

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May 19, 2016 in Scholarship, Tax | Permalink | Comments (0)

The Emotionally Intelligent Law Professor: A Lesson From The Breakfast Club

Breakfast clubHeidi K. Brown (Brooklyn), The Emotionally Intelligent Law Professor: A Lesson From the Breakfast Club, 36 U. Ark. Little Rock  L. Rev. 273 (2016):

While some law review articles emphasize the importance of teaching Emotional Intelligence (EI) as part of the students' law school curriculum as a component of “professionalism,” fewer articles thus far have illuminated how professors can cultivate their own EI to become better educators. The present article aspires to provide law professors with a workable explanation of EI, and practical guidance to make EI accessible and useful in the classroom.

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May 19, 2016 in Legal Education | Permalink | Comments (1)