TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, May 18, 2016

Law Students' Work Drive Positively Correlates To Their 1L Grades

Jeffrey Minneti (Seattle), Work Drive Matters: An Assessment of the Relationship between Law Students' Work-Related Preferences and Academic Performance, 42 Mitchell Hamline L. Rev. 150 (2016):

This article explores the dimensions of law students' schoolwork-related preferences and discusses an empirical assessment of those preferences. The assessment revealed two findings: (1) a positive correlation between students' schoolwork-related preferences and their first-year law school cumulative grade point average (LGPA); and (2) students' schoolwork-related preferences significantly enhanced the predictive power of the traditional law school success predictors, law students' LSAT performance and their undergraduate cumulative grade point average (UGPA).

Continue reading

May 18, 2016 in Legal Education | Permalink | Comments (1)

Luke Reviews Kahng's Taxation Of Intellectual Capital

Charlene D. Luke (Florida), Illuminating the Dark Matter of Intellectual Capital, 66 Fla. L. Rev. F. 61 (2015):

Professor Lily Kahng’s article, The Taxation of Intellectual Capital, [66 Fla. L. Rev. 2229 (2014),] highlights the distortion contained in the current tax rules governing capitalization. Her article emphasizes that U.S tax law systematically fails to require capitalization for self-created, high-value intangible assets. Professor Kahng’s contribution is to situate the problem in a broader, interdisciplinary context and to use the knowledge gained from that context to suggest specific reforms. In the process, Professor Kahng explores the definitional boundaries of “intellectual capital” and considers potential objections to capitalization of the costs of intellectual capital. As a result, Professor Kahng’s article fosters a richer, contextualized conversation about a significant shortcoming of the tax system.

Continue reading

May 18, 2016 in Scholarship, Tax | Permalink | Comments (0)

It's Official:  'Antonin Scalia Law School At George Mason University'

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, 2016) 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.)

56,012

Reuven Avi-Yonah (Mich.)

10,555

2

Michael Simkovic (S. Hall)

32,036

Michael Simkovic (S. Hall)

4479

3

Paul Caron (Pepperdine)

31,056

D. Dharmapala (Chicago)

3702

4

D. Dharmapala (Chicago)

26,620

Paul Caron (Pepperdine)

2461

5

Louis Kaplow (Harvard)

25,850

Richard Ainsworth (BU)

2366

6

Vic Fleischer (San Diego)

22,306

Jeff Kwall (Loyola-Chicago)

1892

7

James Hines (Michigan)

21,719

Nancy McLaughlin (Utah)

1850

8

Richard Kaplan (Illinois)

21,052

Louis Kaplow (Harvard)

1776

9

Ted Seto (Loyola-L.A.)

20,965

Omri Marian (UC-Irvine)

1759

10

Ed Kleinbard (USC)

19,768

Robert Sitkoff (Harvard)

1747

11

Katie Pratt (Loyola-L.A.)

18,807

Chris Hoyt (UMKC)

1688

12

Richard Ainsworth (BU)

17,814

Dan Shaviro (NYU)

1683

13

Carter Bishop (Suffolk)

16,933

David Weisbach (Chicago)

1670

14

Robert Sitkoff (Harvard)

16,913

Ed Kleinbard (USC)

1595

15

Brad Borden (Brooklyn)

16,799

Brad Borden (Brooklyn)

1575

16

David Weisbach (Chicago)

16,768

Jack Manhire (Texas A&M)

1554

17

Jen Kowal (Loyola-L.A.)

16,521

William Byrnes (Texas A&M)

1545

18

Chris Sanchirico (Penn)

16,385

Vic Fleischer (San Diego)

1482

19

Dennis Ventry (UC-Davis)

16,016

Katie Pratt (Loyola-L.A.)

1428

20

Francine Lipman (UNLV)

15,862

Richard Kaplan (Illinois)

1426

21

Bridget Crawford (Pace)

15,557

Yariv Brauner (Florida)

1387

22

David Walker (BU)

14,988

Steven Bank (UCLA)

1373

23

Dan Shaviro (NYU)

14,791

Chris Sanchirico (Penn)

1306

24

Steven Bank (UCLA)

13,314

Gregg Polsky (N. Carolina)

1273

25

Herwig Schlunk (Vanderbilt)

13,161

Francine Lipman (UNLV)

1246

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.

Continue reading

May 18, 2016 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

WSJ:  Women In Elite Jobs Face Stubborn Pay Gap

WSJWall Street Journal, Women in Elite Jobs Face Stubborn Pay Gap:

On average, American women earn less than their male peers. Highly educated women fare worst of all.

A Wall Street Journal examination of pay in 446 major occupations found that women in many elite jobs earn well below men, with professions such as doctors, compensation managers and personal financial advisers among those showing the widest earnings gaps.

Male doctors working full time earned about $210,000 annually on average for the five years through 2014, the Journal’s analysis of Census Bureau data found. Female physicians made 64% of that, about $135,000 a year. Among personal financial advisers, men took in about $100,000 while women made about $62,000.

Many white-collar jobs give substantially larger financial rewards to those logging the longest hours and who job-hop often, phenomena that limit white-collar women who pull back for child-rearing. Researchers on the topic say ingrained workplace cultures also impede women’s earnings.

The gender pay gap has become a big issue in corporate boardrooms, state capitols and the 2016 presidential campaign. Executives and policy makers are weighing ways to bridge it, with ideas such as limiting employers from asking about salary histories and attempting to create “wage transparency” by requiring employers to report salary data.

Continue reading

May 18, 2016 in Legal Education | Permalink | Comments (0)

Are We Ready To Raise Taxes On The Rich? History Says No.

Taxing the RichWashington Post op-ed:  Are We Ready to Raise Taxes on the Rich? History Says No., by Kenneth F. Scheve (Stanford) & David Stasavage (NYU):

Economic inequality is high and rising. At the same time, many governments are struggling to balance budgets while maintaining spending for popular programs.

That’s prompted some presidential candidates to argue it’s time to raise taxes on the rich. Bernie Sanders is leading the charge and would create a new top income tax rate of 54.2 percent, up from the current 39.6 percent. Hillary Clinton would institute the so-called “Buffett rule” to require individuals with adjusted gross incomes of more than $1 million to pay an effective rate of at least 30 percent, and she’d add a new 4 percent surcharge on anyone who pulls in $5 million or more.

As White House aspirants, other politicians and voters debate whether it’s time to once again soak the rich to spread their wealth around, it’s helpful to consider what prompted past governments — ours and others — to raise their taxes.

We investigated tax debates and policies in 20 countries from 1800 to the present for our new book, Taxing the Rich: A History of Fiscal Fairness in the United States and Europe [Princeton University Press, 2016] [blogged here]. Our research shows that it is changes in beliefs about fairness — and not economic inequality or the need for revenue alone — that have driven the major variations in taxes on high incomes and wealth over the past two centuries.

Continue reading

May 18, 2016 in Book Club, Political News, Scholarship, Tax | Permalink | Comments (1)

NLJ:  Law Grad Employment Rates Up, But Class Size Is Smaller

National Law Journal (2016)National Law Journal, Law Grad Employment Rates Up, But Class Size Is Smaller:

The latest law school graduate employment data from the American Bar Association show mixed results for the class of 2015.

A slightly higher percentage of graduates landed in long-term, full-time jobs that require bar passage 10 months after graduation: 59.3 percent had such jobs, compared with 57.9 percent for the previous class. But the overall number of those gold-standard law jobs declined by nearly 1,700 year-over-year. In short, the employment rate went up because of the 9 percent decline in the number of new law graduates, not because of growth in the market for new lawyers.

Continue reading

May 18, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1105

IRS Logo 2Washington Post, Impeachment Hearings Are Latest Victory in Conservative War on IRS:

The House Judiciary Committee’s decision to hold hearings a week from today on whether to impeach IRS Commissioner John Koskinen is a victory for the chamber’s far-right caucus, still smarting over the agency’s treatment of conservative groups.

Over five years, House Republicans have slashed the IRS budget, passed bills banning employee bonuses and prohibiting employees fired for misconduct from getting rehired. The GOP has vowed to simplify the tax code, pounced on agency management failures and assailed customer service breakdowns caused by the budget cuts.

And last week, anti-IRS lawmakers persuaded previously hesitant House leaders to start the unusual process of removing the tax collector from office.

One of the biggest questions now is whether the 76-year-old tax commissioner will show up for the grilling. IRS officials said Monday they have made no decision on whether Koskinen will accept the Judiciary Committee’s invitation to appear May 24 and at a hearing in June.

Daily Kos, Republicans Move to Impeach Head of Government Agency for First Time Since 1876:

Suppose you hate taxes. And government. You could try to pass bills that cut taxes, scale back government … in short, do the things the extreme right Freedom Caucus says they want. Or you might simply make it impossible for the government to collect taxes by maneuvering to cripple the agency in charge, which is the approach conservatives radicals have actually taken.

The House Judiciary Committee’s decision to hold hearings a week from today on whether to impeach IRS Commissioner John Koskinen is a victory for the chamber’s far-right caucus, still smarting over the agency’s treatment of conservative groups.

The agency’s treatment of conservative groups. Which turned out to be pretty much the agency’s treatment of every sort of group. It was just that so many groups emerged from the tea party chaos, and so many of them blatantly did not know the difference between what was acceptable in a tax-exempt organization and what was not, that a high number of them became regulatory road kill.

But conservatives have never believed they have to play by the rules, and this scandal-that-wasn’t serves as sufficient pretext to carry on the teahad. ...

Oh, but do mark this down as a historic moment. It’s the first time anyone has tried to impeach the head of a government agency since the Grant administration. ... The real purpose of trying to impeach IRS Commissioner John Koskinen is to give the extremists in the GOP a distraction to talk about when they climb on the stage at rallies between now and November. The chances that they would actually remove Koskinen, who is set to leave in 2017 in any case, are somewhere between extremely slim and laughable. But he provides a demon to rail against. And his name isn’t Donald.

Continue reading

May 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Tuesday, May 17, 2016

BakerHostetler Hires Robot Lawyer 'Ross', Ushers In Legal Jobs Apocalypse

ROSS
Built on Top of Watson, IBM's Cognitive Computer

Sputnik News, Law School Scam? $200,000 in Student Debt, Replaced by Job-Killing Robot:

Law school, the default location for America’s brightest unemployed Liberal Arts graduates and the worst decision a 20-something can make in the modern era just became an even worse bargain, if that’s possible. ...

The world’s first "artificial-intelligence attorney," touted as the newest member of white-shoe law firm BakerHostetler, threatens to spark a job-killing trend in a vocation where career prospects already frighten a terrorized workforce.

Continue reading

May 17, 2016 in Legal Education | Permalink | Comments (14)

Papers From The 2015 IRS-TPC Research Conference: Improving Tax Administration Through Research-Driven Efficiencies

TPCIRSThe IRS has released the papers from the 2015 IRS-TPC Research Conference: Improving Tax Administration Through Research-Driven Efficiencies:

2015 IRS Research Bulletin

Foreword

1. Innovative Methods for Improving Resource Allocation

Continue reading

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

Gold:  Reducing The Cost Of Legal Education — We Either Hang Together Or Hang Separately

HangVictor James Gold (Former Dean, Loyola-L.A.), Reducing the Cost of Legal Education: The Profession Hangs Together or Hangs Separately, 66 Syracuse L. Rev. ___ (2016):

Is a legal education worth the cost? Until just a few years ago, there was little doubt that the answer was yes. The recession that began in 2007 changed everything. The job market for entry-level lawyers suddenly collapsed. With tuition high and job prospects low, many concluded that legal education was a bad investment. This essay documents the challenges confronting legal education and advises law schools to meet those challenges by reducing the cost of a JD degree. But forces within the legal profession itself make it unnecessarily difficult to follow this advice.

Continue reading

May 17, 2016 in Legal Education, Scholarship | Permalink | Comments (5)

Why Foreign Buyers Are Snapping Up U.S. Companies: Our Tax Code

Wall Street Journal op-ed:  Why Foreign Buyers Are Snapping Up U.S. Companies, by James Carter & Ernest Christian

No matter who is elected president in November, fixing America’s broken tax code should be a high priority. Laying the groundwork for tax reform, the House Ways and Means Committee recently held a hearing inviting “proposals for improvements to the U.S. tax system.” Here’s one that should head the list: Bring U.S. corporate taxes in line with the rest of the developed world.

Continue reading

May 17, 2016 in Tax | Permalink | Comments (2)

Elsevier Acquires SSRN

ESSRNPress Release, Elsevier Acquires the Social Science Research Network (SSRN), the Leading Social Science and Humanities Repository and Online Community:

Elsevier, a world-leading provider of scientific, technical and medical information products and services, announced today the acquisition of the Social Science Research Network (SSRN). Founded in 1994, SSRN is a Rochester, NY-based scholarly research preprint repository and online community. SSRN will be further developed alongside Mendeley, a London-based free reference manager and scholarly collaboration network owned by Elsevier.

Continue reading

May 17, 2016 in Legal Education, Scholarship | Permalink | Comments (1)

Senate Holds Hearing Today On Integrating The Corporate And Individual Tax Systems

Senate LogoThe Senate Finance Committee holds a hearing today on Integrating the Corporate and Individual Tax Systems: The Dividends Paid Deduction Considered:

  • Michael J. Graetz (Columbia)
  • Judy A. Miller (American Society of Pension Professionals & Actuaries)
  • Steven M. Rosenthal (Tax Policy Center)
  • Bret Wells (Houston)

In connection with the hearing:

Michael J. Graetz (Columbia) & Alvin C. Warren, Jr. (Harvard) have published Integration of Corporate and Shareholder Taxes, 69 Nat'l Tax J. ___ (2016):

Integration of the corporate and individual income taxes can be achieved by providing shareholders a credit for corporate taxes paid with respect to corporate earnings distributed as dividends. When such integration was previously considered in the U.S., proponents emphasized that it could reduce or eliminate many of the familiar distortions of a classical corporate income tax. Integration would also provide a framework for addressing current concerns for tax incentives for U.S. companies to shift income to foreign affiliates in lower-taxed countries or to expatriate in "inversion" transactions. A recent Congressional proposal for a corporate dividend deduction coupled with withholding on dividends could achieve equivalent results, while also reducing effective U.S. corporate tax rates.

Steven M. Rosenthal & Lydia S. Austin (Tax Policy Center) have published The Dwindling Taxable Share of U.S. Corporate Stock, 151 Tax Notes 923 (May 16, 2016):

Continue reading

May 17, 2016 in Congressional News, Tax | Permalink | Comments (0)

Merritt:  The Never-Ending Law School Crisis

Deborah Jones Merritt (Ohio State), The Crisis That Wouldn’t End:

The crisis in legal education was supposed to be over by now. The recession, after all, ended in June 2009. Even allowing for a slow recovery, legal educators predicted that JD hiring would be robust by this point. When applications fell and schools cut class sizes, educators hoped for a recovery bonus: An improved job market, combined with smaller graduating classes, would boost placement rates and attract applicants back to law school. Meanwhile, some projected, the economy would suffer a lawyer shortage.

Things haven’t worked out that way. As the ABA employment report for the Class of 2015 shows, JD employment remains depressed–and there is some evidence of a downward trend. In this post, I explain why law schools need to take this news very seriously. ...

What Does the Future Hold?

Continue reading

May 17, 2016 in Legal Education | Permalink | Comments (9)

Coalition For Tax Competition Call On Congress To Eliminate Funding For OECD Due To BEPS Targeting Of American Corporations

BEPSThe Coalition for Tax Competition has sent this letter calling on Congress to stop funding the Organization for Economic Cooperation and Development (OECD) on the ground that its Base Erosion and Profit Shifting (BEPS) project is undermining American interests:

With release of the final reports on Base Erosion and Profit Shifting (BEPS), there can be no doubt that the Organization for Economic Cooperation and Development (OECD) is no friend to the United States. For this reason it should no longer be subsidized by American taxpayers.

Continue reading

May 17, 2016 in Congressional News, Tax | Permalink | Comments (3)

Northwestern Adopts New Curriculum To Prepare Law Grads To Thrive In Technology-Driven Economy

Northwestern (2016)Northwestern Press Release, New Curriculum to Address Technologically Driven Economy:

Two significant curricular additions, designed to help graduates succeed in the technologically driven global economy, were recently approved by Northwestern Pritzker School of Law faculty:

  • The Technology, Innovation, and Entrepreneurship Concentration will expose JD students to the issues that drive the innovation process and to the role of technology in the modern economy.
  • The Innovation Lab will focus on the legal, business, technical, teamwork, design, and presentation skills involved in the innovation process and allow students to put those skills to work in designing a commercial product that will solve a legal problem. 

Together these curricular initiatives will expand and enhance the Law School’s ability to prepare graduates to navigate complex legal issues related to innovation, to gain exposure to evolving legal practice technologies, and to develop an entrepreneurial mindset. ...

Continue reading

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

The IRS Scandal, Day 1104

IRS Logo 2Wall Street Journal editorial:  The IRS’s Donor Lists: Congress Should Keep the Names of Donors Out of Tax Returns:

Democratic Attorneys General in California and New York have been trying to get their hands on donor information in the tax returns of nonprofit groups. Their disclosure demands were recently shot down in a California federal court, but the better question may be why the IRS is even collecting the info.

Under the Tax Reform Act of 1969, 501(c) groups are required to file Form 990 Schedule B that lists the sources of donations of more than $5,000 in the previous calendar year. The lists are supposed to remain private, but this is the government we’re talking about. The National Organization for Marriage’s donor list leaked to the Human Rights Campaign in 2012, and the state of California recently posted some 1,400 Schedule Bs on Attorney General Kamala Harris’s public website, though they were quickly taken down.

Sloppy handling of data that includes home addresses threatens donors with potential harassment. In his April order in AFPF v. Harris, the case challenging Ms. Harris’s appeal to see unredacted donor information from nonprofits, federal Judge Manuel Real noted that the disclosures included donors for Planned Parenthood of California. “An investigator for the Attorney General,” Judge Real wrote, “admitted that ‘posting that kind of information publicly could be very damaging to Planned Parenthood.’”

That goes across the political spectrum, which may be why IRS head John Koskinen and Director of Exempt Organizations Tamera Ripperda have said even the IRS is debating whether the information is necessary for tax enforcement.

Meanwhile, Illinois Republican Peter Roskam’s bill to stop the IRS from collecting donor details of tax-exempt groups passed the Ways and Means Committee in late April. Progressive groups, such as Democracy 21 and Public Citizen, say Schedules Bs are important to protect against foreign donations to tax-exempt groups.

But dropping Schedule Bs wouldn’t change the law. There is no ban on foreign contributions to tax-exempt outfits—see the Clinton Foundation—but there is a blanket ban on foreign money being spent to influence U.S. elections. Audits can determine if foreign contributions are being channeled into politics. Lawbreakers trying to skirt election laws aren’t disclosing improper donations on tax returns in any case.

The real progressive interest in donor disclosure is to use the information as a political weapon. Leaked selectively, donor lists suppress the speech of political rivals. Mr. Roskam’s bill is worth moving to the House floor.

Continue reading

May 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, May 16, 2016

State Audit Rips California Bar For Shady Finances, Bloated Salaries

California State BarCalifornia State Auditor, The State Bar of California: Its Lack of Transparency Has Undermined Its Communications With Decision Makers and Stakeholders (May 12, 2016):

As required by Business and Professions Code section 6145, the California State Auditor presents this audit report concerning the State Bar of California’s (State Bar) financial operations and management practices. This report concludes that the State Bar’s financial-related reports lacked transparency and contained errors, limiting stakeholders’ ability to understand the State Bar’s operations and the Legislature’s ability to ensure the appropriateness of the State Bar’s fees.m

Continue reading

May 16, 2016 | Permalink | Comments (2)

Johnson Controls Shifts Tax Gears, Will Structure Spin-Off Of Auto Parts Business As Taxable Dividend But New London Company Will Be Taxed At Lower Rate

JCTFollowing up on my previous post, Johnson Controls To Renounce U.S. Corporate Citizenship In Tax-Driven Inversion With Tyco:  Wall Street Journal, Johnson Controls Merger Will Give Its Spinoff a U.K. Home; Filing Reveals Adient Shares “Will Be Treated as a Taxable Dividend” for Recipients:

When Johnson Controls spins off its big auto-parts business in October, shareholders won’t get the tax breaks they expected. Instead, they receive something that might be even better: a company with a London address and even lower taxes.

Milwaukee-based Johnson Controls recently disclosed in a regulatory filing that the auto-parts company, which will be known as Adient, will be based in London, and shares in the new company “will be treated as a taxable dividend” for recipients.

Continue reading

May 16, 2016 in Tax | Permalink | Comments (1)

The Ridiculous Controversy Over Changing The Name Of George Mason Law School

Scalia 2The Volokh Conspiracy:  On the Ridiculous Controversy Over Changing the Name of the George Mason University School of Law, by Jonathan H. Adler (Case Western):

A group of GMU faculty (from outside the law school) have objected to the name change and pushed for a Faculty Senate resolution opposing the move, over the objections of law school faculty, allegedly in the name of tolerance and academic freedom.

Naming gifts are common in academia, and no one bats an eye when a school is named after a donor or a progressive icon. There’s no controversy over the renaming of the Pace University School of Law after liberal philanthropist and environmentalist Elisabeth Haub, and I can’t recall any objection to naming a law school after the jurist who infamously filed an amicus brief cataloging social science research purporting to show women are weaker than men. But naming a school after one of the most important and consequential jurists of the past century is apparently a bridge too far for some on the leftist fringe.

Continue reading

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

Tennessee Man Convicted In Romney Tax Return Fraud And Extortion Scheme

Romney

Following up on my previous post, Report: Hackers Stole Mitt Romney's Tax Returns From PwC, Demand Ransom Payment: Department of Justice Press Release, Tennessee Man Convicted for Romney Tax Return Fraud and Extortion Scheme:

Michael Mancil Brown was found guilty late yesterday by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the U.S. Attorney’s Office for the Middle District of Tennessee and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office.

Continue reading

May 16, 2016 in Tax | Permalink | Comments (0)

The Counterintuitive Costs And Benefits Of Clinical Legal Education

Wisconsin LogoFollowing up on my previous post, Wisconsin Law Review Debate: Does Experiential Learning Improve J.D. Employment Outcomes?Richard E. Redding (Vice Chancellor for Graduate Education and Professor of Law, Chapman), The Counterintuitive Costs and Benefits of Clinical Legal Education, 2016 Wis. L. Rev. Forward 55:

Professor Jason Yackee’s recent study, Does Experiential Learning Improve JD Employment Outcomes?, finding no relationship between a schools’ clinical offerings and student employment outcomes was greeted with skepticism by the clinical legal education (hereinafter “CLE”) community. If we may tentatively conclude from the study that clinical courses fail to give students any significant leg-up in the job market, then perhaps CLE entails some counterintuitive pedagogical costs and benefits that we ought to consider. Could it come at the expense of what is nowadays often touted as being precisely its goal, which is to equip students with practice-ready skills?

Continue reading

May 16, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

Graetz:  'Death Tax' Politics

BCACTEC 2Michael J. Graetz (Columbia), 'Death Tax' Politics, 57 B.C. L. Rev. ___ (2016):

In his Keynote Address 'Death Tax' Politics at the October 2, 2015 Boston College Law School and American College of Trust and Estate Counsel Symposium, The Centennial of the Estate and Gift Tax: Perspectives and Recommendations, Michael Graetz describes the fight over the repeal of the estate tax and its current diminished state. Graetz argues that the political battle over the repeal of the estate tax reflects a fundamental challenge to our nation’s progressive tax system.

Continue reading

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

Teaching With Judge Bork in Mind: The Best Teachers Are Driven By Love For Their Subject

BorkWall Street Journal op-ed:  Teaching With Judge Bork in Mind: The Best Teachers Are Driven by Love for the Subject They Teach, by Helaine L. Smith:

The current wrangling over a Supreme Court nomination calls to mind Robert H. Bork’s reply when he was asked at his confirmation hearing in 1987: Why do you want to be on the Supreme Court? He responded, “Because it would be an intellectual feast.” For that he was roundly condemned as heartless by his enemies and politically naïve by his friends.

I thought his answer was perfect. It revealed someone of honesty and intellectual integrity, someone who would have been the best of justices. Or perhaps I was only projecting, because I knew that had anyone ever asked me why I teach, I would have answered the same way.

Continue reading

May 16, 2016 in Legal Education | Permalink | Comments (3)

Chorvat:  Corporate Equities As Lotteries—Skewness And The Tax Preference For Corporate Debt

Terrence R. Chorvat (George Mason), Corporate Equities as Lotteries: Skewness and the Tax Preference for Corporate Debt:

The tax preference for interest payments by corporations as compared to dividend payments is a long surviving feature of many tax systems. Many have argued that there is no reason for this preference and so it distorts the capital structure of corporations needlessly. This article argues that because the returns to equity are more positively skewed as compared to debt, individual investors will tend to value equity more than they would value it given only its mean and variance characteristics.

Continue reading

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

The IRS Scandal, Day 1103

IRS Logo 2Wall Street Journal: Donald Trump’s Amazon Adventure, by Holman W. Jenkins, Jr.:

You might get some argument about exactly how illegal it is for politicians to use their law-enforcement powers to punish their political opponents.

But at least when Nixon sought to, he felt obliged to do so by secret memorandum. As keeper of the enemies list John Dean wrote, “This memorandum addresses the matter of how we can maximize the fact of our incumbency in dealing with persons known to be active in their opposition to our Administration; stated a bit more bluntly—how we can use the available federal machinery to screw our political enemies.”

As it happened, however, the IRS commissioner at the time, Donald Alexander, refused orders to carry out tax audits of the Nixon White House’s political enemies.

Today, nobody, not even his worst critics, expects to find a memo from President Obama instructing Lois Lerner at IRS to stonewall applications from conservative political groups for tax-exempt status.

His critics probably don’t even expect Mr. Obama to have muttered under his breath that such a thing would be desirable. Rather, Ms. Lerner, all on her own, seemingly decided as a loyal Democratic and ideological warrior that it would be a good thing to use her agency to hamper the president’s partisan antagonists. ...

Donald Trump, an innovator in all things, is now in the process of changing the rules in America with his threat to bring legal action against Amazon on antitrust grounds and, if we hear him correctly, on tax grounds as well.

Mr. Trump couldn’t have been clearer about his motivation. He complained about Washington Post reporters calling up and “asking ridiculous questions,” “all false stuff,” apparently related to Mr. Trump’s tax returns, which in defiance of all tradition he has refused to release, as well as Mr. Trump’s real-estate dealings.

Mr. Trump says the Post was purchased as “a toy” by Amazon founder Jeff Bezos (who bought the paper with his personal funds in 2013). Mr. Trump says the paper now is being used to attack Mr. Trump in order to protect Amazon’s alleged tax-dodging practices even though Amazon, after long resistance, has begun in recent years to collect state sales tax.

All this seems to arise because the Post, the dominant newspaper in the nation’s capital, has assigned reporters to investigate the business career of the candidate who champions his credibility to be president by referring to his business career. ...

Mr. Trump knows U.S. political culture well enough to know that gleefully, uninhibitedly threatening to use government’s law-enforcement powers to attack news reporters and political opponents just isn’t done.

Maybe he thinks he can get away with it. Maybe he’s trying to figure out how to disqualify himself for the presidency in a way that wouldn’t embarrass his fans or blow back on the business career that he always imagined he’d be returning to after the Republican convention at the latest. After all, one way to throw an election is to scare off donors (he needs about a billion dollars) by flaunting his inner Nixon.

Or maybe he really does want to be the American caudillo who flings American democratic and legal norms out the window and ushers in a new age of populist authoritarianism.

Continue reading

May 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

TaxProf Blog Weekend Roundup

Sunday, May 15, 2016

Why Are There So Few Conservative/Libertarian Law Profs, Even Though They Are More Productive Scholars Than Liberal Law Profs?

James Cleith Phillips (Ph.D. Candidate, UC-Berkeley), Why are There So Few Conservatives and Libertarians in Legal Academia? An Empirical Exploration of Three Hypotheses, 39 Harv. J.L. & Pub. Pol'y 153 (2016):

There are few conservatives and libertarians in legal academia.

Graph 3

Why? Three explanations are usually provided: the Brainpower, Interest, and Greed Hypotheses. Alternatively, it could be because of Discrimination. This paper explores these possibilities by looking at citation and publication rates by law professors at the 16 highest-ranked law schools in the country. Using regression analysis, propensity score matching, propensity score reweighting, nearest neighbor matching, and coarsened exact matching, this paper finds that after taking into account traditional correlates of scholarly ability, conservative and libertarian law professors are cited more and publish more than their peers.

 

Continue reading

May 15, 2016 in Legal Education, Scholarship | Permalink | Comments (2)

Larry Summers, Robert Rubin And The President's Authority To Tax Carried Interest As Ordinary Income

Following up on yesterday's post, The President's Authority To Unilaterally Raise Taxes

Business Insider, Larry Summers Just Threw Epic Shade About Tax Breaks Right in a Private-Equity CEO's Face:

On Wednesday morning, at the SkyBridge Alternatives hedge fund conference, Carlyle Group co-CEO David Rubenstein interviewed [former Treasury Secretary Larry] Summers alongside his Clinton administration colleague, Robert Rubin.

But at one point, Summers turned the tables on Rubenstein, with an assist from Rubin.

The interviewees noted that Rubenstein could teach the audience some lessons on influencing government, given his surprisingly successful record of fighting to retain the "carried interest" tax loophole, which gives private-equity and hedge fund managers a tax preference on their performance fees.

"Rarely has a policy existed so long with such weak arguments in its favor," said Summers, in backhanded praise of Rubenstein's lobbying skill. "It's the First Amendment, the Second Amendment, and carried interest, right?"

"Not necessarily in that order," Rubin added.

Rubenstein replied that, if Summers and Rubin thought the tax preference for carried interest was such bad policy, then they could have used executive action to eliminate it when they served in the Treasury Department.

"Not sure it works like that," Rubin replied.

He's right: You would need legislation to close the loophole, and that legislation has been stalled by private-equity-friendly members of Congress.

David Hemel (Chicago), Two-and-Twenty and Fifty-Fifty:

Continue reading

May 15, 2016 in Tax | Permalink | Comments (1)

When You Are Called To Your Life's Work

Oxford 4Wall Street Journal, When You’re Called to Your Life’s Work:

Callings come in many ways, some unexpected. ... A chance encounter with an elderly homeless man led physician Lara Weinstein to her work treating marginal populations. “It was almost like a transcendental experience,” says Dr. Weinstein, a family doctor in Philadelphia.

Such events are more prevalent than one might expect. A 2006 Gallup poll of 1,004 adults, the most recent it has done on the subject, found that 33% of Americans said the following statement “applies completely” to them: “I have had a profound religious experience or awakening that changed the direction of my life.”

The experiences vary. A revelation, directive or message comes unexpectedly. A series of unlikely synchronistic events occur. Some people sense a divine presence, and others feel deeply connected to something larger than themselves, be it nature or others around them, and pursue more altruistic work.

People of all ages and faiths, agnostics and atheists, have such experiences, yet they rarely talk about them. They’re concerned others will dismiss them as delusional or won’t take them seriously. Sometimes words fall short of conveying the intensity of what they felt.

Some scientists and scholars are beginning to pay attention, says Lisa Miller, director of clinical psychology at Columbia University and editor of The Oxford Handbook of Psychology and Spirituality, published in 2012, which includes chapters written by quantum physicists and other scientists.

Continue reading

May 15, 2016 in Book Club, Legal Education | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

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

  1. [863 Downloads]  Lexisnexis® Guide to FATCA Compliance: Chapter 1, by Willliam Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  2. [352 Downloads]  Ownership of the Means of Production, by E. Glen Weyl (Chicago) & Anthony Lee Zhang (Stanford)
  3. [319 Downloads]  The Panama Papers and Tax Morality, by Usman W. Chohan (University of New South Wales)
  4. [205 Downloads]  Google's 'Alphabet Soup' in Delaware, by Bret Bogenschneider (Vienna) & Ruth Heilmeier (Cologne)
  5. [157 Downloads]  New Prominence Of Tax Basis In Estate Planning, by Paul L. Caron (Pepperdine) & Jay A. Soled (Rutgers)

May 15, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Big Law Women Talk About Abortion (Their Own)

PhotoAmerican Lawyer, Big Law Women Talk About Abortion (Their Own):

Most lawyers I know are a bit uptight. They don't usually reveal too much information, particularly  if it might cast them in a negative or controversial light. They don't even like to admit to having a cold, lest their professional armor appears tarnished.

Why, then, would lawyers working at major law firms, the epitome of corporate discretion, go public about their own abortions? Weren't they worried about the reaction of clients and colleagues? Did their firms try to stop them? Or is abortion not a controversial subject in the world of elite law firms?

I've been curious about those questions since Tony Mauro of The National Law Journal reported that some 113 female lawyers signed an amicus brief to the Supreme Court challenging Texas's restrictions on abortion clinics. (The high court is expected to rule on the case this summer.) The brief was powerful, both as narrative and symbol. There were personal anecdotes about the women's abortions, though they were not identified with the individual signers. 

I tracked down three of the signers from Big Law to see what possessed them to go public about such a private matter, and how it's affected their career thus far.

Continue reading

May 15, 2016 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 1102

IRS Logo 2Erick Erickson, House GOP to Consider Impeaching IRS Commissioner. Trump Complicates Things.:

House Republicans are going to consider impeaching the IRS Commissioner, Commissioner John Koskinen. The IRS is accused of targeting conservative groups for harassment. Likewise, the IRS is accused of dragging its feet on giving non-profit status to conservative groups. Based on an inspector general investigation into the IRS and subsequent congressional hearings, the accusations appear legitimate.

Koskinen, as head of the IRS, has not seemed interested in actually dealing with the IRS’s stalling and apparent cover up as the investigations continued. He deserves to be impeached.

Donald Trump, however, neutralizes the GOP’s talking point on the IRS. Just the other day he threatened Jeff Bezos and Amazon, suggesting Trump would support internet taxation to hurt Amazon, among other things, because of the Washington Post’s investigative reporters looking into Trump.

If the GOP has a candidate who implies or directly suggests he might use the government against his opponents, it will be really hard for them to distinguish what the IRS did from what their own Presidential nominee wants to do.

Continue reading

May 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Saturday, May 14, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Lindgren:  The Most Under-Represented Groups In Law Teaching Are Whites, Christians, Republicans, Males

James Lindgren (Northwestern), Measuring Diversity: Law Faculties in 1997 and 2013, 39 Harv. J.L. & Pub. Pol'y 89 (2016):

This article is the first careful look at the demographic makeup of law faculties compared to the larger pools of lawyers and the general public. It examines which racial, gender, religious, and political groups were the most under- and overrepresented in 1997 and in 2013 compared to persons of similar ages in larger pools, including the U.S. full-time working population and the U.S. lawyer population.

The data show that in 1997 women and minorities were underrepresented compared to some populations, but Republicans and Christians were usually more underrepresented. For example, by the late 1990s, the proportion of the U.S. population that was neither Republican nor Christian was only 9%, but the majority of law professors (51%) was drawn from that small minority. Further, though women were strongly underrepresented compared to the full-time working population, all of that underrepresentation was among Republican women, who were—and are—almost missing from law teaching.

Table 13
Table 13B

Continue reading

May 14, 2016 in Legal Education, Scholarship | Permalink | Comments (1)

Hemel & Galle:  The President's Authority To Unilaterally Raise Taxes

Following up on Monday's post, Taxing Carried Interest As Ordinary Income Through Executive Action:

Daniel Hemel (Chicago), The President’s Power To Tax Doesn’t Stop at Carried Interest:

No one can predict with complete confidence whether a court would uphold as-yet-unwritten Treasury regulations addressing carried interest, but I agree with Morgenson (and with the tax experts she cites) that such regulations — if written carefully and finalized after notice and comment — quite likely would pass judicial muster. What Morgenson doesn’t mention, though, is that when it comes to tax reform measures that the Obama administration could implement on its own, carried interest is just the tip of the iceberg. President Obama might not be able to make much of a dent in income inequality without legislative action, but he could raise billions of dollars in revenue while addressing some of the most objectionable tax avoidance strategies employed by U.S. corporations and high-net-worth individuals.

In a forthcoming Cornell Law Review article, The President’s Power To Tax, I set out a list of tax reform measures that the Obama administration could accomplish without an act of Congress.

Continue reading

May 14, 2016 in Scholarship, Tax | Permalink | Comments (2)

Harrison:  Law Professor Divas

DivaJeffrey Harrison (Florida), The Diva Tax: Insufferable Diva, BUT He Writes:

I mean he and she divas although I know that is technically incorrect but cut me some slack on this one.

I wrote about this general idea some time ago. The context was whether "character" should be consider a plus among law professors so that it off-sets a lack of productivity. The converse question is harder -- should a low character law professor be cut extra slack if he or she writes or at least is perceived as being productive. ...

Here, I think, would be the conventional thinking. If you do not write enough you will pay for character issues or being a pain in the ass. On the other hand, if you write enough, you pay no price. ... [I]n law school rankings, the bottom line, along with student qualifications and placement, there is image which is often based on writing. So, in a sense, law school administrators do not and should not care about divas unless it affects the writings of others.

Continue reading

May 14, 2016 in Legal Education, Scholarship | Permalink | Comments (2)

Law Firm Revenues Surged In First Quarter

American Lawyer LogoAmerican Lawyer, Citi Report: Law Firm Revenues Surged in First Quarter:

Challenging market conditions belied the strong results, on average, that the legal industry reported in the first quarter of 2016. In the first quarter, revenue grew 5.8 percent, driven by increases in demand and billing rates, as well as a strong collections effort. Further, the industry saw revenue growth outpace expense growth, while inventory growth was solid. Both are positive signs heading into the second quarter. Has the legal industry broken from the pattern of modest growth that defined the post-recession years of 2009-13? Or were the results from the first quarter of 2016 simply fueled by fourth-quarter activity and buoyed by a comparison to the slow start of 2015?   These results are based on a sample of 176 firms (79 Am Law 100 firms, 45 Second Hundred firms and 52 niche/boutique firms). ...

Continue reading

May 14, 2016 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 1101

IRS Logo 2Press Release, House Judiciary Committee to Examine Misconduct by IRS Commissioner:

The House Judiciary Committee today announced that it will hold two full committee hearings to examine misconduct by the Internal Revenue Service (IRS) Commissioner John Koskinen.

At the first hearing, which will take place on Tuesday, May 24 at 10:00 a.m., members of the House Judiciary Committee will hear from a witness panel presenting the findings of the House Oversight and Government Reform Committee’s investigation of IRS Commissioner Koskinen. The House Judiciary Committee will also invite IRS Commissioner Koskinen to testify. The House Oversight and Government Reform Committee has investigated the targeting of conservative groups for several years and many of the Committee’s members have found that Commissioner Koskinen failed to comply with a congressional subpoena which resulted in destruction of key evidence, made false statements during his sworn congressional testimony, and did not notify Congress that Lois Lerner’s emails were missing.

At the second hearing, which will take place in June, members of the House Judiciary Committee will invite outside experts to comment on the findings presented in the first hearing and whether further congressional action is warranted. Witnesses for both hearings will be announced at a later date.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) issued the statement below on the Committee’s upcoming hearings:

The fact that officials at the IRS wielded their power to target certain Americans for their political views is both outrageous and contrary to our nation’s values. Our government is supposed to work for all Americans, not for a particular partisan agenda. As a result of the IRS’ targeting, conservative groups were singled out across the nation, resulting in lengthy paperwork requirements, overly burdensome information requests, and lengthy, unwarranted delays in their applications.

Despite repeated congressional efforts to get to the bottom of this matter, Obama Administration officials, including the IRS Commissioner, have consistently undermined the investigation. Over the coming weeks, the House Judiciary Committee will closely examine Commissioner Koskinen’s misconduct and the implications of his actions.

Continue reading

May 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, May 13, 2016

66 Year Old Law Firm Partner/Lifeguard Wins Age Discrimination Appeal Challenging Requirement That Swim Test Be Taken Wearing A Speedo

LifeguardNew York Law Journal, Lawyer's Age Bias Suit Over Lifeguard Swimwear Is Revived:

A Long Island bankruptcy attorney who lost his job as a summer weekend lifeguard after refusing to sport a Speedo [top photo] for his recertification test will be able to take his age discrimination suit to trial, an appeals court ruled.

Roy Lester [J.D., University of San Diego], 66, the principal at Lester & Associates in Garden City, has worked for decades at Jones Beach State Park, one of the more than 100 beaches supervised by the New York State Office of Parks, Recreation and Historic Preservation.

The state office requires lifeguards to take an annual exam that includes a timed swimming component. Lester said he prefers wearing a "jammer" [bottom photo] a bicycle-short style bathing suit that extends to just above the knees, to get a better time on the test.

But before the start of the 2007 season, the parks office prohibited Lester from taking the test while wearing a jammer rather than a Speedo, which is the state-issued uniform for lifeguards. He was not hired for the season.

Prior to 2007, the parks office did not have restrictions on the type of swimsuit applicants wore to take the test, according to court papers. Lester filed an age discrimination complaint with the Human Rights Division, which was dismissed for lack of evidence.

In 2008, he attempted to take the test for new hires while wearing a jammer, once again refusing to don a Speedo or wear state-approved boxers, briefs or board shorts. He was barred from the test.

Continue reading

May 13, 2016 in Legal Education | Permalink | Comments (3)

Pepperdine 3Ls Receive Two of The Eight Available Merit Scholarships To Attend NYU Graduate Tax Program

PeppNYUCongratulations to Pepperdine 3Ls Brady Cox and David Khanjyan, who will be attending the #1 ranked NYU Graduate Tax Program in 2016-17.  They received two of the eight 50% merit scholarships available from NYU and will be serving as Graduate Editors of the Tax Law Review.  I was fortunate to have both Brady and David in my tax classes, and I can personally attest to their bright tax futures.  I am proud to be part of the tax faculty at Pepperdine that offers a robust tax curriculum to prepare our students for exciting tax careers. 

May 13, 2016 in Legal Education, Tax | Permalink | Comments (1)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

NY Times:  Amidst 33% Enrollment Decline (From 260 1Ls To 174), University Of Minnesota Funds $16 Million Law School Operating Deficit

Minnesota LogoFollowing up on my previous post:  New York Times, Minnesota Law School, Facing Waning Interest, Cuts Admissions:

Resisting the temptation to admit more students to bolster tuition receipts, the University of Minnesota, which has one of the nation’s highly ranked law schools, has gone in the opposite direction. It decided to shrink enrollment, and take in less tuition income, to preserve its national standing as a top law school. It did this even as some argued for broader inclusion of students who would fall outside the school’s admissions parameters.

During Mr. Wippman’s tenure, Minnesota has gradually admitted fewer students, shrinking its first-year class to only 174 in the 2015 academic year from more than 250 a few years ago. It offset the sharp loss in tuition income with more public subsidies, which in Minnesota are decided by a Board of Regents.

Minnesota’s law school has closed its deficits with university money — expected to total $16.1 million through 2018 — according to university officials. ...

Continue reading

May 13, 2016 in Legal Education | Permalink | Comments (20)

NTA 46th Annual Spring Symposium:  Tax Policy At The Crossroads

NTA 2The 46th Annual Spring Symposium on Tax Policy at the Crossroads: What Direction Next? hosted by the National Tax Association and American Tax Policy Institute concludes today in Washington, D.C.:

Panel #1:  Base Erosion and Profit Shifting (BEPS) Project

  • Stephen Shay (Harvard) (organizer & moderator)
  • Kimberly Clausing (Reed)
  • Ruth Mason (Virginia)
  • Victoria Perry (IMF)
  • Robert Stack (U.S. Treasury Department)

Panel #2:  The Economic Consequences of Taxing the Rich

Continue reading

May 13, 2016 in Conferences | Permalink | Comments (1)

George Mason Law Faculty Unanimously Supports Naming Law School After Justice Scalia For $30 Million

Scalia 2The tenured and tenured-track faculty of George Mason University School of Law voted unanimously in favor of a resolution yesterday to support renaming the school after the late Justice Antonin Scalia:

  • Full support by the law school faculty of the renaming of the law school.
  • Recognition of the confidentiality that is normally connected to major gifts.
  • Finds appropriate the minimal conditions placed on the two gifts connected to the renaming of the law school.
  • Condemns ill-informed criticisms of educational programs of the Law & Economics Center by faculty unaffiliated with the Law School.
  • Highlights criticism by the George Mason Faculty Senate as baseless and ideological.
  • Expresses regrets over criticisms to the Scalia family.
  • Praises gratitude to Law School Dean Henry Butler, President Angel Cabrera, the Board of Visitors, and others who were instrumental in bringing these transformative gifts to the Law School as well as to the donors of the two gifts to the Law School.

Continue reading

May 13, 2016 in Legal Education | Permalink | Comments (3)

Pew:  America’s Shrinking Middle Class

Pew Research Center, America’s Shrinking Middle Class: A Close Look at Changes Within Metropolitan Areas:

The American middle class is losing ground in metropolitan areas across the country, affecting communities from Boston to Seattle and from Dallas to Milwaukee. From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. ...

Pew 2A

Pew 1A

Continue reading

May 13, 2016 in Tax, Think Tank Reports | Permalink | Comments (0)