In his recent post summarizing three new cases the Supreme Court has agreed to hear, Lyle Denniston of SCOTUSblog mentions the docket numbers for two of them, as is his usual practice.
But he omits the docket number of one of the cases that was granted certiorari today:
Could someone be a little superstitious?
May 21 Orders [U.S. Supreme Court (PDF)]
Court to hear three new cases [SCOTUSblog]
Supreme Court Grants Cert in Davis, Which Prohibits Tax Exemption for In-State Municipal Bond Interest [TaxProf Blog]
Court to Review Municipal Bond Case [Associated Press]
Tax Law
JEEZ. This tax treatment is way harsh.
Perhaps those Tax Court judges need to chillax. With a joint or two.*
(And perhaps the losing litigants should have hired “L.A.’s dopest attorney,” Allison Margolin.)
* This suggestion is made in jest. ATL strenuously objects to illegal drug use. We also encourage you to donate blood and to support cancer research.
Have a great day!
Tax Court Denies Deduction for Cost of Medical Marijuana Given to Dying Patients [TaxProf Blog]
Californians Helping to Alleviate Medical Problems, Inc. v. Commissioner [Tax Court (PDF)]
We just finished our taxes (or our accountant just did), so we have taxes on the brain. Remember, everyone: tax returns are due on April 17 this year, instead of the usual April 15. (To learn why, click here.)
Considering the time of year, it’s appropriate that our Lawyer of the Day is one George E. Harp. Harp accomplished the impressive feat of losing two cases in Tax Court — his client’s, and his own — on the same day.
Congratulations, Mr. Harp!
(Okay, perhaps it’s not THAT impressive a feat. Harp seems to be one of those nutty tax protestors, with no viable arguments in defense of his failure, or his client’s failure, to file a tax return.)
A Tough Day in Tax Court: Lawyer Loses Two Failure to File Tax Return Cases — His Client’s and His Own [TaxProf Blog]
Tax Returns Are Due April 17 This Year [TaxProf Blog]
Maybe you’re grumpy because your firm hasn’t matched the latest associate pay raises. Maybe your clerkship bonus isn’t as big as the $50,000 now offered by Sullivan & Cromwell.
But at least you still have a job. From Bloomberg:
Jenkens & Gilchrist, a Dallas-based firm that once had 600 lawyers, is shutting down after reaching an accord with authorities to avoid prosecution for selling tax shelters that generated more than $1 billion in phony losses.
The firm admitted it developed and marketed fraudulent tax shelters and faces a $76 million fine, the Internal Revenue Service said.
The firm points a finger towards its Chicago office:
Jenkens & Gilchrist blamed its demise on unnamed lawyers in its Chicago office. That branch was closed on March 22.
“The Chicago tax shelter practice seriously undermined the firm’s long-standing reputation,” the firm said in a statement. “We deeply regret our involvement in this tax practice.”
This was probably ill-advised on the part of the firm:
Among the fraudulent shelters were transactions known as BOSS, BART and HOMER, prosecutors said in the agreement.
Guess those IRS types aren’t Simpsons fans.
Update: This Jenkens & Gilchrist promotional video is nothing short of mortifying.
Jenkens to Close After U.S. Agrees Not to Prosecute [Bloomberg]
U.S. Enters Non-Prosecution Pact With Jenkens & Gilchrist [WSJ Law Blog]
Little things matter in the legal profession. A typographical error can cost you $40,000. A misplaced comma can be worth hundreds of thousands.
And citing the wrong statute can lead to a nine-figure loss. From the AP:
Poorly written Justice Department documents cost the federal government more than $100 million in what was supposed to have been the crowning moment of the biggest tax prosecution ever.
Walter Anderson, the telecommunications entrepreneur who admitted hiding hundreds of millions of dollars from the IRS and District of Columbia tax collectors, was sentenced Tuesday to nine years in prison and ordered to repay about $23 million to the city.
But U.S. District Judge Paul Friedman said he couldn’t order Anderson to repay the federal government $100 million to $175 million because the Justice Department’s binding plea agreement with Anderson listed the wrong statute.
At the end of the day, it may not matter much, because the IRS intends to pursue the money in civil proceedings. But it’s still highly embarrassing for the DOJ — which doesn’t need more embarrassment these days.
Tax Cheat Escapes $100 Million Repayment [Associated Press]
Mogul Sentenced to 9 Years For Tax Evasion and Fraud [Washington Post]
Please read this. Here are your study questions:
1. “How did a Goldman Sachs banker earn only $115,000?” (This one was from Professor Caron.)
2. “How can she afford to give away this much to charity — does she have a
sugar daddywealthy spouse?”3. “So what exactly does $55,000 in secondhand clothing look like?”
(On that last item, maybe we should ask our little sibling, Fashionista.)
P.S. With respect to the title of this post: Yes, we realize that the charity in question, Housing Works, funds its programs by running a high-end thrift store — it’s not giving designer duds directly to homeless people. We’re just taking a little poetic or blogospheric license; please cut us some slack.
Tax Court: Goldman Sachs Investment Banker With $115k Salary Can’t Take $55k Deduction for Charitable Donation of Used Clothing [TaxProf Blog]
Last week we posted this photo, with captions:
“Speaking of asking people out, have you ever seen a tax law professor bust a move?”
“Well, now you have.”
For the record, these captions can be read in more than one way. Was Professor Paul Caron hitting on Professor Shari Motro (profiled here)? Or was it the other way around?
Within the legal blogsophere, Professor Caron is a total rock star. And what’s a rock star without groupies?
(Digression: Speaking of Professor Caron, he has prepared this handy list of teaching fellowships for aspiring law professors. It’s a great resource for those of you interested in legal academia.)
By the way, after we chastised Professor Caron for wearing a button-down shirt with a suit, the good professor wrote us as follows:
I showed my students your comment about the button down shirt and asked them to vote on whether your fashion sense was correct about button down shirts with suits — maybe it is a Midwest v. East Coast thing (or perhaps they were just sucking up to me), but the students voted 85% v. 15% in favor of the button downs.
Update/clarification: We can’t believe we even have to do this. But for the record, a “button-down shirt” refers to a shirt with a button-down collar.
Time for an ATL reader poll:
Earlier: Writing About the Law: A Correction, and Photographs
We’ve had a lot of debate in these pages concerning the cost of living in different U.S. cities. Folks have been arguing over whether the high cost of living in New York justifies the NYC pay scale of $160K and up, as opposed to the $145K pay scale that seems to have taken hold in most major legal markets outside New York.
We’ve heard a lot of trash talk. Here’s some actual data, courtesy of Michael Machen, Director of Financial Aid at the University of Chicago Law School:
David, longtime reader first-time emailer. So as you see from my title [in the signature block of my email], I’m the financial aid guy at U-Chicago. I’ve been running some numbers on the new salaries at large firms, and came up with something interesting, maybe it’s obvious to New Yorkers, but I found it surprising.
The taxes in NYC make $160,000 equal to $145,000 in Chicago. The NY State and NY City income taxes of 6% and 3.3% versus the flat 3% income tax in IL means that the after-tax pay in NY is actually less than the take home in Chicago, even if Chicago pays $15K less. I would imagine firms know this, at least those with tax departments. The attached spreadsheet illustrates this.
I didn’t run DC tax ##s, but DC has high district income tax rates (9% of income over 30K) so it would be similar to NY, unless you relocated to NoVA (gasp). So the DC folks should be bitching (a bit) while Chicago folks should be happy.
You can check out the actual numbers after the jump. Also, please treat this post as the morning open thread. Thanks!
Continue reading “Skaddenfreude: Some Interesting Data, and Morning Open Thread”
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