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Tuesday, December 2, 2014

Weisbach Presents The Use of Neutralities in International Tax Policy Today at Columbia

WeisbachDavid Weisbach (Chicago) presents The Use of Neutralities in International Tax Policy at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

This paper analyzes the use of neutrality conditions, such as capital export neutrality, capital import neutrality, capital ownership neutrality, and market neutrality, in international tax policy. Neutralities are not appropriate tools for designing tax policy. They each identify a possible margin where taxation may distort business activities. Because these neutralities cannot be all satisfied simultaneously, however, they do not allow analysts to determine the appropriate trade-offs of these distortions, unlike deadweight loss measures used in other areas of tax policy. International tax policy should instead be tied directly to the reasons for taxing capital income, reasons which are derived from optimal tax or similar models.

December 2, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Slate: A Bunch of Law Schools Are About to Go Bust. Hooray.

Slate:  A Bunch of Law Schools Are About to Go Bust. Hooray., by Jordan Weissman:

In the world of law schools, every day is sort of like Black Friday.

OK, slight exaggeration. But with applications in free fall, schools are locked in a brutal competition to attract students who might theoretically one day be qualified to sit for a bar exam. And that, the New York Times reports today, has meant slashing tuition and dolling out discounts. At Northwestern University School of Law, one of the top ranked institutions in the country, “74 percent of first-year students this academic year received financial aid, compared with only 30 percent in 2009,” the paper notes. The University of Iowa, University of Arizona, and Penn State University have cut their prices. J.D.s are on sale! ...

It seems fairly obvious that some law schools are going to have to close in the not too distant future. Between the fall of 2010 and fall of 2013, enrollments dropped 24 percent. This year’s crop of new students should be even smaller. And while schools are doing everything in their power to pare back expenses and prop up their head counts, it seems like someone is going to fall victim to a collapsing demand. “I don’t get how the math adds up for the number of schools and the number of students,” Northwestern Dean Daniel Rodriguez, told the Times. That’s because it probably won’t. ...

If about 10 percent of law schools closed, that would mean about 20 casualties. Could that possibly come to pass? I don't know, but I wouldn't entirely rule it out.

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December 2, 2014 in Legal Education | Permalink | Comments (1)

Iowa Law School Asks U.S. Supreme Court to Block 8th Circuit Order of New Trial in Unsuccessful Republican Faculty Candidate's Discrimination Suit

Wagner 2Following up on my previous posts (links below) about Teresa Wagner's federal lawsuit claiming she was denied a faculty position because of her conservative views:  the Des Moines Register reports that the University of Iowa College of Law has asked the U.S. Supreme Court to block the Eighth Circuit's July 15, 2014 order of a new trial.  Wagner v. Jones, No. 13- 1650 (8th Cir. July 15, 2014):

Lawyers for the school's current and former deans petitioned justices last week to overturn an appeals court ruling that granted Wagner a new trial. The court should reinstate a 2012 verdict that found the school's former dean didn't discriminate against Wagner based on her beliefs, the Iowa Attorney General's Office argued in the petition. The state agency is defending school officials in the case. ...

Wagner, a part-time employee of the law school's writing center, claims that liberal professors blocked her 2007 candidacy for jobs teaching legal writing because she is a Republican who previously worked for anti-abortion groups. She's seeking to be placed into a job with back pay and damages.

Professors testified that they were aware of Wagner's politics but passed her over because she performed poorly during an interview.

The lawsuit went to trial two years ago, but has since been tangled up over a judge's mistake.

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December 2, 2014 in Legal Education | Permalink | Comments (1)

Inversions Shaved U.S. Tax Bills by $2 Billion in 2014

Bloomberg:  ‘Unpatriotic Loophole’ Targeted by Obama Costs $2 Billion, by Zachary R. Mider:

U.S. companies that have already carried out inversions are likely to cost the government a record $2.2 billion or more in lost tax revenue next year, double the amount in 2014, according to calculations based on companies’ financial results.

That doesn’t include the impact of companies that shift their legal addresses abroad in the future, which one Congressional study pegged at about $2 billion a year over the next decade. Since the first inversion in 1982, the deals have cost more than $9.8 billion in inflation-adjusted dollars, the calculations based on data compiled by Bloomberg show.

In an era when tax rates paid by U.S. companies overall have declined, those that inverted reduced their taxes far more than competitors did. They were able to lower their effective tax rates between 6.6 and 17.4 percentage points more than peers that didn’t take a foreign address, the calculations show.

The data highlight how the U.S. government is paying the price for inversions it allowed to happen years or decades earlier. Even if Congress or President Barack Obama, who has called inversions an “unpatriotic tax loophole,” were to stop them today, the erosion of the tax base by past deals will continue to accelerate.

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December 2, 2014 in Tax | Permalink | Comments (0)

Will Faculty Soon Be Cleaning Law School Bathrooms?

New York Times:  When the Forces of Media Disruption Hit Home, by David Carr:

Janitor 2I read on Friday that the price of taxi medallions in New York City had fallen about 17 percent, a drop created by competition from ride-sharing services like Uber and Lyft. The impact is remarkable because neither company possesses big capital assets, or a huge number of employees. Instead, they put a new user interface over cars and drivers already on the road. In the same way, Airbnb has remade the rental markets, not by buying properties, but simply by surfacing available units on the web to people in need.

In both cases, inefficiency was reduced by using software and smarts to create a new market of underused assets — and consumers have benefited. ...

I work in an industry that has also been profoundly disrupted. The shift of news and information to the Internet meant that the heavy investment in trucks and presses that once served as a barrier to entry disappeared. Insurgents flooded in with new approaches that eliminated much of the inefficiency and created whole new streams of content. Again, great for consumers, not so great for the traditional news industry, because those inefficiencies were also profits by another name.

Right now, The New York Times is in the middle of a round of buyouts in an effort to cut 100 positions, to stretch existing revenue over a smaller cost base. ... Buying out those folks — layoffs will follow if the goal of 100 jobs is not met — also allows the organization to invest in new technologies and the people who build them. ...

[I]t’s always good to remember that things could be worse, far worse, in a business as challenged as journalism. ... At The Orange County Register, which has struggled through layoffs and misguided expansions, the delivery of the newspaper was interrupted after the company failed to pay The Los Angeles Times for the service. ... Reporters are also among those now being asked to, um, deliver the newspaper.

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

Driessen: Corporate Tax Fate May Hinge on Modeling Omission

Tax Analysys Logo (2013)Patrick Driessen (former revenue estimator, Joint Committee on Taxation and Treasury Department), Corporate Tax Fate May Hinge on Modeling Omission, 145 Tax Notes 1043 (Dec. 1, 2014):

By omitting corporate income, traditional distribution models overstate the U.S. corporate tax rate and overall tax progressivity. The prevailing capital gains realization approach could be replaced by an inclusive corporate income method that would correctly show corporate equity owners as more lightly taxed than capital gains realization models indicate. That replacement would accord with how the individual tax is modeled for distribution as well as with results from corporate tax studies conducted outside the distribution context. Augmenting corporate income in distribution models would also enable proper reflection of proposals, such as corporate integration, and provide a better perspective on how much corporate tax is borne by labor.

(Hat Tip: David Cay Johnston.)

December 2, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

2014 Tannenwald Tax Writing Competition Results

TannenwaldHere are the results in the 2014 Tannenwald Tax Writing Competition, sponsored by The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and the American College of Tax Counsel:

  • First Prize (tie) ($4,500):  Alex Levy (NYU), Believing in Life After Loving: IRS Regulation of Tax Preparers (Faculty Sponsor:  David Kamin)
  • First Prize (tie) ($4,500):  Mark C. Westenberger (Washington University), Tax-Exempt Hospitals and the Community Benefit Standard: A Flawed Standard and a Way Forward (Faculty Sponsor:  Cheryl Block)
  • Honorable Mention:  Nika Antonikova (San Diego), Real Taxes in Virtual Economies: What Does the IRS Say (Faculty Sponsor:  Brian Galle)
  • Honorable Mention:  Michael Daly (Georgetown University), Bound and Gagged: Making the Case for Congress Delegating Tax Policy to the Experts (Faculty Sponsor:  Tom Field)

December 2, 2014 in Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

Johnston: Real World (California, Kansas) Contradicts Right-Wing Tax Theories

Al Jazeera:  Real World Contradicts Right-Wing Tax Theories:  California Raised Taxes, Kansas Cut Them. California Did Better, by David Cay Johnston (Syracuse):

Ever since economist Arthur Laffer drew his namesake curve on a napkin for two officials in President Richard Nixon’s administration four decades ago, we have been told that cutting tax rates spurs jobs and higher pay, while hiking taxes does the opposite.

Now, thanks to recent tax cuts in Kansas and tax hikes in California, we have real-world tests of this idea. So far, the results do not support Laffer’s insistence that lower tax rates always result in more and better-paying jobs. In fact, Kansas’ tax cuts produced much slower job and wage growth than in California.

The empirical evidence that the Laffer curve is not what its promoter insists joins other real-world experience undermining the widely held belief that minimum wage increases reduce employment and income. 

Laffer

For more, see Joseph Bankman (Stanford) & Paul L. Caron (Pepperdine), California Dreamin': Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014)

December 2, 2014 in Tax | Permalink | Comments (0)

Casting Call: Love, Sex and the IRS

Love 2Backstage, Casting Notice:  Love, Sex and the IRS:

Company
The Norris Theatre

Production Description
Palos Verdes Performing Arts is casting Love, Sex and The IRS.

Rehearsal and Production Dates & Locations
Rehearsal for Love, Sex and The IRS begins Jan. 5, 2015; runs Jan. 23-Feb. 8, 2015 at the Norris Theatre in Rolling Hills Estate, CA.

Compensation & Union Contract Details
Pays $510/wk. min. Equity Guest Artist Tier 3 Contract.

Seeking Talent
Select a role below for more information and submission instructions.

December 2, 2014 in Book Club, Tax | Permalink | Comments (0)

The IRS Scandal, Day 572

IRS Logo 2Forbes:  Are Criminals Outsmarting The IRS?, by Robert W. Wood:

With the IRS scandals of the last 18 months, it might seem that we have lost control of our tax system. The IRS is an essential part of our government, which can’t run without taxes. So having it fairly and efficiently run is pretty important. More than 18 months ago, an angry President Obama sacked the IRS Chief, Steven Miller. That was inevitable after the story broke that Tea Party and other conservative groups were targeted for extra scrutiny. The cover-up was worse than the crime, especially for an agency that must rely on taxpayers self-assessing their taxes.

More than 18 months ago, Mr. Obama said (in this transcript) that the IRS needed new leadership while it faced a broad probe of its conduct. The President promised full cooperation with congressional investigations. For new leadership “that can help restore confidence,” President Obama picked John Koskinen as next Commissioner. He came to office having no tax knowledge and no tax experience, but was an avowed turnaround specialist.

Whatever Mr. Koskinen’s skills, the agency hasn’t yet come back to smooth sailing. With alleged targeting, bonus controversies, systemic lien and collection errors and more, the agency looks incompetent to many outsiders. Whatever one’s political views, it doesn’t exactly inspire confidence. The different stories surrounding the lost or destroyed Lois Lerner emails alone do not leave everyone as certain as the President that there is not a smidgen of corruption.Perhaps the President will be proven right–I hope so.

But it still is no way to run a railroad. Taxpayers deserve better, and so do the thousands of IRS honest and hard working IRS employees. The 18 months of dissembling started when a comparatively unknown Lois Lerner was speaking at a bar association meeting May 10, 2013. She planted a question in the audience so she could get out ahead of the TIGTA report documenting IRS targeting. It may have been well-intentioned but came off as duplicitous. 18 months later, we’re still waiting for the final word, though now we are told that 2,500 previously undisclosed documents may link to the White House.

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December 2, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, December 1, 2014

Yagan Presents Capital Tax Reform and the Real Economy Today at UC-Berkeley

YaganDanny Yagan (UC-Berkeley) presents Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

Policymakers frequently propose to use capital tax reform to stimulate investment and increase labor earnings. This paper tests for such real impacts of the 2003 dividend tax cut -- one of the largest reforms ever to a U.S. capital tax rate -- using a quasi-experimental design and a large sample of U.S. corporate tax returns from years 1996-2008. I estimate that the tax cut caused zero change in corporate investment, with an upper bound elasticity with respect to one minus the top statutory tax rate of .08 and an upper bound effect size of .03 standard deviations. This null result is robust across specifications, samples, and investment measures. I similarly find no impact on employee compensation. The lack of detectable real effects contrasts with an immediate impact on financial payouts to shareholders. Economically, the findings challenge leading estimates of the cost-of-capital elasticity of investment, or undermine models in which dividend tax reforms affect the cost of capital. Either way, it may be di¢ cult for policymakers to implement an alternative dividend tax cut that has substantially larger near-term effects.

December 1, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

NY Times: Law Schools Engage in 'Hand-to-Hand Combat' Over Declining Applicant Pool

NY Times Dealbook (2013)New York Times DealBook:  Law School Becomes Buyers’ Market as Competition for Best Students Increases, by Elizabeth Olson:

Summer was waning and students were already packing for the fall semester, but Prof. Daniel B. Rodriguez, dean of the Northwestern University School of Law, was still fielding phone calls from incoming students seeking to bargain down the tuition at the elite school.

“It’s insane,” Professor Rodriguez said. “We’re in hand-to-hand combat with other schools.”

In the new topsy-turvy law school world, students are increasingly in control as nearly all of the 204 accredited law schools battle for the students with the best academic credentials. Gone are the days when legal educators bestowed admittance and college graduates gratefully accepted, certain that they were on the path to a highly paid, respectable career.

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December 1, 2014 in Legal Education | Permalink | Comments (8)

Vanderbilt Symposium: The Role of Federal Law in Private Wealth Transfer

VandySymposium, The Role of Federal Law in Private Wealth Transfer, 67 Vand. L. Rev. 1531-2006 (2014):

December 1, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Zucman: Taxing Across Borders -- Tracking Personal Wealth and Corporate Profits

Gabriel Zucman (London School of Economics), Taxing Across Borders: Tracking Personal Wealth and Corporate Profits, 28 J. Econ. Perspectives 121 (Fall 2014):

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.

Figure 1

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December 1, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tax Whistleblower Claims Vanguard Tried to Silence Him

VanguardFollowing up on my previous posts (links below) on the whistleblower suit brought by a former Vanguard tax lawyer alleging that the mutual fund giant evaded over $1 billion in taxes:  Philadelphia Inquirer, Vanguard 'Silenced' Tax Fraud Claims, Whistleblower Says:

David Danon tried to warn Vanguard Group it was illegally underpaying its income taxes while he was a tax lawyer for the company from 2008 to 2013 -- and was punished, with "attempts to silence me," until he was fired "in retaliation for my persistent and vocal questioning" of the $3 billion investment company's "unlawful practices," the Wayne resident says in an affidavit filed for his whistleblower lawsuit this week.

He says he only sued after Vanguard officials' "refusal to act on clear violations of law" he brought to their attention, showed the company "intentionally engaged in unlawful conduct," Danon alleged in court papers meant to answer Vanguard's efforts to discredit him and stop his complaint from advancing in a New York court.

Danon alleges Vanguard, based in Malvern, has violated federal tax law governing payments between corporate affiliates, by undercharging for services it provides to its own mutual funds. Low income means less income tax. Danon says Vanguard has used this method to underpay taxes by more than $1 billion over the years.

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December 1, 2014 in Tax | Permalink | Comments (0)

Gender Disparity in Law Review Citation Rates: Women Outperform Men

Christopher Anthony Cotropia (Richmond) & Lee Petherbridge (Loyola-L.A.), Gender Disparity in Law Review Citation Rates:

Gender disparity in scholarly influence – measured in terms of differential citation to academic work – has been widely documented. The weight of the evidence is that, in many fields of academic inquiry, papers authored by women receive fewer citations than papers authored by men. To investigate whether a similar gender disparity in scholarly influence exists in legal studies we analyze the impact of gender on citation to articles published in top 100 law reviews between 1990 and 2010. We find evidence of gender disparity in citation rates, but in surprising contrast to observations made in other disciplines, we observe that articles authored by women receive significantly more citations than articles authored by men.

Table 3

December 1, 2014 in Legal Education, Scholarship | Permalink | Comments (7)

Taxpayers Ask Supreme Court to Decide President's Authority to Remove a Tax Court Judge

Supreme Court (2014)Following up on my previous posts (links below):  the taxpayers in Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014), on Wednesday filed a  cert. petition in the U.S. Supreme Court arguing that the President’s authority under 26 U.S.C. §  7443(f) to remove Tax Court judges violates the Constitution’s separation of powers.

December 1, 2014 in New Cases, Tax | Permalink | Comments (0)

Call for Papers: Taxing Racism

Call for Papers Taxing Racism: Racial Hoarding, Redistribution, and Contestations of ‘The Public’:

SociologyDuring the 1950s, ’60s, and ’70s, the Black Freedom Struggles pushed for minority inclusion into “mainstream” institutions, seeking integration in schools and housing as well as access to social safety net policies — all gains that would signify acceptance into larger society. As these preliminary steps toward inclusion occurred, we have witnessed large-scale reconfigurations in the very institutions that represented minority access to the public in these struggles. White racial resentment has seen expression in tax revolts, anti-welfare and “social entitlements” discourse, and the decimation of cities’ tax bases through white withdrawal to suburbs. The past few decades have also seen the growth of seemingly neutral tax policies at local, state and federal levels that privilege whites at the expense of blacks (and other people of color too). Through collective as well as corporate interests, whites have sought to lessen their tax obligations for those public services seen as disproportionately benefitting blacks. We have also seen the diversion and hoarding of public tax funds to private pockets in for-profit charter schools, economic development and “urban renewal,” and the growth of private prisons, all of which capitalize on the suffering of a racialized war against the poor.

All these examples allude to broader themes on the racialized meaning of the public itself. If struggles between power and resistance over taxation can reveal anything to scholars of race, it may be that the whole notion of the public is a politically contested battleground in which racial groups assert and defend their collective interests. Taxation can be either a democratizing social force or a site for the reproduction of inequality and racial repression; perhaps even both. Open-ended questions of the public, what constitutes it, who defines it, and whom it should serve all represent contentious matters of racial politics that manifests in conflicts over taxation. Yet what we know of the public as a racially-contested concept has been one subject that remains relatively unexplored by academics generally and sociologists specifically.

This special issue fills this theoretical and empirical gap by uniting a discussion of contemporary racial trends in taxation, with special attention paid to racially-motivated revisions of the public, all with the intent of generating broader hypotheses about race and belonging in the modern era. Preferred approaches will be sociological in nature, but interdisciplinary orientations will be considered. Papers that use a variety of theoretical and methodological approaches are welcomed. Manuscripts may include, but are not limited to the following themes:

  • Property Tax Revolts, White Backlash, and Education Finance
  • “The 47 Percent,” the “Food-Stamp President,” and Racial Redistribution
  • The Earned Income Tax Credit: When Tax Policy becomes “Welfare”
  • Tax Increment Financing, Urban Growth Regimes, and Transforming “Inner-cities”
  • Tax Exemptions, White Flight, and Segregation Academies
  • The “Death” Tax, Growing Wealth Disparity, and the Racial Politics of Deservingness
  • Fiscal Cliffs, BIG Government, and the Racial State
  • Business Tax Breaks in Overtaxed Black Cities
  • Brownfield Redevelopment and School Tax Capture
  • Court Fines and Fees, Government Finance in Ferguson, Missouri

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December 1, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 571

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

TaxProf Blog Holiday Weekend Roundup

Sunday, November 30, 2014

Tax and Proverbs 6:30-31

Martin v. Her Majesty the Queen, 2014 TCC 200 (2014):

ProverbsAfter filing his 2010 tax return, M. Martin sought to claim $14,000,000 of disposition costs for his former clientele and increase his capital loss by a like amount – from $800,000 to $14,800,000. M. Martin arrived at his $14,000,000 disposition costs number as follows. He estimated that $2,000,000 was the value of his property seized or lost as a result of the loss of his clientele and the revenue generated thereby. This included the value of his home, his country property, his collection of vehicles, his library, and all of his other collections and belongings. As mentioned, these properties were seized as a consequence of his resulting financial difficulties. M. Martin then multiplied the $2,000,000 value of his lost property by seven, relying upon the proverbial exhortation to thieves to pay back sevenfold what they stole.1

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November 30, 2014 in Tax | Permalink | Comments (2)

The Research Productivity of New PhDs in Economics: The Surprisingly High Non-success of the Successful

John P. Conley (Vanderbilt) & Ali Sina Önder (Bayreuth), The Research Productivity of New PhDs in Economics: The Surprisingly High Non-success of the Successful:

We study the research productivity of new graduates from North American PhD programs in economics from 1986 to 2000. We find that research productivity drops off very quickly with class rank at all departments, and that the rank of the graduate departments themselves provides a surprisingly poor prediction of future research success. For example, at the top ten departments as a group, the median graduate has fewer than 0.03 American Economic Review (AER)-equivalent publications at year six after graduation, an untenurable record almost anywhere. We also find that PhD graduates of equal percentile rank from certain lower-ranked departments have stronger publication records than their counterparts at higher-ranked departments. In our data, for example, Carnegie Mellon's graduates at the 85th percentile of year-six research productivity outperform 85th percentile graduates of the University of Chicago, the University of Pennsylvania, Stanford, and Berkeley. These results suggest that even the top departments are not doing a very good job of training the great majority of their students to be successful research economists. Hiring committees may find these results helpful when trying to balance class rank and place of graduate in evaluating job candidates, and current graduate students may wish to re-evaluate their academic strategies in light of these findings.

Table 2

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November 30, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (2)

Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads on SSRN is the same as last week's list.  The #1 paper is now #115 in all-time downloads among 10,535 tax papers:

  1. [1176 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [390 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [372 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  4. [240 Downloads]  A World Turned Upside Down: Reflections on the 'New Wave' Inversions and Notice 2014-52, by Reuven S. Avi-Yonah (Michigan)
  5. [229 Downloads]  A White Paper on Executive Action to Restore Trust in the Internal Revenue Service by Rebuilding Field Operations, by Frank Wolpe (Bentley)

November 30, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 570

IRS Logo 2Breitbart:  Obama: Not Legitimate for Future Presidents to Lower Taxes via Executive Action:

After unilaterally granting temporary amnesty and work permits to millions of illegal immigrants last week, President Barack Obama said it would not be legitimate for a future president to unilaterally lower tax rates. 

When asked on ABC's This Week if his successor could unilaterally act to lower taxes if Congress does not, Obama replied, "absolutely not."

Obama, despite the IRS's targeting of conservative and Tea Party organizations, also said that his administration only audits "folks who are most likely to be cheating" and said that even though the IRS does not "audit every single person... we still expect that people are going to go ahead and follow the law."

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November 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Saturday, November 29, 2014

Moneyball for Government

MoneyballMoneyball for Government (Jim Nussle & Peter Orszag, eds.) (Nov. 10, 2014) (website):

Data and evidence don’t lie—but for too long, our policy makers haven’t paid them nearly enough attention. In this refreshing collaboration, an all-star team of leaders and thinkers from across the political spectrum lays out an exciting and achievable vision for the country — one where policy makers base decisions not on politics or expedience, but on the hard evidence of what really works. For anyone who believes that government must do better for America’s children and their families, Moneyball for Government is a home run.

The Atlantic:  Can Government Play Moneyball, by John Bridgeland & Peter Orszag:

Based on our rough calculations, less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely. As former officials in the administrations of Barack Obama (Peter Orszag) and George W. Bush (John Bridgeland), we were flabbergasted by how blindly the federal government spends. In other types of American enterprise, spending decisions are usually quite sophisticated, and are rapidly becoming more so: baseball’s transformation into “moneyball” is one example. But the federal government—where spending decisions are largely based on good intentions, inertia, hunches, partisan politics, and personal relationships—has missed this wave. ...

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November 29, 2014 in Book Club, Tax | Permalink | Comments (10)

Miami: The Cradle of TV Judges

Miami LogoMiami New Times Blog, University of Miami Is Tops in Churning Out TV Judges:

Just three years ago, mega-attorney Roy Black wrote in a candid blog post: "The UM Law School is in a death spiral; we have plummeted in the law school rankings, falling to 77th, while UF is 47 and FSU is 50. This is more than a little embarrassing."

[FIU is hot on our tail and at a cheaper price. So the question is, what do we do about it? In my opinion, it is time to question long-held beliefs about legal education. It maybe uncomfortable, but the winds of change are upon us. We either bend and survive or break and die.

My solution is to radically reform the curriculum. I suggest we become the MIT of litigation. After the first year of required courses, we create a program designed to intensely train trial lawyers. Not with the usual clinical courses, or useless apprenticeships, but with rigorous courses, taught by experienced professionals, using mock trials and moot courts, to teach students how to litigate. This will make the UM law degree more valuable in the marketplace. When a law firm needs young litigators, we will be the first place they look.]

[No other law school does this; it is time for a new brand at UM. We should advertise as the school to learn trials. The vision should be a school go-to for the finest litigation education and experience.]

Yes, the University of Miami law school is not held in the highest of regards.

But there is no denying that UM does something really, really well compared to all other programs: turning out graduates who go on to become TV judges. Seriously, the University of Miami has more alumni who have gone on to host their own daytime courtroom show than any other school. ... [C]onsidering that the Wikipedia category for television judges has only 23 entries, we figured that about 17 percent of prominent TV judges have a UM law degree. That's still a lot. Here's the rundown on the proud syndicate of UM's TV judges.

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November 29, 2014 in Legal Education | Permalink | Comments (1)

Burk: The Evolving Market for New Lawyers in the 21st Century

Bernard A. Burk (North Carolina), What's New About the New Normal: The Evolving Market for New Lawyers in the 21st Century, 41 Fla. St. U. L. Rev. 541 (2014):

Everyone agrees that job prospects for many new law graduates have been poor for the last several years; there is rather less consensus on whether, when, how or why that may change. This article analyzes historical and current trends in the job market for new lawyers in an effort to predict how that market may evolve.

The article derives quantitative measurements of the proportion of law graduates over the last thirty years who have obtained initial employment for which law school serves as rational substantive preparation (“Law Jobs”). In comparing entry-level hiring patterns since 2008 with those in earlier periods, a significant development emerges: While other sectors of the market for new lawyers have changed only modestly during the Great Recession, one sector — the larger private law firms colloquially known as “BigLaw” — has contracted six times as much as all the others. Though BigLaw hiring has historically accounted for only 10%-20% of each graduating class, it is responsible for over half the entry-level Law Jobs lost since 2008.

While some observers predict a return to business as usual as the economy recovers, this article is skeptical of that account. The article identifies significant structural changes in the way that the services traditionally provided by BigLaw are being produced, staffed and priced that diminish BigLaw’s need for junior lawyers both immediately and in the longer term. These observations suggest that entry-level BigLaw hiring, and thus the market for new lawyers overall, will remain depressed below pre-recession levels well after demand for the services BigLaw has traditionally provided recovers. At the same time, new lawyers’ job prospects may nevertheless improve as the contraction in the legal academy now underway reduces the number of new graduates competing for work.

Chart

November 29, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

The IRS Scandal, Day 569

IRS Logo 2Forbes:  In 'Lost' Trove Of IRS Emails, 2,500 May Link White House To Confidential Taxpayer Data, by Robert W. Wood:

The recent news that the lost or destroyed Lois Lerner emails were actually not lost or destroyed surprised some people. That they will now be sorted, cataloged and released provokes mixed reactions. It has some Republicans upset that more wasn’t done and more transparently. It has some Democrats upset that more money is being spent on what some see as a witch hunt that reveals not even a smidgen of corruption. Despite the 18 months of dissembling about who did what and when, the latter reaction may be premature.

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. Yes, the White House.

Why should the White House be getting confidential taxpayer information? That is a good question. If the facts show such data was transmitted, even under the most charitable interpretation, you would think every American would want to know what happened.

The Inspector General for Tax Administration has seemed to be a white knight in the sometimes tawdry (and often inflammatory) email and targeting scandal that has roiled the IRS over 18 months. Yet on this particular issue, the Inspector General is being questioned too. An advocacy group called Cause of Action sued the Inspector General under the Freedom of Information Act for information about communications between the White House and the IRS.

Eventually, the court ordered that office to reveal whether the documents existed. Finally, the Obama administration has agreed to release the documents. A key question is whether any officials at the White House have ever asked anyone over at the IRS to transmit private taxpayer information to the White House in violation of law. Another question, regardless of whether the White House asked for any taxpayer information, is whether the IRS ever transmitted any.

With talk of targeting for more than 18 months, those of fair questions. The Obama administration consistently resisted responding, but has finally had to relent. In an email to Cause of Action, the Department of Justice has proposed deadlines for turning over documents next month. The DOJ states that it anticipates delivering some of the documents December 1st, and the remainder by December 15th.

The data may seem unimportant, and hopefully it will turn out to be. Still, the privacy protections for taxpayer data held by the IRS are among the most sensitive parts of the tax law. That makes any alleged transgressions of these rules serious. It makes this topic arguably the worst part of the IRS scandal so far.

According to the U.S. Supreme Court in a decision reaching back to 1819, the power to tax includes the power to destroy. The current administration’s pooh-poohing, including its ‘no smidgen of corruption’ remark to Fox News in February, does little to help. We have been feted to multiple mixed explanations of what happened, to multiple participants who may or may not have said or done something, to multiple refusals by one of the key players to testify. Such shifting sands leave us wondering.

The defiance and hubris from at least some at the IRS itself has been as disturbing. It has hardly seemed to be the kind of “we’re here to serve” attitude one might reasonably have expected. Some are even wondering about that whole separation of powers thing we learned about in civics or history class. American taxpayers should want to know what happened.

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November 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, November 28, 2014

Lewis Black Hammers Black Friday 'Tax' as 'Most Anti-American Thing I've Ever Heard'

News Busters, Lewis Black Hammers Black Friday 'Tax' as 'Most Anti-American Thing I've Ever Heard':

Black FridayDuring Wednesday evening's edition of The Daily Show on the Comedy Central cable network, comedian Lewis Black devoted his “Back in Black” segment to slamming the tradition of Black Friday, the day after Thanksgiving and a time when stores open early and shoppers arrive before the sun comes up to buy items at huge discounts.

Black claimed that even worse than the rush to get tremendous bargains is the practice of “taxing” stores in malls that stay closed so their employees can spend the time with their families. “That’s the most anti-American thing I’ve ever heard!” Black exclaimed. “It’s like Sharia law for capitalism!”

“Next week is my favorite day of the year,” Black stated, but he wasn't talking about Thanksgiving. Instead, it's Black Friday because if you “trample a guy on a Tuesday afternoon, you get charged with assault. But do it in a Walmart on Black Friday, you get a PS4. But this year,” he noted, “something about Black Friday is twisting everyone's panties.” ...

The most disturbing clip came from Steve Doocy on the Fox & Friends morning program, who quoted an email from a viewer as stating: “You have got to be kidding me. … Just go to work. You can celebrate by eating a turkey sandwich while on break. [I] did it for years and was well compensated.”

“Sure, Thanksgiving is just as good eating a cold sandwich alone in the back of a Kmart,” Black snarled. “You don't even need cranberry sauce. You can season it with your tears.”

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November 28, 2014 in Books, Celebrity Tax Lore, Tax | Permalink | Comments (1)

Weekly Tax Roundup

 

November 28, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (1)

Weekly Legal Education Roundup

November 28, 2014 in Legal Education, Weekly Legal Education Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

The IRS Scandal, Day 568

IRS Logo 2Wall Street Journal:  ‘Lost’ IRS Emails Found: An Investigator Locates What the Tax Agency Claimed Had Vanished:

The Democrats’ midterm shellacking was in part a referendum on competence, which leads, naturally, to the all but unreported news that the IRS never “lost” emails after all. IRS Commissioner John Koskinen is pulling off the impossible task of destroying what little credibility that bureaucracy has left.

Treasury Department Inspector General Russell George recently informed Congress that his forensic investigation has turned up as many as 30,000 emails from the account of former IRS Exempt Organizations Director Lois Lerner—emails the IRS has insisted were destroyed. The emails cover the crucial period from January 2009 through June 2011 when the IRS was ramping up its targeting of conservative nonprofits.

Mr. Koskinen—hired nearly a year ago to clean up the IRS—has been at the center of that delay. In June the IRS buried in a letter to the Senate Finance Committee the bombshell news that nearly two years of Lerner emails were missing because her hard drive had crashed. This malfunction conveniently happened about 10 days after Congress alerted the IRS that it was looking into claims the agency was harassing conservative groups.

It later emerged that Mr. Koskinen had known about these missing emails in April—but hadn’t told Congress. He informed Congress only after a court case revealed the Lerner email record was incomplete.

Mr. Koskinen claimed in June that his agency had done everything humanly possible to recover the pesky documents. ... We can only imagine Mr. Koskinen’s shock in September when the Treasury IG said it had found 760 tapes that might hold Lerner emails. Or his further surprise when it took only a few weeks to identify and extract the specific Lerner documents—out of 250 million backup emails.

And we can only imagine Mr. Koskinen’s apology for his agency’s email failure—since he hasn’t given one. In response to the emails’ miraculous reappearance, the IRS explained: “The IRS welcomes TIGTA’s independent review and expert forensic analysis. Commissioner Koskinen has said for some time he would be pleased if additional Lois Lerner emails from this time frame could be found.”

This is an extraordinary statement, in that it suggests the only way an agency can be held accountable for producing subpoenaed documents is if an outsider tosses the joint. Either the IRS didn’t bother to investigate these tapes or, more alarming, it did and chose not to produce the results.

The IG is turning over the emails to the IRS, which is supposed to redact sensitive tax information before sending them to Congress. Mr. Koskinen needs to end the IRS stonewalling and turn the records over with dispatch without covering up incriminating evidence.

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November 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, November 27, 2014

What Tax Profs Are Thankful For

Thanksgiving
  • Jordan Barry (San Diego):  "I have so much to be thankful for. I am thankful for my brilliant and beautiful wife Emily, my loving family, and my wonderful friends. I’m also thankful for my job—and for tenure, which I received this past year. "
  • Paul Caron (Pepperdine):  "I am thankful for my beautiful wife, daughter, son, and dog, and that three of them are gainfully employed."
  • Mirit Eyal-Cohen (Alabama):  "This year I am grateful for the colleagues I have had in the past few years and my new colleagues at the present."
  • Bridget Crawford (Pace):  "Democracy, the right to peaceful protest, and university presses."
  • Cliff Fleming (BYU):  "In August 2011 my wife Linda learned that she had aggressive uterine cancer and that if she proved to be in the wrong tail of the bell curve, she would pass within 12 months. So we consider ourselves very blessed that we were able to celebrate our 50th wedding anniversary in June 2014 and that Linda is well enough to have traveled to Europe twice with me in 2014 and now to be preparing for a full-bore, big family Thanksgiving dinner. We live on the bubble between quarterly MRIs but are grateful for each additional day."
  • Victoria Haneman (Concordia):  "I am thankful for so many things in 2014: publication of Making Tax Law with co-author Dan Berman, a new position at a school with incredibly engaged students and a great selection of farm-to-table restaurants, and a baby girl on the way."
  • David Hasen (Colorado):  "I give thanks that a holy God (Isaiah 6:3-5) provides a way of salvation for us in His Son (Romans 10:9)."
  • Stephanie Hoffer (Ohio State):  "I am so grateful for my wonderful colleagues and my happy little family!"
  • Sagit Leviner (Ono):  "I am thankful for my little pumpkin."
  • Francine Lipman (UNLV):  "Thankful to be at UNLV, where we embrace diversity and understand that education is the key, door, path, and answer."
  • Ed Lyons (Oklahoma City):  "I am thankful because the more I focus my mind on the goods and the good people that surround me, the more they seem to multiply: 'For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away' (Matthew 25:29)."
  • Jim Maule (Villanova):  [See here.]
  • John Plecnik (Cleveland State):  "I am thankful for the chance to serve my students at Cleveland State as their professor, and my neighbors in Willoughby Hills as their Councilman."
  • Richard Winchester (Thomas Jefferson):  "I am thankful for the students who appreciate the work that I do."

November 27, 2014 in Legal Education, Tax | Permalink | Comments (0)

WSJ: Law School Deans Question Sharp Drop in Bar Exam Scores

Following up on my previous posts:

Wall Street Journal, Law School Deans Question Sharp Drop in Bar Exam Scores:

Law schools are turning up the heat on the nation’s leading bar exam group over what they say is an inexplicable drop in student scores on the most recent test.

Dozens of law school deans across the country attached their names to a letter sent to the National Conference of Bar Examiners on Tuesday demanding a “thorough investigation of the administration and scoring” of the July 2014 bar exam. ...

The NCBE, the Wisconsin-based non-profit that prepares widely used standardized portions of the bar exam, says the results of the July test are troubling, but says the tests aren’t to blame. The group says students this year just didn’t do as well as previous years’ cohorts.

Law schools — many of which are straining to keep up enrollment in a time of sagging demand for law degrees — have bristled at the response.

The letter signed by roughly 80 deans hailing mostly from middle-ranked and public institutions, wants the NCBE to back up its claim with another review and disclosure of its methodology. ...

“We take this very seriously,” the longtime president of the National Conference of Bar Examiners, Erica Moeser, told Law Blog on Wednesday. “It calls for an institutional response, which, of course, I’ll supply.” Ms. Moeser said her group has checked and rechecked its data and has found nothing awry on its end. ...

Deans from University of Connecticut, Case Western, Wake Forest, University of California-Hastings, and University of Washington were among those who added their names. [Although Deans of 40% of American law schools signed the letter, only 14% of the Deans at Top 50 law schools did so (BYU, Colorado, Fordham, Texas, and Utah, in addition to Washington and Wake Forest) -- none of the T14, and only one of the Top 20].

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November 27, 2014 in Legal Education | Permalink | Comments (5)

Taxing Two Thanksgiving Day Gentlemen

TwoForbes:  Taxing Two Thanksgiving Day Gentlemen, by Robert W. Wood:

A central theme of the Bible is that it is better to give than to receive, even when you give up a great deal. Two Thanksgiving Day Gentlemen, a short story masterpiece by O. Henry, gives this theme a twist. A vagabond—today we would call him homeless—is feted each Thanksgiving Day to a grand dinner in a posh New York eatery by a successful businessman. But on this Thanksgiving Day, each man hides his true circumstances.

The businessman is down on his luck so starves for two days in order not to disappoint the vagabond. Ironically, the vagabond is flush, his stomach bursting from two other holiday meals from other well-wishers. Forcing down each bite, he plays along knowing how important this ritual is to his kindly rich benefactor. Only O. Henry could make us feel what each feels as we smile ruefully at the comedy playing out.

In this crowdfunding era, individual acts of kindness still count, even if they don’t produce a tax break. That’s right, the charity the two Thanksgiving gentlemen exchange isn’t tax deductible, since you can’t give directly and get a deduction.

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November 27, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

The IRS Scandal, Day 567

IRS Logo 2CP Politics:  IRS Scandal a Priority for New House Oversight Committee Chair:

Rep. Jason Chaffetz, R-Utah, will focus on the IRS scandal as the House's new head executive watchdog. He was appointed as the next chairman of the House Oversight and Government Reform Committee on Tuesday.

Replacing the term-limited Rep. Darrell Issa, R-Calif., the 47-year-old Chaffetz will now chair the committee that has been a leading force behind the House investigation into the scandal involving the Internal Revenue Service's targeting of conservative and Christian groups. ...

Chaffetz' appointment could spell continued trouble for the IRS. Fox News reported that Chaffetz "vowed" to make the probe into the IRS's practice of stalling 501(c) tax-exempt applications of conservative and religious political action groups the "centerpiece of his chairmanship."

Along with Issa's leadership, Chaffetz has been an influential part of the Committee's IRS investigation. In the Spring, Chaffetz called for an independent special prosecutor when the IRS announced that emails from IRS Director of Exempt Organizations Unit, Lois Lerner, had been lost in a 2011 hard drive and no backup copies were made to turn over for review.

Chaffetz said he sees a pattern in the coincidental loss of evidence when it comes to federal agencies turning over documents when pressed in investigations.

"This is a recurring theme, from Fast and Furious, right down to Benghazi and now this IRS. It's the same basic drumbeat," Chaffetz told Sean Hannity earlier this year. "I think they are trying to play out the clock."

Numerous conservative political groups have accused the IRS of stalling their tax-exempt applications for political reasons. When a political action group does not receive tax-exempt status, potential donors can not be guaranteed that their donations will be eligible for tax write-offs. The IRS' stalling of the applications has cost groups thousands in donations and grants, while other groups have have not been able to survive. A communications director for a Texas-based conservative group told the Christian Post in October that the IRS's stalling cost his group $80,000 in donations and grants.

"The IRS, more than anybody else, cannot be a political organization. But is what it looks like it is has been like lately," Chaffetz told Fox News' Sunday Morning Futures with Maria Bartiromo in June. ...

The House Ways and Means Committee, which is also involved in the IRS investigation, will also have a new chair as Rep. Paul Ryan, R-Wis., was appointed as the committee's chairman on Tuesday. In a statement, Ryan said his committee will work to "hold the IRS accountable."

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November 27, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, November 26, 2014

Law Professor Blogs Network in ABA Blawg 100 and ABA Blawg Hall of Fame

ABA Blog 100Kudos to our Law Professor Blogs Network bloggers named to the 2014 ABA Blawg 100 -- "the 100 best Web sites by lawyers, for lawyers, as chosen by the editors of the ABA Journal":

  • EvidenceProf Blog, edited by Colin Miller (South Carolina):  "Every weekday, law professors—primarily the University of South Carolina's Colin Miller—post on the very latest rulings regarding the admissibility of evidence in criminal cases and what sorts of lines of questioning should be permitted at criminal trials. He also notes differences between the federal rules of evidence and the rules of various states. Occasionally, he will comment on whether he thinks courts have reached the right outcomes in these evidence cases or note fishy behavior by prosecutors."
  • Wills, Trusts & Estates Prof Blog, edited by Gerry W. Beyer (Texas Tech):  "Death and taxes are certainties for which we may plan. But quite a few of life's uncertainties can be faced with equanimity as well, if we just make some prudent preparations, Texas Tech law professor Gerry W. Beyer tells us. His blog provides useful advice on doing so, along with book and article summaries and thoughtful news analysis. Entries are concise and accessible, even to those who are unversed in estate law topics."

Hall of Fame 2Two Law Professor Blog Network blogs are in the ABA Blawg 100 Hall of Fame:

In 2012, we established the Blawg 100 Hall of Fame for those blogs which had consistently been outstanding throughout multiple Blawg 100 lists. The inaugural list contained 10 inductees; this year, we added 10 more, bringing the total to 30.

  • Legal Profession Blog, by Alan Childress (Tulane), Michael Frisch (Georgetown), and Jeff Lipshaw (Suffolk):  "The posts here often have us wondering, 'What were they thinking?' If a lawyer strays from ethical boundaries, the professors who blog here are quick to pick up on the trail of any discipline with to-the-point, snark-free dispatches."
  • TaxProf Blog, edited by Paul Caron (Pepperdine): "Paul Caron, a professor at Pepperdine University School of Law, covers tax reform in the news and scholarship related to U.S. tax law, and he notes celebrity tax disasters. But we like TaxProf at least as much for Caron’s exhaustive coverage of news and debates covering legal education. He became the sole owner of the Law Professor Blogs Network and a makeover of that group of blogs soon followed."

November 26, 2014 in Legal Education | Permalink | Comments (0)

Are You a Jerk at Work?

Columbia Press Release,  Are You Seen as a Jerk at Work? A New Study Reveals That Many People Are Oblivious to How They Come Across to Counterparts and Colleagues:

The JerkWhen Jill Abramson was ousted from her position as the executive editor of The New York Times, it was reported that she was, among other things, too “pushy.” But did Abramson—who has also been described by the media as “polarizing” and “brusque”—know during the course of her tenure that others viewed her as being overly assertive? A new study from the Columbia Business School suggests that there’s a great chance she didn’t.

“Finding the middle ground between being pushy and being a pushover is a basic challenge in social life and the workplace. We’ve now found that the challenge is compounded by the fact that people often don’t know how others see their assertiveness,” said Daniel Ames, professor of management at Columbia Business School and co-author of the new study. “In the language of Goldilocks, many people are serving up porridge that others see as too hot or too cold, but they mistakenly think the temperature comes across as just right—that their assertiveness is seen as appropriate. To our surprise, we also found that many people whose porridge was actually seen as just right mistakenly thought their porridge came off as too hot. That is, they were asserting themselves appropriately in the eyes of others, but they incorrectly thought they were pushing too hard.”

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November 26, 2014 in Legal Education, Tax | Permalink | Comments (1)

Hoenig: What's Wrong With Trafficking in NOLs?

Tax Analysys Logo (2013)Mark Hoenig (Weil, Gotshal & Manges, New York), Trafficking in Net Operating Losses: What's So Bad?, 145 Tax Notes 919 (Nov. 24, 2014):

Hoenig examines the almost century-long history of Congress’s efforts to allow tax losses and limit their transfer. He explores the rationale for those efforts, assesses the system now in place, and asks whether an alternative set of rules might better serve policy and the economy.

November 26, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

The IRS Scandal, Day 566

IRS Logo 2Washington Examiner:  2,500 New Documents ID'd in White House-IRS Taxpayer Harassment Cases:

In a shocking revelation, the Treasury Inspector General has identified some 2,500 documents that “potentially” show taxpayer information held by the Internal Revenue Service being shared with President Obama’s White House.

The discovery was revealed to the group Cause of Action, which has sued for access to any of the documents. It charges that the IRS and White House have harassed taxpayers.

In an email from the Justice Department’s tax office, an official revealed the high number of documents, suggesting that the White House was hip deep in probes of taxpayers, likely including conservatives and Tea Party groups associated with the IRS scandal.

Power Line:  The IRS Scandal Rears Its Head:

The Obama Administration’s IRS scandal is multi-faceted. In addition to the persecution of conservative non-profits by Lois Lerner et al., the question has been percolating for some years whether Obama’s IRS has transferred confidential taxpayer information to Obama’s White House in violation of federal criminal laws. The issue first arose when Austin Goolsbee of the president’s Council of Economic Advisers told reporters that he had information about Koch Industries that could only have come, illegally, from confidential IRS files. When questions were asked, the administration immediately clammed up.

Years later, the judicial system may be poised to expose another layer of Obama corruption. A group called Cause of Action began a Freedom of Information Act lawsuit against the Department of the Treasury, and for several years, your taxpayer dollars have funded the administration’s cover-up.

But nothing lasts forever, and a federal court in Washington, D.C. has finally overruled the Treasury Department’s frivolous objections, and ordered Treasury to respond to Cause of Action’s request for documents. That request relates to the Department’s Inspector General’s investigation–which began a long time ago, and probably has long been concluded–and asks for “[a]ll documents pertaining to any investigation by [TIGTA] into the unauthorized disclosure of [26 U.S.C.] §6103 ‘return information’ to anyone in the Executive Office of the President.”

That is an extraordinarily narrow request for documents which, one would think, could have been responded to in a few hours. But the administration’s evasion has gone on for years. Now that the court has ordered the administration to respond, its lawyers have asked for more time

Cause of Action:  Press Release:

Monday the Treasury Inspector General for Tax Administration (TIGTA) informed Cause of Action that there exist nearly 2,500 potentially responsive documents relating to investigations of improper disclosures of confidential taxpayer information by the IRS to the White House. This disclosure, coming only after Cause of Action sued TIGTA over its refusal to acknowledge whether such investigations took place, and after the Court ordered TIGTA to reveal whether or not documents existed, signals that the White House may have made significant efforts to obtain taxpayers’ personal information. This disclosure, following on the heels of TIGTA’s admission that it recovered 30,000 “lost” Lois Lerner emails, renews Cause of Action’s concerns about the decaying professionalism of, and apparent slip into partisanship by, IRS’s senior leadership.

Cause of Action will continue to pursue the truth and to work for IRS accountability.

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November 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, November 25, 2014

Alarie Presents Policy Preferences and Expertise in Canadian Tax Adjudication Today at Columbia

AlarieBenjamin Alarie (Toronto) presents Policy Preferences and Expertise in Canadian Tax Adjudication, 62 Canadian Tax J. ___ (2014) (with Andrew Green (Toronto)), at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

Both taxpayers and governments struggle to stay on top of the various complex sources of tax law and to apply them in a myriad of different contexts. Given the potential for confusion and disagreement (not to mention the sometimes very large financial stakes involved) it would make sense to have a process for taxpayers to appeal government decisions to an expert body that can provide authoritative, reasoned and rational solutions to tax disputes. For this reason Canada, like the United States, has a specialized tax court dedicated to hearing appeals from decisions of the tax administration. Yet there is some evidence in both Canada and the US that judges in tax cases may be influenced by their own personal policy preferences or other factors extraneous to the “true” legal merits in deciding appeals from decisions of the tax administration. This paper examines in more detail appeals from tax assessments in Canada to understand the relative influence of judicial tax expertise and the policy preferences of judges on appeals to the Tax Court of Canada and the Federal Court of Appeal.

Our analysis reveals three main results: (1) policy preferences of judges matter, but not that much; (2) resources matter — a lot; and (3) there are dynamics relating to affirmation of appeals that are difficult to explain, although a desire to avoid the apprehension of bias is possible.

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November 25, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

TIGTA: IRS Still Has Not Taken Necessary Steps to Prevent Billion Dollar Prisoner Tax Fraud

TIGTA The Treasury Inspector General for Tax Administration today released Prisoner Tax Refund Fraud: Delays Continue in Completing Agreements to Share Information With Prisons, and Reports to Congress Are Not Timely or Complete (2014-40-091):

Refund fraud associated with prisoner Social Security Numbers remains a significant problem for tax administration. The number of fraudulent tax returns filed using a prisoner’s Social Security Number that were identified by the IRS increased from more than 37,000 tax returns in Calendar Year 2007 to more than 137,000 tax returns in Calendar Year 2012. The refunds claimed on these tax returns increased from $166 million to $1 billion. ...

TIGTA found that the IRS has not yet shared fraudulent prisoner tax return information with Federal or State prison officials. TIGTA also found that the required annual prisoner fraud reports to Congress are not timely and that the reports do not address the extent to which prisoners may be filing fraudulent tax returns using a different individual’s SSN. TIGTA also followed up on a condition identified in a past review and found that IRS processes still do not ensure that all tax returns filed using a prisoner Social Security Number are assigned a prisoner indicator.

Figure 1

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November 25, 2014 in IRS News, Tax | Permalink | Comments (0)

Ranking of School Does Not Affect Quality of Teaching

Chronicle of Higher Education, Colleges’ Prestige Doesn’t Guarantee a Top-Flight Learning Experience:

NSSE Logo[T]his year’s National Survey of Student Engagement [Nessie], which was released on Thursday, ... took a stab at identifying educational quality on the institutional level, an attribute that is as important to higher education as it is hard to define. The survey collected data from 355,000 freshmen and seniors at 622 institutions in the spring.

Nessie researchers, who are based at Indiana University at Bloomington, created two indicators for quality. One, student-faculty interaction, asked students how often they talked with faculty members about career plans, course topics, or other ideas outside class, among other questions. The other measure, effective teaching practices, distilled student perceptions of how often their instructors clearly explained course goals and requirements, taught in an organized way, used examples to illustrate difficult points, or provided feedback.

The results were surprising, especially when they were grouped based on how selective a college is. ... [R]esearchers analyzed the measures of interaction and teaching according to selectivity, as defined by Barron’s Profiles of American Colleges.

The average student, the researchers found, experienced widely different degrees of educational quality in different colleges within the same category of prestige. And, in all but a few cases, the categories of selectivity had no meaningful relationship to the indicators of teaching and interaction. ...

"Conventional wisdom says that the more selective an institution is, the better it is going to be," Alexander C. McCormick, director of Nessie, said in an interview. "That’s not systematically true with these two measures." ...

NSSE

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November 25, 2014 in Law School Rankings, Legal Education | Permalink | Comments (2)

Who Pays for Employee Perks at High-Tech Companies?

CBS Moneywatch, Who Pays for Employee Perks at High-Tech Companies?:

Google MealBeginning in the 1990s, the high-tech industry has gained a reputation for offering employees not only generous pay, but also lavish, and even outlandish, perks. Massages, free food and even napping pods were but a few of the benefits companies lavished on engineers in hopes of retaining their talents.

Despite the dot-com bust and the Great Recession, financial crises that ushered in new age of austerity -- and massive layoffs -- in many sectors, tech companies today are showing even more largess with engineers and other key workers. In fact, there's a new job category: people in charge of devising newer and more effective treats for these elites. ...

The copious benefits tech players are bestowing is starting to raise questions about who foots the bill for the perks. The IRS, for one, has ruled that free food for employees represents a taxable benefit. A Wall Street Journal analysis concludes that workers who get two meals a day courtesy of their company could be on the hook for an additional $4,000 to $5,000 in taxes.

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November 25, 2014 in Tax | Permalink | Comments (0)

Crowd-Sourced Interview of Judge Richard Posner

PosnerRonald K.L. Collins (University of Washington), The Maverick – A Biographical Sketch of Judge Richard Posner: Part I:

Below is the first installment in a multi-part series of posts on Seventh Circuit Judge Richard Posner. The first two installments consist of an unconventional biographical profile of the Judge. These posts will be followed by a series of posts consisting of the Judge’s candid and often unexpected responses to numerous questions I posed to him along with those of 24 noted legal figures. In the process, Judge Posner bursts into the breach with frankness about his views on privacy, the exclusionary rule, NYT v. Sullivan, intellectual property rights, law and economics, constitutional interpretation, legal education and scholarship, and the politicization of the judiciary. With Posnerian resolve, he also speaks of his own life, his onetime thoughts on being a Supreme Court Justice, his cherished feline, and even his favorite rock stars. Given all that, we selected “Posner on Posner” as the title for this series.

November 25, 2014 in Legal Education | Permalink | Comments (0)

Legal Services Sector Shrank 2.9% in 2013

Matt Leichter, Commerce Dept.: Legal Services Sector Contracts (Again) in 2013:

Earlier this month the Commerce Department’s Bureau of Economic Analysis (BEA) updated its GDP by industry data. The chief finding for law-watchers is that in 2013 the legal services industry shrank by 2.9 percent. Ouch. The legal services industry includes all private law firms, and it employs about half of all lawyers. Meanwhile GDP grew by 2.2 percent, meaning that once again, the shriveling legal sector is being outdone by the rest of the economy.

Percent Change Real Value Added by Industry

November 25, 2014 in Legal Education | Permalink | Comments (3)

IRS Hires Outside Law Firm to Audit Microsoft

MicrosoftBloomberg, Microsoft Sues IRS Over Law Firm Contract Tied to Audits:

Microsoft sued the IRS seeking information about its contract with a law firm tied to audits of the software maker’s transactions with subsidiaries.

Microsoft wants the complete government contract between the IRS and Quinn Emanuel Urquhart & Sullivan LLP, the firm assisting the agency in examining federal income tax returns for 2004 through 2009, according to the complaint filed today under the Freedom of Information Act in federal court in Washington. The IRS “unlawfully withheld” the information, Microsoft said.

Microsoft submitted a public records request on Sept. 22 seeking information on the contract entered in May for $2.2 million, according to the filing. To date, the IRS hasn’t disclosed the records, Microsoft said. ...

The agency is examining Microsoft’s “transfer pricing,” transactions between the company and its offshore subsidiaries, according to the complaint.

November 25, 2014 in IRS News | Permalink | Comments (0)

2014 Moot Court Rankings

Moot Court2014 Moot Court Rankings:

1.  Florida Coastal
2.  Georgetown
3.  UC-Hastings
4.  South Texas
4.  Texas Tech
6.  Georgia
7.  Chicago-Kent
8.  Seton Hall
9.  Miami
10. Loyola-Chicago
11.Oklahoma
12. Stetson
13. Houston
14. Mississippi
15. Faulkner
16. Emory
17. George Washington
18. Wisconsin
18. Regent
20. San Diego
20. Georgia State
22. Hawaii
23. St. John's
23. William Mitchell
25. Pepperdine

November 25, 2014 in Law School Rankings, Legal Education | Permalink | Comments (0)

Tax Farming: Experimental Evidence on Performance Pay for Tax Collectors

Adnan Q. Khan (London School of Economics), Asim I. Khwaja (Harvard) & Benjamin A. Olken (MIT), Tax Farming Redux: Experimental Evidence on Performance Pay for Tax Collectors:

Performance pay for tax collectors has the potential to raise revenues, but might come at a cost if taxpayers face undue pressure from collectors. We report the first large-scale field experiment on these issues, where we experimentally allocated 482 property tax units in Punjab, Pakistan into one of three performance-pay schemes or a control. After two years, incentivized units had 9.3 log points higher revenue than controls, which translates to a 46 percent higher growth rate. The scheme that rewarded purely on revenue did best, increasing revenue by 12.8 log points (62 percent higher growth rate), with little penalty for customer satisfaction and assessment accuracy compared to the two other schemes that explicitly also rewarded these dimensions. Further analysis reveals that these revenue gains accrue from a small number of properties becoming taxed at their true value, which is substantially more than they had been taxed at previously. The majority of properties in incentivized areas in fact pay no more taxes, but do report higher bribes. The results are consistent with a collusive setting in which performance pay increases collector's bargaining power over taxpayers, who either have to pay higher bribes to avoid being reassessed, or pay substantially higher taxes if collusion breaks down.

(Hat Tip: Bruce Bartlett.)

November 25, 2014 in Scholarship, Tax | Permalink | Comments (1)