Paul L. Caron

Friday, February 28, 2014

Caron Presents The Role of Faculty Scholarship at Faith-Based Law Schools Today at Regent

Caron 2012 PhotoPaul L. Caron (Pepperdine) presents Faculty Scholarship at Faith-Based Law Schools: Long Tails, Moneyball and Rankings in a Time of Crisis at Regent today:

I have written extensively on legal scholarship and teaching in a variety of contexts, particularly the impact of technology in transforming faculty roles in research and in the classroom.  In What Law Schools Can Learn From Billy Beane and the Oakland Athletics, 82 Tex. L. Rev. 1483 (2004), Rafael Gely and I argued that legal education must use technology to develop more sophisticated measures of law school success and faculty contributions to law school success.  In Ranking Law Schools: Using SSRN to Measure Scholarly Performance, 81 Ind. L.J. 83 (2006), Bernie Black and I contended that SSRN downloads can play a role in measuring faculty scholarly performance along with the existing measures of reputations surveys, publication counts, and citation counts.  In The Long Tail of Legal Scholarship, 116 Yale L.J. Pocket Part 38 (2006), I showed that legal scholarship is shifting from a hit-driven model represented by citation counts to a niche-driven model represented by download counts.  In Are Scholars Better Bloggers? Bloggership: How Blogs Are Transforming Legal Scholarship, 84 Wash U. L. Rev. 1025 (2006), I argued that blogs illustrated the shift away from traditional scholarship and traditional methods of disseminating scholarly ideas.

Two things have changed since the publication of those articles.  First, legal education is confronted with an existential crisis,  In The Law School Crisis: What Would Jimmy McMillan Do?, 31 Pepperdine Law 14 (2012), I argued that the law school crisis results from the confluence of four factors:  skyrocketing costs and student loan debt, and plummeting job placement and enrollments.  Second, after over twenty years at the University of Cincinnati College of Law (a public, secular law school), this past fall I joined the tenured faculty at Pepperdine University School of Law (a private, Christian law school).

I argue that religious law schools are uniquely positioned to thrive in the midst of the law school crisis because our faith-fueled commitment to our students and to each other empowers us to better define the pathways to success for our schools, our students, and our faculties and equips us to make that journey together.

February 28, 2014 in Colloquia, Legal Education, Scholarship, Tax | Permalink | Comments (0)

California Couple That Found $10 Million in Gold Coins Faces 47% Tax Rate

GoldSan Francisco Chronicle, Couple's Gold Discovery Will be Taxed at Top Federal Rate:

The Gold Country couple who unearthed at least $10 million worth of 19th century gold coins in their yard last year will probably owe close to half of that sum in federal and state income tax - whether or not they sell the coins.

There is no question that the discovery of the coins is a taxable event. In a famous 1969 decision, a U.S. District Court in Ohio ruled that a "treasure trove" is taxable the year it is discovered. In that case, Cesarini vs. United States, [296 F.Supp. 3 (N.D. OH 1969), aff'd, 428 F.2d 812 (6th Cir. 1970)] a couple bought a used piano in 1957 for about $15. In 1964, they found $4,467 in old currency inside it. The court ruled that the money constituted ordinary income in 1964, the year in which they had "undisputed possession" of the funds. It did not qualify for the lower capital gains tax rate because neither the piano nor the currency were sold or exchanged.

In its 2013 tax guide, the IRS states, "If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession."

The couple, who have not been publicly identified, found the coins in cans buried in their backyard in February 2013. That means they will owe tax on the estimated value of the coins by April 15 to avoid a penalty and interest, says Leo Martinez, a law professor at UC Hastings College of the Law.

Most of the money will be subject to the top federal tax rate of 39.6 percent, which starts at $450,000 in joint taxable income.

In California, the top rate - on joint income over roughly $1 million - is 13.3 percent. Taxpayers generally get a federal deduction for state income tax paid, reducing their effective federal rate.

That puts the total amount going to state and federal tax at about 47 percent.

The couple could try to argue that the find should be taxed as a capital gain on the grounds that "when they bought the property, it was part of the property and part of the acquisition price," says Arthur "Kip" Dellinger, a CPA with Cooper, Moss, Resnick, Klein & Co.

Long-term capital gains are generally taxed at a top rate of 20 percent, but the rate on collectibles - which include gold and coins - is 28 percent. Starting in 2013, high-income taxpayers will owe a 3.8 percent Medicare tax on some or all of their investment income if their modified adjusted gross income exceeds a certain level ($250,000 for joint returns).

Dellinger says the capital gains argument would be tough to win, and "if the government wants to challenge them, the minute they litigate the issue, their names become known." To shield their privacy, he suspects, "They are going to pay the ordinary income tax and be happy with it."

February 28, 2014 in Tax | Permalink | Comments (4)

Weekly Tax Roundup

Weekly SSRN Tax Roundup

February 28, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Ring Reviews Resolving Transfer Pricing Disputes: A Global Analysis

Book 2Diane M. Ring (Boston College), Book Review, 73 Tax Notes Int'l 713 (Feb. 17, 2014) (reviewing Resolving Transfer Pricing Disputes: A Global Analysis (Eduardo Baistrocchi & Ian Roxan eds., Cambridge University Press 2013)):

Eduardo Baistrocchi and Ian Roxan have brought a new contribution, Resolving Transfer Pricing Disputes, to the global literature on transfer pricing. The basic structure is straightforward: The introduction provides an overview of the book's mission, coverage, and design process. Chapter 2 outlines the transfer pricing problem, its history, and the evolving international response. The following 18 chapters highlight countries around the globe, both those with a long history of transfer pricing regulation and countries just beginning to develop and implement a national response. The concluding chapters return to themes identified at the outset regarding the evolution of the transfer pricing regime -- the claim that the international tax system has been moving from a rules-based response to a more standards-based approach to the problem of artificial income shifting.

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February 28, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Villanova to Offer Online Tax LL.M.

Villanova has announced that it will offer an online tax LL.M. program, becomming at least the seventh such online program:

Villanova University Graduate Tax Program is proud to announce the launch of the Master of Laws in Taxation and Master of Taxation in an online modality in addition to its on-campus counterparts. These programs can be completed in as few as 24 months. Applications are currently being accepted for the Fall 2014 term.

“We are so thrilled that our renowned Graduate Tax Program is now available in the online arena. This delivery method expands our geographic reach and enhances the level of diversity in our classes. It also allows our esteemed taxation faculty to support legal and accounting professionals across the globe in broadening their expertise and achieving their goals,” said Leslie Book, professor of law and online program director of the Villanova University Graduate Tax Program.

February 28, 2014 in Legal Education, Tax | Permalink | Comments (0)

FBA Hosts 38th Annual Tax Law Conference

FBAThe Federal Bar Association Section on Taxation hosts the 38th Annual Tax Law Conference today at the Ronald Reagan Building and International Trade Center, 1300 Pennsylvania Avenue, N.W., Washington, D.C. The featured speakers are:

  • David A. Hubbert (Deputy Assistant Attorney General, U.S. Department of Justice, Tax Division)
  • William J. Wilkins (Chief Counsel, IRS)

February 28, 2014 in Tax, Tax Conferences | Permalink | Comments (0)

The Fossil Fuel Tax Deception

32Tax panel at today's 2014 Public Interest Environmental Law Conference at Oregon:

Fossil Fuel Deception: The Federal Government’s Participation Through Financial Incentives (Organizer: Mona L. Hymel (Arizona))
The deception of oil causes us to think that we can buy cheap stuff from China, we can live in cheap big houses in the exurbs, and we can keep on driving to CostCo in our SUVs to stock up on that cheap stuff from around the world. Is our economy hostage to cheap oil? Our thirst for oil leads to exploitation of pristine lands and exploitation of native people. Concern about oil justifies military buildup. From a tax perspective, “regular” oil tax benefits like percentage depletion, enhanced oil recovery, and IDCs, while relatively minor in terms of total tax expenditures, never expire and illustrate the strength of the fossil fuel lobby, which resists any cut backs. There are also stealth oil benefits: exemption from AMT and passive activity loss rules, the § 199 deduction, and master limited partnerships. Unconventional oil and gas extraction techniques (fracking and tar sands) reduce the net energy benefit of oil. Energy from oil could be used to transition into a fossil-free economy, but we just seem to keep burning it. A carbon tax could help reduce the incentive to keep drilling and digging ourselves even deeper in the climate change hole.

  • Greg Bothun (Oregon) 
  • Neil Buchanan (George Washington)
  • Mona Hymel (Arizona)
  • Roberta Mann (Oregon)
  • Tracey Roberts (Seattle)
  • Walter Wang (San Diego)

February 28, 2014 in Tax, Tax Conferences | Permalink | Comments (0)

The IRS Scandal, Day 295

IRS Logo 2Wall Street Journal: All the President's IRS Agents, by Kimberley Strassel:

Few presidents understand the power of speech better than Barack Obama, and even fewer the power of denying it to others. That's the context for understanding the White House's unprecedented co-option of the Internal Revenue Service to implement a political campaign to shut up its critics and its opponents.

Perhaps the biggest fiction of this past year was that the IRS's targeting of conservative groups has been confronted, addressed and fixed. The opposite is true. The White House has used the scandal as an excuse to expand and formalize the abuse. ...

Politics is also guiding the Justice Department's alleged investigation of IRS abuses. The Oversight Committee held a separate hearing on Wednesday, at which legal experts laid out the ludicrously partisan nature of Justice's probe—including the choice of Barbara Bosserman, an Obama donor in the liberal civil-rights division, to handle it.

Ms. Mitchell, the attorney, was due to testify before the Oversight Committee Feb. 6. On Feb. 4, she filed her written testimony, which explained that nine months after this scandal broke, neither she nor her clients had yet to receive a phone call from the FBI or Justice. Three hours after filing, she told me, a Justice representative called, wanting to check on this targeting thing.

And now we have new IRS regulations, which will formalize the crackdown on 501(c)(4) political speech. The IRS has no business here—there is a bipartisan Federal Election Commission to enforce laws about political speech. But the FEC can't be controlled by the White House, and Democrats have been unable to pass new speech restrictions through Congress.

Democrats are instead fully vested now in using the IRS to shut down criticism by outside groups of ObamaCare, overspending or (ironically) the IRS targeting. Even liberal groups are howling about the White House's use of the IRS to silence political speech, and the House on Wednesday passed a bill to delay the regulations. The White House's response? A veto threat.

At a Senate Judiciary Committee markup Thursday morning, Texas's Ted Cruz offered an amendment to prohibit IRS employees from deliberately targeting individuals or groups based on political views. It was unanimously rejected by every member of the Democratic majority.

The IRS targeting was shocking because Americans expect that agency to be free of politics. In the age of Obama, that era is over. Only when Washington recognizes the IRS for the political tool it has become can it start to fix the problem.

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February 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, February 27, 2014

Mini-Symposium on Taxing Eggs

EggFollowing up on my prior post, Tax Court Seeks Amicus Briefs on Tax Treatment of Egg Donation (more here):  Kim Krawiec (Duke) has hosted a Mini-Symposium on Taxing Eggs based on Perez v. Commissioner, No. 9103-12 (Feb. 14, 2014) (Holmes, J.) at The Faculty Lounge:

Update #1:  Kim Krawiec (Duke), Taxing Eggs: What Have We Learned?:

I wanted to take a stab at recapping/synthesizing some of the points that have emerged from the discussion, ask a few more questions, and play devil’s advocate (as any good moderator should.)

First, the point on which all of our experts seem united is the weakness of the 104(a)(2) claim – that is, the payments to Perez are not taxable because they are compensation for her pain and suffering.  Yet, this is precisely the ground on which the IRS has apparently allowed Perez and other egg donors to exclude such income in the past.  Why have they allowed this if the argument is so weak? ...

Second is the sale of bodily property versus compensation for service question.

Update #2:  Kim Krawiec (Duke), Taxing Eggs: The Wrap-up:

I wanted to again thank our guest bloggers, commenters, and readers of last week’s Taxing Eggs mini-symposium and collect the links to all of the posts in one place for easy reference (see below).  In wrapping up, I also wanted to move away from the specific tax questions we’ve been debating, and address some larger issues raised by the case.

As my colleague Larry Zelenak says in his post, “It is striking that, despite one hundred years of development of federal income tax doctrine, and despite the fact that sales/donations of eggs, sperm, blood, hair, etc., are far from rare, we still don’t have clear answers to these questions.”  Perez v. Commissioner, then, may illustrate yet another of the ways in which our discomfort with these transactions involving the body impedes a rational development of the law governing them.

February 27, 2014 in Tax | Permalink | Comments (1)

Editorial Page Reactions to the House GOP Tax Reform Plan

Tax Reform LogoEditorial page reactions to the House GOP tax reform plan from

  • Bloomberg
  • New York Times
  • Wall Street Journal
  • Washington Post
  • USA Today

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February 27, 2014 in Congressional News, Tax | Permalink | Comments (0)

Polsky Presents Private Equity Monitoring Fees Are Actually Disguised Dividends Today at UCLA

Polsky 2014Gregg D. Polsky (North Carolina) presents The Untold Story of Sun Capital: Private Equity Monitoring Fees Are Actually Disguised Dividends, 142 Tax Notes 556 (Feb. 3, 2014) (blogged here) at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh, Kirk Stark, and Alexander Wu:

Polsky addresses the tax implications of monitoring fees paid to private equity firms and argues that they typically are improperly deducted by the portfolio companies that pay them.

February 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Zelenak Presents Mitt Romney, the 47%, and the Future of the Mass Income Tax Today at Indiana

Zelenak (2014)Lawrence A. Zelenak (Duke) presents Mitt Romney, the 47 Percent, and the Future of the Mass Income Tax at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

This essay puts Romney’s remarks in the context of their causes and consequences–first by describing the 2010 origins and subsequent development of the 47 percent critique in conservative circles, and then by describing the reactions to the remarks (of both opinion leaders and the public, and across the political spectrum). The essay also situates the 47 percent critique in the context of related conservative critiques of federal tax-and-transfer policies–in particular, criticism of the fact that about half the population receives direct government benefits in any given year, and studies concluding that 60 to 70 percent of Americans are “net takers” who receive more value from the government than they pay in taxes.6 Although the goals of the essay are primarily descriptive (of the several critiques and of the reactions to them) and predictive (of the unpromising political future of the critiques), the author’s own normative views may intrude from time to time.

February 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Viard Presents State Taxes, Trade Neutrality, and Nondiscrimination Today at Northwestern

ViardAlan D. Viard (American Enterprise Institute) presents Putting the Commerce Back in the Dormant Commerce Clause:  State Taxes, Trade Neutrality, and Nondiscrimination at Northwestern today as part of its Tax Colloquium Series hosted by by Herbert Beller, Charlotte CraneDavid Cameron, Philip Postlewaite, Jeffrey Sheffield, and Robert Wootton:

The Supreme Court’s Dormant Commerce Clause jurisprudence has been intensely criticized as incoherent, with many questioning whether coherence is even possible. We explain that a coherent DCC jurisprudence arises if state taxes and subsidies are evaluated based on their relative treatment of interstate and intrastate trade. Under this “trade neutrality” standard, state taxes and subsides are invalid if they create an economic incentive to engage in intrastate trade rather than interstate trade. Economic analysis reveals that such an incentive arises when the combined tax on imports and exports exceeds the tax on intrastate transactions or when the subsidy to intrastate transactions exceeds the combined subsidy to imports and exports.

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February 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Blanchard Presents Individual Income Tax Reform: Back to the Base Today at Temple

BlanchardKimberly S. Blanchard (Weil, Gotshal & Manges, New York) presents Individual Income Tax Reform: Back to the Base, 138 Tax Notes 307 (Jan. 21, 2013), at Temple today as part of its Tax Policy & Administration Colloquium Series hosted by Alice Abreu & Andrea Monroe:

Nearly all the individual income tax reform proposals under discussion in Washington follow the approach of broadening the tax base by eliminating tax expenditures or imposing dollar caps on deductions. This report argues that these types of proposals are regressive and would increase taxes disproportionately on middle-income earners, who are already paying aggregate taxes much higher than is generally understood or acknowledged. It also argues that the proposals are distortive because they fail to account for the differences in the cost of living in different parts of the United States. A better approach would be to restore progressivity and transparency to the individual income tax by significantly expanding the exempted base of the tax and imposing steeply graduated rates over that exempted base. Arbitrary caps, thresholds, and phaseouts would be eliminated because they distort measurement of the tax base, exacerbate horizontal inequity, and mask true effective tax rates, making it difficult to compare tax burdens among similarly situated individual taxpayers.

February 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Can't File Your Tax Return: Blame ObamaCare, Not TurboTax

TurboTax (2013)Wall Street Journal:  8960 or Fight! Can't File Your Taxes? Blame ObamaCare, by James Taranto:

Some TurboTax customers are mad at Intuit, maker of the popular tax-prep software, because they've finished their returns but are unable to file. Their anger is misplaced. They should blame the Internal Revenue Service, along with the 111th Congress and President Obama for enacting and signing the tax increase with which TurboTax can't yet comply. (They could also blame George W. Bush if they're in a jocose frame of mind.)

At issue is ObamaCare's new 3.8% "net investment income tax." It took effect Jan. 1, 2013, so that taxpayers are encountering it just now as they prepare their returns for last year. In effect, it applies the Medicare payroll tax to interest, dividends and capital gains.

But it doesn't apply to all such income. If your modified adjusted gross income is under $200,000 (or $250,000 for a married couple), you don't pay the tax at all. Further, if your modified AGI is above the threshold but your noninvestment income is below it, the tax is applied on the difference between your total income and the threshold. ...

It's a no-win for Intuit and for impatient TurboTax users. By preventing the filing of returns that include an 8960 until the IRS releases the final instructions, the company was protecting its customers from the risk of misfiling--and itself from the backlash that would surely ensue if many filers end up having to amend their returns as a result. The company still ended up with a backlash, its response to which could yield another backlash if the final instructions turn out to be different enough from the draft that a large number of users have to amend their returns.

February 27, 2014 in Tax | Permalink | Comments (7)

Online Advertising and Source-Based Taxation

Assaf Y. Prussak (S.J.D. 2013, Michigan), The Income of the 21st Century: Online Advertising as a Case Study for the Implications of Technology for Source-Based Taxation, 16 Tul. J. Tech. & Intell. Prop. 39 (2013) (Winner, 2012 International Fiscal Association (USA Branch) Student Writing Competition):

Throughout history, traditional trade and commerce, whether by land, sea or air was always engaged in a very physical manner, thus subjecting it to constraints and barriers imposed by both natural and man-made borders and jurisdiction lines. The computer and Internet revolutions created a new medium for trade and commerce – the virtual market place. This unique platform for engaging in trade and commerce created new opportunities for generating value and profit in ways not available before. One of those Internet-based revenue-generators is online advertising. With growing availability of the Internet around the world, double-digit growth rate, and stronger-than-ever financial reports of the major players in this market (Google, Facebook and the like), online advertising is expected to be a key player in the twenty first century global economy. The unique characteristics of this new type of economic activity challenge the traditional boundaries of generating income from cross-border transactions, which for centuries have defined and limited the world of commerce. Online advertising is completely unbound by any physical or jurisdictional borders and it is generated in a multi-party transaction in which the active party which generates the revenue (the end-user who views the advertisement or acts upon it) is neither the payee nor the payor. When this type of activity takes place in a multi-jurisdiction context (whether at the international or state level), it gives rise to interesting questions regarding the tax implications of the income it generates. The source of this income, its character, its effect on the U.S. domestic tax system and its implication on the complex web of bilateral tax treaties, are only some of the issues which deserve a serious discussion. This paper will attempt to introduce the reader to the unique characteristics of income from online advertising and present some of the interesting tax implications it creates.

February 27, 2014 in Scholarship, Tax | Permalink | Comments (0)

Publication Opportunities in the Pepperdine Law Review

Pepperdine Law ReviewThe Pepperdine Law Review publishes two volumes: the Traditional Volume and the Annual Volume.  The Annual Volume differs from the Traditional Volume in only two ways: (1) the Annual Volume publishes shorter works, consistent with the guidelines outlined below; and (2) hard copy reprints are printed on demand rather than by default.  This volume retains the same editorial standards as material published in the Traditional Volume and bears a Pepperdine Law Review citation because it is part of the same publication. 

The Annual Volume features shorter works such as Commentaries and Traditional Book Reviews and innovative, responsive dialogue pieces in the form of Multi-Author Discussions and Book Review Symposia.  The Annual Volume allows authors and editors to publish material on a tighter acceptance and publication schedule, eliminating the lengthy editorial calendar of traditional law review publishing.  We guarantee decisions on Annual Volume submissions within five business days and will create PDF galleys within two to four weeks depending upon the publication type. 

Overview of the Content Types Published in the Annual Volume

For all content types, we accept or reject proposals within five (5) business days.  Offers to publish expire within forty-eight (48) hours.  Word limits are approximate and inclusive of footnotes. 

Commentaries – We publish brief commentary (4000 words) on current topics.  All accepted commentary pieces are published on the PLR website and are available in PDF galleys within fourteen (14) days. 

Traditional Book Reviews - We publish traditional book reviews (6000 words).  Accepted reviews are published on the PLR website and are available in PDF galleys within four (4) weeks of submission.  We also strongly encourage supplemental book reviews that respond to recently hosted Book Symposia (see below).

Multi-Author Discussions – We organize brief discussions between scholars on timely issues.  Once two or more scholars have agreed to participate, production begins the following week.  Opening statements (2000 words) and rebuttals/responses (1000 words) are published to the PLR website on consecutive Mondays.  Closing statements (500 words) are published Friday of the second week.

Book Review Symposia – We organize mini-symposia on recently published books and books in pre-publication proofs.  This is a dialogue between the author and the reviewers, which begins at a time agreed upon between the author, reviewers, and PLR.  Initial reviews (2000 words) and the author’s responses (2000 words) are published to the PLR website on consecutive Mondays.  Closing statements (500 words) are published Friday of the second week.

Traditional Volume, Citation: XX PEPP. L. REV. XX (Year)

Annual Volume, Citation: XXXX PEPP. L. REV. XX (Year)


Multi-Author Discussions



Case Notes

Book Review Symposia


Traditional Book Reviews

February 27, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

The IRS Scandal, Day 294

IRS Logo 2Wall Street Journal op-ed:  Connecting the Dots in the IRS Scandal, by Bradley A. Smith (Capital):

The 'smoking gun' in the targeting of conservative groups has been hiding in plain sight.

The mainstream press has justified its lack of coverage over the Internal Revenue Service targeting of conservative groups because there's been no "smoking gun" tying President Obama to the scandal. This betrays a remarkable, if not willful, failure to understand abuse of power. The political pressure on the IRS to delay or deny tax-exempt status for conservative groups has been obvious to anyone who cares to open his eyes. It did not come from a direct order from the White House, but it didn't have to. ...

In 1170, King Henry II is said to have cried out, on hearing of the latest actions of the Archbishop of Canterbury, "Will no one rid me of this turbulent priest?" Four knights then murdered the archbishop. Many in the U.S. media still willfully refuse to see anything connecting the murder of the archbishop to any actions or abuse of power by the king.

New York Times op-ed:  Why the I.R.S. Scandal Won't Go Away, by Thomas D. Edsall:

Congressional Republicans have demonstrated exceptional persistence and determination in their efforts to keep this nine-month-old controversy alive, convinced that it is a partisan goldmine. Since last May, the Ways and Means and Government Oversight Committees have, together, held at least a dozen separate hearings on the issue of I.R.S. targeting of conservative groups.

Meanwhile, the Exempt Organization Division has been paralyzed. Employees have been forced to deal not only with House investigations, but also with an investigation by the Senate Finance Committee, another by the Senate Permanent Subcommittee on Investigations, an investigation by the Department of Justice and a civil suit brought by 41 of the targeted Tea Party groups.

“It’s been a huge distraction for the agency,” Marcus Owens, who was the director of the division from 1990 to 2000, told me. Owens, who is currently a tax lawyer in private practice, added: “They have gone into a bunker or a zone of silence. The events have caused a lot of tax administration to grind to a halt.”

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February 27, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, February 26, 2014

House GOP Releases Tax Reform Plan

Tax Reform LogoThe House Ways & Means Committee Republicans today released a tax reform plan, The Tax Reform Act of 2014:

Press and blogosphere coverage:

February 26, 2014 in Congressional News, Tax | Permalink | Comments (2)

Shaviro Presents Fixing U.S. International Taxation Today at Duke

FixingDaniel N. Shaviro (NYU) presents Fixing U.S. International Taxation (Oxford University Press, 2014) at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

Part 1, consisting of chapters 2 and 3, first reviews the basic U.S. international tax rules, and then addresses in greater detail the design challenges that they raise, along with their main incentive effects and planning implications. Part 1 could be skimmed or even skipped by readers who either are already well-versed in the operational details, or else do not wish to delve too deeply into the U.S. international tax system’s plumbing. However, it does (chapter 3 in particular) develop some points that are important to the subsequent analysis. Part 2 then shifts to a broader policy focus. To this end, chapter 4 addresses the global welfare perspective on U.S. international tax policy. Chapter 5 addresses the unilateral national welfare perspective. Finally, chapter 6 addresses the question of what practical steps might be taken to improve U.S. international tax policy.

February 26, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Zara Fashions Tax Avoidance by Shifting Profits to the Alps

ZaraBloomberg:  Ortega’s Zara Fashions Tax Avoidance by Shifting Profits to Alps, by Jesse Drucker:

Zara’s celebrity chic helps make its Spanish parent company, Inditex, the world’s biggest fashion retailer. Singer Taylor Swift, reality-television personality Kim Kardashian and Kate Middleton, Prince William’s wife, have all been spotted wearing the stylish, low-cost brand.

Another reason for Inditex’s industry-best profit margins of almost 15 percent: the company uses the kind of tax loopholes coming under increasing scrutiny from international regulators.

In the past five years, Inditex has shifted almost $2 billion in profits to a tiny unit operating in the Netherlands and Switzerland, records show. Although that subsidiary employs only about 0.1 percent of Inditex’s worldwide workforce, it reported almost 20 percent of the parent company’s global profits last year, according to company filings. [Infographic]

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February 26, 2014 in Tax | Permalink | Comments (0)

In Defense of Disciplines: Rejecting the Siren Song of Interdisciplinary Research

Inside Higher Ed:  A Call to Embrace Silos:

In DefenseEveryone, it seems, wants to promote interdisciplinary work. College and university presidents love to announce new interdisciplinary centers. Funders want to support such work. Many professors and graduate students bemoan the way higher ed places them in silos from which they long to free themselves, if only they could get tenure for interdisciplinary work.

Jerry A. Jacobs, a professor of sociology at the University of Pennsylvania, wants to end the interdisciplinary love fest. His new book, In Defense of Disciplines: Interdisciplinarity and Specialization in the Research University (University of Chicago Press, 2013), challenges the conventional wisdom that academe needs to get out of disciplines to solve the most important problems and to encourage creative thinking. The most significant ideas (including those related to problems that cross disciplines) in fact come out of specialized, discipline-oriented work, Jacobs argues. Further, he says that the idea that disciplines don't communicate right now is overstated -- and that such communication can be encouraged without weakening disciplines.

In an interview, he said common sense shows that interdisciplinary problems require many disciplines to work on them -- from the strength of their scholarly backgrounds.

February 26, 2014 in Book Club, Legal Education, Scholarship, Tax | Permalink | Comments (0)

NLJ Releases Data for 168 Law Schools in its Rankings by Graduates in BigLaw Jobs

Go to Law SchoolsThe National Law Journal has again released the complete data for 168 law schools in its Law School Rankings by Graduates in BigLaw Jobs (prior posts here and here):  

For the second year in a row, we are making all of the data from our Go-To Law Schools Report on large firm associate hiring available to the public in a searchable format.  Select a law school from the list to see where 2013 juris doctor graduates from those institutions were hired.  Scroll over the chart to find the school's number of graduates placed at each firm, percentage of graduates at NLJ 250 firms, and tuition.  Click the tabs above to search by law firm, view the complete list of law school data, and see our Value Index.

February 26, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

Burke & McCouch: Woods: A Path Through the Penalty Maze

Tax Analysys Logo (2013)Karen C. Burke (Florida) & Grayson M.P. McCouch (Florida), Woods: A Path Through the Penalty Maze, 142 Tax Notes 829 (Feb. 24, 2014):

In this report, Burke and McCouch discuss the Supreme Court’s Woods decision concerning partnership-level penalty jurisdiction in proceedings under the 1982 Tax Equity and Fiscal Responsibility Act, and they explore the implications of the decision for subsequent partner-level proceedings.

February 26, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Gamage: The Future of Tax Salience Scholarship

David Gamage (UC-Berkeley), On the Future of Tax Salience Scholarship: Operative Mechanisms and Limiting Factors, 41 Fla. St. U. L. Rev. 173 (2013):

This Essay — written for Florida State University’s symposium on the 100th anniversary of the federal income tax — evaluates how the literature on tax salience should be advanced in order for it to better guide tax policy over the coming decades. The literature on tax salience analyzes how taxpayers account for the costs imposed by taxation when the taxpayers make decisions or judgments, both in the taxpayers’ roles as voters and as market participants. This Essay evaluates both possible operative mechanisms that might underlie observed tax salience effects and limiting factors that might prevent tax salience effects from materializing in real-world policy contexts.

February 26, 2014 in Scholarship, Tax | Permalink | Comments (1)

Mays Receives 2014 Pillar of Excellence Award

Janice Mays, Democratic Staff Director, Chief Counsel, and Former Chief Tax Counsel of the House Ways & Means Committee received the 2014 Pillar of Excellence Award at the Tax Council Policy Institute's 15th Annual Tax Policy & Practice Symposium in Washington, D.C.:

MaysThe 2014 award is given to Mays based on her extraordinary dedication and contribution to the field of tax law and policy. ... "Janice Mays embodies all the characteristics the Pillar of Excellence Award was designed to recognize," said Lynda K. Walker, executive director and general counsel of TCPI. "For more than three decades she has been a driving force behind federal tax policy development and is both widely regarded as a thoughtful expert and highly respected on both sides of the aisle for her leadership on Capitol Hill. We are honored to present the award to Janice, who has dedicated her career to shaping sound and fair tax policy."

Mays is the first woman and fifth overall recipient of this award, which honors individuals who consistently go above and beyond what is required, proving to be true leaders in their field. ... Qualifications for the Pillar of Excellence Award include playing a key role in tax policy; its impact on the tax business and national economy; participation in knowledge-sharing opportunities; and demonstration of the overall understanding of tax policies among professionals, executives and policymakers.

Mays joined the Committee staff in 1975 after receiving her undergraduate degree (cum laude) from Wesleyan College in Macon, Ga., and her juris doctorate from the University of Georgia College of Law.  She also holds a Master of Law in taxation from the Georgetown University School of Law.

February 26, 2014 in Congressional News, Tax | Permalink | Comments (1)

Senate Charges Credit Suisse With Helping U.S. Clients Evade U.S. Taxes

The IRS Scandal, Day 293

IRS Logo 2Wall Street Journal editorial:  Liberals vs. the IRS: Even the Left Doesn't Want the Tax Man Regulating Speech:

The media have remained quiet about the IRS targeting of conservative nonprofit groups and even quieter about the proposed IRS rule to restrict their political speech. Maybe our colleagues will snap out of their slumber now that the objections are coming from liberals.

The comment period for the new IRS political-speech rule is open until Feb. 27, but already there have been more than 69,000 comments, the majority negative. That's far more than the normal reaction to a new regulation—only 7,353 comments on the Keystone XL pipeline, according to—and it shows how much anger and concern the rule has generated across the political spectrum. ...

By restricting the ability of 501(c)(4)s to engage in politics, the Administration hopes more groups will have to register as political committees instead of social-welfare groups and thus disclose their donors. The purpose of this disclosure is to set up donors as political targets for boycotts and intimidation so the costs of participating in politics will be too steep.New York Democrat Chuck Schumer recently gave this game away when he urged the IRS and Administration to "redouble" their efforts to crack down on the "tea party elites" who "gained extraordinary influence by being able to funnel millions of dollars into campaigns with ads that distort the truth and attack government."

In other words, Mr. Schumer and the White House want to use the IRS to impose campaign-finance reform. But that's a role Congress has never envisioned for what is supposed to be the nonpartisan tax authority. Congress set up the Federal Election Commission, with three members each from both parties, to enforce campaign-finance regulations so there would be a check on partisan enforcement.

Conservative criticism hasn't stopped the Obama IRS, but maybe liberal unhappiness will. The Treasury Department said earlier this month that the draft rule is merely the "first step in a careful, thoughtful process." It's been thoughtful only in the sense that it is driven by political motives. If the liberals don't want some future Republican IRS to reduce their political speech, they'll continue the clamor until the White House kills this assault on the First Amendment.

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February 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, February 25, 2014

House GOP Releases Tax Reform Plan

Tax Reform LogoThe House Ways & Means Committee Republicans today released a tax reform plan, Making Today’s Tax Code Simpler and Fairer while Creating More Jobs and Higher Take Home Pay for American Workers:

The Ways and Means Committee has held more than 30 separate hearings on comprehensive tax reform over the last three years and released three discussion drafts.

1.  Simplifying taxes for small business and their employees:

This draft is specifically focused on reducing the burden the tax code imposes on small businesses and their workers.  With about half of the private sector workforce employed by a small business – a total of nearly 60 million Americans –  every dollar spent on complying with an overly complex, burdensome and broken tax code is a dollar that cannot be used for investment, hiring and higher wages for American workers.

The discussion draft contains several core components that simplify tax compliance for small businesses and provide certainty with respect to the ability of small businesses to recover certain costs immediately.  These include widely supported reforms such as permanent section 179 expensing and expansion of the “cash accounting” method, amongst other provisions.  The discussion draft also includes two separate options designed to achieve greater uniformity between S corporations and partnerships – one that revises current rules and a second that replaces current tax rules with a new unified pass-through regime.

2.  Making Wall Street play by the rules:

The proposal seeks to modernize tax rules to minimize Wall Street’s ability to hide and disguise potentially significant risks through the abuse of derivatives and other novel financial products – an activity that was a contributing factor to the 2008 financial crisis.  The discussion draft also outlines changes to tax rules designed to provide greater simplicity and uniformity.

3.  Helping America compete and win when doing business overseas:

Despite losing jobs to foreign competitors, America is still using an outdated international tax system designed nearly 60 years ago.  Yet, in recent years, virtually every one of our major competitors around the globe has been actively reforming their tax laws.  Even our closest neighbors are getting ahead of us, as Canada has already reformed its tax code and Mexico is doing so right now.  If we don’t take action, we risk falling further behind.

An American tax code should make it easier for American companies to bring profits earned overseas back home to the U.S. – so they can be invested here – and that is the purpose of the international tax reform draft.

Press and blogosphere coverage:

February 25, 2014 in Congressional News, Tax | Permalink | Comments (0)

Sanchirico Presents International Tax and Ownership Nationality Today at NYU

SanchiricoChris William Sanchirico (Pennsylvania) presents As American as Apple Inc.: International Tax and Ownership Nationality at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

The ownership nationality of large US multinational companies plays an implicit but important role in the current debate over how such companies should be taxed. This paper identifies that role and investigates what is actually known about where these companies’ shareholders reside.

February 25, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Colleges Rethink Honor Codes Amidst Rampant Cheating

Middlebury LogoInside Higher Ed, The Proctor Is In:

Only 100 or so colleges maintain honor codes, which are thought to bolster integrity and trust among professors and students by involving the latter in the creation and enforcement of academic standards. When a campus culture values open and frequent discussion about when and why cheating is socially unacceptable, the thinking goes (and some research shows), students are less likely to flout the rules – and more likely to report their peers who do.

Except when they aren’t. Most traditional honor codes allow for unproctored exams, where the professor leaves the room and students are expected to report any cheating they observe. (Some even let students take the exam wherever they choose.) But the system is not working out so well at Middlebury College, where faculty members in economics will proctor their exams this spring semester.

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February 25, 2014 in Legal Education | Permalink | Comments (4)

18 Law Schools Just Missed NLJ Top 50 Ranking of Grads in BigLaw Jobs

Go to Law SchoolsFollowing up on yesterday's post, NLJ: Law School Rankings by Graduates in BigLaw Job:  National Law Journal, Tight Race at Bottom of Go-To Law Schools Rankings, by Karen Sloan:

Seven law schools came within a hair of ranking among The National Law Journal’s Go-To Law Schools—the NLJ’s list of the 50 that led in sending their 2013 juris doctors into associate jobs in the 250 largest law firms in the country.

Every year, a handful of law schools come oh-so-close to making the list, but 2013 posed an especially tight race. Just a single graduate made the difference in some instances. ... [T]he University of Kansas School of Law snagged the No. 50 spot by sending 8.62 percent of its 2013 graduates to the largest law firms. The University of Arizona James E. Rogers School of Law sent 8.5 percent of its graduates into that same future, but that fell about one-tenth of a percentage point short of making the list. ... The University of Alabama School of Law; Arizona State University Sandra Day O’Connor College of Law; University of Colorado Law School; University of South Carolina School of Law; Rutgers School of Law–Newark; and the University of Georgia School of Law each came within one percentage point of Kansas’ placement rate.

Another 11 law schools came within two percentage points of making the top 50, led by Seton Hall University School of Law at 7.49 percent, the University of Cincinnati College of Law at 7.38 percent and the University of Florida Levin College of the Law.

February 25, 2014 in Law School Rankings, Legal Education | Permalink | Comments (0)

IRS Criminal Prosecutions (18%) and Convictions (26%) Jumped in 2013

IRSThe IRS yesterday released (IR-2014-18) its IRS Criminal Investigation (CI) Annual Report for Fiscal Year 2013, reflecting significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft:

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

High points of fiscal year 2013 include a 12.5 percent increase in investigations initiated compared to the prior year and a nearly 18 percent gain in prosecution recommendations. Specifically, CI initiated 5,314 cases and recommended 4,364 cases for prosecution. These increases were accomplished at a time when agent resources decreased more than 5 percent.

Meanwhile, convictions rose more than 25 percent compared to the prior year. The conviction rate for fiscal 2013 was 93 percent.

Overall IRS Criminal Investigations Data FY 2013

Clean Slate Tax, IRS Prosecutions and Convictions Jump 15%+ in 2013

February 25, 2014 | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through February 1, 2014) of the Top 25 Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):



All-Time Downloads


Recent Downloads


Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Paul Caron (Pepperdine)


Paul Caron (Pepperdine)



Louis Kaplow (Harvard)


Ed Kleinbard (USC)



Vic Fleischer (San Diego)


Richard Ainsworth (BU) 



James Hines (Michigan)


Katie Pratt (Loyola-L.A.)



D. Dharmapala (Illinois)


D. Dharmapala (Illinois)



Ted Seto (Loyola-L.A.)


Brad Borden (Brooklyn)



Richard Kaplan (Illinois)


Jen Kowal (Loyola-L.A.)



Katie Pratt (Loyola-L.A.)


Richard Kaplan (Illinois)



Dennis Ventry (UC-Davis)


Bridget Crawford (Pace)



Carter Bishop (Suffolk)


Louis Kaplow (Harvard)



David Weisbach (Chicago)


Ted Seto (Loyola-L.A.)



Jen Kowal (Loyola-L.A.)


Robert Sitkoff (Harvard)



David Walker (BU)


James Hines (Michigan)



Chris Sanchirico (Penn)


Carter Bishop (Suffolk)



Bridget Crawford (Pace)


Vic Fleischer (San Diego)



Brad Borden (Brooklyn)


Omri Marian (Florida)



Francine Lipman (UNLV)


Susan Morse (Texas)



Robert Sitkoff (Harvard)


Jeff Kwall (Loyola-Chicago)



Richard Ainsworth (BU)


John Miller (Idaho)



Herwig Schlunk (Vand.)


David Gamage (UCBerkeley)



Ed Kleinbard (USC)


David Weisbach (Chicago)



Ed McCaffery (USC)


Gregg Polsky (N. Carolina)



Wendy Gerzog (Baltimore)


Dan Shaviro (NYU)



Dan Shaviro (NYU)


Chris Sanchirico (Penn)


Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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February 25, 2014 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

2013 Washington & Lee (and Google Scholar) Law Review Rankings

W&L LogoWashington & Lee has released its 2013 Law Review Rankings.  David Lat has a detailed analysis here, including a comparison of the W&L rankings with the U.S. News rankings:

  1. Stanford Law Review (2 in U.S. News)
  2. Harvard Law Review (2)
  3. Columbia Law Review (4)
  4. Yale Law Journal (1)
  5. University of Pennsylvania Law Review (7)
  6. Georgetown Law Journal (14)
  7. UCLA Law Review (17)
  8. Michigan Law Review (9)
  9. California Law Review (9)
  10. Virginia Law Review (7) 

Google ScholarHere are the Google Scholar rankings (with each publication’s W&L rank noted parenthetically):

  1. Columbia Law Review (3 in W&L)
  2. Harvard Law Review (2)
  3. Stanford Law Review (1)
  4. University of Pennsylvania Law Review (5)
  5. Yale Law Journal (4)
  6. Georgetown Law Journal (6)
  7. Michigan Law Review (8)
  8. UCLA Law Review (7)
  9. Texas Law Review (11)
  10. Virginia Law Review (10)

February 25, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

WSJ: Hiring Improves for Law Grads

NALP New LogoFollowing up on last week's post,  NALP: Entry-Level Law Firm Recruiting Remains Flat:  Wall Street Journal, Hiring of Law Grads Improves for Some; Offer Rates for Summer 2013 Interns Approach Pre-Financial Crisis Levels:

Here's some good news for law students set to graduate this year: The job-offer rate for those lucky enough to have landed a summer job at a law firm in 2013 is nearly as high as it was before the financial crisis.

Summer-associate programs are the traditional path to employment at big law firms. Students interview with dozens of firms in the late summer and early fall of their second year. Those who are selected spend the following summer working at a law firm in hopes of being offered a permanent position after they graduate.

The recession put a crimp in that pipeline. Many firms, facing a collapse in demand for their services, scaled back hiring programs, and summer associates faced greater competition for permanent slots.

But things are looking up for the class of 2014, at least by some measures, according to figures released last week by the National Association for Law Placement, a nonprofit group that tracks legal employment figures.

About 92% of law students who worked as summer associates last year received job offers. In 2007, before the financial crisis upended the legal profession, the offer rate was about 93%.

The most recent NALP employment data shows a bump up from 2012, when 90% of summer associates got offers. And it is a significant improvement from 2009, when many firms slashed jobs and the summer offer rate hit a 20-year low. "This is a huge change from the stark offer rate of only 69% measured in 2009," says a 23-page report by the group, which polled 123 law schools and 389 law firms.

Finding full-time work as a lawyer remains a challenge for new graduates, who are often saddled with hefty student loans.

According to a separate NALP survey, only 64.4% of the 2012 law graduates for whom employment status is known got a job that required bar passage, the lowest percentage the group has ever measured. Just over half of 2012 graduates found work in private practice; typically such jobs account for 55% to 58% of postgraduate employment.

February 25, 2014 in Legal Education | Permalink | Comments (0)

Christ and Cannabis: Christian Pot Dispensary Takes on IRS Today in Tax Court

Time:  Christian Pot Dispensary Takes on IRS:  A Business Touting Christ and Cannabis Takes a Stand Over Dispensaries' Awkward Tax Status:

ChristianmarijuanaAt Lanette Davies’ shop in Sacramento, everyone stops what they’re doing at 6 p.m. Some patrons come especially for this moment in the day, while others just happen to be there. “We have prayer every night, for our community and our patients,” she says. And those patients are all taking at least one of the same prescriptions: medical marijuana. Her shop, Cana Care, is a “Christian-based dispensary,” where the owners believe in both the powers of Christ and cannabis.

The not-for-profit dispensary has a rare mix of messages, but it might also be on the verge of setting a new precedent for the marijuana industry. On Feb. 24, Davies and her husband Bryan will face the Internal Revenue Service in tax court over disputes about business deductions. A ruling in their favor could help pull dispensaries like hers out of a legal limbo—in which states view them as legitimate businesses but the IRS continues to view them as aiding in drug trafficking.

Federal law defines pot as a controlled substance, and that is the law that the IRS follows, even after 20 states and Washington, D.C., have legalized medical marijuana. “The tax law is grossly unfair,” says San Francisco-based tax attorney Robert Wood, who has written extensively about the issue. “Whether you think dispensaries are a good idea or not, if they’re lawful businesses under state law, they should be able to deduct their business expenses like anybody else.”

So far, courts have ruled that dispensaries can’t do that. Businesses like Canna Care aren’t eligible for what would normally be routine deductions like payroll expenses and rent, because of a section of the federal tax code known as 280E, which dates back to 1982—more than a decade before California became the first state to legalize medical marijuana in 1996. When Davies’ filed her taxes in 2006, 2007 and 2008, she listed $2.6 million in such deductions. The IRS, which has repeatedly pursued dispensaries using that section of the code, came knocking with an audit in 2011 and refused to accept those deductions, levying nearly $875,000 in additional taxes on Canna Care.

(Hat Tip: George Yin.) Prior TaxProf Blog coverage:

February 25, 2014 | Permalink | Comments (0)

The IRS Scandal, Day 292

IRS Logo 2PowerLine:  Cleta Chronicles: IRS Scandals, Part 1:

Cleta Mitchell may be the most dangerous woman in America. She is the prominent Washington attorney who represents several clients victimized by the criminal misconduct of the IRS over the past four years. She speaks with authority when she asserts, as she did recently in her testimony before a congressional subcommittee, that the Obama administration is responsible for “lies upon lies” covering up the multifarious, politically inspired wrongdoing of the IRS. Cleta took the lead in the outstanding Heritage Foundation program on the IRS and the Obama administration this past Friday.

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February 25, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, February 24, 2014

University of Chicago Law School Study: Better Scholars Are Better Teachers

Tom Ginsburg (Chicago) & Thomas J. Miles (Chicago), The Teaching/Research Tradeoff in Law: Data from the Right Tail:

There is a long scholarly debate on the tradeoff between research and teaching in various fields, but relatively little study of the phenomenon in law. This analysis examines the relationship between the two core academic activities at one particular school, the University of Chicago Law School, which is considered one of the most productive in legal academia. We use standard measures of scholarly productivity and teaching performance. For research, we measure the total number of publications for each professor for each year, while for teaching, we look at the average teaching rating. Net of other factors, we find that, under some specifications, research and teaching are positively correlated. In particular, we find that students’ perceptions of teaching quality rises, but at a decreasing rate, with the total amount of scholarship. We also find that certain personal characteristics correlate with productivity. The recent debate on the mission of American law schools has hinged on the assumption that a tradeoff exists between teaching and research, and this article’s analysis, although limited in various ways, casts some doubt on that assumption.

Chicago Chart

February 24, 2014 in Legal Education, Scholarship, Teaching | Permalink | Comments (1)

TRAC-IRS: The Decline of the District Court as a Tax Litigation Forum

The Transactional Records Access Clearinghouse at Syracuse University has released a report, Tax Lawsuits Edge Downward:

TRAC 2The latest available data from the federal courts show that during January 2014 the government reported 68 new civil filings under the category of "Taxes." According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this number represents a decline of nearly 10 percent from one year ago. Tax lawsuits have declined a total of 32.4 percent from the levels reported five years ago in January 2009. The January 2014 figure is however up 9.7 percent over the previous month, when the number of civil filings of this type totaled 62.

The comparisons of the number of civil filings for tax lawsuits are based on case-by-case court records which were compiled and analyzed by TRAC (see Table 1). Note that the cases covered by this report exclude suits dealing with summonses on third-party witnesses under 26 USC 7609.


February 24, 2014 in Tax, Think Tank Reports | Permalink | Comments (2)

Income Inequality, by State, 1917-2011

Economic Analysis and Research Network, The Increasingly Unequal States of America: Income Inequality by State, 1917-2011:

[A]ll 50 states have experienced widening income inequality in recent decades.  ... Between 1979 and 2007, the top 1 percent took home well over half (53.9 percent) of the total increase in U.S. income. Over this period, the average income of the bottom 99 percent of U.S. taxpayers grew by 18.9 percent. Simultaneously, the average income of the top 1 percent grew over 10 times as much—by 200.5 percent.

Table 1

Income growth from 1979 to 2007, overall and for the top 1% and bottom 99%, U.S. and by state and region

  Average real income growth 
Rank (by top 1% income growth)State/regionOverallTop 1%Bottom 99%Share of total growth (or loss) captured by top 1%
 1 Connecticut 72.6% 414.6% 29.5% 63.9%
 2 Massachusetts 82.1% 366.0% 51.7% 43.1%
 3 New York 60.5% 355.1% 22.2% 67.6%
 4 Wyoming 31.5% 354.3% -0.8% 102.3%
 5 New Jersey 62.6% 264.7% 41.3% 40.3%
 6 Washington 31.2% 222.3% 13.9% 59.1%
 7 Florida 38.8% 218.8% 13.8% 68.9%
 8 Vermont 42.4% 217.0% 27.8% 39.5%
 9 South Dakota 44.8% 216.0% 30.5% 37.2%
10 New Hampshire 53.2% 215.9% 37.6% 35.5%
11 Utah 31.0% 214.9% 15.4% 54.1%
12 Virginia 58.2% 214.8% 44.6% 29.5%
13 Illinois 31.4% 211.6% 12.2% 64.9%
14 Maryland 51.0% 202.1% 37.0% 33.6%
15 Colorado 37.4% 200.8% 21.2% 48.3%
16 Idaho 30.1% 197.6% 16.3% 49.9%
17 California 31.5% 191.8% 13.2% 62.4%
18 Pennsylvania 40.0% 184.9% 25.2% 42.8%
19 Tennessee 35.3% 178.0% 20.2% 48.4%
20 Minnesota 44.4% 175.9% 30.9% 36.8%
21 North Carolina 44.8% 172.0% 32.1% 34.8%
22 Georgia 37.5% 170.9% 23.5% 43.3%
23 Rhode Island 53.8% 170.3% 40.4% 32.6%
24 Nevada 8.6% 164.0% -11.6% 218.5%
25 South Carolina 25.4% 163.5% 12.8% 54.0%
26 Nebraska 43.5% 160.3% 31.8% 33.5%
27 Alabama 33.7% 158.8% 20.5% 44.9%
28 Arizona 17.0% 157.8% 3.0% 84.2%
29 Wisconsin 28.5% 150.4% 17.4% 44.0%
30 Oklahoma 33.9% 149.6% 20.3% 46.6%
31 Maine 39.9% 149.4% 30.2% 30.5%
32 North Dakota 33.7% 147.8% 24.0% 34.2%
33 Montana 22.3% 146.8% 10.9% 55.2%
34 Missouri 31.9% 140.5% 20.3% 42.5%
35 Kansas 37.0% 132.3% 26.6% 35.0%
36 Oregon 13.5% 127.2% 2.7% 81.8%
37 Texas 26.6% 124.1% 13.5% 55.3%
38 Delaware 31.5% 122.6% 21.2% 39.7%
39 Arkansas 35.0% 121.6% 25.6% 34.0%
40 New Mexico 14.0% 119.3% 4.2% 72.6%
41 Alaska -10.3% 118.6% -17.5% Ŧ
42 Hawaii 12.4% 118.0% 3.9% 70.9%
43 Indiana 21.4% 115.3% 12.6% 46.5%
44 Ohio 20.4% 111.2% 11.3% 49.4%
45 Iowa 30.9% 110.5% 23.7% 29.8%
46 Kentucky 19.9% 105.1% 11.2% 48.8%
47 Michigan 8.9% 100.0% -0.2% 101.7%
48 Mississippi 31.8% 93.4% 24.8% 29.8%
49 Louisiana 35.4% 84.6% 29.5% 25.6%
50 West Virginia 12.9% 74.1% 6.6% 53.3%
 6* District of Columbia 88.1% 239.4% 65.8% 34.8%
  United States 36.9% 200.5% 18.9% 53.9%
  Northeast 59.0% 301.2% 31.0% 52.9%
  Midwest 26.5% 147.1% 14.4% 50.7%
  South 37.6% 167.5% 22.6% 46.1%
  West 27.3% 186.2% 10.5% 65.2%

February 24, 2014 in Tax | Permalink | Comments (1)

NLJ: Law School Placement Offices Focus More on Employer Relations, Not Just Student Career Counseling

Employer RelationsNational Law Journal:  It's Their Job to Find the Jobs for Law Students, by Karen Sloan:

Since the 2008 recession, when large law firms cut back on new associate hiring, roughly two dozen law schools have created positions ... that focus exclusively on employer relations rather than student career counseling. Many more have given employer-relations duties to their existing career services staff. ...

In line with the level of interest, NALP is developing a set of best practices for employer outreach as members share notes about what works and what doesn't. ... In flusher times, law schools could wait for legal recruiters to come to them, but those days have passed. Schools understand that they need to go directly to employers, said Donna Davis, assistant dean of career development at Case Western Reserve University School of Law in Cleveland.

The school takes a national approach: Each year, it polls students about the top three locations where they would like to practice, along with favored practice areas. The staff then creates an outreach schedule. Those trips might include alumni receptions or small dinners with employers, Davis said. Her office has made 140 employer outreach visits during the past year. "In the past, you did some employer outreach, mostly locally," Davis said. "Every now and then you would go somewhere regionally. But now we go to California, New York, Boston, Chicago and Texas. We're covering the country, and I think that's really different from five years ago." ...

The way law schools handle employer relations varies. ... For big-name law schools that steer high percentages of graduates into associate jobs at large firms, employer relations might entail coordinating on-campus interviews. Many ­lower-tier law schools target small and midsized law firms, government offices and corporate legal departments.

February 24, 2014 in Legal Education | Permalink | Comments (0)

Stein: The Sale and Resale of Concert and Sports Tickets

StubHubGregory M. Stein (Tennessee), Will Ticket Scalpers Meet the Same Fate as Spinal Tap Drummers? The Sale and Resale of Concert and Sports Tickets:

Some people purchase concert or sports tickets for their own entertainment and then are unable to use their tickets. They may have a scheduling conflict, or their favorite team may be underperforming. Other people buy tickets with the intention of giving them as gifts. Still others purchase with the goal of reselling the tickets at a profit. This Article examines the transferability of tickets to performances and sporting events.

What, exactly, is a “ticket”? What property and contract rights does the initial ticket holder acquire? Does the holder have the legal power to transfer these rights? To what extent can the initial ticket seller limit that transferability? Does it matter whether the initial purchaser planned to sell at a profit all along? If there is a profit to be made, who is entitled to keep the resale premium? More generally, what are the economics of the market in ticket sales and resales?

Part I of this Article asks what legal rights a ticket creates under contract and property law and whether the party who acquires a ticket is legally empowered to reconvey it. Part II looks more globally at the economics of the market in sales and resales of tickets. Part III examines and compares the roles of the private market and the government in transactions involving the sale and resale of event tickets. Finally, Part IV looks to the future, suggesting some directions the ticket resale market may and should take as technology and the law continue to evolve and as the political process functions.

February 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

NLJ: Law School Rankings by Graduates in BigLaw Jobs

National Law Journal, The Go-To Law Schools:

Go to Law SchoolsLarge law firm associate hiring ticked up for a second straight year in 2013—welcome news, considering law schools sent more newly minted juris doctors into the job market than ever before. Among the 50 schools most popular with hiring firms, 27 percent of graduates landed associate jobs—up from 25 percent in 2012. That was the highest hiring percentage recorded since 2010.

We’ve ranked the top 50 law schools by the percentage of 2013 law school graduates who took jobs at NLJ 250 firms—the nation’s largest by headcount as identified in The National Law Journal’s annual survey. We’ve also identified the law schools that saw the most alumni promoted to partner during 2013, and compared how each law school’s cost compares to its large firm hiring record.

The Top 50 Go-To Law School:  These schools sent the highest percentage of new graduates to NLJ 250 firms:

Rank Law School 2013 Grads @ NLJ 250 2013 JDs % of Grads @ NLJ 250 Tuition
1 Columbia 286 437 65.45% $55,488
2 NYU 295 537 54.93% $51,150
3 Harvard 309 577 53.55% $50,880
4 Chicago 114 215 53.02% $50,727
5 Pennsylvania 136 259 52.51% $53,138
6 Northwestern 146 286 51.05% $53,468
7 Duke 117 241 48.55% $51,662
8 Stanford 89 189 47.09% $50,802
9 Cornell 87 193 45.08% $55,301
10 UC-Berkeley 135 301 44.85% $48,068
11 Virginia 161 364 44.23% $46,400
12 Michigan 165 400 41.25% $48,250
13 Yale 80 206 38.83% $53,600
14 Georgetown 238 638 37.30% $48,835
15 Texas 120 378 31.75% $32,376
16 Vanderbilt 65 206 31.55% $46,804
17 UCLA 101 332 30.42% $45,221
18 USC 65 220 29.55% $52,598
19 Fordham 118 481 24.53% $49,526
20 Notre Dame 45 184 24.46% $45,980
  • Firm Favorites:  NLJ 250 firms most relied upon these law schools to fill their first-year associate ranks
  • Associates to Partner:  These law schools saw the most alumni promoted to partnership during 2013
  • Go-To vs. 'U.S.News':  When it comes to placing graduates at NLJ 250 firms, these schools outperformed their 'U.S. News & World Report' rankings
  • The Value Index:  Check out our cost benefit analysis chart to find out which of our top 50 Go-To Law Schools offer the best bang for the buck when it comes to getting a job at an NLJ 250 firm

Update #1:  Wall Street Journal, Want to Work in BigLaw? Apply to These Law Schools

Update #2:  The National Law Journal has issued a corrected ranking.

February 24, 2014 in Law School Rankings, Legal Education | Permalink | Comments (15)

American Taxation Association 2014 Midyear Meeting

ATA LogoThe American Taxation Association held its 2014 Midyear Meeting last week in San Antonio. The full program is here.

February 24, 2014 in Tax, Tax Conferences | Permalink | Comments (0)

The IRS Scandal, Day 291

IRS Logo 2New York Post op-ed:  I Was a Victim of the IRS, by Christine O'Donnell:

On March 9, 2010, around 10 a.m., I announced my plans to run for senate representing Delaware.

Later that same day, my office received a call from a reporter asking about my taxes.

It’s since come out, after a halting and unenthusiastic investigation, that a Delaware Department of Revenue employee named David Smith accessed my records that day at approximately 2 p.m. — out of curiosity, he says.

That these records ended up in the hands of the press is just a coincidence, the IRS claims. ...

Let’s imagine if the situation was reversed. What if, while a Republican was president, the IRS leaked the tax records of Democratic candidates to the press? What would the reaction look like then?

Would journalists be dismissing this as “not a scandal”?

You may not agree with my politics, but is this the kind of precedent Democrats really want to set — that leaking private information is no big deal?

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February 24, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Working 9 to 5 (2014 Edition)

(Hat Tip: Glenn Reynolds.)

February 24, 2014 in Legal Education, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup