TaxProf Blog

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

Tuesday, April 30, 2019

Cui Presents A Conceptual Defense Of The Digital Services Tax Today At NYU

Cui (2018)Wei Cui (British Columbia) presents The Digital Services Tax: A Conceptual Defense (reviewed by Kim Brooks (Schulich School of Laws, Dalhousie University) and Ruth Mason (Virginia)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Since 2018, the UK government, the European Commission, and several European national governments have advanced bold proposals for a new “digital services tax” (DST), with the aim of capturing profits earned by multinationals that reflect value contributed by users of digital platforms. I offer a novel set of arguments in support of the DST, which appeal to both efficiency and fairness considerations. In particular, the DST would allow location-specific rent (LSR) earned by digital platforms to be captured by the countries in which such rent arises. I argue that platform LSR is often hidden from view under the traditional international income taxation paradigm, due to that paradigm’s focus on physical presence, source of payment, and profit allocation among related entities. Moreover, that paradigm ignores a basic intuition about how rent accruing to mobile intangible assets should be assigned: when the deployment of a technology is non-rival with respect to multiple locations, it is both efficient and fair to assign any rent earned from the technology’s deployment with respect to a given location to that location.

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April 30, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

NY Times: Profitable Giants Like Amazon Pay $0 In Corporate Taxes. Some Voters Are Sick Of It.

New York Times, Profitable Giants Like Amazon Pay $0 in Corporate Taxes. Some Voters Are Sick Of It.:

Colin Robertson wonders why he pays federal taxes on the $18,000 a year he makes cleaning carpets, while the tech giant Amazon got a tax rebate. ...

Sanders and Elizabeth Warren, have hammered recently as they travel the campaign trail, spurred by a report that 60 Fortune 500 companies paid no federal taxes on $79 billion in corporate income last year. Amazon, which is reported to be opening a center in an abandoned Akron mall that will employ 500 people, has become the poster child for corporate tax avoidance; last year it had an effective tax rate of below zero — receiving a rebate — on income of $10.8 billion.

NYT

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April 30, 2019 in Tax | Permalink | Comments (1)

Fired Economics Professor Claims Arizona State Required Him To Fail 30% Of Class, Profited From Students' Use Of Courseware Required To Turn In Homework

NY Times: Obama, Taxes, And The Upper Middle Class

New York Times op-ed:  Obama on the Upper Middle Class, by David Leonhardt:

Before Barack Obama’s 2008 presidential campaign, Democrats had spent decades bedeviled by the politics of taxes. Republican candidates portrayed themselves as tax cutters whose economic policy would benefit all voters, even though the bulk of the tax cuts were for the rich. Democrats tried to explain this nuance, often without success.

Obama figured out a solution. He called for tax increases on households making more than $250,000. But for the great majority of Americans, he proposed larger tax cuts than his opponent, John McCain, and Obama repeatedly bragged about them.

Voters got it. Polls showed that more saw Obama as the tax-cutter in the race. Even conservatives acknowledged the strategy’s success. “One of Barack Obama’s most potent campaign claims is that he’ll cut taxes for no less than 95% of ‘working families,’” The Wall Street Journal editorial board lamented in October 2008.

As president, Obama followed through. He quickly cut taxes for most families and, after several years, won a tax increase on the rich.

Yet there was one major downside to his approach. And I was intrigued this weekend to see that Obama himself seems to understand that downside.

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April 30, 2019 in Tax | Permalink | Comments (2)

Reflections On Legal Employment Outcomes Over The Past Five Years

With the ABA Section of Legal Education and Admissions to the Bar’s reporting of employment outcomes for the Class of 2018, I thought it might make some sense to look at five-year trends for a couple of different categories of jobs data.

The Total Number of Graduates in Full-time, Long-term Bar Passage Required or JD Advantage Positions Increased Slightly for the Class of 2018

First, as shown in Table 1, with respect to full-time, long-term, Bar Passage Required (BPR) and JD Advantage (JDA) positions, the Class of 2018 offers some good news, with the first-increase in the total number of these positions in the last four years, increasing from 26,302 for the Class of 2017 to 26,632 for the Class of 2018 (although down from 29,740 for the Class of 2014).

Table 1 -- Full-time, Long-Term BPR and JDA for Class of 2014 to Class of 2018

 

FTLTBPR

FTLTJDA

TOTAL

Graduates

% of Grads in FTLTBPR/JDA

2014

24978

4762

29740

43132

68.95%

2015

23738

4340

28078

39983

70.22%

2016

22851

4000

26851

36786

72.99%

2017

23117

3185

26302

34923

75.31%

2018

23424

3208

26632

34283

77.68%


This is the second year in a row in which full-time, long-term BPR positions increased (from 22,851 for the Class of 2016, to 23,117 for the Class of 2017, to 23,424 for the Class of 2018), although still down from 24,978 for the Class of 2014.  This year also saw a four-year decline in the number of full-time, long-term JDA jobs paused as the number of these positions grew from 3,185 for the Class of 2017 to 3,208 for the Class of 2018 (still down almost one-third from the 4,762 for the Class of 2014).

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April 30, 2019 in Jerry Organ, Legal Education | Permalink | Comments (11)

Shanske & Gamage: Why States Can Tax the GILTI

Darien Shanske (UC-Davis) & David Gamage (Indiana), Why States Can Tax the GILTI, 91 State Tax Notes 967 (Mar. 18, 2019):

A centerpiece of the 2017 federal tax legislation’s reforms to international corporate income tax rules is the new global intangible low-taxed income regime (or GILTI). In a prior essay, we argued that U.S. state governments should conform to GILTI. But might there be constitutional restrictions preventing state governments from doing so? This essay argues that state governments can constitutionally conform to the federal GILTI rules and thereby tax GILTI income as part of the states’ corporate income tax bases.

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April 30, 2019 in Scholarship, Tax | Permalink | Comments (0)

Class Of 2018 Notches Highest Legal Employment Rate In A Decade

Law.com, Law Class of 2018 Notches Highest Legal Employment Rate in a Decade:

The percentage of newly minted J.D.s who found legal work increased for the fifth straight year in 2018, according to new employment data from the American Bar Association.

The latest figures, released Monday, show that 78.6 percent of the class of 2018 had secured full-time, long-term jobs that either require bar passage, or for which a law degree offers an advantage within 10 months of graduation—up from 75.3 percent the previous year.

ABA Legal Education Section Releases Employment Data For Graduating Law Class of 2018:

ABA

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April 30, 2019 in Legal Education | Permalink | Comments (0)

Actor Wesley Snipes’ Offer In Compromise Got Sniped By The IRS

Snipes 2New York Law Journal, Actor Wesley Snipes’ Offer in Compromise Got Sniped by the IRS:

If you watch TV, listen to the radio, read a newspaper or hear conversations, invariably you will notice many organizations offering their services to settle tax liabilities for pennies on the dollar. How real are these offers to help a delinquent taxpayer?

There is no question that the Internal Revenue Service (IRS) has liberalized its collection policies and procedures. Specifically, the agency has established a “Fresh Start” initiative to permit qualified taxpayers a means to pay less taxes through the Offer in Compromise (O.I.C.) program. The IRS also grants different types of installment arrangements for taxpayers who may not qualify for an O.I.C. ...

Even though the O.I.C. program has become more commercialized, there are many taxpayers who do not qualify. Last year, Actor Wesley Snipes made headlines when his O.I.C. was rejected by the IRS. Upon information and belief, Snipes failed to file Federal Income Tax Returns for the years 2001-2006, allegedly owing the IRS at least $23.5 million. After the IRS issued numerous collection notices and liens, Snipes filed a Request for a Collection Due Process Hearing. He then submitted an O.I.C. for an $842,061.00 offer in full satisfaction of his $23.5 million debt to the IRS.

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April 30, 2019 in Celebrity Tax Lore, IRS News, Tax | Permalink | Comments (1)

Monday, April 29, 2019

Weil Legal Innovators Program Pays Columbia, Duke, Georgetown, NYU & Penn Admittees $50k To Defer Law School For One Year To Work In Public Interest

WeilThe Weil Legal Innovators Program:

The Weil Legal Innovators Program engages incoming law school students in addressing some of the most pressing social and legal challenges in our communities today.

Legal Innovators is comprised of a cohort of 10 incoming law school students who plan to attend one of our WLI Law School Partners [Columbia, Duke, Georgetown, NYU & Penn Law Schools]. Innovators defer their first year of law school to work at one of WLI's sponsoring nonprofit organizations, executing a strategic initiative designed to leverage their business acumen and commitment to public service, while amplifying the impact of the sponsoring nonprofit.

What do Innovators receive for their participation?

  • $50,000 salary plus health benefits
  • $10,000 law school scholarship
  • Ongoing engagement with Weil, including a Weil Partner Mentor
  • Opportunity to interview for the Weil Summer Associate program

Nonprofit partners sponsoring Innovators receive $40,000.

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April 29, 2019 in Legal Education | Permalink | Comments (1)

Yin: Congressional Testimony On The House Ways & Mean Committee's Authority To Obtain President Trump's Tax Returns

George K. Yin (Virginia), Testimony Before the House Ways and Means Oversight Subcommittee on Legislative Proposals and Tax Law Related to Presidential and Vice-Presidential Tax Returns:

This submission is the testimony provided to the House Ways and Means Oversight Subcommittee in February 2019 on the ability of the chairman of the committee to obtain and disclose the tax return information of any taxpayer including the president. It describes the controlling law, the circumstances in which the chairman's request should be respected, and the conditions for disclosing the information to the public.

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April 29, 2019 in Congressional News, Tax | Permalink | Comments (0)

Father And Daughter Graduated From Law School And Took Bar Together — Only One Passed

AkronAkron Beacon Journal, Bittersweet Outcome for Father-Daughter Who Made History in Legal Pursuit:

Sarah and Tim Smith, the first father and daughter to attend the University of Akron law school and take the bar exam at the same, anxiously pulled up the list of people who passed the bar Friday morning.

Scrolling through the list, they saw “Smith, Sarah” but no “Smith, Tim” on the list.

“Congratulations,” Tim told his daughter via FaceTime.

“I’m so sorry, Dad,” Sarah responded.

It was a bittersweet outcome for the Smiths, who made history with their joint law-degree odyssey and had many family and friends hoping they’d reach another milestone by passing the bar at the same time.

“We really wanted it to be the same,” Sarah said, getting choked up. “Our worth is not our results. We are friends and family. We’re OK.” ...

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April 29, 2019 in Legal Education | Permalink | Comments (0)

Democratic 2020 Candidates Lag Average Americans (And Mike Pence) In Charitable Giving

Bloomberg Law, Democratic 2020 Candidates Lag U.S. in Giving, Tax Returns Show:

As more presidential candidates release their tax returns, a picture of Democrats’ charitable giving is beginning to emerge. For the most part, they’re not as generous as most Americans.

With notable exceptions, most high-polling 2020 Democratic presidential candidates gave well below the U.S. average to charity in 2018, according to the deductions claimed on their tax returns. While Americans give between 2 percent and 4 percent of their incomes on average, most candidates claimed charitable deductions of less than 2 percent of their total incomes.

Senators Bernie Sanders, Elizabeth Warren and Cory Booker gave more than 2 percent of their total incomes, according to their returns. Beto O’Rourke, the former Texas congressman, gave the least, with donations of just $1,166 in 2017 or 0.31 percent of his income. O’Rourke hasn’t yet released his 2018 return.

Tax Returns

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April 29, 2019 in Tax | Permalink | Comments (1)

Lesson From The Tax Court: The Role Of The Taxpayer Bill of Rights

Taxpayer Bill of RightOver the years Congress has enacted various pieces of legislation that it labels “Taxpayer Bill of Rights” (TBOR).  The original TBOR came in 1988 as part of the Technical and Miscellaneous Revenue Act of 1988.  It was followed by a free-standing TBOR II in 1996, and then TBOR III in 1998, enacted as part of The IRS Restructuring and Reform Act of 1998. 

All three of these TBORs created substantive changes in the tax laws, such as adding procedures for the IRS to follow, giving taxpayers greater access to the Tax Court, giving taxpayers the right to sue under certain circumstances, creating the Taxpayer Advocate Service, etc. 

In 2015, Congress did something different.  It enacted yet another TBOR but this time the substantive command was framed as an additional duty given to the Commissioner, not additional rights given to taxpayers.  The new duty is to “ensure that employees of the Internal Revenue Service are familiar with and act in accord with taxpayer rights as afforded by other provisions of this title.”  There follows a list of 10 nobly worded vagaries, such as “the right to quality service” and “the right to a fair and just tax system” and “the right to finality” which is somewhat in tension with “the right to challenge the position of the Internal Revenue Service” and “the right to appeal a decision of the Internal Revenue Service in an independent forum” (think Collection Delay Process).  You can find the complete high-minded list in §7803(a)(3)

Taxpayers want TBOR IV to be more than pretty words.  They want §7803(a)(3) to give them substantive rights.  The recent case of Maria Ivon Moya v. Commissioner, 152 T.C. No. 11 (Judge Halpern) (April 17, 2019), teaches a lesson about that.  The case did not directly involve §7803(b).  It instead involved the administrative adoption of taxpayer rights in 2014, the year before the statute’s enactment.  Still, the Tax Court’s decision here is an important lesson that presages what is likely to happen when a taxpayer tries to allege violations of the statutory TBOR IV: do not waste Tax Court opportunities to argue the merits of an NOD by complaining about procedural errors. 

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April 29, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (3)

Dan Markel's Parents Want Justice As Suspects Finally Head To Trial In Murder-For-Hire Case

Markel 3Inside Edition, Dan Markel's Parents Want Justice as Suspects Head to Trial in Murder-for-Hire Case:

It's been nearly five years since prominent law professor Dan Markel was shot to death in the driveway of his Florida home. Now, his parents are reliving the nightmare — and seeking justice — as the suspects in the murder-for-hire case head to trial.

In July 2014, Markel was shot twice in the head as he pulled into his garage at his Tallahassee home. ...

Two suspects, who have pled not guilty, are going on trial in June in connection with Markel's murder. Katherine Magbanua allegedly enlisted the father of her children, Sigfredo Garcia, and another man, Luis Rivera, to pull off the shooting. Rivera entered into a plea deal with prosecutors and claims that Garcia is the person who shot Markel. Rivera pleaded guilty to second-degree murder and is expected to testify at the trial.

Prosecutors say Magbanua had dated Wendy Adelson's brother. According to a police affidavit, “investigators believe the motive for this murder stemmed from the desperate desire of the Adelson family to relocate Wendi and the children to” Coral Springs. No one in the Adelson family has been arrested or charged. They have denied any involvement in the murder and call the police's theory about a possible motive "fanciful fiction."

"I'm looking for justice. I'm looking for answers," Phil Markel told Inside Edition.

"This is no accident," Ruth Markel said.

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April 29, 2019 in Legal Education | Permalink | Comments (1)

Formulary Apportionment Workshop In Montréal

CiranoTax Prof speakers at last week's Formulary Apportionment Workshop at the Center for Interuniversity Research and Analysis of Organizations (CIRANO) in Montréal:

  • Yariv Brauner (Florida)
  • Cliff Fleming (BYU)
  • Itai Grinberg (Georgetown)
  • Walter Hellerstein (Georgia)
  • Bob Peroni (Texas)
  • Steve Shay (Harvard)

April 29, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, April 28, 2019

Tax-Free Housing And Religious Employers

Bridget J. Crawford (Pace) & Emily Gold Waldman (Pace), Ministerial Magic: Tax-Free Housing and Religious Employers, 21 U. Pa. J. Const. L. Online ___ (2019):

Religious organizations enjoy many of the same benefits that other non-profit organizations do. Churches, temples and mosques, for example, generally are exempt from local real estate taxes. Economically speaking, a tax exemption has the same effect as a subsidy; freedom from tax liability means that the organization can devote its financial resources to other activities. But where an exemption afforded to a religious employee is broader than the equivalent exemption available to a secular employee, a significant Establishment Clause concern is raised. The parsonage exemption of Internal Revenue Code Section 107 presents such an issue: ministers are permitted to exclude cash housing allowances from their taxable income as a matter of course, even though the equivalent exemptions for secular employees are far more limited. Recently, however, in Gaylor v. Mnuchin, the United States Court of Appeals for the Seventh Circuit rejected the argument that the parsonage exemption violates the Establishment Clause. This Essay evaluates the court’s reasoning and suggests that the decision minimized the extent to which the parsonage exemption provides active governmental support for religion. This minimization, we argue, led to a distorted Establishment Clause analysis and the wrong result.

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April 28, 2019 in Scholarship, Tax | Permalink | Comments (1)

Satanic Temple Wins IRS Recognition As An Official House Of Worship

Bloomberg, Satanic Temple Wins IRS Recognition as an Official House of Worship:

Many Americans regard paying taxes as a necessary evil. If they want to worship Satan, now the IRS has officially given them a tax-exempt place to do so.

The Internal Revenue Service has granted the same non-profit status given to churches, synagogues and mosques to The Satanic Temple, an organization in Salem, Massachusetts, that calls itself America’s first devil-worshiping church. It is now protected by federal laws governing churches that operate as charities.

Satanic InstaGram

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April 28, 2019 in Tax | Permalink | Comments (1)

'Intolerant And Illiberal'? Trinity Western University And Its Implications

Trinity Western 2Derek Ross (Christian Legal Fellowship), 'Intolerant and Illiberal'? Trinity Western University and its Implications for Charter Jurisprudence, 89 Sup. Ct. Rev. 127 (2019):

Canada’s Constitution guarantees freedom of religion. This means that religious communities have the right to “insist upon certain moral commitments from those who wish to join” them. In Wall v Highwood Congregation, the Supreme Court affirmed that “religious groups are free to determine their own membership and rules” and that it will not intervene in “issues of theology.” But two weeks later, in Trinity Western University, the Supreme Court ruled that government actors could refuse to recognize law degrees issued by a religious university because of its religiously-based admissions requirements.

Many aspects of the Trinity Western ruling are difficult to reconcile with the Court’s previous interpretations of the Charter, including its 2001 decision which explicitly affirmed Trinity Western’s right to maintain a Community Covenant. This article offers a critique of the reasoning employed (especially by the majority), and provides some reflections on what the ruling might mean for future jurisprudence, particularly in the area of religious freedom.

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April 28, 2019 in Legal Education, Scholarship | Permalink | Comments (1)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [327 Downloads]  Residual Profit Allocation by Income, by Michael Devereux (Oxford), Alan Auerbach (UC-Berkeley), Michael Keen (IMF), Paul Oosterhuis (Skadden), Wolfgang Schön (Max Planck) & John Vella (Oxford) (reviewed by Christine Kim (Utah) here)
  2. [317 Downloads]  Taxing the Digital Economy Post BEPS ... Seriously, by Andrés Báez (Universidad Carlos III de Madrid) & Yariv Brauner (Florida)
  3. [169 Downloads]  The Fraud Triangle and Tax Evasion, by Leandra Lederman (Indiana)
  4. [158 Downloads]  The Architecture of a Basic Income, by Miranda Perry Fleischer (San Diego) & Daniel Jacob Hemel (Chicago)
  5. [137 Downloads]  Fixing Philanthropy: A Vision for Charitable Giving and Reform, by Roger Colinvaux (Catholic)

April 28, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 27, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Cross-Cultural Differences In Plagiarism In Law Schools And Legal Practice

Diana Simon (Arizona), Cross-Cultural Differences in Plagiarism: Fact or Fiction?, 57 Duq. L. Rev. 73 (2019):

Are there cross-cultural differences in plagiarism? Is it helpful — let alone fair — to try to generalize attitudes toward plagiarism across cultures? Is this issue of relevance for learning institutions like law schools? And how do these issues intersect with the legal profession? My perspectives on these issues stem from 25 years of legal practice handling complex commercial disputes combined with over 20 years as a law school professor, first as an adjunct professor and now as a part of the legal writing department. The two perspectives — the practicing attorney view and the academic view — are not identical.

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April 27, 2019 in Legal Education | Permalink | Comments (0)

Big Law's International Tilt Has Gone Too Far. A Restructuring Beckons.

Law.com, Big Law's International Tilt Has Gone Too Far. A Restructuring Beckons.:

Since the last market peak, in 2008, the 50 largest U.S. firms contracted by 3,000 lawyers in the United States while growing by 8,700 lawyers abroad. As a result, international lawyers now comprise 35 percent of total Am Law 50 lawyers, up from 24 percent a decade ago.

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April 27, 2019 in Legal Education | Permalink | Comments (0)

WSJ: IRS Payments To Tax Snitches Are Up 900%

Wall Street Journal Tax Report, The Profitable Prospects of Snitching for the IRS:

These are boom times for snitches who turn in tax cheats to Uncle Sam.

The Internal Revenue Service awarded more than $312 million to tipsters last year, according to a little-noticed report released in February [Whistleblower Program Fiscal Year 2018 Annual Report to Congress]. This total far outstrips the previous record of $125 million awarded in 2012. The 2018 rewards, paid in the fiscal year ended Sept. 30, were for additional collected revenue of $1.4 billion, compared with $191 million in fiscal 2017.

IRS 1

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April 27, 2019 in Tax | Permalink | Comments (0)

Friday, April 26, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Knoll's The TCJA And The Questionable Incentive to Incorporate

This week, David Elkins (Netanya) reviews a two-part work by Michael S. Knoll (Pennsylvania), The TCJA and the Questionable Incentive to Incorporate, 162 Tax Notes 977 (Mar. 4, 2019), and The TCJA and the Questionable Incentive to Incorporate, Part 2, 162 Tax Notes 1447 (Mar. 25, 2019).

Elkins (2018)The Tax Cuts and Jobs Act (TCJA) is the most far-reaching tax reform in a generation. The political, and often the academic, discourse regarding the TCJA has tended to focus on the distributional effect of the reform – who gains and who loses from the changes instituted by the act. However, one particular aspect of the TCJA that been largely ignored by the popular press – indeed by most except those who are responsible for advising clients how to arrange their tax affairs – is the seismic shift in the corporation tax regime.

Until the turn of the twenty-first century, U.S. corporate taxation was based upon what is commonly referred to as either the “classic model” or the “double taxation model,” under which corporations pay tax at full rates on their income as it accrues and shareholders pay tax at full rates on dividends when they receive them. The problem with the classic model is that economically the same income is taxed twice. For that reason, during the course of the twentieth century, most other countries moved to integrate their corporation tax structure.

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April 26, 2019 in David Elkins, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (1)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Yin: Stanley Surrey And The Tax Legislative Process

Surrey 2George Yin (Virginia), 'Who Speaks for Tax Equity and Tax Fairness?': Stanley Surrey and the Tax Legislative Process:

This article examines and assesses Stanley Surrey’s view of the federal tax legislative process. One of the most influential tax professionals of the twentieth century, Surrey is likely best known for his advocacy of specific tax policy ideas. But Surrey saw legislation as the prime route for adoption of most of his ideas, and he thus focused and provided many commentaries on the tax legislative process. He drew on extensive experience with the process, serving two lengthy terms (almost 20 years) in the Treasury Department, and remaining closely involved with it throughout his academic years.

This article shows that Surrey’s faith in expertise and fierce commitment to tax equity and fairness led him to believe that Treasury should play the dominant role in the legislative process.

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April 26, 2019 in Scholarship, Tax | Permalink | Comments (0)

Want To Make Millions And Pay No Taxes? Try Real Estate

Bloomberg, Want to Make Millions and Pay No Taxes? Try Real Estate:

Real estate is a cyclical business. Markets crash. Deals sour. But hard landings are rare for a savvy property mogul, thanks to the U.S. tax code.

Take Harry Macklowe, a New York City developer. Macklowe, 81, hasn’t paid income tax since the 1980s, according to a court opinion in his divorce proceedings issued in December. The ruling, which also divided luxury homes and an art collection worth more than $650 million between Macklowe and his ex-wife, Linda, doesn’t suggest the couple did anything wrong to avoid paying income taxes. Rather, it highlights the special perks available to property investors in the U.S.—advantages that have expanded under the tax law signed in 2017 by Donald Trump, America’s real estate developer president.

“The real estate industry is notorious for throwing off lots of deductions, and real estate developers are notorious for paying very few taxes,” says Steven Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center. “As Leona Helmsley said, ‘Only the little people pay taxes.’ ”

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April 26, 2019 in Tax | Permalink | Comments (5)

Peter Blessing Named IRS Associate Chief Counsel (International)

BlessingIR-2019-79 (Apr. 25, 2019), IRS Announces New Personnel Selection for Office of Chief Counsel:

The Internal Revenue Service’s Chief Counsel today announced the appointment of Peter Blessing to the position of Associate Chief Counsel, International, Office of Chief Counsel.

Blessing has many years of experience in private practice and has focused primarily on international tax law. “We are very fortunate to attract an individual of his caliber and expertise,” said Michael Desmond, IRS Chief Counsel.

The Associate Chief Counsel, International, is responsible for coordinating and directing all activities of the international organizational component of the Office of Chief Counsel. That organization provides legal advisory services on all international and foreign tax matters, including all matters relating to the activities of non-U.S. persons or entities within the United States and the activities of U.S. or U.S.-related persons or entities outside the United States. These services support uniform interpretation, application and enforcement of all international provisions of the United States revenue laws, all bilateral and multilateral tax treaties and agreements to which the United States is a party, and all foreign revenue laws that pertain to or affect tax matters in the United States.

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April 26, 2019 in IRS News, Tax | Permalink | Comments (0)

New Dean Says He Plans To 'Fix' Cooley's Reputation, Right Size Law School (1209 Students) Without Reducing Faculty

McGrathABA Journal, Cooley Law's New Dean Says He's 'Here to Fix' School's Reputation:

James McGrath, a professor and associate dean at Texas A&M University School of Law, has been tapped to serve as president and dean at Western Michigan University Cooley Law School.

The school announced Tuesday that McGrath will take the reins on July 1, becoming the third president and sixth dean in the Cooley Law School’s history. During his time as Texas A&M dean, McGrath oversaw academic support, bar passage and compliance at the school, according to his bio.

In November 2017, Cooley Law School was found to be out of compliance with an ABA admissions standard, but in March 2018 the council of the Section of Legal Education and Admissions to the Bar found that the law school was back in compliance. In October 2018, the law school dismissed its federal lawsuit against the ABA, alleging Higher Education Act and common law due process violations. Cooley Law School’s ultimate bar passage rate is 69.02 percent, according to ABA data.

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April 26, 2019 in Legal Education | Permalink | Comments (1)

North Carolina Tax Institute

North Carolina Tax InstituteTax Prof presentations at the J. Nelson Young Tax Institute at North Carolina (agenda):

Cassady Brewer (Georgia State) & Bruce McGovern (South Texas), Recent Federal Income Tax Developments:

Recent Federal Income Tax Developments This session highlights significant court decisions, rulings, and statutory and regulatory federal income tax developments affecting taxpayers over the past twelve months.

Lawrence Zelenak (Duke), Figuring Out the Tax: Congress, Treasury, and the Design of the Early Modern Income Tax:

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April 26, 2019 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, April 25, 2019

NY Times: Closing The Racial Wealth Gap

New York Times op-ed:  Closing the Racial Wealth Gap, by Courtney E. Martin (author, The New Better Off: Reinventing the American Dream (2016)):

The United States tolerates a widening chasm between the very rich few and the many with low incomes. Even more shameful, the burden of poverty falls heaviest on African-Americans and other people of color.

In her 2018 book, Give People Money, the journalist Annie Lowrey delivered a stinging criticism of the ways in which the United States has essentially won the race to the bottom when it comes to distribution of wealth:

“We tolerate levels of poverty that are grotesque and entirely unique among developed nations.”

She was speaking not just about cold hard cash and other forms of wealth, but also about the way race still shapes who is preposterously rich and who remains predictably poor.

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April 25, 2019 | Permalink | Comments (0)

Being A Black Academic In America: No One Escapes Without Scars

CHEChronicle of Higher Education, Being a Black Academic in America: No One Escapes Without Scars:

The “Operation Varsity Blues” bribery scandal led to an outpouring of conversation on privilege, merit, and fairness in higher education. African-American scholars were quick to point out the hypocrisy the scandal revealed. As Anthony Abraham Jack, an assistant professor at the Harvard Graduate School of Education, put it, “I have been told by people at times, ‘You stole a spot because you’re here.’ Now, who stole what from who?”

In the wake of the scandal, The Chronicle Review asked graduate students, junior professors, and senior scholars what it’s like to be an African-American academic today. We asked respondents to speak to themes raised by the admissions-bribery scandal. Here’s what they told us.

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April 25, 2019 in Legal Education | Permalink | Comments (5)

Haneman: Retrenchment, Temporary-Effect Legislation, And The Home Mortgage Interest Deduction

Victoria J. Haneman (Creighton), Retrenchment, Temporary-Effect Legislation, and the Home Mortgage Interest Deduction, 71 Okla. L. Rev. 347 (2019) (reviewed by Sloan Speck (Colorado) here):

There are several sacred cows in the Internal Revenue Code, but perhaps none quite as sacrosanct as the home mortgage interest deduction. U.S. Treasury Secretary Steve Mnuchin has characterized the mortgage interest deduction as so beloved by the American people that it is “kind of like apple pie.” Reform of the home mortgage interest deduction has been described as the third rail of tax reform, in that “touching the [mortgage interest deduction] is not just treasonous but ruinous.” That is, until December 22, 2017 when the Tax Cuts and Jobs Act of 2017 was enacted. And though the change to Section 163 may not seem significant by its own terms, its interaction with other changes to the Internal Revenue Code will result in profound change: the reduction of the home mortgage interest cap to $750,000 from $1 million will interact with the provision capping state and local property, sales, and income tax at $10,000, and the almost-doubled standard deduction. The obvious effect will be fewer homeowners itemizing their home mortgage interest deduction: an estimated 44% of taxpayers received the benefit of the home mortgage interest deduction under prior law, and it is anticipated that this number will drop to less than 15%.

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April 25, 2019 in Scholarship, Tax | Permalink | Comments (2)

The Judicial Embrace Of Local Excise Taxation

Navad Shoked (Northwestern), Cities Taxing New Sins: The Judicial Embrace of Local Excise Taxation, 79 Ohio St. L.J. 801 (2018):

The past decade has witnessed an unprecedented expansion in the number and reach of local excise taxes. Though excise taxes have always formed part of the American fiscal system, they have traditionally been largely state, or even federal, level taxes. Therefore, contemporary excise taxes that have received much attention—soda taxes, plastic bag taxes, gun taxes, and more—are innovative not only in the products they target, but also in the identity of the government imposing them: a city or county government. From a legal perspective, the most striking—and heretofore, largely unacknowledged—feature of this development is the wholehearted legal embrace of this turn to the local. This Article demonstrates that when confronting the new local excise taxes, courts have completely reversed their typically hostile attitude towards local action.

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April 25, 2019 in Scholarship, Tax | Permalink | Comments (0)

The Metric Society Has Exacerbated Competition, Comparisonitis, And Inequality On The Road To A 21st Century Dystopia

The Metric SocietySteffen Mau (Humboldt University (Berlin)), The Metric Society: On the Quantification of the Social (2019):

In today’s world, numbers are in the ascendancy. Societies dominated by star ratings, scores, likes, and lists are rapidly emerging, as data are collected on virtually every aspect of our lives. From annual university rankings, ratings agencies, and fitness tracking technologies to our credit score and health status, everything and everybody is measured and evaluated.

In this important new book, Steffen Mau offers a critical analysis of this increasingly pervasive phenomenon. While the original intention behind the drive to quantify may have been to build trust and transparency, Mau shows how metrics have in fact become a form of social conditioning. The ubiquitous language of ranking and scoring has changed profoundly our perception of value and status. What is more, through quantification, our capacity for competition and comparison has expanded significantly — we can now measure ourselves against others in practically every area. The rise of quantification has created and strengthened social hierarchies, transforming qualitative differences into quantitative inequalities that play a decisive role in shaping the life chances of individuals.

This timely analysis of the pernicious impact of quantification will appeal to students and scholars across the social sciences, as well as anyone concerned by the cult of numbers and its impact on our lives and societies today.

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April 25, 2019 in Book Club, Law School Rankings, Legal Education | Permalink | Comments (0)

WSJ: Blackstone To Join Other Private Equity Firms In Shift From Partnership To C Corporation Structure Due To New Tax Law

BlackstoneWall Street Journal, Blackstone To Join Other Private Equity Firms In Shift From Partnership To C Corporation Structure Due To New Tax Law:

Blackstone Group said it would abandon its partnership structure and become a corporation, a move some publicly traded peers have taken in an effort to expand the ownership of their stocks.

For private-equity firms, a conversion to a so-called C corporation became a realistic option after Congress passed the new tax law in late 2017, which lowered the highest corporate rate to 21% from 35%.

The new law made it more palatable to make the switch, which the firms hope will make their stock more attractive to mutual funds and other institutional investors. Those investors typically don’t invest in publicly traded partnerships. ...

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April 25, 2019 in Tax | Permalink | Comments (0)

ProPublica: Lawmakers Confront The IRS Over Tax Audits That Target The Poor

Pro PublicaProPublica, Lawmakers Just Confronted the IRS Over Tax Audits That Target the Poor:

Over the past six months, ProPublica has detailed the myriad ways the IRS has been gutted and how that has impacted its ability to do its job. In sum: The wealthy escape scrutiny while the working poor, an easier target, are audited at high rates.

This week, Congress, in two separate hearings, confronted IRS Commissioner Charles Rettig with the findings.

“How can the Congress stand by a tax-enforcement system that punishes working people and gives the wealthy a green light to cheat?” asked Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee, during his opening statement on Wednesday.

Wyden was referring to a ProPublica investigation last week into the fate of the elite unit the IRS formed to keep up with the complicated tax-avoidance schemes of the wealthy. Faced with staff cuts and blowback from the wealthy and their tax representatives, the effort fumbled and was scaled way back.

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April 25, 2019 in IRS News, Tax | Permalink | Comments (5)

D.C. Circuit Upholds IRS's Voluntary Regulation Of Tax Preparers

Frank G. Colella (Pace), D.C. Circuit Upholds IRS's Voluntary Regulation of Tax Preparers — Majority Holds APA's Statutory Notice and Comment Not Required: AICPA v. IRS, 15 N.Y.U. J. L. & Bus.229 (2019):

In American Institute of Certified Public Accountants (“AICPA”) v. Internal Revenue Service (“IRS”), the D.C. Circuit for the District of Columbia Circuit (“D.C. Circuit”) reversed the District Court for the District of Columbia’s (“District Court”) dismissal and held, for a second time, that the AICPA had standing to challenge the IRS’s promulgation of the Annual Filing Season Program (“AFSP” or “the Program”). The D.C. Circuit then went a step further and ruled on the merits of the AICPA’s challenge to the IRS’s rulemaking. It held that the IRS had the statutory authority to promulgate the voluntary program to enhance the skills of licensed tax return preparers. However, while the D.C. Circuit was unanimous on standing and the merits, it split two-to-one on whether the IRS had followed proper procedure when it adopted the AFSP without first providing the requisite “notice and comment” period required by the Administrative Procedures Act (“APA”).

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April 25, 2019 in IRS News, New Cases, Tax | Permalink | Comments (0)

Wednesday, April 24, 2019

Two Law Schools Snag Hefty Donations

Law.com, Two Law Schools Snag Hefty Donations:

Pepperdine 2

Case Western Reserve University School of Law and Pepperdine University School of Law are celebrating sizable donations that will expand their offerings.

Case Western on Tuesday announced a $10 million gift from alumnus Coleman Burke, which will be used to launch a new environmental law center. It’s the largest donation in the school’s 126-year history.

Meanwhile, Pepperdine unveiled a new $2 million donation from Carrol and Rex Parris, which will endow the five-year-old Parris Institute for Professional Formation. Law dean Paul Caron noted on his TaxProf Blog that the Malibu law school has raised $20 million in endowment gifts over the last two years.

Rex Parris is a Southern California trial lawyer, and the couple’s three children graduated from Pepperdine Law. They gave the law school $1 million in 2014 to establish the professional formation institute, which aims to aid first-year law students in their professional development. The program helps students plan out their law school experience, exposes them to different aspects of the legal profession, brings in mentors and offers character training. The latest gift will ensure that the program continues while also expanding it to second-and-third year students.

“It is an honor to have the opportunity to shape the character of the young men and women who come to Pepperdine Law for a premiere legal education,” said Carrol Parris in an announcement of the gift. “Beyond expanding the skill sets of these students, the Parris Institute perhaps most importantly connects future lawyers with current legal professionals who give them practical advice on how to use those skills.”

At Case Western, the new Coleman P. Burke Center for Environmental Law will increase the school’s environmental law course offerings and serve as a research hub. The new center will be led by environmental law scholar Jonathan Adler.

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April 24, 2019 in Legal Education | Permalink | Comments (1)

WSJ: Should Trump Tweet More About Tax Cuts?

Trump Tweet

Wall Street Journal, Should Trump Tweet More About Tax Cuts?:

The latest NBC/Wall Street Journal survey finds that while Americans continue to like Donald Trump more than they did in the fall of 2016, most U.S. adults still don’t respond positively when asked to express their feelings about America’s 45th President. A full 51% of respondents in the latest survey express a negative view of Mr. Trump, 40% express a positive one, and 9% hold a neutral view.

According to NBC/WSJ polls conducted in September and October of 2016, more than 60% of respondents expressed negative views of Mr. Trump and those with positive views amounted to just 30% or less in each edition of the survey. ...

Looking at the results of the 2016 election, the Trump White House might be tempted to conclude that re-election is assured. The challenge for Mr. Trump is that Democrats are unlikely to nominate Hillary Clinton again and it’s at least conceivable that they will select a candidate who does not offend most of the country. ...

Dan Clifton of Strategas Research reports that net individual income tax cuts amounted to about $100 billion in 2018 but will double to roughly $200 billion this year.

Even though the overwhelming majority of taxpayers received tax cuts, what if the polls are right and voters improbably never realize they got relief? The NBC/WSJ survey is consistent with many other surveys taken since late 2017. Polling has often found not only that most people don’t think they received a tax cut but also that the Trump tax cut law is not all that popular.

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April 24, 2019 in Tax | Permalink | Comments (0)

AALL Releases Inaugural State Of The Law Library Profession

AALLAALL Releases Inaugural State of the Profession Report:

The American Association of Law Libraries (AALL) today releases its AALL State of the Profession 2019, a data-driven exploration of current legal information professionals’ contributions. It covers research platform expertise,contract and vendor negotiation,AI development and implementation, metadata management,legal writing and research instruction, competitive intelligence, customer and client relations, and leadership. The report provides quantitative insights on user services, technology services, operations, budgets, and partnerships. Additionally, the report features an inventory of expertise—including current skills held bylaw librarians and competencies for library and law school graduates. ...

The complimentary AALL State of the Profession 2019 Snapshot provides an introduction to the full report. The AALL State of the Profession 2019 is available in print and digital formats.

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April 24, 2019 in Legal Education | Permalink | Comments (0)

ProPublica: How The IRS Gave Up Fighting Political Dark Money Groups

Pro PublicaProPublica, How the IRS Gave Up Fighting Political Dark Money Groups:

Six years after it was excoriated for allegedly targeting conservative organizations, the agency has largely given up on regulating an entire category of nonprofits. The result: More dark money gushes into the political system.

In the past decade, people, companies and unions have dispensed more than $1 billion in dark money, according to the Center for Responsive Politics. The very definition of that phrase, to many critics, epitomizes the problem of shadowy political influence: Shielded by the cloak of anonymity, typically wealthy interests are permitted to pass limitless pools of cash through nonprofits to benefit candidates or political initiatives without contributing directly to campaigns.

Such spending is legal because of a massive loophole. Section 501(c)(4) of the U.S. tax code allows organizations to make independent expenditures on politics while concealing their donors’ names — as long as politics isn’t the organization’s “primary activity.” The Internal Revenue Service has the daunting task of trying to determine when nonprofits in that category, known colloquially as C4s, violate that vague standard.

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April 24, 2019 in IRS News, Tax | Permalink | Comments (2)

Pepperdine Law School Seeks To Fill Two Development Positions

PEPPERDINE CAMPUS WITH LOGO (2019)Pepperdine Law is seeking to fill two development positions due to the  departure of Associate Dean Jim Gash to become President of Pepperdine University and Director of Development Ben Gifford to become an Assistant U.S. Attorney. This is an exciting time to join the leadership team at Pepperdine Law and build on our success over the past two years in raising over $20 million in new endowment gifts  (the most in any two-year period in our law school's 50-year history) as we continue our rise:

Assistant Vice Chancellor and Senior Director of Development, School of Law:

The Assistant Vice Chancellor and Senior Director of Development will have primary responsibility for developing, organizing, leading, and implementing a comprehensive fundraising program and strategies for the School of Law and plays an important front-line fundraising role. As a major gift officer, this position will be expected to personally raise major gifts in support of the dean’s fundraising priorities, focusing on donors with a capacity of $25,000 to $1M+. In addition, the Assistant Vice Chancellor and Senior Director of Development will mentor and supervise the Director, Law Associates, the annual giving officer at the School of Law whose primary focus is on gifts of $1K to $25K.

Director, Law Associates:

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April 24, 2019 in Legal Education | Permalink | Comments (0)

If The ACA Is Enjoined, Must The TCJA Be Enjoined Too?

Yale Notice & CommentSam Wice, If the ACA Is Enjoined, Must the TCJA Be Enjoined Too?, 36 Yale J. on Reg.: Notice & Comment (2019):

The Department of Justice recently announced that it will support a district court ruling that the entire Affordable Care Act (ACA) should be enjoined as the allegedly unconstitutional modifications in the Tax Cuts and Jobs Act (TCJA) that zeroed out the individual mandate to purchase health insurance are inseverable from the rest of the ACA. ... [A]ssuming for the sake of argument that the lower court’s holding is correct, it seems that the court did not take its holding to the logical conclusion of its legal reasoning. The court’s opinion seems to imply that it also should have enjoined the TCJA in its entirety.

By the severability argument used by the district court, it should have ruled the offending provision added by the TCJA inseverable from the TCJA and enjoined the entire TCJA too. ...

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April 24, 2019 in Tax | Permalink | Comments (0)

Dorothy Brown: Goodbye, But Not Farewell

Dorothy

Dorothy Brown headed back to Emory yesterday after completing her stint at Pepperdine as our Straus Distinguished Visiting Professor. She left behind one old friend and countless new ones. She regaled our students in Federal Income Tax and Tax Policy, which she co-taught (cough) with a frazzled dean. I will have three lasting memories of Dorothy's time here: (1) the great tax workshop series we put together, with seven outstanding speakers and wonderful post-presentation lunches; (2) the wonderful Critical Tax Conference we co-hosted, particularly Dorothy's fiery keynote address, The Life of a Tax Crit: When Keeping It Real Can Go Really Really Wrong; and (3) most importantly, the relationships Dorothy developed in her four months here, particularly with the students and staff (perhaps never before has a Straus Distinguished Visiting Professor (certainly not me) taken several staff people out for meals and given them gifts on her departure). We hope Dorothy will be back in Malibu in the future, initially as part of our Spring 2020 tax workshop series.

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April 24, 2019 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Research Guide On The Indexation Of Capital Gains

Bruce Bartlett, Research on the Indexation of Capital Gains to Inflation:

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April 24, 2019 in Scholarship, Tax | Permalink | Comments (1)

Tuesday, April 23, 2019

Kyle Rozema To Join Washington University Tax Faculty

RozemaKyle Rozema (Wachtell Lipton Fellow in Behavioral Law and Economics, Chicago) has accepted a tenure-track tax position at Washington University, beginning in August 2019:

Kyle Rozema’s research interests are in how legal rules affect economic inequality, disparate outcomes, and discrimination. To study these questions, he uses a range of empirical methods, collaborates across disciplines, and collects original data. His main research interests are in tax law and policy. Kyle's tax research explores the distributional consequences of taxes and the interactions between tax laws and other public policies. Much of his tax research to date seeks to understand the extent to which the distributional consequences of tax laws are more nuanced than conventional wisdom would suggest. Beyond tax law, Kyle conducts empirical research on bias and discrimination in the law in general, largely focusing on the manners in which discrimination can affect employment patterns in law-related professions.

Kyle's recent publications include:

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April 23, 2019 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Ventry Presents Free File: A Story of Agency Capture Today At Georgetown

VentryDennis J. Ventry, Jr. (UC-Davis) presents Free File: A Story of Agency Capture at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

The IRS Free File program and the Free File Alliance (FFA) harm taxpayers. Meanwhile, the IRS refuses to conduct any meaningful oversight over the program or FFA companies, thereby failing to protect taxpayers and exacerbating an already abusive program.Worse, Congress wants to make Free File a permanent part of the Internal Revenue Code, obligating the IRS to partner in perpetuity with FFA companies and their abusive tactics. ...

Each year, I encourage my tax students to use Free File to file their federal income taxes. (I also encourage them to use CalFile, California’s truly freee-filing web-based software, for their California income tax returns and to avoid being upsold state filing services from FFA companies.) I also warn them about the upselling and forced arbitration and likely impermissible use and disclosure of their tax return information. Armed with this knowledge, they become savvy consumers of FFA companies’ purportedly free products. Also armed with this knowledge, they can report back and chronicle the abuses of the system, which they have done for years. This year was no exception. ...

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April 23, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)