TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, June 20, 2016

AEI & TPC:  A New Proposal For Corporate Tax Reform

American Enterprise Institute & Tax Policy Center, A New Proposal for Corporate Tax Reform:

Eric Toder & Alan D. Viard, A Proposal to Reform the Taxation of Corporate Income:

  • Reduce corporate tax rate to 15 percent
  • Tax at ordinary rates dividends and marked-to-market capital gains of taxable American shareholders of publicly traded companies
  • Allow (only) those shareholders an imputation credit for corporate taxes – 17.5 percent of cash or stock dividends
  • Provisions to address volatility, companies going public, tax-exempt shareholders, transition, etc.

Discussion of the proposal:

  • Daniel N. Shaviro (NYU)
  • Joann Weiner (George Washington)
  • Howard Gleckman (Tax Policy Center)

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June 20, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

University Of Wyoming Declares Financial 'Crisis', Hopes To Avoid Financial 'Exigency' And Termination Of Tenured Faculty

Wyoming 2Chronicle of Higher Education, U. of Wyoming’s President Declares Financial Crisis:

The University of Wyoming’s president has declared a financial crisis and plans to reduce or cut academic programs and review the institution’s structure, according to a letter on Thursday from the president, Laurie Nichols, to the campus.

According to Wyoming’s financial-exigency policy, if the university is in a dire financial situation, it should follow guidelines to navigate the financial constraints fairly.

Ms. Nichols stressed in her letter the difference between financial exigency and the current financial crisis. Financial exigency, the worst of all scenarios, means the university may terminate tenured faculty members. ...

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June 20, 2016 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 1138

IRS Logo 2Washington Post editorial, The GOP Congress Is Unfairly Targeting the IRS:

Most of the country has moved on from the Internal Revenue Service targeting controversy, which turned out to be not much of a scandal. Although initial reports seemed highly suspicious, it’s been clear for some time that administrative incompetence was the likely culprit, not the Obama administration vindictively singling out conservative groups for IRS scrutiny. But Rep. Jason Chaffetz (R-Utah) and the other Republicans on the House Oversight and Government Reform Committee are still outraged. Having turned what could have been a wholly reasonable investigation of IRS carelessness into a partisan scandal hunt, the most concrete result from their inquiries may end up being a gratuitous attack on a longtime public servant.

The committee voted on party lines Wednesday to censure IRS Commissioner John Koskinen, the man President Obama tapped to lead the agency after reports that IRS employees had disproportionately scrutinized conservative nonprofits. Nonprofits that may engage in political activity deserve IRS attention, because the government should not be subsidizing political groups through the tax code. The problem was the thoughtless way IRS employees went about determining which groups to examine. Mr. Koskinen, an old bureaucratic hand, was not at the IRS when this happened. He was just supposed to clean things up afterward.

As their inquiry failed to turn up evidence of malign political motives, House Republican investigators turned their sights on Mr. Koskinen personally, claiming that he badly — perhaps purposely — bungled his assignment. IRS employees destroyed a trove of emails the committee wanted to see — after the agency was supposed to be saving them. The IRS’s inspector general found that the erasure was an honest, if frustrating, mistake. Still, Mr. Koskinen’s congressional inquisitors charge, he did not confess to Congress when he should have. Some statements he made to Congress turned out to be untrue. The IRS director has a reasonable response to that, too: He did not immediately know the nature or extent of the gap in emails, and once he did, he ordered his staff to attempt to recover what they could.

The GOP Congress has already harassed and weakened the IRS through counterproductive budget cuts. Now Republican lawmakers appear to be doing their best to deter anyone of competence from ever agreeing to lead the agency. The result of a congressional investigation into IRS dysfunction would end up being more IRS dysfunction.

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June 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

TaxProf Blog Weekend Roundup

Sunday, June 19, 2016

California Raised Taxes, Economy Grew 4.1%; Kansas Lowered Taxes, Economy Grew 0.2%

CKWashington Post Wonkblog:  The Interesting Thing That Happened When Kansas Cut Taxes and California Hiked Them, by Jim Tankersley & Max Ehrenfreund:

In 2012, voters in California approved a measure to raise taxes on millionaires, bringing their top state income tax rate to 13.3 percent, the highest in the nation. Conservative economists predicted calamity, or at least a big slowdown in growth. Also that year, the governor of Kansas signed a series of changes to the state's tax code, including reducing income and sales tax rates. Conservative economists predicted a boom.

Neither of those predictions came true. Not right away -- California grew just fine in the year the tax hikes took effect -- and especially not in the medium term, as new economic data showed this week.

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June 19, 2016 in Tax | Permalink | Comments (10)

More On The $30,000 Cost Of Law Review Articles

$30,000Following up on my previous posts on Jeff Harrison's estimate that the annual cost of each of the 8,000 law review articles produced by the nation's law professors is $240 million—$30,000 per article:

Jeff Harrison (Florida), Every Decision is Made: P.S. on Peeps:

Law professors are terrified of cost/benefit analysis when it comes to scholarship. I am too unless I am doing it. Actually, they want no part of cost benefit analysis, no matter how broadly defined, whether it comes to scholarship, LLM programs, certificates, or courses.

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June 19, 2016 in Legal Education, Scholarship | Permalink | Comments (4)

The Top 5 Tax Paper Downloads

ABA Grants Full Accreditation To 200th Law School: Belmont

Belmont LogoThe ABA has granted full accreditation to Belmont Law School in Nashville, Tennessee.  Belmont is the 200th fully accredited school that offers the first degree in law (The U.S. Army Judge Advocate General's School also is fully accredited. It offers an officer's resident graduate course, a specialized program beyond the first degree in law). There are four provisionally accredited law schools (Concordia, Indiana Tech, Lincoln Memorial-Duncan, UMass-Dartmouth).

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June 19, 2016 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1137

IRS Logo 2Real Clear Politics, Strassel Nails the Left's "Intimidation" Crusade, by Peter Berkowitz (Hoover Institution, Stanford University):

The most notorious instance of the left’s efforts to use government power to intimidate political opponents during Obama’s presidency was the Internal Revenue Service’s targeting, beginning in 2010, of some 300 small, often Tea Party-affiliated conservative organizations that had applied for tax-exempt status. The IRS’s job was to ensure that applications had been filled out correctly. But at the behest of longtime Democratic Party partisan and then-director of the IRS’ Exempt Organizations Unit Lois Lerner, the agency delayed action on applications for months, which in many cases stretched into years.

Sometimes the IRS directed targeted organizations to answer extensive questionnaires that were “a mix of boring officialdom and sinister intrusiveness.” In the case of the San Fernando Valley Patriots—a small organization established to oppose what they deemed an arrogant, overspending, out-of-touch Washington establishment—the IRS requested, Strassel reveals, “the names and Social Security numbers of every person who had ever donated their money or time to SFVP.”

The IRS conspiracy to drive conservatives from the political arena, the impact of which on the 2012 presidential election may have been decisive, was part of a multi-front offensive. Strassel recounts harrowing tale after tale of private citizens, nonprofits, corporations, and elected officials caught in the maws of a “vast and orchestrated” campaign to close down speech.

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June 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (12)

Saturday, June 18, 2016

Reactions To Yesterday's NY Times Article On The Human Cost Of The Law School Crisis

NY Times Dealbook (2013)Following up on yesterday's post, NY Times: As Law Grads Seethe With 'Atavistic Rage' At Their Financial Plight, Many Law Schools Confront Stark Choice: Continue To Admit Marginal Students, Or Shut Down:

Paul Campos (Colorado), End Game:

Over the last few years, all but a handful of the most elite law schools have had to engage in some combination of reducing class size, cutting admission standards, and cutting effective tuition (sticker minus discounts). Valpo has done all three. The school cut admissions standards drastically three years ago, with its median LSAT dropping from the school’s historical 150 range to an astonishing 143. The last two entering classes have compiled 50th/25th LSAT percentiles of 145/142 and 145/141. These scores all but guarantee that the school will be unable to come anywhere close to meeting the new ABA requirement that 75% of a school’s graduates who take the bar pass it within two years of graduation. ...

I emphasized to Scheiber that Valpo’s historical journey from a modest but respectable regional law school that didn’t cost much to attend to an institution with something resembling Harvard Law School’s financial structure (minus HLS’s two billion dollar endowment of course) is a completely standard one in the context of American legal education. ...

Here’s the average tuition at private ABA law schools over time: (All figures have been adjusted to constant 2016 dollars):

1956: $4,178
1974: $11,232
1985: $16,803
1995: $26,480
2005: $35,550
2015: $45,123

Stephen Diamond (Santa Clara), New York Times Takes Another Shot at Law Schools and Puts Up an Air Ball:

Apparently Scheiber was not interested in an accurate picture of the costs and benefits of law school. Instead of, for example, examining the standardized data on employment and income exhaustively collected every year by the Bureau of Labor Statistics he consulted with scambloggers who have a variety of vested interests in attacking law schools even when they have been the beneficiary of those same institutions.

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June 18, 2016 in Legal Education | Permalink | Comments (8)

This Week's Ten Most Popular TaxProf Blog Posts

Tax Moves To Make For A Clinton—Or Trump—Presidency

Hillary Trump (2016)Forbes:  Tax Moves To Make For A Clinton—Or Trump—Presidency, by Janet Novack:

Robert Gordon, the president of Twenty-First Securities Corp., is something of a guru when it comes to tax efficient investing. He writes and lectures widely on the topic, and has created the visualization below showing the likelihood of various tax outcomes depending on which political party controls the White House and Congress next year. Despite the uncertainty surrounding the November election, Gordon offers two pieces of specific advice for well off folks seeking to election proof their finances.


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June 18, 2016 in Political News, Tax | Permalink | Comments (0)

Grand Jury Indicts Two Hit Men In Dan Markel's Murder, State Attorney Expects More Indictments; Girlfriend Of Ex-Brother-in-Law Denies Ex-Wife's Family's Involvement

MarkelTallahassee Democrat, Grand Jury Indicts Two in Markel Killing:

After two days of hearing evidence, Leon County grand jurors indicted both Sigfredo Garcia and Luis Rivera on first-degree murder charges in the death of Dan Markel.

Garcia, 33, is in the Leon County Jail and 34-year-old Rivera is housed in a federal prison in Orlando.

State Attorney Willie Meggs said he would move to keep the grand jury as more arrests in the case are expected.

Daily Mail, Girlfriend Defends the Ex-Brother-in-Law of FSU Professor Shot Dead in his Driveway Who Cops Say Is Connected to Execution-Style ‘Murder-for-Hire’:

The wealthy Ft Lauderdale family police suspect of having a motive related to the execution-style killing of a highly respected Florida State University law professor had nothing to do with the murder, according to the live-in girlfriend of a family member.

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June 18, 2016 in Legal Education | Permalink | Comments (5)

The IRS Scandal, Day 1136

IRS Logo 2NPR, Court Documents Show The IRS Focused Scrutiny On Conservative Groups:

Three-year-old allegations of political influence at the Internal Revenue Service are being revived as two House committees move toward punishing the IRS commissioner, John Koskinen.

The House Oversight Committee this week voted on party lines to censure Koskinen. The House Judiciary Committee holds its second hearing next week on whether to impeach him.

"This all started with the IRS using its authorities to target certain conservative groups for their beliefs," Oversight Committee Chairman Jason Chaffetz, R-Utah, said in prepared testimony to the Judiciary panel.

This has been the accusation against the IRS since 2013, when Lois Lerner — head of the office that reviewed applications for tax-exempt status — admitted that the agency put additional scrutiny into the applications for nonprofit tax status of conservative and Tea Party groups.

Since the Supreme Court's 2010 Citizens United decision, politically active nonprofit groups have proliferated. The nonprofit tax status shields such groups from having to disclose donors, but it also requires that at least half of the group's activities focus on nonpolitical, "social welfare" causes.

Republicans allege an organized effort, possibly run by the White House, to aggressively probe and then stall the applications in order to handicap its political opposition. The Treasury Department's inspector general overseeing the IRS found that progressive groups were treated the same way. Democrats blame it all on bureaucratic mistakes, misjudgments and understaffing and say the GOP is on a witch hunt.

Until now, what's been missing is a list of the nonprofit groups that got special scrutiny — a list that presumably would show whether the agency had a political agenda or not.

Now, thanks to filings in a federal lawsuit in Ohio, there is such a list, with 426 names on it. And yes, it's top-heavy with conservative groups. ...

In all, 282 conservative groups were on the IRS list, about two-thirds of the total number of groups that got additional scrutiny. ... Whatever the IRS meant to do, this hodgepodge of a list illustrates how the agency bollixed the nonprofit application process. Now the partisan controversy seems to have knocked the agency out of its enforcer's role as nonprofit groups move deeper into politics.

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June 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 17, 2016

Donald Trump Accused Of Using His Charity As A Political Slush Fund In Violation Of § 501(c)(3)

TrumpDaily Beast, Donald Trump Accused of Using His Charity as a Political Slush Fund:

The Trump Foundation, Donald Trump’s nonprofit organization, is under fire for allegedly operating as more of a political slush fund than a charity. The foundation is accused of violating rules prohibiting it from engaging in politics—prompting ethics watchdogs to call for public investigations.

On numerous occasions this year, Trump’s campaign work and his foundation work have overlapped—putting himself at risk for penalties and his charity at risk of being shut down.

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June 17, 2016 in IRS News, Political News, Tax | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

NY Times:  As Law Grads Seethe With 'Atavistic Rage' At Their Financial Plight, Many Law Schools Confront Stark Choice: Continue To Admit Marginal Students, Or Shut Down

NY Times Dealbook (2013)New York Times Deal Book: An Expensive Law Degree, and No Place to Use It, by Noam Scheiber:

By most measures, John Acosta is a law school success story. He graduated from Valparaiso University Law School — a well-established regional school here in northwestern Indiana — in the top third of his class this past December, a semester ahead of schedule. He passed the bar exam on his first try in February. Mr. Acosta, 39, is also a scrupulous networker who persuaded a former longtime prosecutor to join him in starting a defense and family law firm. ...

Yet in financial terms, there is almost no way for Mr. Acosta to climb out of the crater he dug for himself in law school, when he borrowed over $200,000. The government will eventually forgive the loan — in 25 years — if he’s unable to repay it, as is likely on his small-town lawyer’s salary. But the Internal Revenue Service will treat the forgiven amount as income, leaving him what could easily be a $70,000 tax bill on the eve of retirement, and possibly much higher.

Mr. Acosta is just one of tens of thousands of recent law school graduates caught up in a broad transformation of the legal profession. While demand for other white-collar jobs has rebounded since the recession, law firms and corporations are finding that they can make do with far fewer full-time lawyers than before.

Nationally, the proportion of recent graduates who find work as a lawyer is down 10 percentage points since its peak of the last decade, according to the most recent data. And though the upper end of the profession finally shows some signs of recovering, the middle and lower ranks remain depressed, especially in slower-growth regions like the Rust Belt.

As of this April, fewer than 70 percent of Valparaiso law school graduates from the previous spring were employed and fewer than half were in jobs that required a law license. Only three out of 131 graduates worked in large firms, which tend to pay more generous salaries.

“People are not being helped by going to these schools,” Kyle McEntee, executive director of the advocacy group Law School Transparency, said of Valparaiso and other low-tier law schools. “The debt is really high, bar passage rates are horrendous, employment is horrendous.”

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June 17, 2016 in Legal Education | Permalink | Comments (32)

Why Does The IRS Need So Many Guns?

IRS GunsWall Street Journal op-ed: Why Does the IRS Need Guns?, by Tom Coburn (former U.S. Senator) & Adam Andrzejewski (Founder,

Special agents at the IRS equipped with AR-15 military-style rifles? Health and Human Services “Special Office of Inspector General Agents” being trained by the Army’s Special Forces contractors? The Department of Veterans Affairs arming 3,700 employees?

The number of non-Defense Department federal officers authorized to make arrests and carry firearms (200,000) now exceeds the number of U.S. Marines (182,000). In its escalating arms and ammo stockpiling, this federal arms race is unlike anything in history. Over the last 20 years, the number of these federal officers with arrest-and-firearm authority has nearly tripled to over 200,000 today, from 74,500 in 1996.

What exactly is the Obama administration up to?

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June 17, 2016 in IRS News, Tax | Permalink | Comments (18)

IRS Makes Electronically Filed Form 990 Data Available In Machine-Readable Format

Form 990

IR-2016-87, IRS Makes Electronically Filed Form 990 Data Available in New Format:

The Internal Revenue Service announced that the publicly available data on electronically filed Forms 990 will now be available for the first time in a machine-readable format through Amazon Web Services (AWS). The publicly available data does not include donor information or other personally identifiable information. Today’s launch of this effort marks an important step forward in access to this important public data.

Previously, this Form 990 data was only available in image files.  This data, which includes filings from 2011 to the present, will now be available as an XML file that is downloadable from the web via AWS.

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June 17, 2016 in IRS News, Tax | Permalink | Comments (0)

IRS FAQ On Wrongful Incarceration Tax Exclusion

InnocenceIR-2016-88, IRS Provides Guidelines on How to Claim New Wrongful-Incarceration Exclusion:

The Internal Revenue Service today released guidelines on how wrongfully-incarcerated taxpayers can take advantage of the new retroactive exclusion from income for any civil damages, restitution or other monetary award received in connection with their incarceration [I.R.C. § 139F].

The guidelines are contained in a set of frequently-asked questions, posted today on According to the FAQs, taxpayers who in the past received payments related to their wrongful incarceration and included those payments in taxable income can now file a refund claim for any income tax paid.

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June 17, 2016 in IRS News, Tax | Permalink | Comments (0)

ABA Associate Deans Conference On Adapting To A Changing Landscape

ABAThe 2016 ABA Associate Deans Conference on Adapting to a Changing Landscape continues today at the University of St. Thomas School of Law:

There is little about legal education that is not in transition right now. Associate Deans are all adjusting to similar challenges and opportunities across the nation. How do law schools respond to the new accreditation requirements and innovate in curricular design with decreasing resources? How do law schools educate a changing student population that is also facing increasing student debt loads and a legal job market that looks very different from when you graduated? How are you managing the shifting demands on your academic programs, student services, and faculty research? 

Today's morning plenary session is Managing People, Managing Resources, Managing Teams:

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June 17, 2016 in Conferences, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1135

IRS Logo 2Politico Morning Tax, What’s Next for Koskinen:

The House Oversight Committee cleared its measure to censure IRS Commissioner John Koskinen on Wednesday in a predictably partisan vote. But that action also raised a couple of questions: What’s next? And what’s going on with Koskinen’s pension?

The House Judiciary Committee will hold its hearing next week on standards for impeachment, Oversight Chairman Jason Chaffetz’s preferred avenue for punishing Koskinen over the loss of documents from Lois Lerner — the central figure in the IRS’s improper scrutiny of tea party groups. But Chaffetz also told Morning Tax that he’s not sure whether GOP leaders, who haven’t exactly embraced his efforts to remove Koskinen, will bring up the censure resolution. “I hope they do it sooner rather than later,” Chaffetz said. “Nothing negative, but nothing certain either on dates.”

On the other issue, our Katy O’Donnell notes that the censure resolution says Koskinen “should” lose his pension, while an Oversight release said the vote “requires” that step. And as Katy also notes, the Congressional Research Service has been skeptical that Congress can use a censure to impose a financial penalty on officials outside the legislative branch without it being an unconstitutional bill of attainder. For his part, Chaffetz acknowledged the censure couldn’t on its own claw back Koskinen’s pension. “We’re stating what we believe is the right course of action, that there ought to be some repercussions for losing the trust of the American people,” he told Morning Tax.

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June 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, June 16, 2016

NY Times:  Why The IRS Can't Close The $125 Billion Small Business Tax Gap

IRS Logo 2New York Times, Why the I.R.S. Fails to Crack the Small-Business Tax Nut:

Sizing up the honesty of small-business owners is one of the Internal Revenue Service’s most vexing problems.

The agency estimates that it collects $458 billion a year less in taxes from all Americans than the government is actually due. Most of that “tax gap” is income that goes unreported, and the biggest chunk of it, by far — $125 billion — is individual business income.

Taxpayers in this category, primarily sole proprietors, pay taxes on the money their operations make through their personal returns. Thus, their cash flows can be particularly opaque. ...

The dreaded audit is the main way the I.R.S. catches scofflaws and ferrets out unreported income, but it is a time-consuming and imperfect tool. Short on resources, the agency collected just $7.3 billion from audits last year, its lowest total in 13 years.

What the I.R.S. really wants is for business owners to voluntarily pay more of what they owe. But 63 percent of “low visibility” income, the kind that isn’t captured by outside parties on tax information documents, is not disclosed on tax forms, the agency says.

So for the last four years, the Taxpayer Advocate Service, an independent office within the I.R.S., has been running studies to help it figure out how more small-business owners who pay their taxes can be persuaded to report their earnings more accurately.

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June 16, 2016 in IRS News, Tax | Permalink | Comments (1)

The Best Thing A Young Lawyer Can Do Is Learn Technology

Above the Law:  The Best Thing A Young Lawyer Can Do Is Learn Technology, by Joe Bennion (Estey & Bomberger, San Diego):

Dear Lawyers Who Just Passed the Bar or Are Studying for the Next Bar Exam:

Soon, you’ll find that your advanced knowledge of the elements of the tort of battery and your ability to write as fast as you can without checking any legal authority is not going to do you very much good in the real world.

There are going to be some things you are going to want to do right off the bat. Get a mentor. Join some trade organizations. Learn about office politics. Learn that the best thing you can do in the office is be nice to your secretary. If you want to do things a little bit above your paygrade, learn technology.

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June 16, 2016 in Legal Education | Permalink | Comments (2)

Kysar:  Interpreting Tax Treaties

Rebecca Kysar (Brooklyn), Interpreting Tax Treaties, 101 Iowa L. Rev. 1387 (2016):

The circumstances, if any, that permit non-uniform, or differentiated, treaty interpretation are difficult to define. Generally, a differentiated approach stands in tension with the Vienna Convention’s rules of interpretation, which apply a methodology based on plain meaning to all treaties. Yet courts, states, and scholars widely accept the notion that some treaties warrant special interpretive rules. Thus far, however, efforts to justify differentiated treaty interpretation on the grounds of subject matter or treaty purpose have proven inadequate. A more promising avenue is the examination of the objective characteristics shared within a treaty type. One such characteristic, I argue, is the treaty’s degree of completeness. Specifically, all else being equal, standalone instruments call for less reliance upon extrinsic materials; interstitial instruments demand more.

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June 16, 2016 in Scholarship, Tax | Permalink | Comments (1)

Taylor:  The GRE Is No Law School Diversity Tool

GREAaron N. Taylor (Saint Louis; Director, Law School Survey of Student Engagement), The GRE Is No Diversity Tool:

In February, the University of Arizona College of Law announced that applicants for admission could submit Graduate Record Exam scores, in lieu of scores from the Law School Admission Test. The announcement made waves because for decades LSAT scores have been a requirement for law-school candidates.

The ABA, the primary accreditor of law schools, requires law schools to use a “valid and reliable admission test” to aid in selecting students. However, no particular test is stipulated. Arizona argues that the GRE is as good a predictor for law school success as the LSAT, which may be true.

But what is interesting, and perhaps disingenuous, is the school’s claim that accepting GRE scores will promote student-body diversity “in all its forms.” This is because if the GRE is misused in the same manner as the LSAT, the admissions process will remain inequitable, at the expense of racial, ethnic and socioeconomic diversity.

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June 16, 2016 in Legal Education | Permalink | Comments (1)

Tax Foundation:  Time Spent Filing Taxes Costs Economy $409 Billion/Year

Tax Foundation logoTax Foundation, The Compliance Costs of IRS Regulations:

Key Findings:

  • The growing complexity of the U.S. tax code has led to large compliance costs for households and businesses.
  • Using data from the Office of Information and Regulatory Affairs and the Bureau of Labor Statistics, it is possible to estimate the total cost of tax compliance on the U.S. economy.

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June 16, 2016 in Tax | Permalink | Comments (2)

Wu:  Is Legal Education Bouncing Back?

The Huffington Post:  Is Legal Education Bouncing Back?, by Frank Wu (Former Dean, UC-Hastings):

BounceI have been asked whether I believe the announcements from major law firms that they would increase starting salaries to $180,000 will cause legal education to bounce back. ... My reply, as you might guess, is an emphatic “no.” [Reforming Law Schools: A Manifesto, 46 U. Tol. L. Rev. 417 (2015)]

Bounce back means, I infer, the hope that legal education will return to the pre-recession levels of interest, with record numbers of applicants vying for seats at accredited law schools. Since then, there has been an unprecedented drop, amidst claims that legal education — even higher education more generally — is worthless or some sort of elaborate sham.

The problems have been publicized well enough if hyberbolically. But they are problems plural rather than singular. There is the lack of jobs, specifically those desirable to young people whose expectations have been set by the instant gratification of the internet era; the extraordinary cost of tuition, which typically is debt financed; and concerns over the utility of the skill set that is offered. Fixes for one problem or two problems exacerbate the third problem. For example, the two-year J.D., touted as a panacea (though some schools attempted to charge the same as for the full three-year version), might reduce cost but perforce reduce the training which is received.

A rush of young people into law schools is good for the law schools, to be sure. Whether it is good for the young people is another matter.

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June 16, 2016 in Legal Education | Permalink | Comments (8)

Corporate Clients Push Back Against $180k Starting Salary For First Year BigLaw Associates

$180,000Following up on last week's post, BigLaw First Year Associate Salaries Jump To $180,000 (From $160,000):  Wall Street Journal, Corporate Clients Push Back After Law Firms Hike Starting Salaries:

After Cravath, Swaine & Moore LLP said last week it would boost starting pay for its junior-most lawyers to $180,000, law firms across the country stumbled over themselves to announce salary increases for their own associates.

But now companies are pushing back.

Bank of America Corp.’s top lawyer recently sent an email to a group of law firms calling the increases in associate lawyer pay unjustified, making it clear the bank wouldn’t help firms absorb the cost. ...

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June 16, 2016 in Legal Education | Permalink | Comments (6)

McEntee:  Brooklyn Publishes 'Misleading,' 'Egregious' 92.5% Law Grad Employment Statistic

Brooklyn 2Kyle McEntee (Law School Transparency), Caveat Venditor: Throwback To The Days Of Junk Employment Statistics:

Welcome to the second installment of Caveat Venditor, a series that assesses claims made by law schools to separate truth from fiction. This week we look at Brooklyn Law School’s employment rate of 92.5% posted on its “By The Numbers” infographic. ...

After the continued bad news about the job market for law school graduates, 92.5% looks fantastic to students looking at Brooklyn Law School. It’s therefore worth examining further. ...

The employment rate on the infographic has an asterisk on it. Follow the asterisk to the bottom of the page and there’s a link. At that link, Brooklyn refers to an “adjusted employment rate” and explains the rate in minimal detail. Even with the explanation, however, the figure is misleading.

Indeed, it’s a return to the way things were before the law school transparency movement. Law schools and the ABA maintained a tapestry of fictional statistics that deceived the public. Schools advertised employment rates north of 90 percent without disclosing that its parts were… not what consumers thought. Much of the deception was unintentional because law school administrators were afflicted by the same cultural conditioning that afflicted applicants who saw these statistics and confirmed their perceptions of law school.

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June 16, 2016 in Legal Education | Permalink | Comments (6)

Yin:  A Maritime Lawyer, The Percentage Depletion Allowance, And The Joint Committee on Taxation

George K. Yin (Virginia), A Maritime Lawyer, the Percentage Depletion Allowance, and the Joint Committee on Taxation:

This year marks the 90th anniversary of both the percentage depletion allowance and the Joint Committee on Taxation. This essay relates the curious tale of Norman Beecher, a New York maritime lawyer with little background in energy, natural resources, or tax, who convinced Congress in 1918 to adopt a tax proposal that helped lead to both of these important features of the tax system eight years later.

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June 16, 2016 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1134

IRS Logo 2New York Times, House Panel Recommends Censure of I.R.S. Commissioner:

A polarized House committee on Wednesday recommended that the House censure the commissioner of the Internal Revenue Service, John A. Koskinen, and seek to strip him of his office and his federal pension for “a pattern of conduct” that betrayed the trust of Congress and the public.

Following the House Republicans’ vote in 2012 to hold the attorney general at the time, Eric H. Holder Jr., in contempt of Congress, the action against Mr. Koskinen appeared to show the lengths they would go to pursue Obama administration officials they oppose. Separately they are considering the more severe action of impeaching Mr. Koskinen, a move that has not been taken against a federal executive other than two presidents in 140 years.

Censure by the House would be the first step, supporters say, yet its impact will probably be limited to political symbolism. The Senate, also run by Republicans, is not expected to follow suit, or to support impeachment. It is unclear when the full House might act on the censure resolution, said aides to House Republican leaders, who are unenthusiastic about the effort against the commissioner.

The House Oversight and Government Reform Committee voted 23 to 15 for his censure, with Republicans in support and Democrats opposed, after hours of exchanging condemnation and praise for Mr. Koskinen.

New York Times, Head of I.R.S., Facing Censure, Relishes a Job Few Could Love:

By John A. Koskinen’s reckoning, at nearly 77 years of age he might finally have his best job ever: commissioner of the Internal Revenue Service.

“If it’s a job where the first thing people say is, ‘Why would you do that?’ then it’s got to be a good job,” he said in an interview.

Little could Mr. Koskinen have imagined how “good” the job would get.

[S]ome Republicans say [censure] will just be a prelude to his impeachment. Besides two presidents, no federal executive has been impeached since William W. Belknap, the secretary of war, in 1876.

Meantime, though, thank you for your service. ...

Mr. Koskinen became the nation’s top tax collector in December 2013 to steady an agency rattled by political upheaval, the latest in a string of knotty assignments he has gotten from presidents of both parties. Since then, things have not gone so smoothly. Critics say Mr. Koskinen obstructed justice and misled Congress as House Republicans continued their inquiries into allegations that I.R.S. employees discriminated against conservative groups seeking tax-exempt status in 2010 and beyond — scrutiny that began before Mr. Koskinen’s arrival.

He has denied the allegations and said his testimony about missing agency emails that turned out to be wrong was based on what he believed to be true at the time. Other investigators — including the Treasury’s inspector general, a Republican, and a bipartisan Senate Finance Committee — criticized Mr. Koskinen’s lapses but found no evidence politics played a role. ...

The genial septuagenarian has long enjoyed a sort of behind-the-scenes prominence, well known to Washington insiders and business leaders. He is also well known to fans of soccer and Duke University — his dual passions — and the soccer stadium there, Koskinen Stadium, is named after him. Mr. Koskinen won the prestigious Elliot L. Richardson Prize this year “for excellence and integrity in government service,” timing that suggested the selection panel’s indifference to the well-publicized complaints of congressional Republicans. ...

In Mr. Koskinen’s telling, he does not get hired; he is “dragooned” — he used the word more than once during an interview in a spacious, if drab, office with few personal touches besides family photos and mementos from previous jobs.

“I never apply for jobs — I just keep getting them,” Mr. Koskinen said. “I say I’m going to go into the witness protection program, and they’ll never find me again.”

He has a physics degree from Duke and a law degree from Yale.

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June 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, June 15, 2016

T&E Is Resurgent In BigLaw:  '50% Psychiatrist, 50% Tax Geek'

T&E 2American Lawyer, The Lawyers Behind the 0.1 Percent:

High-end trusts and estates lawyers ... have some of the most fascinating practices in Big Law, with client lists packed with entertainment stars, business moguls, Internet entrepreneurs and reclusive billionaires. While drafting wills, setting up trusts for wayward children, crafting prenuptial agreements for third wives and structuring complex vehicles to reduce taxes, they're privy to the intimate personal and financial details of the lives of the creative and the ultrawealthy. ...

Putting aside the glamour factor, the practice has taken on increasing relevance, with top T&E lawyers on the front lines of one of the most pressing political issues of our time: the shocking wealth disparity in the country. Their typical client sits in the top 0.1 percent of U.S. households, defined as those with more than $20 million in assets. These individuals own 22 percent of the nation's total wealth—roughly the same amount held by the bottom 90 percent, according to Federal Reserve data. These are the lawyers who help ensure that the 0.1 Percent stay comfortably at the top.

With the increasing concentration of riches, some firms are refocusing on these clients. "I know a lot of big firms want to start estate planning practices," says Julie Miraglia Kwon, a T&E partner in McDermott, Will & Emery's Menlo Park office. Noting the number of calls she's received lately from recruiters, she remarks, "Maybe they see headlines about all the wealth."

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June 15, 2016 in Legal Education, Tax | Permalink | Comments (1)

Legal Tech Firm UnitedLex Establishes Residency Program At Seventh Law School (Boston University)

UnitedLex LogoLegal technology services provider UnitedLex has established a legal residency program with Boston University, joining pre-existing programs with Emory, Miami, Notre Dame, Ohio State, USC, and Vanderbilt law schools:

The The two-year program will train recent Boston University School of Law graduates in cutting-edge legal technologies, project management, and delivery processes to provide high-quality, efficient legal services to corporate legal departments and top law firms. Those selected for the residency program each year will receive rigorous classroom instruction provided by senior attorneys, serve in a supervisory capacity for client engagements, and work directly with clients to deliver legal services in key emerging legal areas including: litigation management, e-discovery, cyber security, contract management, patent licensing, IP management, and immigration law. Residents will earn salaries and benefits equivalent to judicial clerkships.

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June 15, 2016 in Legal Education | Permalink | Comments (0)

New Evidence Donald Trump Didn’t Pay Taxes

TrumpThe Daily Beast: New Evidence Donald Trump Didn’t Pay Taxes, by David Cay Johnston:

New questions about the integrity of Donald Trump’s income tax returns, and new indications that he does not pay income taxes, arise from rulings in two tax appeals that Trump filed in the 1990s. Trump lost both cases. ...

These two decisions should prompt new calls for Trump to release his tax returns. He claims, falsely, that he cannot release his returns since 2012 because they are being audited. But a tax return is filed under penalty of perjury and releasing a return has no effect on an audit, as many tax authorities (including a former IRS commissioner) have noted.

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June 15, 2016 in Political News, Tax | Permalink | Comments (5)

WSJ:  Jobs, Salaries Dwindle For Ph.D.s

Wall Street Journal, Job-Seeking Ph.D. Holders Look to Life Outside School:

[A] conversation [is] taking place across dozens of research universities that is aimed at preparing doctoral candidates entering the job market for a jarring reality: Their Ph.D. doesn’t deliver the bang for the buck it once did.

The percentage of new doctorate recipients without jobs or plans for further study climbed to 39% in 2014 from 31% in 2009, according to a National Science Foundation survey released in April. Median salaries for midcareer Ph.D.s working full time fell 6% between 2010 and 2013.


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June 15, 2016 in Legal Education | Permalink | Comments (12)

NYU Call For Papers:  Human Rights And Tax In An Unequal World

NYUCall for Papers: Human Rights and Tax in an Unequal World:

The NYU Center for Human Rights and Global Justice (CHRGJ) invites submissions of scholarly papers for a conference on human rights and tax, to be held at NYU School of Law on September 22-23, 2016. The conference aims to develop a deeper understanding of the ways in which tax policy is a centrally important form of human rights policy, and to consider how the international human rights framework can best be used to promote greater equality and justice through the global tax regime.

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June 15, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

More On Law Firm (And Law School) Tech 'Disruptors'


Following up on yesterday's post, Artificial Intelligence Will Revolutionize Legal Practice (And Legal Education):  Keith Lee has a great series of posts from the 2016 Stanford CodeX Future Law Conference on these "legal disruptors": 

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June 15, 2016 in Legal Education | Permalink | Comments (0)

Boston College Symposium:  The Centennial of the Estate Tax

Boston College (2017)Symposium, The Centennial of the Estate Tax: Perspectives and Recommendations, 57 B.C. L. Rev. 801-1078 (2016):

Keynote Address:  Michael J. Graetz (Columbia), "Death Taxes" and Politics, 57 B.C. L. Rev. 801 (2016)

Panel #1

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June 15, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Harvard Grad Who Flunked Bar Sues Over Loss Of Big-Law Job

WycheNational Law Journal:  Harvard Grad Who Flunked Bar Sues Over Loss of Big-Law Job, by Karen Sloan:

A 2013 Harvard graduate who twice failed the bar exam has sued the New York State Board of Law Examiners, claiming its refusal to provide testing accommodations derailed her career at Ropes & Gray.

Tamara Wyche, who alleges she suffers from anxiety and cognitive impairment, asserts that the board’s decision not to grant all of her requested accommodations the first two times she took the exam led to her termination from the Boston-based law firm. She passed the exam on the third try in 2015 with additional accommodations but hasn’t been able to find work at a large firm, according to the complaint, filed June 10 in the U.S. District Court for the Eastern District of New York. ...

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June 15, 2016 in Legal Education | Permalink | Comments (44)

Tax Foundation:  Modeling The Estate Tax Proposals Of 2016

Tax Foundation:  Modeling the Estate Tax Proposals of 2016, by Alan Cole:

Tax Foundation

Key Findings:

  • Several lawmakers and presidential candidates in 2016 have proposed changes to the federal estate tax. These changes are a worthwhile case study in economic modeling of tax proposals.
  • The estate tax’s marginal rate greatly exceeds its average rate, which makes its disincentives to save relatively strong for the small amount of revenue collected.

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June 15, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)

ABA Proposes Changes To Law School Accreditation Standards

ABA Section on Legal EdABA Section of Legal Education and Admissions to the Bar, ABA Standards for Approval of Law Schools Matters for Notice and Comment (June 14, 2016):

At its meeting held on June 3-4, 2016, the Council of the Section of Legal Education and Admissions to the Bar approved for Notice and Comment the following proposed revisions to the ABA Standards and Rules of Procedure for Approval of Law Schools:

  • Standard 204
  • Standard 303
  • Use of the term “Full-Time Faculty” in the Standards

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June 15, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1133

IRS Logo 2Nonprofit Quarterly: After a 3-Year Wait, IRS Releases List of Groups Targeted in Scandal, by Michael Wyland:

In response to a class action lawsuit, the IRS released a list of 426 organizations it says were singled out for special scrutiny beginning in 2010 in what became known as the IRS scandal. The list is larger than the 298 overwhelmingly conservative groups identified by U.S. Treasury Inspector J. Russell George in his May 2013 report that first brought the scandal to public attention. ...

Most people have lost track of the IRS scandal, and some even deny to this day that there ever was a scandal. Paul Caron, a law Professor at Pepperdine University, is continuing to keep count of the days. (June 7, 2016 is Day 1125.) The House Judiciary Committee is considering the impeachment of IRS Commissioner John Koskinen, but this is widely seen as a partisan exercise by Republicans—even by those who believe others, especially former Exempt Organizations Director Lois Lerner, should be held accountable for their actions in the IRS targeting scandal.

One observation NPQ has made in the past bears restating as the political and judicial processes continue: The public disclosure of much of what we have learned over the past year or more has come as the result of nonprofit advocacy and the access of nonprofit advocates to support from federal courts. Groups such as Judicial Watch and Cause of Action have peppered executive agencies with Freedom of Information Act (FOIA) requests and sued in court when their requests were refused or ignored.  The class action lawsuit is led by the NorCal Tea Party Patriots, a 501(c)(4) social welfare nonprofit and one of the groups targeted by the IRS. Judicial Watch and Cause of Action are also aggressively pursuing other issues associated with political conservatives, including Hillary Clinton’s State Department emails and the Obama administration’s enforcement of immigration laws. There is a developing appearance that nonprofit advocacy groups, with judicial support, are having better success than Congress in investigating the executive branch of the federal government and securing the release of documentary evidence.

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June 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 14, 2016

The ABA Is Auditing Law School Placement Data For The First Time

ABAAuditNational Law Journal: ABA to Audit Law Schools' Job Stats for Accuracy,  by Karen Sloan:

For the first time, the American Bar Association is randomly auditing graduate employment data reported by law schools to ensure its accuracy.

The closer scrutiny of the jobs numbers has been in the works since 2012 but the employment data for the class of 2015, which the ABA made public in May, is the first to be analyzed under the ABA’s new audit procedure.

Students who feel duped by overly rosy employment projections have questioned the veracity of the school-released employment data since at least 2011. The new audit is “intended to promote confidence among the ABA, law schools, law school applicants, and other interested parties that law graduate employment information is complete, accurate, and not misleading,” according to a 2014 ABA memo.

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June 14, 2016 in Legal Education | Permalink | Comments (7)

Avi-Yonah:  Reflections On 'Google Taxes', BEPS, And The DBCT

Reuven Avi-Yonah (Michigan), Three Steps Forward, One Step Back? Reflections on 'Google Taxes', BEPS, and the DBCT:

Since the market is less subject to tax competition pressures than the location of headquarters or production facilities, reducing the PE threshold makes it easier to prevent BEPS. This has recently led some jurisdictions to enact new taxes aimed specifically at structures that seek to exploit the domestic market while avoiding a PE. This article will discuss these taxes in the UK, Australia and India, explore their relationship to the BEPS project, and then consider whether further steps can be taken toward a destination-based corporate tax (DBCT) that will be a permanent cure for BEPS.

June 14, 2016 in Scholarship, Tax | Permalink | Comments (0)

Artificial Intelligence Will Revolutionize Legal Practice (And Legal Education)


Following up on my previous post, BakerHostetler Hires Robot Lawyer 'Ross', Ushers In Legal Jobs Apocalypse:

Deborah J. Merritt (Ohio State), Artificially Intelligent Legal Research:

At least three law firms have now adopted ROSS, an artificial legal intelligence system based on IBM’s pathbreaking Watson technology. The firms include two legal giants, Latham & Watkins and BakerHostetler, along with the Wisconsin firm vonBriesen. Commitments by these firms seem likely to spur interest among their competitors. Watch for ROSS and other forms of legal AI to spread over the next few years.

What is ROSS, what does it do, and what does it mean for lawyers and legal educators? Here are a few preliminary thoughts.

College Fix, Still in Law School? Artificial Intelligence Begins to Take Over Legal Work:

For those thinking of law school, keep in mind that technology may revolutionize the profession before you earn that J.D.

In the research-driven, labor-intensive legal profession, the age-old question of man vs. machine is being answered as some law firms have begun to use an “artificially intelligent attorney” to research and hash out legal issues – a trend that legal minds predict will displace some human lawyers.

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June 14, 2016 in Legal Education | Permalink | Comments (3)

Ryan:  Marital Sharing Of Transfer Tax Exemptions

Kerry A. Ryan (Saint Louis), Marital Sharing of Transfer Tax Exemptions, 57 B.C. L. Rev. ___ (2016):

This Article analyzes portability and its antecedents in order to distill a positive account of marital sharing of transfer tax exemption amounts. Prior to 2010, the estate and gift tax exemption equivalent was a nontransferable, separate tax attribute of each spouse. A spouse could only access his or her spouse’s effective exemption by shifting property into the other spouse’s tax base. With the enactment of portability, Congress decoupled tax-free availability of a spouse’s unified credit from the necessity of a prior intra-spousal transfer. All that is required is an election by the decedent spouse, via the executor, to share the decedent’s unused exemption equivalent with the surviving spouse.

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June 14, 2016 in Scholarship, Tax | Permalink | Comments (0)

Bilionis:  Professional Formation And The Political Economy Of The American Law School

Louis D. Bilionis (Former Dean, Cincinnati), Professional Formation and the Political Economy of the American Law School, 83 Tenn. L. Rev. ___ (2016):

This article proposes that a comprehensive model for doing professional formation in law school is now in sight. The model can work for formation – which is to say that it has the right vision of the fundamentals and the appropriate program features and pedagogies to effectively support students in the development of their professional identities. The model also can work for the political economy of the typical American law school – which is to say that its strategy and approach to roles and resources makes it congenial to postulates about power, resources, work, and governance that shape relations inside the law school.

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June 14, 2016 in Legal Education, Scholarship | Permalink | Comments (0)