TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, February 24, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new working paper by David M. Schizer (Columbia), Subsidies and Nonprofit Governance: Comparing the Charitable Deduction with the Exemption for Endowment Income (Columbia Univ. Sch. of Law, Ctr. for Law & Econ. Studies, Working Paper No. 558, 2017).

HemelDavid Schizer’s new paper offers a fresh take on two long-running debates in tax law: should we allow a deduction for charitable contributions, and should we exempt the passive investment income of charities from tax? Schizer’s central claim is that the exemption (but not the deduction) distorts donors’ decisions as to the timing of charitable contributions—and, specifically, that the exemption inefficiently encourages donors to accelerate their giving. This post summarizes Schizer’s argument and then offers a reason why the deduction, at least in its current form, might distort donors’ decisions as to the timing of charitable contributions in the opposite direction.

The tax exemption for passive investment income earned by charities “creates an important inconsistency,” writes Schizer: “If donors keep an investment, their return (generally) is taxable. But if they donate the investment to charity, the return is no longer taxed” (p. 16). This gives the donor “a tax incentive to transfer assets to charities, and thus to give up control of these resources” (p. 20). That “can have two unfortunate effects,” according to Schizer: “it can erode the motivation and ability of charities to change with the times, and also can impede the ability of donors to monitor the performance of managers.” And while acknowledging that endowments might be desirable under some circumstances, Schizer writes that “it is hard to see why the tax law should put a thumb on the scale” (p. 24). 

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February 24, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Fleischer Presents Subsidizing Charity Liberally Today At Columbia

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents Subsidizing Charity Liberally at Columbia today as part of its Public Law Workshop Series hosted by David Pozen:

When visiting America over 150 years ago, Alexis De Tocqueville was amazed by the role of charities in American society. Since De Tocqueville’s visit, the sector’s size and influence have grown enormously. So too have the legal benefits accorded them, the most important of which are governmental subsidies in the form of exemption from the corporate income tax and the ability to receive tax-deductible contributions. Given the sector’s importance and the cost of these benefits, whether the sector’s legal treatment reflects our society’s broader ideals merits examination. More specifically, our Constitution enshrines two bedrock principles of Western liberal democracies: limited government and equal opportunity. Does the legal treatment of the charitable sector further these ideals, or undermine them?

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February 24, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Desai & Kleinbard:  A Workable Compromise For The Release Of President Trump's Tax Information

Trump Tax ReturnsFollowing up on my previous posts (links below):  Washington Post op-ed:  A Win-Win Path to Getting the Trump Tax Information That Really Matters, by Mihir Desai (Harvard) & Edward Kleinbard (USC):

President Trump’s spokespeople have made it perfectly obvious that he will not release his federal income tax returns during his presidency. Appeals to the tradition of presidents publishing their returns will not change this president’s resolve. Nor is a more forceful approach likely to pry the returns into public view.

As others have explained, Congress’s Joint Committee on Taxation, composed of the senior tax writers from the two political parties in both the House and the Senate, has the authority to examine the president’s tax returns in closed session. The committee can then report its findings or release those returns to the Congress as a whole (and thereby the public). The tax code is clear on this.

Democrats on the committee might leap at the chance, but Republican leadership plainly is not ready to confront the president here through unilateral demands. And yet the day may come soon enough that those leaders find it in their strategic interest to embrace this authority, if it can be asserted adroitly.

In the meantime, the public interest demands more than accepting the current stalemate. The path forward requires sensitivity to the president’s presumptive reasons for his tax disclosure reticence — in other words, compromise. ...

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February 24, 2017 in Tax | Permalink | Comments (4)

Pew:  How Governments Support Higher Education Through The Tax Code

Pew Charitable Trusts, How Governments Support Higher Education Through the Tax Code (2017):

To maximize the impact of higher education investments and achieve desired policy goals, policymakers should have knowledge of the full range of assistance provided to institutions and students. This means having an understanding of the billions of dollars made available through spending programs and the tax code. However, too frequently these two types of support are not considered in tandem, and most states lack the cost estimates they would need to determine how tax provisions for higher education compare in size to other postsecondary investments.

The federal government and the states each invested more than $70 billion in higher education-related spending programs, excluding loans, in academic year 2014, the latest year for which data are available. But that figure, as substantial as it is, does not paint a full picture of federal and state investments in higher education. It excludes the billions of dollars that the federal government and the 41 states plus the District of Columbia that levy personal income taxes provide to students and their families through tax expenditures—such as credits for tuition and college savings incentives—to help offset postsecondary costs.

Figure 1

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February 24, 2017 in Tax, Think Tank Reports | Permalink | Comments (1)

Minnesota Law Prof Francesco Parisi Accused Of Rape; His Lawyer Says Charges Are Frivolous

ParisiBrian Leiter (Chicago) has blogged the rape allegations against Minnesota law professor Francesco Parisi, whose lawyer calls the charges "frivolous":

Minneapolis Star Tribune, U Law School Prof Charged With Sex Assault, Stalking; Lawyer Said the 55-Year-Old Woman Has "Zero Evidence" of Her Accusations:

A University of Minnesota law professor engaged in years of protracted legal battles over real estate with the woman he is charged with sexually assaulting and stalking, according to court documents.

Francesco Parisi, 54, of Minneapolis, made his first appearance in Hennepin County District Court Wednesday on charges of first degree criminal sexual conduct and stalking. His bail was set at $350,000.

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February 24, 2017 in Legal Education | Permalink | Comments (3)

Thursday, February 23, 2017

Osofsky Presents Regulating By Example Today At Duke

Osofsky (2016)Leigh Osofsky (Miami) presents Regulating by Example, 35 Yale J. on Reg. ___ (2017) (with Susan C. Morse (Texas)), at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Agency regulations are full of examples. Regulated parties and their advisors parse the examples to develop an understanding of the applicable law and to determine how to conduct their affairs. However, neither the legal nor theoretical literature contains any study of regulatory examples or explains how they might be interpreted. This Article fills this gap.

In this Article, we explore regulatory examples and set forth a theory for how to interpret them. We examine how regulatory examples, like common law cases, serve as data points that help communicate legal content. We argue that regulatory examples are best understood through analogical, or common law, reasoning, and illustrate this through a variety of examples.

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February 23, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mehrotra Presents Law, Politics And The Rise Of Progressive Taxation (1877-1929) Tonight At UNLV

Mehrotra (2017)Ajay Mehrotra (American Bar Foundation & Northwestern) delivers the Philip Pro Lectures in Legal History at UNLV tonight on Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877-1929 (Cambridge University Press, 2013) (reviews)  (awards):

At the turn of the twentieth century, the U.S. system of public finance underwent a dramatic transformation. The late-nineteenth-century regime of indirect, hidden, partisan, and regressive taxes was eclipsed in the early twentieth century by a direct, transparent, professionally administered, and progressive tax system. This book uncovers the contested roots and paradoxical consequences of this fundamental shift in American tax law and policy. It argues that the move toward a regime of direct and graduated taxation marked the emergence of a new fiscal polity — a new form of statecraft that was guided not simply by the functional need for greater revenue but by broader social concerns about economic justice, civic identity, bureaucratic capacity, and public power.

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February 23, 2017 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

IRS Audit Rate Of Individuals (0.7%), Businesses (0.5%) Falls To 10+ Year Lows Due To Budget Cuts

Audit (2016)Wall Street Journal, IRS Audits of Individuals Drop for Fifth Straight Year:

U.S. tax audits of individuals declined for the fifth straight year in 2016 to reach the lowest level since 2003, showing the effects of budget cuts at the Internal Revenue Service.

The IRS, which has lost 30% of its enforcement staffing since the 2010 peak, audited 0.7% of tax returns in the fiscal year that ended Sept. 30, according to preliminary data released Wednesday. That means the IRS audited roughly 1 in every 143 individual tax returns, down from 1 in 90 back in 2010.

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February 23, 2017 in IRS News, Tax | Permalink | Comments (5)

Stanford Provost:  Academia Is Its Own Worst Enemy

Stanford (2016)John Etchemendy (Provost (2000-2017), Stanford), The Threat From Within:

Universities are under attack, both from outside and from within. ... But I’m actually more worried about the threat from within.

Over the years, I have watched a growing intolerance at universities in this country — not intolerance along racial or ethnic or gender lines — there, we have made laudable progress. Rather, a kind of intellectual intolerance, a political one-sidedness, that is the antithesis of what universities should stand for. It manifests itself in many ways: in the intellectual monocultures that have taken over certain disciplines; in the demands to disinvite speakers and outlaw groups whose views we find offensive; in constant calls for the university itself to take political stands. We decry certain news outlets as echo chambers, while we fail to notice the echo chamber we’ve built around ourselves.

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February 23, 2017 in Legal Education | Permalink | Comments (4)

Camp & Thuronyi:  An IRS Whistleblower Could Release Trump's Tax Return To Congress Under § 6103(f)

Trump Tax ReturnsFollowing up on my previous posts (links below):  Forbes, Disclosing President Trump's Tax Returns — An Unconventional Idea, by Bryan Camp (Texas Tech) & Victor Thuronyi (former Lead Counsel, (Taxation), IMF):

Lots of folks want to see Donald Trump’s tax returns. Conventional wisdom is that the returns cannot be disclosed unless he consents. That conventional wisdom is based on the general rule contained in 26 U.S.C. § 6103(a). The general rule forbids IRS employees (and some folks who receive information from IRS employees) from disclosing “return information.” That is a term of art that means not just tax returns but also just about anything in the IRS files.

Section 6103 is a really complex statute, mostly because of the exceptions to the general rule. The exceptions are found in subsections (c) through (o). These exceptions balance a taxpayer’s privacy with the needs of government officers and employees to do their jobs. So the exceptions to the general rule can get quite gnarly.

Several commentators have begun to explore some of the lesser-known exceptions to the general rule of nondisclosure. George Yin has a nice op-ed piece that explains one exception to the general rule in § 6103: Congress can ask for Trump’s returns. Andy Grewal also explores this idea in a well-done post over at the Yale regulation blog. Both posts are worth reading.

Both George and Andy focus on the power of certain congressional committees and staff to ask for tax returns as part of their oversight function. That power is found in § 6103(f)(1) through (f)(4). Democrats have acted on the ideas in George and Andy’s blogs. Stephen Ohlemacher from the AP reports that Democrats on the House Ways and Means Committee tried to get the committee to ask for Trump’s returns, but were outvoted by committee Republicans.

But what if the returns were dumped on the committee’s lap by an IRS employee without the Committee having made a request? That could happen under the very last paragraph in subsection (f).

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February 23, 2017 in Congressional News, IRS News, Tax | Permalink | Comments (1)

Hayashi & Murphy:  Savings Externalities In A Second-Best World

Andrew T. Hayashi (Virginia) & Daniel Patrick Murphy (Virginia), Savings Externalities in a Second-Best World:

The debate among legal scholars about individuals’ failure to save enough for retirement happens on a “micro” level. It focuses on the causes and consequences of undersaving from the perspective of individuals and analyzes how legal interventions, such as tax subsidies and nudges, can best address individual saving mistakes. This debate depends on certain assumptions about how the macroeconomy operates. When these assumptions do not hold, neither do the implications of the micro analysis, turning the conventional analysis of undersaving on its head. In fact, in a variety of circumstances, saving imposes a negative externality. Consequently, what looks like undersaving at the individual level may result in oversaving in the aggregate, and private vice may become a public virtue.

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February 23, 2017 in Scholarship, Tax | Permalink | Comments (0)

The Atticus Finch Effect: Has Donald Trump Made Attorneys (And Law Schools) Popular Again?

FT

Following up on my previous posts (links below):  My Northwest, The Atticus Effect: Has Trump Made Attorneys Popular Again?:

Kellye Testy knew perceptions had shifted when, purely by accident, she bumped into a couple of her former students while having dinner in Seattle.

Testy, dean of the University of Washington School Of Law, said the two men — now attorneys — had just arrived at Seattle-Tacoma International Airport. Excited, they gushed to her that they had engineered the legal proceedings which grounded an aircraft and stopped U.S. immigration authorities from deporting legal immigrants in the hours following President Donald Trump’s controversial immigration ban. Then, as they loudly gabbed about the evening’s events, a surprising thing happened: The other diners broke out in applause.

“The whole restaurant was, ‘Woo hoo!’ and applauding these guys,” she recalled. “It was an amazing scene.” ...

The wave of pro-lawyer sentiment in the wake President Donald Trump’s election and subsequent executive orders and cabinet appointments has caught even the most thick-skinned, skeptical attorneys a little off-guard. ...

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February 23, 2017 in Legal Education | Permalink | Comments (1)

Soled:  The $250 Billion Price Tag Associated With Gift Tax Repeal

Jay A. Soled (Rutgers), The $250 Billion Price Tag Associated with Gift Tax Repeal, 154 Tax Notes 429 (2017):

For close to a century, many commentators, academics, and politicians have considered the gift tax as an important backstop to preserve the integrity of the nation’s estate tax. Indeed, in the absence of a viable gift tax, taxpayers could easily circumvent their estate tax obligations. But what these very same people often fail to realize is that the gift tax also serves an entirely different, yet significant purpose as well: it acts as an integral backstop to ensure the progressive nature of the nation’s income tax. Indeed, in the absence of a viable gift tax, taxpayers could easily circumvent their income tax obligations.

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February 23, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, February 22, 2017

Iowa, North Carolina Bills Would Require 'Partisan Balance' In Faculty Hiring

Chronicle of Higher Education, Iowa Bill Would Force Universities to Consider Political Affiliation in Faculty Hiring:

Iowa’s public universities would have to base faculty-hiring decisions on applicants’ political-party affiliations under a bill pending before the State Senate’s Education Committee.

The measure, SF 288, would require the state’s three public universities to gather voter-registration data on prospective instructors and not make any hire that would cause either Democrats or Republicans on an institution’s faculty to outnumber each other by more than 10 percent. ...

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February 22, 2017 in Legal Education | Permalink | Comments (15)

Kara Getz Named Democratic Chief Counsel For House Ways & Means Committee

Ways & Means (2016)House Ways & Means Committee Ranking Member Richard Neal (D-MA) announced yesterday that Kara Getz has been named Chief Counsel for the committee:

“I have known Kara for many years and I am happy to welcome her back to the House in this Chief Counsel role,” said Ranking Member Neal. “Kara has proven herself to be an indispensable adviser to many Congressional leaders, and moving forward she will be absolutely integral to House Democrats’ efforts as she works on tax, trade, pension, and retirement policy.”

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February 22, 2017 in Congressional News, Tax | Permalink | Comments (0)

Snuggies Are Blankets, Not Garments, For Tax Purposes

Snuggie2Prior Probability, The Snuggies Case:

Have you seen those cheesy infomercials for Snuggies, those wearable fleece coverings–blankets with sleeves? Now, as a matter of tax law, is a Snuggie more like a blanket or more like a garment? (Blankets are subject to a lower import tax than articles of clothing are.) The United States Court of International Trade recently decided this close question, ruling that Snuggies are blankets for import tax purposes [citations omitted]:

Parties do not dispute that specifications, purchase orders, and invoices describe the Snuggie® as a blanket, and Allstar has trademarked "Snuggie®" to use on blankets and throws. The Snuggie® is marketed as a blanket, albeit one with sleeves. Retail packaging depicts people wearing the Snuggie® in the types of situations one might use a blanket; for example, while seated or reclining on a couch or bed, or outside cheering a sports team. The television commercial additionally shows a woman wearing a Snuggie® in place of a blanket that failed to sufficiently cover her. All of the above indicates that the Snuggie® is designed, used, and functions as a blanket, and is regarded in commerce and described in sales and marketing literature as a blanket.

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February 22, 2017 in Tax | Permalink | Comments (0)

Lawyers Could Be The Next Profession To Be Replaced By Computers

CNBC, Lawyers Could be the Next Profession to be Replaced by Computers:

Technology is often blamed for destroying traditional working-class jobs in sectors like manufacturing and retail.

But blue collar jobs aren't the only ones at risk.

The legal profession — tradition-bound and labor-heavy — is on the cusp of a transformation in which artificial-intelligence platforms dramatically affect how legal work gets done.

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February 22, 2017 | Permalink | Comments (4)

Should New York State Give President Trump’s Federal Tax Returns To Congress?

Trump Tax ReturnsBalkinization:  Does New York State Have a Copy of President Trump’s Federal Returns?, by Gregory Klass (Georgetown):

There has been a lot of talk about the new role state attorneys general have been taking on as a check on federal overreach. ... There is something else state attorneys general might do. It is now absolutely clear that the President will not release his federal tax returns.

Any state with a copy of those returns could choose to share them with Congress.

Section 6103(f)(1) of the Tax Code gives House Ways and Means Committee, the Senate Finance Committee, and the Joint Committee on Taxation the power to request individual returns from the IRS. Representative Bill Pascrell is a member of the House Ways and Means Committee. On February 1, he sent a letter to the Chairman, Republican Kevin Brady, requesting that that the Committee obtain from the IRS President Trump’s returns. Last week Brady rebuffed Pascrell.

But there is another option. Since 1998, another subsection of section 6103 has given whistleblowers permission to share federal returns with Congress. Section 6103(f)(5) provides:

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February 22, 2017 in IRS News, Tax | Permalink | Comments (5)

Lawyers For Adelsons, Magbanua Attack Prosecution's Case Against Their Clients In Dan Markel Murder

Markel SuspectsOrlando Sun Sentinel, 'That's What We Went to Go Kill That Man For': New Details Emerge in FSU Professor's Killing:

No one in the Adelson family has been arrested or charged in the case. The family, through its attorneys, has denied any involvement in Markel's death. "There is a reason that the police have not arrested any of the Adelsons — they weren't involved in Dan's death,” according to a statement released in August 2016 by attorneys representing the family.

David Oscar Markus, Charlie Adelson’s attorney, said Friday: “Even though Charlie wasn't involved, the prosecution has run a smear campaign against him and his family by using alternative facts created by people with quite a bit of time on their hands.” ...

Christopher DeCoste, one of Magbanua’s attorneys, said his client has done nothing wrong. "The prosecution created a theory fit for a soap opera, built a case around that preposterous plot using the wholly unreliable word of a thug as mortar, and peddled it through the media without mentioning any of the massive inconsistencies,” DeCoste said in a statement. “Before they turned Luis Rivera, a lifelong gangster, into their snitch, the threadbare circumstantial evidence wasn't even enough to arrest Katie.” ...

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February 22, 2017 in Legal Education | Permalink | Comments (5)

Racism In The Legal Academy: A Tale Of Two Law Professors

Racism In Academia (Not A Breaking Story), by LawProfBlawg (Anonymous Professor, Top 100 Law School):

This is a story of a traditional law school. It is a story I have heard many times at law professor gatherings around the country. It’s a story, which, while not true as a whole, is an amalgam of true experiences people have had being a person of color in academia. ...

As with many tragic tales, this story starts with a Dean. The Dean makes a genuine effort to promote diversity in a predominantly white faculty. The faculty’s new hire is a person of color. People of color now represent 5 percent of this school’s faculty. ...Let’s call the new hire Professor X. ...

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February 22, 2017 in Legal Education | Permalink | Comments (6)

ABA Tax Section Publishes New Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 36 Tax Times No. 2 (Feb. 2017):

FROM THE CHAIR
Interesting Times
By William H. Caudill, Norton Rose Fulbright LLP, Houston, TX
As I write this column, we are well into the Tax Section’s 2016–2017 year. I am pleased that we have made good progress on many tasks, but there is much that remains to be accomplished, not least of which is how we as tax lawyers will prepare for the tax reforms that will likely come our way as a result of this last election cycle and how the Section can contribute to the process.

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February 22, 2017 in ABA Tax Section, Tax | Permalink | Comments (0)

Tuesday, February 21, 2017

Oh Presents Are the Rich Responsible for Progressive Marginal Rates? Today At NYU

OhJason Oh (UCLA) presents Are the Rich Responsible for Progressive Marginal Rates? at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

Why do income tax systems across the world consistently feature progressive marginal rates? The existing literature tells a political story focusing on the top of the rate schedule and the preferences of the poor and middle class. According to the standard view, higher rates at the top result from the poor and middle class using the political process to “soak the rich.” However, this explanation is inconsistent with research showing that public policy is generally more responsive to the preferences of the rich. Explaining marginal rate progressivity as a universal (and exceptional) triumph of the poor and middle class rings hollow.

This Article resolves this tension in the extant literature by showing how progressive marginal rates are in fact consistent with the preferences of the rich.

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February 21, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

2018 U.S. News Law School Rankings

US News 2018Robert Morse (Chief Data Strategist, U.S. News & World Report) announced today that the new 2018 law school rankings will be released online on Tuesday, March 14 and in hard copy on Tuesday, April 11. Here is my coverage of the current 2017 law school rankings:

February 21, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

Will Trump Make Legal Infrastructure Great Again?

Rules for a Flat WorldPaul Lippe (ABA Legal Rebels), Will Trump Make Legal Infrastructure ‘Great Again’? (reviewing Gillian Hadfield (USC), Rules for a Flat World: Why Humans Invented Law and How to Reinvent It for a Complex Global Economy (Oxford University Press, 2016)):

President Donald Trump says he wants to ‘make America great again,” in part by investing in upgrading our “obsolete” infrastructure. University of Southern California law professor Gillian Hadfield has a proposal that may not be on the top of the president’s list. ...

To the extent that law schools concern themselves primarily with legal theory, they tend to operate in a self-contained echo chamber, with less influence over the profession and society and less opportunity to test those theories against reality to make them more powerful. Medicine and other fields have moved much more strongly to an evidence-based model, with faster learning, less hierarchy and faster practice improvement.

Hadfield is one of the most consequential legal scholars doing evidence-based work. Her recent book ... is a must-read for lawyers trying to see the whole landscape of the legal New Normal.

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February 21, 2017 in Legal Education | Permalink | Comments (1)

Fleming:  The EU Apple Case

J. Clifton Fleming Jr. (BYU), The EU Apple Case: Who Has a Dog in the Fight?, 154 Tax Notes Int'l 251 (Jan. 9, 2017):

This is a reductionist article. It provides a simplified diagram and explanation of Apple's foreign tax planning that eliminates complexities not necessary to an understanding of either the relevant EU or U.S. tax issues. The primary focus of the article is identification of the stakeholders in the controversy over the EU Commission's Apple decision, analysis of their interests, and evaluation of the impact of the Apple decision on those interests.

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February 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Hemel & Lederman:  The Impact Of Repeal Of The Affordable Care Act On The Economic Substance Doctrine

Daniel Hemel (Chicago), Repealing Economic Substance Codification and Replacing It With What?:

The Republican effort to repeal the Affordable Care Act appears to be stalling. If and when it picks up again, the fate of section 7701(o) of the Internal Revenue Code will be far from the most consequential issue at stake. But section 7701(o), the provision added by the ACA that codifies the tax law economic substance doctrine, matters still — to the tune of $5.8 billion in federal revenue that will be lost over the next decade if the provision is repealed. Or so the Congressional Budget Office estimates; what repeal of section 7701(o) would actually accomplish is something of a mystery. ...

One can imagine (at least) three possible interpretations:

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February 21, 2017 in Tax | Permalink | Comments (0)

Oei & Ring:  Leak-Driven Tax Law

Shu-Yi Oei (Tulane; moving to Boston College) & Diane M. Ring (Boston College), Leak-Driven Law:

Over the past decade, a number of well-publicized data leaks have revealed the secret offshore holdings of high-net-worth individuals and multinational taxpayers, leading to a sea change in cross-border tax enforcement. Spurred by leaked data, tax authorities have prosecuted offshore tax cheats, attempted to recoup lost revenues, enacted new laws, and signed international agreements that promote “sunshine” and exchange of financial information between countries.

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February 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Syracuse's Secret Sauce For Its Outperformance On NY Bar: Tougher 1L Curve And Readmit Policy, Mandatory Bar Courses

Syracuse Logo (2016)I previously have blogged Syracuse's over-performance on the New York State Bar Exam: although Syracuse is the seventh highest ranked of fifteen New York law schools, it ranked fourth (89.5%) in bar passage on the July 2016 bar exam, behind only Columbia, Cornell, and NYU (and above Fordham, Cardozo, St. John's, and Brooklyn); fifth (83.3%) in 2015; and fourth (87.0%) in 2014.    Brian Leiter reprints a note from Syracuse professor Christian Day,  who attributes the impressive results to the faculty's decision after much study to:

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February 21, 2017 in Legal Education | Permalink | Comments (2)

2017 Tannenwald Tax Writing Competition

Tannenwald (2013)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2017 Tannenwald Tax Writing Competition:

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to legal scholarship of the highest quality, the Tannenwald Writing Competition is open to all full- or part-time law school students, undergraduate or graduate. Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules.

Prizes:

  • 1st Place:   $5,000, and publication in the Florida Tax Review
  • 2nd Place:  $2,500
  • 3rd Place:  $1,500

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February 21, 2017 in Legal Education, Tax, Teaching | Permalink | Comments (0)

Monday, February 20, 2017

Blank Presents The Timing Of Tax Transparency Today At Pepperdine

Blank (2017)Joshua Blank (NYU) presents The Timing of Tax Transparency, 90 S. Cal. L. Rev. ___ (2017), at Pepperdine today as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine:

Fairness in the administration of the tax law is the subject of intense debate in the United States. As recent headlines reveal, the Internal Revenue Service has been accused of failing to enforce the tax law equitably in its review of tax-exempt status applications by political organizations, the international tax structures of multinational corporations, and the estate tax returns of millionaires, among other areas. Many have argued that greater “tax transparency” would better empower the public to hold the IRS accountable and the IRS to defend itself against accusations of malfeasance. Mandatory public disclosure of taxpayers’ tax return information is often proposed as a way to achieve greater tax transparency. Yet, in addition to concerns regarding exposure of personal and proprietary information, broad public disclosure measures pose potential threats to the taxing authority’s ability to enforce the tax law.

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February 20, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Revenge Of The Tax Nerds

Revenge of the NerdsWeekly Standard, Revenge of the Nerds:

How the Prosperity Caucus and the Joint Economic Committee drove the tax reform debate.

If some sort of fundamental tax reform does occur this year—and the odds of its happening are looking good—the politicians, economists, tax lawyers, congressional staffers, trade associations, think tanks, academics, corporations, and others claiming credit for having influenced the legislation that finally becomes law will be legion.

But the critical impetus for reform has arguably come from a loose clique of policy wonks with ties to an inconsequential congressional committee—a group that came to be called the Prosperity Caucus. Its monthly meetings—which began 30 years ago, shortly after the last big tax reform passed in 1986—have been a regular abode for a long list of thinkers who have greatly influenced Republican thinking about tax reform. Its alumni now hold key positions in Congress and the Trump administration, and one happens to be the current speaker of the House. If any entity can rightly lay claim to credit for the reform, the Prosperity Caucus can.

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February 20, 2017 in Congressional News, Tax | Permalink | Comments (2)

Ball & Viswanathan:  From Business Tax Theory To Practice

Alina S. Ball (UC-Hastings) & Manoj Viswanathan (UC-Hastings), From Business Tax Theory to Practice:

The past decade has seen a dramatic increase in the number of business law clinics in legal academia. This increase in clinical transactional courses has not, however, resulted in a proliferation of transactional tax clinical offerings. Although tax issues, including federal, state, and local tax matters, are an integral consideration of nearly every business transaction, most business law clinics explicitly exclude tax representation from their client services. For clients of business law clinics that are social enterprises — companies that combine market-based business strategies and social mission — this lack of tax-focused representation is problematic for two reasons.

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February 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Creighton Dean Lifts Law Prof's Suspension After Faculty Threaten Vote Of No Confidence

MelilliOmaha World-Herald, Creighton University Law Professor Reinstated After Brief Suspension:

A professor at Creighton University has agreed to return to the law school today after he was temporarily suspended by the school’s dean.

Kenneth Melilli [right], who won the Robert F. Kennedy Memorial Award for Teaching Achievement at Creighton last year, was suspended by the dean of law Wednesday evening, evidently after an argument this month with a senior associate dean of law.

Letters obtained by The World-Herald show Melilli had support from numerous faculty members who intimated they would push for a vote of no confidence against Paul McGreal, dean of law, and Nicholas Mirkay, associate dean of law [and tax professor]. ...

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February 20, 2017 in Legal Education, Tax Profs | Permalink | Comments (6)

Sixth Circuit Reverses IRS, Tax Court:  'Citizens Can't Comply With Tax Laws They Can’t See'

CaligulaSumma Holdings v. Commissioner, No. 16-1712 (Feb. 16, 2017):

Caligula posted the tax laws in such fine print and so high that his subjects could not read them. Suetonius, The Twelve Caesars, bk. 4, para. 41 (Robert Graves, trans., 1957). That’s not a good idea, we can all agree. How can citizens comply with what they can’t see? And how can anyone assess the tax collector’s exercise of power in that setting? The Internal Revenue Code improves matters in one sense, as it is accessible to everyone with the time and patience to pore over its provisions.

In today’s case, however, the Commissioner of the Internal Revenue Service denied relief to a set of taxpayers who complied in full with the printed and accessible words of the tax laws. The Benenson family, to its good fortune, had the time and patience (and money) to understand how a complex set of tax provisions could lower its taxes.

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February 20, 2017 in IRS News, New Cases, Tax | Permalink | Comments (11)

Hawaii Seeks To Hire A Tax Prof

Hawaii LogoThe University of Hawaii Law School invites applications from entry level and lateral candidates for a tenure-track or tenured tax position beginning in the 2017-18 academic year:

We are seeking applicants with the ability and interest to teach in the area of federal taxation and preferably also trusts and estates. ...

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February 20, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Florida Names Fred Murray Professor Of Tax Practice

Muray (2018)Dean Laura Rosenbury has announced that Fred Murray will join the faculty of the University of Florida Levin College of Law as a full-time Professor of Tax Practice:

Since 2007, Professor Murray has been at Grant Thornton LLP, where he serves as a Managing Director, International Tax Services. In addition, he has taught International Tax as an adjunct Professor of Law in the LL.M. program at the Georgetown University Law Center since 2005. Professor Murray started his career as a tax lawyer at Chamberlain, Hrdlicka in Houston, Texas, where he was a partner, before he left to serve as Special Counsel (Legislation) to the Chief Counsel for the Internal Revenue Service from 1992 to 1996. Professor Murray also has served as a Deputy Assistant Attorney General in the Tax Division of the U.S. Department of Justice, as General Counsel and Director of Tax Affairs of the Tax Executives Institute, and as Vice President for Tax Policy at the National Foreign Trade Council.

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February 20, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, February 19, 2017

University Of Washington Delays Launch Of New Law School In Tacoma Until At Least 2021 In Face Of Projected Annual $5.5 Million Deficits

UWT2Following up on my previous posts (links below): News Tribune, UW Tacoma Law School Vision Remains Years Away:

If you share the years-old vision of adding a law school to the growing University of Washington Tacoma campus, prepare to wait a few more years.

A newly released study has found trends in law school applications and available jobs that persuaded officials to wait a few years longer than they hoped to try to restore postgraduate legal education to the South Sound.

Because a UW Tacoma law school — like most public universities’ graduate-school programs, including the UW law school in Seattle — wouldn’t pay for itself, backers of the plan said they want to be sure the school will be sustainable enough to justify investing an estimated $62 million over a decade to get the school started, stabilized and accredited.

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February 19, 2017 in Legal Education | Permalink | Comments (4)

Bill Gates:  Robots That Displace Workers Should Be Taxed

Quartz, The Robot That Takes Your Job Should Pay Taxes, Says Bill Gates:

Robots are taking human jobs. But Bill Gates believes that governments should tax companies’ use of them, as a way to at least temporarily slow the spread of automation and to fund other types of employment.

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February 19, 2017 in Celebrity Tax Lore, Tax | Permalink | Comments (4)

Did Florida State President Violate Lobby Ban In Special $1 Million Annual Appropriation For Law School?

Florida State logoTallahassee Democrat, Did FSU President John Thrasher Violate Lobby Ban?:

Florida State University President John Thrasher’s push for a special law school appropriation includes a 2015 form with Thrasher named as the requester and dated before the former senator’s ban on lobbying expired, records show.

Thrasher denies he unlawfully lobbied the Legislature for the $1 million a year, and said he’s been careful to follow the rules as FSU president. ...

The $1 million, tucked away in this year’s $82.3 billion state budget, is among the special lawmaker requests that have surfaced in a battle between House and Senate leaders over how to write the spending plan. ... 

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February 19, 2017 in Legal Education | Permalink | Comments (0)

Bob Jones University Regains Tax-Exempt Status 34 Years After It Was Stripped By IRS, Supreme Court Due To Interracial Dating Ban

Bob JonesGreenville News, Bob Jones University Regains Nonprofit Status 17 Years After It Dropped Discriminatory Policy:

In a move that’s been more than two years in the making, Bob Jones University announced Wednesday it would regain its federal tax-exempt status on March 1, more than three decades after the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

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February 19, 2017 in Tax | Permalink | Comments (1)

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 #2:

  1. [2,131 Downloads]  Problems with Destination-Based Corporate Taxes and the Ryan Blueprint, by Reuven S. Avi-Yonah (Michigan; moving to UC-Irvine) & Kimberly A. Clausing (Reed College)
  2. [1,019 Downloads]  The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, by Michael J. Graetz (Columbia)
  3. [677 Downloads]  A Guide to the GOP Tax Plan — The Way to a Better Way, by David A. Weisbach (Chicago)
  4. [326 Downloads]  Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, by Lily L. Batchelder (NYU)
  5. [274 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)

February 19, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 18, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Michael Jackson Estate's $700 Million Tax Court Thriller Turns On Value Of Star's Name At Time Of Death

ThrillerWall Street Journal, Michael Jackson’s Estate Faces Demand for Big Tax Payment: Dispute With IRS Centers on Valuation of the Singer’s Name and Likeness Rights at Time of His Death:

When pop star Michael Jackson died in 2009, weeks before a planned comeback tour, how much was the man in the mirror worth? The answer is far from black and white.

After coming to agreements on the value of some of the King of Pop’s more concrete assets in a legal fight that began four years ago, the estate’s executors are facing off with the Internal Revenue Service in U.S. Tax Court on Monday, primarily over the valuation of the singer’s name and likeness rights at the time of his death.

Depending on the outcome of the case, the estate could be on the hook for more than $500 million in taxes and $200 million in penalties, according to the IRS’s notice to the estate of its deficiency.

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February 18, 2017 in Celebrity Tax Lore, New Cases, Tax | Permalink | Comments (1)

IRS Suspends Guidance Due To Trump Executive Order

Sam Brunson (Loyola-Chicago), The (Near) Future of Treasury Regulations:

Today’s Tax Notes reports [No Substantive IRS Guidance Coming for a While, Official Says] that the IRS has announced that it will not release pretty much any new formal guidance (including revenue rulings and revenue procedures) for the foreseeable future. [Fn: It will continue to release routine guidance, like updated interest rates and updated mileage allowances.]

Why not? A confluence of an Executive Order and a January 20 memorandum. The EO, Reducing Regulation and Controlling Regulatory Cost, requires that, for every new regulation issued, two existing regulations be eliminated.

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February 18, 2017 in IRS News, Tax | Permalink | Comments (4)

Charlotte Law School Is Delinquent On Its $148k Property Tax Bill, Says Check Is In The Mail

CLS

Charlotte Business Journal, Charlotte Law Delinquent on $148K in Taxes; School Says Check Issued:

Charlotte School of Law is delinquent on its property taxes for its uptown campus.

A tax bill shows that the for-profit law school owes $148,227.63 as of Friday. Charlotte Law is located at 201 S. College St.

“A check for the outstanding Meck County property taxes has been cut. The county should receive full payment in the next few business days,” spokeswoman Victoria Taylor told the Charlotte Business Journal Friday.

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February 18, 2017 | Permalink | Comments (0)

NY Times Special Tax Section

Friday, February 17, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses how a dentist kept adequate records to beat the IRS's claim that he did not materially participate in his real estate business:

KristanPart-time dentist, full-time record-keeper beats IRS.

Beyond Flossing. A California man seemed to have a pretty good deal going. He had a dental practice with his dentist wife and had a pretty good six-figure joint income. Yet somehow it didn’t satisfy. He wanted a real estate career.

He still kept up a part-time dental practice, but he threw himself into real estate. He spent a lot of time on it. The couple owned for rental properties that he managed, and he also worked as a broker. The rental properties generated a taxable loss, and the IRS said that he couldn’t deduct them under the “passive loss rules.”

Rental real estate losses are automatically passive for most taxpayers, deductible only to the extent of other “passive” income or when the property is sold. A special rule applies to “real estate professionals.” They get to determine whether rental losses are “passive” using the same “material participation” standards that apply to other businesses — primarily based on hours worked in the activity.

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February 17, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)