TaxProf Blog

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

Saturday, March 17, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Fair Shot:  Rethinking Inequality And How We Earn

Fair ShotNew York Times Book Review, Chris Hughes Made Millions at Facebook. Now He Has a Plan to End Poverty. (reviewing Fair Shot: Rethinking Inequality and How We Earn (2018)):

Chris Hughes, as he will be the first to tell you, has too much money. As he relates in his new book, “Fair Shot,” he co-founded Facebook, asked his roommate Mark Zuckerberg for 10 percent of the company, received 2 percent instead and became dynastically wealthy as a result.

Hughes is acutely aware of how unfair this is. “Most Americans cannot find $400 in the case of an emergency,” he writes, “yet I was able to make half a billion dollars for three years of work.” He’s also aware that the flip side of people like himself having too much money is that tens of millions of Americans have too little. Over 40 million Americans live below the poverty line, including one in five children under the age of 6.

There is a simple solution to the problem of people having too little money: giving them some. As Hughes efficiently and compellingly recounts, the proven and far-reaching effects of cash grants include more work; higher incomes; better performance in school and college; less tobacco and alcohol use; and fewer hospitalizations, illnesses and untimely deaths. In short, grants strengthen and empower the poor, making them much more economically and socially productive.

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March 17, 2018 in Book Club, Tax | Permalink | Comments (0)

How Much Time Does It Take to Write a Law Review Article? 250-500 Hours

Robert Anderson (Pepperdine), How Much Time Does It Take to Write a Law Review Article?:

How long does it take to write a law review article? This question sometimes arises as law faculties balance the competing expectations of teaching, service, and scholarship. ...

In an attempt to develop some back-of-the-envelope estimates on the amount of time to write a law review article, I ran the following poll on Twitter. The poll received 246 votes and the results appear to reflect a fairly surprising degree of consensus. 


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

Spotlight On The AALS Tax Section

AALS (2019)AALS News, Spotlight on Sections: Taxation:

The AALS Section on Taxation promotes the communication of ideas, interests, and activities among members and makes recommendations on matters of interest in the teaching and improvement of the law relating to taxation. AALS News caught up with Larry Zelenak (now Immediate Past Chair) and Shu-Yi Oei (Chair) onsite at the 2018 Annual Meeting in San Diego.

How do your section members interact and collaborate outside of the AALS Annual Meeting?

LZ: The National Tax Association’s annual conference has become almost like a second annual meeting for us in terms of having a place to meet other tax law professors. Most of us are not economists, but there’s a lot you can learn as a consumer of tax and economic research without having to be one yourself. Historically, there has been a tendency for tax law professors to be doubly siloed: within law schools but also within tax. Maybe that’s why we’re such a tight group among ourselves. We haven’t traditionally talked a lot to accountants or economists. We are becoming much less siloed in both respects.

Other than that: a lot of email. We mostly use the tax prof listserv rather than our AALS Section listserv, because it was already running before the AALS one existed.

SO: The listserv and the tax prof blog are generally how tax law professors get together outside of the meeting. There’s also the Law and Society Conference, which has a number of tax panels.

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

Friday, March 16, 2018

Lawsky Presents A Logic For Statutes And Formalizing The Code Today At Florida

Lawsky (2017)Sarah Lawsky (Northwestern) presents A Logic for Statutes, 21 Fla. Tax Rev. ___ (2018), Formalizing the Code, 70 Tax L. Rev. 377 (2017), at Florida today as part of its Graduate Tax Speaker Series:

A Logic for Statutes:

Case-based reasoning is, without question, a puzzle. When students are taught to “think like lawyers” in their first year of law school, they are taught case-based common-law reasoning. Books on legal reasoning are devoted almost entirely to the topic. How do courts reason from one case to the next? Is case-based reasoning reasoning from analogy? How should case-based reasoning be modeled? How can it be justified?

In contrast, rule-based legal reasoning (as exemplified in much statutory reasoning) is taken as simple in legal scholarship. Statutory interpretation — how to determine the meaning of words in a statute, the relevance of the lawmakers’ intent, and so forth — is much discussed, but there is little treatment of the structure of statutory reasoning once the meaning of the words is established. Once the meaning of terms is established, statutory reasoning is considered, roughly speaking, to be deductive reasoning.

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

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Satterthwaite's Smallness And The VAT

This week, Erin Scharff (Arizona State) reviews a new article by Emily Ann Satterthwaite (Toronto), On the Threshold: Smallness and the Value-Added Tax, 9 Colum. J. Tax L. ___ (2018):

Scharff (2017)Emily Satterthwaite’s latest article explores the ways tax law should reflect the needs (and especially the relatively high-compliance costs) of small businesses. Her focus is on Value-Added Taxes (VATs) and, in particular, on the VAT exemption threshold.  

Though there is widespread expert agreement that VATs should exempt small firms, there is significant variation in the VAT thresholds, particularly among developing countries. Further, exemption thresholds are often set much lower than what VAT experts have recommended for optimal efficiency. Satterthwaite’s article argues that this expert recommendation not only advances efficiency goals, but would also improve distributional equity.

Satterthwaite does yeomen’s work in making her argument accessible, particularly to U.S. readers who might be less familiar with the way VATs operate, and the first part of her article is an excellent and highly accessible introduction to VATs and its relative advantages over cascading turnover taxes and retail sales taxes. 

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March 16, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Pepperdine’s Place In The 2019 U.S. News Rankings

As most of you know, on Tuesday morning U.S. News released to law schools an embargoed confidential electronic version of the 2019 edition of its annual rankings to be published online on Tuesday, March 20.  At Pepperdine, we immediately analyzed the data U.S. News used in calculating our ranking.  To our horror, we learned that we had made an inadvertent data entry error in reporting our median LSAT for the class that began in Fall, 2017.

We immediately contacted U.S. News Tuesday morning to inform them of the error and requested that they update the rankings with the correct median LSAT.  On Tuesday afternoon, anonymous source(s) leaked the embargoed rankings which were posted on several blogs, showing Pepperdine’s ranking as 59 (up from 72 last year).

Unfortunately, U.S. News has denied our request and instead issued a revised embargoed electronic version of the rankings that replaced the original.  In the new version, Pepperdine is removed from the rankings.  Instead, Pepperdine is listed as “unranked due to a data reporting error by the school.” 

We contacted three law school rankings experts — Bill Henderson (Indiana), Andy Morriss (Texas A&M), and Mike Spivey (Spivey Consulting) — who all confirmed our analysis that Pepperdine would have ranked 62nd or 64th had U.S. News recomputed the rankings with our correct LSAT median.

It is, of course, deeply disappointing to be unranked for a year. But the reality is that we made great progress in the rankings this year, and should continue our ascent next year. 

For a fuller description of the rankings snafu, see here.

March 16, 2018 in Law School Rankings, Legal Education | Permalink | Comments (3)

Corporate Tax Avoidance And Honoring The Fiduciary Duties Owed To Corporation And Its Stockholders

Eric C. Chaffee (Toledo) & Karie Davis-Nozemack (Georgia Tech), Corporate Tax Avoidance and Honoring the Fiduciary Duties Owed to Corporation and Its Stockholders, 58 B.C. L. Rev. 1425 (2017):

Corporate tax avoidance is a pressing issue of both national and international concern. In recent years, the tax strategies of Apple, Facebook, Pfizer, Starbucks, and numerous other corporations have reminded the public that firms regularly undertake highly aggressive tax strategies to minimize their corporate taxes. Corporations often claim that they are legally required to engage in these aggressive strategies. But this article proves that claim is utterly and completely incorrect when based upon the fiduciary duties owed to the corporation and its stockholders.

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

What to Teach Law Students About Artificial Intelligence and Law?

Harry Surden (Colorado), What to Teach Law Students About Artificial Intelligence and Law?, 112 Nw. U. L. Rev. Online ___ (2018):

It is helpful to provide law students with a basic understanding of the current state of artificial intelligence (AI) and its likely near-term impact on law. With this knowledge, students can orient their careers to avoid those legal positions that are most vulnerable to automation and focus instead on activities for which their legal training and cognitive abilities provide the most value for clients.

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

Galle: Kill Quill, Keep The Dormant Commerce Clause — History's Lessons On Congressional Control Of State Taxation

Brian D. Galle (Georgetown), Kill Quill, Keep the Dormant Commerce Clause: History's Lessons on Congressional Control of State Taxation, 70 Stan. L. Rev. Online 158 (2018):

The world of internet commerce was shaken to its foundations in January this year, when the Supreme Court agreed to reconsider its landmark holding in Quill Corp. v. N. Dakota. For more than twenty-five years, Quill has barred states from imposing tax-collection obligations on retailers lacking “physical presence” in the taxing state. As a practical matter, this has meant that internet retailers with no employees or facilities in a state can sell into the state without collecting the sales taxes that local retailers must. In this Essay, I’ll argue that original historical evidence I’ve collected suggests that the political economy premises on which Quill rests are fundamentally mistaken. But I believe that same evidence should lead the Court to keep in place the larger body of “Dormant Commerce Clause” jurisprudence from which Quill first sprung.

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

Thursday, March 15, 2018

Glogower Presents Taxing Inequality Today At UCLA

Glogower (2016)Ari Glogower (Ohio State) presents Taxing Inequality on Friday as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The argument proceeds in three main parts. The Article first interrogates the justifications in the literature for a wealth tax and introduces a new justification grounded in the relative economic power theory which explains how inequality generates social and political harm. This theory formalizes the problem of inequality and has specific implications for the way that economic inequality should be measured and constrained. In particular, this theory implies that economic inequality should be measured by differences in economic spending power during the taxing period.

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March 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Aprill: The GOP's New Tax Law Encourages Campaign Donor Secrecy

The Hill op-ed:  GOP's New Tax Law Encourages Campaign Donor Secrecy, by Ellen P. Aprill (Loyola-L.A.):

The National Rifle Association is now deeply embroiled in two current political storms. This first, of course, in light of the Parkland shooting, involves its influence in blocking gun control legislation. The second involves the role it might have played in permitting Russian money to influence the presidential election, an issue that indictments released by Special Counsel Mueller also heightens .

According to reports in January, the FBI is investigating whether money from a Russian banker with Kremlin ties channeled funds through the NRA to President Trump’s campaign. At the beginning of this month, Sen. Ron Wyden (D-Ore.) asked the NRA and the Treasury Department for documents related to these possible ties. If this accusation proves to be the case, the donation would violate the prohibition in our campaign finance laws on the use of foreign money to support a candidate.

We know only that there is a reported investigation, not the validity of the claim. We do know, however, that recent changes to our tax laws may well increase the possibility of such illegal behavior regarding foreign influence in our elections.

The NRA is exempt from income tax as a section 501(c)(4) social welfare organization. These entities can lobby without limit and, of particular importance, can engage in campaign intervention – supporting or opposing candidates for public office – so long as such activity is not their primary activity. Permitted campaign intervention activity includes not only donations to campaigns and PACs, but also urging the organization’s members to support or oppose candidates.

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

Law Schools Dive Into Virtual Reality Experiences For Their Students

VRABA Journal, Law Schools Dive Into Virtual Reality Experiences For Their Students:

Law schools are ramping up efforts to provide more experiential learning opportunities through virtual reality experiences that will allow both students and practicing attorneys to practice their lawyering skills anytime, anywhere. 

“I was walking past the courtroom one day and saw students just waiting to use it … I also have spoken to attorneys in big firms who don’t have places to practice,” said Jennifer Wondracek, director of legal educational technology at University of North Texas Dallas College of Law. “My thought was, well, why not create a virtual courtroom?”

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March 15, 2018 in Legal Education | Permalink | Comments (0)

Rossi: Carbon Taxation By Regulation

Jim Rossi (Vanderbilt), Carbon Taxation by Regulation, 102 Minn. L. Rev. 277 (2017):

This Article argues that, even though a carbon tax remains politically elusive, “carbon taxation by regulation” has begun to flourish as a way of financing carbon reduction. For more than a century, energy rate setting has been used to promote public good and redistributive goals, akin to general financial taxation. Various non-tax subsidies in customer energy rates have enormous untapped potential for promoting low-carbon sources of energy, while also balancing broader economic and social welfare goals.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

Cauble: Tax Law's Loss Obsession

Emily Cauble (DePaul), Tax Law's Loss Obsession, 2018 Utah L. Rev. ___ :

This Article will address tax law’s inconsistent treatment of gains and losses – focusing in particular on certain instances in which a taxpayer is prevented from shifting a built-in loss to another taxpayer but would be allowed to shift a built-in gain to another taxpayer. The article will explore whether any legitimate justification can explain the inconsistency.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

WSJ: I’d Be An ‘A’ Student If I Could Just Read My Notes

No LaptopWall Street Journal, I’d Be an ‘A’ Student if I Could Just Read My Notes:

Professors are banning laptops in class, driving college students to revert to handwriting—and to complain about it; ‘a hand cramp in government’

Adam Shlomi says he is a good student at Georgetown University. But the sophomore is failing in one unexpected area: note-taking.

Back in his Florida high school, he brought a Chromebook to class, taking “beautiful, color-coded notes.” So he was shocked to learn many professors at the elite Jesuit university in Washington, D.C., don’t allow laptops in their lecture halls.

With nearly illegible handwriting—a scrawl of overlapping letters with interchangeable t’s and f’s, g’s and y’s—Mr. Shlomi, 20 years old, begs notes from friends, reads textbooks and reviews subjects on YouTube when it’s time to take a test.

As professors take a stand against computers in their classrooms, students who grew up more familiar with keyboards than cursive are struggling to adjust. They are recording classes on cellphones, turning to friends with better penmanship and petitioning schools for a softer line. ...

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March 15, 2018 in Legal Education | Permalink | Comments (4)

Christians: Tax And The Immigrant Investor

Allison Christians (McGill), Jumping the Line or Out of the Net? Tax and the Immigrant Investor, 88 Tax Notes Int'l 357 (Oct. 23, 2017):

Many countries seek to attract wealthy individuals — their capital, if not actually themselves — with programs that confer residence or citizenship in exchange for specified investments in local property or business ventures. Some programs simply facilitate jumping the immigration line, while other facilitate jumping out of the tax net in one country to land in another potentially more favorable.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

Kleinbard: Perversion Of The Tax Policymaking Process

Wednesday, March 14, 2018

Crawford Presents Tax Talk And Reproductive Technology Today At Toronto

Crawford (2018)Bridget Crawford (Pace) presents Tax Talk and Reproductive Technology at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

What do the busiest fertility clinics in the United States communicate to their clients about the tax consequences of so-called human egg “donation”? As in Canada, the purchase of human ova is illegal in the United States. Nevertheless, it is an open and common practice for an egg providers, aided by a fertility clinic, to contract with intended parents for substantial remuneration. How do egg providers understand their remuneration vis-a-vis the tax system? How does that understanding square with existing tax laws in the U.S. and Canada? Through a content analysis of publicly-available websites and internet message boards, this paper examines the tax information that U.S. fertility clinics and doctors make available to patients, as well as the information that compensated egg providers share with each other. The paper demonstrates that correct and reliable tax information is in short supply, and there is a need for clear administrative or judicial guidance.

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March 14, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pepperdine University President Andrew Benton to Conclude Presidency In 2019

BentonPepperdine University President Andrew K. Benton to Conclude Presidency in 2019:

Pepperdine University president and chief executive officer Andrew K. Benton has announced his intent to conclude his presidency at the end of the 2018–2019 academic year. In a prepared statement to the University community, Benton said he and his wife have decided it is a good time for a change and that he has asked the Board of Regents to begin the process for selecting a new president.

“This is a significant change that, while difficult, we believe comes at just the right time - for Pepperdine, for our students, and for us,” said Benton. “As president, I have always tried to make the hardest institutional decisions from a position of strength, and because of the talent and passion of our people throughout the last several decades, I can confidently say that Pepperdine has never been stronger academically, spiritually, and financially.”

As he anticipates his final year of service as president, Benton plans to stay focused on the strategic priorities he believes will add value to the student experience and Pepperdine’s reputation among elite universities. These initiatives include the completion of the new Seaside Residence Hall and School of Law renovation, plans for a revitalized Washington, DC program and facility, and securing funds for a new student recreation and events center.

“Our aspirations for Andy’s success have been realized beyond our dreams, and he has become one of our nation’s truly great university presidents,” said board chair Ed Biggers, speaking on behalf of the Board of Regents. “Serving with Andy has been among the greatest privileges of my life, and the entire board is deeply grateful for his strength, integrity, and grace. Throughout all of his roles and responsibilities, he has led with determination, intelligence, and tenacity, tempered with his compassion and a deep and abiding faith. His genuine love for students has been, perhaps, the hallmark of his career, and we congratulate him on his distinguished service.”

Benton has committed to serving as president until his successor is found and will continue to serve the University as President Emeritus following the conclusion of his presidency. At the end of his presidential tenure, Benton will be the longest serving president in Pepperdine’s 80-year history.

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March 14, 2018 in Legal Education | Permalink | Comments (0)

March Madness Law School Bracket

Here is the March Madness Law School Bracket, with outcomes determined by the 2018 U.S. News Law School Rankings (using academic peer reputation and student quality as tiebreakers). The Final Four are Pennsylvania (7), Michigan (8), Virginia (8), and UCLA (15), with Penn beating Virginia in the championship game.


March 14, 2018 in Law School Rankings, Legal Education | Permalink | Comments (0)

Global IFA Writing Competitions

IFA Logo (2015)Following up on my previous post, 2018 IFA International Tax Student Writing CompetitionGlobal IFA Writing Competitions (2018):

  • IFA President YIN Scientific Award
  • Mitchell B. Carroll Prize
  • Maurice Lauré Prize

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March 14, 2018 in Tax, Teaching | Permalink | Comments (0)

Is Tennessee's New Enhanced Posttenure Performance Review Policy An Attack On Tenure?

Tennessee (2018)Inside Higher Ed, Posttenure Review or a Plan to Undercut Tenure?:

A joint committee of faculty members and administrators from across the University of Tennessee’s four campuses spent months revising the system’s posttenure review policy, which it acknowledged was outdated and needed strengthening. The committee included the university system's Board of Trustees in its process and its recommendations were adopted this year, with the goal of making posttenure review clearer and more meaningful.

So professors from across the system are baffled and alarmed by a new, hastily written add-on proposal from the trustees, with some saying it challenges the idea of tenure altogether.

“We’re concerned they're putting together a very ambiguous board policy that threatens academic freedom and represents a huge service load on the faculty,” said Beauvais Lyons, Chancellor’s Professor of Art at the Knoxville campus and president of its Faculty Senate.

Tennessee’s current — and still very new — Enhanced Posttenure Performance Review (EPPR) policy says that a campus chief academic officer must initiate an assessment after a professor gets an overall “unsatisfactory” annual performance review rating (the lowest category) or two annual review ratings of “needs improvement” (the next-to-lowest rating) in a four-year period.

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March 14, 2018 | Permalink | Comments (3)

Wallace: Congressional Control Of Tax Rulemaking

Tax Law ReviewClint Wallace (South Carolina), Congressional Control of Tax Rulemaking, 71 Tax L. Rev. ___ (2018):

The notice and comment process is often touted as a mechanism for establishing political accountability, and providing a check on agency decision-making. Based on a survey of three years of recently proposed tax regulations, this Article shows that many notice-and-comment processes for tax regulations have been ineffective for these purposes. Fully one-third of the time, no one participated. The few participants there are have been heavily weighted towards private interests, which commented on approximately two-thirds of all proposed regulations from 2013 through 2015. In contrast, public interest groups commented on less than 24% of proposed regulations. If the notice and comment process almost always fails to meet the ideal of robust and diverse participation, who is accountable for tax regulations?

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March 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

After 'Disparaging' Comments About Black Students, Amy Wax Barred From Teaching 1L Course At Penn

Penn (2017)Folowing up on my previous posts (links below):  Daily Pennsylvanian, After 'Disparaging' Comments on Black Students, Amy Wax Barred From Teaching First-Year Course:

For the first time since Penn Law professor Amy Wax made headlines last year for controversial comments on race and free speech, the University that employs her has responded with action.

Penn Law Dean Ted Ruger announced on Mar. 13 that Amy Wax would no longer be allowed to teach a mandatory first-year course. This comes days after students and alumni responded with outrage to a video of Wax saying she's never seen a black Penn Law student graduate in the top quarter of their class. Earlier this week, an online petition was launched calling on Ruger to take action against Wax for her comments.

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March 14, 2018 in Legal Education | Permalink | Comments (5)

Mason: EU State Aid

Ruth Mason (Virgina), EU State Aid:

March 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, March 13, 2018

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 37, No. 1 (Fall 2017):

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

Satterthwaite: Smallness And The Value-Added Tax

Columbia Journal of Tax Law LogoEmily Satterthwaite (Toronto), On the Threshold: Smallness and the Value-Added Tax, 9 Colum. J. Tax L. ___ (2018):

Three-quarters of the world’s population live in a country in which a value-added tax (VAT) is collected on sales of goods and services. The registration threshold determines which businesses — typically as measured by their annual revenues — remain exempt from the obligation to register for and collect VAT on their sales. Among VAT economists, there is broad consensus that setting thresholds higher rather than lower (such that more rather than fewer businesses are exempt) increases the economic efficiency of a VAT. Despite these high stakes and the longstanding expert consensus in favor of high thresholds, real-world thresholds vary widely and skew low, even within OECD and European countries. This article leverages the insights of the economic model to address an issue that lies outside of it but is central to lawyers and policymakers: distributional equity.

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

A Law And Economics Critique Of The Law Review System

Timothy T. Lau (Federal Judicial Center), A Law and Economics Critique of the Law Review System, 55 Duq. L. Rev. 369 (2017):

The law review system prizes placement of articles in highlyranked journals, and the optimum method to ensure the best placement, which many scholars have intuited, is a saturation submission strategy of submitting articles to as many journals as possible. However, there has neither been an explanation as to what incentivizes this submission strategy nor any analysis as to what happens to scholars who cannot afford this strategy. This article uses a law and economics approach to study the incentive structures of the law review system, and identifies two features of the system that encourage saturation submission and punishes the poorly-resourced: (a) journals have no availability to accept all articles of equal quality; and (b) there is an insufficient match between acceptance and journal ranking.

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March 13, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

ABA Tax Section Publishes New Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 37 Tax Times No. 2 (Mar. 2018 2017):

Midyear Wrap-Up and a Look Ahead
By Karen L. Hawkins, Hawkins Law, Yachats, OR
The Section’s Midyear Meeting in San Diego was a resounding success. The committees once again provided timely and top-notch continuing education presentations and materials on myriad aspects of the new tax law.

Estate Portability: Sowers Reap Unexpected Harvest in Estate of Sower v. Commissioner
By James Lynch, Sobel & Co., LLC, Livingston, NJ
In 2010, Congress introduced into the tax code the concept of portability for certain estates. Each estate has an applicable exclusion amount. Under portability, the executor of the estate of a deceased spouse may elect to give the surviving spouse that deceased spouse’s unused applicable exclusion amount (DSUE). In the recent case of Estate of Sower v. Commissioner, the Tax Court provided some guidance on the audit of the return of the first deceased spouse.

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March 13, 2018 | Permalink | Comments (0)

Zelenak: Congress, Treasury, And The Design Of The Early Modern Income Tax

LZelenakawrence Zelenak (Duke), Figuring Out the Tax: Congress, Treasury, and the Design of the Early Modern Income Tax (Cambridge University Press 2018):

Figuring Out the Tax recounts the forgotten early development of the federal income tax in the US, resulting from the interplay between Congress and the Treasury Department in the decades following the enactment of the tax in 1913. It covers a wide range of topics including the income tax treatments of marriage, capital losses, charitable contributions and homeownership, as well as the rise, demise and resurrection of income tax withholding. Lawrence Zelenak deftly illustrates how the income tax achieved its current form through a range of stories which are new to tax history scholarship and involve some remarkable personalities and surprising plot twists. Although of particular interest to tax academics and professionals, this book will also serve as a useful introduction to the development of income tax for undergraduate students and law students.

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March 13, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (0)

McGeorge Law School To Reduce Faculty By 25% Through Voluntary Buyouts

McGeorgeSacramento Bee, McGeorge School of Law to Reduce Full-Time Faculty By About 25%:

Dean Michael Schwartz said the move is part of the Sacramento law school’s strategic plan for the next five years and faculty members who volunteer for buyouts will have several options related to timing. ...

McGeorge anticipates 10 or 11 professors will take buyouts, which will free up money to reinvest in student recruitment. After the buyouts, about 28 full-time professors will remain. …

He also declined to disclose specific terms of the buyout packages, but said the packages will be the same for professors across the board.

According to Law School Transparency, McGeorge's 1L enrollment has fallen 56% from 2010 (from 346 to 152), and its LSAT median has fallen from 158 to 151. 

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

The Use Of Big Data Analytics By The IRS

IRS Big DataKimberly Houser (Washington State), The Use of Big Data Analytics by the IRS: What Tax Practitioners Need to Know:

With the budget reductions and losses in staff over the past several years, the IRS has been forced to do more with less. In turn, the IRS has turned to big data analytics make up for its loss of personal and the impact of the budget reductions. In 2011, the IRS created the Office of Compliance Analytics in order to create analytics programs that could identify potential refund fraud, detect taxpayer identity theft, and become more efficient in handling noncompliance issues. The IRS uses a wide range of analytic methods to mine public and commercial data including social media sites such as Twitter, Facebook, and Instagram. The data collected from this mining is combined with IRS’s own proprietary information and analyzed using pattern recognition algorithms, which help to identify potential noncompliant taxpayers.

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March 13, 2018 in IRS News, Tax | Permalink | Comments (0)

300 Former Students At Shuttered Charlotte Law School Are Eligible For Discharge Of Loans

Charlotte Logo (2016)ABA Journal, Nearly 300 Former Students at Shuttered Law School Are Eligible for Discharge of Student Loans:

Nearly a dozen additional students who were enrolled at the now-shuttered Charlotte School of Law will be eligible for discharge of their federal student loans as a result of an extension granted by the U.S. Department of Education.

Nearly 300 former students in total are eligible for forgiveness of the federal loans, according to a press release by the U.S. Department of Education. The Charlotte Observer, WFAE and Inside Higher Ed have stories.

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March 13, 2018 | Permalink | Comments (2)

Monday, March 12, 2018

Thomas Presents Taxing The Gig Economy Today At UC-Irvine

Thomas (2017)Kathleen Delaney Thomas (North Carolina) presents Taxing the Gig Economy,  166 U. Pa. L. Rev. ___ (2017), at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce compliance burdens for this new generation of business owners, while simultaneously enhancing the government’s ability to collect tax revenue.

First, Congress should create a “non-employee withholding” regime that would allow online platform companies such as Uber to withhold taxes for their workers without being classified as employers. Second, the Article proposes a “standard business deduction” for gig workers, which would eliminate the need to track and report business expenses.

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March 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Christians Presents Taxing Income Where Value Is Created Today At BYU

Christians (2018)Allison Christians (McGill) presents Taxing Income Where Value Is Created, 21 Fla. Tax Rev. ___ (2018) (with Laurens van Apeldoorn (Leiden)) at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Subscribing to the core idea that income should be taxed where value is created, the international community has devised a set of tax base protecting rules to counter a world in which highly profitable multinational companies like Apple, Google, and Amazon pay very little in taxation. But these rules rely on assumptions about value that tend to allocate most revenues from international trade and commerce to rich countries while, whether intentionally or not, depriving poorer countries of their proper share. This article argues that a rigorous examination of what we mean by value would prompt changes in this allocation.

To demonstrate with a concrete example, the article examines wages paid to workers in low income countries and reveals a clear and well-documented gap between market price and fair market value resulting from labor exploitation.

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March 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

WSJ: The Truth About The SAT And ACT

Wall Street Journal, The Truth About the SAT and ACT:

Myths abound about standardized tests, but the research is clear: They provide an invaluable measure of how students are likely to perform in college and beyond.

This Saturday, hundreds of thousands of U.S. high-school students will sit down to take the SAT, anxious about their performance and how it will affect their college prospects. And in a few weeks, their older peers, who took the test last year, will start hearing back from the colleges they applied to. Admitted, rejected, waitlisted? It often hinges, in no small measure, on those few hours spent taking the SAT or the ACT, the other widely used standardized test.

Standardized tests are only part of the mix, of course, as schools make their admissions decisions. They also rely on grades, letters of recommendation, personal statements and interviews. But we shouldn’t kid ourselves: The SAT and ACT matter. They help overwhelmed admissions officers divide enormous numbers of applicants into pools for further assessment. High scores don’t guarantee admission anywhere, and low scores don’t rule it out, but schools take the tests seriously.

And they should, because the standardized tests tell us a lot about an applicant’s likely academic performance and eventual career success. Saying as much has become controversial in recent years, as standardized tests of every sort have come under attack. But our own research and that of others in the field show conclusively that a few hours of assessment do yield useful information for admissions decisions.

Unfortunately, a lot of myths have developed around these tests—myths that stand in the way of a thoughtful discussion of their role and importance.

Myth: Tests Only Predict First-Year Grades
Longitudinal research demonstrates that standardized tests predict not just grades all the way through college but also the level of courses a student is likely to take. Our research shows that higher test scores are clearly related to choosing more difficult majors and to taking advanced coursework in all fields. ...

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March 12, 2018 in Legal Education | Permalink | Comments (4)

NY Times: Tax Law’s Errors Upset Companies As Congressional Leaders Feud

New York Times p. 1:  Tax Law’s Errors Upset Employers As Leaders Feud, by Jim Tankersley & Alan Rappeport:

The legislative blitz that rocketed the $1.5 trillion tax cut through Congress in less than two months created a host of errors and ambiguities in the law that businesses big and small are just now discovering and scrambling to address.

Companies and trade groups are pushing the Treasury Department and Congress to fix the law’s consequences, some intended and some not, including provisions that disadvantage certain farmers, hurt restaurateurs and retailers and could balloon the tax bills of large multinational corporations.

While Treasury can clear up uncertainty about some of the murky provisions, actual errors and unintended language can be solved only legislatively — at a time when Democrats seem disinclined to lend votes to shoring up a law they had no hand in passing and are actively trying to dismantle.

On Thursday, the U.S. Chamber of Commerce sent the Treasury Department 15 pages of detailed requests for clarification on how the law affects multinational corporations, mutual fund investors and mom-and-pop pass-through entities.

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March 12, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Vic Fleischer Leaves San Diego For UC-Irvine

Fleischer (2018)Leading Tax Scholar and Teacher Victor Fleischer Joins UCI Law Faculty:

Fleischer will join tax faculty Omri Marian and Josh Blank at UCI Law

UCI Law is pleased to announce the appointment of renowned tax expert Victor Fleischer to its faculty as professor of law. Fleischer joins UCI Law from University of San Diego School of Law, where he currently is a professor of tax law and director of tax programs.

"We are delighted to have Vic join our preeminent faculty and further enhance our robust tax program," said UCI Law Dean L. Song Richardson.

"UCI has an amazing, diverse, talented, and energetic faculty," said Fleischer. “It’s a wonderful opportunity for me and I’m delighted to join the team.”

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March 12, 2018 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

Lesson From The Tax Court: The Common Law Of Tax

Tax Court (2017)When I go abroad and introduce U.S. law and legal systems to lawyers from civil law countries, they are generally surprised that U.S. judges have so much power. They rightly perceive that the “common law” is really a license of power to judges, a power that is only broadly constrained by other government actors. This power allocation to the judicial branch is, however, an essential part of the U.S. political system, a system designed to resist a corrosive and corrupting concentration of power into any one person or small group of people. Our system carves up power both horizontally—think legislative v. executive v. judicial—and vertically—think state v. federal.

Our law schools inculcate the common law tradition into our students starting in the first year. In fact, despite nods to leg/reg courses, the first year curriculum is still mostly about the common law.  And the Socratic method is, in large measure, a method that works to establish common law thinking methods in our students, notably in how it forces students to pay attention to facts. Facts matter in the common law. We teach them to matter to students. And some of those students eventually become Tax Court judges.

We tax lawyers tend to forget the great common law tradition that undergirds the U.S. legal system. After all, we work from that Bodacious Compendium of rules in the Internal Revenue Code and associated regulations. But even in such a textually bounded area of law as tax, the common law persists. For example, the tax question about “who” must pay tax on an item of income is largely common law, even when it intertwines with various tax statutes, notably the grantor trust rules in §671 et seq. When I teach assignment of income, I tell my students to leave their statutory supplements at home.  We're in common law country. 

The importance of common law to tax is the lesson I draw from the Tax Court’s opinion last week in the consolidated cases of Celia Mazzei v. Commissioner and Angelo L, and Mary E. Mazzei v. Commissioner, 150 T.C. No. 7 (March 5, 2018). The taxpayers in these cases played around with various entity structures to try and avoid the contribution limits to their Roth IRAs. The IRS caught them out. The Tax Court sustained the IRS NOD and the Judges wrote three opinions totaling 104 pages. The majority, in an opinion by Judge Thornton (joined by 11 others) uses common law rules developed in the assignment of income area to sustain the IRS’s Notice of Deficiency. Judges Paris and Pugh, who joined the majority, also pen a concurring opinion that emphasizes the common law question (and are joined by three of the others who also joined the majority). Judge Holmes (joined by three others) dissents, believing that the relevant tax statutes trump the common law.

The clash of opinions are good reading, not only for their very satisfying lesson about the role of common law in our system of taxation but also because they really do clash: Judge Holmes basically accuses the majority of channeling the Emperor Caligula and Judge Thornton labels some of Judge Holmes’s claims “bizarre.”

Details below the fold.

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March 12, 2018 in Bryan Camp, Legal Education, New Cases, Tax | Permalink | Comments (10)

U.S. News Strips Ranking From Three Graduate Schools For Submitting False Data

2018 U.S. News GradI previously have blogged reports of over a dozen schools inflating their rankings by submitting erroneous data to U.S. News (BucknellClaremont McKennaCollege of CharlestonCreightonEmoryGeorge WashingtonIllinoisMissouri-Kansas City, TempleTulaneUniversity of Mary Hardin-BaylorVillanovaYork College of Pennsylvania).   U.S. News recently announced that it was removing the rankings of three graduate schools for submitting false data:

The University of Florida's College of Nursing originally reported its fiscal year 2016 NIH educational and practical initiative grants and expenditures at $1,684,495. The school informed U.S. News the corrected value for its fiscal year 2016 NIH grants was $0. ...

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March 12, 2018 in Law School Rankings, Legal Education | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, March 11, 2018

Kahrl Presents Lien On Me: Race, Power, And The Property Tax At UCLA

KahlrAndrew Kahrl (Virginia) presented Lien On Me: Race, Power, and the Property Tax at UCLA on Friday as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

This paper forms part of a larger book project I am currently completing on the taxation of black Americans from Reconstruction to the present. The project focuses specifically on the property tax and examines its role in shaping—and frustrating—African Americans’ struggles for political and economic empowerment, and claims to property rights, during the long Black freedom movement. Because of the opaque nature of the assessment process, the legal barriers to uncovering and challenging assessment irregularities, and the harsh penalties for tax delinquency in many states, the property tax, I argue, became a powerful instrument of white homeowner advantage, on the one hand, and racial discrimination and black property dispossession, on the other.

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March 11, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

What They Don't Teach You In Law School: How To Get A Job

Gropper 2Adam Gropper (Legislation Counsel, Joint Committee on Taxation; Founder, Legal; Former Tax Partner, Baker & Hostetler), What They Don't Teach You in Law School: How to Get a Job (2018):

It arms you with a fresh perspective from students who landed great legal jobs. These personal, enlightening stories and the insight they reveal form the foundation of a straightforward six-step process to create multiple job opportunities.

You'll quickly learn how to:

  • Create an entrepreneurial approach to your career planning.
  • Be seen by potential employers as integral to achieving their objectives.
  • Build your brand to get the job you want with the employer you want.

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March 11, 2018 in Book Club, Legal Education | Permalink | Comments (2)

The Pain Of Loving Old Dogs

SandyFollowing up on my previous post, Goodbye Sandy:  New York Times op-ed:  The Pain of Loving Old Dogs, by Margaret Renkl:

Clark is ... deaf, and he suffers from crippling arthritis. So far we have been able to manage his pain with medication, but at his checkup last year, when he turned 13, the vet had some sobering news. “With big dogs, there’s often a huge difference between 12 and 13,” he said. “One day Clark won’t be able to get up, and when that happens it’ll be time to let him go.”

The very idea is unthinkable. Clark has been our family protector, making political canvassers and religious zealots think twice about knocking on our door. He was the dog of our sons’ childhood, the pillow they sprawled on during Saturday-morning cartoons, the security blanket they returned to after an impossible test or a classroom bully or, later, a broken heart. At 14, this big dog has now surpassed his life expectancy. ...

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March 11, 2018 in Legal Education, Tax | Permalink | Comments (2)

The Top Five New Tax Papers

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. [32,717 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1983 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [1059 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [720 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane Ring (Boston College)
  5. [359 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Bradley Borden (Brooklyn)

March 11, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 10, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Court Holds LSAC In Contempt, Extends Consent Degree For Two Years

LSAC (2018)National Law Journal, LSAT-Maker Held In Contempt Over Disability Accommodations:

The Law School Admission Council violated court-ordered rules meant to help disabled test takers gain accommodations on the Law School Admission Test, ruled a federal judge who held the organization in civil contempt.

Judge Joseph Spero in the U.S. District Court for the Northern District of California did not hold back, in a ruling handed down Monday, about what he saw as the council’s efforts to circumvent procedures agreed to under a 2014 consent decree the test administrator reached with the U.S. Department of Justice and the California Department of Fair Employment and Housing.

“[The council] deprived certain candidates of their automatic right to accommodations previously granted on comparable tests by improperly imposing substantive conditions on the candidate’s ability to accept those accommodations, and denied those candidates and others the right to the procedural safeguards established by the Panel for requests not based on such past accommodations,” Spero wrote in a 53-page opinion.

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March 10, 2018 in Legal Education | Permalink | Comments (0)