TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, January 24, 2018

Chason: Taxing Systemic Risk

Eric D. Chason (William & Mary), Taxing Systemic Risk, 16 U.N.H. L. Rev. 1 (2017):

A tax on the harmful elements of finance—a tax on systemic risk—would raise revenue and also lower the likelihood of future crisis. Financial institutions, which pay the tax, would try to minimize its cost by lowering their systemic risk. In theory, a tax on systemic risk is perfect policy. In practice, however, this perfect policy is unattainable. Tax laws need clear definitions to be administrable. Our current understanding of systemic risk is too abstract and too metaphorical to serve as a target for taxation.

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January 24, 2018 in Scholarship, Tax | Permalink | Comments (0)

The IRS Spent $20 Million On Private Debt Collection To Bring In $7 Million

Sam Brunson (Loyola-Chicago), Private IRS Debt Collection: A Surly Taxsplainer:

You may have heard that the IRS spent $20 million last year on private debt collection, and managed to raise … almost $7 million. So what’s up with that? A number of things.

Tax Vox, The IRS Private Debt Collection Program Once Again Looks Like A Failure:

What’s the old line about “fool me once?” When it comes to privatizing debt collections for the IRS, Congress has now tried to fool American taxpayers for the third time. According to a new report by the agency’s Taxpayer Advocate Service, the outcome is roughly the same as the last two episodes—the agency is spending far more on the program than the firms are collecting and remitting to the Treasury. This time, according to the TAS, the agency spent $20 million in fiscal years 2016-2017 on a program that generated $6.7 million in payments through last October.

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January 24, 2018 in IRS News, Tax | Permalink | Comments (1)

Dorothy Brown Named Straus Distinguished Visiting Professor At Pepperdine Law School

Brown (Dorothy) (2015)Dorothy Brown, Professor of Law at Emory Law School, has been named Pepperdine Law School's Straus Distinguished Visiting Professor for Spring 2019.

Dorothy is the nation's leading critical tax scholar examining race, class, and gender implications of tax policy. Last month, she secured a deal with Crown Publishing Group (a subsidiary of Random House) for a book on The Whiteness of Wealth, which will "investigate how American tax policy enriches white families at the expense of black families in many spheres, including housing, education, investing, and marriage." The book will draw on Dorothy's prior work, including:

Dorothy is the co-author of a leading federal income tax casebook, Federal Income Taxation: Cases, Problems, and Materials (West 6th ed. 2016). She has won seven teaching awards over the course of her career. 

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January 24, 2018 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

July 2017 California Bar Exam Results For Out-Of-State Law Schools

CA state bar logo PNGFollowing up on my previous post on the July 2017 California Bar Exam for in-state law schools:  the state bar has released comparable data for out-of-state law schools.  Overall, 49.6% of all students passed the California bar exam.  Among graduates of ABA-accredited law schools, students graduating from in-state law schools passed at higher rate (70.0%) than students graduating from out-of state law schools (67.1%). 

Out-of-state law schools with the highest pass rates:
Chicago:  100% (24 students took the bar)
Yale: 97.1 (34)
Harvard: 93.7% (95)
Duke: 92.6% (27)
Notre Dame: 92.0% (25)
NYU: 91.9% (92)
Columbia: 90% (40)
Virginia: 89.7% (29)
Michigan: 86.0% (43)
Pennsylvania: 83.3% (24)
Northwestern: 82.9% (35)

Out-of-state law schools with the lowest pass rates:

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January 24, 2018 in Legal Education | Permalink | Comments (1)

Martinez: Latinos And The Internal Revenue Code

Leo P. Martinez (UC-Hastings), Latinos and the Internal Revenue Code: A Tax Policy Primer for the New Administration, 20 Harv. Latinx L. Rev. 101 (2017):

With the expectation that the new administration and the new Congress will undertake significant tax reform, this article seeks to provide a comprehensive view of how seemingly neutral legislation in the form of the Internal Revenue Code (the “Code”) disadvantages Latinos. If tax reform is ever to correct the many inequities outlined in this paper, education of legislators and other policymakers is of paramount importance. To this end, I recognize that the complexity of the Code is such that the big picture is often lost in details. Accordingly, this article is not a technical one. Instead, I paint with a broad brush seeking to acquaint the non-tax expert as to how the Code impinges on a particular population in a way that surely must be unintended. It is with this breadth and accessibility that perhaps some meaningful tax reform is possible.

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January 24, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wilson: Cooperatives — The First Social Enterprise

Elaine W. Wilson (West Virginia), Cooperatives: The First Social Enterprise, 66 DePaul L. Rev. (2017):

This Article considers some of the issues that may impede the charitable sector in supporting the growth of the cooperative business model as a potential solution to issues of income inequality. To do so, the Article first defines a “cooperative.” Part II examines the definition of a cooperative from three different viewpoints: cooperative as social movement, cooperative as economic arrangement, and cooperative as legal construct. From these definitions, it is possible to identify those elements inherent in the cooperative model that might qualify as a tax-exempt purpose under the Internal Revenue Code (the Code) § 501(c)(3). Part III reviews the definition of “charitable” for § 501(c)(3) purposes, specifically in the context of economic development and the support of workers. This Part demonstrates that many of the values inherent in the cooperative model are, in fact, charitable as that term is understood for federal tax purposes.

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January 24, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, January 23, 2018

Dietsch Presents Tax Competition And Global Justice Today At NYU

DietschPeter Dietsch (University of Montreal, Department of Philosophy) presents Tax Competition and Global Background Justice (with Thomas Rixen (University of Bamberg, Department of Political Science)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Competition for mobile tax bases undermines the fiscal self-determination of states and exacerbates inequalities of income and wealth both within countries and globally. The paper provides a normative evaluation of international tax competition, and puts forward two principles of international taxation designed to both protect and circumscribe the fiscal self-determination of states. First, a membership principle, which holds that deriving the benefits of membership in any given country grounds an obligation to pay one’s taxes there. Second, a constraint on fiscal policy, ruling out fiscal arrangements that can be shown both to be based on strategic intent and to have a collectively negative outcome.

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January 23, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

'Tiger Daughter' May Go To Law School 'To Delay Entering The Real World As Long As Possible'

Tiger Mom 2Following up on my previous posts:

Lulu Chua-Rubenfeld (Daughter of Yale Law Profs Amy Chua & Jed Rubenfeld), My Parents' Work-Life Balance:

Tell me about your relationship with your parents.

I’m very close to them in different ways. As I’ve gotten older, I’ve realized that my mom and I are increasingly similar. When my friends meet my mom now or if they read the book [Battle Hymn of the Tiger Mother], they always come up to me and they’re like, “Oh my gosh. You sound exactly like your mom.” I probably would not have wanted to admit that when I was younger. ...

What is your dad’s job exactly?

He’s also a professor at Yale Law School. My dad does more like hard law. He teaches constitutional law and criminal law. My mom teaches contracts law and international business transactions. ...

Do you have a sense of what you want to do for work one day?

I don’t know, honestly. I’m considering going to law school mostly for the fact that I love school and I want to delay entering the real world for as long as possible.

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January 23, 2018 in Legal Education | Permalink | Comments (6)

Listokin Presents The Law And Economics Of Recessions Today At Georgetown

Listokin (2015)Yair Listokin (Yale) presents Law and Macroeconomics: The Law and Economics of Recessions at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

In this Article, I offer a macroeconomic perspective on law that reshapes the microeconomic perspective that currently dominates law and economics. I argue that 1. The economy works one way in ordinary economic conditions, in which supply capacity determines output, and a different way in deep recessions, in which demand for spending determines output. 2. Because the economy functions differently in deep recessions than in ordinary times, a law causes one set of effects in deep recessions and a different set of effects at other times. 3. Because the same law has different effects at different times, law should be different in deep recessions than in other times. Specifically, law should do more to promote spending in deep recessions than in ordinary economic conditions.

Because the stakes of deep recessions are so high (tens of trillions of dollars in lost output, countless lives impaired, and political upheaval), I argue that the (significant) costs associated with introducing macroeconomics into law are worth bearing.

January 23, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Law Review Publishing: Thoughts On Mass Submissions, Expedited Review, And Potential Reform

Michael D. Cicchini, Law Review Publishing: Thoughts on Mass Submissions, Expedited Review, and Potential Reform, 16 U.N.H. L. Rev. 147 (2017):

The current law review publishing system—in particular, mass submissions and expedited review—works well for prestige-driven professors; however, it places a tremendous burden on the editors of journals lower in the hierarchy. This problem is exacerbated by several professorial tactics including, most significantly, submitting articles to journals from which the professor would never accept an offer—not even when he or she fails to receive a “better” offer through the expedite process.

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January 23, 2018 in Legal Education | Permalink | Comments (2)

Herzig: The Income Equality Case For Eliminating The Estate Tax

David J. Herzig (Valparaiso), The Income Equality Case for Eliminating the Estate Tax, 90 S. Cal. L. Rev. 1143 (2017):

The estate tax and income tax rules independently attempt to either promote or deter different behaviors. The interaction of these different rules often leads to disparate or unintended consequences to taxpayers: for example, achieving an overall lower effective tax rate by paying more estate tax to lower the income tax rate. This overlay of the estate tax rules on the income tax rules is a key problem at the core of our tax system. Yet, few scholars focus on this topic.

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January 23, 2018 in Scholarship, Tax | Permalink | Comments (4)

Five Lessons From Georgetown For Teaching Law And Technology

Georgetown (2016)ABA Journal, 5 Lessons for Teaching Law and Technology:

Over the fall semester, we ran an experiment at the Georgetown University Law Center.

Through a course we co-created and taught, we used technology to help students critically think through criminal justice policy and law.

To prepare for future versions of the course, we are reflecting on what worked and what we can improve on. From this reflection, we identified five lessons that we think are key for teaching law and technology. With the influx of experimental tech courses in law schools across the U.S., we hope that these lessons will aid practitioners developing similar curricula and complement the larger discussion about the role of technology in legal education.

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January 23, 2018 in Legal Education | Permalink | Comments (0)

Tax Issues Slow Merger Talks Between Bryan Cave, UK Law Firm

Bryan_CaveABA Journal, Tax Issues Reportedly Slow Merger Talks Between Bryan Cave and UK Law Firm:

Tax issues have reportedly held up merger talks between Bryan Cave and U.K. law firm Berwin Leighton Paisner.

The firms are discussing full financial integration rather than a merger using the looser Swiss verein structure, and that will create tax issues, the American Lawyer reports. The story relies on unidentified sources at the two law firms.

The tax hit could be in the tens of millions of dollars, according to legal consultant Tony Williams, a former managing partner at Clifford Chance. The BLP firm told the American Lawyer that the estimate was incorrect, but it did not comment further.

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January 23, 2018 in Tax | Permalink | Comments (0)

Law, Legal Education, And Imagining The Future

Michael Madison (Pittsburgh), For a New Year: An Invitation Regarding Law, Legal Education, and Imagining the Future, Part I:

Modern law schools were invented before modern law practice emerged.

I mean that statement as the first part of an invitation, rather than as the first part of an argument. The invitation, below and in several posts to follow, is to participate in conversations about the future of legal education in ways that integrate rather than distinguish several threads of concern and revision that have emerged over the last decade.

Conversations about the future of legal education necessarily include conversations about the future of law practice, legal services, and law itself. Some of those start with the somewhat stale questions:  What are US law professors doing, what should they be doing, and why? Those questions are still relevant and important, but they are no longer the only relevant questions, and they are not the only places to start. What about other legal educators, meaning those who teach and train in legal services worlds but who don’t teach the professional practice of law or the delivery of traditional legal services? What about those who are involved deeply in the production and distribution of law, legal services, and legal information but who are not, themselves, lawyers? Why start with current teachers; why not start with current or future students, or current or future clients, or current or future institutions, or current or future sets of values? Expand the communities of interest and identities of potential participants not only beyond elite US law schools, and not only beyond the private law firms that constitute BigLaw, but also beyond the US and beyond North America.

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January 23, 2018 in Legal Education | Permalink | Comments (0)

Monday, January 22, 2018

Scharff Presents Green Fees: Pricing Externalities Under State Law Today At BYU

Scharff (2017)Erin Scharff (Arizona State) presents Green Fees: The Challenge of Pricing Externalities under State Law at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Policymakers at the state and local level are increasingly interested in using market-based pricing mechanisms as regulatory tools. At the state level, Massachusetts, Rhode Island, and Washington have recently considered state-level carbon pricing, while California is moving forward with its own cap-and-trade program. At the local level, municipal governments are increasingly turning to stormwater remediation fees to pay for the treatment of municipal runoff required by the Clean Water Act. And Philadelphia, Berkeley, and Seattle all recently joined Chicago and impose a soda tax on high-caloric beverages.

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January 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Socratic Artificial Intelligence Is Changing The Face Of Legal Knowledge

SMAI

Law Practice Management, Socratic AI Is Changing the Face of Legal Knowledge:

I cannot teach anybody anything. I can only make them think. —attributed to Socrates

Law is a science, and … all the available materials of that science are contained in printed books… —Christopher C. Langdell, Speech at Harvard University, Cambridge, Mass., 1887

Discussions on artificial intelligence and law seek to find the diminishing demarcation between the human-only part of lawyering (multi-disciplinary integration, especially regarding strategy; “reading” the client; emotional intelligence) and those lawyering skills more efficiently accomplished by artificial intelligence (legal pattern recognition research for document and contract review). But the more meaningful inquiries have not been asked: will human-AI collaboration advance the lawyer’s counseling? Can the AI system help the human lawyer overcome bias and produce better decisions? ...

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January 22, 2018 in Legal Education | Permalink | Comments (2)

Four Ways Law Firms Could Game The New Tax Law (But Probably Shouldn’t)

Following up on my previous posts (links below):  Law.com, 4 Ways Law Firms Could Game the New Tax Law (But Probably Shouldn’t):

As businesses everywhere take stock of the new U.S. tax law, both law firms and individual lawyers are asking: What’s in it for us?

Despite the uncertainty that remains about the law, “the gains are just too large” not to explore tax-saving tricks, said New York University tax professor Daniel Shaviro.

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January 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Oei: The Trouble With Gig Talk — Choice Of Narrative And Worker Classification

Shu-Yi Oei (Boston College), The Trouble with Gig Talk: Choice of Narrative and the Worker Classification Fights, 81 Law & Contemp. Probs. ___ (2018):

The term “sharing economy” is flawed, but are the alternatives any better? This Essay evaluates the uses of competing narratives to describe the business model employed by firms like Uber, Lyft, TaskRabbit, and GrubHub. It argues that while the term “sharing economy” may be a misnomer, terms such as “gig economy,” “1099 economy,” “peer-to-peer economy” or “platform economy” are just as problematic, possibly even more so. These latter terms are more effective in exploiting existing legal rules and ambiguities to generate desired regulatory outcomes, in particular, the classification of workers as independent contractors. This is because they are plausible, speak to important regulatory grey areas, and find support in existing laws and ambiguities. They can therefore be deployed to tilt outcomes in directions desired by firms in this sector.

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January 22, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Lesson From The Tax Court: Treasury Regulations And The APA

Tax Court (2017)No doubt there is a lot of dirty bathwater in the Treasury Regulations, codified in title 26 of the Code of Federal Regulations (CFR). The upside of the current administration’s anti-regulation focus is that it is allows Treasury to prioritize scrubbing unneeded regulations. Treasury reported on its progress in October noting that “the IRS Office of Chief Counsel has already identified over 200 regulations for potential revocation, most of which have been outstanding for many years.”

To be sure, it’s a small upside. Some regulations become outdated because they are simply overtaken by statutory changes. For example, Treas. Reg. 1.217-2(b)(1) allows taxpayers to deduct the cost of meals when moving to start a new job. That was fine under the statute Congress originally enacted in 1969, but it became obsolete when Congress modified the statute in 1986 to specifically disallow meal expenses as a deductible item. And now, of course, Congress has repealed the moving expense deduction entirely, but the regulations will still be there.

Other regulations become outdated because of societal change. My favorite example is former Treas. Reg. 1.162-6 which started off this way: “A professional man may claim as deductions the cost of supplies used by him....” To modern eyes, that regulation obviously denied deductions to taxpayers not in the trade or business of being a “professional man” ...such as anyone who was only a man as a hobby and not as profession. Think Victor, Victoria. Treasury nuked that reg in 2011.

The scrubbing effort carries a small upside because outdated regulations generally do little harm. I tell my students that is why you have to read the actual statutory language first. In real life, of course, tax practitioners rely on the commercial services like BNA, CCH or RIA to summarize the rules and those services keep current. Taxpayers reporting their 2017 taxes are unlikely be blindsided by the moving regulations into trying to deduct meal expenses in a move. Likewise, taxpayers reporting their 2018 taxes are unlikely to try and deduct moving expenses at all, much less in reliance on the regulations.

But the focus on throwing out the bathwater presents an obvious danger to the baby. The ham-fisted 2-for-1 requirement of Executive Order 13711 is not just focused, it’s myopic. Another danger is posed by the myopic thinking that the word “regulation” has the same meaning for all agencies and that the Administrative Procedure Act (APA) applies in lock-step to all agencies. Both myopias ignore the vast difference in purpose of regulations issued by different agencies.

Last week’s Tax Court opinion in SIH Partners LLLP, et al. v. Commissioner, 150 T.C. No. 3, January nicely illustrates the purpose and use of tax regulations. In it, the taxpayer tried to invalidate a 45 year old regulation for failing to meet APA requirements. The Tax Court has a nice opinion applying the APA with sensitivity to the tax regulation process and suggests a clearer view of what makes tax regulations different from those of many other agencies.

More below the fold.

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January 22, 2018 in Bryan Camp, IRS News, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Gender Bias In Economics Textbooks

Following up on my previous posts:

Inside Higher Ed, Gender Bias, by the Numbers:

New study says economics textbooks underrepresent women in both real-life and imagined examples — and that fixing that could help attract more women to the field.

Economics remains dominated by men, both in terms of faculty members and students. New research suggests that while economics textbooks aren’t necessarily to blame, they’re not helping close the field’s gender gap.

A study of leading introductory economics textbooks, presented last week at the annual meeting of the American Economic Association, found that three-quarters of the people mentioned in the books (77 percent), real or imagined, are male. Some 18 percent of mentions are female and 5 percent are gender neutral.

IHE

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January 22, 2018 in Legal Education | Permalink | Comments (0)

WSJ: Small Colleges Take Big Hit From New Endowment Tax

WSJ 2Wall Street Journal, Which Colleges Will Have to Pay Taxes on Their Endowment? Your Guess Might Not Be Right:

The Juilliard School, New York’s magnet for aspiring artists, is bracing for a 1.4% tax on income from its $1 billion endowment. Three miles away, Columbia University and its $10 billion endowment will remain untouched for now.

A college-endowment tax, enacted in December in the Tax Cuts and Jobs Act signed by President Donald Trump, is causing confusion and frustration at schools across the country, which rely on the previously tax free-earnings when setting their budgets.

Small liberal arts colleges will likely be hit disproportionately because many have sizable endowments but limited enrollment. The tax applies only to private schools with at least 500 students and at least $500,000 of investments per student. ...

The wealthiest schools, such as Harvard and Princeton University, will definitely pay, while the smallest and least wealthy schools won’t.

Some wealthy universities will probably avoid the tax in the near-term. Columbia, New York University, the University of Southern California, Vanderbilt University and Johns Hopkins University all have endowments over $3 billion. But their endowments fall below the $500,000-per-student threshold because they have so many students, federal data show. ...

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January 22, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, January 21, 2018

Colker: Stop Banning Laptops In Law School Classrooms!

LaptopRuth Colker (Ohio State), Universal Design: Stop Banning Laptops!, 39 Cardozo L. Rev. 483 (2017):

Banning laptops in the classroom constitutes a needless barrier to academic performance that is increasingly common at the university level. In this article, I review the existing literature that is cited to support laptop bans and show how that literature does not, in fact, support such a ban. Further, I report a modest empirical study that reflects that students who use laptops in a large lecture class do as well as students who do not use laptops so long as Internet use of the laptop is clearly and effectively banned. The article concludes that a permissive laptop policy should be on the list of Universal Design features that supports effective learning for all students.

Colker

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January 21, 2018 in Legal Education, Teaching | Permalink | Comments (5)

The Big Winners In Apple's Tax Bonanza: Shareholders

Apple LogoFollowing up on Thursday's post, Apple To Pay $38 Billion In Taxes To Bring Cash Hoard Back To U.S. And Build U.S. Campus:  Wall Street Journal, Apple’s Big Cash Winners: Shareholders:

Apple announced a $38 billion tax windfall for the U.S. government this week, but the biggest beneficiary of the company’s response to tax-system changes will likely be its shareholders.

The tech giant’s plan to bring back to the U.S. most of its $252.3 billion in overseas cash holdings is expected to lead to a large increase in share buybacks and dividends, say analysts, tax experts and investors. Of broader benefit to investors, the change in tax law should boost Apple’s bottom line by cutting its effective tax rate. It also could prompt the company to ramp up acquisitions and research-and-development spending to reduce its iPhone dependency, an abiding concern of some shareholders. ...

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January 21, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Feldman: Law Profs Should Blog, Not Tweet

TBFollowing up on my previous posts:

Noah Feldman (Harvard), Twitter's Not a Great Place for Legal Advice:

We have our first confirmed federal Twitter judge, Judge Don Willett of the U.S. Court of Appeals for the 5th Circuit. More than 500 legal scholars both young and old, as well as sophisticated practitioners, use Twitter to comment, analyze and argue. From a practical perspective, legal Twitter is thriving.

But is legal Twitter a good thing? The question has been bouncing aroundon (surprise) Twitter — but without (surprise) any very sustained engagement.

This matters because law professors serve a public function: They work out the meaning of the law before it goes to the courts, and they explain law to the public. If they’re doing a bad job, the legal system suffers.

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January 21, 2018 in Legal Education | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3 and #4. The #1 paper is #1 and the #2 paper is #2 among 13,313 tax papers in all-time downloads (see Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings).

  1. [45,407 Downloads]  The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [30,266 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  3. [997 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  4. [662 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  5. [573 Downloads]  Tax Reform: Process Failures, Loopholes and Wealth Windfalls, by Stephen Shay (Harvard)

January 21, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 20, 2018

This Week's Ten Most Popular TaxProf Blog Posts

A Law School Dean's Oscars Preview: Darkest Hour

Darkest HourNicholas W. Allard (Dean Brooklyn), Reel Law: After the Darkest Hour, What Is Next?:

A Democracy in peril depends on leadership, a free press, and the willingness of the governed to abide by the rule of law.  As the Hollywood awards season rolls into high gear, theaters near you showcase vivid examples of all three.  Recent uplifting films such as Darkest Hour, depicting the noble courageous leadership of Winston Churchill, and The Post, spotlighting journalists putting their first amendment protection to good use by throwing back the covers on government lies and holding it accountable, both seem like timely, long-form, public service announcements.  They certainly offer more than entertaining excuses to consume a large bucket of popcorn.  Other films of the past year examine in very different ways the right and wrong of people taking law into their own hands.  The remake of the classic mystery Murder on the Orient Express; the much darker, more violent and grotesquely funny Three Billboards Outside Ebbing, Missouri; and the surprisingly riveting and humorous I, Tonya about the rise and fall of Olympic figure skater Tonya Harding, are actually on-screen morality plays and studies of vigilantism.  All of these five films dramatically delve into the importance and limitations of the rule of law in a just and free society.  They address issues that are not only now front and center in our law schools, but also in the grand public civics lesson engaging all of America about how our rule book, that is, our Constitutional system of limited self-government and laws, actually works. For starters we can begin here with Darkest Hour and then as the Academy Awards approach, offer subsequent commentaries reflecting upon how other new films relate to important questions of law and society.

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January 20, 2018 in Legal Education | Permalink | Comments (0)

Holderness:  The Next Tax Reform — Internet Sales Tax

The Hill op-ed:  The Next Tax Reform: Internet Sales Tax, by Hayes Holderness (Richmond):

On Jan. 12, the U.S. Supreme Court decided to hear the case of South Dakota v. Wayfair. If you haven’t been following along, this is a big deal and may affect households across the country — it’s about internet sales taxes.

The Wayfair case pits the “Kill Quill” movement  against internet retailers. As riveting as it sounds, this isn’t a new Quentin Tarantino film about sales taxes. The Kill Quill movement is a group of state tax administrators, brick-and-mortar retailers and their allies, whose goal is to overturn the ruling in the 1992 Supreme Court case of Quill Corp. v. North Dakota. With the current court agreeing to hear the Wayfair case, Quill looks to be on its last breath.

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January 20, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Pepperdine Hosts 3rd Annual Southern California Trial Lawyers Conference On Jan. 27

TLC Banner

Pepperdine Law School will host its 3rd Annual Southern California Trial Lawyers Conference on Saturday, January 27. The Keynote Speaker will be Mark Lanier. Founder of the Lanier Law Firm, Mark has been recognized as one of the top trial attorneys in the United States, with firm offices in Houston, New York, and Los Angeles.

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January 20, 2018 in Conferences, Legal Education | Permalink | Comments (0)

Friday, January 19, 2018

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Federal Tax Treatment Of Charitable Contributions For State Tax Payments

This week, Erin Scharff (Arizona State) reviews a working paper by Joe Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford), Daniel Hemel (Chicago), Darien Shanske (Davis), Kirk Stark (UCLA), Dennis Ventry (Davis), & Manoj Viswanathan (Hastings), Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit.   

Scharff (2017)One of the most important lessons I learned in law school is that legal rules are often less ideological than the context from which they emerge.  It is a lesson I’ve thought about repeatedly this past year, as questions about state standing to sue the federal government and the validity of nationwide injunctions are raised by new parties against a new administration.  I hadn’t, however, seriously considered the way such lessons might apply to substantive tax law.

Of course, it was foolish to think that tax law would be immune from this larger trend.  In response to the 2017 tax legislation’s dramatic curtailment of the state and local tax deduction, several scholars and policymakers have been exploring the possibility that high tax states might want to offer state tax credits for charitable donations made to the state.  As someone long skeptical of my state’s use of charitable tax credits, I’ve find this sudden progressive interest in state tax credits bemusing and intriguing.

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January 19, 2018 in Scholarship, Tax, Tax Policy in the Trump Administration, Weekly SSRN Roundup | Permalink | Comments (1)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

The Effect Of A Government Shutdown On The IRS: Not What You Think

Machines are cheap. Humans are expensive. The IRS depends upon both to administer the fiendishly complex tax code that Congress tirelessly re-scrambles every year. This year is, of course, much, much worse. And everyone seems at least aware that a government shutdown will hurt the IRS’s ability to implement the new law. Here’s a recent WaPo article on the subject.

But the effect of a government shutdown on IRS operations is worse than is being reported.  More below the fold.

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January 19, 2018 in Bryan Camp, IRS News, Miscellaneous, News, Tax, Tax Policy in the Trump Administration | Permalink | Comments (6)

Rebecca Kysar Leaves Brooklyn For Fordham

KysarAfter visiting at Fordham last semester, Rebecca Kysar (Brooklyn) is joining the tenured faculty in the fall.  Rebecca's publications include:

 

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January 19, 2018 in Legal Education, Scholarship, Tax, Tax Prof Moves | Permalink | Comments (1)

Viswanathan: Form 1023-EZ And The Streamlined Process For The Federal Income Tax Exemption

Manoj Viswanathan (UC-Hastings), Form 1023-EZ and the Streamlined Process for the Federal Income Tax Exemption: Is the IRS Slashing Red Tape or Opening Pandora's Box?, 163 U. Pa. L. Rev. Online 89 (2014):

On July 1, 2014, the Internal Revenue Service (IRS) released Form 1023-EZ, a streamlined version of the application required of all organizations seeking federal tax-exempt status. Form 1023-EZ requires dramatically less time to complete and represents a radical change to a decades-old process. It is expected that approximately seventy percent of the 80,000 organizations annually applying for tax-exempt status will be eligible to use Form 1023-EZ. The IRS expects that Form 1023-EZ will more efficiently provide determinations to applicants, preserve accuracy, and enable the IRS to focus on back-end compliance. Yet several commentators, including, perhaps counterintuitively, representatives of large consortiums of nonprofits, have decried Form 1023-EZ as an IRS misstep.

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January 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

NY Times: Saying You Want To Reform the Tax Code? Easy. Doing It? Less So.

New York Times, Saying You Want to Reform the Tax Code? Easy. Doing It? Less So.:

It read like a maddening instruction manual for a do-it-yourself piece of furniture, with page after page of bare-bones guidance — and plenty of room for confusion.

If taxpayers and lawmakers were expecting that a new 37-page reportwould provide a definitive road map of how New York State might sidestep the effects of President Trump’s new federal tax plan and its sharp reduction in the deductibility of state and local taxes, they instead got a view of just how complicated this is.

The report, released this week, laid out at least a half-dozen ways New York could rewrite its tax code, with no indication of which option legislators might pursue. There was a potpourri of progressive rates, wage credits and tax-withholding schemes, with officials cautioning that all the options would require further study. No bills have been drafted.

The possibilities included completely replacing the state income tax with an employer-side payroll tax; introducing a new progressive payroll tax in addition to the existing income tax, with tax credits to make up the difference; or designing a payroll tax only for wage earners above a certain income threshold — the taxpayers most likely to be hurt by the federal tax plan in the first place. Some versions would be mandatory. Others would be opt-in.

More than anything, the report illustrated how difficult it may be to turn academic theory into real policy, serving as a cautionary guide to other states contemplating similar options. And it underscored the political challenges that lie ahead for Gov. Andrew M. Cuomo, as he seeks to sell a new payroll tax that could slightly reduce workers’ wages, even though the net payout, after taxes, would remain the same.

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January 19, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Morse: Important Developments In Federal Income Taxation

Edward A. Morse (Creighton), Important Developments in Federal Income Taxation:

This [92 page] outline covers significant developments in federal income taxation along with a few other interesting or noteworthy tax topics. It offers a selective treatment of case law and some administrative developments that are likely to interest practitioners and advisors within a broad range of professional practices; it is not intended to provide comprehensive coverage. The discussion includes events reported through November 27, 2017.

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January 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

Thursday, January 18, 2018

Bankman Presents The Federal Tax Treatment Of Charitable Contributions Entitling The Donor To A State Tax Credit Today At Duke

Bankman (2017)Joseph Bankman (Stanford) presents Federal Income Tax Treatment of Charitable Contributions Entitling the Donor to a State Tax Credit (with David Gamage (Indiana), Jacob Goldin (Stanford), Daniel Hemel (Chicago), Darien Shanske (UC-Davis), Kirk Stark (UCLA), Dennis Ventry (UC-Davis) & Manoj Viswanathan (UC-Hastings)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

This paper summarizes the current federal income tax treatment of charitable contributions where the gift entitles the donor to a state tax credit. Such credits are very common and are used by the states to encourage private donations to a wide range of activities, including natural resource preservation through conservation easements, private school tuition scholarship programs, financial aid for college-bound children from low-income households, shelters for victims of domestic violence, and numerous other state-supported programs. Under these programs, taxpayers receive tax credits for donations to governments, government-created funds, and nonprofits.

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January 18, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Brennan Presents Debt And Equity Taxation: An Economic And Legal Perspective Today At Indiana

Brennan (2017)Thomas J. Brennan (Harvard) presents Debt and Equity Taxation: A Combined Economic and Legal Perspective (with Robert L. McDonald (Northwestern)) at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

We describe the law distinguishing debt from equity in the corporate setting, and we discuss the historical development of the rules. We show how economically similar positions may be treated differently because of binary categorizations that are not updated over time, and we use simple economic models to illustrate how dynamic bifurcation of instruments into debt and equity components could eliminate such inconsistencies and associated distortions.

We discuss how the debt-equity distinction affects the corporate income tax, and we show that if ownership financed entirely by risk-free obligations is treated as equity and risk-free obligations by themselves are treated as debt, then a corporate tax providing for interest deductibility burdens only rents, under the assumption that the zero-price risk-premium is not burdened by an income tax. This result could be achieved using the current definitions of debt and equity by making an allowance for corporate equity (ACE) equal to a hypothetical pre-tax risk-free return on equity, and restricting the interest deduction to the same hypothetical return on total debt capital. This would achieve a result similar to that proposed in the Mirrlees Review for a deduction for the normal return to corporate capital.

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January 18, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Interested In Law School? Click Here

Click HereLaw.com, Interested in Law School? Click Here:

Two of legal education’s biggest players are teaming up to ease the path to law school for interested high school and college students.

The Law School Admission Council—which administers the Law School Admission Test and serves as the central clearinghouse for law school applications—and the Association of American Law Schools—which counts nearly all American Bar Association-accredited law schools as members—have launched a new partnership aimed at getting information about legal education into the hands of prospective students earlier in their academic careers.

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January 18, 2018 in Legal Education | Permalink | Comments (1)

Apple To Pay $38 Billion In Taxes To Bring Cash Hoard Back To U.S. And Build U.S. Campus

Apple
New York Times, Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S.:

Apple, which had long deferred paying taxes on its foreign earnings and had become synonymous with hoarding money overseas, unveiled plans on Wednesday that would bring back the vast majority of the $252 billion in cash that it held abroad and said it would make a sizable investment in the United States.

With the moves, Apple took advantage of the new tax code that President Trump signed into law last month. A provision allows for a one-time repatriation of corporate cash held abroad at a lower tax rate than what would have been paid under the previous tax plan. Apple, which has 94 percent of its total cash of $269 billion outside the United States, said it would make a one-time tax payment of $38 billion on the repatriated cash.

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January 18, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

NY Times: Accountant (Penn)|Lawyer (Georgetown)|MBA (Chicago) Hunts The Taliban

New York Times, He Studied Accounting. Now He Hunts the Taliban.:

When Navy Lt. William Conway is piecing together clues about a new Taliban or Islamic State terrorist cell in Afghanistan, he often falls back on skills he learned hauling crooks, swindlers and embezzlers into court in Chicago.

Lieutenant Conway is not your typical military intelligence analyst. A former state prosecutor in Chicago, he comes armed for his sleuthing duties with a law degree from Georgetown University and an M.B.A. from the University of Chicago. Not to mention an undergraduate degree in accounting from the University of Pennsylvania’s Wharton School.

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January 18, 2018 in Legal Education | Permalink | Comments (0)

Touro Law School Offers New York's First Hybrid J.D.

Touro LogoNew York Law Journal, Touro Law Offers New York's First Hybrid JD:

Touro College Jacob D. Fuchsberg Law Center this fall will launch New York’s first hybrid J.D.

The new FlexTime J.D., as the program is dubbed, combines online and in-person classes and can be completed just under four years. It’s an alternative to the Long Island school’s more traditional day and evening part-time programs.

FlexTime J.D. students will take online classes year round for the first two years of the program. During that time, they will attend classes on the Long Island campus every other Sunday. Much of the remaining two years of the program’s coursework can be completed online.

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January 18, 2018 in Legal Education | Permalink | Comments (0)

Chorvat & Chorvat: The Dynamic Stability Of Progressive Taxation

TaxingElizabeth Chorvat (Illinois) & Terrence R. Chorvat (George Mason), The Dynamic Stability of Progressive Taxation, 71 Nat'l Tax J. 1 (2018) (reviewing Kenneth Scheve & David Stasavage, Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (Princeton University Press 2016)):

The optimality of progressive taxation is influenced by various factors including elasticities of response, taxpayers’ ability to hide income, the technology of government enforcement, et cetera. In Taxing the Rich, Scheve and Stasavage point to the large increases in taxes on the rich which accompanied the entrance of various countries into the two world wars of the twentieth century and conclude that high taxes on the rich have been sustained essentially only in times of mass mobilization for war, the prime examples of which being the two world wars. Although they are careful not to assert that it is the only setting in which significantly progressive taxes can be implemented and maintained, the authors argue that mass mobilization is the only factor which can be isolated as correlative with highly progressive taxation. Based on the Scheve and Stasavage data — including observations from the tax systems of twenty-one countries between 1800 to 2010 — and the Stata commands used in their analysis online, we conclude that not only are there other factors that have determined the dynamics of progressivity, but that these factors appear to be more important than military mobilization.

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January 18, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Who Had Dan Markel Killed?

Markel 3The Forward, Who Had Dan Markel Killed?:

[O]bservers have accused the Adelsons of planning the hit on Markel. The Adelsons have called the accusations a “fanciful fiction.”

It is possible that Wendi Adelson had no idea about a planned hit on her ex-husband. Police testimony suggests that Charlie Adelson joked about having Markel killed. Wendi Adelson also told People magazine that an ex-boyfriend from after her divorce, a law professor named Jeffrey Lacasse, may have had something to do with it.

“I’m the paranoid ex-boyfriend,” Lacasse reportedly told the police. “I was surprised that you guys didn’t call me earlier, though, because I probably said a hundred times that I’d like to kick his ass because he kept, like, really making Wendi suffer.”

Both Rivera and Magbanua have yet to go to trial for the murder. Magbanua’s trial was recently moved to October after it was scheduled to begin on January 22. Garcia’s trial was originally set for December 2017 but was moved to July of this year.

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January 18, 2018 in Legal Education | Permalink | Comments (1)

Wednesday, January 17, 2018

AccessLex And Gallup Release National Study On The Long-Term Outcomes Of A Law Degree

AccessLex Institute and Gallup Release National Study on the Long-Term Outcomes of a Law Degree:

With the recent decline in law school applications, AccessLex Institute commissioned Gallup to conduct a study on how the value of the law degree is perceived when compared to other higher education degrees. The study, Examining Value, Measuring Engagement: A National Study of the Long-Term Outcomes of a Law Degree, builds on AccessLex Institute and Gallup's 2016 report, Life After Law School.

The study adopted a holistic conception of value, encompassing not only employment outcomes, but also well-being and professional engagement. The study finds that the perceived value of the law degree is high among law graduates and recipients of other higher education degrees. Moreover, most law graduates report they would still get a law degree if they could go back and do it all over again.

Perceptions of the law degree differed, however, based on student loan debt and graduation date. Law graduates who accumulated $100,000 or more in student loan debt in order to obtain their law degree or who graduated during or after the Great Recession had less favorable perceptions of the degree's value.

Figure 1

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January 17, 2018 in Legal Education | Permalink | Comments (10)

Cauble: Itemized Deductions In A High Standard Deduction World

Emily Cauble (DePaul), Itemized Deductions in a High Standard Deduction World, 70 Stan. L. Rev. Online ___ (2018):

New tax legislation enacted in December 2017 exacerbates the extent to which various itemized deductions, such as the charitable contribution deduction and the home mortgage interest deduction, disproportionately benefit high income individuals.

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January 17, 2018 in Scholarship, Tax | Permalink | Comments (0)

Law Schools Are Under The Microscope

Inside Higher Ed, Law Schools Under the Microscope:

The ABA has publicly posted reports on the accreditation status of more than 5 percent of the law schools it approves in the last 18 months, providing a window into the continued aftereffects of the law school bubble. ...

Cooley Law School’s case stands as a microcosm of developments that have been battering nonelite legal education for years. After enjoying an enrollment surge in the first decade of the new century, many law schools have more recently struggled mightily amid a dearth of jobs for young lawyers, dwindling student interest, worries schools were encouraging students to take on high debts they would struggle to repay, and intense criticism that many schools had been admitting students who never had the academic chops necessary to become practicing lawyers. At the same time, the accreditation world has been grinding toward greater transparency, placing some institutions under an unwelcome harsh light.

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January 17, 2018 in Legal Education | Permalink | Comments (0)

Abreu & Greenstein: Embracing The Taxpayer Bill Of Rights

TBORAlice G. Abreu (Temple) & Richard K. Greenstein (Temple), Embracing the TBOR, 157 Tax Notes 1281 (Nov. 27, 2017):

When Congress codified the Taxpayer Bill of Rights (the “TBOR”) in 2015 the tax bar largely shrugged, but that is a mistake. Section 7803(a)(3) is not just another iteration of the phrase Congress used to christen legislation designed to reign in perceived IRS abuses in the 80’s and 90’s, when Congress enacted three different pieces of legislation that bore the name “Taxpayer Bill of Rights.” Despite their lofty titles, none of those enactments contained a single amendment to the Internal Revenue Code that used the word “right,” or employed the language of rights. By contrast, section 7803(a)(3) actually refers to “taxpayer rights” and lists ten items. Therefore, despite the claims of its promoters that the 2015 legislation simply restates rights already provided by the Code, the codification of the TBOR has the power to transform the tax practice and the relationship between taxpayers and the IRS. In this Article we explain why.

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January 17, 2018 in Scholarship, Tax | Permalink | Comments (0)