TaxProf Blog

Big Change In The U.S. News Law School Specialty Rankings

U.S. News Report is making a dramatic change in their ranking of nine law school specialty programs (Clinical Training, Dispute Resolution, Environmental, Health Care, Intellectual Property, International, Legal Writing, Tax, Trial Advocacy).  Since their inception, the specialty ranking ballots have asked professors teaching in those areas to identify up to a given number (currently 15) of law schools having the top programs in the area.  This year, the ballots give faculty the opportunity to rank all 200 law schools on a 1-5 scale, the approach used in the overall peer reputation survey:

Please review the entire list of law schools before rating individual programs. Identify the law schools you are familiar with, and then rate the overall academic quality of their _____ law courses or programs. In making your choices consider all elements that contribute to a program's academic excellence, the depth and breadth of the program, faculty research and publication record, etc. Rate programs on a scale of outstanding (5) to marginal (1). If you are not familiar with a school’s faculty, programs and graduates, please mark “No answer.”

I contacted Robert Morse, Director of Data Research at U.S. News, for an explanation of the change.  His answer:

Our intent/goal is to enable more programs to get enough ratings to be ranked. We don’t expect raters to have in depth knowledge of a specialty in all schools. We do believe they likely know more than 15. They should definitely only rate the schools they know. Our intent/plan is that the law specialties rankings would be based on the average peer score and we would show the average score so there would be more of understanding of the “difference” between schools. 4.8 vs 3.2 for example.

Continue reading

Satterthwaite Presents Entrepreneurs' Legal Status Choices And The C Corporation Penalty At UC-Irvine

Emily Satterthwaite (Toronto) presented Entrepreneurs' Legal Status Choices and the C Corporation Penalty at UC-Irvine yesterday as part of its Tax Policy Colloquium Series hosted by Josh Blank, Vic Fleischer, and Omri Marian:

Foundational to the American Dream is the ability to easily and rapidly start a new business. Over the past quarter century, the introduction of the limited liability company (LLC) has dramatically shifted the choice-of-legal-status calculus, and in its wake a consensus against the use of traditional C corporations by non-venture-backed start-ups has emerged.  The C corporation, scholars argue, has fatal drawbacks: tax disadvantages as well as governance inflexibility.  Due to historically limited sources of data, there has been little empirical research on choice-of-entity generally and none that explores the anti-C corporation thesis in particular.  Do C corporations under-perform as compared to similarly-situated businesses with alternative legal statuses?  This paper exploits a large panel dataset that contains legal status, owner, business, financing, and other firm-specific information collected from an eight-year panel survey of nearly five thousand enterprises that were formed in 2004.  The paper presents four main results. 

Continue reading

Seattle Law School Suspends Externship With ICE

Seattle News, Seattle University Law School Suspends Externship with ICE:

After pressure from students, Seattle University School of Law administrators suspended its externship with U.S. Immigration and Customs Enforcement.

Continue reading

Bankman, Kane & Sykes: The Global Battle To Capture Multinational Enterprise Profits

Joseph Bankman (Stanford), Mitchell Kane (NYU) & Alan Sykes (Stanford), Collecting the Rent: The Global Battle to Capture MNE Profits, 72 Tax L. Rev. ___ (2019):

Multinational enterprises (MNEs) often earn substantial profits, or "economic rents." Often, these MNEs are domiciled in the United States, and the rents derive from ownership of intellectual property. These MNEs have structured their affairs to pay little taxes to countries outside the United States or otherwise to share their rents in these countries. Apple and Microsoft, for example, may earn roughly half their profits outside the United States but do not pay significant amounts of taxes to any foreign country.

Continue reading

SSRN Tax Professor Rankings

SSRN 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.  This ranking includes downloads from two 30- and 35-page papers by 12 tax professors on the new tax legislation that garnered a lot of media attention (including the New York Times and Washington Post) and generated a massive amount of downloads (the papers are the most downloaded papers over the past 12 months across all of SSRN and the most downloaded tax papers of all-time by over 200%).  See Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings. (For some reason, Mitchell Kane (NYU) — the twelfth academic co-author of the two papers — is not included in the SSRN download rankings (although the downloads are included on his individual author page)).  Here is the new list (through November 1, 2018) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

		All-Time		Recent
1	Reuven Avi-Yonah (Mich.)	178,540	Reuven Avi-Yonah (Mich.)	105,338
2	Dan Shaviro (NYU)	114,509	Daniel Hemel (Chicago)	102,784
3	David Gamage (Indiana)	110,268	David Gamage (Indiana)	97,375
4	Lily Batchelder (NYU)	108,229	Darien Shanske (UC-Davis)	97,046
5	Daniel Hemel (Chicago)	107,673	Manoj Viswanathan (Hastings)	96,591
6	Darien Shanske (UC-Davis)	104,322	Dan Shaviro (NYU)	96,523
7	Cliff Fleming (BYU)	99,943	Lily Batchelder (NYU)	94,480
8	David Kamin (NYU)	96,820	David Kamin (NYU)	94,295
9	Manoj Viswanathan (Hastings)	96,814	Cliff Fleming (BYU)	94,034
10	Rebecca Kysar (Fordham)	96,116	Ari Glogower (Ohio State)	93,961
11	Ari Glogower (Ohio State)	94,361	Rebecca Kysar (Fordham)	93,796
12	Michael Simkovic (USC)	41,337	Gladriel Shobe (BYU)	10,686
13	D. Dharmapala (Chicago)	35,481	Jacob Goldin (Stanford)	3,889
14	Paul Caron (Pepperdine)	34,815	Michael Simkovic (USC)	3,607
15	Louis Kaplow (Harvard)	30,390	Richard Ainsworth (BU)	3,507
16	Richard Ainsworth (BU)	25,956	Kirk Stark (UCLA)	3,507
17	Ed Kleinbard (USC)	25,232	Joe Bankman (Stanford)	3,460
18	Vic Fleischer (UC-Irvine)	25,011	D. Dharmapala (Chicago)	3,226
19	Jim Hines (Michigan)	24,039	Dennis Ventry (UC-Davis)	3,052
20	Gladriel Shobe (BYU)	23,787	Ruth Mason (Virginia)	2,529
21	Richard Kaplan (Illinois)	23,145	Sam Donaldson (Georgia St.)	2,470
22	Ted Seto (Loyola-L.A.)	22,985	Kyle Rozema (Chicago)	2,355
23	Katie Pratt (Loyola-L.A.)	21,544	Brad Borden (Brooklyn	2,275
24	Robert Sitkoff (Harvard)	21,235	Omri Marian (UC-Irvine)	2,193
25	David Weisbach (Chicago)	20,542	Hugh Ault (Boston College)	2,178

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.

Continue reading

A Clinic Rises From The Ashes

Following up on my previous post:  Law.com, Ahead of the Curve: A Clinic Rises From the Ashes:

Last year, Pepperdine University School of Law developed a one-semester disaster relief clinic to help people impacted by Hurricane Harvey in Texas to file appeals with the Federal Emergency Management Agency when their applications for financial assistance were denied.

Clinic director Jeff Baker joked at the time that the clinic framework would come in handy when an inevitable earthquake rocked Southern California and people needed FEMA help locally. But it turns out wildfires were the first major natural disaster to strike the area, with the Woolsey fire ravaging Ventura County. And Pepperdine is once again diving into disaster relief. This time, its client base is in the school’s Malibu backyard.

Continue reading

UCLA Law Prof Files Lawsuit To Obtain UC Admissions Data

Wall Street Journal, Law Professor Seeks Data on Admissions at UC System:

A law professor and an Asian-American politician are suing the University of California for data they believe would reveal that the state university system is illegally using race in its admissions process.

The suit, filed Thursday in a California state court, asks for the socioeconomic and academic characteristics of applicants who enrolled in the nine undergraduate colleges that make up the University of California over the last 12 years. ...

Continue reading

Fordham Conference: International Tax Law Changes In The 2017 Tax Cuts And Jobs Act

Shobe Presents Economic Segregation, Tax Reform, And The Local Tax Deduction Today At Loyola-L.A.

Gladriel Shobe (BYU) presents Economic Segregation, Tax Reform, and the Local Tax Deduction at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katie Pratt: 

Economic segregation has increased over the past half century. The trend of rich neighborhoods getting richer while poor neighborhoods get poorer is particularly concerning because it limits upward mobility for children and perpetuates intergenerational income inequality. Although scholars and governments have studied the effects and consequences of economic segregation, they have overlooked the connection between economic segregation and the federal deduction for local taxes.

Continue reading

Hellerstein & Appleby: Substantive And Enforcement Jurisdiction In A Post-Wayfair World

Walter Hellerstein (Georgia) & Andrew Appleby (Stetson), Substantive and Enforcement Jurisdiction In a Post-Wayfair World, 90 State Tax Notes 283 (Oct. 22, 2018):

In this article, the authors examine the Wayfair case through the lens of substantive and enforcement jurisdiction and focus on the question whether there is a constitutionally required relationship between the nexus of the person that the state seeks to enlist as the tax collector and the underlying activity that the state is taxing.

What Are Law Schools Training Students For?

Forbes:  What Are Law Schools Training Students For?, by Mark A. Cohen (CEO, Legal Mosaic):

The legal profession and the trillion-dollar global industry are undergoing a transformation. The seminal elements of legal practice—differentiated expertise, experience, skills, and judgment—remain largely unchanged. The delivery of legal services is a different story altogether. New business models, tools, processes, and resources are reconfiguring the industry, providing legal consumers with improved access and elevated customer satisfaction from new delivery sources. Law is entering the age of the consumer and bidding adieu to the guild that enshrined lawyers and the myth of legal exceptionalism. That’s good news for prospective and existing legal consumers.

The news is challenging for law schools, most of whom seem impervious to marketplace changes that are reshaping what it means to be a lawyer and how and for whom they will work. The National Advisory Committee on Institutional Quality and Integrity (NACIQI), a branch of the Department of Education, rebuked the American Bar Association (ABA) in 2016 for its lax law school oversight and poor “student outcomes.” Paul LeBlanc, a NACIQI member, concluded that the ABA was “out of touch with the profession.”

Law schools have made some strides during the past few years-- experiential learning, legal technology, entrepreneurship, legal innovation, and project management courses,   are becoming standard fare. A far bigger—and more important step would be for the legal Academy to forge alignment with the marketplace. That would be a “win-win-win” for students, law schools, and legal providers/consumers. Students would be exposed to the “real world” and the skills, opportunities, and direction it is taking. The Academy would acquire context, use-cases, and an understanding of consumer challenges and needs—a strong foundation from which to remodel legal education and training, address the "skills gap," as well as to improve “student outcomes.” Legal providers/consumers would benefit from a talent pool better prepared to provide solutions to the warp-speed pace and complex challenges of business. ...

Continue reading

Democratic Congressman Responds To Grewal's Post On Trump's Tax Returns

Hon. Bill Pascrell, Jr (D-NJ 9th District), Scrutinizing Trump’s Taxes is in Congress’s Power, 36 Yale J. on Reg.: Notice & Comment (Nov. 16, 2018):

I read with great interest Andy Grewal’s recent post on plans by House Democrats to compel the release to Congress of Donald Trump’s tax returns [The Battle For Trump’s Taxes And The President’s Potential Revenge] As a Democratic Member of the House of Representatives and the leader of my caucus’s efforts to expose Trump’s financial records to sunlight, I felt it appropriate to respond to Grewal’s piece.

Our focus on Trump’s personal and business tax returns stems from Trump’s refusal to provide a scintilla of transparency on his family’s corporate empire. As the first man to become President not to release any of his tax returns in decades, his rejection of democratic norms is bad enough, made unbearable given the size, scope and opacity of Trump’s companies. Recent investigations detailing widespread tax fraud and other financial crimes by Trump and his family only add to our urgency to scrutinize Trump’s returns. ...

Continue reading

Observations On Enrollment Patterns For The Fall 2018 Entering Class Based On Preliminary Data

In a blog posting in August relating to projections for the fall 2018 entering class, I suggested that with applicants up over 60,000 (up over 8% from 2017) the fall 2018 entering class might be over 40,000 (up roughly 8%). I made this prediction based on the strength of the applicant pool and the perception that given the opportunity, law schools would seek to regain revenue lost over the last few years. I also suggested that the distribution might be “lumpy” with some of the increase concentrated in highly-ranked schools (given the growth among applicants with high LSATs of 165 or higher).

We will know more one month from now when the ABA releases data from the Standard 509 reports for all ABA-accredited law schools, but based on preliminary reports from 142 law schools (nearly 72% of the 199 law schools in the 48 contiguous state and Hawai’i), I appear to have over-estimated the growth in matriculants, while correctly predicting significant “lumpiness” in enrollment growth skewed toward law schools with higher median LSATs.

FALL 2018 ENTERING CLASS CLOSER to 38,500

The first-year class across the 199 ABA-accredited law schools in the 48 contiguous states and Hawai’i in 2017 totaled roughly 36,900 students. Across the 142 law schools on which I have available data for 2018, the 2017 first-year enrollment totaled 28,352, or roughly 76.8% of the total across all 199 law schools in the sample. First-year enrollment at these 142 law schools in 2018 increased by 1,231 to 29,583, an increase of 4.3%. If the remaining 57 law schools see a comparable increase in enrollment of 4.3%, the 2018 first-year class across these 199 law schools would be roughly 38,500. In all likelihood, however, it will be even smaller than that. As shown in Table 1 below, the 57 law schools for which data is not presently available are disproportionately law schools that had median LSATs of less than 155 in 2017, across which the smallest average gains in enrollment have been seen for the fall 2018 entering class.

My prediction that the first-year class might be over 40,000 appears to have been erroneous for three reasons. First, I failed to account for two law schools that ended up not enrolling classes for fall 2018 (Arizona Summit and Valparaiso).  Second, I failed to account for the impact of ABA regulatory efforts on law schools with lower median LSATs, a number of which significantly reduced enrollment to improve the LSAT profile of their entering classes. Third, and perhaps most significantly, however, I believed higher-ranked law schools would take advantage of a larger applicant pool with stronger credentials to welcome more students to enhance revenue. In doing so, I failed to heed one of the key points highlighted in research I have been working on with Bernie Burk and Emma Rasiel -- that law schools tend to favor profile over revenue. Thus, a number of law schools that could have enrolled more first-years without impacting their first-year class profile chose instead to increase their class profile rather than increasing enrollment as much as they might have.

ENROLLMENT PATTERNS BY LSAT RANGES

The information in Table 1 highlights the enrollment patterns for fall 2018 across the 142 law schools with available data, highlighting the number and percentage of law schools with first-year enrollment increases or decreases of 5% or more overall between 2017 and 2018, and also showing the number and percentage of first-year enrollment increases or decreases across law schools within different LSAT categories based on median LSAT for the 2017 entering class.

There are a couple of things worth noting in Table 1. First, data are available on a much larger percentage of law schools with median LSATs of 155 or higher than law schools with median LSATs of 154 or lower. Second, as I predicted in August, more law schools with median LSATs of 155 or higher showed increases in first-year enrollment of 5% or more compared to law schools with median LSATs of 154 or lower.

Table 1 - Increases or Decreases in First-Year Enrollment of 5% or More

Median LSAT	Up		Down		Flat		Total	Overall Total	% Reporting
Total	57	40%	26	18%	59	42%	142	199	71%
160+	22	45%	8	16%	19	39%	49	51	96%
155-159	17	45%	6	16%	15	39%	38	46	83%
150-154	14	36%	6	15%	19	49%	39	60	65%
<150	4	25%	6	38%	6	38%	16	42	38%

Continue reading

Lesson From The Tax Court: Counting The Days

As a young child I counted the days to Christmas starting December 1st, using advent calendars.  As I grew older, advertisements taught me that not all days were equal; one counted “shopping days” differently than calendar days.  As I now grow old, the Christmas season starts the day after Halloween, briefly tolled by days around Thanksgiving. 

Counting days is important in tax law, both for substance (e.g. figuring holding periods, allocating expenses between business days and personal days) and procedure (e.g. applying limitation periods).  Fortunately, how one counts days in tax has not changed much since I was a child.  So the lesson we find in last week’s case of Randy Richardson and Melisa Richardson v. Commissioner, T.C. Memo. 2018-189 (Nov. 13, 2018), should stick with us for a while. 

Richardson involves a married couple who filed a CDP petition contesting NFTLs filed against them.  Shortly after filing their CDP petition they filed a bankruptcy petition and received a discharge.  When the IRS denied CDP relief, the Richardsons sought Tax Court review, arguing that the IRS did not correctly account for the discharge they got in bankruptcy.  They ended up before Judge Lauber.  The resulting lesson is how counting days can be important to resolving the question of what taxes the IRS can later collect.  Even more important, it’s a lesson on when NOT to use CDP, but to instead request an “Equivalent Hearing.”  Details below the fold.  You can count on it.

Continue reading

With Sharp Rebuke to Law School, Judge Tosses Prof's Suit That Included ABA

National Law Journal, With Sharp Rebuke to Law School, Judge Tosses Prof's Suit That Included ABA:

A federal judge in Florida has tossed a whistleblower lawsuit brought by a former professor at the Charlotte School of Law against the defunct school, its parent company InfiLaw Corp. and the American Bar Association.

Judge Roy Dalton, Jr. of the U.S. District Court for the Middle District of Florida ruled that plaintiff Barbara Bernier’s claims that Charlotte and InfiLaw defrauded the federal government of more than $285 million by admitting unqualified students were too vague to move forward. Moreover, two earlier False Claims Act actions against InfiLaw’s soon-to-close Arizona Summit Law School bar Bernier’s suit because they brought very similar allegations, Dalton ruled.

Continue reading

TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• WSJ: Forget The Playoff, College Football’s Burning Question Is About Taxes
• July 2018 California Bar Exam Pass Rate Falls To 67-Year Low
• Lederman: Increased Transparency In The U.S. Tax Court: Has The Moment Arrived?

Sunday:

• NTA 111th Annual Conference On Taxation
• WSJ: Switch To Chained CPI Will Erode Trump Tax Cut Next Year
• New International Student Enrollment In American Higher Ed Fell 6.6% In 2017, On Heels Of 3.3% Decline In 2016
• The Top Five New Tax Papers

NTA 111th Annual Conference On Taxation

Highlights of the National Tax Association 111th Annual Conference on Taxation in New Orleans (full program here):

Plenary Panel on Fiscal Policy After the Midterm Elections
Moderator: William Gale (Brookings)
Panelists: Michael Graetz (Columbia), James Hines (Michigan), Mark Prater (PricewaterhouseCoopers), Kim Rueben (Tax Policy Center), Betsey Stevenson (Michigan)

Digital Aspects of International Tax
Chair: Omri Marian (UC-Irvine)

• Wei Cui (British Columbia),  Three Arguments in Defense of the EU’s Proposed Digital Services Tax
• Michael Devereux (Oxford) & John Vella (Oxford), Taxing the Digitalised Economy: Targeted or System-Wide Reform?
• Lilian Faulhaber (Georgetown), Is Digital Different? Economic Nexus and Other Efforts to Respond to the Changing International Tax Landscape
• Monica Gianni (California State-Northridge), Is Digital Different? Economic Nexus and Other Efforts to Respond to the Changing International Tax Landscape
• Discussants:  Omri Marian (UC-Irvine), Ruth Mason (Virginia)

Inequality and Taxation
Chair: Patrick Sharma (Cooley)

• Miranda Perry Fleischer (San Diego), The Architecture of a Universal Basic Income
• Jonathan Grossberg (Robert Morris), Something for Nothing: Universal Basic Income and Work
• Zachary Liscow (Yale), The Dilemma of Moral Commitments in Addressing Inequality
• Nancy Shurtz (Oregon), Rural America Rejuvenated with New Tax Approaches
• Discussants:  Tracey Roberts (Samford), Steven Sheffrin (Tulane)

Legal Perspectives on the TCJA
Chair: Lilian Faulhaber (Georgetown)

Continue reading

WSJ: Switch To Chained CPI Will Erode Trump Tax Cut Next Year

Wall Street Journal, Trump Tax Cut to Be Eroded Next Year by Inflation Switch:

Last year’s big tax cut is about to start shrinking.

The Internal Revenue Service on Thursday announced the tax code’s parameters for 2019, implementing a new method for making inflation adjustments that will result in higher tax payments—and government revenue—over time.

The shift will cost Americans $133.5 billion over a decade, according to Congress’s Joint Committee on Taxation.

The tax law enacted last year lowered tax rates and reduced tax burdens for most households in 2018. It also required the IRS to switch to a different, slower-moving measure of inflation to adjust a variety of tax-code features for rising prices. ...

Continue reading

New International Student Enrollment In American Higher Ed Fell 6.6% In 2017, On Heels Of 3.3% Decline In 2016

Institute of International Education, Fall 2018 International Student Enrollment:

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 #1 paper and a new paper debuting on the list at #2:

1. [171 Downloads]  Tax Competition and the Ethics of Burden Sharing, by Ivan Ozai (McGill)
2. [165 Downloads]  The Illegality of Digital Services Taxes Under EU Law: Size Matters, by Ruth Mason (Virginia)
3. [145 Downloads]  Double Non-Taxation and the Use of Hybrid Entities: An Alternative Approach in the New Era of BEPS, by Leopoldo Parada (University of Turin)
4. [141 Downloads]  The Mandatory Repatriation Tax Is Unconstitutional, by Sean McElroy (Stanford)
5. [138 Downloads]  The Proposed SALT Regulations May Be Doomed, by Andy Grewal (Iowa)

This Week's Ten Most Popular TaxProf Blog Posts

1. 'Big Law Killed My Husband': An Open Letter From A Sidley Partner's Widow
2. Bryan Camp (Texas Tech), Lesson From The Tax Court: The Hotel California Rule
3. Fires Cause Massive Destruction In Malibu, But Pepperdine Is Safe
4. University of Illinois Law School Releases Additional Documents Related To Allegations Of Professor's Sexual Misconduct
5. The Elite Teaching The Elite: Who Gets Hired By The Top Law Schools?
6. Non-Elite Universities Launch Medical, Not Law, Schools In Search Of Future Financial Stability
7. Scholars With Surnames Beginning With Letters Early In The Alphabet Have An Unfair Advantage In Citation Studies
8. July 2018 New York Bar Exam Results: NYU #1
9. NY Times: Trump’s Tax Cut Was Supposed To Change Corporate Behavior. Here’s What Happened.
10. SCOTUS Clerk Signing Bonuses Reach $400,000; Jones Day Hires 11 Clerks, Including Pepperdine Law Grad

WSJ: Forget The Playoff, College Football’s Burning Question Is About Taxes

Wall Street Journal Tax Report, Forget the Playoff, College Football’s Burning Question Is About Taxes:

The tax treatment of college football donations has turned into a bewildering tangle thanks to last year’s tax overhaul, the most far-reaching rewrite of the U.S. tax code since 1986. Buried in the bill was the repeal of a write-off for so-called seat donations. Internal Revenue Service guidance on lingering questions about the change isn’t expected for months.

Continue reading

July 2018 California Bar Exam Pass Rate Falls To 67-Year Low

The California State Bar has released the results from the July 2018 bar exam. The overall pass rate was 40.7%, down 8.9 percentage points from last year and a 67-year low. For California ABA-accredited law schools, the pass rate was 64%, down 6 percentage points from 2017.  The mean scaled MBE was 1404 compared with the national average of 1395 (a 32-year low).

The Recorder, Nearly Six in 10 Failed California's July 2018 Bar Exam:

The results mirror lower bar scores in other states. The percentage of successful test-takers in Pennsylvania, Texas [results by school], New York [results by school], Florida [results by school], and Indiana all dipped year over year. ... But California’s nearly six-in-10 failure rate is shocking for a state that has tried to boost scores by shortening the test by a day and conducting studies of the notoriously difficult exam.

State Bar of California, State Bar Releases July 2018 Bar Exam Results:

Continue reading

Lederman: Increased Transparency In The U.S. Tax Court: Has The Moment Arrived?

Leandra Lederman (Indiana), Increased Transparency in the U.S. Tax Court: Has the Moment Arrived?:

Transparency is a widely accepted judicial norm. It increases courts’ accountability and thereby increases the confidence and trust litigants and the general public have in courts’ decisionmaking. The comparatively limited access afforded to Tax Court documents is a longstanding issue. The reason Tax Court transparency differs from that of other courts is partly structural, in that the Tax Court isn’t as neatly situated in the federal government’s org chart as Article III courts, administrative agencies, or even Article I courts such as the Court of Federal Claims. (In fact, even which branch of government the Tax Court is located in has presented a puzzle.) Accordingly, the Tax Court traditionally has created many of its own rules and procedures, such as ones governing access to its documents. This means that the question is also partly cultural. As discussed below, access to Tax Court documents has increased over time, and the appointment of several new Tax Court judges may mean that we see further changes in the future. ...

Continue reading

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Shaheen's Income Tax Treaty Aspects Of Nonincome Taxes

This week, Sloan Speck (Colorado) reviews a new work by Fadi Shaheen (Rutgers), Income Tax Treaty Aspects of Nonincome Taxes: The Importance of Residence, 71 Tax L. Rev. 583 (2018).

In Income Tax Treaty Aspects of Nonincome Taxes: The Importance of Residence, Fadi Shaheen argues that, in any transition from an income tax to a nonincome tax, a critical gating consideration is how that nonincome tax interplays with the concept of residence in bilateral tax treaties based on the U.S. and OECD models. In defining the scope of nonincome taxes, Shaheen lists the usual suspects—consumption and cash flow taxes such as VATs, the flat tax, and the DBCFT—as well as newer varieties, such as equalization and turnover taxes on digital transactions. One of Shaheen’s important insights is that a person’s tax residence, a primary criterion to claim treaty benefits, depends on the taxes to which that person is subject. For a newly introduced nonincome tax, the problem is larger than just whether the treaty applies to the tax instrument. Instead, the issue is that the nonincome tax may preclude persons in the relevant contracting state from claiming any treaty benefits at all. In this sense, nonincome taxes may trigger tax treaty Armageddon, rather than some milder form of dislocation that is cabined to the nonincome tax’s direct reach.

Continue reading

Weekly Legal Education Roundup

• Gregory W. Bowman (Dean, West Virginia), The Rise of the Creative Law School
• Paul Caron (Dean, Pepperdine), July 2018 New York Bar Exam Results: NYU #1
• Nikos Harris (British Columbia), The Risks of Technology in the Law Classroom: Why the Next Great Development In Legal Education Might Be Going Low-Tech
• Lansing State Journal, Dean: Making MSU College of Law Part of the University 'Will Stabilize Us'

Continue reading

Tax Policy In The Trump Administration

• Bloomberg, $630 Million Death Tax Keeps LG Heir Out of Billionaires’ Club
• Bloomberg, Banks Are Losing Fight to Spike Tax on Sales Above $285 Million
• Bloomberg, Democrats Are Going to Try to Raise the Corporate Tax Rate
• Bloomberg, U.S. Companies Flee No-Tax Caribbean Havens After EU Crackdown

Continue reading

Pepperdine At Daybreak

We feel grateful and blessed to be back at our beloved Pepperdine this morning.

Northwestern Law Is Paring Back Amid Budget Woes. Are Other Elite Schools Next?

Following up on my previous post, Northwestern Law Dean Cites School's 'Difficult Time' As Reason For Faculty Cuts:  Law.com, Northwestern Law Is Paring Back Amid Budget Woes. Are Other Elite Schools Next?:

The recent decision to trim staff and lecture faculty at Northwestern University Pritzker School of Law amid a budget shortfall illustrates that even elite law schools are subject to the financial pressures of staying competitive in a soft legal education market.

But make no mistake: Name-brand law schools on the whole are faring better than their counterparts further down the legal education food chain.

That’s according to experts who have studied the changing economics of law schools and deans at several schools within U.S. News & World Report’s top 20, who say that fundraising has been strong and that the financial shortfalls that emerged in the midst of the so-called crisis in legal education have largely been addressed. Put another way, don’t expect top law schools to announce drastic cuts any time soon. ...

Former University of North Carolina law professor Bernie Burk and University of St. Thomas School of Law professor Jerome Organ examined enrollment, tuition and scholarship trends in legal education from 2010 to 2016 to conclude that the nation’s law schools are collectively losing $1.5 billion annually due to lower enrollment and lower actual cost for students.

Continue reading

Harvard Braces For $40-$50 Million Annual Endowment Tax

Harvard Crimson, Bacow Met With U.S. Treasury Representative to Discuss Endowment Tax Guidance:

University President Lawrence S. Bacow recently met with a U.S. Treasury Department official as the government prepares final regulations for taxing university endowments, Bacow said in an interview last month.

Harvard’s endowment, valued at $39.2 billion, qualifies for taxation under the new tax codes Republican lawmakers passed last year. The University's endowment was previously exempt from taxes because the school is a non-profit entity.

The University’s financial report released in October estimates that the tax will cost Harvard $40 million to $50 million annually. Harvard will have to pay the endowment tax for the first time on returns from this fiscal year, which ends in June 2019. ...

Continue reading

LSAC Hit With $480k Attorney Fees In LSAT Disability Litigation

National Law Journal, LSAT Maker Hit With $480K in Fees for Disability Violations:

A federal judge has ordered the Law School Admission Council to pay nearly half a million dollars in attorney fees to the California Department of Fair Employment and Housing in connection to litigation over its accommodation of Law School Admission Test takers with disabilities.

The California agency sought more than $567,000 in attorney fees after it successfully petitioned the court to hold the council in civil contempt for violating a 2014 agreement on how it would handle requests for accommodation on the LSAT. The parties met for a court hearing on Friday. U.S. Magistrate Judge Joseph Spero of the U.S. District Court for the Northern District of California on Monday largely sided with the agency in finding that the council must pay $480,000. ...

Continue reading

Ruth Mason Posts Two Tax Papers On SSRN

• The Illegality of Digital Services Taxes Under EU Law: Size Matters
• A Political-Process Defense of Deutsche Bahn Deference

Barry Presents The Transition (Under-) Tax Today At Northwestern

Jordan Barry (San Diego) presents The Transition (Under-) Tax at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

One of the most significant effects of the Tax Cuts and Jobs Act (“TCJA”) was shifting the United States from a worldwide tax system to a territorial one: Before the TCJA, U.S. corporations were subject to tax on all of the income they earned, regardless of where they earned it; after the TCJA, U.S. corporations generally will not have to pay U.S. federal income tax on profits earned outside of the United States. The TCJA coupled this permanent shift with a one-time transition tax (the “Transition Tax”). The Transition Tax taxes the trillions of dollars of income that U.S. corporations earned outside of the United States, but which had not yet been subjected to U.S. tax, at a rate of either 8% or 15.5%, depending on how the income was invested. There is much to criticize about the Transition Tax.

Continue reading

Fox Presents Ironing Out The Tax Law At Michigan

Edward Fox (Michigan) presented Ironing Out the Tax Law (with Jacob Goldin (Stanford)) yesterday at Michigan today as part of its Tax Policy Workshop Series hosted by Reuven Avi-Yonah:

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out — or “ironed” — by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in the tax law, focusing particularly on concerns related to efficiency, complexity, and administration. Sliding scales are common for tax provisions that depend on income, but relatively uncommon for provisions that depend on non-income factors.

Continue reading

The Next Big Innovation In Law School Teaching: Low Tech

Nikos Harris (British Columbia), The Risks of Technology in the Law Classroom: Why the Next Great Development In Legal Education Might Be Going Low-Tech, 51 U. British Colum. L. Rev. 773 (2018):

It is often assumed that technology improves every facet of our lives, including learning in the university classroom. However, there is mounting evidence that traditional lecturing and note-taking techniques may provide the optimal learning environment. Student use of laptops, and professor use of electronic course slides, may actually impair learning in a manner which has particular significance for legal education. This emerging evidence suggests that law professors can make a justifiable decision to bring about a "low tech revolution" in their classrooms.

Continue reading

Krugman: The Tax Cut And The Balance Of Payments

New York Times op-ed:  The Tax Cut and the Balance of Payments (Wonkish), by Paul Krugman:

Now that Democrats have taken the House, it seems likely that the Tax Cuts and Jobs Act will turn out to have been the only major piece of legislation enacted under Donald Trump. There might conceivably be an infrastructure bill, but don’t get your hopes up: Trump’s people seem dead set against straightforward public spending, i.e., just building the damn infrastructure, and Democrats probably won’t agree to privatization disguised as public investment.

Now, the TCJA played almost no role in the midterms: Republicans dropped it as a selling point, focusing on fear of brown people instead, while Democrats hammered health care. But now that the election is past, it seems like a good idea to revisit the bill and its effects. What I want to focus on in this piece is the effects on the balance of payments.

Continue reading

SCOTUS Clerk Signing Bonuses Reach $400,000; Jones Day Hires 11 Clerks, Including Pepperdine Law Grad

National Law Journal, $400K for SCOTUS Clerks: A Bonus Too Far?:

[T]he prevailing hiring bonus for Supreme Court clerks is $400,000—up from $300,000 in 2015. And that does not include salaries. If the trend continues, the clerk bonus will soon approach twice the annual salary of the justices they work for. Associate justices are paid $235,000, and the chief justice gets $267,000.

Firms such as Jones Day, which announced Tuesday that it hired 11 clerks from last term’s “class,” take the number in stride, even as in the case of Jones Day if it amounts to a $4.4 million investment. The firm has recruited 47 Supreme Court clerks since 2012. The firm declined to discuss its compensation practices.

Bloomberg Law, Jones Day Lands Almost a Third of Latest Supreme Court Clerks:

The Jones Day arrivals include five women:

• Cynthia Barmore, a Stanford Law School graduate who clerked for Justice Stephen G. Breyer, and will work in the Washington office.
• Elizabeth G. Bentley, a Harvard Law School graduate who clerked for Justice Sonia Sotomayor, and will work in the Minneapolis office.
• Carmen G. Iguina Gonzalez, a New York University School of Law graduate who clerked for Sotomayor, and will work in the Washington office.
• Brittney Lane Kubisch, a Pepperdine University School of Law graduate who clerked for Justice Clarence Thomas, and will work in the Los Angeles office.
• Mary H. Schnoor, a Harvard Law School graduate who clerked for Justice Ruth Bader Ginsburg, and will work in the Chicago office.

The other clerks Jones Day hired are:

Continue reading

The Coming Global Digital Tax Showdown

Bloomberg Tax, A Global Digital Tax Showdown Looms. Here’s What Could Happen:

The world’s biggest tech companies are staring down the barrel of a new tax on their European revenue.

The EU’s divisive effort to create a special tax for Google, Facebook, and their peers is at a pivotal moment as proponents of the so-called digital tax push for a December vote. The measure would impose a 3 percent temporary turnover tax on the biggest multinational tech companies—those with 750 million euros or more in global turnover and 50 million euros in EU sales.

The tax is more than just a new levy. It could create deep fissures in the global consensus on how to tax major companies.

Continue reading

The Elite Teaching The Elite: Who Gets Hired By The Top Law Schools?

Eric Segall (Georgia State) & Adam Feldman (USC), The Elite Teaching the Elite: Who Gets Hired by the Top Law Schools?:

Do you want to teach at a top 25 law school? If so, you had better excel at something you will encounter years before you will even consider applying to be a law professor. Something that has no relationship at all to the skills academics need. You better score extremely high on the Law School Admissions Test (LSAT) (or now at some schools the GRE). If you don’t score towards the very top, you will likely not be admitted to a top 10 ranked law school. And if you do not attend a top 10 ranked law school, no matter what you accomplish during the school you do attend (even a top 20 school) or afterwards, your chances of teaching at a top law school are virtually non-existent. The reality is that by far the most important credential one needs to teach at a top law school is to attend a top law school. The elite, teaching the elite, who will then teach more elites.

Continue reading

Democrats Intend To Get Hold Of Trump’s Tax Returns, But Their 'Intemperate Comments' May Block Their Access

Bloomberg, Democrats ‘Intent’ on Getting Hold of Trump’s Tax Returns:

Democrats are in discussions about the best way to get the Treasury Department to hand over President Donald Trump’s tax returns, according to the incoming chairman of the House Ways and Means Committee.

“We don’t have a timetable yet, but we’ve talked about it, and we are certainly intent on doing it,” Representative Richard Neal, a Massachusetts Democrat who will lead the committee next year, told reporters Tuesday.

The heads of the House and Senate tax-writing committees have the authority to request any individual tax return from the Treasury secretary, including the president’s. Trump departed from roughly 40 years of tradition for presidential candidates by refusing to release his tax returns during the 2016 campaign. The forms, or some of the information they contain, could effectively become public if the committee votes to release them.

In practice, however, the process could turn into a protracted legal battle if Treasury Secretary Steven Mnuchin decides to delay sending the tax documents to Congress.

Law & Crime, Dems May Have Already Screwed Themselves Out of Getting Trump’s Tax Returns:

Congress has the power to call for Trump’s tax returns, but according to University of Iowa Law Professor Andy Grewal, it has to be for a legitimate legislative purpose. That means you can’t just do things out of spite or because you want to embarrass the president. As the Supreme Court said in Watkins v. United States, “there is no congressional power to expose for the sake of exposure.”

In a February 2017 post for Yale’s Notice & Comment blog, Grewal noted that while Section 6103(f) of the U.S. tax code makes it clear that committees can get someone’s tax return information, “any congressional action, including requests for information, must come within the scope of legislative powers granted by Article I of the Constitution.” That means, Grewal said, that “a request for President Trump’s tax returns, if made for purely political purposes, may exceed legislative powers.” ...

One thing that often came up during this year’s election season was that if Democrats took control of the House of Representatives, they could theoretically impeach the president. After the election, when they secured a majority, Democratic leadership made it clear that impeachment was not on the agenda—barring a bombshell report from Robert Mueller—but that they could use other powers to investigate the president. One specific power that they’re looking to exercise is the power to force the release of President Donald Trump‘s tax returns for Congress to review them.

Unfortunately, they may have already blown their chance before they even tried.

Yes, technically Congress has the power to call for Trump’s tax returns, but according to University of Iowa Law Professor Andy Grewal, it has to be for a legitimate legislative purpose. That means you can’t just do things out of spite or because you want to embarrass the president. As the Supreme Court said in Watkins v. United States, “there is no congressional power to expose for the sake of exposure.”

In a February 2017 post for Yale’s Notice & Comment blog, Grewal noted that while Section 6103(f) of the U.S. tax code makes it clear that committees can get someone’s tax return information, “any congressional action, including requests for information, must come within the scope of legislative powers granted by Article I of the Constitution.” That means, Grewal said, that “a request for President Trump’s tax returns, if made for purely political purposes, may exceed legislative powers.”

Continue reading

Rosenbloom Presents The BEAT And The Treaties Today At Pennsylvania

David Rosenbloom (NYU)  presents The BEAT and the Treaties, 92 Tax Notes Int'l 53 (Oct. 1, 2018) with Fadi Shaheen (Rutgers)), at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

In this article, the authors discuss the base erosion and antiabuse tax [BEAT] implemented under the U.S. Tax Cuts and Jobs Act, focusing on its relationship with U.S. tax treaties currently in force. The first relevant provision in the U.S. Model Income Tax Convention is the commitment in article 23 (relief from double taxation), paragraph 2, of an FTC for income tax of the treaty partner “in accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof).” It is possible to ponder the precise meaning of the quoted words, but there is no need to do that for the BEAT.

Continue reading

Amazon Could Win Big Under Trump's New Opportunity Zone Tax Break

Bloomberg Tax, Amazon NY Could Win Big Under Tax Break Meant for Distressed Zones:

Amazon could benefit from federal tax breaks designed to revitalize struggling communities if it builds all or part of its second headquarters in Long Island City.

The company’s eligibility comes down to whether the IRS would view a new headquarters as a new entity or as a part of Amazon’s larger umbrella. ...

Continue reading

HELP NEEDED FROM VOLUNTEER LAWYERS: The Pepperdine Disaster Relief Clinic And The Woolsey Fire

Dear Lawyers, Law Professors, Legal Clinics:

We need your help. Today, I am officially launching the Disaster Relief Clinic to serve Malibu, the Santa Monica Mountains, and the Conejo Valley here in Southern California where the Woolsey Fire is still burning.

Pepperdine students are displaced and scattered, and we are closed through Thanksgiving, when we are embarking on a massively ambitious, dense final week of school and finals, all while we try to be compassionate to the students. I do not want to put volunteering on their plate until we can launch the clinic course in January.

So now, we need volunteer lawyers and clinical law profs. We're going to run an emergency, triaged VLP. I need lawyers and law profs to take cases by referral.

Continue reading

2019 National Tax Moot Court Competition Registration Is Open

Registration is open for the 2019 National Tax Moot Court Competition, being held March 7-9, 2019, on the University of Florida campus in Gainesville, Florida. This year, the competition is co-sponsored by the Florida Bar Tax Section and UF Levin College of Law. The problem release date is November 19, 2018, with a submission deadline of January 19, 2019.

Continue reading

July 2018 New York Bar Exam Results: NYU #1

The July 2018 New York bar passage rates by law school are out. Here are the results for first time test takers for the 15 New York ABA-approved law schools, along with each school's U.S. News ranking (New York and overall).

Bar Pass Rank (Rate)	School	US News Rank NY (Overall)
1 (98.4%)	NYU	2 (6)
2 (98.3%)	Columbia	1 (5)
3 (94.1%)	Cornell	3 (13)
4 (89.1%)	Fordham	4 (37)
5 (86.7%)	St. John's	6 (83)
6 (83.5%)	Syracuse	8 (88)
83.0%	Statewide Average
7 (80.5%)	Cardozo	5 (56)
8 (75.9%)	Albany	9 (106)
9 (73.8%)	CUNY	13 (125)
10 (72.3%)	Brooklyn	6 (83)
11 (70.2%)	SUNY-Buffalo	9 (106)
12 (65.9%)	Pace	13 (125)
13 (64.1%)	New York Law School	11 (110)
14 (62.0%)	Hofstra	11 (110)
15 (48.6%)	Touro	15 (Tier 2)

Continue reading

Oei & Osofsky: Beyond Notice-and-Comment — The Making Of The § 199A Regulations

Shu-Yi Oei (Boston College) & Leigh Osofsky (North Carolina), Beyond Notice-and-Comment: The Making of the § 199A Regulations:

Congress passes a highly transformative but hastily drafted legal reform. Who comments in the regulatory process, when, and what are the implications? In this Article, we study these questions by examining how the regulatory process has unfolded in the case of § 199A, one of the central provisions from the monumental 2017 tax reform.

We document the comments that went into making the § 199A regulations from the time of legislative enactment through the hearing on the proposed regulations. We show that many comments were made before the proposed regulations were issued and the official administrative law notice-and-comment period had even opened. We examine how Treasury explicitly considered these comments in the proposed regulations. And we explore how these comments and other engagements—which were not wholly transparent to the public—shaped the proposed regulations and the subsequent conversation in the actual notice-and-comment period. We also investigate the role of indirect public dialogue and comments received after the official close of the notice-and-comment period.

Continue reading

Dean Chemerinsky Recommends Removing Boalt Name From UC-Berkeley Law School

• Letter From Erwin Chemerinsky To Berkeley Law Community (Nov. 13, 2018)
• ABA Journal, Dean Chemerinsky Recommends Removing Boalt Name From Use at Berkeley Law
• Daily Californian, UC Berkeley School of Law Dean Recommends Removal of ‘Boalt’ Name
• Law.com, UC Berkeley Law to Ditch Boalt Name Over Namesake's Racist Legacy

Continue reading

Scharff: The Challenge Of Pricing Externalities Under State Law

Erin Scharff (Arizona State), Green Fees: The Challenge of Pricing Externalities Under State Law, 97 Neb. L. Rev. 168 (2018):

Policymakers at the state and local level are increasingly interested in using market-based pricing mechanisms as regulatory tools. For example, at the state level, several states have recently considered state-level carbon pricing, while at the local level, municipal governments are increasingly turning to stormwater remediation fees to pay for the treatment of municipal runoff required by the Clean Water Act.

These regulatory programs are inspired by the insight of English economist Arthur Pigou, who suggested governments could price social costs into market transactions by imposing a tax. Such policies, however, are frequently subject to state court litigation challenging them as unlawful taxes. State law restricts both state and local governments’ ability to enact taxes, but similar restrictions are often not in place to limit the enactment of regulatory actions or user fees. Unfortunately, state courts have struggled to appropriately classify these fees under existing state law doctrines.

Continue reading

Fleming Presents Real Worldwide v. Territorial Taxation After The TCJA Today At Boston College

J. Clifton Fleming, Jr. (BYU) presents An Early Look at Real Worldwide v. Territorial Taxation After the TCJA (with Robert Peroni (Texas) & Stephen Shay (Harvard) today at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu-Yi Oei:

In the run up to enactment of the 2017 Tax Cuts and Jobs Act (TCJA) one of the principal U.S. tax policy issues was how foreign source active business income of U.S. multinational enterprises (MNEs) should be taxed by the United States if the system of deferring U.S. tax on active income of a foreign subsidiary was ended. Should active foreign income be taxed under a territorial or exemption system—i.e. bear no residual U.S. tax—or should it be subjected to real worldwide taxation—i.e. current taxation at regular U.S. rates coupled with a credit for foreign income tax paid limited to the U.S. tax on the foreign-source income as measured for U.S. tax purposes.

The opposing sides were not without common ground. Both agreed that the existing U.S. system for taxing the foreign-source active-business income of U.S. MNEs was bad because it generally did not impose U.S. tax until the active income of foreign subsidiaries was repatriated, either through dividends or by sale of subsidiary stock at a price reflecting accumulated foreign-source income.

Continue reading

Elkins Presents The Case Against Income Taxation Of Multinational Enterprises Today At Hebrew University

David Elkins (Netanya) presents The Case Against Income Taxation of Multinational Enterprises, 36 Va. Tax Rev. 143 (2017), today at the Hebrew University of Jerusalem Faculty of Law:

Probably the most uncontroversial thing that one can say about international taxation is that it is a mess. Sophisticated planning techniques, which seem beyond the power of taxing authorities to control, enable highly profitable multinational enterprises (MNEs) to pay little or no tax on their income. Efforts by transnational organizations to coordinate action in an attempt to rescue the international tax regime from collapse have hitherto proven ineffective. Some commentators have speculated that any attempt to impose tax on MNEs in a globalized economy is doomed to failure.

The focus of this article is in the taxation of foreign MNEs by the countries in which they operate, and its thesis is that the choice of income as a base for taxing foreign MNEs is inappropriate both normatively and practically.

Continue reading