Ebooks and ExamSoft

By Sam Brunson

A couple weeks ago, one of my students emailed me. This semester, he bought the ebook for my BizOrg class, and didn’t bother buying a physical copy. And he wanted to know if he could use his ebook on the final.

My finals are all open-book; students can bring in and use the casebook, the statutory supplement, and any notes that they create (on their own or in their study group). So in theory, I’m totally fine with it.

In practice, though, I had to send him to our Dean of Students. Because, like many law schools (and some bar examiners), we use ExamSoft for tests.[fn1] Now. I haven’t personally used ExamSoft since I was in law school (it was fine back then, though it was apparently not Mac compatible back in those days). Basically, when I used it, it was a basic word processor that saved your work every minute and blocked access to the rest of your computer while you took the exam. Continue reading “Ebooks and ExamSoft”

A Libertarian Tip

By: David Herzig

Yesterday on Twitter, Scott Greenberg (@ScottElliotG) posted the following tweet from Matt Bruenig.

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Well, David Gamage, Omri MarianAndy Grewal and I had fun in 120 characters debating the quality of the tax advice provided on both the receipt and the note.  Suffice to say: (A) this will be appearing on a number of basic income tax exams shortly;[1] and, (B) neither piece of advice provided by “Mr. Libertarian” seems to be correct.  Both David and I pointed out that the “tip” did not seem to meet the old Duberstein detached and disinterested test.  Clearly there was a quid-pro-quo; don’t spit on my food and I will give you extra money in addition to the bill.

Joking around about the gift/income distinction made me think that tipping is very tax inefficient.  Assuming that what I said is true: tips are not gifts and they are income to the recipient. This means that the payment is not deductible by the payor (just personal consumption) yet income to the recipient, i.e. the server. If it is ordinary income to the recipient, then there should be a corresponding wage deduction, right?

Let’s assume the following counterfactual.  The restaurant includes the tip as part of the bill.  The restaurant pays the employee salary including the entire tip.  Under this structure, the restaurant would receive an entire wage adjustment for the tip paid.  The customer is still does not receive a deduction for paying the employee’s wages and the employee still pays the same amount of income tax.  But the employer captures the unused deduction for wages by the customer.  Theoretically, this deduction could be shared by all the stakeholders to reduce costs to all parties.

Who cares?  Well, only economists and tax professors, probably.  Back to finals preparation!

[1] Here is David Gamage’s hypo: customer leaves $1K and says, I just won the lottery and want to share some of my winnings as a “gift”. 

The Surly Subgroup Turns One!

Time flies when you’re having fun, I guess. Today is the one-year blogiversary of the Surly Subgroup. What started off as a group-blogging experiment hatched at last year’s Critical Tax Conference at Tulane Law School has provided quite a bit of entertainment for Surly bloggers and our guest bloggers, and hopefully for our readers as well.

It’s obviously been a big year on tax and other fronts. Since our inception, we’ve published 206 blog posts on a variety of topics. And we’ve drawn readers from 140 different countries.

Surly regulars and guest bloggers have covered various tax-related issues surrounding politics and the 2016 election—including disclosure of presidential tax returns, the Emoluments Clause, the Trump Foundation, and the Clinton Foundation. We’ve written about churches, 501(c)(3)s and the IRS treatment of non-profits. We’ve discussed the tax reform proposals of the 2016 presidential candidates and the #DBCFT. We’ve written several administrative law posts about Treasury Regulations and rulemaking.

Politics aside we’ve also covered other important issues in tax policy—including taxation and poverty, healthcare, tax policy and disabilities, tax compliance, and tax aspects of the Puerto Rico fiscal crisis. We’ve discussed several issues in international and cross-border taxes, touching on the EU state aid debate, the CCCTB, taxation and migration, the Panama Papers, tax leaks more generally, and tax evasion in China.

We hosted our first ever online Mini-Symposium on Tax Enforcement and Administration, which featured posts by ten different authors on a variety of tax administration topics. The Mini-Symposium was spearheaded by Leandra Lederman. Leandra had organized and moderated a discussion group on “The Future of Tax Administration and Enforcement” at the 2017 AALS Annual Meeting, and many of the discussion group participants contributed to the online symposium. We hope to organize future online symposia on other topics.

We’ve blogged about various conferences, workshops, and papers, both tax related and not-so-much tax related. We’ve also had lots of fun writing about taxes in popular culture – Surly bloggers and guest bloggers have written about the tax aspects of Pokémon Go, tax fiction, music-related tax issues (Jazz Fest! Prince! “Taxman”!), soccer players, dogs, Harry Potter fan fiction, Star Trek, and John Oliver. Surly bloggers even recorded a few tax podcasts!

In short, it’s been a busy year, and we’ve had a lot of fun with the Surly platform. We hope you have as well. Going forward, we’re going to keep the blog posts coming. We also hope to draw more regular and guest bloggers and to organize other online symposia.

Thanks for reading!

The Games We Play

Shu-Yi Oei

I’ve been ever so slightly glum since my colleague Ann Lipton went and blogged about this game called the Unicorn Startup Simulator over at BLPB. The goal of the game is for your startup to have a billion dollar valuation by the end of the year while keeping your employees happy. You have to make a series of decisions juggling those two goals. Turns out that’s harder than one might imagine. Here is what keeps happening to me:

Screenshot 2017-04-10 23.18.32

So, I guess the message is “don’t quit your day job”?

Anyway, I was feeling grumpy about not having cool tax games to call our own but then I went hunting around and realized, WAIT, we do have tax games! Whether they’re cool or not is another story.

Here are a couple:

Continue reading “The Games We Play”

Teaching Depreciation with a #DBCFT Lurking

Shu-Yi Oei

I’m teaching depreciation in my Basic Federal Income Tax class this week. As I suspect is the case for most tax profs, our coverage of depreciation comes right after we wrap up discussion of expense taking in §§ 162 and 212 (and § 195) but before we get to § 165 losses.

Depreciation is literally my favorite topic in the entire universe to teach. I mean, if I was going to get a tattoo of a Code section on myself, it would literally be “26 U.S.C. § 168 (as amended).” No disrespect meant to 26 U.S.C. §§ 167, 179, 197 and friends. [Distraction: Here is a virtual tattoo generator. You, too, can practice getting your favorite Tax Code section inked on yourself.] I firmly believe that you can teach any number of core skills in tax class by teaching depreciation (e.g., statutory construction, policy choices, reading cross-references, political economy and legislative change, time value of money, etc.). Conversely, I also tend to think that if you can understand the depreciation statute in Basic Tax and explain it to your classmates, you can do pretty much anything in our legal profession.

Therefore, putting aside all of the reasons why cash-flow expensing may not have the effects that one might hope, I will be absolutely heartbroken if we actually end up with a cash-flow tax, because then what am I gonna talk about in tax class?

All of which brings me to today’s dilemma: Do I mention the ubiquitous #DBCFT in teaching depreciation this week? Or can I just pretend it’s not happening? If one does teach cash-flow expensing, when does one bring it up (i.e., in what order of coverage)? My inclination is to (1) explain the basics of how economic cost recovery over time works in theory; (2) talk briefly about the ACRS changes in 1981; (3) teach the Simon v. Commissioner cases (violin bows) to illustrate the policy tensions that arise once we move from true economic recovery and actual useful lives to ACRS and statutory recovery periods; (4) discuss #DBCFT as an alternative design approach, noting the possible benefits and downsides of that approach, noting that there’s some discussion in the ether right now re whether we should be doing this (and deemphasizing the border adjustment features); (5) introduce bonus depreciation concepts (§§ 168(k) and 179) as an illustration of how expensing has surreptitiously worked its way into the conversation in the guise of bonus depreciation circa financial crisis; and then (6) move right along to parsing the actual statutory elements of §§ 167 and 168 and understanding how it all stitches together.

This strikes me as a nice middle ground between (1) dorkin’ out and going #DBCFT full bore and totally losing the class, and (2) just ignoring the current debate. I’d be curious to know what other tax profs are doing with coverage here.

Tulane Seeks Fall 2017 Visitors

Here’s another hiring announcement from Tulane Law School, this time for Fall 2017 visitors:

Tulane Law School invites applications for a one-semester visiting position in the Fall of 2017. Our specific needs for the Fall 2017 semester include basic income tax and corporate tax, criminal law, and professional responsibility. Applicants must possess a J.D. from an ABA-accredited law school, strong academic credentials, and at least three years of relevant law-related experience; prior teaching experience is strongly preferred. Applicants should submit a letter of interest, CV, and the names and contact information of three references through Interfolio at https://apply.interfolio.com/40060. For additional information, please contact Onnig Dombalagian atodombala@tulane.edu.

Tulane University is an equal employment opportunity/affirmative action employer committed to excellence through diversity. All eligible candidates are invited to apply for position vacancies as appropriate.

Tulane Law School Seeks to Hire Forrester Fellow and VAP

I’m passing along this hiring announcement from Tulane Law School for two positions: (1) the Forrester Fellowship, and (2) a VAP position focusing on the regulation of economic activity, broadly defined. (Emerging scholars doing work in tax are welcome to apply for both positions.)

Tulane Law School invites applications for its Forrester Fellowship and visiting assistant professor positions, both of which are designed for promising scholars who plan to apply for tenure-track law school positions. Both positions are full-time faculty in the law school and are encouraged to participate in all aspects of the intellectual life of the school. The law school provides significant support, both formal and informal, including faculty mentors, a professional travel budget, and opportunities to present works-in-progress to other faculty workshop in various settings.

Tulane’s Forrester Fellows teach legal writing in the first-year curriculum to two sections of 25 to 30 first-year law students in a program coordinated by the Director of Legal Writing. Fellows are appointed to a one-year term with the possibility of a single one-year renewal. Applicants must have a J.D. from an ABA-accredited law school, outstanding academic credentials, and at least three years of law-related practice and/or clerkship experience. To apply, please visit the Tulane University “iRecruitment” website at http://tinyurl.com/phd53k7. If you have any questions, please contact Erin Donelon at edonelon@tulane.edu.

Tulane’s visiting assistant professor (VAP), a two-year position, is supported by the Murphy Institute at Tulane (http://murphy.tulane.edu/home/), an interdisciplinary unit specializing in political economy and ethics that draws faculty from the university’s departments of economics, philosophy, history, and political science. The position entails teaching a law school course or seminar in three of the four semesters of the professorship (presumably the last three semesters). It is designed for scholars focusing on regulation of economic activity very broadly construed (including, for example, research with a methodological or analytical focus relevant to scholars of regulation). In addition to participating in the intellectual life of the law school, they will be expected to participate in scholarly activities at the Murphy Institute. Candidates should apply through Interfolio, at apply.interfolio.com/, providing a CV identifying at least three references, post-graduate transcripts, electronic copies of any scholarship completed or in-progress, and a letter explaining your teaching interests and your research agenda. If you have any questions, please contact Adam Feibelman at afeibelm@tulane.edu

The law school aims to fill both positions by March 2017.  Tulane is an equal opportunity employer and encourages women and members of minority communities to apply.

Federal Hall and Taxes

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By Sam Brunson

I spent my Thanksgiving in New York this year, ostensibly to see the Macy’s Thanksgiving Day Parade.[fn1]

Before and after Thanksgiving, my family and I went to various National Memorials in New York. (My Hamilton-obsessed kids were thrilled to make a pilgrimage to Hamilton Grange, even if they haven’t actually seen the musical yet.)

And on Friday, we went to Federal Hall.[fn2] And, like our visit to Alcatraz over the summer, I was surprised (and pleased) to find a tax connection.  Continue reading “Federal Hall and Taxes”

Letter Urging the Senate to Vote on U.S. Tax Court Nominations

Over 50 tax law professors have signed a letter (available here) urging the U.S. Senate to vote on U.S. Tax Court nominees Elizabeth Ann Copeland and Vik Edwin Stoll. Unfortunately, these nominations may not get much attention in the wake of the election. However, the signatories (myself included) are urging the Senate to schedule a vote on these nominees, both of whom were favorably reported out of the Senate Finance Committee over a year ago. Danshera Cords has more on Procedurally Taxing.

Congratulations to the Newly Elected Members of the American Law Institute!

By: Francine J. Lipman

The American Law Institute (ALI) has just announced its newly elected members. The members who join ALI from across the country will bring their diverse backgrounds and areas of legal expertise to ALI’s work. Fifteen of the 45 new members are professors, sixteen are partners (or the equivalent) in law firms, seven are judges, six are in private industry, and one is a government legal advisor.

“One of the most exciting aspects of being President of the ALI is meeting some of today’s most important and inspiring legal minds as they are elected into The American Law Institute. I look forward to having the opportunity to work alongside these new members in continuing the ALI’s efforts in clarifying the law,” said ALI President Roberta Cooper Ramo. Continue reading “Congratulations to the Newly Elected Members of the American Law Institute!”