TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, October 20, 2016

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 35, No. 2 (Winter 2016):

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October 20, 2016 in Scholarship, Tax | Permalink | Comments (0)

NY Times:  Corporate Tax Problems And Solutions

New York Times op-ed: The Big Companies That Avoid Taxes, by David Leonhardt:

Donald Trump has become the country’s most notorious tax shirker. And while his long avoidance of federal income taxes is extreme, it’s also part of a larger problem.

The most affluent and powerful parts of our society have too easy a time legally avoiding taxes.

Consider corporate taxes, which ultimately tend to be paid by the well-off, because they own the most stock. The official corporate rate is 35 percent, infamously higher than in any other advanced economy. Yet there are so many loopholes that companies often pay relatively little in tax.

Many companies work hard to shroud how much they really pay, sprinkling various figures throughout their complex financial statements. But companies must report one number that provides a good glimpse. It’s called cash taxes paid — the combined amount that a company pays in federal, state, local and even foreign taxes.

I asked the analysts at S&P Global Market Intelligence to calculate this number since 2007 for this country’s 500 largest public companies, and the results reveal a broken tax system. Fixing it should be an early priority for the next president. If Hillary Clinton wins, it may well be.

NY Times

New York Times op-ed: We Can Fix Corporate Taxes, by David Leonhardt:

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October 20, 2016 in Tax | Permalink | Comments (0)

Crawford & Spivack:  Tampon Taxes, Equal Protection And Human Rights

Bridget J. Crawford (Pace) & Carla Spivack (Oklahoma City), Tampon Taxes, Equal Protection and Human Rights, 2016 Wis. L. Rev. ___ :

In recent months, activists around the globe have harnessed the power of the Internet to raise awareness of the so-called “tampon tax,” an umbrella term to describe sales, VAT and similar “luxury” taxes imposed on menstrual hygiene products. In response to pressure from constituents, five U.S. states and Canada have repealed their tampon tax. Active campaigns are underway in Australia, the United Kingdom and several other countries. Where public pressure has not been an effective technique, those seeking to challenge the tampon tax in the United States have turned to litigation. In four U.S. states, class action lawsuits have been filed seeking repeal of the tax and a refund for back taxes paid, alleging equal protection violations. In the international context, human rights law provides a promising foundation for similar legal challenges to the tampon tax because human rights law takes a capacious approach to gender equality. In the European Court of Human Rights, for example, there are several tax cases that recognize gender-differentiated taxes as a form of impermissible discrimination. This Article explains how the tampon tax violates equal protection and human rights norms. The tax also shows how deeply embedded gender is in matters of tax policy. Full realization of gender equality will require revision of tax laws.

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October 20, 2016 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1260: Cleta Mitchell — Use Of The IRS Against Republican Critics Likely Will Persist In A Clinton Administration

IRS Logo 2Washington Times op-ed:  Hillary Clinton’s IRS — A Sneak Preview: Use of the Agency Against Republican Critics Likely Will Persist, by Cleta Mitchell  (Foley & Lardner, Washington, D.C.):

Imagine:  What if the Internal Revenue Service (IRS) singled out hundreds of grassroots citizens groups across the nation and subjected them to ill treatment because of their political beliefs and values, mainly in opposition to the president of the United States? And imagine if that president ordered an investigation of the scandal and the lead attorney was a maximum donor to the president’s political campaigns. And then imagine if the president appointed as IRS commissioner to “clean up” the scandal someone who was a maximum donor to the president’s political campaigns. Can you imagine such a thing? The watchdogs in Congress and the media would never allow such clear partisanship to rule the IRS, right?

But that is exactly the situation we have watched unfold over the past three years, since the Treasury inspector general for tax administration (TIGTA) confirmed that the IRS had, indeed, targeted conservative groups — hundreds of them — for singular mistreatment and abuse. The Department of Justice attorney charged with “investigating” the targeting was Barbara Bosserman, an individual who had contributed the maximum to President Obama’s political campaigns.

And what about IRS Commissioner John Koskinen? He is yet another maximum Democratic donor. Since 1997, Mr. Koskinen has contributed $51,550 to the Democratic National Committee, various Democratic congressional and Senate candidates and the presidential campaigns of John Kerry, Barack Obama and Hillary Clinton. ...

What harm might arise from having one of Hillary Clinton’s staunchest supporters at the helm of the IRS? Think back. During the Bill Clinton administration, the IRS audited a host of Clinton “enemies”: According to the Christian Science Monitor, the Clinton-era IRS, like several before it, audited a wide range of organizations viewed as hostile to the White House agenda. These included leading conservative publications, think tanks and interest groups, among them the American Spectator, Judicial Watch, National Review, the Heritage Foundation, the National Rifle Association, the National Center for Public Policy Research, the American Policy Center, American Cause, Citizens for Honest Government, Citizens Against Government Waste, Progress and Freedom Foundation, and Concerned Women for America. The IRS also audited two Clinton paramours: Gennifer Flowers and Liz Ward Gracen, and sexual assault accusers Paula Jones and Juanita Broaddrick, as well as fired White House Travel Office Director Billy Dale.

There was never anyone in the IRS held to account for the Clinton administration’s targeting of its perceived “enemies” for IRS audits; there has likewise been no accountability for the oppression and discrimination practiced by Mr. Obama’s IRS via the targeting of those groups who have opposed and criticized the Obama administration.

Nor has Congress taken steps to prohibit the IRS from using donor information as a basis for generating IRS tax audits, and there is ample evidence that the IRS audited scores of donors to the 2012 Mitt Romney presidential campaign and the super PAC supporting Mr. Romney.

A Hillary Clinton presidency, with a maximum Clinton donor running the IRS, would not bode well for conservative organizations, donors, activists and sympathizers. ... 

As long as the liberal media and congressional Democrats collude with Democratic administrations in their targeting and attacking of conservatives, the Democrats in the White House will feel free to use the agencies of the federal government — including the IRS — as political weapons against those who criticize and disagree with them.

A Hillary Clinton presidency, with an IRS commissioner who has long been an ardent political supporter and donor, does not present a very encouraging picture of a non-political IRS that will resist being used as an arm of the Democratic White House.

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October 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, October 19, 2016

Gamage Presents Tax Cannibalization And Fiscal Federalism Today At Toronto

Gamage (2017)David Gamage (UC-Berkeley, moving to Indiana) presents Tax Cannibalization and Fiscal Federalism in the United States, 111 Nw. U. L. Rev. ___ (2017) (with Darien Shanske (UC-Davis)), at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The current structure of U.S. federal tax law incentivizes state governments to adopt tax policies that inflict costs on the federal government, at the expense of national welfare. We label this the “tax cannibalization problem.”

This article introduces the tax cannibalization problem to the law and policy literatures for the first time. This article also explains how U.S. federal tax law might be restructured so as to alleviate the tax cannibalization problem — to counteract the perverse incentives currently leading U.S. state governments to design their tax systems so as to, in effect, wastefully devour federal tax revenues.

October 19, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Speck Presents Expertise And International Tax Norms Today At Northwestern

SpeckSloan Speck (Colorado) presents Expertise and International Tax Norms at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

This project explores the ways in which a particular framework for understanding international taxation—a framework driven by so-called international tax neutrality norms—developed among economists and legal academics in the 1960s and subsequently became entrenched among public-sector policymakers. The neutrality norm framework marks a turn from the instrumental use of international taxation in the 1950s toward the ostensibly objective, efficiency-driven orientation towards international taxation that dominates discussions about international tax policy today (though a growing academic literature questions the viability of this orientation). This project explores how the neutrality norm framework came into being, and how it became a durable framework for understanding international tax policy.

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October 19, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Texas A&M Seeks To Hire A Tax Clinic Director

Texas A&M Law SchoolTexas A&M University School of Law seeks to hire a director of its tax clinic:

The Director of the Texas A&M University Low Income Tax Clinic is responsible for all aspects of the Tax Clinic, including client representation, law student supervision, classroom instruction, community outreach and education, and IRS compliance. The Tax Clinic will be part of the Low Income Taxpayer Clinic program of the U.S. Internal Revenue Service.

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October 19, 2016 in Tax, Tax Prof Jobs | Permalink | Comments (0)

The IRS Scandal, Day 1259: George Will — Trump Is Right That Elections Are Rigged, And The IRS Is Exhibit A

IRS Logo 2Real Clear Politics, George Will: Trump Has Point That Elections Are Rigged If He Would Just Make It More Clearly:

When Mr. Trump talks about it being rigged, he sweeps all his grievances into one big puddle. He talked about the media. He talked about the primaries. He talked about the polls. Talked about the Republican National Committee. I think when most persons hear that an election is rigged, they think of government action to rig the election. And there Mr. Trump has a point if he would just make it more clearly. 

It is hard to think of an innocent reason why Democrats spend so much time, energy and money, scarce resources all, resisting attempts to purge the voter rolls, that is to remove people who are dead or otherwise have left the jurisdiction. It's hard to think of an innocent reason why they fight so tremendously against Voter I.D. laws. They say, well that burdens the exercise of a fundamental right. The Supreme Court has said that travel is a fundamental right and no one thinks that showing an I.D. at the airport burdens that fundamental right.

We know -- we don't surmise -- we know that the 2010, '12 and '14 elections were rigged by the most intrusive and potentially punitive institution of the federal government, the IRS. You can read all about it in Kim Strassel's book Intimidation Game. She's familiar to all Wall Street Journal readers and FOX viewers. This is not a surmise. I have talked to lawyers in a position to know they say it's still going on. The IRS is still intolerantly delaying the granting of tax exempt to conservative advocacy groups to skew the persuasion of this campaign.

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October 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, October 18, 2016

McCormack Presents Postpartum Taxation: The Internal Revenue Code And The Opt Out Mom Today At Columbia

McCormackShannon Weeks McCormack (University of Washington) presents Postpartum Taxation: The Internal Revenue Code and the Opt Out Mom at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Legislation seeking to ensure that women receive equal pay for equal work has been on the books for decades. Nevertheless, the average American woman still receives less than eighty cents for every dollar earned by the average American man. Happily, the gender pay gap between men and childless women is narrowing over time. Meanwhile, the gap between mothers and others continues to widen. Career interruptions contribute significantly to this disturbing trend — nearly half of mothers opt out of the workforce at some point in their lives, most often to care for young children. Faced with too-short (or non-existent) maternity leaves, inflexible work schedules and the soaring costs of childcare in the United States, this opt out phenomenon is hardly surprising. But with the decision to opt out comes grave cost. Over 90% of opt out moms want to return to the workforce several years after off ramping. Unfortunately, many discover that they are unable to do so. A mother that does manage to reenter the workforce will find that even a short off ramp results in a sizeable and disproportionate reduction in her annual earnings that will persist for every year of her remaining life.

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October 18, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (3)

A Nobel Prize In Tax Law Would Go To ... Michael Graetz Or Louis Kaplow?

Nobel PrizeFollowing up on yesterday's post, A Nobel Prize In Law Would Go To ... Calabresi, Posner, Or Sunstein?:  Brian Leiter (Chicago) polled this question:

If there were a Nobel Prize, which living legal scholar in the U.S. should get it? Rank order the [51] candidates. Only those over the age of 60 who might make the top ten are listed as choices. 

Michael Graetz (Columbia) and Louis Kaplow (Harvard) were the only tax folks among the 51 candidates. Louis finished 21st in the 129 ballots cast, sandwiched between Frank Easterbrook (7th Circuit/Chicago)/Martha Minow (Harvard) and Phiilip Bobbit (Columbia). Michael finished 42nd, sandwiched between Deborah Rhode (Stanford) and Daniel Fischel (Chicago).  The results are here, along with the rankings on the 129 individual ballots.

October 18, 2016 in Legal Education, Tax | Permalink | Comments (2)

Taubinsky Presents Heuristic Perceptions Of The Income Tax Today At UC-Berkeley

Taubinsky 2Dmitry Taubinsky (Dartmouth) presents Heuristic Perceptions of the Income Tax: Evidence and Implications for Debiasing (with Alex Rees-Jones (Pennsylvania)) at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar:

This paper reports a new survey experiment designed to directly assess misperceptions of the US Federal Income Tax, and presents a theoretical framework for analyzing the redistributive consequences of these misperceptions. Survey participants are asked a series of incentivized questions about the tax that would be owed by a hypothetical taxpayer. This taxpayer is nearly identical to the participant, but household income is varied across questions; forecasts in this setting identify perceptions of the full tax schedule. We estimate the prevalence of previously discussed heuristics for simplifying tax forecasts (Liebman and Zeckhauser, 2004), and identify the qualitative features of the remaining misperceptions that are not captured by existing models.

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October 18, 2016 in Colloquia, Scholarship, 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 October 1, 2016) 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):







Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Michael Simkovic (S. Hall)


Michael Simkovic (S. Hall)



Paul Caron (Pepperdine)


D. Dharmapala (Chicago)



D. Dharmapala (Chicago)


Paul Caron (Pepperdine)



Louis Kaplow (Harvard)


Richard Ainsworth (BU)



Vic Fleischer (San Diego)


Robert Sitkoff (Harvard)



James Hines (Michigan)


Ed Kleinbard (USC)



Ted Seto (Loyola-L.A.)


Dan Shaviro (NYU)



Richard Kaplan (Illinois)


William Byrnes (Texas A&M)



Ed Kleinbard (USC)


Lily Batchelder (NYU)



Katie Pratt (Loyola-L.A.)


Chris Hoyt (UMKC)



Richard Ainsworth (BU)


Jeff Kwall (Loyola-Chicago)



Robert Sitkoff (Harvard)


Omri Marian (UC-Irvine)



Carter Bishop (Suffolk)


David Weisbach (Chicago)



Brad Borden (Brooklyn)


Louis Kaplow (Harvard)



David Weisbach (Chicago)


Vic Fleischer (San Diego)



Jen Kowal (Loyola-L.A.)


Nancy McLaughlin (Utah)



Chris Sanchirico (Penn)


Yariv Brauner (Florida)



Francine Lipman (UNLV)


Steven Bank (UCLA)



Dennis Ventry (UC-Davis)


Brad Borden (Brooklyn)



Bridget Crawford (Pace)


Katie Pratt (Loyola-L.A.)



Dan Shaviro (NYU)


Jack Manhire (Texas A&M)



David Walker (Boston Univ.)


Brian Galle (Georgetown)



Steven Bank (UCLA)


Francine Lipman (UNLV)



Herwig Schlunk (Vanderbilt)


Richard Kaplan (Illinois)


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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October 18, 2016 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

The IRS Scandal, Day 1258: Judge Orders IRS to Clear Tea Party Application Backlog Within Month

IRS Logo 2American Center for Law and Justice, Major Victory: IRS Ordered to Issue Outstanding Determinations & Answer for Political Targeting of Citizens:

Three years after we filed a lawsuit on their behalf, and for some, nearly seven years after they submitted their applications for tax-exempt status, the grassroots conservative groups that were targeted by the IRS for their political views are finally receiving some of the relief to which they have long been entitled—determinations on those applications.

In early August, the federal appellate court for the District of Columbia Circuit held that the plaintiffs who filed suit in Linchpins of Liberty, et al. v. United States, et al. in 2013 had set forth allegations sufficient to obtain actual evidence about the IRS’s targeting of conservative tax-exempt applicants based on their names and political positions. The D.C. Circuit thus reversed the decision of the district court (which had previously dismissed the claims on the grounds that the IRS had apparently ceased the targeting conduct) and sent the case back to the lower court, explaining that the IRS had failed to demonstrate that either the targeting scheme, or its effects on plaintiffs, had actually ended.

Last week, District Judge Reggie B. Walton held a status conference to resume the lower court proceedings in the case. While the IRS’s attorney once again took the position that most of the claims are moot because most of the plaintiff organizations have received determinations, the court picked up where the D.C. Circuit left off, and ordered that the IRS cease delaying determinations on any outstanding tax-exempt applications of Tea Party groups and other grassroots organizations. He gave the IRS thirty days to comply.

It will be seven years this December since one of our clients awaiting a final determination – Albuquerque Tea Party – submitted its tax-exempt application. Another client – Unite in Action – has been waiting six and a half years since filing its application in May 2010. As a result of Judge Walton’s order, these years-long application processes are finally concluding, and the organizations are receiving the review and determinations they deserve. This is a major victory.

Judge Walton also agreed with our position, affirmed by the appellate court, that the IRS cannot obtain dismissal of the case simply by issuing the remaining determinations but must also produce evidence showing that any negative effects of the targeting on plaintiffs have been completely and irrevocably eradicated. Specifically, we urged, and the court agreed, the IRS must answer such questions as: What was the determination process prior to the targeting? How and why did the targeting begin? What treatment did plaintiffs’ applications receive during the targeting? What assurances are currently in place that plaintiffs will not suffer further retaliation or discriminatory treatment at the hands of the IRS?

As a result of this order, the IRS will, at long last, be required to disclose the details of the lawless and unconstitutional Tea Party targeting scheme. The court’s requirement that the IRS give account for its conduct is a tacit acknowledgment that plaintiffs—as well as the American public—deserve honesty and transparency from their government.

We are pleased that the court has taken this first step and look forward to a resolution of this case that will hopefully include the first judicial acknowledgment of the unmistakably unconstitutional nature of the IRS’s egregious political targeting of U.S. citizens.

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October 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Monday, October 17, 2016

Crane Presents Integrating A Fragmented Corporate Tax Today At Boston College

Crane (2016)Charlotte Crane (Northwestern) presents Integrating a Fragmented Corporate Tax at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti and Diane Ring:

Calls for corporate tax reform are made with increasing intensity. From some perspectives, there appear to be two separate reform efforts, one focused on “integration” of the tax on the corporation itself with the tax its shareholders pay on distributions to eliminate “double taxation,” and the other focused on reform of the taxation of US-based corporations on their offshore earnings.

The problems to be addressed in these two efforts have in the past been largely treated as distinct policy problems. Solutions that integrate the corporate and individual income taxes in order to eliminate “double taxation” have ordinarily assumed that the current system of cross-border taxation remained in place, and solutions that address cross-border taxation have for the most part assumed the existing approach to taxing distributions from corporations to shareholders remains in place.

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October 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Hoffer Presents Will Treasury's Final Regulations Fix The ABLE Act? Today At Loyola-L.A.

Hoffer (2016)Stephanie Hoffer (Ohio State) presents Will Treasury's Final Regulations Fix the ABLE Act?, 153 Tax Notes 265 (Oct. 10, 2016), at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katherine Pratt:

Passed as part of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 (ABLE Act), section 529A allows states to build tax-preferred savings programs for individuals with qualifying disabilities. The law is similar to section 529, which governs college savings programs, and it is a game-changer for the disability community. Account principal and investment earnings can be withdrawn from the account tax free for qualified disability-related expenditures, and if used appropriately, withdrawals will not affect the beneficiary’s eligibility for Medicaid, Supplemental Security Income (SSI), and other federal supports for people with serious disabilities. But Treasury will determine how truly able the law is to achieve its dual goals of allowing individuals with disabilities to cover their own expenses and save for the future. The law contains both annual and aggregate contribution limits, and interpretation is up for grabs. Under one reading of the law, an account could accept no more than the annual limit, regardless of withdrawals from the account. Under an alternative reading that is more in keeping with the spirit of the law, dollars contributed and then withdrawn in the same year would not count against the annual contribution limit. 

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October 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Tax Lawyer Publishes New Issue

Polsky & Rosenzweig:  The Up-C Revolution

Gregg D. Polsky (Georgia) & Adam H. Rosenzweig (Washington University), The Up-C Revolution:

Over the past few years, a revolutionary new tax structure, known as the Up-C, has become increasingly popular, particularly in instances where an LLC is being taken public. In such an Up-C IPO, a newly formed C corporation is placed on top of the existing LLC, which continues to operate the business. Shares of the C corporation are sold to new investors, and the proceeds are used by the C corporation to buy an interest in the LLC. Meanwhile, the legacy owners of the LLC (typically, founders and private investment funds) retain their interests in the LLC, while receiving exchange rights that allow them to swap their LLC interests for equivalent-value shares of the C corporation. In addition, the legacy owners often receive the benefit of tax receivables agreements (TRAs), which provide that the owners will receive a specified percentage (usually 85 percent) of the tax benefits to the C corporation resulting from future exchanges. In combination, these features seem to provide a near-nirvana of tax efficiency. It is therefore unsurprising that the popularity of Up-Cs is growing at an exponential rate.

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October 17, 2016 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1257

IRS Logo 2Lima News editorial: Jim Jordan Is the Conscience of Conservatives:

U.S. Rep. Jim Jordan’s growing stature on Capitol Hill makes him an easy choice for re-election in the 4th Congressional District over Democrat Janet Garrett. ...

Another hearing saw him push for impeachment proceedings against IRS Commissioner John Koskinen, saying the IRS leader lied to Congress.

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October 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 16, 2016

Filing Taxes Should Be As Easy As Ordering Pizza, Obama Says

PizzaWired, Filing Taxes Should Be as Easy as Ordering Pizza, Obama Says:

The Situation Room is not as gee-whiz as you think it is. Take it from someone who knows: President Obama.

“I always imagined the Situation Room would be this super cool thing, it’d be like Tom Cruise in The Minority Report,” Obama, the guest editor of WIRED’s November issue, said during a lengthy interview with Joi Ito of MIT’s Media Lab and Editor-in-Chief Scott Dadich. “It’s not like that at all.”

In a wide-ranging conversation, the president described the tech gap between the public and private sectors. (Guess which side has better gear?) ...

“There’s a whole bunch of work we need to do around getting government to be more customer-friendly,” Obama said, adding that filing taxes should be “at least as easy as ordering a pizza or an airline ticket.”

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October 16, 2016 in Tax | Permalink | Comments (5)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 papers is now #24 in all-time downloads among 12,265 tax papers):

  1. [3,532 Downloads]  Families Facing Tax Increases Under Trump's Latest Tax Plan, by Lily L. Batchelder (NYU)
  2. [268 Downloads]  Transfer Pricing Money: The Chevron Case, by Richard J. Vann (Sydney) & Graeme S. Cooper (Sydney)
  3. [185 Downloads]  Law and Macroeconomics: The Law and Economics of Recessions, by Yair Listokin (Yale)
  4. [168 Downloads]  Taxation and Human Rights: A Delicate Balance, by Reuven Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan)
  5. [146 Downloads]  Capital Taxation in an Age of Inequality, by Edward Kleinbard (USC)

October 16, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 1256: The IRS Spent $12 Million For Microsoft Cloud-Based Email Archive That Was Incompatible With Its On-Premises Email System And Never Used

IRS Logo 2Treasury Inspector General for Tax Administration, Review of the Enterprise E-Mail System Acquisition (2016-20-080):

The IRS currently maintains an on-premises e‑mail environment that does not have archive capability. The existing system hardware is approaching manufacturer end-of-support and is experiencing numerous failures resulting in a significantly increased workload on enterprise e‑mail support staff. If the IRS does not efficiently upgrade its e-mail environment, it could adversely affect the IRS’s ability to effectively perform tax administration.

The IRS purchased subscriptions for an enterprise e-mail system that, as it turned out, it could not use. The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.

IRS Information Technology organization executives made a management decision to consider the enterprise e-mail project an upgrade to existing software and not a new development project or program. Therefore, the Information Technology organization did not follow the Internal Revenue Manual Enterprise Life Cycle guidance. The IRS authorized the $12 million purchase of subscriptions over a two-year period between June 2014 and June 2016. However, the software to be used via the purchased subscriptions was never deployed.

Figure 1

The IRS may have violated the bona fide needs rule when it purchased the subscriptions using Fiscal Years 2014 and 2015 appropriations and did not deploy the software subscriptions in those years. In addition, the IRS violated Federal Acquisition Regulation requirements by not using full and open competition to purchase these subscriptions.

Bloomberg BNA, IRS Wasted $12 Million on Failing E-Mail System, IG Reports:

Lacking the ability to archive all e-mails on site is especially troubling considering the blowback the agency has faced for the last several years, Douglas Mancino, a partner at Seyfarth Shaw LLP told Bloomberg BNA today. Members of the House Freedom Caucus are vying to impeach the IRS commissioner, saying he misled Congress and alleging the agency destroyed e-mails showing evidence of its scrutinizing of conservative groups. The agency’s records retention was also at the heart of a recent lawsuit (Judicial Watch, Inc. v. IRS, D.D.C., No. 1:13-cv-01559).

The IRS strongly disagrees with the notion that it wasted taxpayer dollars or didn’t follow appropriate practices, Gina Garza, the chief information officer, said in a response letter included in the report. “The IRS takes seriously our obligation to manage taxpayer dollars in the most efficient and effective manner possible,” she said. “The IRS remains committed to continuously improve our IT systems and processes.”

But Mancino differed. “The IRS expects taxpayers to have record-retention policies that extend for years, particularly for major corporate records, including when they’re maintained in electronic format. One would think the IRS itself would think along the same lines and have the same policies, especially in the environment of the last five or six years,” he said. The findings show mismanagement and spending that would be considered “a career-limiting move” in the corporate world, he said.

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October 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, October 15, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Presidential Campaign Tax News

The IRS Scandal, Day 1255

IRS Logo 2Government Executive, White House Accused of Bypassing Rules on Access to Taxpayer Information:

In the latest in a long effort to prove White House interference with the Internal Revenue Service, the right-leaning legal group Cause of Action Institute released a 67-page investigative report saying President Obama has “circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information.”

Writing in the context of the three-year-old political controversy over alleged political “targeting” by the IRS’s Exempt Organizations division, Cause of Action explored “recent IRS misuse and unauthorized release of confidential taxpayer information and the possible role of a detailee program in the Office of the White House Counsel that may have provided access to the protected information.”

The report cites two examples of alleged political abuse of private taxpayer information. One involved a 2010 charge that then-Obama Council of Economic Advisers Chairman Austan Goolsbee in a call with reporters questioned the sufficiency of taxes paid by Koch Industries, news of which launched an inspectors general probe (never released) into whether the Kansas businessmen’s tax returns were reviewed at the White House.

A second example the legal group cited was a November 2012 instance in which the IRS allegedly gave the journalism group ProPublica “confidential application files of certain conservative groups seeking tax exempt status.”

The Obama team allegedly accomplished the interference by “relying on individual consent forms that were never intended for use by the president,” Cause of Action wrote. “The practice has allowed the president to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976.”

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October 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, October 14, 2016

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new paper by Louis Kaplow (Harvard), A Distribution-Neutral Perspective on Tax Expenditure Limitations, 31 Tax Policy and the Economy (Robert Moffitt, ed., forthcoming 2017).

Glogower (2016)Louis Kaplow’s new article extends his distribution-neutral framework for analyzing tax reforms, as developed in prior works, to the context of reforms limiting tax expenditures. Kaplow argues that this framework allows for more rigorous analysis of tax expenditure policy, and yields substantive insights challenging common assumptions about the benefits of limiting expenditures.

In the distribution-neutral framework, a reform is evaluated alongside an offsetting adjustment to the income tax schedule that washes out distributive effects in two steps: The schedule is first adjusted to leave taxpayers at same level of disposable income (Step 1), and then adjusted further to hold their utility constant (Step 2). In other words, if a reform increases utility by eliminating a consumption distortion, Step 2 will raise the tax rate to restore utility to the pre-reform level. 

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October 14, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Trump's Estate Tax Plan Would Raise GDP, Incomes By 1%; Clinton's Would Shrink GDP, Incomes By 1%

Clinton TrumpWall Street Journal op-ed: Killing the Death Tax Would Resurrect Growth, by Stephen J. Entin (Tax Foundation):

The death tax is an inevitable point of disagreement in a presidential campaign. Donald Trump would eliminate it to promote growth. Hillary Clinton would raise it—up to 65%, while lowering the exemption for estates to $3.5 million—to promote equality. The outcomes would be as different as their intentions. ...

Analysts at the Tax Foundation, where I work, have run the numbers using two models: one of the estate tax, based on historical filings, and another to estimate the economic effects on capital formation, GDP, profits, wages and federal revenue from those sources.

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October 14, 2016 in Political News, Tax | Permalink | Comments (16)

Treasury Issues Final Section 385 Debt-Equity Earnings-Stripping Regs

Treasury Department Logo (2017)After the Treasury Department submitted the proposed final section 385 debt-equity regulations on earnings-stripping to the White House Office of Management and Budget on September 30 for its 90-day review, Republicans on the House Ways & Means Committee (on October 5) and Senate Finance Committee (on October 11) requested that the regulations not be issued in haste without addressing their concerns.  Yesterday, the Treasury Department and IRS issued the final regulations:

Press and blogosphere coverage:

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October 14, 2016 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1254

IRS Logo 2The Daily Caller, Obama’s Tax Lawyers Had Conservative Groups’ Confidential Information:

President Barack Obama’s White House hired at least two Department of Justice (DOJ) attorneys who accessed conservative groups’ confidential taxpayer information while defending the Internal Revenue Service (IRS) during the targeting scandal.

The two were among 10 Justice Department Tax Division lawyers Obama has kept on the White House staff without taxpayer privacy training since April 2009, nonprofit government watchdog Cause of Action Institute (CofA) said in a report made public Wednesday [Presidential Access to Taxpayer Information].

Obama “is the first president to have recruited litigation specialists from the DOJ Tax Division, some of whom had knowledge of confidential taxpayer information concerning his political opponents,” the report said. “The DOJ has supplied a regular stream of Tax Division lawyers to the Obama White House for more than seven years, all without any apparent guidance or safeguards to ensure against the unauthorized disclosure of taxpayer information.”

Using Department of Justice tax lawyers may be unique to the current White House, but for “nearly as long as the IRS has existed, presidents have weaponized it against their foes,” the report said. “The Obama administration has made frequent and damaging use of the IRS as a political weapon.”

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October 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Thursday, October 13, 2016

David Gamage Leaves UC-Berkeley For Indiana

Gamage (2017)David Gamage (UC-Berkeley) has accepted a lateral offer to join the Indiana law faculty in the fall (announcement). After graduating from Stanford in 2000 (B.A. Economics, M.A. Economic and Organizational Sociology), he worked for Bain Capital before earning his J.D. in 2005 from Yale. He was an Emerging Scholars Program Fellow at Texas in 2005-07 and joined the UC-Berkeley law faculty in 2007. He served as Special Counsel and Senior Stanley S. Surrey Fellow in the Treasury Department's Office of Tax Policy in 2010-12. His publications include:

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October 13, 2016 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Facebook Pledges To Comply With 'Extraordinarily Broad' IRS Summons, Fight $5 Billion Tax Deficiency From 'Double Irish' Maneuver

Facebook (2016)Bloomberg, Facebook Continues Fight Over U.S. Taxes After Ireland Move:

Facebook Inc. is carrying on its fight with the U.S. Internal Revenue Service over taxes relating to its transfer of global operations to Ireland in 2010 even as the social media giant pledged cooperation with the government’s investigation.

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October 13, 2016 in Tax | Permalink | Comments (1)

Gordon, Joulfaian & Poterba:  Choosing Between An Estate Tax And A Basis Carryover Regime — Evidence From 2010

Robert Gordon (NYU), David Joulfaian (U.S. Treasury Department) & James M. Poterba (MIT), Choosing Between an Estate Tax and a Basis Carryover Regime: Evidence from 2010:

Executors of estates for decedents in 2010 could choose between an estate tax regime and a basis carry-over regime. For most executors, this created a tradeoff between a current estate tax payment and a future capital gains tax liability for beneficiaries who inherited assets with carryover-basis. Various features of a decedent’s estate, including the gross value of assets, outstanding debts, whether the decedent resided in a state with an estate tax, and the basis of assets held at the time of death, affected the relative tax burden under the two regimes. Some executors chose to file estate tax returns for decedents from 2010, but these estate tax filings resulted in very little estate tax revenue. Estate tax filers had more leverage, were more likely to be from a state with an estate tax or from married decedents, were less likely to have made lifetime gifts, and had larger charitable bequests — all factors that are associated with reduced estate tax liability.

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October 13, 2016 in Scholarship, Tax | Permalink | Comments (0)

Field:  Aggressive Tax Planning And The Ethical Tax Lawyer

Heather M. Field (UC-Hastings), Aggressive Tax Planning & the Ethical Tax Lawyer, 36 Va. Tax L. Rev. ___ (2017):

Can a tax planner be both ethical and aggressive? When a client wants help with a transaction in which the lawyer thinks the tax benefits will probably not be sustained on the merits if challenged, what is the ethical response? How low should the tax adviser go?

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October 13, 2016 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1253

IRS Logo 2Tax Notes, Koskinen Impeachment Paused but Not Forgotten as Elections Near:

The House's extended recess appears to signal a respite from, if not an end to, the 114th Congress's months-long push to impeach IRS Commissioner John Koskinen.

The effort has been directed by conservatives outraged over claims that the IRS targeted Tea Party and other conservative groups for extra scrutiny when they applied for tax-exempt status. The drive sputtered to a halt in late September after pro-impeachment congressmen traded their privileged motion on the House floor for an impeachment hearing in the House Judiciary Committee.

That three-and-a-half-hour hearing on September 21 rehashed accusations that Koskinen had deliberately misled and lied to congressional investigators looking into the targeting controversy. However, the hearing didn't uncover anything substantially new, it didn't seem to change any minds on the committee, and it offered no resolution to the impeachment inquiry, such as a vote by the Judiciary Committee asking the full House to impeach.

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October 13, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, October 12, 2016

Laura Rosenbury Stakes Her Deanship On Raising Florida's Ranking To #35; Amidst Claims Of Sexism, Her Regime Comes Under Fire, With The Graduate Tax Program Its Flashpoint

Rosenberry (2016)Following up on my previous posts (links below) on the turmoil at the University of Florida College of Law:  Chronicle of Higher Education, As U. of Florida Law Dean Calls Out Sexism, Her Rankings-Driven Regime Comes Under Fire:

An alumnus in Orlando told her he didn’t remember a dean with "legs like that."

The star editor of the law review described her as "young and vivacious," parroting a phrase he’d picked up from his mentor.

Faculty members and graduates have called her a careerist, whose singular focus on national rankings has come at the expense of collegial consultation and respect for beloved professors.

This is the turbulent and lately tortured world of Laura A. Rosenbury, the first woman to lead the University of Florida’s Fredric G. Levin College of Law. Ms. Rosenbury has sought to shake up a 107-year-old school with a reputation that is more often described as good than great. She has staked her deanship on a promise to move the school up 13 spots in the U.S. News & World Report rankings, which would bring Florida to No. 35. It could all happen, Ms. Rosenbury says, as soon as 2019. That is, if the dean and the Gator faithful don’t devour each other first.

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October 12, 2016 in Legal Education, Tax | Permalink | Comments (14)

Mason Presents Citizenship Taxation Today At Pennsylvania

Mason (2015)Ruth Mason (Virginia) presents Citizenship Taxation, 89 S. Cal. L. Rev. 169 (2016), at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

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 migrant.

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October 12, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Johnston:  Who Else Doesn't Pay Taxes?

David Cay Johnston, Who Else Doesn't Pay Taxes?:

A big and important story about America’s failing tax system lurks in the revelation (which Donald Trump seemed to confirm in Sunday’s debate) that he had tax losses that could allow him to spend almost $4 million a month for nearly two decades while paying no federal income taxes.

Trump is part of a growing wave of people who enjoy lavish lifestyles, but pay little or no federal income taxes, my analysis of the official tax data going back two decades shows. There are enough of them that they even have their own IRS nickname.

The taxes paid by most Americans subsidize those who do not pay — including a strikingly high number of affluent, not poverty stricken, Americans. Let’s take a look at the latest IRS data, which I have analyzed annually for more than two decades.

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October 12, 2016 in IRS News, Tax | Permalink | Comments (21)

Sen. Hatch Demands Treasury Clarify Use Of Secret Memo In Section 385 Debt-Equity Regs

Senate LogoFollowing up on my previous post, Sen. Hatch Demands Release Of Secret Reagan-Era DOJ Tax Memo Supporting Obama's Expansive Use Of Presidential Power:  Press Release, Hatch Demands Treasury Clarify Use of Secret Memo Regarding Section 385 Debt-Equity Regulations:

Now Public Memo of Agreement Used to Justify Absence of Economic Impact Analysis for Proposed Regulations

Senate Finance Committee Chairman Orrin Hatch (R-Utah) today wrote to Treasury Secretary Jack Lew with a series of questions regarding a long-secret Memorandum of Agreement (MOA) with the Office of Management and Budget (OMB) concerning the economic and regulatory effects of tax regulations.  The Treasury Department uses the memo, recently made public at Chairman Hatch’s urging, to justify forgoing a cost-benefit analysis required by federal law and executive order when issuing tax regulations, including proposed regulations relating to the Internal Revenue Code’s section 385 debt-equity rules.  

“Today, I write to 1) set forth the details of that MOA and request information on its use, and 2) raise additional questions concerning the proposed regulation and the Treasury Department’s unusual process in moving toward a final rule,” Hatch wrote. “These issues matter a great deal to me because federal regulations have grown in quantity and scope to unprecedented levels in recent decades, and tax regulations are no exception.”

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October 12, 2016 in IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1252

IRS Logo 2USA Today editorial, Impeachment Won't Reform IRS:

You have to give a band of conservative Republicans known as the House Freedom Caucus credit for one thing: No matter how bad one of their ideas is, they never quit.

Right now, they’re battling the Obama administration, House Democrats, their own leadership and Republican moderates to push a futile and absurd effort to impeach IRS Commissioner John Koskinen. ...

While the allegations against Koskinen are serious, wiser Republicans know they are not the stuff of impeachment. In fact, the underlying issue that has driven impeachment goes back years: the agency’s misuse of its immense powers to target conservative groups. It occurred before Koskinen was even at the agency.

He was brought in to clean up the mess after revelations in 2013 that the agency’s tax-exempt division had singled out conservative organizations, including Tea Party groups, because of their political beliefs. The IRS sent the groups burdensome inquiries and delayed their applications for tax exemption, actions that President Obama acknowledged were “intolerable and inexcusable.”

Congress investigated, and high-level officials were forced out. The FBI also investigated but found no criminal wrongdoing, a finding Republicans have found hard to swallow.

Certainly, the public deserves to know exactly what happened, see the relevant records, and be convinced that it won't happen again. Instead, Koskinen’s “cleanup” has raised more suspicions. It has been marred by disappearing emails and bungled searches for backups. Federal court rulings excoriated the agency for secrecy.

A few months ago, the agency was still stonewalling. In March, the 6th U.S. Circuit Court of Appeals  blasted the IRS for resisting “at every turn” a judge’s orders to disclose a list  of the groups targeted. And just last month, a federal appeals court in the nation’s capital revived a lawsuit against the IRS by conservative groups that had been targeted. A three-judge panel cited the agency’s own admission that two groups still had not gotten their tax exemption, years  after seeking it. The IRS’ excuse? Because the groups had sued the agency.

Republicans have good reason to want the IRS to come clean and release any documents that shed light on what happened. But impeachment of a man who wasn't even there when the scandal occurred? No. ...

There are plenty of things the IRS needs — more money to provide better customer service and combat ID fraud, a simpler tax code to administer, and reforms to ensure it will never again target anybody for political beliefs. Republicans would do better to turn to the serious work of governing than to press a frivolous impeachment vote.

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October 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, October 11, 2016

Zelenak Presents Tax-Free Basis Step-Up At Death And The Charitable Deduction Of Unrealized Appreciation Today At Columbia

Zelenak (2016)Lawrence Zelenak (Duke) presents The Tax-Free Basis Step-Up at Death, the Charitable Deduction for Unrealized Appreciation, and the Persistence of Error at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

This essay recounts, as a study in the remarkable persistence of some early errors even when the errors were promptly recognized and addressed, the legislative and administrative histories of the tax-free basis step-up at death and the charitable deduction for unrealized appreciation.

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October 11, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Presidential Campaign Tax News

Kahn & Kahn:  The Fallacious Objections To The Tax Treatment Of Carried Interest

Florida Tax Review  (2015)Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State), The Fallacious Objections to the Tax Treatment of Carried Interest, 18 Fla. Tax Rev. ___ (2016):

Carried interest is the term used to describe a profits interest in a partnership that invests in entities. A managing partner typically will receive a 20% profits interest in exchange for managing the investments of the partnership. The complaint against the treatment of carried interest is aimed at the characterization of the managing partner's share of the partnership's subsequent capital gains. The contention is that since the managing partner receives her share of the partnership's income for services performed, she should be taxed at ordinary income tax rates rather than the preferentially lower capital gains rate.

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October 11, 2016 in Scholarship, Tax | Permalink | Comments (1)

The Practical Tax Lawyer Issues Call For Articles

Practical Tax LawyerThe Practical Tax Lawyer, published by ALI-CLE and supported by the ABA Tax Section, has issued a call for "how-to" or “intro to” sorts of articles that are oriented towards the general practitioner:

We especially welcome articles that help practitioners think about how to deal with any recent changes in the law, regulations, or IRS litigating position that might affect a tax practice. PTL articles tend to be very short (3,000-5,000 words).

Here are the submission deadlines for each issue:

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October 11, 2016 in Scholarship, Tax | Permalink | Comments (0)

Donald Trump And Hillary Clinton: I've Had The Time of My Life

The IRS Scandal, Day 1251: Bill O'Reilly Calls For A Special Prosecutor

IRS Logo 2Fox News, O'Reilly: Enough Evidence of Corruption in DOJ for an Independent Prosecutor:

In his Talking Points Memo tonight, Bill O'Reilly said a major scandal could erupt in the Justice Department.

He explained that many Americans believe the fix was in during investigations into the IRS' targeting of conservative groups and Hillary Clinton's private email server.

O'Reilly noted that former IRS official Lois Lerner was never held legally accountable for allegedly targeting right-wing groups for audits, and Attorney General Eric Holder subsequently refused to explain why.

Meantime, the number of immunity deals the DOJ granted in the Clinton email investigation is "strange to say the least," O'Reilly said.

"The FBI and the Justice Department have a lot of explaining to do on the email front," O'Reilly stated.

"Talking Points believes there is now enough evidence of corruption in the Justice Department that an independent prosecutor should be appointed. We all know Mr. Obama is not going to do that. But he should. We need honest government."

Media Matters, O’Reilly Uses Old, Repeatedly Debunked Right-Wing Myths To Call For “Independent Prosecutor” Of “Corrupt” DOJ:

Fox News host Bill O’Reilly used debunked right-wing myths to claim there is “enough evidence of corruption in the Justice Department” to warrant appointing an “independent prosecutor” for the FBI and the DOJ, citing the closed investigation relating to Democratic presidential nominee Hillary Clinton’s use of private email as secretary of state, and the long-debunked IRS targeting pseudo-scandal. ...

O’Reilly also alleged there was corruption regarding the investigation into the IRS allegedly targeting right-wing organizations, complaining that then-IRS head Lois Lerner "was never really held legally accountable." But a congressional investigation revealed that progressive groups were also subjected to the same kind of scrutiny as conservative groups, evidence which Fox News itself ignored when it first came to light. And months before that, in June 2013, the congressional investigation found the culprit behind the increased scrutiny of organizations applying for tax-exempt status: not Lois Lerner, but a Cincinnati-based IRS manager who told investigators that he “instructed his team of screeners” to look for cases of political-sounding groups applying for tax-exempt status, and that “he took this action on his own.”

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October 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Monday, October 10, 2016

Tokić Presents Taxing Greed Today At Loyola-L.A.

 (LTokicGenevieve Tokić (Northern Illinois) presents Taxing Greed at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katherine Pratt:

Appeals to greed in support of various tax proposals have become increasingly commonplace in response to a populist mood in politics. References to ensuring that the greedy rich “pay their fair share” sate a populist attitude towards wealth and wealth accumulation, and may be used to garner political support for a policy or proposal. However, there has been little academic consideration of the role of greed in the law, and in the tax law in particular. This paper seeks to fill that hole by taking a close look at the concept of greed.

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October 10, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Yale Symposium On Seminole Rock:  The Past, Present, And Future Of Deference To Agency Regulatory Interpretations

Yale Notice & CommentThe Yale Journal on Regulation's Notice & Comment Blog, an affiliate of our Law Professor Blogs Network, hosted an online symposium on Reflections on Seminole Rock: The Past, Present, and Future of Deference to Agency Regulatory Interpretations with contributions from twenty-five contributors, including three Tax Profs:

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October 10, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

New Research On Inequality: ‘Whatever You Thought, It’s Worse’

Washington Post Wonkblog, Striking New Research on Inequality: ‘Whatever You Thought, It’s Worse’:

Social mobility, the amount that a typical American moves up or down the economic ladder from where their parents and grandparents stood, has became a major focus of political discussion, academic research and popular outrage in the years since the global financial crisis. While Americans have traditionally seen their country as a place where anyone can make through hard work and a stroke of luck, data collected in the past decade have shown otherwise.

Compared with many European countries, for example, few Americans end up with an income or educational level that is substantially different than their parents. Research by economists from Harvard and Berkeley found that fewer than 10 percent of people in the bottom fifth of the wealth distribution will make it into the top fifth [Raj Chetty (Stanford), Nathaniel Hendren (Harvard), Patrick Kline (UC-Berkeley), Emmanuel Saez (UC-Berkeley), Nicholas Turner (U.S. Treasury Department), Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility]. Things weren't much better for the middle class: Only about 20 percent of people in the middle fifth would rise into the top fifth over the course of their lives.

Now, new research suggests that social mobility in America may be even more limited than researchers have realized. In a new paper, Joseph Ferrie of Northwestern University, Catherine Massey of the University of Michigan and Jonathan Rothbaum of the U.S. Census Bureau draw on a newly constructed dataset about American families reaching back to 1910 [Do Grandparents and Great-Grandparents Matter? Multigenerational Mobility in the US, 1910-2013]. Unlike past studies, which have mainly compared parents and children, the new work adds data on grandparents and great-grandparents to show just how fixed the fortunes of many Americans have become.

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October 10, 2016 in Scholarship, Tax | Permalink | Comments (8)

33% Of $800 Million California Film Tax Credits Went To Projects That Would Have Been Made In The State Anyway

Following up on my previous post, Starstruck States Squander $10 Billion In Film Tax Incentives Producing Minimal Economic Returns:  California Legislative Analyst's Office, California's First Film Tax Credit Program:

Figure 1California provides tax incentives for qualified film and television productions to be made in the state. The first film tax credit program was adopted in 2009 and provided $800 million ($100 million per year over eight years) in credits to selected feature films and television projects. In 2014, the Legislature created a new film tax credit program that increased the available amount of tax credits to $330 million per year—beginning in the 2015–16 fiscalyear—and modified the program in various ways.

In this report, as required by law, we evaluate the economic effects and the administration of the first film tax credit program passed in 2009. We find that about one–third of the film and television projects receiving incentives under this program would probably have been made in California anyway. We suspect that this level of “windfall benefits” to some credit recipients may be low compared to other tax credits, which would suggest that the first film tax credit program targeted the types of production vulnerable to being filmed outside the state relatively well.

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October 10, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

Trump's Accountant/Lawyer Committed 'Grievous' Violation Of Legal And Professional Ethics In Discussing His Tax Returns With Media

Following up on Saturday's post, Trump’s Ex-Accountant Jack Mitnick: He’s No Tax Genius:  National Review, Confidentially Yours:  Even a Scoundrel Like Trump Deserves Ethical Legal Representation:

Is there anyone concerned at the ugly turn the election has taken with the release of a few pages of Donald Trump's taxes from 1995? The ugliness is not that Trump's taxes have been revealed, per se, but that it was done, in part it appears, by getting an elderly lawyer to violate his duty of confidentiality to his client. One might say that Trump deserves what he gets. But in this age of ever-eroding privacy, it is alarming when the official rules meant to guard privacy come under assault. ...

Mr. Mitnick has committed a grievous violation of legal and professional ethics.

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October 10, 2016 in Political News, Tax | Permalink | Comments (6)