TaxProf Blog

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

Thursday, July 27, 2017

A Hamilton Birthday

The wonderful people at Pepperdine really "get" their new dean:  check out what greeted me in my office this morning:


For more on my obsession with interest in Hamilton, see here and:

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July 27, 2017 in Legal Education, Tax | Permalink | Comments (1)

Trump, Congress Reach Agreement On 'Skinny Tax Reform'

GOP Statement on Tax Reform:

Today, House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) issued the following joint statement on tax reform:

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July 27, 2017 in Congressional News, Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Reality Check: Is Trump Right That US Has Highest Taxes?

OECDBBC News, Reality Check: Is Trump Right That US Has Highest Taxes?:

The claim: The US has the highest taxes in the world.

Reality Check verdict: The total amount of tax raised by the United States as a proportion of the size of its economy is not the highest in the world. It also does not have the highest rates of taxes on households. By one measure, it does have the highest rate of corporation tax.

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July 27, 2017 in Tax | Permalink | Comments (2)

Crawford & Spivack: Human Rights And Taxation Of Menstrual Hygiene Products In An Unequal World

HRBridget J. Crawford (Pace) & Carla Spivack (Oklahoma City), Human Rights and Taxation of Menstrual Hygiene Products in an Unequal World, in Human Rights and Tax in an Unequal World (Philip G. Alston and Nikki Reisch eds., Oxford University Press 2018):

This book chapter, written in connection with the New York University School of Law Center for Human Rights and Global Justice Conference on Human Rights and Tax in an Unequal World, argues that taxation, gender, and human rights are all linked. The authors use the lens of the "tampon tax" — sales, VAT and similar taxes imposed on menstrual hygiene products — to explain the relationship between and among affordable menstrual hygiene products and the human rights to be free from discrimination, to sanitation, to education, to dignity, and to work. The chapter refers to examples from India and Kenya to illustrate the importance of access to both affordable menstrual hygiene products and private, hygienic sanitation facilities.

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July 27, 2017 in Book Club, Scholarship, Tax | Permalink | Comments (0)

The Collateral Costs Of Diversity In Legal Education

SpearIt (Texas Southern), Not for Free: Exploring the Collateral Costs of Diversity in Legal Education, 48 Pac. L. Rev. 887 (2017):

This essay examines some of the institutional costs of achieving a more diverse law student body. In recent decades, there has been growing support for diversity initiatives in education, and the legal academy is no exception. Yet for most law schools, diversity remains an elusive goal, some of which is the result of problems with anticipating the needs of diverse students and being able to deliver. These are some of the unseen or hidden costs associated with achieving greater diversity. Both law schools and the legal profession remain relatively stratified by race, which is an ongoing legacy of legal education’s origins as a project dominated by white male elites predominantly serving white male clients. Today’s law schools still lack in diversity, but major developments are increasingly changing student demographics.

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July 27, 2017 | Permalink | Comments (1)

Brexit Puts Financial-Trade Tax On Ice As Banks Start Moving

Bloomberg, Brexit Puts Financial-Trade Tax on Ice as Banks Start Moving:

A six-year push to impose a tax on financial transactions in Europe may have run its course, with Germany and France dragging their feet as they prepare for Brexit and a redrawing of the financial map that has already begun.

French Finance Minister Bruno Le Maire said earlier this month that Brexit could bring “thousands of jobs to Paris,” an opportunity that could be lost if the tax were imposed. His German counterpart, Wolfgang Schaeuble, said that “quite a bit speaks in favor of the French argument to look first at how the Brexit negotiations are going.”

With the heavyweight boosters among the 10 countries pursuing the tax getting cold feet, the plan’s future looks bleak....

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July 27, 2017 in Tax | Permalink | Comments (0)

Wednesday, July 26, 2017

Anderson: Save Law Students Tens of Millions of Dollars By Opting Out Of New Casebook Editions

Following up on my previous post, Opting Out Of New Editions Of Casebooks And Saving Students 97 Cents On The Dollar:  Robert Anderson (Pepperdine), Save Law Students Tens of Millions of Dollars: Opt Out of New Casebook Editions:

Two years ago I blogged about my decision to use an older edition of my Contracts casebook instead of the newer edition. This saved my contracts students about $200 each which totaled about $10,000 for the class. The law of Contracts changes only glacially, and the students miss out on little by using an older edition. ... This year I am doing the same thing with my Corporations class. ...&

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July 26, 2017 in Legal Education | Permalink | Comments (8)

Boni-Saenz: Distributive Justice And Donative Intent

Alexander A. Boni-Saenz (Chicago-Kent), Distributive Justice and Donative Intent, 65 UCLA L. Rev. ___ (2018):

The inheritance system is beset by formalism. Probate courts reject wills on technicalities and refuse to correct obvious drafting mistakes by testators. These doctrines lead to donative errors, or outcomes that are not in line with the decedent’s donative intent. While scholars and reformers have critiqued the intent-defeating effects of formalism in the past, none have examined the resulting distribution of donative errors and connected it to broader social and economic inequalities. Drawing on egalitarian theories of distributive justice, this Article develops a novel critique of formalism in the inheritance law context.

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July 26, 2017 in Scholarship, Tax | Permalink | Comments (0)

ABA Considers Raising 15 Credit Cap On Distance Learning Accreditation Standard

ABA Section On Legal Education (2016)ABA Journal, Distance Learning Standards Under Consideration by ABA Legal Ed Section:

Where and how accredited law schools offer courses and ways in which existing rules on those topics might be modified were discussed [July 15] by the standards review committee of the ABA’s Section of Legal Education and Admissions to the Bar.

Accreditation rules under consideration for revision include Standard 307, which addresses programs of domestic law schools held outside the United States, and Standard 306, which sets rules for distance learning. Feedback was the focus of the meeting, and the committee will meet again in October for further discussion.

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July 26, 2017 in Legal Education | Permalink | Comments (0)

Columbia Journal Of Tax Law Publishes New Issue

NY Times: Canada Debates Whether Purchase Of Leibovitz Photos For $4.75m And Donation Valued At $20m To Art Gallery Is A Tax Dodge

Annie 2New York Times, Canada Debates Whether Gift of Leibovitz Photos Is Also a Tax Dodge:

Someone — and absolutely no one involved seems ready to say who — came up with an idea in 2012 for a patron to purchase 2,070 photos by the American portrait photographer Annie Leibovitz and then donate them to a museum in Canada.

This was a colossal score for the Art Gallery of Nova Scotia in Halifax, which owned nothing by Ms. Leibovitz at the time.

For Ms. Leibovitz, who had a financial crisis several years earlier, the transaction meant she earned several million dollars.

And the donor, a Deloitte Canada partner who said he had bought the collection to honor his mother’s memory, stood to qualify for a generous tax deduction and recognition as an arts patron.

Four years later, though, a Canadian government panel that must sign off on the deduction is still balking at approving it, partly because the panel won’t accept a $20 million valuation for a collection that the donor purchased for just $4.75 million.

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July 26, 2017 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

Pepperdine Bar Exam Lunches

I was delighted to take part yesterday in a wonderful Pepperdine tradition: providing lunch to our grads who are taking the California bar exam in Ontario.

Bar Lunch 1

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July 26, 2017 in Legal Education | Permalink | Comments (5)

'Captain Marvel' Will Receive A $20-Million Tax Credit To Shoot In California

MarvelLos Angeles Times, 'Captain Marvel' Will Receive a $20-Million Tax Credit to Shoot in California:

“Captain Marvel,” the upcoming superhero movie starring Brie Larson as the title character, will receive more than $20 million in tax credits to film in California, making it the first Marvel Comics movie to shoot primarily in-state since 2014’s “Captain America: The Winter Soldier.”

Eight studio and independent features were selected from 92 applications for the $68 million handed out in the latest round of tax incentives that are designed to attract more big-budget movie shoots to California. They include “Midway,” a World War II film directed by Roland Emmerich, and “Cheney,” a biopic of former Vice President Dick Cheney, starring Christian Bale....

“Captain Marvel” is expected to receive $20.8 million in credits. “Midway” has been allocated $13.9 million. “Bird Box,” a Netflix movie starring Sandra Bullock, will receive an estimated $2.5 million in credits....

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July 26, 2017 in Tax | Permalink | Comments (0)

Tuesday, July 25, 2017

Lawsky:  Formalizing The Tax Code

Sarah B. Lawsky (Northwestern), Formalizing the Code, 70 Tax L. Rev. 377 (2017):

The Internal Revenue Code is notoriously complex, both substantively and structurally. This article examines one source of structural complexity in the Internal Revenue Code: dependency among sections that stems from defined terms. In particular, the article examines what it terms the problem of “definitional scope”: when the structure of the Code leaves unclear to what a term refers. The article uses the problem of definitional scope as a case study to suggest that those who draft tax legislation should formalize proposed statutory language — translate it into logical terms — prior to its enactment.

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July 25, 2017 in Scholarship, Tax | Permalink | Comments (4)

Advice For Professors For The First Class Of Their Law School Course

Emily Grant (Washburn), Beyond Best Practices: Lessons From Tina Stark About the First Day of Class, 95 Or. L. Rev. 397 (2017):

This Article reviews and expands the literature on best practices in a narrow subset — the first day of class. At the same time, it seeks to convey words of wisdom from one of the most well-known and highly-regarded legal educators: Tina Stark, a giant in transactional drafting. The first day of any law school class can be fraught with tension and nerves, even for professors. This Article presents advice from Professor Stark, supplemented with guidance from best practices research, so that professors can take advantage of the opportunities that the first day of class offers to set the tone for a successful semester.

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July 25, 2017 | Permalink | Comments (1)

Ring: The Tail, The Dog, And the Gig Worker (Commentary On The NEW GIG Act of 2017 Proposed Legislation)

Diane Ring (Surly Subgroup): The Tail, the Dog, and Gig Workers 

New legislation has just been introduced in the Senate that creates a “safe harbor” for independent contractor status. The proposed legislation provides that if a worker relationship satisfies certain criteria, then that worker can bypass the sometimes messy, multi-factor test for distinguishing between employees and independent contractors, and will be classified as an independent contractor for tax purposes. What prompted action now to address what has been a decades-old classification challenge for workers, businesses and the IRS alike? The gig economy. (Hence, the not-so-catchy title for the legislation: The New Economy Works to Guarantee Independence and Growth (NEW GIG) Act of 2017 (S. 1549)):

The legislation’s sponsor, Senate Finance Committee member John Thune, (R-S.D), described the impetus for the legislation as follows: “My legislation would provide clear rules so that these freelance style workers can work as independent contractors with the peace of mind that their tax status will be respected by the IRS.”

Is this really what gig workers are worrying about? . . .

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July 25, 2017 in Tax | Permalink | Comments (0)

The Dan Markel Murder Case: Katherine Magbanua Turns Down A Plea Deal, Judge Says Third Party (Not The Adelsons) Is Paying Her Legal Fees

Markel SuspectsAbove the Law, The Dan Markel Case: Katherine Magbanua Turns Down A Deal:

Who's paying Katie Magbanua's legal fees will remain a mystery, and her trial date has been set. ...

[A]s reported by the Tallahassee Democrat:

A third party is paying Katherine Magbanua’s legal fees, but it’s not the former in-laws of the man she is suspected of being involved with killing, according to her attorneys and a Leon County Circuit judge. ...

Here’s another thing I’m wondering: how deeply did Judge Hankinson delve into the explanation proffered by Magbanua’s counsel? One could imagine a situation where the Adelsons paid money to a third party, and the third party then paid DeCoste and Kawass, without telling DeCoste and Kawass about the Adelson connection. This would then allow DeCoste and Kawass to maintain — honestly, enthusiastically, and even indignantly — that they aren’t being paid by the Adelsons. ...

What prompted the prosecution’s curiosity about legal fees? As prosecutor Georgia Cappleman told WCTV after the hearing, “It’s a little suspicious that [Magbanua] has no money to pay, yet she’s hired an expensive legal team that’s housed in the same building as Mr. [Charlie] Adelson’s attorneys.” ... 

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July 25, 2017 in Legal Education | Permalink | Comments (4)

WSJ: Mortgage Interest Tax Break Has ‘No Effect’ on Homeownership, Study Finds

Wall Street Journal, Mortgage Interest Tax Break Has ‘No Effect’ on Homeownership, Study Finds:

The mortgage interest deduction, a sacred cow in the U.S. tax code, does nothing to promote homeownership, according to an academic paper released Monday [Jonathan Gruber (MIT), Amalie Jensen (University of Copenhagen) & Henrik Kleven (Princeton), Do People Respond to the Mortgage Interest Deduction? Quasi-Experimental Evidence From Denmark], a finding that undermines one of the core justifications for the tax break.

Letting taxpayers deduct mortgage interest encourages them to buy bigger homes and more expensive homes — but it doesn’t change that fundamental decision about whether to buy in the first place.

“Over multiple time periods, and considering multiple empirical strategies, we find no effect of the tax policy change on whether households own or rent,” wrote the authors, Jonathan Gruber of the Massachusetts Institute of Technology, Henrik Kleven of Princeton University and Amalie Jensen of the University of Copenhagen.

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July 25, 2017 in Scholarship, Tax | Permalink | Comments (9)

Law School Rankings By Student Quality (LSAT And UGPA)

2018 U.S. News Law 2Christopher J. Ryan Jr. (Vanderbilt) & Brian L. Frye (Kentucky), A Revealed-Preferences Ranking of Law Schools,  69 Ala. L. Rev. ___ (2017)

The U.S. News & World Report “Best Law Schools Rankings” define the market for legal education. Law schools compete to improve their standing in the rankings and fear any decline. But the U.S. News rankings incite contention, because they rely on factors that are poor proxies for quality like peer reputation and expenditures per student. While many alternative law school rankings exist, none have challenged the market dominance of the U.S. News rankings. Presumably the U.S. News rankings benefit from a first-mover advantage, other rankings fail to provide a clearly superior alternative, or some combination of the two.

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July 25, 2017 in Law School Rankings, Legal Education | Permalink | Comments (1)

Feldstein:  How To Make The Tax System Fairer And Save Social Security

Martin Feldstein (WSJ op-ed), How to Make the Tax System Fairer and Save Social Security:

The U.S. faces two major fiscal problems. Fortunately, there is a simple solution to both that also improves the fairness of the tax system.

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July 25, 2017 in Tax | Permalink | Comments (0)

NY Times:  ‘A Bleak Picture’ For Women Trying To Rise At Law Firms

NY Times Dealbook (2013)New York Times Deal Book:  ‘A Bleak Picture’ for Women Trying to Rise at Law Firms, by Elizabeth Olson:

Even as more women add a law degree to their résumés, carving out a successful career at a law firm remains an uphill endeavor.

While initiatives and conferences to expand the number of women who are equity partners at law firms are something of a cottage industry, progress for women is, at best, static, according to the “2017 Law360 Glass Ceiling Report,” released on Monday by the legal publication Law 360.

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July 25, 2017 in Legal Education | Permalink | Comments (3)

Monday, July 24, 2017

AALS Bans Conferences In Texas Due To Immigration, Bathroom Bills

AALS (2019)Texas Lawyer, Law School Association Ditches Texas Over Immigration, Bathroom Bill:

The American Association of Law Schools is moving a 2018 conference from Austin to Chicago and will no longer hold meetings in Texas because of the state's new controversial immigration law and a proposed "bathroom bill" that restricts restroom access for transgender people.

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July 24, 2017 in Legal Education | Permalink | Comments (5)

New Sri Lanka Tax Bill Aims To Widen Tax Net, Cut Indirect Taxes

Reuters, New Sri Lanka Tax Bill Aims to Widen Tax Net, Cut Indirect Taxes:

Sri Lanka's new tax bill, demanded by the IMF as a condition for a third tranche of aid disbursed this week, will seek to ensure that all citizens pay direct taxes and cut indirect taxes, top finance ministry officials said on Friday.

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July 24, 2017 in News, Tax | Permalink | Comments (0)

California Bar Cut Score, Lawyer Salaries Are Second Highest In Country: Anti-Competitive Or Pro-Consumer Protectionism?

California Bar ExamFollowing up on my previous post (links below):  Michael Simkovic (USC), Is California’s Bar Examination Minimum Passing Score Anti-competitive?:

The deans of almost all ABA approved California law schools have jointly expressed concerns that California’s minimum passing score (‘cut score’) on the nationally uniform, multiple choice, Multi-State Bar Exam bar examination is excessively high.

These leaders of legal education note that California has a higher cut score than any state except Delaware, no justification has been provided for this unusually high cut score, and some parts of California may have a shortage of lawyers.  Moreover, although law graduates from California score better on the MBE than the national average, they are less likely to pass the bar exam because of California’s unusually high cut score. The case for bringing California’s cut score into line with those of other leading legal jurisdictions such as New York has been most forcefully stated by UC-Hastings Dean David Faigman. 

Amid concerns about possible anti-trust lawsuits against the State Bar, the Supreme Court of California has agreed to supervise the state bar of California and may set a lower bar cut score.

High cut scores are not the only signs of possible anti-competitive protectionism in California. California is among the few states that, without exception, forces experienced attorneys licensed in other states to sit for reexamination prior to relicensing. ...

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July 24, 2017 in Legal Education | Permalink | Comments (5)

Number Of Law School Graduates Sitting For California Bar Exam Surges 11%, To Highest Level In More Than A Decade

California Bar, Who Says California's Bar Exam Is Too Tough? Would-be California Lawyers Flock to Take July Bar Exam:

Over the last year California’s bar exam has been scrutinized and vilified. But that hasn’t stopped a crush of would-be Golden State lawyers from registering for the latest crucible, which starts Tuesday.

Applications to take the July bar exam topped 10,000 this year — an increase of more than 1,000 above July 2016’s numbers, according to figures released by the state bar. Requests to take the general bar exam are up by 499 to 7,981. The number of out-of-state lawyers who applied to take next week’s test surged to 2,051, up from 1,549 this time last year.

The application rush may be due to the fact that this year’s exam is the first to be held over two days instead of the traditional three.

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July 24, 2017 in Legal Education | Permalink | Comments (0)

C.S. Lewis & Lin-Manuel Miranda: How I Found My Faith In Mere Christianity And Deepened It In Hamilton

MCH2I repeatedly (perhaps excessively) extol the genius of Hamilton (see links below). I often tell people that the play changed my life and led me to seek the deanship of Pepperdine law school.  

Part of the explanation, of course, is the artistic majesty of the play. Like Michelle Obama, I think it is the best piece of art in any form that I have ever seen in my life. Like Oskar Eustis, I believe that Lin-Manuel Miranda is the William Shakespeare of our time. But Hamilton also transformed my life like nothing else has since I read C.S. Lewis's Mere Christianity twenty-one years ago. 

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July 24, 2017 in Legal Education, Tax | Permalink | Comments (1)

Yes, Killing The ACA’s Investment Tax Now Would Make The Next GOP Tax Bill Easier. Here's Why

Howard Gleckman (TaxVox Blog), Yes, Killing The ACA’s Investment Tax Now Would Make The Next GOP Tax Bill Easier. Here's Why:

The chaos surrounding Senate efforts to replace the Affordable Care Act will prolong the debate over what Republicans will do about the nearly $1 trillion in taxes the ACA will generate over the next 10 years. It is often said that the GOP wants to scrap those levies because it would make it easier for them to pass a future tax bill. But why?

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July 24, 2017 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 23, 2017

McIntyre & Simkovic:  Timing Law School

Frank McIntyre (Rutgers) & Michael Simkovic (USC), Timing Law School, 14 J. Empirical Legal Stud. 258 (2017):

We investigate whether economic conditions at labor market entry predict long-term differences in law graduate earnings. We find that unemployment levels at graduation continue to predict law earnings premiums within 4 years after graduation for earners at the high end and middle of the distribution. However, the relation fades as law graduates gain experience and the difference in lifetime earnings is moderate. This suggests that earnings figures from After the JD II and III — which track law graduates who passed the bar exam in 2000 — are likely generalizable to other law cohorts because these studies are outside the window when graduation conditions predict differences in subsequent earnings.

Figure 2

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July 23, 2017 in Legal Education, Scholarship | Permalink | Comments (4)

Tribute To Erik Jensen

JensenTribute to Erik Jensen, 67 Case W. Res. L. Rev. 637-78 (2017):

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

Can State Bars Prevent Law Schools From Offering Faith-Based CLE?

Bill Piatt (Former Dean, St. Mary's), State Bar Efforts to Deny Accreditation to Faith-based CLE Ethics Programs Sponsored by Religiously Affiliated Law Schools, 29 Regent U. L. Rev. 293 (2017):

Religiously affiliated law schools focus on the integration of faith in the formation of future attorneys and leaders. Yet our students are only our students for three years. We can extend our influence and continue to provide a faith-based perspective to them and to other attorneys during the thirty, forty, or more years of their careers by offering continuing legal education (CLE) courses, which bring attorneys and judges together to provide a model for incorporating faith and morality into our professional roles. However, CLE programs must receive accreditation by state authorities if participants are to receive credit for them. Recently, the State Bar of Texas’ Minimum Continuing Legal Education (MCLE) Committee refused to accredit such a program, determining that only “secular” programs could receive CLE credit. That committee was forced to reverse itself by virtue of a formal appeal filed by this author, and supported by evangelical Christian and Catholic attorneys and entities, including St. Mary’s University School of Law. This Article examines that situation, and provides the framework other schools may use to prevent similar denials from occurring in their states.

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July 23, 2017 | Permalink | Comments (1)

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. [585 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan Blattmachr (Milbank, New York)
  2. [341 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [297 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  4. [207 Downloads]  The Case Against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)
  5. [162 Downloads]  Targeting Corporate Inversions — Are We Doing the Right Thing?, by Doron Narotzki (Akron)

July 23, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 22, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Do Taxes Affect Marriage? Lessons From History

Edward G. Fox (NYU), Do Taxes Affect Marriage? Lessons from History:

This Article investigates the effect of taxes on marriage formation using a natural experiment generated by the income tax’s halting movement from individual taxation of married couples to joint taxation. The 1948 Revenue Act was the first to explicitly adopt joint taxation. Under the Act, married couples were taxed like two individuals, except each was assigned half of the couple’s joint income. This income splitting blunted the progressivity of the tax code, usually reducing the couple’s taxes. The 1948 Act, however, only affected common law states. Married couples in community property states in practice already enjoyed joint taxation with income splitting under Poe v. Seaborn (1930). The 1948 Act thus presents an unusually good opportunity to study the impact of taxes on marriage because it offers substantial exogenous state-by-state variation in tax incentives to marry.

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July 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

ABA Censures Texas Southern Law School Following Gender Discrimination Complaint By Associate Dean

Thurgood Marshall Logo

Texas Lawyer, ABA Fines, Publicly Censures Law School for Noncompliance With Anti-Discrimination Standard:

Texas Southern University Thurgood Marshall School of Law was publicly censured and must pay $15,000 for not complying with an American Bar Association standard that prohibits schools from discriminating against faculty members.

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

Going Cashless? Bad for Tax Cheats, Privacy, Poor

Bloomberg, Going Cashless? Bad for Tax Cheats, Privacy, Poor:

Do we need cash? Humans have used all sorts of things to exchange items of economic value -- rare metals, strings of shells and even sunken boulders. Those objects have gotten more ephemeral, with paper money replacing most coins, and digital forms increasingly supplanting paper. Could physical cash go away entirely? Economists see great payoffs in a cashless society: lower transaction costs, new tools to manage economic growth and an end to tax evasion and money laundering. Critics see an end to privacy, frightening new powers for tyrants and costs that would fall disproportionately on the poor. The giant, if unintended, experiment that followed India’s attempt to withdraw 86 percent of cash in circulation showed one thing clearly: The end of cash is not likely to be a neat or simple process.

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July 22, 2017 in Tax | Permalink | Comments (2)

Friday, July 21, 2017

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new draft article by Regina Herzlinger (Harvard Business School) and Barak D. Richman (Duke Law), Evaluating Changes to the Income Tax Code to Create Consumer-Driven Health Insurance Competition.

Gamage (2017)The intersections between taxation and health policy have become increasingly important to political debates in Washington. A gorilla in the room for most of these discussions is the tax exclusion for employer provided health insurance. This exclusion has been widely criticized. Yet reformers have had little success in attempting to limit this exclusion.

In their new draft article, Herzlinger and Richman (hereinafter “HR”) model how reforming the exclusion for employer provided health insurance might affect employee pay and health care costs. HR argue for making changes to the tax laws surrounding the exclusion so that employees could choose to what extent they want to take advantage of the exclusion or instead receive increased take home pay (which would be taxable). HR estimate that giving workers this option would increase after-tax incomes by $46-48 billion annually, while reducing income inequality and “likely” controlling health care costs.

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July 21, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

IRC § 457A, Literal Income And Substitution Effects, And The Kübler-Ross Five Stages Of Taxes

Matt Levine (Bloomberg), Tax Bills and Libor Witnesses:

There is a widespread belief that taxes discourage economic activity. If you tax cigarettes, that will reduce smoking; if you tax labor income, that will reduce work; if you tax capital gains, that will reduce savings; if you tax estates, that will reduce death. This is standard Econ 101 reasoning, but that doesn't mean that it's universally valid. You can't rule out the possibility that someone, somewhere, will think "Higher taxes? That just means that I need to work more hours to pay them!" That someone is literally Steven A. Cohen:

Mr. Cohen, who ran SAC Capital before it pleaded guilty to criminal insider-trading charges in 2013, is nearing a launch of a new firm to manage as much as $20 billion, The Wall Street Journal earlier reported.

He has set that target, which would exceed the $16 billion managed at peak by SAC, partly because he wants to generate income to help pay the large tax bill, a person close to him said.

The "large tax bill" is the one that is coming due soon on offshore deferred compensation: Hedge fund managers used to be able to defer that income indefinitely, but Congress closed that loophole in 2008, and gave the managers until next year to pay taxes on previously deferred compensation....

Another widespread belief about taxes is that they encourage wasteful gamesmanship and structuring to avoid them. (That's how the offshore compensation came into being in the first place.) And that is still true. Here is a wonderful quote from a tax lawyer in his role as spiritual counselor:

“These are smart, aggressive people who don’t want to pay more than they have to and writing a huge check can be quite demoralizing," said Jonathan Brenner, a tax partner at Caplin & Drysdale. “Most recognize they’ve had a good run and now have to pay the piper, though not after first asking six different ways if there’s some silver bullet” to eliminate or reduce the taxes.

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July 21, 2017 in Tax | Permalink | Comments (3)

Ohio State Bar Association Futures Commission Report 2017

Thimmesch:  Online Shopping And Tax Privacy

Adam Thimmesch (Surly Subgroup): Online Shopping and Tax Privacy

The privacy implications of online commerce are complicated and fascinating. On the one hand, it allows individuals to protect their privacy by shopping for sensitive items without the knowing glances of store clerks, fellow patrons, or those passing by. On the other hand, it creates a digital trail that can connect them to a particular vendor or purchase in perpetuity. This can occur with respect to items that are politically, medically, or sexually sensitive and with respect to items that they’d just prefer to keep a secret. (For example, if you forget to browse in private mode, you might find that your wife’s Facebook feed now includes ads for the items that you were searching out for her birthday. Woops. Sorry dear.)

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July 21, 2017 in Tax | Permalink | Comments (0)

Thursday, July 20, 2017

Schizer:  Border Adjustments And The Conservation Of Tax Planning

David M. Schizer (Columbia), Border Adjustments and the Conservation of Tax Planning, 155 Tax Notes  1451 (June 5, 2017):

In this article, Schizer argues that U.S. corporate and shareholder taxes need to be reformed, and the corporate rate should be much lower. In reforming this dysfunctional regime, according to Schizer, Congress should keep both of these taxes as a form of built-in redundancy; if one tax is avoided, the other can still be collected.

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

Ousted Cincinnati Dean Jennifer Bard Named Penn State Visiting Professor

BardPress Release, Jennifer Bard to Join Penn State Law, College of Medicine as Visiting Professor:

Jennifer S. Bard, an internationally recognized expert in the fields of law, public health and bioethics, will join the faculties of Penn State Law and the Penn State College of Medicine this summer for a one-year appointment as a visiting professor of law and medicine.

Bard is a professor of law at the University of Cincinnati College of Law where she also holds an appointment as professor in the Department of Internal Medicine at the University of Cincinnati College of Medicine. She served as dean of Cincinnati Law from 2015 to 2017.

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July 20, 2017 in Legal Education | Permalink | Comments (0)

10 Things To Know About Tax Practice

Above the Law: 10 Things to Know About Tax Practice:

Today’s topic: tax law.

1. What do you do in a typical day?

A typical day usually begins with reading daily tax publications. There are always many changes and developments to keep up with in tax law. It’s a challenge to stay on top of new regulations, IRS guidance, and other changes, but it also presents an opportunity for younger lawyers to know as much about a specific issue as more experienced lawyers.

Junior associates often spend a fair amount of time researching discrete issues. Although more senior lawyers spend less time on research, tax lawyers throughout their careers devote more of their time to research than lawyers in other practice areas. Despite the thousands of pages in the Internal Revenue Code and Treasury Regulations, there are still a lot of unanswered questions about how the tax rules apply to any given situation. Associates at large firms may also spend time reviewing tax disclosures in securities offerings, reviewing and negotiating the tax representations and other tax-related provisions in merger or other acquisition agreements, reviewing and negotiating the tax provisions in loan agreements, or drafting tax opinions.

As tax lawyers gain experience, they usually become more involved in tax structuring for joint ventures, acquisitions, dispositions, investment funds, or financial products, and provide more expert advice directly to clients on discrete tax issues. 

2. Who do you work with?


July 20, 2017 in Tax | Permalink | Comments (1)

Allard:  The California Bar Exam Is The Tip Of The Lawyer Licensing Iceberg

Allard (2018)TaxProf Blog op-ed:  California Bar Exam Developments: Tip of the Iceberg, by Nicolas W. Allard (Dean, Brooklyn):

Legal climate change is starting to dramatically crack the frozen status quo of the antiquated bar exam and testing industry. Now we should collectively move forward with determination and deliberateness to address bar exam reform comprehensively and thoughtfully.

The recent initiatives of the California Supreme Court to take back control of licensing and admitting new lawyers, like a huge ice shelf breaking off in Antarctica, signals that there are much larger concerns that will force an overhaul of legal testing and licensing practices eventually everywhere.

Traditional bar exam and licensing practices have outlived their sell-by date. In their present state they are increasingly hard, if not impossible, to justify as serving the best interests of the profession or the public.

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July 20, 2017 in Legal Education | Permalink | Comments (5)

Ventry:  Lawyers As Whistleblowers

Dennis J. Ventry, Jr. (UC-Davis), Stiches for Snitches: Lawyers as Whistleblowers, 50 U.C. Davis L. Rev. 1455 (2017):

This Article challenges the prevailing wisdom that ethics rules forbid lawyers from blowing the whistle on a client’s illegal conduct. While a lawyer is not free to disclose confidential information in every jurisdiction for every legal violation, the ethics rules in all jurisdictions permit disclosure of confidential information pertaining to a client’s illegal activities under certain conditions. Proving the lie of the prevailing wisdom, this Article examines a high profile case in the state of New York that ruled a lawyer whistleblower violated the state’s ethics rules by revealing confidential information to stop his employer-client from engaging in a tax fraud of epic proportions. The Article argues that the court undertook a deficient analysis of New York ethics rules pertaining to permissive disclosure of confidential client information. Even if the whistleblower had violated his ethical obligations, the New York False Claims Act (the statute under which he brought his action) expressly protects disclosure of confidential employer information made in furtherance of the statute. In addition to New York’s statutory shield, federal courts across the country have developed a public policy exception safeguarding whistleblowers for disclosing confidential information that detects and exposes an employer’s illegal conduct.

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

Wendi Adelson Named Executive Director Of The Immigration Partnership & Coalition Fund

AdelsonFollowing up on yesterday's post, On Three Year Anniversary Of Dan Markel's Murder, Wheels Of Justice Continue To Turn Slowly:  Gates Cambridge, Press Release:

A Gates Cambridge Scholar has been named executive director of an organisation focused on raising funds to finance existing legal services for undocumented individuals with no criminal background in the US.

Wendi Adelson has been appointed head of the Immigration Partnership & Coalition (IMPAC) Fund.

Prior to IMPAC, Adelson served as a law clerk to the Honorable Adalberto Jordan on the United States Court of Appeals for the Eleventh Circuit from 2015 to 2016 and for seven years was a law professor specialising in immigration at Florida State University.

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July 20, 2017 in Legal Education | Permalink | Comments (2)

Wednesday, July 19, 2017

Liscow & Woolston:  How Income Taxes Should Change During Recessions

Zachary D. Liscow (Yale) & William A. Woolston (Stanford), How Income Taxes Should Change During Recessions, 70 Tax L. Rev. ___ (2017):

This paper offers recommendations for how the design of labor income taxes should change during recessions, based on a simple model of a recessionary economy in which jobs are rationed and some employees value working more than others do. The paper draws two counter-intuitive conclusions for maximizing social welfare.

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

A Portrait Of Asian Americans In The Law

A Portrait of Asian Americans in the Law:

Published by Yale Law School and the National Asian Pacific American Bar Association, A Portrait of Asian Americans in the Law is a systematic analysis of how Asian Americans are situated in the legal profession. ... We address five broad sets of questions:

  1. How are Asian Americans distributed across law schools and the legal profession? In what sectors and positions are they overrepresented or underrepresented?
  2. What factors influence how Asian Americans are distributed in the legal profession? What motivations or aspirations do Asian Americans have when they decide to attend law school? What incentives and obstacles—familial, societal, financial, or professional— affect the career decisions of Asian American law students and lawyers? What stereotypes do they face in navigating the legal profession? In what ways do they seek to counter or assimilate to those stereotypes?
  3. Are Asian American lawyers satisfied with their careers? With what aspects of their careers are they most satisfied? Least satisfied? Does their career satisfaction vary over the course of their career?
  4. To what extent have Asian Americans achieved positions of leadership that enable them not only to practice and implement the law, but also to shape the law and the legal profession?
  5. To what extent do Asian American lawyers experience mental health challenges? How do they compare on this dimension to the profession as a whole? How often do Asian American lawyers seek treatment?

Figure 2A

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July 19, 2017 in Legal Education | Permalink | Comments (0)