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Thursday, July 16, 2015

Osofsky: Tax Administration And Tax Scholarship

Leigh Osofsky (Miami) has a great series of posts on tax administration and tax scholarship:

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July 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

The Contemporary Tax Journal Publishes New Issue

Contemporary Tax JournalsThe San Jose State University Masters of Science in Taxation Program in the Lucas Graduate School of Business has published the sixth issue (Vol. 5, No. 1 (Spring/Summer 2015)) of The Contemporary Tax Journal.

July 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

Chodorow: The Tax Consequences Of Catalyzed Fans

Red SoxAdam Chodorow (Arizona State), The Tax Consequences of Catalyzed Fans, 6 Harv. J. Sports & Ent. L. 187 (2015):

This article, in honor of Dan Markel, explores the tax issues that would arise were fans to band together as a Fan Action Committee (FAC) to offer players additional compensation or a donation to a favored charity as an incentive to sign with the fans’ team, the proposal at the heart of one of Dan’s last articles. Both the direct compensation and charitable models raise questions regarding whether the players and owners have income, the tax consequences for the FAC of both contributions and distributions, and the fans’ ability to deduct contributions to the FAC. Exploring these questions will help pave the way for FACs to move from academic discourse to the real world, offers the opportunity to consider a number of important tax policy issues that have far broader application, and seems like a wonderful way to honor Dan’s memory.

July 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

Taylor: Law School Scholarships Foist Surtax On The Neediest Students

National Law Journal op-ed:  Law School Scholarships Foist Surtax On Neediest, by Aaron Taylor (St. Louis):

Students with less-educated parents and lower LSAT scores accrue the most debt.

The ABA Task Force on the Financing of Legal Education recently released its report identifying factors driving the high costs of legal education. One factor cited by the task force was law school scholarship policies based on high Law School Admis­sion Test scores, instead of financial need. These policies contribute in large part to high levels of law student debt, particularly among first-generation students. Worse yet, they result in the neediest students paying a tuition premium — a "merit surtax," if you will — that subsidizes the attendance of their wealthier peers.

An analysis of data from the 2014 administration of the Law School Survey of Student Engagement charts how this phenomenon unfolds. The purpose of the analysis was to identify trends relating to the law school experience that were attributable to socioeconomic factors. ... We found that average LSAT scores increased as parental education increased. 

These numbers suggest that respondents with more highly educated parents tended to have an advantage in the admissions process. This is where the merit surtax comes into play. The neediest applicants are doubly disadvantaged. They are least likely to gain admission and, even if admitted, they are least likely to be awarded the most generous scholarships. Student loan debt trends from Law School Survey of Student Engagement support this supposition. Respondents whose parents had lower levels of education were more likely to have law school debt and more likely to have higher levels of that debt. 

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July 16, 2015 in Legal Education | Permalink | Comments (0)

NYC Firm Refuses To Hire Ivy League Law Grads: Top Students From Lower Ranked Schools Are Hungrier, More Ambitious

Ivy LeagueHuffington Post op-ed:  Why We Do Not Hire Law School Graduates from the Ivy League Schools, by Adam Leitman Bailey:

In order to strive to become one of New York's best real estate law firms we do not hire law school graduates from Harvard, Yale, Cornell, Columbia or any of the other traditional highest tier schools.

Our hires come from the top of the classes of the second, third or fourth tier law schools. We find these men and women we take under our wing to be more ambitious and more hungry to excel in the legal profession. They are hard-working and usually grew up with a middle or lower class upbringing. We do not hire our clients' sons and daughters unless they demonstrate the same merits as any stranger to our family. The candidates we recruit are those who have been battle tested in one manner or another. They have been forced to compete against their peers to rank at the top of their law school and college classes.

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July 16, 2015 in Legal Education | Permalink | Comments (18)

NPR: Medicine, Law, Business: Which Grad Students Borrow The Most?

Taxing Meat To Fight Climate Change

MeatMarya Torrez (American), Accounting for Taste: Trade Law Implications of Taxing Meat to Fight Climate Change, 27 Geo. Int'l Envtl. L. Rev. 61 (2014):

Global climate change threatens to have disastrous consequences for life as we know it. Animal agriculture makes a tremendous contribution to climate change. While largely ignored in the policy arena, in recent years, scientists have suggested a tax on meat to begin to address this issue.

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July 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 798

IRS Logo 2Washington Examiner, With New Documents, Stench of IRS Scandal Reaches Into its Third Year:

In 2013, Lois Lerner, former head of the IRS non-profit section, pleaded the Fifth Amendment before the House Oversight Committee. She had been called to testify about her division's unjustifiable harassment of conservative applicants for nonprofit status.

Just over a year later, it was reported that a number of Lerner's work emails had gone missing due to a supposed problem with her hard drive. Then last month, the Treasury inspector general for tax administration testified that IRS employees — despite being under explicit orders not to destroy records — had "magnetically erased" as many as 24,000 of Lerner's missing emails from hundreds of data tapes where they were being stored.

Whether the emails' disappearance was innocent or not, the public is only now beginning to get more information about just what it concealed, thanks to an ongoing Freedom of Information Act lawsuit against the IRS by the conservative watchdog group Judicial Watch. Documents unearthed this week show that in Fall 2010, Lerner was working to get the Justice Department to prosecute nonprofits that engaged in political activity. This despite the fact that 501(c)4 groups, which cannot take tax-deductible donations, are permitted to engage in some political advocacy by law and by Civil Rights-era court precedents. ...

The original IRS scandal hinted at an intensive but narrow effort within one division to punish or at least make life difficult for the Obama administration's political opponents — the sort of thing that could perhaps be chalked up to a few bad actors. But the new documents suggest there were at least attempts to bring other agencies in on the wrongdoing. ...

This scandal continues to stink at least as badly as it did when IRS targeting of conservative non-profits was first acknowledged. This isn't a partisan political issue — unfair tax enforcement is unfair to everyone, and anyone can become a victim. Moreover, federal tax privacy laws exist because tax information is so sensitive and susceptible to abuse by politicians and ideologically interested parties.

Congress is right not to let go of this bureaucratic malfeasance, and to continue investigating what could prove to be a with a broader scope than anyone anticipated.

Daily Caller, Bozell On IRS Scandal: ‘A Tyrannical Administration Using Stalinist Tactics Against Its Political Opponents’:

The president of the Media Research Center, Brent Bozell, came out swinging Thursday in response to the revelations — uncovered by the watchdog Judicial Watch — that Lois Lerner, other officials from the IRS, the Department of Justice, and the FBI met in 2010 to discuss criminally prosecuting non-profit organizations targeted for illegal political activities.

Bozell was incensed that few media outlets bothered to cover the news. “The networks’ refusal to cover these devastating revelations borders on being complicit in a cover-up of criminal misconduct by a tyrannical administration using Stalinist tactics against its political opponents,” the conservative figure declared in a statement.

In Bozell’s opinion, the meeting revealed “criminal coordination between the IRS, FBI and the Department of Justice in an effort to politically persecute innocent, law-abiding Americans and independent organizations.”

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July 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Wednesday, July 15, 2015

TurboTax To Drop Cloud Backup Option; Desktop Users Have 1 Week To Download Their Returns

Turbo Tax (2015)New York Times, TurboTax Drops Cloud Backup Option for Desktop Users:

If you used the desktop version of TurboTax during the most recent tax filing season and backed up your return online, you may want to make sure you have a copy of it stored on your computer.

Intuit, the maker of TurboTax tax preparation software, has notified some desktop customers that it is discontinuing a service that allowed them to store a copy of their return on TurboTax’s cloud system. (Desktop customers install the tax software on their own computer, by buying a CD-ROM or a download, rather than preparing their returns on the TurboTax website.)

Users have until July 21 to gain access to their tax returns on the cloud and resave them on their own computer if they need to do so. ...

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July 15, 2015 in Tax | Permalink | Comments (0)

Soled & Gans: Asset Preservation And The Evolving Role Of Trusts In The 21st Century

AssetJay A. Soled (Rutgers) & Mitchell M. Gans (Hofstra), Asset Preservation and the Evolving Role of Trusts in the Twenty-First Century, 72 Wash. & Lee L. Rev. 257 (2015):

For the vast majority of the twentieth century, trusts served two pivotal roles. The first was as a vehicle to help mitigate federal and state estate tax burdens, the rates of which could be quite significant. The second was to assist in asset preservation, safeguarding trust beneficiaries from their profligacy, former spouses, creditors, and the like.

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July 15, 2015 in Scholarship, Tax | Permalink | Comments (0)

Report: IRS Hung Up On 8.8 Million Taxpayers This Year (Up From 544k Last Year); ‘Courtesy Disconnects’ Increased 1,500 Percent

TAS 2National Taxpayer Advocate Nina Olson today released (IR-2015-97) her semi-annual report to Congress, FY 2016 Objectives Report to Congress:

“With funding down about 17 percent on an inflation-adjusted basis since FY 2010, and with the IRS having had to implement large portions of the [ACA] and the Foreign Account Tax Compliance Act (FATCA) this year without any supplemental funding, sharp declines in taxpayer service were inevitable,” Olson wrote. Likening the 2015 filing season to “A Tale of Two Cities,” however, the report says: “For the majority of taxpayers who filed their returns and did not require IRS assistance, the filing season was generally successful. For the segment of taxpayers who required help from the IRS, the filing season was by far the worst in memory.”

  • The IRS answered only 37 percent of taxpayer calls routed to customer service representatives overall, and the hold time for taxpayers who got through averaged 23 minutes. This level of service represents a sharp drop-off from the 2014 filing season, when the IRS answered 71 percent of its calls and hold times averaged about 14 minutes.
  • The IRS answered only 39 percent of calls from taxpayers seeking assistance from TAS on the National Taxpayer Advocate (NTA) Toll-Free hotline, and hold times averaged 19 minutes. TAS serves as the IRS’s “safety net” for taxpayers who are experiencing a financial or systemic hardship as a result of IRS action or inaction.
  • The IRS answered only 17 percent of calls from taxpayers who called after being notified that their tax returns had been blocked by the Taxpayer Protection Program (TPP) on suspicion of identity theft, and the hold times averaged about 28 minutes. In three consecutive weeks during the filing season, the IRS answered fewer than 10 percent of these calls.
  • The IRS answered only 45 percent of calls from practitioners who called the IRS on the Practitioner Priority Service line, and hold times averaged 45 minutes.
  • The number of “courtesy disconnects” received by taxpayers calling the IRS skyrocketed from about 544,000 in 2014 to about 8.8 million this filing season, an increase of more than 1,500 percent. The term “courtesy disconnect” is used when the IRS essentially hangs up on a taxpayer because its switchboard is overloaded and cannot handle additional calls.

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July 15, 2015 in IRS News, Tax | Permalink | Comments (5)

Chorvat: Taxation And Liquidity — Evidence From Retirement Savings

Elizabeth Chorvat (Illinois), Taxation and Liquidity: Evidence from Retirement Savings:

This paper tests the response of a cross section of U.S. households to a reduction in the tax cost of holding liquid assets by the 2003 Jobs and Growth Tax Relief Reconciliation Act, whether that response was tax efficient, and the distribution of that response. Empirical results based on regression analyses of Survey of Consumer Finances data between 1998 and 2010 suggest that lower, middle, and high-income households responded to the enactment of the dividend preference in a tax-efficient manner, increasing allocations to liquid accounts and away from tax-preferred retirement accounts. Notwithstanding the conventional wisdom that behavioral responses to changes in the taxation of investments occur predominantly among the wealthy, the paper finds that the largest behavioral response to the 2003 dividend preference appears to have been among those households in the highest and lowest income groups, with the largest response among the lowest income households. If household income is an important determinant to the value of liquidity, we might well understand that those with the highest need for liquidity might have the largest response to a reduction in the cost of that liquidity. Curiously, while middle-income households responded to the lower cost of liquidity in a tax-efficient manner, theirs was a distinctly smaller response.

July 15, 2015 in Scholarship, Tax | Permalink | Comments (0)

Luke: The Taxing Problem of Debt Principal

Charlene Luke (Florida), Of More Than Usual Interest: The Taxing Problem of Debt Principal, 39 Seattle U. L. Rev. ___ (2015):

Leverage is an essential but often troubling component of the U.S. market. In the tax area, the potentially problematic incentive effects of interest deductibility have long engaged a wide array of tax commentators and policymakers. While interest deductibility rightly receives widespread scrutiny, a more comprehensive approach to leverage is needed. This Article focuses on the surprisingly complicated tax treatment of cash (and cash equivalent) borrowings. This Article highlights that using debt principal to finance business and investment tax benefits yields favorable tax timing mismatches for taxpayers and thereby theoretically amplifies any distortions caused by the deductibility of debt interest.

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July 15, 2015 in Scholarship, Tax | Permalink | Comments (0)

District Court Refuses To Dismiss Claim By Law Prof Denied Tenure That Failure To Provide Annual Reviews Breached His Contract

MawakanaFollowing up on my previous post, Prof Sues UDC Law School For Discrimination After Tenure Denial:  National Law Journal, Fired Prof’s Lawsuit Against University of DC Law Survives:

A professor at the University of the District of Columbia David A. Clarke School of Law who was denied tenure then fired in 2013 may move forward with his breach-of-contract claim against the university, a federal judge has ruled.

Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ruled on July 10 that Kemit Mawakana’s complaint offered just enough evidence to support a claim that he and the university had an implied contract that guaranteed him annual performance reviews leading to his tenure eligibility.

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July 15, 2015 | Permalink | Comments (0)

The Impact Of The Obama Administration’s New 'REPAYE' Plan On Law Students

Gregory Scott Crespi (SMU), The Obama Administration's New 'Repaye' Plan for Student Loan Borrowers: Not Much Help for Law School Graduates:

In response to President Obama’s 2014 directive the DOE has proposed a new student loan repayment option, labeled the Repaye As You Earn Plan (“REPAYE Plan”), which will be open for enrollment in early 2016 to up to five million student loan borrowers who are not eligible for enrollment in the generous Pay As You Earn Plan (“PAYE Plan”) because of pre-October 1, 2007 student loan debts. I estimate that approximately 60,000 of those five million persons are law graduates. However, I also estimate that approximately three-quarters of those 60,000 law graduates have already enrolled in either the Income-Based Repayment Plan (“old IBR Plan”) or the Income-Contingent Repayment Plan (“ICR Plan”). Most of those persons among the remaining group of about 15,000 PAYE Plan-ineligible law graduates who have not already enrolled in a loan repayment Plan, if they later do decide to enroll, will enroll in the old IBR Plan rather than the new REPAYE Plan because of the REPAYE Plan’s spousal income inclusion rules.

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July 15, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 797

IRS Logo 2The Hill, Senate Panel's IRS Report Due in Weeks:

The Senate Finance Committee plans to release its report on the IRS’s improper scrutiny of conservative groups before lawmakers leave Washington for the August recess, a panel spokesman said Tuesday. 

The committee’s IRS investigation has lasted for more than two years, ever since former agency official Lois Lerner apologized in May 2013 for the IRS’s treatment of groups seeking tax-exempt status.

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July 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, July 14, 2015

Browde: The Need For Increased Penalties To Deter Tax Identity Theft

Florida Tax ReviewPippa Browde (Montana), Many Unhappy Returns: The Need for Increased Tax Penalties for Identity Theft-Based Refund Fraud, 18 Fla. Tax Rev. ___ (2015):

The growing problem of fraudulent tax returns being submitted based on stolen identities is a “tsunami of fraud,” and victims, lawmakers, and law enforcement are struggling with how to deal with the fallout. The issues surrounding identity theft-based tax fraud are complex. Current IRS efforts to stem the tide involve pouring resources into assisting victims, updating IRS processes to detect and prevent refund fraud, and increasing the number of criminal investigations and prosecutions it pursues. The IRS’s approach and pending proposed legislation are not enough to address the problems created by identity theft-based tax fraud. This article argues the IRS and Congress must use a holistic approach to attack this specie of tax fraud. To that end, this article supports enhanced criminal penalties and proposes new civil tax penalties aimed specifically at identity theft tax fraud.

This article pursues two goals. First, it documents and explains the problem of identity theft-based refund fraud, highlighting particular issues with respect to tax compliance. In so doing it analyzes existing civil and criminal tax penalties to punish and deter identity thieves, an analysis which reveals that existing criminal penalties are insufficient and that there is no directly applicable existing civil penalty. Second, to address the gaps in existing law, the article proposes standards for Congress to use in crafting a comprehensive penalty scheme to apply to identity theft-based refund fraud.

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July 14, 2015 in Scholarship, Tax | Permalink | Comments (0)

Manhire: Beyond The U.S. News Index — A Better Measure Of Law School Diversity

2016 U.S. News RankingsJ.T. Manhire (Texas A&M), Beyond the U.S. News Index: A Better Measure of Law School Diversity, 101 Iowa L. Rev. Online ___  (2015):

The U.S. News & World Report publishes a diversity index along with its annual ranking of U.S. law schools. Race and ethnicity are the only factors the magazine uses to measure law school diversity. But is this a meaningful measure of student difference? Are race and ethnicity all that count or are there other differences that contribute to a richer educational experience for students and better outcomes for law schools? In a 2011 Iowa Law Review article, Kevin Johnson argues that law school diversity is not limited to only race and ethnicity. He further argues that law school diversity, defined broadly, is critical to the success of legal education; both for the students and the institutions that serve them.

Yet, the epistemological question remains: how do law schools know how diverse their student bodies are? If law student diversity is more than just racial diversity, the current U.S. News index is incomplete and fails to provide a meaningful law school diversity measure. This essay proposes an improved diversity index that captures more of the differences that matter to the success of both law students and law schools. The essay begins by very briefly recapping some of Dean Johnson’s compelling arguments for why law school diversity (in its broader conception) is critical, and why measuring it is so important. It then examines the types of differences shown to produce better outcomes in heterogeneous groups, and explains the methodology behind the proposed cognitive diversity index.

July 14, 2015 in Law School Rankings, Legal Education | Permalink | Comments (3)

Merritt: New Data Reveal That ExamSoft, NCBE To Blame For Lower July 2014 Bar Pass Rates

LogoFollowing up on my previous posts (links below): Deborah Jones Merritt (Ohio State), ExamSoft: New Evidence from NCBE:

Almost a year has passed since the ill-fated July 2014 bar exam. As we approach that anniversary, the National Conference of Bar Examiners (NCBE) has offered a welcome update.

Mark Albanese, the organization’s Director of Testing and Research, recently acknowledged that: “The software used by many jurisdictions to allow their examinees to complete the written portion of the bar examination by computer experienced a glitch that could have stressed and panicked some examinees on the night before the MBE was administered.” This “glitch,” Albanese concedes, “cannot be ruled out as a contributing factor” to the decline in MBE scores and pass rates.

More important, Albanese offers compelling new evidence that ExamSoft played a major role in depressing July 2014 exam scores. He resists that conclusion, but I think  the evidence speaks for itself. Let’s take a look at the new evidence, along with why this still matters.

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July 14, 2015 in Legal Education | Permalink | Comments (2)

Moody's: Financial Outlook Brightens For Public And Private Universities

Moody'sMoody's Investor Services, Fiscal 2014 Medians Show Easing Pressures at Public and Private Universities:

Fiscal year 2014 medians for public and private universities show much of the higher education sector stabilizing into balanced operations, increased liquidity, and slowly strengthening balance sheets, Moody's Investors Service says in two new reports. Nonetheless, approximately 20% of universities continue to confront material revenue growth pressures.

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July 14, 2015 in Legal Education | Permalink | Comments (0)

Hillary Clinton's Tax Plan

LSAT Is Poor Predictor Of Law School Grades: 6 LSAT Points = 0.1 LGPA

LSAT (2015)Alexia Brunet Marks (Colorado) & Scott A. Moss (Colorado), What Makes a Law Student Succeed or Fail? A Longitudinal Study Correlating Law Student Applicant Data and Law School Outcomes:

Despite the rise of "big data" empiricism, law school admission remains heavily impressionistic; admission decisions based on anecdotes about recent students, idiosyncratic preferences for certain majors or jobs, or mainly the Law School Admission Test (LSAT). Yet no predictors are well-validated; studies of the LSAT or other factors fail to control for college quality, major, work experience, etc. The lack of evidence of what actually predicts law school success is especially surprising after the 2010s downturn left schools competing for fewer applicants and left potential students less sure of law school as a path to future success. We aim to fill this gap with a two-school, 1400-student, 2005-2012 longitudinal study. After coding non-digitized applicant data, we used multivariate regression analysis to predict law school grades ("LGPA") from many variables: LSAT; college grades ("UGPA"), quality, and major; UGPA trajectory; employment duration and type (legal, scientific, military, teaching, etc.); college leadership; prior graduate degree; criminal or discipline record; and variable interactions (e.g., high-LSAT/low-UGPA or vice-versa).

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July 14, 2015 in Legal Education, Scholarship | Permalink | Comments (9)

Baylor Prof Replaces Exams With 'Celebrations Of Learning'

BaloonsInside Higher Ed, Celebrations, Not Tests:

Students entering a classroom to take a test can be filled with a sense of dread. But in one classroom at Baylor University, students in some sections of Introduction to Sociology are greeted by balloons, streamers, bright lights and loud music.

Their professor isn’t administering an exam, they’re told. Instead, they are there to celebrate what they’ve learned.

Kevin Dougherty, an associate professor of sociology at Baylor University, is trying to reframe the way both students and faculty members approach assessments by changing the environment in which students are evaluated, relabeling quizzes and exams as “learning checks” and “learning celebrations.” ...

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July 14, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 796

IRS Logo 2Fox News, IRS Ignores Deadline to Hand Over Lerner Emails:

The Internal Revenue Service is ignoring a court-imposed deadline to turn over newly found Lois Lerner email documents essential to investigations of the IRS tax-exempt scandal.

U.S. District Court Judge Emmet Sullivan last week ordered the agency to turn over 1,800 new emails from Lerner, who ran the tax exempt unit which decided which organizations could receive tax exempt status. The government watchdog group Judicial Watch has sought the emails in a Freedom of Information Act (FOIA) request. Monday, a spokesperson told  FOXBusiness.com that the group would not oppose the IRS producing something this Wednesday and every 2 weeks thereafter, assuming the Court agrees. At the time of publication there was no word from the IRS on this development or an amended order from the court. 

Judicial Watch President Tom Fitton said his organization has agreed to receive the information this week, but as of today no information has been received. Lerner is at the center of a scandal in which conservative groups, especially those that identified themselves as Tea Party groups, were denied tax exempt status.

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July 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, July 13, 2015

Yin: Preventing Congressional Violations Of Taxpayer Privacy

ABA Tax LawyerGeorge K. Yin (Virginia), Preventing Congressional Violations of Taxpayer Privacy, 68 Tax Law. ___ (2015):

This article claims that the U.S. House Ways & Means Committee violated the law in 2014 when it voted (strictly along party lines) to release to the public the tax return information of 51 taxpayers. The committee acted under the belief that an obscure tax law provision authorized its action. But the provision required the committee to have a legitimate purpose for the disclosures and — incredibly — the committee failed to satisfy this almost trivial, common-sense restriction. Although the disclosures occurred in connection with the committee’s allegations of possible criminal misconduct by a high-ranking IRS official (Lois Lerner), most of the return information released was completely unrelated to the oversight objective and none of it was necessary for the committee’s claims. In fact, there does not appear to have been any purpose whatsoever for the disclosures other than possibly providing a partisan political advantage to the committee majority. Because the Speech or Debate Clause of the Constitution insulated the committee from prosecution for the violation, the incident reveals a serious gap in taxpayer privacy protections. A future tax committee, for no legitimate reason, might release with impunity the return information of any taxpayer, including a political opponent of those who control the committee at the time.

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July 13, 2015 | Permalink | Comments (0)

Multiple Choice Exam Twist: The Prisoner's Dilemma

ScantronKTVB, Professor Asks Cruelest Extra Credit Question Ever:

For most college students, extra credit opportunities usually come in the form of essay questions at the bottom of the test, additional assignments, or a detail hidden in the exam instructions.

So when a group of University of Maryland students got a multiple choice prompt for an extra credit question (that required no additional information they needed to study), it seemed like a dream come true.

But instead they saw this:

Maryland

In short, the entire class would get at least two points of extra credit, but only if less than 10 percent of students took the six points option.

It's a college exam sized version of "The Prisoner's Dilemma" ...

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July 13, 2015 in Legal Education | Permalink | Comments (2)

Brophy: The Coming Age Of Micro Law Schools

MicroAl Brophy (North Carolina), The Micro Law School:

Maybe what we’ll see are micro law schools — schools with entering classes of 50 or fewer students. Appalachian School of Law in Grundy, Virginia, seems headed in that direction now — with about a dozen full-time faculty and a first year class of 48 in fall 2014.  Micro law schools will permit schools that serve geographically remote communities, like Appalachian School of Law, to continue to provide an education to people who might not be able to travel far from home.  This will work well for the communities and those students, both.

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July 13, 2015 in Legal Education | Permalink | Comments (0)

The Relative Value of $100: Lowest In D.C. ($85), Highest In Mississippi ($115)

Tax Foundation, The Relative Value of $100: Which States Offer the Biggest Bang For Your Buck?:

Tax Foundation

The Bureau of Economic Analysis has been measuring this phenomenon for two years now; it recently published its data for prices in 2013. Using this data, we have adjusted the value of $100 to show how much it buys you in each state.

July 13, 2015 in Tax, Think Tank Reports | Permalink | Comments (3)

Brooklyn Law School Offers 15% Tuition Refund For Students Who Don't Find Full-Time Jobs 9 Months After Graduation

Brooklyn (2015)New York Times, Brooklyn Law School Offers a Safety Net for New Students:

Beginning with students entering this year — whether in two-, three- or four-year programs — Brooklyn Law School is offering to repay 15 percent of total tuition costs to those who have not found full-time jobs nine months after graduating. That, according to school officials, is how long it typically takes graduates to get such jobs and, if necessary, to obtain the requisite licenses. ...

The introduction of the program, called Bridge to Success, comes as law school graduates across the country face increasing competition in a depressed job market that is only slowly recovering from the economic downturn. ...

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July 13, 2015 in Legal Education | Permalink | Comments (7)

20 Schools Are Responsible for 20% Of All Graduate School Debt

Washington Post, These 20 Schools Are Responsible for a Fifth of all Graduate School Debt:

A new study from the Center for American Progress (CAP) found that 20 universities received one-fifth, or $6.5 billion, of the total amount of loans the government gave graduate students in the 2013-2014 academic year. Those schools, however, only educate 12 percent of all graduate students.

WaPo

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July 13, 2015 in Legal Education | Permalink | Comments (6)

The IRS Scandal, Day 795

IRS Logo 2Tribune-Review, Another IRS 'Oops': Hardly Credible:

It was “an unbelievable set of circumstances” that led to the erasure of backup tapes of Lois G. Lerner's emails after a congressional subpoena sought these records in an investigation of the tax agency's targeting of tea party and conservative groups. Or so says the IRS' deputy inspector general.

In literature and in cinema, this would be referred to as suspension of disbelief. For the Obama administration in its dealings with Congress, it's business as usual.

As the script goes, Ms. Lerner formerly led the IRS agency accused in the targeting scandal. Once an investigation commenced, the IRS informed Congress that, by golly, her computer had suffered a debilitating hard drive crash and that her emails were lost.

Backup computer tapes of the sought emails later turned up. But — oops! — about 24,000 emails might have been permanently lost to erasure, The Washington Times reports. Of the 1,000 recovered emails that the IRS didn't turn over to Congress, none pertain to the targeting, according to the IG. Imagine that.

Why, nobody “did anything intentionally to hinder our investigation,” said Democrat Rep. Elijah E. Cummings.

A crashed hard drive. Now erased backup tapes. It is not unreasonable to suspect the destruction of evidence amid a succession of excuses during a two-year investigation. Congress must redouble its efforts to get to the bottom of this.

Newsmax, Judicial Watch's Fitton: More Lois Lerner Emails on the Way:

The IRS is dragging its feet on the court-ordered release of newly-discovered emails to and from Lois Lerner, the ex-agency official who allegedly targeted tea party groups seeking tax-exempt status, Tom Fitton, president of the government watchdog Judicial Watch, tells Newsmax TV.

"The government found 1,400-plus new Lois Lerner emails. Remember those emails that were deleted and weren't recoverable on backup tapes? Well, they weren't deleted, they were recoverable and they were on backup tapes," Fitton said Friday on "The Steve Malzberg Show." ...

Fitton said other Lerner emails that have been released thus far are "astonishing." "They provide an exhaustive account of a meeting that Lois Lerner and other IRS folks had with the Department of Justice.... It wasn't just the IRS stalling tea party applications, it was the Justice Department and the FBI talking about prosecuting these very groups," he said.

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July 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, July 12, 2015

Brunson: Churches And Religiously-Affiliated Schools That Oppose Same-Sex Marriage Will Not Lose Their Tax Exemption After Obergefell

White House Same Sex MarriageFollowing up on my previous posts:

Sam Brunson (Loyola-Chicago), Tax Exemption, Post-Obergefell:

There’s been a lot of Sturm und Drang recently over what will happen to the tax exemptions of churches and religiously-affiliated schools that oppose same-sex marriage. The specter of loss of exemption has been bandied about. ...

[C]could the church or BYU lose its tax exemption as a result of their policies on homosexuality? Yes. ... Just because the government could, though, doesn’t mean that it’s likely. And, based on historical and current practice, revoking the church’s exemption is virtually impossible, and revoking BYU’s is tremendously unlikely. 

Sam Brunson (Loyola-Chicago), The Church Will Not Lose Its Tax-Exempt Status:

Do I seriously have to say this? Again? Look, Obergefell does not mark the end of churches’ tax-exempt status. It’s just not going to happen. ...

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July 12, 2015 in Tax | Permalink | Comments (3)

The Wealthiest ZIP Codes In America

Wealthiest ZIP Codes in America:

America

(Hat Tip: Francine Lipman.)

July 12, 2015 in Tax, Think Tank Reports | Permalink | Comments (3)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's:

  1. [395 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [339 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [193 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [190 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [178 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (Texas A&M)

July 12, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 794

IRS Logo 2Nonprofit Quarterly, IRS Lois Lerner Emails Impossible to Find or Save:

Yesterday, NPQ published a newswire based on an editorial that speculated that it would be difficult to address the dark money issues in 501(c)(4) nonprofits this election season because of the targeting scandal of the IRS. This, of course, is not helped by the fact that the inquiry drags on and on.

Last week’s Treasury Inspector General’s update to the House Oversight and Government Reform Committee on Lois Lerner’s missing emails was unsatisfying to all parties. Early estimates of tens of thousands of possible emails being found that relate to the IRS scandal were subsequently reduced to 6,000 and ultimately to about 1,000. Meanwhile, the TIGTA’s office reported that as many as 24,000 emails may be permanently lost.

The IRS had promised for more than a year to respond fully to a subpoena and produce all Lerner emails. After a long delay, the IRS ultimately reported the emails to have been lost due to computer hardware failures. However, the TIGTA’s office later found more than 700 backup tapes (not produced by the IRS in response to the subpoena) that may have included the Lerner emails under subpoena. Almost all of the tapes had been erased and the data unrecoverable.

The investigators’ interviews with IRS personnel discovered no willful intent to destroy evidence. The tapes were handled in accordance with IRS policy and procedures for the handling of confidential material, and the personnel involved in the destruction claimed no knowledge of the subpoenas and the potential relevance of the materials destroyed.

Democrats on the committee continue to point out that there is no evidence of political bias as a motivation for the IRS’s targeting and that there is no demonstrated link to the White House. They cite the more than 160,000 labor hours and $20 million spent by the IRS to comply with investigators’ demands as a distraction from customer service and other IRS priorities. Democrats and the Treasury investigators both complained about leaks from committee Republicans citing the early numbers of possible emails. Republicans continue to be enraged about the slow IRS response and apparent unwillingness to take the investigations seriously, despite credible evidence of IRS malfeasance that, by definition, targeted “Tea Party” and other conservative-sounding organizations in the wake of the Citizens United Supreme Court ruling in early 2010.

At the very least, the IRS’s procedures for responding to subpoenas for electronic evidence have been demonstrated to be seriously deficient. In addition, the IRS’s destruction of electronic records may violate the Federal Records Act, which mandates the archiving of all government communications under the ultimate supervision of the Archivist of the United States.

The IRS’s targeting of conservative-sounding tax-exempt organizations, first reported publicly in May 2013, prompted several simultaneous and ongoing investigations that have awaited production of subpoenaed emails to and from Lerner. Lerner was the Director of the Exempt Organizations (EO) Unit of the IRS from 2006 until being placed on unpaid administrative and ultimately retiring from the IRS in 2013. Lerner is believed to have been a key figure in the IRS scandal, based on the TIGTA’s May 2013 initial audit report and upon evidence subsequently produced.

To add more unfortunate fodder for the conspiracy theorists, there is now a link between the IRS scandal and the Congressional investigation surrounding the attack on the US Consulate in Benghazi, Libya, in 2012. Catherine Duval, the IRS attorney responsible for supervising the production of the Lerner emails, has been transferred to the State Department, where she now oversees the production of former Secretary of State Hillary Clinton’s emails to the House committee investigating Benghazi.

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July 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, July 11, 2015

This Week's Ten Most Popular TaxProf Blog Posts

9th Circuit: Marijuana Dispensaries Cannot Deduct Business Expenses, Must Pay Taxes On 100% Of Their Gross Income

Vapor RoomThe Ninth Circuit on Thursday affirmed the Tax Court (139 T.C. 19 (2012)) and held that § 280E prevents a San Francisco  medical marijuana dispensary from deducting ordinary or necessary business expenses because its Vapor Room is a "trade or business . . . consist[ing] of trafficking in controlled substances . . . prohibited by Federal law."  Olive v. Commissioner, No. 13-70510 (July 9, 2015).  See Tony Nitti (Forbes), Ninth Circuit: Legal Or Not, Marijuana Facility Cannot Deduct Its Expenses:

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July 11, 2015 in Tax | Permalink | Comments (3)

65% Of Faculty Plan To Delay Retirement

TIAA-CREF Institute, Understanding the Faculty Retirement (non)decision: Results from the Faculty Career and Retirement Survey:

Tenured faculty age 50 or older can divided into three groups—35% expect to retire by normal retirement age; 16% would prefer to retire by normal retirement age, but expect to work longer (i.e., they are “reluctantly reluctant” to retire); and 49% would like to and expect to work past normal retirement age (i.e., they are “reluctant by choice”). The key drivers differ between those reluctantly reluctant and those reluctant by choice.

TIAA-CREF

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July 11, 2015 in Legal Education | Permalink | Comments (7)

The IRS Scandal, Day 793

IRS Logo 2Town Hall, I Know What Lois Lerner Did Last Summer:

I know her secret, I know she’s scared, and I know what she did last summer.

If you need something lighthearted to pick yourself up and get back into work after a long holiday weekend, I’ll give you a column that would more humorous if it weren’t so close to the truth. It’s the story about what Lois Lerner and her new bestie, Hillary Clinton, did last summer.

The 4th of July reminded me of the 1997 horror-thriller, “I Know What You Did Last Summer,” where a girl gets attacked on the 4th of July. Which then reminded me of the chilling probability that I may know what girls gone wild like former IRS Director of Exempt Organizations Lois Lerner did last summer. ...

Well, after two summers of chilling at the beach, on May 31 of 2015, the U.S. Attorney’s Office announced that Lois Lerner would not be charged with contempt or face charges. Lois could keep the $129,000 in bonuses that she received while presiding over contended favoritism at the IRS and retire will full pension. ...

Lois Lerner’s case isn’t closed. Late last month the chief government watchdog for the IRS revealed at a Congressional testimony that Lerner’s hard drive containing emails dated between 2010 and 2012 appear to have been destroyed by “an impact of some sort.” Translation: Lois might pack a hammer in her beach bag. ...

Treasury Inspector General for Tax Administration J. Russell George further testified that 422 backup tapes containing up to 24,000 emails sent to and from Lois Lerner had been destroyed by IRS employees. George qualified his revelation by saying that he did not smell foul play in this destruction of evidence. Which makes you question the strength of George’s watchdog sniffer. But, I digress. ...

[A] few days before the 4th of July holiday, we learned that the same woman charged with managing Congress’ investigation into Lerner’s emails has also been charged with overseeing Clinton’s email scandal: an attorney named Catherine Duval.

Perfect.

“If you're going to bury the truth, make sure it stays buried,” was a movie tagline for I Know What You Did Last Summer.

Depending on how well Lois and Hillary buried the truth contained in the thousands of emails that they do not seem eager for you or me to see may determine how many more summers they spend sunbathing—or doing community service. Either way, we know what Lois Lerner did last summer.

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July 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, July 10, 2015

Light At The End Of The Law School Tunnel?

LightThe number of LSAT takers in June 2015 (the first test of the 2015-16 cycle) increased 6.6% from June 2014.  This is the third consecutive increase, following the 0.8% increase in December 2014 and 4.4% increase in February 2015. This follows 14 consecutive declines in LSAT takers from February 2010 through December 2013.

The June 2015 figure is even more impressive because it reflects a whopping 10.9% increase in first time LSAT takers from June 2014.

LSAT 1

LSAT 2

LSAT also reports that law school applicants are down only 2.0% for the Fall 2015 entering class (which represents 97% of the preliminary final applicant count):

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July 10, 2015 in Legal Education | Permalink | Comments (4)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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July 10, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Save The Date: Inaugural International Conference On Taxpayer Rights — The Bedrock Of Tax Administration

NTA

Save the Date:  Inaugural International Conference on Taxpayer Rights: The Bedrock of Tax Administration in Washington, D.C. on November 18-19, 2015:

The National Taxpayer Advocate of the U.S. Internal Revenue Service is convening the Inaugural International Conference on Taxpayer Rights in Washington, D.C. This ground breaking conference will explore how taxpayer rights globally serve as the foundation for effective tax administration.

Government officials, scholars, and practitioners from many countries will discuss issues such as:

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July 10, 2015 in Conferences, IRS News, Tax | Permalink | Comments (0)

Indiana Law School Freezes Tuition For Three Years For Entering 1L Class

Indiana (2016)Press Release:

Tuition for students entering the Indiana University Maurer School of Law in the fall of 2015 will not increase during their entire three years in Bloomington, the school has announced. "Fixed-rate tuition, along with the generous guaranteed, nonconditional scholarships our school has long offered, will enable our students to plan actively for their future," said Austen L. Parrish, dean and the James H. Rudy Professor of Law.

Tuition for Indiana residents of this year's entering class will be $30,500 per year, while for nonresidents it will be $50,500. Most students pay significantly less after scholarships and financial aid packages are considered.

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July 10, 2015 in Legal Education | Permalink | Comments (0)

Fleischer: Revenue Estimates And Carried Interest Tax Reform

NY Times Dealbook (2013)New York Times Deal Book:  An Income Tax on Carried Interest Couldn't Be Avoided, by Victor Fleischer (San Diego):

The private equity industry has killed the idea of taxing carried interest as ordinary income. Several times. And yet it returns, relentlessly, like a “Game of Thrones” reanimated wight from beyond the wall.

Representative Sander Levin, Democrat of Michigan, and Senator Tammy Baldwin, Democrat of Wisconsin, introduced legislation on June 25 that, like earlier legislative proposals, would tax carried interest at ordinary income rates. Under current law, the share of an investment fund’s profits earned by private equity and other private fund managers, known as carried interest, is often taxed at lower capital gains rates. 

The new legislation, which is similar to earlier proposals passed in the House of Representatives, has a slim chance of passing on its own in this Congress. But there is still a possibility that the tax change could be included as part of a package to partly offset the cost of changes to the corporate and international tax provisions that the tax-writing committees in Congress have been focused on.

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July 10, 2015 in Tax | Permalink | Comments (0)

After Selection Of New Mexico Law School Co-Deans, Passed Over Candidate Resigns From Faculty Amidst 'Revolt' Over Increased Publication Demands Imposed By Prior Dean

BergmanAlbuquerque Journal, New Co-Deans Are Facing Divided UNM Law School:

For a group of people trained to manage and mediate, if not master, other people’s conflict, lawyers turned professors at the University of New Mexico School of Law haven’t had much success mastering their own conflict recently.

So much so that selecting – and keeping – leaders for the school has been a task akin to directing battle, some in the legal community say.

Even UNM Provost Chaouki Abdallah said, only half-joking, that he suggested the two men – professors Alfred Mathewson and [Tax Prof] Sergio Pareja – he appointed last month to share deanship at the school “deserve combat pay.”

The move to create a co-deanship, only the third law school in the nation to ever do so, set off a frenzy in the tight-knit New Mexican legal community. “There is great concern about what is going on at the law school,” said David Martinez, 30-year member of the alumni board and practicing lawyer in Albuquerque.

Emotions are running so high that longtime faculty and student favorite professor Barbara Bergman [right], who had been a contender for the deanship, resigned within a week after Abdallah’s selection. Her supporters are angry. Bergman declined to comment.

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July 10, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 792

IRS Logo 2Wall Street Journal editorial, Wisconsin’s Friend at the IRS: Emails Show a Common Cause in Restricting Political Speech:

Wisconsin’s campaign to investigate conservative tax-exempt groups has always seemed like an echo of the IRS’s scrutiny of conservative groups applying for tax-exempt status. It turns out that may be more than a coincidence.

Former IRS tax-exempt director Lois Lerner ran the agency’s policy on conservative groups. Kevin Kennedy runs the Wisconsin Government Accountability Board (GAB) that helped prosecutors with their secret John Doe investigation of conservative groups after the 2011 and 2012 recall elections of Governor Scott Walker and state senators.

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. The emails indicate the two were also personal friends who met for dinner and kept in professional touch. “Are you available for the 25th?” Ms. Lerner wrote in January 2012. “If so, perhaps we could work two nights in a row.”

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. ...

These interconnections matter because they reveal that the use of tax and campaign laws to limit political speech was part of a larger and systematic Democratic campaign. Speaking at the University of Wisconsin in 2010, President Obama sent his own political message to investigators.

“Thanks to a recent Supreme Court decision, [Republicans] are being helped along this year, as I said, by special interest groups that are allowed to spend unlimited amounts of money on attack ads. They don’t even have to disclose who’s behind the ads,” he said. “You’ve all seen the ads. Every one of these groups is run by Republican operatives. Every single one of them—even though they’re posing as nonprofit groups with names like Americans for Prosperity, or the Committee for Truth in Politics.”

Conservative nonprofits like the Wisconsin Club for Growth and Wisconsin Manufacturers and Commerce were later subpoenaed and bound by secrecy orders as their fundraising all but ceased. Liberals worked together to turn the IRS and the GAB into partisan political weapons.

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July 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)