TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, May 26, 2017

Henderson:  The Number Of Law School Graduates Has Fallen 28% Amidst Declining Demand

Bill Henderson (Indiana), Supply of Law Graduates Is Shrinking, But So Is Demand:

Henderson 3

The ABA just released 10-months out employment data for the class of 2016.  The percentages of grads employed in full-time/long term Bar Passage Required and JD Advantage jobs is up (72.5% compared to 70.1% in 2015).  However, the total number of these jobs is down (28,029 to 26,923).

Is this good news for law schools? Not really.  The employment percentage is up only because the number of law grads is dropping faster than the number of jobs. But both numbers — grads (supply) and jobs (demand) — are declining. A true recovery would show the opposite.

The graph above reveals a dramatic drop in the number of law grads.  The green bars reflect historical data.   The orange bars are projections for the next three years based on incoming 1L classes that have already enrolled. (Based on a 10-year historical average, 90.1% of entering 1Ls receive a JD three years later.)  Between 2013 and 2019, the size of graduating classes will drop 28.0%.

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

Tax Policy In The Trump Administration

NY Times:  How London And Vancouver Tax Breaks Hollowed Out Hollywood's Visual Effects Industry

HollywoodNew York Times Sunday Magazine, Why Hollywood’s Most Thrilling Scenes Are Now Orchestrated Thousands of Miles Away:

The visual effects industry, and the “movie magic” blockbuster films spend huge shares of their budgets on, are being lured away from California — and into two of the most expensive cities in the world.

[W]hile visual effects’ role in movie making is growing, its presence in Hollywood is shrinking. From 2003 to 2013, at least 21 notable visual-effects companies went out of business, including Digital Domain, which produced the Oscar-winning effects in “Titanic.” Rhythm & Hues finally filed for bankruptcy protection in 2013, just days before winning an Oscar for “Life of Pi,” though it has since been revived under new ownership, working largely on TV shows like “Game of Thrones.”

One factor behind these companies’ failure is a raft of tax-incentive programs that have popped up around the world in an effort to lure cash-starved VFX production companies — and their high-tech jobs and movie glamour — out of California. The chief destinations, at the moment, are London and another even more expensive city: Vancouver, British Columbia. The stunning, Oscar-winning spacescape of “Gravity”? Created by London’s Framestore. The fantastical jungles of “The Jungle Book”? Most of the credit (and the Oscar) belongs to the London-based Moving Picture Company. The grand, galactic battles in “Star Trek Beyond”? That work was led by Double Negative in Vancouver. The companies that make billion-dollar blockbusters possible are barely hanging on, and — for the most part — they aren’t anywhere near Los Angeles.

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

Thursday, May 25, 2017

Kim:  'Citizenship Taxation' — In Defense Of FATCA

Florida Tax Review  (2015)Young Ran (Christine) Kim (Utah), Considering 'Citizenship Taxation': In Defense of FATCA, 20 Fla. Tax Rev. 335 (2017):

Inspired by Ruth Mason’s recent article, Citizenship Taxation, [89 S. Cal. L. Rev. 169 (2016),] which reaches a general conclusion against citizenship taxation, this Article also questions citizen taxation under the same normative framework, but with a particular focus on efficiency and administrability, and takes a much less critical stance towards the merits of citizenship taxation.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (1)

Former UC-Hastings Dean's Advice To Those Considering Law School: 'Choose Wisely, My Friend'

Choose WiselyHuffington Post: Is Law School Worth It?’ It Depends!:  Choose Wisely, My Friend, by Frank Wu (Former Dean, UC-Hastings):

I hate hyperbole. And that’s no exaggeration. It’s likely a consequence of my profession: I teach law. So my business is training advocates, and, contrary to cartoon caricatures, you are more persuasive in a court governed by rules by emphasizing reason over rhetoric.

The debate over legal education nonetheless tends toward extremes. So-called scam bloggers allege legal education is worthless and ruins lives. Their opponents, whom they note rightly are not free of self-interest, insist on its abundant merit for the individual and doubtless necessity for our society. These claims are extravagant. They do not hold up.

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May 25, 2017 in Legal Education | Permalink | Comments (0)

Morrow:  Accelerating Depreciation In Recession

Florida Tax Review  (2015)Rebecca N. Morrow (Wake Forest), Accelerating Depreciation in Recession, 19 Fla. Tax Rev. 465 (2016):

What would you do if on January 13, 2016, you had won the $1.5 billion Powerball jackpot? The prize gives you the choice of a smaller lump sum now or the full jackpot parceled out for years to come. For the New York Times and numerous financial experts, the right choice is clear: take the money over time. While lump sums are nice, they are not worth a big discount when compared to “ultrasafe” income streams (like the Powerball annuity), especially in an “ultralow interest rate environment.”

What everyone understands about Powerball seems to elude us when it comes to the United States’ largest corporate tax expenditure. “Accelerated depreciation” rules give taxpayers a lump sum deduction now, rather than the gradual deductions they would normally claim. Called tax law’s “standard method for combating recessions,” accelerated depreciation has become the most important tax policy affecting businesses because it is thought to be an effective if costly way to stimulate the economy, particularly during tough economic times.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

The Introvert Law School Dean

IntrovertJane Byeff Korn (Dean, Gonzaga), The Dean As Introvert, 48 U. Tol. L. Rev. 298 (2017):

You might be thinking about becoming a dean. You wonder about whether you have what it takes, what you could offer to a law school, and what contributions you could make to advance the mission of a law school. There are many reasons to become a dean, and you probably know them already. If you are thinking about it, you are probably already an associate dean enjoying (usually) the challenges and opportunities offered by being an administrator. You are probably an effective teacher and scholar. You likely enjoy working with faculty, staff, and students, and are good at problem solving. But you might be unsure whether you have the personality to be a successful dean. In particular, if you are an introvert, you might question your ability to be an effective leader.

The common wisdom is that law deans are outgoing people with an easy ability to engage others in conversation and make small talk. In a world sometimes divided into extroverts and introverts, many people think that deans are extroverts and that if you are not an extrovert, you should not think about becoming a dean. I am an introvert and a dean; they are not mutually exclusive.

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May 25, 2017 in Legal Education | Permalink | Comments (2)

Shaheen:  Treaty Aspects Of The McDonald's State Aid Investigation

McDonaldsFadi Shaheen (Rutgers), Tax Treaty Aspects of the McDonald's State Aid Investigation, 86 Tax Notes Int'l 275 (Apr. 24, 2017):

Supporting the European Commission’s conclusion that Luxembourg was under no treaty obligation to exempt income attributable to a U.S. branch of a McDonald’s Luxembourgian subsidiary, this paper suggests two alternative methods for reaching the same result in ways that avoid possible obstacles in the commission’s approach.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

One Year After Arrest Of Alleged Hit Man, Prosecutors Are No Closer To Charging Adelsons In Murder Of Dan Markel, Despite 'Mountain Of Strong But Circumstantial Evidence'

Markel SuspectsTallahassee Democrat, Prosecutor Not Ruling Out Charges For Ex-In-Laws In Markel Case:

A year ago today, one of Tallahassee’s most enthralling whodunits took an explosive turn when Sigfredo Garcia was arrested at a Miami-area gas station.

His arrest began the dominos falling in a nearly two-year long investigation into who killed Florida State law professor Dan Markel. Soon enough, Garcia's arrest on murder charges would be followed by that of his alleged accomplice and the woman investigators say helped broker the deal between the hitmen and Markel’s former in-laws.

But a year later, none of those who investigators and prosecutors say paid to have Markel shot in his Betton Hills garage have been charged in connection with the July 2014 killing. Donna and Charlie Adelson, the mother and brother of Markel’s ex-wife Wendi Adelson, vehemently deny involvement in the plot despite being implicated as the instigators and financial backers of the murder-for-hire plot.

Assistant State Attorney Georgia Cappleman said at this point there is a lack of direct evidence to arrest anyone in the Adelson family. But that doesn’t mean it won’t happen. She pointed out there is no statute of limitation for murder charges and the investigation continues.

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May 25, 2017 in Legal Education | Permalink | Comments (6)

Wednesday, May 24, 2017

Knoll Critiques Kleinbard's Influential Article Claiming That Competitiveness Has Nothing To Do With Inversions

Michael Knoll (Pennsylvania), Taxation, Competitiveness, and Inversions: A Response to Kleinbard, 155 Tax Notes 619 (May 1, 2017):

In a 2014 article [Competitiveness’ Has Nothing to Do With It, 144 Tax Notes 1055 (Sept. 1, 2014)], Professor Edward D. Kleinbard leaped into the center of [the inversion] debate. In that article, he contended that competitiveness arguments for corporate inversions are “almost entirely fact-free” and constitute “a false narrative,” and that “international business ‘competitiveness’ has nothing to do with the reasons for these deals.” He concluded that although the current U.S. tax system “is highly distortive and inefficient . . . one of the few deficiencies it has avoided is imposing an unfair international business tax competitive burden on sophisticated U.S. multinationals.”

Kleinbard and his article have played and continue to play a highly visible role in public policy debates over inversions.

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

Henderson:  Overcapacity In Legal Education

Bill Henderson (Indiana), A Measure of Overcapacity in Legal Education:

Henderson

Between 1971 and 2010, the average entering 1L class at an ABA-accredited law school was 246 students with a very narrow band of fluctuation. The high-water mark was 262 in 2010. Every year since 2012 has set a new historical low. As the chart above shows, the average has tumbled by a staggering 31%. ...

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

Dodge:  The Personal Realization Income Tax

Florida Tax Review  (2015)Joseph M. Dodge (Florida State), The Fair Tax: The Personal Realization Income Tax, 19 Fla. Tax Rev. 522 (2016):

This article argues that the properly conceived fairness norm for taxation leads to a personal realization income tax. Fairness in taxation refers to “allocative tax fairness,” that is, the ethical/political standard according to which taxes are to be apportioned among the relevant population. In concrete terms, the standard constitutes the tax base for individual taxpayers. Allocative fairness is but one norm bearing on taxation, but it is one that (in academia, at least) has unjustifiably taken a back seat to economics and welfarist norms, largely due to the perception that allocative tax fairness lacks any specific content apart from the speaker's political and personal tastes and, therefore, by implication, is without independent normative grounding. The short riposte is that exclusive adherence to economic and/or welfarist norms is itself a matter of personal taste.

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May 24, 2017 in Scholarship, Tax | Permalink | Comments (1)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through May 1, 2017) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

68,651

Reuven Avi-Yonah (Mich.)

12,639

2

Michael Simkovic (S. Hall)

36,246

Lily Batchelder (NYU)

9013

3

Paul Caron (Pepperdine)

33,093

Michael Simkovic (S. Hall)

4210

4

D. Dharmapala (Chicago)

30,734

D. Dharmapala (Chicago)

4114

5

Louis Kaplow (Harvard)

28,121

Michael Graetz (Columbia)

3508

6

Vic Fleischer (San Diego)

23,719

Richard Ainsworth (BU)

2870

7

James Hines (Michigan)

22,842

Ed Kleinbard (USC)

2768

8

Ed Kleinbard (USC)

22,536

David Weisbach (Chicago)

2531

9

Richard Kaplan (Illinois)

21,983

Dan Shaviro (NYU)

2374

10

Ted Seto (Loyola-L.A.)

21,950

Louis Kaplow (Harvard)

2271

11

Richard Ainsworth (BU)

20,684

David Gamage (Indiana)

2229

12

Katie Pratt (Loyola-L.A.)

20,176

William Byrnes (Texas A&M)

2110

13

David Weisbach (Chicago)

19,299

Paul Caron (Pepperdine)

2037

14

Robert Sitkoff (Harvard)

18,895

Robert Sitkoff (Harvard)

1981

15

Brad Borden (Brooklyn)

18,242

Jeff Kwall (Loyola-Chicago)

1731

16

Carter Bishop (Suffolk)

18,065

Omri Marian (UC-Irvine)

1671

17

Francine Lipman (UNLV)

17,526

Francine Lipman (UNLV)

1664

18

Jen Kowal (Loyola-L.A.)

17,441

Brian Galle (Georgetown)

1629

19

Chris Sanchirico (Penn)

17,402

Darien Shanske (UC-Davis)

1589

20

Dan Shaviro (NYU)

17,165

Jordan Barry (San Diego)

1535

21

Bridget Crawford (Pace)

17,091

Bridget Crawford (Pace)

1534

22

Dennis Ventry (UC-Davis)

16,465

Steven Bank (UCLA)

1472

23

David Walker (BU)

15,654

Brad Borden (Brooklyn)

1443

24

Steven Bank (UCLA)

14,786

Christopher Hoyt (UMKC)

1438

25

Gregg Polsky (Georgia)

13,890

Yariv Brauner (Florida)

1430

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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May 24, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

After Hiring Lobbyist Who Helped Get Education Secretary Betsy DeVos Confirmed, Charlotte Law School Gets Federal Student Loan Lifeline

Charlotte DOEFollowing up on my previous posts (links below):  National Law Journal, With New Lobbyists, Charlotte Law Disperses Federal Student Loans as School Year Ends:

The beleaguered Charlotte School of Law finally got some good news earlier this month when the U.S. Department of Education released federal loan money to some students just days before the spring semester ended. That development comes several months after the school hired a trio of lobbyists to make its case in Washington, one of whom helped shepherd Education Secretary Betsy DeVos through the confirmation process in January.

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May 24, 2017 in Legal Education | Permalink | Comments (3)

Ventry:  Trump's Tax Plan Will Boost, Not Reduce, Home Ownership

The Hill op-ed: Trump's Tax Plan Can Boost, Not Reduce, Homeownership, by Dennis J. Ventry, Jr. (UC-Davis):

President Trump’s tax plan has the housing industry in a tizzy. The National Association of Realtors (NAR) says it puts “at risk ... targeted tax incentives” like the mortgage interest deduction (MID) and property tax deduction (PTD), which “help lower- and middle-class families purchase” a home. It would “effectively nullify the current tax benefits of owning a home for the vast majority of tax filers,” the NAR continues. In addition, it could make “home values plummet ... equity evaporate,” and Americans’ “nest eggs” disappear.

It sounds scary. But almost none of it is true. 

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May 24, 2017 in Tax | Permalink | Comments (1)

Tuesday, May 23, 2017

3rd Annual Mid-Career Tax Professors Workshop Concludes Today At Arkansas

Arkansas Fayetteville LogoPanel #6

Susan Morse (Texas), Skewed Deference
Commentator:  Charlene Luke (Florida)

Jordan Barry (San Diego), Taxation and Innovation: The Sharing Economy as a Case Study
Commentator:  Shu-Yi Oei (Tulane)

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May 23, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Battle Of The Network Stars Returns To Pepperdine

BattleToday is a big day at Pepperdine:  ABC starts filming a "reboot" of the Battle of the Network Stars, which was hosted on our campus and aired on ABC from 1976-1988. From Variety:

The original “Battle of the Network Stars” aired on ABC from 1976 to 1985 and featured teams representing ABC, CBS, and NBC competing in events such as kayaking, golf, three-on-three footbal, and tug of war. The show was hosted for most of its run by Howard Cosell. Among the co-hosts and competitors featured over the years were Ron Howard, Penny Marshall, Bruce Jenner, O.J. Simpson, Rob Reiner, LeVar Burton, Billy Crystal, David Letterman, Tony Randall, Robin Williams, Dick Van Dyke, Lynn Redgrave, Tom Selleck, William Shatner, and Michael J. Fox.

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May 23, 2017 in Legal Education | Permalink | Comments (2)

House Holds Hearing Today On The Border Adjustment And International Tax Reform

Ways & Means (2016)The House Ways & Means Committee held a hearing this morning on Increasing U.S Competitiveness and Preventing American Jobs from Moving Overseas:

The hearing focused on border adjustment and international tax modernization as a core element of comprehensive tax reform and the implications of these policies for increasing jobs, investment, and economic growth in the United States.

Witness List
Juan Luciano
President & CEO, Archer Daniels Midland
Testimony

Brian Cornell
Board Chairman & CEO, Target
Testimony 

William Simon
Former President & CEO, Walmart
Testimony 

Lawrence B. Lindsey
President & CEO, The Lindsey Group
Testimony 

Kimberly Clausing
Thormund A. Miller & Walter Mintz Professor of Economics, Reed College
Testimony:

Clausing 4

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May 23, 2017 in Congressional News, Tax | Permalink | Comments (0)

2016-17 Moot Court Rankings

Moot Court2016-17 Moot Court Rankings:

1.   South Texas
2.   Oklahoma
3.   St. Mary's
4.   Stetson
5.   Georgetown
6.   SMU
7.   Chicago-Kent
8.   Texas Tech
9.   Michigan State
10. UC-Hastings
11. Pepperdine
12. McGeorge
12. Wake Forest
14. Ohio State
15. Mississippi College

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May 23, 2017 in Law School Rankings, Legal Education | Permalink | Comments (2)

Kades:  Reducing Inequality With A Progressive State Tax Credit

Eric A. Kades (William & Mary), Giving Credit Where Credit Is Due: Reducing Inequality with a Progressive State Tax Credit, 77 La. L. Rev. 359 (2016):

Widening economic inequality is fast becoming the defining social problem of this era. Although there are a number of policy mechanisms available for addressing the problem, taxation is the first and best tool for the job. The federal income tax code is already moderately progressive and thus partially counteracts growing inequality in before-tax incomes. State taxation, however, is an entirely different matter: every single state has some combination of sales, property, and income taxes that, taken together are regressive: average (“effective”) state tax rates fall as income rises. It is perverse that taxation in each and every state exacerbates instead of ameliorates the nation’s burgeoning income inequality.

Figure 8

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May 23, 2017 in Scholarship, Tax | Permalink | Comments (2)

Weber:  Killing Zombie Mortgages With Differential Property Taxes

David P. Weber (Creighton), Taxing Zombies: Killing Zombie Mortgages with Differential Property Taxes, 2017  U. Ill. L. Rev. 1135 (2017):

Zombie mortgages and abandoned properties are costly problems for cities and counties across the country. The term “zombie mortgage” is meant to, and hopefully does, evoke images of undead mortgages that are nearly impossible to eliminate. In the legal literature, the term is used to describe the circumstance when a lender or mortgagee has initiated foreclosure proceedings, the homeowner has quit the premises, and the lender later abandons the foreclosure process, often without notifying the owner of record. The mortgages, accompanying fees, and real estate taxes are “zombies” because the affected homeowner cannot escape them by abandoning the property, even after notice of eviction. Generally, the affected homeowner cannot shed these “zombies” through bankruptcy, either.

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May 23, 2017 in Scholarship, Tax | Permalink | Comments (1)

Monday, May 22, 2017

3rd Annual Mid-Career Tax Professors Workshop Kicks Off Today At Arkansas

Arkansas Fayetteville LogoPanel #1

Jennifer Bird-Pollan (Kentucky), Sovereignty, Tax, and BITs
Commentator: David Herzig (Valparaiso)

John Brooks (Georgetown), Income Tax as Wealth Tax
Commentator:  Rebecca Kysar (Brooklyn)

Emily Cauble (DePaul), Tax Law’s Inconsistent Treatment of Gains and Losses
Commentator:  Heather Field (UC-Hastings)

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May 22, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)

WSJ:  Law Firms Finally Say It’s OK to See a Therapist

Wall Street Journal, Law Firms Finally Say It’s OK to See a Therapist:

Big firms have long been reticent to openly address addiction and other mental-health problems, despite research showing lawyers face higher rates of substance abuse, depression and suicide than the wider population. Law-firm leaders say the need to keep up appearances in a competitive industry has contributed to the resistance.

That attitude, however, is slowly changing.

Some U.S. law firms are tackling mental-health issues head-on. They’re offering on-site psychologists, training staff to spot problems and incorporating mental-health support alongside other wellness initiatives. ...

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

Private Investigator's Attempt To Obtain Donald Trump's Tax Return Led IRS To Shut Down FAFSA Data Retrieval Tool; Who Hired Him?

FAFSAIRSFollowing up on my previous posts:

Diverse Issues in Higher Education, FAFSA Hacker Targeted Trump Tax Info:

The person accused of a 2016 attempt to use a web-based federal student-aid tool to illegally obtain taxpayer information is a Louisiana-based private investigator who used the tool to target then-presidential candidate Donald J. Trump, court records obtained by Diverse show.

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May 22, 2017 in IRS News | Permalink | Comments (0)

GOP Senate Cuts UNC Law School's Budget 30% As Payback To Liberal Faculty (Especially Gene Nichol), Rankings Slide From 20 (1979) To 39 (2017)

North Carolina LogoFollowing up on my previous posts (links below):  News & Observer, The GOP Crafts a Message to UNC, With a Chain Saw:

The state Senate took a chain saw to the University of North Carolina law school this month, cutting nearly a third of the state appropriation for one of the nation’s oldest law schools.

The official explanation from the Republican-controlled Senate is that we have too many lawyers in North Carolina. But not even the teenaged pages in the Senate believe that.

The GOP is sending a message: It thinks the law school faculty is liberal leaning, it doesn’t like the Center for Civil Rights, and it particularly doesn’t like Gene Nichol. ...

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May 22, 2017 in Legal Education | Permalink | Comments (34)

WSJ:  The Blind Spot In The Sharing Economy — Tax Collection?

Airbnb uberWall Street Journal Tax Report: The Blind Spot in a Sharing Economy: Tax Collection, by Laura Saunders:

A loophole is helping gig-economy workers, online sellers and home-sharing hosts cheat on their taxes.

Under a law enacted in 2008 and later clarified by the Internal Revenue Service, many online-platform businesses that connect buyers and sellers and take credit-card payments, such as Airbnb, TaskRabbit, Etsy and ride-sharing firms, fall into a special category.

These businesses have to report a provider’s income to the IRS only if that person earns more than $20,000 and has more than 200 transactions. In that case, the company sends both the provider and IRS a Form 1099-K listing gross income.

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

TaxProf Blog Weekend Roundup

Sunday, May 21, 2017

San Diego Dean: It Is Time To Rethink The California Bar Exam

California Bar ExamStephen Diamond (Santa Clara), Time to Rethink the California Bar Exam, San Diego Dean Stephen Ferruolo Testifies:

It was the testimony [before the Standing Committee on the Judiciary of the California State Assembly] of Stephen Ferruolo, the dean of the University of San Diego’s Law School, that really caught my attention. Dean Ferruolo shared his full statement to the committee with me and you can read it here. (The dean’s testimony begins at 57:54 on the video archive.)

The conclusion I drew from his testimony and the discussion that ensued with the legislators is that the current form of the California bar (including the new 2 day version that starts this summer) is, in essence, an outdated regulatory barrier to needed innovation in legal education. Because of the exceptionally large number of subjects tested as well as because of the bias towards multiple choice questions (now heightened with the 2 day bar) law school curriculum is being distorted in a way that creates a disconnect between what is taught in law schools and what it is new lawyers need to know to be successful.

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May 21, 2017 in Legal Education | Permalink | Comments (3)

John Oliver Property Tax Scam Uses Loophole Created By Donald Trump

John Oliver 2New York Observer, The John Oliver Property Tax Scam: HBO Comedian Secretly Buys Manhattan Mansion; Liberal Deity Avoids Taxes By Using Loophole Created By Donald Trump:

The hypocrisy really gets ratcheted up with John Oliver, the No. 1 darling to so many liberal anti-Trumpies, who regularly attacks GOP tax schemes as giveaways to the rich and detrimental to the poor. ... 

For years, Oliver has criticized the estate tax, which opponents, in a smart linguistic move dreamed up by Frank Luntz, long ago labeled the “death tax”; and the tax code’s raft of loopholes that benefit special interests he identified as oil companies and hedge fund managers. Oliver even briefly established the bogus Our Lady of Perpetual Exemption to draw attention to tax-exempt status granted to churches and charities.

Back in July 2014, in an episode in which he lamented the Wealth Gap in America” (which has resulted in the richest one percent of Americans controlling 20 percent of annual income), Oliver said, “At this point the rich are just running up the score…What sets America apart is that we are actively introducing policies that disproportionately benefit the wealthy,” such as tax cuts and loopholes like trusts.

So it’s a little surprising to discover that just months before, Oliver had a tax attorney set up two revocable trusts, one for him and one for his wife, to hide the couple’s purchase of a $9.5 million Manhattan penthouse. Then he used a tax loophole created by Donald Trump himself back in the 1970s, when the current president was merely a prominent New York real estate developer and aspiring celebrity author.

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May 21, 2017 in Celebrity Tax Lore, Tax | Permalink | Comments (6)

Closing More Law Schools Won't Solve The Problem; Changing The Model And Delivery Of Legal Education Will

SorrySusan Cartier Liebel (Founder & CEO, Solo Practice University), If We Close Some Law Schools, Legal Education Will Be Saved! Wrong.:

[W]e do not have too many law schools.  ...  What we have is too many law schools operating under an antiquated model and that is why we are turning out too many under-educated lawyers who cannot qualify or compete in a changing market. This creates a glut of debt-ladened, disillusioned students, ill-equipped to fend for themselves.

Closing schools doesn’t solve the problem.

Closing schools just reduces the number of debt-ladened, disillusioned students still ill-equipped to fend for themselves. Changing the education model and method of delivery of this education will fix the problem. ...

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May 21, 2017 in Legal Education | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3, #4, and #5:

  1. [306 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  2. [229 Downloads]  BEPS and the New International Tax Order, by Allison Christians (McGill)
  3. [202 Downloads]  Can New York Publish President Trump's State Tax Returns? , by Daniel Hemel (Chicago)
  4. [171 Downloads]  A Global Treaty Override? The New OECD Multilateral Tax Instrument and Its Limits, by Reuven S. Avi-Yonah (Michigan) & Haiyan Xu (Michigan)
  5. [149 Downloads]  Base Erosion by Intra-Group Debt and BEPS Project Action 4's Best Practice Approach: A Case Study of Chevron, by Antony Ting (Sydney)

May 21, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 20, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Should La Verne And Other Law Schools With Low First-Time Bar Passage Rates Follow Whittier's Lead And Close?

Laverne (2017)Bloomberg Law, Are Law Schools with Low Bar Pass Rates at Risk of Closing?:

The University of La Verne College of Law enrolls over 100 students each year, and if past history is any indication, only slightly more than half, 54 percent, will likely pass the bar on their first try after graduation.

Should that affect whether it stays open?

The disconnect between a school’s low bar passage rate, relative to other schools in the country, and its ability to draw applicants raises a question that’s been looming for legal education regulators: Is the bar passage rate the best way to measure whether a law school is adequately preparing its students to become lawyers?

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May 20, 2017 in Legal Education | Permalink | Comments (9)

Facing Competition From GRE, LSAC Allows Applicants To Take LSAT An Unlimited Number Of Times

LSAT (2015)In the face of growing competition from the GRE (which is now accepted by Arizona and Harvard), the LSAC today is permitting 1,000 applicants to take a digital version of the LSAT.  In additional, the LSAC is removing the limit on how many times students can take the LSAT (the former limit was three times in any two-year period).

The ABA and LSAC require law schools to report each applicant's highest LSAT score, which counts 12.5% in the U.S. News rankings.  The rule change thus gives wealthier students who can afford to take the LSAT multiple times an enormous advantage in law school admissions.

The rule change also will increase LSAC's revenues, which were $59.7 million in its most recent publicly available Form 990.  LSAC has $238 million of assets and paid its President $692,000.  Four other employees were paid over $300,000. 

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

Reinterpreting Corporate Inversions: Non-Tax Competitions And Frictions

Inho Andrew Mun (J.D. 2017, Yale), Note, Reinterpreting Corporate Inversions: Non-Tax Competitions and Frictions, 126 Yale L.J. 2152 (2017)

Corporate inversions have drawn outrage from all segments of society. In an inversion, a company reincorporates abroad to escape its U.S. tax burden. Regulators and academics have typically sought tax law solutions to curb tax inversions. However, the resulting tax regulations have been ineffective, while more radical tax reforms are not politically feasible. This Note argues that inversion is not a tax problem in isolation, but a problem of aligning tax paid with benefits conferred by a given country. By introducing non-tax dimensions into the equation, this Note refines the oft-ignored benefit tax theory. The benefit tax theory proposes that the U.S. corporate tax regime accounts for superior legal and nonlegal benefits that companies enjoy by incorporating or operating in the United States. While paying U.S. tax, corporations receive the benefits of corporate governance, securities regulation, intellectual property law, and other areas of law; furthermore, benefits include many nonlegal business factors such as access to a large consumption market, skilled labor pool, capital markets, and more.

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

Friday, May 19, 2017

Congratulations, Pepperdine Law School Class of 2017!

SOL Graduation 2017 (1)
Photo Credit: Jessie Fahy

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

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a recent Tax Court case highlighting the perils of do-it-yourself tax preparation.

KristanThe perils of do-it-yourself tax prep.

I’ve tried to do plumbing myself. I have learned that it is cheaper in the not-very-long run to pay a plumber.

An insurance consultant learned a similar lesson about tax preparation in Tax Court last week. His client specialty was accountants. Whether out of thrift or because he didn’t want to be seen playing favorites, he used TurboTax. It went badly in Tax Court.

The taxpayer claimed disallowed deductions for alimony and for a net operating loss. The court determined that he reported too much Alimony, and that he whiffed entirely on the NOL. The deficiency was big enough to bring the 20% “accuracy related” penalty into play. Judge Holmes considers the issue:

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May 19, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews an article by Darien Shanske (Davis), The (Now Urgent) Case for State-Level Monitoring of Local Government Finances (or, One Way to Protect Localities from Trump's 'Potemkin Villages of Nothing'), forthcoming in the NYU Journal of Legislation and Public Policy: 

Scharff (2017)Darien Shanske’s forthcoming article on local government financing suggests reforms that might protect local governments from their own bad decisions.   The fiscal challenges facing local governments are enormous, and Shanske persuasively argues localities are ill equipped to deal with these problems on their own.  And his proposal responds to the variety of fiscal problems facing cities. There are problems both with the ways cities spend their revenue and also their revenue streams.  Too often, we foucs on only one side of this problem.

At the time Shanske wrote the paper, he was particularly worried about the possibility of a federal infrastructure plan that would flood local governments with public-private partnership opportunities that would fail to deliver promised benefits.  As Shanske’s title alludes to, Larry Summers denounced such infrastructure spending as a “Potemkin Village [] of nothing.”

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May 19, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Houston Hosts Third Annual Texas Tax Faculty Workshop

Houston (2017)The University of Houston Law Center hosts the Third Annual Tax Faculty Workshop today:

Bryan Camp (Texas Tech), Application of Equitable Principles to Jurisdictional Time Periods
Commentator: Terri Helge (Texas A&M)

Calvin Johnson (Texas), Beckemeyer and the Tax Benefit Rule
Commentator: Johnny Buckles (Houston)

Susan Morse (Texas), The Dark Side of Safe Harbors?
Commentator: Bruce McGovern (South Texas)

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

Tax Policy In The Trump Administration

Soled & Thomas:  Regulating Tax Return Preparation

Jay A. Soled (Rutgers) & Kathleen DeLaney Thomas (North Carolina), Regulating Tax Return Preparation, 58 B.C. L. Rev. 151 (2017):

Every year the U.S. government collects nearly $3 trillion of income and employment taxes, a large share of which is used to deliver social welfare benefits to the poor. With respect to these collections and deliveries, the Form 1040 (U.S. Individual Income Tax Return) seeks to ensure taxpayer accuracy. In the twenty-first century, there are two sets of key players that dominate the Form 1040 preparation and submission process, namely, tax return preparers and tax return preparation software companies. The former hand-hold taxpayers through the entire tax return preparation and submission process while the latter provide taxpayers with the necessary tools to complete and submit tax returns on their own. These two groups – tax return preparers and tax software companies – thus stand as vital intermediaries between the government and taxpayers, assisting in the preparation of over 90 percent of all individual tax returns.

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

Thursday, May 18, 2017

Roin:  Retroactive Taxation, Unfunded Pensions, And Shadow Bankruptcies

Julie Roin (Chicago), Retroactive Taxation, Unfunded Pensions, and Shadow Bankruptcies, 102 U. Chi. L. Rev. 559 (2017):

Academics and journalists criticize politicians for the dismal financial situations of many state and local jurisdictions. And certainly, politicians routinely make inaccurate fiscal claims. However, the voting public bears some of the blame for continuing to vote for politicians peddling what amounts to fiscal “magic.” This Article suggests a mechanism for holding them at least partially accountable for their carelessness: retroactive taxation triggered by objective measures of fiscal distress.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (1)

Trump Proposes To Dramatically Cut Law Student Loans

Washington Post, Trump and DeVos Plan to Reshape Higher Education Finance:

Budget documents obtained by The Washington Post show President Trump’s administration is proposing a raft of changes that could have significant impact on college students and graduates.

One of the most striking higher education proposals calls for replacing the five income-driven student loan repayment plans with a single plan to the benefit of undergraduate borrowers. As Trump promised last year on the campaign trail, the new plan would cap repayment to 12.5 percent of the borrower’s income and forgive the balance of the loan after 15 years. That would apply if the loans were taken out for an undergraduate degree. Anyone with graduate loans would expect to pay the same percentage of their income, but would only receive forgiveness after 30 years.

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May 18, 2017 in Legal Education | Permalink | Comments (5)

Barry & Pollman:  Regulatory Entrepreneurship

Jordan M. Barry (San Diego) & Elizabeth Pollman (Loyola-L.A.), Regulatory Entrepreneurship, 90 S. Cal. L. Rev. 383 (2017):

This Article examines what we term “regulatory entrepreneurship”—pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

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

Grinberg:  The House GOP Blueprint Can Be Drafted To Comply With WTO Rules

Itai Grinberg (Georgetown), The House GOP Blueprint Can Be Drafted to Comply with WTO Rules:

The House GOP Blueprint can be drafted into legislation in a manner that would comply with the United States’ international trade obligations. This paper presents two alternative approaches that avoid the key WTO discrimination and subsidy issues often raised in discussions of destination-based cash flow tax proposals.

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

NTA 47th Annual Spring Symposium On Taxation In The Trump Era

NTA

The NTA 47th Annual Spring Sympoisum on Taxation in the Trump Era: Reforms, Revenues and Repercussions kicks off today in Washington, D.C.  Tax Prof speakers include:

Exploring the Destination-Based Cash Flow Tax

Organizer: Itai Grinberg, Georgetown University Law Center
Moderator: Lily Faulhaber, Georgetown University Law Center

Destination-Based Cash Flow Taxation
Alan Auerbach, University of California, Berkeley, Michael P. Devereux, Oxford University Centre for Business Taxation, Michael Keen, International Monetary Fund, and John Vella, Oxford University Centre for Business Taxation

Problems with Destination-Based Corporate Taxes and the Ryan Blueprint
Kimberly Clausing, Reed College and Reuven Avi-Yonah, University of Michigan Law School

Can a Destination-Based Cash Flow Tax be Compatible with the WTO Commitments of the United States?
Itai Grinberg, Georgetown University Law Center

Is the Destination-Based Cash Flow Tax Easily Gamed?
John Vella, Oxford University Centre for Business Taxation

Using the Tax Code to Support Families: Past, Current and Future Policy

 

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May 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (2)

Debby Merritt Criticizes Doug Kahn’s 'Ignorance Of Clinical Education'

ClinicalFollowing up on Monday's post, The Downside of Requiring Additional Experiential Courses in Law School:  Deborah Jones Merritt (Ohio State), What Do Students Do in Clinics?:

Douglas Kahn has posted an article criticizing the “proliferation of clinical and other experiential courses” in legal education. These courses, he argues, reduce the number of “doctrinal” courses that students take, leaving them “ill-prepared to practice law as soon after graduation as law firms would like.” The TaxProf Blog posted a summary of the article, and a baker’s dozen of readers have offered pro and con comments.

It’s an old debate, one that has bristled for more than 50 years. The discussion doesn’t surprise me, but Professor Kahn’s ignorance of clinical education does. His bold assertions about clinics reveal little familiarity with the actual operation of those courses. Let’s examine some of Kahn’s claims. ...

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May 18, 2017 in Legal Education | Permalink | Comments (5)

Hurt:  The Private Ordering Of Publicly Traded Partnerships

Christine Hurt (BYU), The Private Ordering of Publicly Traded Partnerships:

Publicly traded partnerships, or master limited partnerships as they are sometimes called, are hybrid entities. Attempting to achieve the perfect structure for organizing economic activity, new statutes added limited liability to entities that enjoy flow-through taxation. However, because of parallel refinements by federal regulators involving taxation and amendments by state legislatures involving fiduciary duties, a strange genetic mutation flourished: the publicly traded partnership (PTP). The PTP organized as a Delaware limited partnership combines limited liability and tax advantages with elimination of fiduciary duties and free transferability of shares. In what might be the pinnacle of separation of ownership and control, unitholders purchase limited partnership units on a public exchange representing equity interests in an entity whose managers have no fiduciary duties toward the purchasers or their investment. Furthermore, new proposals seek to expand the universe of firms that may choose this structure, creating interesting, or alarming, questions about the future of this once tiny but now growing population of firms.

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

Wednesday, May 17, 2017

Law School Rankings By Federal Judicial Clerkships

Derek Muller (Pepperdine), Visualizing Law School Federal Judicial Clerkship Placement, 2014-2016:

The release of the latest ABA employment data offers an opportunity to update the three-year federal judicial clerkship placement rates. Here is the clerkship placement rate for the Classes of 2014, 2015, and 2016. Methodology and observations below the interactive visualization. The "placement" is the three-year total placement; the "percentage" is the three-year placement divided by the three-year graduating class total.

Here are the California Law School rankings:

California Ranking

Here are the Top 10 law schools nationally:

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May 17, 2017 in Law School Rankings, Legal Education | Permalink | Comments (2)