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Editor: Paul L. Caron
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Sunday, December 14, 2014

Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 paper is now #97 in all-time downloads among 10,578 tax papers:

  1. [1340 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [397 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [231 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)
  4. [206 Downloads]  A Conceptual Framework for the Regulation of Cryptocurrencies, by Omri Marian (Florida)
  5. [168 Downloads]  Corporate Inversions and the Unbundling of Regulatory Competition, by Eric L. Talley (UC-Berkeley)

December 14, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Witte: From Critical Legal Studies to Christian Legal Studies

Law Bible 4John Witte Jr. (Emory), Foreword: From Critical Legal Studies to Christian Legal Studies, in Law and the Bible: Justice, Mercy and Legal Institutions (Robert Cochran & David VanDrunen, eds.  2013):

This text reflects briefly on the precocious rise of Christian legal studies in North American and European law schools, and the past, present, and potential role of Scripture and the Christian tradition in shaping modern understandings of public, private, penal, and procedural law.

December 14, 2014 in Book Club, Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 584

IRS Logo 2Las Vegas Review-Journal editorial:  IRS Defies Order to Turn Over Tax Documents:

Back in February, President Barack Obama said the apparent targeting of conservative organizations by the IRS was not illegal or politically motivated, but rather the result of “some bone-headed decisions,” and that “not even a smidgen of corruption” was at play. A few months — and developments — later, however, the president’s words are even less believable than they were then.

First, nonprofit watchdog group Cause of Action filed a Freedom of Information Act request for documents from the IRS indicating that the agency had been sharing individuals’ private tax data with the White House. (The group was trying to obtain information proving the existence of an independent investigation into alleged unauthorized access to the Koch brothers’ tax returns by former White House senior economics adviser Austan Goolsbee.) When the agency dragged its feet and ultimately denied the request, Cause of Action sued. A judge ruled in Cause of Action’s favor, ordering the IRS to turn over all of the documents by December 1.

Despite the court order, however, the IRS has continued to stonewall, refusing to share the requested records. While the Treasury Inspector General for Tax Administration (TIGTA) claimed initially that the IRS would comply and turn over more than 2,000 pages of documents, it abruptly reneged, saying in a letter to Cause of Action on December 1 that, yes, they did indeed have 2,043 pages of documents relating to the FOIA request, but that Cause of Action couldn’t see them due to federal privacy laws.

So, if you’re keeping score at home, the IRS claimed that turning over the documents would be an invasion of privacy — despite the fact that the agency already invaded that privacy by having the documents in the first place.

These new developments highlight a very cozy and, in all likelihood, very much illegal relationship between the Obama administration and the IRS. We still don’t know the full extent and depth of the IRS targeting scandal, but this case could provide evidence of coordination. For now, we are left with a ton of questions:

What, exactly, was the White House doing with more than 2,000 pages of documents containing private tax data of various Americans? Is the IRS helping the Obama administration go after the “dark money” groups the president and his party have long condemned? And what are we to make of the fact that as many as 30,000 supposedly destroyed emails from former IRS Exempt Organizations Director Lois Lerner have suddenly turned up — emails from January 2009 through June 2011, the time period during which the IRS was ramping up its conservative targeting efforts?

Does the IRS just have really bad luck with computers? Are those in charge of finding the emails incompetent? Or is there something more coordinated and corrupt going on? And, if so, how much did President Obama know about it?

When President Obama took office, he swore that his would be “the most transparent” presidency in history, but his administration’s hostility regarding actual transparency, as well as the free press, remains alarming and unacceptable. All of the requested IRS records need to be made public, and if the Obama administration and the IRS won’t do it, then the Republican-led Congress needs to push for hearings to get to the bottom of the matter.

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December 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, December 13, 2014

Four Charts That Explain Why America Has Too Many Law Schools

Bloomberg Businessweek, Four Charts That Explain Why America Has Too Many Law Schools:

It is probably the worst time in decades to be a law school. The four charts below show why we don't need to be minting any new ones. 

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December 13, 2014 in Legal Education | Permalink | Comments (0)

Life and Death in the Federal Income Tax Class

TedTheodore Eisenberg, Henry Allen Mark Professor of Law at Cornell, died suddenly of a heart attack on February 23, 2014 at the age of 66 (remembrance here).  I was a student of Ted's in his bankruptcy class, and I later convinced him to participate in our law school rankings symposium at Indiana.  Although Ted was primarily known for his empirical research in bankruptcy, civil rights, and the death penalty, he also taught federal income tax.  Here is an excerpt from a student evaluation in Ted's federal income tax class as a visiting professor at Harvard Law School from In Memoriam: Theodore Eisenberg [1947-2014], 100 Cornell L. Rev. 1, 3 (2014):

Thank you, Professor Eisenberg, for making a course I feared taking since day one of HLS enjoyable. Really enjoyable. There were days when I thought, My god, it can’t be, I like tax. Prof. Eisenberg is the best teacher I’ve had at HLS. An unpretentious, patient, searching attitude and a brilliant teaching style. I can’t say enough in favor of this unique, witty, and motivating professor. Profs at HLS should be required to take lessons from Eisenberg on how to teach a law school class. Made a class of 150 seem like a class of 15. A great communicator. I’m not afraid of tax anymore. EISENBERG IS A GOD. HLS does not deserve him. But HLS stu- dents do. 

TyreUNLV, Q&A: New Grad Tyre Graym:

You've had significant health issues during your studies. Did that influence the direction you wanted to take with your degree?
I suffered from focal segmental glumerulosclerosis, which is a chronic kidney disease. On Sept. 11, 2012, while sitting in Professor (Francine) Lipman’s federal income tax course, I received the call I had been waiting to get for about three years: A kidney was available and I needed to rush to the hospital. At 4 a.m. on the next day, I received a kidney transplant. ...

My long-term goals include establishing a nonprofit that will provide legal advice to people who are candidates for transplant and major medical procedures. I believe that I can and will be able to raise awareness about kidney disease and organ donation.  I am here today because of the selfless act of another. If through my efforts, I can do the same for one other person, my time on this earth will have been well spent.

December 13, 2014 in Legal Education, Tax | Permalink | Comments (0)

NY Times: Life Insurers Use State Laws to Avoid $100 Billion in U.S. Taxes

New York Times DealBook, Life Insurers Use State Laws to Avoid as Much as $100 Billion in U.S. Taxes:

Some companies have been called economic traitors for seeking to lower their tax bills by moving overseas. But life insurers are accomplishing the same goal without leaving the country, saving as much as $100 billion in federal taxes, much of it in the last several years.

The insurers are taking advantage of fierce competition for their business among states, which have passed special laws that allow the companies to pull cash away from reserves they are required to keep to pay claims. The insurers use the money to pay for bonuses, shareholder dividends, acquisitions and other projects, and because of complicated accounting maneuvers, the money escapes federal taxation.

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December 13, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 583

IRS Logo 2The Blaze:  Did the IRS Share Confidential Taxpayer Data With the White House? It May Take Several More Months to Find Out:

A government watchdog group has been forced to ask a federal court to insist that the government hand over thousands of documents that could show the IRS gave confidential taxpayer information to the White House.

The Treasury Inspector General for Tax Administration, an internal oversight arm of the Treasury Department, indicated last month it was willing to hand over up to 2,500 documents that could show the IRS improperly shared this information with the Obama administration.

TIGTA had collected these documents after Austan Goolsbee, the former chair of the White House’s Counsel of Economic Advisers, implied that Koch Industries doesn’t pay any corporate income tax, which raised questions about how Goolsbee would know that.

But last week, TIGTA told Cause of Action, the group seeking those documents, that it could not hand them over after all. TIGTA said the rules of the tax code would prevent it from making them public. TIGTA said the documents contain confidential taxpayer data that cannot be released.

As a result, Cause of Action filed a new motion in the U.S. District Court for the District of Columbia that asks the court to dispute TIGTA’s decision. That motion indicates a resolution of the fight could still take several months.

Under Cause of Action’s proposed motion, the group would file a motion for summary judgment in late January, TIGTA would file its own arguments in late February, and all replies would be due by early April.

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December 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, December 12, 2014

Pepperdine Survived Today's Rain

The view from the law school atrium (via Al Sturgeon):

Rainbow Law School

The view from the pool (via Marcelo Ferreira):


December 12, 2014 in Legal Education, Tax | Permalink | Comments (1)

WSJ: Bonus Depreciation Fails to Boost Jobs, Capital Investment

Wall Street Journal, A Tax Break Fails to Produce Jobs:

With Congress poised to extend a raft of tax breaks, consider this: One such break has helped AT&T and Verizon slash their recent tax bills by billions of dollars without leading to the intended increase in investment or jobs.

The measure, known as “bonus depreciation,” lets companies offset their income with investments they have made more quickly. It was enacted in 2008 as part of the economic stimulus package with the goal of giving companies an incentive to build more factories or upgrade more equipment, creating jobs and giving a boost to sluggish economic growth in the process.

But that isn’t how it has worked, at least at AT&T and Verizon, whose vast networks of towers and cables make them two of the country’s biggest investors in infrastructure.

AT&T estimated its federal tax bill last year at $3 billion, down from about $5.9 billion in 2007, before the tax relief was enacted. Verizon estimated that it would get $197 million back last year, compared with a 2007 bill of $2.6 billion.

Meanwhile, the companies have kept their capital spending relatively flat since the stimulus was adopted, and their employee count has dropped by more than 100,000 people, a fifth of their combined work forces.


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December 12, 2014 in Scholarship, Tax | Permalink | Comments (2)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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December 12, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Study Gauges the Stress of Waiting for Bar Exam Results

BarNational Law Journal, Study Gauges the Stress of Waiting for Bar Exam Results:

Any lawyer can tell you that awaiting the results of the bar examination is stressful. Now there is a study to prove it.

A pair of psychologists at the University of California, Riverside, tracked the emotional states of 50 law graduates who sat for the California bar exam in 2011. Their goal was to better understand how people cope with the uncertainty while awaiting important news.

They found a general pattern: Stress and anxiety peaked immediately after the three-day exam, and then dropped significantly during the monthslong wait for the results. However, anxiety shot up again in the weeks before the results were released.

“Our research suggests that you’re really stressed out in the beginning and the end, but you relax a little bit in the middle,” said psychology professor Kate Sweeny, who wrote the article with graduate student Sara Andrews.

“It’s tough in the beginning, when that exam is fresh in your mind. My guess is that people are focusing on the questions they missed. And in the solid month before they get the results, the rumination and stress ramps up.”

The article, Mapping Individual Differences in the Experiences of a WaitingPeriod, appears in the Journal of Personality and Social Psychology.

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December 12, 2014 in Legal Education | Permalink | Comments (0)

Dumpster Diving Into the ABA’s 509 Information Reports

Associate's Mind, Dumpster Diving Into the ABA’s 509 Information Reports (Statistics + Graphs):

So I noticed on the TaxProf Blog that the newest crop of ABA 509 Information Reports on accredited law schools came out recently. It’s good that the ABA has begun to release this data. It can help students look at trends at schools over time. Unfortunately, there are only reports from 2011 to date available. Whenever some official body like the ABA or the LSAC dumps of numbers, I like to dig around for a bit and see what I can find. For the past couple of years I’ve done it with LSAC data that indicated that top university students are avoiding law schools, and schools where there have been increases in law schools applicants (2013, 2014). The general theme was that “the best and brightest students” from top schools have been shying away from going to law school. And that lower ranked schools were increasingly sending more students to law school.

For a lark (and because I’m stuck at home sick with the flu), I decided to go through some of the 509 reports and pull data. I picked the Top Ten schools as listed in Above The Law’s Top 50 Law School Rankings (represent) to see if any particular trends were visible. I also choose the ten lowest ranked schools according to US News & World Report’s Best Law School Rankings (note, I choose the bottom ranked schools, not those listed as “unranked”). I pulled out three sets of data to compare. GPA percentiles, LSAT percentiles, and matriculant percentage change from 2011 to 2014.


[Click on chart to enlarge.]

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December 12, 2014 in Legal Education | Permalink | Comments (0)

Prof Sues UDC Law School For Discrimination After Tenure Denial

Legal Times, Former UDC Law Professor Sues School for Discrimination:

MawakanaA former law professor at the University of the District of Columbia David A. Clarke School of Law is accusing the school of discriminating against African-American faculty. Kemit Mawakana filed a lawsuit against the university claiming he was denied tenure and a promotion because of his race. ...

Mawakana joined the law school faculty in 2006 as an assistant professor, according to his complaint. He was promoted to associate professor in 2010. Mawakana applied for tenure in 2011 and maintains in his lawsuit that he “met or exceeded all of the criteria” in the school’s faculty handbook and tenure guidelines.

The school denied him tenure, according to the suit, citing his failure to meet scholarship standards—a finding that Mawakana said was false and rooted in racial discrimination.

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December 12, 2014 in Legal Education | Permalink | Comments (0)

The Burger King Inversion: A 'Whopper of a Tax Dodge'

Whopper-Tax-DodgeBlog of the Legal Times, Tax Group Calls Burger King Merger 'Whopper of a Tax Dodge':

Burger King Worldwide Inc. will save hundreds of millions of dollars in U.S. taxes by merging with a Canadian coffee and doughnut chain, according to a new report from a tax advocacy group that called the deal a "'whopper' of a tax dodge." [Americans for Tax Fairness, Whopper of a Tax Dodge: How Burger King’s Inversion Could Shortchange America]

The Miami-based fast-food giant will create a parent company in Canada for it and Tim Hortons Inc. through its acquisition of the business. The deal, considered a major tax-lowering corporate inversion by its critics, is set to close on Friday, creating the new Restaurant Brands International Inc. in Canada, according to Burger King and Tim Hortons.

The transaction will allow Burger King to sidestep $400 million to $1.2 billion in U.S. taxes from 2015 to 2018, the Americans for Tax Fairness analysis shows. In announcing the merger in August, Burger King chief executive officer Daniel Schwartz said the move wouldn't bring "meaningful" tax savings.

December 12, 2014 in Tax | Permalink | Comments (2)

Barnhizer: Traditionalism and Faculty as Legacy Costs

David Barnhizer (Cleveland State), ‘We Have Met the Enemy and He Is Us’: Traditionalism and Faculty as Legacy Costs:

[I]n 1950 there were 114 law schools and about 950 law teachers in those schools. ...Today there are 205 ABA approved law schools with more than 8400 faculty members, a 900 percent growth in the law professoriate relative to 1950. ...

[L]aw school faculties and deans need to understand a fundamental truth directly linked to their ability to fashion new strategies that strengthen their institutions and increase the chances of survival. We are the primary obstacle to designing and implementing effective and innovative solutions. It is our excessive traditionalism, our self interest, our resistance to change, our ego gratification and our carefully constructed blindness to the need for transformation that erects the greatest obstacles to solutions that are more than minimalist “tinkering” on the edge of the institution of legal education. ...

Numerous law schools are burdened by costs that are unsustainable in terms of their ability to operate the educational business model that has existed until the past several years. There are very limited options available to those law schools as they seek to figure out how and when to shift to a different business model. One challenge, or “albatross”, in all this is that the single most significant set of costs for a law school involves expenditures for tenured and tenure track faculty. For a substantial number of law schools, unless they can rid themselves of the “troublesome” burden of expensive faculty, they will lose out in the competitive “game of thrones” in which American legal education is now engaged.

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December 12, 2014 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 582

IRS Logo 2Columbus Dispatch editorial: ‘Lost’ IRS Emails Might Reveal Truth:

It’s unsurprising that the “lost” email messages of former IRS official Lois Lerner, the disappearance of which conveniently coincided with her being investigated for the improper targeting of conservative groups, have been located by the Treasury Department’s inspector general.

Tech experts, as well as common sense, suggested from the outset that it was implausible that the emails just happened to vanish when they did, and were unrecoverable.

But that was the administration’s story, and it was sticking to it — at least until after the midterm elections.

The inspector general reported that 30,000 of Lerner’s emails have been recovered from the period of January 2009 to June 2011, the critical time when she and her colleagues were going after nonprofit groups whose ideology they didn’t like.

The content of the emails is unknown; investigators have said it might take months to sift through them.

For those who have lost track: Politically active conservative groups had their applications for nonprofit status delayed leading up to the 2012 elections and were asked improper questions about their affiliations, beliefs and even the content of their prayers. Some cried foul, but largely were ignored for months.

The Internal Revenue Service denied the targeting until after the election, and only when it became clear the issue wasn’t going away.

In May 2013, Lerner staged a limited confession in response to a planted question at a conference, in apparent attempt to limit the damage.

President Barack Obama at first expressed anger and vowed to get to the bottom of the issue ... until he felt it had blown over enough to dismiss the whole affair as a “phony scandal” without a “ smidgen” of corruption involved.

Meanwhile, IRS Commissioner John Koskinen, appointed about a year ago, went before Congress insisting that the agency had bent over backward to recover Lerner’s emails, but “confirmed that backup tapes from 2011 no longer existed because they have been recycled, pursuant to the IRS normal policy.”

Not only would that have violated standard government records policy, according to testimony from the head of the National Archives, it turned out not to be true.

In light of all this, it’s alarming that after extracting the Lerner emails from the recovered files, the IG plans to send them to the IRS for redactions of confidential information. That would be the definition of allowing the fox to guard the henhouse.

It’s good news that the American public might finally get some answers in this investigation.

But it’s another dismaying example of how the administration that promised to be the “most transparent in history” has routinely misled, delayed and obfuscated in an effort to make its actions look better, especially before an election.

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December 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, December 11, 2014

The Law Student Transfer Market: Arizona State, Florida State, George Washington, Georgetown & Utah Lead The Way

The Legal Whiteboard:  Better Understanding the Transfer Market, by Jerry Organ (St. Thomas): 

TransferUp until this year, the ABA Section of Legal Education and Admissions to the Bar only asked law schools to report the number of transfer students “in” and the number of transfer students “out.”  This allowed us to understand roughly how many students are transferring and gave us some idea of where they are going, and where they are coming from, but not with any direct “matching” of exit and entrance.

Has the number and percentage of transfer students changed in recent years? ...

Using data published in the law school Standard 509 reports, the number of transfers in 2011, 2012 and 2013 has increased only marginally, from 2427 to 2438 to 2501, but, given the declining number of law students, it has increased as a percentage of the preceding year’s first-year “class,” from 4.6% to 5.6%.  ...

The following two charts list the top 20 transfer schools in Summer 2011 (fall 2010 entering class), Summer 2012 (fall 2011 entering class) and Summer 2013 (fall 2012 entering class) – with one chart based on “numbers” of transfers and the other chart based on the number of transfer students as a percentage of the prior year’s first year class. ... [T]hree of the top four schools with the highest number of transfers were the same all three years, with Georgetown welcoming 71 in the summer of 2011, 85 in the summer of 2012, and 122 in the summer of 2013, George Washington, welcoming 104 in the summer of 2011, 63 in the summer of 2012, and 93 in the summer of 2013, and Florida State welcoming 57 in the summer of 2011, 89 in the summer of 2012 and 90 in the summer of 2013.  (Notably, Georgetown and Florida State were the two top schools for transfers in 2006, with 100 and 59 transfers in respectively.) Similarly, three of the top four schools with the highest “percentage of transfers” were the same all three years, with Utah at 19.7% in 2011, 17.5% in 2012 and 34.7% in 2013, Arizona State at 17.8% in 2011, 24.6% in 2012 and 48% in 2013, and Florida State at 28.6% in 2011, 44.5% in 2012 and 48.1% in 2013. More specifically, there are several schools that have really “played” the transfer game in the last two years – increasing their engagement by a significant percentage.  These eight schools [Texas, Arizona, Emory, Arizona State, Georgetown, Flodia State, USC, Minnesota] had 10.2% of the transfer market in 2011, but garnered 22.2% of the transfer market in 2013. ...

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December 11, 2014 in Legal Education | Permalink | Comments (0)

The Ten Best States For Paying Back Your Law School Debt

Huffington Post:  10 Best States for Paying Back Your Law School Debt, by Stephen Dash (CEO, Credible):

Average law school debt at graduation exceeds a staggering $100,000. Everyday at Credible, we see young lawyers trying to deal with their student debt, whether by refinancing their student loans, finding an appropriate federal or state forgiveness program, or even relocating for a better job.

Having helped over 1,000 lawyers with their student debt in the last three weeks alone, we have perspective on which states are most attractive destinations for young lawyers trying to repay their law school debt.

We have found that the most important factors are the ability for young lawyers to get a job, their ability to save once they have a job (which is a product of salary and cost of living), and the breadth and magnitude of each state's loan forgiveness programs.

With those factors in mind, we have created a list of the Best States for Paying Back your Law School Debt. Bear in mind that this list uses aggregated data -- so for lawyers not taking advantage of forgiveness programs, whichever state they can get a stable high-paying job is likely the best for them.

That said, we looked at the numbers and identified the top 10 states for young lawyers to reduce their loan repayment timeline, and detailed some determining metrics [employment ratio, mean salary, cost of living] below:

  1. Washington, D.C.
  2. Georgia
  3. Texas
  4. California
  5. Virginia
  6. Arizona
  7. Colorado
  8. Utah
  9. Illinois
  10. Delaware

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December 11, 2014 in Legal Education | Permalink | Comments (0)

Avi-Yonah: Why AMT and No AMxT? A Comment on Hines and Logue

Reuven S. Avi-Yonah (Michigan), Why AMT and No AMxT? A Comment on Hines and Logue:

In Understanding the AMT, and Its Unadopted Sibling, the AMxT,  Jim Hines and Kyle Logue propose an interesting new theory about why the US has an Alternative Minimum Tax (AMT). The function of the AMT, they propose, is to enable Congress to adopt a progressive rate schedule and to accommodate heterogeneous preferences for tax expenditures. Hines and Logue write that "By taxing a broad definition of income, the AMT makes it possible to have a tax system that both encourages certain activities with generous tax preferences and maintains a semblance of distributional equity." This rationale, they suggest, also favors the adoption of an Alternative Maximum Tax (AmXT), which would cap tax liabilities of individuals with very few preference items and thereby afford Congress greater flexibility in designing the income tax. This analysis is certainly novel, since most of the existing tax literature is opposed to the AMT. The problem, however, is that Hines and Logue have no explanation why Congress adopted the AMT but not the AMxT. When a novel theory explains part but not all of the observed phenomena, it behooves us to take another look at the theory. The following suggests another explanation for the AMT, which I believe is more consistent with Congress’ intent. It also suggests a reason to retain the AMT even if Congress does not adopt the AMxT.

December 11, 2014 in Scholarship, Tax | Permalink | Comments (0)

The Over/Under On The Number Of Law Schools Closing By 2020: Less Than Five (Probably Zero)

ClosedPeter Nemerovski (Miami), Reality Check: Law School Closures Are Unlikely:

For several years now, law professors and journalists who cover the legal profession have been predicting that multiple U.S. law schools will be forced to close in the very near future. In 2010, Bernard Burk and David McGowan wrote that “contraction in the number of schools seems probable.”

Brian Leiter predicted in 2012 that up to ten law schools would close “during the next decade.” In October of this year, Jerry Organ wrote that it is possible that as many as ten percent of law schools will be forced to close. Not to be outdone, David Barnhizer recently opined that eighty law schools are “at some degree of risk” of closure.

Earlier this week, Slate’s Jordan Weissmann got into the act with a piece headlined “Get Ready for Some Law Schools to Close.” Weissmann quickly followed up with another piece describing a bet he made with Professor Steven Davidoff Solomon of Berkeley Law that at least one ABA-accredited law school will close or merge by the end of 2018. While I applaud Weissmann for putting his money — two dollars of it, anyway  —where his mouth is, I’m afraid he’s going to lose his bet.

Unfortunately for Weissmann, the reality is that new law schools open all the time, and existing law schools almost never close. I had to go all the way back to 1955 to find the last ABA-accredited law school that closed for good. That’s when Lincoln University School of Law in St. Louis, Missouri, shut its doors. ...

Of course, just because something hasn’t happened, or hasn’t happened recently, doesn’t mean it won’t. Weissmann’s argument is that law schools have experienced an unprecedented decline in enrollment — 24 percent between 2010 and 2013 — and that the end result of that decline in demand for law degrees will be a decrease in the “supply” of schools offering them.

I have two responses to this. First, Weissmann is comparing 2013 enrollment to a year — 2010 — in which first-year enrollment reached an all-time high of 52,488. So 2013 enrollment was not 24 percent lower than normal; it was 24 percent lower than it was the year more people went to law school than ever before or since.

Wake me up when the decline hits 50 percent.

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December 11, 2014 in Legal Education | Permalink | Comments (4)

2016 Law Grads Shouldn't Take Comfort in New Lawyer Jobs Projection

American Lawyer LogoAmerican Lawyer:  2016 Grads Shouldn't Take Comfort in New Jobs Projection Approach, by Matt Leichter:

[I]t took only two days after I first reported on the proposed change for a law professor, Theodore P. Seto of Loyola Law School, Los Angeles, to declare to "commentators who believe the end of the world is near for legal education" that by 2016, the number of law graduates would exceed the new projected annual job growth rate, creating "a significant excess of demand over supply."

Seto's optimism is misplaced, and other law school stakeholders hoping to benefit from the new methodology should be very careful not to make similar statements if they do not wish to mislead students about their future careers.

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December 11, 2014 in Legal Education | Permalink | Comments (1)

Geier Publishes Free Income Tax Textbook

CALIDeborah H. Geier (Cleveland State) has published a free eLangdell textbook, U.S. Federal Income Taxation of Individuals (CALI 2014):

As one, lone law professor, I have little direct ability to reduce tuition costs for my students. When writing this textbook, however, I decided to decline expressions of interest from the legacy legal publishers in favor of making this textbook available as a free download over the internet (in ePub format for iPads, Mobi format for Kindles, and pdf format for laptops), with an at-cost, print-on-demand alternative for those who like a hard copy. Fortunately, eLangdell (a division of CALI, the Center for Computer-Assisted Legal Instruction) has been an ideal partner in this regard.

In addition to eliminating (or lowering) student cost, this mode of publication will permit me to quickly and fully update the book each December, incorporating expiring provisions, inflation adjustments for the coming calendar year, new Treasury Regulations, etc., in time for use in the spring semester, an approach that avoids cumbersome new editions or annual supplements. This publication method also makes the textbook suitable for use as a free study aid for students whose professors adopt another textbook, as this textbook walks the student through the law with many more fact patterns and examples than do many other textbooks. While this practice adds length, I believe that it also makes the book more helpful to students in confronting what can be daunting material. Finally, having the textbook easily accessible to foreign students enrolled in a course examining the U.S. Federal income taxation of individuals is important to me, and having the textbook available as a free internet download succeeds well in that regard.

A Teacher’s Manual is available for professors who adopt the book (or parts of it) for use in their course.

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December 11, 2014 in Book Club, Tax, Teaching | Permalink | Comments (2)

IRS Is Big Loser in Government Funding Bill

Wall Street Journal, Funding Bill: The Losers:

House and Senate negotiators unveiled Tuesday evening a $1.1 trillion agreement to fund the U.S. government for the next fiscal year, and some federal government agencies, their staffs and the people they serve got some bad news. ...

The 3.1% reduction in the budget of the Internal Revenue Service — bringing its funding below its 2008 level — comes amid Republican outrage over allegations IRS officials targeted conservative political groups for extra scrutiny of their filings for non-profit status.


Mother Jones, Rich People Cheer As Republicans Cut IRS Budget, by Kevin Drum

December 11, 2014 in IRS News, Tax | Permalink | Comments (1)

Luxembourg Roiled by Leak of Secret Tax Deals for Disney, Koch Brothers

LuxLuxembourg Tax Deals for Disney, Koch Brothers Empires Revealed:

A new leak of confidential documents expands the list of big companies seeking secret tax deals in Luxembourg, exposing tax-saving maneuvers by American entertainment icon The Walt Disney Co., politically controversial Koch Industries Inc. and 33 other companies. 

December 11, 2014 in Tax | Permalink | Comments (3)

Yin: The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area

George K. Yin (Virginia), The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area:

This paper briefly explains why the IRS’s adoption of an abbreviated application form (Form 1023-EZ) for organizations seeking recognition of their tax exemption under section 501(c)(3) results in a misuse of scarce compliance resources in the exempt organization area.

December 11, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 581

IRS Logo 2Forbes:  Obama Justice Department Was Involved In IRS Targeting, Lerner Emails Reveal, by Robert W. Wood:

Sadly, the 18 month investigation into the IRS targeting of conservative groups isn’t over, and it may be worse than anyone thought. A federal judge has broken loose more emails that the DOJ had surely hoped would never surface. The picture it reveals isn’t pretty. The documents prove that Lois Lerner met with DOJ’s Election Crimes Division a month before the 2010 elections.

It has to be embarrassing to the DOJ, which may not be the most impartial one to be investigating the IRS. In fact, the DOJ withheld over 800 pages of Lerner documents citing “taxpayer privacy” and “deliberative privilege.” Yet these internal DOJ documents show Ms. Lerner was talking to DOJ officials about prosecuting tax-exempt entities (yes, criminally!) two years before the IRS conceded there was inappropriate targeting. ...

[I]t is getting harder and harder to simply accept President Obama’s ‘no smidgen of corruption’ remark made to Fox News in February, no matter how sincere and forthright his delivery.

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December 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, December 10, 2014

ABA Releases 2014 Law School Standard 509 Information Reports

ABA Logo 2The ABA Section of Legal Education and Admission to the Bar has released the 2014 Standard 509 Information Reports for all ABA-accredited law schools.  The reports contain a wealth of data for each school, including:

  • Tuition and Living Expenses
  • Conditional Scholarships
  • J.D. Enrollment and Ethnicity
  • Admissions (applications, offers, matriculants, 75/50/25 GPA and LSAT Scores)
  • Grants and Scholarships
  • J.D. Attrition and Transfers In
  • Curriculum
  • Faculty and Administrators
  • Bar Passage Rates

David Frakt (Barry), What Would Really Useful Law School Consumer Data Look Like?:

I propose that each law school be required to have a calculator on their website which would provide customized, tailored predictors of success to all prospective students.  Each law school would be required to maintain a master database which tracked every law student who matriculated.  The database would include the students undergraduate GPA (UGPA) and LSAT score.  The database would track whether the student was academically attrited, voluntarily left school, transferred to another law school, or graduated.  The database would also track each student who reported taking the bar and whether they passed on their first or a subsequent attempt.  Of course, law schools are already collecting most, if not all, of this data already.   What I propose is that this data be made available to prospective students through the personal success calculator.  Here's how it would work: the prospective student would plug in their UGPA and LSAT score into the calculator, and the school's website would then provide a customized personal report describing the experience of similarly qualified students, which I would define as those within +/- 1 point on the LSAT and +/- .10 UGPA.  So, if a student entered a UGPA of 3.0 and an LSAT of 150, the website would provide the following information:

"Over the last 7 years, we have matriculated x# of students with similar entrance credentials to your own, defined as those with a UGPA of 2.9 to 3.1 (+/- .10 from your self-reported UGPA) and an LSAT of 149-151 (+/- 1 point of your self-reported LSAT score).

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December 10, 2014 in Legal Education | Permalink | Comments (6)

IRS Releases 2015 Standard Mileage Rates

IRS Logo 2The IRS today released  (IR-2014-114) the standard mileage rates for 2015 (Notice 2014-79,  2014-53 I.R.B. ___ (Dec. 29, 2014)):

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

  • 57.5 cents per mile for business miles driven [up 1.5 cents from 2014]
  • 23 cents per mile for medical or moving purposes [down 1/2 cent]
  • 14 cents per mile for charitable organizations [unchanged]

December 10, 2014 in IRS News, Tax | Permalink | Comments (0)

Is the Bar Exam Broken? Or Are Law Students Dumber?

Bloomberg, Is the Bar Exam Broken? Or Are Law Students Dumber?:

Law schools and the bar exam's creators agree: The plunge in test scores that hit several states this year is alarming, and it's probably the other side's fault. ...

[S]ome deans and legal experts are floating tentative theories about the historically bad results. Derek Muller, a law professor at Pepperdine University, says he has tested and rejected every explanation not tied to the test itself. Muller compared LSAT scores with bar exam scores and found that this year’s law grads should have done only slightly worse than last year. He also rejected the idea that a glitch in Examsoft, the software used to upload the July test, could have made the difference, because states that did not use Examsoft, such as Arizona and Virginia, still saw their pass rates dip. “By process of elimination, I’m running out of alternative explanations and looking more to the NCBE as a possibility,” he says.


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December 10, 2014 in Legal Education | Permalink | Comments (2)

GAO: IRS's 24% Error Rate in Making $14 Billion/Year of Improper EITC Payments Is 2d Worst Among All Federal Programs, Violates Law

GAOGovernment Accountability Office, Improper Payments: Inspector General Reporting of Agency Compliance under the Improper Payments Elimination and Recovery Act (Dec. 9, 2014):

Improper payments—such as duplicate or erroneous payments, payments to ineligible recipients, or payments for ineligible services—have been a long-standing challenge of the federal government and have annually totaled billions of dollars. For fiscal year 2013, federal agencies reported an estimated $105.8 billion in improper payments, a decrease of $1.3 billion from the prior year revised estimate of $107.1 billion. Based on our review of Office of Management and Budget (OMB) data, the $105.8 billion estimate was attributable to 84 programs across 18 agencies (see enc. I). Fiscal year 2013 marked the 10th year of implementation of the Improper Payments Information Act of 2002 (IPIA), Five programs accounted for approximately $82.9 billion, or 78 percent of the total improper payments estimate in fiscal year 2013 (see enc. II for a list of the five programs with the largest estimates for fiscal years 2011 through 2013).


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December 10, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

Harvard B-School Prof Goes to Legal War With Chinese Restaurant to Redress $4 Overcharge

Boston Globe, Ben Edelman, Harvard Business School Professor, Goes to War Over $4 Worth of Chinese Food:

EdelmanBen Edelman is an associate professor at Harvard Business School, where he teaches in the Negotiation, Organizations & Markets unit. ... He graduated summa cum laude from Harvard College. He has a Ph.D. in economics from Harvard University, and a law degree from Harvard Law School. ...

Ran Duan manages The Baldwin Bar, located inside the Woburn location of Sichuan Garden, a Chinese restaurant founded by his parents.

Last week, Edelman ordered what he thought was $53.35 worth of Chinese food from Sichuan Garden’s Brookline Village location.

Edelman soon came to the horrifying realization that he had been overcharged. By a total of $4.

If you’ve ever wondered what happens when a Harvard Business School professor thinks a family-run Chinese restaurant screwed him out of $4, you’re about to find out.

(Hint: It involves invocation of the Massachusetts Consumer Protection Statute and multiple threats of legal action.)

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December 10, 2014 in Legal Education | Permalink | Comments (7)

Caron: Thomas Piketty and Inequality -- Legal Causes and Tax Solutions

Paul L. Caron (Pepperdine), Thomas Piketty and Inequality: Legal Causes and Tax Solutions, 64 Emory L.J. Online ___ (2015):

PikettyThomas Piketty's Capital in the Twenty-first Century has acted as an accelerant fueling the fiery public debate over increasing inequality in America and around the world. Piketty makes the provocative empirical claim that the rate of return to private capital inevitably exceeds the rate of economic growth (r > g) and thus leads to growing concentrations of wealth among the richest members of society. Piketty has spawned heated debates in newspapers, magazines, and blogs, which soon will continue in academic journals and law reviews. Shi-Ling Hsu is one of the first out of the gate with The Rise and Rise of the One Percent: Considering Legal Causes of Wealth Inequality, 64 Emory L.J. Online ___ (2015).

Hsu focuses on the interesting question of how law and legal institutions foster inflated returns on capital (Piketty's r). He also makes the important point that lawmakers often conflate Piketty's r with g (public economic growth), resulting in laws that boost the former with little discernible impact on the latter. The bulk of Hsu's argument is devoted to explaining how five areas of American law contribute to "the legal enrichment of the one percent": financial regulation, antitrust law, oil and gas subsidies, transition relief, and electric utility regulation. He concludes with a plea for greater federal funding of education to spur greater economic growth and bridge the deepening inequality chasm in America.

Hsu's essay is a significant contribution to what is certain to be an energetic debate over the implications of Piketty's work. The need to examine the impact of legal rules and institutions on both private capital returns and public economic growth will be an enduring contribution to future scholarship on the extent, consequences, and reduction of income and wealth inequality. I offer here two modest reactions to Hsu's essay: (1) recent inequality research has shifted the focus of high-end wealth concentration from the Top 1% to the Top 0.1% (and even the Top 0.01%), with important implications for the work of both Piketty and Hsu, including (2) the inquiry into whether policymakers should intervene before the fact to re-shape the distribution of the benefits and burdens of economic activity (Hsu's approach) or instead redistribute wealth after the fact (Piketty's approach).

In a recent essay, Joseph Bankman and I argued that tax scholars need to focus more of our work on how policymakers should address the federal government's unprecedented (and growing) fiscal imbalance. California Dreamin’: Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014). In Piketty terms, s (spending) > r (revenues). We proposed that California's recent tax increases on the wealthy should provide a template for the nation to bring r more into alignment with s.

Piketty's pioneering work provides added impetus for deploying the tax system in this effort. Increasing the tax burden on the wealthy would both raise revenue to meet the nation's spending needs and redistribute wealth to alleviate Gatsby-level inequality in America. Hsu’s proposed focus on the distributional impact of laws and legal institutions may prove to be helpful in the long run but a chimera in the short term as the nation's fiscal and inequality challenges demand solutions that only the tax system stands ready to provide. In short, raising taxes on the wealthy would both increase r (revenues) to better match s (spending) and decrease r (private capital returns) to better match g (public economic growth). 

December 10, 2014 in Scholarship, Tax | Permalink | Comments (0)

German Inheritance Tax Battle Shakes Family Dynasties

Germany 2Wall Street Journal, Tax Battle in Germany Shakes Family Dynasties:

German business owners keen to keep their companies in familiar hands have long had a powerful ally: The German tax code, which exempts corporate successions from inheritance tax in most cases.

This considerable privilege has made Germany home to some of the world’s oldest and wealthiest corporate dynasties and some of the most tightly held businesses in the world. But it is now under threat in what some owner-managers claim could deal a fatal blow to Europe’s largest economy.

In a case referred by the country’s highest tax-affairs court, Germany’s Constitutional Court will rule this month on whether the tax exemption is in line with the constitution. Many tax lawyers expect the court will instruct lawmakers to restore a level playing field between how various forms of wealth—and heirs—are taxed. ...

At present, companies can be transferred to heirs, prior or after the owner’s death, tax-free as long as the heirs keep running the business for at least seven years and without substantial layoffs. By contrast, non-business assets upwards of €500,000, or around $616,000, for spouses or €400,000 for children are taxed in line with the beneficiary’s income-tax bracket.

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December 10, 2014 | Permalink | Comments (0)

Manhire: Do Tax Audits Matter?

J. T. Manhire (U.S. Treasury Department), Do Audits Matter?: A Speculative Theory on the Relation between Tax Audits and Underreporting:

The theory expressed in this paper stems from the conviction that the underreporting rate is discoverable if one understands the relationship between the audit perspective of the tax authority and the underreporting perspective of the population filing individual income tax returns. This theory, if correct, allows for an approximation of the underreporting rate given only enforcement statistics.

After deriving the hidden measure, the paper then approximates the underreporting rate for the categories of individual income tax return filers regularly published by the tax authority and correlates the published audit rates with the approximated underreporting rates. In an attempt to answer the question, “do audits matter for voluntary compliance?,” this paper hypothesizes that a negative correlation between audit and underreporting rates suggests that those categories of tax returns have a hypersensitivity to the audit rate and any underreporting is perhaps intentional. A positive correlation suggests underreported tax is more a result of ignorance or mistake due to a complex tax code and its administration. At a system (non-individual) level, audits appear to matter for certain categories of tax return filers. For other categories, audits appear to have no effect on voluntary compliance rates.

These results can be instructive for tax administration policymakers. For example, as increased investment in enforcement against the categories of returns that suggest underreporting might be intentional could yield more significant compliance effects than enforcement against those categories that contain underreporting as a result of mistake or ignorance. At the same time, an investment in taxpayer education could possibly yield more significant compliance effects for taxpayers in the latter category.

December 10, 2014 in Scholarship, Tax | Permalink | Comments (0)

TIGTA: IRS Has 25-30% Error Rate In Refundable Child Tax Credits, Mistakenly Pays $6-7 Billion

TIGTA The Treasury Inspector General for Tax Administration yesterday released Existing Compliance Processes Will Not Reduce the Billions of Dollars in Improper Earned Income Tax Credit and Additional Child Tax Credit Payments (2014-40-093):

The Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) are refundable credits designed to help low-income individuals reduce their tax burden. The IRS estimated that it paid $63 billion in refundable EITCs and $26.6 billion in refundable ACTCs for Tax Year 2012. The IRS also estimated that 24 percent of all EITC payments made in Fiscal Year 2013, or $14.5 billion, were paid in error. ...

The IRS has continually rated the risk of improper ACTC payments as low. However, TIGTA’s assessment of the potential for ACTC improper payments indicates the ACTC improper payment rate is similar to that of the EITC. Using IRS data, TIGTA estimates the potential ACTC improper payment rate for Fiscal Year 2013 is between 25.2 percent and 30.5 percent, with potential ACTC improper payments totaling between $5.9 billion and $7.1 billion. In addition, IRS enforcement data show the root causes of improper ACTC payments are similar to those of the EITC.

New York Times, Billions in Child Tax Credits Were Invalid, U.S. Audit Finds

December 10, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (3)

The IRS Scandal, Day 580

IRS Logo 2Judicial Watch:  Judicial Watch Lawsuit Forces Release of DOJ Emails Showing IRS’s Lois Lerner Met with DOJ Officials Just Before 2010 Elections:

Judicial Watch today released internal Department of Justice (DOJ) documents revealing that former IRS official Lois Lerner had been in contact with DOJ officials about the possible criminal prosecution of tax-exempt entities two full years before what the IRS conceded was its “absolutely inappropriate” 2012 targeting of the organizations. According to the newly obtained documents, Lerner met with top Obama DOJ Election Crimes Branch officials as early as October 2010. ...

“These new documents dramatically show how the Justice Department is up to its neck in the IRS scandal and can’t be trusted to investigate crimes associated with the IRS abuses that targeted Obama’s critics.  And it is of particular concern that the DOJ’s Public Integrity Section, which would ordinarily investigate the IRS abuses, is now implicated in the IRS crimes.  No wonder the Department of Justice under Eric Holder has done no serious investigation of the Obama IRS scandal,” said Judicial Watch President Tom Fitton. “It is shameful how Establishment Washington has let slide by Obama’s abuse of the IRS and the Justice Department.  Only as a result of Judicial Watch’s independent investigations did the American people learn about the IRS-DOJ prosecution discussions of Obama’s political enemies and how the IRS sent, in violation of law, confidential taxpayer information to the FBI and DOJ in 2010.  Richard Nixon was impeached for less.”

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December 10, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, December 9, 2014

36 Presidents of Private Colleges Earn More Than $1 Million

Chronicle of Higher Education, 36 Presidents of Private Colleges Earned More Than $1-Million in 2012 (complete salary data of 537 private college presidents here):

One Million

December 9, 2014 in Legal Education | Permalink | Comments (5)

Sen. Coburn Releases 300-Page Tax Decoder

Senator Tom Coburn (R-OK) today released Tax  Decoder:

This report, Tax Decoder, is intended to decode the tax code for every taxpayer. It reveals more than 165 tax expenditures costing over $900 billion this year and more than $5 trillion over the next five years.

It is nearly impossible to know who is benefiting from the tax code because it lacks any real transparency or accountability. This is not unintentional. The Senate Finance Committee recently rejected an amendment that would have required the recipients of some tax credits to be publicly listed in the website.10 The recipients of these tax breaks know who they are, so it seems reasonable for those who are paying the taxes to provide the benefits should know as well. 

Tax Decoder attempts to provide a detailed and comprehensive overview of the code for all taxpayers. It includes the background, cost, and primary beneficiaries of each provision along with specific examples of some of the recipients of certain tax breaks. It covers well known tax provisions as well as others that are more obscure. ...

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December 9, 2014 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

U.S. Sues Deutsche Bank Over $190 Million in Taxes

Posner on Legal Education: Tenure, Socratic Method, Con Law in the First Year, Balance Between Scholarship and Teaching

PosnerFollowing up on my previous post, Crowd-Sourced Interview of Judge Richard Posner: Ronald K.L. Collins (University of Washington), On Legal Education & Legal Scholarship — More Questions for Judge Posner:

Question: What do you think is the single greatest shortcoming of legal education in America today?

Posner: There are several shortcomings; I don’t know how to rank them.

  1. Legal education is too expensive, in part because law school faculties are too large.
  2. Not enough law professors, especially at the elite law schools, have substantial practical experience as lawyers, and
  3. Law school teaching focuses excessively on legal doctrine, to the exclusion of adequate attention to facts, business practices, science and technology, psychology, judicial mentality and behavior, legal practice, and application of legal principles. ...

Question: In Tagatz v. Marquette University (1988) you noted that tenure “tends to take some of the edge off academic ambition.” What are your views on the current tenure system as it operates in law schools and how, if at all, might you change it?

Posner: Tenure is a form of nonmonetary compensation, hence attractive to universities. The downside is it undermines the work ethic. I don’t know whether the benefits exceed the costs. ...

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December 9, 2014 in Legal Education | Permalink | Comments (1)

Call for Nominations: $12,500 IBFD Prize for International Tax Research

IBFD logoThe IBFD Frans Vanistendael Award for International Tax Law:

Call for applications: IBFD wishes to promote outstanding scientific research output on international tax law. For this purpose it has decided to introduce the IBFD Frans Vanistendael Award, named after its previous, esteemed Academic Chairman, Prof. Dr.Frans Vanistendael. With his academic production at the highest scientific standards, Professor Vanistendael has long distinguished himself as one of the most far-sighted scholars in the field of international tax law. 

I. Funding, focus and requirements
The proposed donation is EUR 10,000 plus a flat financial reimbursement for travel and accommodation expenses incurred to attend the award ceremony. Eligible publications are all articles and book chapters on international tax law (including EU tax law), in paper or digital format (with an ISBN or ISSN number), published in English between 1 January 2014 and 31 December 2014, which have provided an outstanding contribution to the development of international tax law. Applications may be submitted by anyone (therefore not just by the author) with a supporting statement of up to 100 words and an abstract of up to 100 words (prepared by the one submitting the application) until 31 January 2015 via email to The subject line should include “IBFD Frans Vanistendael Award”. There is no age limit for applicants.

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December 9, 2014 in Tax | Permalink | Comments (0)

ABA Approves Duncan Law School, Defers Action on InfiLaw’s Acquisition of Charleston Law School

LMU LogoABA Section on Legal Education and Admissions to the Bar, Memorandum (Dec. 8, 2014):

The Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association, at its meeting on December 5-6, 2014, granted provisional ABA approval to Lincoln Memorial University Duncan School of Law.

ICNational Law Journal, InfiLaw’s Acquisition of Charleston Law Hits Snag at ABA:

The proposed sale of the Charleston School of Law to the venture capital-backed InfiLaw chain of law schools remains in limbo.

The ABA’s Council of the Section of Legal Education and Admissions to the Bar on Dec. 6 deferred action on InfiLaw’s request for its acquiescence in the sale. During its two-day meeting in Puerto Rico, the council decided that InfiLaw must first win the blessing of state regulators. “There was no decision reached on the merits,” said Barry Currier, the ABA’s managing director for legal education.

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December 9, 2014 in Legal Education | Permalink | Comments (7)

California Offers Budgetary Lessons For U.S. Government

Stanford Report, California Offers Budgetary Lessons For U.S. Government, Stanford Professor Says:

Once the fodder of late-night comedians, California's budgetary strategy is actually one that national lawmakers might emulate, a Stanford tax scholar says.

Just two years ago, California's budget situation was among the worst in the nation, wrote Joseph Bankman, a law professor at Stanford University, in a new journal article [California Dreamin': Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014):]. The Golden State's annual budget deficits soared past $20 billion, its net asset deficit was more than $127 billion, and the state legislature seemed dysfunctional.

Then, pushed to the brink with very real fears of cutbacks in state services, schools and escalating college tuition, California voters approved Proposition 30 in November 2012.

"California voters defied the conventional political wisdom in resoundingly embracing Prop. 30 by an over-10 percent point margin, 55.4 percent to 44.6 percent," wrote Bankman and his co-author Paul Caron, a law professor at Pepperdine University. ...

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December 9, 2014 in Scholarship, Tax | Permalink | Comments (4)

Columbia Law School Lets Students Postpone Exams Due to Grand Jury Decisions; Harvard, Georgetown Students Demand Similar Treatment

Wall Street Journal, Columbia Law School Lets Students Postpone Exams Due to Grand Jury Decisions:

Columbia LogoColumbia University Law School is allowing its students to reschedule their exams if they feel traumatized by the recent grand jury decisions in the Eric Garner and Michael Brown cases.

The school’s interim dean, Robert E. Scott, notified students of the option in an email circulated to the student body on Saturday on the eve of the December exam period.

“The grand juries’ determinations to return non-indictments in the Michael Brown and Eric Garner cases have shaken the faith of some in the integrity of the grand jury system and in the law more generally,” Mr. Scott’s letter said. “For some law students, particularly, though not only, students of color, this chain of events is all the more profound as it threatens to undermine a sense that the law is a fundamental pillar of society designed to protect fairness, due process and equality.”

As a result, “students who feel that their performance on examinations will be sufficiently impaired due to the effects of these recent events may petition [head of registration services] Dean Alice Rigas to have an examination rescheduled,” he wrote. ...

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December 9, 2014 in Legal Education | Permalink | Comments (0)

MBAs for 'Newly Admitted Attorneys Who Are Facing Employment Challenges'

MBAWilliam Howard Taft University, Information for Law School Administrators About The Master of Business Administration – with a Concentration in Professional Practice Management Program:

The Master of Business Administration program with a concentration in Professional Practice Management is believed to be the first program of its kind – designed specifically for newly admitted attorneys who are facing employment challenges.

Starting in February of 2015, this distance education Program will address the business concepts they didn’t teach in law school - addressing issues and business challenges that are faced by solo or small practice attorneys. It combines a traditional M.B.A. curriculum with webinars and assignments directly related to the operation of a law practice. Enrollment is limited to the first thirty qualified attorney applicants.

Benefits of the Program include:

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December 9, 2014 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 579

Horrible BossesForbes:  Horrible Bosses, IRS Edition, by Robert W. Wood:

People joked about horrible bosses long before Horrible BossesHorrible Bosses 2, and The Office. I’m guessing that at least some employees over at the IRS may not be too impressed with their own leadership. I mean big issues, not relatively harmless but kitschy things like Star Trek, Gilligan’s Island or line dancing videos. Perhaps there may have been some mistakes from regular employees, but the bosses surely have the most explaining to do.

The news that the lost or destroyed Lois Lerner emails were actually not lost or destroyed, for one. Remember, when the IRS brass said they looked really hard, and spent $10 million (of taxpayer money!) trying to find those emails? After a year of investigation, they belatedly said they were lost, hard drives were recycled, etc. Anyhow, now they will be sorted, cataloged and released, which is good.

Some people are upset that money is being spent on a ‘witch hunt’ that reveals not even a smidgen of corruption. Others aren’t so sure. The Treasury Inspector General for Tax Administration has confirmed that, on top of the backed-up email horde, there are also nearly 2,500 documents relating to investigations of the improper disclosure of confidential taxpayer information by the IRS to the White House. ...

Lois Lerner–the former IRS official at the heart of Tea Party targeting–supposedly didn’t even direct them, though she remains silent. She was held in contempt of Congress for refusing to testify, but hasn’t been prosecuted. Yet after her long silence, in an exclusive interview with Politico she said did nothing wrong and considers herself the victim.She bristled at any suggestion she had anything to do with destroying emails, switching to texts, or letting her own political views influence her treatment of Tea Party “a__holes.”

In the midst of all this, many Americans could use a little reassurance on key points:

  • We Want To Be Dealt With Fairly ...
  • We Don’t Want Others To Get Away with Anything ...
  • We Want Our Private Information Kept Private ...
  • We Want IRS Employees To Be Policed ...
  • We Don’t Want More Complex Tax Laws ...

Since the IRS is made up of humans, sometimes the IRS is unreasonable or wrong. Richard Nixon supposedly asked the IRS to audit his political enemies. There has been no proof yet that President Obama tried to influence the IRS in the Tea Party targeting scandal. But it’s not unreasonable to want to get to the bottom of it once and for all. ...

The IRS has a very hard job to do, and in general, does it well and fairly. But that is precisely why this is so important. We need fairness and faith in the tax system restored. We shouldn’t need a Freedom of Information Act lawsuit to get it.

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December 9, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, December 8, 2014

Raskolnikov: Law and Economics of Variable Sanctions

Alex Raskolnikov (Columbia), Six Degrees of Graduation: Law and Economics of Variable Sanctions:

From parking tickets to tax fines and punitive damages, legal sanctions matter in people’s lives. Yet neither the legal nor the economics literature offers a comprehensive treatment of sanctions. Their practical complexity is not well-understood and their theoretical analysis is fragmented. This essay prepared for an edited volume addresses both limitations. On the practical side, I highlight the complexity of sanctions using tax law as a primary example. The complexity exists because sanctions may (and do) vary along six different dimensions: aggressiveness, magnitude, culpability, effort to comply, likelihood of detection, and offense history. These six degrees of sanctions graduation are distinct, potentially independent, but often intertwined in obscure and perplexing ways. On the theoretical side, I review the economics literature in search of the reasons underlying each degree (or axis) of graduation. I conclude that three graduation axes of great practical significance — aggressiveness, culpability, and offense history — are the least developed theoretically. Two other dimensions — the likelihood of detection and the effort to comply with the law — are more conceptually advanced, although the theory is still fairly removed from the enforcement realities. In contrast, economic analysis reveals a good grasp of the magnitude axis and a clear path to modeling the real-life features that have remained overlooked thus far. By highlighting the complexity of sanctioning regimes and emphasizing the related theoretical successes and shortcomings, this essay identifies fruitful areas of future research, some of which I pursue in related work.

December 8, 2014 in Scholarship, Tax | Permalink | Comments (2)

Big Data Track Student Performance; Are Faculty Next?

New York Times op-ed:  Blowing Off Class? We Know, by Goldie Blumenstyk:

Big DataThe stuff some colleges know right now about their students, thanks to data-mining of their digital footprints, boggles the mind. It may even seem a bit creepy.

Has their attendance slipped? Have they stopped logging in to read course packets or file assignments? Did they just drop the very class they needed for their major?

Tools developed in-house and by a slew of companies now give administrators digital dashboards that can code students red or green to highlight who may be in academic trouble. Handsome “heat maps” — some powered by apps that update four times a day — can alert professors to students who may be cramming rather than keeping up. As part of a broader effort to measure the “campus engagement” of its students, Ball State University in Indiana goes so far as to monitor whether students are swiping in with their ID cards to campus-sponsored parties at the student center on Saturday nights.

The university has taken to heart studies that say that students who are more engaged with college life are also more likely to graduate. When a student’s card-swipe patterns suggest she’s stopped showing up for clubs or socials, a retention specialist will follow up with a call or an email to see how she’s doing. ...

Big Brother-esque? Perhaps. But these “big data” developments have the potential to cut the cost of higher education for students and their families, as well as for taxpayers. Deployed properly, the tools could help millions of low-income students navigate the academic and financial hurdles that often derail first-generation college students. A new University Innovation Alliance of 11 large public universities is seeking to do just that. The alliance, announced in September and backed by a half-dozen major foundations, will use data analytics in its first set of projects, which are aimed at improving graduation rates for needy students. ...

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December 8, 2014 in Legal Education | Permalink | Comments (0)