Paul L. Caron

Sunday, January 31, 2010

TaxProf Blog Weekend Roundup

Publication Study of Faculty at Non-Top 50 Law Schools

Roger Williams University School of Law has updated its per capita publication study of the faculties at law schools ranked 51 or lower by U.S. News (as well as the New England law schools).  The study covers the 1993-2009 period and uses methodology developed by Brian Leiter, with one change: although Brian focused exclusively on the Top 20 journals, this study examines the Top 50 journals, defined as the general law reviews published by the 54 schools receiving the highest U.S. News peer assessment scores (2.8 or higher), plus an additional 13 journals that appear in the Top 50 of the Washington & Lee Law Journal Combined Rankings. (See here for an alphabetical listing of those journals.)

Roger Williams ranks the Top 40 Non-Top 50 law schools.  Here are the Top 25:


San Diego



Florida State















Case Western












Roger Williams









Arizona State












Seton Hall























Update:  Brian Leiter notes that "this study nicely confirms what one would suspect--e.g., San Diego and Florida State are tops--and provides some very useful perspective on the scholarly seriousness and ambition of schools that are 'demoted' by U.S. News to tiers three and four. The strong showing of the relatively new law school at the University of Nevada is another striking, and quite reasonable, result."

January 31, 2010 in Law School Rankings, Legal Education | Permalink | Comments (3) | TrackBack (0)

Top 5 Tax Paper Downloads

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

1.  [299 Downloads]  The Regulatory Systems for Employee Benefits, by Brian A. Benko (McDermott Will & Emery, Washington, D.C.)

2.  [232 Downloads]  Linton Family LLC and the Step Transaction Doctrine, by Wendy C. Gerzog (Baltimore)

3.  [207 Downloads]  Allocations Made in Accordance with Partners' Interests in the Partnership, by Bradley T. Borden (Washburn)

4.  [189 Downloads]  A Beneficiary as Trust Owner: Decoding Section 678, by Jonathan G. Blattmachr (Milbank, New York), Mitchell M. Gans (Hofstra) & Alvina H. Lo (Credit Suisse)

5.  [142 Downloads]  The Role of Physical Presence in the Taxation of Cross-Border Personal Services, by Michael S. Kirsch (Notre Dame)

January 31, 2010 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0) | TrackBack (0)

Spicing Up the AALS Annual Meeting

As Brian Leiter polls faculty on seven ways to improve the AALS Annual Meeting, Tax Prof Bridget Crawford offers a different suggestion:  a Profs Date service:

I see a business opportunity in the legal academy.  What if there was a “profs date” database (a la J-Date, Match, eHarmony, etc.) that was conference-specific?   Attendees of the AALS Annual Meeting, for example, could register with the service to indicate to their target audience an interest and availability for a few dates, flirtation, whatever.

There would have to be some sort of certification process — no registering unless you are legally single or divorced, morally available, etc.  The system would facilitate initial communication between the professors and after that, it would be up to them.

Now THAT is a conference add-on that might increase attendance.

For more, see

See also this paper on SSRN:  Swinger Economics.  Here is the abstract:

Swinging is a sexual behavior of increasing relevance but substantially ignored in theoretical economic investigation. This paper has two major goals. The first is to describe what swinging is, discuss its economic relevance and single out the main characteristics of swinger behavior. To this end, the Italian situation has been considered as a type of case study. The second goal is to use standard and less-standard tools from economic theory to propose some preliminary assessments of the causes and consequences of swinger couples’ behavior. In this respect, some contributions on two-sided markets, hedonic adaptation approaches and equilibrium matching models have proved particularly useful.

(Hat Tip: Kim Krawiec.)  The author's purported name and academic affiliation appear dubious -- Fabio D'Orlando (University of Cassino and Cream Economic Center) -- and The Perfect Substitute notes "I was so convinced that this was a pen name that I googled the author's name, and came across another paper of his on the pornography market, complete with empirical data."

January 31, 2010 in Legal Education, Tax Conferences | Permalink | Comments (1) | TrackBack (0)

Saturday, January 30, 2010

What's Worse for a Law Grad: Cheating on Taxes or Writing Term Paper for $300?

Above the Law, Hard-Hitting Term Paper Exposé Costs Appellate Law Clerk His Job:

In November, we told you about Damian Bonazzoli, who was — at that time — a senior staff attorney for the Massachusetts Appeals Court. He decided to make some money on the side by responding to a Craigslist ad seeking someone to write a term paper. The Boston College law grad sent along his résumé and said he was willing to write a paper on physician-assisted suicide for $300.

The Craigslist poster though was not a lazy Harvard freshman. It was an investigative journalist for Commonwealth magazine, who wanted to expose the “shadowy underworld” of college papers for purchase. When the journalist confronted him, Bonazzoli was surely embarrassed but said:

“I am aware of no state or federal statute that prohibits such a practice. This is not the equivalent of, say, lying on a federal employment or tax form,” he said. “Could your school take disciplinary action? Of course. But that’s quite different from a criminal prosecution.”

Bonazzoli should have done some research before making that statement, as there is such a statute, passed in 1972. ...  Joan Kenney, a spokeswoman for the Trial Court, issued a statement saying that “as of December 29, 2009, Mr. Bonazzoli no longer works at the court.” ...

Bonazzoli lost his $94,000 per year job over a $300 term paper. Ouch.

January 30, 2010 in Legal Education, News, Tax | Permalink | Comments (2) | TrackBack (0)

Call for Presentations: Teaching Law Practice Across the Curriculum

Institute The Institute for Law Teaching and Learning has issued a Call for Presentations for its annual summer conference, Teaching Law Practice Across the Currulicum:

The Institute for Law Teaching and Learning invites proposals for conference workshops on techniques for teaching law practice across the law school curriculum. The Institute's summer conference provides a forum for dedicated teachers to share with colleagues innovative ideas and effective methods for modern legal education.

The Institute invites proposals for 75-minute workshops consistent with a broad interpretation of the conference theme, Teaching Law Practice Across the Curriculum. The workshops can address teaching and learning in first-year courses, upper-level courses, clinical courses, writing courses, and academic support. The workshops can deal with innovative materials, alternative teaching methods, ways to enhance student learning, formative feedback to students, evaluation of student performance, etc. Each workshop should include materials that participants can use during the workshop and when they return to their campuses. Presenters should not read papers, but should model effective teaching methods by actively engaging the participants. The co-directors would be glad to work with anyone who would like advice in designing their presentations to be interactive.

To be considered for the conference, proposals must be limited to one page, single-spaced, and include the following:

  • The title of the workshop;
  • The name, address, phone number, and email address of the presenter(s); and
  • A summary of the contents of the workshop, including its goals and methods.

The Institute must receive proposals by February 12, 2010.

Submit proposals via e-mail to Professor Michael Hunter Schwartz, Co-Director, Institute for Law Teaching and Learning.

The conference will be June 16-18, 2010, at Washburn University School of Law in Topeka, Kansas.

January 30, 2010 in Legal Education, Tax Conferences, Teaching | Permalink | Comments (0) | TrackBack (0)

Joint Tax Committee Releases List of Expiring Federal Tax Provisions, 2009-2020

The Joint Committee on Taxation yesterday released List of Expiring Federal Tax Provisions 2009-2020 (JCX-3-10):

This document, prepared by the staff of the Joint Committee on Taxation, provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2009-2020 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law). Expiring Federal tax provisions providing temporary disaster relief are separately listed in Part II of the document.

For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at a statutorily specified date, the provision expires completely or reverts to the law in effect before the present-law version of the provision. Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year. For these provisions, the expiration dates listed in this document apply with respect to calendar year taxpayers. The expiration dates of such provisions may differ, however, with respect to fiscal year taxpayers or taxpayers with short taxable years.

January 30, 2010 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Medical Residents and the Student FICA Exception

Patrick Timothy Rowe (J.D. 2010, Washington & Lee) has published Note, The Impossible Student Exception to FICA Taxation and Its Applicability to Medical Residents, 66 Wash. & Lee L. Rev. 1369 (2009).  Here is part of the Introduction:

This Note will address the unique characteristics of, and current tensions between, tax law, the Social Security system, and the various processes employed by the federal courts, all of which have led to such ambiguities. Part II will introduce the two divergent approaches employed by the federal courts in deciding whether medical residents qualify for the student exemption, identifying those analytical tools which should be salvaged, and those which were either improperly employed or are simply irrelevant to the dispute in question. Part III will review briefly the history of the current Social Security system and related statutes and regulations, focusing on the development of the student exception under § 3121(b)(10). In this context, Part IV will discuss how tax law presents several practical problems and internal inconsistencies which render resolution of disputed tax issues more difficult than in many other areas of law.

Part V of the Note will argue that the Internal Revenue Service (IRS) should view graduate medical education programs (GMEs) in the United States as institutions of higher education, and view their medical residents as students because, as a practical matter, the relationship between medical residents and their sponsoring institutions is one based on the pursuit of medical education. Part VI will propose a framework to resolve these tax issues, balancing law, policy, and economics to reconcile the principle considerations of tax scholarship. Specifically, this Part will argue that the IRS’s attempts to disqualify residents from the student exception contravene Congressional intent and that the federal courts’ further reliance on a "case-by-case" standard of review is unnecessary. Accordingly, GME programs and their medical residents should be afforded the presumption of qualification under the student exception of § 3121(b)(10).

January 30, 2010 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

GAO Issues Report on New Markets Tax Credit

The Government Accountability Office yesterday released New Markets Tax Credit: The Credit Helps Fund a Variety of Projects in Low-Income Communities, but Could Be Simplified (GAO-10-334):

The Treasury Department’s Community Development Financial Institutions (CDFI) Fund awarded $26 billion in New Markets Tax Credits (NMTC) through 2009 for investment in low-income communities. The NMTC allows investors to claim a tax credit totaling 39% of their investment in Community Development Entities (CDE) over 7 years which CDEs reinvest in qualified communities.

This mandated report (1) describes where and how CDEs are using NMTCs, (2) assesses how CDEs use NMTCs to offer favorable financing terms to low-income community businesses and describes options for simplifying the NMTC, (3) describes how, if at all, NMTC investments support low-income community development, and (4) determines how effective IRS and the CDFI Fund have been in monitoring NMTC compliance. GAO analyzed CDFI Fund and CDE data, did case studies of CDEs, and interviewed relevant experts.

January 30, 2010 in Gov't Reports, Tax | Permalink | Comments (0) | TrackBack (0)

Friday, January 29, 2010

Aliens and 'Taxation Without Representation'

Erin E. Stefonick (J.D. 2008, Florida Coastal) has published Note. The Alienability of Alien Suffrage: Taxation Without Representation in 2009, 10 Fla. Coastal L. Rev. 691 (2009).  Here is part of the Introduction:

Individuals seeking admission to the United States presently face more economic difficulty than ever before. Particularly in a time where citizens and noncitizen immigrants alike are concerned about keeping their jobs and a roof over their heads, issues of taxation, health care, and public benefits affect immigrants in a substantial way. Specifically, current immigration laws require noncitizen immigrants--both lawful and unlawful classes--to pay taxes, but deny them the right to vote. In addition, noncitizen immigrants have experienced restricted access to health care since the Mayflower. Furthermore, noncitizen immigrants have been denied public benefits including “Supplemental Security Income and Food Stamps until they attain citizenship.” These issues raise criticism of the current immigration laws and beg reform to reflect the foundations of fairness and opportunity in America. Noncitizen immigrants should be given the right to vote at least at the local level, if not the national level, and the right to use public benefits if they are to be taxed.

January 29, 2010 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

The Tax Lawyer Publishes New Issue

Tax Lawyer The Tax Lawyer has published Vol. 63, No. 1 (Fall 2009):

January 29, 2010 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Should Law Schools 'Gross Up' Pay for Taxes on Benefits to Gay & Lesbian Faculty?

Inside Higher Ed, 'Grossing Up': Equity or Bias?:

Syracuse University may be on the cutting edge of promoting equity for its gay and lesbian employees. Some of the university's straight employees, however, say Syracuse needs to focus its limited funds on benefits for everyone -- and recognize that it can't be held responsible for the inequity of marriage laws in the United States.

The battle is over "grossing up" -- a human resources term for paying someone on top of salary levels so that the employee takes home the full salary amount. So if someone would owe $10,000 on a $50,000 salary, grossing up would mean paying that person $60,000 (plus whatever tax is needed on the extra $10,000 and so forth) so that $50,000 becomes take-home pay.

Syracuse plans to pay $1,000 each to its gay and lesbian employees who use the university's domestic partner program to provide health insurance for their partners. While health insurance benefits for employees and their spouses and children are not taxable under federal law, health insurance that an employee receives for a partner who is not a spouse recognized under state law is taxable. So even though Syracuse has tried to be equitable by offering partner benefits, the university's gay employees have pointed out that they were not really being treated the same way as married opposite-sex couples. ...

If Syracuse goes ahead with its plans, it may be the first college to offer such a benefit. The College and University Professional Association for Human Resources could not identify any colleges with this benefit. The Human Rights Campaign, a gay rights organization that encourages grossing up policies for partner benefits, has identified only three businesses and one family foundation with such policies.

Pat Cihon, an associate professor of law and public policy and president of the Syracuse chapter of the American Association of University Professors, has spoken out against the new benefit. Cihon said that he applauds the chancellor's commitment to inclusiveness and agrees that current marriage and tax law discriminate against gay people. He also said that he supports offering domestic partner benefits and believes that most of his colleagues share that belief. But he said that the problem that needs addressing is the law, not the university's benefits. "We really ought to be lobbying to change the tax laws," he said.

What troubles him, he said, is that the planned $1,000 payments are effectively only available to one class of people -- gay employees with partners on benefits -- and could never be available to employees married to or in domestic partnerships with people of the opposite sex.

"I appreciate and understand the rationale and intent, but now the employer is treating different people differently, and they are giving additional compensation to some groups because of sexual orientation," said Cihon.

Update: Tony Infanti (Pittsburgh), “Grossing Up” Domestic Partner Benefits

January 29, 2010 in Legal Education, News, Tax | Permalink | Comments (5) | TrackBack (0)

University of California to Start San Diego Law School?

UCSD San Diego Union-Tribune, UCSD Looking at a Law School; The University Is Exploring its Options With Cal Western:

The University of California San Diego has revived a decades-old plan to establish a law school through a partnership with California Western School of Law.

Discussions are preliminary, but the arrangement could range from a strengthened affiliation between the downtown San Diego private law school and the La Jolla public university to a full merger.

This month, faculty and administrators from both campuses formed a committee to explore the concept. Leaders of the two institutions emphasize that if a UCSD school of law were established it would be self-supporting and not involve any state or UCSD campus funds, at least initially.

Supporters of the partnership say it could advance research collaborations between the two campuses, expand learning opportunities for students and raise the prestige of both institutions.

“From our perspective, it would increase the value to our students in terms of the teaching we do, it would increase the value to society in terms of the research we can do, and it would increase service opportunities in San Diego,” said California Western’s dean, Steven R. Smith.

Critics question whether the school could be self-supporting and whether there’s a mismatch between UCSD’s research focus and California Western’s emphasis on teaching. Some also doubt the need for such a school, considering there are already five UC law schools. ...

Among the models being considered, Smith said, are the law schools at Michigan State University and Pennsylvania State University.

Penn State did not have a law school until 2000, when it merged with Dickinson School of Law, a private institution about 100 miles away. Since then, the school has been able to recruit distinguished scholars, increase the number of student applicants and broaden student diversity.

Michigan State characterizes its partnership with the former Detroit College of Law as an affiliation. The private school, renamed Michigan State University College of Law, has merged its academic policies and faculty governance with the public university. It remains financially independent and does not take any state funding. ...

The most difficult issues UCSD and California Western will need to resolve will likely be financial. “If they want to have a law school that has the same kind of student profile and faculty profile of other UC law schools, that’s a pretty expensive undertaking,” said Kevin Cole, dean of the University of San Diego School of Law. “The question is whether they have a model to allow that to happen and still lead to tuition rates that are sustainable.”

(Hat Tip: Francine Lipman.)

January 29, 2010 in Legal Education | Permalink | Comments (1) | TrackBack (0)

Hong Kong Hosts Conference Today on Green Taxation in East Asia

The Taxation Law Research Programme (TLRP) of the Asian Institute of International Financial Law, Faculty of Law, University of Hong Kong hosts a conferemce today on Green Taxation in East Asia: Problems and Prospects.  Tax Prof speakers include:

  • Art Cockfield (Queens University)
  • David Duff (University of British Columbia)
  • Janet Milne (Vermont Law School)

January 29, 2010 in Tax, Tax Conferences | Permalink | Comments (0) | TrackBack (0)

Death of Two Heiresses Highlights Absurdity of Estate Tax Repeal

Daily Finance, Casey Johnson and Ruth Lilly: A Tale of Two Heiresses, Tax Loopholes, and Tequila, by Sarah Weinman:

At first blush, Casey Johnson and Ruth Lilly, who died within days of each other around the new year, could hardly have been more different. Johnson, who died at 30, was a party animal who lived her life in the public eye, most recently as the fiancée of D-list celebrity Tila Tequila. Lilly, 94, made her biggest waves not on with clubbing but philanthropy -- most famously with her $200 million donation in 2002 to the Poetry Foundation....

But scratch the surface, and similarities emerge. Johnson and Lilly were both heiresses to major corporate fortunes: Johnson & Johnson and Eli Lilly & Co. Both had massive personal wealth tied up in trusts they couldn't access directly. And both fortunes illustrate a yearlong Congress-induced quirk that could greatly benefit the heirs to anyone who dies this year, cost the U.S. billions of tax revenue, and drive estate-planning lawyers crazy.

When Casey Johnson died, the frenzied tabloid coverage of her death overlooked a detail of crucial importance to her family's lawyers and accountants: time of death. Johnson was found at her West Hollywood home on January 4, apparently a few days after she died. Her last Twitter post was December 29. No one, not even Tequila (née Nguyen), reports having seen Johnson since then.

In accordance with California law, the date of death is certified as the day the body is found. Determining an exact time of death is a highly unreliable science, especially if several days or more have passed since someone's last appearance. Had Johnson been found at the end of 2009, her estate -- a trust that her family had recently cut off -- would have been subject to a tax that is suspended this year.

But Lilly died on December 31, so her estate, estimated at more than $1 billion, is subject to significant taxation. Aside from the Poetry Foundation bequest, Lilly gave away some $800 million -- almost as much as she was finally worth -- the bulk of it put in trust and administered as a foundation named after her.

(Hat Tip: Christine Lipman, Jim Maule.)

January 29, 2010 in Celebrity Tax Lore, News, Tax | Permalink | Comments (0) | TrackBack (0)

ABA Tax Section Publishes Winter 2010 Issue of News Quarterly

The ABA Tax Section has published 29 News Quarterly No. 2 (Winter 2010)

January 29, 2010 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

David Weisbach Spurns Yale Offer to Remain at Chicago

Weisbach Brian Leiter reports that David A. Weisbach, the Walter J. Blum Professor of Law and Kearney Director of the Program in Law and Economics at the University of Chicago Law School who taught a short course last year at Yale Law School as the Maurice R. Greenberg Visiting Professor of Law, has turned down a senior lateral offer from Yale to remain at Chicago.



January 29, 2010 in Tax, Tax Prof Moves | Permalink | Comments (1) | TrackBack (0)

Bags Fly (Tax) Free

Bags The IRS has ruled that the airlines are not subject to excise tax on the $1.76 billion to be received this year in baggage fees:

January 29, 2010 in IRS News, Tax | Permalink | Comments (3) | TrackBack (0)

UNC Tax Symposium Kicks Off Today

UNC Tax Logo The two-day 13th Annual UNC Tax Symposium kicks off today at the University of North Carolina Kenan-Flagler Business School.  Here are the papers to be presented at the symposium:

January 29, 2010 in Tax, Tax Conferences | Permalink | Comments (0) | TrackBack (0)

IRS Faces Challenges to Meet 80% e-Filing Goal

IRS Oversight Board The IRS Oversight Board yesterday released its Electronic Filing 2009 Annual Report to Congress, reporting that the IRS faces many challenges to meet its 80% electronic filing goal by 2012.

January 29, 2010 in IRS News, Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, January 28, 2010

California Man Pleads Guilty to Filing 250 Tax Returns for Dead People, Claiming $2m in Refunds

From a Department of Justice press release:

Haroon Amin of Upland, Calif., pleaded guilty Monday to conspiracy to defraud the United States ...  In December 2008, Amin and Ather Ali of Diamond Bar, Calif., were indicted by a federal grand jury in Riverside, Calif., on charges of engaging in a scheme to file false returns with the IRS using the names and Social Security numbers of deceased individuals. Ali is scheduled to begin trial on March 2, 2010. According to the indictment, in 2002 and 2003 Amin and Ali filed at least 250 fraudulent tax returns, falsely stating that the deceased individuals earned wages from which income tax was withheld. These false returns claimed more than $2 million in income tax refunds. Although the IRS rejected the bulk of these refund claims, a number of refund checks were issued and delivered to addresses controlled by Amin, Ali and their co-conspirators, including to various mailboxes opened by Ali using false forms of identification. Most of these refund checks were then delivered overseas to be deposited in bank accounts in Armenia and Pakistan.

January 28, 2010 in New Cases, News, Tax | Permalink | Comments (3) | TrackBack (1)

Gamage Presents On Tax Salience Today at UCLA

David Gamage David Gamage (UC-Berkeley) presents On Tax Salience (and Hidden Taxes & Fiscal Illusion) (with Darien Shanske (UC-Hastings)) at UCLA today as part of its Tax Policy and Public Finance Colloquium Series.  Here is the abstract:

For well over a century, scholars and political actors have debated about “hidden taxes” and “fiscal illusion.” In addition to this older literature on the political-salience of taxation, a newer literature has begun to explore tax salience with respect to market transactions. Critically reviewing both of these literatures, this Article supports the use of tax instruments with both low market-salience and low political-salience. Reducing the market-salience of taxation can mitigate the economic distortions caused by raising revenue. For political-salience, the Article argues that it is normatively undesirable for voters to assess government policies by focusing on their own tax burdens. Without taking any position on the optimal size of government, the Article concludes that democratic values are enhanced when taxation has low political-salience. Nevertheless, the nature of tax salience limits governments’ abilities to reduce either the market- or political- salience of taxation, due to factors such as taxpayers learning from experience and aversion to being manipulated.

January 28, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Pratt Presents Deductibility of Fertility Treatment Today at Florida State

Pratt Katherine Pratt (Loyola-L.A.) presents Deducting the Costs of Fertility Treatment: Implications of Magdalin v. Commissioner for Opposite-Sex Couples, Gay and Lesbian Same-Sex Couples, and Single Women and Men, 2009 Wis. L. Rev. ___, at Florida State today as part of its Faculty Enrichment Series hosted by Gregg Polsky.  Here is the abstract:

This Article considers whether federal tax law permits taxpayers to deduct medical expenses (or exclude flexible spending account reimbursements) for fertility treatment costs, including the costs of in vitro fertilization (IVF), egg donor, and surrogate procedures. Magdalin v. Commissioner (December 2008) calls into question the deductibility of IVF, egg donor, and surrogacy costs, and, perhaps unintentionally, the deductibility of the costs of various other types of reproductive medical care (e.g., sterilizations, birth control pills, legal abortions, and vasectomies). This Article explores the tax implications of the case for infertile and fertile taxpayers, including opposite-sex married and unmarried couples, gay and lesbian same-sex couples, and single women and men. The case indicates that the tax deductibility of fertility treatment costs turns on: (1) whether the taxpayer (or “his spouse”) has been diagnosed with “medical” infertility; (2) how we constitute “the body,” “of” “the taxpayer, his spouse, or dependents;” (3) the taxpayer’s sex, marital status, and sexual orientation; and (4) what the IRS and judges implicitly consider to be “natural” or “normal” reproduction. As the case illustrates, most legal discourse - including tax discourse - regarding assisted reproductive technologies assumes that: (1) the need for fertility treatment arises because of medical infertility; (2) women, not men, are infertile; and (3) fertility treatment is undertaken to allow an opposite-sex married couple to bear a child in the context of a traditional nuclear family. This Article also addresses the taxpayer’s argument that the status-based distinctions in section 213 are unconstitutional, discusses the circumstances in which section 213 does and does not aggregate “bodies,” and notes the ways in which law constitutes “the body,” based on notions of what is “natural” or “normal.”

January 28, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Christians Presents Taxation in a Time of Crisis Today at BYU

Christians Allison Christians (Wisconsin) presents Taxation in a Time of Crisis: Policy Leadership from the OECD to the G20 at BYU today.  Here is the abstract:

After decades of directing global economic policy standards alone, the United States and Europe publicly extended leadership power to some developing countries in response to the economic crisis of 2008-2009. But an entrenched international architecture of tax policy expertise ensures that a small group of established players continue to shape tax norms and practices throughout the world. This architecture is based on historical international power relationships, institutional history, and a persuasive rhetoric of technical expertise that encircles tax policy reform discourse. For diplomatic restructuring on the world stage to usher in a new age of inclusion for previously marginalized states and peoples, systemic changes must also take place in these entrenched institutions and processes.

January 28, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Knoll & Mason Present What Is Tax Discrimination? Today at NYU

Knoll Mason Michael Knoll (Pennsylvania) & Ruth Mason (Connecticut) present What Is Tax Discrimination? at NYU today as part of its Colloquium Series on Tax Policy and Public Finance. The co-convenors of the colloquium are Daniel Shaviro (NYU) & Mihir Desai (Harvard Business School). Here is the abstract:

Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity, little agreement exists as to how tax discrimination should be defined. Lack of a clear definition of tax discrimination has led prior commentators to conclude that the concept is incoherent and in need of fundamental reform. In this Article, the authors draw on their prior work on capital and labor neutrality, competitiveness, and discrimination to propose coherent guidelines for interpreting tax discrimination to require, in the alternative, locational neutrality, savings neutrality, or ownership neutrality. After presenting these alternatives, the authors argue that because the nondiscrimination principle concerns maintaining a level playing field between domestic and foreign taxpayers, nondiscrimination provisions should be interpreted to prevent states from enacting tax policies that discourage equally or better qualified foreign taxpayers from participating in the economic activity of a country relative to its own domestic taxpayers. This conception of a level playing is best understood as an application of ownership neutrality.

January 28, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Borden Presents Partners' Interests in a Partnership Today at Brooklyn

Borden Bradley T. Borden (Washburn) presents Partners' Interests in a Partnership at Brooklyn today as part of its Faculty Workshop Series.  Here is the abstract:

Entities taxed as partnerships (e.g., partnerships, limited liability companies, and limited partnerships) have management flexibility and are subject to favorable tax rules. Consequently, such entities are very popular among business owners. Such entities are also complex structures that often present complex tax, legal, and economic issues. The state and tax laws that govern them are intertwined, so actions partners take for legal or economic purposes may affect the partners’ tax consequences. Actions partners take for tax purposes may affect the partners’ economic and legal situations. State and tax laws have related but subtly different concepts that may work in tandem, or at odds, with the partners’ intent. For example, state law focuses on the partnership’s economic items and determines the partners’ economic interests in the partnership. Tax law does not impose a tax on partnership income, so the partners’ legal and economic interests in the partnership should influence the allocation of tax items. Tax law governs the allocation of partnership tax items and generally allows partners to direct the allocation of those items. Tax law uses the partners’ interests in the partnership to test partner-directed tax-item allocations or to otherwise allocate tax items to the partners. Partner-directed tax-item allocations may, however, affect the partners’ economic interests in the partnership. This Article illustrates that state and tax laws are each at work in partnerships but do not adequately correlate the various concepts. Such failure causes ambiguity and may generate unintended negative legal and economic consequences. That ambiguity allows sophisticated business owners to exploit the interaction of the respective laws, and the unintended consequences may ensnare unsuspecting and ill-advised business owners. This Article recommends changes to the law that would correlate state law and tax law, eliminate ambiguity, check the actions of tax game-players, and protect unsophisticated business owners from legal traps.

January 28, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Oregon Voters Approve Tax Hikes on the 'Rich'

On Tuesday, Oregon voters approved two ballot measures increasing individual and business income taxes by a 53%-47% vote:

  • Measure 66 raises income tax rates by 2% (to 11%) on individuals earning more than $125,000, and married couples earning more than $250,000
  • Measure 67 replaces Oregon's $10-minimum corporate income tax with a minimum tax of $150 or 0.1% of gross revenues in excess of $500,000.

Press and blogosphere coverage:

January 28, 2010 in News, Tax | Permalink | Comments (1) | TrackBack (1)

WNEC, UMKC Win 2009 ABA Law Student Tax Challenge

LSTC The ABA Tax Section yesterday released the winners of the 2009 Law Student Tax Challenge:

The LSTC is a national tax planning and client-counseling competition designed to more closely reflect everyday tax practice than traditional moot court competitions. The semi-final and final rounds of the 2009 LSTC took place in January of 2010 in San Antonio, Texas during the Section of Taxation Midyear Meeting. ...

“We were pleased this year to have more teams than ever before competing,” said Stuart M. Lewis, chair of the ABA Tax Section. “Forty-three J.D. teams and 26 LL.M. teams submitted their solutions to a challenging, complex tax planning problem that involved individual and business entity issues,” he said.

J.D. Division:

  • 1st Place:  Western New England -- Brendan Sponheimer & James Murtha (Frederick Royal, faculty coach)
  • 2nd Place:  Temple -- Sara Steinberger & Travis Wheeler (Kathy Mandelbaum, faculty coach)
  • 3rd Place:  Hamline -- Kaitlyn Wahlsten & Jonathan Heinonen (Morgan Holcomb, faculty coach)
  • Best Written Submission:  Western New England -- Neill O’Brien & Casey Nunez (Frederick Royal, faculty coach)
  • Runner-Up Best Written Submission:  Denver -- Bryan Jensen & Scott Valent (Alicia Buckingham, faculty coach)
  • Semi-finalist #1:  Memphis -- Joe Aaron Mullis & Kevin Henson (William Kratzke, faculty coach)
  • Semi-finalist #2:  Denver -- Bryan Jensen & Scott Valent (Alicia Buckingham, faculty coach)
  • Semi-finalist #3:  Western New England -- Neill O’Brien & Casey Nunez (Frederick Royal, coach)

LL.M. 1st Place LL.M. Division:

  • 1st Place:  Missouri-Kansas-City -- Nicole Forsythe & Ryan White (right) (Judith Wiseman, faculty coach)
  • 2nd Place:  San Diego -- Henry Chen & Irina Goldberg (Richard Shaw, faculty coach)
  • Best Written Submission:  Missouri-Kansas City -- Nicole Forsythe & Ryan White (Judith Wiseman, faculty coach)
  • Finalist #1:  Georgetown -- Hiram Powers & Joshua Erlich (Martin Ginsburg, faculty coach)
  • Finalist #2:  Temple -- Nina Garonski & James Vandermark (Kathy Mandelbaum, faculty coach)

Participating Schools:

  • Alabama
  • Baltimore
  • Boston College
  • Chapman
  • Chicago
  • Columbia
  • Denver
  • Florida
  • Florida Coastal
  • Golden Gate
  • Georgetown
  • Hamline
  • Indiana-Bloomington
  • LaVerne
  • Lewis & Clark
  • Maryland
  • Miami
  • Michigan State
  • Missouri-Kenas City
  • New England
  • New York University
  • Northwestern
  • Oklahoma
  • Oregon
  • Pittsburgh
  • Quinnipiac 
  • Rutgers-Newark
  • San Diego
  • St. Louis
  • Temple
  • Tulane 
  • UC-Davis
  • Western New England
  • Villanova

More pictures below the fold:

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January 28, 2010 in ABA Tax Section, Tax, Teaching | Permalink | Comments (0) | TrackBack (0)

Tax Portions of President Obama's State of the Union Speech

State of the Union Here are the tax portions of President Obama's State of the Union address last night:

As we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.

That's why we extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.

Let me repeat: We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. ...

As a result, millions of Americans had more to spend on gas, and food, and other necessities, all of which helped businesses keep more workers. And we haven't raised income taxes by a single dime on a single person. Not a single dime. ...

So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I am also proposing a new small business tax credit -- one that will go to over one million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment. ...

And to encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America. ...

To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans. Instead, let's take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. ...

Now, the price of college tuition is just one of the burdens facing the middle-class. That's why last year I asked Vice President Biden to chair a task force on middle-class families. That's why we're nearly doubling the child care tax credit, and making it easier to save for retirement by giving every worker access to a retirement account and expanding the tax credit for those who start a nest egg.

January 28, 2010 in News, Tax | Permalink | Comments (2) | TrackBack (0)

Textron Amicus Briefs

Here are the eleven amicus briefs filed in the U.S. Supreme Court (No. 09-750) by yesterday's deadline, supporting Textron's certiorari petition seeking review of the First Circuit's 3-2 en banc decision in United States v. Textron, Inc., No. 07-2631 (1st Cir. Aug. 13, 2009), which reversed the 2-1 panel decision and held that Textron's tax accrual work papers were not protected under the work product doctrine and thus had to be turned over to the IRS in its tax shelter investigation.

See also National Law Journal, Reed Smith Gets Personal in Work-Product Debate Before Supreme Court, by Tony Mauro:

Another sign came on Wednesday of just how important a brewing Supreme Court dispute over the privacy of legal work papers may be to law firms nationwide.

In a rare move, the Reed Smith law firm, with nearly 1,600 lawyers worldwide, filed a brief on its own behalf -- and for two of its clients -- telling the Supreme Court how crucial the case of Textron v. United States is to the relationship between lawyers and their clients.

January 28, 2010 in New Cases, Tax | Permalink | Comments (1) | TrackBack (0)

Tax Lawyers Not Up in Arms About New IRS Proposals...Yet

American Lawyer, Tax Lawyers Not Up in Arms About New IRS Proposals...Yet, by Zach Lowe:

Those wary of any extension of the government's reach were a little upset last night, when Douglas Shulman, the IRS commissioner, announced a series of new proposed disclosure rules during a speech in front of the New York State Bar Association's tax section. The new regulations, if officially enacted, would require companies with over $10 million in assets to disclose any questionable tax structures and the amount they would have to pay should the IRS challenge those structures and win, according to the New York Times and the Wall Street Journal.

We wanted to answer a fairly simple question: How big a deal is this going to be? Should tax lawyers be rolling up their sleeves for a bundle of new work in the event the IRS--or Congress, if need be--goes ahead with this? The answer, according to lawyers we talked to: It could be huge, but it's too early to say.

January 28, 2010 in IRS News, News, Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 27, 2010

I.R.C. § 761(f) and the Husband and Wife Business

Adam S. Winger (J.D. 2010, Georgia State; LL.M. (Taxation) 2011, NYU) has published Note, Divorcing the Husband and Wife Business: An Analysis and Critique of I.R.C. Section 761(f), 25 Ga. St. U. L. Rev. 1231 (2009).  Here is the Introduction:

Congress extended a unique benefit to husband-and-wife businesses in its 2007 modification of I.R.C. § 761(f). The subsection now allows a spousal venture to elect out of federal partnership status in favor of a newly created hybrid entity, the “qualified joint venture.” By splitting the existing partnership into two distinct sole proprietorships, the qualified joint venture relieves couples of complex compliance burdens associated with partnership taxation. Additionally, I.R.C. § 761(f) calls for a proportionate division of income between the spouses, thus each will be correctly awarded Social Security and Medicare credit for their efforts. Although the subsection's benefits are clear, Congress' failure to resolve several related issues may unfortunately limit the legislature's benevolent intent. This article provides an analysis of I.R.C. § 761(f), highlighting some of its benefits and shortcomings and also provides a few recommendations for improvement. Part I investigates several benefits I.R.C. § 761(f) seeks to extend. Part II offers both an analysis and critique of the subsection's provisions. Finally, Part III provides functional recommendations for improvement.

January 27, 2010 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

Lawsky: Barack Obama as FDR -- Are Presidents Constitutionally Exempt From Tax Increases They Sign?

Lawsky From Sarah B. Lawsky (George Washington; visiting at Virginia):

Throughout his first term, President Franklin Roosevelt paid taxes at the rates in effect when he took office, even as statutory tax rates increased. His position was that paying tax at a rate higher than that in effect at his inauguration reduced his salary, which violated the Constitutional provision that states that the president's compensation "shall be neither increased nor diminished during the period for which he shall have been elected."

At least one tax historian believes the approach is unique to Roosevelt. The memo on the cover of Roosevelt's 1937 return thus seems to exemplify chutzpah: "I am wholly unable to figure out the amount of tax for the following reason," he writes. "The first twenty days of January, 1937, were part of my first term of office and to these twenty days the income tax rates as of March 4, 1933 apply. To the other 345 days of the year 1937, the income tax rates as they existed on January 30, 1937. As this is a problem in higher mathematics, may I ask that the Bureau let me know the amount of the balance due?" Or in other words: I made a problem. Fix it, please!

President Roosevelt's chutzpah aside, does President Obama, say, have a good argument that he would not be subject to any tax hikes that occur during his term? (Or should President Bush have paid higher taxes throughout his first term, notwithstanding his tax cuts?) Probably not. Roosevelt might have taken his position based on Evans v. Gore, 235 U.S. 245 (1920), and Miles v. Graham, 268 U.S. 501 (1925), which held that taxing judges appointed prior to or even after, respectively, the enactment of the income tax violated the provision of the Constitution that says that the compensation of judges "shall not be diminished during their continuance in office."

Both of these cases have, however, been overruled: Miles v. Graham in 1939, and Evans v. Gore in 2001, when the Court held that judges' salaries could be subject to tax. "There is no good reason why a judge should not share the tax burdens borne by all citizens," the Court wrote. "[T]he Compensation Clause does not forbid Congress to enact a law imposing a nondiscriminatory tax (including an increase in rates or a change in conditions) upon judges, whether those judges were appointed before or after the tax law in question was enacted or took effect" (emphasis added).

While these cases involve the salaries of judges, a court would likely reach a similar conclusion when analyzing the similar language of the presidential compensation clause. But this question will, I suspect, never be resolved. Although tax returns are private as a matter of law, all presidents since Richard Nixon have chosen to release their tax returns. Thus a president who saved a few dollars by avoiding his own rate hikes would also be, quite simply, committing political suicide.

Thanks to Joseph Thorndike, Bill Drew, and Mike Dorf for their guidance on this subject.


January 27, 2010 in Political News, Scholarship, Tax | Permalink | Comments (1) | TrackBack (0)

Brian Galle Leaves Florida State for Boston College

Galle Brian Galle (Florida State) has accepted a lateral offer from Boston College.  This is quite a coup for BC -- Brian is an incredibly talented and prolific young tax scholar, with a dozen major pieces in just four years in the academy.  He has visited at Georgetown and George Washington.  Brian joins a very strong tax faculty at BC (Hugh Ault, Ray Madoff, Jim Repetti, and Diane Ring) -- BC ranks 23rd in the latest U.S. News Tax Rankings (10th among law schools without a graduate tax program).

January 27, 2010 in Tax, Tax Prof Moves | Permalink | Comments (2) | TrackBack (0)

Shaviro Presents The Case Against Foreign Tax Credits Today at Pennsylvania

Shaviro Daniel N. Shaviro (NYU) presents The Case Against Foreign Tax Credits at Pennsylvania today as part of its Center for Tax Law and Policy Seminar Series.  Here is the Conclusion:

Among means of reducing the domestic tax burden on foreign source income that would otherwise result from worldwide taxation of resident taxpayers, foreign tax credits are decidedly problematic. They provide a 100 percent marginal reimbursement rate (MRR) for foreign taxes paid, notwithstanding that the optimal such rate, from a unilateral national welfare standpoint, equals the otherwise applicable marginal tax rate for foreign source income.

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January 27, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Tax Prof Course Outlines

Fleming, Peroni & Shay: Worse Than Exemption

J. Clifton Fleming, Jr. (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Deputy Assistant Secretary for International Tax Affairs, U.S. Treasury Department) have published Worse Than Exemption, 59 Emory L. J. 79 (2009).  Here is the abstract:

In this article, we discuss how various defects in the current U.S. international tax system - deferral, defective income-sourcing and cost allocation rules, lenient transfer-pricing rules, generous cross-crediting, the export sales source rule, the effectively tax-exempt treatment of many types of foreign-source royalties, and the deduction of foreign losses against U.S.-source income - can be combined to make the present U.S. system as generous as, and in some important respects more generous than, a properly designed exemption or territorial system for taxing foreign-source income of U.S. resident corporations. In other words, when judged from a public policy standpoint, the current U.S. system can produce worse-than-exemption results. Because of this, the U.S. multinational corporate community largely has shifted its lobbying efforts away from support for an exemption or territorial system and toward support for changes in the current incoherent international tax system that would further reduce the effective U.S. income tax rate on U.S. corporations’ foreign-source income by magnifying the worse-than-exemption results. In our view, reform efforts in the international tax area should be directed toward comparing the strengths and weaknesses of a properly designed worldwide system with the strengths and weaknesses of a properly designed exemption system, and then proceeding to enact one of those two coherent systems for taxing the international income of U.S. persons. Based on our prior work in the international tax area we believe that such an analysis will lead to a conclusion that a strengthened and properly designed worldwide system is superior to a properly designed territorial system and is definitely superior to our defective and incoherent current U.S. international tax system.

January 27, 2010 in Scholarship, Tax | Permalink | Comments (0) | TrackBack (0)

62nd Annual USC Law Tax Institute Concludes Today in L.A.

USC The 62nd Annual USC Law Tax Institute concludes today in Los Angeles:

Wednesday remains dedicated to estate planning issues. Jeffrey Pennell, the Richard H. Clark Professor of Law at Emory University's School of Law, will provide his trademark morning update. Edward McCaffery, Robert C. Packard Trustee Chair in Law and Professor of Law, Economics and Political Science at USC Law, Visiting Professor of Law and Economics at the California Institute of Technology and Of Counsel at Seyfarth Shaw LLP, will provide the luncheon address.

For a list of the speakers and their topics, see the brochure.

January 27, 2010 in Tax, Tax Conferences | Permalink | Comments (0) | TrackBack (0)

Should Law Schools Adopt a 4-Day Work Week?

The University of Montana is considering a four-day week for classes and work schedules to save $450,000 annually, mostly on utility cost reductions.  Classes would meet Tuesday through Friday, with class times increased to 90 minutes, and more classes held at 8 a.m.

A four-day week would require 16-week semesters (rather than the customary 13- or 14-week semesters) in order to comply with ABA Accreditation Standard 304(a):  "A law school shall have an academic year of not fewer than 130 days on which classes are regularly scheduled in the law school."

January 27, 2010 in Legal Education | Permalink | Comments (1) | TrackBack (0)

Tracking Non-Cash Charitable Contributions ... There's an App for That

IDonatedIt From: iDonatedIt:

The first iPhone and iPod Touch app to track and value your non-cash charitable donations.

Have you ever dropped off a bag of clothes at a charity and wondered what that bag of clothes was really worth?

Have you ever had a garage sale and realized that it's an overwhelming amount of work and that donating the items to a charity would've been a lot easier?

When you prepare your tax return, have you ever struggled to remember what you donated, whom you donated it to, and when you donated it?

Do you want to get the most value possible from your charitable donation?

(Hat Tip: Web CPA.)

January 27, 2010 in News, Tax | Permalink | Comments (1) | TrackBack (0)

ABA Tax Section Webcast Today on Current Federal Tax Developments

ABA Tax The ABA Tax Section offers a teleconference and webcast today on Current Developments in Individual, Corporate, Partnership and Estate & Gift Taxation from 1:00 - 2:30 p.m. EST:

Please join Professors Martin J. McMahon, Jr. (Florida) and Ira B. Shepard (Houston) as they review the most significant statutory enactments, judicial decisions, IRS rulings, and Treasury regulations promulgated during the last twelve months that affect general income taxation, transfer taxation, and tax procedure.

January 27, 2010 in ABA Tax Section, Tax, Tax Conferences | Permalink | Comments (0) | TrackBack (0)

Nationwide Free Tax Preparation Locator

The University of Missouri has launched a new web site (MoTax) allowing people to search for free tax preparation sites (Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), and AARP) by state, county, and city.  (Hat Tip: Andrew Zumwalt.)

January 27, 2010 in Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 26, 2010

Presidents Join Deans in Asking ABA to Remove Faculty Tenure as Accreditation Standard

I previously blogged efforts by the American Law Deans Association (with over 140 members) to get the ABA to eliminate its accreditation standards relating to the tenure of faculty (and Deans) and tenure-like job protection for clinical faculty, legal writing faculty, and law librarians:

Last year, I blogged the deans' attempt to get their presidents to similarly pressure the ABA.  Here is the letter sent by over a dozen college presidents:

We the undersigned are chancellors, presidents, and provosts of our respective universities. Each of our universities includes as one of its constituent schools a law school accredited by the ABA Council. Each of us is ultimately responsible to our governing boards and to our students who attend them for the quality of the legal education provided by our law schools.

We understand that the ABA Council has been considering whether to continue to regulate the terms and conditions of employment of faculty and others within law schools accredited by the ABA Council.

We urge the ABA Council to remove from its Standards for Approval of Law Schools all Standards and Interpretations that require that a law school must provide specified terms and conditions of employment to its faculty and others. In particular, we urge the Council to remove the Standards and related Interpretations listed on Schedule A attached to this Statement.

Such requirements are unrelated to the quality of the education that our law schools provide and for which we are responsible. To our knowledge, no other accrediting agency authorized by the Department of Education requires specific terms and conditions of employment. While the accrediting standards of other agencies do vary in approach and content, none of them to our knowledge specifies the employment arrangements that the accredited educational program must have with its faculty and employees. Instead, they all focus solely on the resulting quality of the educational program, which is the purpose for accreditation in the first place.

We adhere to the following principles:

(1)  The terms and conditions of employment offered to our faculty are within the exclusive province of our individual institutions. The ability of each of our universities to make those judgments and determinations is fundamental to our being able to offer flexible, responsive, and innovative educational programs,

(2)  As a corollary to the preceding, each of our respective institutions is free to offer its faculty, law library directors, deans, and others tenure or tenure like security if we make the individual determination that doing so will help us attract and retain the best personnel. We recognize that tenure is a venerable institution and affords one way to advance our respective missions. This is not an assault on the system of tenure, only a rejection of the premise that it is the only way to provide an excellent educational product in our law schools.

(3)  Each of us individually -- and each of our universities -- has adopted and strongly endorses and enforces the principles of academic freedom as stated in the 1940 Declaration of the American Association of University Professors. We do not believe that the academic freedom of our faculty or of our institutions requires the imposition of uniform terms and conditions of employment.

We urge the Council to remove immediately from its Standards for the Approval of Law School those Standards and Interpretations that purport to require that our law schools provide specific terms and conditions of employment. We would welcome their replacement with reasonable standards that require our law schools to retain competent and dedicated faculty and that protect the academic freedom of all faculty regardless of the terms and conditions of their employment.

There may be serious internal obstacles within the ABA Council to taking this action, but those obstacles must not be allowed to preserve the status quo so that the ABA Council continues to impose these inappropriate requirements on our law schools.

Michael Adams, President, University of Georgia
Charles Bantz, Chancellor, Indiana University-Purdue University Indianapolis
Henry S. Bienen, President, Northwestern University
Lawrence Biondi, President, Saint Louis University
Mary Sue Coleman, President, University of Michigan
John Hennessy, President, Stanford University
Robert Khayat, Chancellor, University of Mississippi
Alan Merten, President, George Mason University
Mark Nordenberg, Chancellor, University of Pittsburgh
Steven Sample, President, University of Southern California
David Skorton, President, Cornell University
Graham Spanier, President, Penn State University
Thomas Wetherell, President, Florida State University
Robert Zimmer, President, University of Chicago

Schedule A:  Standards Related to Terms and Conditions of Employment

The following Standards should be removed or modified to eliminate the requirement that law schools provide certain and terms and conditions of employment:

  • Dean (Standard 206(c)): “Except in extraordinary circumstances, a dean shall also hold appointment as a member of the faculty with tenure.”
  • Student-Faculty Ratio (Interpretation 402-l(1)(A)): For the purposes of the published student-faculty ratio a law school must differentiate among faculty and instructors based on the terms and conditions of their employment by counting certain faculty who are “not on tenure track or its equivalent who teach a full load” as 0.7, and “adjuncts, emeriti faculty, nontenure track administrators who teach, librarians who teach, and teachers from other units of the university” as 0.2. This provision creates perverse incentives that may limit hiring of non-tenure track faculty.
  • Faculty (Standard 405(b) and Interpretation 405-1): “A law school shall have an established and announced policy with respect to academic freedom and tenure. . . .“ (to the extent that it is interpreted to require a system of tenure or tenure-like job security).
  • Clinical Faculty (Standard 405(c) and Interpretations 405-6, 405-7, and 405- 8): “A law school shall afford to full-time clinical faculty members a form of security of position reasonably similar to tenure, and non-compensatory perquisites reasonably similar to those provided to other full-time faculty members.”
  • Legal Writing Faculty (Standard 405(d)): “A law school shall afford legal writing teachers such security of position and other rights and privileges of faculty membership as may be necessary to (1) attract and retain a faculty that is well qualified to provide legal writing instruction as required by Standard 302(a)(2) and (2) safeguard academic freedom.”
  • Law Librarian (Standard 603(d) and Interpretation 603-3): “Except in extraordinary circumstances, a law library director shall hold a law faculty appointment with security of faculty positions.”

(Hat Tip: Ted Seto.)

January 26, 2010 in Legal Education | Permalink | Comments (0) | TrackBack (0)

Mason Presents What Is Tax Discrimination? Today at Michigan

MasonRuth Mason (Connecticut) present What Is Tax Discrimination? (with Michael Knoll (Pennsylvania)) at Michigan today as part of its Tax Policy Workshop Series coordinated by Reuven S. Avi-Yonah (Michigan).  Here is the abstract:

Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity, little agreement exists as to how tax discrimination should be defined. Lack of a clear definition of tax discrimination has led prior commentators to conclude that the concept is incoherent and in need of fundamental reform. In this Article, the authors draw on their prior work on capital and labor neutrality, competitiveness, and discrimination to propose coherent guidelines for interpreting tax discrimination to require, in the alternative, locational neutrality, savings neutrality, or ownership neutrality. After presenting these alternatives, the authors argue that because the nondiscrimination principle concerns maintaining a level playing field between domestic and foreign taxpayers, nondiscrimination provisions should be interpreted to prevent states from enacting tax policies that discourage equally or better qualified foreign taxpayers from participating in the economic activity of a country relative to its own domestic taxpayers. This conception of a level playing is best understood as an application of ownership neutrality.

January 26, 2010 in Colloquia, Tax | Permalink | Comments (0) | TrackBack (0)

Pete DuPont: Coming Tax Hikes Will Cause Greater Economic Collapse Than 2008-09

Wall Street Journal op-ed, An Economic Time Bomb: Even If Congress Does Nothing, Tax Hikes Will Hit Hard a Year From Now, by Pete DuPont (Chairman of the Board, National Center for Policy Analysis):

Weather-wise it has been a very cold January, and politically the Scott Brown Senate victory has chilled Washington Democrats even further. But if the Democratic economic policies continue nevertheless, this year will be nothing like the bitter economic January we will be living in a year from now.

Government spending has already hugely increased, and so has the size and scope of government, but next year there will also be substantial tax increases for a great many Americans. ...Add on to all of these increases the biggest government deficits and spending increases (to 26.5% of gross domestic product from 21%) in half a century, the protectionism of free trade downsizing through the "buy American" requirements, China import restrictions, and the administration limitations of Columbia, South Korea, and Panama free trade agreements, and we have a very different, and not very prosperous, America ahead of us. ...

[W]hen the huge tax-increase agenda arrives a year from now, the economy will begin to decline, and will be some 3% to 4% smaller than it otherwise would have been. The artificially high growth in 2010 followed by artificially low growth in 2011 would "represent a larger collapse than occurred in 2008 and early 2009," Mr. Laffer writes.

January 26, 2010 in News, Tax | Permalink | Comments (18) | TrackBack (0)

IRS Hits Arizona Cardinals' Pro Bowl Safety With $2.2m Tax Bill

Rolle Forbes, IRS Hits Cardinals' Antrel Rolle With $2.2 Million Bill; Football Safety Sues After Audit Nixes His Big Charitable and Business Deductions, by William P. Barrett:

The IRS says Arizona Cardinals safety Antrel Rolle understated his taxable income by more than 50% during his first two years in pro football, sending him a $2.2 million bill for back taxes, interest and penalties.

The IRS claims are contained in a previously unreported lawsuit Rolle filed in U.S. Tax Court against the agency [docket no.  029453-09]. ... Rolle does not specifically dispute the IRS audit findings, which he attached to his pleading. The IRS findings state that it was discrepancies and inconsistencies in Rolle's own filings that accounted for most of the bill. Cited points included nonexistent or unlikely addresses, huge deductions claimed by Rolle for a personally run executive business and hard-to-locate churches listed as recipients of big cash gifts, with the amounts and descriptions of these donations changing. ...

Drawing particular IRS attention was Rolle's report of a Schedule C "sole proprietorship" involving "management and consulting" that he said he operated both years. Over that period he listed $557,000 in revenue and $1.9 million in expenses. The IRS disallowed all but $71,000 of the expenses, which included $254,000 for "advertising" and $372,000 classified as "rent or lease--vehicles." Rolle said his business was located at an address in Chandler, Ariz., a Phoenix suburb. But "correspondence mailed to that address was returned indicating 'no such number,' and electronic research turned up the same result," the IRS agent wrote. ...

Rolle also claimed $2.5 million in cash contributions to two churches with similar names in Granada Hills: $636,000 in 2005 to the Victory Chapel Christian Fellowship Church, or VCCFC, and $1.9 million in 2006 to Victory Chapel Church. ... 

Forbes took a spin through middle-class Granada Hills, which is bisected by the Ronald Reagan Freeway in the sprawling San Fernando Valley 25 miles northwest of downtown Los Angeles. The official address listed for VCCFC is a copy shop mail drop. "We're not even open on Sundays," a worker there joked. The address listed in Rolle's IRS paperwork for Victory Chapel Church is a dermatology office fronted by a tall sign proclaiming treatment of "diseases of the skin." Workers there said they have never heard of Victory Chapel anything.

January 26, 2010 in Celebrity Tax Lore, Tax | Permalink | Comments (1) | TrackBack (1)

2010 Tannenwald Tax Writing Competition

For students writing tax seminar papers this semester (or having completed a tax paper last semester):  The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2010 Tannenwald Writing Competition:

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to legal scholarship of the highest quality, the Tannenwald Writing Competition is open to all full- or part-time law school students, undergraduate or graduate. Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules.

Cash Prizes:  $5,000, $2,500 and $1,500 for the top three papers.

Deadline:  9:00 p.m. EST, July 1, 2010. Mail papers to: Tannenwald Foundation, Ste. 200, 1275 Pennsylvania Ave., N.W., Washington, D.C. 20004, attn: Melnie Moore.

For more information, contact Nancy Abramowitz.

For a list of participating law schools, see here. For a list of winners from prior years, and their tax faculty sponsors, see here.

January 26, 2010 in Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0) | TrackBack (0)

Debating a Payroll Tax Break to Spur Jobs

Senators Charles E. Schumer (D-NY) and Orrin G. Hatch (R-UT) have published an op-ed in the New York Times, A Payroll Tax Break for Jobs:

With the national unemployment rate at 10%, and more than 15 million Americans looking for work, ideas to spur job creation are at the forefront of everyone’s minds. While we may represent different political philosophies, we recognize that high unemployment — particularly long-term unemployment — is not a liberal problem or a conservative problem; it’s a national problem that takes a huge toll on families.

The idea for some sort of jobs tax credit is percolating again, but the jobs credit that existed in the late 1970s was of limited success, and it was excruciatingly complicated. Recalling this experience, members of Congress from both parties have been lukewarm to such a credit, and the idea was dropped from the stimulus package last year.

We have an idea that is simple, straightforward and easy to explain and administer. In fact, it is so simple that the legislative text of the proposal is only a few pages long — a rarity when it comes to tax policy.

Here’s the idea: Starting immediately after enactment, any private-sector employer that hires a worker who had been unemployed for at least 60 days will not have to pay its 6.2% Social Security payroll tax on that employee for the duration of 2010. The Social Security trust fund will then be made whole with spending cuts elsewhere in the budget between now and 2015. That’s it. Simple to understand, and easy to explain.

The proposal has drawn considerable fire:

Unfortunately, the simplicity of the Schumer-Hatch plan leaves it wide open to unacceptable abuses. Fixing these problems will pretty much put us back into the same can worms we get into with jobs credits.

What's the problem? In brief, under the Schumer-Hatch plan employers could get tax credits for firing current employees and hiring the unemployed. This would most likely occur in low-wage jobs where employers do not highly value the job skills of existing employees. Another separate problem is that under the plan employers would receive generous tax credits for normal turnover of their workforce even when they are not increasing or even reducing the size of their workforce. Yet another problem is that officially unemployed would be favored over other prospective hires--like youths entering the workforce and parents returning to the workforce.

The way to fix these problems with the Schumer-Hatch plan is to add a requirement that we only give the tax relief to employers that are expanding employment. But then we go full circle and are back to the basic structure of the jobs credit they do not like.

Like many efforts to use the tax code to fine-tune the behavior of firms or individuals rather than to efficiently and fairly raise the revenue required for government, however, this idea has problems that Mr. Schumer and Mr. Hatch don't confront in their article. What's to stop a business from firing its employees now and then re-hiring them two months later to take advantage of the tax benefit? If you are an employer interviewing a promising job applicant who has been unemployed for 30 days, are you going to tell that person to start work tomorrow, or wait a month so that you can take advantage of the tax benefits? If you were fired yesterday, are you going to start looking for work today, or wait 45 days until you are more appealing to a potential employer who knows about the tax benefit? The effect of the Schumer-Hatch proposal might be to retard job growth rather than to spur it.

(Hat Tip: Ted Seto.)

January 26, 2010 in News, Tax | Permalink | Comments (0) | TrackBack (0)

IKEA Shelters its Enormous Profits from Tax via World's Biggest 'Charity'

IKEA The Economist, Flat-Pack Accounting:  Forget About the Gates Foundation; The World's Biggest Charity Owns IKEA—and Is Devoted to Interior Design:

Few tasks are more exasperating than trying to assemble flat-pack furniture from IKEA. But even that is simple compared with piecing together the accounts of the world's largest home-furnishing retailer. Much has been written about IKEA's remarkably effective retail formula. The Economist has investigated the group's no less astonishing finances.

What emerges is an outfit that ingeniously exploits the quirks of different jurisdictions to create a charity, dedicated to a somewhat banal cause, that is not only the world's richest foundation, but is at the moment also one of its least generous. The overall set-up of IKEA minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover. And if that seems too good to be true, it is: these arrangements are extremely hard to undo. The benefits from all this ingenuity come at the price of a huge constraint on the successors to Ingvar Kamprad, the store's founder, to do with IKEA as they see fit. ...

The parent for all IKEA companies—the operator of 207 of the 235 worldwide IKEA stores—is Ingka Holding, a private Dutch-registered company. Ingka Holding, in turn, belongs entirely to Stichting Ingka Foundation. This is a Dutch-registered, tax-exempt, non-profit-making legal entity, which was given the shares of Mr Kamprad in 1982. Stichtingen, or foundations, are the most common form of not-for-profit organisation in the Netherlands; tens of thousands of them are registered. ...

If Stichting Ingka Foundation has net worth of at least $36 billion it would be the world's wealthiest charity. Its value easily exceeds the $26.9 billion shown in the latest published accounts of the Bill & Melinda Gates Foundation, which is commonly awarded that accolade.

Measured by good works, however, the Gates Foundation wins hands down. It devotes most of its resources to curing the diseases of the world's poor. By contrast the Kamprad billions are dedicated to “innovation in the field of architectural and interior design”. The articles of association of Stichting Ingka Foundation, a public record in the Netherlands, state that this object cannot be amended. Even a Dutch court can make only minor changes to the stichting's aims.

The Kamprad foundations compare poorly with the Gates Foundation in other ways, too. The American charity operates transparently, publishing, for instance, details of every grant it makes. But Dutch foundations are very loosely regulated and are subject to little or no third-party oversight. They are not, for instance, legally obliged to publish their accounts.

Under its articles, Stichting Ingka Foundation channels its funds to Stichting IKEA Foundation, another Dutch-registered foundation with identical aims, and which actually doles out money for worthy interior-design ideas. But the second foundation does not publish any information either. So just how—or whether—Stichting Ingka Foundation has spent the €1.6 billion that it collected in dividends from Ingka Holding in 1998-2003 remains hidden from view.

IKEA says only that this money is used for charitable purposes and “for investing long-term in order to build a reserve for securing the IKEA group, in case of any future capital requirements.” IKEA adds that in the past two years donations have been concentrated on the Lund Institute of Technology in Sweden. The Lund Institute says it has recently received SKr12.5m ($1.7m) a year from Stichting Ikea (which also gave the institute a lump sum of SKr55m in the late 1990s). That is barely a rounding error in the foundation's assets. Clearly, the world of interior design is being tragically deprived, as the foundation devotes itself to building its own reserves in case IKEA needs capital.

January 26, 2010 in News, Tax | Permalink | Comments (2) | TrackBack (0)

62nd Annual USC Law Tax Institute Continues Today in L.A.

USC The 62nd Annual USC Law Tax Institute continues today in Los Angeles:

Tuesday will feature three concurrent tracks of programming, focused on partnerships and real estate, individual tax planning, and ethics, compliance and enforcement issues. Blake Rubin of McDermott Will & Emery will open Tuesday morning with an in-depth review of current developments in partnership tax planning. Karen Hawkins, Director of the IRS Office of Professional Responsibility, will speak at lunch. The day will end with a hosted networking reception and evening workshops.

For a list of the speakers and their topics, see the brochure.

January 26, 2010 in Tax, Tax Conferences | Permalink | Comments (0) | TrackBack (0)