TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, September 9, 2017

The IRS Scandal, Day 1584: Trump’s DOJ Won’t Pursue Criminal Charges Against Lois Lerner

IRS Logo 2

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September 9, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Friday, September 8, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Sloan Speck (Colorado) reviews a new work by Lee Anne Fennell and Richard McAdams (Chicago), Inverted Theories.

Speck (2017)Since the early 1960s, the interdisciplinary turn in legal scholarship has been marked by academic lawyers’ engagement with, and adoption of, theoretical work from economics, anthropology, and philosophy, among other fields. In an important new article, Lee Anne Fennell and Richard McAdams argue for a novel reconsideration of how certain of these theories are deployed by law professors. Specifically, Fennell and McAdams identify a category of theories in which a central (and typically normative) claim “takes center stage,” while implausible or stylized assumptions that qualify this claim are minimized. For this type of theory, the footnotes supersede the headline, but readers are just skimming the large print. Fennell and McAdams argue that we should “turn the spotlight” on these “untrue assumptions” by inverting these theories, putting the footnotes first and downsizing the headline. Doing so will lead to more fruitful inquiry, both in terms of the questions we ask and the answers we find.

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September 8, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Should Law Schools Shift Scholarship Money From Merit (LSAT & UGPA Medians) To Need?

Deborah Jones Merritt (Ohio State) & Andrew Merritt, Agreements to Improve Student Aid: An Antitrust Perspective, 67 J. Legal Educ. ___ (2017):

Law schools tie much of their scholarship money to LSAT scores and undergraduate grades. By awarding substantial discounts to students with above-median indicators, schools attempt to climb the U.S. News ranking ladder. This practice, as many educators recognize, reduces access to legal education for low-income and minority students. As a result, many schools would like to shift at least some of their scholarship funds to need-based awards. Schools, however, struggle to make that change unilaterally; they worry about losing ground in the rankings race.

Could law schools act collectively to reform their scholarship practices? Could the ABA reshape those practices by adopting an accreditation standard that limits the award of “merit” based aid?

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September 8, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

My First 100 Days

100 DaysToday marks my 100th day as Dean of Pepperdine Law School.   Since my first day, I have loved working towards our shared goal to become the nation's premier Christian law school by combining academic and research excellence with a deep-rooted commitment to our Christian mission that welcomes people of all faiths and backgrounds.  When I sought the deanship, I laid out my three priorities in achieving that goal.

My top priority is to increase our students' return on their investment in a Pepperdine legal education in today's changed legal landscape.  As readers of this blog know, since 2010 law schools have suffered a 38% decline in applicants (and a 45% decline in applicants in the highest LSAT band Pepperdine seeks to attract), which has led to declining credentials in incoming classes and to declining bar passage and job placement results for graduates.  Most law schools have responded by reducing the size of their incoming classes.  This fall, with the full support of the university, Pepperdine reduced the size of our entering class by over 20% and increased our median LSAT (160) and UGPA (3.62).

We are right-sizing the law school in a financially sustainable way by paring our budget while investing in areas of excellence, ramping up our fundraising efforts, and expanding our non-J.D. enrollment in areas of our historic strength.  We are leveraging our #1 ranked (for 12 of the past 13 years) Straus Institute for Dispute Resolution by expanding our Masters and LL.M. degree programs. Last month, we launched a new LL.M. degree program in Entertainment, Media, and Sports Law to capitalize on the opportunities for our students in the Los Angeles market, the university's partnership with AEG, and our great faculty in those areas.  In addition, we are leveraging our faculty's nationally recognized strength in teaching through our new online master of legal studies program, which we launched in August with enrollment 67% higher than our projections.

We also have hit the ground running on my other priorities to:

  • Pursue ambitious and accountable excellence in everything we do
  • Build a community in which all students, faculty, and staff are loved, nurtured, and challenged to grow professionally, personally, and spiritually

Over the summer, my wife and I hosted 20 dinners with faculty and students, and will over the 2017-18 academic year host dinners for the entire first year class.  I met with staff departments to discuss the critically important ways they contribute to the school.  My Dean of Faculty, Associate Dean for Academic Affairs, Associate Dean for Research and Faculty Development and I met with each member of the faculty to discuss how we can support them to help achieve our shared ambitious goals for the school.


I am proudest of simply working on a daily basis over these first 100 days with an amazing collection of faculty, students, administrators, and staff.  Mine has been an unusual journey to the deanship, and my biggest surprise is how much I enjoy the new aspects of my life in alumni relations, advancement, and university administration. In fact, I can honestly say that I have loved every minute of the job, except one:

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September 8, 2017 in Legal Education | Permalink | Comments (3)

Kleinbard: The Right Tax At The Right Time

Florida Tax Review  (2015)Edward Kleinbard (USC), The Right Tax at the Right Time, 20 Fla. Tax Rev. ___ (2017):

The companion paper to this (Capital Taxation in an Age of Inequality, 90 S. Cal. L. Rev. 593 (2017)) argues that a moderate flat-rate (proportional) income tax on capital imposed and collected annually has attractive theoretical and political economy properties that can be harnessed in actual tax instrument design. This paper continues the analysis by specifying in detail how such a tax might be designed.

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September 8, 2017 in Scholarship, Tax | Permalink | Comments (0)

Allison Christians Named Associate Dean For Research And Promoted To Full Professor At McGill

Christians (2018)The McGill Faculty of Law is pleased to announce that Allison Christians has been promoted to the rank of Full Professor, effective September 1.

Professor Christians, who was recently renewed as H. Heward Stikeman Chair of Tax Law, coincidentally began her term as Associate Dean (Research) at the Faculty on the very same date for a three-year mandate.

Her research and teaching focus on national and international tax law and policy issues, with emphasis on the relationship between taxation and economic development and on the role of government and non-government institutions and actors in the creation of tax policy norms.

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September 8, 2017 in Legal Education, Tax, Tax Profs | Permalink | Comments (1)

Steinbuch: Questionable Arguments About The LSAT's Role In Admissions And Bar Passage

Following up on my previous posts:

Robert Steinbuch (Arkansas-Little Rock), Questionable Arguments About Serious Statistics:

I write to continue the interesting discussion with Aaron Taylor regarding the proper role of the LSAT in law school admissions. ...

Unfortunately, Taylor confuses some simple statistical truths, both in general and regarding LSAT scores and bar passage, specifically: First, correlations can be explained through any of the following: causation, reverse causation, or "third" variables. Second, nobody actually thinks that LSAT scores cause bar outcomes or vice versa. After all, how can a score on one exam cause a score on another? And, third, LSAT scores demonstrably help predict bar success due to at least one underlying common causal factor of both, i.e., likely some measure of skill. Empirical analysis is complex, and clichés and truisms do nothing to simplify it....

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September 8, 2017 in Legal Education | Permalink | Comments (1)

Thursday, September 7, 2017

Hemel Presents In Defense Of The State And Local Tax Deduction Today At Boston College

HemelDaniel Hemel (Chicago) presents Easy on the SALT: In Defense of the Deduction for State and Local Taxes at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Diane Ring, and Shu Yi Oei:

Congressional Republicans and Trump administration officials have said that they plan to repeal the deduction for nonbusiness state and local taxes (SALT) as part of a comprehensive tax reform package. This essay critically examines the major arguments for repealing the SALT deduction. Repealing the deduction and using the resulting revenues to reduce federal rates across the board would likely lead to greater tax-induced deadweight loss overall. Repealing the deduction also would distort decisions about the financing of education and health care, which together account for more than half of all state and local government spending. Repeal would further encourage a shift from nonbusiness to business taxes at the state and local level, and potentially would result in more borrowing by subnational governments in the short and medium term.

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September 7, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Tax Prof Panel On A U.S. Perspective On Tax Compliance And Tax Privacy At Cambridge

CambridgeWilliam Byrnes (Texas A&M), Michael Hatfield (University of Washington), Leandra Lederman (Indiana-Bloomington), and Adam Thimmesch (Nebraska) participated in a panel on Tax Compliance and Tax Privacy: A U.S. Perspective at the 35th Cambridge International Symposium on Economic Crime yesterday at the University of Cambridge:

This panel of US tax academics explored cutting edge issues in tax compliance, information reporting, and tax privacy. The topics include recent developments in the behavioral economics and psychology of tax compliance, and the rapidly evolving use of technology and big data in tax enforcement and its impact on the privacy of taxpayers

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September 7, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

How Top U.S. Law Firms Get Away With Paying Women Less

Bloomberg Businessweek, How Top U.S. Law Firms Get Away With Paying Women Less:

In January 2014, the law firm Chadbourne & Parke hired Kerrie Campbell to work in its Washington office. After 27 years in the business, she’d finally reached the pinnacle of private law practice: partnership at a top-tier firm—a century-old stalwart of the elite New York bar. In a press release, Chadbourne said, “We are thrilled to welcome her.”

After two years, the thrill was gone. Chadbourne’s managing partner, Andrew Giaccia, and Abbe Lowell, its head of litigation, appeared together at Campbell’s office. Her time at the firm had been rocky. Still, she says she was shocked by what they had to say. The firm’s five-member, all-male management committee had decided that she didn’t “fit” at Chadbourne. She wasn’t being fired, exactly, but she ought to find a new job, they told her. To “incentivize” a swift departure, her compensation would be cut about 60 percent, to $9,000 a month, less than that of a first-year associate right out of law school. Giaccia and Lowell suggested that, to preserve her reputation, she leave quietly.

It felt like “someone smacking a baseball bat into your gut,” Campbell, 55, says. The firm denies her version of events.

Campbell—a “pit bull,” according to her son Tyler—did not leave quietly. She filed a sex-discrimination suit in August 2016 alleging that Chadbourne treated her like a second-class citizen, paid her much less than male partners, and—when she objected—showed her the door. Indignant, Chadbourne denied wrongdoing and lashed out. It said in court papers that Campbell lacked basic competence, alienated colleagues, and drank too much at firm social events—all accusations she denies.

For a profession dedicated to lofty concepts such as “equal protection” and “due process,” the practice of law has allowed unequal treatment of women to fester for decades. A 2016 survey of the 350 largest U.S. law firms found female partners on average received $659,000 in annual pay. Male partners, meanwhile, averaged $949,000, or 44 percent more.

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September 7, 2017 in Legal Education | Permalink | Comments (0)

Insights From Behavioral Economics Can Improve Administration Of The EITC

Leslie Book (Villanova), David Williams (Intuit) & Krista Holub (Intuit), Insights from Behavioral Economics Can Improve Administration of the EITC:

The IRS is a non-traditional but key player in delivering social benefits to the nation’s working poor. In fact, it administers one of the nation’s largest anti-poverty programs: the earned income tax credit (EITC). The EITC is generally praised for its role in reducing poverty and incentivizing low-wage work. While the credit has bipartisan support, the IRS continues to face strong criticism over EITC compliance issues.

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September 7, 2017 in Scholarship, Tax | Permalink | Comments (0)

California Bar Trustees Vote 6-5 To Give Supreme Court Three Bar Exam Cut Score Options: Keep It 144, Lower To 141.4 Or 139

California Bar ExamThe Recorder, State Bar Leaves Reducing Exam Score for Supreme Court to Resolve: Bar Leaders Offer Justices a Range of Lower Scores, or Keeping It At 144:

California state bar trustees on Wednesday punted the fate of the bar exam pass score to the California Supreme Court, offering the justices a range of choices on the controversial issue, from leaving the score at 144 to lowering it to 139.

The trustees’ 6-5 vote endorsing the range reflected the contentious nature surrounding the pass score, or cut score. California law school deans, which have seen their students’ pass rates plummet in recent years, have pleaded with the bar and the Supreme Court reduce the cut score—now the second highest in the nation behind Delaware — to as low as 135. The Committee of Bar Examiners, however, endorsed maintaining the 144 score while additional studies are completed.

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September 7, 2017 in Legal Education | Permalink | Comments (0)

Dealing With IRS Scammers (And How To Tell They Are Not Private Debt Collectors)

Readers will recall that Congress, in §32102 of the 2015 (FAST) Act, amended IRC §6306 to force the Service to outsource some collection inventory to private collection agencies.

Now, I have no doubt that readers of this blog are totally compliant in their taxes.   And if any happen to be delinquent in their taxes, I have no doubt they are not in the category of delinquent taxpayers who face collection from private collection agencies.   But I also suspect many readers have received questions about the program from clients, friends, family members, workplace colleagues, neighbors, and others.

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September 7, 2017 in Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

Harvard Law School Unveils Memorial Honoring Slaves Who Enabled Its Founding

HLSHarvard Law Today, Harvard Law School Unveils Memorial Honoring Enslaved People Who Enabled Its Founding:

On September 5, at the opening of its Bicentennial observance, Harvard Law School unveiled a memorial to the enslaved people whose labor helped make possible the founding of the school.

The plaque, affixed to a large stone memorial placed at the Crossroads in the center of the Law School’s plaza, reads:

In honor of the enslaved whose labor
created wealth that made possible
the founding of Harvard Law School

May we pursue the highest ideals
of law and justice in their memory

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September 7, 2017 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 1582: Is The IRS Scandal About To Break Wide Open?

IRS Logo 2PJ Media, Is the IRS Scandal About to Break Wide Open?:

Lost emails, destroyed hard drives, foot dragging, stonewalling, and a smirking, sneering IRS commissioner doing his best to obscure the truth -- this has largely been the response by the Internal Revenue Service to investigations by Congress and FOIA requests from conservative groups trying to discover the truth about the IRS targeting scandal.

But one federal judge appears to be just as curious as the rest of us about what exactly the IRS was up to when it targeted conservative groups for special scrutiny in approving their tax-exempt status. ...

Although the arrogance of the IRS is breathtaking, it looks like they may have more than they can handle with Judge Walton. With the agency already proving that it tried to hide documents directly related to a FOIA request, how much nonsense will Walton put up with? He better have a low tolerance for word games and shenanigans by the IRS.

More names means more witnesses to be deposed under oath. Perhaps some promises of immunity are in order so that the truth can be wrung out of an agency that has been used to target the political opponents of a president and materially affect the ability of conservative groups to exercise their rights.

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September 7, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, September 6, 2017

Thomas: Taxing the Gig Economy

Kathleen DeLaney Thomas (North Carolina), Taxing the Gig Economy, 166 U. Pa. L. Rev. ___ (2017):

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce compliance burdens for this new generation of business owners, while simultaneously enhancing the government’s ability to collect tax revenue.

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September 6, 2017 in Scholarship, Tax | Permalink | Comments (0)

Law Schools With The Best Employment Rates

Following up on last week's post, The 49 Law Schools With The Most Improved Employment Rates: The National Jurist, Most Improved Employment Rates:

The National Jurist took into consideration all forms of post-graduation employment. The employment rates were weighted, giving the most heft to full-time jobs that require bar passage. Other jobs, such as J.D.-advantage jobs and positions in other professions, received less weight.


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September 6, 2017 in Law School Rankings, Legal Education | Permalink | Comments (1)

The (Lack Of) Human Touch In Collecting Taxes

The National Taxpayer Advocate Nina Olsen has a blog post here that is well worth your time to read.  It's about the Service's automated levy program called FPLP (Federal Levy Payment Program).  

One way the Service tries to collect unpaid taxes is by looking for people who owe the delinquent taxpayer money and snagging those payments.  That's called a levy.    FPLP is a computer program designed to snags payments owed by the federal government to delinquent taxpayers.  Now, some people consider it an irony that one hand of the federal government actually sends payments to many delinquent taxpayers who owe the federal government money. Notably, however, FPLP hits what are commonly viewed as "safety net" payments from Social Security and Federal Retirement programs.  So other people consider it an irony that one hand of the federal government would partially undo the safety net payments made by the other hand.

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September 6, 2017 in Gov't Reports, IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (0)

What Law Students Say About Experiential Learning

David I. C. Thomson (Denver) & Stephen Daniels (American Bar Foundation), If You Build it, They Will Come: What Students Say About Experiential Learning:

In the Fall of 2013, soon after the reduction in applications that many law schools experienced in 2011-13, the University of Denver’s law school lead the way nationally in making a significant additional investment in experiential learning. Starting that fall, it provided the option for all incoming students to spend one entire year of law school in experiential learning courses and programs. While this commitment was being rolled out, the authors prepared a study of the impact of the program on enrollment and the educational experience of students. A three-year study — each year surveying 1Ls — also included follow up surveys of 2Ls and 3L/4Ls, with additional “look back” questions for the 3L/4L surveys. What we learned was that applicants chose Denver Law on several traditional factors (such as cost and location) but also strongly indicated that the experiential learning component was an important part of their decision. In the 3L/4L surveys, students reflected back on their law school education, and still ranked experiential learning as very important to them, while noting the importance of other practical concerns, such as employment outcomes for graduates.


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September 6, 2017 in Legal Education, Scholarship | Permalink | Comments (0)

The 100 Most Influential People In Tax And Accounting

100 CoverI am honored to be included on the list of Accounting Today's 100 Most Influential People in Tax and Accounting for the twelfth consecutive year:

Not only is Caron’s blog one of the most important in tax — it hit an alltime high of 1.5 million page views a month in 2016 — its prominence also helped elevate him to his new position as dean of his law school; proof, if any was needed, that thought leadership really does pay off.

I am honored to be on the Top 100 list with such high-powered people in the tax and accounting worlds, including:

  • Karen Abramson (CEO, Wolters Kluwer Tax & Accounting)
  • Joe Baron (Managing Director, Thomson Reuters Tax & Accounting)
  • Wayne Berson (CEO, BDO)
  • Kevin Brady (Chair, U.S. House Ways & Means Committee)
  • James Doty (Chair, PCAOB)
  • Lynne Doughtie (Chair & CEO, KPMG)
  • Kimberly Ellison-Taylor (Incoming Chair, AICPA)
  • Cathy Engelbert (CEO, Deloitte)
  • George Farrah (Executive Director, Tax & Accounting, Bloomberg BNA)
  • J. Russell George (Treasury Inspector General for Tax Administration)

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September 6, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (1)

Would A 91% Top Tax Rate Bring Back A Flourishing Economy?

91%New York Times op-ed:  When the Rich Said No to Getting Richer, by David Leonhardt:

A half-century ago, a top automobile executive named George Romney — yes, Mitt’s father — turned down several big annual bonuses. He did so, he told his company’s board, because he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today). ...

Romney didn’t try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month.

The old culture of restraint had multiple causes, but one of them was the tax code. When Romney was saying no to bonuses, the top marginal tax rate was 91 percent. Even if he had accepted the bonuses, he would have kept only a sliver of them.

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September 6, 2017 in Tax | Permalink | Comments (3)

The Path To Lawyer Well-Being

Path 2National Task Force on Lawyer Well-Being, The Path to Lawyer Well-Being: Practical Recommendations For Positive Change:

To be a good lawyer, one has to be a healthy lawyer. Sadly, our profession is falling short when it comes to well-being. The two studies referenced above reveal that too many lawyers and law students experience chronic stress and high rates of depression and substance use. These findings are incompatible with a sustainable legal profession, and they raise troubling implications for many lawyers’ basic competence. This research suggests that the current state of lawyers’ health cannot support a profession dedicated to client service and dependent on the public trust.

The legal profession is already struggling. Our profession confronts a dwindling market share as the public turns to more accessible, affordable alternative legal service providers. We are at a crossroads. To maintain public confidence in the profession, to meet the need for innovation in how we deliver legal services, to increase access to justice, and to reduce the level of toxicity that has allowed mental health and substance use disorders to fester among our colleagues, we have to act now. Change will require a wide-eyed and candid assessment of our members’ state of being, accompanied by courageous commitment to reenvisioning what it means to live the life of a lawyer.

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September 6, 2017 | Permalink | Comments (0)

Macroeconomic And Distributional Effects Of U.S. Personal Income Tax Reforms

Macroeconomic and Distributional Effects of Personal Income Tax Reforms : A Heterogenous Agent Model Approach for the U.S (IMF Working Paper):

This paper assesses the macroeconomic and distributional impact of personal income tax (PIT) reforms in the U.S. drawing on a multi-sector heterogenous agents model in which consumers have non-homothetic preferences and sectors differ in terms of their relative labor and skill intensity. The model is calibrated to key characteristics of the US economy. We find that (i) PIT cuts stimulate growth but the supply side effects are never large enough to offset the revenue loss from lower marginal tax rates; (ii) PIT cuts do “trickle-down” the income distribution: tax cuts stimulate demand for non-tradable services which raise the wages and employment prospects of low-skilled workers even if the tax cut is not directly incident on them;

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September 6, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, September 5, 2017

Hemel: Is Rothification Just A Budget Math Gimmick?

Daniel Hemel (Chicago), Is Rothification Just a Budget Math Gimmick?:

Trump administration officials and congressional Republican leaders are reportedly considering a proposal to “Rothify” retirement savings as part of a comprehensive tax reform package. The idea is that instead of excluding 401(k) contributions from taxable income in the year they’re made and then paying tax on withdrawals, individuals would pay tax on 401(k) contributions in the year they’re made and then be able to withdraw tax-free. The latter approach — already an option for individuals whose employers offer Roth 401(k) plans  —  would become mandatory with respect to some or all 401(k) savings. Similar changes on the IRA side would push individuals from traditional to Roth accounts.

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September 5, 2017 in Tax | Permalink | Comments (2)

FactChecking Trump’s Tax Speech

FactCheck, FactChecking Trump’s Tax Speech:

In a speech on changing the tax code, President Donald Trump offered some political spin on the facts.

  • Trump claimed “anywhere from $3 trillion to $5 trillion” of profits are left overseas by U.S. companies to avoid U.S. taxes. But his own press office cites an estimate of $2.6 trillion in a fact sheet posted online the day of his speech. The group that published that number told us $5 trillion “seems impossibly high.”

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September 5, 2017 in Political News, Tax | Permalink | Comments (0)

Who Will Win The Battle For The Soul Of Legal Education: University Grandees Or Hessians Craft Guild?

Ian Holloway (Calgary) & Steven Friedland (Elon), The Double Life of Law Schools:

The law school of 2025 will soon appear around the corner. An increasingly asked question is what will legal education look like? Will it look like the Langdellian model of the past 120 years, centered on the coverage of appellate case reports, leavened by a modest degree of experiences and some tweaks? Or will its shape transmogrify, becoming a blend of technology, Carnegie, and a redesigned marketplace?

Our view is that by the year 2025, law school will indeed be dramatically different. But how different depends on who wins the war between the traditional education, tracing back to the days of Langdell in the 1870s, and the repositioned drivers influencing legal education today from inside and out. In a word, we are living in a time of struggle — struggle for control of the soul of legal education.

Until recently, law schools lived a very comfortable double life that straddled two worlds — the world of academia and the world of law practice. This double life was made possible by the Langdellian revolution in the late 19th century, rejecting the apprenticeship system and adopting a model based on the teaching of appellate cases.

The double-life can be described as part grand university, part Hessian craft guild. The grand university identity takes on a similar hue as a graduate liberal arts endeavor: offering a good background for its emphasis on critical thinking, whether students practice law or not. The Hessian craft guild, by contrast, trains students to learn the details of the skilled practitioner, to welcome clients into a specific domain.

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September 5, 2017 | Permalink | Comments (6)

Corporate Tax Reform Would Increase Employment By 6%-22% And Wages By 15%-28%

Andrew Hanson (Marquette) & Ike Brannon (Cato Institute), Corporate Income Taxes and Labor: An Investigation of Empirical Evidence:

With the highest top marginal corporate tax rate among OECD nations and the third-highest in the world at 35 percent, it is not surprising that policymakers have long evinced a desire to lower the U.S. federal corporate income tax rate. Reducing the corporate income tax rate has implications for a wide-range of outcomes — from federal revenues to foreign direct investment, but the effects of such a change on workers is less understood. This paper examines the empirical literature on the effect of corporate income taxes on labor, specifically on employment and worker incomes.

In general, empirical work with the most robust results and controlling for factors of influence outside of corporate income taxes generally have an elasticity of employment with respect to the corporate income tax rate of between -0.2 and -0.4, with a wage/income elasticity near -0.5. In the context of recent tax reform discussions that propose a rate reduction between 30% to 57%, that would imply employment gains between 6% to 22% and wage increases between 15% to 28%. 

September 5, 2017 in Scholarship, Tax | Permalink | Comments (2)

How You Can Help Houston Law Students, Staff, And Faculty In The Wake Of Hurricane Harvey

Hurricane HarveyI reached out to the deans at the three Houston law schools (University of Houston Law Center, South Texas College of Law Houston, and Thurgood Marshall Law School) to see how the law school community can best support their students, staff, and faculty in the wake of Hurricane Harvey. Deans Baynes and Guter responded with links to websites set up by their schools for this purpose:

Here are the full responses I received:

From Len Baynes (Dean, University of Houston Law Center):

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September 5, 2017 in Legal Education | Permalink | Comments (0)

The Tax Consequences Of Hurricane Harvey (And Other Natural Disasters)

Hurricane HarveyThe Service has put up a very useful and comprehensive webpage titled "Help for Victims of Hurricane Harvey."  The page contains excellent information about all the different actions the Service takes in response to a natural disaster and has links to all kinds of useful sites. 

The Texas State Comptroller has a similarly useful webpage that describes the state and local tax relief (such as exemption from hotel taxes).


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September 5, 2017 in IRS News, Tax, Tax Practice And Procedure | Permalink | Comments (2)

The IRS Scandal, Day 1580: Conservative Group Hoping For 'Perp Walks' After Breakthrough In IRS Lawsuit

IRS Logo 2Washington Examiner, Conservative Group Hoping for 'Perp Walks' After Breakthrough in IRS Lawsuit:

One of the groups that sued the Internal Revenue Service over its targeting of conservative and Tea Party groups believes there has been a breakthrough that will help them draw a more complete picture of what went on behind the scenes at the agency, four years after it took its case to court.

In a lawsuit involving True the Vote, Judge Reggie B. Walton of the U.S. District Court for the District of Columbia ordered the IRS last week to release the names of employees involved in targeting conservative and Tea Party groups. Walton also told the IRS to explain why groups were targeted and search for additional records in agency databases from May 2009 to March 2015.

The IRS has until Oct. 16 to complete its records search.

Walton's order was a turning point for True the Vote President Catherine Engelbrecht in her legal battle with the IRS that began in 2013.

"We've come so far, and I believe that we are going to bring this thing to a head," Engelbrecht told the Washington Examiner. "I believe we will see the IRS correct its ways, and as to accountability, I'd love to see some perp walks." ...

Engelbrecht ... said just learning the names of those involved isn't enough for her. Instead, she wants the IRS to enact a policy prohibiting viewpoint discrimination. "That's our whole goal — it's to make sure this viewpoint discrimination can never occur again. It is procedurally prohibited," Engelbrecht said. "That they admit what they did was unconstitutional and won't happen to an organization, an individual, doesn't matter your political party preference. The IRS has been weaponized and needs to be put back in the box."

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September 5, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Holiday Weekend Roundup

Monday, September 4, 2017

A Personal Tribute To Judge Posner And The Life Of The Mind

PosnerBack in September 2004, when I was still the general counsel of a corporation, I had begun to dip my toes into legal academia some twenty-five years after graduating from law school.  I eventually told some of that story in How Not to "Retire and Teach" (and its sequel six years later).  I didn't include it in the essays, but I have occasionally told friends this heretofore unpublished story involving Judge Posner.

The great change between 1979 and 2004 was, of course, the rise of interdisciplinarity in legal scholarship. It didn't take me long to figure out that law-and-economics and Judge Posner's contribution were the models par excellence of the shift in emphasis from doctrine to theory.  My first re-introductions to the theoretical perspective came from books like The Problematic of Moral and Legal Theory and The Problems of Jurisprudence.  I didn't necessarily agree with them; my experience was too many other factors intervened to make microeconomics meaningful in the extension from transactions to subjective decision making.  Indeed, from the beginning, I was more interested in what was going on in the head of the utilitarian "rational frog" (Judge Posner's wonderful coinage in Economic Analysis of Law) whose decision-making could be plotted on a curve.  Clearly, I thought moral theory was less problematic.

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September 4, 2017 in Legal Education, Miscellaneous, News | Permalink | Comments (1)

The Evilness Of Section 6511

Tax Court (2017)Last week, in Borenstein v. Commmissioner, 149 T.C. No. 10 (Aug. 30, 2017), the Tax Court was asked to apply Section 6511 contrary to its very, very intricate terms.  The Court declined to do so.  That meant that a taxpayer lost out on a $30k+ refund.   Ms. B. had paid about $112k in taxes by the due date of her 2012 return (April 15, 2013), but she did not file the return.  While she did get the 6 month extension she still failed to file a return by October 15, 2013.  The months went by — 22 of them— before the Service was kind enough in June 2015 to send her an NOD but was unkind in slamming her with an asserted $1.2m deficiency.   You know that drill.  Ms. B. then quick-like-a-bunny filed a return that September, showing a $79k liability.  The Service said "oh, ok, that's good" and accepted her return as accurate.  So she now only needed to get her refund, right?  Wrong.  See below the fold for why.

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September 4, 2017 in New Cases, Tax Practice And Procedure | Permalink | Comments (4)

Taylor: A Little Bit Of Data Can Be A Lot Dangerous When It Comes To LSATs And Bar Passage

Following up on last month's post, The LSAT's 'Noteworthy' Correlation To Bar Passage:  The National Jurist op-ed:  A Little Bit of Data Can Be a Lot Dangerous, by Aaron Taylor (St. Louis; Executive Director, AccessLex Center for Legal Education Excellence):

I recently penned a commentary titled, For Diversity: Let’s Talk Less About Pipelines and More About Why Blacks Are Not Admitted. In it, I argue that the law school admission process disproportionately excludes Black people from legal education for reasons that are unsupported by relevant data. In making my point, I referenced research conducted by a few law schools showing the measurable, but limited, value of the LSAT in predicting bar exam performance and the acquisition of lawyering skills.

I received many responses to my inbox. Some favorable. Some not. I am writing though to address a public rebuttal by Robert Steinbuch, a law professor at Arkansas-Little Rock. Steinbuch challenged my thesis by presenting a data table showing that graduates of his law school who entered with lower LSAT scores passed the bar exam at lower rates.


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September 4, 2017 | Permalink | Comments (10)

Sunday, September 3, 2017

Death Of Lesley McAllister

McAllisterLesley McAllister, an environmental law professor at San Diego (2005-13) and UC-Davis (2013-), died on August 30 at the age of 47 after a four year battle against cancer.  She leaves behind her husband Andrew and two young children, Erin and Nathan.  A Celebration of Lesley's Life is being held today at 4:00 p.m. at the Unitarian Universalist Church of Davis.  In lieu of flowers, charitable contributions in Lesley's honor may be made to Camp Kesem, a camp that helps children whose parents have cancer.

I got to know Leslie during my many summers at USD, and we often were neighbors in a suite of faculty offices.  I prevailed on her to take over our network's Environmental Law Prof Blog, which she did with her customary élan.

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September 3, 2017 in Legal Education, Obituaries | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. [501 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  2. [495 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  3. [238 Downloads]  BEPS and European Union Law, by Sjoerd Douma (Leiden)
  4. [226 Downloads]  Is Efficiency Biased?, by Zachary Liscow (Yale)
  5. [157 Downloads]  When Did Tax Avoidance Become Respectable?, by Steven Bank (UCLA)

September 3, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Pepperdine's New LL.M. In Entertainment, Media, And Sports Law

AEGA nice write up of Pepperdine's new LL.M. program in Entertainment, Media, and Sports Law in Lawyer & Statesman, Entertainment, Media and Sports Law: Becoming an Expert:

The practice areas of entertainment, media and sports law are multidisciplinary, global and challenging. Lawyers that establish expertise in these fields work with entertainers, athletes, production companies and other businesses that support these international industries.

Practicing attorneys who want to gain specialized legal knowledge of the entertainment, media or sports industries should consider an LL.M. program designed to develop a higher level of expertise. ...

Starting fall of 2017, Pepperdine Law offers an LL.M. in Entertainment, Media and Sports Law. The program is designed to provide practicing attorneys with a holistic understanding of the sports industry.

“The program will give students access to the industry, hone skills specific to sports law, and provide unique networking opportunities, said Victoria Schwartz, co-director of the LL.M. and Certificate Programs in Entertainment, Media and Sports Law at Pepperdine Law.

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September 3, 2017 in Legal Education | Permalink | Comments (0)

Saturday, September 2, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Golden Gate Seeks To Hire A Faculty Director Of Its Tax & Estate Planning LL.M. Programs

Golden Gate Logo (2018)Golden Gate University School of Law is seeking to hire a Director of its LL.M. in Taxation and LL.M. in Estate Planning, Trust and Probate Law programs:

This position is a full time, tenure or tenure-track position. Our LLM in Taxation has provided 40 years of instruction and has 1,600 plus alumni and is consistently ranked as the best LLM in Taxation in California. We are also proud of our newest LLM in Estate Planning which started in 2015 and is the first LLM in Estate Planning west of the Mississippi River. We welcome the opportunity to work with a director to help shape these programs to best meet the needs of lawyers seeking to enhance their learning and training in these specialty areas. 

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September 2, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (1)

WSJ: What Tops The Agenda For A New Space Colony? A Debate Over Taxes

Wall Street Journal, What Tops the Agenda for a New Space Colony? A Debate Over Taxes:

It’s tough enough to create a nation in space. There’s the Earth-orbiting colony to plan, the provisioning to figure out and the technical challenge of launching thousands of people.

On top of that, you have to make folks get along before they even rocket up there.

The scale of the human task is dawning on Russian businessman and scientist Igor Ashurbeyli, who last year drew headlines with his plan for a peaceful democratic utopia dubbed Asgardia above the stratosphere.

More than 300,000 people from 217 countries and territories signed up online to be Asgardians — among them starry-eyed dreamers, sci-fi fans and political idealists — and 110,000 of them are now officially citizens.

While Dr. Ashurbeyli’s lofty plan involves launching “Space Arks” into lower Earth orbit by 2025, he has found himself caught up in earthly debates among his people about pesky details such as the space nation’s constitution and potential taxes.

Not to mention its prospective shortage of women.

Among problems facing Asgardia, “the biggest is self-organization,” said Dr. Ashurbeyli, 53, “because no one has ever tried organizing … what is today 100,000 citizens from 200 countries who don’t know each other and live in different places on Earth.”...

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September 2, 2017 in Tax | Permalink | Comments (0)

Friday, September 1, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Orly Mazur (SMU) reviews a new work by Brian Galle (Georgetown), How to Save Unemployment Insurance, forthcoming in the Arizona State Law Journal.

Mazur (2017-2)With the Labor Day Holiday upon us, what a perfect time to celebrate American workers by considering how best to provide workers with a source of relief in the event of involuntary unemployment. Brian Galle’s compelling new work does exactly that by analyzing and suggesting potential reforms that can help to save our unemployment insurance (UI) program.

The UI program is a form of social insurance that provides temporary income support to workers that lose their jobs through taxes collected by state and federal governments from employers. Unfortunately, as the recent Great Recession showed us, “the U.S. system of financing its unemployment insurance program is seriously dysfunctional.” After explaining the cause of the UI program’s failings, Galle makes a persuasive case that for any UI reform proposal to be effective, three factors need to be taken into account. 

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September 1, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Weekly Legal Education Roundup

California Bar Law School Council Recommends Lowering Cut Score to 135-139; Bar Examiners Recommend Keeping It At 144

A California Bar survey revealed that 80% of attorneys surveyed (34,295) and 2% of applicants (4,188) support leaving the cut score at 144:

On Wednesday, the California Bar's Law School Council recommended lowering the cut score to 135- 139.

On Thursday, the Committee of Bar Examiners voted 13-1 to recommend leaving the cut score at 144.

The California Bar's Board of Trustees will meet on September 6 and 7 to make its recommendation to the California Supreme Court.

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September 1, 2017 in Legal Education | Permalink | Comments (2)

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September 1, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

Sorry, Charlotte. You Don’t Need A Law School.

Charlotte Logo (2016)Charlotte Observer, Sorry, Charlotte. You Don’t Need a Law School, Officials Say.:

Charlotte appears set to regain its crown as the largest U.S. city without a law school, given the closing of Charlotte School of Law and a quiet announcement by UNC Charlotte this month that it does not intend to fill the void. “We do not envision creating another law school in the state,” Chancellor Phil Dubois told the school’s faculty last week during UNCC’s annual fall convocation.

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September 1, 2017 in Legal Education | Permalink | Comments (2)

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September 1, 2017 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1576: Will Justice Come For IRS Lawbreakers At Last?

IRS Logo 2Investor's Business Daily editorial, Will Justice Come For IRS Lawbreakers At Last?:

The IRS scandal seemingly has lain dormant now for months, all but forgotten amid the spate of recent anti-Trump media spasms, the ongoing violent antics of the antifa leftists and, now, Hurricane Harvey's devastation. But even if much of Washington has forgotten about it, a Washington judge hasn't.

As reported by the Washington Examiner, Judge Reggie B. Walton of the Washington, D.C., District Court last week revived legal attention to the scandal, telling the IRS it has to reveal the names of IRS employees who targeted conservative, libertarian and Tea Party groups.

But Walton didn't stop there. He also gave the IRS until Oct. 16 to find all the records in IRS databases from May 2009 to March 2015 that are relevant to the case and to explain just why these groups were targeted.

All of this is the result of a suit against the IRS brought in 2013 by True the Vote and 38 other groups. The groups have doggedly pursued the IRS for four years after the tax agency held up their tax-exempt status before and during the 2012 election year for what appear to be blatantly political reasons. In their search for justice, the groups have had little help from the mostly apathetic, left-leaning media that wish conservative groups would just go away. ...

Paul Caron, dean of the Pepperdine University School of Law and himself a tax lawyer, has kept a lonely vigil at his blog on the IRS' questionable actions in all this, running a virtually day-by-day account of the news behind the scandal, which as of Monday by his count was in its 1,572nd day (and counting).

With so little action, on Monday Caron wondered plaintively, "Why did it go away?" Well, we've wondered that too.

Caron quotes a piece from the Nonprofit Quarterly that notes that since May 2013 there have been "several congressional and other investigations but no criminal indictments or known personnel actions against  anyone involved in the targeting. ... The U.S. Justice Department launched an investigation, but in the midst of that investigation, they announced there would be no indictments." ...

By seeking maximum disclosure, Walton is doing yeoman's duty in making the IRS accountable. We wish him success in prying open the IRS' chest of dirty secrets.

But that's not enough. At the very least, it's time the U.S. Department of Justice stopped defending the indefensible, and started forcing the rogue tax-collection agency and its former executives to answer for its politically motivated crimes. As the old saying goes, justice delayed is justice denied.

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September 1, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)