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Wednesday, April 23, 2014

Florida Coastal Law School Asks Dean Candidate to Leave Midway Through Lunch Presentation for Raising Concerns About Plummeting Student Credentials and Job Placement

Florida CoastalLaw Deans on Legal Education:  Florida Coastal Dean Search Raises Deeper Issues, by I. Richard Gershon (Dean, Mississippi):

The editors of this blog have received disturbing reports from sources inside the Florida Coastal School of Law regarding its dean search. ...

One oddity was that the faculty was told they could only exclude one of the seven candidates from consideration. In effect, that means that the faculty has very little role in selecting the dean from the six remaining candidates. That is odd, but not particularly alarming, provided that the faculty had a significant role in the selection of candidates.

The disturbing part of the report involves a candidate who raised concerns about the school’s declining student credentials and bar pass rates. That candidate was asked to leave in the middle of the lunch presentation. The candidate resisted, but was told that security would be called to remove the candidate from campus. This all happened in the view of about 40 faculty and staff present at this presentation, which was being recorded so others who were teaching class could see it later. 

Th concerns raised by the dean candidate are supported by publicly available information showing that the 2013 entering class at Coastal had the following 75/50/25 LSAT profile: (148/144/141). Reports indicate that the students who have placed seat deposits in 2014 have a virtually identical profile as the 2013 entering class.

The LSAT in 2008 and 2009 was (153/150/147). In 2010 the numbers were (152/149/146). The decline continued to in the succeeding years (151/147/145) in 2011 and (151/146/143) in 2012. 

As might have been  predicted, the weaker entering class of 2010 had a low bar pass rate, 67% for first time takers on the July 2013 Florida bar.  This was the first time in several years that Florida Coastal had dropped below 70%.

Prior TaxProf Blog coverage:

April 23, 2014 in Legal Education | Permalink | Comments (1)

Marian: Reconciling Tax Law and Securities Regulation

Omri Y. Marian (Florida), Reconciling Tax Law and Securities Regulation, 48 U. Mich. J.L. Reform ___ (2014):

IRS SECIssuers in registered securities offerings are required to disclose, among other tax matters, the expected tax consequences to investors that result from investing in the offered securities (“nonfinancial tax disclosure”). I advance three arguments in this regard. First, nonfinancial tax disclosure practice, as sanctioned by the SEC, does not achieve its intended regulatory purposes. Nonfinancial tax disclosures provide irrelevant information, sometimes fail to provide material information, create unnecessary transactions costs, and divert valuable administrative resources to the enforcement of largely-meaningless requirements. Second, I suggest that the practical reason for this regulatory failure is an unsuccessful attempt by tax practitioners and the SEC to address investors’ heterogeneous tax preferences. Specifically, nonfinancial tax disclosure practice assumes the existence of a “reasonable investor” who is also an “average taxpayer”, and tax disclosures are drafted for the benefit of such average taxpayer. The “average taxpayer”, however, is not a defensible construct. Third, the theoretical reason for the dysfunctionality of the regulatory regime is misapplication of mandatory disclosure theory to tax rules. I argue that given the special nature of tax laws, mandatory disclosure theory — even if accepted at face value — does not support current regulatory framework. To remedy this failure, I describe the types of tax-related disclosures that would be supported by mandatory disclosure theory. Under my suggested regulatory reform, nonfinancial tax disclosure will only include issuer-level tax items, (namely, items at the company level not otherwise disclosed in the financial statements), that affect how “reasonable investors” calculate their own individual tax liabilities. Under such a regime, there is no need to rely on the “average taxpayer” construct.

April 23, 2014 in Scholarship, Tax | Permalink | Comments (0)

TIGTA: IRS Gave $1 Million in Cash Bonuses to 1,100 Employees Who Owe Back Taxes

TIGTA The Treasury Inspector General for Tax Administration has released The Awards Program Complied With Federal Regulations, but Some Employees With Tax and Conduct Issues Received Awards (2014-10-007):

[B]etween October 1, 2010 and December 31, 2012, more than 2,800 employees with recent substantiated conduct issues resulting in disciplinary action received more than $2.8 million in monetary awards, more than 27,000 hours in time-off awards, and 175 quality step increases. Among these, more than 1,100 IRS employees with substantiated Federal tax compliance problems received more than $1 million in cash awards, more than 10,000 hours in time-off awards, and 69 quality step increases within a year after the IRS substantiated their tax compliance problem.

With few exceptions, the IRS does not consider tax compliance or other misconduct when issuing performance awards or most other types of awards. Governmentwide policies do not provide guidance on providing awards to employees with conduct issues. The IRS Restructuring and Reform Act of 1998 does not specifically mention awards, but does make mandatory the removal of IRS employees who are found to have intentionally committed certain acts of misconduct, including willful failure to pay Federal taxes. Thus, while not specifically prohibited, providing awards to employees with conduct issues, especially those who fail to pay Federal taxes, appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration. 


April 23, 2014 in IRS News, Tax | Permalink | Comments (2)

GAO: Budget Cuts Hurt IRS's Performance

GAO,  GAO LogoInternal Revenue Service: Absorbing Budget Cuts Has Resulted in Significant Staffing Declines and Uneven Performance (GAO-14-534) (Apr. 21, 2014):

IRS’s appropriations have declined to below fiscal year 2009 levels and FTEs have been reduced by about 8,000 since fiscal year 2009. Planned performance in enforcement and taxpayer service has decreased or fluctuated; for example, in the fiscal year 2014 congressional justification the audit coverage target for individual examinations was 1.0 percent for fiscal year 2014, however, the target was lowered to 0.8 percent in the fiscal year 2015 congressional justification. Amidst lower demand, IRS’s telephone level of service performance (the percentage of callers seeking live assistance and receiving it) was 73 percent from January 1 through March 15, 2014 compared to 69 percent during the same period last year. However, between fiscal years 2009 and 2013, IRS’s telephone level of service fluctuated between 61 percent and 74 percent. Average wait times have almost doubled since fiscal year 2009—from 8.8 minutes to 16.8 minutes as of mid-March 2014.

Not including other budgetary resources such as user fees, the fiscal year 2015 budget request for IRS is $12.5 billion, which is an increase of 10.5 percent ($1.2 billion) in funding and 8.3 percent in staffing (6,998 FTEs) over fiscal year 2014. According to the President’s budget, of the requested $1.2 billion, $480 million is predicated on a cap adjustment—funding above the discretionary spending limit—and largely covers enforcement and infrastructure initiatives. IRS’s workload has increased as a result of legislative mandates and priority programs, such as work related to the Patient Protection and Affordable Care Act and identity theft.

IRS has absorbed approximately $900 million in budget cuts since fiscal year 2010 through savings and efficiencies and by reducing, delaying, or eliminating services. For example, IRS delayed two information technology projects (Information Reporting and Document Matching and Return Review Program) and substantially reduced employee training. To help improve operations, the President requested a large budget increase for IRS in fiscal year 2015. However, additional funding is not the only solution. We have open recommendations on IRS’s operations that may help it achieve efficiencies over time, such as developing a long-term plan to improve web services.

IRS Enacted Appropriations, FY 2009-2014, and Fiscal Year 2015 Request

Continue reading

April 23, 2014 in Congressional News, Gov't Reports, IRS News, Tax | Permalink | Comments (0)

Brown: Race, Home Ownership, and the Environment

Dorothy Brown (Emory) spoke to MSNBC's Melissa Hart-Perry on race, home ownership, and the environment:

April 23, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 349

Tuesday, April 22, 2014

WSJ: Skyrocketing Graduate Student Debt Threatens Income-Based Repayment Programs

Wall Street Journal:  Student-Debt Forgiveness Plans Skyrocket, Raising Fears Over Costs, Higher Tuition; Some Law Schools Advertise Their Own Plans to Cover Loan Repayments:

Government officials are trying to rein in increasingly popular federal programs that forgive some student debt, amid rising concerns over the plans' costs and the possibility they could encourage colleges to push tuition even higher.

Enrollment in the plans—which allow students to rack up big debts and then forgive the unpaid balance after a set period—has surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion, U.S. Education Department records show.

The popularity of the programs comes as top law schools are now advertising their own plans that offer to cover a graduate's federal loan repayments until outstanding debt is forgiven. The school aid opens the way for free or greatly subsidized degrees at taxpayer expense.

At issue are two federal loan repayment plans created by Congress, originally to help students with big debt loads and to promote work in lower-paying jobs outside the private sector.

The fastest-growing plan, revamped by President Barack Obama in 2011, requires borrowers to pay 10% a year of their discretionary income—annual income above 150% of the poverty level—in monthly installments. Under the plan, the unpaid balances for those working in the public sector or for nonprofits are then forgiven after 10 years. ...

Private-sector workers also see their debts wiped clean—after a longer period of 20 years—reflecting a government aim to have no one, wherever they work, paying down student debt their entire working life.

An independent study estimates the future cost of the 2011 program, known as Pay As You Earn, could hit $14 billion a year.

The Obama administration has proposed in its latest budget released last month to cap debt eligible for forgiveness at $57,500 per student. There is currently no limit on such debt. ...

Law schools at Columbia University, the University of Chicago and Georgetown University are among those offering some graduates additional aid to cover all or part of their minimum monthly payments under the federal plans.

Max Norris, a 29-year-old lawyer for the state of California, illustrates the potential costs of the program. He pays about $420 a month to the Education Department on his $172,000 in debt, which he says fails even to cover the interest owed. But his out-of-pocket expense falls to $100 monthly after aid from his school, University of California's Hastings College of Law.

Mr. Norris, who makes $60,000 a year in his job, would have about $225,000 in debt forgiven after 10 years, assuming he stays in public service and his salary rises 4% annually, according to a repaymentcalculator created by the New America Foundation, which advocates less-generous forgiveness. ...

Schools aren't shy in touting the programs' benefits. Georgetown said on its law-school website until recently the school's aid combined with the federal plan "means public interest borrowers might not pay a single penny on their loans—ever!" A school spokeswoman said the statement was removed this year in light of the proposed changes in Mr. Obama's budget.

Georgetown Law Dean William Treanor said the school sees steering graduates to public-service jobs as part of its Jesuit mission. The school, which assists only those who go on to work in the public sector, spent about $2 million last year covering payments for those in the federal program, he said. In all, 432 Georgetown graduates are now in the program, up from 264 in 2012. Annual tuition is $50,890. Mr. Treanor said the program doesn't influence the prices the school charges its students. ...

The plans are designed to help people like Jacqueline Grippe, a Monroe County assistant public defender in Rochester, N.Y. Using an income-based repayment plan, Ms. Grippe pays about $350 a month toward her roughly $180,000 in debt, most of it accrued at Syracuse University's law school, from which she graduated in 2012.

That keeps her payment manageable on a $58,500 salary, she said, and relieves the pressure of having to find work at a higher-paying law firm. Syracuse isn't assisting in the payments. "Being in the public sector is a calling for me," said Ms. Grippe, 29. Without the repayment plan, she said, "I don't know what I would do."


Update:  Steven J. Harper (Northwestern), Who Really Pats for Law Student Debt?

April 22, 2014 in Legal Education | Permalink | Comments (6)

Clausing Presents Lessons for International Tax Reform from Formulary Apportionment Today at NYU

ClausingKimberly Clausing (Reed College) presents Lessons for International Tax Reform from the U.S. State Experience under Formulary Apportionment at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

This work undertakes a comprehensive analysis of the US state experience under formulary apportionment of corporate income. While formulary apportionment eliminates the possibility of shifting income across states through accounting strategies that manipulate where income is booked, it may heighten the tax responsiveness of formula factors. The present analysis uses the substantial variation in corporate tax policy decisions of US states over the period 1986 to 2012 to understand the consequences of formulary apportionment better. It examines the effects of policy choices regarding tax rates, formula weights, and other parameters on economic activity, estimating the tax sensitivity of employment, investment, and sales. With the inclusion of adequate control variables, results indicate that economic activity has not been particularly sensitive to US state corporate tax policy choices, especially in recent years. Still, tax policy choices have important effects on corporate tax revenues. These results suggest important lessons regarding possible international adoption of formulary apportionment.

April 22, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

NY Times: The American Middle Class Is No Longer the World’s Richest

New York Times:   The American Middle Class Is No Longer the World’s Richest, by David Leonhardt & Kevin Quealy:

NYTThe American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality. ...

The income data were compiled by LIS, a group that maintains the Luxembourg Income Study Database. The numbers were analyzed by researchers at LIS and by The Upshot, a New York Times website covering policy and politics, and reviewed by outside academic economists. ...

Continue reading

April 22, 2014 in Tax | Permalink | Comments (0)

Four Law Schools' Debt Classified as 'Junk Bonds'

Following up on yesterday's post, Moody's Downgrades Vermont Law School's Bonds to Junk Status:  National Law Journal, Independent Law Schools Suffer Credit-Ratings Slips:

Vermont was the latest stand-alone law school to take a hit from a credit-rating service; in December, Standard & Poor’s concluded that they are especially vulnerable.  “Credit quality has been deteriorating for stand-alone law schools, which are more susceptible to credit deterioration than law schools that are nested within comprehensive universities,” the service said. ... Of the five stand-alone law schools Standard & Poor’s looked at—Albany Law School [BBB], Brooklyn Law School [BBB+], New York Law School [A-]; Thomas M. Cooley Law School [BBB] and Thomas Jefferson School of Law [B+]—it deemed only Albany’s credit rating stable. Moreover, in November Moody’s affirmed the Baa1 rating on Southwestern Law School’s $28.6 million in outstanding bonds.

April 22, 2014 in Legal Education | Permalink | Comments (0)

Osofsky: Frictions, Screening, and Tax Law Design

Leigh Osofsky (Miami), Who's Naughty and Who's Nice? Frictions, Screening, and Tax Law Design, 61 Buff. L. Rev. 1057 (2013):

This Article sets forth a new dimension for designing and evaluating the tax law. Scholars have examined how many provisions throughout the tax code serve as “frictions” on tax planning, by imposing costs as a means to deter such planning. In this Article, I argue that, by imposing costs that will necessarily be borne differently by different taxpayers, frictions also inherently screen between different taxpayers. Recognizing how frictions screen upends conventional wisdom regarding the design of tax law. By focusing on the deterrence aspect of frictions, and not recognizing their additional screening role, scholars have concluded that: (1) frictions are successful if they deter tax planning rather than cause it to continue in a more wasteful fashion, and (2) that frictions should not impose costs on regular, business transactions. However, in coming to these conclusions, scholars have missed the key inquiry regarding frictions. As I flesh out in this Article, the key inquiry should be whether frictions impose differential, and greater, costs on tax planners, relative to non-planners, and thereby reduce the overall social cost attributable to tax planning. This inquiry not only reveals that frictions that successfully deter tax planning may nonetheless fail as a result of poor screening, but also that imposing costs on regular, business transactions is not always a flaw of a friction. More broadly, this inquiry suggests a new, more robust framework for optimal tax law design, which incorporates screening as a central part of the analysis. Many times frictions impose higher costs on taxpayers based on characteristics other than tax planning motivation. At times, these unintended screening results are undesirable, but not overly problematic, and they may even be remedied by careful attention to screening. Other times, however, these screening results are perverse, and counsel reform or elimination of the friction altogether. In any event, understanding how frictions screen is essential to ensure that the right taxpayers are bearing the right costs throughout the tax code, or, alternatively, that important deterrence objectives justify any undesirable screening outcomes.

April 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Law Professor Blogs Network Launches Clinical Law Prof Blog

LPBN LogoThe Law Professor Blogs Network is thrilled to announce the launch of Clinical Law Prof Blog, edited by Jeff Baker (Pepperdine) with these contributing editors:

  • Bryan Adamson (Seattle)
  • Kim Bart (Duke)
  • Kelly Behre (UC-Davis)
  • Warren Binford (Willamette)
  • Kristina Campbell (UDC)
  • Tanya Cooper (Alabama)
  • Meta Copeland (Mississippi College)
  • Jill Engle (Penn State)
  • Carrie Hagan (Indiana)
  • D’lorah Hughes (Arkansas (Fayetteville))
  • Robert Lancaster (LSU)
  • Inga Laurent (Gonzaga)
  • Kelly McTear (Faulkner)
  • Kelly Olson (Arkansas (Little Rock))
  • Brittany Stringfellow Otey (Pepperdine)
  • Danny Schaffzin (Memphis)
  • Kelly Terry (Arkansas (Little Rock))
  • Virgil Wiebe (St. Thomas)

From Jeff's inaugural post:

We hope to amplify and magnify the work of clinical law professors, to share resources and ideas and to collaborate with our colleagues online and in social media who are serving our community.  We write to advance the twin causes of good teaching and justice.   

With the support of our sponsor Wolters Kluwer Law & Business/Aspen Publishers, the Network is seeking to expand in two ways.

First, I am actively recruiting law professors to launch blogs in other areas of the law school curriculum not currently covered by the Network, including Administrative Law, Bankruptcy, Intellectual Property, National Security, Native American Law, Race and the Law, and Trial Advocacy.

Second, I am actively recruiting law professors to affiliate their existing blogs with the Network, as have Brian Leiter's Law School Reports, Brian Leiter's Law School Rankings, Tom Smith's The Right Coast, and Doug Berman's Sentencing Law and Policy.

The Network offers law professors the premier blogging platform and the opportunity to share in growing sponsorship and advertising revenues. For more information about these opportunities, see here.

April 22, 2014 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

NLJ: Which Law Schools Are Tops for Jobs?

National Law Journal, Which Law Schools Are Tops for Jobs?:

The ABA has released a trove of data on how the law school class of 2013 fared in the employment market nine months after graduation. Here, we look at which law schools placed the highest percentage of new graduates in full-time, longterm jobs that require bar passage but were not funded by the schools themselves. We also highlight schools that placed the most graduates in large firm jobs, federal and state clerkships, and government and public interest jobs.


Full-Time, Long-Term, Bar-Passage Required, Excluding School-Funded

Jobs at Law Firms With > 100 Lawyers





















































New Mexico






Southern Illinois

Boston College

On the other end of the spectrum, we've determined which law schools had the highest rate of unemployment, the most graduates in school-funded jobs, and the most graduates who were "underemployed"—either without jobs or in part-time, temporary, or nonprofessional jobs.









Golden Gate


La Verne

La Verne





Florida Coastal

Florida Coastal


San Francisco



Golden Gate



Thomas Cooley



Thomas Jefferson

Ave Maria



San Francisco


Ave Maria

Thomas Cooley






Thomas Jefferson


Florida A&M







Detroit Mercy



Western State










April 22, 2014 in Law School Rankings, Legal Education | Permalink | Comments (1)

Georgetown Offers Three Online Graduate Tax Programs and Online Basic Tax Course

Georgetown Law Logo (2013)Georgetown has announced that three of its graduate programs will be offered online beginning in the Fall 2014 semester:

In addition, Georgetown is offering Foundations of Federal Income Taxation, a 12-hour online course intended for students who wish to enroll in Georgetown's LL.M. in Taxation or other tax certificate program and who have not previously taken a course in basic federal income taxation:

This course covers certain foundational concepts in federal income tax law that are considered fundamental to more advanced courses offered through the Graduate Tax Program. The course is a zero-credit course which carries a tuition charge of $2,080. Students who wish to enroll in Georgetown's LL.M. in Taxation or other tax certificate program must sit for a 90-minute, 50-question multiple choice exam at the conclusion of the course and achieve a passing score of 35 out of 50 questions.

Frequently Asked Questions

April 22, 2014 in Legal Education, Tax | Permalink | Comments (0)

WSJ: IRS Whistleblower Awards, Amounts Fell in 2013

Following up on my previous post, IRS Whistleblower Office Issues Annual Report to Congress:  Wall Street Journal, IRS Pays Awards to Whistleblowers, by Laura Saunders:

IRS Whistleblower (2014)The IRS paid $53 million in awards to whistleblowers in fiscal 2013 and collected $367 million based on information provided by tipsters, according to the agency's latest report to Congress. ...

The IRS has two whistleblower programs. One, which has existed for decades, makes payments as high as 15% of tax collected and now applies in cases involving less than $2 million of tax. The other, enacted in 2006, makes payments of up to 30% of tax collected and is for cases involving tax of $2 million or more. The agency reports combined dollar amounts for awards and collections from the two programs.

WSJ Chart

April 22, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 348

Monday, April 21, 2014

Barry Presents PPL and the Arbitrary Foreign Income Tax Credit Today at Pepperdine

BarryJordan M. Barry (San Diego) presents PPL and the Arbitrary Foreign Income Tax Credit at Pepperdine today as part of its Tax Policy Colloquium Series hosted by Paul Caron:

Last year, the Supreme Court decided PPL v. Commissioner, ruling that the United Kingdom’s windfall tax qualifies for a U.S. foreign income tax credit. Even though the windfall tax only applies to a handful of taxpayers, economists and tax experts nationwide closely followed the PPL litigation: The foreign income tax credit a key provision of the U.S. tax code and a major component of U.S. economic policy. The rules surrounding the foreign income tax credit are quite intricate, and there is relatively little authoritative guidance to help taxpayers navigate them. And since the Supreme Court decides foreign income tax credit cases so rarely, the Court’s reasoning in PPL will likely influence courts’ thinking—and taxpayers’ pocketbooks—for many years to come.

Unfortunately, the Court’s decision in PPL does little to clarify the law and guide taxpayers. Instead, it reveals the fundamentally arbitrary nature of the foreign income tax credit.

The Court justifies its ruling as a triumph of substance over form. But the Court’s opinion itself demonstrates how two taxes can be the same in substance, yet be treated quite differently for purposes of the foreign income tax credit. The Court describes a specific hypothetical tax that would not be creditable—yet there are multiple taxes that are substantively identical to the Court’s hypothetical tax, but qualify for significant foreign income tax credits.

This Article explores these conceptual problems with the foreign income tax credit, as demonstrated by PPL, and suggests several ways in which Congress and the IRS might wish to ameliorate them.

Update: Post-presentation lunch:


April 21, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Fluidity of American Wealth

New Your Times Sunday Review:  From Rags to Riches to Rags, by Mark R. Rank (Washington University):

ChasingThomas A. Hirschl of Cornell and I looked at 44 years of longitudinal data regarding individuals from ages 25 to 60 to see what percentage of the American population would experience these different levels of affluence during their lives. The results were striking [Chasing the American Dream: Understanding What Shapes Our Fortunes (Oxford University Press, 2014)].

It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.

Yet while many Americans will experience some level of affluence during their lives, a much smaller percentage of them will do so for an extended period of time. Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

Continue reading

April 21, 2014 in Tax | Permalink | Comments (1)

TRAC-IRS Releases Tax Enforcement Data

GAO: IRS Audits 1% of Big Partnerships, 27% of Big Corporations

GAO LogoFollowing up on my previous post, David Cay Johnston, How to Cheat on Your Taxes: the Government Accountability Office has released Characteristics of Population and IRS Audits (GAO-14-379R):

This report provides data on the number and characteristics of large partnerships as well as Internal Revenue Service (IRS) audits of large partnership returns. For purposes of this report, GAO did not identify a statutory, IRS, or industry-accepted definition of a large partnership. Instead, GAO used a combination of criteria for partner size and asset size used by IRS to define large partnerships as those that reported having 100 or more direct partners and $100 million or more in assets. The number of large partnerships increased from 720 in tax year 2002 to 2,226 in tax year 2011. Large partnerships also increased in terms of the average number of direct partners and average asset size. IRS had data on two categories of large partnership return audits. First, the number of completed field audits of large partnership returns increased from 11 in fiscal year 2007 to 31 in fiscal year 2013. Second, IRS counted audits closed through its campus function, which increased from 42 to 143 over the same period. Unlike field audits, campus function audits generally do not entail a review of the books and records of the large partnership return but rather were opened to pass through large partnership return audit adjustments to the related partners' returns. The percentage of IRS audits that resulted in no change to the taxpayer's return varied from fiscal year 2007 to 2013 but was 52 percent for campus function audits and 45 percent for field audits in fiscal year 2013.

April 21, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

Bainbridge: The Ten Likeliest Law School Reforms

Stephen Bainbridge (UCLA), Rank Ordering the Likelihood of Law School Reforms:

Top 10 (2014)I have to give a talk next month on the state of legal education. As someone who falls in between the "law school is a scam" and the "law school is great" folks, I think the system doesn't need to be blown up but also that some reforms in legal education are essential. But what are the odds they're going to happen?

Here are my Big 10 reforms. My questions for readers are (a) have I left any out and (b) do I have them correctly ranked by order of probability they will actually happen (going from most to least likely). Please note that this list is NOT normative. It's not the order in which I think reforms ought to happen, but rather the order of the likelihood I think they might happen.

April 21, 2014 in Legal Education | Permalink | Comments (0)

Today Is Tax Freedom Day -- Earlier in LA, MS & SD, Later in CT, NJ & NY

Tax Foundation logoToday is Tax Freedom Day, the day on which Americans will have earned enough money to pay all federal, state, and local taxes for the year:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for year. A vivid, calendar-based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income. This year, Tax Freedom Day falls on April 21, or 111 days into the year. Tax Freedom Day is three days later than last year due mainly to the country’s continued slow economic recovery, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.

The total tax burden borne by residents of different states varies considerably due to differing state tax policies and because of the progressivity of the federal tax system. This means a combination of higher-income and higher-tax states celebrate Tax Freedom Day later: Connecticut (May 9), New Jersey (May 9), and New York (May 4). Residents of Louisiana will bear the lowest average tax burden in 2014, with Tax Freedom Day arriving for them on March 30. Also early are Mississippi (April 2) and South Dakota (April 4).


The Center on Budget and Policy Priorities criticizes the Tax Foundation's methodology here.

April 21, 2014 in Tax, Think Tank Reports | Permalink | Comments (0)

The Case for Confiscatory Taxation: 90% Rate on Estates, Income Over $10 Million

Vox:  Beyond the Laffer Curve — The Case for Confiscatory Taxation, by Matthew Yglesias:

90%The Laffer Curve — the idea that tax cuts can sometimes increase tax revenue — is one of the most influential and widely debated ideas in the past two generations of American politics. Beloved by the right and despised by the left, one thing that both sides have tended to agree on is that knowing what side of the curve we're on should be a key driver of tax policy. But in an era of surging inequality, it's time to revisit that assumption. Maybe at least some taxes should be really high. Maybe even really really high. So high as to useless for revenue-raising purposes — but powerful for achieving other ends.

We already accept this principle for tobacco taxes. If all we wanted to do was raise revenue, we might want to slightly cut cigarette taxes. And since cigarettes are about the most-taxed thing in America, we certainly would want to cut out all our other anti-smoking initiatives. But we don't do that because we care about public health. We tax tobacco not to make money but to discourage smoking.

The same is true of widely discussed proposals to tax carbon dioxide and other greenhouse gas emissions. The goal here wouldn't be to maximize tax revenue, it would be to reduce pollution. The revenue would be a pleasant side effect.

If we take seriously the idea that endlessly growing inequality can have a cancerous effect on our democracy, we should consider it for top incomes as well.

With the growing concentration of wealth an increasing subject of public concern, it's time to reconsider whether the application of Laffer-style reasoning to very prosperous individuals is appropriate.

Imposing a marginal tax rate of 90 percent on inheritances worth over $10 million, for example, would probably raise very little revenue. Rather than pay $90 to Uncle Sam for the chance to send $10 more to their kids, rich people would give the money to a tax-exempt charitable institution instead. That wouldn't help balance the budget — in fact, it would hurt those efforts — but it would help break the doom loop of oligarachy whereby concentrated wealth breeds political power breeds greater concentration of wealth.

Even more intriguing would be to apply the same principle of taxation-as-deterrence to very high levels of income. ... Imagine a world in which we ... imposed a 90 percent marginal tax rate on salaries above $10 million

April 21, 2014 in Tax | Permalink | Comments (0)

Moody's Downgrades Vermont Law School's Bonds to Junk Status

Moody's Investors Service, Moody's Downgrades Vermont Law School to Ba1; Outlook Negative:

Vermont LogoThe downgrade to Ba1 reflects continued substantial declines in JD enrollment given reduced national demand, expectations for lower net tuition revenue that will pressure cash flow and debt service coverage, and modest projected headroom on a financial covenant that may require an extraordinary release of net assets to remain compliant in the near term.

The Ba1 rating captures Vermont Law School's adequate liquidity coverage of demand debt and financial resource cushion for debt and operations, as well as management's demonstrated ability to manage through the past few years' weakened law school demand while maintaining stable cash flow. The rating also incorporates the school's small size and niche position as a standalone law school, modest financial resources, and high dependence on student charges.

The negative outlook reflects the potential for future erosion of the school's market position leading to weaker operating performance and erosion of financial covenant headroom that could jeopardize orderly access to the market or raise concerns about debt acceleration.

April 21, 2014 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 347

TaxProf Blog Weekend Roundup

Sunday, April 20, 2014

Tax Court: 'Taxpayers Rely on IRS Guidance at Their Peril'

Forbes:  'Taxpayers Rely on IRS Guidance at Their Own Peril,' Tax Judge Rules, by Janet Novack:

Tax Court Logo 2Taxpayers rely on IRS guidance at their own peril,” Judge Joseph W. Nega wrote in an order entered on April 15th —an order [No, 7022-11 (Apr. 15, 2014)] denying a motion that he reconsider his earlier decision [T.C. Memo. 2014-21 (Jan. 28, 2014)] to penalize tax lawyer Alvan L. Bobrow [Partner, Mayer Brown, New York] for making an IRA rollover move that IRS Publication 590, Individual Retirement Arrangements (IRAs), says is allowed. Technically, Nega denied the motion as moot, since Bobrow and his wife Elisa had reached a settlement with the government. But the judge wrote in his order that IRS guidance isn’t “binding precedent” or even sufficient “substantial authority” to get a taxpayer excused from penalties if he follows that guidance and the IRS’s interpretation of the tax law turns out to be wrong.

Huh? Sound unfair? Some of the nation’s most prominent tax lawyers sure think so. In a friend of the court brief urging Nega to reconsider his original decision, the Board of Regents of the American College of Tax Counsel had argued that it undermines public confidence in the tax system to tell taxpayers who have followed the IRS’ own guidance that they “have made an error with potentially catastrophic financial consequences.” Nega was unimpressed. He cited in his order Tax Court and Appeals Court decisions holding that IRS published guidance doesn’t count in court and added that he had been well aware of what Pub 590 said before his original ruling.

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April 20, 2014 in IRS News, Tax | Permalink | Comments (4)

Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with new papers debuting on the list at #4 and #5:

  1. [412 Downloads]  Submission to Finance Department on Implementation of FATCA in Canada, by Allison Christians (McGill) & Arthur J. Cockfield (Queen's)
  2. [341 Downloads]  As American as Apple Inc.: International Tax and Ownership Nationality, by Chris William Sanchirico (Pennsylvania)
  3. [290 Downloads]  2012 Developments in Connecticut Estate and Probate Law by Jeffrey A. Cooper (Quinnipiac) & John R. Ivimey (Reid & Riege, Hartford)
  4. [156 Downloads]  Recent Developments in Federal Income Taxation: The Year 2013, by Martin J. McMahon, Jr. (Florida), Ira B. Shepard (Houston) & Daniel L. Simmons (UC-Davis)
  5. [151 Downloads]   It's Time for the Supreme Court to Address the Economic Substance Doctrine, by Andy Grewal (Iowa)

April 20, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (1)

President Obama's Passover and Easter Message

April 20, 2014 | Permalink | Comments (0)

The IRS Scandal, Day 346

IRS Logo 2Washington Post op-ed:  Regulatory Overkill, by George F. WIll:

This case, which comes from Cincinnati, where the regional IRS office was especially active in suppressing the political speech of conservative groups, involves the intersection of two ominous developments. One is the inevitable, and inevitably abrasive, government intrusions into sensitive moral issues that come with government's comprehensive and minute regulation of health care with taxes, mandates and other coercions. The Supreme Court will soon rule on one such controversy, the ACA requirement that employer-provided health care plans must cover the cost of abortifacients. The other development is government's growing attempts to regulate political speech, as illustrated by the Obama administration's unapologetic politicization of the IRS to target conservative groups.

These developments are not coincidental. Government's increasing reach and pretensions necessarily become increasingly indiscriminate.

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April 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, April 19, 2014

NY Times: Hollywood Begs for a Tax Break in Some States, Including California

HollywoodNew York Times:  Hollywood Begs for a Tax Break in Some States, Including California:

Nationwide, about $1.5 billion in tax breaks is awarded to the film industry each year, according to a 2012 survey by The New York Times. Several tax policy groups oppose film incentives; a 2010 report by the nonprofit Tax Foundation said states justified them using “fanciful estimates of economic activity” and they largely just shift production from one sector to another without producing a net increase in economic activity or employment. ...

In California, a new law would expand the film credit program to cover not only smaller films and new TV series as it does now, but also major studio productions that cost as much as $100 million, and expensive, established television shows. ...

Supporters of the proposed increase in tax incentives for Hollywood point to a report published by the Milken Institute in February noting that California lost more than 16,000 production jobs since 2004, while other states with substantial subsidy programs, including Texas and North Carolina, together gained that many, and more.

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April 19, 2014 in Tax | Permalink | Comments (0)

IRS Uses Private Company to Track Taxpayer License Plates

Bloomberg, IRS Among Agencies Using License Plate-Tracking Vendor:

IRSThe IRS and other U.S. agencies awarded about $415,000 in contracts to a license plate-tracking company before Homeland Security leaders dropped a plan for similar work amid privacy complaints. Federal offices such as the Forest Service and the U.S. Air Force’s Air Combat Command chose Livermore, California-based Vigilant Solutions to provide access to license plate databases or tools used to collect plate information, according to government procurement records compiled by Bloomberg.  ...

“Especially with the IRS, I don’t know why these agencies are getting access to this kind of information,” said Jennifer Lynch, a senior staff attorney with the Electronic Frontier Foundation, a San Francisco-based privacy-rights group. “These systems treat every single person in an area as if they’re under investigation for a crime -- that is not the way our criminal justice system was set up or the way things work in a democratic society.”

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April 19, 2014 in IRS News, Tax | Permalink | Comments (1)

Small Colleges Battle Death Spiral as Enrollment Drops

Bloomberg:  Small U.S. Colleges Battle Death Spiral as Enrollment Drops:

Moody’s, which rates more than 500 public and private nonprofit colleges and universities, downgraded an average of 28 institutions annually in the five years through 2013, more than double the average of 12 in the prior five-year period. Dozens of schools have seen drops of more than 10 percent in enrollment, according to Moody’s. 


April 19, 2014 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 345

Friday, April 18, 2014

NY Times: Will The Super Rich Finally Pay More Taxes Than The Very Rich?

New York Times:  Merely Rich and Superrich: The Tax Gap Is Narrowing, by Floyd Norris:

Will this be the year that the superrich finally pay higher taxes than the very rich? ...

[I]t is an interesting fact that our current tax system assures that — year after year — the superrich, those who report adjusted gross incomes of more than $10 million, have tax rates that are significantly lower than those of the very rich, those earning more than $500,000 but less than $10 million.

Figures just released by the Internal Revenue Service show that in 2011 the difference in rates between the groups rose to 4.1 percentage points, the largest since the I.R.S. began calculating the data in 2000. The superrich paid 20.4 percent of their income in federal income taxes in 2011, while the very rich paid 24.5 percent. ... Why are the superrich treated so well? It is largely because investment income — what we used to call unearned income — has long enjoyed preferential tax treatment. ...


Starting in 2013, the wealthy face significant tax increases. And the increases are greater for investment income. It seems likely that the gap in tax rates between the superrich and the very rich may be narrowed.

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April 18, 2014 in Tax | Permalink | Comments (2)

58,000 IRS Computers Are Still Running Windows XP; IRS Says It Is Paying Microsoft $9/Computer for Security Patches, 95% Less Than Cost to Others

Following up on my previous post, IRS Computers Are Still Running Windows XP, Confidential Taxpayer Data Is At Risk:  Computer World, IRS Misses XP deadline, Will Spend $30M to Upgrade Remaining PCs:

XPThe IRS acknowledged last week that it missed the April 8 cut-off for Windows XP support and will be paying Microsoft for an extra year of security patches. But the tax agency disputed an earlier estimate by Computerworld that put the cost of those patches in the millions, saying that it was paying Microsoft "less than $500,000" for the after-retirement support.

Microsoft terminated Windows XP support on Tuesday when it shipped the final public patches for the nearly-13-year-old operating system. Without patches for vulnerabilities discovered in the future, XP systems will be at risk from cyber criminals who hijack the machines and plant malware on them. ...

According to the IRS, it has approximately 110,000 Windows-powered desktops and notebooks. Of those, 52,000, or about 47%, have been upgraded to Windows 7. The remainder continue to run the now retired XP. ...

John Koskinen, the commissioner of the IRS, defended the unfinished migration at the hearing, saying that his agency had $300 million worth of IT improvements on hold because of budget issues. One of those was the XP-to-7 migration. ... But he stressed that the migration had to continue. "Windows XP will no longer be serviced, so we are very concerned if we don't complete that work we're going to have an unstable environment in terms of security," Koskinen said.

Koskinen concurred with Crenshaw's $30 million figure as the cost for upgrading the IRS's remaining Windows XP systems. The money will be taken from the agency's enforcement budget. Part of that $30 million will be payment to Microsoft for what the Redmond, Wash., developer calls "Custom Support," a program that provides patches for critical vulnerabilities in a retired operating system.

Earlier this year, analysts said Microsoft had dramatically raised prices for Custom Support. ... Microsoft negotiates each contract separately, asking for an average of $200 per PC for the first year of Custom Support, those analysts said. Using that average -- and the number of PCs the IRS admitted were still running XP -- Computerworld estimated that the IRS would pay Microsoft $11.6 million for one year of Custom Support. Late Friday, however, the IRS disputed that estimate. An agency source said that the IRS was paying Microsoft less than $500,000 for Custom Support on its remaining 58,000 Windows XP PCs, or about $9 each. According to the source, the exact figure will be disclosed at a later date.

April 18, 2014 in IRS News, Tax | Permalink | Comments (1)

Weekly Tax Roundup

 Weekly Roundup

April 18, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Roundup

April 18, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

April 18, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (2)

Oregon Provost Rejects Law Faculty's Offer to Divert Money for Pay Raises to Public Interest Jobs for Students

Following up on Tuesday's post, Oregon Law Prof Objects to Shifting Funds for Faculty Raises to Public Interest Jobs for Students:  Oregon Law Blawg, Some Information:

Oregon LogoRecently the University announced across-the-board cost of living adjustments and merit pay increases to take effect later in the year. A group of law faculty came up with the idea to divert the law school’s portion of the faculty merit pay funds to a post-graduate fellowship program for new law grads, in lieu of accepting a pay increase. Last Friday, this group brought this idea as a resolution (included below) to the regularly scheduled faculty meeting.  A wide majority of those present voted to approve the resolution—in addition, a majority of the full faculty support the resolution.

We brought the matter to the Provost and although he is supportive of our goals he cannot bend the University rules to make this creative idea happen.

April 18, 2014 in Legal Education | Permalink | Comments (0)

San Francisco Launches Tax LL.M. Program

USFThe University of San Francisco School of Law is launching an LL.M. in Taxation Program beginning in August, 2014:

All classes will be held in the heart of San Francisco at USF’s downtown campus. The program is structured to provide students with a firm grounding in the major areas of taxation and prepare graduates to launch or advance careers in tax law.

Full-time faculty teaching in the USF LL.M. Program include Professor Daniel Lathrope, the E.L. Wiegand Distinguished Professor in Tax and Director of the Program; and Professor Joshua Rosenberg. Adjunct professors teaching in the Program are highly qualified, experienced practitioners in fields of tax and estate planning.

The curriculum in USF’s LL.M. in Taxation Program is wide ranging, offering both breadth as well as specialization in fields such as business taxation, international taxation, and estate planning. The program offers advanced standing for certain tax courses taken at an ABA-accredited JD institution. Merit scholarships and financial aid are also available to students applying for the inaugural class. For additional information on the Program, contact Associate Director Natascha Fastabend.

April 18, 2014 in Legal Education, Tax | Permalink | Comments (0)

ABC News: Oregon Man Claims IRS Auditor Coerced Him Into Having Sex

ABC News, U.S. Man ‘Seduced’ by IRS Agent Appeals Dismissal of His Lawsuit (click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate):

Daily Mail:  'I Feel Like a Cheap Wh***!': Man Left Owing $69K After 'IRS Agent Seduced Him' Wants to Sue the GOVERNMENT Over Sexual Coercion

April 18, 2014 in Tax | Permalink | Comments (1)

Audits as Signals

Maciej H. Kotowski (Harvard), David A. Weisbach (Chicago) & Richard J. Zeckhauser (Harvard), Audits as Signals, 81 U. Chi. L. Rev. 179 (2014):

A broad array of law enforcement strategies, from income tax to bank regulation, involve self-reporting by regulated agents and auditing of some fraction of the reports by the regulating bureau. Standard models of self-reporting strategies assume that although bureaus only have estimates of the of an agent’s type, agents know the ability of bureaus to detect their misreports. We relax this assumption, and posit that agents only have an estimate of the auditing capabilities of bureaus. Enriching the model to allow two-sided private information changes the behavior of bureaus. A bureau that is weak at auditing, may wish to mimic a bureau that is strong. Strong bureaus may be able to signal their capabilities, but at a cost. We explore the pooling, separating, and semi-separating equilibria that result, and the policy implications. Important possible outcomes are that a cap on penalties increases compliance, audit hit rates are not informative of the quality of bureau behavior, and by mimicking strong bureaus even weak bureaus can induce compliance.

April 18, 2014 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 344

IRS Logo 2Above the Law:  Should ‘Campaign For Liberty’ Have Called Itself ‘Campaign For Progress’ Instead?:

Campaign for Liberty, Ron Paul’s 501(c)(4) organization, announced this week that it’s actually pretty sure that its tax recent filings are incomplete, even if true and correct. (Two out of three ain’t bad?) According to C4L, the organization refused to divulge the names of its donors when it filed its IRS 990 forms. The IRS fined Campaign for Liberty just shy of $13,000, plus growing interest for each day the fine goes unpaid. ...

Megan Stiles, the communications director at Campaign for Liberty, told the Washington Examiner in an email on Tuesday:  There is no legitimate reason for the IRS to know who donates to Campaign for Liberty. The IRS technically requires donor information from 501(c)(4) organizations and is forbidden by law from releasing it to the public, yet despite this they have ‘mistakenly’ released the information repeatedly over the years. Often these leaks have been made to political opponents of the conservative groups whose information was leaked. Leaking the donor information is intended to harass and to intimidate those donors from donating to political causes. Campaign for Liberty has refused to provide donor information to the IRS to protect the privacy of our members. Now the IRS has demanded the information and fined Campaign for Liberty for protecting its members’ privacy. ...

[C]an you blame them for being skeptical of how the IRS will treat them and their donors? It’s been a year since the Treasury Inspector General for Tax Administration conceded that the IRS used “inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based on their names or policy positions instead of indications of potential political campaign intervention.” President Obama himself has in the past used donor lists to publicly chastise private citizens who oppose him politically.

The investigation by the House Oversight and Government Reform Committee crawls along with all the deliberate speed of a patient on Seconal. However, Judicial Watch released yesterday a new batch of internal IRS emails showing that former IRS official Lois Lerner communicated with the Department of Justice on strategies for targeting 501(c)(4) groups. Even as Lerner broke the news of the IRS scandal by blaming “low-level” employees in Cincinnati, Lerner was still consulting with the DOJ about how the targeted organizations could be prosecuted. There’s mounting evidence to support conservative concerns about the political nature of the IRS.

In November, the IRS proposed changes to the rules governing 501(c)(4) organizations. The changes would constrict the political activity of groups claiming this tax-exempt status and require them to disclose their donors. The proposal elicited a record-breaking 169,000 public comments. IRS Commissioner John Koskinen told USA Today on Monday that, given the extraordinary number of comments, “In all likelihood we will re-propose a redefined rule and ask for more public comment.” He predicted that the process would not be complete “until the end of the year and beyond.”

Conservatives like Senate Minority Leader Mitch McConnell (R-Ky.) have opposed these changes, unsurprisingly. However, even the ACLU has criticized the proposed rules as unduly burdensome on First Amendment rights. It’s not only conservatives who should be wary about not only what the IRS has done in the past, but also what it aims to do in the future.

Can you blame Campaign for Liberty for not wanting to expose its private-citizen donors to retribution, even if that means disregarding IRS demands? Perhaps we should just ask former Mozilla CEO Brendan Eichwhat the consequences of disclosure might be.

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April 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, April 17, 2014

National Law Journal: Is Now the Ideal Time to Enroll in Law School?

Following up on yesterday's post:  National Law Journal, Theory: The Time Was Never Better to Enroll in Law School:

Is now the ideal time to enroll in law school? Steven Freedman, assistant dean for admissions at the University of Kansas School of Law, has been making the counterintuitive case that it is. In a series of posts on the law professor blog The Faculty Lounge, he argues that the relatively small number of people set to graduate with J.D.s in 2017 will mean better job prospects for those who do. In short, the supply of new lawyers will be much more closely aligned with the demand for their services than for the Class of 2013. ... “Enroll today or you will miss out on what might be a once-in-a-lifetime opportunity,” Freedman wrote on April 10. “Namely, the chance to graduate from law school in 2017-2018, which will likely be one of the best times ever to graduate from law school.” ...

Freedman is not the first to float this idea. University of Washington School of Law professor Ryan Calo made a similar argument in Forbes in November. And Theodore Seto, a professor at Loyola Law School, Los Angeles, wrote a [TaxProf] blog post in June suggesting demand for legal services would grow along with the U.S. population. “...

Still, Freedman clearly struck a nerve with readers of The Faculty Lounge, many of whom disputed his findings in the comments section.  ...

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April 17, 2014 in Legal Education | Permalink | Comments (2)

Gamage Presents A Framework for Analyzing the Optimal Choice of Tax Instruments Today at Indiana

Gamage (2014)David Gamage (UC-Berkeley) presents A Framework for Analyzing the Optimal Choice of Tax Instruments, 68 Tax L. Rev. ___ (2014), at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

What mix of policy instruments should governments employ to raise revenues or to promote distribution? The dominant answer to this question in the tax theory and public finance literatures is that (with limited exceptions) governments should rely exclusively on a progressive consumption tax. Thus, among other implications, the dominant view is that governments should not tax capital income or wealth, and that legal rules should not be designed to promote distribution.

In contrast, this Article argues that governments should make use of a number of tax and non-tax policy instruments to raise revenues and to promote distribution. Furthermore, this Article argues that governments may have much greater capacity to raise revenues and to promote distribution at lower efficiency costs than is generally recognized. Whereas the existing theoretical literature focuses on a small number of distortionary costs that result from taxation (in particular, on labor-to-leisure and saving-to-spending distortions), this Article analyzes the implications of taxpayers engaging in a diverse variety of tax-gaming responses. To the extent that taxpayers respond to different tax instruments through different forms of tax gaming, this Article demonstrates that governments can raise revenues and promote distribution more efficiently by employing a variety of different policy instruments.

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April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fleischer Presents The Inferiority of Pigouvian Taxes Today at Washington

Fleischer Vic (2013)Victor Fleischer (San Diego) presents The Inferiority of Pigouvian Taxes at the University of Washington today as part of its Graduate Tax Program Colloquium Series:

Pigouvian (or "corrective") taxes have become the favored policy instrument to address activities that cause negative externalities. There is considerable academic support for Pigouvian taxes on a wide range of products and activities, including carbon, gasoline, fat, high fructose corn syrup, financial transactions, executive pay, excessive zoning, and SUVs. Economists of all political stripes are therefore mystified by our politicians’ collective inability to see the merits of using Pigouvian taxes more frequently to address serious social harms.

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April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Solomon Presents Tax Policymaking in the United States Today at Temple

SolomonEric Solomon (Director of National Tax Practice, Ernst & Young, Washington, D.C.) presents The Process for Making Tax Policy in the United States: A System Full of Friction, 67 Tax Law. ___ (2014), at Temple today as part of its Tax Policy & Administration Colloquium Series hosted by Alice Abreu and Andrea Monroe:

The paper, first presented to the Canadian Tax Foundation Roundtable ..., acknowledges the roles of multiple participants in the formation of tax policy, including the Treasury, IRS, and courts, but focuses on the legislative process and describes both the roles of the various players in it. It emphasizes the operation of the checks and balances in the system and the ways in which they influence tax legislation and tax policy. The Colloquium will also include a discussion of the tax gap drawn from testimony presented to the Senate Finance Committee on April 18, 2007 by Eric Solomon and Henry Paulsen.

April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mazur Presents Tax Policy and the Economy Today at Florida

Mazur 2Mark Mazur (Assistant Secretary for Tax Policy, U.S. Treasury Department) presents Tax Policy and the Economy at Florida today as the Fourth Annual Ellen Bellet Gelberg Tax Policy Lecture in the Graduate Tax Program.  Prior lectures:

April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Recent Tax Prof Tax Notes Articles

April 17, 2014 in Scholarship, Structuring a Tax Workshop Series, Tax | Permalink | Comments (0)