A Half-Century With The Internal Revenue Code: The Memoirs Of Stanley Surrey

A Half-Century with the Internal Revenue Code: The Memoirs of Stanley S. Surrey (Lawrence Zelenak (Duke) & Ajay Mehrotra (Northwestern; Google Scholar) eds. Carolina Academic Press 2022):

Stanley S. Surrey was the most prominent mid-twentieth-century American tax law academic, and the federal government official with the greatest influence on tax policy over that same period (aside from politicians). His professional life with the federal tax system spanned half a century, ending only with his death at the age of 73 in 1984. As Surrey writes in his memoirs, he had good reason to "doubt that any person alive today has had as close and as varied a relationship with the Internal Revenue Code as I have had."

He divided the five decades of his professional life between academia (three early years at the University of California, Berkeley, followed by many years at Harvard Law School), and two lengthy tours of duty in the service of the U.S. Treasury Department. In his second Treasury stint he served as the Assistant Secretary of the Treasury for Tax Policy, the highest executive branch position exclusively focused on taxation. Surrey's influence on the federal tax system was deep and pervasive and continues to this day; perhaps his most enduring accomplishment has been his development of tax expenditure analysis, which since the 1970s has played a central role in a wide range of tax policy discussions.

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After Roe Leak, Yale Law Students Call For Ostracizing Conservative Classmates

Aaron Sibarium (Washington Free Beacon), ‘Unrelenting Daily Confrontation’: After Roe Leak, Yale Law Students Call for Ostracizing Conservative Classmates and Tossing Out Constitution:

It’s been a rough couple of weeks for students at Yale Law School, who are responding to news that the Supreme Court may overturn Roe v. Wade with calls to accost their conservative classmates through "unrelenting daily confrontation" and toss the Constitution by the wayside.

Members of the law school’s conservative Federalist Society, first year law student Shyamala Ramakrishna said in an Instagram post, are "conspirators in the Christo-fascist political takeover we all seem to be posting frantically about." Why, she asked, are they still "coming to our parties" and "laughing in the library" without "unrelenting daily confrontation?"

Simple Justice, Short Take: Have Yale Law Students Suffered Enough?:

I can’t condemn Aaron for doing what he did. This is newsworthy. The students have no claim to privacy. And what they wrote is both disturbing and fundamentally inconsistent with what one would expect of any law student, no less a Yale law student. And still, I share Orin’s sense that this has gone too far, been too harmful and that too many young lives have become casualties of the culture war.

• Daily Caller, Yale Law Students Call For ‘Unrelenting Daily Confrontation’ Against Conservative Peers Following SCOTUS Leak
• Daily Mail, Woke Yale Law Students Call For 'Unrelenting Daily Confrontation' With Conservative Classmates and Attack the Constitution Following Leaked SCOTUS Opinion That Could See Roe v. Wade Overturned
• Legal Insurrection, Yale Law Students React to Roe Leak With Call to Ostracize Conservative Classmates

Socialism, Progressive Taxation, And The Fiscal State

Sol Picciotto (ICTD, Lancaster, London; Google Scholar), Socialism, Progressive Taxation, and the Fiscal State:

This paper traces the philosophical, political, sociological and economic underpinning for the advocacy by socialists of progressive taxation, from the Communist Manifesto to recent supporters of tax justice campaigns. Socialists’ attitudes to taxation have been tied to their primary aim of socialisation of the ownership of the means of production, reflecting the view that inequality and exploitation are inherent in capitalism, which rests on private property enforced by state power. Communism, as developed particularly by Marx and Engels, aimed to transcend capitalism and end the separation of the state from civil society, by the socialisation of property, including through progressive taxation. Marx’s view in Capital volume 3 that the emergence of large scale enterprises already entailed the ‘abolition of capital as private property within the framework of capitalist production itself’, when it was published in 1894 became central to the debates among German socialists (Liebknecht, Kautsky, Bernstein and Luxemburg), and the Austro-Marxists (Renner, Hilferding), but socialists split when graduated direct taxes were introduced to help fund the welfare-warfare state. Goldscheid’s outline for a social science of the state centred on fiscality underpinned his radical and influential wartime proposals to finance the socialisation of large corporations through taxes on capital.

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McGinnis: Lawyers For Radical Change

John O. McGinnis (Northwestern), Lawyers for Radical Change:

The transformation of the legal profession marks a fundamental change in American democracy. In the republic’s early days, lawyers provided ballast for stability and served as an anchor against excessive populism. The judiciary’s sober attachment to formal order was a primary reason for giving it the power to review the constitutionality of legislation. Law was the profession most likely to preserve the enduring framework of republican government against the mutable passions of the hour.

Nowadays, lawyers are a force for often-radical progressive change. Nothing symbolizes that shift better than the American Bar Association. Once an embodiment of conservatism, it has been captured by the Left. Its resolutions at its annual meeting constitute a wish list of Democratic Party proposals. It also deploys its influence in the accreditation process of law schools to make them even more monolithically left-wing than they already are.

The reasons for the shift lie, at least in part, in the reorientation of lawyers’ interests. Since the birth of the modern regulatory state, lawyers are no longer primarily the allies of commercial classes, as they were in the early republic, but instead the technocrats and enablers of regulation and redistribution. The more the nation intervenes in economic affairs to regulate and redistribute, the greater slice of compliance costs and transfer payments lawyers can expect to receive. Thus, they cannot be counted on as supporters of property rights or even of a stable rule of law. Their interest lies frequently in dynamic forms of legal transformation and the uncertainty they bring. Far from supporting a sound, established social order, they are likely to seek to undermine it. Only an ideological attachment to older forms of legal orders, like that which Federalist Society members manifest, can call lawyers back to the essential role they play in the civic life of our republic. ...

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Colella: Crispino Upholds IRS Mailbox Rule Reg

Frank G. Colella (Pace), ‘But I Mailed It’ — Crispino Upholds IRS Mailbox Rule Regulation, 173 Tax Notes Fed. 1479 (Dec. 13, 2021):

In Crispino, the U.S. District Court for the District of New Jersey held that taxpayers cannot introduce extrinsic evidence under the common law mailbox rule to establish timely filing of their claim for refund and, accordingly, dismissed the refund action for lack of jurisdiction. Crispino, a decision appealable to the Third Circuit, upheld the IRS’s position that the only means to satisfy section 7502, the statutory “mailbox rule,” is by proper compliance with reg. section 301.7502- 1(e)(2), which requires proof of certified or registered mailing when the IRS alleges that it has not received a document.

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Day 1 Of The Retrial Of Katherine Magbanua In Dan Markel's Murder: Jury Selection

Tallahassee Democrat, 'Conspiracy to Murder': Jury Selection Goes Behind Closed Doors in Katherine Magbanua Retrial:

The second trial of Katherine Magbanua — the alleged conduit between the hired gunmen who killed Dan Markel and his in-laws who allegedly hired them — began Monday with jury selection.

Magbanua, whose first trial in 2019 ended with a hung jury, is on trial on charges of first-degree murder, conspiracy to commit first-degree murder and solicitation of first-degree murder.

The court set aside two days to select a 12-person jury and four alternates. Because the case has gotten so much publicity, lawyers questioned potential jurors individually and behind closed doors at the Leon County Courthouse.

• Florida Politics, Markel Trial Day 1: Civics Lessons, Sealed Motions, and Evolving Witness Lists
• WCTV, Jury Selection Underway in Katherine Magbanua Retrial
• WTXL, Judge, Attorneys in Katherine Magbanua Retrial Sift Through 100 Potential Jurors

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Lipman: How To Design An Antiracist State And Local Tax System

Francine Lipman (UNLV; Google Scholar), How to Design An Antiracist State and Local Tax System, 53 Seton Hall L. Rev. ___ (2022):

Since the first ship of enslaved African people landed in Virginia in 1619, racist policies in institutions, systems, structures, practices, and laws have ensured inequity for people of color. These racist policies include every imaginable variant of injustice from slavery to lynching, to segregation, and to economic injustices, including those delivered through tax systems today. Although facially color-blind, tax systems have long empowered the explosion of white wealth and undermined wealth accumulation for Black families and communities of color. State and local tax systems, especially in the South, have deeply-rooted racist fiscal policies, including Jim Crow laws that continue to sustain and bolster racial inequality today. These injustices have become even more obvious during the global pandemic.

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Legal Ed News Roundup

• ABA Journal, Alito Sidesteps Question About Collegiality During Remote Appearance at Law School
• Above the Law, 3LOL Is Not Always The Joke Everyone Says It Is
• Above the Law, Deans Only Like Preferential Treatment When It Benefits Their Law School
• Above the Law, Law Schools Are Bringing Out The Best Legal Names As Speakers For In-Person Graduation Ceremonies
• Above the Law, The Only Thing Better Than A 180 On The LSAT Is A 187
• Above the Law, Want More Lawyer Diversity? Sure, Axe The LSAT, But The Real Problem Is Inside The Profession
• Above the Law, We Should Tell The Truth About Judicial Clerkships
• The American Lawyer, Big Law Firms Welcome Larger Summer Associate Classes to In-Office Work and Entertainment

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Two Tax Court Paid Internship Programs: Diversity, Case Processing

The U.S. Tax Court offers two paid internship programs:  

Diversity in Government Internship Program
The DiG Tax program is separate from the Court’s legal internship program, and you need not be a law student to apply.  DiG Tax interns may assist on projects with departments throughout the Court, including Case Services, Facilities, Finance, Human Resources, Library, Information Technology, and Public Affairs.  For more information, see here.

Case Processing Legal Student Intern

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Retrial Of Katherine Magbanua In Dan Markel's Murder Begins Today: 'Prosecutorial Desperation' Or 'Nefarious Nexus'?

Tallahassee Democrat, 'Prosecutorial Desperation' or a Nefarious Nexus: Two Takes on Katherine Magbanua's Retrial:

For six years prosecutors have alleged that Katherine Magbanua was the link between Dan Markel’s estranged in-laws and the two killers who brutally murdered him in his Betton Hills garage.

They’ve said she helped hire the father of her two kids, convicted gunman Sigfredo Garcia and his childhood friend Luis Rivera, coordinated payment of $100,000 for the hit and helped further a conspiracy that has spiraled into one of Tallahassee’s most notorious murder cases.

On the eve of Magbanua’s second trial on May 16, her attorneys say she is the unwitting suspect in a spat between the man who shot Markel and the Florida State law professor’s former brother-in-law, Charlie Adelson.

Magbanua narrowly escaped being convicted in Dan Markel’s murder by a hung jury deadlocked in a 10-2 vote in favor of guilty, two sources with knowledge of the vote confirmed weeks after the trial.

For the do-over, a dozen jurors will be selected starting on Monday with trial expected to commence Thursday and end by May 27. Court administration issued 500 jury summonses and expects roughly 200 potential jurors to report.

The first person Garcia called when his phone was picked up on cellular towers in the Lake City area after the July 18, 2014 shooting was Magbanua. Throughout the day, Magabanua was in contact with him and Adelson, according to evidence presented at Magbanua's 2019 trial.

Police found between Markel’s killing in July 2014 and Nov. 2015, Magbanua deposited more than $56,000 in cash into her bank account. The deposits, according to arrest records, were made mostly through ATMs in increments of $300 to $2,000.

But her defense team has never waivered in their contention their client is innocent and have labeled their client's arrest as "prosecutorial desperation," to make other arrests in the case.

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Lesson From The Tax Court: Only One Exclusion For Military Retiree Disability Payments

My dad served as a doctor in the military for 30 years, 23 days. Starting this week, he will have been retired for longer than he served. When he first retired, he received a monthly pension check from the Defense Finance and Accounting Service (DFAS) and that was all.  A few years later he learned that his hearing loss, likely from his time in Vietnam, qualified him for disability payments from the Department of Veterans Affairs (VA).  He applied for, and received, a 30% disability rating.  He then started receiving two checks each month, one from DFAS and one from the VA.

My dad’s DFAS check is included in gross income but his VA check is not, thanks to §104(a)(4).  If he had never applied for the disability rating, however, §104 would still permit him to exclude part of his DFAS check to the extent he would have be entitled to a disability check from the VA.  Confused?  Today’s lesson will help! 

In Tracy Renee Valentine v. Commissioner, T.C. Memo. 2022-42 (Apr. 28, 2022) (Judge Gustafson), the taxpayer was a veteran and received two checks per month, one from DFAS and one from VA for disability compensation.  She wanted to exclude not only the VA disability check, but she also wanted to exclude part of her DFAS check.  But she mis-read §104(a)(4)’s interplay with §104(b).  Judge Gustafson teaches us the proper way to read the rules.  Basically, veterans get only one exclusion for their disability payments.  Details below the fold.

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The Cost Of Academe’s Fixation On Productivity

Chronicle of Higher Education Op-Ed:  What Is the Real Cost of Academe’s Fixation on Productivity?, by Maria LaMonaca Wisdom (Duke):

A few months ago, I took part in a virtual conversation at my university about how to rebuild campus relationships fragmented by Covid. Faculty members and administrators asked the same sorts of late-pandemic questions vexing colleges across the country: What could we do to mitigate the isolation and disengagement that everyone — students, professors, staff members — seemed to be feeling? And how could we begin to rebuild the academic and intellectual fellowship lost since the pandemic?

In my role as a faculty coach at Duke University, I jumped in with some ideas, based on what I was seeing and hearing from academics during our coaching conversations. My recommendations — that small, incremental changes at the personal and local level could be more effective than top-down solutions — ended up as an advice post on our faculty-advancement website. ...

But the more I thought about it, the more I felt like I was proposing a dam to hold back a tsunami — one that started well before Covid and has been eroding social relationships for years both in higher education and in many other sectors of American life. Long before the pandemic, academics were finding it difficult to foster “intellectual community.” To attribute all of the problems we now face to the pandemic risks covering up a much larger, long-term issue. ...

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• Law Schools Are Becoming The New Business Schools For Future Leaders
• Azam: Online Taxation Post Wayfair
• A Year After Abruptly Ousting Tony Varona As Dean, Miami President Names David Yellen New Law School Dean

Sunday:

• WSJ Book Review: America's Book — The Rise and Decline Of A Bible Civilization
• NY Times Op-Ed: If Roe Is Overturned, Where Should The Pro-Life Movement Go Next?
• NY Times Op-Ed: Too Much Church In The State For This Catholic
• The Top Five New Tax Papers

WSJ Book Review: America's Book — The Rise and Decline Of A Bible Civilization

Wall Street Journal Book Review:  ‘America’s Book’ Review: The Word Out of Season, by D.G. Hart (Hillsdale College) (Reviewing Mark A. Noll (Notre Dame), America's Book: The Rise and Decline of a Bible Civilization, 1794-1911 (2022)):

Many Americans born after 1960 have trouble imagining that for much of the country’s history the Bible was a chief source of national identity. ... Whether ceremonial or therapeutic, Bible-reading in public schools was, by the 1950s, among the last uncontested conventions of America’s Bible civilization.

Mark Noll’s Mark A. Noll (Notre Dame), America's Book: The Rise and Decline of a Bible Civilization, 1794-1911 explains how the Bible achieved this status. The new nation’s rejection of European forms of Christendom such as sacral monarchy and state churches left the Bible to bear the burden of America’s attempt to create a Christian civilization. A completely secular republic was never a possibility except for the most free-thinking of free thinkers. The Founders virtually to a man insisted that a republic depended on a virtuous citizenry, and that the best source of morality was religion. Despite the variety of Protestant denominations, church leaders and public officials agreed that the Bible was the best and most reliable guide for determining moral consensus.

“America’s Book” documents the extent of the Bible’s reach—from the printing and distribution of Bibles and the creation of Sunday schools to the intellectual dead ends into which unwise handlers of the Bible were led. The book’s breadth is a tribute to Mr. Noll’s career as an interpreter of Protestantism in North America, even if its encyclopedic quantity occasionally obscures the overarching argument. ...

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NY Times Op-Ed: If Roe Is Overturned, Where Should The Pro-Life Movement Go Next?

New York Times Op-Ed:  If Roe Is Overturned, Where Should the Pro-Life Movement Go Next?, 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)):

Pro-life activists have been working toward overturning the Supreme Court’s Roe v. Wade decision ever since it came down in 1973. But as I spoke to folks from pro-life and whole-life movements last week after the leak of a draft opinion that indicated the court will overturn Roe, the mood was complicated. I did not find unalloyed jubilance or triumph.

Most people I talked to expressed cautious optimism and hope but also concern. This was in part because they worried that the court’s draft opinion may shift in weeks to come. But more so because those who take a holistic approach to reducing abortion feel that legally restricting abortion, while a win for justice and the voiceless and vulnerable, is not alone enough to create a culture that is holistically pro-life and addresses the needs of both women and unborn children.

The sense I got is that, for many pro-life and whole-life leaders, this Supreme Court decision would represent a starting line, not a finish line. There are no credits rolling with a victorious pro-life movement marching into the sunset. One activist told me, “I feel joy and relief, but it is kind of like the joy and relief one feels in getting into college, being cast in the school play or making the varsity team. The conditions for the possibility of achieving the goal have been met, but there’s so much more hard work to do.”

What lies ahead is the continued need to enact policies that address the underlying reasons that some women feel they need abortions in the first place. I asked pro-life or whole-life thinkers and leaders: If Roe is overturned, where should the pro-life and whole-life movements direct energy to support women, unborn children and families?

Here are some of their responses: ...

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NY Times Op-Ed: Too Much Church In The State For This Catholic

New York Times Op-Ed:  Too Much Church in the State, by Maureen Dowd:

As a Catholic whose father lived through the Irish Catholics “need not apply” era, I’m happy to see Catholics do well in the world. There is an astonishing preponderance of Catholics on the Supreme Court — six out of the nine justices, and a seventh, Neil Gorsuch, was raised as a Catholic and went to the same Jesuit boys’ high school in a Maryland suburb that Brett Kavanaugh and my nephews did, Georgetown Prep. ...

[T]his Catholic feels an intense disquiet that Catholic doctrine may be shaping (or misshaping) the freedom and the future of millions of women, and men. There is a corona of religious fervor around the court, a churchly ethos that threatens to turn our whole country upside down.

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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 #4:

1. [940 Downloads]  Amazon and the State Aid Tax Saga, by Leopoldo Parada (Leeds; Google Scholar)
2. [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)
3. [385 Downloads]  Taxing Robots, by Rita de la Feria (Leeds; Google Scholar) & Maria Amparo Grau Ruiz (Universidad Complutense de Madrid; Google Scholar)
4. [350 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)
5. [346 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)

This Week's Ten Most Popular TaxProf Blog Posts

1. Bryan Camp (Texas Tech), Lesson From The Tax Court: Avoiding The 2-Year Lookback Period In Bankruptcy
2. Wall Street Journal, Annual Reviews And OKRs Are A Terrible Way To Evaluate Employees
3. Philadelphia Inquirer, As Temple Dean Begins Serving 14-Month Sentence For U.S. News Rankings Fraud, Tenured Professor Is Defiant At Sentencing Hearing: 'Every Single University Has People Doing The Same Exact Operations'
4. FedSoc Debate, Should The ABA Be Stripped Of Its Monopoly Law School Accrediting Power?
5. New York Times, ABA May Eliminate Standardized Tests for Law School Admissions
6. Tallahassee Democrat, Following Charlie Adelson's Arrest, Attention Shifts To Katherine Magbanua's May 16 Trial In Dan Markel's Murder
7. Jasper L. Cummings, Jr. (Alston & Bird, Raleigh, NC), Louis Brandeis, Antitrust, And A Functioning Tax System
8. New York Times Op-Ed, Why I Pray To A God I Don’t Believe In
9. St. Louis Post-Dispatch, University Pays $1.65 Million To Settle Tuition Refund Class Action Claiming Online Classes During Covid Were 'Subpar'; Students Get $185 Each; Lawyers Get $550,000
10. Paul Caron (Dean, Pepperdine), 8th Annual Parris Awards At Pepperdine Caruso Law School

Law Schools Are Becoming The New Business Schools For Future Leaders

Inc., How Law Schools Are Becoming the New Business Schools for Future Leaders:

There's a revolution going on right now in top law schools across the country. They're starting to teach leadership — and trust me, it's not an easy task. Some, however, are succeeding beyond their wildest dreams. 

Law students aren't used to learning about how to develop leadership skills, and professors certainly aren't used to teaching it. Getting left-brained, analytic, hyper-competitive law students to genuinely embrace soft and squishy concepts like empathy and teamwork requires a different mindset. In fact, it requires a new way of educating altogether. Century-old Ivy League law schools, chock full of Socratic professors like the fictional and highly cantankerous Professor Kingsfield in the movie Paper Chase, simply won't suffice any longer. A new paradigm is needed. A fundamentally new approach is required. 

But it isn't easy to teach old dogs new tricks. That's why most come up short or avoid the challenge altogether. ...

Fortunately, some law schools aren't shying away from reinventing themselves. A handful of administrators are at the forefront, including Dean Heather Gerken and former assistant dean Anastasia Boyko at Yale Law School, Jennifer Leonard at the University of Pennsylvania, and Scott Westfahl at Harvard Law School.

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Azam: Online Taxation Post Wayfair

Rifat Azam (Radzyner School of Law, Israel; Google Scholar), Online Taxation Post Wayfair, 51 N.M. L. Rev. 116 (2021):

The United States Supreme Court saved the states’ sales tax base in the landmark case of South Dakota v. Wayfair in 2018. This revolutionary decision ended the long ban on states imposing sales tax collection duties on out-of-state retailers without a physical presence in the state, as established in Bellas Hess v. Department of Revenue of Illinois in 1967 and Quill Corp. v. North Dakota in 1992. Wayfair now allows states to impose sales taxation on out-of-state retailers in the era of digitalization. In this article, I provide valuable guidelines and suggestions to aid states on this critical journey toward taxing remote online transactions fairly and efficiently.

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A Year After Abruptly Ousting Tony Varona As Dean, Miami President Names David Yellen New Law School Dean

Miami Herald, UM Hires Cornell Law Grad as its Law School Dean, Following Tumult After Varona Demotion:

About a year after abruptly ousting Anthony Varona as law school dean, University of Miami President Julio Frenk hired his replacement: David Yellen, a New Jersey native who has devoted most of his career to reforming the justice system and leading two other law schools.

Yellen, 64, who earned his bachelor’s in politics from Princeton University and his law degree from Cornell University, will start July 1, according to the Thursday posting from the Coral Gables-based private university.

“I’m very excited,” said Yellen. “The University of Miami School of Law, I’ve known and admired for decades, so I’m really excited to join them.”

Yellen will move to South Florida in June from Colorado, where he has served since last June as the CEO of the Institute for the Advancement of the American Legal System, a research organization at the University of Denver. ...

The turnover of UM’s law school deans began when Frenk announced last May that Varona, an openly gay man of Cuban heritage, would step down as dean. Frenk’s abrupt decision to demote the popular Varona — without prior consultation of the faculty, alumni or students — led to an outcry in the legal community, locally and nationally. ...

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Weekly Legal Education Roundup

• ABA Journal, Are more law schools needed in areas where InfiLaw campuses closed?
• Claudia Angelos (NYU), Mary Lu Bilek (Former Dean, CUNY, Massachusetts) & Joan Howarth (UNLV; Dean Emerita, Michigan State), The Deborah Jones Merritt Center for the Advancement of Justice
• Paul Caron (Dean, Pepperdine), 8th Annual Parris Awards At Pepperdine Caruso Law School
• Robert Kuehn (Washington University), The Economic Value Of Law Clinic Legal Assistance
• Law.com, 'Arbitrary and Unfair': Dispute Over Limited Seating, Preferential Treatment for DC Bar Exam Continues—But Court Isn't Budging
• Lynn M. LoPucki (UCLA), The PowerPoint Channel
• New York Times, American Bar Association May Eliminate Standardized Tests for Admissions

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Tax Policy In The Biden Administration

• Bloomberg, Biden Reaps Record Tax Haul on Meme Stocks’ Once-and-Done Frenzy
• Bloomberg, Bored in Retirement? Start a 501(c) Charity for Fun and Profit
• Bloomberg, Crypto Investors Likely Paying Less Than Half the Taxes They Owe
• Bloomberg, US Budget Deficit Shrinks $1.6 Trillion on Record Tax Surge
• Lynnley Browning (Financial Planning), New Treasury Proposal Would Hammer Wealthy Investors Using Clever Tax Strategies

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Next Week’s Tax Workshop

Thursday, May 19: Alex Raskolnikov (Columbia) will present Should Only the Richest Pay More? as part of the OMG Transatlantic Tax Talks Series. This event does not require registration. 

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Kuehn: The Economic Value Of Law Clinic Legal Assistance

Tax Prof Blog op-ed:  The Economic Value of Law Clinic Legal Assistance by Robert Kuehn (Washington University):

Each year law school clinics provide free legal assistance to tens of thousands of clients, most of whom would otherwise go unrepresented. The work of clinic students and faculty allows clients to advance or defend their rights or obtain assistance or funds to which they are entitled, assistance that is in many ways invaluable to clients and their communities. While the benefits of clinic work can be difficult to monetize, it is possible to estimate the dollar value of the millions of hours of free legal assistance law clinics provide each year to individuals, governmental agencies, and non-profit organizations. As explained below, law clinic students alone provide tens of millions of dollars in pro bono legal services each year.

During academic year 2020-21, 114,520 J.D. students were enrolled in ABA-approved law schools.[i] The ABA ceased collecting data on law clinic course enrollment in 2016. But in the six years prior, schools reported that enrollment each year in their clinics (“seats filled”) was between 85% to 76% of the total number of seats available for enrollment (“seats available”), decreasing in percentage each year from 2011 to 2016.[ii] Because there is no evidence of a noticeable increase in enrollment in experiential courses since 2016,[iii] a reasonable assumption is that of the 32,062 reported seats available in 2020-21, around 24,000 students (75% of 32,062) actually enrolled in one of the school’s clinics (21% of all J.D.s). Only a handful of clinics charge a fee for their services and approximately 10% of the clinics in the 2019-20 Center for the Study of Applied Legal Education (CSALE) survey might assist some for-profit organizations, though even those are generally of limited means.[iv] After excluding those categories of clinic work, it is reasonable to conservatively assume that in 2020-21, approximately 22,000 clinic students provided their free assistance just to individuals, government entities, and non-profits.

The CSALE survey collected information on 950 law school clinics. The median number of credits awarded for just the clinic student’s field or casework (i.e., non-classroom activity) on behalf of clients was 3.5, with each credit representing 42.5 hours of work under the minimum standard set by the ABA. The average clinic student, therefore, worked 149 hours during the term on the casework portion of their law clinic course. Thus, during the 2020-21 academic year, the 22,000 students in law school clinics are estimated to have provided approximately 3,278,000 hours of free legal assistance to individuals, government entities, and non-profits.

The Supreme Court held that in awarding legal fees to prevailing parties, paralegals and law clerks are to be awarded fees at market rates, and courts also award fees for comparable clinic student work at market rates.[v] One national survey of typical billing rates for paralegals found that law firms charge their clients between $100-$200 per hour, with most falling in the median of that range;[vi] another survey found that rates for non-lawyers across states ranged from $99 to $220 per hour.[vii] If law student work is conservatively valued at a market rate of $100 per hour, as cases support,[viii] clinic students are estimated to have provided over $325 million in free legal assistance in 2020-21.

Clinic Students	2020-21 Hours	Value/Hour	Total Value
Market Rate	3,278,000	$100.00	$327,800,000
Wage Rate	3,278,000	$27.03	$88,604,000

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Brookings: Rethinking The Corporate Income Tax — The Role Of Rent Sharing

William G. Gale (Brookings Institution; Google Scholar) & Samuel I. Thorpe (Brookings Institution), Rethinking the Incidence of the Corporate Income Tax:

Debates about corporate income tax cuts follow a familiar script. Republicans claim that rank-and-file workers benefit. Democrats argue that affluent shareholders reap the gains.

In a new project [Rethinking the Corporate Income Tax: The Role of Rent Sharing], we find that, workers do benefit, but it is the most affluent employees — managers and executives — who receive the lion’s share of benefits, not rank-and-file staff.

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D.C. Court Of Appeals Increases Bar Exam Seating Capacity By 41% After Outcry From Deans Nationwide

Following up on Wednesday's post, Dispute Over Limited Seating, Preferential Treatment For DC Bar Exam Continues—But Court Isn't Budging:  D.C. Court of Appeals, The DC Court of Appeals Adds 450 Seats to the July 2022 DC Bar Exam:

The DC Court of Appeals has continued to seek additional venues to administer the DC Bar Exam in July, and today we are happy to announce that we have increased our seating capacity to 1550 seats.

The University of the District of Columbia will provide 450 extra spots above the 1,100 seats available at the DC Armory.

The priority registration period opened today and will close May 17th at 11:59pm.

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The Tax Lawyer Publishes New Issue

The Tax Lawyer has published Vol. 75, No. 3 (Spring 2022):

• Linda Galler (Hofstra), Tax Opinion Policies and Procesures,  75 Tax Law. 443 (2022)
• Steven Z. Hodaszy (Robert Morris), Exchange-Traded Funds Use Section 852(b)(6) for Tax Avoidance, Not Just Tax Deferral: So Why Is This Loophole Still Open?, 75 Tax Law. 489 (2022)

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University Pays $1.65 Million To Settle Tuition Refund Class Action Claiming Online Classes During Covid Were 'Subpar'; Students Get $185 Each; Lawyers Get $550,000

St. Louis Post-Dispatch, Lindenwood U. to Pay $1.65 Million to Settle Claim Online Classes 'Subpar':

The nearly 6,000 Lindenwood University students who had spring 2020 classes move online during the COVID-19 pandemic soon will be getting some money back.

U.S. District Judge Ronnie L. White approved a $1.65 million settlement Wednesday between the St. Charles university and a class action group of students led by Dylan Martin, of Eldon, Missouri. Each student will receive roughly $185, and the students' attorneys will receive roughly $550,000. ...

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Parsons: Cryptocurrency, Legibility, And Taxation

Amanda Parsons (Academic Fellow, Columbia; moving to Colorado), Cryptocurrency, Legibility, and Taxation:

In Jarrett v. United States, a taxpayer in Tennessee is arguing that staking cryptocurrency did not result in him earning “income” under federal income tax law. This case illustrates the fundamental challenge that cryptocurrency and blockchain technology present for tax law. Wealth creation in the crypto space is not readily legible to the state. This absence of legibility threatens tax law’s reliance on placing economic activities into categories to determine how they should be taxed. Furthermore, this case highlights the harms Congress and Treasury are risking by not taking action on cryptocurrency taxation. The uncertainty and lack of guidance on the appropriate taxation of cryptocurrency is opening the door for a critical juncture in tax law to be decided via strategic litigation. This threatens a jurisprudential evasion of the democratic and administrative process in a high-stakes moment for tax law.

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LoPucki: A Comprehensive Theory And Style For Using PowerPoint To Teach Law

Lynn M. LoPucki (UCLA), The PowerPoint Channel, 17 U. Mass. L. Rev. 41 (2022):

This Article is the first to present a comprehensive theory and style for using PowerPoint to teach law. The theory is that presentation software adds a channel of communication that enables the use of images in combination with words. Studies have shown that combination to substantially enhance learning. The style is based on an extensive literature regarding the use of PowerPoint in teaching law and other higher education subjects as well as the author’s experimentation with PowerPoint over two decades. The Article states fourteen principles for slide or slide sequence design, provides the arguments from the literature for and against them, and explains the techniques by which the author implements them. It argues that PowerPoint is effective for eight kinds of presentation:

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ABA Tax Section Hybrid 2022 May Meeting

This week's ABA Tax Section hybrid 2022 May Meeting (program) kicks off today. One of the highlight of the meeting is Saturday's luncheon and plenary session:

Keynote Speaker: Lily Batchelder, Assistant Secretary for Tax Policy, U.S. Department of the Treasury
Roundtable: Tax Data Transparency: Changes Coming to a Post-Pandemic Tax Code? On January 20, 2021, President Biden signed Executive Order 13985, which, inter alia, established an Interagency Working Group on Equitable Data prompted by a growing recognition that the absence of demographic data in federal datasets, including tax data, results in inequities across federal programs. In addition, Treasury is undertaking a comprehensive research initiative to study the relationship between the U.S. tax code and racial inequities, in response to research identifying inequities in tax enforcement. Congress, too, is making demands for more transparency in tax data, with Senate Finance Chair Ron Wyden (D-OR) calling for the IRS to “collect and disclose more information relating to the effect of the tax code on different demographics [because] it makes no sense to blind lawmakers to the key data that would illuminate injustice in our tax laws.” This roundtable will provide new insight on the tax policy implications of greater tax data transparency in a post-Pandemic tax code. Discussion will focus on the role of tax data transparency in tax expenditure oversight; the implications of the absence of demographic data on current tax administration and policy; and how tax expenditures included in Pandemic- related legislation have created an opportunities for new data.

Moderator: Caroline Bruckner, Sr. Professorial Lecturer & Managing Director of the Kogod Tax Policy Center, American University Kogod School of Business

Panelists: Steven Dean, Professor of Law, Co-Director of the Dennis J. Block Center for the Study of International Business Law, Brooklyn Law School; Mark Mazur; Danny Yagan

• Steven Dean, Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. __ 
• Steven Dean, Filing While Black: How Our Racially Biased Tax System Hurts All of Us, 175 Tax Notes Fed. 466 (Apr. 18, 2022)

Other Tax Profs with speaking roles include:

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The Deborah Jones Merritt Center For The Advancement Of Justice

Claudia Angelos (NYU), Mary Lu Bilek (Former Dean, CUNY, Massachusetts) & Joan W. Howarth (UNLV; Dean Emerita, Michigan State; Google Scholar), The Deborah Jones Merritt Center for the Advancement of Justice, 82 Ohio St. L.J. 911 (2021):

When invited to write an essay on clinical legal education honoring our friend, we were struck by the importance of a focus on clinical legal education in any collection of work paying tribute to Professor Deborah Jones Merritt. Legal education has benefited from a fifty-year movement for clinical education. This movement necessarily interrogates and seeks to overcome the anachronistic, inherited Langdellian paradigm that dominates and continues to define the curricula and policies of our law schools. But the movement for clinical education has been exponentially confounded by contemporary legal education’s shape as a pyramid of statuses and privileges accumulated over time and embedded in the straight, white, male, ableist, classist structures of American universities, our legal system, and our laws.

Progress has been made. Thousands of lawyers now enter the profession with the advantage of having practiced under the supervision of faculty who choose to live in the fray of the reality of clients’ lives, the ambiguity of the real world, and the politics of the profession. Thousands of lawyers have learned through clinical education the habits of planning, doing, and reflecting that are otherwise invisible in the academy.

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Brooks: The International Tax System Is There To Achieve Justice

Kim Brooks (Dalhousie University, Schulich School of Law; Google Scholar), The International Tax System Is There to Achieve Justice (JOTWELL) (reviewing Allison Christians (McGill; Google Scholar) & Laurens van Apeldoorn (Open University, the Netherlands), Tax Cooperation in an Unjust World (2021)):

I love everything about this book book, Tax Cooperation in an Unjust World, by Allison Christians and Laurens van Apeldoorn. It’s short, it’s readable, there’s no mystery about the point (and the authors don’t belabour it), and it’s important.

The main claim: our international tax system has justice at its heart. And when we fail to attend to its justice consequences, we enable states with great wealth to “facilitate[] and feed[] off continued human suffering.” (P. 1.)

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Law Students Left Behind: Law School's Role In Remedying The Devastating Effects Of Federal Education Policy

Sandra Simpson (Gonzaga), Law Students Left Behind: Law School's Role in Remedying the Devastating Effects of Federal Education Policy, 107 Minn. L. Rev. __ (2023):

Due to the unintended consequences of misdirected federal education policy, students come to law school with underdeveloped critical thinking and cognitive adaptability skills. As the products of the No Child Left Behind Act (“NCLB”) and its progeny, students educated in the United States after 2002 excel at memorization and multiple-choice exam strategies but were not afforded the practice needed to fully develop other critical professional attributes. This is problematic as these are the very characteristics law students need to be a successful student and lawyer. Further, legal employers are demanding their new lawyers possess these capabilities upon graduation from law school. The Uniform Bar Exam may also be substantially changing to test these essential qualities.

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Wiedenbeck & Stein: The Executive Compensation Threat To Retirement

Peter J. Wiedenbeck (Washington University; Google Scholar) & Norman P. Stein (Drexel), The Executive Compensation Threat to Retirement:

In recent years a new phenomenon has appeared on the retirement savings landscape: the expansion into middle management ranks of a traditional tool of executive compensation, the so-called “top hat” pension plan. Top hat plans are unfunded deferred compensation programs for a “select group of management or highly compensated employees.” Properly structured, top hat plans amass retirement resources that are taxed to employee-participants only when distributed. From the participant’s viewpoint, that delayed inclusion appears comparable to the tax deferral accorded qualified retirement plan savings, yet top hat plans are exempt from all of the Code’s qualification conditions. They are likewise excused from virtually all of ERISA’s pension plan participant protections, including vesting, funding, and fiduciary responsibilities.

This regulatory immunity licenses three interconnected pathologies that undermine core retirement policy objectives. The inapplicability of ERISA’s worker protections, combined with preemption of state law, relegates top hat plan participants to a uniquely precarious position: their retirement savings are more exposed to depredation and vulnerable to loss than if ERISA had never been enacted. The inapplicability of the Code’s qualified plan nondiscrimination requirements allows employers to offer additional retirement savings to highly-paid managerial, technical, and professional employees without having to pay comparable benefits to rank-and-file workers. And the dramatic disparity, post-2017, between income tax rates applicable to corporations and high-income individuals incentivizes that favoritism with a substantial tax subsidy that’s unmeasured and generally overlooked.

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A Human Being Wrote This Law Review Article: GPT-3 And The Practice Of Law

Amy B. Cyphert (ASPIRE), A Human Being Wrote This Law Review Article: GPT-3 and the Practice of Law, 55 UC Davis L. Rev. 401 (2021):

Artificial intelligence tools can now “write” in such a sophisticated manner that they fool people into believing that a human wrote the text. None are better at writing than GPT-3, released in 2020 for beta testing and coming to commercial markets in 2021. GPT-3 was trained on a massive dataset that included scrapes of language from sources ranging from the NYTimes to Reddit boards. And so, it comes as no surprise that researchers have already documented incidences of bias where GPT-3 spews toxic language. But because GPT-3 is so good at “writing,” and can be easily trained to write in a specific voice — from classic Shakespeare to Taylor Swift — it is poised for wide adoption in the field of law. 

This Article explores the ethical considerations that will follow from GPT-3’s introduction into lawyers’ practices. GPT-3 is new, but the use of AI in the field of law is not. AI has already thoroughly suffused the practice of law. GPT-3 is likely to take hold as well, generating some early excitement that it and other AI tools could help close the access to justice gap. That excitement should nevertheless be tempered with a realistic assessment of GPT-3’s tendency to produce biased outputs. 

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Hasen: Interest Deductibility

David Hasen (Florida; Google Scholar), Interest Deductibility:

The proper tax treatment of interest expense has been a subject of disagreement since the inception of the modern income tax in the early twentieth century. On one view, the purpose of the financing transaction dictates the tax treatment of interest so that interest paid on borrowing used to finance consumption should be nondeductible, whereas business interest should be deductible. On another view, interest paid does not finance a consumption item but rather a mere shift in resources and therefore should be deductible at all events, assuming the recipient includes the interest received in income.

Both of these views lead to conundrums that cannot be resolved without considering the broader question of why some expenses are deductible at all. Focusing on that question, it turns out that business interest, like any other business expense, should generally be deductible as a timing or an accounting principle under an income tax. That principle does not apply to personal interest expense. Nevertheless, there may be an independent basis to permit a deduction for personal interest expense that is grounded in considerations of vertical equity.

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Dispute Over Limited Seating, Preferential Treatment For DC Bar Exam Continues—But Court Isn't Budging

Law.com, 'Arbitrary and Unfair': Dispute Over Limited Seating, Preferential Treatment for DC Bar Exam Continues—But Court Isn't Budging:

“I cannot understand the rationale for such favoritism and I think it is likely unconstitutional," wrote Berkeley Law Dean Erwin Chemerinsky in a follow-up letter to the D.C. Court of Appeals on Monday.

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Tax Law Review Publishes New Issue

The Tax Law Review has published a new issue (Vol. 74, No. 2 (Spring 2021)):

• Jason S. Oh (UCLA) & Eric M. Zolt (UCLA; Google Scholar), Wealth Tax Design: Lessons from Estate Tax Avoidance, 74 Tax L. Rev. 175 (2021)
• Ilan Benshalom (Hebrew Univ.), Recalibrating Moral Feasibility Boundaries of Taxation, 74 Tax L. Rev. 211 (2020)

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WaPo: How Merit Scholarships Perpetuate Racial Inequities

Washington Post, How Popular Merit College Scholarships Have Perpetuated Racial Inequities:

“The Bright Futures Scholarship Program offers opportunity and prosperity for all Florida families!” the Department of Education there tweeted this spring.

The message seems simple: Anyone can get most, or even all, of their tuition paid through the state’s signature program. Students just have to get the right grades and standardized test scores.

Bright Futures has loomed large, then, in the work of people like Sherry Paramore. As the president of Elevate Orlando, a nonprofit group, she helped Florida high school students get to college. Every September, Paramore would go over finances, walking through the types of aid. She’d work with tutors to help her students improve their grades. She connected them with mentors to plan their careers.

To Paramore, they’re exactly the kinds of students a state scholarship should help. They worked hard and got accepted to college. But when it came to Bright Futures, there was a mismatch.

Over three years, Paramore worked with nearly 200 students. Many were the first in their families to attend college; most were Black. But they struggled with the standardized tests. So in the end, how many qualified for a Bright Futures scholarship — the ticket Florida created to educational opportunity? Not a single one.

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Hasen: Legal Standards And Incomplete Monitoring

David Hasen (Florida; Google Scholar), Legal Standards and Incomplete Monitoring, 30 Res. in L. & Econ. 109 (2022):

Regulators can adjust penalties to compensate for incomplete monitoring of regulated parties that are subject to legal rules, but compensating penalty adjustments often are unavailable when regulated parties are subject to legal standards. Incomplete monitoring consequently invites greater noncompliance under standards than under rules. This chapter develops a model that quantifies some of the specific tradeoffs that regulators face in designing standards regimes under incomplete monitoring. 

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The ABA Should Be Required To Disclose Law School Accreditation Information

Following up on last week's post, FedSoc Debate: Should The ABA Be Stripped Of Its Monopoly Law School Accrediting Power?: Henry Webb (Palm Beach Atlantic University), Patrick Baker (Tennessee) & Kaleb Byars (J.D. 2021, Tennessee), Accreditation Information Produced by United States Law Schools to the American Bar Association Should be Made Available to the Public From Both Law and Policy Perspectives, 34 Loy. U. Chi. Consumer L. Rev. ___ (2022):

This article argues that, from a legal perspective, the American Bar Association (“ABA”) is the functional equivalent of a government agency and so is subject to the United States Freedom of Information Act. Under Soucie v. David and related cases, the fact that the ABA has the final decision-making authority to decide whether a United States law school is or is not to be accredited renders it the functional equivalent of a government agency, and the ABA’s refusal to make available to the public the voluminous amount of important information produced to the ABA by law schools going through the accreditation and accreditation review processes is illegal and would not likely survive a challenge in court.

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A Critical Review Of Tax The Rich! And The Patriotic Millionaires

Michael Conklin (Angelo State; Google Scholar), We Must Raise Taxes on the Rich: A Critical Review of Tax the Rich! and the Patriotic Millionaires:

At the 2021 Met Gala, Alexandria Ocasio-Cortez sparked controversy by wearing a “Tax the Rich” dress. Afterward, AOC championed the race of the dress designer and accused her critics of being sexist, while her critics pointed to the irony of such a message at a $30,000-a-ticket event designed to support the interests of the ultra-rich. But these points are largely irrelevant when considering if taxes on the rich should be increased. This is unfortunately also the level of discourse present in the book Tax the Rich! How Lies, Loopholes, and Lobbyists Make the Rich Even Richer. Anyone reading this book in an effort to better understand the arguments for and against raising taxes on the rich will be disappointed, as it largely provides neither. This review critiques the book for selectively omitted information, ignoring incentivization effects, and the appeal to emotion by villainizing the rich. These critiques provide a better understanding of the legitimate arguments for and against raising taxes on the rich and point to potential hypocrisy in groups such as the Patriotic Millionaires.

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WSJ Essay: In Praise of Anxiety

Wall Street Journal Essay:  In Praise of Anxiety, by Tracy Dennis-Tiwary (Hunter College; Author, Future Tense: Why Anxiety Is Good for You (Even Though It Feels Bad) (2022)):

Anxiety can be used to create a deeper sense of personal fulfillment by striving toward excellence and savoring having a purpose in your life.

Nobody likes to feel anxious. Anxiety is among the most pervasive and reviled of human emotions. An entire industry has sprung up to aid us in eradicating it, from self-help books and holistic remedies to pharmaceuticals and cutting-edge cognitive behavioral therapy. Yet we are an ever more profoundly anxious society. Epidemiological studies show that over 100 million people in the U.S. will suffer from an anxiety disorder in their lifetime. Rates, especially among the young, have been rising for the past decade. Our efforts to contain anxiety aren’t working.

As a clinical psychologist and neuroscience researcher, I have devoted the past 20 years to understanding difficult emotions like anxiety, and I believe that we mental health professionals have made a terrible mistake. We’ve convinced people that anxiety is a dangerous affliction and that the solution is to eliminate it, as we do with other diseases. But feeling anxious isn’t the problem. The problem is that we don’t understand how to respond constructively to anxiety. That’s why it’s increasingly hard to know how to feel good.

This “bad” feeling isn’t a malfunction or failure of mental health. It’s a triumph of human evolution, a response that emerged along with one of our greatest attributes: the ability to think about the uncertain future and prepare for it. Anxiety places us in the “future tense” (pun intended)—a state in which we are motivated not only to survive but to thrive, by being more persistent, hopeful and innovative.

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Pennell & Weisbord: Trust Alteration And The Dead Hand Paradox

Jeffrey Pennell (Emory) & Reid K. Weisbord (Rutgers), Trust Alteration and the Dead Hand Paradox, 48 ACTEC L.J. __ (2023):

Trusts are popular instruments for wealth transmission because they can be crafted to suit almost any imaginable estate planning goal that is not contrary to public policy. With the abrogation of the Rule Against Perpetuities in most states, settlors may impose trust terms that will be legally enforceable for scores of future generations, if not in perpetuity. Long-term and perpetual trusts, however, present a paradox of dead hand control, because the specificity and the durability of settlor-imposed restrictions tend to be inversely related. As donative preferences become increasingly specific and restrictive, trusts become less durable with the passage of time, as changing circumstances imperil the settlor’s original intent or render the trust unadministrable.

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Legal Ed News Roundup

• Above the Law, Drowning In Debt? You Might Be A Graduate Of One Of These Law Schools
• Above the Law, Law Professor Responds To Supreme Court Leak With Racist Commentary. Gee, I Wonder Which Law School...
• Above the Law, Law School Changes Exam. .. Via Email ... Which Students Couldn't Check ... BECAUSE THE EXAM HAD STARTED
• Above the Law, So Uhh ... About That Con Law Final Next Week...
• Above the Law, The Best Law Schools For Diversity (2022)
• Bacon's Rebellion, How Partisan Bias Affects Law School Rankings
• Daily Business Review, Miami Law Offering Free Virtual Summer Legal Academy for Third Year

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Jones & Maynard: Unfulfilled Promises Of The FinTech Revolution

Lindsay Sain Jones (Georgia-Terry Business School; Google Scholar) & Goldburn Maynard Jr. (Indiana-Kelley Business School; Google Scholar), Unfulfilled Promises of the FinTech Revolution, 111 Cal. L. Rev. ___ (2023):

Racial wealth inequality is complex. While not entirely to blame, lack of access to credit and financial services, lower rates of return, and discrimination have contributed to this persistent gap. Some are hopeful that financial technology (fintech) can address these underlying issues by broadening access to capital and providing fairer lending standards, better investment advice, and more secure transactions. Indeed, key players in the industry promote fintech as a primary means to advance financial inclusion for minorities. Despite promises of financial inclusion from the fintech industry, however, underserved populations continue to experience unequal access to financial services and wealth. This Paper evaluates claims relating to key components of the so-called “fintech revolution” to determine whether they can address underlying causes of wealth inequality.

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As Temple Dean Begins Serving 14-Month Sentence For U.S. News Rankings Fraud, Tenured Professor Is Defiant At Sentencing Hearing: 'Every Single University Has People Doing The Same Exact Operations'

Following up on my previous post, Former Temple Dean Sentenced To 14 Months In Federal Prison For Rankings Fraud:  

Poets & Quants, Moshe Porat, Denied Bail, Will Begin Prison Sentence On May 9:

Philadlphia Inquirer, Ex-Temple Employees Sentenced to Probation for Fraud Tied to Business School Rankings:

A former administrator and a retired statistics professor at Temple University were sentenced to probation this week for assisting the former dean of its business school in a scheme to inflate its position in national rankings publications.

But standing before a federal judge in Philadelphia, Marjorie O’Neill, a onetime finance manager at the Fox School of Business, and Isaac Gottlieb, who was a tenured professor, struck vastly different tones when it came to accepting responsibility for a scandal that has since cost the university millions in legal settlements.

O’Neill admitted last year that she, under the direction of former dean Moshe Porat, had falsified data on students at the school to help propel it to the top of influential lists like U.S. News and World Report’s ranking of top business school programs. She told U.S. District Judge Gerald A Pappert during a hearing Thursday that she was “thoroughly ashamed.” ...

Meanwhile, Gottlieb — who helped Fox cheat more effectively by reverse engineering the criteria by which U.S. News ranked schools — showed flashes of defiance at his sentencing hearing Wednesday. “Every single university in the United States has people doing the same exact operations,” he said. ...

“It is important for other institutions to realize that this chase for rankings is not worth it,” the judge said Thursday. “There are lines you can’t cross. It’s important for people to see there are going to be criminal consequences and penalties for doing that.” ...

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Lesson From The Tax Court: Avoiding The 2-Year Lookback Period In Bankruptcy

Today’s lesson is about how to maximize the discharge of tax liabilities through bankruptcy.  It's a lesson on timing.  Last year I blogged two cases showing how a bankruptcy tolls both the collection and assessment limitation periods in the Tax Code.  See Lesson From The Tax Court: For Whom The Bankruptcy Tolls, TaxProf Blog (July 19, 2021).  Today’s lesson is the flip side: we learn how taxpayers who want to discharge old tax liabilities through bankruptcy need to be careful about how the two-year lookback exception to discharge may be tolled by provisions in the Tax Code.

I offer today’s lesson in honor of Bob Pope, who died on April 29th.  Bob was one of those remarkable attorneys who could navigate the complex interplay of bankruptcy and tax law.  He was one of the founders of the Tax Collections, Bankruptcy and Workouts Committee in the ABA Section of Taxation, along with Paul Asofsky, Fran Sheehy, Ken Weil, and Mark Wallace.  He will be missed.

Bob would appreciate today’s lesson.  In Robert J. Norberg and Debra L. Norberg v. Commissioner, T. C. Memo 2022-30 (Apr. 5, 2022) (Judge Lauber), the taxpayers filed their 2016 return in February 2019 without paying the tax they reported due.  When the IRS started collection, the Norbergs asked for a CDP hearing.  When they got to Tax Court in September 2020 they filed a bankruptcy petition, hoping to wipe out the liability.  They failed because they mis-timed their bankruptcy petition.  An irony is that these taxpayers could have likely gotten their desired discharge if they had ignored the siren song of CDP.  Bob could have taught them that.  And, if you click below the fold, you too can learn this lesson on how to maximize the discharge of tax liabilities in bankruptcy.

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