Tax Law

NYT Smacks Around a Biglaw Partner While Behaving as If Mitt Romney Needed Tax Advice From Stephen Hawking

By Elie Mystal

I get that to lay people, the tax code seems incredibly complicated. It is complicated, and years of both parties legislating through the tax code has made it that way. I understand that the sepia-toned relief of an American being able to puzzle out his taxes on the hood of his pick-up truck before he goes fishing is a powerful image.

But honestly, the mainstream media has to stop acting like Mitt Romney is beset on all sides by byzantine forces that only our greatest theoretical physicists can understand. Taxes are governed by laws. As I’ve said before, we have professionals who deal with those laws; they are called tax lawyers. In fact, if you have modest investments and intelligence, you probably could do your taxes on the hood of your pick-up truck, provided you had a Macbook and downloaded TurboTax.

If, on the other hand, you want to make millions of dollars a year, enjoy the benefits of sophisticated investments, and keep money offshore to avoid paying American taxes on it, then you’re going to have to hire a freaking professional to help you. We’re going to cry over this? We’re going to be sad that we live in a world where people who make extraordinary amounts of money have to rely on trained professionals to help them make just a little bit more?

I guess the Times isn’t exactly crying over it (Fox News has been carrying most of the water on poor Mr. Romney and his complicated taxes), but they are smacking around one of the Biglaw professionals Romney hired. Let’s see which firm…

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Mitt Romney’s Taxes Aren’t ‘Complicated’ to His Tax Lawyers

By Elie Mystal

Romney shows what he thinks the ideal effective tax rate should be for people who have good hair.

If you are a wealthy American who pays the top regular income tax rate of 35%, you have terrible, awful lawyers.

Mitt Romney does not have terrible lawyers.

The news of the day is that GOP frontrunner Romney released the previous two years of his tax returns. Romney’s 2010 adjusted gross income was $21,661,344. His estimated AGI for 2011 is $20,901,075. If all of that income was taxed at the highest tax rate, Romney would be paying around $7 million in federal taxes. But only true idiots and Republicans trying to scare people in election years actually believe that wealthy people pay anything approaching a 35% income tax in this country. Instead, Romney’s effective tax rate was about 14% in 2010 and is estimated to be around 15% in 2011. My effective tax rate was higher than Mitt Romney’s in 2010, and I don’t even get to like firing people.

But Romney is trying to spin his tax returns as an example of how “complicated” that tax code is. And the mainstream media is overwhelmed and helping to push that line. But these taxes are not complicated for a tax lawyer — and when you make $20 million a year, you can afford some good ones, so doing your taxes is about as complicated as writing a check for legal fees…

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Former S&C Partner Gets Sentenced for Tax Offenses

By David Lat

John J. O'Brien

Last August, John J. O’Brien, who was once a highly regarded and well-liked partner in the celebrated M&A practice of Sullivan & Cromwell, pleaded guilty to four misdemeanor tax offenses. The charges of conviction were mere misdemeanors, but the amounts involved were large, as you’d expect from a well-paid partner at S&C.

O’Brien was accused of failing to file income-tax returns for tax years 2001 to 2008, on almost $11 million in partnership income. In the end, he pleaded guilty to failing to file taxes relating to $9.2 million in partnership income, for tax years 2003 to 2008.

Earlier today, John O’Brien was sentenced. The sentencing hearing provided some interesting additional information about why O’Brien acted as he did.

So is O’Brien trading Biglaw for the Big House? And if so, how long a sentence did he receive?

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The Value of the LL.M. Degree? Still Low

By Elie Mystal

Every so often, people ask us about the “value” of getting an LL.M. degree. Our answer has remained pretty consistent. Is it a tax LL.M. from Georgetown or NYU? No? Then save your money and buy something valuable like gold or drugs. See this graphic (click to enlarge):

Photo credit: some dude on TLS.

But still, people ask: “Is it worth it to get an LL.M. degree?” And obviously, there are a bunch of people who put down good money chasing an extra credential that has little to no impact on their job prospects.

Why? Well, the simplest answer is that LL.M.s are extremely valuable to law school budgets. LL.M.s are so lucrative for law schools that law school deans are willing to lie or become willfully ignorant as to the employment opportunities generated by an expensive post-law school degree.

The National Law Journal made that EXTREMELY OBVIOUS point yesterday (again)….

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Moonlighting: Things Not to Say In-House – ‘I’m Bad at Math’

By Susan Moon

It’s one of the biggest cons going around. I cringe whenever I hear it. A lawyer laughs and says, “I’m not good with numbers — that’s why I became a lawyer.”

On the surface, it seems to make sense; it sounds like it should be true. For some, it might even be true. After all, the last time we used quadratic equations was back when loafers on bare feet were considered desirable footwear (thanks Don Johnson).

In-house lawyers should never, ever say they’re bad at math — even those who really are. After all, business people are preoccupied with numbers. As an in-house lawyer, telling a business person that you’re bad at math is like telling them you don’t care about the most important thing that everyone else in your company cares about, and if your company is publicly listed, what every investor in your company cares about — the company’s numbers….

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Morning Docket: 12.23.11

By Staci Zaretsky

* Merry Christmas! House Republicans will get one less lump of coal in their stockings this year after accepting a two-month extension of unemployment benefits and payroll tax cuts. [New York Times]

* Another birther lawsuit has been thrown out, but Orly Taitz won’t be stopped. She’s like the Energizer Bunny of questionable litigation. She’ll keep appealing, and appealing, and appealing… [Los Angeles Times]

* John Edwards is trying to delay his criminal trial, claiming to have a mystery medical diagnosis. What kind of disease does karma hand you for cheating on your sick wife? [New York Daily News]

* Nora Demleitner will be will be stepping in as the new dean of Washington and Lee University School of Law. Hofstra Law, you M.A.D.? [National Law Journal]

* Is the American Bar Association really driving up the cost of law school tuition, or is it the law schools themselves? Here are some graphs that might surprise you. [Am Law Daily]

Morning Docket: 12.21.11

By Staci Zaretsky

... but it will never be granted.

* Most Americans can look forward to a tax increase in 2012 because our elected officials would rather bicker with each other than do their jobs. Happy freakin’ New Year! [Los Angeles Times]

* Duncan Law’s dean sheds some light on why the ABA might have denied the school provisional accreditation. Come on, what’s not to like about a median LSAT of 147? [National Law Journal]

* Umar Farouk Abdulmutallab, the failed underwear bomber, has put in some special requests for a new lawyer. Beggars can’t really be choosers, though, so I wouldn’t count on it, buddy. [Reuters]

* More ex-NFL players are suing over brain injuries. You shouldn’t be allowed to sue over your career in football when you knew that a helmet was a required part of your uniform. [Bloomberg]

* If everyone with a professional degree could sue over lost sleep and long hours, then almost every lawyer in the country would be a plaintiff, especially those in Biglaw. [New York Post]

Non-Sequiturs: 12.20.12

By Elie Mystal

Herman Cain: Do you miss him yet?

* It’d be easy to say “a former Tea Party candidate posted about assassinating the President.” But it’s probably more accurate to say a crazy, racist, loony person scrawled something naughty on Facebook and is now in trouble. [Huffington Post]

* I’d like to buy this, and then use it to TP Herman Cain’s house while screaming, “It’s less complicated than your sex life!” [Tax Prof Blog]

* I wonder if, a generation from now, people will look back on Citizens United like Plessy v. Ferguson. Like, there will still be a few holdouts saying, “money is speech now, money is speech forever,” but most of society will have moved on to a more enlightened state. [Congressman John Yarmuth]

In my lifetime, Kobe has been one of the most fun players to not like.

* Maybe all we need is a simple Constitutional amendment clarifying that “only people are people.” Corporations are not people. Animals are not people. Artificially intelligent robots who one day rise up to threaten humanity’s existence are not people. [Miller-McCune]

* Oh, Kobe. When you beat a rape rap yet still have to publicly admit you bang hoteliers in Vail, you should just get divorced right then and there. No number of diamond nor championship rings is going to put that back together. She’s still going to kill you in the divorce, and all you’ve bought yourself is a few extra years of living with a woman who openly hates you. [L.A. Now via ABA Journal]

* You think bloggers suffer from group think too much? I vote for 2012 being the year when the mainstream media stops stealing story ideas from the blogs (without credit), and does some actual original reporting again. You know, like they are supposed to with their huge staffs and massive budgets. [What About Clients?]

Career Center Survey Results: Who Worked on Thanksgiving Day?

By Above the Law

According to the over 900 respondents to the Career Center survey, only 16% reported working on Thanksgiving Day. That means a whopping 84% of you took the day off for feasting with family and friends. However, of these respondents, 24% said they did have to work the day after Thanksgiving, but still, that’s an impressive 60% who took full advantage of the four-day weekend.

If you’ve been following our holiday surveys this year, Thanksgiving Day is the clear winner so far. Just compare the 16% of survey respondents who worked on Thanksgiving Day with the 48% of survey respondents who worked on Labor Day, the 35% of survey respondents who worked on the Fourth of July, the 73% of respondents who worked on Presidents’ Day, and the 66% of respondents who worked on MLK Day.

The top reasons for missing out on the Thanksgiving festivities were….

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Job of the Week: In-House in H-Town

By Above the Law

Are you a tax lawyer looking for an in-house opportunity that is sure to be a gas? Look no further! Lateral Link has an incredible opportunity (think excellent benefits plus work-life balance) for an attorney to work in-house at a major oil and gas company. Check out the Job of the Week below for more details.

Position: Legislative Tax Specialist

Description: A large oil and gas company seeks a legislative tax specialist with 7+ years experience in corporate tax. Experience with government relations and legislative bodies preferred.

Location: Houston, TX

For more details, please contact Katy Lewis, at klewis@laterallink.com, or see position #10569 on the Lateral Link website. If you are not currently a Lateral Link member, you can sign up for free at www.laterallink.com. Lateral Link offers Members a $1,000 referral fee for each attorney referred to us who is not already part of the Lateral Link network and who subsequently obtains a position through Lateral Link.

Morning Docket: 11.18.11

By Staci Zaretsky

* John Wilkes Booth. Lee Harvey Oswald. Oscar Ortega-Hernandez. Sorry, Oscar, you have three names, but you didn’t actually kill the president, so you don’t get to join the club. [New York Times]

* Former SCOTUS clerk Roy McLeese III has been nominated for a seat on the D.C. Court of Appeals. I don’t have an opinion on this yet because I can’t tell if he’s cute. [Blog of Legal Times]

* Do you really think that the .XXX domain is going to have any remarkable effect on the online porn industry? Besides more men with sticky keyboards and angry girlfriends, what’s the problem? [CNET]

* USC Law won’t be adding a tax LL.M. program. Because just dying is more advisable than adding additional debt to your name under the school’s debt solution plan. [National Law Journal]

* Wishing a very happy holiday season to you and yours with this top-of-the-line molotov snow globe. Hallmark: When You Care Enough to Send the Very Best. [New York Daily News]

Biglaw Perk Watch: Has the Gay Gross-Up Hit the Tipping Point?

By David Lat

It’s late October, so Biglaw bonus news could drop any day now. In 2010, Cravath didn’t kick off the season until November 22. But back in 2009, Cravath announced bonuses on November 2. And in 2007 — yes, the glory days, before the Great Recession — Cravath announced bonuses, regular and “special,” on October 29.

In light of the economic gloom and doom, including the possibility of a double-dip recession, it wouldn’t be shocking if bonuses are modest this year. Better to conserve the cash and avoid layoffs, right? Or maybe repeat what happened in 2010 and save some money for spring bonuses in a few months, when firms might have a better idea of the direction of the economy?

Regardless of how bonuses turn out, there are other pockets of good news in the world of large law firms — even news requiring law firms to open their wallets. Check out the growing number of firms that offer the perk we’ve dubbed the gay gross-up….

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Non-Sequiturs: 10.21.11

By Elie Mystal

A war hero comes home.

* Lawyers with four to seven years of experience are apparently now in demand. You know why? BECAUSE THEY FIRED ALL OF THEM TWO YEARS AGO! [WSJ Law Blog]

* Occupy Wall Street is now getting free hugs. It’s like, when you register as a liberal, somebody comes in the night and shoves your testicles back up inside you. [Dealbreaker]

* I dream of a day when eyewitness testimony is viewed as unreliable as DNA evidence is now thought to be reliable. [An Associate's Mind]

* If you are a lawyer, it’s really never about you. [What About Clients?]

Morgan Chu

* Even in the extremely unlikely scenario that one of these radical tax plans is adopted, tax lawyers will still find work. Believe it. [Going Concern]

* Morgan Chu, the hotshot Irell & Manella partner accused of sexual harassment, won a motion to compel arbitration of the dispute. [Law360 (subscription)]

* If you took the “over” on the cold day in Hell when BP is allowed to drill in the Gulf again, you’re gonna lose that bet. [New York Times]

* It’s a bit anticlimactic. And we’ve been pulled apart by political divisiveness. But we are just about done with the Iraq War! Yay? Ticker tape in Times Square, or is it going to be all, “Welcome home, while you were away we misplaced all the jobs and money”? [Politico]

Morning Docket: 10.21.11

By Staci Zaretsky

* According to Jacoby & Myers, “winning is everything.” And by “winning,” they, of course, mean “settling.” Ten points to Gryffindor Jay Shepherd. [New York Times]

* Ah, DOMA. Like it or not, we’re footing the bill for a law the DOJ won’t touch. This guy wants us to stop putting money in Paul Clement’s pockets. [WSJ Law Blog]

* Cooley Law has filed a motion to dismiss the complaint over its employment statistics. Reasoning? BLAME THE ABA. [National Law Journal]

* “You are a beautiful grave — dead inside.” Be still my heart. What kind of a girl wouldn’t appreciate a love letter like this? A former tax attorney from Winston & Strawn, apparently. [New York Post]

* What happened at yesterday’s hearing on public nudity in the Bay Area? Soon the only buns you’ll see at restaurants in San Francisco will be on the table. [San Francisco Chronicle]

Morning Docket: 10.17.11

By Staci Zaretsky

* Wait, is this real? People actually sued al-Qaeda and expect to be paid billions of dollars in damages? Seriously? Having a major “what is this I don’t even” moment over here. [Bloomberg]

* Judith Kaye is the new centerfold for the New York State Court of Appeals. She’s the first woman in history whose portrait will hang in the state’s highest courtroom. [New York Law Journal]

* Thompson Hine partner Leslie Jacobs was charged with tax fraud last week. As could be expected, the Biglaw firm now wants nothing to do with him. [Am Law Daily]

* Another law firm’s confidential files mysteriously ended up in the garbage, but this time at a Georgia newspaper’s office. Just as an FYI, our office is located in New York. [Gainesville Times]

* GTL doesn’t just stand for “Gym, Tan, Laundry” anymore. Apparently, it also stands for “Get The Lawyer.” The Situation is suing a guido lifestyle company for trademark infringement. [Examiner]

* Lindsay Lohan’s alleged probation violations might send her back to the slammer, but she doesn’t want to be made “an example of” in court. Sweetie, it’s called “a mockery.” [Daily Mail]

Are Male Lawyers Getting Less Attractive?

By David Lat

Is the Unfrozen Caveman Lawyer more attractive than the average attorney?

Last week, we posed a provocative question: Are The 1Ls Actually Dumber This Year? Based on the decisive vote in our reader poll, the answer appears to be “yes.”

Today we bring you another controversial query: Are male lawyers and law students getting uglier? Does the J.D. degree — and the student debt that comes with it — make them look fat?

Whether male lawyers are decreasing in attractiveness seems subjective. But there’s actually some evidence that the men of the legal profession are 66 percent less hot than they were last year….

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Non-Sequiturs: 09.07.11

By Elie Mystal

Wesley Snipes

* I thought the rule for how to cite a blog in your brief was “don’t,” but I have less use for a Bluebook than a homeless orphan (I hear kindling is hard to come by on the streets). [Adjunct Law Prof Blog]

* More analysis on the mean mommy lawsuit reminds me of how much better things would be if somebody — be it a parent or a bully — had slapped these kids upside their fat heads during crucial developmental years. [Healthland / TIME]

* Maybe if more lawyers knew some basic principles of digital masking, they wouldn’t be so terrified when it comes to tipping ATL about the stuff going down at their firms. Either that, or people would make even more fun of me. [An Associate's Mind]

* Culinary school graduates are also unhappy with the employment prospects available to them after investing in additional education. Let me try this maxim out and you tell me what you think: if the education has neither “computer,” nor “science,” nor “military” in the title, you are being charged way too much. [Eater]

* Don’t you love how lawyers can turn any massive failure into a business opportunity? Lawyers are like the bacteria in charge of decomposition in the crisis ecosystem. [Law and More]

* In the game of tax conviction appeals, Wesley Snipes came up a little bit short. Kind of like the time he slid into second base too early and stopped before the bag. (New rule: all Wesley Snipes tax references must be accompanied by a Wesley Snipes movie reference.) [TaxProf Blog]

Biglaw Perk Watch: More Firms Adopt the Gay Gross-Up

By David Lat

We have been tracking — as have other news outlets, such as the New York Times — which leading law firms offer the perk we’ve nicknamed the gay gross-up. If you’re inclined towards formality, you can call it the “tax offset for domestic partner health benefits.” For an explanation of what this perk is all about, read this prior post.

Since our last round-up, additional prominent law firms have adopted this policy. Let’s check out the latest list….

UPDATE (9/7/11, 12:30 PM): We’ve added to our list since it went up yesterday.

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Non-Sequiturs: 08.30.11

By David Lat

Sri Srinivasan

* “Ten Worst Things for a Law Prof To Put on a CV.” [The Faculty Lounge]

* Think of this as another warning against taking sexually explicit photos of yourself. Or buying suspiciously cheap used computers. [Not-So Private Parts / Forbes]

* Musical Chairs: Sri Srinivasan, chair of the appellate and Supreme Court practice at O’Melveny & Myers, is leaving OMM to serve as principal deputy to Solicitor General Donald Verrilli. [Main Justice]

* Hey Warren Buffett: if you really feel that you are taxed too little, feel free to write a big check to the United States Government. [Huffington Post]

* Lawyer turned CEO Andy Lansing is looking for a few nice men (and women). [New York Times]

Woof woof!

* Stop me if you’ve heard this one before. A dog walks into a bar…. [Volokh Conspiracy]

* IMF employees give Dominique Strauss-Kahn a warm welcome. [Dealbreaker]

* What is up with Georgia judges? Another one bites the dust: Judge Douglas Pullen leaves the bench, terminating an investigation by the Judicial Qualifications Commission. [Atlanta Journal-Constitution]

* More bad news for the much-sued Dov Charney. [Fashionista]

* Congratulations to the recipients of the First Chair Awards for in-house counsel! The awards will be presented tomorrow night. [First Chair Awards]

Job of the Week: Where Are My Peaches At?

By Above the Law

Calling all Atlanta associates! The city has seen a tremendous recent uptick in hiring, specifically in finance, corporate work, and tax, and Lateral Link’s recruiters are currently working on filling over 40 law firm positions. If you have experience in banking/finance, general corporate work (M&A, private equity, venture capital, capital markets & securities), or tax, we have several jobs for you at some of Atlanta’s top firms.

For those East Coasters looking to escape the recent natural disasters (earthquakes and hurricanes), consider relocating to Atlanta, the “New York of the South.” To learn more about the Atlanta legal industry, contact Scott Hodes, Lateral Link Director for the Atlanta region, at shodes@laterallink.com.

Today’s Job of the Week is for the corporate finance associate looking to make a move to a prominent Atlanta-based firm where Lateral Link has recently placed several associates. You could be next!

Position: Corporate Finance Associate

Description: Top Atlanta firm looking for an associate with 3-6 years’ experience representing financial institutions, lenders, investors, and borrowers in lending transactions, including syndicated credit facilities, private placement of notes; acquisition financing experience is required.

Location: Atlanta, GA (this position is also available in Charlotte, NC)

If you are currently a Lateral Link member, please see position #9538. Not a member? Sign up for free at www.laterallink.com to access hundreds of law firm and in-house jobs and to work with a recruiter in your market.