Fox: Does Capital Bear The U.S. Corporate Tax After All?

Edward G. Fox (Michigan), Does Capital Bear the U.S. Corporate Tax After All? New Evidence from Corporate Tax Returns, 16 J. Empirical Legal Stud. ___ (2019):

This Article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957-2013, corporations had been subject to a hypothetical corporate cash flow tax — i.e., a tax allowing for the immediate deduction of investments in long-lived assets like equipment and structures — rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995-2013) differed little from that under the hypothetical cash flow tax.

Continue reading

NY Times: Want To Pay Off A Student’s Debt? At Morehouse, Donors Now Can

New York Times, Want to Pay Off a Student’s Debt? At Morehouse, Donors Now Can:

The surprise announcement elicited disbelief, then jubilation from the crowd of 396 graduates at Morehouse College’s commencement in May, and from onlookers like Xavier Antoine, a junior who was photographing the celebration.

“This is my class, 2019, and my family is making a grant to eliminate their student loans,” Robert F. Smith, the richest black man in America and this year’s commencement speaker, told the crowd at Morehouse, a historically black men’s college in Atlanta.

The extraordinary and unexpected pledge also led other Morehouse men like Mr. Antoine, who has taken out several student loans, to ask the inevitable question: What about the Class of 2020?

Continue reading

Abstract 'Spin': Nearly Half Of All Scholars Exaggerate Their Papers' Findings

Inside Higher Ed, Abstract ‘Spin’:

We’ve all been told not to judge a book by its cover. But we shouldn’t be judging academic studies by their abstracts, either, according to a new paper in BMJ Evidence-Based Medicine [Evaluation of Spin in Abstracts of Papers in Psychiatry and Psychology Journals]. The study — which found exaggerated claims in more than half of paper abstracts analyzed — pertains to psychology and psychiatry research. It notes that “spin” is troublesome in those fields because it can impact clinical care decisions. But the authors say that this kind of exaggeration happens in other fields, too.

“Researchers are encouraged to conduct studies and report findings according to the highest ethical standards,” the paper says, meaning “reporting results completely, in accordance with a protocol that outlines primary and secondary endpoints and prespecified subgroups and statistical analyses.”

Yet authors are free to choose “how to report or interpret study results.” And in an abstract, in particular, they may include “only the results they want to highlight or the conclusions they wish to draw.” ...

How often did articles’ abstracts exaggerate the actual findings? More than half the time, or 56 percent. Spin happened in 2 percent of titles, 21 percent of abstract results sections and 49 percent of abstract conclusion sections. Fifteen percent of abstracts had spin in both their results and conclusion sections.

In a word: spin. ...

Continue reading

Kysar: Critiquing (And Repairing) The New International Tax Regime

Rebecca M. Kysar (Fordham), Critiquing (and Repairing) the New International Tax Regime, 128 Yale L.J. F. 339 (Oct. 25 2018):

In this Essay, I address three serious problems created — or left unaddressed — by the new U.S. international tax regime. First, the new international rules aimed at intangible income incentivize offshoring and do not sufficiently deter profit shifting. Second, the new patent box regime is unlikely to increase innovation, can be easily gamed, and will create difficulties for the United States at the World Trade Organization. Third, the new inbound regime has too generous of thresholds and can be readily circumvented. There are ways, however, to improve upon many of these shortcomings through modest and achievable legislative changes, eventually paving the way for more ambitious reform. These recommendations, which I explore in detail below, include moving to a per-country minimum tax, eliminating the patent box, and strengthening the new inbound regime.

Continue reading

Is America Ready For a Professor President — Especially A Rich One?

The Cut (New York Magazine), Elizabeth Warren’s Classroom Strategy:

A lifelong teacher, she’s the most professorial presidential candidate ever. But does America want to be taught?

The story of Elizabeth Warren’s career in education — at least in legal education — begins with one word: assumpsit. It is literally the first word of the first case she had to read for the first class she ever took as a 24-year-old law student at Rutgers University in 1973. She has recalled, in vivid detail, the fear and confusion she’d felt as a young mother, former public-school teacher, and unlikely law student when her first law professor walked into the room and called on a student whose name began with A, asking her, “Ms. Aaronson, what is ‘assumpsit’?” Ms. Aaronson had not known, and neither had the next several students he called on after her. Ms. Warren also had not known what assumpsit meant, despite having done the reading for the day.

Since her last name was at the end of the alphabet, Warren was spared public humiliation, but she left her first law-school class badly shaken, with a degree of clarity about how she must move forward: “Read all the words and look up what you don’t know.”

In the following years, Warren became a law-school professor: first teaching night classes at Rutgers and eventually landing at Harvard, where she worked for 16 years before becoming a U.S. senator from Massachusetts in 2013.

Continue reading

Field: An Introduction To Tax Careers for JDs

Heather M. Field (UC-Hastings), An Introduction to Tax Careers for J.D.s, ABA Tax Times, Vol. 38, No. 3, p. 30 (Spring 2019):

To many people, the tax field seems like a very narrow niche. The tax profession does require specialized expertise, but tax professionals know that there is actually great diversity in the career paths available to law school graduates. Yet for law students and junior lawyers interested in the tax field, it can be difficult to appreciate the range of possible tax careers and to distinguish between what different tax practitioners do. Thus, to help aspiring tax professionals easily understand the range of tax careers they might pursue, this article offers a 3-pronged framework for describing tax careers available to J.D.s.

Continue reading

'Law School Was Kind Of A Shock:' Students Take The Lead In Mental Health Initiatives

Law.com, 'Law School Was Kind of a Shock:' Students Take the Lead in Mental Health Initiatives:

Luke Finn expected to find a robust network of mental health supports in place when he showed up at Northwestern University Pritzker School of Law in 2017.

He assumed an American campus would be more attuned to wellness than schools in his native U.K., where stiff-upper-lip attitudes prevail. Instead, he was underwhelmed by what he found offered at the Chicago law school.

“As a 1L, it seemed obvious to me that people needed something they weren’t getting,” said Finn, who is open with classmates about his own struggles with depression. “There were people having anxiety attacks by October.”

Rather than complain about what he viewed as a lack of programming centered on mental health and wellness, Finn decided to do something about it. In his first semester he started the Students Mental Health Alliance—a student-run organization dedicated to wellness programming, education, counseling access and other supports. It began as informal peer counseling, but the 18-month-old group now produces a variety of events from mental health panels and sessions timed to especially stressful periods of the academic year—finals, for example—to a weekly email to all Northwestern law students listing wellness events and resources. The group even partnered with Illinois Lawyers Assistance Program to double the amount of on-campus counseling offered.

Continue reading

Analyst In IRS Criminal Investigation Division Pleads Guilty To Leaking Michael Cohen's Confidential Financial Information To Michael Avenatti, Stormy Daniels' Ex-Lawyer

NBC News, IRS Staffer Pleads Guilty to Giving Michael Cohen Data to Stormy Daniels' Lawyer:

An IRS staffer who leaked confidential details about former Trump lawyer Michael Cohen's finances to Michael Avenatti, ex-lawyer for adult film star Stormy Daniels, pleaded guilty Wednesday to illegally accessing and distributing that information.

John C. Fry was an investigative analyst with the IRS Criminal Investigation Division, the law enforcement arm of the agency, in May 2018 when he twice logged on to the Financial Crimes Enforcement Network (FinCEN) database and downloaded five Suspicious Activity Reports (SARs) — reports filed by banks when they note potentially suspicious transactions — related to Cohen and his company Essential Consultants.

In court Wednesday, Fry admitted giving Avenatti the information via cellphone and emailing him screenshots of the SARs. He pleaded guilty to one county of unauthorized disclosure of SARs. ...

Continue reading

NY Times: More Private Colleges Cut Tuition As Discount Rate Hits All-Time High Of 52%

Following up on my previous post, Private College Tuition Discount Rate Hits All-Time High Of 52%: New York Times, More Private Colleges Are Cutting Tuition, but Don’t Expect to Pay Less:

[A] small but rising number of mostly private liberal arts colleges ... are cutting their tuition prices. But what they’re actually doing is reducing their advertised rates, which only the wealthiest students usually pay. At the same time, the colleges are also reducing the heavy discounts they offer to everyone else. The result is a new sticker price that more closely reflects what students already pay.

Institutions are making the change out of economic necessity: As college costs have soared, expensive smaller schools risk being bypassed as applicants seek more affordable options.

The colleges hope the truth in advertising will attract more applicants, including transfer students, and increase retention rates.

Continue reading

University Of Florida Seeks To Hire A Tax Prof

University of Florida Levin College of Law seeks to hire multiple professors, across an array of fields, over the next several years as part of the university’s quest to become a top five public research institution. The University of Florida, located in Gainesville, FL, is currently the eighth best public research institution in the nation and the flagship university of the third largest state. In addition to seeking candidates for tenured and non-tenure-track positions, advertised separately, the Levin College of Law seeks highly qualified candidates for tenure-track positions.

The Appointments Committee welcomes applications from tenure-track candidates in all areas of law. Successful candidates will have a publication record, strong scholarly potential, a commitment to excellence in teaching, and enthusiasm for creating an inclusive environment for all students. Candidates must also have a JD, PhD, or equivalent degree in a related field. In reviewing applications, the Appointments Committee will consider long-term teaching needs in large enrollment classes, environmental law, health law, tax, and law and technology.

Continue reading

The Impact Of The U.S. News Rankings On The Cost Of Law School

Following up on my previous post, Symposium: Uncomfortable Conversations About Legal Education — Student Debt, Diversity, And More:  Law.com, Cracking the Case of Law School Cost:

Here’s the million-dollar question on my mind today: How do you make a law degree more affordable?

That was the focus on a day-long session I attended last week on bringing down the cost of a legal education held at the American Bar Association’s Annual Meeting in San Francisco. It was an interesting—and at times frustrating—discussion, so I’m going to devote this newsletter to parsing some of the ideas that emerged. ...

The U.S. News rankings loomed large in the day’s conversation, and Law School Transparency Executive Director Kyle McEntee tackled it head on with a talk about how the rankings can be improved and their influence curbed. He proposed a change to the rankings formula that would do away with the expenditure-per-student metric, which rewards schools for spending money. In its place, he proposed an alternative measure that would divide the total amount of J.D. revenue a school receives annually by the number of long-term, fulltime bar passage required or J.D. advantage jobs its graduates land. This would essentially reward schools for keeping tuition low while also sending graduates on to good legal jobs.

McEntee also made news when he announced that in 2020 Law School Transparency will launch its own law school certification system, which is intended to create some competition for U.S. News in terms of evaluating the quality of law schools. It will award badges to law schools that meet its criteria in different areas, such as affordability and diversity and inclusion. The badges will offer schools alternative benchmarks that don’t hinge solely on the U.S. News formula, McEntee said. Law schools can then use the LST badges in their marketing materials and websites as a signifier of quality, along the lines of LEED certification for energy efficient construction. He said law deans are hungry for alternatives to the U.S. News rankings because they feel very constrained by those rankings’ narrow definition of what makes a good law school and the perverse incentives they create, such as the need to devote funds to merit scholarships at the expense of need-based ones. ...

[Q]uite a few legal educators associate efforts to reduce student costs with also reducing the quality of legal education. That’s a pretty serious obstacle to overcome. The way I see it, faculty and the various stakeholders involved in legal education need to buy into the idea that law school can cost less while also serving as the gatekeeper into the profession if there is ever to be progress made.

The 25 Wealthiest Dynasties On The Planet Are Worth $1.4 Trillion, Up 24% From Last Year

Bloomberg, The World’s Wealthiest Family Gets $4 Million Richer Every Hour:

The Walton fortune has swelled by $39 billion, to $191 billion, since topping the June 2018 ranking of the world’s richest families.

Other American dynasties are close behind in terms of the assets they’ve accrued. The Mars family, of candy fame, added $37 billion, bringing its fortune to $127 billion. The Kochs, the industrialists-cum-political-power-players, tacked on $26 billion, to $125 billion.

So it goes around the globe. America’s richest 0.1% today control more wealth than at any time since 1929, but their counterparts in Asia and Europe are gaining too. Worldwide, the 25 richest families now control almost $1.4 trillion in wealth, up 24% from last year.

Continue reading

Hemel: Bullock v. IRS And The Future Of Tax Administrative Law (Part II)

TaxProf Blog op-ed:  Bullock v. IRS and the Future of Tax Administrative Law (Part II), by Daniel Hemel (Chicago):

In Bullock v. IRS, a federal district court in Montana held that states have standing to challenge the IRS’s rollback of information reporting requirements and that those requirements can only be amended through notice and comment. As my last post explained, the immediate significance of the decision is that noncharitable tax-exempt entities—including but not limited to politically active section 501(c)(4) groups—will have to disclose their large-dollar donors to the IRS (though not to the public). But the potential implications are much broader than that. The decision in Bullock suggests a possible new path for states to exert influence over federal tax policy through administrative law litigation. This post explores that possibility.

Bullock is the latest in a series of cases that might be seen as auguring the end of “tax exceptionalism.” By “tax exceptionalism,” I refer to the long-held view that general principles of administrative law—such as Chevron deference for agency statutory interpretations and the notice-and-comment requirement for agency rules—do not apply in the tax domain. Paul Caron put forward an early and influential critique of that view in his unforgettably titled 1994 article “Tax Myopia, or Mamas Don’t Let Your Babies Grow Up to Be Tax Lawyers.” Kristin Hickman advanced the attack on tax exceptionalism in a series of significant articles starting in the mid-2000s. The effort to end tax exceptionalism scored a major victory in January 2011 when Chief Justice John Roberts, in the case of Mayo Foundation for Medical Education and Research v. United States, said that the court was “not inclined to carve out an approach to administrative review good for tax law only.” Declarations of the “death of tax exceptionalism” soon followed.

Continue reading

Women Are Less Likely To Get Tenure The More They Coauthor

Heather Sarsons (Chicago; "This paper is intentionally solo-authored."), Gender Differences in Recognition for Group Work:

How is credit for group work allocated when individual contributions are not perfectly observed? Do demographic traits like gender influence the allocation of credit? Using data from academic economists’ CVs, I test whether coauthored and solo-authored publications matter differently for tenure for men and women. Because coauthors are listed alphabetically in economics, coauthored papers do not provide specific information about each contributor’s skills or ability. Solo-authored papers, on the other hand, provide a relatively clear signal of ability. I find that men are tenured at roughly the same rate regardless of whether they coauthor or solo-author. Women, however, become less likely to receive tenure the more they coauthor. The result is most pronounced for women coauthoring with men and less pronounced among women who coauthor with other women. I contrast economics with sociology, a discipline in which coauthors are listed in order of contribution, and find that when contributions are made clear, men and women receive equal credit for coauthored papers.

Continue reading

Nonprofit AccessLex Institute Announces New Resources For Pre-Law Students

Nonprofit AccessLex Institute Announces New Suite of Resources for Pre-Law Students:

AccessLex Institute, the largest charitable organization dedicated to legal education, has released a new online suite of resources created expressly for aspiring law students. Designed by a team of JDs, financial aid experts, law school admissions professionals and experienced pre-law advisors, MAX Pre-Law by AccessLex® offers interactive lessons, webinars, worksheets and checklists, as well as one-on-one financial strategy coaching from accredited financial counselors to answer student’s most pressing questions about law school – all free to anyone interested in pursuing a legal education.

MAX Pre-Law builds on the success of AccessLex Institute’s MAX by AccessLex® program, the comprehensive financial education program created to maximize the financial capability and capacity of law students. Launched in 2017, MAX is currently being used by over 15,000 students at more than 150 ABA-approved law schools across the country.

Continue reading

University of Calgary Seeks To Hire A Tax Prof

Position Description:

The University of Calgary’s Faculty of Law is in the midst of a sustained period of growth and renewal. In its Strategic plan – Energy.Innovation.Impact. – UCalgary Law set itself the dual goals of enhancing its international eminence in the areas of energy, environmental and natural resources law and continuing its position of national leadership in the area of experiential learning. Since 2011, we have made twenty three new Faculty appointments, and we are looking to make further appointments to begin in 2019 and in years to follow.

The Faculty of Law at the University of Calgary invites applications for a tenure-track appointment at the rank of Assistant Professor in the area of tax law. The anticipated start date is July 1, 2020.

Continue reading

Brunson: Afterlife Of The Death Tax

Samuel D. Brunson (Loyola-Chicago), Afterlife of the Death Tax, 94 Ind. L.J. 355 (2019):

More than a century ago, Congress enacted the modern estate tax to help pay for World War I. Unlike previous iterations of the estate tax, though, this one outlived the war and accumulated additional goals beyond merely raising revenue. The estate tax helped ensure the progressivity of the tax system as a whole, and it limited the hereditary ability to accumulate wealth.

This modern estate tax almost instantly met with opposition, though. The opposition has never been sufficient to entirely eliminate the estate tax, but it has severely weakened its ability to raise revenue and to prevent the accumulation of wealth. As a result, today’s estate tax is functionally a zombie: it accounts for less than one percent of federal revenues and does little to prevent the accumulation of wealth among a small group of citizens. The estate tax largely serves to evoke fear and costly tax planning, but it only manages to bite the largest and slowest estates.

Continue reading

A New Growth Vision For Legal Education, Part III: The Path Forward — Being Both Human And Digital

Following up on my previous posts:

• Hilary G. Escajeda (Denver), Legal Education: A New Growth Vision Part I – The Issue: Sustainable Growth or Dead Cat Bounce? A Strategic Inflection Point Analysis, 97 Neb. L. Rev. 628 (2019)
• Hilary G. Escajeda (Denver), Legal Education: A New Growth Vision Part II – The Groundwork: Building a Customer Satisfying Innovation Ecosystem, 97 Neb. L. Rev. 935 (2019)

Hilary G. Escajeda (Denver), Legal Education: A New Growth Vision. Part III — The Path Forward: Being Both Human And Digital, 97 Neb. L. Rev. 1020 (2019):

In the decades ahead, innovative and status quo-breaking law schools will leverage and combine multidisciplinary, multigenerational human expertise with digital platform and artificial intelligence (AI) technologies to create vibrant legal education ecosystems. These combinations will deliver market-valued knowledge and skill transfer and development services that are high-quality, cost-effective, omnichannel, pedagogically sound, data-validated, personalized, on-demand or just-in-time, and multi-format (e.g., hybrid, HyFlex, digitalfirst, digital-live, etc.).

Continue reading

WSJ: The IRS Is Coming For Your Bitcoin

Wall Street Journal Tax Report, The IRS Is Coming For Your Bitcoin:

The Internal Revenue Service is on the war path against Americans who haven’t reported income from cryptocurrencies like bitcoin.

In late July, the IRS said it had started to send warning letters to more than 10,000 people who may not have complied with tax rules on virtual currencies. Agency officials have said criminal tax indictments involving cryptocurrencies are expected soon, and other enforcement letters are going out.

Tax specialists are urging crypto users who aren’t in compliance to act quickly. While coming clean involves a maze of tricky decisions, ignoring the agency could cost a crypto holder dearly. ...

Continue reading

2019 World Law School Rankings

Quacquarelli Symonds has released the 2019 World Law School Rankings as part of its World University Rankings. The methodology is 50% academic reputation, 30% employer reputation, 15% h-index per faculty member, and 5% citations per paper.  The rankings consist of 300 law schools, 150 in the United States.  Here are the U.S. law schools in the Top 50, along with each school's position in the latest SSRN Top 750 Law School Faculty Rankings -- Total Downloads):

1. Harvard (#1 in SSRN)
4. Yale (#6)
5. Stanford (#2)
8. UC-Berkeley (#4)
9. Columbia (#5)
10. NYU (#3)
11. Chicago (#7)
17. Georgetown (#9)
23. UCLA (#15)
27. Michigan (#12)
30. Pennsylvania (#11)
33. Duke (#18)
35. Cornell (#27)
50. Northwestern (#14)

Hemel: Bullock v. IRS And The Future Of Tax Administrative Law (Part I)

Following up on my previous post, Federal Judge Overturns IRS Rule To Shield Political Donor Identities:  TaxProf Blog op-ed:  Bullock v. IRS and the Future of Tax Administrative Law (Part I), by Daniel Hemel (Chicago):

The world of “dark money” became a bit less opaque at the end of last month when a federal district court in Montana struck down an IRS revenue procedure that had shielded section 501(c)(4) organizations from having to disclose large-dollar donors to tax authorities. The decision in the case—captioned Bullock v. IRS—is significant both because of its immediate implications for the oversight of section 501(c)(4) groups and other exempt organizations as well as its broader ramifications for judicial review of IRS actions. Tax law practitioners and professors—whether or not they focus on exempt organizations in their work, study, and teaching—should take note.

This is the first of two posts on Bullock v. IRS and its implications. Here, I’ll lay out the facts of the case and some thoughts on discrete legal issues that it raises. In the next post, I’ll try to situate Bullock within the wider debate over tax exceptionalism (and its alternative, which we might call “tax ordinaryism”). I’ll argue there that Bullock represents both a continuation of the trend toward tax ordinaryism and a novel twist.

Continue reading

Student Evaluations Are Unreliable And Biased Against Female Professors

London School of Economics and Public Policy, Student Evaluations of Teaching Are Not Only Unreliable, They Are Significantly Biased Against Female Instructors:

A series of studies across countries and disciplines in higher education confirm that student evaluations of teaching (SET) are significantly correlated with instructor gender, with students regularly rating female instructors lower than male peers. Anne Boring, Kellie Ottoboni and Philip B. Stark [Student Evaluations of Teaching (Mostly) Do Not Measure Teaching Effectiveness] argue the findings warrant serious attention in light of increasing pressure on universities to measure teaching effectiveness. Given the unreliability of the metric and the harmful impact these evaluations can have, universities should think carefully on the role of such evaluations in decision-making.

Continue reading

Chaffee: Collaboration Theory And Corporate Tax Avoidance

Eric C. Chaffee (Toledo), Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 93 (2019):

Tax revenue is the primary source of income for the government, yet corporations regularly engage in tax avoidance. Corporate managers and advisers commonly claim that the corporate form requires that they undertake this behavior because the nature of that form mandates it. Direct and indirect references are made to the classic case of Dodge v. Ford, as providing an edict that corporations must engage in unrelenting profit maximization that requires them to undertake aggressive tax avoidance.

As explored in my co-authored piece with Professor Karie Davis-Nozemack [Georgia Tech), Corporate Tax Avoidance and Honoring the Fiduciary Duties Owed to the Corporation and Its Stockholders [58 B.C. L. Rev. 1425 (2017)], the “Dodge Mandate,” as it may be termed, is far from absolute.

Continue reading

Sons Of BOSS Rocks Out UC-Irvine

Last Friday, the UC-Irvine Graduate Tax Program hosted a welcome reception for its inaugural class of LL.M. students. The reception featured a special performance by “Sons of BOSS.” (Tax cognoscenti know that the Son of BOSS is a successor to BOSS (Bond and Option Sales Strategy) tax shelter.)

The leader of the band is Omri Marian (UC-Irvine). The other band members are: Frank Rork (Senior Director, Tax, Edwards Lifesciences), Michael Strasser (Senior Manger, Global Supply Chain Strategy, Edwards Lifesciences), Neil Richmond (International Tax Services, EY) and Joseph Cruz (EY). The band played numerous songs for UCI students and faculty, including, of course,  Taxman by the Beatles.

For video of the band's performance, see below the fold:

Continue reading

Law Degree Held Against Defendant In Tax Scam

Peter J. Reilly (Forbes), Law Degree Held Against Defendant In Tax Scam:

Anthony Charles Dwight Box was at what I consider the end of the line in tax litigation — appealing his sentence from prison — when he heard from the Eleventh Circuit last month. It was not good news. The Circuit Court approved the 36 month sentence handed down by Judge Federico Moreno of the Southern District of Florida.

Judge Moreno had made an upward adjustment from the 24 to 30-month sentence called for by the guidelines because Mr. Box's legal education should have made him know better, a conviction in 1989 and failure to make any restitution.

Continue reading

Weisbach: Graduation Remarks To The Class of 2019 — Democracy Needs Lawyers To Defend It

David Weisbach (Chicago), Graduation Remarks to the Class of 2019: Democracy Needs to be Defended, and Lawyers Are Key to Defending It:

Graduation speeches are supposed to be nonpolitical yet inspirational, summarizing a life lesson in seven minutes. I wrote one, focusing on the career choices you will face over the next 30 to 40 years. It was nonpolitical and attempted to be inspirational. But I woke up this morning and I couldn’t do it. As important as career choices are, it isn’t what I want to talk about.

Instead, this morning I scribbled some notes about what I really want to say. And it is not nonpolitical, or inoffensive to all, so I apologize in advance. I can see Dean Miles shifting nervously in his seat.

This is what I want to say: the world needs you. It needs great lawyers like never before. I’m 55 years old. I’ve lived through the Cold War, the civil rights movement, Watergate, the Bork and Thomas confirmation hearings, Bush versus Gore, 9/11, the Great Recession. I’ve never felt as scared as I do now. Maybe it’s an illusion, that the current moment always seems worse than the past because we know we made it through the past but we don’t know about the future. But I don’t think that’s it. Today feels different. I wake up every day a little bit terrified.

Like no time in my life, the world needs people like you. I’ve never been more proud to be a law professor than today, because my job is to help create the young lawyers, you, that our country and the world need.

Why does the world need you? You’ll have your own list and mine is surely incomplete. And you’ll likely disagree with some of this.

Continue reading

The Effect Of Tax Avoidance On Capital Structure Choices

Yoojin Lee (California State University, Long Beach), Terry J. Shevlin (UC-Irvine) & Aruhn Venkat (UC-Irvine), The Effect of Tax Avoidance on Capital Structure Choices:

In this study, we examine whether tax avoidance affects firm-level external financing choices. We hypothesize that firms marginally choose equity over debt because tax avoidance generates incremental cash flows but is likely risky. Consequently, we predict that tax avoidance induces a relative price increase in debt relative to equity. Our results are consistent with tax avoidance inducing firms to choose equity over debt. Importantly, our theory and results are distinct from the effects of marginal tax rates on capital structure (e.g., Modigliani and Miller 1963) and we control for marginal tax rates in all specifications. From an identification standpoint, we use path analyses, a plausibly exogenous 9th Circuit decision and cross-sectional tests to support our main results.

Continue reading

ABA Profile Of The Legal Profession

ABA Profile of the Legal Profession (2019) (98 pages):

No matter where we went to law school or when we graduated, lawyers across the country are aware of the extraordinary transformation of the legal profession. In this report, for the first time, the American Bar Association has compiled a comprehensive look at these changes and provided a vivid picture of the legal profession as it exists today.

• Above the Law, New ABA Report: Everything You Ever Wanted To Know About The Legal Profession But Didn’t Know Where To Ask
• Law.com, 70 Years of Women in the Legal Profession: By the Numbers
• Law.com, By the Numbers: Lawyer Salary Increases in the Past Two Decades
• Law.com, Soaring Debt Loads and Plunging Bar Pass Rates: Legal Education by the Numbers

Lesson From The Tax Court: A Lesson Of Interest

Politicians love to brag about the voluntary nature of the U.S. tax system.  Back in 1862, the first Commissioner of Internal Revenue, George Boutwell, reported glowingly that, “sustained by the patriotic sentiments of the people, it is a matter for congratulation that the taxes assessed have, with few unimportant exceptions, been paid with cheerfulness...”  Those with boots on the ground had a different view: “Human nature must greatly change, before we shall find that patriotism is more universal than selfishness,” wrote the tax assessor Charles Emerson in 1867.

Good tax administration works with, rather than fights against, the selfishness of human nature.  One way to do that is by creating structural mechanisms that put taxpayers into a default posture of compliance.  Withholding is one of those.  Another way is to give taxpayers incentives to accurately comply with their reporting and payment obligations, incentives such as avoiding penalties and interest.

Enhancing taxpayer compliance is a central purpose of both penalties and interest.  See Policy Statement 20-1 in IRM 1.2.1.12 (08-01-2019).  Last week’s case of Jon D. Adams v. Commissioner, T.C. Memo. 2019-99 (Aug. 12, 2019) (Judge Urda) is an object lesson in how penalties and interest do that.  In particular the case illustrates how the difficulty in obtaining relief from interest, coupled with the very robust statutory interest rates, suggest that imposition of interest is more than just a mechanism to compensate the government for the lost time value of money; it is a compliance tool.

Continue reading

The Ohio State University Seeks To Trademark 'The'

Chronicle of Higher Education, Its Eyes on New Merchandise, Ohio State Looks to Trademark a Single Word: ‘THE’:

American universities boast a storied history of trademark claims — from threatening mom-and-pop bakeries to cashing in on Cinderella upsets — and the Ohio State University last week continued that tradition when it filed an application for a word central to Buckeye pride. It’s also one of the most common words in the English language:“THE.

”Discovered, and subsequently publicized, on Tuesday night by Josh Gerben, a trademark lawyer, the application claims use of the three-letter word “without claim to any particular font style, size, or color.” 

In response to questions from The Chronicle, a university spokesman wrote that the trademark “would apply for usage of ‘The’ in ways that clearly signify association with Ohio State and its brand, like for example a scarlet and gray T-shirt with ‘The’ on the front.” ...

Continue reading

Amazon Wins $1.5 Billion Ninth Circuit Tax Dispute Over Intangible Assets Shifted To Europe

Amazon.com v. Commissioner, No. 17-72922 (9th Cir. Aug. 16, 2019):

The panel affirmed the Tax Court’s decision [148 T.C. 108 (2017)] on a petition for redetermination of federal income tax deficiencies, in an appeal involving the regulatory definition of intangible assets and the method of their valuation in a cost-sharing arrangement.

In the course of restructuring its European businesses in a way that would shift a substantial amount of income from U.S.-based entities to the European subsidiaries, appellee Amazon.com, Inc. entered into a cost sharing arrangement in which a holding company for the European subsidiaries made a “buy-in” payment for Amazon’s assets that met the regulatory definition of an “intangible.” See 26 U.S.C. § 482. Tax regulations required that the buy-in payment reflect the fair market value of Amazon’s pre-existing intangibles. After the Commissioner of Internal Revenue concluded that the buy-in payment had not been determined at arm’s length in accordance with the transfer pricing regulations, the Internal Revenue Service performed its own calculation, and Amazon filed a petition in the Tax Court challenging that valuation.

At issue is the correct method for valuing the preexisting intangibles under the then-applicable transfer pricing regulations. The Commissioner sought to include all intangible assets of value, including “residual-business assets” such as Amazon’s culture of innovcation, the value of workforce in place, going concern value, goodwill, and growth options. The panel concluded that the definition of “intangible” does not include residual-business assets, and that the definition is limited to independently transferrable assets.

Continue reading

TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• Judge Tosses Another Whistleblower Suit Against For-Profit Law School Chain
• How Online Degrees Can Advance Worker Careers In A Shifting Economy
• Tax, Technology And Privacy: The Coming Collision

Sunday:

• Don't Give Up On Vermont Law School
• The Taxation Of Religious Organizations In America
• Morals And Mentors: What The First American Law Schools Can Teach Us About Developing Law Students' Professional Identity
• The Top Five New Tax Papers

Don't Give Up On Vermont Law School

Following up on my previous posts (links below):  Connecticut Law Tribune editorial, Don't Give Up on Vermont Law School:

We in Connecticut have a special interest in Vermont Law School because so many alumni live and practice here, and the school has done a great job in educating a generation of committed environmental lawyers. Vermont Law School, an independent school and the only law school in Vermont, has been at the forefront of environmental law education and advocacy since its founding in 1972, and modest beginnings in an old schoolhouse in the sleepy little town of South Royalton.

But today, VLS is floundering, up to its neck in debt brought on by the sagging enrollment caused by the Great Recession and struggling to stay afloat with a totally inadequate endowment. Applications, admissions and enrollment are up, but the improvements are recent and follow too many years of financial losses. ...

Continue reading

The Taxation Of Religious Organizations In America

Grant M. Newman (J.D. 2019, Harvard), Note, The Taxation of Religious Organizations in America, 42 Harv. J.L. & Pub. Pol'y 681 (2019):

Christ taught his disciples to “[r]ender to Caesar the things that are Caesar’s, and to God the things that are God’s." The Supreme Court has, to an extent, rendered to God what is God’s by repeatedly acknowledging that it will not involve itself in the internal affairs of religious organizations. Nevertheless, the extent to which religious organizations remain vulnerable to involvement from other branches of government remains a pertinent question, especially with regards to the government’s power to tax.

This Note investigates the extent to which religious organizations are vulnerable to such involvement. A prime example of such involvement is Congress’ ability to use the Internal Revenue Code to the detriment of religious organizations. As it ensures that what is Caesar’s (i.e., taxes) is rendered to Caesar (i.e., the federal government), any policy of Congress and the Internal Revenue Service (I.R.S.) that thwarts the faithful from rendering to God what is God’s has the potential to impose a prohibitive burden on the operation of religious organizations. The potential to hinder the work of religious organizations through taxation is great. Indeed, “the power to tax involves the power to destroy.” Insofar as Congress retains the power to tax religious organizations, it likewise maintains the power to destroy.

Continue reading

Morals And Mentors: What The First American Law Schools Can Teach Us About Developing Law Students' Professional Identity

Benjamin V. Madison (Regent) & Larry O. Natt Gantt, II (Regent), Morals and Mentors: What the First American Law Schools Can Teach Us About Developing Law Students' Professional Identity, 31 Regent U. L. Rev. 161 (2019):

This article examines what the first American law schools can teach current legal educators about how best to develop law students’ professional identity. Drawing upon the seminal reports of Educating Lawyers and Best Practices for Legal Education, the article underscores legal educators’ responsibility to cultivate our students’ professional identity and instill in them the key normative values of the profession. Turning to the lessons we can learn from early American law schools, the article then discusses how legal educators in America, from colonial times through the late nineteenth century, sought to teach aspiring lawyers both legal analysis and the study of — and reflection on — ethical and moral principles underlying the law.

Continue reading

The Top Five New Tax Papers

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

1. [530 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
2. [400 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
3. [170 Downloads]  Fixing the Five Flaws of the Tax Cuts and Jobs Act, by Kimberly Clausing (Reed College)
4. [128 Downloads]  The Substantive Canons of Tax Law, by Jonathan Choi (NYU)
5. [105 Downloads]  Recent Developments in Federal Income Taxation: The Year 2018, by Bruce McGovern (South Texas) & Cassady Brewer (Georgia State)

This Week's Ten Most Popular TaxProf Blog Posts

1. Bryan Camp (Texas Tech), Lesson From The Tax Court: Know The Difference Between IRAs And 401(k)s
2. Chronicle of Higher Education, The Revolt Of The Feminist Law Profs At Harvard
3. Joseph Epstein (Northwestern), Do Faculty Have A 'Sweet Racket? Or Do They Work 60 Hours/Week For Less Pay Than They Could Get Elsewhere?
4. Wall Street Journal, Making Big Law Partner Is Like 'Winning A Pie-Eating Contest In Which The Prize Is More Pie'
5. The Atlantic, Has College Gotten Too Easy?
6. Bloomberg, Uber Created A $6.1 Billion Dutch Weapon To Avoid Paying Taxes
7. Chronicle of Higher Education, George Washington To Reduce Enrollment By 20% To Increase Quality
8. SSRN, Tax Professor Rankings
9. Bloomberg, How Trump Is Saving Law Schools And Hurting Business Schools
10. Paul Caron (Dean, Pepperdine), Welcome, Pepperdine Law School Class Of 2022

Judge Tosses Another Whistleblower Suit Against For-Profit Law School Chain

Law.com, Judge Tosses Another Whistleblower Suit Against For-Profit Law School Chain:

For-profit law school operator InfiLaw Corp. has dodged a third whistleblower lawsuit claiming it defrauded the federal government and deceived students.

A federal judge in Florida on Monday dismissed a qui tam suit brought by two former employees of the now-closed Arizona Summit Law School that claimed, among other things, that InfiLaw administrators conspired with bar preparation outfit BarBri to make sure that the Phoenix law school was in compliance with a rule that no more than 90% of it funds were derived from federal student loans.

In a 58-page opinion, U.S. District Judge Marcia Morales Howard of the Middle District of Florida ruled that many of the plaintiffs’ claims of wrongdoing by InfiLaw and its three law schools were barred in court because they had already been disclosed in the media through articles and blog posts critical of the schools’ practices. Moreover, Howard found the allegations brought by Paula Lorona and Reid Potter to be too vague to overcome the defendants’ motions to dismiss. ...

Continue reading

How Online Degrees Can Advance Worker Careers In A Shifting Economy

EdSurge, How Online Degrees Can Advance Worker Careers in a Shifting Economy:

If you’re wondering why online learning is booming, take a look at the latest U.S. Department of Labor data showing heightened demand for skilled workers. Those with an undergraduate or advanced degree now represent about 40 percent of the nation’s workforce, while those with just a high school diploma have slipped in the last 25 years from more than a third to about a quarter of American workers.

Continue reading

Tax, Technology And Privacy: The Coming Collision

Andrew Leahey (Tax LL.M. 2019, NYU), Tax, Technology and Privacy: The Coming Collision:

In the last decade a dominant storyline in the realm of technology and the law has been the rise of Big Data and the various state responses, or lack thereof, to concerns stemming from the same. At first, technology companies pursued methods of monetizing accumulated data almost by default — massive stores of data were a byproduct of other business ventures. Like early wildcat oil drillers that struck natural gas, the stores of data was seen more as a hindrance than anything else. Over time, oil companies found a use for natural gas and Silicon Valley found a use for our stores of data. The next trove of data is going to be found in our tax information. Let us insure that this time, from the outset, our privacy is kept front of mind.

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews The Property Tax Forty Years After Prop 13 and Alternative Local Government Revenues

This week, Ariel Jurow Kleiman (San Diego) reviews two recent articles on Californians’ perceptions of property taxes,by Ronald C. Fisher (Michigan State), Robert W. Wassmer (Cal State Sacramento), and Zachary Kuloszewski (Michigan State): Perspectives of the Property Tax Forty Years after Proposition 13 and Support for Alternative Local Government Revenues.

Tax experts are befuddled and frustrated by Americans’ diehard aversion to the property tax, which contravenes professional wisdom on the tax’s salutary qualities and hamstrings local governments’ ability to provide necessary and popular public services.  The rich trove of survey research sparked by the 1970’s property tax revolt, e.g., here and here, speaks to decades of such consternation.  Two recent papers by Fisher, Wassmer, and Kuloszewski use 2016 CalSpeaks surveys to add modern texture to this body of data.

In Support for Alternative Local Government Revenues, the authors conclude that the property tax revolt is “alive and well in California forty years after Proposition 13.”  To arrive there, they asked survey respondents to choose a preferred revenue source to either: 1) make up for a public revenue shortage, or 2) raise revenue to improve inadequate services.  (Side note, data on respondents’ opinions of the adequacy of various public services is interesting on its own.)  In both cases, only about 15% of respondents preferred to raise property taxes, compared to about 30% who preferred to raise the sales tax, and 42-52% preferring to raise fees.  Unsurprisingly, they find that those who self-identify as progressive are more likely to support raising revenue via property taxes, and less likely to support doing so via fees.  Those who identify as conservative are more likely to support fees over taxes.  Aside from ideology, they also find that most other personal characteristics (such as race or education) are not correlated with tax preferences.  Two exceptions to this are homeowners and people with income above $150K, both of whom are less likely to prefer the property tax over other revenue sources. 

Continue reading

Weekly Legal Education Roundup

• Chronicle of Higher Education, ‘Better, Not Bigger’: As Private Colleges Hunger for Students, One University Slims Down
• Chronicle of Higher Education, The Revolt of the Feminist Law Profs
• Alissa Gomez (Houston), Learning to Love Pro Bono: A Practical Recipe for Engaging Law Students
• Shi-Ling Hsu (Florida State), Cooperation and Turnover in Law Faculties: A Game-Theoretic Model and Empirical Study
• James Levy (Nova SE),  The indisputable need for mentors to bridge the gap between law school and practice-readiness

Continue reading

Tax Policy In The Trump Administration

• Bloomberg News, Apple, EU Set for September Showdown Over Record Tax Bill
• Bloomberg Opinion, Trump’s Wine War Is Giving Macron a Headache
• Bloomberg Tax, Facebook Must ‘Reengineer’ to Comply With French Digital Tax
• Bloomberg Tax, New York City’s Tax Grab on Foreign Income Called Unfair Outlier
• Bloomberg Tax, U.S. Plotting Strategy to Strike Back at French Digital Services Tax

Continue reading

Trump's Taxes And Tax Returns

• Vikram David Amar (Dean, Illinois), Why Challenges to California’s Tax-Return-Disclosure Law Should Fail (Putting Aside Whether They Will)
• Bloomberg editorial, Trump’s Tax Returns Are Essential Reading
• Bloomberg Tax, California Presidential Tax Return Suits Could Be Consolidated
• Bloomberg Tax, Trump Opposes Consolidation of California Tax Return Lawsuits
• Bloomberg Tax, Trump’s Hearing on California Tax Returns Law Pushed Back

Continue reading

How Trump Is Saving Law Schools And Hurting Business Schools

Bloomberg, Trump Is Driving Women Into Law School:

A few short years ago, law schools were falling out of favor with young Americans looking for a route to affluence, influence, or both. Business schools, on the other hand, were attracting more students than ever.

This year, the number of applicants to U.S. law schools is up an estimated 3.2%, after rising 8.1% last year. Graduate business schools in the U.S. saw a 6.6% decline in applications last year, and indications are that applications are down again this year as well.

What changed? Donald Trump became president, silly!

Continue reading

UConn Seeks To Hire A Clinical Tax Prof

The University of Connecticut School of Law seeks candidates for the position of Assistant Clinical Professor of Law to serve as the Director of the Tax Clinic beginning July 1, 2020. This is a full-time, non-tenure-track position subject to the Law School’s Policy on Long-Term Contracts for Non-Tenure Track Clinical Faculty, which complies with ABA Standard 405(c).

The Tax Clinic is one of 18 clinics and field placement programs operated by the Law School. Students in the clinic, under faculty supervision, provide free legal assistance to low-income taxpayers in disputes with the Internal Revenue Service and/or the Connecticut Department of Revenue Services. The Director is responsible for training students in the relevant law and lawyering skills and supervising them in their clinical fieldwork. The Director also manages and oversees all aspects of clinic operations, including but not limited to: client selection, intake, and representation; case-flow; quality control; supervision of clinic staff; and relationships with external University, state, and private stakeholders. The clinic is partially funded by a federal grant through the IRS Low-Income Taxpayer Clinic (LITC) program, and the Director’s duties include working with the University’s grant office to periodically renew the grant and provide required reports and documentation to ensure compliance. The Director also provides academic and career counseling to students; participates in public service activities; and may teach additional courses if mutually agreed upon with the Associate Dean for Clinical and Experiential Education.

Continue reading

Jim Maule's Reflections On 40 Years Of Teaching Tax Law

Jim Maule (Villanova), Some Thoughts on Teaching Law:

• Part I: Introduction
• Part II: Transactional Curriculum for Doctrinal Courses
• Part III: The Problem Method
• Part IV: Teaching Ethics
• Part V: Team Teaching
• Part VI: Balancing Theory with Practical Reality
• Part VII: Smaller Classes
• Part VIII: Learning Outcomes Measurement
• Part IX: Online Education
• Part X: Teaching Loads
• Part XI: Tenure, Teaching, Scholarship, Service, and Compensation
• Part XII: Office Hours, Email, Virtual Classroom Discussion Boards
• Part XIII: Flipping the Classroom
• Part XIV: Laptops in Classroom
• Part XV: Attendance

Continue reading

Shanske: State Tax Administrators In An Age of Statutes

Darien Shanske (UC-Davis), State Tax Administrators: Please Do Your Part in Sending PL 86–272 Off Into the Sunset:

This is the story of an arbitrary and destructive interstate tax shelter, one created by the federal government. No, this is not about collecting the sales and use tax. That tax shelter is largely on its way out; it was created by the Supreme Court in 1967, embraced anew in 1992 and finally ended, by the Court, in 2018, in a case called Wayfair. The tax shelter I am talking about in this post was created in 1959, by Congress. It was meant to be temporary, but is still with us and it shields certain large multistate taxpayers from the state corporate income tax.

The law in question, PL 86–272, shields taxpayers from paying the corporate income tax if certain conditions are satisfied. In particular, the taxpayer must be engaged in selling only tangible personal property in the state and the only activity in the state must be “solicitation.” Leaving aside the wisdom and propriety of Congress creating a tax shelter at all, these requirements indicate how dated the statute is now — and how poorly thought through it always was. Why are only sellers of tangible person property given the benefit of this special rule? Why only solicitation? How is solicitation a proxy for whether it would be fair and reasonable to ask a taxpayer to pay the income tax? If one remember the statute’s vintage, then one can understand the focus on tangible personal property because that was a more important part of the economy. This also explains the emphasis on solicitation as this refers to a then much more common business model of relying on an in-state sales force, though it never made a lot of sense to give a break to taxpayers large enough to engage in only solicitation. ...

Continue reading

Grinberg: Reestablishing International Tax Order

Itai Grinberg (Georgetown), Stabilizing 'Pillar One': Corporate Profit Reallocation in an Uncertain Environment:

This paper is about how the world reestablishes international tax order.

The paper focuses on the OECD’s work on profit reallocation and asks whether this multilateral effort can be successful in stabilizing the international tax system. The analysis centers on the current leading concepts for reallocating profit among jurisdictions under what is known as “Pillar One” of the OECD work programme. To analyze whether any Pillar One concept can be turned into a stable multilateral regime, it is necessary to specify certain elements of what a proposal to reallocate profits might entail. Accordingly, this paper sets out two strawman proposals. One strawman uses a “market intangibles” concept that explicitly separates routine and residual returns. The other strawman may reach a similar result, but does not explicitly attempt to separate routine and residual returns. Instead, in current OECD parlance, it might be described as a “distribution-based” approach.

Continue reading

Overhaul The Bar Exam? Two Major Studies Focus On The Test's Future

National Law Journal, Overhaul the Bar Exam? Two Major Studies Focus on the Test's Future:

[T]he lawyer licensing exam could look much different in another 10 years. Two large-scale studies are underway to examine the knowledge and skills new lawyers need to succeed and how well—or not—the existing bar exam assesses those competencies. Those findings could prompt changes in not only what is tested, but the format of the exam as well.

The National Conference of Bar Examiners is midway through a three-year project examining every aspect of the test—an initiative dubbed the Testing Task Force. The task force recently concluded its first phase, which involved 30 listening sessions in which it gathered input from more than 400 people on the bar exam and its future. The second phase, looking at lawyer tasks and skills, gets underway in August.

Continue reading