Tax Profs at Western Law Professors of Color Conference

The 3-day Western Law Professors of Color Conference kicks off today in San Diego.  Tax Profs making presentations or serving on panels at the conference include:

Friday, 1:45 - 3:15 p.m.:  Dorothy A. Brown (Washington & Lee) serves as a panelist on Tracing the Influence of Derrick Bell's Interest Convergence Theory on Scholarship by Scholars of Color.

Saturday, 1:45 - 3:15 p.m.:  Richard Winchester (Thomas Jefferson) presents Working for Free: A New Tax Dodge for the Wealthy Magnifies Employment Tax Defects, and Francine Lipman (Chapman) serves as Commentator

Saturday, 1:45 - 3:15 p.m.:  Michael T. Yu (California Western) presents A Proposed Allocation of Distributable Net Income to the Separate Shares of a Trust or Estate, and Dorothy A. Brown (Washington & Lee) serves as Commentator

Saturday, 3:15 - 5:00 p.m.:  Francine Lipman (Chapman) presents Taxing Undocumented Immigrants: Separate, Unequal and Without Representation as part of a panel on Immigration without Representation

NY Post: Tax Lawyer "Skunk" v. "Skank"

We previously have blogged the sordid tale of James Colliton, the 42-year old former Cravath tax lawyer and married father of five who is in jail on teenage rape and prostitution charges.  The New York Post adds a new chapter today with the article Perv-Case Skunk vs. "Skank":

The Manhattan lawyer accused of raping two teen sisters who were being pimped by their own mother told his side of the story yesterday, when his new defense attorney called the two young victims "perjurers" - and the oldest one a "skank."

"My client made $500,000 a year," the defense lawyer, Howard Greenberg, said after a Manhattan Supreme Court appearance for James Colliton, who is being held without bail. Colliton was a tax attorney for Cravath, Swaine and Moore, a top Midtown law firm.

"He had the wherewithal to pay for any piece of tuchus on the planet," Greenberg continued. "And he paid that skank?"

(Hat Tip:  Peter Lattman's WSJ Law Blog.)  For prior TaxProf Blog coverage, see:

• National Law Journal: Cravath Tax Associate's Trouble Brings Spotlight
• Former Cravath Tax Lawyer Indicted on Teenage Rape and Prostitution Charges
• Police Apprehend Former Cravath Tax Lawyer Wanted on Teenage Rape and Prostitution Charges
• NY Post: "Pervert" Tax Lawyer Is Broke

Colombo Presents Federal and State Tax Exemption Policies and Health Care for the Poor Today at St. Louis

John D. Colombo (Illinois) presents Federal and State Tax Exemption Policies and Health Care for the Poor at St. Louis today as part of its Medical Debt Symposium.

 

Staudt Presents Congressional Oversight of Supreme Court Decision-Making Today at Georgetown

Nancy C. Staudt (Washington University, moving to Northwestern) presents Auditing the Court: Congressional Oversight of Supreme Court Decision-Making at Georgetown today as part of its Law & Economics Workshop Series.  Here is the Conclusion:

Recent academic studies have shown that Congress pays a surprising amount of attention to Supreme Court decision-making. In this paper, we investigated this Court- Congress dynamic in the economic context, and specifically in the field of taxation. We found that Congress actively monitors the Court and that monitoring is associated with codification proposals, override proposals, and “position-taking” activities. These findings suggest that the extant literature on Court-Congress relations, which focuses solely on the override process, seriously underestimates the amount of time and energy that legislators spend on Court-related issues.

In order to explain why Congress engages in these oversight activities, as well as the speed and frequency with which oversight takes place, we collected data on economic, political, and case-related factors that we hypothesized would explain congressional activity. We found that when the deficit is high, when amicus curiae file briefs with the Court, when the justices invite a congressional response, and when congressional politics are aligned with those of the Court—the likelihood of oversight increases at statistically significant levels. Although these findings are preliminary and much more diagnostic work must be done, they do provide insight into congressional motives never before explored in the literature.

WSJ: Charitable Contributions Via State Tax Forms

Interesting article in today's Wall Street Journal:  A Less-Painful Way to Donate, by Sally Beatty:

Tax day is fast approaching, and so is the deadline for earmarking tax dollars to charity, a little-promoted option on most state tax forms. These programs, which date to the 1970s, allow taxpayers to donate to nonprofits of their choice by redirecting refund dollars, or adding to their bill when they file their state taxes. Taxpayers in Arizona, for instance, can send money to support child-abuse prevention, among other causes. In California, residents can donate to breast cancer, Alzheimer's and 12 other causes. Maryland allows citizens to give to the popular Chesapeake Bay Trust, aimed at restoring the bay, while in Pennsylvania residents can donate to wildlife conservation. Taxpayers take a deduction for the donation on the following year's form.

The last full-year analysis by the Federation of Tax Administrators, an association of state tax agencies, found that $32.8 million in donations was raised nationwide from state tax returns processed in 2002, up from $5.5 million in 2000.

Biggest Moves in New 2007 U.S. News Law School Rankings

Top 25 Moves:

• +5 Washington University (19 in 2007)
• +3 California-Berkeley (8)
• +2 Notre Dame (22)
• +1 Stanford (2)
• +1 NYU (4)
• +1 USC (17)
• +1 George Washington (19)
• - 1 Harvard (3)
• - 1 Texas (16)
• - 2 Northwestern (12)
• - 2 Cornell (13)
• - 2 Boston University (22)

Biggest Top 26-50 Moves:

• +9 SMU (43)
• +6 Emory (26)
• +5 Colorado (43)
• +4 George Mason (37)
• +4 American (43)
• +2 Georgia (34)
• - 2 California-Davis (34)
• - 2 Alabama (43)
• - 2 Arizona (43)
• - 2 Tulane (43)
• - 3 Wake Forest (39)
• - 4 California-Hastings (43)
• - 5 Fordham (32)

Biggest Top 51-75 Moves:

• +30 Kansas (70)
• +25 Denver (70)
• +13 Seton Hall (70)
• +9 Missouri-Columbia (60)
• +8 Miami (65)
• +7 Temple (58)
• +7 Nebraska (70)
• +5 Arizona State (53)
• +5 Cardozo (53)
• +5 Cincinnati (53)
• +5 Chicago-Kent (60)
• +3 Florida State (53)
• +3 Villanova (60)
• - 5 Houston (70)
• - 7 Loyola-L.A. (65)
• - 8 Utah (57)
• - 8 Pittsburgh (60)
• - 8 Tennessee (60)
• - 9 Kentucky (65)

Biggest Top 76-100 Moves:

• From Tier 3 DePaul (80)
• From Tier 3 Santa Clara (87)
• From Tier 3 San Francisco (93)
• From Tier 3 Toledo (93)
• +18 Indiana-Indianapolis (77)
• +13 Mercer (87)
• +8 LSU (87)
• +8 Penn State (87)
• - 7 Rutgers-Newark (80)
• - 7 St. Louis (80)
• - 7 Richmond (80)
• - 7 Pacific (97)
• - 7 South Carolina (97)
• - 8 New Mexico (77)
• - 10 Pepperdine (87)
• - 10 Hawaii (93)
• - 12 Georgia State (97)
• - 12 University of Mississippi (97)

Top 100 to Third Tier:

• Catholic (85 last year)
• Louisville (85)
• Nevada-Las Vegas (90)
• Hofstra (95)
• Syracuse (95)
• Marquette (100)

Fourth Tier to Third Tier:

• Drake
• Northern Illinois
• Pace
• Quinnipiac

Third Tier to Fourth Tier:

• Franklin Pierce
• Michigan State
• Wyoming
• West Virginia

For the 2007 U.S. News Law School Rankings, see here ($).

Princeton Review's Law School Rankings: Career Rating

With yesterday's release of the U.S. News & World Report new 2007 law school rankings (blogged here, here, and here), I want to conclude this week's discussion of five of the quantitative rankings in The Princeton Review's book, Best 159 Law Schools, based on a survey of more than 15,000 students and statistics provided by law school administrators.

Career Rating:  How well the law school prepares its students for a successful career in law, on a scale of 60-99.  The rating incorporates school-reported data and the average responses of students at the school to a few questions on our law student survey.  We ask law schools for the average starting salaries of graduating students, the percentage of graduating students who find employment after graduation, and the percentage of students who pass the bar exam the first time they take it.  We ask students about how much the law program encourages practical experience; the opportunities for externships, internships, and clerkships; and how prepared to practice the law they will feel after graduating.

Here is the Princeton Review's ranking of the Top 29 law schools based on Career Rating (and their scores):

1.  Northwestern	99
1.  Michigan	99
3.  Harvard	98
3.  Chicago	98
5.  Penn	97
5.  NYU	97
5.  Louisville	97
5.  Franklin Pierce	97
5.  Duquesne	97
10. Yale	96
10. Georgetown	96
10. Notre Dame	96
13. California- Berkeley	95
13. Virginia	95
13. Oklahoma	95
13. Marquette	95
13. Capital	95
18. Boston College	94
18. Boston University	94
18. Hofstra	94
18. Stetson	94
18. Penn State	94
18. Touro	94
18. Florida Coastal	94
25. UCLA	93
25. Fordham	93
25. Saint Louis	93
25  Detroit-Mercy	93

Princeton's Review's Law School Rankings:

• Monday:  Academic Experience
• Tuesday:  Professors Interesting
• Wednesday:  Professors Accessible
• Thursday:  Admissions Selectivity

University of Baltimore Seeks Tax Clinic Fellow

The University of Baltimore School of Law invites applications for an anticipated position as a fellow in the Tax Clinic:

This public interest fellowship program offers practicing attorneys exposure to law school clinical teaching. The fellow's duties include direct supervision of case work of clinic students and clinic classroom teaching in coordination with clinic faculty. This position is a contractual appointment for up to two years which is potentially renewable for one additional year due to particular case coverage or teaching needs. The start date is negotiable, but should be no later than July 15, 2006.

Qualifications: excellent oral and written communication skills; at least two years of experience either as a practicing lawyer primarily in the area of tax law or in a U.S. Tax Court clerkship; a strong academic record and/or other indicia of high performance ability; a commitment to work for low income clients and a lively interest in teaching. Fellows must be members of the Maryland bar to supervise law practice by students. You must take the Maryland bar at the July 2006 sitting if you are not currently a member.

Salary: $50,000 year 1; $53,000 year 2. The position, which entails year-round responsibilities, includes full benefits, including retirement annuities, research support and travel allowance.

Applicants should submit a letter of interest and curriculum vitae by April 21, 2006, to Professor Keith Blair, Tax Clinic, University of Baltimore School of Law, 40 West Chase Street, Baltimore, Maryland 21201. Phone: (410) 837-5706; fax: (410) 333-3053. The University of Baltimore is an equal opportunity employer and minority candidates are encouraged to apply.

Cohen on Misassigning Income: The Supreme Court and Attorneys' Fees

Stephen B. Cohen (Georgetown) has published Misassigning Income: The Supreme Court and Attorneys' Fees, 25 Va. Tax Rev. 415 (2005).  Here is the abstract:

This past term's Supreme Court decision in Commissioner v. Banks and Commissioner v. Banaitis distorts foundational principles, known as assignment of income law, which help identify the person who must report income for federal tax purposes. The Court held that assignment of income principles require a plaintiff to report as income the portion of a recovery paid to the plaintiff's attorney as a contingent fee. As a result, the plaintiff is taxed at excessively high rates, which may in some cases equal or exceed a confiscatory 100%. Taxing the plaintiff on the attorney-fee portion of a recovery also undermines the objective of federal fee-shifting statutes, which is to enable a prevailing plaintiff to act as a private attorney-general by employing an attorney without cost. Although recent legislation changes the result in the future for specified categories of litigation, including a wide variety of civil rights and employment claims, there remain significant classes of cases, including nonphysical torts, physical torts with punitive damages, and environmental statutes with fee-shifting provisions, to which this recent legislation does not apply and in which plaintiffs will continue to be taxed unfairly under the Court's decision.

New 2007 U.S. News Tax Rankings

The new 2007 U.S. News Law School Tax Rankings are out and available on-line here ($).  U.S. News again ranks the Top 20 (21 with ties).  The Top 5 schools with graduate tax programs are the same as last year:

• 1. NYU
• 2. Florida
• 3. Georgetown
• 4. Northwestern
• 5. Miami

The 12 schools with graduate tax programs included in the rankings are the same as last year, with only slight variations in their places in the rankings:

• 6. Boston University (#6 last year)
• 7. San Diego (#6)
• 8. University of Washington (#8)
• 9. SMU (#10)
• 10. Loyola-L.A. (#9)
• 10. Denver (#10)
• 10. Villanova (#10)

New 2007 U.S. News Law School Rankings Are Out!

The new 2007 U.S. News Law School Rankings are out and available on-line here ($).

Logue Presents Optimal Income Tax Penalties When the Law is Uncertain Today at Northwestern

Kyle D. Logue (Michigan) presents Optimal Income Tax Penalties When the Law is Uncertain at Northwestern today as part of its Advanced Topics in Taxation Series organized by David Cameron and Philip Postlewaite. Here is the abstract:

This Article examines the optimal income tax penalty in circumstances in which the tax law is uncertain – that is, when the precise application of the tax laws to a taxpayer’s particular situation at the time of the investment decision is not entirely clear. The Article begins with the assumption that there will always be some degree of substantive uncertainty in the tax laws. Two interesting questions arise out of this assumption: One, how certain should a taxpayer be if she is going to rely on a particular interpretation of a substantively uncertain tax rule? Two, what penalty regime would give the taxpayer the right incentives with respect to relying on substantively uncertain tax laws?

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Fleischer Presents Partnership Profits in Hedge Funds, Venture Capital Funds, and Private Equity Today at NYU

Vic Fleischer (UCLA; moving to Colorado) presents Two and Twenty: Partnership Profits in Hedge Funds, Venture Capital Funds, and Private Equity at NYU today as part of its Colloquium on Tax Policy and Public Finance series conducted by Alan Auerbach and Daniel Shaviro.  Here is the abstract:

Private investment fund managers take a share of the profits of the partnership as the equity portion of their compensation. The tax rules for compensating service partners create a planning opportunity for managers who receive the industry standard “two and twenty” (a two percent management fee and twenty percent profits interest). Compensation is routinely deferred and converted from ordinary income into long-term capital gain. After all is said and done, this quirk in the tax law allows some of the very richest workers in the country to pay tax on their labor income at a very low rate. Changes in the investment world - the growth of private equity funds and hedge funds, the adoption of portable alpha strategies by tax-exempt and tax-indifferent institutional investors, the preference for capital gains, and aggressive tax planning - require reconsideration of the partnership profits puzzle. In this Article, I offer a targeted reform proposal.

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Court: NYC T&E Lawyer Used Undue Influence to Take Elderly Parents' Long Island Home

Interesting article in today's New York Law Journal:  Lawyer's Purchase of Home From Parents Found Too Good to Be True, by Anthony Lin:

By any standard, Manhattan trusts and estates lawyer Edward F. Campbell Jr. got a great deal on his house in ultra-exclusive Lloyd Harbor on Long Island's North Shore. For no down payment and a mere $1,000 a month, he was assigned the deed to a seven-bedroom house sitting on two wooded acres in a village where the median home sale price has been close to $2 million in recent years.

Too good to be true? Yes, said the Long Island judge who ruled earlier this month that Campbell, 57, had exercised undue influence and taken advantage of his superior legal knowledge to foist an unfair transaction on the sellers -- his own elderly parents....

The judge voided both the purchase agreement and the resulting deed, but he ordered the parties to maintain the status quo pending further hearings in Campbell v. Campbell, 23391/01. That status quo has been awkward, as the purchase agreement provided that Campbell's parents, Edward Sr. and Lucy, could continue to live in the house for the rest of their lives, cared for by their son and daughter-in-law, Carol. In their complaint, the elder Campbells claimed the arrangement had rendered them "virtual prisoners in their bedroom" who were "fed sandwiches for dinner" and denied air conditioning in the summer.

[The judge] noted that the younger Campbell had argued vigorously that this consideration should include "meals on the table" and assistance in the home, but the judge said it was "clear from the testimony that the value of this aspect of the claimed consideration has not proved significant to the plaintiffs." Bailey said a particularly "glaring example" of the unfairness of the agreement was that it gave the younger Campbell and his wife an unrestricted right to deduct any amounts they considered debts from their monthly payments to the elder Campbells. Edward Jr. paid off with interest an undocumented loan made to his parents by another son. To reimburse himself, Edward Jr. then deducted $600 from his monthly payment to his parents, paying them only $400 a month.

The judge noted that the parents did consult an outside lawyer about the proposed transfer in 1995 and that lawyer urged them to request changes to the deal. The requests caused Edward Jr. to pull out of the deal, only agreeing to revive it if his parents dropped their change requests and agreed that no outside lawyers be involved in the transaction.

Edward Jr., the oldest of nine children, also asked all of his living siblings to sign a release form agreeing not to sue over the agreement. The judge said it was significant that he did not also circulate a copy of the purchase agreement for his siblings to review.

KPMG's After-Tax Business Cost Guide

KPMG has released Competitive Alternatives, a guide to international business costs.  Here is the Executive Summary:

Competitive Alternatives represents KPMG's guide to comparing business costs in North America, Europe and Asia Pacific. This report measures the combined impact of 27 cost components that are most likely to vary by location, as applied to specific industries and business operations. The eight-month research program covered 128 cities in nine industrialized countries: Canada, France, Germany, Italy, Japan, the Netherlands, Singapore, the United Kingdom, and the United States. More than 2,000 individual business scenarios were examined, analyzing more than 30,000 items of data. The basis for comparison is the after-tax cost of startup and operation for representative business operations in 12 industries, over a 10-year planning horizon. Results are based on the combined results for a group of comparable cities in each country, and are expressed in comparison to the baseline results of the United States.

5 Lowest-Cost U.S. Cities for Businesses	5 Highest-Cost U.S. Cities for Businesses
93.0: Dothan, AL	112.6: New York, NY
93.7: Greenville-Spartanburg, SC	108.5: San Jose, CA
94.1: Lexington, KY	107.8: Boston, MA
94.3: Lima, OH	107.7: Newark, NJ
94.7: Charleston, WV	105.3: Hartford, CT

Inside Higher Ed: Grading Edge for Conservative Students

Interesting article in today's Inside Higher Ed:  Grading Edge for Conservative Students, by Scott Jaschik:

Markus Kemmelmeier, a sociologist at the University of Nevada at Reno, has been watching the Academic Bill of Rights debate with growing frustration, because he thinks there is proof about the question about classroom bias that has been ignored. “I just don’t see evidence” of bias, says Kemmelmeier, one of three authors of an in-depth study on the topic that was published last year in Personality and Social Psychology Bulletin [What's in a Grade?: Academic Success and Political Orientation, 31 Personality and Social Psychology Bulletin 1386 (2005).]

The research looked at the politics and grades, over a four-year period, of 3,890 students at a large public university. The students — most of whom entered as freshmen together and participated in the study by choice — were asked a series of questions about their politics, shared information about their educational backgrounds and SAT scores, and then had their college grades tracked. The students in this sample broke down as 20% conservative, 42% middle of the road, 35% liberal, and the rest scattered in various extreme categories. The research focused on grading patterns for which there was an enrollment pattern by students’ politics....

The more liberal students are, the more likely they are to take courses in fields like sociology and American studies where “questions of social justice” are a focus. Conservative students are more likely to enroll in departments like economics and business. This is a key fact, Kemmelmeir said, because the fields conservatives tend to study are fields where average grades are lower — across all political groups. So when conservative students complain that their grades are lower than their liberal friends, they might be right — but it has nothing to do with bias.

In disciplines that tend to attract more conservative students (economics and all of the disciplines in business schools), conservatives have a slight edge — the equivalent of 0.25 on a 4-point graduate point average scale.

Princeton Review's Law School Rankings: Admissions Selectivity

With U.S. News & World Report set to release its new 2007 law school rankings on April 1, I want to return to a subject I previously blogged:  The Princeton Review's book, Best 159 Law Schools.  This week, I will focus on five of the quantitative rankings based on a survey of more than 15,000 students and statistics provided by law school administrators.

Admissions Selectivity Rating:  How competitive admission is at the law school, on a scale of 60 to 99.  Several factors determine this rating, including LSAT scores and the average undergraduate GPA of entering 1L students, the percentage of applicants accepted, and the percentage of accepted applicants who enroll in the law school.  We collect this information through a survey that law school administrators complete for the Fall 2004 entering class.

Here is the Princeton Review's ranking of the Top 29 law schools based on Admissions Selectivity (and their scores):

1.  Yale	99
1.  Harvard	99
3.  Stanford	98
4.  Penn	97
4.  Columbia	97
6.  Chicago	96
6.  California- Berkeley	96
6.  Northwestern	96
9.  Virginia	95
9.  UCLA	95
9.  Texas	95
12. Georgetown	94
12. Michigan	94
12. NYU	94
15. Duke	93
15. Cornell	93
15. BYU	93
18. Notre Dame	92
18. Fordham	92
18. George Mason	92
21. Vanderbilt	91
21. Baylor	91
23. North Carolina	91
24. Washington & Lee	90
24. Boston College	90
24. USC	90
24. Maryland	90
24. George Washington	90
24. University of Washington	90

Princeton's Review's Law School Rankings:

• Monday:  Academic Experience
• Tuesday:  Professors Interesting
• Wednesday:  Professors Accessible

CTJ: States Hardest Hit by AMT

Citizens for Tax Justice has released Who Pays The Individual AMT: State-by-State Estimates for 2006.  Here are the ten states hardest hit by the AMT in 2006:

State	% of Taxpayers in AMT in 2006
1. New Jersey	26%
2. Connecticut	23%
3. New Hampshire	23%
4. Massachusetts	22%
5. Maryland	22%`
6. Wisconsin	20%
7. Minnesota	18%
8. Rhode island	18%
9. North Dakota	18%
10. New York	17%

More on "Diversity," the ABA, and the Law Schools

On Friday, we blogged Tax Prof Michael Livingston's post on "Diversity," the ABA, and the Law Schools.  Michael has since blogged the reactions to the post among his Rutgers-Camden colleagues and others, and Spencer Overton has blogged the response of Imani Perry of the Rutgers-Camden faculty.

NLJ on Rumsfeld v. FAIR: Good Ruling, Bad Policy

Interesting op-ed in this week's National Law Journal:  Good Ruling, Bad Policy, by Thaddeus Hoffmeister:

Rumsfeld v. Forum for Academic and Institutional Rights (FAIR), however, is not the answer, as made evidently clear by the recent 8-0 Supreme Court vote. (Judge Samuel A. Alito Jr. did not hear oral arguments, so he did not participate in the opinion.) Surprisingly, FAIR (a coalition of law schools and law faculties) was unable to persuade even one justice, despite succeeding at the 3d U.S. Circuit Court of Appeals. The law schools were attempting to restrict the access afforded military recruiters on law school campuses. The law schools argued that requiring them to choose between hosting military recruiters on campus and losing federal funding forced them to endorse the military's don't ask, don't tell policy, thus violating their First Amendment freedom of speech rights.

As a matter of public policy, the arguments made by the law professors also failed. This lawsuit appears to have been generated by those who were bothered by military recruiters on campus, which often are law professors and not students. Many students, unlike faculty and school administration, are OK with the military on campus. For example, a 2003 poll at Columbia University showed that a majority of the students favored the return of ROTC on campus; however, the faculty senate and school president voted against the return. Rather than consult with students, the ones most likely to be affected, the law professors took it upon themselves to decide which recruiters should have access to students.

When did law professors acquire the power to decide student employment choices? In the end, the law professors were acting no better than the supporters of the military's ban on homosexuals. Regardless of the reasons, both want to keep the best and brightest out of the military.

Don't ask, don't tell is unnecessary and unwanted. Continuation of this policy hurts military readiness. Now is the time for Congress and the executive branch to remove the ban and put our country's national security before archaic stereotypes.

Avi-Yonah on The Four Ages of U.S. International Taxation

Reuven S. Avi-Yonah (Michigan) has published All of a Piece Throughout: The Four Ages of U.S. International Taxation, 25 Va. Tax Rev. 313 (2005).  Here is the abstract:

This paper divides up the history of U.S. international taxation into four periods, on the basis of what was the basic theoretical principle underlying the major legislative enactments made in each period. The first period lasted from the adoption of the Foreign Tax Credit in 1918 to the end of the Eisenhower administration, and was dominated by the concept of the right to tax as flowing from benefits conferred by the taxing state. The second period lasted from 1960 until the end of the Carter administration and was dominated by the concept of capital export neutrality and an emphasis on residence-based taxation. The third period lasted from 1981 until 1997, and was driven by the need to preserve the competitiveness of the U.S. economy in an increasingly globalized marketplace, resulting in an emphasis on source-based taxation, albeit with significant exceptions. The last period began with the decision to cooperate with the OECD's harmful tax competition project in 1998, and is marked by a continuous attempt to coordinate residence and source taxation to prevent both double taxation and double non-taxation.

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WSJ: Home Sellers Face Unexpected Tax Hit

Interesting article in the Wall Street Journal:  Home Sellers Face Unexpected Tax Hit; Eliminated Exemptions, Rising Property Values Trigger Capital-Gains Taxes, AMT, by Tom Herman:

A growing number of homeowners, riding the crest of the real-estate boom, are getting hit by an unpleasant surprise when they sell: a hefty tax bill. This development stems from a 1997 law that Treasury Department officials said at the time would eliminate capital-gains taxes for nearly everyone selling their primary residence. Under that law, most married couples who file jointly can exclude as much as $500,000 of their gain. For most singles, the limit is $250,000.

But as home prices have surged, more people have been selling their home for bigger gains than the exclusion amount -- and thus are facing unexpectedly big tax bills, accountants and other tax professionals say. Besides getting hit by the top 15% rate on capital gains, some also are facing the loss of deductions, exemptions and credits. In some cases, they may even be drawn into the rapidly expanding web of the alternative minimum tax.

IRS Refutes Syracuse Study of Audit Rate of Millionaires

Interesting article on Bloomberg:  IRS Quickly Answers Study on Audits of Rich Americans:

In a rare disclosure, the IRS said yesterday that it had audited 11,715 — or 5.2% — of the 225,000 Americans who reported incomes of more than $1 million in 2005. The IRS released the data to counter a report by researchers at Syracuse University [blogged here] that the agency had conducted face-to-face audits of only 30 households reporting incomes of more than $1 million. The discrepancy is a result of a change in the way the IRS keeps records, officials said.

Logue on The Problem of Tax Law Uncertainty and the Role of Tax Insurance

Kyle Logue (Michigan) has published The Problem of Tax Law Uncertainty and the Role of Tax Insurance, 25 Va. Tax Rev. 339 (2005).  Here is the abstract:

In the broadest sense this is an article about legal or regulatory uncertainty and the role that private and public insurance can play in managing it. More narrowly, the article is about tax law enforcement and the familiar if ill-defined distinctions between tax evasion, tax avoidance, and abusive tax avoidance. Most specifically, the article is about a new type of tax risk insurance policy, sometimes called tax indemnity insurance (or transactional tax risk insurance) that provides coverage against the risk that the IRS will disallow a taxpayer-insured's tax treatment of a particular transaction. The question is whether this type of insurance coverage increases incentives for illegitimate tax avoidance or, alternatively, provides needed certainty to taxpayers, certainty that the IRS is not able or willing to provide. Should tax insurance be banned? Encouraged? Ignored? To what extent should the government, instead of commercial insurance companies, provide such legal-uncertainty insurance directly either by increasing the use of private rulings or by selling the equivalent of tax indemnity insurance policies? On the question of commercially provided tax indemnity insurance, the article concludes that the appropriate regulatory response is probably (a) to allow the policies to be purchased (and perhaps in some situations to subsidize their purchase) but (b) to compel taxpayers who purchase such policies to disclose this fact to the IRS. Such a response allows the use of tax risk insurance as a supplement to private letter rulings while at the same time minimizing the possibility that the insurance will be sold to cover pure detection risk.

Schizer Responds to Columbia Hiring Flap

Columbia Dean (and Tax Prof) David Schizer has published a letter to the editor in the New York Sun regarding the claim by Curt A. Levey in Bollinger on the Spot that the law school may have hired a faculty member as a "payoff" for help given to President Bollinger in the University of Michigan affirmative action cases:

Curt A. Levey's column titled "Bollinger on the Spot" implied that Columbia University President Lee Bollinger was personally involved in the recent appointment of Olati Johnson to the Columbia Law School faculty [Opinion,March 24, 2006]. This is not the case. Although President Bollinger is a member of our faculty, he obviously has many responsibilities throughout Columbia University, and was not personally involved in the Law School's decision to hire Professor Johnson. Professor Johnson, a former clerk to Justice Stevens on the United States Supreme Court, has been serving as a Kellis Parker Fellow at the Law School for the past two years. She brings a wealth of knowledge to her scholarship and teaching, and she will teach courses here in civil procedure and constitutional law.The ethics charges referred to in the column arose in a highly partisan atmosphere and involved many disputed issues of fact that were never adjudicated, principally because the complaints were dismissed in the jurisdiction (New York) where Olati Johnson is licensed to practice law. As Mr. Levey himself noted in his column, she is personable, extremely articulate, and exceptionally bright. We're pleased to welcome her to the faculty.

Gail Heriot blogged the original article on The Right Coast, as well as Dean Schizer's response, which included a detailed reply from Avery Katz, Columbia's Chair of Entry Level Hiring. (We blogged the original article (here), as well as DeNovo's criticism of the article (here)).

SOI Releases 2006 Tax Filing Season Data

The Statistics of Income Division has released Tax Stats Dispatch 2006-09: Individual Income Tax Returns, Filing Season 2006:

Weekly statistics on the 2006 filing season for individual income tax returns are now available. These statistics cover the number of returns received (including e-filed returns) and processed by IRS, amounts of refunds (including those that are direct deposited), and usage of the IRS Website. The 2006 data are compared to the 2005 filing season data. :

Findlaw Launches New Tax Law Center

Findlaw has launched a new Tax Law Center.  According to the press release:

• Easy access to federal and state income tax forms, tax laws and tax agencies
• A step-by-step guide with tips on how to file federal income tax returns
• Options for taxpayers who are unable to pay their 2005 federal income taxes
• What to do if you're audited
• Tax issues related to marriage, child support, home ownership, divorce, adoption, self-employment and bankruptcy

(Hat Tip:  Robert Ambrogi.)

Leiter Lists Overrated and Underrated Law Schools in New 2007 U.S. News Rankings

Rankings guru Brian Leiter has some preliminary thoughts on the advance copy of the new 2007 U.S. News Law School Rankings released last night. He lists the Top 30 law schools ranked by academic reputation and notes:

Not a crazy set of results, but if we assume reasonably enough that "academic reputation" ought to track the quality of faculty and students, then some schools (UC Davis [#25], Washington & Lee [#25], Duke [#11], Michigan [#6], perhaps North Carolina [#19], perhaps Northwestern [#14]) are too high, while others (UC Hastings [#30], Illinois [#25], NYU [#6], BU [#25]) are too low, relative to the actual academic merits. (Addendum: It should go without saying, I hope, that these are my judgments about the relative merits only: e.g., Michigan is "too high" in the sense that NYU is now clearly better; and so on.)

Leiter also lists the Top 30 law schools ranked by practitioner reputation.

Princeton Review's Law School Rankings: Professors Accessible

With U.S. News & World Report set to release its new 2007 law school rankings on April 1, I want to return to a subject I previously blogged:  The Princeton Review's book, Best 159 Law Schools.  This week, I will focus on five of the quantitative rankings based on a survey of more than 15,000 students and statistics provided by law school administrators.

Professors Accessible Rating:  Based on law student opinion.  We asked law students to rate how accessible the law faculty members at their schools are.

Here is the Princeton Review's ranking of the Top 25 law schools based on Professors Accessible (and their scores):

1.  Washington & Lee	99
1.  Samford	99
3.  Mercer	98
3.  Creighton	98
5.  Ave Maria	97
5.  Pepperdine	97
7.  Loyola-L.A.	96
7.  University of D.C.	96
9.  Boston University	95
9.  Kentucky	95
11. New Mexico	94
11. Wyoming	94
13. Chapman	93
13. Tennessee	93
15. Wake Forest	92
15. Illinois	92
17. Mississippi College	91
17. Tulsa	91
19. University of St. Thomas	90
19. Boston College	90
19. University of Hawaii	90
19. Memphis	90
19. Toledo	90
19. Pace	90
19. Thomas Jefferson	90

Princeton's Review's Law School Rankings:

• Monday:  Academic Experience
• Tuesday:  Professors Interesting

The Pain of Accounting

From today's law.com:  Charity's Former Accountant Pleads Guilty to Embezzling Money to Pay Dominatrix:

A charity foundation's former accountant, accused of embezzling heart disease research funds to pay an Ohio dominatrix to beat him, pleaded guilty Tuesday to grand larceny and admitted that he stole more than $237,000. Abraham Alexander, 45, of East Meadow, N.Y., admitted he stole the money from the Cardiovascular Research Foundation between Nov. 2, 2003, and April 20, 2005, by using company credit cards and writing checks to himself....

At least $11,000 stolen by Alexander, who was an accounts payable executive, went to pay Through the Looking Glass, an online company run by Columbus, Ohio-based dominatrix Lady Sage, according to the Manhattan District Attorney Robert Morgenthau's office....

Alexander's lawyer, Herschel Katz, said his client will raise as much of the money as he can by selling his interest in the Long Island house where he lives with his wife, who is divorcing him, and his two children....

Lady Sage says on her Web site she charges $250 an hour for her services and $1,500 for eight hours. She says the client pays her expenses if she has to travel for a meet-and-beat session. On the site, she declares, "Professional domination sessions are about good people having great fun." And, "I love nothing more than coaxing you to accept more pain and torment for my pleasure. I love holding your very soul in my hands."

Infanti on Homo Sacer, Homosexual: Some Thoughts on Waging Tax Guerrilla Warfare

Anthony C. Infanti (Pittsburgh) has posted Homo Sacer, Homosexual: Some Thoughts on Waging Tax Guerrilla Warfare on SSRN.  Here is the abstract:

Inspired by Giorgio Agamben's Homo Sacer: Sovereign Power and Bare Life, this essay raises the question whether lesbians and gay men should fundamentally rethink their relationship with the law. Until now, lesbians and gay men have played by the rules: We bide our time for the appropriate moment to challenge the application of the law, and then do so from within the legal system through impact litigation. Focusing on Agamben's discussion of Kafka's parable Before the Law, this essay challenges us to consider whether, instead of engaging the law on its own terms, lesbians and gay men should use the law as a tool against itself in an effort to open the way for a meaningful and thorough reconsideration of the appropriate relationship between sexual orientation and legal and social norms.

2007 U.S. News Law School Rankings

Update:  In response to a request from the Gneeral Counsel's office at U.S. News, Dan Markel has pulled the advance copy of the Top 100 law schools in the 2007 U.S. News rankings off of PrawfsBlawg.  He notes:

I think there's a good claim of fair use for the amount that we reproduced of USNews' rankings. That said, we're not interested in staking a claim on this issue; I recently had a conversation with the nice folks in the General Counsel's office of USNews and I'm complying with their polite request to take the materials down in exchange for their assurances not to pursue the matter further with us.

Orin Kerr blogs about the fair use aspects of the situation, with extensive commentary.

Graetz Presents The Politics of Taxation: Then & Now Today at NYU

Michael J. Graetz (Yale) presents The Politics of Taxation: Then & Now today at NYU. The talk is based on his recently-published book, Death by a Thousand Cuts: The Fight over Taxing Inherited Wealth (Princeton University Press, 2005) (with Ian Shapiro (Yale)) [blogged here]. The commentator is Alan S. Murray, Assistant Managing Editor, The Wall Street Journal, and co-author of Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely Triumph of Tax Reform. The program is from 4:00 p.m. - 6:00 p.m. in Vanderbilt Hall, Room 214, with a reception to follow in Golding Lounge. For more information, contact Maribell Wiscovitch.

TRAC Reports Higher Audit Rates for Lower Income Taxpayers

The Transactional Records Access Clearinghouse (TRAC) of Syracuse University reports  today that only 30 of the nation's 180,000 plus millionaires were subject to face-to-face audits in FY 2005. When only traditional face-to-face audits are considered, those reporting less than $25,000 in total positive income were six times more likely to be audited than all those reporting $200,000 or more in income. IRS continues to withhold from TRAC statistical data it has made public in the past that might explain the aberration.

Update:  From TRAC: 

After this report was posted this morning (3/28/2006), the IRS contacted TRAC and informed us that the official IRS numbers were not correct. In an effort to understand the reasons for this error, TRAC has requested additional information from the IRS. A follow up report will be posted if it is warranted.

Hymel, Schneider & Dixon on Impact of the New Anti-Tax Shelter Rules on Non-Tax Shelter Lawyers and Accountants

Mona L. Hymel (Arizona), Steven R. Schneider (Miller & Chevalier, Washington, D.C.) & Steven R. Dixon (Miller & Chevalier, Washington, D.C.) have posted Impact of the New Anti-Tax Shelter Rules on Non-Tax Shelter Lawyers and Accountants, 64 NYU Inst. Fed. Tax'n ___ (2006), on SSRN.  Here is the abstract:

After many proposed and temporary regulations and recent legislative changes, major portions of the new anti-tax shelter rules are now final. Although targeted at abuses, the regime is broad and can unexpectedly impact lawyers and accountants involved in common business transactions. This article is meant to help tax practitioners navigate these complicated rules in daily practice addressing questions such as . . . There are so many rules - which apply to taxpayers and which apply to advisors? Do I need to worry about disclosure even when I don't have a tax-motivated transaction? What if I didn't disclose a transaction that I now understand to be a reportable transaction? What are my options? My partnership sent me a listed transaction protective disclosure - does this affect my personal return? I am a taxpayer - should I care if my advisor's correspondence states that it does not provide me penalty protection - What am I paying them for? I am an advisor - if I add the Circular 230 caveat to all of my correspondence, is it business as usual? If I prepare tax returns, am I governed by the Circular 230 rules on "covered opinions"? What if I prepare studies or reports for taxpayers under section 382 or section 482? Should I be nervous if someone tells me my e-mail was a covered opinion on a transaction where I am a material advisor on an undisclosed reportable transaction that is also a "listed transaction"? We answer these questions at the end of this article. This article focuses on two pieces of the anti-tax shelter rules: (1) the rules that define "reportable" transactions and require taxpayers and advisors to disclose those transactions and (2) the Circular 230 rules that govern tax opinions. The article does not discuss other parts of the regime such as (i) the strengthened reasonable cause exception and the disqualified advisor/opinion rules under new section 6662A; (ii) individual state tax shelter rules; and (iii) audit independence rules for accounting firms doing tax work for their audit clients.

De Novo Debunks Claim that Columbia's President Hired Law Faculty As Payoff for Help in Affirmative Action Case

On Sunday, we blogged an article (Bollinger on the Spot) in the New York Sun:  Did Columbia Hire Faculty Member as Payoff for Help to President Bollinger in Affirmative Action Case?.  Denovo debunks the NY Sun article in Reason #23 for Liberals to Join Fed Soc:

[T[he suggestions made by the NY Sun ... struck me as quite silly, To my understanding, the Columbia University president has little role in hiring faculty in general, and particularly in the graduate schools.

(Hat Tip:  Leiter's Law School Reports.)

Princeton Review's Law School Rankings: Professors Interesting

With U.S. News & World Report set to release its new 2007 law school rankings on April 1, I want to return to a subject I previously blogged:  The Princeton Review's book, Best 159 Law Schools.  This week, I will focus on five of the quantitative rankings based on a survey of more than 15,000 students and statistics provided by law school administrators.

Professors Interesting Rating:  Based on law student opinion.  We asked law students to rate the quality of teaching at their law schools.

Here is the Princeton Review's ranking of the Top 26 law schools based on Professors Interesting (and their scores):

1.  Chicago	99
1.  Boston University.	99
3.  Loyola-L.A.	98
3.  Washington & Lee	98
5.  Kentucky	97
5.  Ave Maria	97
7.  Notre Dame	96
7.  Chapman	96
9.  Wake Forest	95
9.  Emory	95
11. Virginia	94
11. Regent	94
13. Stanford	93
13. University of St. Thomas	93
15. Boston College	92
15. Samford	92
17. BYU	91
17. SMU	91
19. Georgetown	90
19. Tennessee	90
19. Arizona	90
19. Vanderbilt	90
19. William & Mary	90
19. New Mexico	90
19. Florida International	90
19. Univ. of D.C.	90

Monday:  Princeton's Review's Law School Ranking:  Academic Experience

Surprise Guilty Plea in KPMG Tax Shelter Case

Press reports of the surprise guilty plea yesterday by David Rivkin, one of the 17 former KPMG employees charged with criminal tax evasion in the sale of questionable tax shelters:

• Bloomberg
• Business Week
• Forbes
• L.A. Times
• New York Times
• Newday
• Wall Street Journal
• Washington Post

IRS Establishes e-Mail Box for Taxpayers to Report Phony e-Mails

The IRS has established an electronic mailbox for taxpayers to send information about suspicious e-mails they receive which claim to come from the IRS.  The IRS’s new mail box allows taxpayers to send copies of possibly fraudulent e-mails involving misuse of the IRS name and logo to the IRS for investigation. Taxpayers should send the information to: [email protected].

For more information about the IRS's new mail box, see the IRS's press release.  For more information about how to protect yourself from electronic tax scams, see:

• How to Protect Yourself from Suspicious E-Mails
• Is It a Phishing Web Site?
• Example of Suspicious E-mail
• Phishing, Identity Theft and Scams
• IR-2005-136, IRS Warns of e-Mail Scam about Tax Refunds
• Identity Theft and Your Tax Records
• TIGTA Computer Security Bulletin
• TIGTA Report on Phishing
• Identity theft DVD, Outsmarting the Crooks

Cowan on Double Taxation in Indian Country

Mark J. Cowan (Boise State University, Department of Accountancy) has published Double Taxation in Indian Country: Unpacking the Problem and Analyzing the Role of the Federal Government in Protecting Tribal Governmental Revenues, 2 Pitt. Tax Rev. 93 (2005).  Here is the Conclusion:

Indian tribes are caught between a Supreme Court that allows states to tax within their borders and a federal policy that tells them they are independent and must raise their own revenue. They are caught between a desire to be sovereign and a need to go to the federal government, yet again, for protection from the states. This Article has attempted to shed light on the double tax problem by revealing that it represents not just another economic headache for tribes, but also a genuine deviation from sound tax policy principles such as tax neutrality and horizontal equity. As such, our tax system should work just as hard ameliorating the double tax problem in Indian country as it does in the international or multistate contexts.

Continue reading

Dagan Presents International Tax and Justice Today at Tel Aviv University

Tsilly Dagan (Bar-Ilan University, Israel) presents International Tax and Justice at Tele Aviv University today as part of it Tax Policy Colloquium.  Here is the abstract:

This Article focuses on justice considerations in designing tax policies under competitive conditions. In the international tax scene national sovereigns compete for residents, investments, and tax revenues. This position of nation-states as competitive players dramatically affects the range of policies that such countries can pursue. This Article examines the choices facing benevolent national sovereigns aspiring to promote efficiency and distributive justice. Specifically, the Article evaluates the current debate in international tax policy between harmonization and tax competition. The Article first considers the national level, and assesses the effect of harmonization and competition on the size of the national welfare pie and its distribution, the composition of the group, decision making processes, and the distribution of political power within society. It then examines the results of tax competition and tax harmonization at the global level as well, as even sovereigns that adopt a national-political conception of justice should take such global effects into consideration where their actions may harm other nations and their nationals. The Article concludes that while harmonization may indeed allow states to preserve the welfare state, it is neither a feasible nor a desirable solution.

DOJ Looking to Hire Experienced Tax Litigators

The Tax Division of the U.S. Department of Justice is seeking experienced attorneys with superior academic and professional qualifications for positions in their Civil Trial, Criminal Enforcement, Appellate, Criminal Appeals, and Tax Enforcement Policy Sections:

Applicants must possess a J.D. degree, be an active member of the bar (any jurisdiction), and have at least one year of post-J.D. experience. Candidates for positions in the Criminal Enforcement Sections or Criminal Appeals and Tax Enforcement Sections should have at least three years post J.D. experience. Applicants also must have exceptional research, writing and oral communication skills.

Applicants should submit a resume or Optional Application for Federal Employment (OF-612), a cover letter highlighting relevant experience, law school and any advanced degree transcripts, a writing sample and a list of three professional references to:

U.S. Department of Justice

Tax Division

Human Resources Office

P.O. Box 813

Washington, D.C. 20044

ATTN: Attorney Recruitment Coordinator

For further information on these vacancies, see here.

Bagaric & McConvill on Stop Taxing Happiness: A New Perspective on Progressive Taxation

Mirko Bagaric (Deaking Law School) & James McConvill (Deaking Law School) have published Stop Taxing Happiness: A New Perspective on Progressive Taxation, 2 Pitt. Tax Rev. 65 (2005).  Here is the Introduction:

Happiness is the ultimate aim of mankind. The pursuit of happiness, however, has not been a strong guiding force in the development of social and legal policy. The main reason for this, one assumes, is because there is insufficient information concerning the things that actually make people happy. Moreover, there seems to be a range of different personality types, with humans expressing and projecting themselves in an almost infinite number of ways. The richness and diversity of the human species seems to militate against the concept that there is even approximate convergence concerning the things that are conducive to happiness.

Thus up to now, happiness as a concept has not been taken very seriously given the common perception that happiness is a vague notion, incapable of definition. For lawyers, while the concept of happiness is appreciated, traditionally it has been associated with ancient moral theory from the likes of Aristotle and Plato and with the utilitarian theories propounded by Bentham and Mill. Thus, while there is a cursory level of understanding of happiness as a concept, it has not been regarded as a virtue that is capable of forming the foundation for a coherent system of law.

NLJ: Rumsfeld v. FAIR to Result in Increased Protests Over Military Recruiting at Law Schools

Interesting article in today's National law Journal:  Law Schools May Ramp Up Protests Over Military Recruiters; Schools' High Court Loss Opens Door for Campus Fight, by Leigh Jones:

Although many law schools were disappointed by the U.S. Supreme Court's recent decision regarding military recruiters on campus, it most likely has opened the door for more protests over the "don't ask, don't tell" policy.

The Court's determination that "students and faculty are free to associate to voice their disapproval of the military's message," could lead to full-throttle demonstrations in the fall recruiting season from law schools opposing the military's policy on gay personnel.

WSJ: Confessions of a Do-It-Yourself Tax Filer

Interesting article in today's Wall Street Journal:  Confessions of a Do-It-Yourself Tax Filer; Or: The Difficulty of Finding an Accountant Who's Just Clever Enough, by George Anders:

There's an old saying that anyone who acts as his own lawyer has a fool for a client. Lately, lots of people have been applying the same principle to tax preparation. According to the IRS, self-prepared tax returns are going the way of vinyl records. About 60% of individual filers now rely on a professional tax preparer, up from less than half a decade ago.

It's easy to see why most people feel tempted to call for help. Even folks who like shuffling numbers -- call them the Sudoku set -- find the tax code can be weirdly gnarly. What's more, time spent on taxes is stolen from something else. In an era where many of us hire strangers to mow our lawns or change our oil, why should we try to crunch out our own 1040s?

Call me stubborn, but I've made tax filing into one of our household's great do-it-yourself projects. It isn't easy, and sometimes it isn't pretty. Yet for the past eight years, I've barged ahead anyway, with the same sort of good-natured determination that I saw as a small child when my parents decided to build their own stereo equipment.

Princeton Review's Law School Rankings: Academic Experience

With U.S. News & World Report set to release its new 2007 law school rankings on April 1, I want to return to a subject I previously blogged:  The Princeton Review's book, Best 159 Law Schools.  This week, I will focus on five of the quantitative rankings based on a survey of more than 15,000 students and statistics provided by law school administrators.

Academic Experience Rating:  The quality of the learning environment, on a scale of 60-99.   The rating incorporates the Admissions Selectivity Rating and the average responses of law students at the school to several questions on our law student survey.  In addition to the Admissions Selectivity Rating, factors include how students rate the quality of teaching and accessibility of their professors, the school's research resources, the range of available courses, the balance of legal theory and practical lawyering skills stressed in the curriculum, the tolerance for diverse viewpoints in the classroom, and how intellectually challenging the course work is. 

Here is the Princeton Review's ranking of the Top 24 law schools based on Academic Experience (and their scores):

1.  Chicago	99
1.  Stanford	99
3.  Loyola-L.A..	98
3.  Virginia	98
5.  BYU	97
5.  Georgetown	97
7.  Washington & Lee	96
7.  Michigan	96
9.  Boston University	95
9.  Penn	95
11. UCLA	94
11. Northwestern	94
13. Wake Forest	93
13. Boston College	93
15. California- Berkeley	92
15. Harvard	92
17. Notre Dame	91
17. Emory	91
19. Vanderbilt	90
19. Arizona	90
19. Tennessee	90
19. California- Davis	90
19. Texas	90
19. Minnesota	90

Hanlon, Mills & Slemrod on An Empirical Examination of Corporate Tax Noncompliance

Michelle Hanlon (University of Michigan, Ross School of Business), Lillian F. Mills (University of Arizona, Eller College of Business and Public Administration) & Joel B. Slemrod (University of Michigan, Ross School of Business) have posted An Empirical Examination of Corporate Tax Noncompliance on SSRN.  Here is the abstract:

This paper offers some exploratory analysis of an extraordinarily rich data set of audit and appeals records, matched with tax returns and financial statements, of several thousand corporations. We find that corporate tax noncompliance, at least as measured by deficiencies proposed upon examination, amounts to approximately 13 percent of “true” tax liability. Second, noncompliance is a progressive phenomenon, meaning that noncompliance as a fraction of a scale measure increases with the size of the company. Other things equal, noncompliance is related to two measures of the presence of intangibles and with being a private company. We find some evidence that incentivized executive compensation schemes are associated with more tax noncompliance, but only with respect to bonuses and not for stock options and other equity-related incentive pay. We uncover no relation between a commonly-studied measure of the quality of corporate governance and the extent of proposed (scaled) tax deficiency. Finally, we find that there is no consistent simple or partial negative association between our measure of tax noncompliance and measures of the effective tax rate calculated from financial statements. These conclusions are preliminary because our central measure of tax noncompliance is the result of an imperfect and perhaps systematically detailed audit of a tax return declaration that may itself be the opening bid in what is expected, often correctly, to be an intense negotiation and formal appeals process. Second, the causal links among tax aggressiveness, executive compensation, and corporate governance are potentially complex, and the analysis presented here at best establishes statistical associations, but certainly does not establish causal relations.

ABA & IPT Hold 4-Day Tax Seminar in Atlanta

The ABA Tax Section and Institute for Professionals in Taxation kick off the 15th annual joint ABA/IPT Tax Seminars in Atlanta:

The ABA/IPT Advanced Income Tax, Sales/Use Tax and Advanced Property Tax Seminars are designed for attorneys, accountants, tax directors, state and local tax managers, government tax officials, appraisers, property tax managers, commercial and industrial property managers, and others interested in state and local income, sales, use, and ad valorem taxation. Over the course of four days comprising three one and one-half day seminars, a distinguished and multidisciplinary faculty, including appraisers, government and private sector tax officials, tax managers, and state and local tax attorneys, will lead you in the practical examination of current state and local tax issues facing different businesses and industries. The program devotes substantial time to current issues in the field and to practical solutions to recurring difficulties in handling and winning a state and local tax appeal.

For the program, see here.

Saturday:

• Tax Prof Profile:  Greg Germain
• NY Sun: Did Columbia Hire Faculty Member as Payoff for Help to President Bollinger in Affirmative Action Case?
• Why Are Law Professors So Unhappy?
• Text of Faux IRS Tax Refund Phishing Scam Email
• McCaffery & Baron on Thinking About Tax
• SOI Releases 2004 Gift Tax Returns

Sunday:

• Top 5 Tax Paper Downloads
• Yale Hosts Alternative Panel During Camara's Symposium Presentation
• King & Roth on Broken Trust: Greed, Mismanagement, and Political Manipulation at America’s Largest Charitable Trust
• WSJ: IRS Says New Rules Will Tighten Restrictions on Disclosure of Taxpayer Information
• Treasury & IRS Seek Public Comment on 2006-2007 Guidance Priority List
• TV Ad Campaign Against the Estate Tax

Top 5 Tax Paper Downloads

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

1.  [201 Downloads]  Words!  Words!  Words!  Teaching the Language of Tax, by Stephen B. Cohen (Georgetown) [blogged here]

2.  [141 Downloads]  Inside Zarin, by Theodore P. Seto (Loyola-L.A.) [blogged here]

3.  [103 Downloads]  Relitigating Seaborn: Taxing the Community Income of California Registered Domestic Partners, by Patricia A. Cain (Iowa) [blogged here]

4.  [67 Downloads]  Government as Contractual Claimant: Tax Policy and the State, by Jonathan R. Macey (Yale) [blogged here]

5.  [46 Downloads]  The Need for Mead: Rejecting Tax Exceptionalism in Judicial Deference, by Kristin E. Hickman (Minnesota) [blogged here]