Paul L. Caron
Dean




Tuesday, December 7, 2021

2021 Tannenwald Tax Writing Competition Winners

Tannenwald (2016)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship has announced the winners of the 2021 tax writing competition:

First Prize ($5,000):
Mohanad Salaimi (Michigan), Corporate Inversions: Getting on the Tax Reform Train Before It Leaves the Station
Faculty Sponsor: Reuven S. Avi-Yonah

Second Prize ($2,500):
Alexander Pettingell (NYU), A Machine Learning Approach to the Debt-Equity Multifactor Test
Faculty Sponsor: Mitchell Kane

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December 7, 2021 in ABA Tax Section, Legal Education, Scholarship, Tax, Tax Scholarship, Teaching | Permalink

WSJ: A Couple Stored IRA Gold At Home. They Owe The IRS $300,000.

Following up on Bryan Camp (Texas Tech), Lesson From The Tax Court: How To Mess Up Your Checkbook IRA:  Wall Street Journal Tax Report, A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.:

It’s official: Owners of individual retirement accounts with assets invested in gold and silver coins can’t store them in a safe at their home.

So ruled the judge in a recent Tax Court case, Andrew McNulty et al. v. Commissioner [157 T.C. No. 10 (Nov. 18, 2021)]. The decision will cost Mr. McNulty and his wife Donna dearly—taxes of nearly $270,000 on about $730,000 of IRA assets, plus penalties likely to exceed $50,000.

The ruling disallows a scheme that was heavily promoted several years ago, when radio and internet ads touted the benefits of using IRA assets to buy gold and silver coins and then store them at home or in a safe-deposit box. Promoters based pitches on a perceived ambiguity in the law, despite warnings from the Internal Revenue Service and legal specialists.

These pitches are less common now, but they’re still around. Savers who have bought into them or are considering such a move should reconsider right away.

The McNulty case has a broader lesson as well: It’s a cautionary tale showing how dangerous it can be to invest retirement-plan funds in alternative assets without proper guidance.

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December 7, 2021 in New Cases, Tax, Tax News | Permalink

Legal Education's Curricular Tipping Point Toward Inclusive Socratic Teaching

Jamie R. Abrams (Louisville), Legal Education's Curricular Tipping Point Toward Inclusive Socratic Teaching, 49 Hofstra L. Rev. 897 (2021):

Two seismic curricular disruptions create a tipping point for legal education to reform and transform. COVID-19 abruptly disrupted the delivery of legal education. It aligned with a tectonic racial justice reckoning, as more professors and institutions reconsidered their content and classroom cultures, allying with faculty of color who had long confronted these issues actively. The frenzy of these dual disruptions starkly contrasts with the steady drumbeat of critical legal scholars advocating for decades to reduce hierarchies and inequalities in legal education pedagogy.

This context presents a tipping point supporting two pedagogical reforms that leverage this unique moment. First, it is time to abandon the presumptive reverence and implicit immunity given to problematic Socratic teaching despite the harms and inadequacies of such performances. Professor Kingsfield depicted an archetype of Socratic teaching where the professor wields power over students instead of wielding knowledge to empower students. He used strategic tools of humiliation, degradation, mockery, fear, and shame. Socratic performances that are professor-centered and power-centered do not merit the reverence and immunity they still receive after decades of sound critiques. This critique is framed as a call to “cancel Kingsfield.” Socratic teaching can (must) be performed inclusively. This Article proposes a set of shared Socratic values that are student-centered, skills-centered, client-centered, and community-centered.

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December 7, 2021 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

WSJ: Some Professional Degrees Leave Students With High Debt But Without High Salaries

Wall Street Journal, Some Professional Degrees Leave Students With High Debt but Without High Salaries:

Professional degrees like dentistry and veterinary medicine are leaving many students with immense college debt, threatening the outlook for fields that provide essential public services, according to a Wall Street Journal analysis of federal data.

The culprits span graduate programs at big state schools, for-profit colleges and some of the U.S.’s elite private universities. ...

In addition to programs for veterinarians and dentists, chiropractic medicine, physical therapy and optometry produced graduates with some of the worst combinations of high debt and modest beginning paychecks, according to newly released data from the U.S. Department of Education. ... In three popular fields—chiropractic medicine, dentistry and veterinary medicine—every professional program with available data had median debt loads that topped median earnings two years after graduation, the latest data available. 

WSJ

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December 7, 2021 in Legal Ed News, Legal Education | Permalink

ABA Hosts Redesigning Legal: The Role Of Legal Education, Clinics And Legal Labs Today

Redesigning-legal
The American Bar Association will host the Redesigning Legal: The Role of Legal Education, Clinics and Legal Labs panel as part of its Redesigning Legal Speaker Series today at 1:00 P.M. EST: 

The fourth virtual Redesigning Legal Speaker Series on Tuesday, Dec. 7, will explore opportunities being created for law school education by the growing trend of regulatory innovation in the legal profession.


Utah and Arizona have already enacted sweeping changes to how legal services can be delivered and who can provide them. Nationally, no fewer than 10 other states are in different stages of exploring, recommending or implementing regulatory change that would generally allow nonlawyers to provide some legal services. The emerging landscape is certain to impact the legal profession in significant ways as well as present new challenges for J.D. education while possibly spawning other law-related educational programs.

Panelists will focus on how law schools are responding and adapting to the prospect of fewer barriers to innovation that offer increased employment opportunities for their students, more roles for people other than lawyers in the delivery of legal services, the creation of tiered legal service providers and collaboration across professional fields to provide more and new kinds of legal services.

Panelists: 

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December 7, 2021 in Conferences, Legal Ed Conferences, Legal Education | Permalink

Economic Freedom Of North America 2021

Fraser Institute Cover

Fraser Institute, Economic Freedom of North America 2021:

Economic Freedom of North America 2021 is the seventeenth edition of the Fraser Institute’s annual report. This year it measures the extent to which—in 2019, the year with the most recent available comprehensive data—the policies of individual provinces and states were supportive of economic freedom, the ability of individuals to act in the economic sphere free of undue restrictions. There are two indices: one that examines provincial/state and municipal/local governments only and another that includes federal governments as well. The former, our subnational index, is for comparison of individual jurisdictions within the same country. The latter, our allgovernment index, is for comparison of jurisdictions in different countries. ...

Figure 1.2b shows the subnational scores for the US states. After a one-year absence in last year’s report, New Hampshire is again in the top spot with 7.83, followed closely by Tennessee (7.82), then Florida (7.78), Texas (7.75), and Virginia (7.59).3 The least free state was again New York with 4.33, far behind California (4.68), Vermont (4.86), West Virginia (5.00), and New Mexico (5.01).

Fraser Institute Chart 1

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December 7, 2021 in Tax, Think Tank Reports | Permalink

Tax System Working Group Discussion Series: Diversity In The Tax Bar

Tax-system-working-group-discussion

Law Firm Antiracism Alliance Tax System Working Group discusses Diversity in the Tax Bar today at 1:30 PM EST (RSVP here): 


The LFAA Tax System Working Group, in conjunction with the American College of Tax Counsel, the American Tax Policy Institute and the Tax Section of the American Bar Association, is sponsoring a ten-part discussion series on diversity in the tax bar. Over the course of this series of virtual discussions, participants will learn about the current state of diversity in the tax bar, opportunities for diverse tax attorneys in different practice settings, and steps that the tax bar should be taking to create sustainable diversity, equity and inclusion strategies.

Panelists:

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December 7, 2021 in Conferences, Legal Education, Tax, Tax Conferences | Permalink

Coherent Capital Structure Policy: Between Bailouts And The Interest Deduction

Jeff Gordon (J.D. 2021, Yale), Note, Coherent Capital Structure Policy: Between Bailouts and the Interest Deduction, 38 Yale J. on Reg. 1182 (2021):

Yale J on Reg (2022)The Federal Reserve’s recent, unprecedented corporate debt purchases will further reduce the cost of corporate debt relative to equity. Given the already high degree of leverage in the corporate sector, I argue that this is a dangerous policy choice. However, the best solution is not to outlaw the Fed’s crisis actions, but to reform other federal laws that create a debt bias in aggregate.

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December 7, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Monday, December 6, 2021

Leviner Presents International Taxation: Contemporary Challenges And Trajectories Today At Hebrew University

Sagit Leviner (Ono Academic College; Google Scholar) presents International Taxation: Contemporary Challenges & Trajectories, Analytical Report to The Bank of Israel (with Yehuda Porath (Bank of Israel)) at Hebrew University today as part of its Faculty of Law Tax Law Forum hosted by David Gliksberg:

LevinerThe existing rules of taxation and the international division of taxing powers and jurisdiction originated more than a hundred years ago. This was when physical boundaries and the nation-state played a prominent geopolitical role, most trade was in physical goods, global value chains were fairly compact and unsophisticated, and trade made a relatively modest contribution to world GDP. While the global economy has drastically evolved over the past century, the international tax architecture, to this date, echoes its origins and determines the allocation of the tax base largely by reference to the geopolitical affiliation of the taxpayer and their source of income.

The existing rules of taxation and the international division of taxing powers and jurisdiction originated more than a hundred years ago. This was when physical boundaries and the nation-state played a prominent geopolitical role, most trade was in physical goods, global value chains were fairly compact and unsophisticated, and trade made a relatively modest contribution to world GDP. While the global economy has drastically evolved over the past century, the international tax architecture, to this date, echoes its origins and determines the allocation of the tax base largely by reference to the geopolitical affiliation of the taxpayer and their source of income.

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December 6, 2021 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink

Holden & Kisska-Schulze: Taxing Sports

John T. Holden (Oklahoma State; Google Scholar) & Kathryn Kisska-Schulze (Clemson), Taxing Sports, 71 Am. L. Rev. ___ (2021):

Sports are no longer mere games. In today’s money-driven culture, they have cultivated into a lucrative business enterprise where everyone – whether professional or amateur; owner or player; coach or spectator – stands to make significant money. Modern sports have also morphed into a landscape encompassing both traditional athletic events, and the more novel esports and daily fantasy sports (DFS) arenas. Across all of these physical, digital, and biological spheres, sports revenues are being measured in terms of billions. It thus stands to reason why taxes have become a progressively critical discussion point within U.S. professional and collegiate sports, the videogaming world, and the newly-legalized sports gambling industry.

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December 6, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Perkins Coie Partner Posts Rejection Letter From Firm When He Was A Vermont 2L, Blows Up The Internet And Leads To Formation Of A Network To Mentor New Attorneys

Perkins Coie partner Brian Potts caused quite a stir when he posted on social media the rejection letter he received when he applied for a position with the firm when he was a 2L at Vermont Law School:

Law students: if at first you don’t succeed, try try again.

Potts Letter

David Lat, Lawyer of the Week: Brian Potts.:

Potts started mentoring several law students, but he had more requests for mentorship than he could handle. Friends and colleagues started to pitch in as mentors, creating an informal mentoring network.

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December 6, 2021 in Legal Ed News, Legal Education | Permalink

Vanderbilt Law Professor To Appear On Jeopardy! Tonight

Jeopardy 1

Vanderbilt University Law Professor to Appear on ‘Jeopardy!’:

Clue: He’s an expert on First Amendment law and technology policy who will compete on television’s most popular quiz show on Dec. 6.

Answer: Who is Gautam Hans, associate clinical professor of law?

Hans is scheduled to appear on Jeopardy! for the gameshow’s inaugural “Professors Tournament,” where he’ll compete against Hester Blum, an English professor at Penn State University and Gary Hollis, a chemistry professor at Roanoke College.

Jeopardy 2

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December 6, 2021 in Legal Ed News, Legal Education | Permalink

Big Law Hiring Of Law School Graduates Has Nearly Doubled In Nine Years

Bloomberg Law, Big Law’s Talent Shortage Raises Vexing Questions on ‘Quality’:

[P]artners struggle with the idea of hiring more law school graduates because of concerns over “quality.” They only hire the best, they say, and they need to make sure that continues. ...

Here’s a hypothetical. In 20 years, only 25 law firms exist in the U.S., and they all employ at least 500 lawyers.

The number of U.S. law school graduates has stagnated for a decade while Big Law has quietly doubled the share of graduates it hires. For the law school class of 2012, 4,600 graduates ended up working full-time at law firms with more than 250 lawyers, according to American Bar Association data. That was just shy of 10% of all law school graduates. Last year, nearly 18% of graduates went to firms with 250 or more lawyers. ...

The firms grow so large that they employ nearly every U.S. law school graduate going into private practice. ... In this world, would Big Law continue to ubiquitously claim that they hire “the best of the best?” After all, they would be hiring everybody. ...

It might sound far-fetched, but this hypothetical is not far from where things are headed.

Bloomberg

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December 6, 2021 in Legal Ed News, Legal Education | Permalink

Lesson From The Tax Court: Taxpayer 'Filed' Return Even Though IRS Could Not Process It

Camp (2021)Case law gets made when things go wrong.  When things go right, a taxpayer will file a return, the IRS will process the return, and the taxpayer will receive any claimed overpayment as a refund.  Today's lesson arises from a breakdown between filing and processing.  It teaches us the difference between those concepts.

In James Forrest Willetts v. Commissioner, T.C. Sum. Op. 2021-39 (Nov. 22, 2021) (Judge Kerrigan), the taxpayer sought refund of an overpayment on the basis of a Form 1040 the IRS had refused to accept for processing because of concerns about identify theft.  The IRS was not sure whether the return was genuine.  By the time the taxpayer demonstrated the genuineness of the Form 1040, it was too late to get the refund unless the taxpayer’s submission of the rejected Form 1040 constituted the “filing” of a “return.”  The Tax Court framed the question as follows: “whether the Form 1040 petitioner mailed...constitutes a properly filed return.”  Op. at 5.  But do you see there are two questions presented in this framing?  First, did the rejected Form 1040 qualify as a “return.”  The Court said yes.  Second, was the rejected Form 1040 “filed” when the IRS could not process the Form? Again, the Court said yes.

The holdings in this non-precedential opinion are consistent with the recent Tax Court precedential opinion Fowler v. Commissioner, 155 T.C. No. 7 (2020), curiously uncited by Judge Kerrigan.  Fowler held a taxpayer had validly filed electronically even though the taxpayer had not supplied his Identify Protector Taxpayer Identification Number (IP-TIN) and thus the IRS could not process the return because, as in today’s case, it did not know who had submitted the return.

In this age of computer processing, especially as taxpayers and the IRS wrestle with such issues as identify theft and the complications created by COVID regarding return filing requirements, discerning whether and when a taxpayer “files” a document that qualifies as a “return” becomes all the more critical.  This Lesson helps us understand the issues at play.  Details below the fold.

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December 6, 2021 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

St. Thomas Launches Benjamin Crump Center For Social Justice With $1 Million Gift

Crump 4

St. Thomas University College of Law, Ben Crump announce Center for Social Justice:

Renowned attorney Ben Crump and St. Thomas University College of Law announced Thursday an initiative to prepare new and diverse lawyers to lead the fight for justice.

The Benjamin L. Crump Center for Social Justice at the St. Thomas University College of Law will provide innovative programming, symposia and training to catalyze the next generation of social justice engineers. The Center is initially funded by a $1 million leadership grant from Truist Financial Corporation through its Truist Charitable Fund, a donor-advised fund at The Winston-Salem Foundation.

Thursday also marked the opening of a $35 million campaign by the College of Law to support ongoing transformative efforts to champion students from traditionally marginalized communities and diversify the legal profession.

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December 6, 2021 in Legal Ed News, Legal Education | Permalink

TaxProf Blog Weekend Roundup

Sunday, December 5, 2021

David French's Belated And Powerful Thanksgiving Message: War, Adoption, And God's Faithfulness

David French (The Dispatch), A Thursday in November: God Is Faithful, In War and Peace:

FrenchI don’t just remember where I was on Thanksgiving day in 2007. I can feel it. I can close my eyes and be there again, instantly. It was my first day in Iraq. The first real day of my deployment. ...

At around 3:00 a.m. on November 22, two CH-47 Chinook helicopters emerged out of the dark sky. The noise was unbelievable, even through my ear protection. On command, my troop stood, each of us staggered by the weight of our weapons, body armor, backpacks, and duffel bags. ...

I prayed. I asked God for some assurance—a sense of peace, maybe—that I’d come home, that I’d see my family again. I felt no peace. I felt no assurance. So I prayed for courage to not embarrass myself in front of men whose jobs were far more dangerous, who would face far more risk.

When we landed at the base, it was still dark. I must confess that I don’t have much of a poker face. I wear my emotions on my sleeve, and it must have been apparent, even through the gloom of night, that I was a bit alarmed. As I gathered my gear and prepared to move to my new quarters, one of the troop commanders—a man I’d later count as a dear friend—walked up, put his arm around me, and said, “Lawyer, if you live through this, it will be the most important year of your life.”

All I could think was, “What do you mean, if?”

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December 5, 2021 in Legal Education | Permalink

WSJ: This Poker-Playing Orthodox Jew Is Giving All His Winnings to Charity. But Is It Kosher?

Wall Street Journal, Playing an Unorthodox Hand: This Poker-Playing, Bond-Trading Orthodox Jew Is Giving All His Winnings to Charity. But Is It Kosher?:

PokerGershon Distenfeld is competing at poker’s highest level despite playing just a few weeks a year. He’s urging rival professional poker players to give away at least 1% of what they make.

Wall Street is full of would-be poker pros. Gershon Distenfeld, the co-head of AllianceBernstein’s roughly $300 billion fixed-income investing unit, is a little different.

He is a Modern Orthodox Jew who is playing at the highest level of the game despite picking it up just a few years ago. The 45-year-old Mr. Distenfeld made it to the final table of the World Series of Poker main event in 2020 and last month won a coveted golden bracelet in another World Series event. ...

He ... refuses to play against friends in private games citing ethical reasons, donates all of his takings to charity and has launched a campaign urging all winners at the World Series to give away at least 1% of what they make.

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December 5, 2021 in Legal Education | Permalink

Scientologists Suing Church Face Hurdle: Religious Arbitration

Los Angeles Times, Scientologists Suing Church Face Hurdle:

ScientologyAfter Chrissie Bixler told the LAPD that Scientologist and actor Danny Masterson had raped her, strangers showed up at her home, filmed her family and peaked in her windows. Two of her dogs mysteriously died, one by eating meat laced with rat poison. Her security system was hacked. Someone posted ads in her name on Craigslist soliciting men for anal sex.

Bixler made these allegations in a lawsuit, charging that Scientology waged a campaign to terrorize her after failing to dissuade her from reporting Masterson to police. Other women joined the lawsuit after telling police that Masterson had sexually assaulted them — which he has denied — saying they too had been stalked and placed under surveillance.

But some of the women, including Bixler, formerly belonged to Scientology, and like other members signed agreements to submit any disputes to binding arbitration before a three-member board of practicing Scientologists. California courts are now trying to decide whether the agreements may be enforced and the lawsuit decided by a Scientology tribunal instead of a jury.

The case has brought attention to a practice known as “religious arbitration,” in which Christians, Jews, Muslims and now Scientologists resolve disputes ranging from divorce to real estate to employment outside of a courtroom. The practice has long been upheld by secular courts, which by law cannot interfere with religious doctrinal matters.

In binding religious arbitration, disputes may be decided according to the tenets of a religion. Awards can be appealed to secular courts, which in most cases uphold them.

“No court has ever said that because this form of arbitration is religious, we are going to discriminate against it and not allow it to be enforced,” said Michael A. Helfand, an expert on religious law who teaches at Pepperdine Caruso School of Law.

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December 5, 2021 in Legal Education | Permalink

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #4 and #5:

  1. SSRN Logo (2018) [316 Downloads]  The Tax Gap's Many Shades of Gray, by Daniel Hemel (Chicago; Google Scholar), Janet Holtzblatt (Tax Policy Center) & Steve Rosenthal (Tax Policy Center)
  2. [216 Downloads]  The 2021 Compromise, by Ruth Mason (Virginia; Google Scholar) (reviewed by Charlotte Crane (Northwestern; Google Scholar) here)
  3. [183 Downloads]  Slicing the Shadow: A Proposal for Updating U.S. International Taxation, by Reuven Avi-Yonah (Michigan; Google Scholar)
  4. [150 Downloads]  Reducing Administrative Burdens to Protect Taxpayer Rights, by Leslie Book (Villanova; Google Scholar), Keith Fogg (Harvard) & Nina Olson (Center for Taxpayer Rights),
  5. [98 Downloads]  Top Wealth in America: New Estimates and Implications for Taxing the Rich, by Matthew Smith (U.S. Treasury Department, Office of Tax Analysis), Owen Zidar (Princeton; Google Scholar) & Eric Zwick (Chicago; Google Scholar)

December 5, 2021 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, December 4, 2021

This Week's Ten Most Popular TaxProf Blog Posts

Lat: Yale Law Faculty Meets Amidst Multiple Scandals And Controversies

Following up on my previous posts (links below):  David Lat (Original Jurisdiction; J.D. 1999, Yale), As The Yale Law School World Turns:

Yale Law Logo (2020)The New Haven soap opera continues—with a faculty meeting this afternoon that should be quite the showdown.

Happy Friday. It’s time for some updates in everyone’s favorite legal-academic soap opera, As the Yale Law School World Turns.

As usual, I assume familiarity with all recent scandals and controversies at Yale Law School, including Dinner Party-gateTrap House-gate, and Antiracism Training-gate. Also as usual, I reached out to the YLS administration for comment, providing them by email with detailed bullet points listing the core factual points in this post. The administration issued this statement, through spokesperson Debra Kroszner: “We are not going to respond to speculation and false accusations made anonymously in the press. Dean Gerken is committed to maintaining the confidentiality of faculty deliberations, as is our norm, and we have no further comment.”

Alrighty then! There’s a lot to cover, so let’s dive right in. ...

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December 4, 2021 in Legal Ed News, Legal Education | Permalink

Doogie Howser, J.D.

Reuters, Law School as a Teen? These Aspiring Lawyers Are on the Fast Track:

Doogie HowserHaley Taylor Schlitz is on track to graduate from Southern Methodist University Dedman School of Law in May. But she won't be able to celebrate at the bar with her classmates—at least not legally.

Schlitz started college at 13, entered law school at 16 and will be 19 when she gets her J.D., placing her among the small group of ultra-young law students who graduate as teens.

Journalist Ronan Farrow—the son of Mia Farrow and Woody Allen—enrolled at Yale Law School at 16 and graduated in 2009. Seth Harding graduated from the University of Alabama School of Law last year at 19. Braxton Moral, also 19, will get his J.D. from Washburn University School of Law later this month. And Charmaine Chui, 16, is in her first semester at Arizona State University Sandra Day O'Connor College of Law on a full-ride scholarship.

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December 4, 2021 in Legal Ed News, Legal Education | Permalink

Break Into Tax: The Limitation On Capital Losses

Learn or review the limitation on capital losses of IRC § 1211. This video covers this disallowance provision, as well as the treatment of individuals' capital loss carryforward under IRC § 1212. Professor Lederman & Professor Emily Cauble co-host. A prior video in this series covers how to determine if a gain or loss is capital or ordinary. A planned future video will cover the capital gains preference applicable to individuals.

TaxProf Blog coverage of Break Into Tax videos:

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December 4, 2021 in Legal Education, Tax | Permalink

Friday, December 3, 2021

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Taxing Buybacks By Hemel & Polsky

This week, Young Ran (Christine) Kim (Utah; Google Scholar) reviews a new work by Daniel J. Hemel (Chicago; Google Scholar) and Gregg D. Polsky (Georgia; Google Scholar), Taxing Buybacks, 38 Yale J. Reg. 246 (2021).

Kim

Before the COVID-19 pandemic, one of the hottest topics in the U.S. capital market was the rise in the volume of corporate share repurchases, also known as stock buybacks. In 2018, U.S. corporation stock buybacks topped $1 trillion, a record-breaking volume. In 2019, stock buybacks remained the single biggest source of demand for U.S. public equity. Despite the pandemic in 2020, stock buybacks continued to be in high demand. This trend has attracted attention from commentators and bipartisan politicians who have raised concerns about the surge. In recent days, most recent criticisms have focused on securities law issues; however, tax scholars have been considering the problem for decades. A monumental example is Marvin A. Chirelstein's seminal article, Optional Redemptions and Optional Dividends: Taxing the Repurchase of Common Shares, published in the Yale Law Journal in 1969.    

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December 3, 2021 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Biden Administration

Weekly Legal Education Roundup

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December 3, 2021 in Legal Education, Scott Fruehwald, Weekly Legal Ed Roundup | Permalink

Implementing ABA Standard 314 by Incorporating Effective Formative Assessment Techniques Across The Law School Curriculum

Diana R. Donahoe (Georgetown) & Julie Ross (Georgetown), Lighting the Fires of Learning in Law School: Implementing ABA Standard 314 by Incorporating Effective Formative Assessment Techniques Across the Curriculum, 81 U. Pitt. L. Rev. 657 (2020):

The American Bar Association now requires law schools to incorporate formative assessment into the law school curriculum by providing feedback to students relating to course-specific learning goals before the end-of-semester exam. Peer reviews and self-evaluations are two powerful formative assessment techniques that faculty can use to meet the new ABA standards to assess the students’ learning outcomes while courses are ongoing, creating more effective learning environments within the classroom.

This article argues that peer reviews and self-evaluations can be successfully used across the law school curriculum to deepen student understanding, encourage student cooperation, and develop students’ abilities to be self-regulated learners in law school.

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December 3, 2021 in Legal Ed Scholarship, Legal Education | Permalink

Colinvaux: Speeding Up Benefits to Charity

Roger Colinvaux (Catholic), Speeding Up Benefits to Charity: Donor Advised Fund and Foundation Reform, 63 B.C.L. Rev. __ (2022):

Charitable giving incentives are failing to achieve their purposes. Currently $1.26 trillion has accumulated in donor advised funds (DAFs) and private foundations, a massive accumulation of wealth under the effective control of the wealthiest in society. Gifts to these charitable intermediaries inherently frustrate the purpose of the charitable giving incentives. Until the funds are released from the intermediary, no working charity is able to benefit from the donation. Congress recognized this delay in benefit problem with respect to private foundations in landmark legislation in 1969, but has never addressed the problem for DAFs, and the rules for foundations are now too easy to avoid. Recent bi-partisan legislation introduced in Congress would address these issues. The Accelerating Charitable Efforts (ACE) Act would impose a time limit on advisory privileges for DAF contributions and close loopholes in the private foundation payout rules, among other reforms. While the ACE Act has many supporters, there is organized opposition in favor of the status quo. The article explains the case for change and addresses the various arguments made against reform, including that current payout levels are sufficient, that reform would harm charitable giving and introduce costly new burdens on charities, that the timing of grants within a DAF does not matter and so should not be regulated, and that to limit advisory privileges is to target DAFs and to attack philanthropic freedom.

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December 3, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Linda Jellum Leaves Mercer For Idaho

Jellum

Linda Jellum, Ellison Capers Palmer Sr. Endowed Chair in Tax Law at Mercer, has accepted a lateral position from Idaho to begin in Fall 2022:

Professor Jellum is a prolific scholar whose work has appeared in top law journals. She is also the author of multiple books. During her professional career Professor Jellum has served as the Deputy Executive Director for the Southeastern Association of Law Schools, the Deputy Director for the Association of American Law Schools, and the Chair of the American Bar Association Section’s on Administrative Law and Regulatory Practice.

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December 3, 2021 in Legal Education, Tax, Tax Prof Moves | Permalink

Menstrual Dignity And The Bar Exam

Marcy L. Karin (District of Columbia), Margaret E. Johnson (Baltimore) & Elizabeth B. Cooper (Fordham), Menstrual Dignity and the Bar Exam, 55 U.C. Davis L. Rev. 1 (2021):

This Article examines the issue of menstruation and the administration of the bar exam. Although such problems are not new, over the summer and fall of 2020, test takers and commentators took to social media to critique state board of law examiners’ (“BOLE”) policies regarding menstruation. These problems persist. Menstruators worry that if they unexpectedly bleed during the exam, they may not have access to appropriately sized and constructed menstrual products or may be prohibited from accessing the bathroom. Personal products that are permitted often must be carried in a clear, plastic bag. Some express privacy concerns that the see-through bag outs test takers’ menstruation as well as their birth-assigned sex — an especially difficult problem for transgender, genderqueer/nonbinary, and intersex individuals who do not wish to share that information.

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December 3, 2021 in Legal Ed Scholarship, Legal Education | Permalink

Applying The Procedural Standing Analysis To Post-Mayo, Pre-Enforcement APA Treasury Challenges

Casey N. Epstein (J.D. 2021, Minnesota), Note, Standing Up to the Treasury: Applying the Procedural Standing Analysis to Post-Mayo, Pre-Enforcement APA Treasury Challenges, 105 Minn. L. Rev. 1947 (2021):

Administrative law and tax law have clashed for the past several decades. While recent caselaw, starting with Mayo Foundation in 2010, has indicated that administrative law, such as the Administrative Procedure Act (APA), does apply to the Treasury, many questions remain unanswered. Much attention has recently focused on the interplay between the Anti-Injunction Act (AIA) and the Treasury and whether the AIA prevents taxpayers from suing the Treasury for APA violations.

With the Supreme Court poised to answer this question in CIC Services this coming Term, this Note poses the next question that the courts will need to answer: even if the AIA does not bar a taxpayer from launching a pre-enforcement administrative challenge against the Treasury, will the taxpayer have standing to secure judicial review?

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December 3, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, December 2, 2021

Nam: Taxing Option Luck

Jeesoo Nam (USC), Taxing Option Luck, 11 U.C. Irvine L. Rev. 1067 (2021):

As economic inequality reaches new heights every decade, academics stress the importance of the tax system in matters of equity. In contemporary winner-take-all markets, much of the massive income and wealth accumulated by the rich are the result of deliberate and calculated economic gambles that turned out in their favor. Yet theories of distributive justice such as Ronald Dworkin’s brute luck egalitarianism have committed themselves to the position that even if these market outcomes are the results of luck, the unequal outcomes are justified insofar as investors chose to take such risks.

This Article argues, in contrast to the aforementioned theories, that inequalities resulting from option luck, the luck involved in deliberate and calculated gambles, remain unjust.

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December 2, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Shanske & Niemeier: Subsidizing Sprawl, Segregation, And Regressivity — Sublocal Tax Districts

Darien Shanske (UC-Davis; Google Scholar) & Deb Niemeier (Maryland), Subsidizing Sprawl, Segregation, and Regressivity: A Deep Dive into Sublocal Tax Districts, 106 Iowa L. Rev. 2427 (2021):

Much ink has already been spilled demonstrating that our current built environment was—and is—the product of numerous policy decisions. Some of these decisions are accidental (as with the mortgage interest deduction provided by the federal income tax), some can be reasonable at times, but are problematic overall (as with local power over zoning), and some are outright immoral (as with redlining). This Essay will demonstrate yet another policy tool that has contributed to the current structuralization of the built landscape: the sublocal tax district. These districts are very common, but are also, by virtue of their nature and spatial heterogeneity, very difficult to study.

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December 2, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

A Second Open Letter From Yale Grad Simon Lazarus: 'A Take On Where Things Stand'

Following up on my previous post on the open letter by Simon Lazarus (J.D. 1967, Yale), Where Yale Law School Has Gone Off The Rails, And What Is Needed To Get Back On Track (Nov. 13, 2021):  Brian Leiter (Chicago) shared an update today from Mr. Lazarus, Trap House Enters Its Fourth Month: A Take on Where Things Stand:

Yale Law Logo (2020)In his recent address to the Federalist Society, Sterling professor Akhil Amar condemned the Yale Law School’s “duplicitous, disingenuous, and downright deplorable” actions in the Trap House Affair. As I elaborated in an earlier memo, I agree with his depiction.

I write this update to assess several significant new developments. Of these, the most noted but not necessarily the most significant is Dean Heather Gerken’s Statement of November 17, her third formal pronouncement on the affair. While she broke new ground in publicly admitting serious errors that did not adequately “conform to our values,” she did not resolve the most critical issue, namely, whether she will remove the two Law School administrators who committed the egregious violations of due process and academic freedom acknowledged in the statement. Only with that further step will Dean Gerken’s mea culpas lead to meaningful change in the life of the Law School. ...

[On] November 15, a still bigger shoe dropped.

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December 2, 2021 in Legal Ed News, Legal Education | Permalink

Academic Freedom Alliance And Brian Leiter Weigh In On How The University Of Illinois-Chicago Has Handled Student Complaints Against A Tenured Law Professor

Following up on my previous posts (links below):  Academic Freedom Alliance, Letter to the University of Illinois Regarding Jason Kilborn:

KilbornThe AFA sent a letter to the University of Illinois on Monday regarding the ongoing complaints concerning Professor Jason Kilborn. In December 2020, Professor Kilborn included on his final exam in a civil procedure class a hypothetical involving redacted slurs. He was suspended without adequate process or justification, and a university investigation found most of the allegations to be meritless. The law school reached an agreement with Professor Kilborn allowing him to resume his professional activities, but students have continued to call for sanctions against him and the law school has failed to adhere to its own agreement. He has been denied the annual raise provided to all of his colleagues despite his positive job evaluation, and the law school has imposed new demands that he complete sensitivity training before fully resuming his duties.

Brian Leiter (Chicago), Academic Freedom Alliance Weighs in on Case of Professor Kilborn at Illinois/Chicago John Marshall Law School:

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December 2, 2021 in Legal Ed News, Legal Education | Permalink

The Coming Spike In Law School Applications

Following up on my recent posts:

Law.com, With Release of LSAT Scores Today, Law School Applications Expected to Spike:

November’s Law School Admissions Test scores were released as scheduled at 9 a.m. ET this morning. And while analysis of the scores likely won’t be available for a few days, according to a Law School Admission Council (LSAC) spokesperson, the expectation is that the already sky-high number of law school applicants and applications in the U.S. will rise even further.

“We’ll likely see law school applications go back up at least initially,” the LSAC spokesperson told Law.com on Wednesday. “If someone got a really good score, then they are going to apply.”

As of Nov. 29, U.S. law school applicant and application data showed declines for the 2021-22 enrollment year, but those numbers are somewhat misleading.

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December 2, 2021 in Legal Education | Permalink

Ed Kleinbard Memorial Conference At USC

Kleinbard

Following up on my previous post on the Ed Kleinbard Memorial Conference At USC:  the conference recordings and downloads are here:

Welcome:  Andrew Guzman (Dean, USC):

Panel 1 - High Noon in the Tax Policy Corral: Ed Kleinbard’s Race Against Time

  • Joseph Bankman (Stanford)
  • Daniel Shaviro (NYU) (slides)

Panel 2 - Financial Products

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December 2, 2021 in Conferences, Legal Education, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink

Lipman: Tax Audits, Economics, And Racism

Francine J. Lipman (UNLV; Google Scholar), Tax Audits, Economics, and Racism, in Oxford Research Encyclopedia of Economics and Finance (2022):

OxfordThe Internal Revenue Service (IRS) is the federal agency charged with tax revenue collection. In fiscal year 2020, the IRS collected $3.5 trillion in taxes, which represented about 96 percent of aggregate annual federal funding (IRS, 2020). In its mission statement the IRS states that its primary role is to enforce tax laws. The IRS’ website announces that it is responsible “to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share,” among similar duties. Nevertheless, the IRS’ most recent official estimate of the “tax gap” or the amount of net taxes owed by taxpayers who did not “pay their fair share” even after IRS enforcement efforts was $1.143 trillion for the three-year period 2011-2013 or $381 billion average annually. This amount is more than all the income taxes paid by 90 percent of all taxpayers (Rossotti & Forman, 2020). Assuming constant compliance rates, the Treasury has estimated that the tax gap in 2019 was $584 billion, $7 billion over the decade, or 15 percent of annual tax liabilities (IRS, 2019). Economists have estimated that the tax gap was at least $630 billion in 2020 (Sarin & Summers, 2019).

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December 2, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Johnson: The Wonderful Mark-to-Market Tax

Calvin H. Johnson (Texas), The Wonderful Mark-to-Market Tax, 173 Tax Notes Fed. 1227 (Nov. 29, 2021):

Tax Notes Federal (2020)Whatever its role in the current U.S. budget decisions, the proposal for mark-to-market taxation is a wonderful idea, so good to be inevitable — at some point. Mark-to-market taxation would tax shareholders on the annual gain from publicly traded stock even when those gains have not been reduced to cash. ...

Both accounting and economics define income to include mark-to-market gains. The 16th Amendment specifically authorizes a tax on income. That alone is sufficient.

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December 2, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Wednesday, December 1, 2021

Fleischer Presents Tax Policy — Legislative Updates Today At UC-Irvine

Victor Fleischer (UC-Irvine; Google Scholar) presents Tax Policy - Legislative Updates at UC-Irvine today:

UCI Logo (2018)Professor Fleischer will provide an overview of the tax legislation currently under consideration on Capitol Hill, including important changes to individual tax, capital gains, carried interest, corporate tax, and international tax provisions. He will also discuss developments at the OECD and the interaction between the OECD process and U.S. domestic legislation.

December 1, 2021 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink

Layser: A Spatial Analysis Of Place-Based Tax Incentives

Michelle D. Layser (Illinois; Google Scholar), Subsidizing Gentrification: A Spatial Analysis of Place-Based Tax Incentives, 12 U.C. Irvine L. Rev. 163 (2021):

Place-based tax incentives, such as the New Markets Tax Credit (NMTC) and Opportunity Zones incentives, are often used to promote investment in low-income neighborhoods. However, not all low-income neighborhoods have an equal need for investment subsidies. Subsidies for investment in already gentrifying neighborhoods, for example, may reflect inefficient inframarginal investment, and they may lead to inequitable outcomes. Critics fear that when gentrifying neighborhoods are eligible for tax incentives, they will draw investment away from the neighborhoods that need it most. However, few studies have provided empirical analysis to assess whether these concerns have merit. Through a novel geospatial analysis of the location patterns of tax-subsidized projects, this Article provides new evidence that critics’ concerns are justified.

This Article analyzes fifteen years of NMTC data to explore the location patterns of tax-subsidized projects in twenty U.S. cities.

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December 1, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

If You Build It, They Will Come: What Students Say About Experiential Learning

David I. C. Thomson (Denver; Google Scholar) & Stephen Daniels (American Bar Foundation; Google Scholar), If You Build It, They Will Come: What Students Say About Experiential Learning, 13 Fla. A & M U. L. Rev. 203 (2018): 

Our purpose here is to explore one of the “natural experiments” cited by the Task Force: the Experiential Advantage (EA) program at the University of Denver’s Sturm College of Law (Denver Law). EA was developed as a part of a greater general focus on experiential learning and is built upon the three “Carnegie Apprenticeships” – “the intellectual or cognitive,” “the forms of expert practice,” and “identity and purpose.” It was implemented at Denver Law starting with students entering in August 2013. To explore this natural experiment, we took a particular route and did so for what we see as good reason. It is often the case with such curricular experiments that the views of students are missing. But of course, it makes little sense to neglect them because such changes are supposedly made for the students’ benefit. So, it seems more than appropriate to ask them – from their perspective – if a change worked, or improved matters, as it was designed to do. This article is a first report on the findings of an extensive case study — a three-year, survey-based, study of Denver Law students concerning the EA Program “natural experiment.” The findings should be of considerable interest to the legal community, given that there is general support for experiential learning across most law schools, but a study of this kind — one exploring student views on curricular innovation — has never been conducted before.

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December 1, 2021 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink

Clinicians Reflect On COVID-19: Lessons Learned And Looking Beyond

Deborah N. Archer (NYU), Caitlin Barry (Villanova), Lisa Bliss (Georgia State), G.S. Hans (Vanderbilt), Vida Johnson (Georgetown), Wilkes Kaas (Quinnipiac), Lynnise Pantin (Columbia), Kele Stewart (Miami), Priya Baskaran (American), Jennifer Fernandez (Penn), Crystal Grant (Duke), Anjum Gupta (Rutgers), Julia Hernandez (CUNY), Alexis Karteron (Rutgers) & Shobha Mahadev (Northwestern), Clinicians Reflect on COVID-19: Lessons Learned and Looking Beyond, 28 Clinical L. Rev. 15 (2021):

As a result of the unprecedented COVID-19 pandemic, clinical faculty had to abruptly adapt their clinical teaching and case supervision practices to adjust to the myriad restrictions brought on by the pandemic. This brought specialized challenges for clinicians who uniquely serve as both legal practitioners and law teachers in the law school setting. With little support and guidance, clinicians tackled never before seen difficulties in the uncharted waters of running a clinical law practice during a pandemic.

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December 1, 2021 in Legal Ed Scholarship, Legal Education | Permalink

ABA Permits Law Schools To Accept GRE Scores In Lieu Of The LSAT

Summary of Actions of the Section’s Council at its Public Meeting Nov. 19, 2021:

ABA Legal Ed (2021)In closed session, the Council also voted to permit law schools to accept GRE test scores from applicants in lieu of an LSAT score under Standard 503. The Council reminds schools that the use of test scores to make admissions decisions is subject to Standard 501(a)’s requirement that a school adhere to “sound admission policies and practices,” and that a law school may not admit applicants who do not “appear capable of satisfactorily completing its program of legal education and being admitted to the bar.” The Council also reminds schools that although Standard 503 does not prescribe the weight that law schools must give to an applicant's test score, it does require law schools to use admissions tests in a manner consistent with the test developer's current guidelines regarding the proper use of the results.

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December 1, 2021 in Legal Ed News, Legal Education | Permalink

Economists Don’t Always Agree. On This Hot-Button Issue (Child Tax Credit), They Do.

Stanford Law, Economists Don’t Always Agree. On This Hot-Button Issue, They Do.:

Goldin (2021)Jacob Goldin recently helped pull off an unlikely feat: As federal lawmakers battled over President Biden’s economic agenda, he worked to recruit more than 460 American economists in urging that a large, but temporary, cash benefit for children as part of an earlier $1.9 trillion stimulus package be made permanent.

In September, the economists, led by Hilary Hoynes and Diane Schanzenbach, sent a letter to Congress that proved propitious. Soon after, the cash benefit they were advocating for — the Child Tax Credit (CTC) — took center stage in negotiations over the future of Biden’s bid to expand the country’s social safety net. Not only are the potential costs of the CTC a point of contention, so, too, is the rekindled argument by opponents that motivated welfare reform a quarter century ago — the notion that giving a handout to the lowest-income families creates disincentives to work.

Goldin’s leading role in corralling support for the expanded CTC makes sense. An associate professor at Stanford Law School and faculty fellow at the Stanford Institute for Economic Policy Research (SIEPR), he is an expert on the taxation of low-income households and how human behavior shapes economic decision-making. He understands the CTC’s historical limitations as a poverty-reducing tool. He is also the co-author of a new working paper that gets to the heart of the current debate: What will broadening the credit ultimately cost the federal government, and are the benefits worth the price? [Whose Child is this? Improving Child-Claiming Rules in Safety Net Programs, 131 Yale L. J. ___ (2022) (with Ariel Jurow Kleiman (Loyola-L.A.)]

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December 1, 2021 in Legal Education, Scholarship, Tax, Tax News, Tax Scholarship | Permalink

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December 1, 2021 in About This Blog, Legal Education, Tax | Permalink

Nuts And Bolts Of the 2021 Advanced, Enhanced Child Tax Credit

Francine J. Lipman (UNLV; Google Scholar) & James E. Williamson (San Diego State), Nuts and Bolts of the 2021 Advanced, Enhanced Child Tax Credit, 173 Tax Notes 319 (Oct. 18, 2021):

Tax-notes-federalThe enhancements in the child tax credit (CTC) in the American Rescue Plan Act of 2021 (ARPA) signed by President Biden on March 11 are a targeted child-centered, economic stimulus. Economists estimate that the 2021 CTC enhancements will increase consumer spending by $27 billion to $37 billion, generate $1.9 billion in state and local sales taxes, and create 511,000 new jobs at the median wage. Similar to the economic stimulus in rural areas from Social Security benefits, the enhanced CTC doubles its pre-ARPA spending power of $14 billion for households in rural America.

Less than four months after enactment starting on July 15, Treasury, through the IRS, is delivering almost 40 million monthly installments of estimated advanced, enhanced child tax credits (AECTC) to households, including 60 million children and their families. The Urban-Brookings Tax Policy Center estimates that 92 percent of families with children will receive an average annual CTC of $4,380 in 2021. The Joint Committee on Taxation has estimated that ARPA CTC enhancements cost $110 billion, while Columbia University based Center on Poverty and Social Policy determined that the benefits should be about eight times the cost at $800 billion. CTC benefits include increases to children’s future earnings, retirement benefits, and tax payments, and decreases in child protection and criminal justice services as well as healthcare costs for children and their families because of better health and longevity.

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December 1, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

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December 1, 2021 in About This Blog, Legal Education, Tax | Permalink

The Application Of International Tax Treaties To Digital Services Taxes

Katherine E. Karnosh (J.D. 2021, Chicago), Comment, The Application of International Tax Treaties to Digital Services Taxes, 21 Chi. J. Int'l L. 513 (2021):

ChicagoAs digital services and electronic commerce have become more prevalent aspects of the global economy, there have been concerns over how tax systems will adapt to this change. International tax treaties in particular seem to be outdated and unprepared for the digital economy. Many international tax treaties provide that businesses are to be taxed on their income only in jurisdictions where they have a sufficient physical presence. By establishing their European headquarters and digital servers in countries with low corporate income tax rates (such as Ireland) and then using those headquarters to provide digital services to the rest of Europe, large, sophisticated, multinational digital businesses have been able to generate much revenue from most European countries without paying significant taxes in those countries.

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December 1, 2021 in Scholarship, Tax, Tax Scholarship | Permalink