TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, December 28, 2016

Clarke Reviews Zucman's The Hidden Wealth Of Nations: The Scourge of Tax Havens

HiddenConor Clarke (Ph.D. Candidate, Yale Law School), What Are Tax Havens and Why Are They Bad, 95 Tex. L. Rev. 59 (2016) (reviewing Gabriel Zucman, The Hidden Wealth of Nations: The Scourge of Tax Havens (University of Chicago Press, 2015)):

This essay reviews Gabriel Zucman's The Hidden Wealth of Nations: The Scourge of Tax Havens. Zucman's important new book brings clarity to a confusing subject -- but occasionally does so at the expense of nuance. My review has three goals. First, I summarize and appraise Zucman's central findings, and re-estimate his revenue-loss totals for the United States using tax-rate assumptions that I believe are more realistic. Second, I position Zucman's findings against the backdrop of the wider literatures on tax havens and inequality, and attempt to answer the two questions in this essay's title. Third, I comment on Zucman's call for a global registry covering the ownership of financial securities. I argue that such a proposal must contend with the fact that there is no international legal consensus on what constitutes ownership.

Prior reviews of The Hidden Wealth of Nations:

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December 28, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Drexel Freezes Faculty, Staff Staff Salaries Due To Decreased Enrollments

DrexelPhiladelphia Inquirer, With Revenue Down, Drexel "Withholds" Merit Raises:

Drexel University will withhold merit raises from faculty and staff this fiscal year as the school continues to adjust to less revenue as a result of an admissions strategy designed to attract fewer, but more serious and better qualified, applicants.

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December 28, 2016 in Legal Education | Permalink | Comments (3)

Popularity Of Donor-Advised Funds Soars With Bull Market And Looming Trump Tax Changes

DAFWall Street Journal Tax Report: Charity Accounts Become the Hot Holiday Must-Have: Rising Markets and Fears About Possible Tax Overhaul Fuel the Rush, by Laura Saunders:

American taxpayers are pouring money into charitable-giving accounts before year-end, prompted by rising markets and fears that a tax overhaul could trim the popular strategy of donation deductions.

At Schwab Charitable, the giving-fund associated with Charles Schwab Corp., donors put more than $693 million into new and existing giving accounts between Thanksgiving and Dec. 18, a 20% increase over the same period in 2015. Spokespeople for Vanguard Charitable, Fidelity Charitable, and National Philanthropic Trust said donations to their giving funds have recently jumped by double- or triple-digit percentages compared with last year, although they declined to provide dollar amounts.

The biggest drivers lately are proposals by President-elect Donald Trump and Republicans in Congress to limit the value of charitable deductions, either by lowering tax rates or cutting the deductible amount. In addition, markets rose to highs recently, and there are tax benefits for donating appreciated assets rather than cash.

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December 28, 2016 in Tax | Permalink | Comments (0)

BigLaw Discriminates In Favor Of Upper Class Males Among High-Credentialed (Top 1%, Law Review) Applicants From Second Tier (Ranked 51-100) Law Schools In Granting Interviews For Summer Associate Positions

Harvard Business Review LogoFollowing up on my earlier posts:

Harvard Business Review: How Subtle Class Cues Can Backfire on Your Resume, by Lauren Rivera (Northwestern) & András Tilcsik (Toronto):

Every fall, tens of thousands of law students compete for a small number of coveted summer associateships at the country’s top law firms. The stakes are high: getting one of these rare internships virtually guarantees full-time employment after law school. The salaries are unbeatable, six-figure sums that catapult young students to the top 5% of household incomes nationally and are often quadruple of those offered in other sectors of legal practice. These jobs also open doors to even more lucrative employment in the private sector as well as prestigious judiciary and government roles. For these reasons, employment in top law firms has been called the legal profession’s 1%.

Now imagine four applicants, all of whom attend the same, selective second-tier law school. They all have phenomenal grade point averages, are on law review, and have identical, highly relevant work experiences. The only differences are whether they are male or female and if their extracurricular activities suggest they come from a higher-class or lower-class background. Who gets invited to interview?

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December 28, 2016 in Legal Education | Permalink | Comments (6)

NY Times Debate:  Should Prenups Cover Intellectual Property Rights?

NY Times Room for DebateNew York Times Room for Debate, Should Couples Get Prenups for Their Ideas?:

The number of 18- to 35-year-olds seeking prenups is on the rise nationwide, but many millennials are more interested in protecting intellectual property — such as films, songs, software and even apps that haven’t been built yet — than cash. What does this shift mean for marriage and divorce?

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December 28, 2016 in Tax | Permalink | Comments (0)

Merritt:  If Women Dominate Men In College Diplomas, Why Not JDs?

Bloomberg Law op-ed: If Women Dominate Men in Diplomas, Why Not JDs?, by Deborah Jones Merritt (Ohio State):

This year women claimed just over half the seats at ABA-accredited law schools. That’s a first: women neared the 50% mark in 2015, but didn’t cross it until this year. The milestone is memorable, but why was it such a long time coming?

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December 28, 2016 in Legal Education | Permalink | Comments (12)

The IRS Scandal, Day 1329:  Did The IRS's Targeting Of Conservative Groups Lead It To Grant Tax-Exempt Status To 'Hate Groups'?

IRS Logo 2Chronicle of Philanthropy, Dozens of ‘Hate Groups’ Have Charity Status, Chronicle Study Finds:

The federal government has granted tax-exempt status to more than 60 controversial nonprofits branded by critics as "hate groups," including anti-immigrant and anti-gay-rights organizations, white nationalists, and Holocaust deniers, according to a Chronicle of Philanthropy analysis.

The issue is a thorny one for the Internal Revenue Service, which must balance First Amendment rights against concerns that it is essentially granting government subsidies to groups holding views that millions of Americans may find abhorrent. Complicating matters, the IRS is already under fire from critics who say the agency has discriminated against conservative political organizations. ...

Still shaken by the revelation that agency leaders had singled out conservative advocacy groups’ applications for tax-exempt status for extra scrutiny, the IRS has little incentive to investigate organizations based on the content of their messages.

The Surly Subgroup:  White Nationalists Groups are Charitable? Apparently so According to IRS, by Phillip Hackney (LSU):

How do [hate groups] qualify [for tax exempt status]? ... There are two answers. ...

Reason 2: The IRS is afraid. This seems like a reasonable argument after all the Tea Party difficulties that the IRS experienced, BUT . . . the IRS has denied other controversial groups tax exemption who are ostensibly educating as well. See: Principle Voices of Polygamy private letter ruling where the IRS denied a group advocating for polygamy on the basis that what it violated public policy by advocating for something that is illegal. The point is that the IRS went after an advocacy group in 2013. With that said, the Tea Party controversy occurred in 2013 and so maybe this is a reason it would not go after such groups now.

Salon, White Nationalists Have Raised Millions Thanks to Tax-Exempt Charities:

Some tax experts said the IRS is still feeling the sting from conservative critics over its 2013 concession that it unfairly gave extra scrutiny to tea party groups seeking tax exemptions. “I don’t think they’re feeling very brave right now,” said Ellen Aprill, a tax law professor at Loyola Law School in Los Angeles.

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December 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, December 27, 2016

Solicitation For Article:  The Top 10 Legal Education Stories Of 2016

Top 10 (2014)For many years, I have published on TaxProf Blog as a New Year's tradition an article on "The Top 10 Tax Stories of [Year]," consisting of contributions by (with attribution to) the individual tax professor authors. In light of the wrenching changes taking place in legal education, I would like to inaugurate a new tradition of an article on "The Top 10 Legal Education Stories of 2016." If you are a law professor and would like to be featured in this article, please send me a contribution of a few sentences (or more) on one (or more) of what you think were the most significant legal education stories of the year. I will knit the best contributions together, with attribution to each of the authors, and publish the article on TaxProf Blog on Tuesday morning, January 3.

Please email your contribution(s) to me by noon on Saturday, December 31.

December 27, 2016 in Legal Education | Permalink | Comments (0)

NY Times:  Family Cemeteries Bind Generations, For Remembrance And Tax Reasons

HeintzNew York Times Wealth Matters:  Family Cemeteries Bind Generations, for Remembrance and Tax Reasons, by Paul Sullivan:

As much as their personal relationships, it is the family cemetery that binds the descendants — not merely to honor and remember their forebears but also for tax reasons. ... Family cemeteries, a relic of another age, continue to bind relatives in ways that today’s wealthy might wish for. ... Some cemeteries have also become the connective tissue for families of far more modest means.

Part of this results from rules of the Internal Revenue Service, which grants nonprofit status to these cemeteries under section 501(c)13 of the Internal Revenue Code. The rules require families to maintain a detailed list of all descendants eligible to be buried there. ...

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December 27, 2016 in Tax | Permalink | Comments (1)

A Plan To Make Students Great Again:  Replace Loans With Income Shares, Force Colleges To Spend 5% Of Their Endowments Each Year

Trump (President Elect)New York Times op-ed: To Boost the Economy, Help Students First, by Sheila C. Bair (President, Washington College):

Donald J. Trump has made bold and provocative campaign promises on taxes, trade, immigration and infrastructure. These pledges are all in service of bolstering our economic future. While we hope these initiatives will help our economic prospects, there is one important measure missing from the debate. And it could have an even more immediate and direct impact on economic growth: student debt relief.

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December 27, 2016 in Legal Education | Permalink | Comments (30)

The Role Of State Estate And Inheritance Taxes After Repeal Of The Federal Estate Tax

Institute  on Taxation and Economic Policy, State Estate and Inheritance Taxes:

For much of the last century, estate and inheritance taxes have played an important role in fostering strong communities by promoting equality of opportunity and helping states adequately fund public services. While many of the taxes levied by state and local governments fall most heavily on low-income families, only the very wealthy pay estate and inheritance taxes.

Changes in the federal estate tax in recent years, however, caused states to reevaluate the structure of their estate and inheritance taxes. Unfortunately, the trend of late among states has tended toward weakening or completely eliminating them.


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December 27, 2016 in Tax, Think Tank Reports | Permalink | Comments (1)

Chronicle:  The IRS Has Granted Tax-Exempt Status To More Than 60 'Hate Groups'

IRS Logo 2Chronicle of Philanthropy, Dozens of ‘Hate Groups’ Have Charity Status, Chronicle Study Finds:

The federal government has granted tax-exempt status to more than 60 controversial nonprofits branded by critics as "hate groups," including anti-immigrant and anti-gay-rights organizations, white nationalists, and Holocaust deniers, according to a Chronicle of Philanthropy analysis.

The issue is a thorny one for the Internal Revenue Service, which must balance First Amendment rights against concerns that it is essentially granting government subsidies to groups holding views that millions of Americans may find abhorrent. Complicating matters, the IRS is already under fire from critics who say the agency has discriminated against conservative political organizations.

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December 27, 2016 in IRS News, Tax | Permalink | Comments (5)

Volokh:  Punishment Of Tax Prof Nancy Shurtz Means The End Of Free Speech At The University of Oregon


Following up on my previous posts (links below);  Washington Post (The Volokh Conspiracy): At the University of Oregon, No More Free Speech for Professors on Subjects Such as Race, Religion, Sexual Orientation, by Eugene Volokh (UCLA):

Last week, the University of Oregon made clear to its faculty: If you say things about race, sexual orientation, sex, religion and so on that enough people find offensive, you could get suspended (and, following the logic of the analysis) even fired. This can happen even to tenured faculty members; even more clearly, it can happen to anyone else. It’s not limited to personal insults. It’s not limited to deliberate racism or bigotry. ...

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December 27, 2016 in Legal Education, Tax | Permalink | Comments (4)

The IRS Scandal, Day 1328:  House's Referral Back To Judiciary Committee Is Likely To Kill Koskinen Impeachment

IRS Logo 2Forbes: House Says No To Renewed Efforts To Impeach IRS Commissioner, by Kelly Phillips Erb:

A motion to table the measure failed while a motion to simply refer the matter back to the Judiciary Committee passed with a 342-72 vote. The final tally showed 166 Republicans joining 176 Democrats to vote yes, 72 Republicans voting no, and 19 members who did not vote. You can see how your Representative voted here.

If that sounds like progress, it's not: it's a step backward. Earlier this year, the House sidestepped a similar resolution introduced by Rep. Jason Chaffetz (R-UT) to move impeachment proceedings forward; yet another resolution from the fall of 2015 also failed

Since impeachment is a legal proceeding, while anyone can make a motion to start the process, the Judiciary Committee determines whether there are sufficient grounds for impeachment. With respect to this matter, Judiciary Chair Bob Goodlatte (R-VA) scheduled hearings to investigate the matter: the third was held in September. Following those hearings, the Judiciary Committee did not bring a resolution or recommendation to the floor, and there is no reason to believe that the result will be any different this time.

In fact, this week, Goodlatte indicated that there were differences of opinion in the House regarding the measure to impeach Koskinen. The House would need a majority of votes to impeach the Commissioner and move the measure to the Senate. All 183 Democrats in the House are expected to vote against impeachment, and a number of Republicans will likely follow suit.

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December 27, 2016 in Congressional News, IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Holiday Weekend Roundup

Monday, December 26, 2016

This Week's Ten Most Popular TaxProf Blog Posts

More On The July 2016 California Bar Exam

California (2016)Continuing my coverage of the July 2016 California bar exam (links below):

David Frakt, Some Thoughts on the California Bar Exam:

2.  LSAT scores matter — if you look at the pass rates, with a couple of notable exceptions, they track the selectivity of the school in terms of LSAT scores and UGPA of the entering class of 2013.  In the chart below, I compare the LSAT profiles of the entering class of 2013 with the pass rate on the July 2016 bar. ...  17 of 21 schools had a bar pass ranking within 2 places of their LSAT rank. Only one school noticeably outperformed its predictors, Cal Western, which outperformed four law schools with higher LSAT scores. Three law schools noticeably underperformed, UC Hastings, which was surpassed by five law schools with students with weaker entrance credentials, and San Francisco and Chapman which were outperformed by three schools with lower LSATs.

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December 26, 2016 in Legal Education | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

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

  1. [306 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. [298 Downloads]  IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385, by David S. Miller (Proskauer, New York) & Janicelynn Asamoto Park (Proskauer, New York)
  3. [195 Downloads]  Were Trump's Fake Losses Legal as Tax Deductions?, by Calvin H. Johnson (Texas)
  4. [193 Downloads]  Apple State Aid Ruling: A Wrong Way to Enforce the Benefits Principle?, by Reuven S. Avi-Yonah (Michigan; moving to UC-Irvine) & Gianluca Mazzoni (S.J.D. 2017, Michigan)
  5. [174 Downloads]  Is Something Rotten in the Grand Duchy of Luxembourg?, by Omri Marian (UC-Irvine)

December 26, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Donald Trump Vows To Close His Charitable Foundation, Democrats Say It Isn't Enough

Trump (President Elect)Washington Post:  Donald Trump Plans to Shut Down His Charitable Foundation, Which Has Been Under Scrutiny for Months, by Mark Berman & David A. Fahrenthold:

President-elect Donald Trump said he plans to shut down his charitable foundation, a decision that comes after repeated controversies over how it collected and disbursed funds. In a statement Saturday, Trump offered no timeline for when his foundation would close down, but said he had directed his attorney to take the steps needed to close the charity.

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December 26, 2016 in Tax | Permalink | Comments (0)

Blackman:  University of Oregon's Punishment Of Tax Prof Nancy Schurtz For Wearing Blackface To Halloween Party In Her Home Is 'Dangerous And Wrong'


Josh Blackman (South Texas), The University of Oregon Ducks the First Amendment:

On Thursday, I blogged about the dangerous precedents set by the University of Oregon’s decision that it could punish a professor for wearing black face at a Halloween party. In this post, I will discuss how the University’s report completely ignores precedents that are directly on point. This decision is not only dangerous, but is wrong.

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December 26, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1327:  Delay In Koskinen Impeachment Is Discordant Note In Kumbaya Between Trump And GOP Congress

IRS Logo 2Washington Post, It’s Mostly Kumbaya So Far for Trump and GOP in Congress:

President-elect Donald Trump is signaling a cease-fire in his battle with the Republican leadership in Congress, which he repeatedly skewered during his election-season attacks on the Washington establishment.

Trump has, by all accounts, patched up his once-turbulent relationship with House Speaker Paul D. Ryan (R-Wis.). To fill top jobs in his administration, Trump has chosen five sitting lawmakers, as well as the wife of Senate Majority Leader Mitch McConnell (R-Ky.). And he has passed up opportunities to meddle in congressional business in ways that might have pleased his populist base but frustrated Republican leaders.

The detente in Trump’s war on GOP leaders reflects the unifying power of victory, the moderating influence of Vice President-elect Mike Pence and incoming White House chief of staff Reince Priebus, and, most of all, a shared desire to make good on years of Republican campaign promises. ...

But it is clear that the members of Trump’s inner circle often are not on the same page, which could spell trouble for his legislative agenda.

For instance, members of the hard-right House Freedom Caucus claimed to have Trump’s backing when they defied Ryan and launched an early-December bid to impeach Internal Revenue Service Commissioner John Koskinen.

Priebus intervened in an attempt to halt a floor vote, as reported by Politico, but conservatives forced one anyway. The Freedom Caucus was emboldened — and encouraged behind the scenes — by Bannon, whose former website, Breitbart News, wrote favorably about it, and by Bossie, who supported the impeachment push as president of Citizens United. Impeachment was effectively buried in the end, handing GOP leaders the win.

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December 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, December 25, 2016

A Hallelujah Christmas

In Hoc Anno Domini

The Wall Street Journal has published this wonderful editorial each Christmas since 1949, In Hoc Anno Domini:

When Saul of Tarsus set out on his journey to Damascus the whole of the known world lay in bondage. There was one state, and it was Rome. There was one master for it all, and he was Tiberius Caesar.

Everywhere there was civil order, for the arm of the Roman law was long. Everywhere there was stability, in government and in society, for the centurions saw that it was so.

But everywhere there was something else, too. There was oppression -- for those who were not the friends of Tiberius Caesar. There was the tax gatherer to take the grain from the fields and the flax from the spindle to feed the legions or to fill the hungry treasury from which divine Caesar gave largess to the people. There was the impressor to find recruits for the circuses. There were executioners to quiet those whom the Emperor proscribed. What was a man for but to serve Caesar?

There was the persecution of men who dared think differently, who heard strange voices or read strange manuscripts. There was enslavement of men whose tribes came not from Rome, disdain for those who did not have the familiar visage. And most of all, there was everywhere a contempt for human life. What, to the strong, was one man more or less in a crowded world?

Then, of a sudden, there was a light in the world, and a man from Galilee saying, Render unto Caesar the things which are Caesar's and unto God the things that are God's.

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December 25, 2016 in Legal Education, Tax | Permalink | Comments (0)

Tax Prof Op-Ed:  How An Atheist Celebrates Christmas — 'True Believers Owe Jesus A Profound Spiritual Debt; We All Owe Him A Profound Intellectual Debt'

Cockfield (2016)The Globe and Mail Op-Ed: How An Atheist Celebrates Christmas, by Arthur Cockfield (Queen's University Faculty of Law):

As an atheist, I have to admit that I have not always had a stellar relationship with Jesus. Still, as much of the world sets to celebrate his alleged birth on Dec. 25, I will also reflect on this icon and the lasting and positive impression he’s had on my heritage and value system.

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December 25, 2016 in Legal Education, Tax | Permalink | Comments (0)

NY Times Op-Ed:  Why It’s Not Wrong To Wish Muslims Merry Christmas

Islamic JesusNew York Times op-ed:  Why It’s Not Wrong to Wish Muslims Merry Christmas, by Mustafa Akyol (Author, The Islamic Jesus: How the King of the Jews Became a Prophet of the Muslims):

Billions of Christians around the world are excited to celebrate Christmas this weekend. Those in the world’s second-largest religious community, Muslims, don’t share quite the same excitement. In a few Muslim-majority countries, like Saudi Arabia, Brunei and Somalia, Christmas celebrations are banned. In Turkey, my country, they are not illegal, but some Islamist groups still organize annual protests against Christmas trees and Santa Claus costumes, which they consider Western impositions.

Meanwhile, many other Muslims around the world are rightly respectful to their Christian neighbors and even share in their holy day. They include the owners of a Turkish restaurant in London that decided to offer a free Christmas meal to the homeless and the elderly, and a Muslim businessman in Baghdad who erected a Christmas tree in solidarity with Christians persecuted by the self-declared Islamic State.

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December 25, 2016 in Legal Education, Tax | Permalink | Comments (1)

WSJ Op-Ed:   Why This Rabbi Loves Christmas

Wall Street Journal op-ed: Why This Rabbi Loves Christmas: Christians and Jews Await the Messiah. The Only Debate Is If He’s Been Here Before, by Rabbi Michael Gotlieb (Santa Monica, CA):

Christmas fascinates me. I’m drawn to its history, its color, its atmosphere, its music. And, of course, I’m drawn to the fact that Jesus was a Jew. He was born a Jew, lived as a Jew and died a Jew. If for nothing else, I can appreciate Christmas as the celebration of one Jew’s epic birthday.

The 20th century philosopher and theologian Martin Buber would often begin lectures to ecumenical gatherings by stating that a key difference separating Jews and Christians is whether Jesus was the messiah. Christians believe he was, and they are awaiting his return. Jews believe that the messiah hasn’t yet come. His suggestion: Let’s all pray for the messiah—Christians and Jews alike. When he arrives, we’ll ask if he’s been here before.

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December 25, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1326: Only 72 House Republicans Voted Against Delay In Impeachment Of IRS Commissioner

IRS Logo 2Atlanta Journal Constitution, House Refuses to Move Forward on Impeachment of IRS Chief:

A last minute effort in Congress to push for an impeachment vote against the head of the Internal Revenue Service fell far short of the votes needed for victory, leaving more conservative Republicans fuming about the message and the lack of support to further investigate the Obama Administration’s Tea Party targeting scandal.

Republicans led by Rep. Jim Jordan (R-OH) argued IRS Commissioner John Koskinen had deliberately refused to turn over documents to Congress, accusing him of actively impeding the Congressional investigation into the targeting of more conservative groups by the tax agency.

“Koskinen has gotten away with stonewalling Congress, obstructing justice, breaching public trust,” Jordan said. “It’s time Congress held him accountable.” ...

The final roll call though was not close, as the House voted 342-72 to send the matter to the Judiciary Committee, where it may simply die a quiet death. ... Here are the 72 Republicans who voted against delay on the IRS impeachment resolution:

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December 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, December 24, 2016

'Twas The Night Before Christmas (Legal Edition)

Twas 6

Check out the original and legal versions of the classic poem, 'Twas the Night Before Christmas [click on chart to enlarge]:


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December 24, 2016 in Legal Education, Tax | Permalink | Comments (1)

Happy Hanukkah, Hamilton-Style

From The Maccabeats, an a cappella group at Yeshiva University:


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December 24, 2016 | Permalink | Comments (0)

Tax Prof Nancy Shurtz Blasts University Of Oregon For Improperly Releasing Error Filled Report As 'Public Retaliation And Shaming'


Tax Prof Nancy Shurtz has released this statement in response to the University of Oregon's release of a report concluding that she violated the university's anti-discrimination policy by wearing blackface to a Halloween party at her home:


On Wednesday, Dec. 21, 2016, the University of Oregon improperly released a flawed investigative report into events surrounding a Halloween party that I hosted in my home. This release violated rights of employees to confidentiality guaranteed by law. In addition, the report contains numerous mistakes, errors and omissions that if corrected would have put matters in a different light. For example, it ignored the anonymous grading process, the presence of many non-students as guests, and the deceptive emails that created a firestorm in the law school.

I, and my legal advisers, were preparing a response to the draft report. Although the University was aware of our intention to submit our corrections by noon (local time) yesterday and to deal with its errors in-house, the Provost’s office or its advisers cynically decided to try to publicly shame me instead.

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December 24, 2016 in Legal Education, Tax | Permalink | Comments (8)

Students File $5 Million Class Action Lawsuit Against Charlotte Law School

FCFollowing up on my previous posts (links below):  ABA Journal, Students File $5 Million Class Action Against Charlotte School of Law:

Two students filed a $5 million class action lawsuit Friday against Charlotte School of Law and its parent company, Infilaw.

The complaint accuses the law school of engaging in misrepresentation, unjust enrichment, breach of fiduciary duty and constructive fraud. The filing follows the U.S. Department of Education announcement that as of Dec. 31, it plans to cut off the school’s federal student aid, for allegedly misleading current and prospective students about its ABA accreditation status.

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December 24, 2016 in Legal Education | Permalink | Comments (3)

Merry Christmas From Tax Prof And City Council Member John Plecnik

Cleveland State Tax Prof and Willoughby Hills City Council Member John Plecnik (Cleveland State) has released this Christmas video:

December 24, 2016 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1325: House Impeachment Leader Grills Witness Over Giving Koskinen 'Excellence In Public Service' Award

IRS Logo 2Government Executive, Lawmaker Seeking to Impeach IRS Chief Targets Public Service Award:

[A] House oversight hearing was supposed to address time-and-attendance troubles at the U.S. Patent and Trademark Office. But one congressman actively seeking the impeachment of the Internal Revenue commissioner used his time to question a good-government nonprofit for having given IRS chief John Koskinen a public service award.

Rep. Jim Jordan, R-Ohio, acted a day after the full House voted 342-72 to refer an impeachment motion favored by the Freedom Caucus to the Ju­di­ciary Com­mit­tee, where observers expect it to die. (House leaders have expressed fears that the resolution would only tie up the Senate.)

At the House Oversight and Government Reform Committee subcommittee hearing on the Patent Office, Jordan reiterated his central complaint about Koskinen: that 422 backup tapes under congressional subpoena that may have contained 24,000 emails involving Lois Lerner, who was at the center of the dispute over alleged IRS bias against conservative nonprofits, were destroyed “on his watch.”

Jordan then zeroed in on David Chu, the president of the Institute for Defense Analyses who, separately, chaired the independent panel for the National Academy of Public Administration that performed a key study of Patent Office teleworking. “What does NAPA stand for?” Jordan asked. “Do you know who it gave the Elliot Richardson award to?” Chu did not recall. Jordan then stated it was Commissioner Koskinen who won the award last spring. “How was he chosen? Did he give money to NAPA?” Jordan asked Chu to speculate on “who was passed over” so Koskinen could get the award, but he declined.

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December 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, December 23, 2016

Cornell Pledges To Reduce Administrative Burdens On Faculty That Detract From Central Mission Of Excellence In Research And Teaching

CornellInside Higher Ed, Streamlining 'Shadow Work': Cornell Looks for Ways to Cut Time Professors Spend on Administrative Requirements, as Opposed to Teaching and Research:

Bagging our own groceries, printing out boarding passes, pumping our own gas — everyone's day involves some "shadow work," tasks that previously would have been performed by someone else paid to do them. But academics’ professional lives increasingly are subsumed by such shadow work, and the implications for their core efforts are stark. How much actual research does a researcher get to do, for example, when he or she spends hours a week on various administrative burdens?

While faculty shadow work is a widely acknowledged problem, it’s gone unaddressed at many institutions. It’s rarely, if ever, out of malice. But administrators who want some information think nothing of sending a survey to hundreds or thousands of professors and giving them a deadline. It only takes a click from a central office, but it's one more task for professors.

Cornell University is trying stem the tide with a new initiative aimed at recentering academic work on academics.

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December 23, 2016 in Legal Education | Permalink | Comments (2)

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (UC-Berkeley, moving to Indiana) reviews a new article by Reuven Avi-Yonah (UC-Irvine) and Kimberly A. Clausing (Reed), Problems with Destination-Based Corporate Taxes and the Ryan Blueprint.

Gamage (2017)The House Republicans’ plans to reform the U.S. corporate tax have been the talk of tax policy town, as of late.  Based to at least some extent on the work of my soon-to-be-former colleague Alan Auerbach, the reforms being discussed would transform the corporate tax into a destination-based cash-flow form of taxation.   

Avi-Yonah and Clausing’s draft article critiques these plans.  As they conclude (p. 16):

“The Ryan Blueprint destination based cash-flow tax is not ready for prime-time. No other country had adopted a similar tax, and as the above analysis makes clear, there are myriad issues that would need to be worked through before any such tax were adopted. These issues are not small: the plan is incompatible with trade rules in a manner which harms our trading partners, it is incompatible with our treaty obligations, it is unlikely to put an end to income shifting, it generates political problems due to large numbers of companies that would experience adverse tax treatment changes, and it is likely to generate large revenue losses. In addition, there are important issues surrounding how exporters with losses would be handled (which could lead to inefficient mergers, etc.), how financial firms would be handled, and how U.S. state corporate tax systems would be affected.”  

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December 23, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Students, Faculty React To Department Of Education's Decision To Cut Off Federal Student Loans For Charlotte Law School

FCFollowing up on my previous posts:

Charlotte Business Journal, Charlotte Law Students Make Demands Via Petition:

On Wednesday, nearly 100 students had signed an online petition aimed at administrators that lists four specific demands. ...

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December 23, 2016 in Legal Education | Permalink | Comments (3)

McDonald’s To Move Non-U.S. Tax Base From Luxembourg To U.K. Amid EU Tax Probe

McDonaldsWall Street Journal, McDonald’s to Move Non-U.S. Tax Base to the U.K.:

McDonald’s on Thursday said a large portion of its non-U.S. income would be taxed in the U.K. following a restructuring that shifts operations away from Luxembourg amid a probe by the European Union competition authority over its tax arrangements.

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December 23, 2016 in Tax | Permalink | Comments (0)

Freshman Drops Out Of Kansas State With 4.0 GPA, Says College Is A Scam Because Students Learn Quadratic Equations, Not Taxes

K StateInside Higher Ed, Giving the Finger to K-State and General Education:

Billy Willson finished his first (and his last) semester at Kansas State University this week -- and in so doing has set off a debate there and beyond on the value of college and of general education in particular.

In a Facebook post, he announced that he was dropping out, despite having earned a 4.0 grade point average. He said that he would start his own business and learn more from that experience than anything he could hope to achieve at Kansas State or any college. He ran a photo of himself giving the finger to Kansas State, although he's since said he really wants to be doing that to all of higher education. ...

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December 23, 2016 in Legal Education | Permalink | Comments (11)

The IRS Scandal, Day 1324: Ways & Means Committee Seeks Information From IRS About Continued Targeting Of Organizations Based On Political Beliefs — This Time, Pro-Israel Groups

IRS Logo 2House Ways & Means Committee Press Release, Brady, Roskam Send Letter Expressing Concern Over Continued IRS Targeting of Pro-Israel Groups:

House Ways and Means Committee Chairman Kevin Brady (R-TX) and Oversight Subcommittee Chairman Peter Roskam (R-IL) sent a letter to the Internal Revenue Service (IRS) requesting information regarding the agency’s practice and policies when reviewing an organization’s application for tax-exempt status, specifically when the organization expresses support for the State of Israel. This letter is another part of the Committee’s aggressive oversight to hold the IRS accountable to the American taxpayer.

Despite the IRS’s assurances that it has ceased its targeting of people based on their political or ideological beliefs, Chairmen Brady and Roskam are concerned about recent reports suggesting the Obama Administration has directed the agency to discriminate against organizations supporting the State of Israel. These reports are especially concerning in light of the IRS’s previous practice of giving special scrutiny to pro-Israel applications for tax-exempt status.   The Chairmen expressed their displeasure with the IRS’s discriminatory actions, writing:

“It is distressing that the United States government subjected Americans to discriminatory treatment because of their political and religious beliefs. It is more distressing that it took seven years for one such group to get fair treatment by the IRS, even as the IRS told Congress that it no longer discriminated against such groups. And perhaps most alarmingly, recent press accounts suggest that even after all of this history, the IRS might even be pursuing new discriminatory policies … Despite the IRS’s claim to Congress that it stopped political targeting in 2013, the IRS and Administration’s actions over the past seven years lend credibility to these reports.”

The Chairmen request that the IRS respond with its tax-exempt review policies and procedures by January 11, 2017.

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December 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, December 22, 2016

Blackman:  University of Oregon Trampled The First Amendment To Punish Law Prof For Wearing Blackface To Halloween Party In Her Home


Following up on this morning's post, University Of Oregon Report: Tax Prof Nancy Shurtz Violated Anti-Discrimination Policy By Wearing Blackface To Halloween Party; Any Disciplinary Action Is Confidential:  Josh Blackman (South Texas), The Freedom of Speech at the University of Oregon:

The University of Oregon’s position is similar to the argument that the University of Oklahoma fraternity brothers, who sang racist songs on a bus, could be expelled because it created a “hostile educational environment.” If you haven’t heard this phrase before, get used to it — it is a nebulous standard which will used to punish all manner of constitutionally-protected speech. But this position is a smokescreen. Eugene Volokh explains in this post why there is no “hostile education environment” exception to the First Amendment — especially for speech at private functions. ...

This is a very, very dangerous standard. An off-campus event that a small number of students attended now gives rise to on-campus discipline because students (who did not even witness the event) feel compelled to “avoid the resulting negative environment.” If this is the standard, then anything and everything can create a “hostile educational environment.” Consider several examples I raise in my my forthcoming piece in the Georgetown Journal of Leg HTML al Ethics on Model Rule 8.4(g). What if a Professor made any of these remarks at a bar association function that was also attended by students?

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December 22, 2016 in Legal Education | Permalink | Comments (1)

Estate Planning Practice Will Boom If Estate Tax Is Repealed

American Lawyer LogoAmerican Lawyer, Lawyers for the Wealthy Await Trump's Estate Tax Plan:

Donald Trump vowed to eliminate the estate tax during his presidential campaign, calling the 100-year-old tax "a disaster" and "a horrible weapon that has destroyed many families." If there are such families, the number is likely small, since very few Americans pay an estate tax. Last year only 4,918 estates owed money under the law, according to the Internal Revenue Service. That's because anyone with an estate worth less than $5.34 million, or $10.68 million for a couple, is exempt.

With Trump soon to take office, trust and estate lawyers who help rich clients minimize or avoid estate taxes don't appear panicked that a revenue stream for their practices is about to dry up. In fact, most anticipate being busier than ever.

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December 22, 2016 in Tax | Permalink | Comments (1)

California Law School Bar Pass Rates Recalculated For New York: Stanford, UCB, USC > NYU; UCI, UCLA > Columbia; Chapman, Loyola, McGeorge, Pepperdine, Santa Clara, UCD, USD > Fordham

Continuing my coverage of the July 2016 California bar exam (links below):  Robert Anderson (Pepperdine), California Law School Bar Passage Rates Recalculated for the New York Bar:

I use the abysmal bar results from the July 2016 bar exam to illustrate the difference between California and another large state, New York. New York has a required passing score that is about average across the 50 states, whereas California has an unusually high required passing score. The table below shows just how different the results for California law schools would have been if California used the same passing score as New York. ...

This chart compares Rob's results for the California law schools' projected New York bar pass rates with the New York law schools' actual New York bar pass rates:


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December 22, 2016 in Legal Education | Permalink | Comments (6)

Google Lowered 2015 Taxes by $3.6 Billion Using 'Double Irish With A Dutch Sandwich' Tax Structure

AlphabetBloomberg, Google Lowered 2015 Taxes by $3.6 Billion Using ‘Dutch Sandwich’:

Alphabet’s Google saved $3.6 billion in worldwide taxes in 2015 by moving 14.9 billion euros ($15.5 billion) to a Bermuda shell company, new regulatory filings in the Netherlands reveal.

The amount the company shifted through its Dutch subsidiary, Google Netherlands Holdings BV, and then on to a Bermuda mailbox was 40 percent greater than in 2014, according to filings the company made with the Dutch Chamber of Commerce on Dec. 12 and which were made available online Tuesday. ...

Alphabet moves the bulk of its non-U.S. profits through this Dutch subsidiary, which has no employees. The company has used the Netherlands company since 2004 as part of a tax structure dubbed a "Double Irish" and a "Dutch sandwich." By moving most of its international profits to Bermuda, the company was able to reduce its effective tax rate outside the U.S. to 6.4 percent in 2015, according to Alphabet’s filings with the U.S. Securities and Exchange Commission. ...

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December 22, 2016 in Tax | Permalink | Comments (1)

University Of Oregon Report: Tax Prof Nancy Shurtz Violated Anti-Discrimination Policy By Wearing Blackface To Halloween Party; Any Disciplinary Action Is Confidential


University of Oregon, Provost Issues Statement and Report Regarding Investigation:

Dear members of the University of Oregon campus community,

A decision by Professor Nancy Shurtz to wear a Halloween costume that included black makeup on her face and hands at a party she hosted for UO law students, former students, and faculty members forced our campus to face some very difficult truths about racism, ignorance, and the state of inclusivity on our campus. Her costume mimicked the historic stereotype of blackface, and caused offense to many who witnessed it.

Today, I write with news of the disposition of the investigation led by the UO Office of Affirmative Action and Equal Opportunity as a result of complaints made to the law school following the event at her home on October 31. The investigation into whether Professor Shurtz violated any law or university policy was conducted by the Barran Liebman LLP law firm in Portland under the direction and guidance of the AAEO office and UO general counsel Kevin Reed.

Although the findings of such investigations are not usually released, in this case the public nature of the act, the resulting public outcry, its impact on campus climate, and the fact that Professor Shurtz already released a letter that identifies herself and her intentions, the university has determined that it best serves the public interest to release a redacted version of the report. A copy has been posted online.

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December 22, 2016 in Legal Education, Tax | Permalink | Comments (5)

Minnesota Seeks To Hire A Tax Clinician

Minnesota LogoPosition Description: Visiting Assistant Professor of Clinical Law:

University of Minnesota Law Clinics, the clinical program of the University of Minnesota Law School, welcomes applicants for a visiting assistant professor position in its Ronald M. Mankoff Tax Clinic. The Tax Clinic is an in-house clinic partially subsidized with a grant from the IRS. The position is a 12-month, full-time position, and the entire position is contingent on funding through the IRS LITC program. The Tax Clinic enrolls twelve students and is a 7-credit course that runs Fall through Spring.

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December 22, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Muller:  As 1L Class Sizes Stabilize, One In Nine Law School Enrollees Are Not A Part Of A JD Program

Derek Muller (Pepperdine), As 1L Class Sizes Stabilize, One In Nine Law School Enrollees Are Not a Part of a JD Program:

[O]verall enrollment in in JD programs is starting to stabilize--not entirely, as the larger incoming classes work their way through the system and are replaced with smaller incoming classes. But total JD enrollment is now at a 42-year low, at 110,951. ...

In contrast, non-JD legal enrollment continues to grow steadily. It's up to 13,677 total enrolled in non-JD programs. ... Non-JD enrollment is [now] 11% of a law school's total enrollment.



December 22, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1323:  Tea Party Group Decries IRS's 'Latest Bob And Weave To Avoid Accountability'

IRS Logo 2Following up on yesterday's post, The IRS Scandal, Day 1322: Government Denies That It Continues To Harass Tea Party Group:  

Plaintiff Texas Patriots Tea Party’s Reply in Support of its Motion to Clarify Preliminary Injunction:

In its response, the IRS again reverses position. Three weeks ago, after it insisted it would deny TPTP unless it responded within 30 days, emergency relief was needed just to allow the current motion. Yet now, the IRS professes bewilderment: had TPTP only asked, its request would have been granted. This claim is stunning. Just a week before TPTP moved for relief, TPTP stated its position in a conference with the Court. A far from “amenable” IRS adamantly opposed it. The IRS rewrites history, perhaps, to obscure the true reason for its last-minute change of heart: it wants this Court to pronounce that the IRS’s new position is a benevolent accommodation of TPTP, outside of the “ordinary course.” This plea for the Court’s blessing is the sole remaining issue now that the IRS agrees to TPTP’s request, but this Court should deny it. The IRS’s latest bob and weave is another effort to avoid accountability. It cynically trades “accommodation” of TPTP for judicial approval of its continuing use of “neutral” policies that exacerbate the targeted groups’ injuries. Most depressingly, it shows that 42 months into this case, the IRS remains more focused on saving face than unwinding the harms it has caused.

Previous TaxProf Blog posts:


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December 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, December 21, 2016

Parrish:  More Thoughts On The ABA’s Proposed 75% Bar Passage Standard

ParrishTaxProf Blog op-ed:  More Thoughts on the ABA’s Bar Pass Standard Proposal, by Austen L. Parrish (Dean, Indiana):

Monday, in an op-ed on this blog, deans Craig Boise (Syracuse) and Andrew Morriss (Texas A&M) responded to a periodic column I write for the Indiana Lawyer. Deans Boise and Morriss disagreed with my conclusion that the ABA House of Delegates should reject the proposal to impose a 75% national bar pass standard as a requirement for accreditation.

If we disagreed simply over the wisdom of the proposed new ABA standard, I would not write. In their op-ed, however, Deans Boise and Morriss say that I believe that law schools “should not be held accountable for their students’ performance,” that the ABA should adopt standards “to ensure [law school] survival rather than the success of law students,” and that I believe “bar exams are merely devices to limit entry into the profession.” But that’s not what I wrote. Nor is it what I believe. And it’s not what others who share my concerns believe. On the contrary, as I said in my original piece, the ABA should withdraw accreditation from any school found to be predatory, as long as they are transparent in what they are doing.

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December 21, 2016 in Legal Education | Permalink | Comments (2)