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Wednesday, May 13, 2015

Law Schools Are Trying To Fix Lawyers' Business Ignorance

Bloomberg, Lawyers Don't Know Enough About Business. Law Schools Are Trying to Fix That:

The popularity of an American legal education is dwindling in the face of disappointing job prospects for graduates. To rescue themselves from oblivion, some law schools are fashioning themselves after a more successful educational institution: business school.

In April, New York Law school announced it would make room in its building for an offsite location for the University of Rochester's Simon Business School, making it easier for law students to take B-School classes. The same month, Harvard Business School announced it would offer incoming students an 11-week course in the fundamentals of business created by HBX, its online business training program.

“Lawyers need to understand and use the tools and skills involved in growing and running a business,” said Harvard Law School Dean Martha Minow in a statement on Harvard Business School’s website. “Law firms, businesses, and also public sector and nonprofit employers increasingly value these skills.” Harvard Law will cover most of the $1,800 tuition for the program, although students will have to pay $250 to take the courses.

Harvard and New York Law are heeding growing calls to fundamentally reshape the education that comes with a JD. Research published last year by three Harvard law professors suggested that litigators and hiring attorneys at big law firms are desperate for law graduates that understand basic accounting and corporate finance. The 124 attorneys, from such bulwark firms as Skadden Arps and Latham & Watkins, said many business courses were more critical to post-JD life than courses on environmental law or the First Amendment. [John Coates, Jesse Fried & Kathryn Spier, What Courses Should Law Students Take? Lessons from Harvard's BigLaw Survey, 64 J. Legal Educ. 443 (2015)]

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May 13, 2015 in Legal Education | Permalink | Comments (1)

Talk Of Ryan-Obama Tax Deal Roils Republican-Business Alliance

Bloomberg, Talk of Ryan-Obama Tax Deal Roils Republican-Business Alliance:

The “job creators” are fighting back on tax policy—against their Republican allies.

Small-business groups that have been among the Republicans’ loyal backers are warning their friends in Congress against cutting a deal with President Barack Obama on lowering corporate taxes.

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May 13, 2015 in Tax | Permalink | Comments (0)

Lawyers With Lowest Pay Report More Happiness

New York Times, Lawyers With Lowest Pay Report More Happiness:

Of the many rewards associated with becoming a lawyer — wealth, status, stimulating work — day-to-day happiness has never been high on the list. Perhaps, a new study suggests, that is because lawyers and law students are focusing on the wrong rewards. [Lawrence S. Krieger (Florida State) & Kennon M. Sheldon (Missouri), What Makes Lawyers Happy?: A Data-Driven Prescription to Redefine Professional Success, 83 Geo. Wash. L. Rev. 554 (2015)]

Researchers who surveyed 6,200 lawyers about their jobs and health found that the factors most frequently associated with success in the legal field, such as high income or a partner-track job at a prestigious firm, had almost zero correlation with happiness and well-being. However, lawyers in public-service jobs who made the least money, like public defenders or Legal Aid attorneys, were most likely to report being happy.

Lawyers in public-service jobs also drank less alcohol than their higher-income peers. And, despite the large gap in affluence, the two groups reported about equal overall satisfaction with their lives.

Making partner, the ultimate gold ring at many firms, does not appear to pay off in greater happiness, either. Junior partners reported well-being that was identical to that of senior associates, who were paid 62 percent less, according to the study, which was published this week in the George Washington Law Review.

“Law students are famous for busting their buns to make high grades, sometimes at the expense of health and relationships, thinking, ‘Later I’ll be happy, because the American dream will be mine,’ ” said Lawrence S. Krieger, a law professor at Florida State University and an author of the study. “Nice, except it doesn’t work.”

The problem with the more prestigious jobs, said Mr. Krieger, is that they do not provide feelings of competence, autonomy or connection to others — three pillars of self-determination theory, the psychological model of human happiness on which the study was based. Public-service jobs do.

Figure 1

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May 13, 2015 in Legal Education | Permalink | Comments (0)

Tax Brackets Aren't The Key To Simplifying The Tax Code

Bloomberg, Why Tax Brackets Aren't the Key to Simplifying the Tax Code, by Richard Rubin:

BracketsIn the TurboTax era, simplifying the tax code has almost nothing to do with the number of tax brackets.

You wouldn't know that from listening to Republican presidential hopefuls, who are touting their plans based in part on how aggressively they tear up today's seven-bracket income tax structure for individuals.

Chris Christie said Tuesday that he wants three brackets. Marco Rubio says two. Ben Carson is going for the one-bracket flat tax. And Mike Huckabee, a longtime backer of a national retail sales tax, wants no income tax brackets at all.

Here's the reality: Computers do most of the work now, so whether there is one bracket or seven makes virtually no difference to the average taxpayer. No one has to do painful algebra or squint at tables full of numbers.

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May 13, 2015 in Tax | Permalink | Comments (6)

Journal Of Legal Education Publishes New Issue

Journal of Legal Education (2014)The Journal of Legal Education has published Vol. 64, No. 3:

Symposium: Nurturing Professionalism:

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May 13, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Merritt: On The Bar Exam, My Graduates Are Your Graduates

Deborah Jones Merritt (Ohio State), On the Bar Exam, My Graduates Are Your Graduates:

It’s no secret that the qualifications of law students have declined since 2010. As applications fell, schools started dipping further into their applicant pools. LSAT scores offer one measure of this trend. Jerry Organ has summarized changes in those scores for the entering classes of 2010 through 2014. Based on Organ’s data, average LSAT scores for accredited law schools fell:

* 2.3 points at the 75th percentile
* 2.7 points at the median
* 3.4 points at the 25th percentile

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May 13, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 734

IRS Logo 2Forbes, IRS Not Grossly Negligent In Disclosure Of Exempt Application, by Peter J. Reilly:

The order from the United States District Court of Colorado in the ongoing lawsuit Citizens Awareness Project Inc versus Internal Revenue Service is giving me flashbacks.  The case relates to one of the aspects of the perennial, interminable IRS scandal, on Day 732 by TaxProf count as I write this. The lawsuit is in reaction to the improper release of tax-exempt applications to ProPublica.  That story showed up on Day 5 (May 14, 2013) as ProPublica joined in piling on the IRS with a story titled IRS Office That Targeted Tea Party Also Disclosed Confidential Docs From Conservative Groups.  The story actually went back to December 2012. ...

As I looked into the background a bit, it struck me that Citizens Awareness Project could well be a great example of what was upsetting Lois Lerner so much – i.e. dark money using 501(c)(4) to game campaign financing disclosure.

The IRS is not contesting that it screwed up when it released a copy of CAP’s Form 1024.  ProPublica had requested the applications of 67 organizations.  They were organizations that had reported substantial expenditures to the FEC.  On October 16, 2012 CAP reported paying Stephen Clouse & Associates  $993,916.79 for printing, production and postage in opposition to Barrack Obama. The expenditure caught a little coverage with this piece titled Mystery group spends $1 million opposing Obama. ...

The IRS admitted that it was wrong to have released CAP’s 1024 that was still in process, so presumably, it would have cut the organization a check for a grand without a lawsuit.  If the actual damages don’t break $1,000, then presumably CAP does not get to recover the costs of the action, which I suspect are a bit more than the potential claim for actual damages of $4,819.78 that the Court still sees as being in play. ...

Sophia Brown was the IRS employee charged with responding to ProPublica’s request.  Apparently she failed to check whether CAP’s Form 1024 had been ruled on yet.  Since it had not been ruled on, it should not have been released. The Court did not see any gross negligence here.

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May 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, May 12, 2015

Law School Website Rankings

For the fourth year in a row, Roger V. Skalbeck (Associate Law Librarian for Electronic Resources & Services, Georgetown) has ranked law school websites. Top 10 Law School Home Pages of 2012, 3 J.L. (2 J. Legal Metrics) 51 (2013) (with Matthew L. Zimmerman (Electronic Resources Librarian, Georgetown).  Here are the Top 10 and Bottom 10:

1

Thomas Cooley

192

Ave Maria

1

Pennsylvania

193

Mississippi C.

3

Arkansas

194

Cornell

3

Houston

194

Touro

5

Florida Coastal

196

St. Thomas (FL)

5

Illinois

197

Stanford

5

U. Mississippi

198

U. Puerto Rico

8

Arizona State

199

St. John's

9

New England

200

D.C.

10

CUNY

201

Catholic U. P.R.

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May 12, 2015 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

Despite Move To Big Ten, Rutgers' Athletic Department Deficit Increases To $36 Million, Funded From Academics, Students

RutgersNew York Times:  At Rutgers, It's Books vs. Ballgames, by Joe Nocera:

In the 1990s, yearning to join the elite, Rutgers became part of the Big East Conference. But, with the exception of women’s basketball, its overall athletic performance has generally remained mediocre.

What’s more, the Rutgers athletic department has consistently run large deficits; indeed, since the 2005-6 academic year, deficits have exceeded $20 million a year. In the last academic year, Rutgers athletics generated $40.3 million in revenue, but spent $76.7 million, leaving a deficit of more than $36 million. In other words, revenue barely covered half the department’s expense

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May 12, 2015 in Legal Education | Permalink | Comments (1)

OECD: Raising Alcohol Tax 10% Would Boost GDP By 1%

OECD Logo (2015)Wall Street Journal, Raise Alcohol Tax to Boost Economic Output, Says OECD:

A tax increase that would raise alcohol prices by 10% is among the most effective means of countering excessive consumption, which reduces economic output in most developed countries and contributes to early death and disability, the Organization for Economic Cooperation and Development said on Tuesday.

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May 12, 2015 in Tax | Permalink | Comments (2)

Chemerinsky: California Should Join New York, Adopt UBE

NCBELos Angeles Times op-ed:  It's Time for California to Accept the Uniform Bar Exam, by Erwin Chemerinsky (Dean, UC-Irvine):

New York's chief judge, Jonathan Lippman, announced last week that the state would adopt the Uniform Bar Exam, a standard licensing test for lawyers. It's the largest state to take this step, which Lippman said could result in a “domino effect.” I hope so, and I hope California will be the next state to fall. The current system, under which each state sets its own requirements and won't recognize out-of-state credentials, is inefficient, burdensome and, frankly, unjustifiable. ...

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May 12, 2015 in Legal Education | Permalink | Comments (1)

Tax Court Approves Crummey Trust With 60 Beneficiaries, Despite Religious Arbitration Clause

Tax Court Logo 2Mikel v. Commissioner, T.C. Memo. 2015-64 (2015):

Petitioners in these consolidated cases, Israel and Erna Mikel, are husband and wife. ... During 2007 each petitioner made to a family trust a gift with an asserted value of $1,631,000. In December 2011 petitioners filed separate gift tax returns reporting these gifts; each petitioner claimed under section 2503(b) an annual exclusion of $720,000. The claimed annual exclusions of $720,000 were based on the contention that each petitioner’s gift included a $12,000 gift of a present interest to each of the trust’s 60 beneficiaries. ...

Article V of the [trust], captioned “Right of Beneficiaries to Withdraw Principal,” granted each beneficiary the power, during the year in which the trust was created and during any subsequent year when property was added, “to withdraw property from the Trust including the property transferred.” The amount “subject to a power of withdrawal by each beneficiary” was limited annually to the lesser of a formula-derived amount and “[t]he maximum federal gift tax exclusion under section 2503(b) * * * in effect at the time of the transfer [$12,000].” ... Apart from directing mandatory distributions in response to withdrawal de-mands, the trust empowered the trustees, “in their sole and absolute discretion,” to make discretionary distributions during the term of the trust. ...

If any dispute arises concerning the proper interpretation of the declaration, article XXVI provides that the dispute “shall be submitted to arbitration before a panel consisting of three persons of the Orthodox Jewish faith.” Such a panel in Hebrew is called a beth din. ... Article XXVI contains an in terrorem provision designed to discourage beneficiaries from challenging discretionary acts of the trustees. ...

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May 12, 2015 | Permalink | Comments (0)

The Critics Are Wrong: The Bar Exam Is A Necessary Process Of Becoming A Lawyer

National Law Journal op-ed:  Like Father Like Son, Bar-Exam Ritual Is a Necessity of the Profession, by Peter Kalis (Chairman & Global Managing Partner, K&L Gates, New York) & Michael Kalis (Associate, Gruber Hurst Elrod Johansen Hail Shank, Dallas):

Law school taught them how to think like lawyers; exam prep taught them the law. ...

Across three decades and 1,000 miles, the experiences of both have left them with a clear view of the bar exam and has rendered its critics a little off-key. Because of the intense pressure surrounding the bar exam, it's not unreasonably viewed as a gating event. After all, the bar exam is how you get your union card.

In reality, however, the bar exam is part of a much longer process on the way to becoming a lawyer. The critics need to get out of an "event" frame of mind and into a "process" frame of mind.

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May 12, 2015 in Legal Education | Permalink | Comments (1)

Is The Apple Watch Tax Deductible?

Apple WatchFollowing up on my previous post, Practicing Law With Your Apple Watch:  Entrepreneur, Is The Apple Watch Tax Deductible?:

I know many of you die-hard Apple fans have already been to an Apple Store and tried on the new watch. Others of you have probably seen the ads and wondered if -- or rather how -- this new device will truly change your life for the better.

So wouldn’t it be nice if the Apple Watch was also deductible as a business expense? It should be, right? You need it in your business in order to be more effective and efficient as a communication tool and the IRS should see it our way…well…maybe hold the phone for a moment.

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May 12, 2015 in Tax | Permalink | Comments (1)

Nominees Sought For $25k Award For Inspiring Law Professors

BeckmanThe Elizabeth Hurlock Beckman Award Advisory Committee is currently seeking nominations for the 2015 Beckman Award:

The award is given to professors who inspired their former students to achieve greatness. Each recipient will receive a one-time cash award of $25,000. Preference will be given to educators who teach or who taught in the fields of psychology, medicine, or law. ... The nomination deadline is Tuesday, June 30, 2015.

Prior law professor winners include:

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May 12, 2015 in Legal Education | Permalink | Comments (0)

IRS-Affiliated Site For Charities Hit By Data Breach

Accounting Today, IRS-Affiliated Site for Charities Hit by Data Breach:

A site that is used to process tax forms for nonprofit organizations on behalf of the Internal Revenue Service recently suffered a data breach.

The site is operated by the Urban Institute’s National Center for Charitable Statistics, or NCCS. The group announced in February it had recently discovered that an unauthorized party or parties gained access to the Form 990 Online and e-Postcard filing systems for nonprofit organizations.

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May 12, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 733

IRS Logo 2Power Line, Corruption from the IRS to the DOJ:

The pro-Israel group Z Street had its application for tax-exempt status held up at the IRS. When founder Lori Lowenthal Marcus asked why, she was told that IRS auditors had been instructed to give pro-Israel groups special attention and that Z Street’s application had been forwarded to a special IRS unit for additional review. Not to put too fine a point on the legal issues, this isn’t kosher. It’s illegal.

Z Street filed a lawsuit against the IRS in the rosy dawn of the Age of Obama; the lawsuit has yet to get beyond the IRS’s motion for dismissal. The Free Beacon’s Alana Goodman wrote about the lawsuit here last year when the DC District Court denied the IRS motion to dismiss the case. Z Street’s Lori Marcus wrote about it here. John wrote about it in 2013 in the post The Other IRS Scandal.

The legal positions asserted by the IRS are ludicrous. Indeed, they are a pretext to precluded discovery until the chief malefactors serving at the pleasure of President Obama have moved on. It is a sidebar to the political corruption of the IRS that remains one of the great untold stories of the Age of Obama. (Sharyl Attkisson doesn’t cover the IRS scandal, but to understand the Obama playbook for handling it, as I explain in The Attkisson file.)

The IRS appealed the denial of its motion to dismiss to the DC Circuit Court of Appeals. Last week a panel of three DC Circuit judges heard the IRS appeal. The hearing did not go well for the IRS. Indeed, it was an exercise in righteous humiliation of the Department of Justice. The DoJ has asserted ludicrous defenses to gum up the lawsuit and preclude discovery. ...

The Wall Street Journal takes a look at the hearing before the DC Circuit in the reported editorial The IRS Goes to Court.

The Journal editorial concludes:

Poor Ms. McLaughlin was sent to argue the indefensible so the IRS can delay discovery until the waning days of the Obama Administration. “If I were you, I would go back and ask your superiors whether they want us to represent that the government’s position in this case is that the government is free to unconstitutionally discriminate against its citizens for 270 days,” said Judge Garland.

Ms. McLaughlin replied, “Well, I will take that back.” The Beltway media may be bored, but the IRS scandal is a long way from over.

Judge Garland’s query seeks to send a message to higher powers at the Department of Justice. The IRS scandal is a long way from over, and, as one can see here, it extends well beyond the IRS. It would be nice if someone outside the walls of the Wall Street Journal took notice.

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May 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, May 11, 2015

Karen Hawkins To Step Down As Director Of IRS Office Of Professional Responsibility

Hawkins 3Karen Hawkins, Director of the IRS Office of Professional Responsibility for the past six years, has announced that she is stepping down on July 11:

Director’s Farewell Message to Tax Professionals
After 48 continuous years in various professional capacities, thirty-six in the practice of law, the last six as Director of the Office of Professional Responsibility, I have decided to take a little “holiday”. My retirement resignation has been tendered to, and accepted by, Commissioner Koskinen, and we have agreed that my last day as an IRS employee will be July 11, 2015.

When Commissioner Shulman asked me to assume the position of Director, OPR, we shared a vision and multiple goals. The vision was to bring reasonable but firm oversight to the unregulated return preparer industry to ensure tax return preparers were both competent and scrupulous in their dealings with the nation’s taxpayers and with the tax administration system. The goals were to enhance the credibility, visibility and stature of the Office of Professional Responsibility and Circular 230 at all levels of professional tax practice.

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May 11, 2015 in IRS News, Tax | Permalink | Comments (1)

Maine Law School's New Dean Charts New Course After 31% Decline in Applications

Maine LogoLewiston-Auburn Sun Journal, Maine Law School's New Dean: Leading the Way in an Uncertain Future:

The number of applicants to law schools is on the decline nationally, and Maine's only law school is no exception.

Over a three-year period from 2012 through 2014, the number of applications to the University of Maine School of Law plunged from 929 to 639, a 31 percent drop.

Some administrators might react to those numbers by seeking strategies that would boost the number of students who apply to their schools in an effort to beef up enrollment.

Not Danielle Conway. "That is not the responsible thing to do," she said. "That's unsustainable."

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May 11, 2015 in Legal Education | Permalink | Comments (5)

NY Times: Legal Marijuana Faces Another Federal Hurdle: Taxes

Marijuana (2015)New York Times, Legal Marijuana Faces Another Federal Hurdle: Taxes:

The country’s rapidly growing marijuana industry has a tax problem. Even as more states embrace legal marijuana, shops say they are being forced to pay crippling federal income taxes because of a decades-old law aimed at preventing drug dealers from claiming their smuggling costs and couriers as business expenses on their tax returns.

Congress passed that law in 1982 after a cocaine and methamphetamine dealer in Minneapolis who had been jailed on drug charges went to tax court to argue that the money he spent on travel, phone calls, packaging and even a small scale should be considered tax write-offs. The provision, still enforced by the I.R.S., bans all tax credits and deductions from “the illegal trafficking in drugs.”

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May 11, 2015 in Tax | Permalink | Comments (0)

'The Vultures Are Circling' Charleston Law School

Charleston LogoPost and Courier, No Matter How You Say It, Law School Is In Serious Trouble:

The Charleston School of Law’s Class of 2015 will graduate today, and their diplomas surely will be embossed with the institution’s lofty Latin motto: Pro bono populi, which means “for the good of the people.” Pro bono populi is a proper guiding principle for future lawyers.

The idea is that graduates of the Charleston School of Law invest three years and approximately $180,000 in tuition and related expenses, learn some Latin legal terms, pass required courses while doing free work with local attorneys, and ultimately land good jobs.

But no matter how intelligent it sounds, actions speak louder than words (facta non verba).

Since the Charleston School of Law started 12 years ago, four of the five founders took in millions in profits and are vacating the premises.

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May 11, 2015 in Legal Education | Permalink | Comments (0)

Manhire: A Government Perspective On Voluntary Tax Compliance

J. T. Manhire (U.S. Treasury Department), What Does Voluntary Tax Compliance Mean?: A Government Perspective, 164 U. Pa. L. Rev. Online ___ (2015):

One of the IRS’s principle goals is to maximize voluntary compliance. Yet, there is often a great deal of confusion and consternation when taxpayers discover that the IRS refers to the annual filing and payment ritual as “voluntary;” especially since most taxpayers do not believe they have a choice when it comes to filing and paying their taxes. What does voluntary compliance mean? Does it mean taxpayers can volunteer to file returns and pay taxes, much as one might volunteer to make a charitable donation? Does it mean taxpayers don’t have to comply with the tax laws if they don’t feel like it? How can it be a federal crime to not file or pay taxes if compliance is voluntary? This essay offers a government perspective as to why the IRS uses this sometimes perplexing term. After investigating (and dismissing) a possible literal defense, the essay surveys the IRS’s history to see why voluntary compliance is such a critical part of the U.S. tax system. The essay then recommends changing the term from voluntary to cooperative compliance to retain the government’s meaning while lessening taxpayer confusion.

May 11, 2015 in IRS News, Scholarship, Tax | Permalink | Comments (0)

UMass Law School Cuts Incoming Class By 33%, Faces $3.8 Million Deficit

UMass 2Boston Globe, Deficit Mounting, UMass Law Cuts Size of Incoming Class; Deficit Is $3.8m, Enrollment Down:

The University of Massachusetts School of Law has a mounting deficit, which hit $3.8 million last fiscal year, a gap expected to widen next year. UMass Dartmouth is picking up the bill for now, that school said.

The law school for now has scrapped plans to increase enrollment and instead decided to cut the size of its incoming class by a third, to 72 students. In addition, the school is not fully accredited by the American Bar Association, a generally accepted stamp of approval in the field. ...

Dean Mary Lu Bilek says the UMass Law School’s goal is “making sure that not only people born with silver spoons in their mouths are making the law.” ...

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May 11, 2015 in Legal Education | Permalink | Comments (1)

Kahng: The Taxation of Women in Same-Sex Marriages

Lily Kahng (Seattle), The Not-So-Merry Wives of Windsor: The Taxation of Women in Same-Sex Marriages, 101 Cornell L. Rev. __ (2015):

In United States v. Windsor, the Supreme Court invalidated the Defense of Marriage Act definition of marriage as “between one man and one woman” and is now poised to recognize a constitutional right to same-sex marriage. Windsor cleared the way for same-sex couples to be treated as married under federal tax laws, and the Obama administration promptly announced that it would recognize same-sex marriages for tax purposes. Academics, policymakers, and activists lauded these developments as finally achieving tax equality between gay and straight married couples. This Article argues that the claimed tax equality of Windsor is illusory and that the only way to achieve actual equality is to eliminate taxation on the basis of marital status.

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May 11, 2015 in Scholarship, Tax | Permalink | Comments (0)

More on Conditional Law School Scholarships

Hunger GamesFollowing up on last week's post, Law School Hunger Games? Profs Debate The Ethics Of Conditional Scholarships

Jerry Organ (St. Thomas), Revisiting Conditional Scholarships:

Having been one of the people who brought attention to the issue of conditional scholarships a few years ago, I feel compelled to offer a few insights on a rekindled conversation about conditional scholarships involving Jeremy Telman and Michael Simkovic and Debby Merritt. ...

While there are other things mentioned by Prof. Telman, Prof. Simkovic and Prof. Merritt to which I could respond, this post is already long enough and I am not interested in a prolonged exchange, particularly given that many of the points to which I would respond would require a much more detailed discussion and more nuance than blog postings sometimes facilitate.  My 2011 article describes my views on competitive scholarship programs and their impact on law school culture well enough.  Accordingly, let me end with one additional set of observations about what has happened with conditional scholarships in an era of increased transparency.

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May 11, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 732

IRS Logo 2The Hill, Two Years Later, IRS Probes Drag On:

Exactly two years after the IRS first admitted improperly scrutinizing Tea Party groups, congressional investigations into the tax agency show no sign of drawing to a close anytime soon.

Congressional Republicans say they are deeply irritated that they haven’t finished off the investigations launched after Lois Lerner apologized for the IRS on May 10, 2013, and insist that President Obama’s Justice Department has stonewalled their efforts.

Top lawmakers like Senate Finance Chairman Orrin Hatch (R-Utah) note that they’ve only just received thousands of emails to and from Lerner that the IRS said were unrecoverable close to a year ago.

Hatch recently said he hoped a bipartisan Finance report, which members once thought could be released more than a year ago, could come out by the end of June. But congressional investigators maintain that they'll need to make sure they have a fuller accounting of Lerner's email trail before any reports are circulated.

Asked about the repeated delays, Hatch said simply: “Every time we turn around we get more emails.”

Congressional committees have received about 5,000 of the roughly 6,400 newly recovered Lerner emails they expect from Treasury’s inspector general for tax administration, a GOP aide said Friday. The aide said that there appears to be little new in the emails, and that the inspector general is expected to issue a broader report on the emails in the coming weeks.

Hatch is far from the only GOP lawmakers fuming about the status of the IRS investigation.

“That’s so egregious, for the tax collection agency of the United States to be in that kind of shape,” said Sen. Pat Roberts (R-Kan.). “They have nobody to blame but themselves. I’d just like to see some accountability, you know?”

But even some Republicans acknowledge that the IRS controversy wasn’t quite the slam dunk case they thought it was two years ago, and House Republicans at least have seemed to put more emphasis on their investigation into the Benghazi attacks over the last year.

Still, Republicans aren't the only group frustrated by the IRS investigations – underscoring that the partisan divisions marking the inquiries aren’t going away, and that controversy will linger long after any reports are issued.

Tea Party groups say some organizations are still facing delays from the IRS, and that they believe Lerner and other agency officials are getting off easy.

“It's clear the IRS would like this scandal to disappear,” Jordan Sekulow, whose American Center for Law and Justice represents dozens of groups challenging the IRS in court, said recently.

Congressional Democrats, though, say that two years’ worth of investigations, costing millions of taxpayer dollars, have found what they long suspected – that the IRS’s scrutiny of Tea Party groups was caused not by political bias, but by bureaucratic mismanagement. ...

And while Republicans don’t want to speculate on when their IRS efforts might come to a close, Roskam dropped some hints that their interest in both the agency and Lerner won’t fade anytime soon.

“The statute of limitations doesn’t lapse until after the new administration comes in, so you could very easily see a newly constituted Justice Department having a new attitude about Lerner,” Roskam said.

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May 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, May 10, 2015

Texas A&M Law School Dean Is Still Cheerful About The Future Of Legal Education

Following up on my previous posts:

Andrew Morriss (Dean, Texas A&M), Still Cheerful About the Future of Legal Education:

It was a privilege to have three such eminent commentators on my Reasons to Be Cheerful essay. Brian Tamanaha deserves enormous credit for being among the first to sound the alarm on the financial problems of legal education. Sam Estreicher is not only a pioneer in bringing bench, bar, and academy together through his programs at NYU but also deserves some of the credit and/or blame for my presence in the academy. Not only was he enormously helpful and kind in participating in a workshop on my dissertation, he has proven equally helpful and kind ever since. Finally, Ken Randall is not only without peer in the world of deans for his success at the University of Alabama, where I had the privilege of being a faculty member, but has become a good friend. Responding to such eminent commentators is thus a challenge.

Prof. Tamanaha is gloomier than I am, because he thinks tuition levels are too high, debt burdens too great, law schools are admitting unqualified applicants, and bar pass rates are likely to continue to decline. He thinks loans and Income Based Repayment (IBR) and Pay as You Earn (PAYE)  will continue to subsidize bad behavior by law schools and innovation will be blocked or slowed by a combination of faculty resistance and ABA accreditation standards. I think we should be cheerier than Prof. Tamanaha because I think that while there is some truth in each of his concerns, things are better than he recognizes. ...

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May 10, 2015 in Legal Education | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [215 Downloads]  The Historical Origins of the Debt-Equity Distinction, by Camden Hutchison (Wisconsin)
  2. [213 Downloads]  Using the 'Smart Return' to Reduce Tax Evasion, by Joseph Bankman (Stanford), Clifford Nass (Stanford) & Joel Slemrod (Michigan)
  3. [179 Downloads]  Scholarship Against Desire, by Shari Motro (Richmond)
  4. [129 Downloads]  Tax Compliance as a Wicked System, by J. T. Manhire (U.S Treasury Department)
  5. [121 Downloads]  Tax Account Misstatements and the PCAOB's Restrictions on Auditors’ Tax Services, by Clive Lennox (Nanyang Technological University)

May 10, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Tacha: Just Mom

Tacha 4TaxProf Blog op-ed:  Just Mom, by Deanell Tacha (Dean, Pepperdine):

As I drove down the street recently, I jerked to attention when I noticed the vanity license plate on the car in front of me. It said simply "Just Mom". My lifelong fascination with the written word went into high gear. I wondered what message the woman driving could be hoping to convey. Those two words carried all the ambiguities that have haunted my generation of mothers. One possible interpretation is that of the boasting stay-at-home Mom who somehow managed to inoculate those of us who chose not to be "just Mom" with a healthy dose of guilt and questioning about what mortal deprivations we had visited upon our children by making the choice to combine motherhood with other professional and economic endeavors. Another possible interpretation is the counterposition. It is the mother who deprecates her other talents, interests, and aspirations by an apologetic admission that she resigns herself to being "just Mom". Neither of these opposing messages resonates with me. The first denigrates and belittles women who have combined motherhood with other occupations. The second diminishes the rich array of talents beyond those required to be a mother that an individual woman possesses. I reject both interpretations.

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May 10, 2015 in Legal Education, Tax | Permalink | Comments (5)

The IRS Scandal, Day 731

IRS Logo 2National Review, America’s Politicized Tax Enforcement Is a Harbinger of Decline, by Victor Davis Hanson (Stanford University, Hoover Institution):

Why did Rome and Byzantium fall apart after centuries of success? What causes civilizations to collapse, from a dysfunctional fourth-century-B.C. Athens to contemporary bankrupt Greece?

The answer is usually not enemies at the gates, but the pathologies inside them.

What ruins societies is well known: too much consumption and not enough production, a debased currency, and endemic corruption.

Americans currently deal with all those symptoms. But two more fundamental causes for decline are even more frightening: an unwillingness to pay taxes and the end of the rule of law. ...

The Clinton Foundation is expected to refile its tax returns for 2010, 2011, and 2012 after failing to separate government grants from donations. If an average citizen tried to amend his taxes for such huge sums and from that long ago, he would probably be under indictment. News reports of undocumented donations from foreign governments caught the foundation underreporting its income. The well-connected Clinton clan apparently had assumed that their political status ensured them immunity. ...

Who will police the tax police?

Former IRS official Lois Lerner and her subordinates were found to have targeted conservative nonprofit groups for excessive federal scrutiny. While testifying before Congress, Lerner invoked her Fifth Amendment right against self-incrimination, and investigators later found that two years of her e-mails had gone missing in a mysterious computer crash. Lerner has not been charged. ...

Our laws are becoming as politicized as our tax system. ...  In the last six years, the enforcement of federal laws has depended on their apparent political utility.  ... Increasingly in the United States, the degree to which a law is enforced — or whether a person is indicted — depends on political considerations. But when citizens do not pay any income taxes, or choose not to pay taxes that they owe and expect impunity, a complex society unwinds.

And when the law has becomes negotiable, civilization utterly collapses.

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May 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, May 9, 2015

Why Some Men Pretend To Work 80-Hour Weeks

80 HourNew York Times, How Some Men Fake an 80-Hour Workweek, and Why It Matters, by Neil Irwin:

Imagine an elite professional services firm with a high-performing, workaholic culture. Everyone is expected to turn on a dime to serve a client, travel at a moment’s notice, and be available pretty much every evening and weekend. It can make for a grueling work life, but at the highest levels of accounting, law, investment banking and consulting firms, it is just the way things are.

Except for one dirty little secret: Some of the people ostensibly turning in those 80- or 90-hour workweeks, particularly men, may just be faking it.

Many of them were, at least, at one elite consulting firm studied by Erin Reid, a professor at Boston University’s Questrom School of Business. It’s impossible to know if what she learned at that unidentified consulting firm applies across the world of work more broadly. But her research, published in the academic journal Organization Science [Embracing, Passing, Revealing, and the Ideal Worker Image: How People Navigate Expected and Experienced Professional Identities], offers a way to understand how the professional world differs between men and women, and some of the ways a hard-charging culture that emphasizes long hours above all can make some companies worse off.

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May 9, 2015 in Legal Education, Tax | Permalink | Comments (0)

WSJ: How To Vet A Charity

Wall Street Journal, How To Vet A Charity:

Do you scrutinize your charities the way you do your stocks or mutual funds? You should. ...

The good news for careful givers is that in return for their tax-free status, nonprofit groups other than churches typically must make extensive public disclosures about their finances and governance. Some state authorities require useful disclosures as well.

The result is a wealth of information and analysis available to prospective donors, much of it free and easy to find online. Within minutes you can get data on an organization’s program expenses, fundraising, assets and executive compensation.

Guides for Giving:

Databases:

Rating Sites:

Wall Street Journal Law Blog, What to Scrutinize on a Charity’s Tax Form:

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May 9, 2015 in Tax | Permalink | Comments (0)

ABA Tax Section May Meeting

ABA Tax Section Logo (2012)The ABA Tax Section May meeting concludes today in Washington, D.C. The full program is here. Tax Profs with speaking roles today include:

  • Employee Benefits:  Kathryn Kennedy (John Marshall)
  • Pro Bono & Tax Clinics:  Scott Schumaker (U. Washington)
  • Sales, Exchanges & Basis:  Brad Borden (Brooklyn), Danshera Cords (Albany), Erik Jensen (Case Western), Calvin Johnson (Texas), Roberta Mann (Oregon)

May 9, 2015 in ABA Tax Section, Tax | Permalink | Comments (0)

Law School To Offer 'Deflategate' Course

LiarWashington Post, University of New Hampshire Law School to Offer Deflategate Class:

“They’ll be teaching that at colleges one day.”

Usually when someone says that, it’s about an important scientific discovery, or a nation-altering leader, or a new way of communicating. Something big like that.

Or they could be talking about that time when the New England Patriots (probably) deflated a bunch of footballs to gain a very slight competitive edge and then got caught.

Michael McCann, an attorney who serves as the in-house legal expert for Sports Illustrated and NBA TV and founded the Sports and Entertainment Law Institute, will teach a course simply called “Deflategate” at the University of New Hampshire School of Law this fall.

The 4 credit course will enroll up to 75 students:

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May 9, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Two Years And Counting

IRS Logo 2The American Spectator, Making Sense of the IRS Scandal: Is Sympathy for the Devil Still Possible?:

Two years ago this month, former IRS official Lois Lerner revealed that the agency had discriminated against scores of right-leaning nonprofits on the basis of their political beliefs. The public called for accountability and got something vaguely resembling it in the form of resignations, investigations, and congressional debates. But despite the flurry of activity, the underlying issues that contributed to the IRS scandal remain unresolved, and the agency is still firmly embroiled in the messy business of policing political speech.

It’s enough to make one wonder: two years later, have things really changed? Or could it happen again?

Starting in 2010, IRS agents were instructed to apply extra scrutiny to applications for nonprofit status from conservative and tea-party organizations, culminating in those applications being sent to a special office where they were subjected to lengthy delays and invasive questioning. This was the agency’s inept response to the Citizens United decision, which freed all organizations to speak about elections, so long as they do so independently of candidates and parties. Critics of the decision, including several U.S. Senators, pressured the IRS to do anything in its power to stop groups from exercising their newfound freedom. Lerner herself remarked to a Duke University panel that “everybody is screaming at [the IRS] right now.”

But the IRS is a revenue collection agency, not a campaign finance regulator, so it was hopelessly ill-equipped for the task. It failed to treat groups equally or fairly, instead singling out conservative and tea party groups for an incredible level of scrutiny. The IRS demanded the personal information of groups’ supporters, copies of minutes from board meetings, résumés of current and former individuals involved with the organization, and even past intern history, copies of social media postings, and print outs of every page of an organization’s website.

President Obama called the IRS’s conduct “outrageous” and promised “I will not tolerate it. And we will make sure that we find out exactly what happened.” Lerner and IRS Commissioner Steven T. Miller resigned, countless congressional hearings were held to rail against the violation of taxpayers’ First Amendment rights, and multiple investigations — some of which are still ongoing — commenced to shed bits of light on the matter. ...

Lois Lerner may be gone, but the IRS is still threating to infringe upon First Amendment rights. In the same vein, a new TIGTA report issued on April 30 praised the IRS for reducing its backload of applications and making some changes to its screening process, such as standardizing the questions asked of groups, but noted that the IRS still “does not have a clearly defined test for determining whether an organization’s request for exemption as a social welfare organization should be approved.”

Things might be a little better, but they’re still not good, and there’s nothing to stop the IRS from deciding to target groups again in the future. The failure to secure the rights of nonprofits in the aftermath of the scandal is a sobering reminder that passion for accountability is not enough. We also have to be wise, and address policy problems where they exist instead of merely searching for individuals to blame.

Disputes over the language of the 501(c)(4) statute, combined with a lack of clear guidance from the Federal Election Commission and gridlock in Congress, left the IRS to regulate in an area where it lacked sufficient expertise to act responsibly. The IRS deserves more than its fair share of rebuke for targeting groups with views it didn’t like, for being dishonest about its activities, and for responding to criticism by proposing even more restrictive regulations. But whether its errors were committed in good faith or not, whether they were catastrophic or mere blunders, the IRS simply should never have been put in position to make them.

As the agency works on its new proposal, it should rely on the feedback it received last time. That means recognizing that nonprofit advocacy groups have a valuable role to play in civic life, protecting that role, and clarifying the rules so that small and volunteer-run organizations can be assured their activities are legal and their supporters’ private information is secure.

That’s the best we can hope for, but it shouldn’t be up to the IRS to make these decisions. That job belongs to Congress. Clarifying the language of the 501(c)(4) statute to explicitly protect the political speech of nonprofit groups would finally chart a path forward out of this regulatory morass. It would be a blessing both to nonprofit groups and the IRS.

On the two-year anniversary of revelations of the IRS scandal, perhaps it is time to leave behind the search for a villain and instead solve the problem. Until advocacy nonprofits have their First Amendment rights secured, the threat of future targeting lingers, no matter who is in charge

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May 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, May 8, 2015

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 68, No. 2 (Winter 2015):

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May 8, 2015 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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May 8, 2015 in Scholarship, Tax | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Congressional Briefing Today on Historical Perspectives on Tax Reform

Congress (2015)The Joint Committee on Taxation and National History Center of the American Historical Association are co-sponsoring a Congressional briefing today on Historical Perspectives on Tax Reform in the United States:

Tax reform is a perennial issue in modern American politics.  Over the past century, the federal tax system has been pilloried for being unfair, inefficient, complex, and generally dysfunctional. “Tax reform” seems like the obvious answer to such problems, but the meaning and substance of that reform is anything but obvious. Indeed, “tax reform,” like many political slogans, is a moving target, its meaning derived less from ideal notions of “good” tax policy and more from changing social and economic conditions of American society.

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May 8, 2015 | Permalink | Comments (2)

University College London Hosts Conference Today on The Philosophical Foundations of Tax Law

UCLUniversity College London Faculty of Laws hosts a two-day conference beginning today on The Philosophical Foundations of Tax Law:

There is currently very little literature considering the philosophical aspect of tax law. Yet given the controversy that surrounds tax, particularly in a turbulent economic environment, it is an excellent time to explore tax from a philosophical perspective. It is essential that we have a complete understanding of the answers to some of the seemingly basic questions which surround tax, before we can begin to think about what a tax system should look like. Questions such as what in fact is a tax? Why should we tax? How much should we tax and on whom should tax be levied? What should taxes be used for? How do ideas of fairness and justice tie in with the tax system?  The consideration of all these questions is crucial to a complete understanding of the tax system and the future of the tax system.

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May 8, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

ABA Tax Section May Meeting

ABA Tax Section Logo (2012)The ABA Tax Section May meeting continues today in Washington, D.C. The full program is here. Tax Profs with speaking roles today include:

  • Bankruptcy & Workouts:  Don Leatherman (Tennessee)
  • Diversity:  Allen Madison (South Dakota)
  • Foreign Activities of U.S. Taxpayers:  Robert Peroni (Texas)
  • Foreign Activities of U.S. Taxpayers, Foreign Lawyers Forum, Transfer Pricing & U.S. Activities of Foreigners and Tax Treaties:  Karen Brown (George Washington)

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May 8, 2015 in ABA Tax Section, Legal Education, Tax | Permalink | Comments (0)

Kahn & Kahn: The Agency Exception to the Anticipatory Assignment of Income Doctrine

Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State), The Agency Exception to the Anticipatory Assignment of Income Doctrine, 147 Tax Notes 555 (May 4, 2015):

One consequence of having graduated income tax rates is that it becomes advantageous to shift income from a high bracket taxpayer to a person in a lower tax bracket. A number of different vehicles have been tried to shift the incidence of the income tax to another person, and the courts and Congress have adopted a number of rules to prevent that from occurring. As early as 1930, the Supreme Court adopted the anticipatory assignment of income doctrine to prevent a person who anticipates earning income from his services from shifting that income to another person in a lower tax bracket. Income is taxed to the person whose services produced it rather than to the person who has the beneficial right to possess the income once it is earned.

This article discusses the tax treatment of an employee whose services create income for his employer. The anticipatory assignment of income doctrine does not apply in these circumstances under the so-called agency exception. This article explains the policy justification of the agency exception and uses examples to help illustrate when and when not the agency exception should apply.

May 8, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 729

IRS Logo 2Orange County Register editorial, Emails Keep IRS Scandal Probe Afloat:

John Koskinen has some ’splaining to do. Last June, Mr. Koskinen, the IRS commissioner, told Senate Finance Committee Chairman Ron Wyden and ranking member Orrin Hatch that a computer malfunction somehow zapped thousands of emails to and from Lois Lerner, the scandalized IRS official whose office targeted conservative groups for special scrutiny when applying for tax-exempt status.

Last week, those potentially incriminating emails were recovered – not because Mr. Koskinen was determined to get to the bottom of the IRS targeting scandal, but because of the diligence of J. Russell George, Treasury Inspector General for Tax Administration.

Mr. George is in the process of turning over some 6,400 emails to the Senate Finance Committee, which last year tasked the inspector general’s office with figuring out what emails had been lost, if someone at IRS intentionally destroyed them and if the emails could possibly be retrieved.

That seemed to us at the time a project Mr. Koskinen’s staff could have undertaken. Instead, it appeared that Mr. Koskinen – and, perhaps, Obama administration officials further up the food chain – were hoping the scandal would just fade away.

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May 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 7, 2015

Charleston Law School May Not Enroll Students In Fall; Owners Who Withdrew $25m In Profits Refuse To Pay $21k For Graduation Reception; Students With $147k Average Debt Take Up Collection

Charleston LogoPost and Courier, Charleston School of Law May Not Enroll New Students in the Fall:

The Charleston School of Law has been trudging along on life support for months, but could it be about to take its final breath?

While students were taking final exams Tuesday, George Kosko and Robert Carr, the remaining owners of the troubled law school, released a statement that said they might not enroll a new class of students in the fall.

They did not elaborate on what the statement might mean for the future of the for-profit law school, and said they would not make additional comments until next week, when they plan to release an update on the school’s situation.

American Bar Association and state rules prohibit the school from simply closing its doors. If the board decides to close the school, it would have to submit a “teach-out” plan that details how students who already are enrolled would finish their education programs.

In their prepared statement, Kosko and Carr said they could not in good faith enroll another class when “like last year, the school is spending more money than is coming in.”

Post and Courier, Charleston School of Law Scales Back Graduation Events:

If Charleston School of Law’s newest graduates want better than Ramen noodles at their commencement reception, they and their friends are going to have to pay for it.

The troubled law school’s two-member board cut the traditional post-commencement reception from its budget this year — despite pulling in $25 million in profit from the school between 2010 and 2013. The move has pushed student and alumni groups to take up a collection to cover the cost, said Matt Kelly, president of the Student Bar Association.

He and others, through Dean Andy Abrams, have asked board members and owners George Kosko and Robert Carr to reconsider holding the reception, which last year cost $21,000. “We’ve given them two weeks to stand up and do the right thing, but they haven’t,” Kelly said. ...

Tuition at the law school this year is $39,096, and many students borrow more than a $100,000 in student loans to pay for their law degrees.

Above the Law, Law School Cuts Graduation Events To Protect Profits:

Charleston may be a failing law school right now — shortchanging the graduates and turning away 1Ls certainly doesn’t sound like a recipe for success — and closing up shop may be the right thing to do long-term. What Kosko and Carr should do is wrap-up operations covering the shortfall with the millions in profits they personally collected to ensure every current student gets to graduate with the same dignity as their predecessors. There’s more than enough.

But that’s probably not going to happen. No, like Mr. Burns, the powers behind Charleston appear more than willing to trade the goodwill of their students to pinch out just a little bit more. 

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May 7, 2015 in Legal Education | Permalink | Comments (10)

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2014)The Virginia Tax Review has published Vol. 34, No. 2 (Fall 2014):

May 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

Journal of Tax Administration Publishes Inaugural Issue

JOTA LogoThe Chartered Institute of Taxation and the University of Exeter Business School have launched the Journal of Tax Administration:

This open access, peer reviewed and on-line journal provides an interdisciplinary forum for scholars and practitioners to share knowledge and research on issues of concern to tax administrations, governments, the tax practitioner community and wider society. An international editorial board includes leading academics in the field.

The inaugural issue (Vol. 1, No. 1) contains these articles:

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May 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

Stanford B-School Offers Grads $140k To Leave Bay Area

StanfordWall Street Journal, For Stanford’s Business School, Bay Area’s Pull Is Mixed Blessing:

Stanford University’s tech-heavy alumni network, close ties to Silicon Valley and nearby pool of venture investors attract top M.B.A. students. Trouble is, those students don’t leave.

More than half of recent graduates from the M.B.A. program at the Graduate School of Business stay in the San Francisco Bay Area, mainly to join—or start—tech companies. That gives the school, which is near Palo Alto, Calif., formidable contacts in the tech industry and region. But it also limits networking opportunities for some young alumni trying to establish themselves elsewhere, said Madhav Rajan, the program’s dean.

This year the school will offer as many as 13 fellowships, worth over $140,000 each, to foreign students willing to commit to returning home after graduation. ...

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May 7, 2015 in Legal Education | Permalink | Comments (0)