Still More NY Times Coverage Of Trump’s Taxes

Following up on my previous posts:

• New York Times, Trump's Tax Returns: Chronic Losses, Years Of Tax Avoidance (Sept. 28, 2020)
• More NY Times Coverage Of Trump's Taxes (Oct.  12. 2020)

New York Times, Trump’s Philanthropy: Big Tax Write-Offs and Claims That Don’t Always Add Up:

In President Trump’s telling, he is a committed philanthropist with strong ties to many charities. “If you don’t give back, you’re never ever going to be fulfilled in life,” he wrote in “Trump 101: The Way to Success,” published at the height of his “Apprentice” fame.

And according to his tax records, he has given back at least $130 million since 2005, his second year as a reality TV star.

But the long-hidden tax records, obtained by The New York Times, show that Mr. Trump did not have to reach into his wallet for most of that giving. The vast bulk of his charitable tax deductions, $119.3 million worth, came from simply agreeing not to develop land — in several cases, after he had shelved development plans.

Three of the agreements involved what are known as conservation easements — a maneuver, popular among wealthy Americans, that typically allows a landowner to keep a property’s title and receive a tax deduction equal to its appraised value. In the fourth land deal, Mr. Trump donated property for a state park.

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Tax Prof Michelle Drumbl Named Interim Dean At Washington & Lee (Succeeding Tax Prof Brant Hellwig)

Michelle Lyon Drumbl Appointed Interim Dean of the Washington and Lee School of Law:

Michelle Lyon Drumbl, Robert O. Bentley Professor of Law and director of the Tax Clinic at the Washington and Lee University School of Law, has been appointed to a one-year term as interim dean of the law school effective July 1, 2021.

Drumbl succeeds Brant Hellwig, who has served as dean since 2015 and recently announced his intention to step down at the end of the current academic year.

W&L President William C. Dudley and Interim Provost Elizabeth Goad Oliver announced Drumbl’s appointment, noting that a national search for a new law dean will take place during the 2021-22 academic year.

“I am pleased that Michelle has agreed to serve in this critical role,” said Dudley. “Her clinical and teaching experience and wide-ranging service to the university will be invaluable in her leadership of the law school during this time of transition. I look forward to working with her next year as we search for our next law dean.”

Drumbl joined the law school faculty in 2007. She holds a B.A. in political science from Emory University, a J.D. from the George Washington University School of Law, and an LL.M. in taxation from New York University School of Law.

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Dean: The Truth About Taxes — George Floyd Died, Donald Trump Got Millions

Steven Dean (NYU), The Truth About Taxes: George Floyd Died, Donald Trump Got Millions:

This year, each of us has lost something. I am fortunate that my biggest loss has been my faith in our tax system.

In 2014, Eric Garner died at the hands of police officers after being suspected of evading taxes by selling cigarettes without tax stamps. That same year, Donald Trump was also suspected of evading income taxes. But unlike Garner, who was killed by police, Trump reached a favorable legal settlement with the IRS.

The New York Times recently revealed that Trump had not engaged in “smart” tax planning as he had boasted during his 2016 presidential campaign but seems to have simply lied to secure a $72.9 million refund. And, thanks to a highly successful effort by Republicans to weaken the IRS, Trump has gotten away with it for years.

Tax law has long been more a secular religion than a job for me. It embodies the commitment we make to one another as Americans to support our shared values by funding our schools and our troops and caring for our most vulnerable. ...

Among all the horrors we have seen in recent months, I am embarrassed to say that a trivial detail has haunted me. George Floyd’s death came after he fell under suspicion of spending a counterfeit $20 bill. ... We all witnessed the swift, ruthless response to George Floyd’s $20 bill and to Eric Garner’s cigarettes. But after years of controversy, almost nothing seems to have been done about Trump’s suspected multimillion-dollar heist. ...

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28,000 Charities Had Their Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Democratic Lawmakers Say

Forbes, 28,000 Charities Had Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Lawmakers Say:

More than 30,000 nonprofit organizations in the U.S. have had their tax-exempt status automatically revoked by the Internal Revenue Service since May, Democratic lawmakers wrote in a letter to Treasury Secretary Steven Mnuchin, after an “apparent error” by the IRS may have erroneously revoked thousands of organizations’ tax-exempt status. ...

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ABA Tax Section Hosts Free Webinar Today On The Tax System and Social Policy

The ABA Tax Section hosts a free webinar today on The Tax System and Social Policy at 1:00 ET:

The tax system has been used with increasing frequency as a social policy tool to administer social programs. From the Earned Income Tax Credit to the recent Economic Impact Payments, the IRS has been asked to do more with an ever decreasing budget. While the tax system may be an attractive vehicle to administer certain payments or benefits, it can also pose challenges. Panelists will examine the history of the tax code as a way to administer social programs. Panelists will then evaluate certain programs and discuss some advantages and disadvantages of administering these programs through the tax code. In particular, panelists will discuss the recent Economic Impact Payments and some of the challenges with administering these payments successfully. Lastly, panelists will propose some changes and alternatives to the way programs are administered to better serve the communities that are most in need of these benefits.

Speakers:

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Mark Zuckerberg Has Spent Over $10 Million To Overhaul California's Proposition 13 Tax Law

Vox, Mark Zuckerberg Is Spending Millions Like Never Before to Overhaul a Landmark Law:

[Mark] Zuckerberg has chosen to embark on a decidedly dicey political crusade: an attempt to touch the so-called third rail of California politics — the state’s 40-year-old landmark tax law — in the most expensive electoral play of the billionaire’s career.

Zuckerberg has been waging a costly and risky political battle for more than a year against California’s Proposition 13, the law that critics say has hamstrung the state’s economy by capping its property taxes, and thus underfunding two priorities of Zuckerberg and his wife, Priscilla Chan: schools and housing. While other tech leaders have conspicuously avoided weighing in until the very last minute, if at all, Zuckerberg stuck his neck out early and has now spent almost $11 million — including $4.5 million more just this month — on the cause, raising the stakes for Election Day.

Zuckerberg is backing what is called the “split roll” reform measure through his and his wife’s philanthropy, the Chan Zuckerberg Initiative. For the past year, he has been a key player behind the scenes and the only major Silicon Valley leader who has publicly endorsed it. And because he has been so alone in this effort, the vote on Prop 13 reform in some ways serves as a test of his and his ambitious philanthropy’s political muscle. ...

[W]hat Zuckerberg is attacking isn’t just a California tax law. It’s the nucleus of the modern, national anti-tax movement.

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Meet The Excel Warriors Saving The World From Spreadsheet Disaster

Wired, Meet the Excel Warriors Saving the World From Spreadsheet Disaster:

David Lyford-Smith is an expert at solving spreadsheet mysteries. Once, in a previous job, he was sent a payroll form to look over for a new starter. It had the number 40,335 in a random box, and payroll wasn’t clear why it was there. “So they assumed it was a joining bonus for the employee and drew up a draft pay slip with a £40,335 bonus,” he says. But, when it comes to spreadsheets, assumptions can be costly.

Lyford-Smith isn’t just a spreadsheet enthusiast. He’s the technical manager for the Institute of Chartered Accountants in England and Wales (ICAEW), running its Excel community group — and as such has always been suspicious of numbers in that range. “That’s how Excel stores dates, as serial numbers,” he says. He was right: that wasn’t a generous signing bonus, but the new hire’s starting date.

Lyford-Smith is part of a community of accountants, auditors and Excel power users who have joined forces in a quiet battle against illogical formulas, copy-and-paste errors, and structural chaos that cause data carnage.

Last week, the government stumbled into its own spreadsheet nightmare when it admitted contact-tracing efforts were stymied by a simple data processing mistake. They’re not the first to fall victim to the curse of Excel – and they won’t be the last either. ...

Research suggests more than 90 per cent of spreadsheets have errors, and half of spreadsheet models used in large businesses have “material defects”. Given some 750 million people use Excel globally, there are plenty of errors needing attention. One prominent researcher calls spreadsheets the dark matter of corporate IT. And that’s why people like Lyford-Smith have become defenders of the spreadsheet, mitigating the risks by fixing everyone else’s mistakes. ...

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Trump’s Taxes Were Not A Flaw In The System

New York Times op-ed:  Trump’s Taxes Were Not a Flaw in the System, by Veronique de Rugy (George Mason):

When Americans recently learned how little President Trump has paid in taxes in the past 15 years and how he benefited from financial maneuvers, it reinforced the widespread belief that the rich don’t pay their fair share. Lost in the outrage is the fact that the tax provisions that allowed Mr. Trump to trim his tax bill were probably not illegal or the results of tax schemes concocted by anti-tax legislators.

Those provisions, and many others like them, delivered exactly what their drafters intended: They are engineered to benefit certain kinds of taxpayers — and most Americans are not among them. ...

[I]f your vision is for a more equitable system that can actually be enforced by the I.R.S., what we really need is a simpler and fairer tax code. Some of the current rules are good, but many are political giveaways to special interests. Telling those rules apart is actually harder than it seems, but there are some obvious places to start.

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The Best Stimulus: 0% Income Tax

Wall Street Journal op-ed:  The Best Stimulus: 0% Income Tax, by Stephen Moore:

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

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U.S. Still Balks At OECD Plan To Tax Tech Giants

New York Times, Global Talks on Taxing Tech Firms Will Slip Into 2021:

International negotiators said on Monday that they would not reach agreement this year on how and where to tax technology giants like Google and Facebook, as talks remain hindered by the pandemic and an ongoing dispute between the United States and other wealthy nations.

Wall Street Journal, U.S.-Europe Relations Tested as Talks on Taxing Multinationals Fall Short:

World governments have failed to agree to new rules on taxing the profits of multinational companies, a long-running point of tension between the U.S. and Europe over levies paid by the likes of Apple Inc. and Google and one that has raised the threat of trans-Atlantic tariffs. ... [T]he Organization for Economic Cooperation and Development, the forum for the talks, said on Monday that governments have failed so far to agree on new rules.

Financial Times, OECD Drafts Principles For $100bn Global Corporate Tax Revolution:

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More NY Times Coverage Of Trump's Taxes

Following up on my previous post, New York Times, Trump's Tax Returns: Chronic Losses, Years Of Tax Avoidance:

• New York Times, Charting an Empire: A Timeline of Trump’s Finances
• New York Times, An Editor’s Note on the Trump Tax Investigation
• New York Times, Eighteen Revelations From a Trove of Trump Tax Records
• New York Times, How Reality-TV Fame Handed Trump a $427 Million Lifeline
• New York Times, Long-Concealed Records Show Trump's Chronic Losses and Years of Tax Avoidance
• New York Times, Seven Key Findings About Trump’s Reinvented Swamp
• New York Times, The Swamp That Trump Built
• New York Times, Trump Engineered a Sudden Windfall in 2016 As Campaign Funds Dwindled

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Tax Fact-Checking The Vice Presidential Debate

Marketplace, Fact-Checking Harris’ and Pence’s Claims About Taxes:

At the vice presidential debate on Wednesday, Sen. Kamala Harris and Vice President Mike Pence sparred over who the Trump administration’s tax reforms wound up benefiting: middle-class families or the rich.

Soon after he entered office, President Trump signed the Tax Cuts and Jobs Act into law, which lowered the corporate tax rate from 35% to 21% and changed the income level of individual tax brackets, dropping the highest tax bracket from 39.6% to 37%.

The winners of Trump’s tax law
Harris said that Donald Trump’s tax law benefited “the top 1% and the biggest corporations,” while Pence said that the average American family of four saved $2,000 in taxes because of the new law.

According to the White House’s Council of Economic Advisers, a typical family of four earning $73,000 received a $2,000 tax break in 2018.

According to Eleanor Wilking, an assistant law professor at Cornell University, because the tax law reduced personal income rates for every tax bracket except for the 10% bracket, it did not exclusively benefit those in the top 1%. She pointed out that it did disproportionately benefit high-income taxpayers. 

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Kirkland & Ellis Names Record 145 New Partners (7 In Tax)

The American Lawyer, Kirkland Again Tops New Partner Promotion Record:

After a record-setting class of new partners in 2019, it appears Kirkland & Ellis has outdone itself again.

The firm announced Thursday that it has promoted 145 new partners, edging out last year's firm record of 141.

This year’s new partner class continues an upward trend in the firm’s promotions: Kirkland promoted 97 partners in 2017 and 122 in 2018, according to data on the firm’s partner classes.

Here are the seven new tax partners:

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2d Circuit: Manhattan DA Can Obtain Trump's Tax Returns

New York Times, The Manhattan D.A. Can Obtain Trump’s Tax Returns, an Appeals Panel Rules:

The Manhattan district attorney can enforce a subpoena seeking President Trump’s personal and corporate tax returns, a federal appeals panel ruled on Wednesday, dealing yet another blow to the president’s yearlong battle to deny prosecutors his financial records Trump v. Vance, No. 20-2766 (2d Cir. Oct. 7, 2020)

The unanimous ruling by a three-judge panel in New York rejected the president’s arguments that the subpoena should be blocked because it was too broad and amounted to political harassment from the Manhattan district attorney, Cyrus R. Vance Jr., a Democrat. ...

Mr. Trump is expected to try to appeal the decision in the United States Supreme Court.

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NY Times: Trump Took $70,000 In Tax Deductions For Hair Care. Experts Say That’s Illegal.

New York Times, Trump Took $70,000 in Tax Deductions for Hair Care. Experts Say That’s Illegal.:

There were many bombshells in The New York Times’s exposé last week about President Trump’s taxes. He has paid basically zero federal income tax for years. His much-ballyhooed businesses are on the ropes. And that was just the headline.

But it was a juicy and seemingly less significant matter that jumped out at me: Mr. Trump spent more than $70,000 on hairstyling during several years of his run on “The Apprentice,” his reality-TV show.

That, of course, is quite a lot for any one person to spend on having his hair cut, blow-dried or colored. But what is really remarkable about the revelation is that Mr. Trump’s production company deducted his hairstyling expenses from its taxable income, reducing its tax bill.

Tax experts told me that deducting what is ordinarily considered a personal expense is prohibited under almost any circumstances. And they said such a deduction could potentially constitute criminal tax fraud if the cost of the hairstyling was reimbursed by someone else. ...

In 2011, the U.S. Tax Court heard a case involving a news anchor at the NBC affiliate in Columbus, Ohio, who deducted her hair-care expenses on the grounds that her job required it and that she was a full-time ambassador for the station. The court flatly rejected the claim. Expenses related to “grooming” are “inherently personal expenditures,” the court held, even though “these expenses may be related to her job.” ...

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The American Dream Is Tax Reform’s Biggest Obstacle

New York Times op-ed:  The American Dream Is Tax Reform’s Biggest Obstacle, by Christopher Faricy (Syracuse University; Co-author, The Other Side of the Coin: Public Opinion Toward Social Tax Expenditures (forthcoming 2020)):

Much of the commentary on the fresh revelations about President Trump’s tax returns has focused on how they illustrate the vulnerability of the federal tax system to exploitation by the ultrarich. This is for good reason: Mr. Trump aggressively used a set of tax breaks popular with real estate developers to pay no taxes in 11 out of the previous 18 years, and just $750 for both 2016 and 2017.

But the most expensive subsidies in the federal tax code are not used by real estate developers, energy chief executives or bankers. They are used by upper-middle-class households under the guise of earned economic security. The main obstacle to reforming the tax code is not Mr. Trump, but rather the upper-middle-class American voter.

There are close to 300 subsidies in the tax code that, in total, cost the federal government over a trillion dollars each year. According to the Congressional Budget Office, in 2019 more money was lost to the federal government through the nation’s regressive tax breaks than was spent combined on Medicare and Medicaid.

And six out of 10 of the most expensive federal tax subsidies — including the exclusion for employment-based health insurance, benefits for company pensions and the charitable contribution deduction — are commonly used by wealthier suburban families. In sum, they drain close to $680 billion annually from the U.S. Treasury.

These subsidies are sold as providing necessary assistance — affordable housing, health care and higher education — to middle-class families. But they also apply a veneer of political legitimacy to a system that shovels billions of taxpayer dollars every year to the wealthiest families and corporations in America. ...

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Congress Has Defunded The Tax Police

Los Angeles Times op-ed:  Two Tax Systems. One For the Likes of Trump., by David Cay Johnston (Syracuse):

Whether the IRS will investigate Trump’s returns for possible criminal violations isn’t clear. What is clear is that the federal government has pretty much stopped enforcing the tax laws, especially when it comes to people like Trump who own businesses. ...

Congress has defunded the tax police. Since 2010, the number of tax returns has grown about 8%, but the number of IRS revenue agents, as auditors are called, has been cut 35%, criminal investigators 27% and the agency’s total staffing by 22%. ...

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ABA Tax Section Accepting Nominations for 2021-2023 Public Service Fellowships

The ABA Tax Section is accepting applications for Christine A. Brunswick Public Service Fellowships for 2021-2023:

The American Bar Association Section of Taxation is pleased to announce that it is now accepting applications for its Christine A. Brunswick Public Service Fellowship program class of 2021-2023. Developed in 2008, the Fellowship program seeks to address the growing need for tax legal assistance and to foster a greater interest in tax-focused public service through funding and other support to young lawyers engaged in tax work for underserved communities.

Other important aspects of the fellowship program:

• The fellowship award includes student loan assistance;
• Fellows have incredible access to ABA Tax Section meetings and the tax community; and
• The positive career trajectories of the prior fellowship recipients (see list here). They are great resources on the fellowship for interested parties.

The deadline for applications is November 2, 2020.

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Andy Grewal: The Lucky Law Professor

Jonathan Curry (Tax Analysts), Academic Spotlight: Andy Grewal — The Lucky Law Professor, 168 Tax Notes Fed. 2527 (Sept. 28, 2020):

By Andy Grewal’s own accounting, the course of his career has often been marked by luck — “dumb luck,” in his own words.

In fact, the Iowa University College of Law professor, known for his witty Twitter account and often contrarian stances on noteworthy topics like congressional Democrats’ quest for President Trump’s tax returns, didn’t even initially set out to be a lawyer, much less a tax law academic. Grewal wanted to be a journalist.

He initially applied to Northwestern University’s Medill School of Journalism, but was rejected. “I was so heartbroken that I just gave up journalism entirely,” he told Tax Notes.

Instead, Grewal took up law. But after his first year of law school, he decided he didn’t like any of those first-year courses all that much, so he just decided — without having taken any tax classes — that he would specialize in whatever area seemed completely different from everything else.

“Somehow it worked out,” he said.

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Sarin: The IRS Is Outgunned

We are outgunned 
Outmanned
Outnumbered
Outplanned

Right Hand Man, in Hamilton

New York Times op-ed:  The I.R.S. Is Outgunned, by Natasha Sarin (Penn Law & Wharton):

The president of the United States paid less in federal taxes than all but the poorest Americans the year he was elected. This is in large part because he lost more money than nearly anybody else in this country for years, a troubling fact given his promise to “run America like his business.”

But the responsibility for his meager $750 tax bill does not lie with President Trump alone, nor with his tax advisers. Instead, the newest revelations put a very famous face on a problem that has long existed: The wealthy aren’t paying what they owe, and our tax system allows it.

This is not a new problem, but it is one that has gotten worse in the last decade, the result of a partisan attack on the I.R.S. that has deprived it of the resources it needs to police evasion aggressively. In the last decade, the I.R.S.’s budget has fallen (in real terms) by nearly 15 percent. Its enforcement budget has fallen 25 percent over this period, and its work force has been slashed by 20 percent.

These grim numbers do not even take into account the growth in the economy and the increasing complexity of tax returns. In fact, as a share of gross tax collections, the I.R.S. budget is down nearly 50 percent from its peak in 1993.

As my work with the former Treasury Secretary Lawrence Summers shows, the result of this underinvestment is that the I.R.S. today cannot administer tax laws effectively. Based on current trends, in the next decade the I.R.S. will fail to collect an estimated $7.5 trillion in owed tax. That “tax gap” corresponds to nearly 3 percent of G.D.P. annually.

The beneficiaries of a gutted I.R.S. are the elite. ...

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Why Millionaires Don't Move Despite Higher State Taxes

New York Times Wealth Matters:  Why These Millionaires Are Staying Put Despite a New Tax on Them, by Paul Sullivan:

The reason has little to do with money. Family and community ties keep them from leaving their state.

New Jersey recently decided to impose a so-called millionaires tax — effectively increasing state taxes 20 percent on people earning more than $1 million.

Critics had an immediate, and unsurprising, reaction, arguing that such taxes will push the wealthy to move to lower- or no-tax states. But is that true?

While some wealthy people will move, proponents of these taxes argue, few will make good on the threat to move to Florida (with no state income tax) or, in New Jersey’s case, to Pennsylvania (where the state tax rate is one-third its neighbor’s rate). They argue that high earners and entrepreneurs have family and community ties that keep them from moving away.

Bloomberg Opinion:  Low Taxes Are Never Enough to Attract Wealthy Residents, by Stephen Mihm (University of Georgia):

A lot of people dream of leaving New York and California and saving a ton. But it takes more to get them to actually do it.

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Chodorow: How I’ll Teach Trump’s Tax Returns

Adam Chodorow (Arizona State), How I’ll Teach Trump’s Tax Returns:

I’m always excited to find stories in the news that touch on the tax law and policy I study and teach. Usually in my classes, we might spend about 10 minutes on such an item before moving on to the day’s lesson. The New York Times’ recent revelations about President Donald Trump’s taxes supply enough material for an entire semester. While most people will view the fact that Trump paid almost nothing in income taxes over the past 15 years as a political matter—does this hurt or help him? Is he actually bad at business?—those of us who teach tax law see a treasure trove of policy questions highlighting the strengths and weaknesses of our current tax system. If I were to build a class around Trump’s taxes, here’s how I’d do it.

One top-line issue is whether Trump was entitled to claim a loss (and if so what kind of loss) when he abandoned his interest in his failing casino business—which ultimately formed the basis for a $72 million refund request to the Internal Revenue Service that is still pending. Taxpayers should be allowed to deduct economic losses they suffer if they have basis in the amounts lost. Generally speaking, this means that they have already paid tax on the money lost. This is why you can’t deduct a loss when a stock you own goes from $100 to $150 and then back down to $100. You never paid tax on the $50 of gain when the price rose, so you can’t deduct the $50 loss when it falls back again. Basis is a core tax concept, and one that students often struggle to grasp. ...

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A Brief History Of The Taxpayer In Chief: From Lincoln To Trump

New York Times op-ed:  A Brief History of the Taxpayer in Chief, by Margaret O’Mara (University of Washington):

From Lincoln to Trump, the president’s attitude toward his taxes has shaped the public’s attitude toward theirs.

This week’s investigation by The Times into President Trump’s long-hidden tax returns uncovered staggering business losses and such vigorous exploitation of loopholes that the president paid only $750 in federal income taxes in 2016 and 2017. When asked during Tuesday’s presidential debate about the revelations, Mr. Trump was unrepentant. “It was the tax laws,” he declared. His tax avoidance was “like every other private person, unless they’re stupid.”

Mr. Trump is no longer a private person, however, and he now joins his immediate predecessors in the intensely personal, frequently embarrassing presidential ritual of having his financial information laid out for all to see. But the importance of presidential returns extends beyond mere voyeurism. Learning what presidents pay (or don’t pay) in taxes shapes how the American public sees the presidency, the government and the fairness of the federal tax system itself.

For a long time, Americans didn’t see presidential tax returns. The first president to file them at all was Abraham Lincoln, after Congress temporarily instituted federal income taxes to help pay for the Civil War. No public proclamation accompanied Lincoln’s payments — at just under $1,300 he paid more in 1864 than Trump did 152 years later, no inflation adjustment necessary — and he filed voluntarily, as it wasn’t clear that taxation of presidential salaries was constitutional. Five years after Lincoln’s death, the courts ruled that it wasn’t. The U.S. Treasury returned Lincoln’s taxes to his estate.

The federal income tax became permanent in 1913, but the salary exemption for presidents continued for decades, and they disclosed little about their finances to the public. Nor was there much pressure to do so. Faith in government leadership was relatively high, and individual tax records were considered to have little relevance to a person’s fitness to be president. ...

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A Conversation With Orly Mazur (SMU): Taking On Tax And Tech

Forbes, A Conversation With Orly Mazur: Taking On Tax And Tech:

Orly Mazur is a pioneer working to shape the tax law to adapt to rapidly changing technology. While leading classes at Southern Methodist University Dedman School of Law through examinations of various aspects of the tax law, she focuses her scholarship on cutting-edge issues in the digital economy and has become a leading voice on the intersection of tax and technology.

The influence of a standout mentor led Mazur to find her place in the front of the classroom at SMU — where she has won accolades from her students — and into the pages of many law journals. Her mentor's work has been a model of combining scholarship and policymaking, and Mazur’s own scholarship on the implications of technology has positioned her to follow a similar path. ...

Balancing classes with research and writing is a constant challenge for professors, but Mazur has made many contributions to tax scholarship, and her articles have landed in highly regarded journals. Mazur also makes an effort to involve students whenever possible so that they gain experience doing research and are able to explore new areas of the law. Thinking about the direction the tax law should take and training future lawyers combine to make for a fulfilling career that Mazur clearly loves.

 

Michelle Drumbl Named Bentley Professor Of Law At Washington & Lee

Michelle L. Drumbl has been named Robert O. Bentley Professor of Law at Washington & Lee:

Professor Drumbl's scholarship focuses on the intersection of low-income taxpayers and fiscal policy, exploring such issues as filing status, innocent spouse relief, and return preparer fraud. Her book, Tax Credits for the Working Poor: A Call for Reform (Cambridge University Press, 2019) identifies shortcomings in how the United States delivers social benefits through its tax system and gazes elsewhere — to programs abroad — to reimagine possibilities for improving administration of the earned income tax credit and bolstering the credit's effectiveness.

• Tax Attorneys as Defenders of Taxpayer Rights, 91 Temple L. Rev. 813 (2019) (reviewed by Hayes Holderness (Richmond) here)
• Joint Winners, Separate Losers: Proposals to Ease the Sting for Married Taxpayers Filing Separately, 19 Fla Tax Rev. 399 (2016)
• Beyond Polemics: Poverty, Taxes, and Noncompliance, 14 eJournal of Tax Research 253 (2016)
• When Helpers Hurt: Protecting Taxpayers From Preparers, 145 Tax Notes 1365 (Dec. 22, 2014)

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NY Times: The Picture Of A Broken Tax System

New York Times editorial, The Picture of a Broken Tax System:

Donald Trump’s tax returns illustrate the profound inequities of the tax code and the shambolic state of federal enforcement.

In the years before he became president, Donald Trump lived lavishly while paying little in federal income taxes. The Times reported on Sunday that Mr. Trump paid no taxes in 10 of the 15 years immediately preceding his run for the White House. In each of the following two years, 2016 and 2017, he paid the token sum of $750.

Remove Mr. Trump’s current job from the picture, and what remains is a story that still demands attention. The portrait of a man who earned hundreds of millions of dollars, lived a life of comic excess and yet, in many years, paid nothing in federal income taxes is an indictment of the federal income tax system. It illustrates the profound inequities of the tax code and the shambolic state of enforcement. ...

On Tuesday night, when Mr. Trump and his Democratic opponent, Joe Biden, take the stage for their first presidential debate, both men should be asked what steps they will take to ensure that all Americans pay the full amount they owe.

And Congress should restore every penny of funding stripped from the I.R.S. since 2010 — plus whatever is necessary for the agency to perform its critical work.

Paying taxes is a civic duty, and the government needs the money. Most Americans try to pay what they owe, even if they wish they owed less, and they take comfort in the assumption that most of their neighbors are conducting themselves in the same way.

Americans deserve to know that the president has paid his taxes, too.

Wall Street Journal editorial, Trump’s Unhappy Returns:

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NY Times: Trump's Tax Returns — Chronic Losses, Years Of Tax Avoidance

New York Times, Long-Concealed Records Show Trump's Chronic Losses and Years of Tax Avoidance:

The Times obtained Donald Trump’s tax information extending over more than two decades, revealing struggling properties, vast write-offs, an audit battle and hundreds of millions in debt coming due.

Donald J. Trump paid $750 in federal income taxes the year he won the presidency. In his first year in the White House, he paid another $750.

He had paid no income taxes at all in 10 of the previous 15 years — largely because he reported losing much more money than he made.

As the president wages a re-election campaign that polls say he is in danger of losing, his finances are under stress, beset by losses and hundreds of millions of dollars in debt coming due that he has personally guaranteed. Also hanging over him is a decade-long audit battle with the Internal Revenue Service over the legitimacy of a $72.9 million tax refund that he claimed, and received, after declaring huge losses. An adverse ruling could cost him more than $100 million.

The tax returns that Mr. Trump has long fought to keep private tell a story fundamentally different from the one he has sold to the American public. His reports to the I.R.S. portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes. Now, with his financial challenges mounting, the records show that he depends more and more on making money from businesses that put him in potential and often direct conflict of interest with his job as president.

The New York Times has obtained tax-return data extending over more than two decades for Mr. Trump and the hundreds of companies that make up his business organization, including detailed information from his first two years in office. It does not include his personal returns for 2018 or 2019. This article offers an overview of The Times’s findings; additional articles will be published in the coming weeks.

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How Philanthropy Benefits The Super-Rich

The Guardian, How Philanthropy Benefits the Super-Rich:

Philanthropy, it is popularly supposed, transfers money from the rich to the poor. This is not the case. In the US, which statistics show to be the most philanthropic of nations, barely a fifth of the money donated by big givers goes to the poor. A lot goes to the arts, sports teams and other cultural pursuits, and half goes to education and healthcare. At first glance that seems to fit the popular profile of “giving to good causes”. But dig down a little. 

The biggest donations in education in 2019 went to the elite universities and schools that the rich themselves had attended. In the UK, in the 10-year period to 2017, more than two-thirds of all millionaire donations — £4.79bn — went to higher education, and half of these went to just two universities: Oxford and Cambridge. When the rich and the middle classes give to schools, they give more to those attended by their own children than to those of the poor. British millionaires in that same decade gave £1.04bn to the arts, and just £222m to alleviating poverty.

The common assumption that philanthropy automatically results in a redistribution of money is wrong. A lot of elite philanthropy is about elite causes. Rather than making the world a better place, it largely reinforces the world as it is. Philanthropy very often favours the rich — and no one holds philanthropists to account for it.

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Tax Prof Twitter Census (2020-21 Edition)

According to Bridget Crawford's latest census, there are 1,368 Law Profs on Twitter (55.4% male/44.5% female), including 86 Tax Profs (several with tax in their Twitter handles):

• @AdamThimmesch (Adam Thimmesch, Nebraska)
• @AjayKMehrotra (Ajay Mehrotra, Northwestern)
• @ajurowkleiman (Ariel Jurow Kleiman, San Diego)
• @andygrewal (Andy Grewal, Iowa)
• @AriGlogower (Ari Glogower, Ohio State)
• @ArthurEshiwani (Arthur Eshiwanti, Nairobi)
• @AshritaPrasad (Ashrita Prasad, OP Jindal Global Univ.)
• @at_hayashi (Andrew Hayashi, Virginia)
• @AusTaxProf (Miranda Stewart, Melbourne)
• @bearerfriend (Jeremy Bearer-Friend, George Washington)
• @benmosesleff (Benjamin Leff, American)
• @book_leslie (Leslie Book, Villanova)
• @ChanceyGardener ‏(Allen Madison, South Dakota)
• @ChristineYR_Kim (Christine Kim, Utah)
• @clintwallace (Clint Wallace, South Carolina)
• @cryptolawprof (Del Wright Jr., Missouri-Kansas City)
• @DanielJHemel (Daniel Hemel, Chicago)
• @DanielShaviro (Daniel Shaviro, NYU)
• @david_hasen (David Hasen, Florida)
• @davidckamin (David Kamin, NYU)
• @davidsgamage (David Gamage, Indiana-Maurer)
• @deathntaxesprof (Goldburn Maynard, Indiana University Business School)
• @delaFeriaR (Rita de la Feria, Leeds)
• @DorothyABrown (Dorothy Brown, Emory)

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Questions Raised About Purdue Global University's Tax-Exempt Status

Inside Higher Ed, Questions Raised About Purdue Global's Tax-Exempt Status:

A review conducted by the Century Foundation raised questions about the documents Purdue University Global presented to the Internal Revenue Service when it applied for tax-exempt status in August 2019.

Purdue University acquired for-profit Kaplan University from Graham Holdings in 2017, then used the acquisition to create a new online institution called Purdue University Global. Purdue Global relies on a Graham subsidiary, the educational services company Kaplan, to provide numerous support activities like financial aid administration, marketing, international student recruiting, business office functions and first-year student advising. Purdue Global acquired tax-exempt status from the IRS in December 2019.

Bob Shireman, director of higher education excellence and senior fellow at the Century Foundation, believes that the IRS was provided with misleading information about the nature of the deal between Purdue Kaplan. After reviewing documents provided by Purdue, Shireman said that Purdue Global excluded Kaplan from its list of contractors and failed to disclose Kaplan as an organization with which the university has a "close connection." ...

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Kristin Hickman Named McKnight Presidential Endowed Professor At University Of Minnesota

Professor Hickman Named a McKnight Presidential Professor:

Professor Kristin Hickman has been named a McKnight Presidential Professor.

The McKnight Presidential Endowed Professorship program at the University “is one of the highest honors for faculty and recognizes highly distinguished, world-class scholars. In recognition of their excellence, the names of all McKnight Presidential Professors are engraved on monuments that line our Scholars Walk.” Recipients are chosen based on their academic and research accomplishments and their contributions to advancing the University among its peers.

Hickman, who joined the Law School in 2004, is a leading authority in the fields of tax administration and administrative law. Her articles on these topics have appeared in the Columbia Law Review, Cornell Law Review, and Duke Law Journal, among other publications.

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The FTC Is Investigating Intuit Over TurboTax Practices

Following up on my previous post, Here’s How TurboTax Just Tricked You Into Paying To File Your Taxes:  ProPublica, The FTC Is Investigating Intuit Over TurboTax Practices:

The Federal Trade Commission has been investigating Intuit and its marketing of TurboTax products, following ProPublica’s reporting that the Silicon Valley company deceived tax filers into paying when they could have filed for free.

The FTC probe, run out of the commission’s Bureau of Consumer Protection, centers on whether Intuit violated the law against unfair and deceptive practices in commerce. One focus of the investigation is whether TurboTax marketing misdirected customers who were eligible to file their taxes for free into paid products.

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The Tax Cut For The Rich That Democrats Love: The State & Local Tax Deduction

New York Times op-ed:  The Tax Cut for the Rich That Democrats Love, by Richard V. Reeves & Christopher Pulliam (Brookings Institution):

Why on earth ... are Democrats fighting — and fighting hard — for a $137 billion tax cut for the richest Americans? Mr. Biden, Nancy Pelosi and Charles Schumer don’t agree on everything, but on this specific issue they speak with one voice: the $10,000 cap on deductions for state and local tax (better known as the SALT deduction) must go. ...

Lifting it would therefore reverse one of the few good things about the 2017 bill. Almost 60 percent of the benefit of removal would go to the top 1 percent of households (of which 90 percent are white). For the superrich, the top 0.1 percent, repeal would make for an average tax cut of around $145,000 a year. In isolation, this change would be more skewed to the rich than the Republican tax bill as a whole.

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ABA Tax Section Releases 20th Annual Law Student Tax Challenge Problem

The ABA Tax Section has released the J.D. Problem (rules; entry form) and LL.M. Problem (rules; entry form) for the 20th Annual Law Student Tax Challenge (infographic):

An alternative to traditional moot court competitions, the Law Student Tax Challenge (LSTC) is organized by the Section’s Young Lawyers Form. The LSTC asks two-person teams of students to solve a complex business problem that might arise in everyday tax practice. Teams are initially evaluated on two criteria: a memorandum to a senior partner and a letter to a client explaining the result. Based on the written work product, six teams from the J.D. Division and four teams from the LL.M. Division receive a free trip to the Section’s Midyear Meeting, where each team presents its submission before a panel of judges consisting of the country’s top tax practitioners and government officials, including tax court judges. The competition is a great way for law students to showcase their knowledge in a real-world setting and gain valuable exposure to the tax law community.

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You Want Progressive Policies? You Need Progressive Taxes

New York Times op-ed:  You Want Progressive Policies? You Need Progressive Taxes, by Kitty Richards (Roosevelt Institute) & Joseph E. Stiglitz (Columbia):

As the coronavirus pandemic — and Congress’s undersize response — wreaks havoc throughout the economy, tax receipts are cratering. This means that state and local governments are facing enormous revenue shortfalls at the exact time they are dealing with large additional demands. So far, states and localities have responded by slashing spending and jobs, with 1.5 million public-sector workers laid off by the end of June.

The federal government, which unlike most states does not have to balance its budget every year, could solve the problem tomorrow by providing fiscal relief to states and localities, like the $1 trillion provided by the HEROES Act that passed the House in May.

But regardless of whether Congress acts, states and localities can bolster their local economies and support their residents by raising taxes on those who have not been hard hit by the recession. This is not only the right thing to do from a humanitarian standpoint, it is sound economics. ...

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NY Times: Trump Wins Another Delay In Turning Over Tax Returns

New York Times, Trump Wins Another Delay in Turning Over Tax Returns:

President Trump on Tuesday won another delay in the long-running legal battle over whether he must turn over eight years of tax returns to the Manhattan district attorney’s office, which subpoenaed them a year ago in a criminal investigation focused on Mr. Trump, his business and his associates.

In a brief order, a federal appeals court in New York said it would temporarily block a grand jury subpoena issued by the district attorney, Cyrus R. Vance Jr., a Democrat, while it considers Mr. Trump’s arguments that the request was “wildly overbroad” and politically motivated.

The ruling is the latest development in the president’s aggressive effort to keep his tax returns and other financial records out of the hands of prosecutors, Congress and others — a dispute that has reached the United States Supreme Court once and is likely to end up there again.

With the election looming, the ruling means that as a practical matter the prosecutors, even if they are ultimately successful, will not receive Mr. Trump’s records for at least another month, and perhaps longer if he seeks a review in the Supreme Court.

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University Of Florida's Laura Rosenbury Is Fourth Law School Dean ($100,000), Neil Buchanan Is Second Tax Prof ($25,001) To Make Major Gifts To Students During COVID-19

Following up on my previous posts (links below):  UF Law Students Receive Nearly $1 Million in Financial Support During Pandemic:

More than 280 University of Florida Levin College of Law students received financial support from the law school this summer, totaling nearly $1 million. ...

UF Law applied for funding from AccessLex, which generously provided a $25,000 grant to the law school for emergency student support.  UF Law Dean Laura Rosenbury immediately contributed an additional $25,000 from her personal funds, and UF Law Tax Professor Neil Buchanan followed Dean Rosenbury’s contribution with a gift of $25,001.  Several alumni also contributed to the emergency fund to help reach the $100,000 goal.

“The pandemic created additional financial stress for many of our students, as they traveled to care for sick loved ones, lost part-time jobs, or assisted family members who had lost their jobs,” Dean Rosenbury said. “I am glad we were able to provide some relief for students incurring these unexpected expenses.”

Dean Rosenbury has also contributed an additional $75,000 to support student scholarships at UF Law.  Her most recent gift of $25,000 supported the HBCU Pathway to Law Endowed Scholarship Fund, which provides full-tuition scholarships to graduates of HBCUs seeking to enroll at UF Law.

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The Best-Timed Charitable Gift Ever: 'There Is No Law Against Insider Giving'

Wall Street Journal, Kodak Insider Makes Well-Timed Stock Gift of $116 Million to Religious Charity He Started:

Eastman Kodak’s wild stock-market ride produced what might be the biggest contribution on record to a religious nonprofit, the product of a well-timed gift by Kodak board member George Karfunkel.

In a securities filing last week, Mr. Karfunkel and his wife, Renee Karfunkel, said they donated 3 million of their 6.3 million Kodak shares to Congregation Chemdas Yisroel in Brooklyn, N.Y.

The congregation was incorporated in Delaware in 2018 and uses a Brooklyn accountants’ office as its mailing address, New York charity-registration filings show. Mr. Karfunkel is listed in those filings as its president.

The securities filing said the gift took place July 29, the day Kodak stock closed at its highest level since 2014. Using the average of the stock’s high and low that day of $38.75, which is how the Internal Revenue Service values stock gifts, the donation was worth $116.3 million.

That would make it the single largest gift recorded to a religious group, based on a list maintained by the Chronicle of Philanthropy. ...

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Arizona Supreme Court Agrees With Tax Prof Amicus Brief: Invest in Education's Ballot Initiative Summary Is Accurate

Lily Batchelder (NYU), Jeremy Bearer-Friend (George Washington), John R. Brooks (Georgetown), Paul Caron (Dean, Pepperdine), Adam Chodorow (Arizona State), Steven Dean (Brooklyn), David Gamage (Indiana), Jacob Goldin (Stanford), Hayes Holderness (Richmond), Ariel Jurow Kleiman (San Diego),  Richard Pomp (Connecticut), Erin Scharff (Arizona State), Darien Shanske (UC-Davis), Daniel Shaviro (NYU), Jay Soled (Rutgers), Kathleen DeLaney Thomas (North Carolina) & Vanessa Williamson (Brookings Institution), Amicus Brief of Tax Scholars in Support of Appellants:

It is hard to describe tax law succinctly. The federal Internal Revenue Code is over 6,000 pages and contains over 4 million words. As scholars who write about taxation, we are well aware of this challenge. Nevertheless, the 100-word summary that appeared on Invest in Education’s petitions accurately describes its proposed change to Arizona tax law.

Arizona's Invest in Education initiative would establish a new, separate surcharge of 3.5% on taxable income above certain threshold amounts. This new surcharge shall be imposed “[i]n addition to any other tax imposed by this chapter” and, it will be “collected regardless of whether the income tax rate brackets in this chapter are changed, replaced or eliminated by an act of the legislature.”

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Federal Judge Orders Trump To Release His Tax Returns To Manhattan Prosecutor

• Trump v. Vance, Opinion, No. 19 Civ. 8694 (SDNY Aug. 20, 2020)
• Trump v. Vance, Denial of Stay, No. 19 Civ. 8694 (SDNY Aug. 21, 2020)
• New York Times, Trump Must Turn Over Tax Returns to D.A., Judge Rules
• Wall Street Journal, Trump Must Release His Tax Returns to Manhattan Prosecutors, Judge Rules

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Billionaire Who Vowed To Pay Off Student Loans Of Morehouse College Graduates Fights Criminal Tax Probe

Bloomberg, Billionaire Robert Smith Fighting U.S. Criminal Tax Inquiry:

When billionaire Robert Smith ended his 2019 Morehouse College commencement speech by vowing to pay off student debt for the entire graduating class, cheers of “MVP, MVP, MVP!” rose from students and faculty on the Atlanta campus.

What the audience didn’t know was that Smith was harboring a financial secret. He was being pursued by Justice Department prosecutors and Internal Revenue Service agents for potential tax crimes, according to four people familiar with the matter.

Federal authorities have spent four years examining whether Smith failed to pay U.S. taxes on about $200 million in assets that moved through offshore structures, some of those people said. Smith hasn’t been charged, and prosecutors may conclude he owes no taxes on those assets.

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NY Times: Trump Is Not Entitled To Details Of Tax Returns Inquiry, DA Says

New York Times, Trump Is Not Entitled to Details of Tax Returns Inquiry, D.A. Says:

The Manhattan district attorney’s office said on Friday that President Trump was not entitled to learn more about the scope of its criminal investigation into his business dealings, rejecting Mr. Trump’s latest effort to block a subpoena for his tax returns.

The office of the district attorney, Cyrus R. Vance Jr., wrote in a pair of new court filings that Mr. Trump should be treated like any other recipient of a subpoena, who is typically unable to access details of secret grand jury proceedings.

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Will Morris: PwC's Deputy Global Tax Policy Leader And Part-Time Priest

Financial Times, Test of Faith: Will Morris, PwC Tax Expert and Part-time Priest:

On the third Sunday of Lent last year, Will Morris, deputy global tax policy leader at accounting giant PwC, admitted he felt conflicted when he became a part-time priest.

“I had asked myself whether I was — as a very well-paid tax lawyer for a large US corporation — subconsciously trying to cleanse a job that some viewed as ethically dodgy, by throwing a priestly cloak over it all,” he told a congregation at London’s St Martin-in-the-Fields church, describing his ordination a decade earlier.

Mr Morris operates at the highest levels of corporate tax and policy. As chairman of the OECD tax advisory committee, he is a powerful lobbying force. As one ally put it, he “can corral an impressive list of tax directors and policymakers into a room”.

The distinction between his professional and priestly life was thrown into particularly sharp relief this month. Mr Morris was one of five former General Electric executives who negotiated a $1bn tax break in the UK in 2005 that HM Revenue & Customs now claims was fraudulently obtained. 

St Martin-in-the-Fields Church, Revd William Morris:

Will Morris is an assistant priest at St Martin’s, having been here since his ordination in 2009. He is a Self Supporting Minister who also works at PwC (PricewaterhouseCoopers) as Deputy Global Tax Policy Leader. At St Martin’s he focuses on faith and workplace issues and wrote Where is God at Work in 2015, and Love thy Colleague: Being Authentically Christian at Work in 2017.

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Zelenak: Tax In Sitcoms

Tax Policy In The Trump Administration

• Bloomberg, The Simple Fix For Corporate Income Tax—Tax Stock Returns
• Center on Budget and Policy Priorities, States Grappling With Hit to Tax Collections
• Fox News, Trump Expects US Economy to Grow at 20% Pace, Supports Middle-Income Tax Cut
• The Hill, Biden's Tax Plan Would Undermine the Coronavirus Recovery
• The Hill, Sanders Offers Bill to Tax Billionaires' Wealth Gains During Pandemic

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NY Times: Can Trump Cut Taxes Without Congress?

New York Times, Advisers Consider Whether Trump Can Cut Taxes Without Congress:

White House officials have explored whether President Trump has the power to sidestep Congress and unilaterally cut a broad swath of taxes as the president looks for ways to inject fuel into a slumping economy, according to a senior administration official.

While such a move is not imminent, Mr. Trump’s advisers have sought legal guidance from White House lawyers about whether the president has the authority to eliminate certain taxes, including income and business taxes, without the approval of Congress.

The discussions about how much power the president can wield over tax policy come as Mr. Trump prepares to delay payroll taxes for some workers until the end of the year. But unlike that move, which simply defers what workers owe until some point in the future, the White House is discussing whether the president can actually eliminate taxes owed by businesses, workers and investors.

The legality of such a move is dubious, but Mr. Trump has not been shy about pushing the boundaries of his authority. The Constitution gives Congress the power to set tax policy and lawmakers would most likely object to any attempt to bypass their authority. The executive branch does have wide latitude, however, to enact regulations regarding tax collection and it can defer taxes, as it did with the payroll tax and with the three-month delay of the traditional April 15 tax filing deadline.

“They clearly can delay pretty much anything for a year,” said Daniel Hemel, a tax law professor at the University of Chicago.

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