TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, July 12, 2016

Morse & Deutsch:  Tax Anti-Avoidance Law In Australia And The U.S.

AUSSusan C. Morse  (Texas) & Robert Deutsch (Australia Administrative Appeals Tribunal), Tax Anti-Avoidance Law in Australia and the United States, 49 Int'l Law. 111 (2015):

In both Australia and the U.S., the tax anti-avoidance law has evolved to include two common doctrinal components. One component requires evidence of taxpayers’ tax avoidance purpose. The other component protects transactions clearly contemplated by the tax statute against charges of tax avoidance. The two bodies of law usually get to the same answer. Transactions involving loss generators, income assignment, and foreign tax credit generators illustrate this similarity.

But the two bodies of law sometimes arrive at different answers. This is because important but subtle doctrinal differences also exist. Australian law conceives of a tax avoidance transaction as a contrived, tax-motivated Plan B departure from the counterfactual of a more normal, Plan A course of action. Australia’s Part IVA has been applied to invalidate a planning step that is part of a larger, business-motivated merger transaction. In contrast, tax planning steps that are part of business-motivated merger and acquisition transactions generally are not vulnerable under U.S. law.

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July 12, 2016 in Scholarship, Tax | Permalink | Comments (0)

The Law Professor Who Penned A 6-Page Response To Students Who Criticized Her 'Black Lives Matter' Shirt

LBLMFollowing up on Saturday's post:  Inside Higher Ed, The Law Professor Who Answered Back:

A few months ago, one or more anonymous students wrote a note to their law professor, complaining that she had been spotted at least once on campus wearing a Black Lives Matter T-shirt. The letter said wearing the shirt was "inappropriate" and "highly offensive." Further, it said "we do not spend three years of our lives and tens of thousands of dollars to be subjected to indoctrination or personal opinions of our professors," and urged the professor to avoid "mindless actions" that might distract students at a law school where not everyone is passing the bar.

The professor wrote back, not only defending her T-shirt, but also critiquing the students' understanding of the professor-student relationship. While the incident took place earlier this year, the students' letter and the professor's response went viral in the last week, as Black Lives Matters protests resumed after the killings of black men in Louisiana and Minnesota. Many have been applauding the professor, while some noted a lack of any information on who she was and whether the letters could be verified.

The professor is Patricia Leary, and she's been teaching at Whittier Law School since 1992. She's traveling right now andInside Higher Ed was unable to reach her directly. But the law school confirmed that the letters were legit and she was the author. Whittier is known for its diversity: nonwhite students make up a majority of the law school's student body.

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July 12, 2016 in Legal Education | Permalink | Comments (3)

NY Times:  Liberal Profs Outnumber Conservative Profs 28:1 In New England

New EnglandNew York Times Sunday Review: There Are Conservative Professors. Just Not in These States, by Samuel J. Adams (Sarah Lawrence College):

In surveys of the ideological leanings of college faculty members by the Higher Education Research Institute from 1989 through 2014, the percentage of those identifying as liberal has always outnumbered moderates and conservatives, but the data show a notable shift left in the middle of the 1990s. In 1989, roughly 40 percent of professors were moderate and 40 percent were liberal; the remaining 20 percent were conservative. By 2014, liberal identifiers jumped to 60 percent, with moderates declining to 30 percent and conservatives to just 10 percent.

Lawrence 1A

But the story turns out to be more complicated than this, since the shift left is far from uniform. ...  Surprisingly, the factor that had the greatest impact on the ideological leanings of college professors was their geographic region.

And the region with the most impact? By far, New England.

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July 12, 2016 in Legal Education | Permalink | Comments (5)

Shaviro:  Ten Observations Concerning International Tax Policy

Daniel Shaviro (NYU), Ten Observations Concerning International Tax Policy:

This is a slightly revised version of a lunch talk that the author gave at the National Tax Association’s 46th Annual Spring Symposium on May 12.

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July 12, 2016 in Scholarship, Tax | Permalink | Comments (0)

Tax Exam Dreams

DreamsAlan J. Oxford (Duncan), Inception: The Exam Dream is Real, 120 Penn St. L. Rev. Penn Statim 1 (2015):

Dream 1. I had a dream about the tax exam .... The test was the hardest test in the world.

I felt like I didn't know any of the material, and you were sitting in the room watching everyone with a look of disappointmen .... I later turned my exam into you and you marked all of them wrong, wrote F, circled it, and handed it back. I started to cry and repeatedly asked you not to fail me. I had a family and a life and I worked so hard and I really tried. My failure was only exacerbated by the fact there were only 4 students, please don't leave me behind. You were thinking about what I had to say and before you answered, I woke up.

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July 12, 2016 in Legal Education, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1160

IRS Logo 2Politico Morning Tax, News on the Koskinen Front:

After lying dormant for a while, there’s been some news on the effort by some House Republicans to impeach or censure or strip the salary of IRS Commissioner John Koskinen. Relatively minor news, but news all the same. First, our Katy O’Donnell reports that a bipartisan group of eight former IRS chiefs took strong exception to the impeachment effort. “We believe these actions are both disproportionate and counterproductive. They would do serious, long-term damage to our revenue system,” they wrote in a letter to House leadership and the top Republican and Democrat on the House Ways and Means Committee. And while Ways and Means members haven’t been out front in the anti-Koskinen effort, Brady endorsed the no-salary effort. After a panel discussion on tax reform organized by the Taxpayers Protection Alliance, Brady said he takes, "every chance I get to make the case that this IRS ought to behave differently," Tax Analystsreported. Sources on the Hill have been less than enlightening about where things stand on the matter. But it’s a fair guess that some of Koskinen’s fiercest critics see bigger fish to fry — like investigating the investigation of Hillary Clinton’s email practices.

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July 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Monday, July 11, 2016

Columbia Law Review Tributes To Marvin Chirelstein

ChirelsteinIn Memoriam: Marvin A. Chirelstein, 116 Colum. L. Rev. 287-323 (2016):

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July 11, 2016 in Legal Education, Obituaries, Tax | Permalink | Comments (1)

Will Placement Data, U.S. News Fudging Make Law Schools Liable For Their Students' Debt Under New DOE Rules Aimed At For-Profit Colleges?

DOE LogoFollowing up on my previous post, Law Students May Use Department Of Education's New Fraud Defense To Loan Repayment Aimed At For-Profit Colleges To Discharge Law School Loans:  Inside Higher Ed, Proposed Federal Student Debt Forgiveness Rules Aimed At For-Profit Colleges Worry Some Nonprofit Colleges:

For-profit colleges and their advocates are aggressively fighting the Obama administration’s proposed rule for federal loan forgiveness, arguing that the regulation is subjective and overly broad, and will “crush” the sector while costing taxpayers many billions of dollars.

Yet for-profits aren’t the only ones fretting about the rule, which is slated to go into effect next year if enacted. Many nonprofit colleges also face financial and reputational challenges due to the scope of the so-called borrower-defense-to-repayment proposal, said lawyers and several traditional higher education groups.

While traditional colleges' vulnerability largely has flown under the radar, the rule's broad definition of what constitutes a misrepresentation in marketing to students and its new requirements for the financial stability of institutions in particular could pose risks.

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July 11, 2016 in Legal Education | Permalink | Comments (21)

Widow Of Indiana Pacers Owner Plays Hardball With IRS, Goes On Offense In Defending Against Subpoenas In $21 Million Gift Tax Case

PacersIndianapolis Business Journal, Pacers’ Legal Tenacity on Display in IRS Fight:

The legal fallout stemming from Melvin Simon’s decision to unload his half of the Indiana Pacers to his brother Herb just a few months before his September 2009 death is getting crazier by the day.

Mel’s widow, Bren Simon, got the public spectacle rolling in March 2015 when she sued the IRS in an effort to overturn the agency’s determination that the terms of the deal were so tilted in Herb’s favor that Mel essentially gave him an $83 million gift.

That conclusion left Bren with a $21 million gift-tax bill, which she paid under protest but hopes to get refunded by winning the suit.

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July 11, 2016 in Celebrity Tax Lore, New Cases, Tax | Permalink | Comments (0)

Happy 100th Birthday, Mortimer Caplin

MortimerUVAToday, Mortimer Caplin: 100 Years Young, and Still Serving:

His name is well-known to every graduate of the University of Virginia’s School of Law, and his penchant for bow ties is almost as famous. Over the course of a career in law, education and government service, Mortimer Caplin has seemingly lived several lifetimes, each distinguished by remarkable and influential achievements, from his time as an actor and boxer when he was a UVA undergraduate, to his service in the U.S. Navy on D-Day, to his work as IRS commissioner during the administration of President John F. Kennedy, and beyond.

On July 11, Caplin will celebrate his 100th birthday, providing an excellent occasion to look back over the accomplishments of, in the words of former Law School Dean Robert Scott, “an exemplar of a professional life well-lived.” In honor of this milestone, we spoke with Caplin and some of his peers and colleagues about highlights of his life and career. ...

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July 11, 2016 in Tax | Permalink | Comments (1)

NY Times:  What Trump And The GOP Agree On: Tax Cuts For The Rich

New York Times: What Trump and the G.O.P. Can Agree On: Tax Cuts for the Rich, by Patricia Cohen:

In some important ways, the House Republicans’ new plan to overhaul the tax code has more in common with proposals from the candidates who lost their party’s presidential nomination than those from Donald J. Trump, the one poised to win it. ...

[T]he blueprint, shepherded by Paul D. Ryan of Wisconsin, the House speaker, embraces a transformational shift promoted by both Mr. Cruz and Mr. Rubio, but not Mr. Trump: a move away from taxing income to a system that basically taxes consumption.

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July 11, 2016 in Tax | Permalink | Comments (2)

2017 Vault Law Firm Tax Rankings:  Skadden Is #1 For 7th Year In A Row

VaultVault has released its annual ranking of the Top 100 Law Firms, based on prestige as voted on by associates (methodology here). The Top Tax Practices (press release) are:



Home City

% Vote



New York



Davis Polk

New York



Cleary Gottlieb

New York



Baker & McKenzie





New York



McDermott Will & Emery





New York



Sullivan & Cromwell

New York



Caplin & Drysdale




Kirkland & Ellis




Simpson Thacher

New York



Latham & Watkins

New York



Weil Gotshal

New York.



Mayer Brown




Miller & Chevalier








Morgan Lewis





New York



Sidley Austin




Fenwick & West

Palo Alto


For the seventh year in a row, Skadden is #1. From the press release:  "Wachtell dropped three spots to No. 7, allowing Baker & McKenzie (No. 4), Cravath (No. 5), and McDermott (No. 6) to each move up a spot. Sutherland Asbill and Brennan (tied at No. 15), Morgan Lewis (No. 17), Debevoise (tied at No. 18), and Fenwick & West (No. 20) all joined the ranking after being unranked last year."

The city rankings are:

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July 11, 2016 in Law Firm Tax Rankings, Tax | Permalink | Comments (2)

WSJ Op-Ed:  After 20 Years Of Teaching, I Am Banning Laptops In My Law School Classroom

No LaptopFollowing up my previous posts (links below):  Wall Street Journal op-ed, I’m Banning Laptops From My Classroom, by Stuart Green (Rutgers Law School):

For more than 20 years, I have taught college graduates, most in their mid-20s, the basics of criminal law and procedure. In all that time, at half a dozen law schools, I’ve had the daily opportunity to observe some of the miracles that modern technology has wrought in the legal academy: Computerized research. PowerPoint. No more handwritten blue books!

But now and then, carrying out my institutional duty to observe classes taught by younger colleagues, I move from the front of the classroom to the rear. What a revelation to see what the students are up to. While virtually all of them have open laptops and most are taking notes, many seem more intent on emailing and texting, posting on social media, reading news sites, shopping online, or looking at YouTube videos. I recently saw one student systematically checking out law-firm websites for summer-associate salaries. Another spent an entire class streaming an NHL hockey game.

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July 11, 2016 in Legal Education | Permalink | Comments (14)

Charles Ogletree Sees 'Blessing' In Alzheimer’s Diagnosis At Age 63

OgletreeHarvard Law Professor Charles Ogletree Sees ‘Blessing’ Despite Alzheimer’s:

A Harvard law professor who taught both President Obama and his wife, Michelle, told fellow members of the African Methodist Episcopal Church that his faith is helping him cope with a personal diagnosis of Alzheimer’s disease.

“I’ve made up my mind to be thankful for what I have rather than focus on what I may lose,” an emotional Charles Ogletree said Tuesday (July 6) in his bicentennial message at a banquet where 3,000 people kicked off the 50th quadrennial General Conference of the denomination in Philadelphia.

“Nothing but the grace of God and faith enables me to respond this way.”

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July 11, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1159

IRS Logo 2Heartland Institute, House Lawmakers Censure IRS Commissioner Koskinen:

A U.S. House committee overseeing the administration of justice in federal courts and agencies voted to censure a high-ranking Internal Revenue Service (IRS) official for his role in covering up abuses of power at the federal revenue-collection agency.

Beginning in 2010, employees of IRS’ Exempt Organizations division, under the supervision of division Director Lois Lerner, violated IRS policies by singling out organizations for special examination based on a group’s name or policy positions, with the aim of slowing or preventing the ability of conservative organizations to receive tax-exempt donations in the run-up to the 2012 elections.

Lawmakers on the U.S. House Oversight and Government Reform Committee say John Koskinen, the current IRS commissioner, participated in covering up Lerner’s actions by destroying public records and stonewalling government investigations.

With the committee having approved the censure in June, the House will vote on the measure. If the censure is approved, Koskinen will be stripped of his taxpayer-funded pension and other government perks.

U.S. Rep. Jim Jordan (R-OH), a member of the House Oversight Committee, told Budget & Tax NewsKoskinen’s actions and statements meet the legal standard necessary for censure.

“We think the standard is dereliction of duty, gross negligence, and breach of public trust,” Jordan said. “Obviously, Mr. Koskinen has done just that. When it’s something of this magnitude, where documents are under two subpoenas and there have been three document preservation orders in place, and under his watch 422 backup tapes were destroyed containing potentially 24,000 e-mails, … that’s a breach of public trust and gross negligence.” ...

Dan Mitchell, a senior fellow with the Cato Institute, says the IRS has also refused to enforce Obamacare provisions.

“In terms of the bigger question of what the IRS has done wrong, it goes way beyond the attempted suppression of Tea Party groups,” Mitchell said. “It deals with everything from the fact that they arbitrarily and unilaterally ignore certain Obamacare law provisions simply because the White House decided that they wanted to change the rules, notwithstanding that the law theoretically means what the law says.”

Mitchell says IRS has effectively become a “weaponized” arm of the government.

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July 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, July 10, 2016

Teaching Law In An Age Of Violence

ViolenceFollowing up on yesterday's post, Law Professor Pens 6-Page Response To Students Who Criticized His 'Black Lives Matter' Shirt:  Jeff Baker (Pepperdine), Teaching Law in an Age of Violence:

In America, our founding principle is that all men are created equal, expressed within a legal document declaring independence from a sovereign who did not extend a voice to his subjects. Our pledge of allegiance binds us to a promise of liberty and justice for all. These are American ideals but so often are not American realities. America is and always has been a violent nation, and race and racism are deep in our spiritual, social, cultural, political and legal vernacular. In no season of our national history have we been at true peace, especially in matters of race and racism. 

In fits and starts, we lurch in anguish and hope toward harmony and reconciliation. Inevitably, when we take a step toward inclusion and justice, the forces of exclusion lash out in death throes. The South didn’t secede until after the country elected an abolitionist. The Klan didn’t form until after emancipation. Bull Connor didn’t unleash the dogs until people started demonstrating for justice and dignity. In our present age, we witness the persistent violence of exclusion as voices rise to demand inclusion of the bodies, minds, and souls of people so tired of waiting in oppression. 

This is also deeply American. “No taxation without representation!” was the rebels’ call for inclusion in the process of lawmaking and governance, and the demonstrators followed it up with war. When the sovereign refused to give his subjects a voice in making the laws that governed them, they rose up to toss off the sovereign. Then, tragically, the new republic founded for government of, by and for the people, systemically excluded vast members of the governed.

Those excluded people have taken patient centuries to call America to account for its aspirations, to illuminate the hypocrisy of exclusion in a republic founded for inclusion. Steeped in blood and struggle, they have brought America around to itself, little by little, kicking and screaming, mourning and grieving, insisting on inclusion, demanding dignity.

In lament and anguish, punch drunk, America stumbles toward its better angels, shaking off its ghosts, battling its demons, as we realize that inclusion is our only hope to keep the republic our ancestors won and handed down to us. Generous inclusion is national life. Reactionary exclusion is national suicide. ...        

As law teachers, we have the privilege to observe and the obligation to train. We observe the law in its promise, success and failings, and we train lawyers to represent the people and their government, to make and improve the law, to sit in judgment with the law.

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July 10, 2016 in Legal Education | Permalink | Comments (2)

Winners Of The 2016 Tax Analysts Student Writing Competition

Tax Analysys Logo (2013)2016 Tax Analysts Student Writing Competition:

Tax Notes:

  • S. Bruce Hiran (Houston)
  • Katrina Vitale (Villanova)
  • Luke Wagner (San Diego)

State Tax Notes:

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July 10, 2016 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

The (Im)Possibility Of Christian Legal Education

Trinity WesternVictor M. Muniz-Fraticelli (McGill), The (Im)Possibility of Christian Education:

Opponents of the Trinity Western University Law School do not seek to prohibit traditionalist religious law schools outright, nor do they seek to exclude individual candidates who hold traditionalist beliefs from becoming lawyers. Their effort, rather, is to give these schools the option to compromise on their religious identity, or to have students lose access to the most direct routes into the legal profession. This choice inhibits the establishment of traditionalist religious law schools by increasing the cost of maintaining a distinct institutional religious identity. When the alternative is to hold fast to religion but retreat from the task of producing lawyers, or play religion down and enter the legal market without any difference from secular institutions, the result is always the elimination of distinctly religious institutions from the educational landscape. This paper proposes an alternative that allows for the possibility of institutional diversity.

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July 10, 2016 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1158

IRS Logo 2Daily Caller op-ed: IRS Hides Records Revealing White House Collusion As Americans Tire Of Constant Scandals, by Mark Meckler (President, Citizens for Self-Governance):

At some point, news of corruption, collusion, and injustice is so common with the Obama administration, it ceases to shock. But here’s the latest nugget of information that will fail to make the headlines of the mainstream media – this time, it deals with the IRS refusing to obey a Freedom of Information Act request that could prove that the White House colluded with them in this scandal.

But this is just one of many scandals, right? Let me refresh your memory if you have lost track. In a stunning show of the Obama Administration’s abuse of power, the IRS admitted at the highest levels to targeting, harassing and intimidating tea party, Christian, pro-Israel and other conservative groups. Their intimidation undermined the ability of ordinary Americans to express themselves and freely participate in the democratic process. In fact, since this was going on during the last Presidential election, their shenanigans could’ve played a role in suppressing the conservative vote.

Which, of course, is why they did it. ...

A new court filing claims that the IRS barely searched for records that would reveal the agency disclosed taxpayer data to the White House without authorization.

CoA Institute issued the FOIA request for documents after a White House official discussed what was supposed to be the private tax status of the Koch Industries’ multi-billion dollar company. Though tax payer information is supposed to be tightly guarded, Austan Goolsbee (chairman of the White House Council of Economic Advisers at the time) freely discussed this confidential information of the privately owned corporation.

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July 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, July 9, 2016

This Week's Ten Most Popular TaxProf Blog Posts

The Time Has Come For Law Reviews (Led By Harvard, Yale & Stanford) To Only Publish Online

HYSSarah Reis (University of Washington), Deconstructing the Durham Statement: The Persistence of Print Prestige During the Age of Open Access:

In the seven years following the promulgation of the Durham Statement on Open Access to Legal Scholarship, law journals have largely responded to the call to make articles available in open, electronic formats, but not to the call to stop print publication and publish only in electronic format. Nearly all of the flagship law reviews at ABA-accredited institutions still insist on publishing in print, despite the massive decline in print subscribers and economic and environmental waste. The availability of a law journal in print format remains a superficial indicator of prestige and quality to law professors, student editors, and law school administrations. A shift from print publication to electronic-only publication is not as simple as having a law journal merely cancel its print runs, but rather requires several fundamental changes to the publication process. Many law journals must also greatly improve their websites before electronic-only publication can truly replace print publication.

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July 9, 2016 in Legal Education | Permalink | Comments (2)

New Company Brings AI To Bear On Tax Law

DeftrFollowing up on my previous posts:

Press Release, Cambridge Startup Deftr Uses AI to Help Clarify Corporate Structures:

Deftr, legal tech company, and Y Combinator Fellowship recipient, today announced the launch of the first AI-powered tool that helps professionals diagram intricate corporate structures. The new product reads text as it is typed in real time, then automatically turns that text into a shareable, interactive graphic illustrating a corporate structure or transaction.

What We Do

Named for the dynamic tax ledger used by the Ottoman Empire, Deftr helps legal and professional service firms focus on high-level, strategic work by leveraging artificial intelligence to automate manual work. From tax law and IRS guidance to corporate structuring and financial regulations, we enable users to navigate legal complexity and understand its practical consequences intuitively, simply, and cheaply.

What We Believe

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July 9, 2016 | Permalink | Comments (0)

Law Professor Pens 6-Page Response To Students Who Criticized Her 'Black Lives Matter' Shirt

BLMFollowing up on my previous posts (links below) on the controversy at American Law School over posting 'All Lives Matter' on a law prof's office door:  U.S. Uncut, Students Complain About Professor’s Black Lives Matter Shirt. The Professor’s Response Is Priceless:

A law professor received a written complaint from “Concerned Students” about his Black Lives Matter shirt, and he responded by brilliantly turning the letter into a teachable moment, taking apart their arguments and the assumptions behind them, literally and figuratively schooling the authors of the complaint with wit, clarity, and moral authority.

The full text of both the student’s complaint and the law professor’s response can be found here.

The students wrote, “The ‘Black Lives Matter’ statement is racist and anti-law enforcement and has been known to incite violence in this country. As someone who is paid to teach the law, you should be ashamed of yourself,” among other arguments against the professor’s choice of wardrobe.

[Y]ou have presented yourself on campus, on at least one occasion, wearing a “Black Lives Matter” t-shirt. We believe this is an inappropriate and unnecessary statement that has no legitimate place within our institution of higher learning. The statement you represented and endorsed is also highly offensive and extremely inflammatory. We are here to learn the law. We do not spend three years of our lives and tens of thousands of dollars to be subjected to indoctrination or personal opinions of our professors.

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July 9, 2016 in Legal Education | Permalink | Comments (39)

The IRS Scandal, Day 1157

IRS Logo 2The Hill, Ex-IRS Chiefs Urge House to Reject Impeaching Koskinen:

Eight former IRS commissioners from both Democratic and Republican administrations are urging the House to reject resolutions to impeach or censure the current head of the agency, John Koskinen.

"Overall, their primary impact would be to harm millions of everyday Americans, small businesses, and other taxpayers as they attempt to comply with their obligations imposed by our tax laws," the former commissioners said in a letter sent this week to Speaker Paul Ryan (R-Wis.), House Minority Leader Nancy Pelosi (D-Calif.) and the leaders of the House Ways and Means Committee.

Some House Republicans, particularly members of the House Freedom Caucus, have called for Koskinen's impeachment because they believe he failed to comply with a subpoena and lied under oath during a House investigation into revelations that the IRS had given extra scrutiny to Tea Party groups' applications for tax-exempt status.

The former commissioners said that Koskinen has been doing good work in the job. "In our view, much of the success of the present IRS is attributable to its dedicated and capable employees and the leadership of Commissioner Koskinen," they said.

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

Friday, July 8, 2016

NY Times Op-Ed:  EITC Is Better Tool To Raise Incomes Than 'Economic Russian Roulette' Of $15/Hour Minimum Wage

FENew York Times op-ed:  A Better Way to Raise Incomes, by Peter D. Salins (Stony Brook University):

In this campaign season, politicians across the country (including the presumptive Democratic presidential candidate and perhaps even the Republican one) have called for raising the minimum wage. Not just marginally, as in the past, but all the way to $15 an hour, more than double the current national level of $7.25. Even elected officials and candidates in states with higher minimum wages like New York have jumped on the $15 an hour bandwagon. Their justification: “You can’t support a family on the current minimum wage.”

What the advocates fail to acknowledge is that minimum-wage workers with families to support are already eligible to receive a financial boost under a national program called the earned-income tax credit. This program, instituted in 1975 and expanded since then, paid benefits to 27.5 million low-income workers in 2014. (That same year, only three million workers fell at or below the federal minimum wage, so the credit also helped millions of other low-wage workers.) Technically, such payments are classified as “refundable tax credits,” paid to qualifying workers when they file their annual income tax returns. ...

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

Are Cravath BigLaw Wannabes Like Ford & GM Circa 1960?

Ford GMABA Legal Rebels:  Associate Salary Increases May Not be Good Business, by Patrick Lamb (Valorem Law Group, Chicago):

On June 6, Cravath Swaine & Moore announced it was raising base salaries for starting associates from $160,000 per year to $180,000 per year. Of course, firms never give a raise to just one class of associates. There is a “ripple effect” throughout all associate classes, and Cravath raised salaries of all of its associates between $20,000 and $35,000 per year. In the days following, one large firm after another matched the Cravath raise. By now, most of BigLaw has matched the raise.

I couldn’t be happier. Why? Because this is just another straw these firms are adding to the backs of their clients. For some clients, it will be the straw that breaks their back and causes them to break free of the bond that BigLaw has on them. ...  [T]he money to pay for these raises comes directly from the clients of the firms who retain Cravath and the many BigLaw firms that have followed Cravath, like sheep following a leader off the edge of a cliff. ...

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

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

IRS Sues Facebook For Billions In Undervalued IP Assets In 2010 Irish Transfers

Facebook (2016)Bloomberg: IRS Takes Facebook to Court, Signaling Start of Tougher Approach, by Lynnley Browning & Kartikay Mehrotra:

Signaling a shift in enforcement tactics against big companies that make money from intellectual property, federal tax officials have sought a court order demanding internal corporate records related to one of Facebook Inc.’s offshore tax strategies.

Arguing that the social-media giant missed a deadline last month to turn over such information, the Internal Revenue Service filed a petition July 6 in San Francisco federal court seeking documents and records for the 2010 tax year. That year, Facebook shifted the global rights for many of its intangible assets -- outside the U.S. and Canada -- to a subsidiary in low-tax Ireland. The IRS claims that, for tax purposes, the company understated the value of those assets by billions of dollars.

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July 8, 2016 in Tax | Permalink | Comments (7)

Law Grad Employment Rose At 158 Law Schools Over Past Five Years

National JuristNational Jurist: Employment on the Rise, by Katie Thisdell:

Five law schools [Pace, BU, Hofstra, St. John's, Drexel] have improved their employment rates by an average of 5 percent or more during the past five years. ... Thirty-four law schools saw upward trends of 3 percent or more over this period. Of the 199 schools with more than three years worth of employment data analyzed, the vast majority had a positive trend line, even if just slight. Fifty-two schools saw less than a 1 percent increase over this time period.

Meanwhile, 41 schools saw an overall drop in their employment rates for the five-year period. Four had a downward trend greater than 4 percent, and three of those were in Texas — St. Mary’s University, South Texas College of Law and Texas Southern University.

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July 8, 2016 in Law School Rankings, Legal Education | Permalink | Comments (15)

TIGTA:  IRS May Have Allowed 60% Of Former Employees (Including Those Subject To Disciplinary Proceedings) Access To Buildings, Computers

TIGTAThe Treasury Inspector General for Tax Administration has released Access to Government Facilities and Computers Is Not Always Removed When Employees Separate (2016-10-038):

During Fiscal Year 2014, more than 4,100 full-time, permanent employees separated from the IRS, including 186 who separated during a pending disciplinary case (including criminal misconduct). It is important for the IRS to recover security items, such as Government identification, to prevent former employees from unauthorized entry to IRS facilities and workspaces, accessing IRS computers and taxpayer information, or potentially misrepresenting themselves to taxpayers. ...

Based on a random sample of Fiscal Year 2014 employee separations, TIGTA estimates that the IRS could not verify that all security items were recovered for more than 2,700 (66 percent) of the more than 4,100 employee separations. TIGTA also reviewed a judgmental sample of 10 employees who separated during a pending disciplinary case. The IRS could not verify the recovery of the security items for six of these employees and could not provide evidence that these cases were referred to the TIGTA Office of Investigations as required. When the IRS did not collect security items, some were later used to enter IRS buildings.

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July 8, 2016 in Gov't Reports, IRS News, Tax | Permalink | Comments (2)

Disgraced Former Case Western Law School Dean Changes Name To Ezra Wasserman Mitchell: A 'Jewish Kunte Kinte'

EzraCleveland Scene, Disgraced Former Case Western Law School Dean Writes About Changing His Name Without Mentioning All The Reasons He'd Disgraced His Former Name:

Lawrence Mitchell is now Ezra Wasserman Mitchell. That matters very little to most people but for some others it's certainly worth noting, because Lawrence Mitchell was the former law school dean at Case Western Reserve University. Former is the key word there. Mitchell departed after the school settled a sexual harassment and retaliation lawsuit that, among other things, included multiple allegations that he'd propositioned students for threesomes. He's dipped off the radar — moving away from Cleveland and recording himself reading creepy poetry — and now, Lawrence Mitchell is off the radar altogether.

In a post on his site Mitchell announces that he's changed his name to Ezra Wasserman Mitchell:

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July 8, 2016 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 1156

IRS Logo 2The Hill, House Rejects Measure to Cut IRS Chief's Salary to Zero:

The House on Thursday rejected an amendment to a financial services spending bill that would have temporarily cut the Internal Revenue Service Commissioner’s salary to zero.

The amendment failed by a vote of 197 to 224, drawing opposition from some Republicans as well as from Democrats.

Republican Reps. Ken Buck (Colo.) and Mark Sanford (S.C.) offered the amendment, which would have reduced IRS Commissioner John Koskinen’s salary to zero from the date of enactment through the date of the presidential inauguration.

“This amendment is necessary because of the serious mistakes by the IRS,” Buck said.

Buck criticized the IRS for subjecting conservative groups’ applications for tax-exempt status to extra scrutiny and for destroying evidence that was subject to a congressional investigation on the political-targeting scandal.

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

Thursday, July 7, 2016

National Taxpayer Advocate Releases FY 2017 Objectives Report To Congress

NTA 2National Taxpayer Advocate Nina E. Olson today released her statutorily mandated mid-year report to Congress:

The Internal Revenue Code requires the National Taxpayer Advocate to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The National Taxpayer Advocate is required to submit these reports directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year.

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July 7, 2016 in Congressional News, IRS News | Permalink | Comments (0)

Was Temple Provost Fired Due To Success Of Automatic Merit Scholarships (1350 SAT, 3.60 GPA) In Raising Quality Of Freshman Class (But Blowing $22m Hole In Budget)?

TempleInside Higher Ed, Debating a Provost's Ouster:

Temple University has a new provost and a newly adjusted budget, but the Philadelphia research institution is still grappling with the sudden dismissal last week of its provost on the heels of a high-priced financial aid overrun.

Faculty members have continued to protest the June 28 dismissal of Provost Hai-Lung Dai, who was in the position for four years, a move revealed in what some saw as a terse and even disrespectful announcement from President Neil D. Theobald. But Theobald has forged ahead, announcing Tuesday the nomination of the university’s law school dean, JoAnne A. Epps, as its new provost.

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July 7, 2016 in Legal Education | Permalink | Comments (0)

A Defense Of Horizontal Equity

Florida Tax Review  (2015)Ira Lindsay (Dartmouth), Tax Fairness by Convention: A Defense of Horizontal Equity, 19 Fla. Tax Rev. 79 (2016):

Horizontal equity is the principle that people who earn equal income should owe equal tax. It has gotten a bad name. Although horizontal equity remains a textbook criterion of tax fairness, scholarly literature is largely hostile. Scholars ranging from the legal theorist Louis Kaplow to philosophers Thomas Nagel and Liam Murphy question its conceptual coherence and normative significance. The crux of the case against horizontal equity is that it seems irrational to worry about the relationship between pre-tax income and tax obligations rather than determining tax policy in light of what our best theory of distributive justice tells us is the best post-tax outcome. I argue that horizontal equity is best understood as a compromise principle for people who disagree about deeper principles of distributive justice.

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July 7, 2016 in Scholarship, Tax | Permalink | Comments (1)

17 Tax Profs Submit Comments To Treasury Department On Earnings Stripping, Serial Inversion Proposed Regs

Press Release, Leading Academics Support Treasury Inversion Rules to Stop Corporate Tax Avoidance:

A total of 17 leading international tax law experts submitted comments today and last week in support of two proposed Treasury Department anti-inversion rules that were issued in April and whose comment period closes Thursday, July 7 [Reuven Avi-Yonah (Michigan), Clifton Fleming (BYU), Richard Harvey (Villanova), David Hasen (Colorado), Daniel Hemel (Chicago), Calvin Johnson (Texas), Jeffery Kadet (University of Washington), Charlene Luke (Florida), Omri Marian (UC-Irvine), Susan Morse (Texas), Robert Peroni (Texas), Daniel Shaviro (NYU), Stephen Shay (Harvard), Sloan Speck (Colorado), Samuel Thompson (Penn State)] .

Treasury’s two proposed rules would take away key tax benefits that occur when U.S. a corporation inverts with a smaller foreign firm, thereby changing its tax residence to reduce or avoid paying U.S. taxes. One rule addressed so-called “earnings stripping,” whereby a foreign corporation, which often has inverted with a larger U.S. corporation, reduces its taxable income by shifting profits through debt arrangements to a lower-tax country. A second rule addressed so-called “serial inverters,” which was a technique employed by Pfizer to get around limits on inversions by acquiring an offshore company, Allergan, that had gone through multiple inversions.

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

ABA Tax Section Publishes Spring 2016 Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 35 Tax Times No. 3 (Spring 2016):

Assisting the IRS
The IRS now more than ever needs the help of the Section and its members. This column describes some of the ways that the Section is providing assistance to the IRS.

The Tax Ghosts of Christmas Past, Christmas Present, and Christmas Yet to Come
In this issue of ATT, People in Tax deviates from its traditional interview format to present the remarks of Terence F. (Terry) Cuff, which he delivered at the Real Estate and Partnerships & LLCs Luncheon on January 29 at the 2016 Midyear Meeting in Los Angeles.

Missing Scalia?

Speculation abounds on the impact on pending cases and major issues, such as abortion and the Second Amendment, of Justice Scalia’s departure from the Supreme Court. Some have tried to focus that speculation on tax issues, but that effort faces two hurdles.

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July 7, 2016 in ABA Tax Section, Tax | Permalink | Comments (0)

Using Altmetrics To Measure The Impact Of Faculty Scholarship

AltmetricsFollowing up on my previous post, Using Altmetrics to Measure the Impact of Faculty Scholarship:  Kevin O’Keefe (CEO & Founder, LexBlog), Legal Scholarship Today Ought Include Blogging:

University of Arkansas property law professor, Steve Clowney, who teaches property law, has put together a list of the most “cited” property law professors in the country over the last five years. [See also Brian Leiter (Chicago), 10 Most-Cited Property Faculty, 2010-2014 (Inclusive).]

Although Clowney does not make clear the purpose of his list, it appears to being taken as recognition of the top scholars.

Law schools, including Notre Dame, are sending out press announcements of the prowess of the scholarship being conducted by their law professors on the list.

The list was arrived at by running searches across Westlaw for the number of times that a professor’s law journal articles had been cited in other law journals.

Is such a list an accurate assessment of a law professor’s influence and level of scholarship today?

What about their blogging? How often do they blog (evidence of their research)? How often do they cite other blogs (demonstrates their network)? How often are their blogs cited on other blogs and shared on Twitter, LinkedIn, and Facebook?

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

DNC Lacks 501(c)(3) Exemption For Philadelphia Convention, Putting Donors' Charitable Deductions At Risk

DNCFollowing up on my previous post:  Philadelphia Inquirer, With DNC Just Weeks Away, Host Committee Still Waiting for Green Light From IRS:

The local fund-raising committee for the Democratic National Convention still has not received tax-exempt status from the IRS, and that could affect donors who want tax deductions.

The Philadelphia 2016 Host Committee, which is responsible for raising at least $60 million for the July 25 to 28 convention at the Wells Fargo Center, has not received the designation under section 501(c)3 of the tax code.

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July 7, 2016 in Political News, Tax | Permalink | Comments (5)

Mehrotra:  Law And The New Intellectual Histories of Capitalism

Ajay K. Mehrotra (American Bar Foundation), A Bridge Between: Law and the New Intellectual Histories of Capitalism, 64 Buff. L. Rev. 1 (2016):

The American historical profession has in recent years witnessed a significant revival of two subfields that were once thought to be nearly dead. Both intellectual history and what is often referred to today as the history of capitalism— and what was earlier considered a variant of business or economic history—are flourishing. They are thriving mainly because of a newfound desire and interest among scholars and the public, alike, for better ways to understand the past. ...

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July 7, 2016 in Scholarship, Tax | Permalink | Comments (0)

Stars Upon Thars:  Law Schools Use ABA Standard 405(c)'s Tenure-Like Security Of Position To Discriminate Against Female Legal Writing Faculty

SneetchesMelissa H. Weresh (Drake), Stars upon Thars: Evaluating the Discriminatory Impact of ABA Standard 405(c) Tenure-Like Security of Position, 34 Law & Ineq. 137 (2016):

This brief Article (the title is inspired by the Dr. Seuss story, The Sneetches) relates to the institutional discrimination against women within the legal academy. More specifically, this Article addresses the potential for exploitation of law faculty members who hold ABA Accreditation Standard 405(c) status and the likelihood that such exploitation will have a disparate, discriminatory impact on a predominantly female cohort of law faculty. ...

The security of position afforded to 405(c) contractual law faculty members, defined as "reasonably similar to tenure, is somewhat vague and largely untested. This ambiguity provides an opportunity for law schools undergoing financial strain to terminate contractual legal writing faculty members without providing adequate, tenure-like protections. Augmenting this problem is the fact that faculty members who hold 405(c) status represent an overwhelmingly female cohort of faculty, resulting in a discriminatory and disparate impact on female members of the academy.

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July 7, 2016 in Legal Education, Scholarship | Permalink | Comments (5)

The IRS Scandal, Day 1155

IRS Logo 2Daily Signal, Conservatives Impatient With House Leadership on Impeaching IRS Chief:

Conservatives’ campaign to impeach IRS Commissioner John Koskinen has yielded hearings but little else. As the congressional calendar slips by, some accuse House Republican leaders of dragging their feet on the issue.

“We’re running out of time” to impeach Koskinen, Rep. Raúl Labrador, R-Idaho, recently told The Daily Signal.

House leadership isn’t serious about impeachment and removal of the IRS chief, Labrador said, adding that he believes House Speaker Paul Ryan and his team probably are “trying to delay it on purpose.”

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July 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, July 6, 2016

'There Has Never Been A More Exciting Time To Be A Tax Lawyer'

Lawyer & Statesman 2016 [Intro - Cover1]Guide to Specialty Graduate Law Programs: Taxation, in Lawyer & Statesman (2016):

The wide array of tax plan proposals by this year's presidential candidates [is] as dramatic as it's ever been. Not until November will we know who will move into the White House, and even then, it's unclear how and if our next president would be able to push major tax changes through Congress.

"There has never been a more exciting time to be a tax lawyer," said Paul Caron, professor of law at Pepperdine University School of Law and the publisher and editor of TaxProf Blog. ...

Employment prospects will likely remain high, and the field is not subject to booms and busts.

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July 6, 2016 in Legal Education, Tax | Permalink | Comments (3)

25 Tax Profs File Amicus Briefs Supporting IRS's Position In Altera 9th Circuit Appeal

AlteraFollowing up on my previous posts on Altera Corp. & Subs. v. Commissioner, 145 T.C. No. 3 (July 27, 2015), in which the Tax Court unanimously (15-0) invalidated the Section 482 stock-based compensation cost sharing regulations:

Two groups of tax professors have filed amicus briefs with the 9th Circuit on behalf of the IRS:

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July 6, 2016 in New Cases, Tax | Permalink | Comments (0)

WSJ:  Marginal Tax Rates Matter To Star Scientists (And To The Rest Of Us)

Wall Street Journal editorial, Why Everyone Needs a Tax Cut: Scientists Like Living in Countries That Don’t Plunder Their Paychecks:

It’s déclassé on the left and right these days to talk about marginal tax rates, so forgive us for pointing out economic evidence that rates affect individual behavior. Two 2015 papers from the National Bureau of Economic Research looked at the impact of top marginal tax rates on the mobility of superstar scientists—the people critical to U.S. success in a high-tech global economy.

Mobility 1One study, by Ufuk Akcigit, Salomé Baslandze and Stefanie Stantcheva, looked at the international migration patterns of highly successful inventors since 1977. The authors found that “top 1% inventors”—those with the most valuable patents—“are significantly affected by top tax rates when choosing where to locate.” Specifically, countries enjoy a “26% increase in foreign superstar top 1% inventors” with each “10 percentage points decrease in top tax rates.” [Taxation and the International Mobility of Inventors]

The authors, in hilariously dry academic fashion, dare to note that these “migratory responses to tax policy might represent a cost to tax progressivity.” Imagine trying to attract the top 1% of earners instead of driving them away.

Mobility 2In another study, Enrico Moretti and Daniel Wilson examine star scientists “at or above the 95th percentile in number of patents over the past ten years” to find that state taxes have “a significant effect” on the geographical location of these innovators. In short, they found, “relative taxes matter.” [The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists]

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (5)

Frye:  Social Technology And The Origins Of Popular Philanthropy

Brian Frye (Kentucky), Social Technology & the Origins of Popular Philanthropy, 32 Ga. St. U. L. Rev. 413 (2016):

The prevailing theory of charity law holds that the charitable contribution deduction is justified because it solves market and government failures in charitable goods by compensating for free riding on charitable contributions. This article argues that many market and government failures in charitable goods are actually caused by transaction costs, and that social technology can solve those market and government failures by reducing transaction costs.

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (0)