TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, February 23, 2018

Tax Policy In The Trump Administration

Survey Confirms 'Trump Bump' In Law School Applications


Following up on Wednesday's post, LSAT Test-Takers Surge 29.7% In December; 19.2% Yearly Rise Would Be Highest In 16 Years:  Kaplan Test Prep Survey, Over 30 Percent of Pre-Law Students Say the Results of the 2016 Election Impacted Their Decision to Apply to Law School:

The results of a new Kaplan Test Prep nationwide survey of over 500 pre-law students reveal a potential reason why the number of law school applications and LSATs® administered are up by double digits compared to last year: politics*. Nearly one third of pre-law students surveyed (32 percent) say the results of the 2016 election impacted their decision to become lawyers. ...

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February 23, 2018 in Legal Education | Permalink | Comments (3)

Charleston Law Students Win 7th Consecutive National Tax Moot Court Competition

2018 National Tax Moot CourtPost and Courier, Charleston School of Law Moot Court Team Defends its Dynasty With 7th National Title:

To the uninitiated, tax moot court might sound like a bit of a snoozefest.

Unlike the academic marathon of a spelling bee or the sassy courtroom repartee of "Judge Judy," deliberations over the finer points of U.S. tax code do not make for a lively spectacle.

But to the Charleston School of Law, the 2018 National Tax Moot Court Competition in St. Pete Beach, Florida, was a chance to defend a dynasty. The school's Moot Court Board had won the championship six years in a row leading up to the event on Feb. 1-3, and its team was ready to notch a seventh national title. ...

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February 23, 2018 in Legal Education, Tax, Teaching | Permalink | Comments (0)

NALP: Perspectives On 2017 Law Student Recruiting

Nalp 2NALP, Perspectives on 2017 Law Student Recruiting:

Following the near collapse of entry-level recruiting by large law firms in 2009, most law firms have rebuilt their summer programs and in many ways, Big Law recruiting volume and practices resemble those measured before the recession. On the other hand, for the second year in a row aggregate summer offer volume decreased compared with the year before, and a significant percentage of law firms said they made fewer offers for 2018 summer programs than for 2017 summer programs. Also, the average summer program class size at the largest law firms dipped in 2017. The data collected from NALP’s surveys of law schools and law firms at the end of the 2017 recruiting cycle present something of a nuanced picture, suggesting not so much a contraction as a leveling of recruiting volumes following years of growth.

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February 23, 2018 in Legal Education | Permalink | Comments (0)

Pepperdine Disaster Relief Clinic Helps California Fire Victims

PDRPepperdine Legal Clinics Aid California Fire Victims:

The Pepperdine School of Law instituted the Disaster Relief Clinic this semester in response to the need of the hundreds of individuals affected by the local Thomas fires, as well as the Texas hurricanes. Through this program, law students are able to provide pro-bono legal services to those who would not otherwise be able to afford it.

The School of Law’s Clinical Education Program includes 10 separate clinics this semester. ... “When teaching students, we also manifest our mission to the world and try to contribute to our communities and our neighbors and serve people who need it,” Director of Clinical Education and Associate Clinical Professor of Law Jeffrey Baker said. ... “Generally, the legal clinics are our teaching law firm inside the law school. So we actually practice real law for real clients…and students work under faculty supervision to get experience practicing law,” Baker said.

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February 23, 2018 in Legal Education | Permalink | Comments (0)

Thursday, February 22, 2018

McCormack Presents America's (D)evolving Childcare Tax Laws Today At Duke

McCormackShannon Weeks McCormack (University of Washington) presents America's (D)evolving Childcare Tax Laws at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Proponents have touted the ability of the Tax Cuts and Jobs Act (the TCJA) — enacted in the twilight of 2017 — to help American working families. But while the TCJA expanded some benefits available to parents with dependent children, these “parental tax benefits” may be claimed regardless of whether or to what extent childcare costs are incurred to work outside the home. To help working parents with these costs (which are often their largest expense), Congress might have turned to two other mechanisms in the tax law — the child and dependent care credit, and the “dependent care exclusion. While these “childcare tax benefits” are only available to working parents that pay for childcare, stringent limitations have kept many from recovering anything near their actual costs, particularly in the critical years before children reach school-age. As a result, the Code has been taxing families with different childcare needs inequitably. But the TCJA left these “childcare tax laws” untouched and thus did nothing to address this problem. By exploring critical junctures in their development, this Article seeks to understand how America’s tax laws have (d)evolved in this manner and, in doing so, situates some of TCJA’s so-called reforms into their historical context.

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February 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pratt Presents Learning To Live Without Form 1040 Today At UCLA

Pratt (2017)Katherine Pratt (Loyola-L.A.) presents Learning to Live Without Form 1040 at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

This Article explores the functions served by the annual mass filing of individual income tax returns on Form 1040 and considers the institutional design opportunities presented by the proposed conversion of the “mass” income tax into a “class” income tax. Focusing on Michael Graetz’s Competitive Tax Plan, Part I briefly summarizes proposals that would narrow the scope of the income tax and significantly reduce the number of Form 1040 tax returns filed annually. The prospect of eliminating so many income tax returns raises the question of whether a reduction in Form 1040 filings could have unexpected consequences.

Part II asks: aside from raising revenue, what functions does the mass filing of Form 1040 serve? Larry Zelenak posits certain functions served by the mass filing of Form 1040, including the “warm glow” “fiscal citizenship” function. This Article addresses additional functions that the mass filing of Form 1040 serves.

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February 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Law Schools Examine Predictive Value Of GRE, LSAT

GRELSATABA Journal, Law Schools Examine Predictive Value of GRE, LSAT:

In 2016, the University of Arizona announced that its law school would accept Graduate Record Examinations scores as well as the traditional Law School Admission Test from applicants. Since then, debate has swirled around how valid and reliable both standardized tests are in predicting how applicants would perform in law school.

The Educational Testing Service, which designs and administers the GRE, claims that exam’s ability to predict law school success is comparable to that of the LSAT. The Law School Admission Council, which designs and administers the LSAT, counters that its exam is specifically designed to test skills needed to excel in law school, and that the validity of the exam has years of research.

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February 22, 2018 in Legal Education | Permalink | Comments (0)

WSJ: New BEAT Tax Could Eliminate Benefit From Lower Corporate Tax Rate For Some Foreign Firms

WSJ 2Wall Street Journal, BEAT UP? U.S. Tax Provision May Sting Foreign Firms:

Executives around the world have embraced the overhaul’s big reduction in the federal corporate-tax rate—from 35% to 21%. Less-well-known provisions in the new code, however, could hurt some companies based outside the U.S. and doing business in the country.

One of the biggest potential threats is the base-erosion and anti-abuse tax. Dubbed BEAT, the levy could damp—or even completely offset—any gains that foreign multinationals such as SAP might otherwise expect from the reduction in the U.S. tax rate.

Here is how BEAT is designed to work: If a company generates more than $500 million in annual revenue in the U.S., and its American units make above a specified level of tax-deductible payments to related companies overseas, those units must pay a minimum tax on their U.S. profit after adding back in certain types of deductions. The minimum rate is 5% in 2018, but rises to 10% in 2019 and 12.5% in 2026.

Drafters of the tax law say the provision was meant to discourage companies from inappropriately channeling profit generated in the U.S. to lower-tax regimes.

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February 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Syracuse Law School's New Hybrid J.D.: 75% Online, 25% Residential/Externships

Syracuse (2017)Following up on last week's post, ABA Approves Online JDs At Syracuse, Southwestern:  Inside Higher Ed, Syracuse Law Gains Approval for (Mostly) Online J.D.:

Syracuse University College of Law has won approval from the American Bar Association's accreditation division to offer a J.D. program in which roughly two-thirds of the course work will be completed online — although about half of the credits completed at a distance will be conducted live, in real time, school officials note. The ABA has been cautious in permitting law schools to educate students via the internet, and before Syracuse, the bar association had approved two institutions to offer more than 15 of their credits online, its current limit (though an increase is under review).

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February 22, 2018 in Legal Education | Permalink | Comments (0)

NY Times: Tax Overhaul Gains Public Support, Buoying Republicans

NYTNew York Times, Tax Overhaul Gains Public Support, Buoying Republicans:

The tax overhaul that President Trump signed into law now has more supporters than opponents, buoying Republican hopes for this year’s congressional elections.

The growing public support for the law coincides with an eroding Democratic lead when voters are asked which party they would like to see control Congress. And it follows an aggressive effort by Republicans, backed by millions of dollars of advertising from conservative groups, to persuade voters of the law’s benefits.

That campaign has rallied support from Republicans, in particular. But in contrast with many other issues — including Mr. Trump’s job approval rating — it also appears to be winning over some Democrats. Support for the law remains low among Democrats, but it has doubled over the past two months and is twice as strong as their approval of Mr. Trump today.

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February 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

2017 Tannenwald Tax Writing Competition Winners

Tannenwald (2016)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship has announced the winners of the 2017 tax writing competition:

First Prize ($5,000):
David Berke (Yale), Reworking the Revolution: Treasury Rulemaking & Administrative Law
Faculty Sponsor:  Anne L. Alstott

Second Prize ($2,500):
Daniel W. Blum (NYU), Treaty Shopping and its Prevention in a Post-BEPS World Limitation-on-Benefits, Beneficial Ownership and the Principal Purpose Test: Evolution, Underlying Rationales and Interrelation
Faculty Sponsor:  H. David Rosenbloom

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February 22, 2018 in ABA Tax Section, Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

Gallup: Only 23% Of Law School Grads Say Their Education Was Worth the Cost

Gallup, Few MBA, Law Grads Say Their Degree Prepared Them Well:

Masters of business administration (MBAs) and law degree graduates are less likely than other postgraduates to say their graduate degree prepared them well for life outside of graduate school and that it was worth the cost. Only two in 10 MBAs and law degree holders say their education prepared them well, while half of medical degree holders say the same.


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February 22, 2018 in Legal Education | Permalink | Comments (9)

Wednesday, February 21, 2018

Wallace & Glogower: Shades Of Basic Income

Clint Wallace (South Carolina) & Ari D. Glogower (Ohio State), Shades of Basic Income:

The basic income concept, at a high level of generality, has generated increasing interest among scholars, policymakers, and members of the public around the world and across the political spectrum. In practice, however, the basic income label encompasses a variety of different proposals, with different underlying policy motivations, design features, and anticipated effects. The varied motivations reflect different political ideologies and policy priorities, as well as different expectations for the future of the economy and labor market demand. While many agree that basic income could be a useful solution, there is no consensus as to the problems basic income solves.

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February 21, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Key To Law Student Well-Being? We Have To Love Our Law Students

David B. Jaffe (American), The Key to Law Student Well-Being? We Have to Love Our Law Students:

Anyone paying attention has moved well beyond guesswork regarding the health of our law students. A recent survey focusing on law student well-being reflects, inter alia, that students are drinking excessively, are taking drugs not prescribed to them, and are expressing high rates of depression and/or anxiety. Another landmark study refutes earlier notions that these issues befall attorneys as they age, suggesting instead that younger attorneys are suffering in greater numbers, which in turn reflects a closer proximity to a lawyer’s time in law school and underscores the importance of addressing these issues at an earlier time. Law school deans of students report increasing meetings and counseling of students (a good sign), which may reflect a coming of age of students who were diagnosed with a mental health issue or substance use disorder, as well as a greater self-awareness and desire for self-care than previously witnessed. However, these students are not seeking professional help for their issues in the numbers that would be anticipated. Unfortunately, after acknowledging that something more should be done to help these students, those who are able to make a difference often return to their own tasks and responsibilities, assuming someone else will address the myriad problems.

This article is an effort to close the gap in the care provided to law students. A National Task Force, convened to focus on well-being in the legal profession, developed a series of recommendations for critical stakeholders. Underscoring the recommendations, the Report is a “call to action” at a critical juncture for those in the legal profession. This article focuses on the greater attention needed in law schools, offering concrete suggestions to take each of us beyond merely agreeing that more needs to be done to making a commitment to action. The article is thus divided into sections in an effort to address the many stakeholders who can play a role in taking better care of our students.

After counseling thousands of law students, many of whom came forward only when in crisis and thus with reduced opportunities to help at the law school’s disposal, I suggest that the time for strengthened approaches is upon us. Together we can make a significant difference in the lives of our law students; we have to start by loving them.

The Dean’s role is critical to the success of almost every suggestion provided here. The Dean must establish the policy if it does not exist, or modify the policy if it is not addressing the needs of the school. Perhaps above all, however, the Dean must decide if well-being is to be among the mandates of governance. The Dean is the face of the law school and as such should be modeling what well-being looks like at the institution. The traditional prongs for assessment of law faculty — teaching, scholarship, and service — do not cater to the substantial needs raised in this article, perhaps because the needs are less traditional, and perhaps because they are less quantifiable. Whether choosing to expand on “service” to include regular non-classroom dedication to one’s students, or to expand the prongs in a similar vein, the Dean is charged with making this work.

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February 21, 2018 in Legal Education | Permalink | Comments (1)

Galle: Design And Implementation Of A Charitable Regulation Regime

Brian D. Galle (Georgetown), Design and Implementation of a Charitable Regulation Regime:

Why is regulation of charity so pervasive? Is regulation justifiable from a perspective of economic theory? How can it be squared with the fundamentally private—that is, non-governmental—nature of charitable firms? This chapter explores five major questions in the design and implementation of regimes for regulation of charity, with the analysis centered in transaction-cost economics.

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February 21, 2018 in Scholarship, Tax | Permalink | Comments (0)

LSAT Test-Takers Surge 29.7% In December; 19.2% Yearly Rise Would Be Highest In 16 Years

After 19.8% (June) and 10.7% (Sept/Oct) surges in the number of LSAT test-takers in the first two test administrations for the 2017-18 admissions cycle, LSAT test-takers skyrocketed 29.7 in December.  The 19.2% increase in the first three test administrations is the largest since 2001-02.

LSAT Test-Takers

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February 21, 2018 in Legal Education | Permalink | Comments (1)

Houston Hosts Conference On Federal Pricing Of Carbon: Tax v. Cap and Trade

Houston (2017)The International Fiscal Association (IFA), University of Houston Environment, Energy & Natural Resources Center, Duke Energy Institute, the UH Energy Institute, and Duke University Nicholas Institute host a two-day conference on Federal Pricing of Carbon: Tax v. Cap and Trade. Today's tax panels:

Considering a Carbon Tax and Cap and Trade:

  • Bret Wells (Hosuton) (moderator)
  • Larry Zelenak (Duke), Overview of Carbon Tax
  • Tracey Roberts (Cumberland), Overview of Cap & Trade and Basic Design Components of the Two Systems
  • Michael Wara (Stanford), Evolution to Hybrid Systems and How Those Systems Handle Price Versus Quantity Uncertainty
  • Brian Murray (Duke), Quantity Instruments and How Complementary Regimes Could Work
  • Diane Kraal (Monash), The Australian Experience With a Carbon Tax System
  • Victor Flatt (Houston), Carbon Pricing and the Energy Industry; The Political Economy of Tax v. Cap and Trade

International Implications of a Carbon Regime:

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February 21, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Penn Dean Denies Amy Wax's Claim That He Asked Her To Take Leave Due To Controversial Op-Ed

Penn (2017)Following up on Monday's post, Amy Wax (Penn), The Closing Of The Academic Mind:, Penn Law Disputes Prof's Claim She Was Asked to Take Leave Due to Op-Ed:

A professor at the University of Pennsylvania Law School claims the school’s dean recently asked her to take a leave of absence after she published a controversial op-ed last year, but the school says the dean was merely discussing a routine sabbatical with her.

Amy Wax alleges in a new Wall Street Journal op-ed published Feb. 16 about free speech on campus that Penn Law Dean Ted Ruger asked her to stop teaching required first-year courses in addition to taking a leave of absence after her first op-ed created a firestorm. Wax offered the request as an example of how college campuses pay lip service to free speech and free inquiry when in reality those who espouse views that are not politically correct face personal attacks rather than reasoned debate.

The law school on Tuesday disputed Wax’s characterization of events, saying that Ruger’s conversation with Wax was not in response to her op-ed, but a routine discussion about her taking a sabbatical.

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February 21, 2018 in Legal Education | Permalink | Comments (1)

Sam: From Each According to His Ability — An Analysis Of Endowment Taxation And Potential Earnings

Erick Sam (Duke), From Each According to His Ability: An Analysis of Endowment Taxation and Potential Earnings:

This article is a theoretical analysis of endowment (or ability) taxation, which is a tax on a person's "potential earnings." Potential earnings are typically defined as the maximum income a person could earn or could have earned over a given time period. This scheme of taxation, which has long enjoyed favor among economists, has recently gained significant support from tax law scholars as well, and is therefore due for an in depth critical analysis.

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February 21, 2018 in Scholarship, Tax | Permalink | Comments (3)

Early, Individualized, Outreach To Low-Performing Law Students Does Not Improve Their Final Grades

David M. Siegel (New England), Should You Bother Reaching Out? Performance Effects of Early Direct Outreach to Low-Performing Students, 94 U. Det. Mercy L. Rev. 427 (2017):

Do early alerts to students at-risk in a law school course affect their performance? Increased use of formative assessments throughout higher education, and now their required use in legal education, permits identification of students whose performance suggests they are at-risk early in a course. In legal education, formative assessments must “measure and improve student learning and provide meaningful feedback to students,” and recent research suggests individualized feedback to law students can improve students’ overall performance. Outside law schools, higher education has increasingly used early alert systems to identify and reach out to at-risk students, but their utility at improving performance is still in question.

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February 21, 2018 in Legal Education | Permalink | Comments (4)

Tuesday, February 20, 2018

Cauble: Exploiting Regulatory Inconsistencies

Emily Cauble (DePaul), Exploiting Regulatory Inconsistencies, 74 Wash. & Lee L. Rev. 1895 (2017):

In many instances, sophisticated parties exploit inconsistencies between regulatory regimes to achieve beneficial treatment under each regime by obtaining classification under one regime that is, at least superficially, inconsistent with classification under the other regime. For instance, parties might design an instrument that is treated as “debt” for tax purposes, but “equity” for purposes of capital requirements instituted by financial regulators.

This Article asks whether exploiting regulatory inconsistencies is problematic. This Article concludes that inconsistency, in and of itself, is not necessarily a problem.

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February 20, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Secret To Midcareer Success: Shift From Primary (Hard) Skills For Personal Productivity To Secondary (Soft) Skills For Leadership

Wall Street Journal op-ed:  The Secret to Midcareer Success, by Michael S. Malone (Santa Clara):

Why are some top professionals able to maintain peak performance throughout long careers, while others who may be even more talented quickly fade and fall behind? And why do some lesser performers suddenly take off in midcareer and accomplish astonishing things?  Two successful tech leaders offer remarkably similar answers to these questions.

Anil Singhal was born in India but emigrated to the U.S. before co-founding NetScout Systems in 1984. ... A key part of Mr. Singhal’s management strategy has involved helping top young employees make the transition to midcareer success. In particular, he believes that employees’ “primary skills” can take them only so far. “Those talents by which you earned your college degrees and first made your professional reputation,” writes Mr. Singhal in his upcoming book, can drive success for the first 10 years of a career. After that, “secondary skills”—social qualities like the ability to interact well with colleagues—become the key to continued success.

Mr. Singhal believes that most employers mistakenly nurture primary skills at the expense of secondary ones. This is especially true for employees who are highly productive right off the bat. Unless they move into management or mentorship roles, these increasingly expensive employees can become a drag on employers as their productivity naturally falls off.

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February 20, 2018 in Legal Education | Permalink | Comments (0)

Why Is It So Hard For Democracies To Deal With Inequality?

New York Times op-ed:  Why Is It So Hard for Democracy to Deal With Inequality?, by Thomas B. Edsall:

In theory, in a democracy, the majority should influence — some would even say determine — the distribution of income. In practice, this is not the case.

Over the past few decades, political scientists have advanced a broad range of arguments to explain why democracy has failed to stem the growth of inequality.

Most recently, Thomas Piketty, a French economist who is the author of “Capital in the Twenty-First Century,” has come up with a straightforward answer: Traditional parties of the left no longer represent the working and lower middle classes.

In a recent Power Point presentation, “Brahmin Left vs Merchant Right,” Piketty documents how the domination of the Democratic Party here (and of socialist parties in France) by voters without college or university degrees came to an end over the period from 1948 to 2017. Both parties are now led by highly educated voters whose interests are markedly different from those in the working class.

The result, Piketty argues, is a political system that pits two top-down coalitions against each other. ...

The Piketty report is a significant contribution to the growing collection of studies analyzing the inability of democratic forces to adequately counter inequality.

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February 20, 2018 in Tax | Permalink | Comments (1)

Tax J.D. And LL.M. Program Rankings By Tax Hiring Authorities

Tax Talent, 2018 Top in Tax Educational Survey:

This annual survey provides tax employers the opportunity to vote for the best U.S. undergraduate, graduate and legal programs from their perspective for the 2017-2018 school year. 370 total respondents (U.S. tax hiring authorities, from both corporate in-house tax departments and professional service firms). This respondent total is up from 321 the previous year.

Recuiter 10 (JD)

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February 20, 2018 in Law School Rankings, Legal Education, Tax | Permalink | Comments (1)

45th Annual Pepperdine Law School Dinner: Our Place In The World

Our Place in the WorldTickets are available for the 45th Annual Pepperdine School of Law Dinner at the Beverly Wilshire Hotel in Beverly Hills.  The theme is Our Place in the World, which is particularly approprriate this year in light of the $8 million gift we received in September to support of our global justice program (the largest single endowment gift in the law school's history).

Our featured speaker is Gary Haugen, CEO of International Justice Mission.  Before founding IJM in 1997, Gary was a human rights lawyer for the U.S. Department of Justice. In addition to his work across the globe on human rights issues, Gary is an author of several books and a visiting professor at Pepperdine.  To pique your interest, check out his 2015 TED Talk:

February 20, 2018 in Legal Education | Permalink | Comments (0)

Avi-Yonah & Vallespinos: U.S. Tax Reform And The WTO

Reuven S. Avi-Yonah (Michigan) & Martin Vallespinos (S.J.D. 2018, Michigan), The Elephant Always Forgets: US Tax Reform and the WTO:

The “Tax Cuts and Jobs Act” (TCJA) enacted on December 22, 2017 includes several provisions that raise WTO compliance issues. At least one such provision, the Foreign-Derived Intangible Income (FDII) rule, is almost certain to draw a challenge in the WTO and is likely to lead to another US loss and resulting sanctions. This outcome would be another addition to the repeated losses suffered by the US for export subsidies from the 1970s to 2004, which led to the imposition of sanctions and the ultimate repeal of the offending regime. The important question for 2018 and beyond is whether the Trump administration and its Congressional allies will react to such a loss in a similar fashion as the Bush administration did in 2004, or whether it will defy the WTO, with potential far-reaching consequences for the world trade order.

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February 20, 2018 in Scholarship, Tax | Permalink | Comments (0)

KPMG Report On New Tax Law

Millennials, Deliberate Learning, Motivation, Resilience, And Law Students

Kim Kass (Valparaiso), Millennials, Deliberate Learning, Motivation and Resilience:

Law school faculty and staff frequently engage in conversations about the challenges of teaching the millennial generation. The millennial generation will continue to fill law school seats for the next several years. Many of these students have had much different educational and life experiences than the law faculty who have been tasked with teaching them.

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February 20, 2018 in Legal Education | Permalink | Comments (1)

Monday, February 19, 2018

Wax: The Closing Of The Academic Mind

Following up on my previous posts (links below):  Wall Street Journal:  The Closing of the Academic Mind, by Amy Wax (Pennsylvania):

There is a lot of abstract talk these days on American college campuses about free speech and the values of free inquiry, with lip service paid to expansive notions of free expression and the marketplace of ideas. What I’ve learned through my recent experience of writing a controversial op-ed is that most of this talk is not worth much. It is only when people are confronted with speech they don’t like that we see whether these abstractions are real to them.

The op-ed, which I co-authored with Larry Alexander of the University of San Diego Law School, appeared in the Philadelphia Inquirer on Aug. 9 under the headline, “Paying the Price for the Breakdown of the Country’s Bourgeois Culture.” It began by listing some of the ills afflicting American society. ...

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February 19, 2018 in Legal Education | Permalink | Comments (6)

WSJ: The New Tax Law Makes Analyzing Corporate Earnings Trickier

WSJWall Street Journal, The Tax Law Is About to Make Analyzing Earnings Trickier:

The new U.S. tax law could throw a monkey wrench into a method many analysts and investors use to gauge the strength of companies’ earnings.

A provision of the tax overhaul enacted in December assesses a one-time tax on companies’ accumulated earnings from outside the U.S. But while the tax is typically charged to companies’ 2017 earnings, firms have the option of stretching the actual tax payment over the next eight years, interest free.

That decision, which companies need to make this year, could throw off the comparison of a company’s earnings to its cash flow, a traditional way of assessing earnings quality.

Investors like to see a company’s earnings fully backed by the cash its operations are generating. It demonstrates the company has the money to pay shareholder dividends and invest in its own future. But stretching out payments of the “transition tax” on foreign earnings will muddy that comparison, accounting experts say.

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February 19, 2018 in Tax | Permalink | Comments (1)

The Uncertain Landscape For Online Legal Education

Inside Higher Ed, The Uncertain Landscape for Online Legal Education:

In late 2013, the American Bar Association gave a private nonprofit law school in Minnesota permission to create a part-time Juris Doctor program that blended online courses heavily with face-to-face instruction. The question Inside Higher Ed posed in our article at the time was “whether it marks an experiment or a turning point for how legal education is delivered in the U.S.”

More than four years later, the answer remains unclear, with a mixed record for law schools seeking approval to create programs with significant online presences and the ABA apparently contemplating a loosening of its standards.

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February 19, 2018 in Legal Education | Permalink | Comments (0)

Galle: Kill Quill, Keep The Dormant Commerce Clause — History's Lessons On Congressional Control Of State Taxation

Brian D. Galle (Georgetown), Kill Quill, Keep the Dormant Commerce Clause: History's Lessons on Congressional Control of State Taxation, 70 Stan. L. Rev. Online ___ (2018):

The world of internet commerce was shaken to its foundations in January this year, when the Supreme Court agreed to reconsider its landmark holding in Quill Corp. v. N. Dakota. For more than twenty-five years, Quill has barred states from imposing tax-collection obligations on retailers lacking “physical presence” in the taxing state. As a practical matter, this has meant that internet retailers with no employees or facilities in a state can sell into the state without collecting the sales taxes that local retailers must. In this Essay, I’ll argue that original historical evidence I’ve collected suggests that the political economy premises on which Quill rests are fundamentally mistaken. But I believe that same evidence should lead the Court to keep in place the larger body of “Dormant Commerce Clause” jurisprudence from which Quill first sprung.

February 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

Lesson From The Tax Court: The Phantom Of The Tax Code—Discharge Of Indebtedness

Tax Court (2017)The Tax Court issued two opinions on January 16, 2018, where taxpayers got hit by what I call the Phantom of the Tax Code: Discharge of Indebtedness (DOI), also known as Cancellation of Debt (COD). I will first tell you about each case, and then discuss what we can learn about this Phantom.

In John Anthony Glennon v. Commissioner, T.C. Memo. 2018-4, Mr. Glennon got unlucky in Las Vegas, but not in the usual way. He was at the airport and was enticed by the offer of a $59 fly-anywhere ticket to sign up for a Southwest Airlines credit card issued by Chase Bank. Like most of us, he just wanted the enticement and after using it planned to cancel the card. But times got bad and he needed the card to pay living expenses. He fell behind in payments and in 2014 the bank contacted him with an offer to settle the debt. He took the offer, and his payment left him with a balance due of just under $9,686. The bank then cancelled that remaining debt and in 2015 sent him a Form 1099-C. Mr. Glennon did not report the COD income and thanks to its nifty computer matching system, the IRS discovered the resulting deficiency in tax. Mr. Glennon’s main argument before the Court seems to be that “the debt had been resolved by his settlement.” The Court responded: “petitioner did not understand the concept of cancellation of indebtedness income.”

In Michelle Keel v. Commissioner, T.C. Memo. 2018-5, Ms. Keel’s 2015 COD income kicked her over the income limit to receive health insurance premium assistance tax credits. Those credits are given to taxpayers on a monthly basis in the form of direct payments to insurers to help pay for the taxpayer’s health insurance. Their purpose is to help with cash flow problems. In Ms. Keel’s case, she claimed the credit for 2015 and the federal government paid $335 per month to her insurer.

Only taxpayers whose income falls below a ceiling can get the health insurance premium assistance credits. And while taxpayers are allowed to estimate their income for the year, they must reconcile the amount of credits received with their actual income. In 2015 the ceiling for Ms. Keel was $46,680. In 2015 Ms. Keel had wage income of $39,000 and if that were her only income, she would qualify. However, in 2015 the Bank of America discharged some $16,000 of indebtedness. If you add that to the wage income, it took her well above the ceiling. While Ms. Keel properly reported the COD income on her return, she failed to reconcile. The IRS did it for her and Ms. Keel protested the resulting NOD. She asserted in her petition that the COD should not count in computing her eligibility for the premium assistance tax credits. But she failed to otherwise appear or argue the matter.  The Tax Court granted Summary Judgement to the IRS.

Each cases teaches us something about the Phantom of the Tax Code: a basic lesson and a more advanced one. Both lessons are below the Fold

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February 19, 2018 in Bryan Camp, New Cases, Tax | Permalink | Comments (2)

Denver Adopts A Kinder, Gentler Post-Tenure Review Policy: Development, Not Punishment

DenverFollowing up on my previous posts on the lawsuit by female law profs against the University of Denver Law School (links below):  Chronicle of Higher Education Special Report, A More Upbeat Approach to Post-Tenure Review:

The University of Denver is instituting a program focused not on punitive measures but on helping professors develop their skills.

Most Professors Hate Post-Tenure Review. A Better Approach Might Look Like This.

Skill development and guidance from colleagues take precedence at the University of Denver.

"Once you’ve got tenure you can antagonize people or bring them in. You can get the most out of them rather than force them to fit a cookie-cutter mold." ...

"Faculty development is not a punishment. The final goal was to make people understand that they couldn’t get tenure and just rest."

The Evolution of a Faculty-Focused Approach

At the University of Denver, faculty members overcame anger and distrust to hammer out a novel set of post-tenure policies.

[T]here were numerous faculty members who were pushing for post-tenure review in what I viewed as a punitive fashion. Some of them were angry at colleagues that they didn’t perceive as being productive and wanted a way to get rid of them. I thought it was fairly draconian, but it started a conversation.

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February 19, 2018 in Legal Education | Permalink | Comments (1)

Tax Reform And IRS Resistance

Wall Street Journal:  Tax Reform and IRS Resistance, by Kimberley A. Strassel:

With all the good news about the new Republican tax law, you may be surprised to learn that the fight isn’t over. Behind the scenes, reformers face a new challenge: Navigating the IRS swamp.

It’s a little-known fact that for 35 years the Internal Revenue Service has exempted itself from the most basic regulatory oversight. When the Labor Department or the Small Business Administration create “major” or “significant” rules or guidance, they are required to submit them for centralized review. That ensures regulations are consistent with the law and with White House priorities and that they’ve been analyzed for costs, benefits and flexibility.

But in 1983, the Treasury Department signed a memorandum with the Office of Management and Budget that largely exempted the IRS from submitting its rules to White House review via OIRA, the Office of Information and Regulatory Affairs. The memo still stands today. In the face of congressional attempts at oversight, the IRS issued a 1996 opinion claiming that tax statutes are in and of themselves responsible for any costs or inflexibility—that the IRS’s rules are, by definition, pure distillation of law. ...

[T]he IRS is already playing games with the GOP tax reform.

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February 19, 2018 in IRS News, Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, February 18, 2018

WSJ: Admissions Officers Personally Deliver Acceptances To Applicants (Sometimes With A Dog)

ButlerWall Street Journal, Who’s at the Door? College Officials Delivering Your Acceptance in Person (Sometimes With a Dog):

Admissions officers are traveling hundreds of miles with a live animal to inform high-school seniors they have been accepted to a college—and to urge them to enroll. It’s not just the star athletes or scholarship winners who get the treatment. It is pretty much anyone, a tactic driven by competition to snag the declining number of college-bound high-school students.

One of the hardest working college salesmen is Trip, a 6-year-old English bulldog with doleful, dark eyes. His predecessors are retired.

On road trips, he paces himself with long naps in the back seat of the school’s car while it shuttles him from Butler University in Indiana to prospective students’ homes in Boston, Milwaukee, Orlando and Chicago. Occasionally he hitches an airplane ride if his visits coincide with road games for the school’s nationally ranked basketball team. ...

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February 18, 2018 in Legal Education | Permalink | Comments (4)

Religious Organizations Should Not Lose Their Tax-Exempt Status Based On Public Policy, Post-Obergefell

Sally Wagenmaker (Wagenmaker & Oberly, Chicago), Why Religious Organizations Shouldn't Lose Tax-Exempt Status Based on Public Policy, Post-Obergefell:

Since the U.S. Supreme Court issued its historic same-sex marriage decision in Obergefell v Hodges in June 2016, the question has been raised whether religiously-affiliated organizations could lose their Section 501(c)(3) tax-exempt status or not, based on the “fundamental public policy” doctrine as used in the Court’s 1983 decision in Bob Jones University v. United States. Several significant considerations come into play: the value and place of religious liberty freedoms within our country’s constitutional framework and shifting cultural context; the IRS’s role as arbiter of Section 501(c)(3) recognition; and the “tax subsidy” theory that accompanies tax-exempt status, particularly whether it should affect religious Section 501(c)(3) organizations.

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February 18, 2018 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Cincinnati Law School Dean's Son Subject Of Racist Taunts At High School Basketball Game

Cincinnati Enquirer:  We're All Better Than This Racist Crap Going on at Our Area High Schools, by Paul Daugherty:

Standing at the free throw line Friday night at Elder High School, St. Xavier senior basketball player Bobby Jefferson was no more than 30 feet from the Elder students who chanted this at him:

“He can’t read.’’

Later, Jefferson would also hear:

“(He) smokes crack.’’


“(He’s) on welfare.’’ ...

For the record, Bobby Jefferson is an African-American, headed to Dartmouth College next fall. ...

What the heck is going on with us? What are we doing?

Have we suddenly lost our minds and misplaced our collective conscience?

I’ve lived here 30 years. Today is the first day I’m embarrassed about that.

First, we had kids in a recreational league wearing jerseys bearing the words “Knee Grow’’ and “Coon’’. Now, we have students at Elder, disgracing themselves, their families and their school. When might it stop, when do the angels of our better natures reappear?

Elder High School is better than this. Its students are better. Their parents who raised them are better, the city in which they live is better. We’re all better than the racist crap we’ve had to put up with from our high school kids the last few weeks. ...

Mina Jefferson, Bobby’s mother [and Associate Dean, Chief of Staff, and Director of the Center for Professional Development at the University of Cincinnati College of Law] was in the stands Friday night. She listened to the slurs for more than a half, until St. X coach Jimmy Lallathin beseeched the referees to do something. That’s when an Elder coach told the students to cool it.

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February 18, 2018 in Legal Education | Permalink | Comments (4)

The Top Five New Tax Papers

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

  1. [32,029 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1831 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [964 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [645 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College)
  5. [427 Downloads]  The Tax Lifecycle Of A Single Member LLC, by F. Philip Manns Jr. (Liberty) & Timothy M. Todd (Liberty)

February 18, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 17, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Treasury Proposes Repeal Of 298 Tax Regulations

RegsTreasury Proposes Repeal of Nearly 300 Outdated Tax Regulations:

The U.S. Department of the Treasury today proposed repealing 298 tax regulations that are unnecessary, duplicative or obsolete and force taxpayers to navigate needlessly complex or confusing rules. President Trump issued an Executive Order on April 21, 2017, directing Treasury to review tax regulations to ensure a simple, fair, efficient, and pro-growth tax system. Today’s actions are a direct result of that review.

“We continue our work to ensure that our tax regulatory system promotes economic growth,” said Secretary Steven T. Mnuchin. “These 298 regulations serve no useful purpose to taxpayers and we have proposed eliminating them. I look forward to continuing to build on our efforts to make the regulatory system more efficient and effective.”

The regulations proposed to be repealed fall into three categories:

  1. Regulations interpreting provisions of the Code that have been repealed;
  2. Regulations interpreting provisions that have been significantly revised and the existing regulations do not account for these revisions; and
  3. Regulations that are no longer applicable.

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February 17, 2018 in IRS News, Tax | Permalink | Comments (2)

Ave Maria Law School Is Now In Compliance With Accreditation Admissions Standard

Ave Maria Logo (2018)ABA Journal, ABA Removes Remedial Actions Requirements for Ave Maria School of Law:

Finding that Ave Maria School of Law is now in compliance with an accreditation standard addressing admissions, the council of the ABA’s Section of Legal Education and Admissions to the Bar has removed requirements of specific remedial actions.

The council decision was recently posted on the Legal Education Section’s website. Public notice about the law school’s compliance with Standard 501(a) and 501(b) was first given in August 2016, after the council affirmed an accreditation committee finding that the law school was not in compliance with the standard. ...

“The ABA seems to have decided that schools should not be admitting significant numbers of extremely high-risk students, which I have defined as students with an LSAT of 144 or below, with correspondingly low grades,” David Frakt, a Florida lawyer and a frequent critic of the accreditation process, told the ABA Journal. “I assume that when Ave Maria submitted its reliable plan to improve their admissions profile that they promised to bring their bottom 25 percent up to 145. Now that they have done that, there is no need to continue the interim monitoring.” ...

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February 17, 2018 in Legal Education | Permalink | Comments (2)

Leonard Silverstein, Founder Of The BNA Tax Management Portfolio Series, Dies At 96

SliversteinWashington Post, Leonard Silverstein, Washington Tax Lawyer and Arts Patron, Dies at 96:

Leonard L. Silverstein, a Washington lawyer and arts patron who started a series of prominent tax-law guidebooks and became a member of the city’s cultural and fundraising firmament, died Feb. 14 at his home in Bethesda, Md. He was 96. ...

As a young, Harvard-educated legal adviser to the Treasury Department, Mr. Silverstein helped shape the Internal Revenue Code of 1954, a massive overhaul of the federal income tax system. In 1959, he created Tax Management Porfolios, authoritative texts for the nation’s accounting firms and which today are part of the Bloomberg media empire.

The next year, he co-founded Silverstein and Mullens, a firm specializing in tax law and estate planning. In 2000, it became a division of what is now the Pittsburgh-based Buchanan Ingersoll & Rooney. Until his death, Mr. Silverstein worked at the merged operation. Among his clients were Fortune 500 companies in fields as disparate as aerospace and entertainment. ...

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February 17, 2018 in Obituaries, Tax | Permalink | Comments (1)

Friday, February 16, 2018

Lawsky Presents A Logic For Statutes Today At Richmond

Lawsky (2017)Sarah Lawsky (Northwestern) presents A Logic for Statutes, 21 Fla. Tax Rev. ___ (2018), at Richmond today as part of its Faculty Colloquy Series:

Case-based reasoning is, without question, a puzzle. When students are taught to “think like lawyers” in their first year of law school, they are taught case-based common-law reasoning. Books on legal reasoning are devoted almost entirely to the topic. How do courts reason from one case to the next? Is case-based reasoning reasoning from analogy? How should case-based reasoning be modeled? How can it be justified?

In contrast, rule-based legal reasoning (as exemplified in much statutory reasoning) is taken as simple in legal scholarship. Statutory interpretation — how to determine the meaning of words in a statute, the relevance of the lawmakers’ intent, and so forth — is much discussed, but there is little treatment of the structure of statutory reasoning once the meaning of the words is established. Once the meaning of terms is established, statutory reasoning is considered, roughly speaking, to be deductive reasoning.

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February 16, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Shaviro's A Requiem For The Destination-Based Cash Flow Tax

This week, Erin Scharff (Arizona State) reviews a new working paper by Daniel Shaviro (NYU), Goodbye To All That:  A Requiem for the Destination-Based Cash Flow Tax.  

Scharff (2017)In teaching tax policy, I tend to focus on the core tax policy ideas of efficiency, fairness, and administrability, and I explicitly side step questions of government spending.  In thinking about the 2017 tax legislation, and, especially after reading Shaviro’s latest working paper, I question whether such debates can be so neatly self-contained.  The story Shaviro tells of the demise of the Destination-Based Cash Flow Tax (DBCFT) proposal is, in part, a story about what happens when tax policy gets debated in that vacuum.  Policy debates overly-focused on the right choice of tax instrument inherently obscure the debate about revenue sufficiency and the potential need for multiple tax instruments. 

I was privileged to hear Shaviro present an earlier draft of this paper at this fall’s National Tax Association conference, before we all were quite certain where the 2017 tax legislation was heading (or whether it would head anywhere at all.)  In the paper (as in the presentation), Shaviro is quite critical of the DBCFT proposal.  For Shaviro, the chief advantage of the DBCFT was the packaging of the idea as corporate tax reform, and its failure to be adopted in 2017 suggests “wholly discarding the DBCFT as a discussion vehicle for its underlying policy ideas.” 

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February 16, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Villanova Hosts Colloquium Today On Tax And The Sharing Economy

Villanova Logo (2015)Villanova hosts a colloquium today on Tax and the Sharing Economy:

As described by the World Economic Forum, a “sharing economy” focuses on the sharing of underutilized assets, monetized or not, in ways that improve efficiency, sustainability and community. Well-known examples include Airbnb, Uber and Lyft.

The gathering of renowned scholars is designed to foster free-flowing discussion and to encourage fresh perspectives on challenging issues. Colloquium participants, led by Villanova Law professors Les Book and Joy Sabino Mullane, include:

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February 16, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)