TaxProf Blog

Weekly Legal Education Roundup

• Above the Law, Elite Law School To Cut Faculty Due To Its ‘Challenging Financial Position’
• Erwin Chemerinsky (Dean, UC-Berkeley), Reflections of the Future of Legal Education
• Barry Currier (Managing Director, ABA Section on Legal Education and Admissions to the Bar), A Legal Education Report Card
• Samuel P. Engel, The Economics of Law School: Employment Prospects and Market Inefficiencies

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Tax Policy In The Trump Administration

• Bloomberg, The Democrats’ Options for Repealing the Trump Tax Cut
• Bloomberg, Trump Says He's Open to Raising Taxes to Offset Middle-Class Cut
• Fiscal Times, 3 Ways Democrats Could Roll Back Trump’s Tax Cuts
• Huffington Post, How Republicans Failed To Sell Their Tax Law

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Scholars With Surnames Beginning With Letters Early In The Alphabet Have An Unfair Advantage In Citation Studies

Jeffrey R. Stevens (Nebraska) & Juan F. Duque (Arcadia), Order Matters: Alphabetizing In-Text Citations Biases Citation Rates, Psychonomic Bulletin & Reviews (2018):

Though citations are critical for communicating science and evaluating scholarly success, properties unrelated to the quality of the work—such as cognitive biases—can influence citation decisions. The primacy effect, in particular, is relevant to lists, which for in-text citations could result in citations earlier in the list receiving more attention than those later in the list. Therefore, how citations are ordered could influence which citations receive the most attention. Using a sample of 150,000 articles, we tested whether alphabetizing in-text citations biases readers into citing more often articles with first authors whose surnames begin with letters early in the alphabet.

We found that surnames earlier in the alphabet were cited more often than those later in the alphabet when journals ordered citations alphabetically compared with chronologically or numerically.

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Estreicher & Wallace: Equitable Health Savings Accounts

Samuel Estreicher (NYU) & Clint Wallace (South Carolina), Equitable Health Savings Accounts, 55 Harv. J. on Legis. ___ (2019):

This Article offers the first comprehensive legal critique of existing Health Savings Accounts (HSAs), arguing that current policy is redistributively regressive, thus exacerbating inequality, and also fails to accomplish stated health care goals. We propose an alternative—Equitable Health Savings Accounts—which uses cash grants as a tool to address both of these problems. The Equitable HSA is a market-based social policy that calibrates size and delivery of a government subsidy to help the least well-off and to facilitate development of and participation in healthcare markets. Equitable HSAs can serve as a model for using cash grants to bridge the gap between Republican social policy proposals that generally carry a market libertarian flavor, and Democratic proposals that are focused on redistribution and social safety nets. Contrary to conventional political wisdom and academic commentary on the tradeoff between equity and efficiency, we make the case that in healthcare delivery, these goals need not be mutually exclusive.

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Mid-Term Exams, One-Handed Catches, And Deliberate Practice

TaxProf Blog op-ed:  Mid-Term Exams, One-Handed Catches, and Deliberate Practice, by Ray Brescia (Albany):

Wide receiver Odell Beckham, Jr., of the New York Giants has already passed into football legend and even popular culture for his ability to make remarkable, one-handed catches.  For some this might suggest that “OBJ,” as he is often called, has innate talent, which he certainly does.  But a little digging on the internet shows that he actually practices these catches, again and again and again, outside of games.  He may be supremely talented, but he also works at perfecting his craft.

Recently, in an excellent post on Best Practices For Legal Education, Carrie Sperling discussed some of the benefits of offering mid-term assessments in her law school classes. For her, offering mid-terms, when coupled with a “growth mindset,” helps propel students toward mastery of a given subject.  Sperling identifies at least three reasons for offering mid-term assessments: students learn first, “whether they are using the right strategies,” second, “whether they have put forth enough effort,” and third, the ways “they can change course in order to grow their intelligence before the final exam.”  I have also found these to be true as a result of my own use of mid-terms.

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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 146 (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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Slain Mobster Whitey Bulger's Career Advice To Students: 'If You Want To Make Crime Pay, Go To Law School'

Independent, Career Mobster James Whitey Bulger's Surprising Advice to Three Schoolgirls:

In the years leading up to his death in jail last week, notorious Boston mob boss James "Whitey" Bulger wrote about his regrets in life.

Bulger, imprisoned for life for his role in 11 murders, wrote a letter to three teenage girls in 2015, telling them he was "a ninth-grade dropout" who "took the wrong road". The former mobster said he was among "society's lower, best forgotten" members. He told the students, who had first written to him for a school history project, not to spend their time on him. "My life was wasted and spent foolishly, brought shame and suffering on my parents and siblings and will end soon," he wrote.

The US Bureau of Prisons confirmed that Bulger (89) died last Tuesday at the jail in Bruceton Mills, West Virginia.

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Shaheen: Income Tax Treaty Aspects Of Nonincome Taxes

Fadi Shaheen (Rutgers), Income Tax Treaty Aspects of Nonincome Taxes: The Importance of Residence, 71 Tax L. Rev. 583 (2018):

This article considers the residence-related income tax treaty aspects of nonincome taxes such as the retail sales tax, the value added tax, the flat tax, the X tax, the destination-based cash flow tax, and certain turnover taxes, and discusses the related treaty aspects of the concepts of tax, tax on income, comprehensive taxation, and nondiscrimination. The focus here is on the underappreciated conceptual and technical importance of tax residence in thinking about and applying tax treaties in the context of nonincome taxes. The article makes two main residence-related points. First, that the question of residence is a critical treaty gateway issue—that is, if the United States were to replace the existing income tax with a noncovered, nonincome tax, the affected U.S. taxpayers would cease to be U.S. residents for treaty purposes and as such would no longer be entitled to claim benefits under existing income tax treaties. This residence problem could become even more consequential if the nonincome tax in question was a tax covered by the treaty. Second, the article emphasizes the residence-relevance criterion for evaluating the identity or substantial similarity of new taxes to existing taxes for determining whether a new tax was covered by a treaty.

Should Professors Teach More At The University Of Wisconsin To Avoid Program Cuts?

Inside Higher Ed, Should Professors Teach More to Avoid Program Cuts?:

Faced with steep budget cuts, several University of Wisconsin System campuses have targeted academic programs to try to save money. The Superior campus announced last year that it was suspending 25 programs, including nine majors — sociology and political science among them. The Stevens Point campus said it would cut 13 majors, including English, history, political science and sociology — and expand programs it says are more job oriented and in demand. In many cases where colleges take this approach, humanities and other liberal arts disciplines face some of the deepest cuts.

The Oshkosh campus is taking a different route to solvency: it’s asking tenured and tenure-track faculty members in the College of Letters and Science to teach more.

“I fully understand the hardship that this change may present to faculty and instructional academic staff,” Colleen McDermott, dean of the college, wrote to faculty members in a recent letter about the change. “We have exhausted every other route of cost cutting for the college (short of laying off faculty or closing programs).”

Currently, tenure-line faculty members in the college teach 24 credit hours per year, or 12 credit hours -- typically four classes -- per semester. But most professors apply for and get what’s known as a curriculum modification to teach 18 credit hours per year, or three classes a semester, to spend more time on research.

Starting next year, however, professors will all teach a minimum of 21 credit hours per year, or four classes one semester and three the other. That’s regardless of where they are in their curriculum-modification schedules, which last three years. ...

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Jensen: Recent Law Review Articles On Taxation And The Constitution

Erik M. Jensen (Case Western), Taxation and the Constitution: Recent Articles, 159 Tax Notes 1155 (May 21, 2018):

This article is the latest installment in a series of reviews of significant articles dealing with taxation and the Constitution. It covers articles that were published or otherwise made generally available in 2017 [2016 articles here].

The Economics Of Law School: Employment Prospects And Market Inefficiencies

Samuel P. Engel, The Economics of Law School: Employment Prospects and Market Inefficiencies, 87 Miss. L.J. 501 (2018):

Using recent data from the American Bar Association and the National Association for Law Placement, as well as proprietary data and modeling, this Article constructs an economic model that indicates that, in many situations, there is remarkably a negative correlation between law school prestige and economic outcome, after controlling for LSAT scores. The Article utilizes six main variables in the construction of the model: (1) cost of tuition; (2) financial aid packages; (3) cost of living; (4) LSAT scores; (5) type of legal employment secured; and (6) the relationship between LSAT score and law school performance. The resulting data provides a detailed breakdown regarding the economic outcomes of attending a specific law school, after adjusting for important factors such as the quality of competition, the cost of living in nearby markets, and the cost of attendance. The Article also briefly discusses the secondary effects and characteristics of this market inefficiency, including its tendency to: (1) resist natural correction by the legal market; (2) accelerate grade inflation; (3) constrain upward mobility, thereby limiting diversity; and (4) reduce the number and quality of law students.

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Grinberg: International Taxation In An Era Of Digital Disruption

Itai Grinberg (Georgetown), International Taxation in an Era of Digital Disruption: Analyzing the Current Debate:

The “taxation of the digital economy” is currently at the top of the global international tax policymaking agenda. A core claim some European governments are advancing is that user data or user participation in the digital economy justifies a gross tax on digital receipts, new profit attribution criteria, or a special formulary apportionment factor in a future formulary regime targeted specifically at the “digital economy.” Just a couple years ago the OECD undertook an evaluation of whether the digital economy can (or should) be “ring-fenced” as part of the BEPS project, and concluded that it neither can be nor should be.

Importantly, concluding that there should be no special rules for the digital economy does not resolve the broader question of whether the international tax system requires reform. The practical reality appears to be that all the largest economies have come to agree either that a) there is something wrong with the taxation of the “digital economy,” or b) there is something more fundamentally wrong with the structure of the current international tax system given globalization and technological trends.

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UC-Berkeley Adopts Diversity, Equity, And Inclusion Action Plan After African-American Composition Of MBA Class Falls From 8.9% To 2.1%

Inside Higher Ed, Berkeley B-School Vows to Do Better on Diversity:

The Haas School of Business at the University of California, Berkeley, is vowing to do a better job of recruiting minority students after enrolling a full-time M.B.A. class that many criticized for having only six black students in a class of 291. That's down from 10 black students who enrolled last year, in a smaller class of 282, and a peak in 2016 of 19 black students in a class of 252. A report issued by the business school [Diversity, Equity, and Inclusion Action Plan] said that it "failed to react quickly" as black enrollment numbers fell. New steps being taken include hiring a director of diversity admissions, adding scholarship dollars and using a "first-offer-best-offer" approach, and changing M.B.A. admissions criteria "to consider an applicant’s skillset and experience in the areas of diversity, equity, and inclusion."

Kahn: GoTaxMe — Crowdfunding And Gifts (Why Peter Strzok Should Be Taxed On The $450k He Raised On GoFundMe)

Jeffrey H. Kahn (Florida State), GoTaxMe: Crowdfunding and Gifts, 22 Fla. Tax Rev. ___ (2019):

In 2018, Peter Strzok was fired from the FBI, based on text messages that he sent degenerating President Trump. A week later, a group set up a GoFundMe page soliciting funds to help with his “legal costs” and to replace his “lost income.” As of early September, that fund had raised over $450,000. GoFundMe states on its website that donations made are usually considered to be “private gifts” and not taxable to the recipient. Using Mr. Strzok’s campaign as an example, this article will discuss the current standards for determining whether a transfer qualifies as a nontaxable gift and the policy rationale for the exclusion of gifts.

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Bakija Presents Would A Bigger Government Hurt The Economy? Today At Pennsylvania

Jon Bakija (Williams College) presents Would a Bigger Government Hurt the Economy?, in How Big Should Our Government Be? (University of California Press 2016) (with Lane Kenworthy (UC-San Diego), Peter Lindert (UC-Davis) & Jeff Madrick (Bernard L. Schwartz Rediscovering Government Initiative, Century Foundation)) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

If the United States is going to meet the rising costs of promised government retirement benefits and health care for the elderly while doing more to promote economic security, equality of opportunity, and shared prosperity, it will eventually need to increase taxes. Is this the best solution, or should we scale back government and cut taxes, thereby improving incentives for productive economic activity? This is the fundamental political dilemma of our times. A thoughtful answer ought to depend on many different considerations, but one of the most critical is the long-run economic costs and benefits of larger government and the taxes that go with it. I begin by briefly reviewing some theory that helps to put the debate into perspective. Then I consider evidence on three key empirical questions:

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Kysar Presents Unravelling The Tax Treaty Today At Michigan

Rebecca Kysar (Fordham) presents Unravelling the Tax Treaty at Michigan today as part of its Tax Policy Workshop Series hosted by Reuven Avi-Yonah:

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties likely lose significant U.S. revenues. Additionally, they enable taxpayer abuse, stagnate domestic policy, and thwart reforms of the antiquated international tax system. These consequences are particularly problematic for the United States. Other nations, after all, have been able to supplement their revenues and pursue destination-based taxation through treaty-friendly VATs.

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Crawford Presents Tax Talk And Reproductive Technology Today At Chicago

Bridget J. Crawford (Pace) presents Tax Talk and Reproductive Technology, 98 B.U. L. Rev. ___ (2018), at Chicago as part of its Regulation of Family, Sex, and Gender Workshop Series:

The tax system both reacts to and helps create attitudes about the value of certain behaviors and choices. This Article makes three principal claims — one empirical, one normative, and one interpretative.

The Article demonstrates empirically that a representative sample of fertility clinics in the United States do not make publicly available information about the tax consequences of compensated human egg transfers — commonly called egg “donation.” The United States Tax Court recently decided in a case of first impression, Perez v. Commissioner, that a compensated egg transferor must report as income any amount she receives for her eggs. Although the Tax Court missed an opportunity to clarify further complex questions about the tax consequences of transfers of human bodily materials, the basic holding of Perez was clear.

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The Future Of Training Powerful Legal Communicators

Nicholas W. Allard (Former Dean, Brooklyn) & Heidi K. Brown (Brooklyn), The Future of Training Powerful Legal Communicators, NYSBA J., Sept. 2018, p. 10:

Twenty years ago, lawyers communicated through lengthy client opinion letters or settlement demand letters transmitted via fax or FedEx, briefs filed with the court (often hand-delivered by couriers), and perhaps the occasional press release carefully crafted for high profile cases. Today, in our fast-paced, media-saturated, and tech-driven world, we see lawyers like Michael Avenatti advocating for his clients through Twitter soundbites. Pleadings and briefs – once buried in dusty court filing cabinets – are electronically accessible for the world’s review and “Monday-morning quarterback” scrutiny. Attorneys conduct negotiations, conferences, and depositions with their national or even international counterparts over Skype, GoToMeeting, or Zoom. Lawyers establish permanent digital footprints through LinkedIn, Facebook, and Instagram. Legal communication is rapidly changing because of technological advances, disruptive business models, and globalism – forces that are transforming the 21st century world of law. The legal profession and legal educators – famously slow and often resistant to adaptation – must evolve with the times. Standing still, clinging to the “business as usual” status quo is not a luxury we can afford. ...

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Taxation, Inequality, And Life: An Interview With Ed Kleinbard

BYU Law School Magazine, On Taxation, Inequality, and the Citizen’s Role: An Interview With USC’s Professor Kleinbard:

Fleming:  You had a lengthy career at a high level of law practice followed by a period of high-level government service. How would you compare the satisfactions of those two parts of your professional life?

Kleinbard:  I enjoyed law practice very much. In contrast, from 2007 to 2009 my service as chief of staff of Congress’s Joint Committee on Taxation (jct) required me to be the principal non-partisan tax adviser to the most partisan collection of men and women on the planet. I was surprised at how little interest there was in improving our tax laws unless the improvement would advance a partisan agenda. Working as a staff member at jct is an interesting way of observing bare-knuckle politics, but the chief of staff is a job I wouldn’t wish on anyone. But the Treasury Department’s Office of Tax Policy and the irs’s Office of Chief Counsel are excellent places for young lawyers to both contribute to the public good and gain important skills and experience—usually without quite as much day-today political drama as one faces on the Hill. I highly recommend that kind of service.

Fleming:  What advice would you have for an undergraduate who is considering law school?

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Auerbach: Measuring The Effects of Corporate Tax Cuts

Alan J. Auerbach (UC-Berkeley), Measuring the Effects of Corporate Tax Cuts, 32 J. Econ. Perspectives 97 (Fall 2018):

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the changes in the treatment of traditional "C" corporations—those corporations subject to a separate corporate income tax. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The magnitude of these increases is extremely difficult to predict.

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The Number Of 1Ls By State (2017 v. 2010)

Law School Transparency lists the number of 1Ls by state in 2017 and the change in enrollment since 2010.  Twelve states had enrollment declines in excess of 1,000:

1. California: 4237 (-29.1%)
2. New York: 4147 (-20.6%)
3. Florida: 2297 (-38.5%)
4. Texas: 2199 (-14.2%)
5. Massachusetts: 1956 (-18.6%)
6. Illinois: 1818 (-25.5%)
7. Washington, D.C.: 1763 (-19.0%)
8. Michigan: 1405 (-48.2%)
9. Pennsylvania: 1393 (-24.2%)
10. Virginia: 1199 (25.4%) 
11. Ohio: 1069 (-35.3%)
12. North Carolina: 1055 (-35.1%)

24 states had enrollment declines in excess of 25%:

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Bird-Pollan: Sovereignty, Tax, And Bilateral Investment Treaties

Jennifer Bird-Pollan (Kentucky), The Sovereign Right to Tax: How Bilateral Investment Treaties Threaten Sovereignty, 32 Notre Dame J.L. Ethics & Pub. Pol'y 107 (2018):

Bilateral Investment Treaties, or “BITs,” are both a response to and likely at least partly responsible for the significant increase in international investments in the last fifty years. BITs provide potential private investors government assurances regarding a variety of factors relevant to their investments. Among these assurances, BITs regularly address the tax authority that the host government has with regard to the foreign investor, often protecting that foreign private investor against changes to the host country’s tax system. If an investor believes the host country has violated the terms of the BIT, that investor can bring a claim against the country in front of an independent arbitration panel, whose decision will be final and binding. Because the power to tax is at the heart of what makes a sovereign authority a sovereign, restrictions on a sovereign’s ability to tax foreign investors, which can be enforced by an external body, threaten that sovereign’s very essence. As a result, tax provisions in BITs and the adjudication of those provisions by arbitration bodies must be carefully examined and potentially reconsidered, to protect the sovereign rights of governments to assess tax, to evolve their tax policies, and administer the laws of their countries in the best interests of their people.

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Goldin Presents Ironing Out The Tax Law Today At San Diego

Jacob Goldin (Stanford) presents Ironing Out the Tax Law (with Edward Fox (Michigan)) at San Diego today as part of its Tax Law Speaker Series hosted by Jordan Barry and Miranda Perry Fleischer: 

The law is full of sharp lines, where small changes in one’s circumstances lead to significant changes in legal treatment. In many cases, a sharp line can be smoothed out — or “ironed” — by replacing it with a sliding scale. Under a sliding scale, small changes in one’s circumstances lead to small changes in legal treatment. In this paper, we study the policy choice between sharp lines and sliding scales in the tax law, focusing particularly on concerns related to efficiency, complexity, and administration. Sliding scales are common for tax provisions that depend on income, but relatively uncommon for provisions that depend on non-income factors.

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Hayashi Presents Countercyclical Tax Bases Today At Boston College

Andrew Hayashi (Virginia) presents Countercyclical Tax Bases at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu-Yi Oei:

Tax scholarship has tended to focus on the efficiency properties of different tax bases under assumptions about the macroeconomy that only sometimes hold, and has paid relatively little attention to how those bases operate in recessions. I show how different tax bases interact with household credit constraints and adjustment costs to either stabilize or aggravate economic shocks. I argue that the choice of the local tax base should consider the effect that the base has on the resilience of the economy by stabilizing government spending and household consumption expenditures.

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Slemrod: Is This Tax Reform, Or Just Confusion?

Joel Slemrod (Michigan), Is This Tax Reform, or Just Confusion?, 32 J. Econ. Perspectives 73 (Fall 2018):

Based on the experience of recent decades, the United States apparently musters the political will to change its tax system comprehensively about every 30 years, so it seems especially important to get it right when the chance arises. Based on the strong public statements of economists opposing and supporting the Tax Cuts and Jobs Act of 2017, a causal observer might wonder whether this law was tax reform or mere confusion. In this paper, I address that question and, more importantly, offer an assessment of the Tax Cuts and Jobs Act. The law is clearly not "tax reform" as economists usually use that term: that is, it does not seek to broaden the tax base and reduce marginal rates in a roughly revenue-neutral manner.

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A Legal Education Report Card

Barry Currier (Managing Director, ABA Section on Legal Education and Admissions to the Bar), A Legal Education Report Card:

If you were asked to grade legal education as an enterprise, what would be the categories or roles for which grades should be assigned? What grades would you give legal education? ... Here’s a first take:

Legal education must provide accessible, high quality legal education confirmed by measurable outcomes related to learning, skill development, and employment outcomes that serves well the students, the profession, and the public. Grade: A/F ...

[A]t its best, U.S. law schools offer an education of unsurpassed quality, and it is better than it has ever been. True, the education can be expensive, but for many the expense is justified by the careers that the education makes possible. At its worst, legal education carries a hefty price tag that leaves graduates with high debt and limited opportunities. ... The quality of programs, outcomes, and opportunities for graduates are a mixed bag across legal education as a whole, thus the A/F grade.

Legal education must conduct research that advances knowledge and protects/promotes the rule of law in the U.S. and the world. Grade: A

The research that has been and continues to be done in U.S. law schools is at or among the best in the world by almost any measure. It makes major contributions to the evolution of both public and private law, leads the growing conversation about the increased use of technology in law and the practice of law, and is increasingly interdisciplinary and global in approach. Legal education has been and continues to be blessed by the participation of some of America’s most talented and wise individuals.

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Deans Chemerinsky, Peñalver & Rodriguez: Innovation, Skills, And The Future Of Legal Education

• Daniel B. Rodriguez (Former Dean, Northwestern), Legal Education and Its Innovations, 13 Fla. Int'l U. L. Rev. 199 (2018)
• Erwin Chemerinsky (Dean, UC-Berkeley), Reflections of the Future of Legal Education, 13 Fla. Int'l U. L. Rev. 215 (2018)
• Eduardo M. Peñalver (Dean, Cornell), The Role of Skills Instruction in Legal Education, 13 Fla. Int'l U. L. Rev. 229 (2018)

NY Times: Tax Prep Companies Use FOIA Requests To Thwart Dennis Ventry's Criticism Of Free File Program

New York Times, Industries Turn Freedom of Information Requests on Their Critics:

Dennis J. Ventry Jr., a law professor at the University of California, Davis, drew the ire of tax preparation companies like Intuit and H&R Block this summer by criticizing a deal they have to provide a free tax filing service through the Internal Revenue Service.

The companies promptly hit back with a tactic that corporations, lobbyists and interest groups are increasingly using against academic researchers: Their trade coalition filed a public records request with the university in July seeking everything Mr. Ventry had written or said about the companies this year, including emails, text messages, voice mail messages and hand-jotted notes.

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Northwestern Law Dean Cites School's 'Difficult Time' As Reason For Faculty Cuts

Law.com, Northwestern Law Dean Cites School's 'Difficult Time' as Reason for Faculty Cuts:

Northwestern University Pritzker School of Law is cutting staff and teaching positions amid a financial shortfall.

Dean Kimberly Yuracko informed the Chicago school’s faculty of the downsizing plan and budget problems in a message to its internal listserv, saying the school is in a “challenging financial position.” In an interview Monday, Yuracko, who sent the message to the school’s faculty in late September, said that the law school is not in dire financial straits. She said that a directive from the central university to reduce expenses and her new deanship—she took over in September—spurred her to take a close look at how and where the law school was spending its funds. ...

Northwestern Law’s situation is notable for several reasons. It dispels the notion that elite law schools—Northwestern is ranked No. 11 by U.S. News & World Report—are immune or at least buffered from the fiscal woes that have plagued many law schools since 2010, when enrollment and the national applicant pool shrunk significantly. Second, it demonstrates aggressive fundraising is no cure-all for financial pressures in a fiercely competitive law school environment. ...

In addition to reducing staff, clinical, and lecture positions through eliminating vacant jobs and not renewing certain short-term teaching contracts next year—tenured faculty positions are not under review—the school is increasing the size of its LL.M. class to increase revenue, she said. Affected clinicians and lecturers have been informed that their contracts will end this academic year, she added. ...

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Tax Court: Foreign Lawyer Cannot Deduct Cost Of NYU LL.M. Because It Qualified Him To Sit For The New York Bar

Valle v. Commissioner, T.C. Summ. Op. 2018-51 (Nov. 5, 2018):

The sole issue presented for decision is whether petitioner is entitled to deductions for education expenses incurred in 2014 while pursuing a master of laws (LL.M.) degree from New York University (NYU). ...

Petitioner earned his law degree (Licenciatura en Derecho) from Carlos III University in Spain in September 2006. That same month he began working as a full-time associate at the Madrid, Spain, office of PricewaterhouseCoopers Tax & Legal Services, S.L. (PwC). Petitioner continued his foreign legal education while working at PwC, earning an LL.M. degree with a major in corporate law from Instituto de Empresa Law School in Spain in July 2008. In November 2009 petitioner began work as an associate at Bird & Bird LLP’s office in Madrid. On January 8, 2010, petitioner was admitted to the bar association of Madrid; he has since maintained a license to practice law in Spain. In September 2010 petitioner commenced work at the Madrid offices of Olswang LLP, an international law firm. From September to December 2011 petitioner was stationed at the London, England, office of Olswang LLP. Petitioner describes his tasks at each of PwC, Bird & Bird LLP, and Olswang LLP as “among others, drafting specialized legal documents, such as contracts and memoranda, researching and analyzing legal and business requirements for clients and providing advice on legal matters.”

After practicing law for several years in Madrid and London, petitioner moved to New York City to pursue an additional LL.M. degree at NYU. Petitioner enrolled at NYU in September 2013 and earned his LL.M. in May 2014. ...  Petitioner paid tuition expenses of $27,435 to attend NYU’s LL.M. program during tax year 2014. 

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Kleven Presents The EITC And The Extensive Margin Today At UC-Berkeley

Henrik J. Kleven (Princeton) presents The EITC and the Extensive Margin: A Reappraisal at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

This paper reconsiders the impact of the EITC on the extensive margin of labor supply, combining evidence from all EITC reforms at the federal and state level in the United States. Starting from long-run evidence, I show that the labor supply of women who are eligible and ineligible for the EITC have evolved in a strikingly similar fashion over half a century, except for a unique period in the late 1990s. During this period, single women with children dramatically increased labor supply at the extensive margin, closing the entire gap between women with and without children. These patterns suggest that the only place for finding potential EITC effects is the 1993-expansion of the program. However, studying the 1993-reform is complicated due to the confounding effects of the strong economy, welfare reform and — potentially — changing social norms in the 1990s. Based on an event study analysis of the 1993-reform, it is argued that the data is consistent with no effect of the EITC. 

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Kleiman Presents Tax Limits And Public Control Today At Loyola-L.A.

Ariel Jurow Kleiman (San Diego) presents Tax Limits and Public Control at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katie Pratt: 

Local governments are severely restricted in their ability to raise tax revenue, in part by state-level statutes that place caps on local tax rates and revenue. Many attribute the proliferation of these local tax limitations to entrenched antitax sentiment among U.S. taxpayers. This antitax narrative is attractive for its simplicity and explanatory power. It provides a clear mandate for those enacting tax limiting laws as well as a simple fiscal rubric for those evaluating the success of such limits—namely, lower taxes equals success. However, the explanatory power of the antitax narrative is limited. Perhaps most notably, it fails to explain why voters regularly approve tax increases, even in places with strict tax limitations. Using the lens of the 1970s Tax Revolt, this Article complicates the traditional antitax narrative surrounding tax limitations, offering evidence that voters also supported tax limits in order to increase public control and oversight of local government fiscal decisions.

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Shaviro Presents The New Non-Territorial U.S. International Tax System Today At Copenhagen Business School

Daniel N. Shaviro (NYU) presents The New Non-Territorial U.S. International Tax System, Part 1, 160 Tax Notes 57 (July 2, 2018), and Part 2, 160 Tax Notes 171 (July 9, 2018) (reviewed by David Elkins (Netanya) here), at today's Copenhagen Business School Annual Tax Conference.

These papers, published in Tax Notes, examine and analyze the three main international provisions in the 2017 tax act. Part 1 of this report discusses how one could more crisply, comprehensively, and accurately conceptualize international tax policy than through the outdated and unhelpful language of “worldwide versus territorial.” It also explores the reasons for several key margins’ normative ambiguity, which include the tension between what I call unilateral and strategic approaches to international tax policymaking. Only the latter involves considering how a given country’s international tax policy choices might subsequently affect other countries’ behavior. Thus, for example, engaging in tax competition is not inherently strategic in my sense of the term. Indeed, tax competition fails to be strategic if it involves overlooking how one’s own tax law changes might affect what other countries later do. Unfortunately, although all sophisticated actors in international tax policy should consider the strategic aspect, it tends to make the underlying policy choices even harder to parse confidently. Strategic interactions are often unpredictable, and even more so when they involve government actors who are subject to the vagaries of domestic politics.

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McGill Law Journal Symposium: Regulatory Challenges On The Edge Of Technology

Tax Prof speakers at yesterday's McGill Law Journal Symposium, Programming Governance / Governing Programming: Regulatory Challenges on the Edge of Technology:

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Gamage: A Call For Professors To Cancel Classes On Election Day

David Gamage (Indiana), A Call for Professors to Consider Cancelling Classes on Election Day, and for Employers to Consider Letting Employees Leave Early:

Democracy is important. Democracy is fragile.

Those were my reflections a few weeks ago, when my family gathered for the unveiling of my grandfather’s gravestone — my grandfather who escaped Nazi Germany while most of his family was sent to concentration camps, and who then started a new life in the U.S. and enlisted to fight on behalf of his new country. ...

What can we do as individuals to protect democracy? We can vote, of course. But those of us who have the privilege of being professors or employers can potentially do more.

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Lesson From The Tax Court: Last Known Address Rules Apply To The Rich And Famous Too

The rich really are different, and not just because they don't cut coupons.  It often seems that they escape the rules that apply to the rest of us.  Thus, there is understandable fascination when rich bad actors get a comeuppance.  That is probably why so many folks blogged last week's decision about Wesley Snipes, where the Tax Court found that the Office of Appeals did not abuse its discretion in rejecting Snipes' OIC that would pay less than 4% of his $23.5 million tax liability.  "Tax Girl" Kelly Erb put up this terrific post if you want the salacious details.

Today I want to look at a different bad actor, one just as rich as Snipes, albeit a bit less famous.  The recent case of Daniel Sadek v. Commissioner, T.C. Memo. 2018-174 (Oct. 16, 2018), raises the question of whether the IRS is entitled to rely upon its records when sending an NOD to a rich and famous taxpayer who “everyone knew” had fled to Lebanon to ride out an FBI investigation.

In 2011 the IRS sent Mr. Sadek an NOD for over $25 million in tax deficiencies for the year 2005 and 2006.  Mr. Sadek did not file his Tax Court petition until 2017.  The IRS moved to dismiss because, it said, the petition was filed way after the expiration of the §6212 period to petition the Tax Court.  Mr. Sadek also moved to dismiss because, he said, the NOD was not sent to his last known address.  The IRS had sent the NOD to an address Mr. Sadek had left long before 2011.

The Tax Court indeed dismissed the case for lack of jurisdiction.  But since the Tax Court might lack jurisdiction either because of an IRS screw-up (not properly sending the NOD) or because of a taxpayer screw-up (not timely filing a petition) it is important to understand which party messed up and why.

The case teaches a useful lesson about when and how the IRS can rely on its own records in order to meet the last known address requirement.  I think Judge Goeke here got the right result, but I do question how he got there and so I offer what I (oh so modestly) believe is a better path.

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NY Times: Democrats Eye Trump’s Tax Returns, With Mnuchin In The Middle

New York Times, Democrats Eye Trump’s Tax Returns, With Mnuchin in the Middle:

Democrats are preparing to use an obscure law to try to obtain a copy of President Trump’s tax returns if they win control of the House or Senate — a scenario that could force one of the president’s most trusted aides to reveal his most closely guarded secret.

Steven Mnuchin, the Treasury secretary, said in an interview that he would honor any legal requests from Congress to release the president’s tax returns, which are stored in a vault at the Internal Revenue Service. But the demand would undoubtedly thrust Mr. Mnuchin into the fraught position of balancing his loyalty to Mr. Trump with a legal requirement to deliver the returns.

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• NY Times: Happy ‘National Jealousy Day’! Finland Bares Its Citizens’ Taxes
• Law School Dean Buys 'Conference Bike' To Increase Collaboration, Fitness
• ABA Administrative Law Conference

Sunday:

• July 2018 Georgia Bar Exam Results: Georgia #1 For 5th Consecutive Year
• Call for Papers: Cambridge Tax Policy Conference On Tax Justice And Tax Law
• Harvard Conference: Christianity And The Common Good
• The Top Five New Tax Papers

July 2018 Georgia Bar Exam Results: Georgia #1 For 5th Consecutive Year

Here are the results of the July 2018 Georgia Bar Exam Results for first-time test-takers by law school, along with each school's U.S. News ranking:

Bar Pass Rank (Rate)	School	US News Rank GA (Overall)
1 (88.1%)	Georgia	2 (32)
2 (85.4%)	Georgia State	3 (65)
3 (84.8%)	Emory	1 (22)
4 (75.3%)	Mercer	4 (128)
75.1%	Statewide Avg. (GA Law Schools)
71.1%	Statewide Avg. (Non-GA Law Schools)
5 (40.4%)	John Marshall	5 (Tier 2)
6 (35.7%)	Savannah	Unranked

Daily Report, Georgia Bar Exam Pass Rate Dips From Prior Year

Call for Papers: Cambridge Tax Policy Conference On Tax Justice And Tax Law

University of Cambridge Centre for Tax Law, Call for Papers: Tax Policy Conference 2019:

The Centre for Tax Law at the University of Cambridge is delighted to invite proposals for papers to be presented at our fourth Tax Policy Conference on Monday 8 and Tuesday 9 July 2019.

The topic of the conference is Tax Justice and Tax Law. Possible areas of interest include, but are not restricted to, the following:

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Harvard Conference: Christianity And The Common Good

Harvard Law Today, Christianity and the Common Good (program):

A panel of legal and theological authorities came together at Harvard Law School to discuss the topic, Christianity and the Common Good. Presented by Harvard with the Thomistic Institute, which aims to promote intellectual Christian thought at universities, the conference brought together a number of guests including Supreme Court Associate Justice Neil Gorsuch ’91, who gave the keynote address. (Justice Gorsuch’s address was closed to the press.)

In one panel discussion, three distinguished guests—Fr. Dominic Legge of the Thomistic Institute, Adrian Vermeule ’93, Ralph S. Tyler Professor of Constitutional Law at Harvard Law School, and Jacqueline Rivers, professor of African-American studies at Harvard University—explored the topic of the common good from the respective viewpoints of Christian philosophy, black cultural history, and political theory.

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The Top Five New Tax Papers

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. [235 Downloads]  The Death of the Income Tax (or, the Rise of America's Universal Wage Tax), by Edward McCaffery (USC)
2. [234 Downloads]  The International Provisions of the TCJA: Six Results after Six Months, by Reuven Avi-Yonah (Michigan)
3. [226 Downloads]  Rolling Real Estate Gain into a Qualified Opportunity Fund: Comparison with § 1031, by Brad Borden (Brooklyn) & Alan Lederman (Akerman, Miami)
4. [156 Downloads]  Tax Competition and the Ethics of Burden Sharing, by Ivan Ozai (McGill)
5. [128 Downloads]  The Mandatory Repatriation Tax Is Unconstitutional, by Sean McElroy (Stanford)

This Week's Ten Most Popular TaxProf Blog Posts

1. Bryan Camp (Texas Tech), Lesson From The Tax Court: When Payments To A Pastor Are Not Gifts
2. Which Law Schools Overperform And Underperform On The Bar Exam?
3. The Best Halloween Tax Tweet
4. Chicago, Notre Dame, Pepperdine, Texas, And Suffolk Are Latest Law Schools To Accept GRE For Admissions
5. Decanal Gloating
6. 'Your Law School Really Sucks At Hiring, And That's Why Your Faculty Lacks Diversity'
7. Best Law-Themed Halloween Costumes
8. Arizona Summit And Valparaiso Law Schools To Close
9. July 2018 Texas Bar Exam Results: Baylor #1
10. The Next Level In The Law School Recruitment Wars: Student Concierges?

NY Times: Happy ‘National Jealousy Day’! Finland Bares Its Citizens’ Taxes

New York Times, Happy ‘National Jealousy Day’! Finland Bares Its Citizens’ Taxes:

Shortly after 6 a.m. on Thursday, people began lining up outside the central office of the Finnish tax administration. It was chilly and dark, but they claimed their places, eager to be the first to tap into a mother lode of data.

Pamplona can boast of the running of the bulls, Rio de Janeiro has Carnival, but Helsinki is alone in observing “National Jealousy Day,” when every Finnish citizen’s taxable income is made public at 8 a.m. sharp.

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Law School Dean Buys 'Conference Bike' To Increase Collaboration, Fitness

Campbell University, Law School’s New ConferenceBike Combines Collaboration and Fitness:

Campbell Law Dean J. Rich Leonard spotted his first ConferenceBike when he was in Vienna with a group of students last spring.

His first thought? Campbell Law School needed one. “It’s a way to combine collaboration and fitness,” Leonard explained. “Our generous donors provide me with discretionary funds for the sole purpose of doing unique and creative things like the ConferenceBike.”

The seven-seat conference bike, known as the CoBi, is available for faculty, staff and student meetings. The recent addition of bike lanes in North Carolina’s capital city made its application even more practical, according to Leonard.

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ABA Administrative Law Conference

Tax Profs with speaking roles at the ABA Administrative Law Conference (Nov. 1-2):

Kristin Hickman (Minnesota), Is Agency Guidance Reviewable (And If So, When)?:

This panel will look at what the federal courts have said about the reviewability of agency guidance, including the rescission of guidance, both in facial challenges and in the enforcement context. All conference attendees should be interested in this program given the important role of agency guidance and the inconsistent case law on the central question presented. Key issues that will be address will include: (i) the treatment of "guidance" within the Administrative Procedure Act (e.g., statements of policy and interpretative rules); (ii) how the courts have grappled with statements of policy and interpretative rules, including application of the APA's "final agency action" requirement; (iii) when "guidance" may be regarded as de facto "legislative rulemaking" for purposes of judicial review; and (iv) whether the form of publication (e.g., "demand letter" or enforcement v. generally applicable "policy bulletin" or "letter of interpretation") and means of publication (e.g., Federal Register, web posting, blast email) affects the question of reviewability, including the subsidiary question of administrative exhaustion. The practical skill attendees will take back to their respective practices after attending this session will be, among other things, a better understanding of the importance to judicial review of how guidance is drafted, i.e., how language is used to communicate the agency's message and the potential legal consequences of that language.

Shu-Yi Oei (Boston College) & Leigh Osofsky (North Carolina), The Role of Agencies in Legislative Drafting and Legislative Cleanup:

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Medical Necessity — A Higher Hurdle for Marginalized Taxpayers?

This week, Michelle Layser (Illinois) reviews Julie Furr Youngman (Washington & Lee) & Courtney D. Hauck (J.D. 2021, Columbia), Medical Necessity: A Higher Hurdle for Marginalized Taxpayers?, 51 Loy. L.A. L. Rev. ___ (2018).

Many recent advancements in transgender rights have been followed by setbacks. Obama era rules that protected transgender patients from discrimination have been rolled back, and just last week the Trump administration announced plans to define gender for federal civil rights laws as biological, immutable and determined at birth. Now a new article by Julie Furr Youngman and Courtney Hauck warns that a 2010 U.S. Tax Court case that upheld the medical expense deduction for gender affirmation surgery may come back to haunt the transgender community if its dicta is interpreted as requiring proof of medical necessity. (Note: For definitions and terms preferred by the transgender community, please see the National Center for Transgender Equality.)

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Weekly Legal Education Roundup

• Ray Brescia (Albany),  Mid-Term Exams, One-Handed Catches, and Deliberate Practice
• Paul Caron (Dean, Pepperdine), Arizona Summit And Valparaiso Law Schools To Close
• Lansing State Journal, MSU College of Law, Previously Private and Independent, to Become a Part of the University
• Ohio Supreme Court, July 2018 Ohio Bar Exam results

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Tax Policy In The Trump Administration

• Business Insider, So Far, It Doesn't Look Like the GOP Tax Law Has Prompted the Investment Boom Republicans Promised
• Cato Institute, Conservatives for Higher Taxes
• Center on Budget and Policy Priorities, New York Times Investigation Highlights Failures in Taxing Income From Wealth
• Forbes, No Minimum Wage Increases Anywhere Says Trump Advisor -- Corporate Tax Cuts Are Enough

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The Proposed Opportunity Zone Regulations

David S. Miller, Jean Bertrand & Sejin Park (Proskauer), The Proposed Opportunity Zone Regulations:

On October 19, 2018, the Internal Revenue Service and the U.S. Department of the Treasury issued proposed regulations under section 1400Z-2 of the Internal Revenue Code regarding the qualified opportunity zone program. This paper summarizes some of the most important aspects of the proposed regulations.