TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Saturday, November 26, 2016

What Would A Libertarian Tax Look Like?

LibertarianJohn R. Dorocak (California State University, San Bernardino), What Would a Libertarian Tax Look Like?, 57 S. Tex. L. Rev. 147 (2015):

Libertarian ideas have been given attention, particularly recently, in academic, judicial, and political areas. Those who have been involved with taxation as practitioners or academicians at some point in time likely wrestle with the question of what should "fair" taxation look like. The goal here is not to discuss all philosophical underpinnings of a tax system, but rather to discuss how libertarians might frame a tax system.

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November 26, 2016 in Scholarship, Tax | Permalink | Comments (4)

The IRS Scandal, Day 1297: The Scorecard

IRS Logo 2Newsmax, IRS Denies Tax Exempt Status to 2 Tea Party Groups — After 7 Years:

After up to 7 years of intentionally delaying their cases, the IRS denied two Tea Party groups tax exempt status while approving one, The Washington Times reports.

The scorecard, published Monday by the Times, shows:

  • 2 denials (Albuquerque Tea Party and Tri Cities Tea Party from Washington).
  • 2 pending, including Texas Patriots Tea Party, part of a class action lawsuit.
  • 1 approval (Unite in Action from Michigan).

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November 26, 2016 | Permalink | Comments (1)

Friday, November 25, 2016

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses the importance of not paying other creditors before you pay payroll taxes to the IRS.

KristanNo good deed goes unpunished if you owe payroll taxes.

IRS>Employees. Pay the payroll taxes to the IRS, no matter who else you have to stiff. That’s the lesson of a sad court case out of Houston last week.

Dr. McClendon ran Family Practice Associates for 20 years. Sometime along the way his CFO started keeping the payroll taxes the practice was supposed to remit to the IRS for himself, until by 2009 $10 million was unpaid. The U.S. District Court Judge takes up the story (my emphasis, citations omitted):

Family Practice stopped operating and remitted its remaining receivables to the IRS to pay toward the tax liability. Dr. McClendon made a $100,000 personal loan to Family Practice “for the restricted purpose of . . . using the funds to pay the May 15, 2009 payroll.” Family Practice used that loan to pay its employees.

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November 25, 2016 in New Cases, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new article by Lily Batchelder (NYU), The “Silver Spoon” Tax: How to Strengthen Wealth Transfer Taxation, in Delivering Equitable Growth: Strategies for the Next Administration (Washington Center for Equitable Growth, Fall 2016).

Glogower (2016)Lily Batchelder’s new work examines the reform options for taxing wealth transfers. 

The argues that that wealth transfer taxes are an essential tool for mitigating economic inequality – as measured by both disparities of wealth, income and other measures of economic well-being, and by disparities of economic opportunity. Wealth transfer taxes are also relatively efficient, since taxpayers save for the purposes of enjoying wealth while they are alive (and the social benefits wealth affords) and for retirement needs, in addition to merely accumulating bequests for future generations. Batchelder argues that wealth transfer taxes may also efficiently counter the decreased work incentive among heirs. 

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November 25, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

The IRS Scandal, Day 1296: Will Koskinen Resign As IRS Commissioner At Trump's Request?

IRS Logo 2Politico Morning Tax, It’s On. Still:

If you thought Donald Trump’s win last week might soften Rep. Jim Jordan’s desire to impeach IRS Commissioner John Koskinen — well, you were wrong.

As our Katy O’Donnell reports, Jordan (R-Ohio), the chairman of the House Freedom Caucus, used the occasion of the IRS denying the Albuquerque Tea Party tax-exempt status to put a jolt into his impeachment efforts. Jordan called that decision just the latest sign that “Koskinen continues in his dereliction of duty. Congress must move forward on impeaching him.”

As Katy also notes, Koskinen isn’t likely to sound daunted by the threat, having noted previously that the votes just don’t seem to be there in the House for impeachment. He’s also said that a federal judge’s recent statement that the IRS might still be improperly singling out tea party groups — which Jordan cited on Monday — was mistaken.

What does it all mean? It’s pretty clear that House GOP leaders really don’t feel the need to tackle impeachment. But Koskinen, who has about a year left on his term, has also suggested that he’d leave if the next president doesn’t want him to lead the agency — which certainly seems like a possibility, at least.

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November 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Thursday, November 24, 2016

Law Profs: Take The Pledge For The Public Good

TakeAlexi Freeman (Denver) & Katie Steefel (Denver), The Pledge for the Public Good: A Student-Led Initiative to Incorporate Morality and Justice in Every Classroom, 22 Wash. & Lee J. C.R. & Soc. Just. 49-106 (2016):

"The first thing I lost in law school was the reason I came." This is the disheartening reality for countless law students. While legal education has made great strides towards diversifying its offerings and expanding its focus over time, the struggle to maintain one's vision and identity, especially if such things connect to the public interest, remains challenging. Some notable exceptions exist, but overall, law schools often still underserve those who are public interest focused and fail to graduate many students who devote themselves to serving the public good.

While the climate at our school is supportive and embracing of public interest, and efforts to do even more are on the rise, the University of Denver Sturm College of Law (Denver Law) is no exception. To move any law school to "the other side" that only a few are privileged to be a part of, large-scale, long-term transformation is needed to connect public interest to all aspects of culture and curriculum. The consumers of legal education—the students—can play a major role in jumpstarting this transformation. At Denver Law, the Chancellor's Scholars did just that with the creation of the Pledge for the Public Good.

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November 24, 2016 in Legal Education | Permalink | Comments (2)

Penn State Issues Call For Tax Papers

Penn StateThe Penn State Journal of Law & International Affairs has issued a call for tax papers:

The Penn State Journal of Law & International Affair (“JLIA”) is conducting a call for papers for an upcoming publication in spring 2017. The publication will focus on areas of taxation, corporate law, banking and finance, and related subject areas. Current papers accepted for publication cover areas of international taxation, international financial regulation for cryptocurrencies, and regulations resulting from the global financial crisis.

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November 24, 2016 in Scholarship, Tax | Permalink | Comments (0)

WKRP in Cincinnati Thanksgiving Turkey Drop

November 24, 2016 in Legal Education, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1295: If Koskinen Is Impeached Or Fired, Trump Could Appoint New IRS Commissioner To Go Easy On His Taxes

IRS Logo 2Politico, Trump Gets to Pick His Own Auditor: Lawyers Say There's Nothing to Stop Him From Appointing an IRS Chief Who Will Go Easy on Him:

President-elect Donald Trump will soon be able to appoint a new director of the agency auditing his taxes, a potential political minefield after his writeoffs and his refusal to release his returns were repeatedly questioned in the campaign.

The president is barred from directing how the IRS treats specific taxpayers, but lawyers say there’s nothing to stop Trump from appointing an IRS chief who will go easy on him while scrutinizing his political enemies.

“There is precious little statutorily that prohibits that,” said Caplin & Drysdale tax lawyer Chris Rizek, who served in the Treasury Department’s Office of Legislative Counsel under former president Clinton.

Trump could have the opportunity to put his own IRS chief into place quickly, even though the IRS commissioner serves a fixed five-year term to shield the agency from presidential politics. Current Commissioner John Koskinen, whose term ends next November, is facing potential impeachment in the House over his handling of investigations, and he could come under pressure to resign before Trump takes office. House Freedom Caucus Chairman Jim Jordan reiterated his call for impeachment this month, and lobbyists expect Trump to give Koskinen the boot to throw conservatives a bone. ...

The IRS also reviews the president’s and vice president’s returns each year, but those audits aren’t required by law, and Trump could stop them. “They don’t need Congress’ approval to change that,” [Valparaiso Law Professor David] Herzig said. “It might raise red flags politically. But you could just change it, or you could just not enforce that part about presidential audits.” ...

Trump is taking office at a time when the IRS has already been weathering accusations that its audits are politically motivated.

The IRS admitted to using “Be On the Lookout” lists to target political groups seeking tax-exempt status in May 2013, after an inspector general audit found the agency was using “inappropriate criteria” to flag “Tea Party and other organizations…based upon their names or policy positions.” No evidence was ever uncovered the White House had anything to do with scandal, but some conservatives argue President Obama in effect sent a dog whistle audit plea by publicly criticizing political social welfare groups, prodding former IRS official Lois Lerner to take it upon herself to act.

Koskinen himself says that the tea party controversy, which he was brought in to clean up, should illustrate the importance of a nonpolitical, independent IRS.

“It’s reemphasized the importance of making sure that there isn’t a question about the IRS being political,” Koskinen maintained.

For the most part, the IRS has gotten pretty good at shrugging off political pressures, tax lawyers said.

“It is not at all uncommon for people to clamor for IRS or DOJ activity or criminal investigation, and the IRS kind of takes the position that they ignore that political pressure. I have not heard of any instance since 1973 of anyone at the White House calling anyone at the IRS to ask for an audit or put pressure on a taxpayer,” [Chris Rizek, who served in the Treasury Department’s Office of Legislative Counsel under former president Clinton] said. “Because if that got out it would be a pretty outrageous news story.”

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November 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, November 23, 2016

Will Trump Treat The Presidency As A Part-Time Job For Tax Purposes?

White House LogoWashington Post: Will Trump Claim That Being President Is a Part-Time Job — For Tax Purposes?, by Allan Sloan:

Can you imagine anyone saying that being president of the United States is only a part-time job? Well, Donald Trump might have an incentive to say just that.

That sounds bizarre. But I think it’s within the realm of possibility for Trump to claim in future years that things such as living in Trump Tower rather than the White House and mentioning his properties at every opportunity are promotional activities. If he can show that he spends more than half his time developing, managing and promoting real estate, it could shelter millions of dollars of his non-real-estate income from federal income tax.

I’m not saying that Trump plans to play this particular tax game. But given that he won’t disclose his tax returns, as presidents and presidential candidates have done for decades — and given how aggressive he’s been about cutting his personal tax bill — it doesn’t seem so far-fetched. ...

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November 23, 2016 in Political News, Tax | Permalink | Comments (2)

Shearman & Sterling Joins Growing BigLaw Trend In De-Equitizing Partners: 'Shearminations'

ShearmanNew York Times: Law Firms, Struggling Financially, Cull Partner Ranks, by Elizabeth Olson:

Wrestling with a difficult market, some big law firms are demoting partners — meaning they are no longer owners in the firm who share in annual profits.

The latest to publicly weigh such a step is Shearman & Sterling, a powerhouse New York firm that indicated recently that it would revamp itself, primarily through demotions and delays in promotions to full partnership status.

Demoting, or even cutting, partners is not new in the legal industry. A decade ago, the efforts at Shearman & Sterling to jettison unproductive partners were called “Shearminations.” But it is a tool the legal industry once wielded sparingly.

“It’s back now because there is a growing recognition that demand for legal services is not picking up and firms are facing overcapacity issues,” said Peter Zeughauser, a law firm consultant.

Some firms have been quietly weeding their partner ranks as a result. In a process called de-equitizing, law firms set retirement dates for certain equity partners or reduce them to salaried status, cutting them out of the yearly profit distribution. ...

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November 23, 2016 in Legal Education | Permalink | Comments (0)

Concord Law School Seeks Permission For Its Graduates To Take The Bar Exam In States Other Than California

Concord Logo (2016)ABA Journal, For-Profit Concord School of Law Seeks More State Bar Exam Opportunities For its Grads:

The Concord Law School of Kaplan University, which offers online courses, in the past month has filed petitions in Arizona, New Mexico and Connecticut, asking the states to change existing rules that restrict its graduates from taking bar exams.

California is currently the only state that allows Concord graduates to sit for its state bar exam as first-time test takers, says Martin Pritikin, the for-profit law school’s dean and vice president. He expects to file more petitions on other states.

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November 23, 2016 in Legal Education | Permalink | Comments (0)

Kaplan:  The Cadillac Tax And Its Potential To Transform How Americans Purchase Health Care Services

Richard Kaplan (Illinois), The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services, 2016 NYU Rev. Em. Ben. & Exec. Comp.:

This Article examines one of the most contentious provisions of the Affordable Care Act — namely, the 40% excise tax on high-value health insurance provided by employers. This levy, commonly denominated the “Cadillac” tax, is scheduled to take effect in 2020 but has already induced many employers to raise annual deductibles on the health insurance they provide to reduce the value of such insurance and thereby lower their exposure to this new tax.

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November 23, 2016 in Scholarship, Tax | Permalink | Comments (0)

Law School Student Debt Rankings

2017 U.S. News LogoJD Journal, Law School Debt Rankings — Law Schools with the Highest Debt:

U.S. News and World Report analyzed the indebtedness of law school graduates in 2015, and they discovered a huge gap between the school with the highest student debt, Thomas Jefferson School of Law, and the least, University of Hawaii-Manoa. To no one’s surprise, the majority of graduates had student loan debt, but what was shocking about this list was that even the non-top ranked schools came with a heavy price tag for students.

Here are the ten law schools with the highest student debt, and the ten law schools with the lowest student debt:

Top 10

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November 23, 2016 in Law School Rankings, Legal Education | Permalink | Comments (6)

Trump Foundation Form 990-PF Admits To Violating Ban On ‘Self-Dealing’

WSJ:  Many Deans Resist Law School Accreditors Raising The Bar—'Nobody Looks At Job Outcomes Of PhDs, MBAs'

WSJWall Street Journal, Law School Accreditors Raising the Bar:

With the percentage of fledgling lawyers failing state licensing exams on the rise, national accreditors are getting tough and telling law schools to better prepare students for legal practice or risk losing their accreditation.

The American Bar Association, which oversees the nation’s more than 200 accredited law schools, is working on a new rule that would require 75% of a law school’s graduates sitting for a bar exam to pass it within two years.

The proposal, which recently cleared a key administrative hurdle and could be implemented early next year, is rankling some law schools that say it will unfairly hurt those institutions with a mission of increasing access to legal education to a more diverse array of students.

Others say a national standard makes little sense when some states, such as California and New York, have notoriously more difficult bar exams than others.

“Nobody looks at what percentage of Ph.D.s end up as college professors, or what percentage of M.B.A.s achieve their goal,” said Gilbert Holmes, the dean of University of La Verne College of Law in California, who opposes the rule.

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November 23, 2016 in Legal Education | Permalink | Comments (8)

The IRS Scandal, Day 1294: House Republicans Will Try To Oust IRS Commissioner Koskinen This Month

IRS Logo 2Washington Examiner, Conservatives Will Try to Oust IRS Chief This Month:

Rep. Tim Huelskamp will call for a post-election vote to impeach IRS Commissioner John Koskinen when Congress returns from Thanksgiving recess, he told the Washington Examiner.

Huelskamp, R-Kan., said he has no plans to drop his effort to oust Koskinen, whose term does not expire until November 2017. "We need to clean house, especially at the IRS," Huelskamp said.

Huelskamp said Koskinen could pre-empt a vote by announcing he will retire when Republican President-elect Trump takes office in January. "But barring that, I anticipate that two weeks from now we will introduce that resolution," Huelskamp said.

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November 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Tuesday, November 22, 2016

July 2016 California Bar Exam Carnage

The California State Bar has released the results from the July 2016 bar exam.  The overall pass rate was 43%, the lowest in 32 years.  For California ABA-accredited law schools, the pass rate fell 6.2 percentage points from 2015, to 62%, down 21 percentage points from 2008. 

California Bar

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November 22, 2016 in Legal Education | Permalink | Comments (10)

Alstott Presents A New Deal For Old Age: Toward A Progressive Retirement Today At Columbia

Old AgeAnne Alstott (Yale) presents A New Deal for Old Age: Toward a Progressive Retirement at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

A growing chorus of policy analysts is calling for an increase in the Social Security retirement age. Even staunch defenders of Social Security have begun to concede that the retirement age of 66 is too low, in light of the increasing longevity, improving health, and expanding work options of older Americans. Still, some progressives worry that the only way to protect disadvantaged workers is to leave the early and full retirement ages as they are. The result is a debate that pits intergenerational fairness against intragenerational fairness: either we shortchange the young (by paying unneeded benefits to the old) or else we shortchange the disadvantaged (by raising the retirement age to levels that are unrealistic for low-earners).

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November 22, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

New Website Seeks To Register Professors Accused of Liberal Bias

ProfessorInside Higher Ed, Being Watched: New Website Seeks to Register Professors Accused of Liberal Bias and “Anti-American Values”

A new website is asking students and others to “expose and document” professors who “discriminate against conservative students, promote anti-American values and advance leftist propaganda in the classroom.”

The site, called Professor Watchlist, is not without precedent -- predecessors include the now-defunct NoIndoctrination.org, which logged accounts of alleged bias in the classroom. There's also David Horowitz's 2006 book, The Professors: The 101 Most Dangerous Academics in America. But such efforts arguably have new meaning in an era of talk about registering certain social groups and concerns about free speech.

At the same time, the new list has attracted Twitter jokesters under the hashtag #trollprofwatchlist, with complaints about Indiana Jones, Professor Plum of "Clue University," and Gilderoy Lockhart from Harry Potter's Hogwarts School of Witchcraft and Wizardry, among others.

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November 22, 2016 in Legal Education | Permalink | Comments (5)

Fleming, Peroni & Shay:  Two Cheers For The Foreign Tax Credit

J. Clifton Fleming Jr. (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Harvard), Two Cheers for the Foreign Tax Credit, Even in the BEPS Era, 91 Tulane L. Rev. 1 (2016):

Reform of the U.S. international income taxation system has been a hotly debated topic for many years. The principal competing alternatives are a territorial or exemption system and a worldwide system. For reasons summarized in this article, we favor worldwide taxation if it is real worldwide taxation – i.e., a non-deferred U.S. tax is imposed on all foreign income of U.S. residents at the time the income in earned. This approach is not acceptable, however, unless the resulting double taxation is alleviated. The longstanding U.S. approach for handling the international double taxation problem is a foreign tax credit limited to the U.S. levy on the taxpayer’s foreign income. Indeed, the foreign tax credit is an essential element of the case for worldwide taxation. Moreover, territorial systems often apply worldwide taxation with a foreign tax credit to all income of resident individuals plus the passive income and tax haven income of resident corporations. Thus, the foreign tax credit is actually an important feature of many territorial systems.

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November 22, 2016 in Scholarship, Tax | Permalink | Comments (0)

Sandy Levinson Receives Hateful Postcard

Sandy Levinson (Texas), who is visiting at Harvard Law School this semester, received this hateful postcard in the mail:

Sandy Levinson

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November 22, 2016 in Legal Education | Permalink | Comments (10)

How Republicans Plan To Spend Like Crazy Without Running Up Debt

Bloomberg, How Republicans Plan to Spend Like Crazy Without Running Up Debt:

When Washington argues about fiscal policy, it’s really fighting over models. By the time the White House produces its budget, its Office of Management and Budget has already modeled what it hopes that budget will do. Majorities in Congress send their budget resolutions to their own preferred think tanks for modeling, too. Then, by statute, bills that come out of most committees must receive a “score”—a modeled result—from the Congressional Budget Office and, for revenue bills, the Joint Committee on Taxation. The CBO and the JCT have a reputation for straight-backed probity, but congressional staffers quietly haggle with both institutions over footnotes.

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November 22, 2016 in Tax | Permalink | Comments (2)

Tax Policy In The Trump Administration

The IRS Scandal, Day 1293: WSJ— Has The Obama Administration Been 'Long On Dignity And Short On Scandal'?

IRS Logo 2Wall Street Journal: A Crisis of Authority—II, by James Taranto:

[I]n a lengthy series of interviews, both pre- and postelection, with the New Yorker’s David Remnick, Obama has been quite fretful—torn, as at that press conference, between his duty as a lame-duck president to respect the office and the man who will soon hold it, and his anguish at what amounts to a repudiation of authority. ...

Remnick himself described the Obama presidency as “two terms long on dignity and short on scandal.” The IRS? The State Department scandal that arguably sank Mrs. Clinton’s campaign? Again, the memory hole.

In Lima on Sunday the president himself declared: “I am extremely proud of the fact that over eight years we have not had the kinds of scandals that have plagued other administrations.” That’s either delusional or very carefully worded: To our knowledge no other administration has used the IRS to punish ordinary citizens for dissent, nor faced FBI findings that the secretary of state treated classified information in an “extremely careless” fashion.

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November 22, 2016 in IRS News, IRS Scandal | Permalink | Comments (4)

Monday, November 21, 2016

Shaviro Presents The Mapmaker’s Dilemma In Evaluating High-End Inequality Today At NYU

Shaviro (2015)Daniel Shaviro (NYU) presents The Mapmaker’s Dilemma in Evaluating High-End Inequality at NYU today as part of its High-End Inequality Colloquium Series (more here):

The last thirty years have witnessed rising income and wealth concentration among the top 0.1 percent of the population, leading to intense political debate regarding how, if at all, policymakers should respond. Often, this debate emphasizes the tools of public economics, and in particular optimal income taxation. However, while these tools can help us in evaluating the issues raised by high-end inequality, their extreme reductionism — which, in other settings, often offers significant analytic payoffs — here proves to have serious drawbacks.

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November 21, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Financial Times Special Section On Law Schools:  
The Admissions Collapse Continues

Financial Times (2017)Financial Times, Law School Admissions Collapse Continues: They Are Being Forced to Innovate or Face Being Left Behind:

Since 2010, US law schools have experienced a drop in student admissions to a level not seen since 1973, when there were 53 fewer schools than today (204). The number of first-year students entering law school in 2015 dropped to just above 37,000 compared to 52,000 in 2010, according to figures released by the American Bar Association. The latest enrolment numbers are due in December.

FT Chart 2

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November 21, 2016 in Legal Education | Permalink | Comments (6)

National Taxpayer Advocate:  The IRS Is Out Of Touch With The People It Serves

Taxpayer Advocate (2016)Accounting Web, Nina Olson: IRS Out of Touch with the People it Serves:

National Taxpayer Advocate Nina Olson minced few words in a recent assessment of the future of the IRS and its current interactions with taxpayers: The agency’s growing disconnect from the people it serves will lead to its failure.

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November 21, 2016 in IRS News, Tax | Permalink | Comments (4)

#AcademicHumblebrags

HumblebragInside Higher Ed, Academic Humblebrags:

Consider the humblebrag, a seemingly modest utterance that’s actually a boast. ...

  • Gosh, if I don’t send in that manuscript to Oxford by this fall, they’re gonna kill me!
  • You know, if it weren’t for all the grateful letters that I’ve gotten from students over the years, I’d’ve given up teaching a long time ago.
  • I’m sure plenty of people could have delivered the keynote address at this conference, but I’m the one who got suckered into it.
  • Never mind all my publications. The teaching award I got this year makes me realize what really matters in life.

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November 21, 2016 in Legal Education | Permalink | Comments (0)

ATPI Conference:  Improving The Tax System Using Advances In Social Knowledge And Technology

ATPI Logo (2014)The American Tax Policy Institute sponsored a conference on Improving the Tax System Using Advances in Social Knowledge and Technology at Skadden's Washington, D.C. office on Friday:

Panel 1:  How behavioral economics relates to and might be taken into account in developing tax policy and administration

  • James Alm (Tulane) (Panel Chair)
  • Mike Hawkins (HM Revenue & Customs)
  • Steven M. Sheffrin (Tulane)
  • Eric LoPresti (Taxpayer Advocate Service, IRS)

Panel 2:  Using social science to improve the tax system and promote voluntary compliance

  • Susan C. Morse (Texas) (Panel Chair)
  • Joseph Bankman (Stanford)
  • John Guyton (Office of Research, Applied Analytics & Statistics, IRS)
  • Ronald Hodge (Office of Research, Applied Analytics & Statistics, IRS)
  • Kathleen DeLaney Thomas (North Carolina)

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November 21, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Law Profs Weigh In On The Hamilton/Pence/Trump Controversy

The IRS Scandal, Day 1292: Boston Herald Editorial—IRS Scandal Belies President Obama's Claim That His Has Been A Scandal-Free Administration

IRS ScandalBoston Herald editorial, Scandal 'Free' Obama:

“I am very proud of the fact that we will — knock on wood — leave this administration without significant scandal.” — President Obama at his Nov. 14 news conference.

Ah, the lie oft repeated . . .

Define scandal. Or perhaps “significant scandal.”

Well, let’s start with the IRS scandal — or is there another word for what happens when public officials in one of government’s most sensitive departments make decisions based on ideology. Let’s see, how about when any organization with the words “tea party” in its name applies for tax-exempt status? Lois Lerner, who headed the tax exempt division resigned.

But guess that’s only a “significant scandal” for those groups still waiting to hear back from the IRS. ...

No scandal here, folks. Just move along.

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November 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

TaxProf Blog Weekend Roundup

Sunday, November 20, 2016

NY Times:   After Critical Inspector General Report, IRS Cracks Down On Bitcoin Users

Bitcoin IRSNew York Times, Bitcoin Users Who Evade Taxes Are Sought by the IRS:

The IRS is on the hunt for people who used Bitcoin to evade taxes.

The tax agency sent a broad request on Thursday to Coinbase, the largest Bitcoin exchange in the United States, asking for the records of all customers who bought virtual currency from the company from 2013 to 2015.

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November 20, 2016 in IRS News, Tax | Permalink | Comments (0)

129 College Presidents Send Letter Asking President-Elect Trump To Condemn 'Harassment, Hate And Acts Of Violence'

Trump (President Elect)Inside High Ed:

Dear President-elect Trump,

As do you, we “seek common ground, not hostility; partnership, not conflict.” In order to maintain the trust required for such productive engagement, it is essential that we immediately reaffirm the core values of our democratic nation: human decency, equal rights, freedom of expression and freedom from discrimination. As college and university presidents, we commit ourselves to promoting these values on our campuses and in our communities, and we stand alongside the business, nonprofit, religious and civic leaders who are doing the same in organizations large and small.

In light of your pledge to be “President for all Americans,” we urge you to condemn and work to prevent the harassment, hate and acts of violence that are being perpetrated across our nation, sometimes in your name, which is now synonymous with our nation’s highest office. In our schools, on job sites and college campuses, on public streets and in coffee shops, members of our communities, our children, our families, our neighbors, our students and our employees are facing very real threats, and are frightened.

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November 20, 2016 in Legal Education, Political News | Permalink | Comments (15)

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. The #1 paper is now #19 in all-time downloads among 12,340 tax papers:

  1. [4,594 Downloads]  Families Facing Tax Increases Under Trump's Latest Tax Plan, by Lily L. Batchelder (NYU)
  2. [522 Downloads]  Aggressive Tax Planning & the Ethical Tax Lawyer, by Heather M. Field (UC-Hastings)
  3. [299 Downloads]  The Up-C Revolution, by Gregg D. Polsky (Georgia) & Adam H. Rosenzweig (Washington University)
  4. [271 Downloads]  Estate Planning for Digital Assets: Assigning Tax Basis and Value to Digital Assets, by Elizabeth Ruth Carter (LSU)
  5. [223 Downloads]  IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385, by David S. Miller (Proskauer, New York) & Janicelynn Asamoto Park (Proskauer, New York)

November 20, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Law Prof Submits Letter With 12,000 Lawyer Signatures Opposing President-Elect Trump's Selection Of Stephen Bannon As White House Strategist

Leong 2

Daily Kos, Over 12,000 Lawyers Sign Letter Opposing Steve Bannon:

Later today, a letter with over 12,000 signatures of attorneys from all over the country will be delivered to key members of Congress. The letter, originally drafted by University of Denver law professor Nancy Leong, has garnered such a huge number of signatures in just 60 hours of being online.  Leong drafted the letter because “Bannon is on a different level.  His website has enabled white supremacists and his public comments show he does not respect the democratic institutions that we as lawyers have sworn to uphold.”

The letter has signers from all types of legal work and all different political persuasions. As Leong described it, “It’s not a partisan issue to support our democratic institutions and oppose a white supremacist, and I hope that what this communicates to vulnerable communities is lawyers have your back in opposing this.”

Bloomberg Law, Meet the Law Prof Who Found 10,000+ Lawyers Opposed to Bannon:

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November 20, 2016 in Legal Education, Political News | Permalink | Comments (10)

The IRS, Day 1291:  Federal Judge—‘Strong Showing’ That IRS Discriminated Against Tea Party Groups

Saturday, November 19, 2016

This Week's Ten Most Popular TaxProf Blog Posts

After Battles With Conservatives, Michael Hunter Schwartz To Step Down After 4 Years As Arkansas Dean

Hunter SchwartzFollowing up on my previous posts (links below):  Arkansas Times, UALR Law Dean Stepping Down in June:

Michael Schwartz, dean of UALR's Bowen School of Law, has announced he's stepping down as dean June 30 to go to a full-time teaching position. He's held the position since July 2013.

Schwartz found himself enmeshed in several controversies at the law school, engendered by conservative activists. One involved faculty member Rob Steinbuch's effort to dislodge student records to determine whether under-qualified black students were gaining admittance. Steinbuch filed suit for records after Schwartz provided redacted copies of some material he sought to analyze bar exam performance. Steinbuch also accused two other faculty members of retaliating against him for seeking the information. He called them "race police."

More recently, Schwartz has been derided by conservatives on the web for providing on-campus counseling to students upset by the presidential election. ...

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November 19, 2016 in Legal Education | Permalink | Comments (8)

NY Times:  How To Give An IRA To Children Without Giving Up Control

New York Times: How to Give an I.R.A. to Children Without Giving Up Control, by Paul Sullivan:

Most people spend whatever they have saved in their individual retirement accounts in the years after they stop working. If they’re fortunate, they have enough to last.

But the few who have amassed such large retirement accounts that they will never exhaust them have a concern common to many wealthy parents: What happens to the money when they die and their children inherit it?

A trusteed I.R.A. is a relatively easy way for parents to control how, when and why their children receive the distributions from their retirement accounts.

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November 19, 2016 in Tax | Permalink | Comments (2)

Reynolds:  Universities' Reactions To Presidential Election Constitute Microaggressions Against Students Who Voted For Trump

Following up on last Saturday's post, Law Schools React To Donald Trump's Election:  USA Today op-ed: 'Tolerant' Educators Exile Trump Voters From Campus, by Glenn Reynolds (Tennessee):

One of the more amusing bits of fallout from [the presidential] election has been the safe-space response of many colleges and universities to the election of the “wrong” candidate. But on closer examination, this response isn’t really amusing. In fact, it’s downright mean.

Donald Trump’s substantial victory, when most progressives expected a Hillary Clinton landslide, came as a shock to many. That shock seems to have been multiplied in academe, where few people seem to know any Trump supporters — or, at least, any Trump supporters who’ll admit to it.

The response to the shock has been to turn campuses into kindergarten. The University of Michigan Law School announced a “post-election self-care” event with “food” and “play,” including “coloring sheets, play dough (sic), positive card-making, Legos and bubbles with your fellow law students.” (Embarrassed by the attention, UM Law scrubbed the announcement from its website, perhaps concerned that people would wonder whether its graduates would require Legos and bubbles in the event of stressful litigation.) ...

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November 19, 2016 in Legal Education, Political News | Permalink | Comments (9)

The IRS Scandal, Day 1290:  Linchpins Of Liberty Seeks Declaratory Relief That IRS Violated Their First Amendment Rights

IRS Logo 2 Notice Regarding Declaratory Relief to Which plaintiffs Are Entitled, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

Based on the applicable law, and the Government’s admissions, there can be no dispute that Plaintiffs are entitled to a declaration that the IRS violated their First Amendment rights by:

(1) engaging in viewpoint-based discrimination when it targeted Plaintiffs’ tax-exempt applications for heightened scrutiny, significantly delayed the processing of those applications, and issued irrelevant and unnecessary demands for information—all because of Plaintiffs’ political-sounding names and/or policy positions (i.e., viewpoints); and

(2) demanding that Plaintiffs disclose such information as donor names, the type of conversations and discussions members and participants had during organizational activities, and the political affiliations of Plaintiffs’ officers and directors, all without any government interest, let alone a substantial or sufficiently important one, as the Government has admitted the accuracy of TIGTA’s finding that such information demands were entirely irrelevant and unnecessary.

United States’ Motion for Summary Judgment as to Remaining CLaims and Supporting Statement of Points and Authorities, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

No one disputes that the IRS used certain criteria and engaged in other conduct in processing applications for tax-exempt status that it should not have done, both as found by TIGTA and acknowledged by the IRS itself. Whether what went wrong rises to the level of a constitutional injury is an issue that this Court has yet to decide, and the United States has not conceded that legal point. But something having gone wrong in the processing of applications, whether it constitutes a constitutional injury or not, the point remains that what happened next is exactly what should have happened: an independent oversight body (TIGTA) became involved and conducted an extensive investigation of what happened, it made its recommendations to correct the objectionable conduct, and the IRS implemented all of those recommendations. And all of that took place with the additional and intense scrutiny of Congress exercising its oversight function. Something having gone wrong in the first place, the process to correct that problem worked as it was supposed to, leaving no need for the Court to grant declaratory or injunctive relief.

The fact that the IRS has acted on Plaintiffs’ applications leaves no live or ongoing issues to be resolved as to Plaintiffs’ claims, which centered on the application process. And, as described, the IRS has permanently changed its procedures that gave rise to Plaintiffs’ claims. As a result, Plaintiffs are not entitled to the declaratory and injunctive relief that they seek.

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November 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, November 18, 2016

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses the importance of keeping good mileage records if you plan on deducting expenses incurred in the business use of a car (even an Aston Martin).

KristanThere is no short form mileage log for an Aston Martin.

All business. A California aerospace consultant visited his clients in a suitably space-age vehicle — an Aston Martin Vantage. Paleolithic vehicle recordkeeping blew up his car deductions on the launch pad.

The consultant claimed $21,747 in vehicle operating expenses on his 2012 return, along with $21,636 in depreciation expense for the Vantage. That’s a lot of deduction, but then again the Vantage is a lot of car. And, of course, the taxpayer said the car was used 100% for business. And he had proof! Well, sort of. Tax Court Judge Nega takes up the story (my emphasis):

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November 18, 2016 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new article by David Kamin (NYU), Getting Americans To Save: In Defense of (Reformed) Tax Incentives, Tax Law Review (forthcoming 2017).

HemelTax-preferred retirement accounts are hugely popular among participants but widely panned by academics who study saving behavior. The two principal criticisms are (1) that tax incentives such as 401(k)s and IRAs aren’t effective at encouraging individuals to save more, and (2) that these incentives amount to “upside-down” subsidies that deliver the largest benefits to wealthy Americans in the highest tax brackets. In an excellent new article, David Kamin carefully considers these criticisms and concludes that the case against tax-preferred retirement accounts is overstated. “[B]ased on the available evidence,” Kamin writes, “tax incentives probably should be used to help correct failures in people’s saving decisions—correcting the ‘internality’ that people impose on themselves because of their biases.”

Kamin begins by canvassing the empirical evidence suggesting that a substantial fraction of American workers are “under-saving” for retirement. He goes on to evaluate the evidence that tax incentives can encourage individuals to save more. On this point, research results vary widely, with some studies finding that tax incentives have little or no effect and others finding that tax incentives play an important role in boosting rates of saving.

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November 18, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

Weekly Legal Education Roundup

Shaviro Presents Fixing U.S. International Taxation Today At San Francisco

FixingDaniel N. Shaviro (NYU) presents Fixing U.S. International Taxation (Oxford University Press, 2014) at the University of San Francisco Graduate Tax Program as part of its Tax Lecture Series:

International tax rules, which determine how countries tax cross-border investment, are increasingly important with the rise of globalization, but the modern U.S. rules, even more than those in most other countries, are widely recognized as dysfunctional. The existing debate over how to reform the U.S. tax rules is stuck in a sterile dialectic, in which ostensibly the only permissible choices are worldwide or residence-based taxation of U.S. companies with the allowance of foreign tax credits, versus outright exemption of the companies' foreign source income.

In Fixing U.S. International Taxation, Daniel N. Shaviro explains why neither of these solutions addresses the fundamental problem at hand, and he proposes a new reformulation of the existing framework from first principles. He shows that existing international tax policy frameworks are misguided insofar as they treat "double taxation" and "double non-taxation" as the key issues, conflate the distinct questions of what tax rate to impose on foreign source income and how to treat foreign taxes, and use simplistic single-bullet global welfare norms in lieu of a comprehensive analysis.

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November 18, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (0)

What American Law Professors Forgot And What Trump Knew

Law ProfessorsChicago Tribune op-ed: What American Law Professors Forgot and What Trump Knew, by Stephen B. Presser (Northwestern; author, Law Professors and the Shaping of American Law (West 2016)):

It was lonely being a Donald Trump supporter in the legal academy. Of my thousands of colleagues teaching law in this country, I don't think more than a few dozen believed that he would have made a better president than Hillary Clinton, and not more than a handful of us were willing to go public with our support.

It has always been a risk to be a Republican teaching in a law school, where many teachers see a thin line between support for the GOP and bigotry or insanity. And yet, enough Americans liked what they saw in Trump to give him a smashing Electoral College victory.

How did it come about that law professors grew so out of touch with much of America?

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November 18, 2016 in Legal Education, Political News | Permalink | Comments (10)

Pomona President Denies Wrongdoing As IRS Complaint Filed Against College For Funding Anti-Trump Student Protesters

PomonaFollowing up on Wednesday's post, Pomona College May Have Violated 501(c)(3) Tax Status To Fund Anti-Trump Student Protesters:  The Claremont Independent, President Oxtoby Denies Wrongdoing as IRS Complaint Filed Against Pomona College, by Matthew Reade & Ross Steinberg:

The Claremont Independent has learned that a concerned individual has lodged a complaint with the IRS in response to Pomona College’s promotion and funding of an anti-Trump rally.

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November 18, 2016 in Legal Education, Political News | Permalink | Comments (3)