Paul L. Caron

Saturday, May 31, 2014

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #11:  Social Policy, Human Needs, and Tax Law
  • Panel #12:  Politics, Substance, and Taxation
  • Author Meets Readers: Ajay Mehrotra (Indiana), Making the Modern American Fiscal State

Today's paper presenters, topics, and abstracts are below the fold:

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May 31, 2014 in Scholarship, Tax, Tax Conferences | Permalink | Comments (0)

Thomas Piketty Responds to Financial Times Criticism: 'If Anything, My Book Underestimates the Rise in Wealth Inequality'

CapitalFollowing up on my previous posts on the new book by Thomas Piketty (Paris School of Economics), Capital in the Twenty-First Century (Harvard University Press, 2014):

Thomas Piketty (Paris School of Economics), Response to FT:

This is a response to the criticisms -- which I interpret as requests for additional information -- that were published in the Financial Times on May 23 2014. ...

I welcome all criticisms and I am very happy that this book contributes to stimulate a global debate about these important issues. My problem with the FT criticisms is twofold. First, I did not find the FT criticism particularly constructive. The FT suggests that I made mistakes and errors in my computations, which is simply wrong, as I show below. The corrections proposed by the FT to my series (and with which I disagree) are for the most part relatively minor, and do not affect the long run evolutions and my overall analysis, contrarily to what the FT suggests. Next, the FT corrections that are somewhat more important are based upon methodological choices that are quite debatable (to say the least). In particular, the FT simply chooses to ignore the Saez-Zucman 2014 study, which indicates a higher rise in top wealth shares in the United States during recent decades than what I report in my book (if anything, my book underestimates the rise in wealth inequality). Regarding Britain, the FT seems to put a lot of trust in self-reported wealth survey data that notoriously underestimates wealth inequality.

May 31, 2014 in Book Club, Tax | Permalink | Comments (2)

My New Digs

I have spent the past week moving into my new faculty office at Pepperdine, complete with spiffy ocean view (and patio):


May 31, 2014 in Legal Education, Tax | Permalink | Comments (9)

The IRS Scandal, Day 387

IRS Logo 2Forbes: Did IRS Target Israel? Suit By Pro-Israel Z Street Will Move Forward, by Peter J. Reilly:

This lawsuit much like Teapartygate confirms me in my view, that the evaluation of whether an organization's purposes should allow it exempt status is not something that the IRS should be doing. There are credits for historic buildings, but it is not the IRS that decides whether the buildings are historic. The same principle should apply here.

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May 31, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, May 30, 2014

Weekly Tax Roundup

 Weekly Roundup

May 30, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

May 30, 2014 in Legal Education, Weekly Legal Ed Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

May 30, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

NY Times: Harvard Is the Stanford of the East

New York Times, To Young Minds of Today, Harvard Is the Stanford of the East: Riding Technology Wave, Stanford Rises to Top of Some Measures:

SHIn academia, where brand reputation is everything, one university holds an especially enviable place these days when it comes to attracting students and money. To find it from this center of learning, turn west and go about 2,700 miles.

Riding a wave of interest in technology, Stanford University has become America’s “it” school, by measures that Harvard once dominated. Stanford has had the nation’s lowest undergraduate acceptance rate for two years in a row; in five of the last six years, it has topped the Princeton Review survey asking high school seniors to name their “dream college”; and year in and year out, it raises more money from donors than any other university.

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May 30, 2014 | Permalink | Comments (1)

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #6:  Comparative Issues in Taxation
  • Panel #7:  Corporate Taxation
  • Panel #8:  Rules Versus Standards in Taxation
  • Panel #9:  Businesses and Taxation
  • Panel #10:  The Administration of Tax Systems

Today's paper presenters, topics, and abstracts are below the fold:

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May 30, 2014 in Scholarship, Tax, Tax Conferences | Permalink | Comments (0)

IRS Eyes New Ways to Tax Frequent Flyer Miles

New York Sun:  IRS Eyes New Ways to Tax Miles of Frequent Fliers, by Ira Stoll:

Just in time for your summer vacation, the IRS is getting ready to toughen the tax treatment on frequent flyer miles and hotel loyalty reward programs.

The IRS announced in 2002 that it wouldn’t try to go after individuals for income taxes on frequent flyer miles or hotel loyalty points earned on company-paid business trips.  Yet the temptation to wring some tax revenue out of the vast non-dollar economy of Starwood Preferred Guest Starpoints, Marriott Rewards points, American Airlines AAdvantage miles, Delta Skymiles, and so on is apparently so great that that the government just cannot resist.

Sure enough, the Tax Foundation, a research group that tracks tax issues, flags a recent post on the View From the Wing blog that runs under the provocative headline, “The IRS Looks To Be on the Verge of Imposing a Big Tax Burden on Loyalty Points.”

The IRS’s plans are vague, but they have airlines and hotel owners concerned enough about the issue that they reportedly sent a letter to Treasury Secretary Jacob Lew. “The IRS’ proposal to alter the tax treatment of loyalty programs will impose a significant new tax on existing and future loyalty points that travel customers enjoy and rely upon,” said the letter, according to a report in Politico. “Any change or clarification of loyalty program accounting should be made through the legislative process, not IRS promulgation.”

Frequent flyer mile fanatics got a wake-up call on the issue back in 2012 when Citibank sent IRS Forms 1099, documenting “miscellaneous income,” at a rate of 2.5 cents a mile, to customers who had signed up for an American Airlines-branded credit card and gotten 40,000 AAdvantage miles as a bonus. It was an unpleasant surprise to cardholders who thought they were getting a free trip, not an unwanted extra tax bill.

May 30, 2014 in IRS News, Tax | Permalink | Comments (1)

Charleston Law School Founder Opposes InfiLaw's Proposed Acquisition, Offers to Donate His 1/3 Interest to Create Nonprofit Law School

Charleston LogoFollowing up on my prior posts (links below):  from our Law Deans on Legal Education Blog, Charleston Law Founder Ed Westbrook Counters Infilaw, by I. Richard Gershon (Dean, Mississippi):

Charleston School of Law Founder Ed Westbrook has written an extensive response to questions raised concerning Infilaw's continued push to acquire the law school. Westbrook has been a supporter of moving the law school to nonprofit status since its inception.

Prior TaxProf Blog posts:

May 30, 2014 in Legal Education | Permalink | Comments (2)

Harvard 3L's Website: Correlation Does Not Imply Causation

BBC News, Spurious Correlations: Margarine Linked to Divorce?:

One of the golden rules of statistics is that correlation does not equal causation. Just because the movements of two variables track each other closely over time doesn't mean that one causes the other.

To make this important, but somewhat dry, point more accessible, [Tyler] Vigen, a criminology student at Harvard Law School, wrote a computer programme to mine datasets for statistical correlations. He posts the funniest ones to Spurious Correlations.



May 30, 2014 in Legal Education, Tax | Permalink | Comments (3)

The IRS Scandal, Day 386

IRS Logo 2Commentary:  Phony Scandal? Courts Open Window on the IRS’s Political Litmus Tests, by Jonathan S. Tobin:

Interest in the Internal Revenue Service’s outrageous practice of subjecting politically conservative groups to discriminatory treatment has died down a bit since the revelations about this scandal first hit the news a year ago. But a court decision that was handed down earlier this week about a similar instance of potential government misconduct may shed more light on the way the Tea Party and other right-wing organizations were given the business by Lois Lerner and the rest of what appears to be a highly politicized bureaucracy at the heart of our tax collection system. ...

In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party. ...

Using the IRS to punish political foes is blatantly illegal. If, as we suspect, the Z Street case reveals the sort of internal email traffic that will reveal how widespread this practice has become in the last five years, perhaps even a liberal mainstream press that still thinks the problems at the IRS are a “phony scandal” will start to pay attention.

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May 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 29, 2014

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #1:  The Theory of Taxation
  • Panel #2:  Nonprofits and TaxationPanel #3:  Higher Education, Sports, and Taxation
  • Panel #4:  From Local to Global Issues in Taxation
  • Panel #5:  International Taxation

Today's paper presenters, topics, and abstracts are below the fold:

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May 29, 2014 in Scholarship, Tax, Tax Conferences | Permalink | Comments (0)

Rising College Costs, Politics, and Tax Reform

Wall Street Journal, Efforts to Curb College Costs Face Resistance:

WSJObama administration initiatives intended to help restrain soaring college costs are facing resistance from schools and from a bipartisan bloc of lawmakers looking to protect institutions in their districts.

Groups representing colleges and universities this week formally opposed the administration's plan to more tightly oversee programs that officials say leave students in steep debt but with weak job prospects. The new rules cover for-profit schools along with career-training programs—those that lead to certificates, but not degrees, in a given field, such as mechanics or cosmetology—at public schools and nonprofits. A bipartisan group in Congress is seeking ways to kill the plan, which the administration wants to have in place by November.

At the same time, the administration is planning to delay the rollout of its signature higher-education initiative: a college-rating system that would score institutions based on their affordability and quality. Education Department officials, hoping to have that proposal in place by late 2015, said they need more time to draft the rules after criticism from school officials unnerved by the prospect of federal officials' making value judgments on a school's worth.

Center for American Progress, Harnessing the Tax Code to Promote College Affordability: Options for Reform:

ChartThe United States tax code is full of provisions designed to encourage or reward specific behaviors, such as owning a home or saving for retirement. Tax benefits for higher education are no exception: Contributions to some college savings accounts grow tax-free, college tuition is often tax deductible, and some student-loan borrowers are able to deduct the interest paid on their student loans just as they would the interest paid on their mortgage.

These higher education tax provisions have implications for access, affordability, and equity. Higher-income families benefit from tax-free savings toward future college costs through Section 529 college savings plans. The tax code, however, rewards middle-class families for savings less, because tax benefits are much smaller for those in lower tax brackets, and these families largely do not participate.

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May 29, 2014 in Legal Education, Tax | Permalink | Comments (3)

Hackney: Why Section 501(C)(6) Trade Associations Are Undeserving of Tax Exemption

Philip Hackney (LSU), Taxing the Unheavenly Chorus: Why Section 501(C)(6) Trade Associations Are Undeserving of Tax Exemption, 92 Denv. U. L. Rev. ___ (2014):

Our federal, state, and local governments provide a subsidy that enhances the political voice of business interests. This article discusses the federal subsidy for business interests provided through the Internal Revenue Code (“Code”) and argues why we should end that subsidy. Under the same section that provides exemption from income tax for charitable organizations, the Code also exempts nonprofit organizations classified as “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.” Theory supporting tax exemption states that we should subsidize nonprofit organizations that provide goods or services that are undersupplied by the market. A charitable organization that assists the poor is a classic example of a service undersupplied by the market. Business interest group services, however, are found in abundance. Data shows that there is a significant bias in the interest group system in favor of business interests and away from interests such as labor, the poor, and the environment. Tax-exemption at federal, state, and local levels likely fosters at least some of this bias in our democracy. Rather than enhancing a pluralistic society, as some argue is a prime benefit of our tax-exempt system, tax-exemption for business interest groups enhances the voice of the powerful and detracts from the voice of the weak. Thus, because business interests experience little in the way of market failure and tax-exemption for such groups likely leads to a bias in our democratic system I argue we should end exemption for nonprofit business interests.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

A Case for Simpler Gain Bifurcation for Real Estate Developers

Florida Tax ReviewBradley T. Borden (Brooklyn), Nathan Brown (Proskauer Rose, Boca Raton) & John Wagner II (Williams Parker Harrison Dietz & Getzen, Sarasota), A Case for Simpler Gain Bifurcation for Real Estate Developers, 15 Fla Tax Rev. ___ (2014):

This Article examines the judicially-sanctioned bifurcation of real estate developers’ gain. The Article recognizes that even though some commentators oppose granting favorable tax treatment to capital gains, the law most likely will not change. With that in mind, the Article examines the all-or-nothing approach of characterizing gain from the sale of real estate as either capital gain or ordinary income. The Article rejects the all-or-nothing approach of characterizing income under the current statutory system. Instead, it embraces gain bifurcation in the second-best setting that taxes capital gains and ordinary income differently. Illustrating the policy justification for gain bifurcation and judicially-sanctioned bifurcation structures, the Article recommends that lawmakers should more fully embrace gain bifurcation for real estate developers by creating a simple statutory election for bifurcating gain that would enhance equity, accuracy, and transparency of gain bifurcation. Although the Article limits its analysis to real estate developers, the idea of gain bifurcation, once improved in this area, could be a catalyst for exploring bifurcation in other areas.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

Fordham Symposium: The Legal Profession's Monopoly on the Practice of Law

Fordham LogoSymposium, The Legal Profession's Monopoly on the Practice of Law, 82 Fordham L. Rev. 2563-3090 (2014):

May 29, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

Mindy Kaling’s Harvard Law School Graduation Speech

Sullivan: Lessons From the Last War on Inversions

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), Lessons From the Last War on Inversions, 2014 WTD 101-4 (May 26, 2014):

Martin A. Sullivan looks at the history of anti-inversion legislation in Congress, starting with Democratic efforts in 2002 and culminating in the enactment of section 7874 in 2004.

Sullivan 2

May 29, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Supreme Court Grants Cert. to Decide Whether Taxes Paid to Other States Must Be Credited Against a State's County and Municipal Income Taxes

Supreme CourtThe U.S. Supreme Court yesterday granted certiorari in Maryland v. Wynne, No. 13-485, to decide whether the constitution requires that taxes paid to other states must be credited against a state's county and municipal income taxes.

May 29, 2014 in Tax | Permalink | Comments (0)

Clausing: Lessons for International Tax Reform from the U.S. State Experience Under Formulary Apportionment

Kimberly A. Clausing (Reed College), Lessons for International Tax Reform from the US State Experience Under Formulary Apportionment:

This work undertakes a comprehensive analysis of the US state experience under formulary apportionment of corporate income. While formulary apportionment eliminates the possibility of shifting income across states through accounting strategies that manipulate where income is booked, it may heighten the tax responsiveness of formula factors. The present analysis uses the substantial variation in corporate tax policy decisions of US states over the period 1986 to 2012 to understand the consequences of formulary apportionment better. It examines the effects of policy choices regarding tax rates, formula weights, and other parameters on economic activity, estimating the tax sensitivity of employment, investment, and sales. With the inclusion of adequate control variables, results indicate that economic activity has not been particularly sensitive to US state corporate tax policy choices, especially in recent years. Still, tax policy choices have important effects on corporate tax revenues. These results suggest important lessons regarding possible international adoption of formulary apportionment.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 385

IRS Logo 2Wall Street Journal editorial:  IRS Judgment Day: The Untalkative Agency Comes Under Scrutiny From a Federal Judge:

The IRS continues to evade questions about its handling of applications for tax-exempt status from groups whose political views conflicted with the Obama Administration's. That may change. A federal judge's ruling will force the agency to defend itself in court and go through discovery on its handling of a slow-tracked application.

In 2009 a Pennsylvania group called Z Street applied to the IRS for tax-exempt status for its mission of educating people about Zionism and other policies related to Israel and the Middle East. In May 2010 the group received a request from the IRS for more information, which it sent. According to Z Street's complaint, two months later the agent in charge of reviewing the application told Z Street's counsel she was holding up the application because of her concerns that the group engaged in advocacy related to the Middle East. 

According to the complaint, Agent Diane Gentry said that special attention was given to Israel-related groups and that "these cases are being sent to a special unit in the D.C. office to determine whether the organization's activities contradict the Administration's public policies." We've since learned that the agency's November 2010 "Be On the Lookout" list also flagged agents to look out for words related to Israel or "inflammatory" references to "disputed territories." ...

This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street's tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street's attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups.

It will be fascinating to see which names— Lois Lerner, former head of IRS tax-exempt scrutiny?—show up in the internal email traffic. The Administration may have a harder time evading accountability now that a judge will be supervising the testimony.

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May 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, May 28, 2014

Blank & Mason Present U.S. National Report on Exchange of Information Today at Annual Congress of European Association of Tax Law Professors

EATLP Logo (2013)Joshua D. Blank (NYU) & Ruth Mason (Virginia) present United States National Report on Exchange of Information at the 2014 Annual Congress of the European Association of Tax Law Professors today in Istanbul, Turkey:

The United States recently has taken an aggressive stance towards non-reporting of offshore income and attendant offshore tax evasion. This National Report discusses administrative and legal mechanisms, including the Foreign Account Tax Compliance Act (FATCA), available to the United States to secure offshore tax information. It also discusses the legal regimes under which the United States shares tax information with partner jurisdictions.

See also Joshua D. Blank (NYU) & Ruth Mason (Virginia), Exporting FATCA, 142 Tax Notes 1245 (Mar. 17, 2014).

Update #1:  Tracy Kaye (Seton Hall), Leandra Lederman (Indiana), and Stephen Mazza (Kansas) at the conference:

Photo 2

Update #2:  Joshua Blank (NYU), Tracy Kaye (Seton Hall), Ruth Mason (Virginia), Leandra Lederman (Indiana), Tsilly Dagan (Bar-Ilan), and Steven Mazza (Kansas) at the conference:


May 28, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Nate Silver on the Financial Times' Challenge to Thomas Piketty's Data Underlying His Increasing Inequality Claims

CapitalFollowing up on my previous posts on the new book by Thomas Piketty (Paris School of Economics), Capital in the Twenty-First Century (Harvard University Press, 2014):

FiveThirtyEight:  Be Skeptical of Both Piketty And His Skeptics, by Nate Silver:

My goal here is not to litigate the individual claims made by Giles; see The New York Times’ Neil Irwin or The Economist’s Ryan Avent for more detail on that. Rather, I hope to provide some broad perspective about data collection, publication and analysis. A series of disclosures: First, my economic priors and preferences are closer to The Economist’s than to Piketty’s.  Second, I haven’t finished Piketty’s book, although I’ve spent some time exploring his data. Third, I’m no expert on macroeconomic policy or macroeconomic data. Fourth, this comment rather liberally takes advantage of our footnote system; there’s a short version (sans footnotes) and a long version (avec).

My perspective is that of someone who has spent a lot of time compiling and analyzing moderately complex data sets of different kinds. Also, I’m someone who, like Piketty, has seen his public profile grow unexpectedly in recent years. I consider myself extremely fortunate for this — however, I know that attention can sometimes yield disproportionate praise and criticism. Throat-clearing aside, here’s what I have to offer. ...

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May 28, 2014 in Tax | Permalink | Comments (0)

New Law School Opens in San Diego

San Diego
San Diego Daily Transcript, Opportunity Law School Opens in San Diego:

San Diego Law School, the new branch campus of San Francisco Law School, is open and accepting applications for Fall 2014. San Francisco Law School, the oldest evening law school in the Western United States, is a California Accredited Law School, and is WASC Accredited as a school of Alliant International University. San Diego Law School is the first new branch campus approved by the State Bar of California in ... 87 years.

The San Diego Law School program is taught by experienced and practicing legal professionals and integrates core law instruction with practical skills and innovative Bar Exam skills training. "Our students come to law school because they care about their community, and return to practice there after graduation," said Jane Gamp, Dean of San Francisco Law School. With tuition substantially more affordable than its ABA counterparts and the availability of financial aid for qualified students, San Diego Law School will match a need in the legal community. ...

California is unique in offering a "fresh start" to those who were not as successful in their first year of law school as they would like. The small classes and personal attention given at schools like San Francisco Law School, and now San Diego Law School, are well suited to assist these second start students. San Diego Law School will be housed in the iconic Walter Library on the Alliant campus at Scripps Ranch located at 10455 Pomerado Road, San Diego, CA 92131. Alliant International University is private non-profit university.

Tuition is $24,750 (assuming a 30-credit load).

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

Shanske: The Federal Role in Municipal Debt Finance

Darien Shanske (UC-Davis), The Feds Are Already Here: The Federal Role in Municipal Debt Finance:

Should the federal government be involved in the regulation of municipal debt finance? The answer is arguably not. But this theoretical dispute is not the focus of this Article because, in fact, the federal government already regulates municipal debt finance extensively, generally much more extensively than the states regulate their municipalities’ use of debt. The primary source of federal regulation is the securities laws. Less well-known is that federal tax law also serves as an important constraint. This Article surveys and critically evaluates these federal laws, and comes to three tentative conclusions. First, the current federal oversight “system,” unplanned and ad hoc as it is, has been effective. Second, in part because the current system has never been thought of as a comprehensive system, there are low-hanging fruit in terms of making the system work better. To the extent the federal government does not put these reforms in place, states should. Third, even an optimally operating federal overlay does not absolve the states from more careful regulation of the financial affairs of their localities, particularly as to the use of debt. Above all, what the federal government does not — and ought not — do is provide localities with the expertise to use debt optimally; this is another area where the states should focus their reform efforts.

May 28, 2014 in Scholarship, Tax | Permalink | Comments (0)

Death of Joe Marshall

Photo 2Philadelphia Inquirer, Joseph Marshall, Temple Law Professor:

Joseph W. Marshall Jr., 88, of Philadelphia, a professor emeritus at Temple University Law School, died Sunday, May 4, of congestive heart failure at Bryn Mawr Hospital.

The law school hailed him on its website as "a legendary tax professor who served the law school from 1960 to his retirement in 1996."

His was a quick rise. He began as a lecturer in 1960, then served as an associate professor for two years before being named a full professor in 1968. In addition to teaching taxation, Mr. Marshall developed the Graduate Tax Program and directed it from 1970 to 1984. During that time, he served as acting dean from 1970 to 1971 and again in 1980.

(Hat Tip: Jim Maule.)

May 28, 2014 in Obituaries, Tax | Permalink | Comments (1)

REFinBlog Joins the Law Professor Blogs Network

LPBN LogoI am delighted to announce that REFinBlog, edited by Brad Borden (Brooklyn) and David Reiss (Brooklyn), has joined the Law Professor Blogs Network.  

With the support of our sponsor Wolters Kluwer Law & Business/Aspen Publishers, the Network is seeking to expand in two ways.

First, I am actively recruiting law professors to launch blogs in other areas of the law school curriculum not currently covered by the Network, including Administrative Law, Bankruptcy, Intellectual Property, National Security, Native American Law, Race and the Law, and Trial Advocacy.

Second, I am actively recruiting law professors to affiliate their existing blogs with the Network, like Brian Leiter's Law School Reports, Brian Leiter's Law School Rankings, REFinBlog, The Right Coast, and Sentencing Law and Policy

The Network offers law professors the premier blogging platform and the opportunity to share in growing sponsorship and advertising revenues. For more information about these opportunities, see here.

May 28, 2014 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Crocodile Injured by Falling 264-Pound Accountant

UPI:  Crocodile Injured by Falling Accountant During Circus Bus Accident in Russia; The Animal Vomited for Several Hours After It Was Crushed by a 264-Pound Accountant:

CrocA Russian reptile was hurt and vomited for several hours after it was crushed by an overweight accountant during an accident on a circus bus.

When the bus hit a pothole, the 264-pound female accountant went flying and landed on top of the 6.5-foot crocodile, RIA Novosti reported.

The crocodile, Fyodor, got sick after the unexpected slam and threw up for three hours. A medical examination of the animal revealed that he had not suffered internal injuries, but he was held out of his next performance, Komsomolskaya Pravda reported. Circus officials expect that Fyodor will be able to return to performing by the weekend.

Fyodor was reportedly experiencing shock symptoms, as was the Soviet Circus accountant who fell on him. The accountant also suffered cuts and bruises.

May 28, 2014 in Tax | Permalink | Comments (3)

Kathryn Keneally, Assistant Attorney General for the Tax Division, to Leave June 5

Department of Justice Press Release:

KKKathryn Keneally, Assistant Attorney General for the Tax Division, will leave her post at the Department of Justice effective June 5, 2014, she announced today.

“Over the past two years, Kathryn Keneally has provided exemplary leadership to the Justice Department's Tax Division, setting a standard of excellence, integrity and professionalism that will guide and challenge those who carry the division’s important work into the future,” said Attorney General Eric Holder. “As a result of her determined efforts, her exceptional judgment, and the tireless work of her colleagues across the division -- and their partners nationwide -- the Tax Division has secured historic gains in our fight to protect the American people from tax fraud and financial misconduct and to hold accountable any individual, bank or other institution that violates our tax laws. Although I wish her the best as she seeks new challenges and opportunities, I will miss her wise counsel and her tireless commitment to the mission we share. I thank her for her service to the American people.”

Keneally was sworn in as the Assistant Attorney General for the Tax Division on April 6, 2012.  Before joining the department, she practiced law in New York City, representing individuals and businesses before the Internal Revenue Service and the Department of Justice in criminal and civil tax cases.  She also appeared and tried cases in the federal district and appellate courts, and in the U.S. Tax Court.  Keneally also served as the chair of the ABA Section of Taxation's Committees on Civil and Criminal Tax Penalties and Standards of Tax Practice, and was a vice chair of the Section of Taxation.  She will be returning to her home in New York.

May 28, 2014 in Tax | Permalink | Comments (1)

Arizona Law School Cuts Nonresident Tuition by 30% (on Top of 2013's 8% Cut); Takes Aim at Arizona State, California Law Schools

Arizona Daily Star, UA Law School to Undercut Peers With Deep Tuition Discounts:

Arizona LogoThe University of Arizona’s law school is turning up the heat on its competitors as demand for traditional law degrees continues to dwindle.

In a second round of tuition-slashing set to take effect this fall, the UA plans to undercut the nonresident tuition rates of more than a dozen peer law schools nationwide by offering steep discounts to students from other states. ...

Nonresidents who paid more than $42,000 last school year to study law at the UA will soon pay $29,000 a year, a drop of more than 30 percent. The rate for an in-state law student will stay about the same, around $24,400.

The change leaves the UA’s law school with the cheapest nonresident tuition rate of its 15 peer schools around the country. Each charges $10,000-$30,000 a year more.

The UA’s new rate also is about 30 percent cheaper than what its sister institution, Arizona State University in Tempe, charges nonresident law students. ASU will charge about $41,700 this fall, nearly $13,000 more than the UA. ...

It’s the second year in a row the UA has cut law tuition for nonresidents. Rates this school year were reduced by 8 percent for nonresidents and also by 11 percent for residents.

The UA’s law school was the first in the nation to cut prices, and some are starting to follow suit. The University of Iowa, for example, recently cited the UA’s cuts in a bid to trim its nonresident rates.

University of Arizona James E. Rogers College of Law, Nonresident Tuition Lowered:

At $29,000 annually Arizona Law is among the lowest cost of the nation's top-tier law schools. This tuition is lower than many other state resident tuitions. [Dean Marc] Miller added that he had noted marked interest among prospective law students in California, and expected a higher number of applications in this admissions cycle.

Arizona Board of Regents, Program Fee Request:

Rationale for request
The drastic nationwide downturn in law school applications and renewed focus on affordability gives us an opportunity to attract additional highly qualified non-resident students by lowering our non-resident cost to more closely reflect what non-resident students pay. Non-resident full costs at $29,000 will place us below – and for the most part substantially below – undiscounted resident (and non-resident) tuition at all of our Western ABOR peer schools. We will continue to provide substantial need and merit-based aid, including a 14% set-aside from differential tuition, albeit less to non-residents and more to residents. Revenue generated from additional students will benefit all students. Overall, we believe that the tuition reduction will improve accessibility and allow our students to graduate with less debt in line with historic public values.

Arizona Chart

Wall Street Journal, University of Arizona Law School Woos Bargain Hunters With Tuition Drop:

University of Arizona is among several law schools that have sought to lure price-sensitive students amid a national decline in applicants. Penn State Law, Brooklyn Law School, University of Iowa College of Law and University of La Verne College of Law have all slashed their prices in the last year. [But see Public Law School Tuition Cuts Are Less Than Meet the Eye.]

Above the Law, Law School Announces 30 Percent Tuition Cut:

Another school has surveyed the landscape of legal education over the next several years and recognized that, to paraphrase Jimmy McMillan, the tuition was too damn high. Reduce the sticker shock and get a leg up on peer institutions.

May 28, 2014 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 384

IRS Logo 2Government Executive:  Justice Fires Back at Issa on Testimony Over IRS Probe:

Tuesday, May 27, was the day the Justice Department was supposed to produce a key prosecutor to testify to staff on a House panel probing alleged political favoritism at the Internal Revenue Service.

But that was according to a May 22 letter sent to Attorney General Eric Holder by House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., who is concerned about what he sees as improper coordination between IRS and Justice in deciding which groups to investigate for possible campaign finance law violations.

As of publication time May 27, there was no scheduled appearance by Jack Smith, chief of Justice’s Public Integrity Section, and no updated comment from the department or Issa’s panel.

What did emerge on Tuesday was a letter from Justice explaining its procedures and reasoning on questions of testifying to Congress. It comes as the latest wrinkle in the year-old controversy over IRS efforts to single out for extra scrutiny certain nonprofit groups applying for tax-exempt status

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May 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, May 27, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at Bocconi University

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Bocconi University today in Milan, Italy, hosted by Carlo Garbarino.

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy rules, should be made publicly accessible. Throughout this age-old debate, participants have speculated about how corporate managers and the IRS might behave differently if they knew that the public could observe corporations’ tax returns and how investors and the general public would respond if they had access to this information. There is, however, another, unexplored perspective: how could seeing other corporations’ tax returns affect how corporate managers engage in tax planning and tax return preparation for their own corporations?

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

The (Non)Finality of Supreme Court Opinions

New York Times:  Final Word on U.S. Law Isn’t: Supreme Court Keeps Editing, by Adam Liptak:

The Supreme Court has been quietly revising its decisions years after they were issued, altering the law of the land without public notice. The revisions include “truly substantive changes in factual statements and legal reasoning,” said Richard J. Lazarus, a law professor at Harvard and the author of a new study examining the phenomenon. [The (Non)Finality of Supreme Court Opinions, 128 Harv. L. Rev. ___ (2014):

Hiding in plain sight at the top of a Supreme Court opinion when first issued is a formal notice that “this opinion is subject to formal revision.” Readers have long assumed that any such revisions are both rarely made and entirely nonsubstantive in nature. Neither is true. Apart from the anticipated routine proofreading corrections of typographical errors, misspellings, and incidental grammatical mistakes, which are many, the Justices routinely correct mistakes in majority and separate opinions relating to the arguments of the parties, record below, historical facts, relevant statutes and regulations, opinions of their colleagues, and Court precedent. The Justices also, even more significantly, sometimes change their initial reasoning in support of their legal conclusions. To all these ends, they sometimes add, delete, and substitute words, phrases, and sentences. Unaware of the existence and degree of such changes, the public routinely refers to versions of opinions of the Court and of Justices that, while superseded, are nonetheless perpetuated through lower court opinions, websites, and even leading academic casebooks.

This article is the first to explore the Court’s practice of revising its opinions after initial publication, which one Justice privately referred to as “a strange and reverse basis” and a Court official described as “completely at odds with general publishing practices.” The article examines the depth and breadth of the practice since the Court’s first opinions through present days. It describes both the institutional reasons for the practice, which one Justice privately speculated extended to each Justice’s natural inclination to “rush to judgment” and “to get ‘on the scoreboard’” as soon as “all the votes are in” and possibly “to guard against any last minute shifting of a vote.” The article also describes how the Court’s related procedures for revision have shifted over time to become increasingly less transparent and potentially lacking in the degree of procedural fairness and rigor appropriate for opinions of the Court and of the Justices. The article recommends that the Court amend its current practices to provide at the very least for after-the-fact disclosure of changes made both to increase transparency and to provide, indirectly, some check against unnecessary substantive changes. The article further recommends that the Court consider the possibility of providing prior notice as well in certain circumstances.]

[M]ost changes are neither prompt nor publicized, and the court’s secretive editing process has led judges and law professors astray, causing them to rely on passages that were later scrubbed from the official record. The widening public access to online versions of the court’s decisions, some of which do not reflect the final wording, has made the longstanding problem more pronounced.

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

NY Times: Colleges Rattled as Obama Seeks Rating System

New York Times, Colleges Rattled as Obama Seeks Rating System:

The college presidents were appalled. Not only had President Obama called for a government rating system for their schools, but now one of his top education officials was actually suggesting it would be as easy as evaluating a kitchen appliance.

“It’s like rating a blender,” Jamienne Studley, a deputy under secretary at the Education Department, said to the college presidents after a meeting in the department’s Washington headquarters in November, according to several who were present. “This is not so hard to get your mind around.”

The rating system is in fact a radical new effort by the federal government to hold America’s 7,000 colleges and universities accountable by injecting the executive branch into the business of helping prospective students weigh collegiate pros and cons. For years that task has been dominated by private companies like Barron’s and U.S. News & World Report.

Mr. Obama and his aides say colleges and universities that receive a total of $150 billion each year in federal loans and grants must prove they are worth it. The problem is acute, they insist: At too many schools, tuition is going up, graduation rates are going down, and students are leaving with enormous debt and little hope of high-paying jobs.

The idea that the government would try to rate the schools has rattled the entire higher education system, from elite private institutions to large state universities to community colleges. ...

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May 27, 2014 in Legal Education | Permalink | Comments (5)

NY Times: IRS Bars Employers From Dumping Workers Into Health Exchanges

New York Times:  IRS Bars Employers From Dumping Workers Into Health Exchanges:

Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace.

The ruling this month, by the IRS, blocks any wholesale move by employers to dump employees into the exchanges.

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May 27, 2014 in IRS News, Tax | Permalink | Comments (1)

Blank Presents In Defense of Individual Tax Privacy at the University of Milan

Blank Joshua D. Blank (NYU) presented In Defense of Individual Tax Privacy, 61 Emory L.J. 265 (2011), at the University of Milan’s Department of International, Legal, Historical and Politcal Studies yesterday in Milan, Italy, hosted by Giuseppe Marino:

The debate over whether tax privacy—a set of statutory rules that prohibits the federal government from publicly releasing any taxpayer’s tax return— promotes individual tax compliance is as old as the income tax itself. It dates back to the Civil War and resurfaces often, especially when the government seeks innovative ways to collect tax revenue more effectively. For over 150 years, the tax privacy debate has followed predictable patterns. Both sides have fixated on the question of how a taxpayer would comply with the tax system if he knew other taxpayers could see his personal tax return. Neither side, however, has addressed the converse question: How would seeing other taxpayers’ returns affect whether a taxpayer complies? This Article probes that unexplored question and, in doing so, offers a new defense of individual tax privacy: that tax privacy enables the government to influence individuals’ perceptions of its tax-enforcement capabilities by publicizing specific examples of its tax-enforcement strengths without exposing specific examples of its tax enforcement weaknesses. Because salient examples may implicate well-known cognitive biases, this strategic-publicity function of tax privacy can cause individuals to develop an inflated perception of the government’s ability to detect tax offenses, punish their perpetrators, and compel all but a few outliers to comply. Without the curtain of tax privacy, by contrast, individuals could see specific examples of the government’s tax-enforcement weaknesses that would contradict this perception. After considering this new defense of individual tax privacy in the context of deterrence and reciprocity models of taxpayer behavior, I argue that the strategic-publicity function of tax privacy likely encourages individuals to report their taxes properly and that it should be exploited to enhance voluntary compliance.

The commentators were Giuseppe Zizzo (Bocconi University) and Andrea Pedroli (Università della Svizzera italiana).

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

LGBT Activists File FOIA Request for Virginia Law Prof Douglas Laycock's Email

Charlottesville Daily Progress, LGBT Activists Take UVa Professor to Task For His Stance on Cases (more here and here):

LaycockUniversity of Virginia legal scholar Douglas Laycock is facing criticism from gay rights groups for his support of religious freedom laws that activists say could lead to discrimination against the lesbian, gay, bisexual and transgender community. Activists also are upset at his support for Hobby Lobby in an ongoing Supreme Court case involving contraception coverage.

Laycock, who is married to UVa President Teresa A. Sullivan, is the subject of a Freedom of Information Act records request by two UVa student activists — Gregory Lewis and Stephanie Montenegro. In an open letter to the professor, Lewis and Montenegro said that while they respect Laycock’s right to academic freedom, they believe his writings supporting controversial religious freedom laws are holding back progressive causes such as access to contraceptives and gay marriage. ...

“As leaders on the UVa campus, we strongly believe in engaging in dialogue, and, equally as important, for professors to truly understand the implications of their work,” the letter continues.

Commentators across the ideological spectrum have condemned the actions of the UVa law students:

Stephen Bainbridge (UCLA), The Purge Arrives at the University of Virginia: PC Thugs versus Douglas Laycock:

The continuing effort by left-liberals to silence any dissent from their politically correct mandates is now taking on a famed legal scholar:   [The UVa student] said they’re not trying to smear Laycock, and they’re not trying to undermine academic freedom. They just want a dialogue, he said.

Bullshit. You don't start a dialogue with FOIA requests. This is a blatant effort at deterring public participation by anyone who does not hew 100% to the most radical version of the gay rights movement.

“I think it would be really constructive for him to hear how his work is being used to hurt the LGBTQ community,” said [the student]. “I don’t think he has any ill intent. I think he’s very thoughtful and moderate, and willing to hear both sides. But I think that everyone really has a lot to learn.”

My God. The pomposity and arrogance of these children (of the corn?) is just amazing. It's time to start fighting back. There have to be consequences for people like [them] or the day will come when they and their ilk will have successfully silenced the rest of us.

Brian Leiter (Chicago), Dear UVA Students: In Prying Into Prof. Laycock's E-mails You Are Attacking His Academic Freedom:

Douglas Laycock (Virginia) is, I would agree, on the wrong side of a number of recent religious liberty issues in both his advocacy and in his scholarship, but students requesting his e-mails are engaged in harassment and intimidation that infringe upon his academic freedom.  Cut it out, kids!  No good will come of this kind of mischief.

Walter Olson (Cato Institute), Critics Hit U.Va. Prof. Douglas Laycock With FOIA:

No one could doubt that Laycock’s views on religious accommodation are part of a set of intellectually derived convictions that run through decades of his work. (In addition to opposing such forms of church-state entanglement as officially sponsored prayer, he supports the right of gays to marry.) It’s simply a matter of trying to arm-twist a tenured, well-recognized scholar who takes a position that the Forces of Unanimity consider wrong. ...

It might also be time for legislators to clarify state open-records laws to determine under what circumstances they can be used to go after academics, and consider altering them, where appropriate, to provide for financial or other sanctions when they are misused.

May 27, 2014 in Legal Education | Permalink | Comments (22)

The IRS Scandal, Day 383

TaxProf Blog Holiday Weekend Roundup

Monday, May 26, 2014

Ten Life Lessons From Navy SEAL Training

Commencement address by Naval Admiral William H. McRaven (Commander of U.S. Special Operations Command), University of Texas (May 17, 2014) (click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate):

Transcript below the fold:

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May 26, 2014 in Legal Education, Tax | Permalink | Comments (14)

Memorial Day Tax Resources for U.S. Armed Forces (and Their Families, Employers)

IwaContinuing a TaxProf Blog Memorial Day tradition, I want to pass along links to the Tax Information for Members of the U.S. Armed Forces material maintained on the IRS web site:

The tax laws provide some special benefits for active members of the U.S. Armed Forces, including those serving in combat zones. For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel may qualify for certain tax deadline extensions because of their service in a combat zone.

For dozens of links to military tax resources, see below the fold.

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

State Income Tax Revenues Fell in 2014 First Quarter; Ohio (-19%), California (-11%) Among Biggest Revenue Losers

Wall Street Journal, Income Tax Yo-Yo Hits U.S. States:

Many state governments were pulled out of the recession by a surge in tax revenue from their residents' stock-market gains. But that money spigot has slowed, leaving budget holes and debates over the reliance on the wealthy just as many governors face re-election.

While a number of states had forecast lower growth this year in personal income-tax revenue—which is derived in part from capital gains on investments—they failed to project the degree of the decline.

Government figures show that state income tax collections nationwide slipped 0.4% in the first quarter, the first drop since the end of 2009, according to the Nelson A. Rockefeller Institute of Government. But the decline is magnified in some states.



North Dakota






North Carolina






South Carolina






A Federal Reserve Bank of Chicago study found that over the last decade, state revenues have become increasingly sensitive to the economy, with tax revenue from residents' investment returns a key reason. There are indications the increased volatility is here to stay, said Richard Mattoon, an economist at the Chicago Fed and one of the authors of the 2012 report [State Tax Revenues over the Business Cycle: Patterns and Policy Responses].

May 26, 2014 in Tax | Permalink | Comments (2)

The IRS Scandal, Day 382

Sunday, May 25, 2014

Charleston Law School Founders Withdrew $25 Million in Profits, Leaving School in Precarious Financial Condition

Charleston LogoFollowing up on my prior posts (links below):  Charleston Post and Courier, Charleston School of Law Founders Withdrew $25 Million in Profits Leaving School on Shaky Financial Ground:

Five respected judges and lawyers started the Charleston School of Law a decade ago with the lofty goal of training attorneys committed to public service.

But beginning in 2010, the well-connected founders and owners with deep South Carolina roots began draining money from the school, withdrawing $25 million in profits by 2013 that they split among themselves.

The owners had a great deal of support from the Charleston community to launch the school, including a below-market-rate land deal from the city aimed at helping it remain on the peninsula and earn accreditation from the ABA.

Their taking out the profits instead of re-investing in the school has left it in such financial shambles its future remains uncertain.

Kevin Hall, a Columbia lawyer who represents InfiLaw System, a company trying to purchase the school, revealed the surprising financial information about founders Robert Carr, George Kosko, Ralph McCullough, Alex Sanders and Ed Westbrook at a public hearing last week. "The Charleston School of Law, ladies and gentlemen, is in a financial tailspin," Hall said.

Carr, Kosko and Westbrook, the three remaining owners, confirmed Hall's description of the school's financial situation, and they all agreed that it got that way because owners for years had been pulling profits from the institution.

Charleston's tuition is $37,874 per year.  89% of Charleston's Class of 2013 took out student loans, in an average amount of $146,766 (the 14th highest amount among all law schools).  53.3% of Charleston's Class of 2013 secured full-time, long-term, bar passage required jobs (compared to the 57.0% national average).

Prior TaxProf Blog posts:


May 25, 2014 in Legal Education | Permalink | Comments (7)

Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [281 Downloads]  The New Flat Tax: A Modest Proposal for a Constitutionally Apportioned Wealth Tax, by John Thomas Plecnik (Cleveland State)
  2. [262 Downloads]  Just Say No: Corporate Taxation and Corporate Social Responsibility, by Reuven S. Avi-Yonah (Michigan)
  3. [207 Downloads]   It's Time for the Supreme Court to Address the Economic Substance Doctrine, by Andy Grewal (Iowa)
  4. [176 Downloads]  The Real Problem with Carried Interests, by Heather M. Field (UC-Hastings)
  5. [175 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)

May 25, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Indiana Tech Law School Dean Resigns After Enrolling Inaugural Class of 28 Students

Indy Tech (2014)Following up on my previous posts (links below):  Fort Wayne Gazette, Indiana Tech’s Law Dean Leaves; Professor Fills In:

Less than a year after opening its doors, Indiana Tech’s law school lost its dean.

On Friday afternoon, Indiana Tech announced that law school Dean Peter Alexander, also a vice president at the university, stepped down Wednesday. In a news release, Alexander said he achieved the goals he had established for the law school and had a desire to pursue other employment opportunities.

The law school opened in September [with 28 students]. ...

Indiana Tech announced andré douglas pond cummings, who does not use capital letters in his name, will serve as the interim dean at the school. Cummings is the associate dean for academic affairs and a professor of law at the fledgling law school.

Indiana Lawyer, Indiana Tech Begins ABA Accreditation Proccess:

After opening its doors and accepting its first class of students in August, Indiana Tech Law School has begun the process of applying for accreditation, a critical step that could determine whether the institution will be able to continue to attract and accept students. ...

Indiana Tech Law School sent a letter in March notifying the ABA of its intent to seek accreditation and will submit a self-study in August which will explain what the school is about, where it wants to go and what challenges it faces. If the school does well it could have provisional approval by the end of the spring 2015 semester.


Prior TaxProf Blog coverage:

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

The IRS Scandal, Day 381