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Friday, March 7, 2014

Weekly SSRN Tax Roundup

March 7, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Student Selectivity (Median LSAT/GPA) for the 2015 U.S. News Law School Rankings

US NewsIn advance of Tuesday's release of the new 2015 U.S. News & World Report Law School Rankings:  below is a ranking of the 202 ABA-accredited law schools by student selectivity weighted by LSAT scores (12.5%) and undergraduate GPAs (10%) using the U.S. News methodology:

1

YALE

2

HARVARD

3

CHICAGO

4

STANFORD

5

PENNSYLVANIA

6

VIRGINIA

7

DUKE

8

UCLA

9

COLUMBIA

10

NYU

11

NORTHWESTERN

12

UC-BERKELEY

13

GEORGETOWN

14

VANDERBILT

15

MICHIGAN

16

ALABAMA

17

MINNESOTA

18

EMORY

19

USC

20

CORNELL

21

GEORGE WASHINGTON

22

WASHINGTON - ST. LOUIS

23

WILLIAM & MARY

24

TEXAS

25

INDIANA - BLOOMINGTON

26

BOSTON UNIVERSITY

27

WASHINGTON - SEATTLE

28

BOSTON COLLEGE

29

GEORGIA

30

BYU

31

NOTRE DAME

32

SMU

33

COLORADO

34

UC-IRVINE

35

WAKE FOREST

36

IOWA

37

WASHINGTON & LEE

38

UC-DAVIS

39

OHIO STATE

40

WISCONSIN

41

ARIZONA STATE

42

FORDHAM

43

PEPPERDINE

44

GEORGE MASON

45

ARIZONA

46

NORTHEASTERN

47

ILLINOIS

48

FLORIDA

49

BAYLOR

50

NORTH CAROLINA

51

RICHMOND

52

PENN STATE

53

MARYLAND

54

UC-HASTINGS

55

FLORIDA STATE

56

UTAH

57

SAN DIEGO

58

CARDOZO

59

CINCINNATI

60

VILLANOVA

61

LOYOLA – LOS ANGELES

62

HOUSTON

63

TENNESSEE

64

NEBRASKA

65

FLORIDA INTERNATIONAL

66

MICHIGAN STATE

67

TEMPLE

68

LEWIS & CLARK

69

CONNECTICUT

70

TULANE

71

NEVADA - LAS VEGAS

72

KENTUCKY

73

SETON HALL

74

BROOKLYN

75

CHICAGO-KENT

76

DENVER

77

OKLAHOMA

78

PITTSBURGH

79

CASE WESTERN

80

GEORGIA STATE

81

MISSOURI - COLUMBIA

82

LOYOLA - CHICAGO

83

WAYNE STATE

84

OREGON

85

AMERICAN

86

NEW HAMPSHIRE

87

MISSISSIPPI

88

TEXAS TECH

89

MIAMI

90

LSU

91

ARKANSAS - FAYETTEVILLE

92

KANSAS

93

TULSA

94

SUNY - BUFFALO

95

BELMONT

96

SAINT LOUIS

97

RUTGERS – CAMDEN

98

RUTGERS – NEWARK

99

ST. JOHN'S

100

CHAPMAN

101

INDIANA - INDIANAPOLIS

102

HAWAII

103

SEATTLE

104

NEW MEXICO

105

ST. THOMAS - MINNESOTA

106

WEST VIRGINIA

107

MAINE

108

DREXEL

109

CITY UNIV. OF NEW YORK

110

STETSON

111

LOUISVILLE

112

SANTA CLARA

113

SYRACUSE

114

QUINNIPIAC

115

DUQUESNE

116

MARQUETTE

117

SOUTH CAROLINA

118

WILLIAM MITCHELL

119

ALBANY

120

MONTANA

121

REGENT

122

DEPAUL

123

MERCER

124

AKRON

125

GONZAGA

126

HAMLINE

127

WASHBURN

128

MCGEORGE

129

TOLEDO

130

SAN FRANCISCO

131

CLEVELAND STATE

132

CATHOLIC

133

WYOMING

134

HOFSTRA

135

DRAKE

136

MEMPHIS

137

PUERTO RICO

138

CAMPBELL

139

MISSOURI - KANSAS CITY

140

IDAHO

141

BALTIMORE

142

CREIGHTON

143

NORTHERN KENTUCKY

144

ARKANSAS - LITTLE ROCK

145

SOUTHWESTERN

146

LIBERTY

147

VERMONT

148

PACE

149

MISSISSIPPI COLLEGE

150

TEXAS A&M

151

SAMFORD

152

NEW YORK LAW SCHOOL

153

SUFFOLK

154

LOYOLA - NEW ORLEANS

155

SOUTH TEXAS

156

OHIO NORTHERN

157

CALIFORNIA WESTERN

158

DETROIT

159

HOWARD

160

WIDENER - DELAWARE

161

NORTH DAKOTA

162

WESTERN NEW ENGLAND

163

WILLAMETTE

164

ROGER WILLIAMS

165

OKLAHOMA CITY

166

CHARLESTON

167

PONTIFICAL CATHOLIC

168

GOLDEN GATE

169

NORTHERN ILLINOIS

170

SOUTHERN ILLINOIS

171

WESTERN STATE

172

ST. MARY'S

173

AVE MARIA

174

JOHN MARSHALL - CHICAGO

175

ELON

176

CAPITAL

177

NOVA SOUTHEASTERN

178

SOUTH DAKOTA

179

DISTRICT OF COLUMBIA

180

NEW ENGLAND

181

DAYTON

182

NORTH CAROLINA CENTRAL

183

WIDENER - HARRISBURG

184

FAULKNER

185

JOHN MARSHALL - ATLANTA

186

APPALACHIAN

187

WHITTIER

188

MASSACHUSETTS

189

INTER AMERICAN UNIV.

190

TOURO

191

ST. THOMAS - FLORIDA

192

FLORIDA A&M

193

TEXAS SOUTHERN

194

BARRY

195

LA VERNE

196

THOMAS M. COOLEY

197

THOMAS JEFFERSON

198

FLORIDA COASTAL

199

CHARLOTTE

200

VALPARAISO

201

ARIZONA SUMMIT

202

SOUTHERN

March 7, 2014 in Law School Rankings, Legal Education | Permalink | Comments (5)

Tax Expatriation Blog

Tax ExpatWelcome to the tax blogosphere:  Tax Expatriation, by Patrick Martin (Procopio, San Diego), which focuses on "matters of U.S. citizenship renunciation and relinquishment, and lawful permanent resident abandonment."

March 7, 2014 in Tax | Permalink | Comments (0)

Death of Sarah Tran

TanSarah McQuillen-Tran (SMU) died last Friday at the age of 34:

Sarah Elizabeth McQuillen-Tran passed away peacefully surrounded by family and friends on Friday, February 28th at the age of 34. She had a strong spirit and heroically fought a relapse of leukemia over the past year.  Sarah received bone marrow transplants from her brother Paul and her sister Kathy.  She received excellent medical care from both Johns Hopkins Medical Center in Baltimore and Baylor Medical Center in Dallas.  Sarah and her family received tremendous support and encouragement from her family, friends and the local community, especially her Fondren Family, (friends and faculty) at Southern Methodist University.  Sarah's family would like to thank Armstrong elementary school, Highland Park Presbyterian Church, and Highland Park United Methodist Church for their wonderful support, as well as the ministers of Baylor and the Music Fairy.

Sarah was born in Leidschedam, Holland in 1979. She went to school in England and Saudi Arabia, and attended high school in the USA and Philippines.  After graduating from high school,  she spent a year volunteering in the Philippines, India and Nepal before going to college at UC Berkeley. After graduating from UC Berkeley with a degree in Civil Engineering, Sarah and her college sweetheart Thuan Tran joined the Peace Corps and served in Guinea, West Africa. They were married in Oakland, California in 2004.

FarrahSophia, their first great love, was born in Oakland, California in 2005. Sarah and Thuan then moved to Washington, D.C, where Sarah attended Georgetown Law School and graduated Magna Cum Laude. She later Clerked for the Honorable Judge Timothy Belcher Dyk on the U.S. Court of Appeals for the Federal Circuit and worked for the Energy Group at Jones Day law firm.

Sarah won her first battle with Leukemia at Johns Hopkins Cancer Research Center in Baltimore, MD.   She received a bone marrow transplant from her brother Paul in 2008, which enabled her to live a happy and healthy life for four and a half more years, and give birth to their second great love, Jimi Owen Tran in 2010.

Since January 2011, Professor Tran served as an Assistant Professor of Law at the Southern Methodist University, Dedman School of Law in Dallas, Texas. She specialized in Intellectual Property, Regulatory and Environmental Law. A nationally recognized legal scholar, Professor Tran published articles in many of the leading U.S. law journals. During the 2012-2013 academic year, Professor Tran served as a Fellow in the SMU Dedman College Interdisciplinary Institute. Professor Tran was equally dedicated to her teaching.  She taught Property Law and other courses to over one hundred students at the law school.  She also taught courage and determination amongst other qualities to her students, often conducting lectures from her hospital bed at Baylor Medical Center via Skype. ...

Sarah is survived by her husband Thuan and their two children FarrahSophia and Jimi Owen, her mother Jacqueline Conci and husband Michael Conci of Auburn, California and her Father Roland McQuillen and wife Gabrielle Kelly-McQuillen, of Ireland.  Sarah is also survived by her brother Paul and his partner Heather, her brother Mark and her sister Kathy, her husband Mo and her niece.

A memorial service celebrating Sarah’s life and spirit will be held on Saturday, March 15th at the Highland Park Methodist Church on 3300 Mockingbird Lane in Dallas, Texas at 10:00 a.m. A potluck lunch will follow the service.

In lieu of flowers, the family requests you consider making a contribution to the Tran Children Development Fund.

Sarah was a compassionate, affectionate wife and a devoted, loving mother. She will live on in our hearts as a shining example of brilliance, tenacity, an adventurous ‘can do’ spirit, dedication to family, students, fun, love and life.  Au revoir until we meet again.

For more of Sara's amazing story, see  SMU Property Law Professor Battling Leukemia Teaches From Hospital Bed. (Hat Tip: Babette Boliek.)

March 7, 2014 in Legal Education, Obituaries, Tax | Permalink | Comments (0)

Georgetown Symposium on Tamanaha's Failing Law Schools

FailingSymposium, Brian Z. Tamanaha's Failing Law Schools, 26 Geo. J. Legal Ethics 341-442; 521-539 (2013):

March 7, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 302

Continue reading

March 7, 2014 in IRS News, IRS Scandal, News, Tax | Permalink | Comments (3)

Thursday, March 6, 2014

Law School Applicants From Top Colleges Plunge 36%

Associate's Mind has updated its prior post and found that law school applicants from graduates of the Ivy league plus Chicago, Duke, and Stanford have plunged 36% since 2008 (click to enlarge):

AM 1 AM 2

March 6, 2014 in Legal Education | Permalink | Comments (4)

Johnston: Real Tax Reform Means Starting From Scratch

AljazeeraAljazeera:  Real Tax Reform Means Starting From Scratch, by David Cay Johnston (Syracuse):

News broke last week about a major new "tax reform" proposal on Capitol Hill. But while the 979-page bill that Rep. Dave Camp (R-Mich.) issued last week contained ideas excellent as well as awful, it didn’t represent "reform" at all.

“Reform” means improvement. News reports should generally avoid that term, except in remarks attributed to advocates. In news articles, as opposed to opinion columns like this, “change” and “overhaul” are appropriately neutral terms.

Three planks in Camp’s proposal show that it is not reform but business-as-usual, brought to you by the powerful lobbying interests that dominate lawmaking in Washington and whose agenda favors shifting tax burdens down the income ladder.

Continue reading

March 6, 2014 in Tax | Permalink | Comments (2)

Shay Presents Formulary Apportionment in the U.S. Today at Temple

ShayStephen E. Shay (Harvard) presents Formulary Apportionment in the U.S. International Income Tax System: Putting Lipstick on a Pig? (with J. Clifton Fleming (BYU) & Robert J. Peroni (Texas)) at Temple today as part of its Tax Policy & Administration Colloquium Series hosted by Alice Abreu & Andrea Monroe:

[T]he authors argue that formulary apportionment and the current standard, arm's length transfer pricing, are just two shades of lipstick on the pig that is the US international tax system, with its twin features of deferral and cross-crediting. They conclude that formulary apportionment might be the less offensive shade, but in effect the whole discussion is a diversion from a broad reform that is sorely needed on the pig itself

March 6, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

IRS Tax Tips for Same-Sex Couples

March 6, 2014 in IRS News, Tax | Permalink | Comments (0)

Journal of Legal Tax Research Publishes New Issue

CoverThe American Tax Association Journal of Legal Tax Research has published Vol. 11, No. 2 (Dec. 2013):

  • Michelle Bertolini & Pamela Weaver, Mandatory Arbitration within Tax Treaties: A Need for a Coherent International Standard, 11 J. Legal Tax Research 1 (2013):  "As businesses expand operations globally, the threat of double taxation on income earned becomes a significant concern. The current Mutual Agreement Procedures (MAP) within the tax treaties frequently fail to provide equitable relief, exposing taxpayers to uncertain outcomes, and cause compliance considerations under Accounting Standards Codification (ASC) 740, Income Taxes. In July 2008, the Organisation for Economic Co-operation and Development (OECD) Model Tax Treaty began including a mandatory arbitration provision for taxpayers failing to reach agreement under MAP. The U.S. Model, while beginning to shift toward including mandatory arbitration in some of the later treaties, still relies on the voluntary MAP proceedings for resolution of disagreements, because any party can elect out of arbitration. Data provided by the U.S. Treasury indicated that a wide range of taxpayer income covered by the U.S. treaties failed to receive partial or full relief from double taxation. The U.S. should consider adopting the OECD Model Tax Treaty’s mandatory arbitration provisions for all tax treaties, to remove the uncertainty of double taxation and promote international trade."
  • Jonathan M. Farrar, Maureen E. Donnelly & Sonia B. Dhaliwal, Procedural Aspects of Tax Fairness: A Content Analysis of Canadian Tax Jurisprudence, 11 J. Legal Tax Research 21 (2013): "We undertake a directed content analysis of Canadian tax jurisprudence to analyze procedural, interpersonal, and informational fairness, and their respective criteria, in the tax context. To facilitate our analysis, we apply Colquitt’s (2001) theoretical framework of fairness. Consistent with this framework, we find 198 cases that contain procedural fairness, 34 cases that contain interpersonal fairness, and 37 cases that contain informational fairness. Furthermore, we identify seven criteria of procedural tax fairness (accuracy, bias, consistency, compatibility, correctibility, representativeness, voice), three criteria of interpersonal tax fairness (respect, propriety, timeliness), and four criteria of informational tax fairness (justification, truthfulness, full disclosure, taxpayer technical competence). Implications for taxpayers, tax authorities, and tax researchers are discussed."
  • John Gamino, “Widely Perceived as Grossly Unfair”: The Unfulfilled Promise of Interest Abatement, 11 J. Legal Tax Research 38 (2013): "This paper explores Internal Revenue Code (IRC) section 6404(e)(1). Enacted in 1986 and amended in 1996, this section authorizes the Internal Revenue Service (IRS) to abate assessed interest on tax deficiencies and underpayments to the extent attributable to prescribed categories of procedural error or delay committed by the IRS in the course of audits and other routine processes. A companion provision, section 6404(h), enacted in 1996, grants the Tax Court jurisdiction to review IRS abatement determinations for abuse of discretion. This paper analyzes the statutory language, legislative history, Treasury regulations, and other administrative materials, as well as post-1996 Tax Court opinions, toward identifying problematic factors that to date have frustrated the stated congressional intent. Recommendations for clarifying statutory amendments are noted."
  • Mark Jackson & Sonja Pippin, “Temporary” Tax Provisions and Uncertainty: Evidence from a Survey of Professional Tax Preparers, 11 J. Legal Tax Research 53 (2013)
  • Linda J. Campbell, Pamela C. Smith & J. Michael Hostetler, Traversing the Regulatory Maze of Charity Care: The Institutional Method and IRC §501(r), 11 J. Legal Tax Research 68 (2013): "The search for a concise definition of charity care continues to elude both practitioners and healthcare administrators. U.S. legislators recently took action by creating the new Internal Revenue Code (IRC) §501(r), mandating hospitals document and justify their tax-exempt status. The new provisions still do not provide a succinct definition of charity care, but may provide an opportunity to establish a quantifiable baseline of the normal level of charity care for hospitals. This paper looks to the history of charity care in the U.S., recent regulatory challenges, the theory of legal realism, and the institutional method to develop an approach to provide clear guidance on acceptable levels of charity care."
  • William A. Raabe, Cherie J. Hennig & John O. Everett, Deferral and Repatriation: A Proposal to Encourage Repatriation of Offshore Income, 11 J. Legal Tax Research 86 (2013):  "The need for U.S. tax laws to encourage and reward repatriation of offshore income is stronger than ever. We propose an approach that will penalize retaining earnings overseas, while rewarding entities that undertake a repatriation policy. The reward structure requires an accountable use of the repatriated funds for designated investments that further the economic needs goals of the U.S. Under our proposal, an interest charge would be assessed on unrepatriated offshore profits and would be reduced as various remission targets are met. The dividends-received deduction on repatriated earnings would increase as various remission and usage targets are met. A clawback provision would require the taxpayer to repay tax benefits received if there is a subsequent failure to meet the usage targets. The potential difficulties of operationalizing our proposal are identified and considered. A combination of the strategies developed in this proposal, perhaps in concert with features of other proposals, would encourage participating corporations to modify their cash management plans in ways that would provide a sustainable boost for the U.S. economy while also increasing tax revenues."

March 6, 2014 in Scholarship, Tax | Permalink | Comments (0)

Median GPAs for the 2015 U.S. News Law School Rankings

US NewsIn advance of Tuesday's release of the new 2015 U.S. News & World Report Law School Rankings: here is a spreadsheet of the 202 ABA-accredited law schools by median undergraduate GPAs for the law school class entering in Fall 2013 (which counts 10% in the forthcoming rankings). (Yesterday, I blogged the rankings by median LSAT scores.)

Here are the Top 52 law schools by median GPAs:

Rank

Law School

Median GPA

1

Chicago

3.90

1

Yale

3.90

3

Pennsylvania

3.89

4

Harvard

3.88

5

Stanford

3.87

5

Virginia

3.87

7

Alabama

3.86

8

Indiana

3.80

9

UCLA

3.79

9

Minnesota

3.79

11

UC-Berkeley

3.78

12

Duke

3.77

12

BYU

3.77

14

Northwestern

3.75

14

Emory

3.75

16

Georgetown

3.74

16

Vanderbilt

3.74

18

William & Mary

3.73

19

NYU

3.72

20

Michigan

3.71

20

G. Washington

3.71

22

Columbia

3.70

22

USC

3.70

24

Washington U.

3.69

24

Georgia

3.69

26

Texas

3.68

27

Boston U.

3.67

28

Cornell

3.66

29

Ohio State

3.65

30

U. Washington

3.64

31

SMU

3.63

32

Boston College

3.61

32

Nebraska

3.61

34

Notre Dame

3.60

35

Iowa

3.59

35

Florida Int’l

3.59

35

Pepperdine

3.59

38

Colorado

3.58

38

Wisconsin

3.58

38

Penn State

3.58

41

Arizona

3.57

41

Wake Forest

3.57

43

Illinois

3.56

43

Villanova

3.56

45

Florida

3.55

45

George Mason

3.55

45

UC-Davis

3.55

48

Arizona State

3.54

48

Tennessee

3.54

50

Baylor

3.53

50

Maryland

3.53

50

Northeastern

3.53

March 6, 2014 in Law School Rankings, Legal Education | Permalink | Comments (4)

Court Orders Divorced Dad to Pay 50% of $225k Cost for Estranged Daughter to Attend Cornell Law School; Dad Had Offered to Pay for Rutgers

Cornell LogoNational Law Journal:  Dad on the Hook For Half Daughter's Cornell Law Tuition, by Karen Sloan:

A father who’d agreed to shoulder half the cost of his daughter’s legal education—before she got into Cornell Law School, which costs $225,000 to attend—found no relief from a New Jersey court late last month. A two-judge appellate panel of the New Jersey Superior Court ruled that James Livingston’s divorce settlement obliges him to pay approximately $112,500 to help his daughter attend Cornell.

Livingston argued that circumstances including his estrangement from his daughter and her decision to attend an expensive private law school rather than a cheaper public school should relieve him of any obligation to help foot the bill. Judges Joseph Yannotti and Victor Ashrafi were unconvinced, and in an unpublished opinion on Feb. 20 upheld a lower court decision that Livingston must pay. ...

Livingston declined to pay a portion of her costs when asked, but offered to contribute $7,500 a year if the daughter went to Rutgers School of Law instead and lived at home. He complained that his daughter had not consulted him in her law school choice.

March 6, 2014 in Legal Education | Permalink | Comments (0)

IRS Low Income Taxpayer Clinic Program Report

TAThe IRS’s Low Income Taxpayer Clinic (LITC) Program Office issued its second annual program report on how LITCs assist thousands of low income taxpayers nationwide with pro bono representation, education, and advocacy services.

The LITCs provide free or low-cost assistance to low income taxpayers who have a tax dispute with the IRS, such as an audit or collection matter, and conduct education and outreach to taxpayers who speak English as a second language (ESL).  LITCs also advocate for low income taxpayers and highlight the need to change administrative practices and procedures that cause their clients economic hardship.

“The LITCs help taxpayers achieve favorable outcomes in cases, access benefits administered through the tax system, and resolve tax debts, levies, and liens.  During 2012, LITCs helped taxpayers secure more than $5.8 million in tax refunds and eliminate nearly $35.5 million in tax liabilities, penalties and interest,” said William P. Nelson, LITC Program Director.  The report provides an overview and history of the LITC Program, discusses the type of work the LITCs perform, and explains how their work helps ensure the fairness and integrity of the tax system. 

The LITC program has a three-prong mission to represent, educate, and advocate for taxpayers.  Included in the report are several stories that provide examples of how LITCs have helped taxpayers.  One taxpayer was facing a levy action that put her in danger of losing her home but the LITC was able to negotiate an offer in compromise to eliminate the debt and keep the taxpayer in her home.  LITCs employ staff but also rely on the contributions of volunteers.  In 2012, taxpayers benefited from over 59,000 volunteer hours provided by nearly 2,300 LITC volunteers.

The LITC program awards matching grants of up to $100,000 per year to qualifying organizations to develop, expand, or maintain a low income taxpayer clinic.  The grant program is administered by the Office of the Taxpayer Advocate at the IRS, led by the National Taxpayer Advocate.  Although LITCs receive partial funding from the IRS, LITCs, their employees and volunteers operate independently from the IRS.

LITC

March 6, 2014 in IRS News, Tax | Permalink | Comments (0)

Willis: Taxes and Religion -- The Hobby Lobby Contraceptive Cases

Hobby-lobbySteven J. Willis (Florida), Corporations, Taxes, and Religion: The Hobby Lobby and Conestoga Contraceptive Cases, 65 S.C. L. Rev. 1 (2013):

Beginning in 2013, the federal government mandates that general business corporations include contraceptive and early abortion coverage in employee health plans. Internal Revenue Code Section 4980D imposes a substantial excise tax on health plans violating the mandate. Indeed, for one company – Hobby Lobby – the expected annual tax is nearly one-half billion dollars. Dozens of “for profit” businesses have challenged the mandate on free exercise grounds, asserting claims under the First Amendment as well as under the Religious Freedom Restoration Act.

So far, courts have been reluctant to hold corporations have religious rights of their own; as a result, standing of a corporation to assert the religious beliefs and rights of owners has become the primary issue in the twenty-six separate cases moving through the courts. Courts are split on whether to grant standing; however, a large majority has used a variation of relational or associational standing to grant preliminary injunctions against enforcement of the tax.

This article discusses the relationship of morality and religion to general business corporations. It concludes that over the past few decades, movements for social justice and corporate social responsibility have intertwined business corporations and moral issues, blurring the line between religion and commerce. It also concludes that courts should permit associational standing for closely-held corporations – particularly those electing S status for tax purposes -- if the owners have unanimous (or near-unanimous) beliefs.

March 6, 2014 in Scholarship, Tax | Permalink | Comments (3)

The IRS Scandal, Day 301

New York Post editorial:  What is Lois Hiding?:

Where Lois Lerner goes, drama follows.

On Wednesday, the former IRS officer again invoked the Fifth before the House Oversight Committee. That precipitated a heated exchange between the committee’s Republican chairman, Darrell Issa, and Democratic ranking member Elijah Cummings, who called the hearings “un-American.” And that spat has become the story.

No doubt that is exactly what Cummings had in mind. Because it distracts attention from the substance of the hearings — and from the questions raised by e-mails and public remarks Lois Lerner wrote, received or made when she was IRS Director of Tax Exempt Organizations

Continue reading

March 6, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, March 5, 2014

Cain Presents Taxation of Same-Sex Couples After Windsor Today at Duke

CainPatricia Cain (Santa Clara) presents Taxation of Same-Sex Couples After United States v. Windsor: Did the IRS get it right in Revenue Ruling 2013-17? at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

The Windsor decision created a huge shift in tax treatment of same-sex spouses. But there are still many unresolved issues. Revenue Ruling 2013-17 is a step in the right direction as it resolves some of the issues that arose after Windsor, but there is still work to be done. As with sports, “it ain’t over until the fat lady sings.”

March 5, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Auten Presents New Perspectives on Income Mobility and Inequality Today at Penn

Penn 2014Gerald E. Auten (Office of Tax Analysis, U.S. Treasury Department) presents New Perspectives on Income Mobility and Inequality at Pennsylvania today as part of its Center for Tax Law & Policy Seminar Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

This study examines several dimensions of income mobility and inequality — mobility of individuals through their peak earnings years, intergenerational mobility, and persistence in the top 1 percent. Its main fi ndings can be summarized as follows. Half of those age 35–40 in the bottom quintile of their cohort moved to higher quintiles 20 years later; over 60 percent moved up relative to the full population. About 70 percent of dependents from low-income households were themselves in higher quintiles 20 years later. Younger generations gradually replaced those that dominated the top percentile in 1987. The results show the importance of life cycle effects and the changing composition of top income groups.

Figure 1

March 5, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Rethinking the Temporary Taxation Debate

Frank Fagan (Erasmus University Rotterdam), The Fiscal Cliff as Reelection Strategy: Rethinking the Temporary Taxation Debate, 116 W. Va. L. Rev. ___ (2014):

Recent scholarship [Rebecca Kysar, Lasting Legislation, 159 U. Pa. L. Rev. 1007 (2011); Frank Fagan & Michael Faure, The Role of Lawmakers, Lobbyists, and Interest Groups in the Normative Evaluation of Timing Rules, 160 U. Pa. L. Rev. PENNumbra 61 (2011)] contends that temporary tax provisions are socially costly because they increase rent-seeking activity and create uncertain investment environments. This Article challenges that view, and shows that, while temporary tax provisions may increase rent-seeking activity, such activity is not always socially costly; and while temporary tax provisions may create uncertain investment environments, such environments are not always unfavorable for private investors. The real problem with temporary tax provisions, simply put, is that legislators use them to win reelection and externalize a number of costs in the process.

Continue reading

March 5, 2014 in Scholarship, Tax | Permalink | Comments (0)

Disney's Frozen: Let It (Winter) Go, Chicago

(Hat Tip: Dan Rodriguez.)

March 5, 2014 in Legal Education, Tax | Permalink | Comments (0)

Median LSAT Scores for the 2015 U.S. News Law School Rankings

US NewsIn advance of Tuesday's release of the new 2015 U.S. News & World Report Law School Rankings:  here is a spreadsheet of the 202 ABA-accredited law schools by median LSAT scores for the law school class entering in Fall 2013 (which counts 12.5% in the forthcoming rankings).  Here are the Top 55 law schools:

Rank

Law School

Median LSAT

1

Harvard

173

1

Yale

173

3

Columbia

171

3

Stanford

171

5

Chicago

170

5

NYU

170

7

Duke

169

7

Pennsylvania

169

7

Virginia

169

10

Georgetown

168

10

Michigan

168

10

Northwestern

168

13

Cornell

167

13

UC-Berkeley

167

13

UCLA

167

13

Vanderbilt

167

17

Texas

166

17

USC

166

17

Washington U.

166

20

Boston U.

165

20

Emory

165

20

G. Washington

165

23

Alabama

164

23

Boston College

164

23

UC-Irvine

164

23

Minnesota

164

23

U. Washington

164

23

Washington & Lee

164

23

William & Mary

164

30

Fordham

163

30

Georgia

163

30

Notre Dame

163

33

Arizona State

162

33

Colorado

162

33

Indiana

162

33

SMU

162

33

UC-Davis

162

33

Wake Forest

162

39

BYU

161

39

George Mason

161

39

Iowa

161

39

North Carolina

161

39

Northeastern

161

39

Richmond

161

39

Wisconsin

161

46

Arizona

160

46

Baylor

160

46

Cardozo

160

46

Florida

160

46

Houston

160

46

Illinois

160

46

Ohio State

160

46

Pepperdine

160

46

Temple

160

46

Tulane

160

Jerry Organ (St. Thomas) analyzes the change in LSAT scores from the 2012 to 2013 classes among the 195 ABA-accredited law schools in the 48 contiguous states and Hawaii (thus excluding Belmont, LaVerne, UC-Irvine, and UMass):

[T]he entering first-year class average LSAT profile fell one point at all three measures [75th percentile/50th percentile/25th percentile] between 2012 and 2013, from 159.6/157/153.5 to 158.6/156/152.5.  The entering first-year class average LSAT profile fell roughly two points at all three measures between 2010 and 2013, from 160.5/158.1/155.2 to 158.6/156/152.5.

The average decline in median LSAT scores between 2012 and 2013 across U.S. News “tiers” of law schools was .98 among top 50 schools, 1.18 among schools ranked 51-99, .72 among schools ranked 100-144, and 1.13 among schools ranked alphabetically.

Notably, 133 law schools saw a decline in their median LSAT between 2012 and 2013, with 80 down one point, 38 down two points, 12 down three points, one down four points, one down five points and one down six points, while 54 law schools were flat and 7 saw an increase in their median LSAT.

In terms of schools experiencing “larger” declines in median LSAT scores between 2012 and 2013, five schools in the top 50 saw a three point decline in their median LSAT, five schools ranked 51-99 saw at least a three point decline (of which one was down four points), three schools ranked 100-144 saw a three point decline, and two schools ranked alphabetically saw large declines – one of five points and one of six points.

The average decline in median LSAT scores between 2010 and 2013 across U.S. News “tiers” of law schools was 1.54 among top 50 schools, 2.27 among schools ranked 51-99, 2.11 among schools ranked 100-144, and 2.79 among schools ranked alphabetically.  If one were to unpack the top 50 schools a little more, however, one would discover that the top 20 schools saw an average decline in their median LSAT of 1.05 between 2010 and 2013, while the bottom 15 schools in the top 50 saw an average decline in their median LSAT of 2.53.

In terms of schools experiencing “larger” declines in median LSAT scores between 2010 and 2013, three schools in the top 50 have seen declines of four or more points, nine schools ranked 51-99 have seen declines of four or more points, 11 schools ranked 100-144 have seen declines of four or more points and 17 schools ranked alphabetically have seen declines of four or more points.

When looking at the 2012-13 data in comparison with the 2010-2013 data, one sees that lower ranked schools have had more of a sustained challenge in terms of managing profile over the last few years, while schools ranked in the top 50 or top 100 had been managing profile fairly well until fall 2013 when the decreased number of high LSAT applicants really began to manifest itself in terms of impacting the LSAT profiles of highly ranked schools.

The overall decline in the LSAT profile of first-year students also can be demonstrated with two other reference points. In 2010, there were 74 law schools with a median LSAT of 160; in 2013, that number has fallen to 56.  At the other end of the spectrum, in 2010, there were only 9 schools with a median LSAT of less than 150 and only one with a median LSAT of 145. In 2013, the number of law schools with a median LSAT of less than 150 has more than tripled to 32, while the number of law schools with a median LSAT of 145 or less now numbers 9 (with the low now being a 143).

Update:  ABA Journal, Which Law Schools Have the Best LSAT Profiles? And How Many Are Struggling? Law Profs Have Answers

March 5, 2014 in Law School Rankings, Legal Education | Permalink | Comments (3)

Tax Provisions in President Obama's FY2015 Budget

Green BookPresident Obama yesterday released his Fiscal Year 2015 Budget. The Treasury Department released the 297-page Green Book (General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals) (revenue tables here).

March 5, 2014 in Tax | Permalink | Comments (2)

Cleveland State Offers Nation's First 'Risk-Free J.D.'

Cleveland StatePress Release, Cleveland-Marshall First School to Offer Risk-Free J.D. with ‘Convertible’ Degree Option:

Cleveland-Marshall College of Law at Cleveland State University is removing some of the personal and financial risk that goes along with committing to a three-year law degree.

Beginning this spring, if a J.D. student decides not to continue law school after completing the first year of studies, the student can graduate with a Masters in Legal Studies (M.L.S.) degree, without taking any additional courses.

“There are many good reasons why a law student may decide not to continue to pursue a J.D.,” said Craig M. Boise, dean of Cleveland-Marshall. “They might have financial concerns, family or personal issues, or they may realize that though they still have an interest in law, a career in traditional legal practice is not right for them. For these students, the first year of law school might have seemed like a waste, and a hard-to-explain item on their resumes. Now they can leave with a master’s degree that we believe will be attractive to employers.”

Update:   National Law Journal, 'Risk-Free' J.D. Offers Students a One-Year Escape Hatch

March 5, 2014 in Legal Education | Permalink | Comments (13)

AALS Call for Papers: Bringing Accounting, Finance, and Tax Into the Business Law Curriculum

AALSThe AALS Section on Agency, Partnerships LLCs, and Unincorporated Associations has issued a call for papers for the 2015 AALS Annual Meeting in Washington, D.C.:  Bringing Numbers into Basic and Advanced Business Associations Courses: How and Why to Teach Accounting, Finance, and Tax:

Business planners and transactional lawyers know just how much the “number-crunching” disciplines overlap with business law. Even when the law does not require unincorporated business associations and closely held corporations to adopt generally accepted accounting principles, lawyers frequently deal with tax implications in choice of entity, the allocation of ownership interests, and the myriad other planning and dispute resolution circumstances in which accounting comes into play. In practice, unincorporated business association law (as contrasted with corporate law) has tended to be the domain of lawyers with tax and accounting orientation. Yet many law professors still struggle with the reality that their students (and sometimes the professors themselves) are not “numerate” enough to make these important connections. While recognizing the importance of numeracy, the basic course cannot in itself be devoted wholly to primers in accounting, tax, and finance.

The Executive Committee will devote the 2015 annual Section meeting in Washington to the critically important, but much-neglected, topic of effectively incorporating accounting, tax, and finance into courses in the law of business associations. In addition to featuring several invited speakers, we seek speakers (and papers) to address this subject. Within the broad topic, we seek papers dealing with any aspect of incorporating accounting, tax, and finance into the pedagogy of basic or advanced business law courses.

Any full-time faculty member of an AALS member school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper in this area is invited to submit a 1 or 2-page proposal by May 1, 2014 (preferably by April 15, 2014). The Executive Committee will review all submissions and select two papers by May 15, 2014. A very polished draft must be submitted by November 1, 2014. The Executive Committee is exploring publication possibilities, but no commitment on that has been made. All submissions and inquiries should be directed to Jeff Lipshaw.

March 5, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 300

Tuesday, March 4, 2014

1L Enrollment Fell More Than 20% at 40 Law Schools in 2013

National Law Journal:  ABA Releases Details of Law Schools Enrollment Declines, by Karen Sloan:

ShrunkSome law schools fared much worse than others as enrollment declined last year, according to data released by the American Bar Association.

Thirteen law schools saw 1L enrollment drop by 30 percent or more in the span of 12 months, while an additional 27 recorded declines of 20 to 30 percent. In all, 132 of the 199 ABA-accredited law schools saw declines in their 1L classes, while eight schools saw no change in new enrollment.

Slightly more than a quarter of schools—62—actually posted 1L enrollment gains.

The ABA had reported in December that new student enrollment had declined significantly last fall, and the latest figures put the decline at 8 percent. The organization also offered a school-by-school breakdown of its findings.

New England School of Law saw the largest single-year decline in 1Ls, according to the ABA’s statistics. The Boston school enrolled 238 new students last fall, compared to 450 the previous year—a 47 percent decline.

NLJ

Here are the 25 law schools with the biggest enrollment decreases and increases:

Rank

Law School (US News Rank)

2013 Enrollment Decline

1

New England (Tier 2)

47.1%

2

Washington & Lee (26)

40.6%

3

Iowa (26)

40.0%

4

McGeorge (124)

36.9%

5

Hawaii (80)

35.3%

6

Cooley (Tier 2)

35.1%

7

Case Western (68)

35.1%

8

Golden Gate (Tier 2)

33.9%

9

Quinnipiac (134)

33.9%

10

Hofstra (113)

32.4%

11

Florida A&M

32.3%

12

Arizona Summit (Tier 2)

30.2%

13

Widener (Tier 2)

30.2%

14

Saint Louis (102)

29.3%

15

Hamline (126)

29.0%

16

San Francisco (144)

27.7%

17

Miami (76)

27.7%

18

New York Law School (Tier 2)

27.3%

19

Roger Williams (Tier 2)

26.5%

20

Villanova (98)

26.4%

21

Loyola-Chicago (76)

25.8%

22

Mississippi (102)

25.4%

23

Regent (Tier 2)

25.4%

24

Appalachian (Tier 2)

25.3%

25

UC-Davis (38)

24.9%

 

Rank

Law School (US News Rank)

2013 Enrollment Increase

1

Puerto Rico (n/r)

64.3%

2

Mercer (105)

44.2%

3

Wake Forest (36)

43.2%

4

Samford (113)

43.0%

5

Tennessee (61)

31.7%

6

John Marshall (Atlanta) (n/r)

29.8%

7

Valparaiso (Tier 2)

27.6%

8

St. Mary’s (140)

25.4%

9

Colorado (44)

21.1%

10

George Washington (21)

20.9%

11

St. Thomas (Florida) (Tier 2)

20.8%

12

Rutgers-Camden (91)

20.7%

13

Southern Illinois (140)

18.8%

14

Pace (134)

16.3%

15

Howard (126)

16.2%

16

William & Mary (33)

15.3%

17

Catholic (80)

14.2%

18

Baylor (54)

14.0%

19

La Verne (n/r)

13.6%

20

Missouri (Kansas City)

12.4%

21

South Dakota (Tier 2)

11.3%

22

Western New England (Tier 2)

11.1%

23

Florida (46)

10.6%

24

Utah (41)

10.3%

25

Northeastern (86)

10.1%

Jerry Organ (St. Thomas) notes the change in 1L enrollment from 2010 to 2013:

Between fall 2010 and fall 2013, the 195 law schools in the 48 contiguous states and Hawaii fully-accredited by the ABA’s Section for Legal Education and Admissions to the Bar as of 2010 (excluding Belmont, LaVerne, California-Irvine, and Massachusetts-Dartmouth), experienced the following first-year enrollment changes:

28 schools had a decline in first-year enrollment of 40% or more,
29 schools had a decline in first-year enrollment of 30% to 39.99%
43 schools had a decline in first-year enrollment of 20% to 29.99%
43 schools had a decline in first-year enrollment of 10% to 19.99%
36 schools had a decline in first-year enrollment of 0% to 9.99%
10 schools had an increase in first-year enrollment of 0.01%to 9.99%
6 schools had an increase in first-year enrollment of 10% or more.

Overall, more than half (100) had a decrease in first-year enrollment of at least 20%, while only roughly 8% (16) had any increase in first-year enrollment.

Across these 195 schools, first-year enrollment declined from 50,408 to 38,773, a drop of 23.1%. The average decline in first-year enrollment across U.S. News “tiers” of law schools was 14.7% among top 50 schools, 22.5% among schools ranked 51-99, 22.8% among schools ranked 100-144, and 26.8% among schools ranked alphabetically.

March 4, 2014 in Legal Education | Permalink | Comments (5)

Hines & Logue Present Delegating Tax Today at NYU

PixJames R. Hines, Jr. (Michigan) & Kyle D. Logue (Michigan) present Delegating Tax at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

Congress delegates extensive and growing lawmaking authority to federal administrative agencies in areas other than taxation, but tightly limits the scope of IRS and Treasury regulatory discretion in the tax area, specifically not permitting these agencies to select or adjust tax rates. This Article questions why tax policy does and should differ from other policy areas in this respect, noting some of the potential policy benefits of delegation. Greater delegation of tax lawmaking authority would permit policies to benefit from the expertise of administrative agencies, and afford timely adjustment to changing economic circumstances. Furthermore, delegation of the tax reform process to an independent commission or agency offers the prospect of Congress commiting itself to rational reform and long-run budget sustainability in a way that is more apt to succeed than are piecemeal legislative efforts. The Article concludes with an analysis of the constitutionality of tax delegation, noting the applicability of recent Supreme Court interpretations that Congress has broad discretion to delegate rulemaking authority to federal agencies, and that tax policy is of a kind with other federal policies.

March 4, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Go Ahead, Let Your Kids Fail

Following up on my prior post, Why Failing Well Is the Key to Success:  Bloomberg, Go Ahead, Let Your Kids Fail, by Megan McArdle:

UpI’m on the road this week, giving talks on my new book [The Up Side of Down: Why Failing Well Is the Key to Success (2014)] about learning to fail better: that is, first, to give ourselves the permission to take on challenges where we might very well fail; second, to pick ourselves up as quickly as possible and move on when things don’t work out. This is, I argue, vital on a personal level, as well as vital for the economy, because that’s where innovation and growth come from.

The other day, after one of my talks, a 10th-grade girl came up and shyly asked if I had a minute. I always have a minute to talk to shy high school sophomores, having been one myself.

And this is what she asked me:

“I understand what you’re saying about trying new things, and hard things, but I’m in an International Baccalaureate program and only about five percent of us will get 4.0, so how can I try a subject where I might not get an A?”

I was floored. All I could think as I talked to this poor girl is “America, you’re doing it wrong.”

I was 15 in 10th grade. If you can’t try something new in 10th grade, when can you? If you can’t afford to risk anything less than perfection at the age of 15, then for heaven’s sake, when is going to be the right time? When you’re ready to splash out on an edgy assisted-living facility?

Now is when this kid should be learning to dream big dreams and dare greatly. Now is when she should be making mistakes and figuring out how to recover from them. Instead, we’re telling one of our best and brightest to focus all her talent on coloring within the lines. This is not the first time I’ve heard this from kids and teachers and parents. But I’ve never heard it phrased quite so starkly. ...

Do we want a society that dreams new things and then makes them happen? I hear that we do, every time I hear a teacher, or a politician, give a speech. So why are we trying so hard to teach the next generation to do the exact opposite?

March 4, 2014 in Book Club, Legal Education, Tax | Permalink | Comments (2)

Case Western Dean Mitchell, Facing Sexual Harassment Allegations and Prof's Lawsuit, Resigns

Bartlett: Tax Reform’s Hard-to-Find Payoff

New York Times:  Tax Reform’s Hard-to-Find Payoff, by Bruce Bartlett:

I have previously discussed the academic research on the Tax Reform Act of 1986, especially the authoritative article in the June 1997 issue of the Journal of Economic Literature by Alan J. Auerbach of the University of California, Berkeley, and Joel Slemrod of the University of Michigan, which found almost no “real” effects on the economy despite massive changes in tax rates and the tax base. The bulk of the effects they could find simply consisted of superficial accounting and portfolio changes.

This is not to say that tax reform isn’t a good idea from time to time, if only to clear away some accumulated brush that grows in the tax code, do some streamlining, combine duplicative tax provisions, deal with legislative fixes required by court cases, codify regulatory rulings, patch glaring holes and so on.

Unfortunately, Congress is no longer interested in such routine legislating. Especially in the tax area, the issues are so politicized that there is no legislation that can be considered noncontroversial. Every tax bill quickly becomes a train to which a long list of legislative amendments can be attached, which requires an ever more powerful locomotive just to get out of the station.

Given the state of the economy, faster growth is the obvious engine that tax reform supporters hope can provide traction. Hence, more than the usual amount of effort has been put into calculating the precise economic effects of the tax reform draft released last week by Representative Dave Camp, Republican of Michigan and chairman of the House Ways and Means Committee. His news release promises 1.8 million new private-sector jobs and an increase in the gross domestic product of $3.4 trillion.

Continue reading

March 4, 2014 in Tax | Permalink | Comments (0)

Bilionis Will Not Seek Third Term as Cincinnati Dean

BilionisLouis Bilionis, Dean of the University of Cincinnati College of Law since 2005, has announced that he will not seek a third term as dean and will return to the faculty on July 1, 2015.  Lou has been a spectacular dean in every respect, but these three decanal attributes stand out to me:

The Dean as Intellectual Leader.  Prior to coming to Cincinnati, Lou was the Samuel Ashe Distinguished Professor of Constitutional Law at North Carolina and had a distinguished publication record (including articles in the Emory Law Journal, Georgetown Law Journal, Michigan Law Review (2), North Carolina Law Review (3), Texas Law Review, and UCLA Law Review).  He was a voracious reader of faculty drafts, and would offer constructive suggestions that always improved the pieces and their placement.  At workshops, he would typically hang back and then offer trenchant observations that invariably pushed the speaker in new and unanticipated directions.  In annual performance reviews, he would prod faculty to expand their scholarly ambitions.

The Dean as Institutional Leader.  Lou's leadership style combined a deep commitment to faculty governance with an action-oriented mindset.  He would solicit faculty views on issues and then lead the school toward those shared goals.  I have never seen a dean accomplish so much with so little faculty pushback.  And I have never seen a dean navigate a university bureaucracy on behalf of a law school with such skill and success.

The Dean as Inspiring Leader.  Lou has an infectious enthusiasm that ennobles those around him.  His relentlessly positive attitude rubs off on faculty, students, staff, and alumni.  He is one of those rare people who breathe life into those around him.  These qualities have never been more crucial than in this time of crisis for legal education.

I have been thinking about Lou quite a bit as I prepared my recent talk on The Role of Faculty Scholarship at Faith-Based Law Schools.  One of the great privileges of my career was serving as his Associate Dean of Faculty in 2007-10, and much of what I know about legal education I learned from him.  Lou was a great dean and colleague, and an even better friend.  He and I share a love of baseball, and I will never forget our too-infrequent trips to Great American Ballpark to watch the Reds and spend hours chatting about life, family, and legal education.  My wife rightly says that the greatest contribution I made in my 20+ years at Cincinnati was serving on the dean search committee that recruited Lou to come to Cincinnati.

March 4, 2014 in Legal Education | Permalink | Comments (2)

ACTEC Issues Call for Proposals for $20,000 Grant to Host T&E Symposium

ACTECThe Legal Education Committee of the American College of Trust and Estate Counsel requests proposals for a $20,000 grant to host a symposium on trust and estate law during academic year 2015-2016:

The ACTEC Foundation Symposium is intended to be the premier academic symposium on trust and estate law in the United States. The goals of the symposium are to stimulate development of scholarly work in trust and estate law, to bridge the gap between the academic community and practitioners, to provide opportunities for junior academics to present papers and interact with more senior academics, to provide an opportunity for trust and estate professors to interact with each other, to involve academics from other disciplines in discussions of trust and estate topics, and to strengthen ACTEC’s image as the leading organization for trust and estate lawyers, both practitioners and academics.

Please submit your proposal by April 15, 2014 to Susan Gary or Nancy McLaughlin.

March 4, 2014 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Disinherit the IRS

Disinherit the IRS:

DisinheritDisinherit the IRS is a well-written, easy-to-read and comprehensive estate planning and wealth protection guide that was originally published in 2001. It evolved in response to requests from fellow Americans who feared the fruits of their life's work was under assault by a growing litigious society and tax hungry government. This updated 2014 edition will help you understand current estate tax laws and how they impact the most popular estate planning tools, including trusts and life insurance. You will also gain insight into lawful wealth protection strategies used by real families as well as vital information on how to leave your assets to heirs and favorite causes and not the IRS. Family wealth protection expert and author of Disinherit the IRS, E. Michael Kilbourn recruited estate planning attorney Brad A. Galbraith for the 2014 edition as an extra guarantee that every chapter reflects the most sound advice based on today's laws. In this book, you will discover how to: remove assets from your taxable estate without losing control of them or the income they generate, make a profit by donating to charity, effectively exempt your entire estate from state taxes, avoid capital gains taxes on the sale of your appreciated property and eliminate state taxes on your assets at your death. In essence, you will learn how to leave what you have to whom you want, when you want and in the way you want while minimizing possible court costs, attorney fees and estate taxes.

March 4, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Lawyer Forms Church of Jesus Christ and Latter Day Austrian Economists to Funnel Money to Avoid Paying Sanctions

ABA Journal, Lawyer Founded Fake Church to Funnel Money While Saying He Couldn’t Pay Sanctions, Judge Says:

A federal judge says a Minneapolis lawyer enjoyed restaurant meals, liquor and tanning while claiming he couldn’t afford to pay $80,000 in sanctions and attorney fees imposed for making frivolous arguments in a suit against banks.

U.S. District Judge Patrick Schiltz held lawyer William Butler in civil contempt on Tuesday, the Minneapolis Star Tribune reports. “Far from making a good-faith attempt to pay the sanctions,” Schiltz said, “Butler has openly flouted them—and used his defiance as a marketing tool to attract new clients.”

Schiltz said Butler created the Church of Jesus Christ and Latter Day Austrian Economists, which funnels money from his law firm to pay his living expenses, and he had an average monthly gross income of more than $64,000 between February 2012 and October 2013. His net income, according to a stipulation in a March 2013 divorce settlement, was $6,000 to $7,200 a month.

For a portion of August 2013, while under a court order to pay sanctions, Butler spent $1,500 on restaurant meals, liquor, and yoga, according to Schiltz’s opinion (PDF). In September 2013, he spent more than $1,700 on restaurant meals, liquor, yoga, tanning, and kettlebell equipment.

(Hat Tip: Jim Maule.)

March 4, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 299

Monday, March 3, 2014

Galle Presents Nonprofit Executive Pay as an Agency Problem Today at Pepperdine

GalleBrian D. Galle (Boston College) presents Nonprofit Executive Pay as an Agency Problem: Evidence from U.S. Colleges and Universities (with David I. Walker (Boston University)) at Pepperdine today as part of its Tax Policy Colloquium Series hosted by Paul Caron:

We analyze the determinants of the compensation of private college and university presidents from 1999 through 2007. We find that the fraction of institutional revenue derived from current donations is negatively associated with compensation and that presidents of religiously-affiliated institutions receive lower levels of compensation. Looking at the determinants of contributions, we find a negative association between presidential pay and subsequent donations. We interpret these results as consistent with the hypotheses that donors to nonprofits are sensitive to executive pay and that stakeholder outrage plays a role in constraining that pay. We discuss the implications of these findings for the regulation of nonprofits and for our broader understanding of the pay-setting process at for-profit as well as nonprofit organizations. 

Brian D. Galle (Boston College) & David I. Walker (Boston University), Sunshine, Stakeholders, and Executive Pay: A Regression-Discontinuity Approach:

We evaluate the effect of highly salient disclosure of private college and university president compensation on subsequent donations using a quasi-experimental research design. Using a differences-in-discontinuities approach to compare institutions that are highlighted in the Chronicle of Higher Education’s annual "top 10" list of most highly-compensated presidents against similar others, we find that appearing on a top 10 list is associated with reduced average donations of approximately 4.5 million dollars in the first full fiscal year following disclosure, despite greater fundraising efforts at "top 10" schools. We also find some evidence that top 10 appearances slow the growth of compensation, while increasing fundraising and enrollment, in subsequent years. We interpret these results as consistent with the hypothesis that donors care about compensation and react negatively to high levels of pay, on average; but (absent highly-salient disclosures) are not fully informed about pay levels. Thus, while donors represent a potential source of monitoring and discipline with respect to executive pay in the nonprofit sector, significant agency problems remain. We discuss the implications of these findings for the regulation of nonprofits and for our broader understanding of the pay-setting process at for-profit as well as nonprofit organizations.

Salaries

Update:  Post-presentation lunch:

Photo

 

March 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Improving Job Prospects for Law Grads (Especially Those Who Pass the Bar on Their First Attempt)

The Legal Whiteboard:  Is the Employment Market for Law Graduates Going to be Improving?, by Jerry Organ (St. Thomas):

this post will focus solely on the market for full-time, long-term Bar Passage Required jobs. Initially, it will analyze those jobs in relation to all graduates; then it will look more specifically at the percentage of graduates who are likely to be eligible for Bar Passage Required jobs for whom full-time, long-term Bar Passage Required jobs likely will be available, a point on which few others appear to have focused up until now. ...

Classes of 2014, 2015, 2016, 2017 – An Improving Dynamic.  What are the employment prospects for those currently in law school or considering starting law school in the fall of 2014? They almost certainly will be getting better – not necessarily because there will be more jobs, but because there will be fewer graduates. ...

Even if the number of full-time, long-term Bar Passage Required jobs does not continue to rebound, but plateaus at 26,000, as the number of graduates declines over the next few years, the percentage of law graduates obtaining a full-time, long-term Bar Passage Required job ... will grow to between 77% and 84% by 2017 (depending upon first-year enrollment in fall 2014) [from 56% in 2012]. ...

Even if we assume no growth in the number of full-time, long-term Bar Passage Required jobs in the coming years and simply hold the number of such jobs at a constant 26,000, the decreasing number of law graduates will mean an even more improved employment market for those seeking full-time, long-term Bar Passage Required jobs who will be eligible for those jobs by virtue of having passed the bar exam on their first attempt, increasing from nearly 70% in 2012 and 2013 to nearly 90% by 2016 and over 90% by 2017. ...

Whether this improving employment situation will be enough to change the trend in terms of declining number of applicants to law school remains to be seen.  While the future may be brightening, the "news" in the coming weeks will be the report on employment outcomes for 2013 graduates nine months after graduation.  As noted above, that may be somewhat uninspiring because any increase in the number of full-time, long-term Bar Passage Required jobs may be masked by the larger number of graduates in 2013 compared to 2012.  As a result, potential law school applicants may remain reluctant to make the commitment of time and money that law school requires because the "good news" message regarding future employment prospects for law graduates may fail to gain traction if the messages about employment outcomes for recent law school graduates continue to be less than encouraging.

March 3, 2014 in Legal Education | Permalink | Comments (3)

It's All Downhill After 40

GeniusBenjamin Jones (Northwestern University, Kellogg School of Management), E.J. Reedy (Director, Kauffman Foundation) & Bruce A. Weinberg (Ohio State University, Department of Economics), Age and Scientific Genius:

Great scientific output typically peaks in middle age. A classic literature has emphasized comparisons across fields in the age of peak performance. More recent work highlights large underlying variation in age and creativity patterns, where the average age of great scientific contributions has risen substantially since the early 20th Century and some scientists make pioneering contributions much earlier or later in their life-cycle than others. We review these literatures and show how the nexus between age and great scientific insight can inform the nature of creativity, the mechanisms of scientific progress, and the design of institutions that support scientists, while providing further insights about the implications of aging populations, education policies, and economic growth.

NBER

(Hat Tip:  Greg Mankiw.)

March 3, 2014 in Legal Education, Tax | Permalink | Comments (3)

Tax Court Issues 63-Page Opinion Debunking Cracking the Code Book

CodeWaltner v. Commissioner, T.C. Memo. 2014-35 (Feb. 27, 2014):

This case has occupied an inordinate amount of the Court’s time. The Court could have disposed of the entire matter summarily by reference to Crain v. Commissioner [737 F.2d 1417 (5th Cir. 1984)] or any number of other cases that stand for the proposition that we need not address frivolous arguments. After all, Mr. Waltner asserted frivolous arguments, and even after the Court rejected those arguments and warned him about potential sanctions under section 6673, he continued to press those arguments. The Court has taken the time, however, to address those arguments because Mr. Waltner appears to be perpetuating frivolous positions that have been promoted and encouraged by Peter Hendrickson’s book Cracking the Code: The Fascinating Truth About Taxation in America (2007). Indeed, it appears not merely that Mr. Waltner’s positions are predicated on that book but that his returns and return information have been used to promote the frivolous arguments contained in that book. Consequently, a written opinion is warranted.

Judicial opinions are the “‘heart of the common law system’” and serve as “a critical component of what we understand to be the ‘law.’”8 Statutes and regulations provide simply an outline; judicial opinions fill in the details by providing the rule of law the court applied, the court’s rationale in applying that law, and the underlying facts.Judicial opinions serve many purposes: they assist attorneys in advising clients and preparing cases; they provide the lower court’s rationale when the appellate court must evaluate its decision; they inform the public of the court’s analysis; and they establish clear and articulate rules for the future. It is with these purposes in mind that we address whether Mr. Waltner’s conduct merits sanctions while addressing the underlying frivolous positions upon which he relies and which he perpetuates by allowing his return information to be used.

Conclusion. Mr. Waltner took a series of frivolous positions that have repeatedly been rejected by the courts. Even after this Court cautioned him that he was making frivolous arguments, he continued to advance them, and his conduct merits sanctions. The Court is authorized to impose sanctions of up to $25,000. In the hope that Mr. Waltner heeds this warning, the Court imposes a penalty under section 6673 of $2,500. Mr. Waltner has other matters pending in this Court in which he is asserting arguments similar to those presented in this case, and he has now been cautioned in both an order and this opinion. We hope that he will heed the warning. And future litigants are on notice that the positions advanced in Cracking the Code are frivolous and relying on those positions may result in sanctions.

Update:  Joe Kristan has more here.

March 3, 2014 in Tax | Permalink | Comments (1)

Warren: Deferral and Exemption of the Income of Foreign Subsidiaries

Alvin C. Warren (Harvard), Deferral and Exemption of the Income of Foreign Subsidiaries: A Review of the Basic Analytics:

Current proposals to replace the U.S. foreign tax credit with an exemption for the income of foreign subsidiaries of U.S. companies make timely a review of the basic analytics of taxation under the two systems. This brief note reviews the key relationships, highlighting some that are not always fully appreciated in policy discussions.

March 3, 2014 in Scholarship, Tax | Permalink | Comments (0)

NLJ: Corrected Law School Rankings by Graduates in BigLaw Jobs

I am re-publishing the ranking of law schools by graduates in BigLaw jobs because the National Law Journal has issued a correction:  "We mistakenly omitted five University of Chicago graduates who were hired by Mayer Brown. The addition of these associates brings the percentage of 2013 Chicago graduates at NLJ 250 firms to 55.34%, which moves them from the No. 4 spot to No. 2."

Go to Law SchoolsLarge law firm associate hiring ticked up for a second straight year in 2013—welcome news, considering law schools sent more newly minted juris doctors into the job market than ever before. Among the 50 schools most popular with hiring firms, 27 percent of graduates landed associate jobs—up from 25 percent in 2012. That was the highest hiring percentage recorded since 2010.

We’ve ranked the top 50 law schools by the percentage of 2013 law school graduates who took jobs at NLJ 250 firms—the nation’s largest by headcount as identified in The National Law Journal’s annual survey. We’ve also identified the law schools that saw the most alumni promoted to partner during 2013, and compared how each law school’s cost compares to its large firm hiring record.

The Top 50 Go-To Law School:  These schools sent the highest percentage of new graduates to NLJ 250 firms:

Rank Law School 2013 Grads @ NLJ 250 2013 JDs % of Grads @ NLJ 250 Tuition
1 Columbia 286 437 65.45% $55,488
2 Chicago 119 215 55.34% $50,727
3 NYU 295 537 54.93% $51,150
4 Harvard 309 577 53.55% $50,880
5 Pennsylvania 136 259 52.51% $53,138
6 Northwestern 146 286 51.05% $53,468
7 Duke 117 241 48.55% $51,662
8 Stanford 89 189 47.09% $50,802
9 Cornell 87 193 45.08% $55,301
10 UC-Berkeley 135 301 44.85% $48,068
11 Virginia 161 364 44.23% $46,400
12 Michigan 165 400 41.25% $48,250
13 Yale 80 206 38.83% $53,600
14 Georgetown 238 638 37.30% $48,835
15 Texas 120 378 31.75% $32,376
16 Vanderbilt 65 206 31.55% $46,804
17 UCLA 101 332 30.42% $45,221
18 USC 65 220 29.55% $52,598
19 Fordham 118 481 24.53% $49,526
20 Notre Dame 45 184 24.46% $45,980

March 3, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

Galle & Tobin: Comments on the Proposed § 501(c)(4) Regulations

Brian D. Galle (Boston College) & Donald B. Tobin (Ohio State), Comments on Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities:

The Notice is a good first step. It creates bright-line standards that are easy to apply and that will eliminate much of the gray area regarding permissible political activity. Clearer lines will reduce the discretion on the part of the IRS. By decreasing the IRS’s discretion, the regulation will reduce the opportunity for the IRS to be used as a political tool in an Administration’s tool box.

However, the Notice does not go far enough. Congress has established a regulatory regime that has as its central purpose the disclosure of any significant campaign contributions by individuals or firms. In recent years many organizations have exploited the confidentiality rules of § 501(c)(4) to evade that regime, to the detriment not only of U.S. political discourse but also the non-profit sector. The Final Rule should ensure that groups with significant partisan political activity cannot obtain exemption under § 501(c)(4), or indeed under any parallel provision of § 501.

We believe, however, that groups carrying out "substantial" electioneering activities should generally be eligible for exemption under § 527, and that the IRS should make that clear in the Final Rule. The main consequence of any ruling denying § 501(c)(4) status based on the political activity of the organization, therefore, would simply be to require the disclosure of an organization’s donors, and to ensure that the organization’s political expenditures are disclosed contemporaneously with the election they seek to influence.

Continue reading

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

Mulligan: ObamaCare's Multiple Taxes Are Shackling the Job Market

New York Times:   The Affordable Care Act’s Multiple Taxes, by Casey B. Mulligan (University of Chicago, Department of Economics):

The Affordable Care Act contains at least two economically distinct taxes on labor market activity. Even the experts on the law have failed to recognize all of them. 

The Affordable Care Act tries to make health insurance affordable by offering means-tested subsidies and tax credits to households so they can make their payments for monthly health insurance premiums and out-of-pocket health expenses like deductibles and copayments for medical services.

Under the Affordable Care Act, only a small minority of workers is expected to get subsidized coverage. So economists concluded that aggregate labor market effects of the new law would be minimal.

I would agree if the implicit income tax were the only new tax on labor market activity in the new law. But there’s more: The Affordable Care Act also contains a new implicit tax on employment that affects far more people than its implicit income tax does. ...

Income taxes and employment taxes are not the same, because the income tax is based on income and the employment tax is based on employment. Two households with the same family structure (in number and age of family members) and annual income who live in the same county will not necessarily get the same assistance from the Affordable Care Act. The household that is employed more months of the year is likely to get less assistance (and maybe no assistance) from the new law, because the law requires that, during the months that they are employed, full-time workers get health coverage from their employer before they turn to the new health insurance marketplaces for federal government subsidies. ...

As far as I know, before this month the only place that one could read about the Affordable Care Act’s new employment tax was in this paper [Perverse Incentives Arising from the Tax Provisions of Healthcare Reform: Why Further Reforms Are Needed to Prevent Avoidable Costs to Low- and Moderate-Income Workers, 65 Tax L. Rev. 669 (2012)] by David Gamage, in posts I have written for this blog, in my 2012 book or in a 2013 paper. Even though the consequences of the law have been debated at least as far back as 2009, the law’s advocates have yet to acknowledge the new implicit employment tax, let alone estimate the number of people who will face it.

But in a recent paper, the Congressional Budget Office has joined me in explaining that it’s not just the implicit income tax that will contract the labor market. As the paper puts it, “The loss of subsidies upon returning to a job with health insurance is an implicit tax on working,” adding that the effect of the new tax is “similar to the effect of unemployment benefits” (see Page 120).

Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.

March 3, 2014 in Tax | Permalink | Comments (1)

The IRS Scandal, Day 298

TaxProf Blog Weekend Roundup

Sunday, March 2, 2014

A Taxing Oscars: $80,000 Swag Bags, Tax Policy, and Divorce in Blue Jasmine

1.  IRS, Gift Bag Questions and Answers:

OscarQ: What are the federal income tax consequences to a person who accepts a gift bag in recognition of involvement in an awards show?
A: In general, the person has received taxable income equal to the fair market value of the bag and its contents and must report that amount on his or her federal income tax return. ...

Q:  If these are gifts, why do they have to be treated as income?
A:  These gift bags are not gifts for federal income tax purposes because the organizations and merchants who participate in giving the gifts bags do not do so solely out of affection, respect, or similar impulses for the recipients of the gift bags.

Q: Can the recipient take a charitable contribution deduction if he or she contributes the gift bag to charity? 
A: If the gift bag is donated to a qualified charitable organization, the recipient may be able to take a tax deduction for his or her charitable contribution, subject to applicable limitations and requirements. But this does not change the taxability of the value of the items.  The fair market value must still be reported on the celebrity recipient’s federal income tax return.

2.  U.S. News & World Report, And the Winner of the 'Worst Tax Policy' Oscar Is ..., by Matthew Mitchell (George Mason University):

Film subsidies from the government are a waste of money.

TaxProf Blog, The Wolf of Wall Street Wins Oscar for Best Tax Break:

E21

3.  Forbes:  Tax Lessons From Woody Allen's 'Blue Jasmine', by Peter J. Reilly:

Blue JasmineI have just a couple of tips that can greatly reduce post marital stress. They fly in the face of conventional wisdom, but they are based on extensive reading of Tax Court decisions. The recommendations are that you not file a joint return for the final year of the marriage and that non-custodial parents not expect to be able to claim dependency deductions.

The recommendations fly in the face of conventional wisdom, because planners assume that people are rational and want to minimize their aggregate tax liability and will then equitably share the savings. Only in rare circumstances will separate filing produce a lower tax liability. The dependency deduction may be more valuable to a non-custodial parent. So if you are having one of those friendly divorces, my advice might not be applicable to you. Of course there is a term for a couple that can navigate all the complexities of a divorce without the least bit of anger and recrimination and irrationality. The term is “still married”. Since both my recommendations are unconventional, they both merit a bit of discussion. ...

The movie Blue Jasmine might be a better warning on the perils of filing jointly with a financially sketchy spouse. Of course Jasmine’s failure to follow her friend’s advice with regard to joint filing was not her only mistake. There is, however, a strong argument for the more financially sophisticated half of the couple to not ask for a joint return, even though it costs extra taxes.

March 2, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

WSJ: How to Minimize the Damage of the AMT

Wall Street Journal Tax Report:  Beware the Stealth Tax: How to Minimize the Damage of the Alternative Minimum Tax, by Laura Saunders:

According to estimates by the Tax Policy Center, a nonpartisan research group in Washington, the alternative minimum tax will raise about $26 billion from four million taxpayers in 2013, nearly two-thirds of them with incomes between $200,000 and $500,000 (see chart on this page).

April 15

The average AMT paid by those subject to it was $7,212 in 2011, according to the most recent data from the IRS. ...

Years ago, say experts, the AMT was typically owed by wealthy investors or executives who had benefited from breaks for incentive stock options, accelerated depreciation on assets, intangible drilling costs and the like.

Maxing OutBut not now. Lawmakers enacted adjustments that prevented 28 million new taxpayers from owing AMT for 2013 in last year's fiscal-cliff legislation. But they didn't undo the effects of many earlier years of inflation that still pulls in many others, says Roberton Williams, a Tax Policy Center expert. As a result, the AMT now applies to eight times as many taxpayers as it did 20 years ago, and common AMT "triggers" often are less esoteric than in the past. ...

While avoiding the AMT will be impossible for some taxpayers, experts recommend three overall strategies.

The first is to reduce reported income wherever possible, such as by contributing to tax-sheltered retirement plans and using pretax dollars to pay medical or child-care expenses. Small-business owners should try to claim expenses on a Schedule C business form rather than on their personal returns. IRA owners 70½ and older should consider making charitable contributions of IRA assets instead of cash, assuming Congress reinstates this expired benefit for 2014.

The second strategy is to check out the tax effects of unusual increases or decreases in income, such as a large capital gain or a loss of income, and plan for its effects over several years, not just one. Careful planning could help avert the AMT or perhaps take advantage of a temporary hiatus in the tax.

Finally, never guesstimate the AMT. The tax is so complex that even the experts say they can't predict it. Says Mr. Kautter: "Run the numbers, run the numbers and run the numbers."

March 2, 2014 in Tax | Permalink | Comments (1)

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 on SSRN, with a new paper debuting on the list at #4:

  1. [330 Downloads]  The Economics of Tax Law, by Daniel Shaviro (NYU)
  2. [287 Downloads]  Important Developments in Federal Income Taxation, by Edward A. Morse (Creighton)
  3. [268 Downloads]  What Do We Know About Base Erosion and Profit Shifting? A Review of the Empirical Literature, by Dhammika Dharmapala (Illinos)
  4. [237 Downloads]  ,2012 Developments in Connecticut Estate and Probate Law by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid & Riege, Hartford))
  5. [221 Downloads]  Understanding Income Tax Deferral, by Daniel I. Halperin (Harvard) & Alvin C. Warren (Harvard)

March 2, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 297