Paul L. Caron
Dean





Tuesday, July 25, 2006

ABA Tax Section Calls on Sen. Baucus to End Block of Solomon's Appointment as Assistant Secretary for Tax Policy

Aba_tax_33 The ABA Tax Section has joined the NYSBA Tax Section (blogged here) in sending a letter to Senate Finance Committee Ranking Minority Member Max Baucus asking that he drop his attempt to block the confirmation of Eric Solomon as Assistant Secretary for Tax Policy unless the Treasury adopts a specific timetable for closing the tax gap [blogged here]:

The ABA does not and cannot endorse any candidate for any office. We believe, however, that the position of Assistant Secretary for Tax Policy should be filled without delay. The position has been vacant since February 2004. This vacancy has had a serious detrimental impact on the development of tax policy and sound administration of the tax law. It is, therefore, imperative that the position be filled at the earliest possible opportunity.

Separately, the Tax Section shares the concerns that you have recently expressed regarding the tax gap. We would welcome the opportunity to work with you and your staff to understand better the sources of the tax gap and to help identify appropriate remedies. We would urge, however, that these concerns not cause delay in filling the position of Assistant Secretary for Tax Policy.

July 25, 2006 in ABA Tax Section | Permalink | Comments (0) | TrackBack (0)

Tax Policy in the Next Clinton Administration

Dream Senator Hillary Rodham Clinton yesterday released her American Dream Initiative, described by the New York Times as her attempt to "stake out the center... [with] a broad policy platform geared toward helping middle-class voters and the working poor through a series of tax credits and other modest government programs."  Among the tax proposals in the 20-page plan:

  • Third-Party Reporting of Capital Gains. According to Tax Notes, the United States is losing billions of dollars in revenues from underreported capital gains. It is bad enough that the Bush administration has given the wealthiest Americans capital gains tax cuts they do not need; it is worse to see even those shrinking obligations go unpaid. We should require securities firms to report to the IRS not only the sale of assets, but the amount of capital gains. This change alone would produce $250 billion in new revenue over the next decade.
  • A Single, Refundable $3,000 College Tuition Tax Credit. To help students and families pay for college, Washington has layered one new tax break upon another and created a confusing, often contradictory system. Under current law, there is no uniform definition of qualifying education expenses, there are different income limitations for different incentives, and much of this assistance comes with massive bureaucracy attached. If we want college to become as universal as high school, college aid needs to be simpler and more generous. We should simplify the tax code by replacing the HOPE tax credit, the Lifetime Learning Tax Credit, and the higher education deduction with a single, refundable $3,000 college tuition tax credit to help offset undergraduate and graduate costs for all families. This new credit will cover up to four years of college and graduate school. In addition, workers will be eligible to use the credit for education and training.
  • Baby Bonds. The chance to get ahead depends in large part on having the assets to take advantage of it. The United States should follow Tony Blair's lead in Britain by providing a Baby Bond to each of the 4 million children born in America each year. A $500 savings bond at birth and again 10 years later would give young people from low- and middle-income families a stake in upward mobility. We should give families with incomes of $75,000 or less the option of directing their existing annual children's tax credit into these accounts, tax-free. The money could be used for college and training, a first home, and retirement savings.
  • A Home Mortgage Deduction for Everyone. Many Americans cannot take advantage of the mortgage deduction because they do not itemize their taxes. Only one-half of American homeowners itemize, and only one-fifth of the 28 million households with annual incomes below $50,000 receive any homeowner subsidy. We should make sure the mortgage deduction helps those who need it most -- middle-income and working families -- by making the deduction available to those who do not itemize their taxes. This would enable an additional 10 million Americans to take advantage of the primary incentive to help individuals purchase homes.
  • American Dream Down Payment Grant for Homebuyers. Owning a home is the biggest "prosperity escalator" into the middle class, yet many American households are missing out because they cannot afford the first step. As Hope Street Group has proposed, we should provide a $5,000 refundable tax credit for down payment assistance, which over the next 10 years will make homeownership possible for 7 million modest- to middle-income home buyers with good credit who would otherwise slip into the higher-interest rate sub-prime mortgage market or be rejected for a mortgage altogether. The credit would be available to home buyers earning up to 120 percent of their area median income. This program should work in conjunction with similar programs offered by state and local governments, financial institutions, and employers. We also should spur the construction of affordable homes by offering an Affordable Homes Tax Credit patterned after the successful Low- Income Housing Tax Credit. Finally, we should build on the model offered by the Federal Home Loan Banks, by creating an affordable housing fund to increase the stock of affordable housing.
  • Housing America's Workforce. Police, firefighters, teachers, and other middle-class families should not be penalized for living and working in areas of the country with high median housing prices. Employer-assisted housing helps attract and retain workers and enhance the economic stability of communities. We should give employers a 50 percent tax credit for qualified employee housing assistance programs, and let working families exclude such housing assistance from their taxable income.

July 25, 2006 in Political News | Permalink | Comments (12) | TrackBack (0)

House to Vote Today on Business Activity Tax Simplification Act

House_7 The House is scheduled to vote today on H.R. 1956, the Business Activity Tax Simplification Act of 2005.  The would forbid states from imposing a corporate tax (based on net income, gross receipts, net worth, etc.) on any corporation that has no physical presence (property or employees) in-state.

Primary Sources:

Think Tank Reports:

Press Reports:

July 25, 2006 in Congressional News | Permalink | Comments (0) | TrackBack (0)

Monday, July 24, 2006

Republicans Put Off Estate Tax Vote

Interesting article in today's Wall Street Journal:  Republicans Opt to Put Off Vote on Estate Tax, by Brody Mullins

In what might be a major blow to efforts to lower estate taxes this year, Republican leaders have decided to put off a vote on the issue until after the August recess, when the legislative calendar will be crowded with other measures. Republicans in the House and Senate are united in their desire to lower or eliminate the federal estate tax, but when the Senate failed to muster the 60 votes needed to approve legislation this year, the two chambers disagreed on strategy.

Update:

July 24, 2006 in News | Permalink | Comments (0) | TrackBack (0)

ABA Tax Section Submits Comments to the IRS & Congress

UH Town Meeting

We previously blogged (here, here, here, and here), Dean Nancy Rapoport's resignation last spring amidst Houston's decline in the U.S. News law school rankings.  Check out this video (with PowerPoint slides) of a town meeting held on April 27 at the law school shortly following Dean Rapoport's resignation.  (Dean Rapoport's presentation begins at around the 34-minute mark.)

July 24, 2006 in Law School | Permalink | Comments (0) | TrackBack (0)

Labor Board: IRS Can Require Agents to Have Accounting Training

Irs_logo_289In a recent decision (61 FLRA No. 119, 7/13/06), the Federal Labor Relations Authority reversed an arbitrator's decision and ruled that the IRS could require its revenue agents to have 30 hours of college credits (rather than 24) in five areas of accounting:  principles of accounting, intermediate accounting, cost accounting, advanced accounting, and auditing.

The National Treasury Employees Union complains that the new standards block experienced employees from competing for new positions.  The IRS contends that taxpayers are entitled to audits of their tax returns by agents with adequate accounting training.  See today's Washington Post for coverage of the decision.

July 24, 2006 in IRS News | Permalink | Comments (0) | TrackBack (1)

Southern Federal Tax Institute Waives Registration Fee for Tax Profs

Southern_federal_tax_institute The Board of Trustees of the Southern Federal Tax Institute invites all full-time tax law professors to attend the Forty-First Annual Institute as guests of the Trustees (the $925 registration fee will be waived). The Institute is held annually in Atlanta, Georgia in September and is well attended by tax professionals throughout the Southeast. This year’s Institute will be held on September 18-22, 2006.  See the full program here.

If you would like to attend all or a portion of the Institute, email Executive Director Myra Whorton  and let her know the dates you would like to attend, as well as your mailing address, e-mail address, institutional affiliation, and telephone number. If you are unable to attend this year’s Institute, but would like a CD-Rom containing the outlines of the Institute and several prior Institutes, please let Myra know. For additional questions, email Ira Shepard, the Institute's Special Advisor.

July 24, 2006 in Tax Conferences | Permalink | Comments (0) | TrackBack (1)

WaPo: Sen. Wyden Leads Effort to Rewrite the Entire Tax Code

Interesting article in today's Washington Post:  Oregon Senator Wants to Take On the Burden of Fixing the Tax Code, by Jeffrey H. Birnbaum:

Sen. Ron Wyden (D-Ore.) has made it his mission to force Congress to rewrite the entire tax code. If he succeeds, every interest in town would take one side or the other in what would be the biggest legislative battle in years. That is just fine with Wyden. The last full-scale revision of the federal income tax was 20 years ago. Since then, Congress has made about 14,000 tax-law changes, and very few of them are what anyone would call reform. A lot of the loopholes and exceptions that were excised by the Tax Reform Act of 1986 have been essentially restored....

Wyden is convinced that 2006 will mark the start of a rethinking of the income tax. If he's right, lobbyists, especially corporate lobbyists, will contest him at every turn. The tax code has become a breeding ground for narrow pleadings from almost every group imaginable.

July 24, 2006 in News | Permalink | Comments (0) | TrackBack (0)

State Estate Tax News

July 24, 2006 in News | Permalink | Comments (0) | TrackBack (0)

Law Review Articles Are Getting Shorter

Matt Bodie reports that the attempt by the top law reviews to limit the length of articles is working:  the average (and median) lengths of articles in the Columbia, Harvard, Penn, Stanford, Texas, Virginia, and Yale law reviews dropped from 87.8 (84) in 2003-05 to 67.1 (61) in 2005-06.

July 24, 2006 in Scholarship | Permalink | Comments (1) | TrackBack (0)

NYSBA Tax Section Calls on Sen. Baucus to End Block of Solomon's Appointment as Assistant Secretary for Tax Policy

Nysba_logoThe New York State Bar Association Tax Section has written a letter to Senate Finance Committee Ranking Minority Member Max Baucus asking that he drop his attempt to block the confirmation of Eric Solomon as Assistant Secretary for Tax Policy unless the Treasury adopts a specific timetable for closing the tax gap [blogged here]:

Although we and the members of the Executive Committee are of all political persuasions, we are united in our belief that Eric is a model public servant and is extraordinarily qualified for this position. We are personally familiar with Eric's beyond-the-call-of- duty dedication to the work of the Treasury Department, and have marveled at his grace under the pressure of working with several Treasury Secretaries while holding down two jobs simultaneously in a department often short on staff. We believe that the government and all taxpayers are extremely fortunate to have Eric in public service, and that it is in the strong interest of the government and of all taxpayers for him to be promptly confirmed for this position.

We agree with you that the tax gap must be reduced. However, we do not believe it is fair to Eric, or in the interest of the government or of taxpayers, for Eric's confirmation to be held up until a specific date for the delivery of a plan to close the tax gap can be set. Eric's appointment will, we believe, increase Treasury's ability to accomplish the formidable task of developing such a plan. As a result, and to further the objective of reducing the tax gap, we respectfully urge prompt confirmation of Eric for this position.

Dan Shaviro has more here.

July 24, 2006 in NYSBA Tax Section | Permalink | Comments (0) | TrackBack (0)

Hostile Takeover of the Tax Code

Hostile_takeover_1 Interesting excerpt in the Sunday New York Times of the new book Hostile Takeover: How Big Money and Corruption Conquered Our Government--and How We Take It Back, by David Sirota:

[W]hen House Majority Leader Tom DeLay (R-TX) gave a major speech on March 12 [, 2003] -- just weeks before the invasion -- the average onlooker might have expected a demand for national sacrifice, a patriotic call to make sure the country was protected and our troops were safe. Instead, we got a glimpse of just how far our political leaders will go to reward the wealthy. "Nothing is more important in the face of a war than cutting taxes," DeLay proudly declared. Nothing? Not securing our country, not preventing another 9/11, not protecting American troops heading into battle? No, to DeLay, the impending violence was just another excuse to reward the rich donors who fund political campaigns.

You might think this comment was the strange babbling of an unhinged lunatic and was greeted with outrage or at least dismissive scorn. You would be half right: the source of the comment was, in fact, a babbling fool....But in today's Washington, the absurd notion that cutting taxes is the noblest and most important mission of the government-even in a time of war-is so commonplace that few reporters thought DeLay's comments newsworthy enough to write about. Big Money's Hostile Takeover of our political system has made DeLay's logic the rule, rather than the exception....

[S]lowly but surely, arguments opposing this perfectly functional [tax] system began to take hold. At first they were promoted only by a small coterie of tax-cutting zealots who possess a cultish devotion to the idea that allowing the superwealthy to accumulate more wealth is the highest economic good. But soon this crusade to change our tax code found converts in the highest levels of government. And the result has been a tax structure flipped on its head.

July 24, 2006 in Book Club | Permalink | Comments (0) | TrackBack (0)

Class Attendance Improves Exam Performance by 7.7%

Ssrn_98Jennjou Chen (National Chengchi University) & Tsui-Fang Lin (National Taipei University) have posted Class Attendance and Exam Performance: A Randomized Experiment on SSRN.  Here is the abstract:

The study of determinants of a college student's academic performance is an important issue in higher education. Among all factors, whether or not attending lectures affects a student's exam performance has received considerable attention. In this paper, we conduct a randomized experiment to study the average attendance effect for students who have chosen to attend lectures, which is the so-called the average treatment effect on the treated in program evaluation literature. This effect has long been neglected by researchers when estimating the impact of lecture attendance on students' academic performance. Under the randomized experiment approach, least squares, fixed effects, and random effects models all yield similar estimates for the average treatment effect on the treated. We find that, class attendance has produced a positive and significant impact on students' exam performance. On average, attending lecture corresponds to a 7.66% improvement in exam performance.

July 24, 2006 in Teaching | Permalink | Comments (1) | TrackBack (0)

Sunday, July 23, 2006

Top 5 Tax Paper Downloads

Ssrn_logo_85This week's list of the Top 5 Recent Tax Paper Downloads on SSRN, is the same as last week's, with a law student's paper increasing its hold on the #1 slot:

1.  [191 Downloads]  Remapping the Charitable Deduction, by David Pozen (Yale J.D. 2007) [blogged here]

2.  [139 Downloads]  War and Taxes: The World War I Veterans’ Bonus and the Defeat of the Mellon Plan, by Anne L. Alstott (Yale) & Benjamin Novick (Yale) [blogged here]

3.  [130 Downloads]  A New Model for Identifying Basis in Life Insurance Policies: Implementation and Deference, by Jay A. Soled (Rutgers Business School) & Mitchell Gans (Hofstra)  [blogged here]

4  [99 Downloads]  Personal and Political Bias in the Debate Over Federal Income Taxation Rates and Progressivity, by Richard J. Kovach (Akron)  [blogged here]

5.  [94 Downloads]  Interstate Competition and State Death Taxes: A Modern Crisis in Historical Perspective, by Jeffrey A. Cooper (Quinnipiac)  [blogged here]

July 23, 2006 in Top 5 Downloads | Permalink | Comments (0) | TrackBack (0)

NY Times: IRS Pursuing "Back-Door Estate Tax Repeal" by Firing 45% of Its Estate Tax Lawyers?

Interesting article in today's New York Times:  I.R.S. to Cut Tax Auditors, by David Cay Johnston:

The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others. The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, in less than 70 days. Kevin Brown, an IRS deputy commissioner, confirmed the cuts after The New York Times was given internal documents by people inside the IRS who oppose them.

The Bush administration has passed measures that reduce the number of Americans who are subject to the estate tax — which opponents refer to as the “death tax” — but has failed in its efforts to eliminate the tax entirely. Mr. Brown said in a telephone interview Friday that he had ordered the staff cuts because far fewer people were obliged to pay estate taxes under President Bush’s legislation. But six IRS estate tax lawyers whose jobs are likely to be eliminated said in interviews that the cuts were just the latest moves behind the scenes at the IRS to shield people with political connections and complex tax-avoidance devices from thorough audits. Sharyn Phillips, a veteran IRS estate tax lawyer in Manhattan, called the cuts a “back-door way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax.”

Update:

July 23, 2006 in IRS News | Permalink | Comments (1) | TrackBack (1)

WaPo: HHS Secretary's Use of Tax-Exempt Supporting Organization Prompts Call for Reform

Interesting articles in the Washington Post:

Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and the committee's ranking Democrat, Max Baucus (Mont.), urged President Bush yesterday to help shut down a tax loophole that allowed his secretary of health and human services to claim more than $1 million in tax deductions for "gifts" that have been used to further his family's interests.

Grassley and Baucus, responding to a report in yesterday's Washington Post, wrote Bush to ask for his support in saving a provision in an embattled pension bill that would rein in what they called an abuse of the charity tax code. And they said the issue could be taken care of through regulatory changes in the Bush administration's control.

The Leavitts used nearly $9 million of their assets to set up the foundation in 2000 under an obscure provision of the federal tax code. But unlike standard private foundations, which are required to give away at least 5% of their assets to charitable causes, the Leavitt organization donated less than 1% of its assets in 2002, 2003 and 2004. The donations jumped to 6.3% of total assets last year, after the sale of family water interests that also allowed the foundation to increase its lending to Leavitt business interests.

While Mike Leavitt alone has claimed about $1.2 million in tax write-offs since 2000, the foundation gave away only $49,000 in 2002 and $52,000 the next year, according to tax returns and other documents filed by the foundation. Meanwhile, the foundation's assets have been used for a $332,000 loan to Leavitt Land and Investment Inc., in which the secretary owns a significant stake, and other secured loans for insurance and real estate deals, said Alan A. Jones, a trustee of the organization....

The tax structure used to create the foundation is called a Type III supporting organization. The Internal Revenue Service has said the category is rife with abuse, designating "supporting organizations" this year as one of its "Dirty Dozen" top tax scams, along with Internet identity theft and offshore banks. Use of the tax structure could be significantly reined in under a tax provision that was inserted into pension legislation passed by the Senate and now under negotiation with the House.

See also:

July 23, 2006 in News | Permalink | Comments (0) | TrackBack (0)

CTJ: How Big Is the Deficit--Really?

Ctj_logoCitizens for Tax Justice has released How Big Is the Deficit--Really?:

In July, the Bush administration estimated that the fiscal 2006 budget deficit, including $174 billion borrowed from the Social Security Trust Fund, will be $470 billion. That will bring total federal borrowing over the past five years to $2,449 billion.

July 23, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Lynch on Taxation of Below-Market Loans Under § 7872

Lynch John A. Lynch, Jr. (Baltimore) has published Taxation of Below-Market Loans Under Section 7872:  This Could be a Lot Simpler!, 21 Akron Tax J. 33 (2006).  Here is the Conclusion:

It is difficult to point to an income tax provision enacted in recent years that is as complicated or intrusive as § 7872. The issues that led to its creation still lurk, especially if interest rates rise from the near historical low rates of recent years. But in several significant ways, § 7872 far overshot its mark. Sound tax policy would counsel that it be amended to a more appropriately targeted tool to limit tax avoidance.

July 23, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Saturday, July 22, 2006

Spotlight_1_1Frank J. Doti (Chapman)

        • B.S. 1966, Illinois
        • J.D. 1969, Chicago-Kent
    •  

      

    

Doti Professor Doti is the William P. Foley II Chair in Corporate Law and Taxation, professor of law, and Director of the J.D. Tax Law Emphasis. He has over 35 years of tax law experience, first as an associate attorney with McDermott, Will & Emery, the largest tax law firm in the nation. Next he was vice president and director of taxes for the multinational Leo Burnett advertising agency. He has taught tax law for a quarter century and developed the first U.S. Tax Court clinical education program west of Denver, Colorado. Professor Doti founded and directs Chapman’s J.D. Tax Law Emphasis program.

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July 22, 2006 in Tax Prof Spotlight | Permalink | Comments (0) | TrackBack (0)

Senate Opposition to Global Taxes

Seven Republican Senators have sent this letter to President Bush requesting that he oppose efforts to impose global taxes to fund various international initiatives.  S. 3633, The Protection Against United Nations Taxation Act of 2006, was introduced on July 11 and has 31 co-sponsors. For more, see:

For prior TaxProf Blog coverage, see A Global IRS? (3/12/06).

July 22, 2006 in News | Permalink | Comments (0) | TrackBack (0)

Tax Policy Center Releases Estimates on S. 3626 Estate Tax Bill

We previously blogged S. 3626, the attempt by Senator Mary L. Landrieu (D-LA) to forge a compromise in the estate tax debate. The bill would set the exemption at $5 million ($10 million for a married couple), impose a 35% flat rate, and provide special valuation rules for family businesses and farms.  The Tax Policy Center has released various estimates in connection with S. 3626:

July 22, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Kovach on Personal and Political Bias in the Debate Over Tax Rates and Progressivity

KovachRichard J. Kovach (Akron) has published Personal and Political Bias in the Debate Over Federal Income Taxation Rates and Progressivity, 39 Akron L. Rev. 1 (2006).  Here is the abstract:

This article is a response to some of the politically aggressive rhetoric contained in a recent symposium issue on tax rates, progressivity, and budget processes published by the Boston College Law Review [blogged here]. The article identifies possible sources of personal and political bias in tax policy scholarship and suggests that scholars should seek neutral, noninflammatory means to analyze the rights and duties of wealthy taxpayers under the Internal Revenue Code.   

 

July 22, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, July 21, 2006

Taxpayer Superheroes

Superman The Council for Citizens Against Government Waste (CCAGW) has released its 2005 Congressional Ratings:

For 17 years, CCAGW has examined roll-call votes to separate the taxpayer advocates in Congress from those who favor wasteful programs and pork-barrel spending....

The entire House had an average of 45%, a 6 point increase over 2004. House Republicans averaged 73%; House Democrats averaged 13%. The entire Senate had an average of 46% also a 6 point increase over 2004. Senate Republicans averaged 68%; Senate Democrats averaged 18%.

There were two Taxpayer Super Heroes with a score of 100%: Jon Kyl (R-Ariz.) in the Senate and Ed Royce (R-Calif.) in the House. Taxpayer Heroes are members who scored between 80 and 99%. The total number of Heroes and Super Heroes in the House dropped from 59 in 2004 to 52 in 2005. The number of Heroes and Super Heroes in the Senate remained the same at 10.

Update:  The Club for Growth has just issued its 2005 Congressional Scorecard that rates every member of Congress on a variety of issues, including support for making the Bush tax cuts permanent and repealing the estate tax:

Interestingly, Sen. Kyl and Rep. Royce -- the "Taxpayer Super Heroes" in CCAGW's formulation -- also scored perfect 100s in the Club for Growth's formulation (along with two other Senators and six other Representatives).

July 21, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (3)

NY Times: What Shamu Taught Me About a Happy Marriage

ShamuSince I am in San Diego for the summer, I was drawn by the title of this New York Times article:  What Shamu Taught Me About a Happy Marriage, by Amy Sutherland.  It is nontax, but very funny:

I spent my days watching students do the seemingly impossible: teaching hyenas to pirouette on command, cougars to offer their paws for a nail clipping, and baboons to skateboard. I listened, rapt, as professional trainers explained how they taught dolphins to flip and elephants to paint. Eventually it hit me that the same techniques might work on that stubborn but lovable species, the American husband. The central lesson I learned from exotic animal trainers is that I should reward behavior I like and ignore behavior I don't. After all, you don't get a sea lion to balance a ball on the end of its nose by nagging. The same goes for the American husband....

I followed the students to SeaWorld San Diego, where a dolphin trainer introduced me to least reinforcing syndrome (L. R. S.). When a dolphin does something wrong, the trainer doesn't respond in any way. He stands still for a few beats, careful not to look at the dolphin, and then returns to work. The idea is that any response, positive or negative, fuels a behavior. If a behavior provokes no response, it typically dies away.

(Hat Tip:  Tom Smith.)

Update:  For a snarky take on the article, see Slate's How To Write a Hit Article; The New York Times "Shamu" Essay Shows the Way, by Jack Shafer:

The Shamu story establishes once and for all that men are the new women. You can now use the New York Times to write the most dehumanizing and insulting shit about them and everybody will laugh in recognition.

(Hat Tip:  Tim Armstrong.)

July 21, 2006 in News | Permalink | Comments (0) | TrackBack (0)

Gale & Reuben on Economic Effects of Car Rental Excise Taxes

The National Business Travelers Association has released Taken for a Ride: Economic Effects of Car Rental Excise Taxes, by William Gale (Brookings Institution) & Kim Reuben (Urban Institute), which reaches three conclusions:

  • Car rental excise taxes are inefficient because they can distort the choices people make regarding what mode of transportation they use.
  • Car rental excise taxes are inequitable because it is unclear why users of one particular business or service should bear a disproportionate cost of financing government.
  • Despite the growing popularity of car rental excise taxes as a solution for municipal funding needs, all evidence points to the fact that these taxes are arbitrary and unjustified.

See Press Release, Report, and Summary.  See also these reports from the Tax Foundation:

July 21, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

President Bush Includes Anti-Estate Tax Message in Speech to NAACP

BushPresident Bush took his anti-estate tax message to the NAACP annual convention yesterday:

You know, one of my friends is Bob Johnson, founder of BET. He's an interesting man. He believes strongly in ownership. He has been a successful owner. He believes strongly, for example, that the death tax will prevent future African American entrepreneurs from being able to pass their assets from one generation to the next. He and I also understand that the investor class shouldn't be just confined to the old definition of the investor class.

Think Progress reports that only 59 African-Americans will be subject to the estate tax in 2006, and 33 in 2009.

July 21, 2006 in News | Permalink | Comments (0) | TrackBack (3)

Seto on The Top 10 Tax Faculties By Metropolitan Region

Ssrn_100Seto_2 As regular readers of this blog know, I prepare a weekly ranking of the Top 5 New Tax Papers, as well as a monthly ranking of the Top 25 Tax Professors, as measured by the number of SSRN downloads.  Theodore P. Seto (Loyola-L.A.) has gone a step further and prepared a study for publication here, SSRN Tax Faculty Downloads by Law School and City.  I am sharing the results of Ted's study this week on TaxProf Blog.

In today's final installment, Ted ranks the Top 10 Tax Faculties by Metropolitan Region, as measured by the number of SSRN downloads (through 7/1/06):

Ssrn_tax_faculty_downloads_by_city

Here is Ted's conclusion:

SSRN downloads are, of course, only one measure of scholarly productivity and impact, and scholarship is certainly not the only relevant measure of the quality of a law faculty. With these qualifications, however, it’s pretty clear who comes out on top: Los Angeles can fairly claim to be one of the most productive centers of tax scholarship in the U.S.

Ted Seto's 3-Part Study of Tax Faculties:

Ted has graciously agreed to update the Top 25 Tax Faculties and Top Graduate Tax Faculties rankings each month, so watch for these updated rankings each month, along with our monthly update of the Top 25 Tax Faculty rankings.

For more on the use of SSRN downloads in law school rankings, see Bernard S. Black & Paul L. Caron, Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83 (2006). For more details about Ted's study, see below the fold:

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July 21, 2006 in Tax Faculty Metro Area Rankings, Tax Rankings, Tax Scholarship | Permalink | Comments (1)

Baucus to Block Solomon Nomination Unless He Agrees to Deadline for Plan to Close Tax Gap

Senate Finance Committee ranking minority member Max Baucus (D-MT) yesterday said he plans to block Eric Solomon's nomination as Assistant Secretary for Tax Policy unless Solomon or new Treasury Secretary Henry Paulson agrees come up with a comprehensive plan to close the tax gap by September 30.

July 21, 2006 in Congressional News | Permalink | Comments (0) | TrackBack (0)

Republicans Seek to Add Estate Tax Relief to Pension Bill

Coverage of Republican efforts to include tax cuts, including estate tax relief, in the forthcoming pension legislation:

July 21, 2006 in News | Permalink | Comments (0) | TrackBack (0)

Mason on When Tax Treaty Derivative Benefits Provisions Don't Apply

Mason Ssrn_99Ruth Mason (Connecticut) has posted When Tax Treaty Derivative Benefits Provisions Don't Apply on SSRN.  Here is the abstract:

The U.S.-U.K tax treaty¸ like several other recent treaties, has a limitations on benefits (LOB) clause that contains a derivative benefits provision. Under derivative benefits, a company that qualifies as a resident under Article 4 of the Treaty - but fails to qualify under the LOB clause due to its foreign ownership - may nevertheless be entitled to treaty benefits if the foreign owner is an “equivalent beneficiary.”

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July 21, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, July 20, 2006

WSJ: KPMG Tax Shelter Case Is "Fiasco" for Government

Following up on Wednesday's decision by the district court to delay the KPMG tax shelter trial (blogged here):  Today's Wall Street Journal has this editorial:  KPMG Justice:

The "largest tax-fraud case in U.S. history" is turning into a slow-motion fiasco for the government. In a two-page order filed Wednesday, federal Judge Lewis A. Kaplan, who is overseeing the criminal trial of 18 defendants -- mostly former employees of accounting giant KPMG -- granted a defense motion to delay the trial until next January....

In June, Judge Kaplan remarked ruefully, "There used to be a time when big cases were investigated a different way in this country. Maybe something's gone horribly wrong." Some serious reconsideration at senior levels of the Justice Department seems called for here.

July 20, 2006 in News | Permalink | Comments (0) | TrackBack (0)

District Court: Anti-"Son of Boss" Regs Cannot Be Applied Retroactively

In Klamath Strategic Investment Fund LLC v. United States, No. 5:04-CV-278 (E.D. Tex. 7/20/06), Federal District Court for the Eastern District of texas today held that the IRS abused its discretion in retroactively banning the "Son of Boss" tax shelter.  The court ruled that the anti-"Son of Boss" regulations do not apply to taxpayers that invested in the tax shelters prior to the August 2000 effective date of the regulations.  (Hat Tip:  Ellen Aprill.)

Update:  Press Reports:

July 20, 2006 in New Cases | Permalink | Comments (0) | TrackBack (0)

More on Deductibility of Boeing's $615 Million Settlement

Boeing_2Here is an update of our prior post on the deductibility of Boeing's $615 million settlement with the government:

July 20, 2006 in News | Permalink | Comments (0) | TrackBack (0)

11th Circuit Orders Tax Court to Give Ballard "High Priority"

The Eleventh Circuit has issued a remarkable three-page order in the long-running Ballard, Kanter and Lisle saga, partially granting petitioner's motion to enforce the Eleventh Circuit's mandate:

In view of the prolonged history of this case, however, we remind all involved that certain facts control. This case cannot be retried as the witnesses are dead. Judge Couvillion heard the witnesses, gave careful consideration to all the evidence, made credibility evaluations and rendered a detailed report (now referred to as the "original" report). The law requires that Judge Haines give "due regard" to the credibility determinations of Judge Couvillion, presuming that his findings are correct unless manifestly unreasonable. This will undoubtedly entail a review of this voluminous record but should not require extensive procedural matters. The parties have been given until November 1, 2006 to complete the filing of objections and replies thereto. We encourage Judge Haines to conclude this matter no later than ninety days thereafter.

Consistent with our retained jurisdiction over this matter, we hereby order that counsel advise this court no later than November 6, 2006 if the briefing of objections has been completed and to thereafter advise this court each thirty days as to what progress has been made towards a final disposition in the Tax Court. We request that Judge Haines advise this court on his progress towards final disposition on December 1, 2006; January 1, 2007 and February 1, 2007. We urge all concerned to expedite this matter in every way possible. At this point in time it deserves a high priority.

Other documents:

Prior TaxProf Blog Coverage:

July 20, 2006 in New Cases | Permalink | Comments (0) | TrackBack (1)

McLaughlin on Increasing the Tax Incentives for Conservation Easement Donations

Ssrn_92Mclaughlin_3Nancy A. McLaughlin (Utah) has posted Increasing the Tax Incentives for Conservation Easement Donations - A Responsible Approach, 31 Ecology L.Q. 1 (2004), on SSRN.  Here is the abstract:

The use of tax incentives to encourage private landowners to donate conservation easements has become increasingly popular as policy makers search for ways to combat the growing problem of urban sprawl. The tax incentives have worked remarkably well to encourage private landowners who have both the will and the means to shoulder a significant percentage of the economic cost of protecting their land through the donation of conservation easements. However, the success of the tax incentive program should not blind its proponents to its inevitable inefficiencies and limitations. Continually increasing tax incentives in an effort to make them attractive to a broader class of landowners - including, in particular, so-called land rich, cash, poor landowners - could have unintended consequences. Thus far, the land trust community has been able to recognize and respond to the challenges presented by the acquisition and long-term stewardship of conservation easements. However, the capacity of land trusts (and the often less well-equipped government agencies) to respond to such challenges is not unlimited. Some easement holders could be overwhelmed if Congress and the states adopt policies that result in a sudden surge in easement donations. Moreover, exploitation and abuse of the tax incentives by profit motivated donors could imperil the very existence of the tax incentive program and call into question both the credibility of the land trust community and the use of conservation easements as a private land protection tool.

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July 20, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

States Show Some Teeth Over Corporate Income Taxes

Interesting article on law.com:  States Show Some Teeth Over Corporate Income Taxes, by Sean P. Kanousis:

It is no surprise that corporate income tax represents a smaller portion of state revenues today than 10 years ago. The creativity of the tax bar has resulted in some significant planning opportunities to reduce tax liability for their corporate clients.

As state revenues shrink, states look for ways to make sure corporations do not fall out of the states' taxing jurisdiction. This means states are also becoming extremely sophisticated at using weapons of their own to combat the ways that have been developed to lower tax liability. One of these weapons is the rules for reporting corporate profits. States generally fall into two categories: either "separate accounting," or "combined reporting" states.

July 20, 2006 in News | Permalink | Comments (1) | TrackBack (0)

Seto on The Top Graduate Tax Faculties

Ssrn_100Seto_2 As regular readers of this blog know, I prepare a weekly ranking of the Top 5 New Tax Papers, as well as a monthly ranking of the Top 25 Tax Professors, as measured by the number of SSRN downloads.  Theodore P. Seto (Loyola-L.A.) has gone a step further and prepared a study for publication here, SSRN Tax Faculty Downloads by Law School and City.  I am sharing the results of Ted's study this week on TaxProf Blog.

In today's installment, Ted ranks the Top 17 Graduate Tax Faculties, as measured by the number of SSRN downloads (through 7/1/06), with the U.S. News graduate tax program rankings in parentheses ("NR" = not ranked by U.S. News):

Ssrn_top_grad_tax_faculty_1

Here is Ted's conclusion:

SSRN downloads are, of course, only one measure of scholarly productivity and impact, and scholarship is certainly not the only relevant measure of the quality of a law faculty. With these qualifications, however, it’s pretty clear who comes out on top: By one measure, at least, Michigan has taken a convincing lead among schools with tax LL.M. programs.

Ted Seto's 3-Part Study of Tax Faculties:

For more on the use of SSRN downloads in law school rankings, see Bernard S. Black & Paul L. Caron, Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83 (2006). For more details about Ted's study, see below the fold:

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July 20, 2006 in Grad Tax Faculty Rankings | Permalink | Comments (0) | TrackBack (0)

Judge Delays KPMG Tax Shelter Trial

The Associated Press and Wall Street Journal report that the federal district judge overseeing the KPMG tax shelter trial has postponed the trial date to Jan. 15 (from Sept. 11), citing the Government's delays in turning over information to defense lawyers and a dispute over the firm’s decision to cut off payment of the KPMG partners’ legal fees.

Update #1:  Here is a copy of the court's order in United States v. Stein, No. SI 05 Crim 0888 (7/19/06).  Some excerpts:

Among the factors supporting relief are these:

First, despite the fact that the government was obliged to complete discovery by October 5, 2005, it has produced a vast quantity of documents to the defense since that date... Moreover, there frequently have been extensive delays between the government's receipt of documents that it eventually concluded that it was obliged to turn over and the production of those documents to the defense. Quite apart from the question whether some of the government's failures are culpable and deserving of sanctions, defendants justifiably argue that the extent of the belated production has been so large that they simply need more time to make sense out of it.

Second, there have been problems with the government's production above and beyond its tardiness....

Third, sixteen of the remaining defendants are former partners and employees of KPMG. As the Court held in an opinion dated June 26, 2006, the government improperly caused KPMG to depart from its uniform prior practice by cutting of its payment of these defendants' legal fees, thus subjecting the defense to a resource constraint in violation of their constitutional rights. Rather than dismiss the indictment as against these defendants out of hand, the Court has sought to afford these defendants the possibility of a remedy short of dismissal by entertaining under its ancillary jurisdiction claims against KPMG to require it to pay the fees. If they succeed in that regard, dismissal or other sanctions against the government may be less appropriate than otherwise may be the case. But it will take some time to resolve that matter, one way or the other. In addition, if these defendants prevail against KPMG, it will take them some time to make effective use of the resources thus made available.

Update #2:  Peter Lattman of the WSJ's Law Blog has more here.

July 20, 2006 in News | Permalink | Comments (0) | TrackBack (0)

Warshawsky Resigns as Assistant Secretary for Economic Policy

War_2 Treasury_8The Treasury Department announced yesterday that Mark J. Warshawsky has resigned as Assistant Secretary for Economic Policy, effective July 28, 2006.  He will join Watson Wyatt Worldwide, a global human capital consulting firm.

Before coming to the Treasury Department, Warshawsky was Director of Research at the TIAA-CREF Institute.  A native of Chicago, Warshawsky received a Ph.D. in Economics from Harvard and a B.A. from Northwestern.

July 20, 2006 in IRS News | Permalink | Comments (0) | TrackBack (1)

Hymel & Mann on Enticing the Consumer to Become "Green" Through Tax Incentives

Mona L. Hymel (Arizona) & Roberta F. Mann (Widener) have published  Getting Into the Act: Enticing the Consumer to Become "Green" Through Tax Incentives, 36 Envtl. L. Rep. News & Analysis 10419 (2006).   Here is the abstract:

This article explores the paradox of energy guzzling consumers who assert that they want a clean environment, through the lens of tax policy. It examines the history of tax incentives for the fossil fuel industry and the future of tax incentives for renewable fuels and conservation. Exploring both federal and state tax incentives and drawing upon economic theory, we analyze the tax incentives targeting consumers and make predictions about their effectiveness in motivating taxpayers to “act green.”

July 20, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Canadian Law Teachers Ass'n Issues Call for Papers

CaltThe Canadian Association of Law Teachers has issued a Call for Papers for the Canadian Legal Education Annual Review:

The Canadian Legal Education Annual Review (CLEAR) is a peer-reviewed annual publication of the Canadian Association of Law Teachers (CALT). The aim of the journal is to foster scholarly exchanges on issues related to legal education and relevant to all Canadian law professors, graduate students and those who teach law. In particular, the journal aims to encourage critical and scholarly reflections on the aspirations, goals, objectives, values and cultures of legal education and on the processes involved in law teaching.

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July 20, 2006 in Law School, Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 19, 2006

IRS Publishes Spring 2006 Statistics of Income Bulletin

Irs_logo_287The Statistics of Income Division has published the Spring 2006 Statistics of Income Bulletin, with these articles:

July 19, 2006 in Gov't Reports | Permalink | Comments (0) | TrackBack (0)

OMB Watch Releases The IRS Political Activities Enforcement Program for Charities and Religious Organizations

OMB Watch has released The IRS Political Activities Enforcement Program for Charities and Religious Organizations: Questions and Concerns.  Here is the Executive Summary:

The IRS's new approach to enforcing the ban on partisan activities by charities and religious organizations has raised serious questions about the agency’s interpretation of the law, about evenhanded enforcement, and about the appropriateness of an approach aimed at deterring speech. The Political Activities Compliance Initiative (PACI), has resulted in unresolved audits and lingering questions about the standards used.

This report summarizes the new program procedures, new compliance guidance from the IRS and raises issues and questions that must be addressed to ensure charities and religious organizations can continue to play their essential role in public policy debates. There are two supplements to the report: one detailing the agency’s 2004 enforcement program, and one describing known cases that are currently or have been under investigation.

See also the press release.

July 19, 2006 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Barton: No Correlation Between Scholarly Productivity/Influence and Teaching Effectiveness

Ssrn_101Barton_1Benjamin Barton (Tennessee) has posted Is There a Correlation Between Scholarly Productivity, Scholarly Influence and Teaching Effectiveness in American Law Schools? An Empirical Study on SSRN.  Here is the abstract:

This empirical study attempts to answer an age-old debate in legal academia; whether scholarly productivity helps or hurts teaching. The study is of an unprecedented size and scope. It covers every tenured or tenure-track faculty member at 19 American law schools, a total of 623 professors. The study gathers four years of teaching evaluation data (calendar years 2000-03) and creates an index for teaching effectiveness.

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July 19, 2006 in Law School, Scholarship, Teaching | Permalink | Comments (1) | TrackBack (0)

Grand Jury May Soon Indict Bonds on Tax Charges

BondsThe Associated Press reports today a San Francisco grand jury may soon indict Barry Bonds on tax evasion charges:  Unpaid Taxes Could Be Bonds' Downfall:

The easy money Barry Bonds made by aggressively selling his name, likeness and sports equipment through his Web site and brief autograph sessions in hotel conference rooms could prove to be the embattled slugger's legal undoing. A federal grand jury is probing whether he paid taxes on some of that fortune, and key government witnesses include a scorned business partner and a jilted lover who profited from the name ''Barry Bonds.'' He also is being investigated for allegedly lying to another federal grand jury about his steroid use. Legal analysts said proving the Giants star cheated the IRS out of its cut of memorabilia sales is far easier to prove than perjury.

July 19, 2006 in News | Permalink | Comments (0) | TrackBack (1)

Urban Poor Pay "Ghetto Tax"

Interesting story in today's New York Times:  Study Documents "Ghetto Tax" Being Paid by the Urban Poor, by Erik Eckholm:

[A] report Tuesday showing that poor urban residents frequently pay hundreds if not thousands of dollars a year in extra costs for everyday necessities. The study said some of the disparities were due to real differences in the cost of doing business in poor areas, some to predatory financial practices and some to consumer ignorance. The study, from the Brookings Institution, said finding ways to eliminate these added costs, often called a “ghetto tax,” could be an important new front in the fight against poverty.

The Brookings Report is From Poverty, Opportunity: Putting the Market to Work for Lower Income Families, by Matt Fellowes.  (Hat Tip:  David Hasen.)

July 19, 2006 in News | Permalink | Comments (3) | TrackBack (0)

Should Untenured Faculty Do Empirical Legal Research?

Interesting blogosphere discussion sparked by Lisa Fairfax on Should Young Scholars Engage in Empirical Legal Research?:

One panel I attended [at SEALS] focused on new developments in empirical legal research. Although the work in which people were engaged sounded interesting, each panelist asked the question, should young scholars engage in such research? The answer appeared to be no, with some qualifications.

July 19, 2006 in Law School, Scholarship | Permalink | Comments (0) | TrackBack (0)

Seto on The Top 25 Tax Faculties

Ssrn_100Seto_2 As regular readers of this blog know, I prepare a weekly ranking of the Top 5 New Tax Papers, as well as a monthly ranking of the Top 25 Tax Professors, as measured by the number of SSRN downloads.  Theodore P. Seto (Loyola-L.A.) has gone a step further and prepared a study for publication here, SSRN Tax Faculty Downloads by Law School and City.  I will share the results of this study over the next three days.

In today's installment, Ted ranks the Top 25 U.S. Law School Tax Faculties, as measured by the number of SSRN downloads (through 7/1/06):

Top_25_tax_faculties_2

Note: Because of his recent move, Victor Fleischer's downloads are credited to Colorado rather than to UCLA.  Ted's conclusion:

SSRN downloads are, of course, only one measure of scholarly productivity and impact, and scholarship is certainly not the only relevant measure of the quality of a law faculty. With these qualifications, however, it’s pretty clear who comes out on top: UCLA’s tax faculty rocks. (If Louis Kaplow’s non-tax works are excluded, UCLA heads both lists.)

Ted Seto's 3-Part Study of Tax Faculties:

For more on the use of SSRN downloads in law school rankings, see Bernard S. Black & Paul L. Caron, Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83 (2006). For more details about Ted's study, see below the fold:

Continue reading

July 19, 2006 in Tax, Tax Faculty Rankings, Tax Rankings, Tax Scholarship | Permalink | Comments (0)