TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, August 21, 2015

Jessica Berg And Michael Scharf Named Case Western Law School Co-Deans

Case WesternAs expectedJessica Berg and Michael Scharf, who have been serving as acting or interim co-deans since November 2013 following the resignation of former dean Lawrence Mitchell amidst a tawdry sexual harassment scandal and resulting lawsuit (and settlement), have been named permanent co-deans:

"Jessica and Michael worked closely with faculty, staff, students and alumni to create a sense of community and possibility," President Snyder said. "The results have been outstanding, and we look forward to the school's continued progress."

Over the past two years, the school has achieved an all-time record for annual fundraising; moved up nine slots in U.S. News & World Report rankings; and grown the number and quality of student admissions applications.

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August 21, 2015 in Legal Education | Permalink | Comments (0)

Yelp Is Now Rating The IRS: 2.5 Stars

IRS Yelp

The Atlantic, Can Yelp Make Government Agencies Work Better?:

The feds are partnering with the popular review site to encourage feedback on public services like the TSA and IRS—and preparing to get an earful.

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August 21, 2015 in IRS News, Tax | Permalink | Comments (1)

From The Paper Chase To Dumb And Dumber: Are Lawyers (And Law Students) Getting Dumber?

Bloomberg,  Are Lawyers Getting Dumber? Yes, Says the Woman Who Runs the Bar Exam:

Paper ChaseLast August, the tens of thousands of answer sheets from the bar exam started to stream into the National Conference of Bar Examiners. The initial results were so glaringly bad that staffers raced to tell their boss, Erica Moeser. ... By the time all the states published their numbers, it was clear that the July exam had been a disaster everywhere. Scores on the multiple-choice part of the test registered their largest single-year drop in the four-decade history of the test.

Panic swept the bottom half of American law schools, all of which are ranked partly on the basis of their ability to get their graduates into the profession. Moeser sent a letter to law school deans. She outlined future changes to the exam and how to prepare for them. Then she made a hard turn to the July exam. “The group that sat in July 2014 was less able than the group that sat in July 2013,” she wrote. It’s not us, Moeser was essentially saying. It’s you.


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August 21, 2015 in Legal Education | Permalink | Comments (11)

Trump Bashes $4 Billion In IRS Refunds To Illegals

TrumpForbes:  Trump Bashes $4 Billion In IRS Refunds To Illegals, by Robert W. Wood:

President Obama and Donald Trump see immigration differently. The President’s aggressive executive action on immigration is still being litigated, and Mr. Trump proposes action of a different kind. In the meantime, tax credits and refunds for illegal immigrants have become controversial. Mr. Trump says illegal immigrants get $4.2 billion in tax credits. He can point to a 2011 audit by the Treasury Inspector General for Tax Administration. It confirms that individuals who are not authorized to work in the United States were paid $4.2 billion in refundable credits.

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August 21, 2015 in Political News, Tax | Permalink | Comments (17)

5th Circuit: Donee's Liability For Billionaire's Unpaid Gift Tax And Interest Cannot Exceed The Amount Of The Gift

A divided Fifth Circuit withdrew an earlier opinion (771 F.3d 854 (5th Cir. 2014)) and held that the heirs of J. Howard Marshall (who was married to model Anna Nicole Smith) are not liable for gift tax and interest beyond the value of a gift from Marshall on which he did not pay gift tax.  United States v. Marshall, No. 12-20804 (5th Cir. Aug. 19, 2015).


One of the principal issues in this appeal is whether a donee’s liability for a donor’s unpaid gift tax and interest on that tax is limited under 26 U.S.C. § 6324(b) to the value of the gift of the donee. We hold that a donee’s liability for the donor’s unpaid gift tax and interest is capped by the amount of the gift. Accordingly, we reverse the district court’s judgment to the extent that it imposed liability upon the donees beyond the value of the gifts.


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August 21, 2015 | Permalink | Comments (1)

The IRS Scandal, Day 834

IRS Logo 2Fox News op-ed:  IRS Targeting Scheme Is a Scandal With No End in Sight, by Jay Sekulow (American Center for Law and Justice) :

When the Senate Finance Committee released its findings on the Internal Revenue Service scheme targeting conservative organizations a couple of weeks ago, the initial determination was clear.

As I reported earlier: The findings of the bi-partisan report revealed gross mismanagement at the IRS. But more than that, the evidence shows partisan political animus resulted in the unwarranted targeting of conservative groups because of their political beliefs.

But in the weeks since, as we have dug further into the lengthy report, some important and disturbing comments by former top IRS official Lois Lerner, who served as director of the Exempt Organizations Unit, have come to light.

Remember, it was Lerner who tried to blame this scandal on low-level employees at the IRS in a faux apology issued May 2013 – a flawed attempt to get out in front of an explosive inspector general’s report about the targeting scheme released just days later.

Now we are learning more of the disturbing details about Lerner’s beliefs and behavior thanks to new emails released in conjunction with a two-year probe by the Senate Finance Committee.

The picture is not a pretty one. ...

The findings of the Senate Finance Committee – along with the ongoing probes by other congressional committees – ensure that we will continue to learn more about the depth and breadth of this scheme implemented by Lois Lerner and others.

But, unfortunately, we are no closer to holding those responsible for this unlawful targeting scheme accountable.

And that must become a priority.

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

Thursday, August 20, 2015

LSAT Takers Fall 34% Since 2010

Following up on yesterday's post, Cumulative Percent Decline In LSAT By State:  Keith Lee mines the data in The Continuing Declining In LSAT Takers:


Although California's 36.5% decline does not even put it in the Top 25 states in percentage terms, the large numerical decline (4,200 (from 14,309 in 2010-11 to 9,089 in 2014-15)) is dramatic:

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August 20, 2015 in Legal Education | Permalink | Comments (2)

Wells: The Foreign Tax Credit War

FTCBret Wells (Houston), The Foreign Tax Credit War, 2016 BYU L. Rev. ___ :

The government has been involved in a sustained war against objectionable foreign tax credit transactions, and this war has caused the U.S. foreign tax credit regime to be riddled with complexity that spawns incoherent outcomes. The complexity contained in section 901 was created due to a legitimate concern. The threats posed by objectionable transactions that artificially generate excess foreign tax credits represent real policy problems. Since at least 1975, Congress and the Treasury Department have been convinced that the cross-crediting of excess foreign tax credits arising from “objectionable transactions” required a response in addition to simply relying on section 904. Thus, it is understandable that Congress and the Treasury Department would seek to redefine the foreign tax credit eligibility standards in response to transactions that generate foreign tax credits in objectionable ways. However, the historical record indicates that Congress and the Treasury Department ran roughshod over section 901 and used a scorched earth approach in their war against objectionable foreign tax credit transactions. The result is that the U.S. foreign tax credit regime is a “byzantine structure of staggering complexity.” In the rush to enact reforms, ill-conceived provisions were enacted that should not have been enacted.

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

Former UCLA Law Dean To Lead ABF Diversity Research Initiative

Moran (Rachel)Press Release, American Bar Foundation Appoints Rachel F. Moran Inaugural William H. Neukom Fellows Research Chair in Diversity and Law:

The American Bar Foundation has announced the appointment of Rachel F. Moran as the first scholar to hold the William H. Neukom Fellows Research Chair in Diversity and Law.  Moran, who recently stepped down as dean of UCLA Law School, is Dean Emerita and the Michael J. Connell Distinguished Professor of Law at UCLA School of Law, and will hold the Neukom Fellows Research Chair as a visiting professor in 2015-2016.

The Neukom Fellows Research Chair was established in 2014 by the ABF to spearhead empirical research on law and legal processes centered on issues of diversity and inequality that women, people of color, people with disabilities, and persons from the LGBTQ community face in legal practice and before the law. At the ABF Moran will serve as co-director of a new ABF research initiative, The Future of Latinos in the United States: Law, Opportunity, and Mobility.  She will also begin a new research project on U.S. inequality, diversity, and the future of legal education and the legal profession. ...

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

Avi-Yonah & Zelik: Are We Trapped By Our Capital Gains?

Reuven S. Avi-Yonah (Michigan) & Dima Zelik (Michigan), Are We Trapped by Our Capital Gains?:

For political reasons, we seem to be stuck with the current realization-based system of taxing capital gains. This means that lock-in is a serious problem. Inflation can be dealt with by adjusting basis and bunching by averaging devices, but it is hard to address lock-in, especially if step-up on death is retained. The current rate structure is 39.6% for ordinary income (higher if limits of deductions are taken into account) and 23.8% for capital gains. This has already led to a proliferation of conversion transactions and to pressure on the labor/capital distinction. We are doubtful that an effective centrifuge can be devised to segregate income from labor from income from capital. This may work in Sweden, but it may not work in a country like the US with a hyper-sophisticated capital market and very aggressive tax advisors.

Thus, we have reluctantly come to the conclusion that we are indeed trapped by our capital gains, that the current rate structure is indefensible in practice, and that we should revert to an overall rate of 28% for all income.

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August 20, 2015 in Scholarship, Tax | Permalink | Comments (4)

Utah Seeks To Hire A Tax Prof

Utah Logo (2015)The University of Utah S.J. Quinney College of Law invites applications for a tenure-track faculty position at the rank of associate professor beginning academic year 2016-17:

Qualifications for the position include a record of excellence in academics, successful teaching experience or potential as a teacher, and strong scholarly distinction or promise. The College is particularly interested in candidates in the areas of business and tax law. Interested persons can submit an application to the University of Utah Human Resources website  (with a cover letter, CV, and list of references). If you have questions, contact Baiba Hicks, Administrative Assistant to the Faculty Appointments Committee.

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August 20, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Presenting While Black

Faculty WorkshopInside Higher Ed, 'Presenting While Black':

There’s a rich of body of research suggesting that higher education can be inhospitable to faculty members of color. But little has been written about “performance” demands on black faculty members at academic conferences or meetings -- what they are and how they might contribute to overall concerns about climate.

A new paper seeks to shed on light on this topic. “Entertainers or Education Researchers: The Challenges Associated With Presenting While Black,” published in Race, Ethnicity and Education, is a phenomenological study of 33 black faculty members’ experiences presenting their research in academic settings. All were scholars of education, and many were interested in race. Common themes experienced by a majority of interviewees include audience critiques or questions about their research being sufficiently objective, and their appearance, energy levels and humor (too unprofessional, too high, not enough, respectively). Such experiences have made a majority of respondents sacrifice key parts of their identity so as to not attract criticism, and, for some, those sacrifices have been damaging enough to hurry their exit from higher education.

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August 20, 2015 in Legal Education | Permalink | Comments (4)

Section 162(f) And The Deductibility Of Fines, Penalties, And Settlement Payment

Florida Tax ReviewAbraham N.M. Shashy, Jr., Sara A. Silverstein & Ariana F. Wallizada (all of King & Spalding, Washington, D.C.), Beyond Frustration: Section 162(f) and the Deductibility of Fines, Penalties, and Settlement Payments, 17 Fla. Tax Rev. 349 (2015):

Section 162(f) is both currently relevant and a developing area of law. Taxpayers can expect continued efforts by lawmakers to broaden the scope of nondeductibility pursuant to section 162(f) as evidenced by the Obama Administration’s continued focus to that end in its current budget proposal.238 Without further clarification of section 162(f), taxpayers and the IRS alike will continue to struggle under section 162(f). At the very least, however, relevant case law and factors discussed herein may help taxpayers navigate the uncertainty of section 162(f) and avoid its applicability.

August 20, 2015 | Permalink | Comments (0)

The IRS Scandal, Day 833

IRS Logo 2Waterbury Republican American, IRS Scandal's Emerging Facts:

Sen. Ron Wyden, D-Ore., recently claimed there was nothing nefarious about the Obama Internal Revenue Service's 2010-12 scrutiny of conservative groups. Referencing a report from the Senate Finance Committee — of which he is ranking member — Sen. Wyden said, "The results of this in-depth, bipartisan investigation showcase pure bureaucratic mismanagement without any evidence of political interference."

The senator is dishonest or delusional. The facts of "IRSgate" leave no doubt there was intentional, systematic harassment. Indeed, the affair constitutes one of President Obama's biggest betrayals of Americans who bought the "hope" and "change" lines from 2008.

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August 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, August 19, 2015

Fleischer: Stop Universities From Hoarding Money By Requiring Them To Spend 8% Of Endowment Each Year

8%New York Times op-ed:  Stop Universities From Hoarding Money, by Victor Fleischer (San Diego):

Who do you think received more cash from Yale’s endowment last year: Yale students, or the private equity fund managers hired to invest the university’s money?

It’s not even close.

Last year, Yale paid about $480 million to private equity fund managers as compensation — about $137 million in annual management fees, and another $343 million in performance fees, also known as carried interest — to manage about $8 billion, one-third of Yale’s endowment.

In contrast, of the $1 billion the endowment contributed to the university’s operating budget, only $170 million was earmarked for tuition assistance, fellowships and prizes. Private equity fund managers also received more than students at four other endowments I researched: Harvard, the University of Texas, Stanford and Princeton.

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

WSJ: Grad School Loan Binge Fans Debt Worries

Wall Street Journal, Grad-School Loan Binge Fans Debt Worries:

The doubling of student debt since the recession, to $1.19 trillion, has stoked a national discussion over how to rein in college costs and debt and is becoming a major issue in the 2016 presidential race. Little noted in the outcry is the disproportionate role played by postgraduate borrowers, who now account for roughly 40% of all student debt but represent just 14% of students in higher education.

Propelling the surge in grad-school debt is a welter of federal programs that make it easy for students to borrow large amounts, then to have substantial chunks of those debts eventually forgiven. Critics of the system say it makes it easier for graduate schools to raise tuition, and for some high-earning graduates such as doctors to escape debts they can afford to repay. ...

Federal programs allow grad students to borrow essentially unlimited amounts—whatever their schools charge—while requiring only a scant credit check and no assessment of their ability to repay. Other government loan programs, such as those for undergraduate students and home buyers, set loan limits to prevent borrowers from getting too deep into debt. Undergraduates are capped at $57,500 total in federal loans.

As graduate-school enrollment swelled over the past decade, the number of Americans owing at least $100,000 in student debt more than quintupled to 1.82 million as of Jan. 1, New York Federal Reserve data show. The number of all student borrowers nearly doubled to 43.34 million.


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August 19, 2015 in Legal Education | Permalink | Comments (4)

Cumulative Percent Decline In LSAT By State

LSAT (2015)Matt Leichter, Where People Aren’t Taking the LSAT:

Cumulative Percent Decline in LSAT by State (2010-2014):
1.   Minnesota (-45.7%)
2.   Wisconsin (-44.9%)
3.   New Hampshire (-44.7%)
4.   Vermont (-43.9%)
5.   Ohio (-43.7%)
6.   Michigan (-43.6%)
7.   Utah (-43.4%)
8.   Iowa (-42.6%)
9.   Missouri (-42.0%)
10. North Carolina (-41.7%)

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

Law Prof's Last Lecture: Unsolicited Advice for Future and Current Lawyers

Last LectureJohn Lande (Missouri), My Last Lecture: More Unsolicited Advice for Future and Current Lawyers:

I was invited to write this essay on the occasion of my retirement, following in the footsteps of my former colleague, Steve Easton, who wrote a wonderful article, My Last Lecture: Unsolicited Advice for Future and Current Lawyers. My essay supplements Steve’s article with additional advice about law school and legal practice. This article is suitable for students in many different courses, orientations, and professional development programs.

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August 19, 2015 in Legal Education | Permalink | Comments (1)

Pittsburgh Seeks To Hire A Tax Prof Or Tax Clinician

Pitt Logo (2015)The University of Pittsburgh School of Law invites applications from entry-level or lateral faculty for one position in a variety of fields, including tax, beginning in the 2016-17 academic year:

The appointment is expected to be either at the rank of assistant, associate or full professor, if tenure stream, or assistant clinical, associate clinical or full clinical professor, if non-tenure stream. This recruitment seeks to fill particular curricular needs in one of two ways: either a tenure-stream or tenured professor teaching in one or more of the following areas: Tax, Property, Estates and Trusts, or, alternatively, a clinical professor outside of the tenure stream who would direct our Tax Clinic and teach one or more courses in Tax Law. Preference will be given to those with an interest in experiential learning. ...

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August 19, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Divided D.C. Circuit Says Anti-Injunction Act Bars Challenge To IRS's Bank Reporting Regulation

In Florida Bankers Association v. Department of the Treasury, No. 14-5036 (D.C. Cir. Aug. 15, 2015), a sharply divided D.C. Circuit held that the Anti-Injunction Act (26 U.S.C. § 7421(a)) barred a challenge by two bank associations to tax regulations requiring U.S. banks to report to the IRS interest earned by non-resident aliens (even though such interest is not subject to U.S. tax). In a blistering dissent, Judge Henderson argues that the majority's decision is directly contrary to the Supreme COurt's recent decision in Direct Mktg. Ass’n v. Brohl, 135 S. Ct. 1124 (2015), and two prior D.C. Circuit decisions. For a detailed discussion of the opinion see Patrick J. Smith (Ivins, Phillips & Barker, Washington, D.C.), D.C. Circuit Majority Opinion in Florida Bankers Not Consistent with Supreme Court’s Direct Marketing Decision (Part 1, Part 2).  (Hat Tip: Kristin Hickman.)

August 19, 2015 in New Cases, Tax | Permalink | Comments (0)

Chronicle Of Higher Education: Why Don't We Ever Assess The Value Of The Student Assessment Mania?

AssessmentChronicle of Higher Education op-ed:  Does Assessment Make Colleges Better? Who Knows?, by Erik Gilbert (Associate Dean, Arkansas State):

Has anyone looked into whether assessing student-learning outcomes over many years has made American colleges, or students, better in some way? Has anyone tried to compare institutions with different approaches to assessment? I am a historian so I am not familiar with the education research, but as best I can tell from a literature search and from asking people in the field the answer is "no."

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August 19, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 832

Tuesday, August 18, 2015

WSJ: How Etsy Crafted A Tax Strategy In Ireland

ETSYWall Street Journal, How Etsy Crafted a Tax Strategy in Ireland:

Etsy, the online marketplace for artisans, works to keep its business “mindful, transparent and humane,” but that became tricky when it crafted a new tax strategy.

The startup, which built its eBay-like marketplace in Brooklyn, has been so serious about authenticity that its founder made his own underwear. But as it geared up for its initial public offering, the company adopted some ideas from rival technology companies that have been aggressive about routing their inventions and earnings through low-tax jurisdictions overseas to minimize what they might owe to Uncle Sam.

Its advisers proposed a number of more-complex options, but the company passed on structures known by nicknames like the “Double Irish” or “Dutch Sandwich” that have become flash points in the broader debate about gaps in the corporate tax code, according to people familiar with the company.

What it did agree to, though, was to relocate some of its intellectual property to Dublin earlier this year. While that approach ranks as relatively straightforward in the business of tax avoidance, it has taken Etsy into the realm of legalistic corporate-speak and vague disclosure that its founders long railed against. Etsy briefly described the moves this way in a May earnings release: “Etsy’s revised corporate structure was implemented to more closely align with its global operations and future expansion plans outside the U.S.”

The questions Etsy grappled with as it planned its tax strategy show the difficulty of staying true to values proclaimed on its website that include running a “mindful, transparent and humane business” while maturing into a publicly traded company that must compete globally with rivals that are often less idealistic.

August 18, 2015 in Tax | Permalink | Comments (0)

What Law Schools Can Learn From Medical Schools

Law MedicineNeil W. Hamilton (St. Thomas) & Sarah Schaefer (St. Thomas), What Legal Education Can Learn from Medical Education About Competency-Based Learning Outcomes Including Those Related to Professional Formation (Professionalism), 29 Georgetown J. Legal Ethics ___ (2016):

Following the ABA’s August 2014 changes in the accreditation standards for law schools requiring the establishment (and assessment) of learning outcomes that include “competency” in knowledge of the law, legal analysis, legal research, problem-solving, effective communication and “the exercise of proper professional and ethical responsibilities,” every law school will now develop competency-based learning outcomes and a curriculum that help each student develop and be able to demonstrate both the listed core competencies and “other professional skills needed for competent and ethical participation as a member of the legal profession.” These accreditation changes require a greater emphasis on professional and ethical responsibilities and both the articulation of learning outcomes for each student on these responsibilities and assessment of the learning outcomes.

Medical education, following accreditation changes in 1999 that emphasized learning outcomes (and assessment) of core competencies is fifteen years in front of legal education in learning how most effectively to help students achieve competency-based learning outcomes including those emphasizing ethical responsibilities. This article analyzes what legal education can learn from medical education’s experience over these past fifteen years with competency-based learning outcomes, especially ethical competencies.

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August 18, 2015 in Legal Education, Scholarship | Permalink | Comments (6)

Tax Prof Baby

I am delighted to publicly welcome Rhema ("ray-ma"), daughter of my dear Pepperdine friend and tax colleague Khrista Johnson and her husband Alton.  Rhema was born on August 8 and checked in at 7 pounds, 11 ounces. 


Khrista explains the origins of the name Rhema:

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August 18, 2015 in Legal Education, Tax, Tax Profs | Permalink | Comments (0)

NY Times: Black Lawyers Navigate A Rocky, Lonely Road To Partner

NY Times Dealbook (2013)New York Times Deal Book:  Many Black Lawyers Navigate a Rocky, Lonely Road to Partner, by Elizabeth Olson:

Only 5.6 percent of lawyers who hold top leadership positions at law firms are anything other than white, according to a study by the National Association for Law Placement. ... Fewer than 2 percent of law firm partners are black, according to the study, based on data collected in 2014; black women are even more uncommon in that rarefied air.

Law firms maintain that, despite their best efforts to recruit black associates over the last two decades, large numbers leave for better-paying, more secure jobs or for less quantifiable reasons, like family responsibilities. Only a handful persevere on the yearslong path to joining a firm’s lucrative leadership circle. ...

According to data tracking African-American representation, the percentage of black partners doubled in the early 2000s, then began sinking in 2008 as law firms adjusted to the recession’s fallout on their business. Minority lawyers were hit particularly hard by layoffs. Like the low percentage of black law firm partners, black associates — who accounted for 4 percent of all firm associates last year — have seen their share of the law firm jobs stagnate in recent years. ...

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August 18, 2015 | Permalink | Comments (0)

IRS Underestimated By 200% The Number Of Taxpayer Victims Of Identity Theft By Hackers Who Gained Access To Tax Returns Through IRS Website

ID TheftThree months ago, the IRS disclosed that hackers gained access on the IRS website to tax returns for 100,000 taxpayers (more here). Yesterday, the IRS disclosed that the true number is 330,000.

August 18, 2015 in IRS News, Tax | Permalink | Comments (0)

John Oliver's

NYLJ Special Report: The New Normal In Law Schools

NYLJNew York Law Journal Special Law School Report, Arriving At a New Normal:

August 18, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 831

Monday, August 17, 2015

Simkovic Presents The Knowledge Tax Today At Loyola-L.A.

Simkovic 2Michael Simkovic (Seton Hall) presents The Knowledge Tax, 82 U. Chi. L. Rev. ___ (2015), at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Labor economists struggle to explain why the rates of return to higher education have remained much higher than the rates of return to other investments. This article proposes a novel explanation: distortionary taxation.

Economic theory suggests that when investments that are substitutes for one another are taxed inconsistently, investors are less likely to choose the investment option that is taxed more heavily. Unfavorable tax treatment of higher education relative to other forms of investment could create an undersupply of educated labor. This distortion would reduce economic growth and social welfare.

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August 17, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (12)

Cooley Law School Enrollment Shrinks 52%, Full-Time Faculty Shrinks 58%

Thomas Cooley Logo (2014)Detroit Free Press, Cooley Law School Enrollment Drops 52%:

More than 3,900 students were enrolled at Cooley Law School in 2010. That was the zenith. It’s been downhill since. Cooley’s enrollment for the 2014-15 academic year was 1,880. That’s a drop of 52%. ...

Law school enrollment has been declining nationwide since 2010, ABA data show. At Cooley, it has declined almost three times as fast.

During its years of explosive growth, Cooley opened three satellite campuses in Michigan and one near Tampa. Last year, administrators at the school, now known as the Western Michigan University Thomas M. Cooley Law School, closed its Ann Arbor campus and laid off faculty members in an effort to mitigate the losses. ...

Records from the ABA show 119 full-time faculty employed at Cooley in the spring of 2014 compared to 49 in the fall. ...

Cooley is one of the least selective law schools in the country. That is by design, [President and Dean Don LeDuc] said. The majority of Cooley’s students are part-time, and many are not considered traditional law school applicants. It’s Cooley’s commitment to proving an opportunity for these prospective students that sets it apart from its counterparts, he said. Among the pool of 2014 applicants, 85% received offers. [President LeDuc earned $675,626 in compensation in 2013, the last year figures are publicly available.] ,,,

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August 17, 2015 in Legal Education | Permalink | Comments (1)

IRS May Tax Free Employee Meals At Silicon Valley Tech Companies

ComfortSilicon Valley Business Journal, No More Free Meals for Tech Workers? IRS Advances Project That Could Tax On-Site Food Perks:

The idea that there’s no such thing as a free lunch could eventually ring true for Silicon Valley employees who get complimentary meals at work, as the Internal Revenue Service and Department of the Treasury have taken a step closer to potentially taxing such meals.

Last year, the IRS suggested in its Priority Guidance Plan that it was exploring modifying sections of the Tax Code concerning employer-provided meals that it believed were problematic. Two weeks ago, the agency suggested in its new annual Priority Guidance Plan that it has moved beyond exploring the possibility of making changes to actually starting a project that could change regulations on these meals. The move does not necessarily mean that the IRS will start taxing meals.

However, the guidance plan issued July 31 means the issue remains on the agency’s radar screen and it is devoting more time and resources to settling the question, which could indeed result in eventually taxing meals.

Silicon Valley companies like Google Inc., Yahoo Inc. and Facebook Inc., in addition to many non-tech companies, provide their employees with free meals and loads of snacks for convenience, and to keep them happy and at work. Google told the Silicon Valley Business Journal that in Mountain View alone, it serves 30,000 meals per day at its 30-plus campus cafés.

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

ABA Seeks Comments On Law School Accreditation Standards

ABA Logo 2For academic year 2015-16, the Council of the ABA Section of Legal Education and Admission to the Bar has directed the Standards Review Committee to review the following Standards and Interpretations of the ABA Standards and Rules of Procedure for Approval of Law Schools:

  • Interpretation 305-2. [Prohibition on granting credit for participation in a field placement program for which a student receives compensation.]

Comments can be submitted to JR Clark by September 11, 2015.

August 17, 2015 in Legal Education | Permalink | Comments (0)

Welcome, Pepperdine Law School Class Of 2018

Launch Week 4

Welcome to the Pepperdine Law School Class of 2018, which begins their legal education today in a week-long introduction to law school and professional formation.  Law students today face a very difficult challenge, with tuition at record highs and the legal profession in turmoil.  Yet you are part of a class that is very strong academically and the most diverse in our history — kudos to Dean Shannon Phillips and her team for putting together such a gifted class in such tough circumstances.  Although this is only my third year at Pepperdine, I have experienced first hand what a very special place this is.  As you have already seen, you will be spending the next three years in a spectacularly beautiful campus and city.  You will begin to experience this week the faculty and staff's faith-fueled commitment to you and to your success that manifests itself in various ways, large and small, in daily life here.  You will hear a lot of advice and goal-setting this week in the wonderful program put together by Dean Danny DeWalt and his team.  My wish is that you will love your time at Peppperdine and that you will leave here in three years with a deep sense of your professional and personal calling in law and in life. I look forward to seeing many of you in my tax classes in your second and third year (and at the softball game on Friday and the dean's bible study on Wednesday nights).

Update:  My friend and colleague Al Sturgeon has further thoughts here.

August 17, 2015 in Legal Education | Permalink | Comments (0)

Tax Papers At 2015 Big Ten Junior Law Faculty Conference

Big TenTax papers at last week's 2015 Big Ten Junior Law Faculty Conference at Indiana:

Margaret Ryznar (Indiana-Indianapolis), An Easy Solution to the Marriage Penalty:

The marriage penalty in the federal income tax continues to persist despite universal agreement that there is no place for it. This Article is modest yet revolutionary in its proposal to eliminate the marriage penalty: to create another tax filing status for two-income earning couples that earn an amount within a particular percentage of each other. This filing status would offer double the rates of single filers because it accommodates two incomes. Such a simple solution to the marriage penalty causes the least upheaval to the general legal framework that treats spouses as a single economic unit. It has the additional attributes of finally no longer penalizing a significant subset of women who work and marry.

Adam Thimmesch (Nebraska), Transacting in Data: Tax, Privacy, and the New Economy:

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

Appalachian Law School Enrolls 32 1Ls, Down 38% From 2014's 52 1Ls (And Down 78% From 2011's 145 1Ls)

Appalachian LogoFollowing up on yesterday's post, UConn Law School Enrolls 100 1Ls, Down 38% From 2014's 160 1Ls:  Appalachian Law School has enrolled 32 1Ls this year, down 38% from 2014's 52 1Ls (and down 78% from 2011's 145 1Ls).

Appalachian has lost 62% of its faculty since Fall 2014:  8 of the 13 faculty teaching there in Fall 2014 (plus their Director of Academic Success and Bar Preparation) are not teaching there in Fall 2015.  They have been replaced with visiting professors and adjuncts.

Prior TaxProf Blog coverage:

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

The IRS Scandal, Day 830

IRS Logo 2 Forbes:  Gross Mismanagement At IRS, Says Senate Report, by Robert W. Wood:

After a long wait, the Finance Committee has released a bipartisan report on the IRS scandal. Since some private taxpayer information was at issue, there have been closed door sessions and interviews leading up to the report. The IRS wasn’t really targeting, it was just incompetent, the report seems to suggest. Top IRS managers did not stay informed about the applications involving possible political advocacy.

And management, top management at least, didn’t really monitor things. Lois Lerner was on top of the issues as early as 2010, but failed to tell her superiors, the report suggests. In fact, the report says that under Ms. Lerner’s leadership, the IRS Exempt Organizations unit launched seven initiatives to handle applications from Tea Party and other groups for tax-exempt status. Each of the seven initiatives failed.

That meant long delays—as long as five years—for some organizations awaiting decisions on IRS tax exemption applications. What’s more, the report says IRS employees handling exemption applications did not appear to be worried about delays or customer service. In some cases, organizations got tired of waiting and disbanded. For others, the delays meant forgone grants.

This report was delayed for over a year after the IRS belatedly informed the Senate Finance Committee that the IRS could not recover large numbers of potentially responsive documents. They were lost when Lois Lerner’s hard drive crashed in 2011. 

The report acknowledges that the IRS functioned in a politicized atmosphere following the the Supreme Court’s Citizens United decision. ...

“Undoubtedly,” the report says ”these events will erode public confidence and sow doubt about the impartiality of the IRS. The lack of candor by IRS management about the circumstances surrounding Lois Lerner’s missing emails may only serve to reinforce those doubts.” It is hard to argue with that.

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August 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, August 16, 2015

IRS: Identity Theft Victims Can Receive Tax-Free Data Protection Services

ID TheftIRS Announcement 2015-22

The IRS will not assert that an individual whose personal information may have been compromised in a data breach must include in gross income the value of the identity protection services provided by the organization that experienced the data breach. Additionally, the IRS will not assert that an employer providing identity protection services to employees whose personal information may have been compromised in a data breach of the employer’s (or employer’s agent or service provider’s) recordkeeping system must include the value of the identity protection services in the employees’ gross income and wages. The IRS will also not assert that these amounts must be reported on an information return (such as Form W-2 or Form 1099-MISC) filed with respect to such individuals. This announcement does not apply to cash received in lieu of identity protection services, or to identity protection services received for reasons other than as a result of a data breach, such as identity protection services received in connection with an employee’s compensation benefit package. This announcement also does not apply to proceeds received under an identity theft insurance policy; the treatment of insurance recoveries is governed by existing law.

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August 16, 2015 in IRS News, Tax | Permalink | Comments (1)

UConn Law School Enrolls 100 1Ls, Down 38% From 2014's 160 1Ls

UConn Law Logo (2015)Connecticut Law Tribune, Law Schools Look Ahead to New Year:

Summer's days are numbered, and new and returning law students are gearing up for their fall semesters at area law schools.

Law schools at the University of Connecticut, Yale University, Quinnipiac University and Western New England College are still recovering from the steep decline in prospective law students, as is the rest of the country, but that has not stopped the schools from providing new programs and course offerings. ...

One of the primary issues law schools are facing is declining enrollment, a trend that has been well documented over the past several years.

At UConn, that change took time to be noticeably felt and the incoming class this year is exactly 100 students, down from 160 students in 2014 [and 181 students in 2011], according to Jeanne LeBlanc, a UConn law school spokeswoman.

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August 16, 2015 | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

The IRS Scandal, Day 829

IRS Logo 2Renew America, True the Vote Still Pursuing IRS, Lois Lerner and Election Integrity:

Sometimes turn around IS fair play.

Especially when a fair count of legitimate votes is at issue.

IRS targets True the Vote and its founder-president Catherine Engelbrecht are still pursuing the Internal Revenue Service, Lois Lerner, now retired in disgrace, and election integrity.

True the Vote's latest weekly email declared:

Just When You Thought the IRS Targeting Scheme Couldn't Get More Twisted...

You would think that TTV would eventually become jaded after years of bombshells in the wake of Lois Lerner's infamous May 2013 admission to targeting organizations presumed to be conservative. In recent days, however, we have come to understand new wrinkles in the case that offer a whole new dimension of insight. The Wall Street Journalrecently reported that Lerner was working directly with the chief officer of the Wisconsin Government Accountability Board – the public entity charged with enforcing election and campaign finance laws – during the targeting period. According to the report, "Emails we've seen show that between 2011 and 2013 the two were in contact on multiple occasions, sharing articles on topics including greater donor disclosure and Wisconsin's recall elections ... This timing is significant because those were the years when the IRS increased its harassment of conservative groups and Wisconsin prosecutors gathered information that would lead to the John Doe probe that officially opened in September 2012." This revelation helps make sense of the fact that multiple IRS targets were questioned about what they knew of TTV's involvement in the 2012 Verify the Recall effort in Wisconsin. The hits just keep on coming."

The Wisconsin Supreme Court just terminated the John Doe probe as baseless in law and reason.

The obviously political IRS targeting of conservative organizations and Engelbrecht personally may have been motivated by the desire to have President Obama reelected, but don't expect the Obama Justice Department to pursue that.

Fortunately, True the Vote remains on the case.

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August 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, August 15, 2015

This Week's Ten Most Popular TaxProf Blog Posts

Charleston Law School Denies Tenure To Three Deserving Candidates Due To Financial Exigency

Charleston LogoPost and Courier, Charleston School of Law Leaders Withhold Tenure:

Charleston School of Law owners announced Friday that they wouldn’t be offering tenure to non-tenured faculty members because the school is in a financial crisis.

In a  memo to eight non-tenured faculty members, school owners said there are three candidates who already have met the standards for tenure, but they will not get it because of the school’s financial problems. ...

School leaders in May laid off seven tenured faculty members, and two of them have filed breach-of-contract lawsuits against the school. [One has obtained a TRO reinstating her on the faculty.] ...

Law school owners and representatives from The InfiLaw System, a company trying to buy the school, have said one of the reasons the school is in a financial crisis is because the owners took $25 million in profit out of the school between 2010 and 2013.

The remarkable memo is here:

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August 15, 2015 in Legal Education | Permalink | Comments (0)

Property Taxes Are Highest In New Jersey, Illinois; Lowest In Hawaii, Alabama

The IRS Scandal, Day 828

IRS Logo 2 MSNBC, The Rachel Maddow Show/The MaddowBlog:

Fox News’ Martha MacCallum posed a question to Louisiana Gov. Bobby Jindal (R), which he seemed eager to answer. From the transcript:

MACCALLUM: On the same topic, let’s go to Governor Jindal. Carly Fiorina, also on the stage, said that she would go so far as to shut down the government over the issue of defunding Planned Parenthood. Would you do that? Would you be willing to shut down the government when it comes to defunding this group?

JINDAL: Well, a couple of things. Planned Parenthood had better hope that Hillary Clinton wins this election, because I guarantee under President Jindal, January 2017, the Department of Justice and the IRS and everybody else that we can send from the federal government will be going in to Planned Parenthood.

This generated no real follow-up, which is a shame because it was an amazing answer. According to Jindal, his administration would dispatch the Internal Revenue Service to target Planned Parenthood because, well, Bobby Jindal doesn’t like Planned Parenthood.

But there’s a small problem with idea: it’s brazenly illegal.

Remember, Richard Nixon, among other things, tried to use the IRS as a political weapon to target his political foes – and had he not resigned in disgrace, Nixon would have been impeached for having done so. More recently, Republicans and much of the Beltway media accused President Obama of using the IRS to punish far-right Tea Party groups. The allegations proved baseless, but for a short while, Republicans saw this as a devastating scandal involving an abusive, out-of-control White House using the IRS as a political weapon.

And yet, there was Jindal – according to some, one of the smarter GOP officials on the national scene – offering a striking example of a presidential candidate vowing to commit impeachable offenses before the election even happens.

Mother Jones, Bobby Jindal Thinks the IRS Shouldn't Be Used to Target Political Enemies, Except For His

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August 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, August 14, 2015

Weissenberger's Made to Measure Man: 'Outrageously Humorous Law School Academic Politics Interweave With Intrigue Of Nazi Stolen Art'

GlenMy dear friend and former Cincinnati colleague Glen Weissenberger, whose firing as Dean of DePaul Law School in 2009 sparked nationwide condemnation (links below), has published his first novel, Made to Measure Man (Aug. 11, 2015):

What happens when charming law school dean, Garth Matthews' predictable life is completely upended by his surprise receipt of a multimillion dollar award for his leadership? While Garth is intrigued by the hilarious, crotchety octogenarian matriarch of the Schmidhausen Foundation that created the award, Agnes, he is immediately romantically captivated by Agnes’ granddaughter, Julia, whose beauty and brilliance are accompanied by an enchanting mysterious quality. Romantic suspense and entertaining humor characterize the ten days of Garth’s life captured in Made to Measure Man in his adventures to find out more about this upcoming achievement award from the bestowing Zürich foundation, and more about the elusive Julia. Is the Schmidhausen Foundation involved in nefarious activities? What if the lovely, elegant Julia is not who she appears to be? And despite Garth’s being a man who is usually in control of his surrounding environment, what happens when he is drawn into the suspenseful world of art theft when he is actually considered a suspect? Outrageously humorous episodes of law school academic politics interweave with the intrigue of Nazi stolen art, and Garth travels from his home in Chicago to New York City to unravel these mysteries.

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August 14, 2015 in Book Club, Legal Education | Permalink | Comments (1)

Weekly Tax Roundup

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