TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, October 8, 2015

Post-Tenure Depression: Causes And Cures

Inside Higher Ed:  Posttenure Depression?, by Kerry Ann Rockquemore (President, National Center for Faculty Development & Diversity):

Dear Kerry Ann,
The president of our college recently told someone who got tenure to try not to fall into “posttenure depression.” Within the same week, another colleague said the same thing to him. He passed that same recommendation on to me. I had never heard of such a thing and thought it'd be important to know what that was about and how to combat it, as I just got tenure. Do you have any thoughts on what posttenure depression is and how to survive it?

Dear Confused,
Congratulations on winning tenure! That is a huge professional accomplishment, and I want to acknowledge all the time, energy and work that went into your promotion. ...

[A]nytime we move from one rank to another, there will be a period of transition in our status, identity, expectations and workload. You already experienced this when you transitioned from graduate student to professor, so it shouldn’t be a surprise that the transition from pretenure to posttenure will also involve a shift in how others see you, how you see yourself (in relation to your campus and colleagues), what’s possible for you professionally and how you will manage an increased workload.

It’s true that there’s a  wide continuum of how people adapt to the tenure transition. Some faculty members adapt quickly and happily, others have a lengthier transition that is marked with confusion and uncertainty, and some struggle with disappointment and disengagement. The idea of posttenure depression is grounded in the negative end of this adaptive spectrum. I assume by your question that you aspire to the positive end of it.

The good news is that you get to choose how you transition and respond to your new status and role on campus. What your president doesn’t seem to realize is that it’s possible to create an environment where newly tenured faculty can make conscious and intentional transitions that are empowering -- as opposed to hoping faculty don’t fall into posttenure depression.

Here are several questions that you can ask yourself to start the process:

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October 8, 2015 in Legal Education | Permalink | Comments (0)

Kahng Reviews Johnson's Organizational Capital

JotwellLily Kahng (Seattle), Can the Smart Market Solve the Problem of Undertaxed Intangibles (Jotwell) (reviewing Calvin H. Johnson (Texas), Organizational Capital: The Most Important Unsettling Issue in Tax, 148 Tax Notes 667 (2015)):

In his article, Organizational Capital: The Most Important Unsettling Issue in Tax, Professor Calvin Johnson argues that the undertaxation of intangibles is “the most important, most damaging issue in tax policy” and proposes a radical solution to remedy the problem: a new tax based on the trading value of public companies. ...

Johnson proposes a more radical solution to the problem of undertaxed intangibles: a new tax based on the trading value of public companies. He argues that his proposal would both avoid the practical problems of a cost recovery approach to intangibles taxation and capture the value of all intangibles including organizational capital. His proposal would essentially tax intangibles on a mark-to-market basis.

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October 8, 2015 in Scholarship, Tax | Permalink | Comments (0)

NY Times: Judge Rejects Request By College To Change Its Name In Exchange For $20 Million Gift

Paul SmithNew York Times, Judge Rejects Request by Paul Smith’s College to Change Its Name:

In the rarefied world of multimillion dollar gift-giving, Paul Smith’s College, named for a 19th-century hotelier and tucked in the forests of northern New York State, carried little cachet. So when Joan Weill, the wife of the Wall Street billionaire Sanford I. Weill, proposed a $20 million gift that would lift the struggling college’s fortunes, its officials saw national prestige on the horizon.

Mrs. Weill’s only condition — one that experts say is becoming more common among major donors — was that the institution become Joan Weill-Paul Smith’s College.

But a state judge rejected that change, ruling in a decision released on Wednesday that Mrs. Weill’s money did not give the college license to violate a provision in its founder’s will that enshrined his father’s name on the college in perpetuity. ...

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October 8, 2015 in Legal Education | Permalink | Comments (0)

Henderson: Where Are The New Law Jobs? Legal Operations.

HendersonCool ABA Journal cover of my friend and co-blogger (The Legal Whiteboard, a member of our Law Professor Blogs Network) Bill Henderson (Indiana), What the Jobs Are: New Tech and Client Needs Create a New Field of Legal Operations:

In this article, Indiana University law professor William Henderson, who helped create the Paradigm Shift series, discusses new jobs for JDs providing a different kind of legal service in law firms, new businesses and in-house departments. These jobs blend technology and business skills with law into a field he calls legal operations. And in a profession showing little to no job growth for recent law school graduates, this field offers both steady income and new challenges to those who join it.

It's mid-March and I'm at the DocuSign conference at the Grand Hyatt in downtown San Francisco. It's a bustling gathering with a Fortune 500 vibe—room after room of people discussing various aspects of digital transaction management.

Yes, that’s right, digital transaction management. DTM. You know what that is, right?

Let me begin this story with a confession. I am a law professor. I am reputed to be an expert on the legal services industry. Until the morning of the conference, I had never heard of DocuSign, which is 33rd on the Wall Street Journal’s Billion Dollar Startup Club for September. I was also ignorant of DTM.

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October 8, 2015 in Legal Education | Permalink | Comments (0)

IRS To End Valuation Discounts For Family Limited Partnerships?

Investment News, The End of Discounts for FLPs?:

Rumors have abounded in the estate planning community that the IRS was working on regulations designed to change the gift and estate tax rules applicable to valuing interests in family-controlled entities, such as corporations, limited partnerships and limited liability companies. Talk is that they'll be released soon.

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October 8, 2015 in Tax | Permalink | Comments (0)

NYU Seeks To Hire Acting Assistant Professor Of Tax Law

NYU Tax LogoThe NYU School of Law Graduate Tax Program is seeking applicants for its Acting Assistant Professor of Tax Law Program for the 2016-17 academic year, commencing August 1, 2016.

For over fifty years, the NYU Acting Assistant Professor of Tax Law (“Tax AAP”) program has launched the careers of dozens of tax academics.  Tax AAPs show promise as legal scholars and have a strong interest in teaching. They serve on a full-time, non-tenure track basis at the Law School for two academic years. At the start of their second year, Tax AAPs are expected to seek a tenure-track position on the law school academic job market.

While in residence at the Law School, Tax AAPs devote a substantial amount of time to their scholarship and begin to develop their research agendas. Tax AAPs teach one or two courses in the Graduate Tax Program each semester. Each Tax AAP also either serves an Assistant Editor of the Tax Law Review, the nation’s top tax policy journal, or works with the International Tax Program, the leading graduate tax program for non-U.S. lawyers.

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October 8, 2015 in Tax, Tax Prof Jobs | Permalink | Comments (0)

Michigan Symposium On Taxation And Citizenship

MichiganMcGill and Michigan are hosting a symposium tomorrow at Michigan on Taxation and Citizenship:

Panel #1:

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October 8, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Major Penalty for High Taxes: How High Income Taxes Drive NHL Players And Other High-Income Earners To Lower Tax Jurisdictions

HockeyCanadian Taxpayers Federation, Major Penalty for High Taxes: How High Income Taxes Drive NHL Players and Other High-Income Earners to Lower Tax Jurisdictions (press release):

A paper co-authored by the Canadian Taxpayers Federation (CTF) and Americans for Tax Reform (ATR) reveals that Montréal, Los Angeles, San Jose and Anaheim are some of the least financially attractive destinations for NHL players due to high tax rates.

The new report, entitled Major Penalty for High Taxes, looks at NHL team salary spending, tax rates in the relevant province or state, and the “true cap,” which is the impact taxes have on the salary cap. The report also examined the tax impact of various off-season trades on players’ incomes.

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October 8, 2015 in Tax, Think Tank Reports | Permalink | Comments (1)

Senate Launches Volkswagen Tax Fraud Probe

VW2Senate Finance Committee Chair Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Oregon) sent a letter Tuesday to Volkswagen asking whether the automaker defrauded the IRS in obtaining federal tax credits despite the installation of “defeat devices” in diesel passenger cars.

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October 8, 2015 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 882

IRS Logo 2George Will (Washington Post), Impeach the IRS Director:

“Look,” wrote Lois Lerner, echoing Horace Greeley, “my view is that Lincoln was our worst president not our best. He should have let the South go. We really do seem to have 2 totally different mindsets.”

Greeley, editor of the New York Tribune, was referring to Southern secessionist states when he urged President-elect Abraham Lincoln to “let the erring sisters go in peace.”

Greeley favored separating the nation from certain mindsets; Lerner favors suppressing certain mindsets. At the IRS, she participated in delaying for up to five years — effectively denying — tax-exempt status for, and hence restricting political activity by, groups with conservative mindsets. She retired after refusing to testify to congressional committees, invoking Fifth Amendment protection against self-incrimination.

As the IRS cover-up of its and her malfeasance continues, the Republicans’ new House leaders should exercise this constitutional power: “The House … shall have the sole power of impeachment.” The current IRS director, John Koskinen, has earned this attention. ...

Jason Chaffetz, chairman of the Oversight and Government Reform Committee, says the IRS has “lied to Congress” and “destroyed documents under subpoena.” He accuses Koskinen of “lies, obfuscation and deceit”: “He assured us he would comply with a congressional subpoena seeking Lois Lerner’s emails. Not only did he fail to keep that promise, we later learned he did not look in earnest for the information.”

After Koskinen complained about the high cost in time and money involved in the search, employees at a West Virginia data center told a Treasury Department official that no one asked for backup tapes of Lerner’s emails. Subpoenaed documents, including 422 tapes potentially containing 24,000 Lerner emails, were destroyed. For four months, Koskinen kept from Congress information about Lerner’s elusive emails. He testified under oath that he had “confirmed” that none of the tapes could be recovered. ...

Even if, as Koskinen says, he did not intentionally mislead Congress, he did not subsequently do his legal duty to correct the record in a timely manner. Even if he has not committed a crime such as perjury, he has a duty higher than merely avoiding criminality.

If the House votes to impeach, the Senate trial will not produce a two-thirds majority needed for conviction: Democrats are not ingrates. Impeachment would, however, test the mainstream media’s ability to continue ignoring this five-year-old scandal, and would demonstrate to dissatisfied Republican voters that control of Congress can have gratifying consequences.

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October 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, October 7, 2015

Back To The Future: Universities Return To Their Spiritual Roots To Provide Enduring Value To Students

New York Times op-ed:  The Big University, by David Brooks:

Many American universities were founded as religious institutions, explicitly designed to cultivate their students’ spiritual and moral natures. But over the course of the 20th century they became officially or effectively secular.

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October 7, 2015 in Legal Education | Permalink | Comments (1)

Hickman & Thomson: Judicial Review Of Post-Promulgation Notice And Comment

Kristin E. Hickman (Minnesota) & Mark Thomson (J.D. 2012, Minnesota), Open Minds and Harmless Errors: Judicial Review of Post-Promulgation Notice and Comment, 101 Cornell L. Rev. ___ (2016):

In 2012, the Government Accountability Office surprised many administrative law specialists by reporting that fully 35% of major rules and 44% of nonmajor rules issued by federal government agencies lacked pre-promulgation notice and opportunity for public comment. For at least most of the major rules, however, the issuing agencies accepted comments from the public after issuing the rule, and in most of those cases, the agencies followed up with new final rules, responding to comments and often making changes in response thereto. Post-promulgation notice and comment do not precisely comply with the Administrative Procedure Act, yet are arguably close enough that some courts have felt compelled to uphold them. Challenges to rules adopted in this manner have created a jurisprudential mess, as courts struggle to balance their duty to enforce the requirements of the Administrative Procedure Act with the practical realities of the modern administrative state. The sheer extent of the practice demonstrates the need for a more consistent judicial response. This Article explores the different approaches courts have taken to judicial review of post-promulgation notice and comment.

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October 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

Who Benefits From State Corporate Tax Cuts? Firm Owners (40%), Workers (35%), Landowners (25%)

ICTJuan Carlos Suárez Serrato (Stanford) & Owen Zidar (Chicago), Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms:

This paper estimates the incidence of state corporate taxes on the welfare of workers, landowners, and firm owners using variation in state corporate tax rates and apportionment rules. We develop a spatial equilibrium model with imperfectly mobile firms and workers. Firm owners may earn profits and be inframarginal in their location choices due to differences in location-specific productivities. We use the reduced-form effects of tax changes to identify and estimate incidence as well as the structural parameters governing these impacts. In contrast to standard open economy models, firm owners bear roughly 40% of the incidence, while workers and landowners bear 30-35% and 25-30%, respectively.

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October 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tacha: Why I Support California's Proposed 15 Credit Skills Requirement

Tacha (2015)In response to yesterday's post, Law School Deans As Conformists:  my non-conformist Dean, Deanell Tacha, has given me permission to post her June 22, 2015 letter requesting that the AALS Steering Committee reconsider its opposition to California's proposed 15 credit skills requirement:

I am so grateful for your leadership and work on behalf of the Association of American Law Schools.   These are such challenging times in legal education.  As those entrusted with guiding law schools through this period, we deans must all bring the full measure of our energy, insights, and experience to this important work.  It is in this spirit that I write to urge you to reconsider your decision to issue a statement in opposition to the TFARR recommendations promulgated under the auspices of the California State Bar and now pending in the California Supreme Court.

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October 7, 2015 in Legal Education | Permalink | Comments (0)

Tax Court Seeks To Hire A Special Trial Judge

Tax Court Logo 2The U.S. Tax Court is seeking to hire a Special Trial Judge (salary:  $180,990):

Duties:  In accordance with I.R.C. section 7443A(a), Special Trial Judges are authorized to hear and decide any case involving tax deficiencies of $50,000 or less (per taxable year), as well as any collection due process, declaratory judgment, employment classification, or whistleblower award case of any amount. Deficiency cases involving amounts greater than $50,000 may be assigned by the Chief Judge to be heard by a Special Trial Judge with the decisions to be entered by a Presidentially appointed Judge, in accordance with I.R.C. section 7443A(b). More specifically, the duties of the position are demanding and wide-ranging and include the following: 

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October 7, 2015 in Tax | Permalink | Comments (0)

The Best U.S. News Voter Swag: Texas A&M

As we approach mid-October, U.S. News ballots soon will be sent to deans, associate deans of academic affairs, faculty appointments committee chairs, and the most recently tenured faculty members at the nation's law schools.  My friend and recently tenured colleague Babette Boliek reports that law porn has been replaced with law swag:  her favorite (thus far):

Texas A&M

October 7, 2015 in Law School Rankings, Legal Education | Permalink | Comments (14)

Roberts: A Structural Examination Of Energy Tax Subsidies

Tracey M. Roberts (UC-Hastings), Picking Winners and Losers: A Structural Examination of Tax Subsidies to the Energy Industry:

The shibboleth that “government should not be picking winners and losers” has dominated the public discourse over renewable energy subsidies. This way of framing the debate ignores the nation’s long history of support for fossil fuels and obscures the economic theory behind the subsidies. This article contributes to the discussion in four ways.

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October 7, 2015 in Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On The Rising Costs Of Higher Education And Tax Policy

House LogoThe Subcommittee on Oversight of the House Ways & Means Committee holds a hearing today on The Rising Costs of Higher Education and Tax Policy.  In connection with the hearing, the Joint Committee on Taxation has released Background and Present Law Related to Tax Benefits for Education (JCX-133-15):

This document ... includes a description of present law and analysis relating to tax benefits for education. Present law includes a variety of provisions that provide tax benefits to individual taxpayers for education expenses.

Figure 3

Table 4

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October 7, 2015 in Congressional News, Legal Education, Tax | Permalink | Comments (3)

Harrison: Law School Rankings And The Law Professor 'Recognition Race'

Jeffrey L. Harrison (Florida), Message or Messenger: The Rise of Professor Porn and the Death of Ideas:

Gone are the days in which law professors could be viewed as people who lived a "life of the mind."[Not being quite old enough, I am not sure they ever lived a life of the mind as much as other academicians and I suspect not.] In those days, teaching, thinking, and writing were the principal activities. Professors put their work out there and it spoke for itself. They might attend a conference or two each year and mail out a few reprints. It seems old fashion now but the process of thinking was in itself a reward. Personal recognition was a side effect.

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October 7, 2015 in Law School Rankings, Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 881

IRS Logo 2Newsweek op-ed:  America Is in Danger of Being Ruled by the Mob, by Victor Davis Hanson:

The constitution of the Roman Republic was designed as a corrective to democracy. Specifically, it was hoping to protect against the excesses of Athenian-style direct democracy. ...

Americans originally were terrified of what 51 percent of the people in an unchecked democracy might do on any given day—and knew that ancient democracies had always become more, not less, radical and thus more unstable. For all the squabbles between Adams, Jefferson, Hamilton and Madison, they agreed that a republic, not a direct democracy, was a far safer and stable choice of governance.

The result was a potpourri of ways to curb the predictable excesses and fits of the people. An Electoral College reserved commensurate power to rural states rather than passing off the presidential vote into the hands of the huge urban majorities. ...

All consensual governments are prone to scary wild swings of mob-like emotion—and to demagogues who can almost rein in or goad the dêmos. But the Founders sought to make American government immune to Athenian-style craziness through a system of checks and balances that vented popular frenzies without a great deal of damage. ...

In the 21st century, novel developments have increasingly turned us from sober Roman republicans into mercurial Athenian democrats, as we can see especially in this election year. ...

[T]he law is seen as an impediment to such sweeping notions of social justice. It is certainly deemed counter-revolutionary and an impediment to the Obama administration’s idea of an equality of result. As a result, the president at one time or another has ignored enforcement of federal laws, from not prosecuting the rogue behavior of federal bureaucrats at the IRS or EPA to suspending elements of his own Affordable Care Act. ...

What now constitutes actionable criminal behavior in the scandals at the IRS, EPA, ICE and a host of other alphabet agencies are not treated as per se violations of the law. Rather, they are judged according to whether the offender and his crime were deemed progressive and well-intended—or reactionary and thus prosecutable.

CEOs who cannot cap a leaky oil well or who sell noxious peanut products go to jail; EPA functionaries who turn white-water rivers into toxic yellow mush melt back into the coils of the bureaucracy.

Ancient Athens was a wild place—as frenetic, brilliant and dangerous as it proved ultimately unsustainable. Yet we are becoming more like the Athenian mob than the Roman Senate. American law has become negotiable and subject to revolutionary justice, while technology has developed the power to inflame 300 million individuals in a nanosecond.

Without strict adherence to republican government and the protections of the Constitution, the mob will rule—and any American will become subject to its sudden wrath.

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October 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, October 6, 2015

Stantcheva Presents Taxation And The International Mobility Of Inventors Today At Columbia

SSStefanie Stantcheva (Harvard) presents Taxation and the International Mobility of Inventors (with Ufuk Akcigit (Chicago) & Salomé Baslandze (Pennsylvania)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

This paper studies the effect of top tax rates on inventors' mobility since 1977. We put special emphasis on "superstar" inventors, those with the most and most valuable patents. We use panel data on inventors from the United States and European Patent Offices to track inventors' locations over time and combine it with international effective top tax rate data. We construct a detailed set of proxies for inventors' counterfactual incomes in each possible destination country including, among others, measures of patent quality and technological fit with each potential destination. We find that superstar top 1% inventors are significantly affected by top tax rates when deciding where to locate.

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October 6, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Law School Deans As Conformists

2016 U.S. News RankingsMichael Hunter Schwartz (Dean, Arkansas-Little Rock), Deans as Conformists:

I suspect at least some readers may be surprised by one aspect of the recent deans vs. clinicians debate relating to California’s proposed 15 credit-hour skills requirement. It should be no surprise that clinicians have come out in support of the initiative; clinicians are all about the skills. It should be no surprise that a group of deans acted collectively to oppose it; deans tend to oppose anything that might add to the cost side of the ledger. What may be surprising is the absence of comments from deans who support the proposed requirement.  Does anyone seriously believe that all deans oppose it?

Years ago, my tax law professor would regularly say in class, “If you ever observe people engaging in unexplainable behavior, think tax law.”  I have a corollary, “If you ever observe deans engaging in unexplainable behavior, think US News.” ...

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October 6, 2015 in Legal Education | Permalink | Comments (0)

Offshore Shell Games 2015: The Use of Offshore Tax Havens by Fortune 500 Companies

Shell Games 2Citizens for Tax Justice & U.S. PIRG, Offshore Shell Games 2015: The Use of Offshore Tax Havens by Fortune 500 Companies:

U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their fair share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their profits are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.

Congress, by failing to take action to end to this tax avoidance, forces ordinary Americans to make up the difference. Every dollar in taxes that corporations avoid by using tax havens must be balanced by higher taxes on individuals, cuts to public investments and public services, or increased federal debt.

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October 6, 2015 in Tax, Think Tank Reports | Permalink | Comments (0)

Academic Journal Rockets To #1 Scholarly Impact Ranking Through Self-Citation

JournalChronicle of Higher Education, What Happens When a Scholarly Journal Constantly Cites Itself?:

The Journal of Criminal Justice has been on a roll. Once considered a somewhat middling publication — not in the same league as top journals like Criminology and Justice Quarterly — it is now ranked No. 1 in the field according to its impact factor, which measures the average number of citations a journal receives and is meant to indicate which titles are generating the most buzz.

Rocketing to No. 1 is even more impressive when you find out that in 2012 the Journal of Criminal Justice was way back in 22nd place. That’s quite a leap!

Predictably, that sharp uptick made some researchers in a field devoted to misdeeds a tad suspicious. Among them was Thomas Baker, an assistant professor of criminal justice at the University of Central Florida. So Mr. Baker did what good researchers in all fields do: He took a hard look at the data. Then, after emailing it to a few friends, he decided to publish what he had found in the field’s widely read newsletter, The Criminologist.

What he found was this: Much of the rise in the journal’s impact factor was due to citations in articles published in the Journal of Criminal Justice itself.

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October 6, 2015 in Law Review Rankings, Legal Education | Permalink | Comments (0)

Organ: 1L Attrition Increases As Median LSATs Decline

The Legal Whiteboard:  Part Two - The Impact of Attrition on the Composition of Graduating Classes of Law Students -- 2013-2016, by Jerry Organ (St. Thomas):

In late December 2014, I posted a blog entitled Part One – The Composition of the Graduating Classes of Law Students – 2013-2016. That blog posting described how the composition of the entering classes between 2010 and 2013 has shifted. During that time, the percentage at or above an LSAT of 160 dropped by nearly 20% from 40.8% to 33.4%. Meanwhile, the percentage at or below an LSAT of 149 increased by over 50% from 14.2% to 22.5%.

But this reflects the composition of the entering classes. How do the graduating classes compare with the entering classes? This depends upon the attrition experienced by the students in a given entering class. This much belated Part Two discusses what we know about first-year attrition rates among law schools.

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October 6, 2015 in Legal Education | Permalink | Comments (3)

Avi-Yonah: Too Big to Tax? Will The IRS Enforce The Arm's Length Standard Against Vanguard?

VanguardFollowing up on my previous post, Avi-Yonah: Vanguard Owes $35 Billion In Back Taxes:  Reuven S. Avi-Yonah (Michigan), Too Big to Tax? Vanguard and the Arm’s Length Standard, 149 Tax Notes 105 (Oct. 5, 2015):

In this article, Avi-Yonah asserts that the Vanguard Group has been allowed to dominate the mutual fund industry and avoid billions of dollars in corporate taxes by providing at-cost services to commonly controlled funds, in violation of the arm’s-length standard. He argues that the IRS could successfully challenge Vanguard’s transfer pricing but warns that the tax liability would ultimately be borne by the millions of Vanguard fund investors.

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October 6, 2015 in Scholarship, Tax | Permalink | Comments (2)

The Effect Of State Taxes On The Geographical Location Of Top Earners: Evidence From Star Scientists

Enrico Moretti (UC-Berkeley) & Daniel Wilson (Federal Reserve Bank of San Francisco), The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists:

Using data on the universe of U.S. patents filed between 1976 and 2010, we quantify how sensitive is migration by star scientist to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists’ migration patterns.

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October 6, 2015 in Scholarship, Tax | Permalink | Comments (0)

Scheuer & Werning: The Taxation Of Superstars

Florian Scheuer (Stanford) & Iván Werning (MIT), The Taxation of Superstars:

How are optimal taxes affected by the presence of superstar phenomena at the top of the earnings distribution? To answer this question, we extend the Mirrlees model to incorporate an assignment problem in the labor market that generates superstar effects. Perhaps surprisingly, rather than providing a rationale for higher taxes, we show that superstar effects provides a force for lower marginal taxes, conditional on the observed distribution of earnings.

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October 6, 2015 in Scholarship, Tax | Permalink | Comments (0)

BP Settlement Generates $15 Billion Tax Deduction

BP LogoFusion, The Gulf Oil Spill Settlement Lets BP Get Away With Not Paying $5.35 Billion in Taxes:

In announcing the final $20.8 billion settlement with BP over the 2010 Deepwater Horizon oil spill, Attorney General Loretta Lynch said on Monday, “BP is receiving the punishment it deserves.”

What she didn’t mention is that BP—which was found grossly negligent for the 2010 disaster, the worst offshore oil spill in U.S. history—will likely only pay about three fourths of that punishment once tax deductions are taken into account.

Just $5.5 billion of the settlement is a penalty under the Clean Water Act. The other $15.3 billion is other damages and payments that BP can treat as a cost of doing business, said Michelle Surka, an analyst with the U.S. Public Interest Research Group. That means that the oil giant can legally deduct 35% of this $15.3 billion from its taxes, for a total windfall of $5.35 billion. ...

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October 6, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

The IRS Scandal, Day 880

IRS Logo 2Ben Carson For President 2016, IRS: Take Away Muslim Group’s Tax-Exempt Status:

The Council on Islamic-American Relations (CAIR), a U.S. Muslim group, recently demanded that I withdraw as candidate for the 2016 presidential race. By doing so, the organization has brazenly violated IRS rules prohibiting tax-exempt nonprofits like CAIR to intervene in a political campaign on behalf of—or in opposition to—a candidate. (Click video link to witness the violation.)

This is not the first time that CAIR has disrespected U.S. laws or America. It has previously lost its tax-exempt status by failing to file federal taxes three years in a row. It had also been named by federal prosecutors as an unindicted co-conspirator in a criminal conspiracy to funnel money to Hamas, a terrorist organization.

The IRS should immediately revoke CAIR’s tax-exempt status. Under the Obama administration, the IRS has systematically targeted conservative nonprofit groups for politically motivated audits and harassment. The agency should now properly do its job and punish the real violators of America’s laws and regulations.

Sign this petition to demand that the IRS revoke CAIR’s nonprofit tax-exempt status.

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October 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, October 5, 2015

Dean Presents Social Enterprise And The Law Today At McGill

Dean (2015)Steven Dean (Brooklyn) presents Social Enterprise and the Law (Oxford University Press, 2016) (with Dana Brakman Reiser (Brooklyn)) at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series:

Social Enterprise and the Law explores how public and private law could be deployed to allow double bottom line ventures (those devoted simultaneously to profits for owners and promoting a social mission) to realize their potential. The book responds not just to the rise of the social enterprise phenomenon generally, but specifically to the emergence of an array of state law organizational forms designed to house social enterprises. As many Volkswagen owners have become all too aware, promises of social good from for-profit ventures can prove hollow. The hybrid organizational forms states have crafted heartily embrace the concept of blending the profit motive and social good but do surprisingly little to protect investors and entrepreneurs from finding themselves in the same position as the Volkswagen owners that “tried to buy a green, high-performance car and ended up being unwitting participants in a conspiracy to pollute the earth.” Ron Lieber, How VW Might Repay Aggrieved Diesel Owners, NY Times, Sept. 26, 2015, at B1 (quoting Ed Mierzwinski of U.S. PIRG).

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October 5, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Coelho Presents Responses To Financial Transaction Taxes In France And Italy Today At UC-Berkeley

Coehlo 2Maria Coelho (UC-Berkeley) presents Dodging Robin Hood: Responses to France and Italy's Financial Transaction Taxes at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar:

This paper looks at the effect of the introduction of financial transaction taxes in equity markets in France and Italy in 2012 and 2013, respectively, on asset returns, trading volume and market volatility. Using two natural experiments in an event study and difference-in-differences design, I identify bounds on elasticity estimates for three categories of avoidance channels: real substitution away from taxed assets, retiming (anticipation of transaction realizations and portfolio lock-in), and tax arbitrage (cross-platform and financial instrument shifting).

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October 5, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Homonoff Presents Behavioral Economics And Sin Tax Policy Design Today At Loyola-L.A.

HomonoffTatiana Homonoff (Cornell) presents Behavioral Economics and Sin Tax Policy Design at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Recent evidence suggests consumers pay less attention to commodity taxes levied at the register than to taxes included in a good’s posted price. This suggests that policymakers should consider a largely overlooked feature of the tax — the tax’s salience — when designing the optimal tax policy. For example, if this attention gap is larger for high-income consumers than for low-income consumers, policymakers can manipulate a tax’s regressivity by altering the fraction of the tax imposed at the register. Using variation in cigarette tax rates, we find that all consumers respond to taxes that appear in cigarettes’ posted price, while only low-income consumers respond to taxes levied at the register. This suggests that a revenue-neutral shift toward register taxes would lessen the tax’s regressivity.

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October 5, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Supreme Court Justices Get More Liberal As They Get Older

538 (2015)FiveThirtyEight, Supreme Court Justices Get More Liberal As They Get Older:

There’s an old saw, often mistakenly attributed to Winston Churchill, that goes something like this: “If you’re not a liberal when you’re 25, you have no heart. If you’re not a conservative when you’re 35, you have no brain.” A person should start left and drift right, and not the other way around, the adage suggests.

But when it comes to Supreme Court justices, growing older appears to incite a trend in the opposite ideological direction. One prominent measure of judicial ideology — the Martin-Quinn score — illustrates this tendency. ...


The current nine justices haven’t been shielded from these westward winds....

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October 5, 2015 in Legal Education | Permalink | Comments (4)

OECD Releases Final Base Erosion And Profit Shifting (BEPS) Reports

Reiser & Dean: SE(c)(3) — A Catalyst For Social Enterprise Crowdfunding

Dana Brakman Reiser (Brooklyn) & Steven Dean (Brooklyn), SE(c)(3): A Catalyst for Social Enterprise Crowdfunding, 90 Ind. L.J. 1090 (2015):

The emerging consensus among scholars rejects the notion of tax breaks for social enterprises, concluding that such prizes will attract strategic claimants, ultimately doing more harm than good. The SE(c)(3) regime proposed by this Article offers entrepreneurs and investors committed to combining financial returns and social good with a means of broadcasting that shared resolve.

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October 5, 2015 in Scholarship, Tax | Permalink | Comments (0)

Lisa McElroy's Novel, Called On: 'This Generation's 1L'

COPB cover front_001Lisa McElroy (Drexel), Called On (2015):

Called On may be this generation’s One L — Tony Mauro, The National Law Journal

Lisa McElroy perfectly captures the pressures, challenges, and triumphs of both teaching and studying the law. Filled with big, memorable personalities, Called On is an utterly charming depiction of the 1L experience. — Alafair Burke, New York Times bestselling author of The Ex

Lisa McElroy nails law school—from first-day jitters to gunners and back-benchers—in a funny, perceptive, and poignant (but never predictable) first novel. Grab a Diet Coke and a handful of M&Ms and settle in; once you start reading, you won't want to stop. — Amy Howe, co-founder & editor, SCOTUSblog

In Called On, Lisa McElroy deftly chronicles the stories of law professor Connie Shun and first year law student Libby Behl, each of whom is trying to move past tragedy and forge a new path for herself. The intersection of their lives is both humorous and heartbreaking. In this thoughtful and thought-provoking commentary on life, love, and the law, McElroy demonstrates the rare gift to simultaneously entertain, educate, uplift, and inspire. — Pam Jenoff, New York Times bestselling author of The Kommandant’s Girl

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October 5, 2015 in Book Club, Legal Education | Permalink | Comments (2)

Northwestern Suspends Accelerated J.D. Program

Northwestern (2016)News Release, Northwestern Law Suspends Accelerated JD Program:

I write to inform you that we are suspending indefinitely admissions recruitment for our Accelerated JD program. Consequently, we will not be enrolling a new class of AJD students this coming spring.

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October 5, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 879

IRS Logo 2Ricochet, Hearings on Hillary:

Hearings by the Republican majority on recent scandals have been mostly ineffective. In the IRS hearings, three former or current heads of the IRS were key witnesses. Those of us who stayed up with the Lois Lerner epic became familiar with the disdain exhibited by John Koskinen, the current head of the IRS, when he testified.

What the committee seems to do – I am talking about any investigating committee in recent history — is to get the head of the agency or subject under consideration and grill him or her. What happens is that the committee and the public gets the “ignorance of the chief.” The top people don’t know any details. This is true in two senses. If the witness is hostile, and they always are, then they can use ignorance as a delaying tactic. Even if, mirabile dictu, they are willing, they are still lawyers and administrators who deal with paper and people on a very high level. Details are not their forte.

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October 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 4, 2015

Darryll Jones Named Finalist For Florida A&M Deanship

Darryll-JonesFollowing up on my previous post:  Orlando Sentinel, Three Finalists Chosen for Dean at FAMU Law School:

The search for the next Florida A&M University Law School dean has been narrowed down to three finalists, according to the school. They are:

  • Angela Felecia Epps, a law professor at University of Arkansas at Little Rock's law school.
  • Darryll Jones, the interim dean at the FAMU Law School since July 1. Before that, he was a [tax] law professor and associate dean for academic affairs at the school.
  • Willajeanne McLean, the University of Connecticut School of Law's interim dean from 2012-13.

October 4, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

4th Annual Educating Tomorrow's Lawyers Conference: Building On The Foundations For Practice


The 4th Annual Educating Tomorrow's Lawyers Conference: Building on the Foundations for Practice concluded yesterday in Denver. Pepperdine is one of 35 law school consortium memberss, almost a quarter of which are in California (Golden Gate, McGeorge, Pepperdine, Southwestern, Stanford, UC-Hastings, UC-Irvine, USC):

In 2014, Educating Tomorrow’s Lawyers launched Foundations for Practice, an ambitious national project to identify the foundations entry-level lawyers need for practice.

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October 4, 2015 in Conferences, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 878

IRS Logo 2Washington Examiner, Jordan: Congress Will Impeach IRS' Koskinen:

This Congress will impeach IRS Commissioner John Koskinen, Rep. Jim Jordan, a member of the House Oversight Committee, told a group of students from the Young America's Foundation Saturday.

"It is something that has to be done," said the Ohio Republican. "If we don't hold some people accountable in the executive branch for the executive overreach we've seen in [the Obama] administration, then they'll never get the message."

Lois Lerner, the central figure at the heart of the IRS' targeting scandal, "did what a lot of people do when they get caught with their hand in the cookie jar; she tried to lie," said Jordan. "She said it wasn't me; it wasn't Washington; it was the folks in Cincinnati" that directed the IRS' illegal targeting of conservative groups.

Lerner said "it was those rogue agents in Cincinnati; a complete lie," he said. Then she took the Fifth Amendment right not to incriminate herself in front of the House Oversight Committee when she was brought in for questioning.

"When you have the central figure lie, and then take the Fifth, it kind of puts a premium on getting the documents, the records, the communications for what went on here," said Jordan.

In the aftermath of the investigation, the IRS issued a preservation order requiring all communications be preserved. But despite all this, in March 2014 the IRS destroyed 422 backup tapes containing as many as 24,000 emails, the Treasury Department inspector general found. ...

The House is going to pursue impeachment because there needs to be consequences for the egregious behavior of the IRS and "we think it's critical to preserving fundamental freedom, fundamental rights," said Jordan.

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October 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, October 3, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Tax Presentations At Midwestern Law & Economics Association Annual Meeting

KansasTax presentations at yesterday's Midwestern Law & Economics Association Annual Meeting at Kansas:

October 3, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

TIGTA: IRS Improperly Withheld Information From Taxpayer FOIA Requests 12% Of The Time

TIGTAThe Treasury Inspector General for Tax Administration has released Fiscal Year 2015 Statutory Review of Compliance With the Freedom of Information Act (2015-30-084):

TIGTA is required to conduct periodic audits to determine whether the IRS properly denied written requests for taxpayer information pursuant to FOIA § 552(b)(7) and I.R.C. § 6103. The overall objectives of this audit were to determine whether the IRS improperly withheld information requested by taxpayers in writing, based on FOIA exemption (b)(3), in conjunction with I.R.C. § 6103, and/or FOIA exemption (b)(7) or by replying that responsive records were not available. Specifically, this included determining whether the IRS had adequate and effective policies and procedures to ensure that all of these requests were processed timely and that information was not improperly withheld. In addition, TIGTA determined whether IRS disclosure officers erroneously disclosed sensitive taxpayer information when responding to written FOIA, Privacy Act, or I.R.C. § 6103 information requests.

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October 3, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 877

IRS Logo 2Washington Examiner, IRS Needs a Housecleaning, Not Retention Bonuses:

Earlier this year, IRS Commissioner John Koskinen warned taxpayers that they would suffer delays and poor service from his agency during tax time. In doing so, he cited cuts to the IRS budget.

But as we noted at the time, this was a case of malingering and retaliation, not of real need at the IRS. The IRS had access to $500 million in fees that it could use to deliver needed services, but chose to use the money for a long list of other things.

One of those other things was bonuses for senior executives and nonunion managerial employees — a small line item, to be sure, but a rather incredible one to behold at an agency so publicly beset over widespread power-tripping and misconduct within its bureaucracy.

A few new details of the senior IRS bonus binge have finally come to light, thanks to a Freedom of Information Act request from the Tax Analysts. As the Washington Examiner's Paul Bedard reported Wednesday, the agency paid nearly $2 million in bonuses to these top employees between the time Koskinen took his post in late 2013 (amid the targeting scandal) and January 2015. During that period, 456 managerial employees received bonuses. Over the last five years, 1,269 such employees have gotten bonuses and 351 attorneys have received retention incentives, with a total value of $6 million. ...

In any case, an agency caught in such egregious misconduct as the IRS seems like a strange one to be giving bonuses to top staff. Just this week, the IRS has also been dinged in an inspector general investigation for failing to fulfill lawful FOIA requests properly more than 12 percent of the time. According to the Treasury Inspector General for Tax Administration, the agency failed to give taxpayers the information to which they were entitled in eight out of 65 cases studied.

In the nearly three years since the targeting scandal was revealed, it has become clear that it was just a symptom of a much deeper problem at the IRS — a culture that lacks accountability, rewards failure, and persecutes the innocent. Like the Department of Veterans Affairs, it needs a thorough housecleaning, not retention bonuses.

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October 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, October 2, 2015

Weekly Tax Roundup

Weekly Legal Education Roundup