TaxProf Blog

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

Thursday, July 19, 2018

NY Times: Brett Kavanaugh's Law Student Evaluations — 'Significantly Better Than Harvard's Full-Time Faculty,' 'Great Hair'

KavanaughNew York Times, ‘Best Professor.’ ‘Very Evenhanded.’ ‘Great Hair!’: Brett Kavanaugh, as Seen by His Law Students:

Anonymous evaluations of professors by their students can be caustic or catty. But they are also unfailingly candid, and collectively they paint a revealing picture of a teacher’s strengths and weaknesses.

Over the last decade, about 350 law students at Harvard, Yale and Georgetown expressed views on classes offered by Judge Brett M. Kavanaugh, President Trump’s Supreme Court nominee. With rare exceptions, they praised his mastery of legal materials, intellectual rigor, fair-mindedness and accessibility. ...

[I]n 12 sets of evaluations spanning 700 pages, there was almost only glowing praise for Judge Kavanaugh’s teaching. More than a few students said he was the most impressive law school professor they had encountered.

“Significantly better than any full-time faculty I’ve had,” a Harvard student wrote. “Kavanaugh is the best professor I have had in law school,” wrote another. “Best class I’ve taken at HLS by a mile,” said a third. ...

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July 19, 2018 in Legal Education | Permalink | Comments (0)

Four Blue States Sue To Block Trump Tax Law's $10,000 State & Local Tax Deduction Cap

Wall Street Journal, Democratic States Sue Trump Administration Over Tax Overhaul:

A coalition of states led by New York sued the federal government Tuesday, alleging that last year’s tax overhaul was politically motivated and designed to interfere with the rights of states to manage their finances. New Jersey, Connecticut and Maryland joined New York in the federal lawsuit filed in U.S. District Court in New York. The lawsuit takes aim at a part of the new tax law limiting federal tax deductions for state and local taxes to $10,000.

The plaintiffs said the new law raises the federal tax liability of millions of taxpayers in those states, making it more difficult for the states to maintain their taxation policies. The tax law also seeks to force the states to slash public spending, the plaintiffs said.

Wall Street Journal editorial, Albany’s Millionaire Tax Revolt:

The Republican tax bill is the law for 2018, but some progressives are mounting an insurrection against taxation without . . . loopholes for rich people. As a slogan it’s not the Boston Tea Party, but check out the revealing legal challenge from four states. ...

This is a sure legal loser, not least because tax reform merely rewrote the federal tax code. Congress didn’t touch a single state statute. The plaintiff AGs claim their states were somehow politically targeted, but the federal law applies to all 50 states uniformly.

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July 19, 2018 in Tax | Permalink | Comments (0)

University Of Illinois-Chicago To Vote Today On Merger With John Marshall Law School

JMUICFollowing up on my previous post, University of Illinois-Chicago May Absorb John Marshall, Creating Chicago's First Public Law School: Champaign/Urbana News-Gazette, UI Chicago Moving Ahead on Merger With Private Law School in Loop:

The University of Illinois at Chicago could soon have its own law school, a counterpart to the 121-year-old College of Law at the Urbana campus.

The UI Chicago announced last November that it was in merger talks with John Marshall Law School, a diverse private institution in Chicago's South Loop area.

The university is now poised to move forward, asking UI trustees Thursday to approve a resolution supporting the idea and a formal proposal to establish the UI Chicago John Marshall College of Law. ...

Coincidentally, the move comes just two weeks after the Carle Illinois College of Medicine opened at the Urbana campus.  The UI Chicago has a major health care center and one of the nation's largest medical schools. ...

[B]ackers at both schools have noted that almost two-thirds of the public universities designated as top-tier research institutions by the Carnegie Foundation have law schools. The UI Chicago, the second-largest university in the state, is among the 35 percent that do not.

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July 19, 2018 in Legal Education | Permalink | Comments (0)

Banks Got A Trump Tax Bump

BanksBloomberg, Without Tax-Cut Boom, Banks Would Be Facing a Bust:

Here’s the latest sign of who’s benefiting in President Donald Trump’s economy: Without the tax cut, bank earnings growth in the second quarter would have been pretty close to zilch. Instead, the nation’s six biggest banks are set to report a 14 percent improvement in earnings in the April-to-June period. Nine of every 10 dollars of that increase is thanks to the tax cut. Just one dollar came from an actual improvement in operations.

That small gain, just $413 million out of an estimated $3.5 billion increase, is odd given how strong the economy appears to be. Just last year, investors seemed certain that a mixture of Trump’s deregulation and then proposed tax cuts would boost corporate America and banks in particular. And yet those tax gains haven’t translated into much more business for the banks.

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July 19, 2018 in Tax | Permalink | Comments (0)

Bankman, Hemel & Ventry: Why Filing Taxes Isn’t Easy

PostcardPolitico:  Why Filing Taxes Isn’t Easy, by Joseph Bankman (Stanford), Daniel Hemel (Chicago) & Dennis Ventry (UC-Davis):

The Trump administration unveiled a “postcard-sized” tax form late last month that will supposedly make it easier for Americans to do their own taxes. The move was nothing more than a publicity stunt—as a number of commentators noted, the administration achieved its postcard-sized ambitions only by requiring millions of Americans to submit supplementary worksheets that actually complicate the task of tax preparation.

The real action on tax filing right now is happening on the other end of Pennsylvania Avenue, where Congress is working hard to ensure that doing your taxes remains a time-consuming and expensive endeavor. The House of Representatives has passed two bills in recent weeks that seek to stop the IRS from simplifying the tax-filing process. One is pending in the Senate Finance Committee. The other cleared the Senate Appropriations Committee in late June, with a floor vote likely this summer.

At issue are two innovations that, if adopted by the IRS, would radically reduce the time and expense incurred in filing federal income tax returns. The first is free online tax preparation paired with electronic filing: The IRS could offer an easy-to-use product that assists you in completing your tax return, then allows you to submit your return online—all at a price of $0. A second and even more pioneering possibility is “pre-population”: the IRS could allow you to begin the filing process with an already filled-out return rather than making you enter each item of information from scratch.

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July 19, 2018 in Tax | Permalink | Comments (0)

Yin: How The Byrd Rule Might Have Killed the 2017 Tax Bill . . . And Why it Didn't

George K. Yin (Virginia), How the Byrd Rule Might Have Killed the 2017 Tax Bill . . . And Why it Didn't:

During debate on the 2017 tax bill that was once slated to become the “Tax Cuts and Jobs Act,” the number of stories referencing an arcane budget law known as the “Byrd rule” skyrocketed in publications as diverse as the New York Times and the weekly trade magazine, Tax Notes. Many of the references, however, dealt with minor effects of the rule, such as its role in removing the bill’s short title from the final legislation. This article briefly describes a much more important and little-known aspect of this little-known rule that might have—and perhaps should have—killed the bill altogether.

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

Vermont Law School's Tenured Faculty Purge And What It Portends For Legal Education

Vermont Law School Logo (2017)Following up on my previous posts (links below):  Forbes, When the Numbers Don't Add Up: Vermont Law School's Tenured Faculty Purge and What It Portends:

Vermont Law School (Vermont) recently announced it had issued pink slips to 14 of its 19 tenured faculty members. This is not the first time a law school has terminated tenured professors for something other than sex, drugs, and rock-n-roll. Albany Law School, Charleston Law, and others have traveled that road, and several other law schools have shuttered. Vermont’s wholesale decimation of its tenured faculty is something different—a clarion call to the legal Academy that its economic model is unsustainable for all but a handful of elite institutions. Students have borne the brunt of the model’s economic pain; now it’s affecting the other side of the lectern. ...

Vermont cited fiscal constraints as the basis for the tenured faculty housecleaning. The law school’s recent $17M loan from the Department of Agriculture to lower the interest rate of its existing debt is, as lawyers say, res ipsa loquitor of its fiscal extremisThe ABA Journal reported that Craig Pease, one of the sacked professors, contends that “the institution has not stated that it faces financial exigencies.” Let’s hope Professor Pease does not teach bankruptcy or evidence. While it’s understandable that he is pursuing his legal and equitable remedies (and foregoing a settlement package), his contention that Vermont fails to meet its financial exigency burden itself flunks the giggle test. That level of economic denial is all-too-prevalent among law school faculty. Vermont’s action might just be that “Thanks…I needed that” slap in the face to wake them up. ...

The unsustainable cost of law school is nothing new to students—most graduate with six-figure law school debt on top of undergrad obligations. Let’s put aside other faults one could assign to the legal Academy—doctrinally-heavy curricula, detachment from the marketplace, most faculty lacking meaningful marketplace experience and awareness of its trends, the (ir)relevance of most legal “scholarship” (noted by Chief Justice Roberts), a “one-size fits all” pedagogical model, a recent building frenzy—and focus on economics. Law school is just too damn expensive for all but the handful that can afford it and/or elite candidates who are given free/steeply discounted rides for ranking purposes. Let’s also exempt graduates of top-tier schools provided they are among a dwindling pool that land high-paying jobs. For everyone else, it’s reasonable to ask, “Is law school worth it?” Short answer: perhaps, but only if one can stomach the debt and has differentiated skillsets—technological, business, linguistic skills, etc.— to augment baseline legal knowledge.

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July 19, 2018 in Legal Education | Permalink | Comments (1)

OMB Seeks To Hire A Tax Policy Analyst

OMBThe Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) is seeking to hire a Policy Analyst with expertise in tax policy/administration.  See here and here.

As a Policy Analyst, GS-0301-14/15, your typical work assignments may include the following:

Policy analysts within the IP Branch are the core source of expertise on matters pertaining to the regulatory and information policies of Federal departments and agencies with tax policy/administration, financial, banking, consumer protection, and related missions. Policy analysts are responsible for:

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July 19, 2018 in Tax | Permalink | Comments (0)

Wednesday, July 18, 2018

Buchanan Reviews Abreu's The 2017 Tax Act: Requiem For Ability to Pay

Jotwell (Tax) (2016)Neil H. Buchanan (George Washington), The Ability-To-Pay Principle and the Counterintuitive Distributive Justice Analysis of Alimony Payments (JOTWELL) (reviewing Alice Abreu, Tax 2018: Requiem for Ability to Pay, 52 Loyola L.A. L. Rev. ___ (2018)):

The tax bill that Republicans in Congress passed, and that Donald Trump signed in December 2017, might end up being one of the shortest-lived tax laws in U.S. history. Not only are large elements of it explicitly temporary, but the political moment that led to its passage seems already to be passing, quite likely to be followed by a time when progressive tax policy will once again be politically viable.

However, even if this bill lapses or is repealed (in whole or in part), Alice Abreu provides an important contribution to our understanding of what just happened in Tax 2018: Requiem for Ability to Pay. The title of the article telegraphs the importance of the issue that she identifies as the most unfortunate aspect of the new tax law. Whereas objective analysts knew that the bill’s changes would make the tax system less progressive than it had been, Abreu explains that seemingly unrelated elements of the bill add up to a repudiation of the very idea of progressive taxation. ...

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

Public College President Salaries, 2016-17

Book-It-Legal: Uber For Law Students Seeking Micro-Clerkships

BookIntroducing Book-It Legal: The Innovative Legal Startup That May Forever Change the Student Clerkship:

Named by the ABA as the number-one legal startup in the country for 2018, Book-It Legal is singlehandedly changing the way law students and attorneys across the country view the student clerkship. 

In a nutshell, Book-It Legal is the Uber of law student clerkships.  Book-It’s platform allows top law students to bid on paid legal projects posted by licensed attorneys from across the country.  Book-It gives law students the flexibility to bid on the projects they want — and to work at their own pace.

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

Treasury Department Restricts Donor Disclosure Requirement To § 501(c)(3) Groups

Treasury Department Logo (2017)Press Release, Treasury Department and IRS Announce Significant Reform to Protect Personal Donor Information to Certain Tax-Exempt Organizations:

The Treasury Department and IRS announced today that the IRS will no longer require certain tax-exempt organizations to file personally-identifiable information about their donors as part of their annual return.  The revenue procedure released today does not affect the statutory reporting requirements that apply to tax-exempt groups organized under section 501(c)(3) or section 527, but it relieves other tax-exempt organizations of an unnecessary reporting requirement that was previously added by the IRS.  

Nearly fifty years ago, Congress directed the IRS to collect donor information from charities that accept tax-deductible contributions.  That statutory requirement applies to the majority of tax-exempt organizations, known as section 501(c)(3) organizations, receiving contributions that can be claimed by donors as charitable deductions.  This policy provided the IRS information that could be used to confirm contributions to those organizations.

By regulation, however, the IRS extended the donor reporting requirement to all other tax-exempt organizations—labor unions and volunteer fire departments, issue-advocacy groups and local chambers of commerce, veterans groups and community service clubs.  These groups do not generally receive tax deductible contributions, yet they have been required to list the names and addresses of their donors on Schedule B of their annual returns (Form 990).

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July 18, 2018 in IRS News, Tax | Permalink | Comments (0)

Liscow: Are Court Orders Sticky? Evidence On Distributional Impacts From School Finance Litigation

Zachary D. Liscow (Yale), Are Court Orders Sticky? Evidence on Distributional Impacts from School Finance Litigation, 15 J. Empirical Legal Stud. 4 (2018):

Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools.

I find that the court orders’ distributional impacts do stick. The education spending is financed by tax increases that do not target the largest beneficiaries of the increased education spending, the poor and those with children.

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

Cornell Is Second Law School To Accept The GMAT And GRE

GMATGRECornell has joined Penn in accepting both the GMAT and the GRE, and is 21st law school to accept the GRE (joining Arizona, Brooklyn, BYU, Cardozo, Chicago Kent, Columbia, Florida State, Georgetown, Harvard, Hawaii, John Marshall (Chicago), Northwestern, Pace, PennSt. John's, Texas A&M, UCLA, USCWake Forest, and Washington University). Two law schools allow the GRE in limited circumstances:  Chicago (admissions committee may grant LSAT waiver) and Georgia (students enrolled in a dual degree program at the university). (George Washington has rescinded its use of the GRE because it has not done a school-specific validation study.)

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

Red State Charities Could Be Collateral Damage From The GOP's War On California's High Taxes

Los Angeles Times, Red State Charities Could be Collateral Damage From the GOP's War on California's High Taxes:

[There are] more than 100 charitable tax-credit programs in dozens of states — including red ones such as Alabama, Georgia, South Carolina and Louisiana — that could be collateral damage in a dispute between Republicans in the nation’s capital and leaders of Democratic-controlled states, including California. ...

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July 18, 2018 | Permalink | Comments (0)

ABA Reveals $1.3M Theft By Former Staffer On Tax Form

ABA Journal (2014)ABA Journal, ABA Reveals $1.3M Theft by a Now-Former Staff Member on Tax Form:

The American Bar Association has posted a tax form that reveals a onetime staff member diverted about $1.3 million from the ABA over a period of eight years.

The ABA became aware of the theft by a nonmanagerial staff member last September, according to Form 990 (see page 118) and an interview with ABA Executive Director Jack Rives.

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

Tuesday, July 17, 2018

Democratic Criticism Of The 2017 Tax Act Grows More Incoherent

E21Brian Riedl (Manhattan Institute), Criticism of Tax Cuts Grows More Incoherent:

The 2017 Tax Cuts and Jobs Act (TCJA) remains controversial, with public opinion evenly split and many Democrats campaigning on repeal. However, the Democratic critique of the tax cuts has grown increasingly incoherent. The party excoriates the “tax cuts for the rich” while trying to tilt them even further to the wealthy. Democrats slam the deficit effect of the tax cuts while working to worsen budget deficits. In addition, they erroneously describe the law as a “middle-class tax hike” while proposing policies that would truly raise middle-class taxes. ...

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July 17, 2018 in Tax, Think Tank Reports | Permalink | Comments (2)

Planning Your Law School Class To Utilize Effective Learning Techniques

James McGrath (Texas A&M), Planning Your Class to Take Advantage of Highly Effective Learning Techniques, 96 U. Det. Mercy L. Rev. ___ (2018):

What are the most highly effective learning techniques? Take a moment and consider what you think they are. Write them down if it is convenient. The symposium that is the subject of this law review volume examines the impact of formative assessment. In this article, I will connect formative assessment possibilities with ideas on how to take advantage of some of the proven highly effective learning techniques. The road there is a bit tortuous, but it is my hope that even the most well-informed teacher will find something that they can add to their quiver of techniques to help with her efforts of continually improve her teaching.

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July 17, 2018 in Legal Education, Scholarship | Permalink | Comments (2)

Ryznar: Homeownership As Savings

Margaret Ryznar (Indiana-Indianapolis), Homeownership as Savings, 159, Tax Notes 1145 (May 21, 2018):

This article suggests that housing is an important savings vehicle, proposing that the tax law should provide incentives for homeownership as it does for retirement savings.

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

Would A Universal Basic Income Cure Poverty?

WSJ 2Wall Street Journal Book Review:  The Cure for Poverty?, by Edward Glaeser (Harvard) (reviewing Annie Lowrey, Give People Money (2018) & Andrew Yang, The War on Normal People (2018)):

The concept of a universal basic income, or UBI, has become part of the moral armor of Silicon Valley moguls who want a socially conscious defense against the charge that technology is making humanity obsolete. The logic of UBI runs that if every adult received $12,000 annually in free, unfettered cash, then we would not need to worry about an ocean of underemployed men who numb their feelings of worthlessness with computer games and opioids. The folly of UBI is that it sees a cash payment as a substitute for purpose and accomplishment and that it enables joblessness when we should be encouraging employment and job-creating innovation.

Two new books examining UBI are better than their subject deserves. Annie Lowrey’s “Give People Money” advances the general progressive case for UBI as a new link in the safety net. Andrew Yang’s “The War on Normal People” is squarely targeted at the techno-dystopians who see UBI as a response to a jobless future in America.

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July 17, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (4)

LSU Seeks To Hire A Tax Prof

LSU Logo (2018)LSU Law School seeks to hire a tenure-track or tenured faculty member in business and commercial law, with particular attention in corporate, partnership, and other areas of tax law:

We may consider applications from persons who specialize in other areas as additional needs arise. Applicants should have superior academic credentials and publications or promise of productivity in legal scholarship, as well as a commitment to outstanding teaching. The Paul M. Hebert Law Center of LSU is an Equal Opportunity/Equal Access Employer and is committed to building a culturally diverse faculty. We particularly welcome and encourage applications from female and minority candidates.

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July 17, 2018 in Tax, Tax Prof Jobs | Permalink | Comments (0)

Law Firm Leaders Are Bullish: 70% Expect Growth In 2d Half Of 2018; Only 9% See Drop

Citi (2016)Law.com, Confidence Dips, but Firm Leaders Bullish on Demand Growth, Citi Report Says:

Law firm leaders are taking a slightly dimmer view of the legal industry’s prospects in the second half of 2018 as their confidence in the U.S. and global economy wanes, according to a survey released Wednesday by Citi Private Bank.

Citi’s latest edition of its Law Firm Leaders Confidence Index showed that while top brass at firms remain a confident group, they have some concerns about the state of the economy, and that has had an impact on overall confidence. The Citi index runs on a scale of 0 to 200, where everything above 100 indicates confidence. Overall confidence among law firm leaders had an index score of 118 in the latest semiannual Citi report, down one point from the previous edition of the report released in February.

Despite the dip firm leaders were more bullish about their own firms’ prospects, particularly in the realm of demand for their services, Citi’s report showed.

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

Puckett: Means-Testing 'Ability To Pay' In The Income Tax To Combat Wealth Inequality

James M. Puckett (Penn State), Improving Tax Rules by Means-Testing: Bridging Wealth Inequality and 'Ability to Pay', 70 Okla. L. Rev. 405 (2018):

The federal income tax can and should do more to address wealth disparities and income inequality. The income tax does not directly count wealth, and the realization rule and basis "step-up" at death exclude substantial amounts of income for the wealthy. The Constitution limits Congress's ability to tax wealth. Despite these serious challenges, this Article considers how to potentially bridge the gap between wealth and the income tax.

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July 17, 2018 in Scholarship, Tax | Permalink | Comments (2)

NYU Law Grad, Creator Of The Trump Resistance Manual, On The 'Hidden Privileges' Of Wealth

ForbesVox:  Like Kylie Jenner, I Was on a Forbes List. Here Are the Hidden Privileges That Made Me a “Success.”, by Aditi Juneja (J.D. 2017, NYU):

Gracing the cover of Forbes’s 60 Richest Self-Made Women issue this week was none other than Kylie Jenner, the 21-year old member of the Kardashian family dynasty and cosmetics mogul.

The problem with this particular cover, and more generally with magazine lists like these, is they often gloss over the role intergenerational wealth and access plays in success. This is especially true when that success is achieved at a young age. I should know. I was on the Forbes “30 Under 30” list this year for Law and Policy.

Lists like these — which fetishize achievement, particularly at a young age — erase the privilege and access that allow some of us to take career risks and be entrepreneurial in ways others can’t. They diminish the hard work done by people in more challenging circumstances and add to the myth that if you just work hard enough, you can pull yourself up by your own bootstraps. They ignore that some people have neither boots nor straps.

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July 17, 2018 in Legal Education, Tax | Permalink | Comments (3)

Monday, July 16, 2018

McGrath & Morriss: Law School Assessment, From Admissions To Curriculum To The Bar Exam

James McGrath (Texas A&M) & Andrew P. Morriss (Texas A&M), Assessments All the Way Down:

The role of assessments is getting attention throughout legal education. A growing acceptance of the Graduate Record Examination (“GRE”) as an alternative to the Law School Aptitude Test (“LSAT”) and its incorporation into the U.S. News & World Report (“USN&WR”) law school rankings opened the door to changes in who is going to law school and how they are recruited. At the other end of students’ journey through legal education, the discussion of recent graduates’ bar exam performance — linked by some to declining LSAT scores of entering students — raised questions about the design of bar exams as well as about law schools’ preparation of graduates for the bar. In between, the American Bar Association’s incorporation of assessment into its accreditation process spurred growing interest in how law schools conduct assessments and is prompting changes in how legal educators evaluate students.

In this article, we begin with the issues raised by the GRE’s appearance as an alternate pathway. Next, we set out assessment principles likely to influence future conversations in the legal academy. Then we look at how the bar results discussion connects to improving assessment strategies. Finally, we conclude with speculation about what this all means.

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July 16, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

IRS Gives Green Light To Back-Door Roth IRAs For High-Income Taxpayers

Forbes, IRS Unlocks The 'Door' For High-Income Savers:

For years, there’s been a debate raging in the financial planning community surrounding something that’s colloquially become known as “The Back-Door Roth IRA.” Some practitioners (including myself) have been advocates of the planning strategy, which involves a two-step process that effectively enables certain high-income taxpayers to skirt the Roth IRA contribution income limits, viewing it as a clever technique to make the most of nonsensical rules. Other practitioners, however, have preached caution, and have largely encouraged their clients to avoid making such transactions out of concern that the IRS could disallow the move thanks to something known as “the step-transaction doctrine.”

Despite the uncertainty surrounding the somewhat popular strategy, the IRS had been relatively tight-lipped as to its official view on the matter… or at least it had been until this past Tuesday. Earlier this week, on a July 10th Tax Talk Today webcast, Donald Kieffer Jr., a tax law specialist with the IRS’s Tax-Exempt and Government Entities Division, gave the Back-Door Roth IRA it’s biggest vote of confidence yet. Here’s what Kieffer had to say about the strategy:

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July 16, 2018 in Tax | Permalink | Comments (5)

Simkovic: How Secure Is Tenure?

Following up on my recent posts:

Michael Simkovic (USC), How Secure Is Tenure?:

Colleges and universities typically pay educated professionals a fraction of what similar individuals earn in the private sector (typically around 60 to 80 cents on the dollar) in return for greater job security and academic freedom.  In recent years, some law schools have effectively reneged on this bargain, slashing compensation, de-prioritizing research support and/or accepting outside funding that compromises academic freedom, and terminating even some tenured faculty members.

Recent reports suggest that Vermont Law School has taken this to the extreme. According to the ABA Journal, Vermont Law School recently stripped tenure from 14 of its 19 tenured professors. This was done without a formal declaration of financial exigency, and according to faculty members and the AAUP, apparently without the consent of faculty members typically required for such decisions. ...

If the reports are accurate, Vermont has essentially acted as if tenure does not exist. This could potentially raise questions about whether Vermont is in compliance with ABA standard 405, but it is unclear how assertive the ABA or site visit teams will be in enforcing those standards. 

The incident highlights the importance of faculty members joining organizations like the AAUP which protect tenure and academic freedom.  At many institutions, tenured faculty members are increasingly getting the worst of both worlds—private-sector level risks with public-sector level compensation.

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July 16, 2018 in Legal Education | Permalink | Comments (7)

UC-Irvine Launches Graduate Tax Program

UCI Logo (2018)UCI Law Launches a New, Innovative Graduate Tax Program:

The University of California, Irvine School of Law is pleased to announce its Graduate Tax Program, a one-of-a-kind, practice-oriented Master of Laws (LL.M.) degree program led by renowned tax scholars Omri Marian, Joshua Blank and Victor Fleischer. True to the spirit of UCI Law’s cutting-edge approach to legal education, the Graduate Tax Program offers a unique tax curriculum emphasizing practice skills and featuring small class sizes and a collegial, supportive learning environment. The program will provide students with both the doctrinal depth and the experiential learning needed to practice tax law and to develop a deep understanding of the new tax law — enacted in 2017. The program will prepare graduate students for careers as tax attorneys, judges, tax administrators and policy advocates in the United States and abroad, and will also offer the opportunity for current practitioners to dramatically expand their tax knowledge and skills. The Program will begin accepting applications in August 2018 for admission to the inaugural class, with students matriculating in the fall of 2019.

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July 16, 2018 in Legal Education, Tax | Permalink | Comments (0)

Lesson From The Tax Court: An 'Origin of the Claim' Test For §104(a)(2) Exclusions

Tax Court (2017)Here at Texas Tech we require all law students to take the basic course in federal income tax. That is not because we are especially cruel, but rather because tax law touches so many other areas of practice that the faculty believes every student should have an introduction to tax. I must shape my course knowing that at least two thirds of the students do not want to become tax lawyers. One tack I take is to highlight tax issues that regularly come up in other practice areas such as family law and litigation.

A case from the Tax Court last week teaches a useful lesson about the intersection of tax with litigation practice.  Jacques L. French and Sherry L. French v. Commissioner, T.C. Summary Op. 2018-36 (July 12, 2018) involves taxpayers seeking to exclude a settlement payment under §104(a)(2), the section that allows taxpayers to exclude from gross income the amount of damages received because of personal physical injury or physical illness.

We usually think about the “origin of the claim” test in the §162 context, where courts use it to decide when taxpayers may deduct expenses associated with litigation. In fact, just this last week I saw another Tax Court opinion that involves this application of the origin of the claim test. I may blog that next week, unless something else catches my eye.

This week, however, I think it is useful to see how the Tax Court takes a very similar approach to deciding when a taxpayer can exclude a damage award under §104(a)(2). In both situations, it is the nature of the claim asserted in litigation that governs the potential exclusion or the potential deduction.  Looking at §104(a)(2) also allows me to give a shout out to the Tax Court's newest Special Trial Judge, Diana L. Leyden.  Her carefully constructed opinion shows us exactly how the Tax Court applies this “origin of the claim test” in the §104(a)(2) context. It makes for a nice lesson from the Tax Court.

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July 16, 2018 in Bryan Camp, New Cases, Tax | Permalink | Comments (0)

LSAT Adopts 12 Different Gender Identity Options; GRE Only Has Two

From Switzerland With Love: Surrey’s Papers And The Original  Intent(s) Of Subpart-F

Nir Fishbien (S.J.D. 2018, Michigan), From Switzerland with Love: Surrey’s Papers and the Original  Intent(s) of Subpart-F, 38 Va. Tax Rev. ___ (2018):

For the first time since 1913, and as part of the 2017 tax reform, Congress adopted a tax regime that exempted from U.S. taxation dividends from foreign subsidiaries. By doing so, Congress abandoned the general principle that U.S. residents should be subject to tax on all income “from whatever source derived.” This shift marked a good occasion for considering the reasons the United States taxed such dividends in the first place. In 1962, Congress enacted a new law, also known as ‘Subpart-F’, which subjected certain earnings of foreign subsidiaries of American parent corporations to current-base taxation. This was a deviation from the general tax principle of tax deferral, under which earnings of foreign subsidiaries are taxed only upon repatriation of these earnings (by a dividend, for example). The new legislation was the result of a political compromise. While Treasury supported a wide-scale elimination of tax deferral, Congress eventually adopted a much narrower law, eliminating tax deferral only in cases where it was abused by using it to avoid otherwise owed U.S. taxes.

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July 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 15, 2018

Willamette Seeks To Hire A Tax Prof

WillametteWillamette University College of Law seeks applicants for up to two full-time, tenure-track faculty positions beginning in fall 2019:

While the focus of our search is for entry-level candidates, we also welcome applications from early-career lateral candidates. Our curricular interests include Business Associations, Commercial Law, and Health Law, as well as Trust & Estates, Property, Family Law, Tax, Torts, and Criminal Law. Applicants must possess strong academic credentials and a proven ability to produce thoughtful scholarship, as well as the skills necessary to communicate their expertise to colleagues and their students. The Faculty Appointments Committee will begin reviewing applications in the late summer and will continue to do so until the positions are filled. ...

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July 15, 2018 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

U.S. Government Revenues Fall In Wake Of GOP Tax Cut

WSJWall Street Journal, U.S. Government Revenues Drop in Wake of Tax Cuts:

Corporations taking advantage of new, lower tax rates reduced their payments to the federal government last month.

The Treasury Department on Thursday said government receipts fell 7% in June compared with the same month a year earlier, including a 33% drop in gross corporate taxes. Individual withheld and payroll taxes were down 5% from June 2017, while non-withheld individual taxes rose by 7%.

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July 15, 2018 in Tax | Permalink | Comments (0)

Enrollment Soars In College's Online Program Costing 60% Less Than Regular Tuition

60%Inside Higher Ed, A College Prices Its Online Programs 60% Less:

Most institutions charge students the same or more for online programs than for face-to-face. Berklee has found success with a pricing model that favors online students.

Berklee College of Music’s online program, priced at just over a third of tuition for the Massachusetts institution’s face-to-face degree offerings, raised eyebrows when it got off the ground in 2013. Conventional wisdom that online programs require more resources to produce had taken hold, and pricing models that favor online students were few and far between.

Five years later, Berklee remains an anomaly in higher ed, as most institutions continue to charge the same or more for online programs as for their face-to-face equivalents. Some arguments hinge on a philosophical belief that online education should be valued equivalently to face-to-face programs, while others emphasize the significant financial burden of designing and launching online courses from scratch.

In the face of a shifting landscape, Berklee has held firm. Online tuition for a bachelor's degree will go up half a percentage point this fall, from $1,479 per course ($59,160 for a 40-course degree program) to $1,497 per course ($59,880 total), but it still remains more than 60 percent less than face-to-face tuition — $171,520. In the last few years, on-ground tuition has increased by a few thousand dollars while online tuition has stayed the same, widening the gap between the two even farther, according to Debbie Cavalier, Berklee’s senior vice president of online learning and continuing education.

As of fall 2017, Berklee Online's undergraduate enrollment stood at 1,138 students, up from 244 just two academic years earlier. Though Cavalier’s team had worried early on that the online program would cannibalize existing offerings, campus enrollment has instead increased from 4,490 undergraduates in 2013 to 4,532 in 2017, even as online has grown more popular. ...

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July 15, 2018 in Legal Education | Permalink | Comments (10)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. [289 Downloads]  Introduction to Tax Policy Theory, by Allison Christians (McGill)
  2. [254 Downloads]  Higher Education Savings and Planning: Tax and Nontax Considerations, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [250 Downloads]  Code Sec. 1031 after the 2017 Tax Act, by Brad Borden (Brooklyn)
  4. [215 Downloads]   The International Provisions of the TCJA: A Preliminary Summary and Assessment, by Reuven Avi-Yonah (Michigan)
  5. [215 Downloads]   Rethinking Legal Taxonomies for the Gig Economy: Tax Law, Employment Law, and Economic Incentives, by Abi Adams, Judith Freedman & Jeremias Prassl (Oxford)

July 15, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 14, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Can Trump Enact A Second Tax Cut On His Own By Indexing Capital Gains?

Wall Street Journal op-ed:  Trump Alone Can Cut Taxes, by Kimberley A. Strassel:

What if President Trump had the authority—on his own—to enact a second powerful tax reform? He does. The momentum is building for him to use it.

In the halls of Congress, the corridors of the administration, and the nerve centers of activist groups, forces are aligning behind a plan: a White House order to index capital gains for inflation. It’s a long-overdue move—one that would further unleash the economy and boost GOP election prospects. And Mr. Trump could be the president bold enough to make it finally happen.

At President Reagan’s behest, Congress in the 1980s indexed much of the federal tax code for inflation. Oddly, capital gains weren’t similarly treated. The result is that businesses and individuals pay taxes on the full nominal amount they earn on investments, even though inflation eats up a good chunk of any gain. It’s not unheard of for taxes to exceed real gains after inflation. The result is significant capital distortion, as companies sit on buildings and property or investors sit on stock—rather than selling and thereby putting both assets and gains to more productive use.

Conservatives have understood this problem for decades, yet for decades they have been held hostage to a 1992 government brief. The paper by the Justice Department’s Office of Legal Counsel offered a few faulty arguments as to why the Treasury lacked the authority to make this regulatory change. Neither President Bush questioned it, but others have.

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July 14, 2018 in Tax | Permalink | Comments (10)

Want To Kill Tenure? Be Careful What You Wish For

Chronicle of Higher Education, Want to Kill Tenure? Be Careful What You Wish For:

The trustee hadn’t said a word for an hour as the board of the small Midwestern liberal-arts college debated ways to turn around its flagging fortunes. But during a lull in the conversation, he finally spoke up. As David Strauss recalls, "He looked at everybody as if we’d all been fools, and said, ‘Well, the solution is easy. Get rid of tenure.’"

Strauss, a principal of the Art & Science Group, a consulting firm that works with colleges, had heard the argument before. Almost anyone who works in higher education has. Many outside academe — and some within — see tenure as an entitlement that encourages "deadwood" professors to coast and shields firebrands who spout off, an anachronism that hinders colleges from innovating and drives up costs.

Strauss says that the trustee’s suggestion was politely ignored and talk soon turned back to more pressing issues, such as enrollment and academic programs. Though tenure is increasingly scarce, its status as an ­ideal in higher education is so sacred that sentiments like the trustee’s are rarely expressed openly. Indeed, several academic leaders, lawmakers, and advocates for adjuncts and academic freedom didn’t respond to requests for interviews for this article. But the trustee’s argument against tenure isn’t going away, and may be gaining momentum.

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July 14, 2018 in Legal Education | Permalink | Comments (11)

Ellen Aprill Receives ABA Outstanding Academic Award

Aprill (2016)The Nonprofit Organizations Committee of the ABA Business Law Section has awarded the Outstanding Academic Award for distinguished academic achievement in the nonprofit sector to Ellen P. Aprill (Loyola-L.A.):

Ellen Aprill is the John E. Anderson Chair in Tax Law at Loyola Law School in Los Angeles and is the founding director of its Tax LLM program. She has been a member of the Loyola Law School faculty since 1989.

Professor Aprill is one of the founders of the Loyola Law School Western Conference on Tax Exempt Organizations, considered by many to be the premier nonprofit law conference on the West coast. She has co-hosted this conference for twenty years and has been instrumental in bringing together leaders in government, academia and the nonprofit law bar each year for this conference.

Professor Aprill has written extensively on issues of nonprofit law and is a reliable source of knowledge both for her students and the public. 

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July 14, 2018 in Tax | Permalink | Comments (5)

Friday, July 13, 2018

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Christians's Introduction to Tax Policy Theory

This week, Sloan Speck (Colorado) reviews a new work by Allison Christians (McGill), Introduction to Tax Policy Theory (2018).

Speck (2017)In Introduction to Tax Policy Theory, Allison Christians fulfils the Herculean task set forth in her title with deft grace and critical perspective. Christians’s short paper first elucidates three general goals of taxation from the taxing authority’s perspective, which she describes as state-building, internal management, and negotiated expansion. Then, Christians juxtaposes these goals with three metrics well-known among tax policy aficionados: equity, efficiency, and administrative capacity (which easily could be “simplicity”). Out of this analysis, Christians calls for the tax policy community to think and reflect on fundamental questions of approach and methodology—and to acknowledge the “discrepancies and weaknesses” in conventional approaches to tax policy.

Christians’s taxonomy of the goals of taxation is a major contribution, although certain to engender disagreement. Some dissention is inevitable when parsing all of human experience into three bins, each labeled with two words, and Christians presents her “imperfect” but “adequate” categories as poles, or touchstones, rather than as discrete silos.

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July 13, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

House Panel Passes $1,000 Tax Break For Gym Memberships, Exercise Classes: 'It Violates Every Principle Of Tax Policy'

Wall Street Journal, House Panel Passes Tax Break for Gym Memberships, Exercise Classes:

Taxpayers would be able to claim new breaks for gym memberships, exercise classes and other fitness expenses under a bipartisan bill advanced Thursday in the House of Representatives.

The bill would consider those costs as medical expenses for tax purposes, enabling people to use tax-advantaged health-savings accounts and flexible spending accounts to pay for them. The break would be capped at $500 a year for individuals and $1,000 for joint filers. It would reduce federal revenue by $3.5 billion over a decade.

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July 13, 2018 in Congressional News, Tax | Permalink | Comments (0)

Vermont Strips Tenure From 14 Of 19 Law Profs

Vermont Law School Logo (2017)Following up on my previous posts (links below):  ABA Journal, 14 of 19 Vermont Law Professors Lose Tenure, Retention Chair Tells Professors' Organization:

After being informed by the chair of Vermont Law School's retention committee that the school stripped 14 law professors of tenure, the American Association of University Professors has questioned whether the school followed proper regulations.

In a June 19 letter sent to the school’s tenure and retention committee chair, the AAUP conceded that under “extraordinary circumstances because of financial exigencies,” law schools can terminate faculty appointments for reasons other than adequate cause. However, in such circumstances, the faculty, administration and governing board should together determine if financial exigencies exist, and faculty should have a “primary responsibility” in determining where the termination of appointments occur, as well as identifying criteria for the terminations, according to the letter.

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July 13, 2018 in Legal Education | Permalink | Comments (5)

Hemel's Advice To Democrats On Kavanaugh's Nomination

From Tax Prof Daniel Hemel (Chicago):
Give Kavanaugh a Chance:

Several Democratic senators already have said that they will oppose Judge Brett Kavanaugh’s nomination to the Supreme Court seat that Justice Anthony Kennedy is vacating (here are statements from Richard BlumenthalKirsten GillibrandKamala HarrisBernie SandersChuck Schumer, and Ron Wyden). This strikes me as a grave mistake — normatively and strategically. Kudos to Democrats — including Sherrod BrownJoe DonnellyHeidi Heitkamp, and Joe Manchin — who have resisted the rush to judgment.

Brett Kavanaugh is a conservative. That should not be disqualifying. Republican presidents generally will nominate conservatives to the Court, and Democratic presidents generally will nominate liberals. Senators of the opposite party should insist upon well-qualified nominees who fall within the mainstream of American legal thought — not extreme ideologues. Judge Kavanaugh is well qualified by any measure, and his views are much closer to the center than those of many of his former and current Republican-appointed colleagues on the D.C. Circuit. ...

Judge Kavanaugh, moreover, is about the best that we liberals could hope for. Yes, he is a conservative, but as far as conservatives go, he is a judicial minimalist. ...

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July 13, 2018 in Legal Education | Permalink | Comments (2)

Shanske: State Conformity And Tax Base Erosion

Darien Shanske (UC-Davis), States Should Conform to — and Improve — the New Federal Tax Provisions Meant to Counter Base Erosion:

The United States used to tax multinational corporations (MNCs) on the basis of their worldwide income, except that most foreign source income would only be taxed when actually repatriated to the United States. This structure naturally created considerable incentive to strip income out of the United States and then not to repatriate it.

Now, thanks to the TCJA, the United States is ostensibly only going to tax MNCs on their US source income. This shift to a so-called territorial system means, of course, that MNCs will continue to have incentive to shift income abroad in order to avoid US tax. The TCJA has two separate provisions meant to counter this: GILTI and BEAT. One question for the states is whether they should conform to these provisions. I think the answer is yes. I also think it is clear that states should improve these provisions when they adopt them.

There is a preliminary question as to whether states can — as a matter of federal constitutional law — conform to these provisions. I think the answer is again yes, but the details of the state law will matter a great deal. ...

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July 13, 2018 in Tax | Permalink | Comments (0)

Gianni: OECD BEPS (In)Action 1 — Factor Presence As A Solution To Tax Issues Of The Digital Economy

ABA Tax LawyerMonica Gianni (California State-Northridge), OECD BEPS (In)Action 1: Factor Presence as a Solution to Tax Issues of the Digital Economy, 72 Tax Law. ___(2018):

The Organisation for Economic Cooperation and Development (OECD) launched its project to address base erosion and profit shifting (BEPS) in 2013 with an Action Plan of 15 Actions. Action 1 encompasses identifying difficulties the digital economy poses for applying existing international tax rules and developing options to address them. Under current international tax rules, an enterprise generally is not taxed in a country in which it does not have a physical presence. With the economy having evolved so that business can be conducted over the internet with no physical presence in a country, companies have been able to avoid taxation in many jurisdictions from which they generate significant income. The OECD issued a final report on Action 1 in 2015 and a subsequent report in 2018, yet has failed to recommend a solution to address the physical presence issue. In effect, Action 1 has become Inaction 1. Countries and the European Union have grown impatient with the OECD and have taken matters into their own hands, with countries and the European Commission (EC) proposing or enacting legislation to address head on the issue of nontaxation of multinational digital companies, tax authorities assessing tax against multinational companies under the existing rules, and the EC bringing actions against countries for illegal state aid.

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July 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

Thursday, July 12, 2018

After Temple Admitted That Its Business School Misreported Data To Goose Its Ranking, U.S. News Demands Certification Of Other Schools' Data (Including Law School)

TempleFollowing up on Tuesday's post, Temple Business School Dean Fired For Knowingly Submitting False Data To Inflate U.S. News Ranking Over Several Years:  U.S. News has sent a letter to Temple asking it to certify the accuracy of data submitted by its other schools and programs (including the law school) because "the scope and duration of the misreporting at Fox calls into question all of Temple University’s submissions to U.S. News."

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July 12, 2018 in Law School Rankings, Legal Education | Permalink | Comments (4)

Avi-Yonah & Mazzoni: BEPS, ATAP And The New Tax Dialogue — A Transatlantic Competition?

Reuven S. Avi-Yonah (Michigan ) & Gianluca Mazzoni (S.J.D. 2018, Michigan), BEPS, ATAP and the New Tax Dialogue: A Transatlantic Competition?:

The Tax Cuts and Jobs Act (TRA17) signed into law by President Trump on 22 December 2017 contains multiple provisions that incorporate the principles of the OECD/G20 Base Erosion and Profit Shifting (BEPS) into domestic US tax law. Together with the changes in the 2016 US Model Tax Treaty, these provisions mean that the United States is following the European Union in implementing BEPS and particularly its underlying principle, the single tax principle (all income should be subject to tax once at the rate derived from the benefits principle, i.e. active income at a minimum source tax rate and passive at the residence state rate).

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July 12, 2018 | Permalink | Comments (0)