TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, July 6, 2016

WSJ:  Marginal Tax Rates Matter To Star Scientists (And To The Rest Of Us)

Wall Street Journal editorial, Why Everyone Needs a Tax Cut: Scientists Like Living in Countries That Don’t Plunder Their Paychecks:

It’s déclassé on the left and right these days to talk about marginal tax rates, so forgive us for pointing out economic evidence that rates affect individual behavior. Two 2015 papers from the National Bureau of Economic Research looked at the impact of top marginal tax rates on the mobility of superstar scientists—the people critical to U.S. success in a high-tech global economy.

Mobility 1One study, by Ufuk Akcigit, Salomé Baslandze and Stefanie Stantcheva, looked at the international migration patterns of highly successful inventors since 1977. The authors found that “top 1% inventors”—those with the most valuable patents—“are significantly affected by top tax rates when choosing where to locate.” Specifically, countries enjoy a “26% increase in foreign superstar top 1% inventors” with each “10 percentage points decrease in top tax rates.” [Taxation and the International Mobility of Inventors]

The authors, in hilariously dry academic fashion, dare to note that these “migratory responses to tax policy might represent a cost to tax progressivity.” Imagine trying to attract the top 1% of earners instead of driving them away.

Mobility 2In another study, Enrico Moretti and Daniel Wilson examine star scientists “at or above the 95th percentile in number of patents over the past ten years” to find that state taxes have “a significant effect” on the geographical location of these innovators. In short, they found, “relative taxes matter.” [The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists]

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (5)

Frye:  Social Technology And The Origins Of Popular Philanthropy

Brian Frye (Kentucky), Social Technology & the Origins of Popular Philanthropy, 32 Ga. St. U. L. Rev. 413 (2016):

The prevailing theory of charity law holds that the charitable contribution deduction is justified because it solves market and government failures in charitable goods by compensating for free riding on charitable contributions. This article argues that many market and government failures in charitable goods are actually caused by transaction costs, and that social technology can solve those market and government failures by reducing transaction costs.

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (0)

Natelson:  The Meaning Of The Constitution's Financial Terms, Including 'Tax,' 'Direct Tax' And 'Apportionment'

Rob Natelson (Independence Institute), What the Constitution Means by “Duties, Imposts, and Excises”—and “Taxes” (Direct or Otherwise), 66 Case W. Res. L. Rev. 297 (2016):

This Article recreates the original definitions of the U.S. Constitution’s terms “tax,” “direct tax,” “duty,” “impost,” “excise,” and “tonnage.”

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (0)

Clausing, Kleinbard & Matheson:  U.S. Corporate Income Tax Reform And Its Spillovers

Kimberly Clausing (Reed College), Edward Kleinbard (USC) & Thornton Matheson (IMF), U.S. Corporate Income Tax Reform and its Spillovers:

This paper examines the main distortions of the U.S. corporate income tax (CIT), focusing on its international aspects, and proposes a set of reforms to alleviate them. A bold reform to replace the CIT with a corporate-level rent tax could induce efficiency-enhancing reform of the international tax system. Since fundamental reform is politically difficult, this paper also proposes an incremental reform that would reduce tax expenditures, reduce the CIT rate to 25-28 percent, and impose a minimum rent tax on foreign earnings.

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (0)

WSJ:  The Better GOP Tax Agenda

Following up on my previous post Paul Ryan Unveils A Better Way To Do Tax Reform:  Wall Street Journal editorial, The Better GOP Agenda:

Table 4A[T]he detailed tax reform floated in late June by the Ways and Means Committee ... would be the most far-reaching tax reform since the Reagan-Rostenkowski condominium of 1986. We can break the news that analysts at the Tax Foundation have inspected the details and will report this week that the House reform would raise American GDP by 9.1% in the long run, lift wages by 7.7% and add some 1.7 million jobs. ...[T]he foundation scores the House reform as reducing federal revenue by only $2.4 trillion over 10 years and a mere $191 billion after accounting for faster economic growth. The larger economy and higher wages would result mainly from the reform’s far lower after-tax cost of capital investment.

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July 6, 2016 in Tax | Permalink | Comments (5)

Hayashi:  The Effects Of Refund Anticipation Loans On Tax Filing And EITC Takeup

Andrew Hayashi (Virginia), The Effects of Refund Anticipation Loans on Tax Filing and EITC Takeup:

The IRS has an uneasy relationship with tax return preparers. Preparers may ease the tax filing process and improve take-up of benefits like the earned income tax credit (EITC); however, preparers also profit from financial products sold in connection with tax preparation that have been viewed as exploitative. But can we have a market for low-income tax preparation without such products, and should we? I estimate the effects of regulation curtailing the market for refund anticipation loans (RALs) on a variety of outcomes, including demand for paid tax preparation, EITC take-up, and demand for other financial products, to explore the source of RAL demand and the relationship between RALs and tax compliance.

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July 6, 2016 in Scholarship, Tax | Permalink | Comments (0)

More On A Law Review Publishing Drama Over The LSAT And Discrimination

Law & InequalityFollowing up on my previous post, Subotnik: Plain Talk About Testing and Race: A Law Review Publishing Drama:  Harvey Gilmore (Monroe College), The SAT, LSAT, and Discrimination: Professor Gilmore Again Responds to Professor Subotnik, 34 Law & Ineq. 153 (2016):

On this very website, Touro Law Professor Dan Subotnik published a response to a piece that I wrote that will be published in a forthcoming edition of the University of Minnesota’s Journal of Law and Inequality. My piece continues the debate that Professor Subotnik and I have had for the past two years over whether standardized tests like the SAT and LSAT are reliable. I argue that they are not, and he argues that they are the best indicators for success in higher education…warts and all. In doing so, he makes some comments and generalizations that I found a little distasteful, and unjustifiably harsh, thus I replied accordingly.

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July 6, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

The IRS Scandal, Day 1154

IRS Logo 2Daily Caller, IRS Allegedly ‘Determined’ To Hide Records Revealing White House Collusion:

IRS officials barely searched for records that would reveal the agency disclosed taxpayer information to the White House without authorization, a court filing alleges.

IRS employees claimed they couldn’t find any documents responsive to a Freedom of Information Act (FOIA) request that would reveal the unauthorized disclosures, but Cause of Action (CoA) Institute’s Friday court filing argues the agency didn’t search email correspondence and only looked through formal disclosure requests.

“In short, the IRS appears determined not to perform an adequate search for records that may demonstrate serious wrongdoing by federal officials — the same officials who are tasked with the duty to protect the confidentiality of taxpayer information,” the filing said.

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July 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, July 5, 2016

Miami Seeks To Hire A Tenured Or Tenure-Track Tax Prof

Miami LogoThe University of Miami School of Law is seeking to hire a tenured or tenure-track tax professor:

The University of Miami School of Law is interested in all persons of high academic achievement and promise, including those who hold Ph.D. degrees. We will consider applications from candidates at any level and with any area of specialization within tax.

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July 5, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (2)

NY Times:  San Francisco Considers 'Tech Tax' To Pay For Boom’s Downside

Tech Logos 2New York Times, San Francisco Considers Tax on Tech Companies to Pay for Boom’s Downside:

Maria Poblet, who leads an organization that assists Latino families facing eviction in San Francisco, says she appreciates the philanthropy that the city’s technology companies do in far-flung places to address global poverty and the environment. But what she really wants to see them do is pay more taxes to help with homelessness and lower-cost housing in San Francisco.

“You have a C.E.O. who cares about kids in Ghana one week or dolphins the next week. Those are important,” she said. “But the people impacted by displacement in San Francisco are a worthy cause, too.”

Ms. Poblet is part of a group of activists behind an initiative by three city legislators to impose a payroll tax that would apply only to technology companies, which have been the engine of a booming economy that now appears to be slowing.

Eric Mar, a member of the city’s Board of Supervisors, announced the proposal last week for a 1.5 percent payroll tax that would serve as a form of indemnification for what he described as the downside of the technology boom.

Tech companies have been “a tremendous benefit to the city in many ways,” Mr. Mar said. “But I don’t think they’ve been paying their fair share.”

The proposal for what has become known as the tech tax comes as officials struggle to fill growing gaps in the city budget. Money from the tech tax would go toward paying for programs for the homeless and the housing “affordability crisis,” Mr. Mar said.

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July 5, 2016 in Tax | Permalink | Comments (0)

Alstott:  Raising The Retirement Age, Fairly

A New DealAnne Alstott (Yale), Raising the Retirement Age, Fairly (Chapters 6 & 7 in A New Deal for Old Age: Toward a Progressive Retirement (Harvard University Press, 2016)):

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

We can solve the policy deadlock by reframing the question. Policy debates tend to focus on how high the retirement age should rise. But age is, more and more, a contingent category, with shifting physical and social meaning. Instead of beginning with chronological age, we can and should start with a deeper account of the objectives of retirement policy.

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July 5, 2016 in Book Club, Scholarship, Tax | Permalink | Comments (1)

Beale:  Reforming Intellectual Property Taxation

Linda M. Beale (Wayne State), #Wow: Reforming Intellectual Property Taxation (or Maybe IP Law), 151 Tax Notes 1249 (May 30, 2016):

Intellectual property (IP) is often used narrowly to refer to areas of the law that provide generally settled legal protections for expressive works and inventions. However, the classic concepts of IP law – e.g., patent, design, copyright, trademark and trade secret — no longer afford easy categorization for taxation purposes. As the “knowledge economy” has expanded, so too have the types of value-producing intangible assets that are often technological and critical to describing business values. Of perhaps the greatest consequence is the shrinking ability of sovereign governments to capture a fair share of tax from quasi-sovereign multinationals that set their own tax liabilities, in part because of the difficulty of determining which country should tax the income attributable to the IP assets. The purview of IP — or at least the scope of what we need to consider in a digitalized, globalized, and deeply commercialized world to establish appropriate IP tax provisions — has become much broader, and characterization has become more difficult.

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July 5, 2016 in Scholarship, Tax | Permalink | Comments (1)

Grubert & Altshuler:  Shifting The Tax Burden From Corporations To Shareholders

Harry Grubert (U.S. Treasury Department) & Rosanne Altshuler (Rutgers), Shifting the Burden of Taxation from the Corporate to the Personal Level and Getting the Corporate Tax Rate Down to 15 Percent, 69 Nat'l Tax J. ___ (2016):

We consider three plans for shifting the tax on corporate income to the personal level to achieve a significant reduction in the corporate tax rate. One plan eliminates the corporate tax and taxes dividends and the annual change in the value of publicly traded financial assets at ordinary rates. The second integrates corporate and shareholder taxes. The third lowers the corporate tax rate to 15 percent and taxes dividends and capital gains as ordinary income. To prevent large reductions in capital gains realizations and dividend payouts, an interest charge on taxes deferred during the holding period would be imposed when an asset is sold. We conclude that the third alternative is more robust than the other two.

July 5, 2016 in Scholarship, Tax | Permalink | Comments (0)

Updated Emmanuel Saez Inequality Data: Bottom 99% Had Income Party Like It's 1999, But Top 1% Did Twice As Well

Emmanuel Saez (UC-Berkeley), U.S. Top One Percent of Income Earners Hit New High in 2015 Amid Strong Economic Growth (July 1, 2016):

The top 1 percent income earners in the United States hit a new high last year, according to the latest data from the U.S. Internal Revenue Service. The bottom 99 percent of income earners registered the best real income growth (after factoring in inflation) in 17 years, but the top one percent did even better. The latest IRS data show that incomes for the bottom 99 percent of families grew by 3.9 percent over 2014 levels, the best annual growth rate since 1998, but incomes for those families in the top 1 percent of earners grew even faster, by 7.7 percent, over the same period. (See Figure 1.)

Saez

Emmanuel Saez (UC-Berkeley), Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2015 Preliminary Estimates) (June 30, 2016):

In 2015, real average incomes per family have continued to grow substantially by 4.7% relative to 2014. 1 Bottom 99% incomes grew by 3.9% from 2014 to 2015, the best annual growth rate since 1999. Top 1% incomes grew even faster by 7.7% from 2014 to 2015. In 2014 and especially in 2015, the incomes of bottom 99% families have finally started recovering in earnest from the losses of the Great Recession. By 2015, real incomes of bottom 99% have now recovered about two thirds of the losses experienced during the Great Recession from 2007 to 2009. Top 1% families still capture 52% of total real income growth per family from 2009-2015 (Table 1) but the recovery from the Great Recession now looks much less lopsided than in previous years.

Table 1

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July 5, 2016 in Tax | Permalink | Comments (5)

UC Berkeley’s Income Inequality Critic's Faculty Salary Puts Him In The Top 1%

UC Berkeley Primary Logo Berkeley BlueCalifornia Policy Center, UC Berkeley’s ‘Income Inequality’ Critics Earn in Top 2%:

Scholars from the University of California at Berkeley have played a pivotal role in making income inequality a major political issue. But while they decry the inequities of the American capitalist system, Berkeley professors are near the top of a very lopsided income distribution prevailing at the nation’s leading public university. ...

Public employee compensation data allows us to measure income inequality on campus. The State Controller’s Public Pay database contains salaries for all UC employees, indicating which campus each employee is on. The Gini coefficient for the 35,000 UC Berkeley employees in the data set is 0.6600 – higher than that of Haiti. ...

According to 2014 data from Transparent California, Center Director Emmanuel Saez received total wages of $349,350.

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July 5, 2016 in Legal Education | Permalink | Comments (12)

GAO:  IRS's 30% Error Rate With Refundable Tax Credits Results In $30 Billion In Annual Erroneous Payments

GAO (2016)Government Accountability Office, Refundable Tax Credits: Comprehensive Compliance Strategy and Expanded Use of Data Could Strengthen IRS's Efforts to Address Noncompliance (GAO- 16-475):

The Earned Income Tax Credit (EITC), the Additional Child Tax Credit (ACTC), and the American Opportunity Tax Credit (AOTC) provide tax benefits to millions of taxpayers—many of whom are low-income—who are working, raising children, or pursuing higher education. These credits are refundable in that, in addition to offsetting tax liability, any excess credit over the tax liability is refunded to the taxpayer. In 2013, the most recent year available, taxpayers claimed $68.1 billion of the EITC, $55.1 billion of the CTC/ACTC, and $17.8 billion of the AOTC.

Eligibility rules for refundable tax credits (RTCs) contribute to compliance burden for taxpayers and administrative costs for the Internal Revenue Service (IRS). These rules are often complex because they must address complicated family relationships and residency arrangements to determine who is a qualifying child. Compliance with the rules is also difficult for IRS to verify due to the lack of available third party data. The relatively high overclaim error rates for these credits (as shown below) are a result, in part, of this complexity. The average dollar amounts overclaimed per year for 2009 to 2011, the most recent years available, are $18.1 billion for the EITC, $6.4 billion for the CTC/ACTC, and $5.0 billion for the AOTC.

GAO

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July 5, 2016 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2)

The IRS Scandal, Day 1153

IntimidationNews Busters, From Cincinnati to Washington: How Lois Lerner's IRS Ruthlessly Targeted the Tea Party, by Kimberly Strassel:

Here is just a taste of what's inside The Intimidation Game: How the Left Is Silencing Free Speech

... Lerner shocked Washington with her May 2013 admission that her agency had harassed Americans. The shocking thing was that anyone was shocked.

Lerner to this day won’t cooperate with any real investigation; the nation has been denied the opportunity to hear her story. But e-mail is a wondrous thing. Between her records and the recollections of her colleagues, we have a vivid portrait of the former head of the IRS’s Exempt Organizations unit. She was a brassy, self-assured bureaucrat with Democratic leanings and a near-messianic belief in the need for more speech regulations.

And she had a long history. Before landing at the IRS, Lerner spent twenty years at the FEC, rising to become its acting general counsel. Never in all that time did she hide her views that money was a problem in politics and needed more restrictions. She was seen even then as a highly biased FEC enforcer—one who harassed conservative groups that wanted more freedoms in politics.

While head of FEC enforcement, Lerner played a role in the 1990s in going after former Mississippi governor Haley Barbour over a nonprofit group he established called the National Policy Forum, which had been accused of taking illegal foreign contributions. (The Justice Department would later find no evidence of a crime.) She was part of an effort to take down a dozen Republican state party chairmen and the Republican National Committee, over accusations that they had broken finance laws during George H. W. Bush’s 1988 presidential bid. That case stayed open for seven years. 

She’d most famously help wage a small war against the Christian Coalition, in one of the largest enforcement actions in FEC history. The coalition was accused (with no proof) of illegally coordinating its advocacy with Republican candidates. Mark Hemingway of the Weekly Standard documented that the harassment cost the conservative group “hundreds of thousands of dollars, and countless hours of lost work.” James Bopp (of later Citizens United fame) handled that case, and he revealed in testimony that the FEC team deposed 48 different people, conducted 81 depositions, put in 127 separate document requests, and sent the group 32 different interrogatories containing hundreds upon hundreds of questions. The agency demanded donor lists, and even inquired into whether people in the group were “praying” for each other. Each of the coalition’s 49 affiliates got document demands; it would ultimately hand over 100,000 pages of information.

So Lerner had a lot of practice in harassment even before she geared up at the IRS. Her e-mails show that she was at home in Democratic politics, with biases against conservatives. There’s a 2004 e-mail with a former colleague in which she’s hopeful she’ll be able to get together to “celebrate” a John Kerry presidential victory. In 2012, a friend would muse to her about the “scary” Romney/Ryan ticket and ask how a “creep like Romney” was ever elected in Massachusetts. She’d later that year decline an invitation to a party to celebrate Obama’s expected victory, noting that she was nonetheless keeping her “fingers crossed. And, I did vote!”

When told that Democrats had kept control of the Senate in 2012, she responded, “WooHoo! [I]t was important to keep the Senate. If it had switched, it would be the same as a Rep president.” Her husband, Michael Miles, comes off as a passionate liberal who egged his wife on. On election day in 2012, he told his wife that he hadn’t been able to find the “socialist-labor candidates on the ballot, so I wrote them in.” Three days after the 2012 election, he complained to her about the losers, “Well, you should hear the whacko wing of the GOP. The US is through; too many foreigners sucking the teat; time to hunker down, buy ammo and food, and prepare for the end. The right wing radio shows are scary to listen to.” Lerner replied, “Great. Maybe we are through if there are that many assholes.” Conservatives, she explained, were “crazy” and worse than “alien terrorists.”

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July 5, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

TaxProf Blog Holiday Weekend Roundup

Monday, July 4, 2016

Tax Like It Is July 4, 1776

1776Wall Street Journal op-ed:  What Life Was Like in 1776, by Thomas Fleming (Former President, Society of American Historians; Author, What America Was Really Like in 1776 (2012)):

Americans [in 1776] had the highest per capita income in the civilized world, paid the lowest taxes—and were determined to keep it that way. ...

In the northern colonies, according to historical research, the top 10% of the population owned about 45% of the wealth. In some parts of the South, 10% owned 75% of the wealth. But unlike most other countries, America in 1776 had a thriving middle class.

Tax Policy Blog:  Independence Day: Taxes Then and Now, by John Olson:

The history of taxation in the United States is a tumultuous one. Since our country’s founding, we have witnessed marginal tax rates on income ranging from zero to 94 percent, and federal revenues taking up less than 5 percent of our economy to more than 20 percent. With presidential candidates proposing more sweeping changes of their own, it seems the future of U.S. taxation will continue to be just as diverse. But what if we were to wind the clock back on our tax code? What was taxation like on the day a group of men in Philadelphia released a document that would change the world, 240 years ago?

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July 4, 2016 in Book Club, Tax | Permalink | Comments (0)

Pittsburgh Seeks To Hire An Entry-Level Or Junior Lateral Tax Prof

Pitt Logo (2015)The University of Pittsburgh School of Law invites applications for a tenure-track tax position beginning in the 2017-2018 academic year:

The successful candidate will become an integral part of Pitt Law’s tax program, which includes a Tax Law Concentration, a Low-Income Taxpayer Clinic, and the peer-reviewed Pittsburgh Tax Review. We anticipate hiring for this position at the rank of assistant or associate professor, depending on the candidate’s qualifications. We encourage applications from entry-level and junior lateral candidates for this position.

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July 4, 2016 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Amidst 26% Enrollment Decline, West Virginia Law School Accelerates Faculty And Staff Downsizing With Buyouts

West Virginia LogoCharleston Gazette-Mail, WVU Invites Employees to Leave Through ‘Voluntary Separation’ Program:

Administrators at West Virginia University are using a new tactic to try to slow their spending: asking employees if they want to voluntarily leave their jobs.

The program, called the voluntary separation incentive plan, has already been used by one college with another one on the way.

“We had a four- to five-year plan for adjusting the size of the law school faculty and staff through voluntary retirements and departures,” said Gregory Bowman, dean of the College of Law. “With the budget challenges that occurred in West Virginia this year, and because there will be challenges for the next several years, I realized that it would be a good idea to accelerate that time period.”

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July 4, 2016 in Legal Education | Permalink | Comments (2)

Exploring American Taxes: Then & Now

Community Tax:

In honor of July 4, we thought we’d look at a longstanding mainstay of the American way—taxes. A lot has changed since our forefathers signed that Declaration of Independence, but one thing has remained the same—owing money to the government. We decided to take a look back and see how our taxing ways began, and found some enlightening comparisons between those taxes imposed on our colonial ancestors and the taxes we face today.

Courtesy of: Community Tax

July 4, 2016 in Tax | Permalink | Comments (3)

The IRS Scandal, Day 1152

IntimidationABC News, Book Excerpt: Kimberley Strassel's 'The Intimidation Game':

Excerpted from The Intimidation Game: How the Left Is Silencing Free Speech, by Kimberley Strassel by arrangement with Twelve, an imprint of Grand Central Publishing, Copyright © Kimberley Strassel 2016.

Cleta Mitchell was sitting in front of her computer in Pinehurst, North Carolina. Mitchell is one of Washington’s most hard-working conservative lawyers, so she spirits off to her home there any chance she gets, for a change of scenery. It was a Friday, May 10, 2013, and she was clearing off the last to-do items, looking forward to a quiet weekend. Instead, her laptop started pinging like mad, notes flooding in from Republican and Democratic colleagues alike. “They all said the same thing: ‘Cleta, did you see? Did you? Lerner admitted it! She admitted the targeting. She apologized. You weren’t nuts after all!’” recalls the lawyer in an amused voice.

The e-mails came within minutes of Lois Lerner's confession. And that was much to the IRS's chagrin. The agency had carefully strategized the moment, choosing an obscure tax meeting as the place where Lerner would let slip the news that her IRS unit had spent three years harassing and silencing conservative groups. Lerner had hoped the little-noticed forum, and the Friday timing, would help skate the moment past the press. Instead, Washington exploded. “I don’t go to those ABA events—they are all communists,” says Mitchell (only half kidding). “But a lot of my Washington colleagues and lawyers were present, and they’d been following this, and they knew exactly what a bomb this was. The IRS was idiotic to think this wouldn’t blow up.”

Mitchell certainly wasn’t surprised. She’d been ferrying—or rather attempting to ferry—several of her clients through the IRS’s tax-exempt program for three years. She’d known there was something rotten on Constitution Avenue since at least 2010, as her applications sat on hold.

What did surprise her was Lerner’s description of events. The head of the IRS’s Exempt Organizations unit assured the ABA audience that this was just a little low-level slipup. Some “line people in Cincinnati” had “centralized” and delayed tax-exempt applications in a way that was “wrong.” They also sent out some letters that “were far too broad,” asking questions that “weren’t really necessary.” Luckily, crowed Lerner, the Washington IRS office was on hand to make it better. All better.

Mitchell couldn’t believe what she was reading. “When I heard her blaming this all on Cincinnati—when I’d been dealing with the Washington office from day one—well...I was rips---.” ...

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July 4, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, July 3, 2016

Charlene Luke Succeeds Marty McMahon As Editor-In-Chief Of The Florida Tax Review

Florida Tax Review  (2015)Charlene D. Luke has been named Editor-in-Chief of the Florida Tax Review, succeeding Martin J. McMahon, Jr. Prof. McMahon and the other tax faculty at the University of Florida Levin College of Law will continue as members of the editorial board, and the Florida Tax Review will continue to draw on the talent of several graduate tax student editors. A board of advisors comprising tax faculty at other institutions provides additional support and guidance. The Florida Tax Review will begin reviewing new submissions on August 1, 2016.

July 3, 2016 in Legal Education, Scholarship, Tax | Permalink | Comments (4)

Update On Murder-For-Hire Investigation Into Dan Markel's Death: Charlie Adelson Denies 'Any Involvement'

Charles AdelsonTallahassee Democrat, Charles Adelson's Attorney Denies Markel Involvement:

The attorney for Dan Markel’s former brother-in-law, Charles Adelson, said his client was not involved in the FSU law professor’s broad daylight slaying. “Let me be clear,” said Fort Lauderdale attorney Michael D. Weinstein. "Dr. Adelson is denying any participation in this death whatsoever.” ... Charles Adelson has not been questioned by investigators, Weinstein said.

FBI and Tallahassee Police investigators cite Markel’s contentious divorce with Wendi Adelson, Charles’ sister, and the family’s eagerness to move the couple’s two young children to South Florida as the motive for the crime.

Two men, Sigfredo Garcia and Luis Rivera, are facing first-degree murder charges in Markel’s July 2014 killing at his Betton Hills home. He was found with two gunshot wounds to the head still seated in his car inside the garage. Police say the men were “enlisted” to kill Markel.

“They don’t even know who killed Danny Markel,” Weinstein said. “They know two people went to Tallahassee and then radio silence. They want to make a connection to the family without any actual evidence.”

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July 3, 2016 in Legal Education | Permalink | Comments (2)

The Top 5 Tax Paper Downloads

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 news papers debuting on the list at #4 and #5:

  1. [349 Downloads]  Following the Money: Lessons from the Panama Papers, Part 1: Tip of the Iceberg, by Lawrence Trautman (American)
  2. [264 Downloads]  Why Does Inequality Matter? Reflections on the Political Morality of Piketty's Capital in the Twenty-First Century, by Liam Murphy (NYU)
  3. [224 Downloads]  'Death Tax' Politics, by Michael J. Graetz (Columbia)
  4. [197 Downloads]  Fiduciary Financial Advice to Retirement Savers: Don't Overlook the Prudent Investor Rule , by Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard)
  5. [159 Downloads]  The President's Power To Tax, by Daniel Hemel (Chicago)

July 3, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Hundreds Of Churches Offer 90-Day Money-Back Tithing Guarantees

90 Day

Following up on my previous posts (links below) about taxes and tithing:  Christianity Today, When Tithing Comes With a Money-Back Guarantee:

This month, hundreds of Christians at a South Carolina megachurch can request a refund on all the money they’ve given since March.

NewSpring Church, led by pastor Perry Noble, is one of hundreds of congregations across the country that have offered 90-day tithing challenges.

Participants sign up with a commitment to give 10 percent of their income or more, and if “God doesn’t hold true to his promises of blessings” after three months, they can request their money back—no questions asked. It’s the church’s version of “satisfaction guaranteed.”

The challenge pulls inspiration from the last book of the Old Testament, Malachi, which states:

Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it." (Mal. 3:10).

“God literally says, ‘Test me out, see if I’m God,’” Noble preached. “You and I cannot out-give him.”

About 440 Christians joined NewSpring’s most recent challenge. Of the more than 7,000 participants over the past four years, fewer than 20—that’s a fraction of 1 percent—have asked for their money back. ...

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July 3, 2016 | Permalink | Comments (1)

The IRS Scandal, Day 1151

IntimidationThe Daily Signal, How the Left Is Using Intimidation to Silence Free Speech:

Most Americans are familiar with the scandal at the IRS targeting conservative groups, but how widespread is the attempt to silence free speech and political activity? Wall Street Journal columnist Kimberley Strassel says it’s one of the biggest threats to our democracy. She sat down with The Daily Signal to talk about her new book, The Intimidation Game, and the left’s orchestrated campaign to silence those it can’t defeat at the ballot box.

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July 3, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, July 2, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Chronicle:  Highly Ranked Law Schools Like Minnesota, Washington & Lee Cut Enrollments, Costs To Survive

MinnesotaChronicle of Higher Education:  Law Schools Cut Back to Counter Tough Financial Times, by Katherine Mangan:

For years they were considered the cash cows of academe, spinning off profits that could keep money-losing parts of the university afloat.

But most law schools today are struggling to break even, buffeted by plummeting applications, a shrinking job market, and the constant pressure to avoid slipping in national rankings. ... Because they rely so heavily on tuition and face a variety of other cost pressures, many and possibly most of those schools are operating at a deficit.

The growing number of universities that are subsidizing struggling law schools "are certainly not happy about the money running the other way," said Paul F. Campos, a professor of law at the University of Colorado at Boulder whose biting critiques of law schools in blogs and books have made him a polarizing but influential figure in legal education. He estimates that at least 80 percent of law schools are losing money — a figure that an ABA spokesman said could not be confirmed.

"The attitude of a lot of the universities is, OK — we’re willing to carry you guys for a while, but you have to shed a lot of costs or come up with other sources of revenue because we’re not going to subsidize you forever," Mr. Campos said. ...

Among the highly ranked law schools now grappling with deficits, the University of Minnesota Law School [#22 in U.S. News] has received subsidies from the university that are expected to total $16 million by 2019, according to a report the law school presented to university regents in 2014, two years after the subsidies began. Faced with a 49-percent decline in applications from 2010 to 2015, the law school trimmed its enrollment by about a third of its 2010 level. ...

Another law school that is making tough financial decisions is Washington and Lee University's School of Law [#40 in U.S. News], which last year announced a transition plan that would allow it to shrink its first-year class, reduce faculty and staff positions through retirements and attrition, and tap into its portion of the university endowment. The goal was to balance its budget by 2018-19.

[Tax Prof] Brant J. Hellwig worked on the plan as a faculty member and took over as dean shortly after it was enacted last year.  ... "I feel like we addressed the difficult questions early and head-on, and made the adjustments we needed to," he said.

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July 2, 2016 in Legal Education | Permalink | Comments (11)

Did Trump Violate IRS Rules By Using His Foundation's Money To Purchase Tebow-Signed Helmet (Now Worth $415) For $12,000?

Trump 2Washington Post, Donald Trump Used Money Donated for Charity to Buy Himself a Tim Tebow-Signed Football Helmet:

Did Donald Trump violate IRS rules, by using a charity's money to buy himself a signed football helmet?

Four years ago, at a charity fundraiser in Palm Beach, Donald Trump got into a bidding war at the evening's live auction. The items up for sale: A Denver Broncos helmet, autographed by then-star quarterback Tim Tebow, and a Tebow jersey.

Trump won, eventually, with a bid of $12,000. Afterward, he posed with the helmet. ... But Trump didn't actually pay with his own money. Instead, the Susan G. Komen organization — the breast-cancer nonprofit that hosted the party — got a $12,000 payment from another nonprofit, the Donald J. Trump Foundation.

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July 2, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (4)

Law Prof Network Blogger's Work Helps Get New Trial For Serial's Adnan Syed

SerialKudos to Colin Miller (South Carolina), editor of our EvidenceProf Blog, whose blogging (and Undisclosed Podcast) on the Serial Podcast on the 1999 prosecution of 17 year-old Adnan Syed for murdering his ex-girlfriend, 18 year-old Hae Min Lee, was cited by Maryland Judge Martin Welch in granting Syed a new trial on Thursday. See National Law Journal, Blogger's Obsession with "Serial" Case Leads to Retrial for Adnan Syed.

July 2, 2016 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 1150

IRS Logo 2The Daily Signal, Conservative Leaders Rally Behind Stopping IRS Abuse of Donor Disclosures for Nonprofits:

Legislation that would prevent the Internal Revenue Service from requiring tax-exempt organizations to include the names, addresses, or identifying information of donors in yearly returns could end up on President Barack Obama’s desk.

The House passed the bill, introduced by Rep. Peter Roskam, R-Ill., by a vote of 240-182 earlier this month.

The White House Office of Management and Budget said the Obama administration opposes the Hosue legislation. The bill “would constrain the Internal Revenue Service’s ability to enforce tax laws and reduce transparency,” it said. ...

The Conservative Action Project, comprised of leaders at over 100 organizations working toward common goals within the conservative movement, recently issued a memo calling for a curtailment of IRS power. ...

Sen. Tim Scott, R-S.C., introduced on June 15 a companion bill to the legislation passed in the House. Scott’s legislation was referred to the Senate Committee on Finance. “The IRS’ targeting of groups based on their political beliefs is totally unacceptable, and we must take concrete steps to ensure it never happens again,” Scott said in a prepared statement.

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July 2, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, July 1, 2016

Kleinbard:  The Trojan Horse Of Corporate Integration (With Shaviro's Commentary)

Edward D. Kleinbard (USC), The Trojan Horse of Corporate Integration:

The U.S. Senate Finance Committee has invested significant resources, including hearings and staff reports, to make the case for an unusual form of corporate dividend integration – a corporate dividends-paid deduction, combined with a universal shareholder dividend withholding tax collected from the firm. This proposal would not reduce the cash tax outlays of U.S. corporations in respect of distributed or retained earnings. It would not reduce the aggregate tax burdens imposed on most shareholders, and in many plausible circumstances would raise those tax costs. It is a poorly targeted response to design weaknesses in the U.S. international corporate tax system. Its efficiency gains are undeveloped and largely overstated.

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July 1, 2016 in Congressional News, Scholarship, Tax | Permalink | Comments (0)

The NLJ 500: A Robust Portrait Of Big Law

NLJ 2National Law Journal, NLJ 500: A Robust Portrait of Big Law:

Welcome to the inaugural NLJ 500. This year, we introduce the biggest-ever expansion of our annual NLJ 350 report—launched in 1978 with a ranking of 200 firms—to provide a more robust portrait of Big Law in the U.S. The additional 150 midsized law firms on the list bear watching as some grow into the large firms of the future, whether organically or through mergers with larger entities.

For the largest 350 firms on our list, head count numbers of attorneys in 2015 dipped slightly from the previous year, to about 146,600 lawyers, from 147,500 in 2014. That deflation flipped the 0.6 percent growth that took place in 2014. The overall numbers skew lower this year, in part because to the world’s largest law firm, Dentons, is no longer on the NLJ list. We explain why, and the impact of its absence, inside.

We also explore the numbers within the numbers in two stories: a Women’s Scorecard look at disappointing but unsurprising news that women lawyers at 254 responding firms comprise a mere 21 percent of partners; and a profile of a Bay Area firm that’s experienced notable growth riding the venture capital deal wave. Finally, there’s a wealth of charts in print and interactives online. We hope you enjoy reading the new NLJ 500 and welcome your feedback.

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July 1, 2016 in Legal Education | Permalink | Comments (0)

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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July 1, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The Influence Of State Taxes On NBA Free Agency

DurantNBA free agency kicked off at midnight.  How important are state tax considerations to players in choosing which team to join?  Kevin Durant reportedly is courting six suitors, two of whom are in states without an income tax: Miami and San Antonio (the others are Boston, Golden State, Los Angeles (Clippers) and Oklahoma City.)  Given his recent tax troubles, Durant may be particularly sensitive to tax considerations in making his free agency decision.  See Slam Online, The Influence of State Taxes on NBA Free Agency:

Modern athletes seem to be more financially literate and are aware of the so-called “Jock Tax” and state taxes. As such, more athletes are signing with teams that are located in states that don’t tax income, like the Miami Heat, the Houston Rockets and San Antonio Spurs.

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July 1, 2016 in Celebrity Tax Lore, Tax | Permalink | Comments (4)

Oxford 10th Annual Academic Tax Symposium

OxfordThe 10th Annual Academic Tax Symposium concludes today at the Oxford University Centre for Business Taxation:

Allison Christians (McGill University), Not So Soft Law: The OECD BEPS Regime
Discussant:  John Vella (Oxford University)

Dominika Langenmayr (KU Eichstatt-Ingolstadt & CESifo), Why The Current Tax Rate Tells You Little: Competing for Mobile and Immobile Firms
Discussant:  Johannes Voget (University of Mannheim)

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July 1, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

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July 1, 2016 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

What Really Matters In Getting Accepted To A Top Law School

Huffington Post, Getting Accepted To A Top Law School: What Really Matters:

As a current student at Stanford Law School, I find myself frequently talking to current prospective law students wanting to know what they should be doing now to get into a top law school. My immediate response is always the same: strengthen your GPA and crush the LSAT. ...

This chart indicates the GPA and LSAT ranges for admitted students at the top 14 law schools this past academic year.

Chart

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July 1, 2016 in Legal Education | Permalink | Comments (6)

Brown:  Domestic Abuse And The EITC

Fred B. Brown (Baltimore), Permitting Abused Spouses to Claim the Earned Income Tax Credit in Separate Returns, 22 Wm. & Mary J. Women & L. 453 (2016):

The subsidy provided by the earned income tax credit (EITC ) is of particular importance to individuals subjected to domestic abuse, given that such individuals are often impoverished, and the EITC can provide them with the financial resources necessary to improve, endure, or leave an abusive relationship. Despite the importance of the EITC, married individuals subjected to domestic abuse face serious difficulties in claiming the credit. Because married individuals are not permitted to claim the EITC in a married filing separate return, such individuals are left with three return-filing options for claiming EITCs: (1) file a joint return, (2) qualify and file as a single taxpayer, or (3) qualify and file as a head of household.

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July 1, 2016 in Scholarship, Tax | Permalink | Comments (1)

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July 1, 2016 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1149

IRS Logo 2Investor's Business Daily editorial, IRS Scandal: No End To Lois Lerner's Lawlessness:

Justice:  IRS official Lois Lerner didn't merely target conservative groups to take away their tax-free status, as first suspected, but also handed over more than a million pages of tax returns to the Justice Department. That's a crime.

It's now apparent, if it wasn't before, that the Internal Revenue Service -- which was created solely to collect revenues due the government, not to persecute the administration's political enemies -- has become a kind of rogue agency.

Its chief, John Koskinen, is being threatened with impeachment for not telling the truth in testimony before Congress. But Lerner, more than even Koskinen, has become a symbol of IRS arrogance and illegality.

As Eliana Johnson of the National Review reported this week, Lerner transmitted some 1.25 million pages of tax returns of mostly Tea Party and conservative groups to the Justice Department in October 2010. In Johnson's words, this was "likely the largest unauthorized disclosure of tax-return information in history."

For some perspective, this took place at the start of a three-year period during which the same groups found their applications for tax-free status inexplicably held up, while those for liberal groups were more or less routinely rubber-stamped.

But the actual transmission of their tax returns as part of a fishing expedition by Lerner is the big problem here -- because she also transmitted IRS Schedule B data, which includes the names and addresses of contributors to those conservative groups. That's a big no-no.

Unfortunately for Lerner, tax returns are nearly sacrosanct under the law. Only an active investigation into criminal acts would allow the IRS to give the tax returns to the Justice Department. And then, by law, Justice would have to specifically request them. They didn't in this case.

By the way, a good-government group called the Cause of Action Institute has been dredging all this information up as part of its ongoing litigation in the case. We wish them luck.

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July 1, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Thursday, June 30, 2016

The End Of Summer (Tax)

As Pepperdine's summer session winds down, my wife and I hosted our third and final lunch today with my small but plucky tax class.  This summer has marked several firsts for me:  my first summer teaching at Pepperdine (after 11 summers teaching at San Diego); my first time teaching such a small (7 students) class; and my first time switching to a new casebook in 25 years of law teaching. 

Lunch

June 30, 2016 in Legal Education, Tax | Permalink | Comments (1)

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 69, No. 3 (Spring 2016):

2016 Erwin N. Griswold Lecture Before the American College of Tax Counsel

Selected Papers From the Inaugural International Taxpayer Rights Conference

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June 30, 2016 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Faulhaber:  Patent Boxes And The Limits Of International Cooperation

Patent Box (2015)Lilian V. Faulhaber (Georgetown), The Luxembourg Effect: Patent Boxes and the Limits of International Cooperation:

This article uses patent boxes, which reduce taxes on income from patents and other IP assets, to illustrate the fact that the jurisprudence of the European Court of Justice has a longer reach than has previously been recognized. This article argues that, along with having effects within the European Union, the ECJ’s decisions can also have effects on countries outside of the EU. In the direct tax context, the ECJ’s jurisprudence has hampered the ability of both EU and non-EU countries to police international tax avoidance.

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June 30, 2016 in Scholarship, Tax | Permalink | Comments (0)

Johnston:  Barack Obama's Astonishing Tax Policy Legacy

Democracy Logo (2017)Democracy: A Journal of Ideas, Taxes: Fund the IRS!, by David Cay Johnston:

Will anyone remember the dramatic turnabout in tax policy that began when Barack Obama took office? Considering the awful economic conditions that prevailed, and the announced intention of Republican Congressional leaders to make his presidency fail, Obama’s successes in tax policy are nothing short of astonishing. They are also little known because of the generally poor quality of mainstream news coverage about his actions as well as Obama’s failure to toot his own horn.

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June 30, 2016 in Tax | Permalink | Comments (28)

Appeals Court Affirms Denial Of Accreditation Of Canada's First Christian Law School

Trinity WesternToronto Star, Ontario Appeal Court Upholds Decision Not to Accredit Evangelical Law School:

Ontario’s top court delivered a strong affirmation of LGBTQ rights on Wednesday when it upheld a decision not to accredit an evangelical Christian law school [Trinity Western University v. The Law Society of Upper Canada, 2016 ONCA 518 (June 29, 2016)].

The Court of Appeal ruled that the Law Society of Upper Canada (LSUC), which regulates lawyers in Ontario, was entitled in 2014 to deny accreditation to Trinity Western University’s proposed law school over its “community covenant,” which students must abide by and prohibits sex outside of heterosexual marriage.

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June 30, 2016 in Legal Education | Permalink | Comments (3)