TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, September 4, 2015

Weekly Tax Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

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September 4, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

North Carolina Central Law School Seeks To Hire A Tax Clinic Director

NCCNorth Carolina Central University School of Law invites applications from entry-level and lateral candidates for the position of Assistant or Associate Clinical Professor/Supervisor of the Low Income Taxpayer Clinic:

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September 4, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Manolakas: The Taxation Of Artists And The Acquirers Of Art

Tax ArtistChristine Manolakas (McGeorge), The Taxation of Artists and the Acquirers of Art: The Many Shades of Grey, 43 AIPLA Q.J. 69 (2015):

The United States has the largest art market in the world with estimated sales of $25 billion in 2014. This booming business involves artists, collectors, dealers and hobbyists – all of which are subject to the federal income tax. However, not all artists and acquirers of art are treated equally under the Internal Revenue Code.

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September 4, 2015 in Scholarship, Tax | Permalink | Comments (0)

Thursday, September 3, 2015

ABA Names Tanina Rostain 2015 Legal Rebel

Legal RebelsTanina Rostain (Georgetown) has named a 2015 Legal Rebel by the ABA Journal:

Professor Tanina Rostain has made a 180-degree turn in her work on the ethics of lawyering. For nearly 20 years she pushed to reform organizational pressures that increasingly had lawyers bending and breaking rules on behalf of corporate clients. (Think dodgy tax shelters.) Now she’s focused on the essence of law as an institution that is supposed to help people. (Think access to justice.)

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September 3, 2015 in Legal Education, Tax | Permalink | Comments (0)

Registration Is Open For Inaugural International Conference on Taxpayer Rights

NTA

Registration is now open for the Inaugural International Conference on Taxpayer Rights in Washington, D.C. on November 18-19, 2015 (agenda):

The National Taxpayer Advocate of the Internal Revenue Service is convening the Inaugural International Conference on Taxpayer Rights in Washington, D.C. This ground-breaking conference will present panelists from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration.

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September 3, 2015 in Conferences, Tax | Permalink | Comments (0)

Brewer: Etsy, Tax Dodging, And B Corp Status

ETSYCass Brewer (Georgia State), "Dodging" Taxes and B Corp Status:

There has been a growing controversy surrounding Etsy’s much-publicized B Corp status and Etsy’s recent move to save (“dodge”???) taxes by using an Irish subsidiary. Stories have appeared in Bloomberg Business, the WSJ, and even The Irish Times. The advocacy group, Americans for Tax Fairness, requested in an August 28, 2015, letter to B Lab that Etsy’s B Corp designation be made “contingent upon its elimination of the use of its subsidiary in Ireland to dodge taxes” (emphasis added). The pressure on Etsy apparently has been so strong that Chad Dickerson, Etsy’s CEO, felt the need to publish a blog post defending the company’s tax strategy.

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September 3, 2015 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 847

IRS Logo 2Wall Street Journal, Miles From Nowhere: An Update on the IRS Scandal, by James Taranto:

Hillary Clinton is not the only official of the Obama administration to have engaged in email shenanigans. While we were away last week, as the Washington Times reported, a court filing from the Internal Revenue Service revealed that “Lois Lerner had yet another personal email account used to conduct some IRS business”: ...

“In addition to emails to or from an email account denominated ‘Lois G. Lerner‘ or ‘Lois Home,’ some emails responsive to Judicial Watch’s request may have been sent to or received from a personal email account denominated ‘Toby Miles,’ ” ... 

At first we wondered why Lerner would use a masculine pseudonym. Then we realized Toby is an epicene name and we’d been thinking of Toby Flenderson, the officious bureaucrat from NBC’s “The Office.” At any rate, Fox News appears to have come up with the explanation: “Two sources told Fox News that Toby Miles is the name of Lerner’s dog.” Confusingly, Lerner’s canine shares a surname with her husband, and Fox adds that “Lerner’s husband Michael Miles also reportedly may have been linked to the account.” ...

This week, as blogger William Jacobson reports, yet another fake Lerner email address came to light:

In . . . an August 31, 2015 Status Report, the IRS revealed that Lerner also used “a second personal email account” that, unlike the Toby Miles account, “does not appear to be associated with a denomination; only the email address itself appears.” The IRS refuses to disclose the email address for either the Toby Miles or the newly discovered account. ...

Why Lerner needed so many email addresses is something of a mystery, but she’s not alone among Obama administration officials. ...

The Washington Times reports on yet another thwarted IRS attempt to evade public scrutiny:

A federal judge Friday ordered the IRS to turn over the records of any requests from the White House seeking taxpayers’ private information from the tax agency, delivering a victory to a group that for two years has been trying to pry the data loose.

It’s not clear that there were any such requests—but Judge Amy Berman Jackson said the IRS cannot just refuse to say so by citing taxpayer confidentiality laws, known as section 6103 of the tax code.

Richard Pollock, then of the Washington Examiner, explained the background in a 2013 piece:

Treasury Department investigators completed but never released a 2011 law enforcement probe of White House economic advisor Austan Goolsbee, The Washington Examiner has learned.

The investigation by the Treasury Department Inspector-General for Tax Administration was sparked by Goolsbee’s remarks during an Aug. 27, 2010, White House news briefing in which he appeared to possess confidential tax information on Koch Industries, the private conglomerate controlled by the Koch brothers, Charles and David. ...

Six senators requested an investigation of Goolsbee’s remark under Section 6103 of the Internal Revenue Code, which protects taxpayers’ privacy. The IRS conducted the probe, then refused to reveal its findings, including to the senators and the Kochs—because, it said, they included taxpayer information that was confidential under Section 6103.

A group called Cause of Action filed the FOIA lawsuit seeking, among other things, “any communications by or from anyone in the Executive Office of the President constituting requests for taxpayer or ‘return information’ ” protected by Section 6103. Again, the IRS balked, saying such requests were private under Section 6103. That was the claim Judge Jackson rejected. ...

Whether the IRS is concealing misconduct is unknown; it’s possible, for instance, that the Goolsbee report found nothing amiss and its suppression was a product of mere bureaucratic monomania. Similarly, it’s possible Mrs. Clinton actually did turn over printouts of all her work-related emails to the State Department, but we may never know. In any case, it’s unreasonable for government officials to expect us to trust their assurances when they take such pains to prevent their verification.

On a happier note, it’s worth mentioning that the judges in both these cases were Democratic appointees. Emmet Sullivan was nominated by Bill Clinton in 1994 and Amy Jackson by Barack Obama in 2011. Independence and integrity are not dead, at least in the judicial branch.

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September 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, September 2, 2015

The 100 Most Influential People In Tax And Accounting

Top 100I am honored to be included on the list of Accounting Today's 100 Most Influential People in Tax and Accounting for the tenth year in a row:

In the years since Caron was one of the few pioneering tax bloggers, a veritable host of others have sprung up, but none can match his authority, his comprehensive approach, or his willingness to doggedly, persistently pursue the long-term unfolding of the scandal around the IRS's targeting of conservative groups.

Accounting Today also quoted me in a sidebar on "The Quest for Work-Life Balance":

I fear that I have achieved work-life balance because work is my life! But seriously, it is a gift to be able to do a job that you love, so that the time you spend does not feel like “work.”

I am flattered to be on the Top 100 list with such high-powered people in the tax and accounting worlds, including:

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September 2, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Repatriation Tax Holiday: Wrong In 2004, Wrong Now

Tax HolidayOxford University Press Blog:  Wrong Again, by Richard S. Grossman (Wesleyan):

Unlike fine wine, bad ideas don’t improve with age.

One such idea is the Invest in Transportation Act, co-sponsored by Sens. Barbara Boxer (D-CA) and Rand Paul (R-KY), which would institute a temporary tax cut on profits brought back to the United States by American firms from their overseas operations and use the proceeds to fund investment in transportation infrastructure.

It sounds great. The US corporate tax rate is 35 percent, much higher than rates in other countries, which gives American companies an incentive to keep their overseas profits off-shore and out of the hands of the IRS. The Boxer-Paul proposal would provide firms with a limited-time offer: bring overseas profits home and pay taxes at the bargain rate of only 6.5 percent.

Everyone wins. Firms get to repatriate their profits, which can be used to invest in the United States and create jobs. The government collects more tax, since 6.5 percent of something is greater than 35 percent of nothing. And politicians get to put money into desperately needed transportation infrastructure without having to vote to raise taxes.

Unfortunately, we have been to this rodeo before and wound up with a few hoof-prints on our collective backside as a result.

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September 2, 2015 in Advice for Erwin Chemerinsky, Tax | Permalink | Comments (0)

Tax Prof Moves, 2015-16

Moves VAP Hires

  • Hayes Holderness (McDermott, Will & Emery, New York) to Illinois
  • Clint Wallace (Caplin & Drysdale, New York) to NYU

Entry Level Hires

Lateral Moves

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September 2, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

McMahon, McGovern & Shepard: 2014 Federal Income Tax Developments

Florida Tax ReviewMartin J. McMahon Jr. (Florida), Bruce A. McGovern (South Texas) & Ira B. Shepard (Houston), Recent Developments in Federal Income Taxation: The Year 2014, 17 Fla. Tax Rev. 97 (2015):

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during 2014 — and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted — unless one of us decides to go nuts and spend several pages writing one up. This is the reason that the outline is getting to be as long as it is.

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September 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

Arsenault: It's Time To Solve The Great GRAT Caper

Steven J. Arsenault (Charlotte), Grantor Retained Annuity Trusts: After $100 billion, It's Time to Solve the Great GRAT Caper, 63 Drake L. Rev. 373 (2015):

A Grantor Retained Annuity Trust (GRAT) is one of the most popular of a number of estate planning strategies that employs an estate-freeze technique. The taxpayer transfers appreciating assets to a beneficiary immediately. The transferred assets are valued using actuarial valuation techniques based on an assumed rate of return specified in the Internal Revenue Code. The transfer has the effect of removing the assets from the taxpayer’s gross estate for estate tax purposes, thus “freezing” the value of those assets for transfer tax purposes. The future appreciation of the assets is transferred to the beneficiary but is never subject to any transfer taxes.

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September 2, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 846

IRS Logo 2Wall Street Journal editorial, The Off-Grid Administration: The Many Ways Obama Officials Have Ducked Public Accountability:

In a famous remark two years ago during a Google Plus Hangout, President Obama boasted that “this is the most transparent administration in history.” This is belied by Administration officials, from Hillary Clinton on down, who have run their communications off the government grid. A bipartisan consensus has long held that a healthy democracy requires a significant measure of government transparency. That is why since 1950 Washington has operated under the Federal Records Act, which requires the government to preserve documents about its decisions.

Since the 1960s the government has been subject to the Freedom of Information Act (FOIA), giving citizens the right to view those records. In 2009 the National Archives issued rules requiring agencies to preserve employee work on nonofficial accounts in a government record-keeping system. Then came the Obama Administration, whose modus operandi has been to hide from this legal regime. ...

Last Monday the IRS was forced to acknowledge to a federal court that it recently discovered that Lois Lerner (of political targeting fame) used a second, private email to conduct government work. The account was set up under the name “ Toby Miles,” and the IRS still can’t account for its contents.

It has been two years since Congress first subpoenaed Ms. Lerner’s emails. In 2013 when Mrs. Lerner was still directing the IRS’s Exempt Organizations unit, she cautioned colleagues to be careful what they said on email; then she inquired whether the agency’s instant-messaging system was archived. Told it wasn’t, she responded by email: "Perfect."

Last week a federal court subpoenaed former EPA official Phillip North after a complaint by a mining concern called the Pebble Partnership. Mr. North worked from inside the EPA with outside activists to scuttle Pebble’s proposed Alaskan mining project, and he did so on private email.

The Lerner and North cases also highlight the Administration’s sloppy, or willfully obstructionist, approach to recordkeeping. Recall the crash of Ms. Lerner’s hard drive, and the IRS’s claim for months it had no backup of her work. Treasury’s Inspector General would later find some. Mr. North’s hard drive also crashed, and Pebble claims that key North emails and documents have gone missing from EPA’s official record. ...

Government officials need some modicum of privacy to get work done. But this Administration’s evasion goes way past a reasonable standard of conduct. Why shouldn’t the public conclude that officials serving in the Obama Administration are flouting the disclosure system because they are engaged in practices they wish to hide from public knowledge and debate?

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September 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, September 1, 2015

Bankman Presents Using The 'Smart Return' To Reduce Tax Evasion At Alabama

Bankman (2014)Joseph Bankman (Stanford) presented Using the 'Smart Return' to Reduce Tax Evasion (with Clifford Nass (Stanford) & Joel Slemrod (Michigan)) at Alabama yesterday as part of its Faculty Colloquium Series:

Tax evasion costs government over 400 billion dollars a year. We suggest enforcement efforts can be strengthened by redesigning the tax return to take advantage of social psychology research, and industry experience with data-driven systems. To illustrate the potential of this approach, in this paper we propose three categories of changes that merit testing through pilot studies. The first involves changing the wording on existing returns to increase the psychological cost of evasion and increase the perceived expectation of detection. The second builds appeals to morality in the return itself through the use of a short phrase containing a "self-relevant" noun. The third uses on-line "conversational agents" to ask adaptive questions.

September 1, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

TIGTA: IRS Could Not Verify 40% Of $15 Billion Of Affordable Care Act Tax Credits Due To Lack Of Data From Health Insurance Exchanges

TIGTAThe Treasury Inspector General for Tax Administration today released Affordable Care Act: Interim Results of the Internal Revenue Service Verification of Premium Tax Credit Claims (2015-43-057):

The Affordable Care Act created the refundable Premium Tax Credit (PTC) to assist eligible taxpayers with paying their health insurance premiums. Individuals may elect to have the PTC paid directly to their health insurance provider as partial payment for their monthly premiums (referred to as the Advance Premium Tax Credit (APTC)) or receive the PTC as a lump sum credit on their annual Federal income tax return. According to the IRS, almost $11 billion in APTCs was paid to insurers in Fiscal Year 2014.

The Consolidated and Further Continuing Appropriations Act of 2015 requires a report no later than June 1, 2015, on the IRS’s reconciliation of APTCs paid to taxpayers and the Department of Health and Human Services use of IRS information to reduce fraud and overpayments. The objective of this review was to provide selected information related to the processing of PTC claims during the 2015 Filing Season. TIGTA plans to issue the final results of its analysis later in Calendar Year 2015.

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September 1, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

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September 1, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

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September 1, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 845

IRS Logo 2Forbes:  Court Orders IRS To Reveal White House Requests About Taxpayers, by Robert W. Wood:

A federal judge has ordered the IRS to reveal all requests the White House made for private taxpayer data. It is a potentially explosive line of inquiry, and the IRS fought the court ruling hard. But now, the IRS must hand them over. It could mean another bombshell in the long simmering IRS scandal that has dogged the Obama administration for over two years.

Recently, the IRS revealed–two years late–that firebrand Lois Lerner had a secret email account under her dog’s name for IRS business. There have been multiple federal investigations for several years, and Ms. Lerner has refused to cooperate or testify. So, one might assume that American taxpayers would know about all of her emails by now. Indeed, IRS documents previously revealed a Lois Lerner email that warned IRS staffers about revealing too much information to Congress.

You might assume that the information would be handed over willingly from the IRS and other agencies. Yet prying each tidbit of information out of a notoriously opaque Obama administration has not been easy. Now, federal Judge Amy Berman Jackson issued her opinion requiring the IRS to reveal whatever the White House requested.

Amazingly, the chief IRS defense in this case—which presumably the White House would support—is that the IRS cannot hand over White House requests and any private taxpayer data the IRS gave the White House in response, because those records are private taxpayer data. We have to protect that taxpayer data, said the IRS! We can’t reveal that is was revealed in violation of the law, because we must protect it!

Finally, though, the court ruled that the IRS cannot hide behind a law used to shield the very misconduct it was enacted to prohibit. The court noted that:

Congress amended section 6103 in 1976 “in the wake of Watergate and White House efforts to harass those on its ‘enemies list,’” in order to “restrict[] government officers and employees from revealing ‘any return’ or ‘return information,’” and its “core purpose” is to “protect[] taxpayer privacy.” So, this Court questions whether section 6103 should or would shield records that indicate that confidential taxpayer information was misused, or that government officials made an improper attempt to access that information. The IRS argues that “section 6103’s definition of ‘return information’ . . . makes no distinction based on the purpose for which a person might seek disclosure of the documents.” But accepting this argument would require a finding that even requests for return information that could involve a violation of section 6103 constitute “return information” that is exempt from disclosure under FOIA Exemption 3 and section 6103. The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit.”

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September 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, August 31, 2015

Mason Presents Citizenship Taxation At The International Tax Research Symposium In Switzerland

IFARuth Mason (Virginia) presents Citizenship Taxation, 88 S. Cal. L. Rev. ___ (2015), at the Second International Tax Research Symposium held in conjunction with the 69th Congress of the International Fiscal Association in Basel, Switzerland:

The United States is the only country that taxes its citizens’ worldwide income, even when those citizens live indefinitely abroad. This Article critically evaluates the traditional equity, efficiency, and administrability arguments for taxing nonresident citizens. It also raises new arguments against citizenship taxation, including that it puts the United States at a disadvantage when competing with other countries for highly skilled migrants. 

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August 31, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Would President Trump Eliminate Section 1031 Like-Kind Exchanges?

TrumpBloomberg:  Donald Trump Wants to Raise His Own Taxes, and Here’s How He Could Do It, by Richard Rubin:

Billionaire Donald Trump, who built his fortune in real estate, told Bloomberg Politics this week that he wants to raise his own taxes. One way to do it is a bipartisan proposal that would blow up one of the real estate industry's favorite tax breaks. 

The break, known as the like-kind exchange or "1031" for the tax code section it comes from, lets real estate owners sell one piece of property and buy a new one soon afterward without paying any capital gains taxes on the profits from the sale. The result is an ever-increasing pile of deferred capital gains, taxed only whenever there is a final sale or, better yet, never taxed as income at all upon death. 

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August 31, 2015 in Political News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 844

IRS Logo 2National Review:  How Obama Officials Dodge the Freedom of Information Act, by John Fund:

During the Watergate era, delaying tactics by government officials were dubbed “stonewalling.” Obama-administration officials seem to have added an element of farce to their cover-ups by literally going to the dogs.

This week, the IRS admitted in court, in response to a Freedom of Information Act lawsuit brought by the watchdog group Judicial Watch, that Lois Lerner was even more secretive than we thought. Lerner, the IRS official who resigned in 2013 after allegedly discriminating against applications for nonprofit status from conservative groups, conducted much of her IRS business on a personal e-mail account in the name of her dog, Toby Miles.

Tom Fitton, the president of Judicial Watch, says there is evidence that the Obama Justice Department and the IRS have known about the Toby Miles account for some time but chose not to tell the court. A House committee months ago urged that a criminal inquiry of Lerner be initiated by the Justice Department, but so far it has been ignored. ...

“Transparency and the rule of law will be the touchstones of this administration,” President Obama declared back in 2009. Rarely has there been a greater gap between what a politician said and what he did.

Freedom of Information Act requests have been censored or outright denied on countless occasions. Lois Lerner sent an e-mail that warned IRS staffers to avoid public scrutiny by using instant messaging that automatically deletes office communications. Judge Emmet Sullivan, a Bill Clinton appointee, has become so frustrated with the IRS’s foot-dragging that last month he called the government’s slow-walking behavior “indefensible, ridiculous, and absurd” and asked, “why shouldn’t the Court hold the Commissioner of the IRS in contempt?”

The Obama administration has responded to all this by cracking down on the one internal government group of officials specifically charged with tracking down malfeasance: the 72 inspectors general who oversee federal agencies.

The Council of the Inspectors General on Integrity and Efficiency sent a letter to Congress this month warning that a recent ruling by the Obama Justice Department, which now requires inspectors general to get permission from agencies they monitor for investigative information, is a “serious threat” to their independence. They urged that Congress should “promptly pass” a law affirming their oversight authority.

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August 31, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, August 30, 2015

The End Of Summer

Summer 2New York Times Sunday Review:  The Summer That Never Was, by Tim Kreider:

I never went to Iceland. I suppose I should say I didn’t go to Iceland this summer — never sounds a little melodramatic, possibly terminal. It’s not as if I’ve died and all hope of ever having gone to Iceland is obviated. But for some reason this missed opportunity is causing me more than the usual, near-toxic level of regret. I’ve had a free apartment in Reykjavik on offer for several years, and somehow I’ve never made it there. The owner of the apartment sends me photos of the aurora borealis that break my heart. ...

Every reminder of forgone pleasures — the empty hammock I hardly ever lay in, a little sugar-cube melon that went bad before I’d even cut one slice from it — makes me want to cry. This end-of-summer melancholy is a common experience, even a cliché. Part of it of course is just my dread and hatred of back-to-school time, unchanged since childhood. The whole world of work and productivity still seems to me like an unconscionable waste of time; the only parts of life that really matter are the summers, the in-between times — the idle goofing off. ...

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August 30, 2015 in Legal Education, Tax | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

The IRS Scandal, 843

IRS Logo 2Washington Examiner, Judge: IRS Must Hand Over White House Record Requests:

The Internal Revenue Service must turn over any White House requests for taxpayers' private information, a federal judge ruled Friday.

The IRS cannot cite taxpayer confidentiality laws to avoid turning over the information requested by Cause of Action, Judge Amy Berman Jackson ruled. Cause of Action has waged a two-year battle to discover whether Obama administration officials had any hand in the IRS' targeting of conservative non-profits.

The IRS cannot cite privacy protection "to shield the very misconduct it was enacted to prohibit," the judge said Friday, according to the Washington Times.

"This court questions whether section 6103 [of the tax code] should or would shield records that indicate confidential taxpayer information was misused, or that government officials made an improper attempt to access that information," wrote Jackson.

Questions about whether the White House directed the IRS' targeting of conservative nonprofits have dogged the administration since the scandal first broke. At one point "then-White House chief economist seemed to describe the tax structure of Koch Industries during a briefing with reporters," increasing speculation, reports the Washington Times.

So far there is no evidence pointing to White House involvement — in part because the IRS has blocked the release of the necessary documents. The agency refused to turn over even administration requests for records since they were first requested in 2013.

Friday's ruling in favor of Cause of Action will change all that.

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August 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, August 29, 2015

This Week's Ten Most Popular TaxProf Blog Posts

The Most Liberal (Entertainment, Civil Rights, Personal Injury) And Conservative (Oil & Gas, M&A, Energy) Lawyers By Practice Area; Law Professors Are The Most Liberal Among 61 Groups

Adam Bonica (Stanford), Adam S. Chilton (Chicago) & Maya Sen (Harvard), The Political Ideologies of American Lawyers:

The ideology of American lawyers has been a persistent source of discussion and debate. Two obstacles, however, have prevented this topic from being systematically studied: the sheer number of attorneys in the United States and the need for a methodology that makes comparing the ideology of specific individuals possible. In this paper, we present a comprehensive mapping of lawyers’ ideologies that has overcome these hurdles. We use a new dataset that links the largest database of political ideology with the largest database of lawyers’ identities to complete the most extensive analysis of the political ideology of American lawyers ever conducted.

Here is the breakdown by practice area:

Chart

 

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August 29, 2015 in Legal Education, Tax | Permalink | Comments (6)

The IRS Scandal, Day 842

IRS Logo 2Town Hall, Lois Lerner May Have Committed a Crime With Use of Private Email at IRS:

In case you missed it yesterday the Washington Times reported former IRS official Lois Lerner, the woman at the center of the IRS targeting controversy, used a private email account under her dog's name to conduct official government business. ...

Now, Judicial Watch President Tom Fitton is responding to the new revelation and notes Lerner may have broken the law if she shared confidential tax information on her private account. ...

It should also be noted using a private email account is against government policy and potentially violates federal records laws as it allows officials to skirt the Freedom of Information Act. Further, use of private email to conduct government business makes it difficult for Congress to make proper inquiries about official communications during investigations.

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August 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, August 28, 2015

Weekly Tax Roundup

Weekly SSRN Tax Roundup

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August 28, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The IRS Scandal, Day 841

IRS Logo 2Robert W. Wood (Forbes), IRS Reveals Lois Lerner's Secret Email Account Named For Her Dog:

The IRS dropped a bombshell in federal court, admitting that firebrand Lois Lerner also used a personal email account for IRS business. She used her dog’s name, Toby Miles. The Washington Times broke the story from the Judicial Watch lawsuit that is still seeking IRS targeting emails. It puts the IRS in another awkward spot. Why wasn’t this revealed by the IRS sooner, you might ask?

Good question. Since there have been multiple probes for several years now, one might assume that American taxpayers would know about this by now. IRS documents previously revealed a Lois Lerner email that warned IRS staffers about revealing too much information to Congress. Forget email, Ms. Lerner had warned. Instead, use instant messaging that automatically deletes office communications. House Oversight Committee documentation suggested that this ruse was used deliberately by IRS officials to evade public scrutiny. ...

The latest email issue came in the Judicial Watch case. The IRS says it “discovered” the Lerner dog email account, in addition to her official account and personal email accounts. There was already an official IRS email account, and Lerner’s own private email account that the IRS had labeled ‘Lois Home.’ But now, the ‘Toby Miles’ account also shows up.

Toby is the dog, and Michael Miles is Ms. Lerner’s husband. The IRS says it may need to re-release additional documents. You think? The IRS notes that a House Ways and Means Committee criminal referral in 2014 mentioned the Toby Miles email address, identified as tobomatic@msn.com. This email address was included on an email that also had Lerner’s official email account. At that time, the committee linked the Toby Miles address to Ms. Lerner’s husband, Michael Miles. ...

What does the dog say about all this? Maybe he’ll take the Fifth too.

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August 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, August 27, 2015

Prebble Presents Tax Papers In Amsterdam

Prebble (2015)John Prebble (Victoria University of Wellington) is presenting two tax papers in Amsterdam:

Aug. 27:   General Anti-Avoidance Rules and the Rule of Law at the International Bureau of Fiscal Documentation (IBFD)

Aug. 28Kelsen, the Principle of Exclusion of Contradictions, and General Anti-Avoidance Rules in Tax Law at the University of Amsterdam as the Opening Address to inaugurate a new Advanced Master’s Degree in International Tax Law.

August 27, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 840

IRS Logo 2New York Post editorial, The IRS Scandal Goes to the Dogs:

Move over, Carlos Danger, there’s a new alias in town: Toby Miles, an electronic front for Lois Lerner.

Lerner famously took the Fifth rather than testify about how the Internal Revenue Service came to target right-leaning advocacy nonprofits in the run-up to the 2012 election.

Ever since, the IRS has blocked congressional efforts to get to the facts, while the Justice Department’s “probe” was a joke even before the president declared there’s “not a smidgen of corruption” in the affair.

Happily, the public-interest group Judicial Watch is on the job, pushing to get the facts out. On Monday, it forced an IRS attorney to admit Lerner had used a personal email account under the “Toby Miles” name to conduct official government business.

This is her second private email account — though the first was under her own name.

Mind you, it’s been two-plus years since the scandal broke, yet the agency that promised to clean up its act is only now revealing this fresh evidence.

No doubt the IRS will take months to fork over any of “Toby’s” emails. As Judicial Watch President Tom Fitton says, “This is the latest in a parade of obstruction from the IRS and the Department of Justice on these issues.” ...

The capper: One Lerner acquaintance says “Toby Miles” is the name of Lerner’s dog.

Nothing quite says truth and transparency like doing Uncle Sam’s work under your dog’s name.

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August 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, August 26, 2015

How H&R Block Is Making The Tax Code More Complicated For America’s Poor

H&R BlockVox, H&R Block Snuck Language into a Senate Bill to Make Taxes More Confusing for Poor People:

H&R Block's entire business model is premised on taxes being confusing and hard to file. So, naturally, the tax preparation company has become — along with Intuit, the company behind TurboTax — one of the loudest voices on Capitol Hill arguing against measures that make it easier to pay taxes. For example, the Obama administration has pushed for automatic tax filing, in which the IRS uses income information it already has to fill out your tax return for you. That would save millions of Americans considerable time and energy every year, but the idea has gone nowhere. The main reason? Lobbying from H&R Block and Intuit.

But H&R Block's latest lobbying effort is even more loathsome than its opposition to automatic filing. At the company's instigation, the Senate Appropriations Committee has passed a funding bill covering the IRS whose accompanying report instructs the agency to at least quadruple the length of the form that taxpayers fill out to get the Earned Income Tax Credit.

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August 26, 2015 in Tax | Permalink | Comments (4)

Historical Novel: Could Flaws In Enactment Of 16th Amendment Bring Down Income Tax, Global Economy?

PatriotSteve Berry, The Patriot Threat (Cotton Malone Series Book 10) (2015):

The 16th Amendment to the Constitution is why Americans pay income taxes. But what if there were problems associated with that amendment? Secrets that call into question decades of tax collecting? In fact, there is a surprising truth to this hidden possibility.

Cotton Malone, once a member of an elite intelligence division within the Justice Department known as the Magellan Billet, is now retired and owns an old bookshop in Denmark. But when his former-boss, Stephanie Nelle, asks him to track a rogue North Korean who may have acquired some top secret Treasury Department files—the kind that could bring the United States to its knees—Malone is vaulted into a harrowing twenty-four hour chase that begins on the canals in Venice and ends in the remote highlands of Croatia.

With appearances by Franklin Roosevelt, Andrew Mellon, a curious painting that still hangs in the National Gallery of Art, and some eye-opening revelations from the $1 bill, this riveting, non-stop adventure is trademark Steve Berry—90% historical fact, 10% exciting speculation—a provocative thriller posing a dangerous question.

What if the Federal income tax is illegal?

The story line is compressed into a tight time frame, taking place in less than a day in real time.  And Berry cleverly mixes the history of the federal income tax law with the creation of the National Gallery of Art.  Speculation and gunplay make The Patriot Threat one of Berry’s best books to date.
The New York Times

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August 26, 2015 in Book Club, Tax | Permalink | Comments (2)

Foundation Press Publishes Seventh Edition Of Federal Wealth Transfer Taxation

Federal Wealth Transfer Taxation CoverFoundation Press has published the seventh edition of Federal Wealth Transfer Taxation (amazon), by the late Paul McDaniel (Florida), Jim Repetti (Boston College), and me:

This edition continues the comprehensive, yet flexible, presentation of prior editions. It explores technical and policy issues and is adaptable for use in a single course covering basic wealth transfer taxation or a sequence of such courses at either the J.D. level or LL.M. level. It includes approximately 300 problems, designed to help students master the material covered in each chapter. Within each section, the book moves from the straightforward to the more complex, empowering the professor to select the appropriate level of complexity for her course. It thoroughly integrates all changes in the law through May 1, 2015, including case law, legislation, regulations, rulings, and other administrative pronouncements.

Jim and I have sent the 212-page Teacher's Manual to Foundation Press:

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August 26, 2015 in Book Club, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Fleischer: Private Equity Fees Paid By Universities Deserve Examination

NY Times Dealbook (2013)New York Times Deal Book:  Private Equity Fees Paid by Universities Deserve Examination, by Victor Fleischer (San Diego):

Some financial professionals reacted to my Aug. 19 Op-Ed article on private equity fees and university endowments by emphasizing that superior performance justifies superior fees.

Fair enough. The essay focused on the spending side of the equation. Even if the high fees are justified, universities can and should do more to advance the charitable mission.

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August 26, 2015 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 839

IRS Logo 2National Review, Who’s Toby Miles?, by Eliana Johnson:

The IRS disclosed in a court filing on Monday that former agency official Lois Lerner used a second personal e-mail operated under the alias “Toby Miles” to conduct IRS business.

Her use of the mysterious account has prompted speculation into the source of the name. “Toby Miles,” according to a former Lerner colleague, is the name of Lerner’s dog: Toby is the dog’s name, and Miles is the surname of Lerner’s husband, Michael Miles.

The IRS disclosed the existence of the second account in a legal filing as part of its ongoing battle with the right-leaning investigative group Judicial Watch. “In addition to e-mails to or from an e-mail account denominated ‘Lois G. Lerner’ or ‘Lois Home,’ some e-mails responsive to Judicial Watch’s’s request may have been sent to or received from a personal e-mail account denominated ‘Toby Miles,’” a lawyer for the agency told Federal District Court Judge Emmet G. Sullivan.

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August 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, August 25, 2015

IRS Strikes Out, Settles Estate Tax Litigation Over Valuation Of Minnesota Twins For 20 Cents On The Dollar

Twins (2015)Forbes:  Estate Of Late Minnesota Twins Owner Carl Pohlad Settles With IRS, by Ashlea Ebeling:

The late Minnesota Twins owner Carl Pohlad’s three sons, executors of his estate, have chalked up a victory in a settlement with the Internal Revenue Service.

Forbes’ Janet Novack first wrote here about the lawsuit filed by Pohlad’s estate in U.S. Tax Court, contesting an assessment of $121 million in extra federal estate taxes for the team, plus a $48 million penalty for gross valuation misstatement. In the settlement, entered in June, the IRS and the Pohlad brothers agreed to an estate tax deficiency of $28 million and a penalty of $1.8 million.

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August 25, 2015 in Tax | Permalink | Comments (2)

Brown, Casselman & Sheppard Discuss The Business Of Life: Why Pay Your Taxes?

BusinessVice News, Why Pay Your Taxes? — The Business of Life (Episode 9):

The American tax code is one of the most impenetrable elements of our society. Surprising, considering how it affects your life every single day. On this episode of the Business of Life, we will show you exactly how your taxes are distributed—and what happens if you try to evade them. To unpack the issue, we are joined by panelists Lee Sheppard of Tax Notes, Ben Casselman of FiveThirtyEight, and Emory University Professor Dorothy Brown.

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August 25, 2015 in Tax | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through August 1, 2015) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Michigan)

47,795

Reuven Avi-Yonah (Michigan)

7284

2

Paul Caron (Pepperdine)

29,046

Ed Kleinbard (USC)

5597

3

Michael Simkovic (Seton Hall)

28,393

Michael Simkovic (Seton Hall)

4493

4

Louis Kaplow (Harvard)

24,592

D. Dharmapala (Chicago)

3979

5

D. Dharmapala (Chicago)

24,131

Gregg Polsky (N. Carolina)

3289

6

Vic Fleischer (San Diego)

21,034

Paul Caron (Pepperdine)

2591

7

James Hines (Michigan)

20,904

Richard Ainsworth (BU)

2051

8

Ted Seto (Loyola-L.A.)

20,142

Omri Marian (UC-Irvine)

1914

9

Richard Kaplan (Illinois)

19,868

Robert Sitkoff (Harvard)

1780

10

Ed Kleinbard (USC)

18,547

Jeff Kwall (Loyola-Chicago)

1777

11

Katie Pratt (Loyola-L.A.)

17,691

Louis Kaplow (Harvard)

1771

12

Carter Bishop (Suffolk)

16,123

Katie Pratt (Loyola-L.A.)

1647

13

Richard Ainsworth (BU)

15.958

Brad Borden (Brooklyn)

1633

14

Dennis Ventry (UC-Davis)

15,749

Dan Shaviro (NYU)

1546

15

Jen Kowal (Loyola-L.A.)

15,694

David Gamage (UC-Berkeley)

1411

16

Chris Sanchirico (Penn)

15,548

Jen Kowal (Loyola-L.A.)

1390

17

Robert Sitkoff (Harvard)

15,524

Dick Harvey (Villanova)

1359

18

Brad Borden (Brooklyn)

15,358

Chris Sanchirico (Penn)

1268

19

David Weisbach (Chicago)

15,286

William Byrnes (Texas A&M)

1245

20

Francine Lipman (UNLV)

14,881

James Hines (Michigan)

1194

21

Bridget Crawford (Pace)

14,622

Ruth Mason (Virginia)

1186

22

David Walker (BU)

14,391

Joe Bankman (Stanford)

1178

23

Dan Shaviro (NYU)

13,569

Carter Bishop (Suffolk)

1096

24

Herwig Schlunk (Vanderbilt)

12,843

Francine Lipman (UNLV)

1062

25

Steven Bank (UCLA)

12,182

Ted Seto (Loyola-L.A.)

1048

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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August 25, 2015 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

The Impact Of Housing Subsidies And Tax Breaks On Inequality

Vox, This Chart Shows How Federal Housing Policy Benefits the Rich More Than the Poor:

If you take out a mortgage to buy a house, the federal tax code lets you deduct your interest payments from your taxable income. People can also deduct state and local property taxes from their federal income taxes.

Both of these tax deductions tend to be larger for rich people, who tend to have more expensive houses. And rich people are also in higher tax brackets, making every dollar deducted worth more. As a result, these tax breaks provide the biggest financial benefit to the wealthiest taxpayers. The Urban Institute's John McGinty, Benjamin Chartoff, and Pamela Blumenthal have created a helpful chart showing just how big these tax breaks get.

Housing tax breaks for rich people are larger than housing subsidies for poor people.

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August 25, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

ABA Tax Section Accepting Nominations For 2016-2018 Public Service Fellowships


ABA Tax Section Logo (2012)The ABA Tax Section is accepting applications for Public Service Fellowships for 2016-2018:

The American Bar Association Section of Taxation is pleased to announce that it is now accepting applications for its Christine A. Brunswick Public Service Fellowship program class of 2016-2018. ...

The Christine A. Brunswick Public Service Fellowships provide funding for the Fellows’ salaries and benefits, as well as law school debt assistance, by means of charitable contributions to the sponsoring organization. The Section plans to award two fellowships each year.

Applications must be received by November 13, 2015, to be considered. Interviews will be conducted during the Section’s Midyear Meeting in Los Angeles, CA, on January 28-30, 2016. The Section will cover the cost of travel and accommodations for applicants selected for interviews.

To apply for the Christine A. Brunswick Public Service Fellowships, see here

August 25, 2015 in ABA Tax Section, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 838

IRS Logo 2Washington Times, IRS Finds Yet Another Lois Lerner Email Account:

Lois Lerner had yet another personal email account used to conduct some IRS business, the tax agency confirmed in a new court filing late Monday that further complicates the administration’s efforts to be transparent about Ms. Lerner’s actions during the tea party targeting scandal.

The admission came in an open-records lawsuit filed by Judicial Watch, a conservative public interest law firm that has sued to get a look at emails Ms. Lerner sent during the targeting.

IRS lawyer Geoffrey J. Klimas told the court that as the agency was putting together a set of documents to turn over to Judicial Watch, it realized Ms. Lerner had used yet another email account, in addition to her official one and another personal one already known to the agency.

“In addition to emails to or from an email account denominated ‘Lois G. Lerner‘ or ‘Lois Home,’ some emails responsive to Judicial Watch’s request may have been sent to or received from a personal email account denominated ‘Toby Miles,’” Mr. Klimas told Judge Emmet G. Sullivan, who is hearing the case.

It is unclear who Toby Miles is, but Mr. Klimas said the IRS has concluded that was “a personal email account used by Lerner.”

Tom Fitton, president of Judicial Watch, said it was stunning the agency was just now admitting the existence of the address.

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August 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, August 24, 2015

Morse Presents Safe Harbors, Sure Shipwrecks Today At Indiana

Morse (2015)Susan C. Morse (Texas) presents Safe Harbors, Sure Shipwrecks at Indiana today as part of its Faculty Speaker Series:

Safe harbors and sure shipwrecks are rule-standard hybrids that appear throughout statutory, regulatory and case law. Safe harbors guarantee compliance, and also leave open the question of compliance for fact situations not described by the safe harbor. Sure shipwrecks provide a conclusive noncompliance result and also leave open the question of compliance outside the sure shipwreck. Safe harbors and sure shipwrecks produce asymmetric behavioral incentives for persons subject to them. Like bright-line rules, safe harbors encourage behavior to converge from both sides of the line drawn by the safe harbor. This is because of the advantage of a zero chance of liability within the safe harbor. Sure shipwrecks generally encourage convergence only from the noncompliant side of the line. Ex ante versus ex post policy making, overinclusion and underinclusion, interest group influence, and other factors also affect safe harbor and sure shipwreck policy making.

August 24, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Trump Says Tax Code Is Letting Hedge Fund Managers 'Get Away With Murder'

TrumpNew York Times, Trump Says Tax Code Is Letting Hedge Funds 'Get Away With Murder':

Republican presidential front-runner Donald Trump blasted hedge fund managers on Sunday as mere "paper pushers" who he said were "getting away with murder" by not paying their fair share of taxes.

In a telephone interview on CBS's "Face the Nation," Trump vowed to reform the tax laws if elected and said the current system was harming middle class Americans who currently faced higher tax rates than traders on Wall Street.

"The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky," Trump said.

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August 24, 2015 in News, Political News, Tax | Permalink | Comments (0)

IRS State Migration Data: Taxpayers Flock To Texas & Florida, Flee From New York, Illinois & California

Table 1Clean Slate Tax, IRS 2012-2013 State Migration Data — NY Down Big, TX & FL Shine:

The IRS recently released state and county-level migration for 2012-2013. The data is based off individual income tax returns (Forms 1040) filed, received, and processed by the IRS from January 1st to December 31st. The data doesn’t represent the whole population, as many individuals are not required to file a tax return every year. The report did take into account the number of exemptions these returns had. To calculate net migration, the IRS subtracted the number of out-migrant returns from the number of in-migrant returns. The results are quite interesting.

Texas, Florida, Colorado, and South Carolina shined. The state of Texas had the largest influx of new taxpayers for a total of 72,032 new tax returns, representing 152,477 exemptions. Florida was behind Texas, with 27,991 returns representing 73,789 exemptions (see Table 1).

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August 24, 2015 in Tax | Permalink | Comments (3)

The IRS Scandal, Day 837

IRS Logo 2Fox News, Gov't Watchdogs Urge Congress to Reverse Obama Administration IG Crackdown:

Nearly six-dozen watchdog agencies are asking Congress to step in after the Obama administration clamped down on access to government records they say are vital for their investigations into waste, fraud and abuse. 

The Council of the Inspectors General on Integrity and Efficiency sent an Aug. 3 letter to congressional leaders ahead of a hearing scheduled for Wednesday where they will ask lawmakers to pass legislation reversing a controversial decision made July 20 by the Department of Justice’s Office of Legal Counsel. The OLC is now requiring investigators to get permission to review sensitive documents from the very agencies they are monitoring.

This decision, the letter said, "represents a serious threat to the independent authority" of all inspectors general. 

IGs are assigned to audit and conduct internal reviews of federal agencies, and recently have been responsible for investigating the IRS targeting scandal, TSA security gaps, personal email use at the State Department and other issues. 

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August 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)