Paul L. Caron

Friday, May 27, 2022

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Dean's The Casual Racism Of The Tax Law

This week, Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar) reviews a new work by Steven A. Dean (Brooklyn), Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. __.


In response to a growing recognition of the absence of demographic data in federal datasets, including tax data, President Biden signed Executive Order 13985 in 2021, which, inter alia, established an Interagency Working Group on Equitable Data. The Treasury Department is also undertaking a comprehensive research initiative to study the relationship between the U.S. tax code and racial inequities. Senate Finance Committee Chair Ron Wyden (D-OR) has called for the IRS to collect and disclose more information relating to the tax code’s effect on different demographics because it makes no sense to blind lawmakers to the key data that would illuminate injustice in our tax laws. Those recent developments are the results of hard work by dedicated scholars like Alice Abreu, Jeremy Bearer-Friend, Dorothy Brown, Wei Cui, Steven Dean, Francine Lipman, and Goldburn Maynard. In this review, I would like to recognize Steven Dean's recent essay, Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. ___. Dean's essay is adapted from his testimony given before the Committee on Ways and Means of the U.S. House of Representatives on June 10, 2021, and was presented at the 2021 Utah Law Review Symposium, entitled #includetheirstories: Rethinking, Reimagining, and Reshaping Legal Education, for which I was an organizer. (Video clips are available here.)

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May 27, 2022 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Weekly Legal Education Roundup

Tax Policy In The Biden Administration

UC-Hastings Law School To Change Its Name In July Due To Founder's Role In Native American Genocide

Following up on my previous posts (see links below): A Message from Chancellor and Dean David Faigman, Law School Name Change:

UC Hastings (2022)I write you regarding a matter of great institutional importance, the name of our law school. This issue may be well known to many in our community but perhaps new to some, so allow me to begin with some background. More details on the College’s efforts are available here.

Shortly after becoming chancellor and dean in 2017, the San Francisco Chronicle published a guest essay describing atrocities attributed to Serranus Hastings, the College’s namesake, in the late 1850s. This prompted my own research into this sordid chapter of California history when the crimes were committed against Native Americans often under color of law or, at times, orchestrated by the State of California itself. This historical review led to the conclusion that California’s first chief justice and attorney general, and the College’s founder, Serranus Hastings, bore responsibility for killings and brutalities against the native tribes of the Eden and Round Valleys, located in what today is known as Mendocino County, and most of all against the Yuki tribal people. It was with this information in hand that the moral imperative to act became evident. ...

During the last five years, the question as to whether to change the school’s name has repeatedly arisen, but no consensus was reached either within or between the College’s and the tribal members’ communities on this issue. However, in late October 2021, the New York Times published a front-page article that put the issue of the College’s name front and center and brought the matter to national prominence and to members of the California Legislature.

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May 27, 2022 in Legal Ed News, Legal Education | Permalink

Avi-Yonah Posts International Tax Papers On SSRN

The Retrial Of Katherine Magbanua In Dan Markel's Murder: The Defense Rests Its Case

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May 27, 2022 in Legal Ed News, Legal Education | Permalink

Thursday, May 26, 2022

No New Tax Cuts? Examining The Rescue Plan's New State Tax Limits

Conor Clarke (DOJ; Google Scholar) & Edward G. Fox (Michigan; Google Scholar), No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits, 103 Tax Notes St. 1361 (Mar. 28, 2022):

Tax-notes-stateIn this article, Clarke and Fox examine the American Rescue Plan Act’s restrictions on state tax cuts, arguing that the restrictions are a variation on more familiar maintenance-of-effort provisions. These provisions are common, and are designed to help ensure that federal grants supplement rather than supplant state spending by requiring the state to maintain its level of spending on a program. Clarke and Fox conclude that the Rescue Plan’s requirements create similar incentives, and argue that the similarity makes it more likely that the act’s tax provisions are consonant with the Constitution’s spending clause.

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May 26, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

What Is The Legacy Of A Law Professor?

Legacy, what is a legacy?
It’s planting seeds in a garden you never get to see.
Alexander Hamilton, in The World Was Wide Enough, in Hamilton

Following up on the previous post by Patricia Sun, widow of Law Prof Andy Taslitz (American), who died of cancer at age 57:  Thoughts on Law Prof Work-Life Imbalance From Those Left Behind:

Lawprofblawg (Anonymous Professor, Top 100 Law School), The Legacies Of Law Professors:

Death has been on my mind lately. I’ve had a few friends and family in the hospital. I’ve also seen several notices of prominent law professors across the country who have passed away.

Which makes me wonder: How will you be remembered, law professors? How do you want to be remembered? Because it won’t be about your scholarly impact or SSRN downloads.

Sure, I and a co-author have written about the law professor’s search for meaning, but this is not that question. That’s a question of why law professors seek to leave their mark. This blog is about how a law professor will be remembered versus how they wish to be remembered. ...

When a law professor talks about their legacy, they look to that which they leave behind. That could be articles, but I suspect (and I plan on researching this) that the shelf life of a law review article isn’t long. How many articles are still cited from the 1990s? What was the top SSRN download from 2010? In many disciplines, the wheel is being replicated because there is so much out there that no one has ever read. When law professors die, I would hope they are not pinning their legacy on their writing.

So when a law professor dies, articles are not the thing that typically gets remembered. It gets mentioned, but the things that really are remembered are how the professor helped others get jobs; how they mentored people; how their door was always open to students; lovable quirks in the classroom. ...

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May 26, 2022 in Legal Ed News, Legal Education | Permalink

Cooper: Section 2058 And The Decline Of State Death Taxes

Jeffrey A. Cooper (Quinnipiac; Google Scholar), Death by Deduction: Section 2058 and the Decline of State Death Taxes, 48 ACTEC L.J. __ (2023):

This article illustrates how, and seeks to explain why, the deduction for state estate taxes (Internal Revenue Code Section 2058) seems to have had no meaningful effect on state tax policy.

Since the deduction for state estate taxes reduces the amount of federal estate taxes paid, the net effect is to shift to the federal government some of the cost of these state death taxes. Prevailing theories of tax policy suggest that state governments will structure their tax systems to maximize this type of available deduction. But theory has not borne out in practice. To the contrary, most states have responded to enactment of Section 2058 not by restructuring their existing state estate taxes to maximize this federal deduction but rather by entirely abandoning state estate taxes. While a remaining group continue to impose those taxes, they have failed to structure those taxes in a manner that would optimize the deduction. In short, the 2058 deduction seems to have had extremely little, or perhaps entirely no, effect on state estate tax policy.

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May 26, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Pepperdine Caruso Law Welcomes New Faculty

New Faculty Pepperdine

Pepperdine Caruso Law Welcomes New Faculty Members in the 2022-23 Academic Year:

Pepperdine Caruso Law is pleased to welcome four new faculty members joining us in August,  whose teaching and research focus on areas of law including the Second Amendment, the treatment of marginalized populations, criminal law, and tax law. Included in this distinguished group are tenure-track faculty and our first Pepperdine Caruso Family Law Fellow.

Jake Charles, who writes and teaches on the Second Amendment and firearms law, comes to Pepperdine from Duke University School of Law where he served as the inaugural executive director of the Duke Center for Firearms Law and remains an affiliated scholar. Charles earned a B.A. in criminology, law and society, and psychology and social behavior from the University of California, Irvine; M.A. degrees in theology and philosophy from Biola University; and his J.D. from Duke Law School. His most recent article, Securing Gun Rights By Statute: The Right to Keep and Bear Arms Outside the Constitution, was published in 120 MIch. L. Rev. 581 (2022)

Mary Hoopes, whose research examines how legal and political institutions serve marginalized populations, joins us from the University of California, Berkeley, School of Law, where she was the Director of Research at the Berkeley Judicial Institute. Hoopes earned a B.S. at the University of Notre Dame, her J.D. from Cornell Law School, and a Ph.D. from Berkeley Law. At Pepperdine, Hoopes will serve as the co-director of the Wm. Matthew Byrne, Jr. Judicial Clerkship Institute. Her most recent article, Regulating Marginalized Labor, was published in 73 Hastings L.J. 1041 (2022).

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May 26, 2022 in Legal Ed News, Legal Education, Pepperdine Legal Ed | Permalink

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through May 1, 2022) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

    All-Time     Recent
1 Reuven Avi-Yonah (Michigan)  208,581 1 Reuven Avi-Yonah (Michigan) 8,882
2 Daniel Hemel (Chicago) 125,410 2 Daniel Hemel (Chicago) 5,468
3 Dan Shaviro (NYU) 124,776 3 Bridget Crawford (Pace) 4,128
4 Lily Batchelder (NYU) 124,345 4 Lily Batchelder (NYU) 2,986
5 David Gamage (Indiana-Bloom.) 121,615 5 D. Dharmapala (Chicago) 2,930
6 Darien Shanske (UC-Davis) 114,651 6 Ruth Mason (Virginia) 2,808
7 David Kamin (NYU) 111,916 7 David Gamage (Indiana-Bloom.) 2,733
8 Cliff Fleming (BYU)    106,965 8 Kim Clausing (UCLA)     2,727
9 Manoj Viswanathan (UC-Hastings) 103,722 9 Zachary Liscow (Yale) 2,667
10 Rebecca Kysar (Fordham) 102,810 10 Darien Shanske (UC-Davis) 2,655
11 Ari Glogower (Ohio State) 102,491 11 Kyle Rozema (Washington University) 2,625
12 D. Dharmapala (Chicago) 47,270 12 David Kamin (NYU) 2,623
13 Michael Simkovic (USC) 46,688 13 Robert Sitkoff (Harvard) 2,590
14 Paul Caron (Pepperdine) 39,472 14 Richard Ainsworth (Boston Univ.) 2,584
15 Louis Kaplow (Harvard) 36,790 15 Dan Shaviro (NYU) 2,008
16 Richard Ainsworth (Boston Univ.) 34,965 16 Margaret Ryznar (Indiana-Indy)   2,000
17 Bridget Crawford (Pace) 31,815 17 Louis Kaplow (Harvard) 1,735
18 Robert Sitkoff (Harvard) 28,956 18 Ari Glogower (Ohio State) 1,711
19 Ed Kleinbard (USC) 28,526 19 Brad Borden (Brooklyn) 1,658
20 Vic Fleischer (UC-Irvine) 28,431 20 Francine Lipman (UNLV) 1,609
21 Brad Borden (Brooklyn) 27,961 21 Hugh Ault (Boston College) 1,558
22 Jim Hines (Michigan) 26,573 22 Vic Fleischer (UC-Irvine) 1,512
23 Ruth Mason (Virginia) 26,272 22 Gregg Polsky (Georgia) 1,435
24 Ted Seto (Loyola-L.A.) 25,559 24 Michael Simkovic (USC) 1,313
25 Katie Pratt (Loyola-L.A.) 25,408 25 Omri Marian (UC-Irvine) 1,246

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May 26, 2022 in Legal Education, Tax, Tax Prof Rankings | Permalink

The Retrial Of Katherine Magbanua In Dan Markel's Murder: The State Rests Its Case

Wednesday, May 25, 2022

8th Annual Mid-Career Tax Professors Workshop At North Carolina

UNC Law School Logo

Tuesday, May 24:

Panel #1:

Ari Glogower (Ohio State; Google Scholar), Means-Adjusted Tax Rules
Commentator:  Philip Hackney (Pittsburgh)

Susan Morse (Texas; Google Scholar), APA Statute of Limitations
Commentator:  Clint Wallace (South Carolina)

Andrew Hayashi (Virginia; Google Scholar), Income Tax Enforcement & Redistribution: A Survey
Commentator:  Shu-Yi Oei (Boston College; Google Scholar

Brian Galle (Georgetown; Google Scholar), Solving the Valuation Challenge: A Feasible Method for Taxing Extreme Wealth (with David Gamage (Indiana-Maurer; Google Scholar) & Darien Shanske (UC-Davis; Google Scholar))
Commentator:  Andrew Hayashi (Virginia; Google Scholar)

Panel #2:

Yariv Brauner (Florida; Google Scholar), What Should Developing Countries do about the Recent Global Minimum Tax "Agreement"?
Commentator:  Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar)

Shuyi Oei (Boston College; Google Scholar), What Determines Treaty Favorability to Developing Countries?
Commentator: Susan Morse (Texas; Google Scholar)

Doron Narotzki (Akron; Google Scholar), Tax Planning and Pillar Two
Commentator: Yariv Brauner (Florida; Google Scholar)

Panel #3:

Jordan Barry (USC), Tax & the Boundaries of the Firm (with Victor Fleischer (UC-Irvine; Google Scholar))
Commentator: Doron Narotzki (Akron; Google Scholar)

Manoj Viswanathan (UC-Hastings), Hybrid Tax Bases & the Constitution
Commentator: Ari Glogower (Ohio State; Google Scholar)

Emily Cauble (DePaul), Testing Intuitions About Partnership Tax Intuitions
Commentator: Leigh Osofsky (North Carolina; Google Scholar)

Panel #4:

Stephanie Hoffer (Indiana-McKinney; Google Scholar), Language of Disability in the Tax Code
Commentator: Kathleen DeLaney Thomas (North Carolina; Google Scholar)

Kathleen DeLaney Thomas (North Carolina; Google Scholar), Fake News & the Tax Law
Commentator: Emily Cauble (DePaul)

Leigh Osofsky (North Carolina; Google Scholar), Implicit Leg Bias & the HMID
Commentator: David Gamage (Indiana-Maurer; Google Scholar)

Wednesday, May 25:

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May 25, 2022 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink

Law360 Summer Associates Survey

Law360, Summer Associates Survey: The Annual Rite of Passage Evolves to Address Shifting Times (May 2022):

Law360 Pulse’s second annual Summer Associates Survey homes in on the process law students undergo when looking to pair with a firm for a summer associateship, examining their criteria for selecting firms, looking at which firms were the most popular and investigating the on-campus interview experience. We will be revisiting the students to assess their associateship experience in Part II of the survey later this year.

Law360 1

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May 25, 2022 in Legal Ed News, Legal Education | Permalink

CIC Services: The Supreme Court Hands The IRS A Major Loss

Beckett Cantley (Northeastern) & Geoffrey Dietrich (Cantley Dietrich), CIC Services v. IRS: the Supreme Court Hands the IRS a Major Loss, 5 Bus. Entrepreneurship & Tax L. Rev. __ (2021):

The Anti-Injunction Act (“AIA”) is an important part of administrative procedure law and a crucial piece of the United States tax system. Enacted to help expedite the tax revenue process, the Act works to invalidate any lawsuit to restrict the assessment or collection of taxes. Nonetheless, having the power to bar standing and having the right to do so are two completely different things. For instance, while the AIA gives the power to bar suits brought against administrative rulemaking processes, the Act does not give this right unless the suit was brought with the purpose of restraining the assessment of a tax.

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May 25, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

How To Engage Law Students In The Online Learning Environment

Andrele Brutus St. Val (Pittsburgh), Survey Says—How to Engage Law Students in the Online Learning Environment, 70 J. Legal Educ. __ (2021):

Journal of Legal Education (2022)The pandemic experience has made it clear that not everyone loves teaching or learning remotely. Many professors and students alike are eager to return to the classroom. However, our experiences over the last year and a half have also demonstrated the potentials and possibilities of learning online and have caused many professors to recalibrate their approaches to digital learning. While the tools for online learning were available well before March of 2020, many instructors are only now beginning to capitalize on their potential. The author of this article worked in online legal education before the pandemic, utilizing these tools and exploring ways to make the online experience more effective. This article is the result of her research on online legal education prior to the pandemic, which sheds light on future possibilities for online learning in law schools in post-pandemic times. 

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May 25, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Google's Cost Sharing Arrangement: Bride Of Frankenstein

Stephen Curtis (Cross Border Analytics), Google's Cost Sharing Arrangement: Bride of Frankenstein:

Google (2022)This paper performs a forensic analysis of Google's transfer pricing cost sharing arrangement based on forensic economic analysis of public information, including tax litigation in France, tax hearings conducted in the United Kingdom, information from a related U.S. tax court case, documents disclosed in a European data privacy investigation, published materials containing insider accounts of Google’s operations, books, periodicals and other sources. The paper finds that Google appears to have violated U.S. transfer pricing laws in 2009 and later years, in ways that appear to have invalidated its cost sharing arrangement but which were not detected by the IRS. These tax violations appear to have led to the potential of tax assessments by the IRS of more than $38 billion and up to $50 billion. Google is now a subsidiary of Alphabet Inc., and the company's reserves for Uncertain Tax Positions were $3.8 billion as of December 31, 2020 – reserves that are about 90% less than this tax adjustment risk. The ability of the IRS to apply periodic adjustments is not limited by any statute of limitations.

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May 25, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Retrial Of Katherine Magbanua In Dan Markel's Murder: The Bump, Money Drops, Cash Deposits And Wiretaps

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May 25, 2022 in Legal Ed News, Legal Education | Permalink

Tuesday, May 24, 2022

Legally Blonde Dean

I was voted the guest who was most committed to the Legally Blonde theme at Saturday night’s graduation party. To all prospective law students: I hope this proves that the dean at Pepperdine Caruso Law will do (almost) anything for our students!

TaxProf Blog

May 24, 2022 in Legal Education, Pepperdine Legal Ed | Permalink | Comments (2)

Saito: Tax Allyship

Blaine G. Saito (Northeastern; Google Scholar), Tax Allyship, 1 LSU L.J. for Soc. Just. & Pol'y 49 (2022):

Tax has a race problem. The tax system’s traditional color-blind approach only ossifies our existing structures of racial hierarchy. The solution, then, is to abandon the color-blind approach and introduce reform to explicitly help combat the inequities in wealth and income that fall along racial lines. 

This essay calls on young lawyers and racial-justice activists to pressure the tax field—scholars, legislators, practitioners, and judges—to do better. I hope, especially, to inspire law students to consider taking tax courses and becoming tax lawyers with an eye toward promoting racial justice both within and outside the field.

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May 24, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Constitutionality Of Required Faculty Diversity Statements

Brian Soucek (UC-Davis; Google Scholar), Diversity Statements, 55 U.C. Davis L. Rev. 101 (2022):

UC Davis Law ReviewUniversities increasingly require ‘diversity statements’ from faculty seeking jobs, tenure, or promotion. But statements describing faculty’s contributions to diversity, equity, and inclusion are also increasingly under attack. Criticisms first made in tweets and blog posts have expanded into prominent opinion pieces and, more recently, law review articles. And the attacks are having an effect. Within universities, faculty-wide resolutions for and against mandatory diversity statements have been called and academic freedom committees have been asked to intervene. Outside universities, lawyers are recruiting plaintiffs to challenge diversity statement requirements in court.

Behind all the rhetoric, the arguments made about diversity statements are, at heart, legal claims — and serious ones at that. Critics allege that universities are engaging in unconstitutional viewpoint discrimination, violating their faculty’s academic freedom, and imposing political litmus tests akin to the loyalty oaths struck down during the Cold War era.

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May 24, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Spivack: The Happy Families Of Tax Law

Carla Spivack (Oklahoma City), The Happy Families of Tax Law, 100 N.C. L. Rev. 601 (2022): 

This Article points to the difference between the treatment of wealthy families and poor families who apply for tax benefits and argues that the same treatment should apply to both. I show that tax breaks for the wealthy and benefits for the poor are both government expenditures that deplete the public fisc; indeed, some have called tax benefits for the rich “hidden” or “submerged” forms of welfare. Yet, as I discuss, the law treats wealthy applicants for tax breaks quite differently from the way it treats poor people applying for similar benefits. The wealthy receive tax breaks based on assumptions about their family dynamics, without any inquiry into the dynamics in a particular family. By contrast, poor people applying for benefits face scrutiny of their intimate lives, relationships, and spaces to establish eligibility. In essence, this Article argues that what’s sauce for the goose is sauce for the gander.

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May 24, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

The Pro Bono Penalty: Extracurricular Activities And Demographic Disparities In Bar Exam Success

Christopher Birdsall (Boise State) & Seth Gershenson (American; Google Scholar), The Pro Bono Penalty: Extracurricular Activities and Demographic Disparities in Bar Exam Success:

Demographic disparities in bar exam pass rates are problematic but poorly understood. We investigate a possible explanation: participation in extracurricular activities, which could either distract from bar exam preparation or motivate and prepare students to succeed. Generally, participation in extracurricular activities while in law school does not play a large role in bar exam success. However, there is a significant, arguably causal, penalty associated with one particular activity—pro bono work—most notably in lower-ranked law schools. This penalty is sizable: pro bono work is associated with a 5 percentage point (6%) decrease in the chances of passing the bar exam on the first attempt. This penalty is largest for Black and female students and may explain as much as 20% of the Black-white gap in first-attempt bar pass rates.

Pro Bono

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May 24, 2022 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

San Diego Law School Names Paul Yong Director Of Graduate Tax Programs

Paul Yong Named Director of Graduate Tax Programs and a Professor of Practice at San Diego

Unnamed (1)University of San Diego (USD) School of Law is pleased to announce that Paul Yong will join the School of Law as the new Director of Graduate Tax Programs and a Professor of Practice as of June 2022. The USD School of Law Tax program has been consistently ranked a top Tax Program by U.S. News.

As the Director, Yong will provide strategic leadership for the law school graduate tax programs. He will also oversee the LLM in Tax and other tax education programs and conferences designed to complement the School of Law's Juris Doctor program.

In addition to his new role at the School of Law, Yong remains Vice President, Chief Tax Counsel for Sempra Energy. He is an innovative, results-oriented tax executive with over 30 years of experience with Sempra Energy, Arthur Anderson, and Unocal Corporation. Yong will be a Professor of Practice for the law school, and developed the School of Law Tax Planning Lab, a unique "hands-on" simulation course. He enjoys mentoring students and preparing them to be practice-ready from day one in their tax careers.

"Paul Yong is going to be an inspirational and a strong leader for the graduate Tax Program. He will be an exceptional mentor for our students and brings a practitioner's perspective to the role coupled with great enthusiasm for teaching," said Miranda Fleischer, Professor of Law and outgoing Director of Graduate Tax programs.

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May 24, 2022 in Legal Education, Tax | Permalink

The Retrial Of Katherine Magbanua In Dan Markel's Murder: Hit Man Sigfredo Garcia Mistakenly Left Nasty Voice Mail For Harvey Adelson, Charlie's Dad

Florida Politics, Markel Trial Day 6: Data Expert, Friend, Employer, Employees, and Ex-Girlfriend All Spill T:

Magbanua’s old friend spills some T

Yindra Velazquez Mascaro, a lifelong friend of Magbanua, took the stand next. She testified to Katherine’s employment history and their personal lives, including how Garcia was jealous of Charlie.

Nevertheless, Mascaro said the only exchange she knew of that occurred between the two men happened on the road — Garcia briefly blocked Charlie and Magbanua as they were leaving a parking lot on the way to a date.

One other communication was also attempted, Mascaro said, when Garcia found what he thought to be Charlie’s number in Magbanua’s phone. Garcia called and left a “very nasty voicemail,” only to later learn it was to the wrong man. He had actually called Charlie’s father, Harvey Adelson.

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May 24, 2022 in Legal Ed News, Legal Education | Permalink

Monday, May 23, 2022

Is Bitcoin Prudent? Is Art Diversified? Offering Alternative Investments To 401(k) Participants

Edward Zelinsky (Cardozo), Is Bitcoin Prudent? Is Art Diversified? Offering Alternative Investments to 401(k) Participants, 54 Conn. L. Rev. 509 (2022):

Whether 401(k) plans’ investment menus should feature “alternative” investments is a fact-driven inquiry applying ERISA’s fiduciary standards of prudence, loyalty, and diversification. Central to this fact-driven inquiry is whether the alternative investment class in question is broadly accepted by investors in general and by professional defined benefit trustees in particular. A similarly salient concern when making this inquiry is the financial unsophistication of many, perhaps most, 401(k) participants. Accounting for these considerations, this Article concludes that REITs, private equity funds, and hedge funds can, with limits, today be offered as investment choices to 401(k) participants, but that cryptocurrencies (including Bitcoin), art, and environmental-social-governance (ESG) funds cannot. These latter investment categories have yet to achieve acceptance among professional defined benefit trustees and thus are not yet prudent to offer to 401(k) participants—if they ever will be. 

This Article explores each of these five categories as a class. Even if 401(k) participants should be offered choices within any (or all) of these classes of alternative investments, particular investments within each class must still be scrutinized individually for their compliance with ERISA’s fiduciary standards. The threshold, fact-intensive question that this Article addresses is whether, before considering specific investments, any generic category of alternative investments ought to be considered for the menu of choices offered to 401(k) participants. 

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May 23, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Legal Ed News Roundup

GAO: Lack Of Data Limits Research On Tax Equity

GAO, Tax Equity: Lack of Data Limits Ability to Analyze Effects of Tax Policies on Households by Demographic Characteristics:

GAO (2022)The U.S. has a large and increasing gap in income and wealth by race, ethnicity, and sex. However, little is known about the effects of tax policies across demographic characteristics. The tax code does not tax individuals differentially based on certain demographics. However, some researchers have noted how it could result in potential unintended disparate tax outcomes. 

The CARES Act includes a provision for GAO to report on its ongoing COVID-19 monitoring and oversight efforts. GAO was also asked to review how selected tax policies affected households by race, ethnicity, and sex as part of this oversight.

This report (1) examines approaches for analyzing the effect of tax policies, including some in the CARES Act and related legislation, on households by race, ethnicity, and sex, and (2) estimates how households use selected tax provisions by race, ethnicity, and sex. 

May 23, 2022 in Gov't Reports, IRS News, Tax | Permalink

Dan Markel's Murder: Will The Jury Convict Katie Magbanua? Why Did Charlie Adelson Change Lawyers?

David Lat (Original Jurisdiction), The Dan Markel Case: Opening Statements:

Magnauba (2021)I listened to the opening statements. And if you, like me, are hoping for a conviction of Katie Magbanua this time around, you should be worried—very worried.

The prosecution did a solid job. This time around, assistant state attorney Sarah Dugan delivered the opening statement, instead of chief assistant state attorney Georgia Cappleman (who has been the lead prosecutor on the case for years, and who delivered the opening in 2019). Dugan outlined the case against Magbanua methodically, thoroughly, and persuasively. Perhaps Dugan could have delivered her opening argument with more emotion, but I appreciated her sober delivery and focus on the evidence. She did well.

Tara Kawass, who along with co-counsel Christopher DeCoste represents Magbanua, gave a more animated opening—and a very strong one, I must admit. As her opening made clear, the defense is going to be more aggressive this time around—and it just might work. ...

This time around, Katie Magbanua’s lawyers have an alternative theory of the case. In her opening, Tara Kawass conceded two important points to the prosecution: yes, the two hitmen, Sigfredo Garcia and Luis Rivera, actually committed the murder of Dan Markel, and yes, they were hired by Charlie Adelson. In fact, throughout her opening, Kawass attacked Charlie, blaming him for the murder and calling him a “master manipulator” who mistreated Katie during their relationship—like he mistreated so many other people in his life.

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May 23, 2022 in Legal Ed News, Legal Education | Permalink

ABA Council Votes 20-1 To Advance Proposal Permitting Law Schools To Go Test Optional. What Are The Implications Of Admitting Students Who Don't Take The LSAT Or GRE?

Following up on my previous post, NY Times: ABA May Eliminate Standardized Tests For Law School Admissions:  Wall Street Journal, No LSAT Required? Law School Admissions Tests Could Be Optional Under New Proposal:

ABA Legal Ed (2021)For decades, budding law students have had to stare down the Law School Admission Test, or LSAT, a rigorous test of abilities in logic, analytical reasoning and reading comprehension.

Those days might be coming to an end.

An American Bar Association panel that accredits law schools issued a proposal Friday to make standardized tests optional for admission, a move that would follow a trend seen in undergraduate admissions offices and give schools more flexibility in how they select law students.

The accrediting council voted overwhelmingly to seek public comment on the proposal, which would eliminate the mandatory use of tests such as the LSAT or the GRE, which has been allowed at some schools in recent years.

Only one person on the 21-member body voted against advancing the proposal.

Any final approval of the policy change would likely be many months away—at the earliest, affecting students who enroll in the fall of 2023. ...

The vote followed a recommendation from an ABA committee last month that called for eliminating the mandate that every law school require applicants to take a “valid and reliable” exam.

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May 23, 2022 in Legal Ed News, Legal Education | Permalink

Lesson From The Tax Court: Counting The Days

Most people know that the IRS generally has three years to audit a return. Calculating the proper three-year period, however, requires close attention to both the start date and the end date.  You need to count those days properly.  I tried to drill into my students the practice of always consulting a calendar when attempting to calculate the proper dates.  Christian Renee Evert v. Commissioner, T.C. Memo. 2022-48 (May 9, 2022) (Judge Marshall), reinforces that teaching: to calculate the period in which the IRS can assess a tax, you need to properly count the days in the three year period.

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May 23, 2022 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, May 22, 2022

NY Times Op-Ed: We’re In A Loneliness Crisis — Another Reason To Get Off Our Phones

New York Times Op-Ed:  We’re in a Loneliness Crisis: Another Reason to Get Off Our Phones, by Tish Harrison Warren (Priest, Anglican Church; Author, Prayer in the Night: For Those Who Work or Watch or Weep (2021) (Christianity Today's 2022 Book of the Year)):

Warren 3It rained one morning this week. I moved back to Texas last year, in part for the rainstorms. Here, it rains decisively, gloriously, like it really means it. It explodes, pounds, roars, thunders and then, suddenly, moves on. I stepped on my back porch, not wanting to miss the show.

I sat, silent, smelling that indescribable rain scent and stretching out my hands, palms open in supplication, the same position I use in church to receive communion. The physicality of the experience, the sensual joy of sounds, smells, touch and sight, was profoundly humanizing. In a very real way, I am made for that. I am made to notice the rain. I’m made to love it.

We are creatures made to encounter beauty and goodness in the material world.

But digitization is changing our relationship with materiality — both the world of nature and of human relationships. We are trained through technology (and technology corporations) to spend more time on screens and less time noticing and interacting with this touchable, smellable, feelable world. Social media in particular trains us to notice that which is large, loud, urgent, trending and distant, and to therefore miss the small, quiet importance of our proximate and limited, embodied lives.

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May 22, 2022 in Faith, Legal Education | Permalink

Christianity And Constitutional Law

Nicholas Aroney (TC Beirne School of Law, University of Queensland; Google Scholar), Christianity and Constitutional Law:

Christianity and ConstitutionalismThis paper, written for the forthcoming Oxford Handbook on Christianity and Law, edited by John Witte and Rafael Domingo, explores the influence of Christianity on constitutional law. The paper begins by pointing out that modern constitutional law is the product of several important historical influences. These include elements of Greek philosophy, Roman law, Christian theology, and Enlightenment principles. Greek philosophy proposed a classification of the basic types of constitution and introduced the idea of the rule of law. Roman law contributed the legal concept of jurisdiction, which is an essential feature of contemporary constitutional law. Christian theology offered a conceptual framework in which the authority of civil government was effectively qualified by a higher natural or divine law, and in which the spiritual authority of the church posed a practical limit on the temporal powers of the civil authority. Christian theology also provided the context in which the powers of civil and ecclesiastical rulers were tempered through various means, including the administration of oaths of office and the issuing of charters guaranteeing the rights of religious, social, economic, and civil associations of many kinds. The principle of the separation of powers and the establishment of written constitutions enforced by judicial review, although associated with the Enlightenment, also owed a great deal to these earlier principles and practices. The paper surveys the contribution of each of these influences and argues that although the Greek, Roman, and Enlightenment contributions have been important, constitutional law would not be what it is today if it were not for the influence of Christianity.

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May 22, 2022 in Book Club, Faith, Legal Education, Scholarship | Permalink

Tax Experts Say Section 107 Housing Allowance For Clergy Remains Safe Despite Recent Cases And Greedy Abuses

Christianity Today, Churches Still Depend on Clergy Housing Allowance:

Despite recent legal cases and reports of greedy abuses, experts say the longstanding benefit remains safe.

Wth the federal tax filing deadline looming, a Virginia court case may have some ministers wondering whether their ministerial housing allowance is secure.

The case isn’t about the housing allowance. But to some, including Supreme Court Justice Neil Gorsuch, it suggests courts may be willing to meddle increasingly in clergy affairs, including housing.

At issue was denial of a property tax exemption for a church parsonage in Fredericksburg, Virginia. New Life in Christ Church sought the tax exemption for a church-owned home inhabited by two youth ministers, married couple Josh and Anacari Storms. The city denied the exemption because it claimed the church’s denomination, the Presbyterian Church in America (PCA), does not allow women to be considered ministers.

New Life in Christ said the city misunderstood its doctrine. Ordination and certain duties, like preaching, are limited to men in the PCA, according to the church, but the denomination’s governing documents permit congregations latitude in hiring nonordained persons like the Stormses for various ministry jobs. Yet a trial court sided with Fredericksburg, as did the Virginia Supreme Court.

The US Supreme Court declined to hear the church’s appeal in January. Now the church must continue paying the annual property tax bill of $4,589.15. The Supreme Court’s action provoked a dissent from Gorsuch.

“The City continues to insist that a church’s religious rules are ‘subject to verification’ by government officials,” Gorsuch wrote. “I would grant the [church’s] petition and summarily reverse. The First Amendment does not permit bureaucrats or judges to ‘subject’ religious beliefs ‘to verification.’”

Is the case a harbinger of increased willingness to scrutinize ministerial housing in court? Pastors across America hope not. While fewer churches own traditional parsonages, the majority take advantage of the federal clergy housing allowance and say it benefits both their families and their churches. ...

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May 22, 2022 in Faith, New Cases, Tax, Tax News | Permalink

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. SSRN Logo (2018) [521 Downloads]  How Treasury and the IRS Have Allowed High-Net-Worth Taxpayers to Exploit Stepped-Up Basis on Intergenerational Wealth Transfers, and How They Can Stop It: Answers to Question for the Record, by Daniel Hemel (Chicago; moving to NYU; Google Scholar)
  2. [397 Downloads]  Taxing Robots, by Rita de la Feria (Leeds; Google Scholar) & Maria Amparo Grau Ruiz (Universidad Complutense de Madrid; Google Scholar)
  3. [370 Downloads]  A Matter of High Interest: How a Quiet Change to an Actuarial Assumption Turbocharges the Life Insurance Tax Shelter, by Andrew Granato (J.D.|Ph.D., Yale; Google Scholar)
  4. [358 Downloads]  Permanent Establishment and Fixed Establishment in the Context of the Subsidiary and the Digital Economy, by Stoycho Dulevski (University of National and World Economy; Google Scholar)
  5. [320 Downloads]  Where Nonprofits Incorporate and Why It Matters, by Peter Molk (Florida; Google Scholar)

May 22, 2022 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, May 21, 2022

This Week's Ten Most Popular TaxProf Blog Posts

The Data-Driven Answer To A Rich And Happy Life

New York Times Op-Ed:  The Rich Are Not Who We Think They Are. And Happiness Is Not What We Think It Is, Either., by Seth Stephens-Davidowitz (Author, Don't Trust Your Gut: Using Data to Get What You Really Want in Life (2022)):

Don't Trust Your GutWe now know who is rich in America. And it’s not who you might have guessed.

A groundbreaking 2019 study by four economists, “Capitalists in the Twenty-First Century,” analyzed de-identified data of the complete universe of American taxpayers to determine who dominated the top 0.1 percent of earners.

The study didn’t tell us about the small number of well-known tech and shopping billionaires but instead about the more than 140,000 Americans who earn more than $1.58 million per year. The researchers found that the typical rich American is, in their words, the owner of a “regional business,” such as an “auto dealer” or a “beverage distributor.” ...

What are the lessons from the data on rich earners?

First, rich people own. Among members of the top 0.1 percent, the researchers found, about three times as many make the majority of their income from owning a business as from being paid a wage. Salaries don’t make people rich nearly as often as equity does. ...

Second, rich people tend to own unsexy businesses. ...

The third important factor in gaining wealth is some way to avoid ruthless price competition, to build a local monopoly. The prevalence of owners of auto dealerships among the top 0.1 percent gives a clue to what it takes to get rich. ...

If pop culture is right, getting rich is a path to happiness. Is that true? Does money actually make people happy?

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May 21, 2022 in Book Club, Legal Education | Permalink

GAO: IRS Audit Rates Plummet For The Rich

GAO, Tax Compliance: IRS Audit Trends for Individual Taxpayers Vary by Income:

From tax years 2010 to 2019, audit rates of individual tax returns decreased for all income levels. On average, individual tax returns were audited over three times more often for tax year 2010 (about 0.9 percent) than for tax year 2019 (0.25 percent). Audit rates for taxpayers with incomes of $200,000 and above decreased the most, largely because higher-income audits tend to be more complicated and require auditors to manually review multiple issues, according to IRS officials. Because audit staffing has decreased, IRS cannot conduct as many of these audits, compared to lower-income audits, which are generally less complex and involve more automated processes. In addition, IRS officials stated that the number of returns filed by higher-income populations is growing, meaning more audits are needed to achieve the same audit rate.

Although audit rates decreased the most for higher-income taxpayers during this time period, IRS continued to audit higher-income taxpayers at higher rates than lower-income taxpayers, in general. However, IRS audited taxpayers claiming the Earned Income Tax Credit (EITC) at a higher rate than average (see fig. 1, using tax year 2019 as an example). IRS officials explained that EITC audits are limited in scope and historically have high rates of improper payments and therefore require a greater enforcement presence.


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May 21, 2022 in Tax, Tax News | Permalink

The Retrial Of Katherine Magbanua In Dan Markel's Murder: Luis Rivera Flips On Katie And Sigfredo Garcia

Friday, May 20, 2022

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews AI, Taxation, And Valuation By Soled And Thomas

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Jay Soled (Rutgers; Google Scholar) & Kathleen DeLaney Thomas (North Carolina; Google Scholar), AI, Taxation, and Valuation, 108 Iowa L. Rev. __ (2023).

Mirit-Cohen (2018)

Artificial intelligence (AI) is improving our lives by utilizing technology and machine learning to accomplish tasks that require considerable human labor. It can deliver similar and often better outcomes in a cost-effective manner. I have written here that calculative actions do not require much creativity thus are the most obvious fields in which machines are superior to humans. It is very fitting to ask, then, how can AI improve tax enforcement and compliance? Valuation is one of the most calculative and arduous areas in tax administration that automation can greatly improve. 

Valuation often requires many efforts determining fair market value (FMV) when there is no willing buyer and seller that negotiate the asset’s purchase price. Because of the essential role that asset valuations play in determining tax liabilities, there is a high sensitivity by the IRS and taxpayers to their accuracy. Transactions between related parties or not at arm’s length such as transfer of bequests, nonfungible real estate, or closely held business interests present complex valuation issues as there is no clear FMV. Congress uses a traditional carrot-and-stick approach to valuation by encouraging taxpayers to comply through clarifying and simplifying reporting obligations, along with imposing penalties for misstating the value of assets.

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May 20, 2022 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup | Permalink

Weekly Legal Education Roundup

Tax Policy In The Biden Administration

Private College Tuition Discount Rate Hits All-Time High Of 54.5%

NACUBO, Tuition Discount Rates at Private Colleges and Universities Hit All-Time Highs:

In the 2021 NACUBO Tuition Discounting Study, 359 private, nonprofit colleges and universities reported an estimated 54.5 percent average institutional tuition discount rate for first-time, full-time, first-year students in 2020-21 and 49 percent for all undergraduates—both record highs. By providing grants, fellowships, and scholarships, these institutions forgo about half the revenue they otherwise would collect if they charged all students the tuition and fee sticker price.


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May 20, 2022 in Legal Ed News, Legal Education | Permalink

Tax Now Or Tax Never: Political Optionality And The Case For Current-Assessment Tax Reform

David Gamage (Indiana-Maurer; Google Scholar) & John R. Brooks (Georgetown; moving to Fordham; Google Scholar), Tax Now or Tax Never: Political Optionality and the Case for Current-Assessment Tax Reform, 100 N.C. L. Rev. 487 (2022):

The U.S. income tax system is broken. Due to the realization doctrine and taxpayers’ consequent ability to defer taxation of gains, taxpayers can easily minimize or avoid the taxation of investment income, a failure that is magnified many times over when considering the ultra-wealthy. As a result, this small group of taxpayers commands an enormous share of national wealth yet pays paltry taxes relative to the economic income their wealth produces—a predicament that this Article condemns as being economically, politically, and socially harmful. 

The conventional view among tax law experts has assumed that the problems created by the realization doctrine can be fixed on the back end by adjusting the rules that govern taxation at the time of realization. Specifically, most tax scholars have favored reform proposals that would retain the realization doctrine while aiming to impose taxes in a way that would erase or reduce the financial benefits of deferral. Examples include retrospective capital gains tax reforms, progressive consumption tax reforms, and more incremental reforms such as ending stepped-up basis. 

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May 20, 2022 in Scholarship, Tax, Tax Scholarship | Permalink

Wendi Adelson And Luis Rivera Take The Stand In The Retrial Of Katherine Magbanua In Dan Markel's Murder

Thursday, May 19, 2022

Raskolnikov Presents Should Only The Richest Pay More? Today At The OMG Transatlantic Tax Talks

Alex Raskolnikov (Columbia) presents Should Only the Richest Pay More? today as part of the OMG Transatlantic Tax Talks Series (OMG = Oxford-Michigan-MIT-Munich-Georgetown):

Alex_raskolnikov_0This paper challenges the leading academic, political, and cultural narrative supporting greater redistribution. This narrative holds that redistribution should come at the expense of the very restricted group of the highest earners: the one percent, the super-rich, the billionaire class. I argue that the very reasons offered in support of this view call for redistribution from a much broader group that includes the affluent—those with incomes in the ninetieth to ninety ninth percentiles of the distribution. Whether one looks at the recent trends in income concentration, wealth concentration, economic mobility, government capture, political polarization, or the rise of populism, the affluent are as great or greater contributors to these problems as those in the top one percent. Remarkably, the contemporary U.S. legal and economic scholarship has ignored the affluent almost completely, greatly limiting the magnitude of possible economic transfers as well the form that these transfers may take.

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May 19, 2022 in Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink

Stanford Law School Joins Yale In Going Tuition-Free For Students In Need

Reuters, Stanford Law Scraps All Tuition for Low-Income Students, Joining Yale:

Stanford Law (2022)Stanford Law School this week became the second elite U.S. law school to commit to fully eliminating tuition payments for low-income students.

In an email Wednesday to students, Dean Jenny Martinez announced a series of new financial aid measures, including full-tuition scholarships for current and incoming students whose family income is below 150% of the poverty line. That works out to $41,625 for a family of four, or $20,385 for an individual.

The school will cover tuition payments for those who qualify starting next year. Annual tuition at Stanford Law is currently $64,350.

Yale Law School announced a similar program in February, with full-tuition scholarships for students with family incomes below the poverty line and whose assets are below $150,000.

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May 19, 2022 in Legal Ed News, Legal Education | Permalink

Texas Tax Faculty Workshop

Texas tax workshopsTax faculty from all Texas Law Schools were invited to gather yesterday for an informal workshop at Texas A&M. As is our tradition, lunch doubled as a half-baked idea brainstorming session for all participants to share ideas and seek input on projects in very early stages. Below the fold is the list of who presented works in progress and who were the official commentators.

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May 19, 2022 in Bryan Camp, Tax Conferences, Tax Scholarship, Tax Workshops | Permalink

Are More Law Schools Needed In Areas Where InfiLaw Campuses Closed?

ABA Journal, Are More Law Schools Needed in Areas Where InfiLaw Campuses Closed?:

As the Florida Coastal School of Law prepares to close, Jacksonville University announced plans to open a new law school in the same city, with the first entering class starting in fall 2022.

The for-profit Florida Coastal had various accreditation problems, including a U.S. Department of Education flag for not meeting the gainful-employment standard. Administration at Jacksonville University, a not-for-profit school, claims the city of approximately 902,000 people needs a law school. ...

Plans are also in place for a new law school at North Carolina’s High Point University, which is about 78 miles from the now-shuttered Charlotte School of Law. Both Florida Coastal and CSL, as well as Arizona Summit Law School, another school that closed following accreditation issues, were operated by InfiLaw, which was owned by the private equity firm Sterling Capital Partners.

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May 19, 2022 in Legal Ed News, Legal Education | Permalink