TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, June 28, 2016

UC Berkeley Spends $1 Million To Refurbish Chancellor's Home; Assistant Claims She Was Fired For Refusing To Lie In IRS Reporting About Time Spent Doing Personal Chores

UC Berkeley Primary Logo Berkeley BlueSan Francisco Chronicle, UC Berkeley Spends Big on Chancellor’s Campus Fixer-Upper:

Over the past three years, UC Berkeley has spent more than $1 million sprucing up the official home of Chancellor Nicholas Dirks, school records show. ...

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June 28, 2016 in Legal Education | Permalink | Comments (0)

Will Artificial Intelligence Really Destroy Legal Jobs?

AIFollowing up on my previous posts:

Legal Tech News, The News of Attorneys' Demise Has Been Greatly Exaggerated (With Apologies to Mark Twain):

There has been a great deal of coverage about the possibility of Artificial Intelligence (AI) replacing the legal profession, stimulated in part by a recent conference at Vanderbilt Law School titled Watson, Esq.: Will Your Next Lawyer Be a Machine?

Some warn that the world’s first artificially intelligent attorney is imminent and that it is only a matter of time before technology gives rise to new ways of delivering professional services and ultimately replacing the traditional lawyer. Yet others think that the human element is critical to the practice of law and cannot be so easily replaced.

While AI has come a long way, replacing lawyers is not on the horizon. 

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June 28, 2016 in Legal Education | Permalink | Comments (0)

Oxford 10th Annual Academic Tax Symposium

OxfordThe 10th Annual Academic Tax Symposium kicks off today at the Oxford University Centre for Business Taxation:

Reuven Avi-Yonah (University of Michigan), Evaluating BEPS
Discussant:  Henk Vording (Leiden University)

Niels Johannesen (University of Copenhagen), The Role of Tax Havens in International Trade With Services
Discussant:  Katarzyna Habu (Oxford University)

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June 28, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

California Law School To Close Unless A Buyer Is Found

California Southern 2ABA Journal, For-Profit Law School With $39K Total Tuition Bill Set to Close:

Tuition is about $39,000—total—at California Southern Law School, and if you’re interested, now is the time. Owners of the non-accredited Riverside institution say that after fall 2016, they won’t be taking new students.

Elwood Rich, a Riverside County Superior Court judge who opened the school in 1971, died last year. His sons Greg and Brian Rich, who serve as assistant to the dean and registrar, are ready to retire.

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June 28, 2016 in Legal Education | Permalink | Comments (1)

Feld:  Federal Taxation Of State Tax Credits

Alan Feld (Boston University), Federal Taxation of State Tax Credits, 151 Tax Notes 1243 (May 30, 2016):

This article analyzes the Federal income tax treatment of state incentive tax credits. It considers whether and when refundable credits should be included in income and discusses their appropriate character as capital gain or as ordinary income.

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June 28, 2016 in Scholarship, Tax | Permalink | Comments (0)

NY Times:  Tax Dodging On The High Seas

CruisingNew York Times:  Tax Dodging on the High Seas, by Gail Collins:

While many of the biggest cruise lines appear to be headquartered in Florida, they are, for tax purposes, actually proud residents of … elsewhere. “Carnival is a Panamanian corporation; Royal Caribbean is Liberian,” said Ross Klein, who tracks the industry through his Cruise Junkie website.

Although, of course, if one of the ships needs help, it will often be the American taxpayer-funded Coast Guard that comes to the rescue. The Coast Guard doesn’t charge for its services, a spokesman said, because “we don’t want people to hesitate” to summon help when passengers are in danger. This attitude is commendable. But the no-taxes part is not.

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June 28, 2016 in Tax | Permalink | Comments (2)

The IRS Scandal, Day 1146

IRS Logo 2Politico Morning Tax: How Strong Is That Koskinen Case?, by Bernie Becker:

Koskinen, Round Two: The House Judiciary Committee’s exploration of the potential impeachment of IRS Commissioner John Koskinen plods forward today, with a hearing examining the standards for impeachment.

From the looks of things, the proceedings will turn on the question of bad faith. Michael Gerhardt, a law professor at UNC, is expected to testify that ill intent has always been a prerequisite for impeachment in the United States. But some of Koskinen’s biggest detractors have argued that “gross incompetence” is more than sufficient. Rep. Jim Jordan (R-Ohio), chairman of the House Freedom Caucus — which forced the Judiciary hearings on impeachment — said last month that impeachment should follow “gross negligence, dereliction of duty and breach of public trust.”

Jordan told POLITICO on Tuesday that he “was very pleased to see that the Judiciary Committee asked Andrew McCarthy to serve as a witness" and is looking forward to the hearing. No wonder — McCarthy’s written testimony suggests the 2013 nonprofit scandal is worse than former President Richard Nixon’s “largely unsuccessful” “endeavor” to abuse IRS powers. But even McCarthy, a former assistant U.S. attorney and a contributor at the conservative magazine National Review, notes the framers of the Constitution rejected “maladministration” as an impeachable offense. So it may fall to Republicans to prove Koskinen intended to obstruct Congress’ investigation of the targeting controversy — something they’ve failed to do so far. ...

Rep. Elijah Cummings of Maryland, the top Democrat on the House Oversight Committee, called out GOP efforts to impeach and/or censure Koskinen as “either pointless or unconstitutional.” Cummings cites several legal experts who said that House Oversight Chairman Jason Chaffetz (R-Utah) overstepped his bounds in saying that his censure resolution required that Koskinen forfeit his pension — because that would be an unconstitutional bill of attainder. Katy made a similar point last week and even Chaffetz acknowledged to reporters that the censure resolution can’t actually force Koskinen to lose his pension.

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June 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, June 27, 2016

NY Times:  The United States Of Inequality

New York Times:  The United States of Inequality, by Teresa Tritch:

It will come as little surprise that income inequality in the United States is greatest in New York and Connecticut. Those states are home base for Wall Street, where the income gains of the few have been amplified by outsized growth in the financial sector and protected by taxpayer-provided bailouts.

But forces of rising inequality are operating throughout the United States, as a new study by researchers at the Economic Policy Institute makes clear [Income inequality in the U.S. by State, Metropolitan Area, and County].

The study, which measures income inequality by state, metro area and county, shows that inequality has risen in every state since the 1970s. It also shows that rising inequality is entrenched. Recessions in recent decades have temporarily slowed income growth among the top 1 percent, but they have not altered the basic pattern in which the rich have gotten much richer while nearly everyone else has seen income stagnate or decline.

Between 2009 and 2013, for example — a period that encompasses most of the post-Great Recession era – the top 1 percent captured all of the income growth in 15 states (Connecticut, Florida, Georgia, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, South Carolina, Virginia, Washington and Wyoming). In another 9 states (Arizona, California, Illinois, Kansas, Massachusetts, Michigan, Oregon, Pennsylvania and Texas), the top 1 percent captured half to nearly all of the income growth.

Figure A

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June 27, 2016 in Tax | Permalink | Comments (3)

University Of Houston Files Trademark Infringement Lawsuit Against South Texas's Rebranding Itself Houston College Of Law

UHHCOLFollowing up on my prior posts (links below) on South Texas College of Law's rebranding itself Houston College of Law:   Press Release, University of Houston Files Trademark Infringement Lawsuit Against South Texas College of Law:

The University of Houston System has filed a trademark infringement lawsuit against South Texas College of Law (STCL).  The suit, filed Monday in U.S. District Court in Houston, alleges STCL’s announced name change to Houston College of Law and its adoption of UH’s red and white color scheme constitutes “intentional and willful infringement of UH’s intellectual property and unfair competition,” which results in “confusion in the marketplace and damage” to the university and its brand.

“This is about protecting our reputation and our business,” said Tilman Fertitta, chairman of the UH System Board of Regents.  “We’ve earned our standing as a nationally ranked law center, and we won’t allow someone else to change their name and colors and market themselves on our success.”

“The University of Houston Law Center’s brand is associated nationwide with top-notch faculty and lawyers,” said Tony Buzbee, principal of The Buzbee Law Firm, which is representing UH as lead counsel in addition to Sutton, McAughan, Deaver, PLLC.  “UH didn’t take shortcuts to achieve this recognition.  We believe the attempted renaming of South Texas College of Law is nothing more than an improper shortcut to take advantage of the success UH has achieved.”

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June 27, 2016 in Legal Education | Permalink | Comments (1)

Skyrocketing Housing Costs, 'Endless' Taxes Prompt Exodus Of Californians; Inequality Worsens As Middle Class Jobs Are 'Vaporized'

California GoodbyeSan Jose Mercury News, California's Skyrocketing Housing Costs, Taxes Prompt Exodus of Residents:

A growing number of Bay Area residents -- besieged by home prices, worsening traffic, high taxes and a generally more expensive cost of living -- believe life would be better just about anywhere else but here.

During the 12 months ending June 30, the number of people leaving California for another state exceeded by 61,100 the number who moved here from elsewhere in the U.S., according to state Finance Department statistics. The so-called "net outward migration" was the largest since 2011, when 63,300 more people fled California than entered. ... "California has seen negative outward migration to other states for 22 of the last 25 years."

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June 27, 2016 in Tax | Permalink | Comments (3)

Posner:  Why Don't Law Professors Have Practical Experience These Days?

Slate (Supreme Court Breakfast Table Series): Why Don't Law School Professors Have Practical Experience These Days?, by Richard Posner (Judge, U.S. Court of Appeals for the 7th Circuit):

Entry 9: The Academy Is Out Of Its Depth:

[T]here's a growing gap between judges (including the Supreme Court justices) and the academy, which judges tend to think is increasingly distant from the actual practice of law, staffed as it increasingly is with refugees from other disciplines—the graduate students in classics, and history, and anthropology, and so on who upon discovering there were very few well-paying positions in such fields nowadays decided to go to law school and afterward had no time to practice law before getting a law-teaching job.

I think law schools should be hiring a higher percentage of lawyers with significant practical experience. I think, for example, of Benjamin Kaplan at Harvard Law School, who went into law-teaching after 14 years in practice. There used to be many like that; there are many fewer now, especially at the leading law schools.

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June 27, 2016 in Legal Education | Permalink | Comments (6)

NY Times:  A Noah’s Ark in Kentucky, Dinosaurs Included — But No Taxes

ArkNew York Times: A Noah’s Ark in Kentucky, Dinosaurs Included, by Laurie Goodstein:

In the beginning, Ken Ham made the Creation Museum in northern Kentucky. And he saw that it was good at spreading his belief that the Bible is a book of history, the universe is only 6,000 years old, and evolution is wrong and is leading to our moral downfall.

And Mr. Ham said, let us build a gargantuan Noah’s ark only 45 minutes away to draw millions more visitors. And let it be constructed by Amish woodworkers, and financed with donations, junk bonds and tax rebates from the state of Kentucky. And let it hold an animatronic Noah and lifelike models of some of the creatures that came on board two-by-two, such as bears, short-necked giraffes — and juvenile Tyrannosaurus rexes.

And it was so.

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June 27, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (3)

NY Times:  Gender-Neutral Family-Friendly Faculty Policies Result In More Men, Less Women Obtaining Tenure

FacultyNew York Times:  A Family-Friendly Policy That’s Friendliest to Male Professors, by Justin Wolters:

The underrepresentation of women among the senior ranks of scholars has led dozens of universities to adopt family-friendly employment policies. But a recent study of economists in the United States finds that some of these gender-neutral policies have had an unintended consequence: They have advanced the careers of male economists, often at women’s expense.

Similar patterns probably hold in other disciplines, too.

The central problem is that employment policies that are gender-neutral on paper may not be gender-neutral in effect. After all, most women receive parental benefits only after bearing the burden of pregnancy, childbirth, nursing, and often, a larger share of parenting responsibilities. Yet fathers usually receive the same benefits without bearing anything close to the same burden. Given this asymmetry, it’s little wonder some recently instituted benefits have given men an advantage.

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June 27, 2016 | Permalink | Comments (1)

Do Law Firms (And Law Schools) Need A 'Rooney Rule' To Improve Gender Equality?

Stanford 3Bloomberg, An NFL Rooney Rule for Law Firms?:

Can law firms borrow ideas from professional sports leagues to improve gender equality?

Lawyers said at a conference on Friday that firms should adopt the equivalent of the National Football League’s Rooney rule, which requires teams to interview minority candidates for head coaching and other senior positions.

“Our proposal is quite simple: Adopt a Rooney rule for law firms,” said Nina Markey, a shareholder at Littler Mendelson who presented the idea in a team of nine members including lawyers and a law student.

The pitch came at the Women in Law Hackathon at Stanford Law School, where lawyers pitched ideas to a panel of judges about how to improve gender parity at law firms.

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June 27, 2016 in Legal Education | Permalink | Comments (3)

Oberlin Offers Buyouts To 100 Tenured Faculty To 'Preserve Their Dignity' Amidst Budget Reductions

OberlinCleveland Plain Dealer, Oberlin College Offers Buyouts to Faculty and Staff:

Oberlin College, in an effort to save several million dollars a year, has offered buyouts to 323 faculty and staff.

Buyout offers at colleges are rare but have become a way to encourage professors, whose positions are protected by tenure, to retire.

Oberlin offered the Voluntary Separation Incentive Plan to employees, including 100 faculty, in April. The college expects about 85 individuals to accept the offer, spokesman Scott Wargo said in an email.

The program goes into effect for staff on Dec. 31 and for faculty on June 30, 2017. Wargo said he did not know how many faculty accepted the offer. ...

Employees had to be at least 52 and have at least 10 years of service. The age and service years had to total at least 75, Wargo wrote.

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June 27, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1145

IRS Logo 2Forbes:  IRS Targeting Scandal: Citizens United, Lois Lerner And The $20M Tax Saga That Won't Go Away, by Kelly Phillips Erb:

It was the question heard round the tax world. But it was the answer that made waves. In 2013, then Acting Director of Exempt Organizations at IRS, Lois Lerner, apologized to a room of tax lawyers for the IRS’s inappropriate targeting of conservative political groups. Her comments set off a chain of events that would slash IRS funds, fire officials and consider impeachment proceedings for IRS Commissioner Koskinen’s actions. But the scandal didn’t begin or end there.

July 2008:  In the run-up to the presidential election, Citizens United, a conservative lobbying group, wants to air a series of commercials promoting a film targeting Hillary Clinton, who was seeking the 2008 Democratic presidential nomination. The United States District Court for the District of Columbia ruled that they couldn’t, finding that it was a violation of the Bipartisan Campaign Reform Act of 2002 (also known as the McCain–Feingold Act). The group appealed. ...

June 22, 2016: ”We’re moving into uncharted waters,” Michael J. Gerhardt, a UNC Chapel Hall constitutional law professor, tells the Judiciary House Committee. Testifing about potential impeachment charges against IRS Commissioner Koskinen, Gerhardt said, “The House has never impeached a sub-Cabinet official. I would urge everyone here to look at alternatives.” He testified “the Founders did not want high-ranking officials in the executive or judicial branches to be subject to impeachment for their mistakes in office,” suggesting impeachment be reserved for more serious offenses.

Koskinen did not attend the hearing, and the IRS did not release an official comment on the proceedings.

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June 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, June 26, 2016

Hoffman:  The Futility Of The Law School Crisis Debate

Dave Hoffman (Temple), Naive Realism & the Law School Debate:

Two recent articles in the Times have stirred yet more unproductive talk about the future of legal education (and by extension, the legal industry). This discussion ends up resembling high school debate: banal points, repeated at increasing volumes, similar in structure and form.

Elie Mystal (@ElieNYC), of Above the Law, has a pungent post up in which he laments this pathology. He first describes a twitter discussion he (and I and others) participated in, which ended in a place I’m pretty sure no one woke up feeling good about. ...

I think he’s onto something. Mystal, in his own way, is trying to figure out why why, in 2016, discussions between otherwise sane people about law school turn into flame wars. He says:

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June 26, 2016 in Legal Education | Permalink | Comments (8)

More On The Possible Suspension Of The ABA's Power To Accredit Law Schools

ABA Logo (2016)Following up on Friday's post, Department Of Education Panel Recommends Suspension Of ABA's Power To Accredit Law Schools Due To Its 'Lack Of Attention To Student Achievement':

ABA Journal, ABA Threatened With 1-year Suspension of Law School Accreditation Powers:

A Department of Education panel on Wednesday recommended that the ABA’s accreditation power for new law schools be suspended for one year, on the basis that the organization failed to implement its student achievement standards and probationary sanctions, while also not meeting its audit process and analysis responsibilities regarding students’ debt levels. ...

“The ABA has been under pressure for quite a number of years about both outcomes for graduates and accurate reporting by law schools, and during the last few years there’s been pressure about the increasing number of students who are admitted with increasingly low test scores,” says Deborah Merritt, an Ohio State University’s Moritz College of Law professor who writes at Law School Cafe. Still, she and other academics were surprised about the announcement, which Paul Caron, a Pepperdine University School of Law professor who edits TaxProfBlog, described as “stunning news.”

Bloomberg Law, Is the ABA on Verge of Losing Law School Accreditation?:

The American Bar Association may be on the brink of a serious rebuke. ... In a little-noticed decision, the National Advisory Committee on Institutional Quality and Integrity on Wednesday recommended the Department of Education suspend for one year the ABA’s ability to accredit new law schools. ...

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June 26, 2016 in Legal Education | Permalink | Comments (8)

The Top 5 Tax Paper Downloads

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

  1. [448 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  2. [321 Downloads]  Following the Money: Lessons from the Panama Papers, Part 1: Tip of the Iceberg, by Lawrence Trautman (American)
  3. [258 Downloads]  Why Does Inequality Matter? Reflections on the Political Morality of Piketty's Capital in the Twenty-First Century, by Liam Murphy (NYU)
  4. [197 Downloads]  'Death Tax' Politics, by Michael J. Graetz (Columbia)
  5. [166 Downloads]  The Problem of Intra-Personal Cost, by Brian D. Galle (Georgetown)

June 26, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Resolving The South Texas/Houston Brand Dispute: Exxon Law School?

HHE2Following up on my prior posts on South Texas College of Law's rebranding itself Houston College of Law, and the University of Houston Law Center's threatened lawsuit to protect its brand due to the "significant confusion this creates in the marketplace": 

Houston Business Journal, University of Houston Threatens Legal Action Over Law School Rebrand:

The University of Houston is not happy with South Texas College of Law's decision to rebrand itself to the Houston College of Law, a move announced June 22.

UH said in a statement that it will take legal action if necessary to defend the brand of its law school, the similarly named University of Houston Law Center.

Houston Chronicle, South Texas College of Law Not Backing Down From Name Change:

In a statement, leaders of the newly named Houston College of Law said they would not back down.

"The board of directors and administrators of Houston College of Law came to the name change decision after thoughtful and lengthy research and input from key constituencies, including alumni, students, faculty, staff, and donors," the statement said. "We made the decision to change the name of the 93-year-old law school based on overwhelming support to tie our institution with its birthplace in downtown Houston. We believe that we are on firm legal ground with this name change, and that we are acting in the best interest of the law school and its students."

Houston Chronicle editorial, What's In a Name?:

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June 26, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1144

IRS Logo 2Huffington Post:  The IRS And The Self-Minimization Of Congressman Jason Chaffetz, by Ralph Nader:

Politicians who limit the effectiveness of government agencies for short-term political advantages cheat taxpayers and short-change the government. ...

[Jason] Chaffetz chairs the House Oversight and Government Reform Committee - a body with powerful tools to investigate government waste, corruption and defiance of the laws. And he has vaulting ambitions, almost running for Speaker of the House last year with only seven years of seniority. ...

[W]hat is self-minimizing Congressman Chaffetz’s principal passion? Trying to impeach, censure or cause the resignation of the head of the IRS, the renowned turnaround specialist John Koskinen. The Utah Roman candle has accused Koskinen of interfering with a congressional investigation, not preserving pertinent records and lying to a congressional committee.

Koskinen repeatedly provided the committee with documentation for his denial of the charges that he was engaged in a cover-up of alleged IRS harassment of Tea Party and other conservative 501(c)(4) organizations applying for tax-exempt status. Ranking minority member Elijah Cummings (D-MD) laid out his own rebuttals, citing the Department of Justice investigation finding that “no evidence that any IRS official acted in a way that would support criminal prosecution” or that any official, including Mr. Koskinen, an Obama appointee, attempted to obstruct justice.

More telling was the exhaustive, multi-year, $2 million investigation by the Republican Inspector General of the IRS, Russell George, who cleared the IRS Commissioner of the Chaffetz Committee’s charges. Mr. George, a Bush appointee, found no politically motivated targeting of these conservative 501(c)(4) applications, no obstruction of justice and no concealing of information from Congress. Some bureaucratic sloppiness, sure, but that was all.

A more cutting judgement came from Law Professor Richard Painter, former Chief Ethics Lawyer for President George W. Bush, who said “this is essentially a dispute between the IRS and Members of Congress about the 501(c)(4) organizations that further the objectives of political campaigns, including campaigns for Members of Congress.”

Legal observers say Chaffetz’s resolution is not legally binding and is going nowhere. So what’s going on here is the Chaffetz caper is part of an overwhelming attack on the IRS by the Congressional Republicans-an attack that has turned them into major aiders and abettors of those who are sitting on $300 billion in annual uncollected taxes.

Washington Post:  Why the GOP Is Targeting the IRS, by Sen. Sheldon Whitehouse (D-WA):

If, as the editorial board suggested in its June 20 editorial, Unfairly Targeting the IRS, the GOP is unfairly targeting the Internal Revenue Service commissioner, what could be its reason for doing so? Follow the money. The IRS controls the “dark money” spigot that fills GOP coffers. If the IRS enforced its rules, or fixed its rules where they could not be enforced, or referred what appear to be self-evident false statements by dark-money groups to the Justice Department for investigation, the river of dark money flowing to the GOP might dry up. Keeping the IRS battered, cowed and on its heels makes strategic sense for the GOP.

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June 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, June 25, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Update On Murder-For-Hire Investigation Into Dan Markel's Death: Hit Men Thwarted In Previous Attempt To Kill FSU Law Prof

The Tax Consequences Of Brexit

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June 25, 2016 in Tax | Permalink | Comments (0)

Temperature Rises In Debate Over NY Times Coverage Of The Law School Crisis

ThermometerPaul Campos (Colorado), Steve Diamond, Academic Fraud (An Apparently Infinite Series):

I don’t want to fill up the cyberpages of LGM with sordid academic squabbles, but I also don’t want to let Steve Diamond quote me in a fraudulent way without making a record of it. Posted as a comment on Taxprof:

Stephen Diamond is a very dishonest man. Diamond does not link to my LGM post he quotes. This is not merely a matter of netiquette, because he quotes me in a way that intentionally hides the fact that my major criticism of him has nothing to do with his quibble regarding the minor point I made in the part of the post he does quote. He is intentionally misquoting me, and in such an egregious way that his behavior is a form of academic fraud.

Stephen Diamond (Santa Clara), Dropping the F-Bomb in Academia: Who Is Kidding Who?:

Professor Campos admits that he made the same mistake I described in my earlier post. And yet, despite this, Professor Campos contends that my blog post is an example of “academic fraud.” So he admits I found a serious error in the way he presented data but I am the fraud? I don’t know whether or not Professor Campos made the mistake intentionally or not – I take him at his word that it was an oversight. But it was his mistake and he is the one who has staked his entire career (as far as I can tell he no longer produces legal scholarship) on his argument that his own chosen profession is a scam. But that certainly gives him no basis to question my original post much less my professional ethics when he admits it to be accurate. ...

Professor Campos is well aware of the damage that he is attempting to impose on my career and reputation by dropping the academic F-bomb and I believe he owes me a public retraction and apology for his careless and irresponsible behavior.

On the other hand, Michael Simkovic (Seton Hall) has a detailed, point-by-point 11,000 word post on Why The New York Times Should Correct Remaining Factual Errors in Its Law School Coverage. He concludes:

Sometimes when journalists are in a rush or are over-confident, they decide the story they want to tell and then search for sources that will support that story while overlooking contradictory evidence.  Sometimes they hear what they want to hear instead of what people are actually saying.  Sometimes they judge sources by whether they support the story rather than by whether they are rigorous and reliable.  Sometimes they don’t even realize that’s what they are doing until someone points it out after the fact. 

We could continue to explore whether these common problems have affected your story from Friday.

But I appreciate you taking the time to respond to me, and my goal in life is not to embarrass you or the New York Times or accuse you of wrongdoing.  I’m doing this because The New York Times is an important newspaper, you are an important journalist, and the public deserves more accurate information.

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June 25, 2016 in Legal Education | Permalink | Comments (38)

The IRS Scandal, Day 1143

IRS Logo 2Kay Bell (Don't Mess With Taxes), IRS Commissioner Impeachment Effort Inches Along at Second, Largely Ignored Judiciary Committee Hearing:

Internal Revenue Service Commissioner John Koskinen probably was the happiest person in Washington, D.C., today. On a day when the House Judiciary Committee's second hearing on his possible impeachment might otherwise have garnered much attention, the Capitol Hill session was upstaged by two other events. ...

[W]hat did all normal, nontax nerds who took a pass miss on the Koskinen front? Not much.

Same old, same old: The wagons were circled along party lines, with Judiciary Committee Chairman Rep. Bob Goodlatte spelling out the "serious allegations of misconduct" against Koskinen in his opening statement. ...

Giving false testimony to Congress about how the Internal Revenue Service [mis]handled intra-agency emails is an impeachable offense, but House [Republican] action sans Senate support would be a mistake. That was the assessment of Andrew McCarthy, a former assistant U.S. attorney for the Southern District of New York, at part 2 of the House Judiciary Committee's hearing to consider the impeachment of IRS Commissioner John Koskinen. ...

Michael Gerhardt, however, told Judiciary members that, "In my opinion, I think gross negligence doesn't qualify" as one of the constitutional requirements -- treason, bribery or other high crimes and misdemeanors -- for impeachment. Gerhardt, a constitutional law professor at the University of North Carolina Law School, said in his view, impeachable conduct would have to involve "bad intent."

The conflicting opinions of legal experts, which also included George Washington University law professor Jonathan Turley and Todd Garvey, legislative attorney with the Library of Congress, mirrored the disputes among the committee members themselves. ...

So far, Chaffetz has been able to get his GOP colleagues on Government Reform to agree to censure Koskinen. But his chances of impeachment the IRS chief are smaller. Neither House nor Senate Republican leaders have expressed support for the effort.

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June 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, June 24, 2016

Paul Ryan Unveils A Better Way To Do Tax Reform

Better Way

A Better Way for Tax Reform:

Our Principle
In a Confident America, the tax code and the IRS work for us, not against us.

Our Challenge
Our tax code is a mess, and that’s putting it lightly. Multiple brackets. High rates. Special interest breaks everywhere. Rules and regulations that are too complicated to understand. It costs more and more each year just to do your taxes, let alone pay them. All of this drags people down and leaves businesses buried in paperwork and compliance problems. So instead of promoting growth, our tax code is pushing jobs overseas. And the agency charged with overseeing all of this—the IRS—has repeatedly violated the trust of the American taxpayer.

Our Vision
We need a new tax code. It needs to be fair and simple for everyone. It should be so simple that most Americans can do their taxes on a form as simple as a postcard. Our tax code should be built for growth. It should help make the United States the best place in the world to hire and invest. And if we’re going to have a better tax code, we need a better IRS, one that puts the taxpayers first.

This blueprint offers a better way to dramatic reform—without increasing the deficit. It does so by promoting growth—of American jobs, wages, and ultimately the entire economy.

Our Ideas

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June 24, 2016 in Tax | Permalink | Comments (12)

Tax Panel At Today's National Business Law Scholars Conference At University Chicago

Chicago LogoTax panel at today's National Business Law Scholars Conference at the University of Chicago Law School:

The Intersection of Business and Tax Law:

  • Ilya Beylin (Columbia), Taxing Fictive Orders: How an Information Forcing Tax Can Reduce Manipulation and Distortion in Financial Product Markets
  • Limor Riza (Carmel Academic Center), Charitable Contributions and Dependent Care Expenses in a Coherent System
  • Sloan G. Speck (Colorado), Competitiveness as a Rationale for International Tax Reform 
  • Eric C. Chaffee (Toledo), Moderator

June 24, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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June 24, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Department Of Education Panel Recommends Suspension Of ABA's Power To Accredit Law Schools Due To Its 'Lack Of Attention To Student Achievement'

ABA Logo (2016)In stunning news, the National Advisory Committee on Institutional Quality and Integrity (NACIQI) voted on Wednesday to recommend that the U.S. Department of Education suspend for one year the ABA's power to accredit new law schools due to the ABA's "lack of attention to student achievement":

[T]he panel on Wednesday rebuked the American Bar Association, in part for its lack of attention to student achievement.

The ABA accredits law schools, some of them freestanding institutions. NACIQI, after three contentious votes, recommended that the department suspend the association's ability to accredit new members for a year. The panel said the ABA had failed to implement its student achievement standards and probationary sanctions, while also falling short on its audit process and analysis of graduates' debt levels.

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June 24, 2016 in Legal Education | Permalink | Comments (17)

Law Professor Sees Bitcoin As Tax Haven For Gig Economy

BitcoinCCN.LA, UC Law Professor Sees Bitcoin Becoming a Tax Haven for the Gig Economy:

Bitcoin is especially attractive to workers in the gig economy who exchange skills for money. So far there is no effective enforcement method for tracking bitcoin.

Omri Marian, a law professor at the University of California Irvine, notes that even as governments have started to cooperate on nabbing tax cheats, bitcoin wallets could become “super tax havens.”

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June 24, 2016 in Tax | Permalink | Comments (0)

Designing A Transactional Law Clinic For Life-Long Learning

ClinicPatience A. Crowder (Denver), Designing a Transactional Law Clinic for Life-Long Learning, 19 Lewis & Clark L. Rev. 413 (2015):

This article makes an important contribution to existing clinical scholarship generally, and, more specifically, to scholarship about transactional lawyering and transactional law clinics. It is one of the first articles to detail transactional clinic design and is particularly important as the number of transactional clinics continues to increase and more articles about transactional clinical scholarship are published. This article serves as a blueprint for the start or redesign of a transactional clinic.

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June 24, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1142

IRS Logo 2PJ Media, Impeachment and the IRS Scandal: Should John Koskinen Face the Music?:

[T]he instant matter involving Internal Revenue Service Commissioner John Koskinen, pertains to an investigation into not a mere “endeavor” (largely unsuccessful in the Nixon case) to abuse IRS powers but actual, concrete abuse, of those powers, including “income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.” I further understand that the instant matter involves the provision of false statements and withholding of evidence from Congress.

I do not purport to have knowledge of the facts of Congress’s investigation. I note however that misconduct that was merely potential and coupled with blatantly obstructive actions was deemed sufficient to impeach (and would clearly have been sufficient to remove) a twice-elected president of the United States who had recently been reelected in one of the largest landslides in American history. It seems patent, then, that if established, actual misconduct in conjunction with blatantly obstructive actions would be sufficient to justify impeaching an unelected subordinate executive official responsible for administering the Internal Revenue Service.

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June 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, June 23, 2016

Debate Continues Over The NY Times Coverage Of The Law School Crisis

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June 23, 2016 in Legal Education | Permalink | Comments (12)

Bales:  75% Of Law School Deans Support Arizona's Use Of GRE As Substitute For LSAT, Not Its Use Of 'Misleading Employment Stats'

WSJ:  Treasury's Inversion Scythe

InversionWall Street Journal editorial, Treasury's Inversion Scythe (online title: The Obama-Lew Business Tax Raid: Treasury’s New Rules Give More Power to the IRS):

Is Treasury Secretary Jack Lew trying to impose a new tax burden on all businesses in the United States? Or is he merely unable to shoot at politically disfavored companies without hitting the rest of the economy? These questions arise because businesses across the U.S. are learning they’ll have to change how they manage their cash to satisfy Mr. Lew’s latest regulatory diktat.

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June 23, 2016 in Tax | Permalink | Comments (0)

List Of BigLaw Firms That Have Raised First Year Associate Salaries To $180,000

180,000Here (82 law firms and counting).

Prior TaxProf Blog coverage:

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June 23, 2016 in Legal Education | Permalink | Comments (4)

Denning:  Five Takes On Wynne And Direct Marketing Association

Brannon P. Denning (Samford), The Dormant Commerce Clause Wynnes Won Wins One: Five Takes on Wynne and Direct Marketing Association, 100 Minn. L. Rev. Headnotes 103 (2016):

October Term 2014 featured what is to date the most important state and local tax case since 1992’s Quill Corp. v. North Dakota. In Comptroller v. Wynne, the U.S. Supreme Court affirmed a state court decision holding unconstitutional Maryland’s refusal to grant a credit for taxes paid by a resident taxpayer to other states on income earned by the taxpayer in those states. This essay offers summary of the case, as well as five takes on Wynne and another state and local tax case from the 2014-2015 term, Direct Marketing Association v. Brohl.

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June 23, 2016 in Scholarship, Tax | Permalink | Comments (0)

NY Times:  Law Schools Go Online In Wake Of 'Marked Declines In Enrollment, Revenue And Jobs'

DisruptingNew York Times:  Law Schools Are Going Online to Reach New Students, by Elizabeth Olson:

Law schools, in the face of marked declines in enrollment, revenue and jobs for graduates, are beginning to adopt innovative new ways of delivering legal education.

Some law schools are moving away from relying solely on classic settings and instead are blending classroom learning with online instruction, said Michael B. Horn, a founder of the Clayton Christensen Institute, a research institution in San Mateo, Calif., that explores disruptive innovation in education.

“Legal education is confronting the most imminent threat in higher education,” Mr. Horn said. “Law schools are increasingly out of step with shifts in the legal services market.”

Law schools that “are able to pioneer online, competency-based programs that focus outside of the traditional J.D. will have a leg up in the struggle to survive,” said Mr. Horn, an author of the newly released report, Disrupting Law School: How Disruptive Innovation Will Revolutionize the Legal World.

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June 23, 2016 in Legal Education | Permalink | Comments (5)

Galle: Philly’s Soda Tax Isn’t Racist (Or Regressive)

CokeFollowing up on yesterday's TaxProf Blog op-ed, Is the Philadelphia Soda Tax Racist?, by Andre Smith (Delaware):  Brian Galle (Georgetown), Philly’s Soda Tax Isn’t Racist, and It Isn’t Regressive, Either:

Some recent commentary labels the soda tax regressive, and one generally thoughtful tax prof posted an op-ed on the TaxProf blog suggesting that the tax’s disparate impact on the African-american population of Philly makes it essentially racist, as well. I don’t want to defend all aspects of Philly’s policy. It has too many exceptions, and probably isn’t as attractive a policy as many alternatives (for instance, I might’ve gone big on portion-size limits). But I don’t think either of these critiques is persuasive.

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June 23, 2016 in Tax | Permalink | Comments (3)

University Of Houston Dean Threatens To Sue South Texas Over Name Change To Houston College Of Law

STHIn yesterday post on South Texas College of Law's announcing that it was changing its name to Houston College of Law, I noted that this would likely cause confusion the University of Houston Law Center.  University of Houston Dean has come out swinging:

We learned yesterday that South Texas College of Law has stated it is changing its name to Houston College of Law.  

The University of Houston issued the following statement regarding this development: 

"It has come to the University of Houston’s attention that South Texas College of Law has announced that it is changing its name to Houston College of Law.  The University of Houston Law Center has an established history of nearly 70 years in the City of Houston. The University of Houston is concerned about the significant confusion this creates in the marketplace and will take any and all appropriate legal actions to protect the interests of our institution, our brand and our standing in the communities we serve."

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June 23, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1141

IRS Logo 2Wall Street Journal, House Republicans Seek to Eliminate IRS Chief’s Paycheck:

Republicans have a new idea for attacking IRS Commissioner John Koskinen: Stop paying him.

Mr. Koskinen’s salary of about $165,000 a year would be cut to zero until the next president takes office Jan. 20, under an amendment the House of Representatives is considering this week. ...

The idea is to prevent Mr. Koskinen from coming to work, as federal law generally bars people from working for free, said Kyle Huwa, a spokesman for Mr. Buck. ...

[L]osing a few months of pay near the end of his career wouldn’t permanently damage Mr. Koskinen. According to his most recent financial disclosure, he is a multimillionaire.

Bloomberg, Push to Impeach IRS Chief Koskinen Stirs Scholars’ Disagreement:

Internal Revenue Service Commissioner John A. Koskinen committed an impeachable offense by giving false testimony to Congress about his agency’s preservation of e-mails, a conservative lawyer told the House Judiciary Committee.

Nonetheless, it would be “a mistake” for House Republicans to move forward with a drive to impeach Koskinen unless the Senate is also on board, said Andrew McCarthy, a former assistant U.S. attorney for the Southern District of New York who has written extensively on impeachment. Although the judiciary panel has conducted two hearings related to a possible impeachment of Koskinen, neither House nor Senate leaders have said they support it.

If it succeeded, it would be the first impeachment of an appointed executive-branch official in 140 years.

Koskinen, who took office in December 2013, was almost immediately mired in the agency’s response to a scandal that predated his tenure; IRS officials acknowledged that they had given extra scrutiny to conservative groups that sought tax-exempt status beginning in 2010. He didn’t attend Wednesday’s hearing, but he has said the allegations against him -- that he misled Congress and failed to ensure that the agency preserved all relevant e-mails -- are meritless.

“Every time I testified, I testified truthfully on what I knew,” Koskinen told reporters last month.

During the hearing, which was marked by partisan exchanges from both Republicans and Democrats, legal scholars disagreed on whether Koskinen’s conduct would constitute grounds for impeachment under constitutional language that specifies “treason, bribery or other high crimes and misdemeanors.”

“In my opinion, I think gross negligence doesn’t qualify,” said Michael Gerhardt, a professor of constitutional law at the University of North Carolina Law School. In his view, impeachable conduct would have to involve “bad intent,” he said.

Yet other witnesses, including Jonathan Turley, a law professor at George Washington University, said the standard is broader. “It doesn’t have to be an indictable offense,” he said. The constitution’s framers also discussed citing “maladministration” as grounds for impeachment, he said. “This is a standard that has room at the elbows,” he said.

Despite pending congressional subpoenas for “all communications sent or received by Lois Lerner,” in March 2014, IRS employees in West Virginia magnetically erased 422 backup tapes, which eliminated as many as 24,000 of her e-mails. Subsequent investigations by the Justice Department and the Treasury Department’s inspector general found that the destruction was accidental.

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June 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, June 22, 2016

Debate Over The Law School Crisis Shifts From The New York Times To Facebook And Twitter

Faecook TwitterThe debate over the New York Times' recent coverage of the law school crisis (links below) has moved onto Facebook and Twitter, with lively exchanges between New York Times reporter Noam Scheiber and Law Profs Stephen Diamond (Santa Clara), David Herzig (Valparaiso), Dave Hoffman (Temple), and Michael Simkovic (Seton Hall) and Above the Law's David Lat and Elie Mystal.

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June 22, 2016 in Legal Education | Permalink | Comments (8)

The End Of Accounting

EndBaruch Lev (NYU) & Feng Gu (SUNY-Buffalo), The End of Accounting (Wiley, June 27, 2016) (WSJ excerpt):

The problem with reported earnings, and financial statements in general, is that they no longer reflect the realities of businesses. Instead, they follow an arcane set of accounting rules and regulations. An alternate reality which fails to illuminate essential factors that make an enterprise rise or fall, where, for example:

  • The most important, value-creating investments in patents, brands, IT and other intangibles are considered regular expenses, like salaries or rent, without future benefits.
  • Reported earnings are a mixed bag of long-term items (indicating sustained growth) and one-time, transitory gains/losses (restructuring costs, for example), having negligible effect on corporate value. ...
  • Nontraded assets/liabilities, like privately placed bonds, which have no market values are nevertheless required to be marked-to-market in the financial reports. This, of course, is an oxymoron. ...

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June 22, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (3)

The Power Shift On College Campuses: Students Are 'Customers,' Entitled To 'Satisfaction'

OberlinNew York Times: In College Turmoil, Signs of a Changed Relationship With Students, by Frank Bruni:

Given all that has happened on so many campuses over the last few years, it’s hard to pick the one that has been roiled the most by struggles over political correctness. But Oberlin College would certainly be in the running.

A widely discussed series of events there included the demand for a so-called trigger warning to students who might be upset reading “Antigone”; complaints about the ethnic integrity of the sushi in a campus dining hall; and a petition, signed by some 1,300 students, calling for a semester in which the lowest possible grade was a C, so that anyone skipping classes or skimping on studies to engage in social activism wouldn’t pay too steep an academic price.

In the view of more than a few observers, these students were taking liberalism to illiberal extremes. But their actions were arguably proof of something else as well.

Students at Oberlin and their counterparts elsewhere might not behave in such an emboldened fashion if they did not feel so largely in charge. Their readiness to press for rules and rituals to their liking suggests the extent to which they have come to act as customers — the ones who set the terms, the ones who are always right — and the degree to which they are treated that way.

Twinned with colleges’ innovations to attract and serve a new generation of students is a changed relationship between the schools and the schooled. It’s one of the most striking transformations in higher education over the last quarter-century. ...

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June 22, 2016 in Legal Education | Permalink | Comments (4)

Smith:  Is The Philadelphia Soda Tax Racist?

Smith (2015)TaxProf Blog op-ed:  Is the Philadelphia Soda Tax Racist?, by Andre Smith (Delaware):

The Philadelphia “soda tax” is an example of how racism works without racists. It is an example of institutional racism, phenomena that tends to exacerbate racial wealth inequality but which is maintained by “well-meaning” people, whites and blacks included.

Let’s concede from the outset that many who support the soda tax have noble intentions. Sin taxes, like cigarette taxes and ante-bellum taxes on slavery and now soda taxes, are attractive because they raise necessary revenue while discouraging otherwise harmful behavior. That’s pretty efficient.

In the case of a soda tax, public health advocates seek to reduce sugar consumption, hopefully reducing the looming financial consequences of a national diabetes epidemic, thereby. Moreover, the proceeds from the soda tax will be dedicated to pre-k education, the benefits of which inure to employers, children and working parents. That which is raised above what is necessary for pre-k education will be used to close budget deficits.

How could such a noble idea be racist especially when quite a few black people support the soda tax?

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June 22, 2016 in Tax | Permalink | Comments (5)

South Texas College Of Law Rebrands Itself Houston College Of Law

STHSouth Texas College of Law (unranked) has changed its name (FAQ) to Houston College of Law, likely causing confusion with the University of Houston Law Center (ranked #50).

Building on a 93-year tradition of success in legal education in downtown Houston, South Texas College of Law administrators and board of directors today announced that the Law School is changing its name to Houston College of Law.

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June 22, 2016 in Legal Education | Permalink | Comments (2)