TaxProf Blog

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

Sunday, September 24, 2017

Gamage & Shanske: Using Taxes To Support Multiple Health Insurance Risk Pools

David Gamage (Indiana) & Darien Shanske (UC-Davis), Using Taxes to Support Multiple Health Insurance Risk Pools, 85 State Tax Notes 871 (Aug. 28, 2017):

In most markets, it is considered desirable for consumers to have more choices. But health insurance regulation is different. When it comes to health insurance, giving consumers more choices can result in the market collapsing — leaving the sickest and most needy consumers without any good choices at all. To mitigate this problem, the Affordable Care Act’s Exchanges were designed around maintaining a single exchange-based risk pool. However, one problem with this approach taken by the Affordable Care Act is that the regulations designed to maintain the single exchange-based risk pool have the side effect of limiting some potentially positive aspects of consumer choice and provider competition.

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September 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

IFA International Tax Student Writing Competition

IFA Logo (2015)The International Fiscal Association is sponsoring the 2017 International Tax Student Writing Competition:

Subject:  Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.

  • Open to:  All students during the 2016-17 academic year pursuing a graduate degree. Any appropriate papers written in fall 2016 or spring and summer 2017.
  • Submission Deadline:  September 30, 2017.
  • Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in February 2018.

Here are the recent winners:

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September 24, 2017 in Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

BYU To Start Selling Caffeinated Soft Drinks On Campus

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. [640 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  2. [347 Downloads]  Is Efficiency Biased?, by Zachary Liscow (Yale)
  3. [240 Downloads]  When Did Tax Avoidance Become Respectable?, by Steven Bank (UCLA)
  4. [162 Downloads]  Codification of the Tax Law and the Emergence of the Staff of the Joint Committee on Taxation, by George Yin (Virginia)
  5. [151 Downloads]  Distributive Justice and Donative Intent, by Alexander A. Boni-Saenz (Chicago-Kent)

September 24, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 23, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Law Prof (And Associate Dean For Academic Affairs) Kendra Fershee Announces Congressional Bid

KendraKendra Fershee, Associate Dean for Academic Affairs and Professor of Law at West Virginia University College of Law (and fellow Hamilton aficionado), announced on Thursday she is running for Congress as a Democrat in West Virginia's First District:

I am a working mom who has dedicated the majority of my professional life to public service. I am a law professor, a family law expert, and a mom of two kids. I’ve been married to the love of my life for almost nineteen years, and together we’ve built a life in West Virginia.

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September 23, 2017 in Legal Education | Permalink | Comments (1)

Law Firms Plan To Increase First Year Associate Hiring By 22%; Average Salary Is $68,000

One-Quarter Of Law Firms To Expand First-Year Associate Hiring:

Newly minted associates may see employers extend more job offers, research indicates. Nearly one-quarter (22 percent) of lawyers recently interviewed by Robert Half Legal said their law firm plans to increase its hiring of first-year associates in the next 12 months, while 67 percent indicated no change in hiring activity and 7 percent plan a decrease.

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September 23, 2017 in Legal Education | Permalink | Comments (0)

Helicopter Pilot Lands In Tax Court, Successfully Establishes That His Tax Home Is In Iraq

Forbes, Helicopter Pilot Lands In Tax Court, Successfully Establishes That Tax Home Is In Iraq

Cowardice, it seems, is not a trait Jesse Linde and I share. A two-time Army helicopter pilot, after struggling to find work in the private sector, Linde jumped at the opportunity to relocate to the Middle East in order to continue flying. To date, he has successfully navigated the many dangers to be found in Iraq, but even halfway across the globe, he couldn't escape one domestic menace: the IRS.

Yesterday, Linde found himself in the Tax Court, and it's a decision that all tax professionals would be wise to review, as it addresses a fascinating area of the law:

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September 23, 2017 in New Cases, Tax | Permalink | Comments (2)

Friday, September 22, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by Gladriel Shobe (BYU), Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, 71 Vand. L. Rev. ___ (forthcoming 2018).   

Glogower (2016)Gladriel Shobe’s new work describes the evolution of Tax Receivables Agreements (TRAs) in IPOs, and evaluates the policy implications of these increasingly common agreements.

A TRA is contract entered into in connection with an IPO whereby the new public company agrees to pay the pre-IPO owners for the value of tax assets held by the historic company, which can offset the company’s future taxable income.  The most common such assets are depreciable asset basis and net operating losses (NOLs).  Under a TRA, the public company pays the pre-IPO owners for the value of these tax assets over a period of years following the IPO as the value is realized.

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September 22, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Galle: Deal To Swing Alaska Senator's Vote May Violate Uniformity Clause

Brian Galle (Georgetown), The "Alaska Purchase" Is Probably Unconstitutional

As Republican leadership searches for the 51st vote in favor of Cassidy-Graham-Heller, their apparently randomly chosen vehicle for repealing the ACA, rumors abound of a sweetheart deal aimed at securing Lisa Murkowski’s vote. The so-called “Alaska Purchase” would maintain existing premium support credits for those purchasing health insurance on the individual market…but only in Alaska and Hawaii.

They probably can’t do that. Article I, section 8 of the Constitution says “all Duties, Imposts and Excises shall be uniform throughout the United States.” Joseph Story, writing in 1834, thought that the point of that provision was to prevent coalitions of states from ganging up, in Congress, to benefit themselves at the expense of others. While the “uniformity clause” has been watered down over time, it’s still enough to swamp the Alaska Purchase proposal.

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September 22, 2017 in Tax | Permalink | Comments (1)

Pepperdine Receives $8 Million Gift For Global Justice Program, Largest Single Endowment Gift In Law School's History

Laure Sudreau RippePepperdine School of Law Announces $8 Million Endowment of Sudreau Global Justice Program:

The Pepperdine University School of Law is proud to announce the endowment of the Sudreau Global Justice Program made possible by the generosity of alumna Laure Sudreau (JD ’97). The $8 million contribution is the largest single endowment gift ever to the School of Law and will help advance the profound impact of the Global Justice Program, which operates within the Herbert and Elinor Nootbaar Institute on Law, Religion, and Ethics at the School of Law.

Since 2007, the Global Justice Program has touched all corners of the globe through its initiatives in international human rights and religious freedom, advancement of the rule of law, and global development. The Sudreau Global Justice Program will support and enhance current programs while envisioning new and innovative initiatives that will create a lasting impact in the lives of the Pepperdine law community and those experiencing injustices in the world’s most vulnerable places.

“We are humbled by Laure's generosity and confidence in the law school,” says School of Law dean Paul L. Caron. “This gift will empower us to expand our important work bringing justice to those around the globe who desperately need the legal assistance of our students, alumni, and faculty.”

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September 22, 2017 in Legal Education | Permalink | Comments (0)

More Law Prof Reactions To The Wax & Alexander Op-Ed On The Breakdown Of The 'Bourgeois Culture' 

LSAT, Law School GPA, Journals, Moot Court, Contracts, Evidence Predict Bar Exam Success; UGPA, Clinics, Con Law, Crim Law, Crim Pro, Property, Torts Do Not

Katherine A. Austin (Texas Tech), Catherine Martin Christopher (Texas Tech) & Darby Dickerson (Dean, John Marshall), Will I Pass the Bar Exam?: Predicting Student Success Using LSAT Scores and Law School Performance, 45 Hofstra L. Rev. 753 (2017):

Texas Tech University School of Law has undertaken a statistical analysis of its recent alumni, comparing their performance in law school with their success on the Texas bar exam. The authors conclude that LSAT predicts bar exam success while undergraduate GPA does not. The study also replicates findings in previous literature that both 1L and final law school GPA predict bar exam success.

Going beyond existing literature, this study also conducted more specific analysis of how student performance in specific courses can predict success on affiliated subcomponents of the bar exam; the Article identifies which courses [Contracts, Evidence] have significant impact on bar exam performance and which do not [Constitutional Law, Criminal Law, Criminal Procedure, Property, Torts].

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September 22, 2017 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1597: New Details Of Targeting Of Conservative Groups Emerge In Tea Party Lawsuits

IRS Logo 2Cincinnati Enquirer, New Details Emerge in Tea Party Suit Against IRS:

The IRS used the political views of conservative "tea party" groups trying to get nonprofit status as a reason for extra scrutiny and continued delaying applications until 2013 — long after they said they'd stopped — new federal court filings allege.

The new accusations counter previous IRS claims that agents did not consider political beliefs when slowing down tax-exempt applications from right-leaning groups in the months leading up to the 2012 presidential election.

The IRS had instead argued that it was merely monitoring whether the groups were conducting more political activity than was allowed.

The filings by conservative groups suing the IRS also state the agency continued the practice after IRS officials said it had stopped in 2011. ...

"By trying to make this about whether this was done to help Obama win is setting the goalpost artificially too high," Eddie Greim, a lawyer representing conservative groups in the class-action suit, said in an interview with The Enquirer. "All we have to prove is whether they had the intent and if they indeed treated a set of groups differently based on their ideology. ...

U.S. Sen. Rob Portman, R-Terrrace Park, who was one of the first in Congress to publicly complain in 2012 about the IRS' possible discrimination against conservative nonprofit groups, said that the practice was "an appalling abuse of power" in a statement to The Enquirer. “It’s clear that the Obama administration’s IRS illegally and intentionally targeted conservative groups for their ideological beliefs, and those responsible ... need to be held accountable," Portman said. ...

[O]thers testified in depositions that Lerner ordered IRS agents to send requests for additional information from the affected groups following that 2011 meeting. That included requests for donor information, normally considered off-limits. Lerner "wanted everyone to know that we are handling the cases as we should," testified Cindy Thomas, the top nonprofit official in Cincinnati at the time.

"So after they were told that this was possibly improper, they doubled down and kept going," Greim said. "This goes well beyond the narrative of what's been reported before."

Greim also said that the IRS removed two Washington agents who had raised questions about the extra scrutiny on the tea party cases. "These two found that ideology was indeed being used, raised questions about it and told their superiors about it and that it was going to cause delay," Greim said. "And wouldn't you know it, they were moved off the matter soon thereafter."

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September 22, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Thursday, September 21, 2017

Hadfield: Law Schools Are Letting Down Their Students And Society — A 3-Point Plan To Fix Legal Education

Quartz: Law Schools Are Letting Down Their Students and Society—Here Are Three Steps They Can Take to Fix Things, by Gillian Hadfield (USC; Member, ABA Commission on the Future of Legal Education):

Law schools in the US today have become depressingly single-purpose: training members of a closed profession and failing to equip them to tackle the full breadth of problems facing economies and societies that are undergoing extensive transformations.

Law schools are letting down their students. They’re requiring anyone who wants to do any type of legal work, even the pro-forma and routine, to enroll in three years of graduate school and take on an average debt of $140,000, all the while facing dwindling job prospects.

This is bad news for students. But it is even worse news for the rest of us. Today’s law schools are graduating hordes of would-be lawyers who are not prepared to respond to, or innovate new solutions for, the pressing legal and regulatory needs of citizens and businesses alike. ...

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September 21, 2017 in Legal Education | Permalink | Comments (0)

IRS FAQs Are A Trap For The Unwary

IRSFAQMarketWatch, What the IRS Does on its Website That’s Unfair to Taxpayers:

Taxpayers can’t rely on Frequently Asked Questions (FAQs) and answers and other “unofficial” guidance that the IRS posts on its website, National Taxpayer Advocate Nina Olson recently explained in a blog post [IRS Frequently Asked Questions Can Be a Trap for the Unwary]. While tax professionals already know about this issue, you may find it unsettling. Here’s what you need to understand.

Unofficial guidance
The IRS puts out what it calls unofficial guidance in many forms. Unofficial guidance includes IRS tax forms and instructions (believe it or not), press releases, online publications, website articles, and website FAQs and answers. Such unofficial guidance is generally not subject to careful internal review or public commentary before being released. Worse yet, the IRS takes the position that taxpayers cannot rely on unofficial guidance even though the IRS has put it out there for public consumption. For example, FAQs and answers that are posted at www.irs.gov can be changed at any time and without any public notice. Ditto for information in IRS publications that are posted on its website. So if you rely on unofficial IRS guidance in taking a position on a federal tax return, the IRS can potentially audit you and assess additional taxes, interest, and even penalties because you did not “follow the rules” even though what you did was consistent with what the IRS said at the time. Not good!

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September 21, 2017 in IRS News, Tax | Permalink | Comments (0)

2016-17 Survey Of The Clinical Legal Education Programs At 187 Law Schools

Robert Kuehn (Washington University) & David A. Santacroce (Michigan) (with Margaret Reuter (UMKC) & Sue Schechter (UC-Berkeley), The 2016-17 Survey of Applied Legal Education (Center for the Study of Applied Legal Education ("CSALE") (2017)):

Over 1,100 law clinic and externship faculty from 187 law schools (94% of ABA accredited U.S. schools) participated in CSALE’s latest tri-annual survey. The 2016-17 survey (CSALE’s fourth) provides the most comprehensive, accurate picture to date of clinical legal education programs, courses, and faculty. The report summarizes the collective responses from schools and their faculty on questions relating to program design, capacity, administration, staffing, funding, and pedagogy, and the role of clinical legal education and educators in the legal academy.

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September 21, 2017 in Legal Education | Permalink | Comments (0)

Controversy Over Law Profs' Op-Ed On The Breakdown Of The 'Bourgeois Culture' Shifts From Penn To San Diego

USD (2016)Following up on my previous posts:

San Diego Dean Stephen Ferruolo has issed this statement:

I want to thank the student groups, as well as the many individual students, faculty and other members of the USD law school community who have spoken or written to me to express their concerns about the article written by USD School of Law Professor Larry Alexander, along with University of Pennsylvania Professor Amy Wax, and their subsequent interviews about the article.

As I said in my remarks at 1L Orientation, I am committed, as Dean of USD School of Law, to ensuring that there are opportunities for respectful discussion of important issues and for everyone's voices to be heard. The rights we must respect in an academic community include freedom of speech and academic freedom, and those rights and freedoms extend to every member of our community. No less importantly, however, in exercising our rights and expressing our views, we must be sensitive to all the members of our community, especially those who may feel vulnerable, marginalized or fearful that they are not welcomed. We must recognize that, for many students, racial discrimination and cultural subordination are not academic theories, they reflect the students’ personal experiences.

USD School of Law supports the rights of its faculty to comment as individuals on matters of public interest. When professors speak and write, they speak in their personal capacities and not for or on behalf of the law school or the university. The views expressed by Professor Alexander were his personal views. I personally do not agree with those views, nor do I believe that they are representative of the views of our law school community.

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September 21, 2017 in Legal Education | Permalink | Comments (18)

Suing Someone for a False Information Return

ABA Tax Section (2017)Last week I went to the ABA Tax Section Meeting in Austin and really enjoyed attending a terrific panel on Section 7434.  The moderator was Professor Leslie Book, of Villanova School of Law and the presenters were Stephen Olsen, of Gawthrop Greenwood, PC; and Mandi Matlock, of Texas RioGrande Legal Aid Inc., Austin, TX.  

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September 21, 2017 in ABA Tax Section, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Another Cellmate Implicates Hit Man In Dan Markel's Murder

Garcia 2Tallahassee Democrat, Another Garcia Cellmate Comes Forward With Information on Markel:

A former cellmate of Sigfredo Garcia said the accused murderer of Dan Markel believes he's beyond redemption.

The former cellmate told investigators that Garcia, 35, said “he did not believe he himself could be saved” during a January conversation in which he opened up about the July 2014 murder, according to court records obtained by the Tallahassee Democrat. ...

While they worked out, the conversation turned to religion and salvation. The former inmate said Garcia told him he was facing the death penalty for a murder he was paid to carry out.

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September 21, 2017 | Permalink | Comments (0)

Wednesday, September 20, 2017

Glogower Presents Progressive Taxation Of Income And Wealth Today At Northwestern

Glogower (2016)Ari Glogower (Ohio State) presents Progressive Taxation of Income and Wealth today at Northwestern as as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Rising economic inequality has led commentators to reassess the base for progressive taxation, and to argue that wealth should be taxed in addition to, or instead of, income. This Article claims that, if income and wealth should both be periodically taxed as factors in economic well-being, then taxing an integrated measure of both factors is preferable to taxing income and wealth under separate instruments. Separate income and wealth taxes cannot consistently compare taxpayers on the basis of their total economic well-being during the taxing period, and will favor or disfavor taxpayers depending whether their economic well-being results from income, wealth, or a combination thereof.

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September 20, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (4)

Batchelder: Opportunities And Risks In Individual Tax Reform

Lily Batchelder (NYU), Opportunities and Risks in Individual Tax Reform: Testimony Before the US Senate Committee on Finance:

This testimony before the US Senate Committee on Finance on individual tax reform makes five main points.

First, the current tax reform effort is occurring at a time when low- and middle-income families are facing deep financial challenges. Economic disparities are vast and have been widening for decades. The US also has one of the lowest levels of economic mobility relative to our competitors. Our debt as a share of GDP is projected to grow to unprecedented levels in coming decades, largely because of the retirement of the Baby Boom and increasing life expectancy. This growth in debt will be a drag on economic growth. For all these reasons, tax reform should increase revenues and enhance progressivity. Doing so would boost economic growth and make the tax code fairer at the same time. At a bare minimum, tax reform should maintain the current level of revenues and progressivity—and these both should be measured consistently and without resort to budget gimmicks like a “current policy” baseline.

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September 20, 2017 in Congressional News, Scholarship, Tax | Permalink | Comments (0)

Ryznar: A Practical Solution To The Marriage Penalty

Margaret Ryznar (Indiana-Indianapolis), A Practical Solution to the Marriage Penalty, 44 Pepp. L. Rev. 647 (2017):

In the federal income tax code, there is a marriage penalty resulting from tax brackets that do not double upon marriage. This marriage penalty persists despite universal condemnation of it, penalizing a significant portion of married women who work and many same-sex couples.

This Article proposes a novel way to deal with this marriage penalty by creating a filing status for dual-income couples that earn an amount within a particular percentage of each other. This filing status would be the same as the current married filing status, except it would double the rates of single filers by accommodating two incomes.

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September 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Anderson: Are LSAT/GPA A Leading Indicator, And Peer Reputation A Lagging Indicator, Of The U.S. News Overall Rankings?

US NewsFollowing up on my recent post, Law School Rankings By Student Quality (LSAT And UGPA):  Rob Anderson (Pepperdine):  Predicting the Future of US News Law School Rankings With Revealed Preference Rankings?:

The approach used by US News includes a variety of factors with varying weights but among the most important are factors based on surveys of academics and of lawyers and judges. Specifically, the US News ranking methodology is based 25% on "peer assessment score" (academics) and 15% on "assessment score by lawyers and judges." The both categories are weighted heavier than LSAT scores (.125) and GPA (.10), which are the raw material for the Ryan and Frye ranking.

As might be expected, the Ryan and Frye rankings correlate strongly with US News rankings, but there are some significant outliers. ... [I] thought it might be interesting to examine the potential causes of divergence between the Ryan-Frye approach and US News by comparing the US News survey-based rankings between 1993 (the year of the first full ranking of law schools) and 2018 (the most recent ranking).

The peer ranking is the largest single component of US News and is measured somewhat comparably across the years so I will focus on that component of US News. The chart below shows a plot of the 1993 peer rankings (then called "academic" rankings) and those for 2018. Because higher ranked schools have lower ranking numbers, the highest ranked schools are in the lower left and the lowest ranked schools in the upper right. Schools above the line have improved in their rankings between 1993 and 2018. Schools below the line have lower rankings in 2018 than in 1993. 

Anderson 3

The correlation between the 1993 peer ranks and the 2018 peer ranks is .93, which is evidence of incredible stability over time. As a result, the 1993 rank can predict with a high degree of accuracy the 2018 rank, especially for the higher-ranked schools (the lower left). However, there are some notable outliers, which I've noted with text in the figure. It is interesting to note that among the largest gainers are three that changed names by affiliating with an existing university (Michigan State, New Hampshire, and Quinnipiac). The remainder of the schools with large jumps in peer rankings (Alabama, CUNY, Georgia State, and Pepperdine) have other explanations. My institution (Pepperdine) and Alabama have made major pushes toward emphasis on research productivity, which may explain the changes in their scores. ...

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September 20, 2017 in Law School Rankings, Legal Education | Permalink | Comments (1)

Perkins: The Threat of Law — Is Treasury Using Regulatory Blackmail Or Responding To Congressional Inaction?

Rachelle Holmes Perkins (George Mason), The Threat of Law: Regulatory Blackmail or an Answer to Congressional Inaction, 65 Kan. L. Rev. 621 (2017):

In light of the obstacles affected taxpayers are up against in the face of regulations of dubious authority, Treasury is able to wield what I term an effective “threat of law.” While certainly less binding than an actual legitimately exercised “force of law,” the effects (at least in the nearterm) can be identical. For example, with respect to the Inversion Notice, taxpayers could either comply with Treasury’s Inversion Notice or potentially face a myriad of negative consequences. When faced with these options, while some taxpayers rolled the proverbial dice and found ways to structure around the Inversion Notice, others declined to play this game of tax chicken with Treasury and called off their transactions.

In this Article, I will explore the contours of this so-called “threat of law” that Treasury can employ even in the absence of legitimate congressional authority to do so.

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September 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

University Of Illinois Professor Put On Paid Leave For Refusing To Give PowerPoint Slides To Learning Disabled Student

IllinoisInside Higher Ed, A Hill to Retire On?:

A dispute over electronic lecture slides and accommodations for a learning-disabled student may have ended the teaching career of Michael Schlesinger, a professor of atmospheric sciences at the University of Illinois at Urbana-Champaign.

Schlesinger said Thursday that he's learned from his lawyer that he is on paid administrative leave over the matter, pending a hearing. He said he has not resigned, despite previously having indicated otherwise to students.

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September 20, 2017 in Legal Education | Permalink | Comments (7)

It's Bigger Than Bitcoins: The Matrix Is Here

ABA Tax Section meetings are fun!  Last week I attended a fascinating panel presentation at the Austin meeting titled "Beyond Bitcoin: Blockchain and the Tax System."  The panel was moderated by Stow Lovejoy, of Kostelanetz & Fink, LLP and included Amanda Wilkie, CIO of Withum Smith & Brown; Tony Tuths, of KMPG in Short Hills; and Lisa Zarlenga, of Steptoe & Johnson.

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September 20, 2017 in ABA Tax Section, Conferences, Miscellaneous, Tax | Permalink | Comments (0)

Tuesday, September 19, 2017

Barry Presents Tax And The Boundaries Of The Firm Today At Columbia

Barry (2017)Jordan Barry (San Diego) presents Tax and the Boundaries of the Firm (with Victor Fleischer (San Diego)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

How does the income tax shape the boundaries of the firm? This Article goes back to foundational ground — Coase’s inquiry into the nature of the firm— to gain some traction on this elementary question. ...

Part II revisits the literature on Coase and the boundaries of the firm, setting the stage for a discussion of how transaction cost economics can inform tax policy. Part III explores some of the ways in which the income tax distorts the boundary of the firm. In doing so, it provides numerous examples of provisions that can grow or shrink firms at the margin or alter the relative size of their components. It also discusses how firms can respond to income tax law incentives without significantly changing their economic behavior by engaging in regulatory arbitrage.

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September 19, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Harrison: Spite And Tax Law

Jeffrey Harrison (Florida), Spite: Legal and Social Implications:

Spite is not a simple concept. The same actions may be motivated by a desire to harm others as a source of the actor’s satisfaction. They may also be a reaction to a personal sense of injustice. Finally, spite-like actions are consistent with simply righting a wrong. This Article makes the case that spite, in its worst from, is comparably to theft. It is a taking of someone’s sense of well-being without consent. It also claims that the purchase of positional goods is ultimately spite driven. It canvasses tort law, contracts, tax law, trademark, and criminal law in an effort to assess the reaction of the law to spite.

September 19, 2017 in Scholarship, Tax | Permalink | Comments (1)

CBO: An Analysis of Corporate Inversions

Congressional Budget Office, An Analysis of Corporate Inversions (Sept. 18, 2017):

U.S. multinational corporations—businesses incorporated and operating in the United States that also maintain operations in other countries—can use a variety of strategies to change how and where their income is taxed. One such strategy is a corporate inversion, which can result in a significant reduction in worldwide tax payments for a company. U.S. companies have engaged in corporate inversions since 1983, and public and government attention to them has varied over the years. Concern grew most recently in 2014 because the group of corporations that announced plans to invert that year included some that were very large: Their combined assets were $319 billion, more than the combined assets of all of the corporations that had inverted over the previous 30 years.

CBO1

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September 19, 2017 in Congressional News, Tax | Permalink | Comments (1)

Women Lawyers Continue To Lag In Partnership Positions, Pay

NAWL3
National Association of Women Lawyers, 2017 Survey on Promotion and Retention of Women in Law Firms:

This year’s survey demonstrates a continuation of a pattern observed over the last 10+ years, that numbers of women in equity partner positions in law firms have increased slowly, if at all, even while there has been some improvement in other areas, such as representation on governance committees. ...

Of primary interest, given the focus of the Survey and the NAWL Challenges, are the numbers for women equity partners and other leadership positions in law firms. Compared to 5 and 10 years ago, this year’s Survey shows a small increase in the percentage of women equity partners (19 percent in the 2017 survey compared to 15 – 16 percent in the 2012 and 2007 Surveys). While this increase is welcomed, law firms continue to fall short of the original NAWL Challenge goal of 30 percent set more than 10 years ago, and long-term sustained progress will be required to achieve the Challenge goal.

NAWL1

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September 19, 2017 in Legal Education | Permalink | Comments (1)

ABA Tax Section Reduces Support For Tax Profs

ABA Tax Section (2017)I was sad to learn that at the Austin meeting the ABA Tax Section Council voted to significantly reduce the academic speaker and academic leadership reimbursement policy, retaining it only for academics who meet the Tax Section's definition of "young lawyer" (under 40 or less than 5 years in practice). I believe this is a penny-wise, pound-foolish policy change and can serve only to damage the historically salutary close ties between tax practitioners and tax academics. I think my personal involvement with the ABA Tax Section would likely be much less had those reimbursements not been available to me. I explain more below the fold.

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September 19, 2017 in ABA Tax Section, Conferences, Legal Education, Tax, Tax Profs | Permalink | Comments (6)

25% Of Law Schools Plan To Accept The GRE

GREFollowing up on my previous posts (links below):  Press Release, Law Schools’ Apprehension to Allow Applicants to Use GRE for Admissions Drops:

Kaplan Test Prep’s 2017 law school admissions officers survey shows more law schools warming up to the idea of allowing applicants to submit GRE scores instead of LSAT scores. According to the responses of 128 law schools across the United States, 25 percent say it’s an admissions policy they plan to implement, up from just 14 percent in Kaplan’s 2016 survey; 45 percent say they have no plans to do so, a drop from 56 percent who ruled it out in last year’s survey; and 30 percent are not sure, the same as in 2016.

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September 19, 2017 in Legal Education | Permalink | Comments (2)

Crawford & Spivack: Tampon Taxes, Discrimination and Human Rights

Bridget J. Crawford (Pace) & Carla Spivack (Oklahoma City), Tampon Taxes, Discrimination and Human Rights, 2017 Wis. L. Rev. 491:

In recent months, activists around the globe have harnessed the power of the Internet to raise awareness of the so-called “tampon tax,” an umbrella term to describe sales, VAT and similar “luxury” taxes imposed on menstrual hygiene products. In response to pressure from constituents, five U.S. states and Canada have repealed their tampon tax. Active campaigns are underway in Australia, the United Kingdom and several other countries. Where public pressure has not been an effective technique, those seeking to challenge the tampon tax in the United States have turned to litigation. In four U.S. states, class action lawsuits have been filed seeking repeal of the tax and a refund for back taxes paid, alleging equal protection violations. In the international context, human rights law provides a promising foundation for similar legal challenges to the tampon tax because human rights law takes a capacious approach to gender equality. In the European Court of Human Rights, for example, there are several tax cases that recognize gender-differentiated taxes as a form of impermissible discrimination. This Article explains how the tampon tax violates equal protection and human rights norms. The tax also shows how deeply embedded gender is in matters of tax policy. Full realization of gender equality will require revision of tax laws.

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September 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

Muller: Bar Exam Scores Rebound To Highest Point Since 2013

MBEDerek Muller (Pepperdine), Bar Exam Scores Rebound to Highest Point Since 2013:

After last year's slight year-over-year improvement in bar exam scores, bar exam scores are up again. The scaled mean of the Multistate Bar Exam rose 1.4 points to 141.7, the highest since 2013, which was 144.3, shortly before a hasty collapse in scores. ...

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September 19, 2017 in Legal Education | Permalink | Comments (1)

Monday, September 18, 2017

Bankman Presents The Global Battle To Capture MNE Profits Today At Loyola-L.A.

Bankman (2017)Joseph Bankman (Stanford) presents Collecting the Rent: The Global Battle to Capture MNE Profits (with Mitchell Kane (NYU) & Alan Sykes (Stanford)) at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katherine Pratt:

Multinational enterprises (MNEs) earn substantial rents in the current global economy. Governments have an interest in capturing some of these rents for their citizens or national treasuries, and regularly pursue policies to that end. Some rents are realized in the country in which the MNE is headquartered and domiciled. In theory, at least, that country (the "resident country") can collect these rents through its power to tax or regulate. Other rents are realized in nations outside that of the MNE's residence. Collection of these rents by nations in which the MNE operates, but does not reside, has proven more difficult.

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September 18, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

July 2017 Florida Bar Exam Results: Florida International Is #1 For 4th Year In A Row

Florida Bar 2The July 2017 Florida bar passage rates by school are out. The overall pass rate for first-time takers is 71.3%, up 3.1 percentage points from last year. For the fourth year in a row, Florida International is #1. Here are the results for the 11 Florida law schools, along with each school's U.S. News ranking (Florida and overall):

Bar Pass

Rank (Rate)

 

School

US News Rank

FL (Overall)

1 (87.8%)

Florida Int'l

5 (100)

2 (84.2%)

Miami

3 (77)

3 (83.9%)

Florida State

2 (48)

4 (77.0%)

Florida 

1 (41)

5 (76.8%)

Stetson

4 (96)

6 (70.2%)

Nova

Tier 2

7 (63.6%)

St. Thomas

Tier 2

8 (58.9%)

Barry

Tier 2

9 (51.3%)

Ave Maria

Tier 2

9 (51.3%)

Florida A&M

Tier 2

11 (47.7%)

Florida Coastal

Tier 2

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September 18, 2017 in Legal Education | Permalink | Comments (3)

The Capacity Of Governments To Raise Taxes

OECD Econ. Dep't Working Paper No. 1407, The Capacity of Governments to Raise Taxes:

This paper investigates the factors that shape governments’ capacity to collect revenue. To do so, it analyses how tax revenue responds to tax rates using evidence from a panel of 34 OECD countries over 1978-2014. The estimations show that the response of revenue to rates weakens as rates become higher, confirming the existence of a hump-shaped relationship between tax revenue and rates for corporate income taxation and providing a new contribution by analysing value-added taxation. Importantly, the estimated responses of revenue to tax rates vary, in some cases very strongly from an economic perspective, depending on country-specific policies and framework conditions. In particular, the corporate income tax revenue-generating potential of hiking the effective rate shrinks much more quickly in more open economies than in more closed ones.

OECD

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September 18, 2017 in Gov't Reports, Scholarship, Tax | Permalink | Comments (0)

Hasen: Taxation And Innovation

David Hasen (Colorado), Taxation and Innovation: A Sectorial Approach, 2017 U. Ill. L. Rev. 1043:

A number of tax rules have been adopted or proposed to promote innovation. The primary justification for these rules is that they can be effective in reducing or eliminating chronic market failure in the innovation sector. This paper argues that special tax rules for innovation generally are inappropriate.

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September 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

McIntyre & Simkovic: Are Law Degrees As Valuable To Minorities?

Frank McIntyre (Rutgers) & Michael Simkovic (USC), Are Law Degrees as Valuable to Minorities?, 52 Int'l Rev. L. & Econ. ___ (2017):

We estimate the increase in earnings from a law degree relative to a bachelor’s degree for graduates of different race/ethnic groups. Law earnings premiums are higher for whites than for minorities (excluding individuals raised outside the U.S.). The median annual law earnings premium is approximately $41,000 for whites, $34,000 for Asians, $33,000 for blacks, and $28,000 for Hispanics.

MS4

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September 18, 2017 in Legal Education, Scholarship | Permalink | Comments (3)

An Emotionally Distressing Lesson From The Tax Court

Tax Court (2017)Last week, in the Summary Opinion of Collins v. Commissioner, the Tax Court agreed with the Service that a taxpayer could not exclude $85,000 under section 104(a)(2) for payments received for "emotional distress" even though that distress resulted in physical sickness.  It's a case that not only teaches an important basic lesson about 104(a)(2) but also exposes a distressing gap in current tax law.  More below the fold. 

Mr. Collins had sued his employer for workplace discrimination and retaliation.  One of his allegations was that he had "suffered severe emotional distress and anxiety, with physical manifestations, including high blood pressure."  The case settled, with $85,000 of the settlement was allocated to "emotional distress."  Could Mr. Collins exclude that $85k under section 104(a)(2)?  Mr. Collins---like many of my basic tax students---thought he could because he had undeniably physical sickness stemming from the stress of his workplace situation.  The Service and Tax Court properly said "no exclusion" based on current law.  

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September 18, 2017 in New Cases, Tax | Permalink | Comments (10)

Hayashi: A Theory Of Facts And Circumstances

Andrew Hayashi (Virginia), A Theory of Facts and Circumstances, 69 Ala. L. Rev. ___ (2017):

The legal consequences of an action often depend on information that only the actor knows. This information is typically inferred from the observable “facts and circumstances” attending the actor’s conduct, which creates a seemingly unresolvable tension in legal design. On the one hand, these unstructured inquiries give free rein to the factfinder’s judgment about which facts justify an inference to the hidden information. On the other hand, specifying the facts that will be used to draw that inference would provide a roadmap for actors to strategically adjust their conduct to manipulate the factfinder’s conclusions. I argue that this tension can be resolved by applying insights from the economics literature on asymmetric information.

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September 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, September 17, 2017

Becoming 'The Nation's Premier Christian Law School'

Pepperdine EquippedMy friend Rick Garnett (Notre Dame) noted on his Mirror of Justice Blog (a member of my Law Professor Blogs Network) that "our good friends at Pepperdine have started to market themselves as 'The Nation's Premier Christian Law School'" and linked to my blog post marking my 100th day as dean.  Rick also wrote:

I certainly agree that Pepperdine is an excellent institution that does a very good job of engaging and meaningfully embracing its Christian character.  I hope, though, that they have not fallen into the old error — and, knowing so many at Pepperdine, I have to believe they have not — of excluding Catholics (and, more specifically, certain outstanding Catholic law schools) from their definition and understanding of "Christian"!  Remember, Evangelicals and Catholics Together (on law)!

I responded to Rick privately that neither of these claims are true.  After an exchange of emails, we agreed that it would be helpful for me to publicly set the record straight so no one is left with the impression that Notre Dame and Pepperdine are anything other than, as Rick put it, "fellow laborers in the vineyard."

On the first point, in the post Rick linked to, I wrote that "our shared goal [at Pepperdine] is to become the nation's premier Christian law school by combining academic and research excellence with a deep-rooted commitment to our Christian mission that welcomes people of all faiths and backgrounds."  In my only other blog post on the subject — marking my first day as dean —   I wrote that "I am especially proud to have the support of our faculty, staff, students, and university administration in the ambitious plan I outlined as a dean candidate for Pepperdine to become the nation's premier Christian law school."  Indeed, in all of the speeches I make as dean (including yesterday in San Francisco), I always say that its is Pepperdine's goal (or aspiration) to be the nation's premier Christian law school, not that we currently claim that mantle.

Rick kindly updated his post to say: 

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September 17, 2017 in Legal Education | Permalink | Comments (0)

Larson & Ruse: On Faith And Science

Larson 2Edward J. Larson (Pepperdine)  & Michael Ruse (Florida State), On Faith and Science (Yale Univ. Press 2017):

Throughout history, scientific discovery has clashed with religious dogma, creating conflict, controversy, and sometimes violent dispute. In this enlightening and accessible volume, distinguished historian and Pulitzer Prize–winning author Edward Larson and Michael Ruse, philosopher of science and Gifford Lecturer, offer their distinctive viewpoints on the sometimes contentious relationship between science and religion. The authors explore how scientists, philosophers, and theologians through time and today approach vitally important topics, including cosmology, geology, evolution, genetics, neurobiology, gender, and the environment. Broaching their subjects from both historical and philosophical perspectives, Larson and Ruse avoid rancor and polemic as they address many of the core issues currently under debate by the adherents of science and the advocates of faith, shedding light on the richly diverse field of ideas at the crossroads where science meets spiritual belief.

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September 17, 2017 in Book Club, Legal Education, Tax | Permalink | Comments (0)

HMRC Chief Warns Brexit Merger Of UK Border And Tax Operation Is A 'Mega Project' Requiring 5,000 Extra Staff

International Business Times, HMRC Chief Warns Brexit Merger of UK Border and Tax Operation is a 'Mega Project' 

Britain's top tax body said a merged border force and tax checking operation will need 5,000 extra staff cost up £800m after Brexit.

HMRC director general of customer strategy Jim Harra told MPs the country will have to tackle 130,000 new companies that import and export within the European Union (EU) that do not currently come into contact with British customs.

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September 17, 2017 in Tax | Permalink | Comments (0)

The Top Five New Tax Papers

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

  1. [588 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  2. [327 Downloads]  Is Efficiency Biased?, by Zachary Liscow (Yale)
  3. [218 Downloads]  When Did Tax Avoidance Become Respectable?, by Steven Bank (UCLA)
  4. [146 Downloads]  Codification of the Tax Law and the Emergence of the Staff of the Joint Committee on Taxation, by George Yin (Virginia)
  5. [142 Downloads]  Distributive Justice and Donative Intent, by Alexander A. Boni-Saenz (Chicago-Kent)

September 17, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 16, 2017

This Week's Ten Most Popular TaxProf Blog Posts