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Thursday, February 12, 2015

Zolt: Politics and Taxation

Eric M. Zolt (UCLA), Politics and Taxation: An Introduction, 67 Tax L. Rev. 453 (2014):

This essay provides some observations about the relationship of politics and taxation and reviews the articles and commentaries that were prepared for the Third Annual NYU/UCLA Tax Policy Conference on Politics and Taxation held in Los Angeles on October 18, 2013. Understanding the relationship between politics and taxation is important for several reasons. First, it may help explain why countries adopt different taxing and spending patterns. It may also explain why the frequency, success and stability of tax reform efforts vary among countries. Finally a better understanding of politics and taxation may provide insights into such questions on how institutions shape policy outcomes and how tax policy may contribute to successful democratic governments.

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February 12, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Lawyers See Big Pay Growth After First 10 Years of Career

Washington Post, Your Lifetime Earnings Are Probably Determined in Your 20s:

new report from the Federal Reserve Bank of New York sends a ... sobering message to millennials:  Your first 10 years in the labor market likely shape your lifetime earning potential. ...

For the average person ...  earnings growth stagnates after the first 10 years of a career. Average earnings growth for the 35-to-55 set is zero, the data shows. ... Workers projected to earn the median lifetime amount will see pay swell 38 percent from age 25 to 55, with the strongest upswing in the first decade, the Fed study found.

Workers in the 95th percentile can expect a 230 percent increase over the same period. Those in the 99th percentile --  the doctors and lawyers and engineers --  will see earnings grow a whopping 1,450 percent.

(Photo provided by the Federal Reserve Bank of New York)

ABA Journal, Lawyers See Big Pay Growth After First 10 Years of Career, a New Report Shows:

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February 12, 2015 in Legal Education | Permalink | Comments (6)

Gerzog: What's Wrong with a Federal Inheritance Tax?

Wendy C. Gerzog (Baltimore), What's Wrong with a Federal Inheritance Tax?, 49 Real Prop. Tr. & Est. L.J. 163 (2014):

Scholars have proposed a federal inheritance tax as an alternative to the current federal transfer tax system, but there are serious flaws with that idea. Those problems include: (1) different tax rates and exemptions based on the decedent’s relationship to the beneficiary; (2) the lack of a tax on lifetime gratuitous transfers, including gifts with retained interests or control; (3) the persistence of most current valuation distortion abuses; and (4) significantly decreased compliance rates and increased administrative costs inherent in a system that taxes transferees on transactions that may be largely unmonitored.

This article reviews common characteristics of existing inheritance tax systems in our U.S. states and internationally, particularly in Europe. In addition, the article analyzes the novel Comprehensive Inheritance Tax (CIT) proposal of Professor Batchelder [What Should Society Expect from Heirs? The Case for a Comprehensive Inheritance Tax, 63 Tax L. Rev. 1 (2009)] that combines some elements of existing inheritance tax systems with some features of the current transfer tax system and delivers the CIT through the federal income tax system.

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February 12, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tax Rates and Corporate Decision Making

John Graham (Duke), Michelle Hanlon (MIT), Terry Shevlin (UC-Irvine) & Nemit Shroff (MIT), Tax Rates and Corporate Decision Making:

We provide evidence consistent with many firms exhibiting behavioral biases (heuristics, salience) when incorporating taxes into their decision processes. For example, we find that many firms employ the more salient average tax rate (i.e., the GAAP effective tax rate) to evaluate incremental decisions rather than the more theoretically correct marginal tax rate. We estimate that behavioral biases that influence firms to use the average tax rate for decision-making lead to deadweight losses that average $10 million for poor capital structure decisions and $25 million for suboptimal acquisitions, and also reduce the responsiveness of corporate investment to growth opportunities.

February 12, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 644

Wednesday, February 11, 2015

Kleinbard: Why Corporate Tax Reform Can Happen

Edward Kleinbard (USC), Why Corporate Tax Reform Can Happen:

This brief essay explains in an informal way to nonspecialists what the stakes are for corporate tax reform and why such reform is more politically feasible than most observers believe. The essay emphasizes the central importance of international tax design as the largest conceptual impediment, but demonstrates that a framework has emerged that can serve as the basis for constructive negotiations. The essay further offers a novel strategy for dealing with the problem that a large fraction of U.S. business income is earned by unincorporated businesses.

February 11, 2015 in Scholarship, Tax | Permalink | Comments (2)

ABA 'Encourages' Law Schools to Offer Debt Counseling to Students

ABA Logo 2ABA Journal, Counsel Young Lawyers About Debt, ABA Policymakers Urge Law Schools and Bar Groups:

The ABA House of Delegates unanimously adopted a resolution on Monday urging law schools and bar associations to counsel young attorneys on student loan debt.

Resolution 106 urges law schools to provide “comprehensive debt counseling and debt management education” to law students, and urges bar associations to provide the same services to their young and newly admitted lawyers.

Chris Rogers of Texas, speaking in favor of the resolution, pointed to the dismal employment statistics young lawyers have confronted in recent years. The Section of Legal Education and Admissions to the Bar reported in 2013 that 56.2 percent of law graduates held full-time, long-term jobs requiring a law degree, excluding jobs created by law schools. The advocacy group Law School Transparency put that number at 55.1 percent.

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February 11, 2015 in Miscellaneous | Permalink | Comments (2)

Givati: A Theory of Line Drawing in Tax Law

Yehonatan Givati (Hebrew University of Jerusalem, Faculty of Law), Walking a Fine Line: A Theory of Line Drawing in Tax Law, 34 Va. Tax Rev. ___ (2015):

In many contexts, U.S. tax law grants a favorable tax treatment to transactions of one type and an adverse treatment to transactions of another type. The task of tax authorities is to draw lines in legally gray areas, distinguishing between economically similar transactions that should receive different treatment. Despite tax law’s propensity for line drawing, the manner in which tax authorities draw legal lines has received little attention. This Article aims to fill this gap by providing guidance to tax authorities on how to select the best line drawing instrument in a given situation. First, the Article demonstrates that tax authorities employ four different line drawing instruments: rulemaking, adjudication, private letter ruling and licensing. Second, the Article develops a theory of line drawing in tax law, which identifies three criteria by which tax authorities should choose line drawing instruments: the ideal policy, the effect on taxpayers, and the effect on tax authorities. Finally, the Article applies this theory of line drawing to explain line drawing instruments currently in use.

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

FactCheck.org: Obama's Loophole Logic

FactCheck LogoFactCheck.org, Obama's Loophole Logic:

The White House is claiming that the top 1 percent of all earners would pay 99 percent of the capital gains tax increase proposed by the president. But that claim rests on some debatable logic.

According to the Obama administration’s way of figuring, a lot of Americans would suddenly enter the top 1 percent only after they die.

An independent analysis by the Urban-Brookings Tax Policy Center estimates that the top 1 percent of earners would bear 58 percent of the increase, not 99 percent. By the TPC’s figuring, the Obama proposal would affect not only the rich, but a good many middle-income taxpayers as well. ...

Which view is right? That depends on what one considers to be “income,” as we shall explain in a moment.

Our Conclusion

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February 11, 2015 in Tax, Think Tank Reports | Permalink | Comments (0)

Mormann: Beyond Tax Credits -- Smarter Tax Policy

Felix Mormann (Miami), Beyond Tax Credits – Smarter Tax Policy for a Cleaner, More Democratic Energy Future, 31 Yale J. on Reg. 303 (2014):

Solar, wind, and other renewable energy technologies have the potential to mitigate climate change, secure America’s energy independence, and create millions of green jobs. In the absence of a price on carbon emissions, however, these long-term benefits will not be realized without near-term policy support for renewables. Mounting federal debt in excess of $16 trillion, meanwhile, urges careful review of all public expenditures. This Article proposes policy reform to simultaneously promote fiscal sustainability and renewable energy through capital markets and crowdfunding.

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

Graetz: Goodbye to Tax Notes

Graetz (2015)TaxProf Blog op-ed:  Goodbye to Tax Notes, by Michael J. Graetz (Columbia):

Today, I received the following email from the Columbia Law librarian announcing a new policy of Tax Analysts:

Tax Analysts is in the process of eliminating their complementary professorial accounts. They have presented us with the following terms, and they will maintain your access for the rest of this work week.

In this case, the alternatives are the library paying $8,500 a year for an broad account shared by the library with individual direct access limited to three professors, or you paying $780 a year for your individual access to Tax Notes and Tax Notes International .... They will not sell access to the “Lawref” e-dress because that is a shared account.....

When Tom Field started a nonprofit publisher and public interest law firm in 1969, he could not have imagined the success Tax Analysts would enjoy. It has for nearly a half century provided a unique and invaluable service to the tax community. I have long relied on it myself for timely information and have had many students use its resources for their papers and publications, even though much of its most useful content is in the public domain. And I have frequently published there and speak often with its correspondents. But with this latest turn, Tax Analysts may be losing sight of its mission. According to its Form 990 for the fiscal year ending June 30, 2013 (which is the most recent readily available) Tax Analysts had over $23 million in revenues from its publications, cash and securities on hand exceeding $40 million and more than $60 million in total assets. Its revenue exceeded its expenses by nearly $4 million. It is difficult to believe that this change in policy is prompted by financial necessity. And the timing is especially unfortunate for many law schools around the country.

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February 11, 2015 in Legal Education, Tax, Tax Analysts | Permalink | Comments (6)

Law Graduate Overproduction and Lawyers Per Capita by State

Matt Leichter has updated the data in his two ongoing research projects:

Law Graduate Overproduction:

This page tracks law graduate overproduction as of 2013 by contrasting state government lawyer job creation projections with ABA graduate data from the Law School Admissions Council. ...

Map

Here’s a chart of the results. The numbers in parentheses are the number of ABA-accredited law schools operating in 2013. ...

#StateAnnual Job OpeningsABA GradsAnnual SurplusGrads Per Opening
1 Puerto Rico (3)* 130 662 532 5.09
2 Vermont (1) 40 203 163 5.08
3 Mississippi (2) 80 377 297 4.71
4 Massachusetts (8)* 560 2,391 1,831 4.27
5 Minnesota (4) 260 942 682 3.62
6 Delaware (1) 80 279 199 3.49
7 Indiana (4) 240 834 594 3.48
8 Louisiana (4) 270 936 666 3.47
9 Oregon (3) 160 527 367 3.29
10 D.C. (6) 690 2,181 1,491 3.16

Lawyers Per Capita by State:

This page uses the number of attorneys “active and resident” according to the “ABA’s National Lawyer Population by State” count (NLPS) and population figures by state from the U.S. Census Bureau via FRED (Puerto Rico’s is from one year earlier from the World Bank). The NLPS does not tell us the number of inactive or nonresident attorneys, but the Lawyer Statistical Report (pdf) calculates those at 4.8 percent and 6.1 percent, respectively. To give you a comparison: For the 1.3 million attorneys on the rolls in 2013, between 1970 and 2012 the ABA conferred just over 1.6 million law degrees and state bars issued nearly 2 million lawyer licenses. According to the Current Population Survey, 1.1 million attorneys were working in the United States in 2012, but the Labor Department’s Employment projections program places the figure at 759,800.

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

Philanthropist, 98, Sues Chapman for Return of $12 Million Gift

ChapmanOrange County Register, Philanthropist, 98, Sues Chapman for the Return of His $12 million Gift:

A 98-year-old man says Chapman University took advantage of his age to get him him to donate $12 million for an engineering building – and he is suing to get his money back.

Corona del Mar philanthropists James and Catherine Emmi have filed a lawsuit in Orange County Superior Court charging that Chapman University President James Doti put undue pressure on James Emmi to sign an irrevocable contract without the consent of his wife.

The suit alleges breach of contract, fraud, deceit and elder abuse by Chapman University. Chapman officials vowed to fight the lawsuit.

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

Postlewaite: The Omnipresence of Subchapter K in the International Arena?

Philip Postlewaite (Northwestern), The Omnipresence of Subchapter K in the International Arena?, 93 Taxes ___ (2015):

The purpose of Subchapter K is to provide certainty as to the appropriate focal point for making tax determinations, i.e., at the partner level or the partnership level, dictating which level is determinative for what purpose. Subchapter K generally ensures that partners are ultimately taxed similarly under the three possible methods of realization upon their investment. Whether (1) the partnership run its course and disposed of its assets for cash and liquidated thereafter, (2) the partner sells his partnership interest to another for cash, or (3) the partnership liquidates by distributing its assets to the partner for sale thereafter, the amount and character of the gain or loss is generally the same, albeit with some deferral in the liquidation context. Regardless of the method chosen, tax consequences ensue.

Subchapter N’s treatment of inbound and outbound activity reflects different overriding purposes. Regarding inbound activity, the goal is to ensure that foreign persons are subject to tax on income, whether investment or business oriented, derived with a nexus to the United States. Regarding outbound activity, the focus is on the avoidance of double taxation by United States persons on income earned abroad as well as limiting the deferral of income by United States persons investing abroad through foreign corporations.

The difficulty arises when partnerships operate internationally, i.e., where Subchapter K and Subchapter N may potentially overlap. Does Subchapter K always control; does Subchapter N? Is the entity approach determinative, the aggregate, or either depending upon the context? What is the ideal model for resolving such issues?

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

The IRS Scandal, Day 643

IRS Logo 2The Hill, Obama Administration Won’t Release IRS Targeting Documents:

The Obama administration is refusing to publicly release more than 500 documents on the IRS’s targeting of Tea Party groups.

Twenty months after the IRS scandal broke, there are still many unanswered questions about who was spearheading the agency’s scrutiny of conservative-leaning organizations.

The Hill sought access to government documents that might provide a glimpse of the decision-making through a Freedom of Information Act (FOIA) request.

The Hill asked for 2013 emails and other correspondence between the IRS and the Treasury Inspector General for Tax Administration (TIGTA). The request specifically sought emails from former IRS official Lois Lerner and Treasury officials, including Secretary Jack Lew, while the inspector general was working on its explosive May 2013 report that the IRS used “inappropriate criteria” to review the political activities of tax-exempt groups.

TIGTA opted not to release any of the 512 documents covered by the request, citing various exemptions in the law. The Hill recently appealed the FOIA decision, but TIGTA denied the appeal. TIGTA also declined to comment for this article.

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February 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, February 10, 2015

Yin Presents Protecting Taxpayers from Congressional Lawbreaking Today at Georgetown

Yin (2015)George K. Yin (Virginia) presents Protecting Taxpayers from Congressional Lawbreaking at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks, Itai Grinberg, and David Schizer:

This paper describes how the U.S. House Ways & Means Committee broke the law in 2014 when it approved public release of the confidential tax return information of 51 taxpayers. Because the Speech or Debate Clause insulates the legislators and their staff from prosecution if they carry out their violation in the context of a protected legislative act, to prevent a future violation, the paper recommends a new restriction on the access of the tax committees to tax return information.

February 10, 2015 in Colloquia, Tax | Permalink | Comments (0)

Toder Presents U.S. Lessons From Other Countries' Taxation of Multinational Corporations Today at NYU

ToderEric Toder (Tax Policy Center) presents Lessons the United States Can Learn From Other Countries' Territorial Systems for Taxing Income of Multinational Corporations (with Rosanne Altshuler (Rutgers) & Stephen Shay (Harvard)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.  

February 10, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Number of Americans Renouncing Their U.S. Citizenship Hit All-Time High in 2014

International Tax Blog, 2014 - More Expatriations Than Ever:

Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the fourth quarter of 2014. .... The [3,415] total for the year breaks last year’s record number of 2,999 published expatriates. The number of expatriates for 2014 is a 14% increase over 2013. 

Expat

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February 10, 2015 in Tax | Permalink | Comments (1)

Senate Holds Hearing Today On Lessons From The 1986 Tax Reform

Senate LogoThe Senate Finance Committee holds a hearing today on Getting to Yes on Tax Reform: What Lessons Can Congress Learn from the Tax Reform Act of 1986?:

Press and blogosphere coverage:

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February 10, 2015 in Congressional News, Tax | Permalink | Comments (1)

WSJ: Avoid These 12 Tax Traps This Filing Season

Tax TrapWall Street Journal Tax Report:  Don’t Fall Into a Tax Trap: These Hidden Hazards Can Cost Taxpayers Money—or Get Them in Trouble With the IRS, by Laura Saunders:

With taxes, what you don’t know can hurt you. ... These errors aren’t the obvious bloopers that cause trouble, such as entering income information incorrectly or misstating Social Security numbers. Instead, they are tricky issues that often confuse taxpayers who do their own returns—and even some paid preparers—and cause people either to overpay Uncle Sam or invite an IRS challenge. 

Here are issues to be aware of, starting with those that are new this year.

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February 10, 2015 in IRS News, Tax | Permalink | Comments (0)

The Legal Profession: From 'The Best And The Brightest' To 'Dumb And Dumber'?

AmLawThe American Lawyer:  Best and Brightest? Or Dumb and Dumber?, by Vivia Chen:

No one wants to admit it, but there's a whiff of anxiety that the legal field is dumbing down.

The source of this angst? The steep decline in law school applicants. Not since 1973, when there were 53 fewer schools in this country, has first-year law student enrollment sunk this low. According to the American Bar Association, there were 37,924 new law students in the fall of 2014—a 28 percent drop from 2010, when 1L enrollment (52,488) hit a historic high.

At the same time, LSAT scores are also dropping. From 2010 to 2014, the number of law schools with median LSAT scores of 160 to 180, a perfect score, declined (from 77 to 50 schools), while the number of schools with median LSAT scores of 150 or lower quadrupled (from nine to 36), according to research by Jerry Organ, a law professor at the University of St. Thomas. It's "a picture of serious deterioration of student quality across dozens of law schools," says Brian Tamanaha, a Washington University School of Law professor. "This is happening in unprecedented numbers."

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February 10, 2015 in Legal Education | Permalink | Comments (0)

NY Times Debate: Are Economists Overrated?

NY Times Room for DebateNew York Times Room for Debate, Are Economists Overrated?:

One in 100 articles in The New York Times over the past few years have used the term “economist,” a much greater rate than other academic professions, according to a recent article in The Upshot. Economic analysis and pronouncements are crucial to most policy decisions and debates.

But given the profession’s poor track record in forecasting and planning, and the continued struggles of many Americans, have we given economists too much authority?

  • Philip Cohen (Maryland), Exceptions Overwhelm Economic Rules:  "Exploitation, dishonesty, violence, ignorance and demagoguery set vast areas of social life apart outside of economic models."
  • Diane Coyle (Manchester), Economists Deal With the Pie on the Table, Not in the Sky:  "Government decisions balance costs and benefits, winners and losers. It is best to do this explicitly, which is what economists do."
  • Marion Fourcade (UC-Berkeley), An Ambivalent Authority:  "Much of economic science is esoteric and preoccupied with internal struggles. Ideological divisions, exploited by politicians, defy clarity."
  • Peter Henry (NYU), Analyze and Explain, Don’t Prognosticate:  "Economics succeeds when used as a forensic tool, employing history and data, not creating unrealistic expectations."
  • Orlando Patterson (Harvard) & Ethan Fosse (Harvard), Don’t Rely on Pseudo-Science:  "Implementation of mainstream economic ideas has led to massive failures after expertise of other academics were ignored."
  • Charles Plott (Cal-Tech), Failures Shouldn’t Obscure Widespread Success:  "Economic science is the foundation of sound policies and techniques in business and government."

February 10, 2015 in Legal Education, Tax | Permalink | Comments (0)

Madam C.E.O., Get Me a Coffee

New York Times:  Madam CEO, Get Me a Coffee, by Adam Grant (Wharton) & Sheryl Sandberg (Facebook):

This is the sad reality in workplaces around the world: Women help more but benefit less from it. In keeping with deeply held gender stereotypes, we expect men to be ambitious and results-oriented, and women to be nurturing and communal. When a man offers to help, we shower him with praise and rewards. But when a woman helps, we feel less indebted. She’s communal, right? She wants to be a team player. The reverse is also true. When a woman declines to help a colleague, people like her less and her career suffers. But when a man says no, he faces no backlash. A man who doesn’t help is “busy”; a woman is “selfish.”

In a study led by the New York University psychologist Madeline Heilman, participants evaluated the performance of a male or female employee who did or did not stay late to help colleagues prepare for an important meeting. For staying late and helping, a man was rated 14 percent more favorably than a woman. When both declined, a woman was rated 12 percent lower than a man. Over and over, after giving identical help, a man was significantly more likely to be recommended for promotions, important projects, raises and bonuses. A woman had to help just to get the same rating as a man who didn’t help. ...

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February 10, 2015 in Legal Education | Permalink | Comments (0)

Why Do Developing Countries Tax So Little?

Timothy Besley (London School of Economics) & Torsten Persson (Stockholm University), Why Do Developing Countries Tax So Little?, 28 J. Econ. Perspectives 99 (Fall 2014):

Low-income countries typically collect taxes of between 10 to 20 percent of GDP while the average for high-income countries is more like 40 percent. In order to understand taxation, economic development, and the relationships between them, we need to think about the forces that drive the development process. Poor countries are poor for certain reasons, and these reasons can also help to explain their weakness in raising tax revenue. We begin by laying out some basic relationships regarding how tax revenue as a share of GDP varies with per capita income and with the breadth of a country's tax base. We sketch a baseline model of what determines a country's tax revenue as a share of GDP. We then turn to our primary focus: why do developing countries tax so little? We begin with factors related to the economic structure of these economies. But we argue that there is also an important role for political factors, such as weak institutions, fragmented polities, and a lack of transparency due to weak news media. Moreover, sociological and cultural factors- such as a weak sense of national identity and a poor norm for compliance- may stifle the collection of tax revenue. In each case, we suggest the need for a dynamic approach that encompasses the two-way interactions between these political, social, and cultural factors and the economy.

February 10, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 642

IRS Logo 2Washington Times, New Emails Show IRS Delayed Witness Interview in Criminal Probe:

Lawyers for the Internal Revenue Service attempted to stall a criminal investigation by waiting nearly a month before giving an agency employee permission to meet with investigators, despite the employee’s willingness to testify, emails showed.

The emails, obtained by Judicial Watch through a Freedom of Information Act request, revealed frustration with IRS lawyers over their reluctance to approve a meeting between federal prosecutors and an unnamed tax agency employee who was prepared to give investigators information.

“[W]e find it amazing that they didn’t immediately respond giving us the green light to meet with you,” the IRS employee’s attorney, whose name was redacted, wrote of the IRS counsel in a June 12, 2013 email to Justice Department officials. ...

Interest in the alleged IRS scandal remains high nearly two years after an inspector general report detailed the delays and excessive scrutiny some agency officials heaped on conservative groups applying for tax-exempt status. The House Oversight Committee has not let up on plans to further its probe of the charges.

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February 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, February 9, 2015

Moneyball, The Super Bowl, And Faculty Hiring

MoneyballFollowing up on Friday's post on Faculty Scholarship Rankings and Law School Success: Bloomberg View: Would You Hire the Super Bowl Hero?, by Virginia Postrel:

When was the last time your talent-hungry organization hired the equivalent of Super Bowl hero Malcolm Butler, the undrafted rookie who came out of the University of West Alabama,a Division II school many football fans had never even heard of? When was the last time you even considered someone with unlikely credentials for a critical position? ...

Elite investment banks, law firms and management consulting firms often hire almost exclusively from a handful of schools, according to research by Lauren Rivera, a sociologist at the Kellogg School of Management at Northwestern University. “So-called ‘public Ivies’ such as University of Michigan and Berkeley were not considered elite or even prestigious,” she wrote in a 2011 article in Research in Social Stratification and Mobility. ...

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

University of New South Wales Issues Call for 2015 Tax Research Fellows

ATaxThe School of Taxation and Business Law (TBL) at the University of New South Wales, Australia, will offer several Atax Research Fellowships  ($7,500) in taxation, business law and related disciplines in 2015. Research Fellows normally spend four weeks working at TBL on a mutually agreed area of research. The preferred timing for successful applicants to undertake the fellowship is August-October 2015, but other times of the year may also be possible. The application deadline is March 31, 2015.

February 9, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

NYU Hosts Book Discussion With Eugene Steuerle on How to Restore Fiscal Freedom and Rescue Our Future

DeadThe NYU Graduate Tax Program hosts a discussion today with C. Eugene Steuerle (Urban Institute) on his book, Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future (2014):

Eugene Steuerle argues that these seemingly separable economic and political problems are actually symptoms of a common disease, one unique to our time. Unless that disease and the history of how it spread over time is understood, Steuerle says, it is easy for politicians and voters alike to fall prey to believing in simple but ineffective nostrums, hoping that a cure lies merely in switching political parties or reducing the deficit or protecting and expanding our favorite program.

Despite the despairing claims of many, Steuerle points out that we no more live in an age of austerity than did Americans at the turn into the twentieth century with the demise of the frontier. Conditions are ripe to advance opportunity in ways never before possible, including doing for children and the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains. Recognizing this extraordinary but checked potential is also the secret to breaking the political logjam that —as Steuerle points out —was created largely by now dead (or retired) men.

February 9, 2015 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Johnston: Obama and Congress Offer Bogus Rhetoric on Tax Reform

Al Jazeera:  Obama and Congress Offer Bogus Rhetoric on Tax Reform: Tax Proposals Favor Political Donor Class at the Expense of Ordinary Americans , by David Cay Johnston (Syracuse):

Considering all the talk in Washington about “tax reform,” you might think serious work is underway to adapt our century-old federal tax system to the 21st century digital economy.

It’s not.

The only matters under discussion are more tax favors that will shift even more of the burden off those with speed-dial access to lawmakers and White House staff and onto ordinary tax payers.

We have a tax code designed for the middle of last century, when we had a national economy with cash incomes that could be levied efficiently and hard assets, like factories, which could be taxed easily because they were immovable.

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

Taylor: Diversity as a Law School Survival Strategy

DiversityAaron N. Taylor (St. Louis),  Diversity as a Law School Survival Strategy (press release):

Over the past few years, law schools have been dealing with a drastic and, so far, unyielding decline in student interest. Between 2010 and 2013, student enrollments fell almost 25%, to levels not seen in 40 years. This trend has prompted many to wonder what schools have done, and what they can do, to ensure their survival in this new climate. This article explores the extent to which law schools have used students of color, particularly black and Hispanic students, to bolster enrollments and lessen the effects of the downturn. The results of this analysis suggest that a school’s median LSAT score influenced the extent to which the racial composition of its entering classes changed between 2010 and 2013. Black and Hispanic students were critical components of the enrollment management calculus for private law schools with the lowest median LSAT scores. Higher-median schools tended to rely more heavily on white and Asian enrollments to stem declines. These trends led to increased racial and ethnic stratification in law school enrollments, where black and Hispanic students were more likely to attend schools with lower median LSAT scores in 2013 than in 2010, while white and Asian students were more likely to attend schools with higher median scores. Perceptions of law school quality and prestige are greatly influenced by a school’s median LSAT score; therefore, the trend of stratification may only serve to intensify racial and ethnic differences in career paths and trajectories.

Update:  National Law Journal, Law School Diversity Improves—But Only at the Bottom

February 9, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Fleischer: Obama’s International Tax Plan May Not Work as Intended

NY Times Dealbook (2013)New York Times Deal Book:  How Obama’s Tax Plan May Not Work as Intended, by Victor Fleischer (San Diego):

Companies’ offshore cash holdings are a tempting target for American tax writers, as President Obama’s proposal this week to tax deferred offshore earnings proves. Those same offshore earnings may attract foreign buyers as well.

A Bloomberg article on Wednesday by David Kocieniewski rightly identifies an unintended consequence of the president’s proposal: It provides companies with an additional incentive to hurry up and move their headquarters overseas before the rules change.

I think the more formidable concern is an increase in foreign acquisitions of companies in the United States. Unlike a corporate inversion, where a larger American company is “acquired” by a smaller foreign one, I am speaking here of acquisitions by foreign companies that are the same size or larger than their American targets. ...

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

'No Relief' for Law School Enrollment Slump

Indiana Business Journal, 'No Relief' for Law School Enrollment Slump:

After three down years for law school enrollment, Austen Parrish expected a rebound of applications and enrollment this year at Indiana University Maurer School of Law.

But it isn’t happening. The law school, which Parrish leads, saw the number of first-year law students decline 10 percent this school year on top of the nearly 25-percent decline in first-year enrollment it suffered from 2010 to 2013.

law school numbers

A similar story is playing out at most law schools in Indiana and the nation. Enrollment has fallen at the IU Robert H. McKinney School of Law at IUPUI and Valparaiso University Law School in northwest Indiana.

And a law school started recently by Indiana Institute of Technology in Fort Wayne has enrolled only a third of the students it expected.

In response, Indiana’s law schools are not replacing retiring faculty, spending more on recruiting, creating programs for non-attorney types of legal education, and experimenting with an educational approach that responds to what many see as permanent shifts in demand for legal services.

law-school-bars.jpgSimilar, and in some cases more drastic, moves are being taken by law schools around the country.

First-year enrollments have plunged almost 28 percent since 2010 and stand at their lowest level since 1973, according to the American Bar Association. Making matters worse, there are 53 more law schools now than there were then.

“This continued decrease in student demand is consistent with our belief that the legal industry is experiencing a fundamental shift rather than a cyclical trend,” Susan Fitzgerald, a higher education analyst at Moody’s Investors Service, said in a January report titled “No Relief in Sight.”

Not everyone agrees the enrollment declines are permanent. But even if they aren’t, the change in status for law schools is stunning.

What used to be one of the surest routes to the upper middle class is now one of the best routes to a life of debt.

Starting salaries for law school graduates with full-time law jobs remain 8 percent below their 2009 peak, averaging $78,205 in 2013, according to the most recent data available from the National Association for Law Placement.

Meanwhile, law school debt runs about $100,000 or more among those with debt.

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

TurboTax Temporarily Suspends State E-Filings on Fraud Concerns

Turbo Tax (2015)Wall Street Journal, TurboTax Temporarily Suspends E-Filings on Fraud Concerns:

The largest online tax-software company in the U.S. temporarily halted electronic filing of all state returns after more than a dozen states spotted criminal attempts to obtain refunds through its systems.

Intuit Inc., based in Mountain View, Calif., said Friday that its TurboTax unit stopped transmitting state e-filing tax returns Thursday after seeing attempts to use stolen personal information to file fraudulent returns for tax refunds.

The company said later Friday that it resumed state tax filings after bolstering its “security measures to combat the type of fraudulent tax activity that it is seeing.” The shutdown lasted about 24 hours, according to the company.

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

Brill: My Frank Look At A University President’s Frank Look At Law Schools

BrillTaxProf Blog op-ed:  Ralph Brill (Chicago-Kent), My Frank Look At A University President’s Frank Look At Law Schools: An 18-Point Analysis (Feb. 6, 2015):

The detailed version of the views of the university president are quite accurate in many respects ... Scholarship is read by very few; student edited law reviews predominantly pass over articles from professors at lesser schools; and that fact hampers lesser schools in the USNW rankings. But the parts of the interview that rankle me and others are the last few paragraphs:

  • It was also suggested that Legal Writing and clinical programs need to be looked at carefully in terms of their resource intensity and the extent to which LW particularly has come to have a heavy influence on law school decision making. This point in no way claims that the teaching of legal writing in various forms and for diverse uses in law practice is not a valid element of a legal education. But it is fair to ask whether it is being done in the most effective and sophisticated way when writing is essentially shunted over to a “lesser” part of the curriculum in large part because traditional tenure track law faculty defaulted on their own responsibility to incorporate writing into the mainstream curriculum due to its labor-intensive nature and the fact that it diverted them from the kinds of activities in which they desired to engage.  Over the last 8-10 years it seems as if there has been created a coherent bloc of special interests that essentially operates as a sort of “quasi-union” in legal education, one capable of dictating operational terms that impose “work rules” that may be in the “union’s” interests but inhibit the adaptive and innovative flexibility of law schools.
  • The great expansion in LW programs and LW faculty has reshaped the quality and structure of law schools in ways that might have been needed conceptually but where the credentials and experience of LW faculty are often not on a par with others. At a point in time where law schools are being asked to improve their ability to better prepare their graduates for entry into the legal profession there is a need to gain a broader and deeper understanding of what is involved in achieving this goal. It may well be that Legal Writing courses achieve much of what is needed. But given the intense focus on more formalized legal writing that often represents what is done in many LW courses it is legitimate to review such programs to determine if they should be modified into deliberately more comprehensive approaches to “skills” education.

Yes, the so-called "regular" faculty historically has shunted off its responsibilities to train students in the fundamentals of legal analysis, reasoning, research, advocacy, and oral and written communication through Legal Analysis and Writing courses.  One cannot teach Legal Writing or Oral Presentation of Analysis in traditional Socratic or Lecture classes, in 100 student classrooms.  The method has to be geared to individual training.  Smaller class sizes; multiple assignments; rewrites; individual conferences; separate focus on a student's analysis; a student's reasoning; a student's advocacy; a student's legal and other research skills; and a student's ability to communicate clearly and simply to others in writing or orally.  Most doctrinal teachers I know do not even provide individual feedback to students on their examinations in their courses.  They haven't the time, while also engaging in their own legal analysis, reasoning, research and writing of law review articles and trying to get them published in elite law reviews.  

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

The IRS Scandal, Day 641

IRS Logo 2Judicial Watch, IRS Obstructs Justice?:

We have just obtained new internal documents from the Department of Justice (DOJ) that show how the IRS Office of the Chief Counsel worked to delay a meeting between an IRS employee and DOJ and FBI investigators about the Obama IRS abuse and harassment of Tea Party and conservative groups and individuals who were in the way of Barack Obama’s reelection effort.

To help you with a timeline, it was in May 2013 that the Treasury Inspector for Tax Administration (TIGTA) released an audit report confirming that the IRS used “inappropriate” criteria to identify, hamstring, and handcuff conservative organizations that stand in opposition to Team Obama. Put simply, the agency violated the First Amendment rights of countless Americans just as Obama sought reelection.  As further confirmation of the criminality of Obama’s IRS abuse, in 2014, Lois Lerner, the former Director of the IRS Exempt Organizations Unit that was “suppression central” for the tax agency, was held in contempt of Congress after refusing to testify at a congressional hearing about the agency’s witch hunts. (The Holder Justice Department has yet to prosecute this contempt charges.)

This latest batch of emails, which were released in response to just one of our several FOIA lawsuits against the DOJ, provide the first window into the criminal investigation of the alleged IRS abuses.  The emails detail the involvement of the DOJ’s Public Integrity Section, which JW was first to expose as being part of a scheme to work with the IRS to prosecute groups and individuals critical of the Obama administration. The documents show the IRS scandal is only getting worse and that the IRS Counsel’s office, which is operated by an Obama appointee, has been, once again, stonewalling any serious investigation.

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February 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 8, 2015

Is the Professor Bossy or Brilliant? Much Depends on Gender

New York Times:  Is the Professor Bossy or Brilliant? Much Depends on Gender, by Claire Cain Miller:

Male professors are brilliant, awesome and knowledgeable. Women are bossy and annoying, and beautiful or ugly.

These are a few of the results from a new interactive chart that was gaining notice on social media Friday. Benjamin Schmidt, a Northeastern University history professor, says he built the chart using data from 14 million student reviews on the Rate My Professors site. It allows you to search for any word to see how often it appeared in reviews and how it broke down by gender and department.

NY Times Chart

The chart makes vivid unconscious biases. The implications go well beyond professors and college students, to anyone who gives or receives feedback or performance reviews.

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February 8, 2015 in Legal Education | Permalink | Comments (4)

The Top 5 Tax Paper Downloads

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

  1. [282 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  2. [178 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)
  3. [137 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  4. [129 Downloads]  Return on Political Investment in the American Jobs Creation Act of 2004, by Hui Chen (Zurich), Katherine Gunny (Colorado) & Karthik Ramanna (Harvard)
  5. [108 Downloads]  Taxation and Surveillance -- An Agenda, by Michael Hatfield (University of Washington)

February 8, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Can America's Faith-Based Law Schools Restrict Sexual Activity to Heterosexual Marriage?

Religiously Affiliated Law SchoolsDeseret News National, Can America's Faith-Based Law Schools Restrict Sexual Activity to Heterosexual Marriage?:

The travails of a Canadian Christian university's quest to establish a law school may reverberate in the United States as conflicts over legalizing same-sex marriage continue, some educators say.

At issue is whether religiously affiliated law schools with honor codes restricting student conduct to heterosexual marriage could trigger challenges to either a school's accreditation or the ability of graduates to sit for bar exams, or both.

While religiously affiliated law schools in the United States can enforce honor codes, the American Bar Association also requires the schools it accredits not to discriminate in admissions on the grounds of sexual orientation.

Schools such as Liberty University's School of Law in Lynchburg, Virginia, founded by the late Rev. Jerry Falwell, are thus in the crosshairs, being both accredited and claiming protection under the religious school provision.

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February 8, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 640

IRS Logo 2Wall Street Journal editorial, End of the IRS Investigation?:

Republicans are rightly furious about the IRS targeting of conservative political groups—and the agency’s lack of cooperation in finding out what happened. They’ve even cut the IRS budget to get the agency’s attention. So it was odd to learn that the new head of the House Oversight Committee thinks these government employees deserve a pay raise. ...

Meanwhile, we’ve learned that key staff in the targeting probe have left the Oversight committee. Does this mean there’s a kinder, gentler new Congressional overseer for the IRS?

Mr. Chaffetz tells us he is “absolutely not” letting up on the targeting inquiry and that the IRS scandal is still “top of the list, number one.” He says he recently met with the IRS inspector general and was “stunned at what I heard.” The Oversight Chairman said that we’ll have to wait for an upcoming hearing to learn about new revelations that he said made his “jaw hit the ground.”

We’re delighted to hear it. But talk of raises should wait until the IRS provides a full accounting of who ordered the harassment of President Obama ’s critics.

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

Saturday, February 7, 2015

Case Western Purchased Home of Former Dean in Settlement of Law Prof's Retaliation Lawsuit

MitchellFollowing up on my coverage of the controversy surrounding former Case Western Dean Lawrence Mitchell (links below):  The Observer, A Land Purchase CWRU Would Like to Forget:

One of Case Western Reserve University’s newest building isn’t on campus. There are no classrooms, lab space or conference rooms, but it is equipped with the following: granite counter tops, a landscaped stone patio, two wood burning fireplaces, a detached 3 car garage and a “glamour bath.”

Nobody’s name graces the outside of this building; university officials would prefer to keep the previous owner out of the spotlight.

Cuyahoga County Fiscal Officer records indicate that on July 1, CWRU purchased former law school Dean Lawrence Mitchell’s five-bedroom, three-and-a-half bath home for $575,000.

Mitchell resigned last March after Law School Professor Raymond Ku sued both Mitchell and CWRU, alleging that Mitchell retaliated against Ku for bringing forth a number of allegations of sexual harassment against the dean, his superior.

The lawsuit alleged that while at CWRU, six professors experienced sexually inappropriate harassment from Mitchell, along with four members of the administrative staff and a law student. Several of these individuals allegedly stated to Ku that they feared for their jobs if they reported Mitchell’s misconduct.

The 3072 Fairmount Blvd. address is located in the middle of a residential Cleveland Heights neighborhood, a 10-minute drive from campus.

The timing of the purchase suggests that CWRU may have bought Mitchell’s residence as part of the undisclosed settlement which ended Ku’s lawsuit. The property was bought a week before the settlement was announced in a joint statement by representatives for CWRU, Mitchell and Ku. ,,,

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

Malcolm Butler, Not Tom Brady, to Pay Income Tax on Super Bowl MVP Truck

BradyFollowing up on Thursday's post, The Tax Consequences of Tom Brady's Gift of His Super Bowl MVP Truck to Malcolm Butler:  ESPN, Malcolm Butler to Pay Taxes on Prize:

The truck that Chevrolet presented to New England Patriots quarterback Tom Brady as Super Bowl MVP will be given directly by the company to teammate Malcolm Butler instead.

Chevy spokesman Michael Albano said the truck, a loaded Colorado, will be given to the cornerback, who intercepted Russell Wilson's pass on the goal line to seal the Patriots' win in Super Bowl XLIX last Sunday. The event will take place in the Boston area Tuesday, Albano said.

If Brady received the truck himself and gave it to Butler, he would have to count its value -- which Albano said was worth roughly $35,000 -- as income and he would be taxed on it, said Robert Raiola, a CPA who specializes in sports tax management with O'Connor Davies in New Jersey. Brady also might have had to pay a gift tax. U.S. residents can give $5,430,000 worth of gifts in their lifetime before having to pay tax on what they give. It is not known how close Brady might be to that limit.

Now instead of Brady paying income taxes, Butler will have to, according to Raiola. The approximately $35,000 value will now count as income to Butler, and he will pay taxes on that.

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February 7, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (2)

NLJ: Scandals Put Law Schools in Damage Control Mode

National Law Journal, This is Not the Attention Law Schools Want: Scandals Put Law Schools in Damage Control Mode:

Scandal

Clockwise, from top left:  Mark Sargent (Villanova), Lawrence Mitchell (Case Western), Ronald Murphy (Connecticut), John Dwyer (UC-Berkeley), John Patrick Shannon (Florida), Donald Marvin Jones (Miami), Barry Freundel (Georgetown), and John Attanasio (SMU).

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February 7, 2015 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 639

IRS Logo 2The Hill, GOP Gives Thumbs Down to IRS Chief:

More than a year into his tenure, some GOP lawmakers say the commissioner has lost his chance to win them over. And while other Republicans, especially in the Senate, give Koskinen higher marks, frustration with the IRS remains at a high boil.

“The IRS has less credibility now than when he took over,” said Rep. Kevin Brady (Texas), a senior Republican on the House Ways and Means Committee. “And I think we will need a new commissioner before that credibility is regained.”

“He’s not up for this job, which is unfortunate because I thought at the beginning he just might be,” Brady added. ...

Koskinen, known as a turnaround artist in government and the corporate world, took over the IRS in December 2013, during the fallout from the Tea Party controversy and the agency’s excessive spending on conferences and video spoofs of “Star Trek” and “Gilligan’s Island.”

The IRS ran into more trouble last June when it said it couldn’t find a number of emails from Lois Lerner, the former IRS official at the center of the Tea Party flap. Federal investigators have since worked to retrieve the missing documents.

“We take the issue seriously. It shouldn’t have ever happened, and it shouldn’t happen again,” Koskinen said.

But he added, “To continue to say we can cut a few hundred million dollars because you had a silly conference and used some inappropriate criteria gets you to a point where you’re failing to recognize the real ramifications.”

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February 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, February 6, 2015

Caron Presents Faculty Scholarship Rankings and Law School Success Today at Pepperdine

Caron 2012 PhotoPaul L. Caron (Pepperdine) presents Faculty Scholarship Rankings and Law School Success at Pepperdine today:

In What Law Schools Can Learn From Billy Beane and the Oakland Athletics, 82 Tex. L. Rev. 1483 (2004), Rafael Gely and I argued that legal education must use technology to develop more sophisticated measures of law school success and faculty contributions to law school success.  Here, I use existing measures of faculty scholarly output (publications) and influence (law review citations, Google Scholar citations (H-Index and M-Index), and SSRN downloads) both to chart how Pepperdine's faculty compares with our competitors and to detail individual Pepperdine faculty contributions in these measures.  I then offer some thoughts on what these existing ranking methodologies leave out in measuring faculty contributions to law school success.  I argue that religious law schools are uniquely positioned to thrive in the midst of the law school crisis because our faith-fueled commitment to our students and to each other empowers us to better define the pathways to success for our schools, our students, and our faculties and equips us to make that journey together.

February 6, 2015 in Colloquia, Legal Education, Scholarship | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Call for Papers: Citizenship and Taxation Symposium at Michigan

Michigan Law Logo (2015)Call for Papers:

We invite paper proposals for a Citizenship and Taxation Symposium, to be held at the University of Michigan Law School, Ann Arbor, Michigan, on Friday, October 9, 2015. This symposium will focus on ongoing developments regarding the unique US practice of taxing citizens who live permanently overseas. With the adoption of regimes such as the expatriation tax added by IRC § 877A and the Foreign Account Tax Compliance Act (FATCA), the taxation of non-residents with US person status now has serious and tangible implications. ...

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February 6, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)