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Monday, February 23, 2015

TaxProf Blog Weekend Roundup

Sunday, February 22, 2015

A Taxing Oscars: $160,000 Swag Bags and Tax Incentives for Best Picture Nominees

IRS, Gift Bag Questions and Answers:

Q: What are the federal income tax consequences to a person who accepts a gift bag in recognition of involvement in an awards show?
A: In general, the person has received taxable income equal to the fair market value of the bag and its contents and must report that amount on his or her federal income tax return. ...

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February 22, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

800,000 HealthCare.gov Users in 37 States Received Wrong Tax Information From Government, Leading to 'Mayhem' This Tax Filing Season

HealthNew York Times, Tax Error in Health Act Has Impact on 800,000:

About 800,000 taxpayers who enrolled in insurance policies through HealthCare.gov received erroneous tax information from the government and were urged on Friday to hold off on filing tax returns until the error could be corrected.

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February 22, 2015 in IRS News, Tax | 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 #1:

  1. [246 Downloads]  Why Corporate Tax Reform Can Happen, by Edward Kleinbard (USC)
  2. [170 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  3. [145 Downloads]  Fiscally Transparent Entities: Eligibility for Tax Treaty Benefits, by Sumeet Khurana & Ashish Karundia
  4. [133 Downloads]  Taxation and Surveillance -- An Agenda, by Michael Hatfield (University of Washington)
  5. [122 Downloads]  Inevitable: Sports Gambling, State Regulation, and the Pursuit of Revenue, by Anastasios Kaburakis (St. Louis), Ryan M. Rodenberg (Florida State) & John T. Holden (Florida State)

February 22, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 654

IRS Logo 2The American Spectator, The Real ‘Dirty Dozen’ at the IRS: For Some Reason, It Fails to Include Itself on its List of Abusers, Scammers, and Cheats:

The IRS just released its “dirty dozen” list of tax scams and schemes for the American people to avoid. In addition to normal phishing and identity theft, a slew of new phone scams around the nation has caught many taxpayers off guard. Plus, unscrupulous return preparers take advantage of confused Americans, especially given that 60 percent of taxpayers need assistance figuring out all those documents, tables, and exemptions. The list also warns the less honest among us to avoid hiding money offshore, in abusive tax shelters, or with false documents. Additionally, it urges people not to falsify income or claim too much in fuel tax credits, either.

But there is an even more concerning “dirty dozen” list that the IRS wants the public to forget.

It’s been almost two years since the news broke that the IRS had been targeting Tea Party, pro-Israel, and other conservative groups — and a scandal erupted. Here are just a select few ways the IRS has mismanaged its problems and shown itself to be incompetent and untrustworthy:

1. Internal emails show these groups were targeted because IRS employees thought them “icky.”

2. Other emails showed that Lois Lerner was conspiring with the Department of Justice to prosecute conservative groups on trumped-up charges.

3. Lerner herself refused to testify to investigating committees and was held in contempt.

4. That didn’t stop her from defending herself to Politico magazine and complaining about being “harassed” for her role.

5. Then, the IRS claimed it had lost the most crucial batch of Lerner’s emails.

6. Oh yeah, and her Blackberry was destroyed too.

7. Six months later, the Tax Inspector General may have found those lost emails. (Still no word yet on what was in them.)

Scandal events aside, the IRS showed its general incompetence in many other ways.

8. IRS workers campaigned for political candidates while on the job.

9. The agency awarded bonuses to its own employees who owed taxes.

10. Guess who was audited ten times more often than the average taxpayer? Supporters of the Tea Party.

11. The IRS illegally shared confidential, protected information with the FBI, the White House, and more.

12. And it has the nerve to constantly ask for a raise.

It all adds up to an agency that doesn’t merit the trust of taxpayers.

For at least three years, the IRS has egregiously wronged this nation — including at least one person on a director level. Yet, it still hasn’t apologized or come clean.

But despite all the excuses and diversions offered by the IRS, the American people are still saying what Senator Ron Johnson expressed: “I smell a rat. I smell a number of rats, and that’s what we are going to get to the bottom of.”

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February 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, February 21, 2015

Law School Survival Strategy From a Former Dean: Cut Tuition by 50%

NewsweekNewsweek:  Law Schools: Reform or Go Bust, by James Huffman (Former Dean, Lewis & Clark):

Like it or not, law schools face real business challenges. Demand has declined every year since 2010—not just a little but by nearly 40 percent. The same number of law schools have 33,000 fewer prospective customers than they had five years ago. ...

The longer legal educators remain in denial about the true magnitude of the financial crisis they face, the more devastating will be the crash. It should be obvious to even the casual observer why the existing business model is broken for all but the well-endowed, elite law schools.

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February 21, 2015 in Legal Education | Permalink | Comments (7)

Vanguard Tax Whistleblower's First Day in Court

VanguardFollowing up on my previous posts (links below):  Philadelphia Inquirer, Vanguard Whistleblower's First Day in Court:

Last Friday Feb. 13, New York Superior Court Judge Joan Madden held a previously-delayed hearing, in Courtroom 351 of Manhattan's state courthouse way downtown, so she could grill lawyers for both sides on Vanguard Group Inc.'s motion to dismiss former Vanguard tax lawyer David Danon's whistleblower lawsuit, which challenges the legal and expense structure the Malvern investment giant has used over its 40-year history.

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February 21, 2015 in Tax | Permalink | Comments (1)

Uber, Lyft, and the IRS

LogoSan Francisco Chronicle, Here’s Why Uber and Lyft Send Drivers Such Confusing Tax Forms:

Uber and Lyft say their drivers are independent contractors, not employees. But when it comes to income-tax reporting, they are treated as neither.

Traditional employers send employees, and the Internal Revenue Service, Form W-2, which shows their wages, deductions and other information.

Freelancers and independent contractors typically get Form 1099-MISC (for miscellaneous income) from any person or company that paid them more than $600 the past year.

But people who earn money through Uber, Lyft, Airbnb, Task Rabbit and a number of other companies in the sharing economy often get neither form. If they get anything, it’s usually Form 1099-K, a relatively new and confusing document used mainly to report credit and debit card payments and online transactions. ...

If Einstein couldn’t understand the tax system, it’s easy to see why entrepreneurs in the on-demand economy are befuddled. Many are self-employed for the first time and unaware of the need to keep careful records and make estimated tax payments four times a year. They’ve never filed a Schedule C, or paid self-employment taxes. Getting a 1099-K adds to the confusion.

The law that created Form 1099-K was passed in 2008, before most sharing-economy companies were started. Congress saw it as a way to unearth income that was not being reported to the IRS.

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February 21, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 653

IRS Logo 2The Maddow Blog, GOP’s Gowdy Eyes New Conspiracy Theory Panel:

[T]he notion that the Obama presidency has featured “six years of scandal” seems bizarre. David Axelrod boasted this week, accurately, “I’m proud of the fact that basically you have had an administration in this place for six years in which there hasn’t been a major scandal. And I think that says a lot about the ethical strictures of this administration.”

This seemed like a fair thing to brag about, though some congressional Republicans appear to have a very different perspective.

At a Republican Party fundraising breakfast in his district on Wednesday, Representative Trey Gowdy suggested that the congressional GOP needed to investigate the IRS’s scrutiny of political groups with the same intensity that it was investigating the 2012 attacks in Benghazi.

>“I’m glad that the speaker of the House convened a select committee on Benghazi,” said Gowdy, a former prosecutor who chairs that panel. “I think it makes every bit as much sense to convene a select committee on the IRS. Now that we have the Senate, the Senate has tools the House doesn’t have in terms of getting e-mails and cooperation. It has nothing to do with politics. Do you really want an IRS targeting you based on your political beliefs?”

Gowdy, the head of the eighth Benghazi committee, went on to tell Dave Weigel that “the same reasons for a select committee exist” in the IRS story as Benghazi, “or maybe even greater.” He also complained about “Fast and Furious” and Solyndra because, well, he was apparently on a roll. ...

At a certain level, there’s a kernel of truth to the far-right congressman’s argument: select committees to investigate the IRS and Benghazi are equally sound. Which is to say, both ideas are equally ridiculous.

The IRS “scandal” turned out not to be a scandal at all, and after a year and a half of investigation from congressional Republicans, literally none of the GOP’s allegations turned out to be true. Even by Congress’ standards, the very idea of creating another select committee to investigate another discredited controversy is absurd.

Part of the underlying trouble here is a falsification problem. Republicans are certain the president is up to no good, and when there’s no evidence to support their assumptions, they convince themselves that this proves how corrupt Obama is – the rascally president must be hiding the proof of his misdeeds.

So they keep looking, which leads them to find nothing, which leads them to believe they better keep looking.

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February 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, February 20, 2015

Burman Presents Taxes and Inequality in a Changing Economy Today at Florida

BurmanLeonard Burman (Director, Urban-Brookings Tax Policy Center; Professor of Public Administration and International Affairs, Syracuse University Maxwell School), delivers the Fifth Annual Ellen Bellet Gelberg Tax Policy Lecture at Florida today on Taxes and Inequality in a Changing Economy: (webcast):

Rising economic inequality is arguably the economic challenge that will define the United States in the 21st century. Technology, which historically made workers more productive and boosted wages, is increasingly substituting for low- and middle-class labor. As a result, virtually all of the gains from rising productivity have accrued to households at the top of the income distribution. Median wages have been stagnant for a generation and there’s no sign that trend will abate any time soon. This lecture discusses historical trends in economic inequality, its likely causes, and the role of the tax system in mitigating income disparities. [The lecture is based on Taxes and Inequality, 66 Tax L. Rev. 563 (2014).]

February 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Boosting Awareness, Citation, and Placement Of Your Next Law Review Article

Harvard Law ReviewDanielle Padula, Don’t Just Build It: How to Boost Awareness of Your Scholarly Publications:

"People will come, Ray"—says Terence Man, played by James Earl Jones, when Kevin Costner’s character questions his decision to build a ball park in the middle of a cornfield in the 1989 film Field of Dreams.

Spoiler Alert: Contrary to this hopeful movie message, if you build it, more than likely, people will not come. This principle holds true for most personal and professional outputs, whether they be middle-of-nowhere baseball stadiums or academic publications.

If you want people to know about your scholarly work you have to give them an accessible place, or ideally variety of places, to learn about it. Accessible has two meanings here—you want to promote your research in places that are easy to access, and you want to explain it in a way that is accessible to a wide audience.

So how can you raise awareness of your scholarly contributions?

  • Become an Expert
  • Write About Your Research and Your Field OFTEN
  • Present Your Findings in a Dynamic Way
  • Seek Speaking Engagements

 Danielle Padula, Proactively Improve Your Law Review Article Citation Rate:

Publishing in law reviews presents the opportunity to contribute scholarship to the legal community with the capacity to impact the research of other scholars and ultimately the way the law is interpreted. In most cases, the impact a law review article will have is dependent upon the number of people who not only read it but also choose to cite it in their own work. Of course, manuscripts worthy of publication and with the power to conceivably move the law must begin with a relevant topic and be written in a clear and compelling way. Beyond how well a manuscript is written though, for many authors without a history of being cited in their field the impact their article will have can often seem to be a matter of luck.

Serendipity aside, are there any steps that legal authors can take prior to being published to improve their chances of citation? ... Here are some potential ways to proactively improve your law review article citation rate:

  • Include an Abstract and Table of Contents
  • Present a Working PaperBefore Submitting
  • Take a Second Look at Your Title and Abstract
  • Become Known in the Legal Community Prior to Being Cited

Jeff Sovern (St. John's), Does Pre-Submission Media Coverage Increase the Odds of a Good Article Placement?:

As law students, law professors, and lawyers know, most law reviews are edited by law students, which means that law students select the articles that appear in their journals.  The prime submission season is just underway, and so newly-minted law review editors—most in their second year of law school—are choosing among the flood of articles submitted by lawyers and law professors.

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February 20, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

Tax Profs Remember Marvin Chirelstein

ChirelsteinFollowing up my posts (here and here) on the February 16 death of Yale/Columbia tax legend Marvin Chirelstein: below the fold are remembrances of Marvin from these Tax Profs (and others):

  • Joe Bankman (Stanford)
  • Paul Caron (Pepperdine)
  • Bill Clinton (Former U.S. President)
  • Mark Cochran (St. Mary's)
  • Steve Cohen (Georgetown)
  • Cliff Fleming (BYU)
  • Will Foster (Arkansas-Fayetteville)
  • Michael Graetz (Columbia)
  • Calvin Johnson (Texas)
  • Richard Kaplan (Illinois)
  • Ed Kleinbard (USC)
  • Michael Knoll (Pennsylvania)
  • Al Lauber (Judge, U.S. Tax Court)
  • Michael Livingston (Rutgers-Camden)
  • Jim Maule (Villanova)
  • Philip Oliver (Arkansas-Little Rock)
  • Alex Raskolnikov (Columbia)
  • David Schizer (Columbia)
  • Dan Shaviro (NYU)
  • George Yin (Virginia)

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February 20, 2015 in Legal Education, Obituaries, Tax | Permalink | Comments (1)

Dan Markel's Death Remains a Mystery Seven Months After Shooting

MarkelTallahassee Democrat, Markel's Death Remains a Mystery:

Seven months after someone shot Florida State law professor Dan Markel in the garage of his Betton Hills home, the Tallahassee Police Department has yet to make an arrest or identify a suspect.

It's frustrating to those who knew the 41-year-old father of two. His friends and neighbors worry that the trail has gone cold. But police say they are still working the case. ... Investigators still believe Markel was the "intended target" of whoever killed him, said TPD spokesman Officer David Northway. ...

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February 20, 2015 in Legal Education | Permalink | Comments (5)

Chapman Symposium: Business Tax Reform

Chapman Logo (2014)Symposium, Business Tax Reform: Emerging Issues in the Taxation of U.S. Entities, 18 Chap. L. Rev. 1-314 (2014):

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February 20, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Nova Symposium: Transforming Legal Education

NovaSymposium, Transforming Legal Education, 38 Nova L. Rev. 171-322 (2014):

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February 20, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 652

IRS Logo 2The Daily Mail, Longtime Presidential Adviser David Axelrod Claims 'There Hasn't Been a Major Scandal' in the Obama White House – And Draws a Mix of Applause and Laughter:

Longtime Obama administration political insider David Axelrod claimed on Monday that the Obama administration hasn't been tainted by a smidgen of scandal.

The surprising boast came during a Q&A at the University of Chicago Institute of Politics, an organization he founded and leads.

'I'm proud of the fact that basically you have had an administration in place for six years in which there hasn’t been a major scandal,' Axelrod said. 'And I think that says a lot about the ethical strictures of this administration.'

Audio and video of Axelrod's remarks indicate the audience's first reaction to his insistence that Obama has presided over a scandal-free government was a chorus of laughs – before friendly attendees quickly drowned them out with applause.

Conservatives have made a parlor game out of cataloging the Obama White House's scandals, with tallies running into the dozens and some organized alphabetically.

The Internal Revenue Service, Americans' most feared and loathed government agency, has had a bumper crop of scandals since Obama took office.

In May 2013 an inspector general report found that the agency spent more than $4.1 million on a single conference in California that included six-figure fees for speakers and expensive video production for a corny Star-Trek themed humor video.

The General Services Administration was caught in a similar conference scandal later that year over an $823,000 in Las Vegas training conference held in 2010. It featured mind-readers, a clown and lavish hotel suites with jacuzzis. The GSA administration resigned over the flap.

Also in May 2013, the IRS was plunged into scandal over news that its Tax-Exempt Organizations section was subjecting Tea Party groups and conservative-oriented charities to intrusive screening and years-long delays before granting them tax-exempt status – while liberal groups were often given a pass.

The IRS later claimed to Congress that years worth of emails belonging to retired official Lois Lerner, who is thought to be responsible, were destroyed in a hard drive crash.

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February 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, February 19, 2015

W&L Law School Permanently Reduces 1L Class to 100 (Down 47% From 2012), Eliminates 6 Faculty and 6 Staff Positions, Cuts or Freezes All Faculty Salaries, and Invades Corpus of Endowment

W&L Logo (2014)Washington & Lee School of Law Strategic Transition Plan:

n response to the changes in the legal profession and legal education nationally, Washington and Lee's School of Law has adopted a proactive approach to stabilize the school's enrollment and financial structure without sacrificing its special strengths. The University's senior administration, in consultation with a working group of faculty and administrators within the law school and a task force of trustees, has developed a strategic initiative that is now being implemented after being presented to the Board of Trustees at its winter meeting this month.

As outlined in the bullet points below, Washington and Lee's law school intends to protect its core values, including its emphasis on educating students for professional integrity, as well as its defining characteristics of personalized attention, strong student-faculty relationships, and an innovative curriculum. At the same time, the financial framework will enable the school to return to self-sufficiency by the 2017-18 academic year.

Highlights of the Plan

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February 19, 2015 in Legal Education | Permalink | Comments (8)

Gamage Presents Analyzing the Optimal Choice of Tax Instruments Today at Northwestern

Gamage (2014)David Gamage (UC-Berkeley) presents Analyzing the Optimal Choice of Tax Instruments: The Case for Levying (all of) Labor-Income Taxes, Value-Added Taxes, Capital-Income Taxes, and Wealth Taxes, 68 Tax L. Rev. ___ (2014), at Northwestern yesterday as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

Economics-oriented analyses of tax policy have primarily focused on the problems of labor-to-leisure and saving-to-spending distortions. By implication, this prior literature has thus generally treated: (a) labor-income taxes and (b) consumption taxes, as being essentially equivalent. Similarly, this prior literature has generally treated: (i) capital-income taxes and (ii) wealth taxes, as being essentially equivalent. Based on these notions of equivalency, the dominant view about the policy implications that follow from these economic analyses has been that neither capital income nor wealth should be taxed.

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February 19, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Winer Presents The Tension Between Tax Design and the Political Economy of Taxation Today at UCLA

WinerStanley Winer (Carleton University) presents On the Tension Between Tax Design and the Political Economy of Taxation at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

Background paper:  Wealth Transfer Taxation: An Empirical Investigation, 21 Int'l Tax & Pub. Fin. 720 (2014):   We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries - Canada, France, Germany, Italy, Japan, the U. K. and the U. S. - over the period from 1965 to 2009. Our model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next three decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.

February 19, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Council of Economic Advisers: Business Tax Reform and Economic Growth

CouncilWhite House, Economic Report of the President (Together With the Annual Report of the Council of Economic Advisers (Feb. 2015) (419 pages):

Chapter 5, Business Tax Reform and Economic Growth (39 pages):

This chapter reviews the role of productivity in long-run growth and summarizes the international context for business tax reform. It then describes the President’s approach to business tax reform and examines how that approach can increase productivity and output. The chapter concludes with a consideration of alternative approaches to reform.

Figure 5-2

Figure 5-4

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February 19, 2015 in Tax | Permalink | Comments (2)

Cauble: Taxing Publicly Traded Entities

Emily Cauble (DePaul), Taxing Publicly Traded Entities, 6 Colum. J. Tax L. ___ (2015):

Publicly traded entities are generally treated as corporations for U.S. tax purposes. Under various exceptions, however, publicly traded entities may obtain special treatment if they earn predominately certain specified types of qualifying income. This Article examines potential rationales for granting special tax treatment to certain publicly traded entities. As the analysis in this Article will show, many of the potential rationales are unconvincing. In addition, to the extent that some rationales may be persuasive, the current rules are not designed in a way that best comports with these potential justifications. Therefore, reform is needed.

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February 19, 2015 in Scholarship, Tax | Permalink | Comments (0)

North Carolina Board of Governors Committee Votes to Close Law School Poverty Center Founded by John Edwards

UNCInside Higher Ed, Who Is Being Political?:

There is wide agreement in North Carolina that Gene Nichol is an articulate and forceful advocate for the impoverished of his state, unafraid to criticize political leaders who in his opinion aren't doing enough about poverty. Nichol does so from an academic perch. He is a law professor at the University of North Carolina at Chapel Hill, and leads the university's Center on Poverty, Work and Opportunity.

On Wednesday, a committee of the board of the University of North Carolina System voted to kill the center, along with a biodiversity center at East Carolina University and a civic engagement and social change center at North Carolina Central University. Conservatives in the state have long complained that some UNC centers (and especially the poverty center) were being used for political attacks on Republican politicians and so had no place in the university.

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February 19, 2015 in Legal Education | Permalink | Comments (2)

Fleischer: 8 Tax Loopholes the Obama Administration Could Close

NY Times Dealbook (2013)New York Times Deal Book:  8 Tax Loopholes the Obama Administration Could Close, by Victor Fleischer (San Diego):

President Obama’s State of the Union address revealed a streak of assertiveness and defiance that had been sorely lacking in the tax policy world. The budget proposal for the 2016 fiscal year is a work of ambition and resolve, laying down important markers in anticipation of negotiating an overhaul of the business and international tax code provisions. ...

I offer eight suggestions for the Treasury Department to act on. There are dozens of possibilities, but I focus on proposals that are of interest to DealBook readers and are consistent with President Obama’s renewed interest in business tax policy.

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February 19, 2015 in Tax | Permalink | Comments (0)

Kerr: Senior Law Faculty Are Just as Productive as Junior Faculty

The Volokh Conspiracy:  Law Faculty Productivity Over Time, by Orin Kerr (George Washington):

It’s generally understood that faculty productivity declines over time. The common wisdom is that professors write up a storm to get tenure; they then write somewhat less mid-career; and they don’t do much writing at all when they are senior. There has been some study of this dynamic in the sciences. As far as I know, however, this pattern hasn’t actually been measured at law schools. I recently decided to measure it at my own law school, George Washington University. The results really surprised me, as they suggested no change in productivity over time. ...

First, we can see how productivity changed over time for the faculty as a whole; second, we can see the changes within each cohort over time; and third, we can compare productivity of different cohorts at the same stage of their careers.

The chart below shows the results. The vertical axis is the average number of published articles per year, and the horizontal axis represents five-year bands of time starting at the beginning of each professor’s career and moving on over time.

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February 19, 2015 in Legal Education | Permalink | Comments (2)

Choi: Tax Commitment Devices

Jonathan H. Choi (Wachtell, New York), Tax Commitment Devices, 15 J. Bus. & Sec. L. 1  (2015):

Every line of the Internal Revenue Code is continually vulnerable to revision or repeal. With each new session of Congress, rates may rise or fall, transactions may become taxable or tax-free, and incentive programs may be extended or repealed. The resulting uncertainty harms taxpayers, who find it difficult to plan their future business affairs. It frustrates government by making its incentive programs less effective. For example, firms may decline to invest in research facilities because they cannot rely on a tax credit that might soon expire. And it provides fodder for political rent-seeking, as legislators can demand money or votes in exchange for supporting a soon-to-expire tax break. This was recently seen in the furor over bonus depreciation, a purportedly temporary provision that has been the subject of furious lobbying and frequent renewal.

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February 19, 2015 | Permalink | Comments (0)

Katz & Margolis: The Role of Leadership and Curricular Change in Transforming Legal Education

Martin Katz (Dean, Denver) & Kenneth R. Margolis (Case Western), Transforming Legal Education as an Imperative in Today's World: Leadership and Curricular Change:

This article is a chapter in the new book, Building on Best Practices: Transforming Legal Education in a Changing World (Deborah Maranville, Lisa Radtke Bliss, Carolyn Wilkes Kaas & Antoinette Sedillo Lopez eds., forthcoming Lexis 2015.) The article aims to identify and explore the emerging best practices for law school leaders in encouraging both individual and institution-wide reform. The authors identify and discuss the differing interests of the various stakeholders in legal education: students, faculty, university administrators, alumni and practitioners, potential clients, and society at large. They urge reformers to take the interests of the various stakeholders into account, obtain input from them, and set reform goals with their interests in mind. The authors discuss various models for engaging in the process of reform and some of the factors that will lead to sustainable change. They further describe the importance of reform being “data driven” and some of the processes that can be used to obtain helpful data. They urge reformers to be deliberative and collaborative and, at the same time, bold and timely by establishing clear timelines and deadlines for various steps in the process. The authors then discuss the most significant barriers to institutional and curricular reform, and how they can be overcome: the need for balance in teaching, scholarship and service of faculty members; concerns about academic freedom; cultural inertia and law school rankings; faculty fears about time, expertise and negative student reactions to change; and cost. Finally, the authors urge law school administrators to use incentives to enlist faculty as “change agents” and to expand teacher training programs to meet the new demands.

February 19, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 651

IRS Logo 2Bloomberg, Trey Gowdy: Time for a Select Committee to Investigate the IRS Scandal:

At a Republican Party fundraising breakfast in his district on Wednesday, Representative Trey Gowdy suggested that the congressional GOP needed to investigate the IRS's scrutiny of political groups with the same intensity that it was investigating the 2012 attacks in Benghazi. 

"I'm glad that the speaker of the House convened a select committee on Benghazi," said Gowdy, a former prosecutor who chairs that panel. "I think it makes every bit as much sense to convene a select committee on the IRS. Now that we have the Senate, the Senate has tools the House doesn't have in terms of getting e-mails and cooperation. It has nothing to do with politics. Do you really want an IRS targeting you based on your political beliefs?" ...

In an interview after the breakfast, Gowdy said that he'd mentioned the idea of a select committee on the IRS to House Majority Leader Kevin McCarthy, and that Ohio Representative Jim Jordan would be an ideal candidate to run it. The investigations of 2013 and 2014, often chaired by then-Ways and Means Chairman Dave Camp (now retired), had gotten out some of the truth. But the newly empowered GOP could force the executive branch to release documents that it insisted on concealing.

The same reasons for a select committee exist there, or maybe even greater," he said. "There's this tendency to over-claim executive privilege. Look, Eric Holder is a smart lawyer. He knows the e-mails that he sends to his wife are not protected by executive privilege. But he didn't want to give us one of them because in it, he referred to us as 'asses.' Look—we know we're asses. You don't have to worry about hurting our feelings. That's not the first time any of us have heard that. So why not give us the documents?"

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February 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, February 18, 2015

Kleinbard Presents We Are Better Than This Today at Pepperdine

Kleinbard (2015)Edward Kleinbard (USC) presents We Are Better Than This: How Government Should Spend Our Money at Pepperdine today as part of our Tax Policy Colloquium Series:

We Are Better Than This fundamentally reframes budget debates in the United States. Author Edward D. Kleinbard explains how the public's preoccupation with tax policy alone has obscured any understanding of government's ability to complement the private sector through investment and insurance programs that enhance the general welfare and prosperity of our society at large.

He argues that when we choose how government should spend and tax, we open a window into our "fiscal soul," because those choices are the means by which we express the values we cherish and the regard in which we hold our fellow citizens. Though these values are being diminished by short-sighted decisions to starve government, strategic government spending can directly make citizens happier, healthier, and even wealthier.

Expertly combining the latest economic research with his insider knowledge of the budget process into a simple yet compelling narrative, he unmasks the tax mythologies and false arguments that too often dominate contemporary discourse about budget policies. Large quantities of comparative data are succinctly distilled to situate the United States among its peer countries, so that readers can judge for themselves whether contemporary budget choices really reflect our aspirational fiscal soul,

Kleinbard's presentation takes a multi-disciplinary approach, drawing on economics, finance, law, political science and moral philosophy. He uniquely weaves economic research and moral philosophy together by emphasizing our welfare, not just our national income, and by contrasting the actual beliefs of Adam Smith, a great moral philosopher, with the cartoon version of the man presented by proponents of the most extreme forms of private market triumphalism.

Update:  Post-presentation lunch:

Photo 2

 

February 18, 2015 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Marian Presents Home-Country Effects of Corporate Inversions Today at Penn

Marian (2015)Omri Marian (Florida) presents Home-Country Effects of Corporate Inversions, 90 Wash. L. Rev. ___ (2015), at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Chris William Sanchirico and Reed Shuldiner:

This article develops a framework for the study of the unique effects of corporate inversions (meaning, a change in corporate residence for tax purposes) in the jurisdictions from which corporations invert (“home jurisdictions”). Currently, empirical literature on corporate inversions overstates its policy implications. It is frequently argued that in response to an uncompetitive tax environment, corporations may relocate their headquarters for tax purposes, which, in turn, may result in the loss of positive economic attributes in the home jurisdiction (such as capital expenditures, research and development activity, and high-quality jobs). The association of tax-residence relocation with the dislocation of meaningful economic attributes, however, is not empirically supported and is theoretically tenuous. The article uses case studies to fill this gap. Based on observed factors, the article develops grounded propositions that may describe the meaningful effects of inversions in home jurisdictions. The case studies suggest that whether tax-relocation is associated with the dislocation of meaningful economic attributes is a highly contextualized question. It seems, however, that inversions are more likely to be associated with dislocation of meaningful attributes when non-tax factors support the decision to invert. This suggests that policymakers should be able to draft tax-residence rules that exert non-tax costs on corporate locational decisions in order to prevent tax-motivated inversions.

February 18, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Georgia State Seeks to Hire a Tax Clinician

Georgia State LogoGeorgia State seeks to fill a  full-time assistant professor, clinical teaching position in its Low-Income Taxpayer Clinic:

The Clinical Faculty position has faculty status, voting rights, research and service expectations, as well as a renewable contract and job security commensurate with tenured faculty, although it is a non-tenure track position. Dependent upon an applicant’s qualifications and interest, the position may be filled as the Clinic Director and/or include doctrinal teaching. The start date is flexible, dependent upon date of hire.

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February 18, 2015 in Tax, Tax Prof Jobs | Permalink | Comments (0)

Marvin Chirelstein's Letter of Recommendation on Behalf of Prospective Law Prof Bill Clinton: 'He Would Do Well as a Tax Teacher'

Following up on yesterday's post on the death of Yale/Columbia tax legend Marvin Chirelstein:  Arkansas Tax Prof Will Foster passed along Marvin's 1973 letter of recommendation supporting Bill Clinton's appointment to the Arkansas law faculty:

 

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February 18, 2015 in Legal Education, Tax | Permalink | Comments (1)

Herzig: Marriage Pluralism -- Taxing Marriage After Windsor

David Herzig (Valparaiso), Marriage Pluralism: Taxing Marriage after Windsor, 36 Cardozo L. Rev. 1 (2014):

The purpose of the tax law is to collect as much revenue in as neutral manner as possible. When the current Code was enacted in 1913 and it was determined that the appropriate taxable unit was the family, a series of patchwork solutions were required to bridge the gap in between the civil and community property law regimes. Those solutions were not based on any fundamental principle of taxation, but, rather, dealing with the binary approach to marriage at that time. As the number of pluralistic approaches to family arrangements increased, the U.S. Department of the Treasury (“Treasury”) did not continue to examine the implications of those relationships. It was not until after U.S. v. Windsor, when the Court decided that the federal definition of marriage in Section 3 of the Defense of Marriage Act (“DOMA”) was unconstitutional, that Treasury was faced with addressing, at the minimum, the state law differential in what it means to be married. As a formal matter, words like “marriage” or “spouse” do appear to require Treasury to investigate the law of a particular state. Treasury had to determine which state’s definition of marriage applies for federal tax purposes: the state where the couple married (state of ceremony) or the state where the couple resides (state of domicile). As a result of the state level distinctions, Treasury issued Revenue Rule 2013-17, in which Treasury (and thus the IRS) stated that, for federal tax purposes, same-sex couples legally married in jurisdictions that recognize their marriages will be treated as married regardless of whether the state of domicile recognizes that marriage.

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February 18, 2015 in Scholarship, Tax | Permalink | Comments (0)

Schmalbeck: Ending the Sweetheart Deal Between Big-Time College Sports and the Tax System

NCAA LogoRichard Schmalbeck (Duke), Ending the Sweetheart Deal between Big-Time College Sports and the Tax System:

This paper was prepared for the annual conference of the National Center for Philanthropy and Law, held at the NYU Law School, held October 24-25, 2013. The overall topic was “Tax Issues Affecting Colleges and Universities,” and I was asked to address specifically those issues relating to athletics. This paper considers two specific issues that have in common only that they involve college sports, and are plagued by egregiously bad, (in this case, egregiously generous), tax treatment: the failure of the IRS to regard any part of the revenue from college sports as unrelated business income, and the choice by Congress to allow taxpayers to deduct 80% of contributions that they make to colleges or their “booster clubs,” even when those contributions entitle the donors to special privileges in purchasing tickets to college athletic events.

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February 18, 2015 in Scholarship, Tax | Permalink | Comments (2)

Call for Papers: International Energy Taxation

Call for papers:  International Taxation in the Energy Sector:

Oil, Gas and Energy Law Intelligence invites submissions for a special issue on International Taxation in the Energy Sector. ... Submissions of relevant tax articles are invited for inclusion in this special tax issue. It is intended that the majority of papers will cover international taxation, but country specific tax issues related to the energy sector will also be welcomed. Potential topics related to these international tax issues could include:

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February 18, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Drexel Symposium: ERISA at 40

Drexel LogoSymposium, ERISA at 40: What Were They Thinking?, 6 Drexel L. Rev. 257-587 (2014)

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February 18, 2015 in Scholarship, Tax | Permalink | Comments (0)

Princeton Review: The 200 Best Value Colleges

PrincetonPrinceton Review, Colleges That Pay You Back: The 200 Best Value Colleges and What It Takes to Get In (2015):

The Princeton Review has released a new book and online resource that addresses two of the major concerns of college applicants and their parents: paying for college and graduating with a good job and paycheck"  ... [A] one-of-a-kind guide to the nation's academically best and most affordable colleges that also have excellent records of alumni employment. The Princeton Review ... developed a unique “Return-on-Education” (ROE) rating to winnow its list of colleges for this book. ROE measures 40 weighted data points. Everything from academics, cost, financial aid, and student debt to statistics on graduation rates, alumni salaries and job satisfaction.

The Princeton Review lists the Top 5o Schools for Return on Education.  Here are the Top 10:

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February 18, 2015 in Book Club, Law School Rankings, Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 650

IRS Logo 2Bayou Buzz, Attorney General: Final Report On IRS Probe To Come Out Soon:

Attorney General Eric Holder said on Tuesday he expects the Justice Department to soon release a list of final recommendations stemming from its probe into whether the Internal Revenue Service wrongfully targeted conservative groups.

"I am satisfied with the progress that the criminal division has done; the civil rights division as well," Holder told reporters at a press conference. "I expect that we will have some final recommendations coming up relatively soon.

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February 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, February 17, 2015

Death of Marvin Chirelstein

ChirelsteinColumbia Law School, Marvin A. Chirelstein: Revered Professor and Leading Scholar of Federal Taxation, Corporate Law, and Contracts:

Columbia Law School Professor Emeritus Marvin A. Chirelstein, a leading scholar of federal taxation, corporate law, and contracts whose textbooks are still used by students across the country, died on Feb. 16. He was 86.

Chirelstein first joined Columbia Law School in 1954 to work on the Federal Income Tax Project under Dean William C. Warren. He then joined the government as an attorney in the U.S. Department of the Treasury and later taught at Rutgers School of Law and Yale Law School. Chirelstein returned to Columbia Law School as a visiting professor in 1981 and became a full-time faculty member in 1984. Two years later, he was named the first Isidor and Seville Sulzbacher Professor of Law, an appointment announced by then-Columbia University President Michael I. Sovern ’55.

In addition to being a highly sought after academic expert on taxation, contracts, and corporate law, Chirelstein was a beloved professor who once taught a seminar on the legal side of one of his favorite sports: boxing. A music lover who played the violin, he was known for his dry sense of humor and quiet wit and was adored by students. Two of his textbooks, Concepts and Case Analysis in the Law of Contracts and Federal Income Taxation: A Law Student’s Guide to the Leading Cases and Concepts, have guided generations of future lawyers through the complexities of the law. A third, Cases and Materials on Corporate Finance, opened the way to interdisciplinary analysis of corporate law.

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February 17, 2015 in Legal Education, Obituaries, Tax | Permalink | Comments (4)

Peroni Presents Getting Serious About Cross-Border Earnings Stripping Today at Minnesota

Peroni (2015)Robert Peroni (Texas) presents Getting Serious About Cross-Border Earnings Stripping: Establishing an Analytical Framework today at Minnesota as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

Earnings stripping the U.S. corporate tax base is a major objective of U.S. corporations that engage in “inversion” transactions to become a subsidiary in a foreign-parented group. Prof. Peroni will discuss how the earnings stripping problem extends beyond corporate inversions to U.S. subsidiaries of foreign-parent groups regardless of how the groups were formed, and also how this problem is independent of the debate over whether the U.S. should adopt a territorial approach. He will share his theoretical framework, developed with Steve Shay (Harvard) and Cliff Fleming (BYU), for analyzing earnings stripping and identifying the scope of an appropriate response. He will also address these issues in context of international tax reform more broadly.

February 17, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

2016 U.S. News Law School Rankings

U.S. News Logo (2014)Robert Morse (Director of Data Research, U.S. News & World Report) has announced that the new law school rankings will be released online on March 10 and in hard copy later in March. Here are the current 2015 law school rankings:

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February 17, 2015 in Law School Rankings, Legal Education | Permalink | Comments (0)

NLJ: Minorities Gain at Less Prestigious Law Schools

National Law Journal,  Lower Tier Leads in Diversity: Minorities Gain at Less Prestigious Law Schools:

DiversityThe percentage of African-American and Hispanic students enrolled in law school increased between 2010 and 2013, but those gains came almost exclusively at less prestigious law schools with lower admission standards, according to new research.

Aaron Taylor, an assistant professor at the Saint Louis University School of Law, examined application trends, Law School Admission Test (LSAT) scores and enrollment figures for minority and white students in both 2010 and 2013. He hoped to better understand how the dramatic downturn in law school applications nationwide has affected diversity.

He found that law schools at the bottom of the prestige ladder — those with the lowest median LSAT scores for incoming students — have relied disproportionately on African-American and Hispanic students to fill their classes. That shift may have served as an economic lifeline for law schools during a difficult period, but bolstered the racial stratification that already existed. Elite law schools with higher median LSAT scores actually saw a proportional decrease in African-American and Hispanic students between 2010 and 2013, Taylor found.

"You've got more black and Hispanic students attending schools that are considered less prestigious in 2013," he said of his paper, Diversity As A Law School Survival Strategy, which will appear in the Saint Louis University Law Review.

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February 17, 2015 in Legal Education | Permalink | Comments (2)

Rosenzweig: Does Punishment Work (At Least In International Tax)?

Jotwell Adam Rosenzweig (Washington University), Does Punishment Work (At Least In International Tax)? (Jotwell) (reviewing Niels Johannesen (University of Copenhagen) & Gabriel Zucman (UC-Berkeley & London School of Economics), The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown, 2014 Am. Econ. J. Econ. Policy 65):

The best way to describe the project is to quote the abstract:

During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens.

This paper provides an extremely important and timely contribution to the international tax literature. Anecdotal evidence about the effectiveness of punishment has been mixed to date, and there has been little empirical data directly on the question. Further, the question taps into a larger debate over the underlying, root causes of tax competition more generally. By providing empirical data directly on this question, Johannesen and Zucman move the debate forward in an extremely valuable way.

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February 17, 2015 in Scholarship, Tax | Permalink | Comments (0)

Law School Pedigree and Law Firm Success

Above the Law, Translating Talent Into ‘Success': Another Look At Law School Pedigree:

How do law firms fare in translating expected talent to actual success? Recently, we published the ATL Top Litigation Firms By Law School Pedigree ranking, a look, focusing on litigation practice, at how longstanding assumptions about attorney credentials are holding up in this new environment. ...

[H]ow does expected talent (as measured by law school credentials) correlate with other indicators of “success”? Below is a comparison — for amusement purposes only! — of the interplay between School Pedigree Rank and Am Law PPP Ranking. Keep in mind that this group only includes those firms in the intersection between “Top Litigation Firms” (as defined in our methodology) and the Am Law 100 (i.e., the boutiques are generally missing):

Chart A

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February 17, 2015 in Law School Rankings, Legal Education | Permalink | Comments (1)

2015 Tannenwald Tax Writing Competition

Tannenwald (2013)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2015 Tannenwald Tax Writing Competition:

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to legal scholarship of the highest quality, the Tannenwald Writing Competition is open to all full- or part-time law school students, undergraduate or graduate. Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules.

Prizes:

  • 1st Place:  $5,000, and publication in the Florida Tax Review
  • 2nd Place:  $2,500
  • 3rd Place:  $1,500

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February 17, 2015 in Legal Education, Tax, Teaching | Permalink | Comments (0)

Systematic Inequality and Hierarchy in Faculty Hiring Networks

Aaron Clauset (Colorado), Samuel Arbesman (Colorado) & Daniel B. Larremore (Harvard), Systematic Inequality and Hierarchy in Faculty Hiring Networks:

F1.large-1The faculty job market plays a fundamental role in shaping research priorities, educational outcomes, and career trajectories among scientists and institutions. However, a quantitative understanding of faculty hiring as a system is lacking. Using a simple technique to extract the institutional prestige ranking that best explains an observed faculty hiring network—who hires whose graduates as faculty—we present and analyze comprehensive placement data on nearly 19,000 regular faculty in three disparate disciplines. Across disciplines, we find that faculty hiring follows a common and steeply hierarchical structure that reflects profound social inequality. Furthermore, doctoral prestige alone better predicts ultimate placement than a U.S. News & World Report rank, women generally place worse than men, and increased institutional prestige leads to increased faculty production, better faculty placement, and a more influential position within the discipline. These results advance our ability to quantify the influence of prestige in academia and shed new light on the academic system.

Inside Higher Ed, Study Suggests Insular Faculty Hiring Practices in Elite Departments:

By now, the secret is out in some disciplines: if you want to land a tenure-line faculty job, you’d better attend a highly ranked graduate program -- not necessarily because they’re better but because the market favors prestige. But a new study suggests that “social inequality” might be worse than previously thought, across a range of different disciplines.

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February 17, 2015 in Legal Education, Scholarship | Permalink | Comments (5)

Does the U.S. System of Taxation on Multinationals Advantage Foreign Acquirers?

Andrew Bird (Carnegie Mellon), Alexander Edwards (Toronto) & Terry J. Shevlin (UC-Irvine), Does the U.S. System of Taxation on Multinationals Advantage Foreign Acquirers?:

The ability for deferral of home country taxation on multinationals’ foreign earnings within the U.S. tax code creates an incentive for firms to avoid or delay repatriation of earnings to the U.S. Consistent with this incentive, prior research has documented a substantial lockout effect resulting from the current U.S. worldwide tax and financial reporting systems. We hypothesize and find that U.S. domiciled M&A target firms with more locked-out earnings are more likely to be acquired by foreigner acquirers, compared to domestic acquirers as a result of this tax advantage. The effect is economically significant; a standard deviation increase in our proxy for locked-out earnings is associated with a 14% relative increase in the likelihood that an acquirer is foreign. We also examine the impact of the home country tax system of the foreign acquirers. Because multinationals facing territorial tax systems are able to shift income to save taxes to a greater extent than firms domiciled in worldwide countries, the tax advantages for a foreign firm acquiring a U.S. target with locked-out earnings are potentially greater when the foreign firm operates under a territorial tax system. We find that foreign acquirers of U.S. target firms with locked-out earnings are more likely to be residents of countries that use territorial tax systems.

February 17, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 649

IRS Logo 2Breitbart,  House Republicans To Pressure Senate Judiciary Members To Oppose Loretta Lynch Nomination:

More than 20 House Republicans have already signed on to a letter that Rep. Jim Bridenstine (R-OK) is circulating—and planning to send to the Senate Judiciary Committee later this week—calling on Senate Republicans to block the nomination of U.S. Attorney Loretta Lynch to replace Eric Holder as Attorney General of the United States in committee, Breitbart News has learned exclusively. ...

“We appreciate Ms. Lynch for her many years of outstanding service to our nation,” the House Republicans write. “Nonetheless, having observed her nomination hearing testimony, we can only conclude that she has no intention of departing in any meaningful way from the policies of Attorney General Eric Holder, who has politicized the Department of Justice and done considerable harm to the administration of justice.” ...

They cite specific concerns with Lynch’s ... unwillingness to support the appointment of a truly independent special prosecutor to oversee the investigation of the IRS scandal. “When given chances to differentiate herself from Attorney General Holder, she chose not to,” the House Republicans write. ...

[W]hen asked whether, unlike Attorney General Holder, she would appoint a special prosecutor to investigate the targeting of conservative groups by the Internal Revenue Service, she deflected the question, saying “[m]y understanding is that that matter has been considered and that the matter has been resolved to continue with the investigation as currently set forth.

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February 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)