Friday, March 30, 2007
As I noted in Ignorant About Tax? It Might Be Dangerous to Life and Law Practice, the IRS reports that only 40 percent of taxpayers eligible for the telephone excise tax refund are claiming it. Previously, I have explained that although Computing Telephone Excise Tax Will Keep Some of Us Busy, for most of us, including myself, when we get around to Adding Up The Telephone Tax Refund, we will discover that the easiest approach will be to claim the standard refund by filling in the appropriate line on the tax return.
At Refunds for Good, there are explanations of the excise tax, why it was enacted, and why a portion is being refunded. I get the impression that the thinking behind the project is this: the refund is a windfall, people weren't expecting it, a majority of people aren't claiming it, so let's motivate people to claim the refund and then, because they weren't expecting it, encourage them to donate the refund to one of the charities. Because there's no way to tell the IRS "just send my refund to charity A," the donation needs to be made through the web site.
Ironically, at the same time many people are overlooking the refund to which they are entitled, others are designing schemes to generate excessive refunds. In its 2007 Dirty Dozen Tax Scams, the IRS ranks telephone excise tax refund abuses number one. Ouch. The IRS intends to investigate and "take prompt action against taxpayers who claim improper refund amounts and against the return preparers who help them."
Would it make sense to take the excise tax refunds that go unclaimed and contribute them to charity? The snag is that there's no workable way to identify the charities that would be the recipients. If all charities participated, each might end up with a very small amount. Distributing the refunds in proportion to the charity's other donations would favor the larger charities, and those might not be in as much need of help as are smaller charities.
Visit the web site of Refunds for Good. Decide what you want to do or not do. Don't be surprised if similar sites begin popping up. Personally, I'd like to see a longer line-up of charitable organizations, but I still prefer the ultimate decision on what to do with the refund being made by taxpayers and not by the government. Refunds for Good provides a limited, but creative, opportunity that very well may be just the first step in a new approach to charitable giving.
Wednesday, March 28, 2007
There is good news and bad news on this continuing story. The good news? According to this Philadelphia Inquirer story, polls by AAA, which opposes the idea, have found "little support" for the proposals to lease or sell state-owned toll roads in Pennsylvania and New Jersey. A survey of letters and email delivered to legislators and comments shared on internet forums "all indicate significant public skepticism" about the proposals. One poll suggested a roughly 70 percent to 20 percent split, with the majority of those polled disapproving the plans. In another poll, 40 percent strongly opposed selling the roads and 13 percent strongly supported such a move. What's so good about this news? Principally, the issue is being set in front of voters and the polls have encouraged them to think about it.
The bad news? There are several items in this category.
The same polls proposed a variety of ways to fund transportation services. The only one to get more than 20 percent positive response was "none of the above." Among "the above" were leasing the roads, which fewer than 15 percent supported, increasing gasoline taxes, also getting a less than 15 percent positive rating, raising other taxes, which fewer than 10 percent favored, and charging tolls on existing and new roads or establishing a tax based on miles driven, which fewer than 20 percent supported. My question to the citizenry is this: how should highways and other transportation projects be funded?
Another disturbing development is that the "expressions of interest" provided by businesses interested in leasing the Pennsylvania Turnpike have been kept secret. The reason provided by the Department of Transportation is that there is "possible proprietary information" in the materials that have been submitted. How can public decisions be made if the information is kept hidden? Are not the voters entitled to know what makes a think tank think it can operate the highways? Are not they entitled to know what life on the toll roads will be like if they are operated by New York investment banks, Philadelphia law firms, construction companies, international developers, or even former employers of the governors of the two states? Here's my question: ought not law firms stick to law practice? Wait, here's another one. Ought not investment banks stick to investment banking? The "get rich quick" aspect of the proposal, attracting all sorts of enterprises with no expertise in road operation, should be a red flag to the public. If it's that good of a deal, ought not the roads be owned by the citizens? Just as they are at the moment. Why change things? Why sell the golden goose?
This matter ought to be put to a referendum at the next election. It ought not be left to the wheelings and dealings of politicians, lobbyists, and highway operator wannabes.
Monday, March 26, 2007
In his last post, Joe confirmed some of what I had figured without being as certain as I usually am. He also filled in some additional information to clear up some loose ends in the discussion.
Joe closed with this comment, "I don't know whether I've satisfied Dr. Maule, but at least I hope I haven't made him angry." Yes, Joe, you filled in my knowledge gaps nicely. No, I'm not angry at all. I do hope my long-delayed response didn't come across as dissatisfaction. Hardly. I could claim it was the busy tax season but I'm not doing very many returns; I've been buried in some writing projects when I'm not teaching.
A bit of background. Although one might think the United States Tax Court has jurisdiction to hear any dispute involving federal taxes, that is not so. One dispute that the Tax Court cannot decide, generally speaking, is a disagreement over collection. Thus, if a taxpayer reports a $5,000 income tax liability on the tax return and the IRS asserts it should be $8,000, the IRS will assert that there is a "deficiency" in the taxpayer's taxes, and issue a notice to that effect. The taxpayer has the choice of paying the $3,000, claiming a refund, and suing in federal district court for the refund after the IRS denies it, or simply going to the Tax Court for resolution of the correct tax liability without paying any tax until after, if at all, the IRS prevails in the Tax Court. In contrast, if the taxpayer properly computes a tax liability, for example, of $12,000, but doesn't pay it, then the IRS initiates collection procedures and the Tax Court doesn't get involved.
In Goode-Parker, a married couple, both of whom were lawyers, filed a joint return. The husband prepared the return, properly computing $18,650 in income tax and $9,796 in self-employment tax. He neglected to add the two tax amounts together. Thereafter, the couple separated. When the IRS sought to collect the tax, the wife claimed innocent spouse relief, and filed a petition in the Tax Court.
For the Tax Court to have jurisdiction to review a claim for innocent spouse relief, there must be a deficiency in the return. The IRS argued that there was no deficiency because the proper amount of the taxes had been reported on the return, though not all of the taxes had been paid. The wife, however, claimed that there was a math error on the return and math errors can give rise to deficiencies.
The Tax Court concluded it did not have jurisdiction. It explained that a deficiency exists if the tax shown on the return is incorrect. The Court decided that the tax was shown on the return even though it was not aggregated onto line 51 as "total tax." The Court agreed with the IRS that a tax is shown on the return if it is reported in any place on the return, even if no grand total is computed. The court dismissed the wife's argument that there was a math error by examining the facts in the light of the language of section 6213(g). That provision lists various math errors, the one closest to the case being "an error in addition, subtraction, multiplication or division shown on any return." The court characterized the error made by the husband as a failure to add rather than a mistake in the addition. According to the Tax Court:
... there is a distinction between a “mathematical error” and omitting a step that requires math. A “mathematical error” occurs when someone multiplies when he should have divided or when his computation produces an erroneous result. Id. In this case, Mr. Parker didn’t botch the addition, he just skipped a step that required addition, and under Huffman that is not the same thing. .... This admittedly very subtle point means that Ms. Goode-Parker’s liability is neither an understatement nor a deficiency, because her return showed all the tax imposed.What a fine line that is! Failure to perform a mathematical calculation is not a math error. It's an error, but not a math error. In contrast, doing a mathematical computation but mistakenly determining an outcome in a mathematical function is a mathematical error. I wonder what school children can do with this. "But, teacher, I didn't make a math error, I simply forgot to do the multiplication assignment you gave me. So my grade should not be as low as Bobby's, because Bobby multiplied 8 times 7 and wrote down 33." I surely hope no teacher buys that sort of argument. At best, it helps teachers and parents identify budding lawyers.
Of course, the underlying issue is why the Congress has determined not to give the Tax Court jurisdiction over a case such as this one. The answer is easy. The dispute in the case does not require analysis of substantive tax provisions, it does not require determination of whether a gross income exclusion or inclusion provision applies or whether the taxpayer qualifies for a deduction or credit. The dispute is simply who must pay the properly computed tax liability. That is more in the nature of debtor-creditor law than tax law as such. Rather than letting the Tax Court get bogged down with issues that the federal district courts can handle, the Congress chose to steer the talents of the Tax Court judges to matters of substantive tax law. There are some exceptions, but those ought not be permitted to obscure the basic paradigm.
Friday, March 23, 2007
The letter that I and my many colleagues received has been posted by Paul Caron on his TaxProf Blog. Take a look at the letter.
The tax gap is a serious problem. Having reached several hundred billion dollars a year, the cumulative unpaid tax liabilities probably would wipe out a huge chunk of the federal debt. No, it would not wipe it out, and the tax gap ought not be an excuse for unwise tax and spending policies that contribute to the federal deficit, but there's something seriously wrong with the nation's collective sense of civic duty when compliance rates on certain types of income fail to reach 60 or 70 percent.
The tax gap has been the subject of several posts on MauledAgain. In January, I pointed out that Closing the Tax Gap Requires Congressional Introspection. In March of 2006, I wondered what would be important in Closing the Federal Tax Gap. In December of 2005, I noted that theTax Gap [Is] Becoming a Tax Chasm. Earlier, in April of 2005, I asked, The Tax Gap: BIG. Wonder Why?.
The tax gap, for some reason, never recedes into the background. In every one of the 31 sections of basic federal income tax that I have taught during the past 28 years of law teaching, I have made it a point to turn my students' attention to its existence and causes. Perhaps if they understand how noncompliance impacts them personally, and will impact them during their careers, they may join in the chorus demanding that action be taken to eliminate the tax gap.
When I drafted my response to Senators Baucus and Grassley, I chose to ignore, for the moment, specific proposals and focus instead on developing a unified strategy for improving compliance. Putting specific proposals on the table as the first step invites the sort of process that causes things to bog down or become absurdly complicated. Instead, it is essential that an overarching plan, reflecting a coherent philosophy, be established as the framework on which specific proposals could be attached, with the plan and philosophy setting the boundaries that keep the specifics from becoming unduly complex or misguided. Another reason I ignored specific proposals was to keep my letter short. If my letter, and those that I expect other tax professors to write, are effective, the opportunity to focus on specific proposals surely will be presented.
I close with the text of the letter that I sent in response to the invitation to provide ideas for improving tax compliance:
March 21, 2007I will let you know if I receive a response.
The Honorable Max Baucus
Committee on Finance
United State Senate
Washington, DC 20510-6200
The Honorable Charles E. Grassley
Committee on Finance
United State Senate
Washington, DC 20510-6200
Dear Senators Baucus and Grassley:
Thank you for the invitation to suggest approaches for improving tax compliance. The tax gap is a concern that demands attention from the Congress.
There is no one “magic bullet” to solve the problem. Instead, I advocate a six-pronged strategy for improving compliance. Those six prongs are tax education in high schools, tax simplification, increased reporting, expansion of withholding, funding an improved tax audit process, and strengthening the ability of the Department of Justice to prosecute tax crime.
Making tax education a part of high school curricula throughout the nation would go a long way in reducing noncompliance. A significant portion of noncompliance is inadvertent, the result of taxpayers’ inability to understand the nature of the federal tax system and to recognize the flaws in the many inappropriate “tax savings” schemes offered to them by unscrupulous promoters of noncompliant tax reduction plans. The tax education I suggest is not a technical tax return preparation course, but one that blends an understanding of the rationale for taxation and the basic features of the tax system with advice on how to maximize compliance and minimize the aggravations that arise from noncompliance. Educating citizens before or as they enter the taxpaying world is much more efficient and effective than trying to remove their misperceptions after the fact during tax audits and tax litigation.
Tax simplification is essential if rates of noncompliance are to be reduced. There is a direct correlation between noncompliance and complexity. As the tax law becomes more complicated, the ability of taxpayers to comply decreases. Even tax professionals who have every wish to keep their clients’ planning and return filing within the bounds of excellent compliance struggle with the rapidity of change, the dearth of guidance on many issues, and the numerous questions arising from the interaction of multiple provisions. The opportunities for tax simplification are easy to identify, and have been addressed by many commentators during the past decade. At this stage of analysis, the specifics do not matter as much as establishing a commitment to simplification as part of the effort to improve tax compliance.
Increased reporting is essential to improving tax compliance. Although the tax law is theoretically a “self-compliance” system, as a practical matter were it not for reporting compliance would be even lower than it is. The story of the many dependents who “disappeared” when social security numbers had to be provided has become apocryphal, but it teaches an important lesson. Presently, the principal area of reporting deficiencies involves transactions in which cash is paid by a person not required under current law to report the payment, particularly with respect to payments to self-employed entrepreneurs. Although imposing a reporting requirement on taxpayers currently not subject to such a requirement would be burdensome, it may be the only highly effective means of curtailing noncompliance in this area. Reducing the $600 reporting threshold to $250 or $300 would also bring within the tax system many transactions that under current law go unnoticed.
An expansion in the reach of withholding also is essential to improving tax compliance. Not surprisingly, studies show that when tax is withheld, the incentive to file a tax return that reports the income on which the tax was withheld increases significantly. Despite reporting of interest and dividends, compliance with respect to those items remains lower than compliance with respect to wages, for the simple reason that withholding on interest and dividends is not required in the manner it is for wages. Although payors of interest and dividends oppose withholding because of allegedly substantial compliance costs, changes in technology since the failed effort to impose interest and dividend withholding several decades ago make it a much more feasible arrangement. The truly difficult issue is whether withholding requirements should be imposed on the many transactions that escape taxation because they are smaller in amount and facilitated in cash. If imposing a reporting requirement on payments by individuals to self-employed entrepreneurs would be controversial and burdensome, a concomitant withholding requirement would be even more so. Effective alternatives do not appear to exist.
Funding an improved tax audit process would go a long way toward bringing tax returns into better compliance with the tax law. So few audits are conducted that too many taxpayers are willing to play the “audit lottery.” Though audit rates have increased slightly in recent years, they remain at dangerously low levels. Whether the audit rate is 0.8% or an “improved” 1.3%, an overwhelmingly vast number of tax returns go unexamined. Comprehensive audits of every tax return is impossible, but if the audit rate reached four or five percent, taxpayers would notice. The IRS is unable to conduct sufficient audits because it lacks resources. Congress would send a strong message by acting in a manner consistent with the special status of the IRS, namely, an agency in which every dollar invested generates multiples of dollars in return. Though it may be politically expedient to “bash” the IRS, it takes serious courage to support and adequately fund the only agency that stands in defense of tax revenue.
Finally, strengthening the ability of the Department of Justice to prosecute tax crime not only deters other taxpayers from acting in similar ways but also blocks the ability of tax fraud marketeers from continuing their efforts. Those who encourage taxpayers to ignore the tax law should be punished even more harshly than those who commit tax fraud on their own tax returns. A taxpayer who files a fraudulent return damages the revenue to the extent of the unreported tax liability. A person who entices dozens or hundreds of taxpayers into noncompliant filing damages the revenue by amounts that are orders of magnitude greater than the negative impact of the taxpayer who files a fraudulent return. Strengthening the efforts of the Department of Justice to prosecute tax crime requires not only funding but also laws with increased penalties and broader definitions of aiding and abetting tax fraud.
These six prongs of a concerted effort to increase tax compliance are harmonious. In other words, as more success is obtained with the first two prongs of tax education and tax simplification, the need for the other prongs will diminish. The same can be said of the impact of success with the third and fourth prongs on the last two. Similarly, as tax simplification grows, tax reporting will become less burdensome because it, too, will become less complex.
Although the six prongs are harmonious, the first two are the most important. The tax system has evolved into a morass that exceeds the abilities of most taxpayers, and many tax professionals, to understand and comply. If the tendency of taxpayers to think that they must “cut corners” in some way when filing tax returns continues to increase because they sense that the complexity affects them more adversely than it affects others, the tax gap will grow accordingly. Sooner rather than later, the system will collapse. The tax gap concern that you are addressing will pale in comparison to the challenges that would then face not only your Committee but the entire nation. In other words, what you do now is of utmost importance.
An opportunity to discuss my suggestions in greater detail would be welcome if you choose to seek additional explanations. In the interest of brevity I have refrained from writing a treatise. There is much more that could be said when the time is appropriate.
Thank you for requesting my ideas. I am happy to have shared them.
James Edward Maule
Wednesday, March 21, 2007
The other day, while continuing with a substantial updating project, I discovered some interesting news.
If I ever become a law school dean, I won't be the first descendant of Thomas Maule to do so. Frank E Holman beat me to it. He is my father's seventh cousin. And if I become a Rhodes Scholar, I won't be the first descendant of Thomas Maule to do so. He did that, too. And if I become president of the American Bar Association, I won't be the first descendant of Thomas Maule to do so. Yes, he did that, too. See his Wikipedia entry and his History Link entry.
But there's another gene whose influence pops up occasionally, namely, interest and expertise in the hard sciences. Holman's nephew, Joseph Wiley Ferrebee, who happens to be my eighth cousin, did "pioneering research on bone marrow transplantation [that] led to the first human transplant." His obituary provides more details. And there's the Nobel Prize winner, Theodore William Richards, grandson of Sarah Ann Maule and second cousin of my great-grandfather. I'll write about him later.
The more genealogy I research, the more some things begin to make sense. It does appear, though, that I'm the first descendant of Thomas Maule to be a tax law professor. If tax is a place where law and science intersect, I suppose I'm a suitable fit.
Monday, March 19, 2007
There's nothing cold, windy, icy, or slippery about Andrew's newest batch of tax charts:
1. De Amodio (U.S. Rental Properties Were A U.S. Trade or Business but not a Permanent Establishment)For those needing cross-references to my previous commentary on Andrew's chart work, look here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.
2. Bollinger (Corporation as Agent of Its Owner)
3. Boulez (Payments for Personal Services or for Royalties?)
4. Donroy (Foreign Limited Partner In U.S. Limited Partnership - Permanent Establishment)
5. Garlock Inc. (Shift of Formal Voting Power to Avoid CFC Status)
6. Housden (Resident Alien Required to Withhold U.S. Tax on Alimony and Interest)
7. Johnson (No Basis Aggregation For Section 301 Distribution)
8. Lewenhaupt (Swedish Count Engaged in U.S. Real Estate Business)
9. Linen Thread Co. (Two U.S. Sales Did Not Create U.S. Trade or Business)
10. Moline Properties (Corporation With A Single Shareholder is a Separate Taxable Entity)
11. Morgan (Liquidation - Reincorporation -- Meaningless Gesture)
12. National Carbide (Subsidiaries Were Not Agents of the Parent)
13. Pinchot (U.K. Citizen Engaged in U.S. Real Estate Business)
14. Sante Fe Drilling Co. (Accrual of Australian Income Taxes for Calendar Year Taxpayer)
15. Unger (Foreign Limited Partner in U.S. Partnership had U.S. Permanent Establishment)
16. Rev. Rul. 84-160 (Section 351 Exchange of One USRPI for Another USRPI)
17. Notice 2005-90 (Foreign Tax Credits Not Disallowed In Certain Back-to-Back Licensing Arrangements)
18. Rev. Rul. 2007-8, Situation 1 (351 Exchange / D Reorg Overlap with Liabilities Exceeding Basis)
19. Rev. Rul. 2007-8, Situation 2 (351 Exchange / C Reorg Overlap with Liabilities Exceeding Basis)
20. Guarantee of Bank Debt Does Not Create A Financing Arrangement [Reg. 1.881-3(e), Ex. 1]
21. Back-to-Back Loan Treated as Financing Arrangement [Reg. 1.881-3(e), Ex. 2]
22. Bank Financing Through Intermediate Entity [Reg. 1.881-3(e), Ex. 3]
23. Related Persons Treated As Single Intermediate Entity [Reg. 1.881-3(e), Ex. 4]
24. Related Persons Treated As Single Intermediate Entity [Reg. 1.881-3(e), Ex. 5]
25. Limitation on Benefits: Example of the Need for the Ownership/Base Erosion Test
Andrew continues to welcome comments on his charts. You can contact him through his web site. For direct access to the charts, you can enter by Topic, by Alpha-numeric order, or by Date uploaded .
Friday, March 16, 2007
The news is no surprise. In more than a few previous posts (such as The Snipes Tax Trial: A Circus in the Making?, How Small is Tax Small?, So Explain Again What It Is That Taxes Are to Provide?, Getting It Right: Questions and a Proposal , Taxes and the State of the Union, and The "Stealth Tax" ), I have advocated teaching tax to high school students because no matter what they plan to do with their future surely they should know some basics so that they can follow public debate on serious issues and become more comfortable or even adept with their own tax planning and compliance.
So the survey results reported by CNN article might surprise some, but they're what I would expect. Three-quarters of the respondents tagged Sunday, April 15, 2007, as tax filing day, whereas it is April 17 this year because April 15 is a Sunday and April 16 is a holiday in Washington, D.C. The IRS reports that only 40 percent or so of taxpayers eligible for the telephone excise tax refund are claiming it. Two-thirds did not know the value of the child tax credit, and fewer than half were familiar with the alternative minimum tax.
The article explains why this tax ignorance can be disadvantageous to taxpayers. Though the article suggests that those who rely on tax software might find their ignorance to be bliss, a general sense of the tax law permits tax software users to spot results that are way out of line. It happens. Many years ago, when computers meant mainframes and not desktops or laptops, I was reviewing a tax return prepared by a computer system operated by a commercial return preparation company (no, not H&R Block), and noted it had calculated a refund of close to $10,000,000 for a taxpayer with just a fraction of that income.
The cause of the ignorance is a combination of three things. One is the lack of tax education in most, or nearly all, K-12 schools. Another is the reluctance of citizens to education themselves about taxation, explaining the disproportionately low enrollments in college tax courses and the reluctance of many law students to sign up for the basic tax course. The third is the complexity, courtesy of the Congress and its lobbyist friends, seasoned with constant changes that prevent even those who want to learn and understand tax from getting enough time to let things sink into their brains.
What might be a surprise is the number of law graduates who don't know very much about taxes. Though some law schools require the course, recognizing how it permeates law practice, many law schools do not. Consequently, when faced with a choice between a rigorous and demanding tax course and an array of less challenging courses, more and more students are taking what they see as the easier path to a higher GPA. Several years later come the phone calls. "I'm a graduate but I didn't take tax and I have a question and I was wondering if you could answer it." Sometimes I'm tempted to make the price for my assistance a visit by the caller to the school to explain the consequences of avoiding the road that is becoming less and less travelled. That one-hour review of tax during bar review turns out not to be the solution.
Oh, well, I'm going to try to find the good news. Here's the best I can do: I doubt that state and federal taxes, unlike many other subjects, is a topic on which school students in other countries would out-perform American students on a standardized test. Seriously, that should be classified as good news only by those who think that American superiority in knowledge about the NFL makes us a nation of in-shape athletes.
Wednesday, March 14, 2007
One comment in particular, which came from a member of a law firm hiring committee, was telling. Courses in "Law and Whatever" tend to generate suspicion that the students, to use my words, "looked for a law school experience lacking in rigor or were ineptly advised to focus on concerns of little relevance to law practice." In contrast, courses in "Something or Other for Lawyers" cause the practitioner to be, again using my words, "confident that the time you invested in academic pursuits have equipped you for a career in which you identify, prevent, and solve problems through legal research, skillful analysis, and proficient writing."
Today's law students usually think that the only important items on a transcript are cumulative average and class rank. They don't seem to understand that most practitioners look behind those numbers, just as law school admissions committees look behind undergraduate GPAs to examine the identity of the school, the student's major, and the number and type of courses in which the student was enrolled. Why are law students given so little advice, or perhaps even bad advice, on this point? The simple answer is that it is a career-killer for placement office personnel to encourage enrollment in some courses and discourage enrollment in others. Law faculty tend to have egos more fragile than people outside the legal world might expect.
As more and more courses are added to law school curricula that fall into the category less favored by practitioners, enrollments in the other type of course will fall. Already law schools are noticing decreasing enrollment in the so-called "bread and butter" courses, the ones that are tested on most bar examinations and that permeate law practice. Some schools are beginning to notice a correlation between bar passage rates and the courses in which unsuccessful candidates were enrolled. Because bar passage rates are a component of those U.S. News and World Report rankings, they are getting attention. Despite a proliferation of "how to pass the bar" programs and courses, ultimately law schools will discover that the best recipe for success is to return to their primary mission, which is the education of successful practitioners.
I've intentionally omitted the names and descriptions of courses that have been nominated for either category. At this stage of the discussion, there's no need to do so. Perhaps I've provided a blog idea for an interested practitioner.
Monday, March 12, 2007
As I prepared to comment on a recent case involving the meaning of temporary absence for purposes of the earned income tax credit (EITC), I thought to myself that the issue would make for at least one good paper topic. I wonder if I will remember this when several months or years from now a student asks for a topic idea. For the moment, students who read MauledAgain will get the added bonus of finding a paper topic in today's post.
The case in question is Rowe v. Commissioner, 128 T.C. No. 3 (22 Feb. 2007). It was a fully stipulated case, with both sides agreeing on the facts. It involved a taxpayer whose claimed earned income credit was denied by the IRS on the ground that, because she was in jail for more than half of the year, she failed to meet the requirement that she and her dependents share the same abode for more than half of the year.
The taxpayer lived with her children from the beginning of the year until June 5, 2002. On that date she was arrested, charged with murder, and held in jail. In 2003, she was convicted of murder and sentenced to life imprisonment. After she was arrested, the children's father moved in with the children, in the home of his mother, and cared for them.
The relevant law is deceptively simple. Four requirements must be satisfied for the taxpayer to be eligible for the EITC. In this case, the parties agreed that three of them - age, identification, and relationship - had been met. The issue was whether the taxpayer and her children shared the same principal place of abode for more than half of the taxable year.
At first glance, one might think that because the taxpayer moved from, or was moved from, the home she shared with her children before June 30, that she failed to meet the requirement. However, as is so typical of tax law, the simple is not so simple.
The first problem is that section 32, which provides for the EITC, does not define "same principal place of abode" or describe what constitutes sharing the same principal place of abode for more than half of the taxable year. It doesn't even provide a cross-reference. Instead, taxpayers, tax practitioners, and the court must dig into the legislative history, where the Congress - or more precisely, its staff -- pointed out that the phrase and requirement ought to be interpreted in the same manner as an identical phrase in the code provision dealing with eligibility to use the head of household filing status and its rates.
The legislative history also put a gloss on the statute similar to that found in other instances where a "sharing the abode" requirement exists. Specifically, it pointed out that temporary absences, such as those for purposes of education or for reasons of illness, ought not be treated as time when the taxpayer or the other relevant parties are not sharing the abode. Nothing is mentioned about absences on account of imprisonment.
The regulations interpreting the abode requirement for purposes of head of household filing status state that temporary absences, generally out of necessity, do not count as failure to live in the abode. The regulations give several examples, namely, illness, education, business, vacation, military service, and custody agreement. Imprisonment is not mentioned. The regulations provide that a taxpayer can have the same abode despite a temporary absence if it is reasonable to assume that the taxpayer will return to the household and the taxpayer continues to maintain the household while absent.
The majority in Rowe pointed out that the list of examples in the regulations is not exclusive. Instead, the list is "only a guide" for distinguishing temporary from permanent absences. The majority concluded that imprisonment after arrest but before conviction is nonpermanent and necessitous. The court concluded that a person in jail after arrest and before conviction "intends to return home" in the same manner as does a person who is away from home because of illness or military service. The court noted that the IRS had advised, in a Service Center Advice, that detention in a juvenile facility is a temporary absence that counts as time lived at home for EITC purposes.
The majority then addressed the question of whether it was reasonable to assume that the taxpayer would return home. The majority analyzed a case from 1957, Hein v. Commissioner, in which the Tax Court held that a person confined in a mental health facility for six years was absent temporarily because both she and her sister, who lived in the abode, intended that the person would return home, even though it was unlikely that she would recover her health and leave the facility. The court in Hein emphasized that there were no indications that the person had chosen a new permanent habitation. Applying this analysis to the taxpayer in Rowe, the court concluded that there were no indications she intended to choose a new home, had not yet been convicted, and referred to her mother-in-law's home as her home. The court declined to analyze factors such as the taxpayer's likelihood of making bail or of being convicted. The court noted that as a practical matter, because income earned by inmates while imprisoned does not qualify for the EITC, the holding would apply to narrow instances such as the Rowe case, where a person was in jail for a portion of the year but had qualifying income earned during the other part of the year.
Of the 16 judges participating in the decision, 4 agreed with the majority opinion. Another 5 concurred in the result. Six judges dissented.
The first concurring opinion preferred to resolve the matter in the taxpayer's favor on very narrow grounds. Specifically, the opinion pointed out that in Revenue Ruling 66-28 the IRS concluded that an absence from the household was temporary due to special circumstances without regard to whether it was reasonable to assume that the person would return. In a 2002 case the Tax Court had prohibited the IRS from arguing against the principle set forth in the Revenue Ruling. The IRS did not cite the ruling in Rowe, but the concurring opinion concluded that because the IRS position was so much at variance with its position in the ruling and the IRS had not cited or distinguished it the taxpayer ought to have the benefit of its conclusion. The IRS did not address the ruling because the Rowe case was submitted without briefs.
In effect, the ruling was an elaboration of the IRS' acquiescence in the Hein decision. The concurring opinion brushed aside the dissent's point that the ruling dealt with the dependency exemption deduction and not head of household filing status on the basis that the two provisions are identical in this respect. It also noted that the ruling had been cited favorably in the legislative history.
The second concurring opinion was written "to emphasize the very limited nature" of the decision. Specifically, "where a taxpayer is involuntarily removed from her principal place of abode and has not manifested any intent to change that abode, her absence shall be considered temporary" for EITC purposes. This opinion pointed out that the criticisms leveled by the dissent against the majority opinion in Rowe apply equally to Hein, and yet the IRS acquiesced in Hein, issued a revenue ruling following its reasoning which the Congress has cited favorably, and gave similar advice in the matter involving the juvenile facility detention. In other words, the IRS and the Congress "seemingly agree" with the result in Hein.
The dissent objected to the holding because the majority and the concurring opinions did not apply the reasonable expectation of return test and looked simply at whether there was a lack of evidence manifesting an intent by the taxpayer to change her place of abode. The dissent preferred to analyze the likelihood of the taxpayer's return and concluded that under the circumstances it was unlikely to occur. The taxpayer, having failed to present evidence that she intended to return, did not meet her burden of so proving. The dissent also devalued the applicability of Revenue Ruling 66-28 because it applied to the dependency exemption deduction rather than head of household filing status.
There are two ways of viewing this case. One is that it addresses a relatively unusual situation, affecting few taxpayers, and thus has limited applicability. The other is to use the case as an illustration of how tax law becomes complicated and convoluted. Why did Congress not deal with the issue in the text of section 32? Why is incarceration not mentioned one way or other in the regulations? Why did the IRS issue a Revenue Ruling that, in all fairness to the dissent, does "by stealth" effectively overrule a portion of a regulation? Why was the case submitted without briefs? Why has the Congress not provided for a uniform definition of the term "temporary" as it applies to occupation of an abode or maintenance of a household?
Those many people who think tax law is simply a matter of numbers would learn much by reading the Rowe opinions. There is nothing in them to deter those with alleged fear of mathematics. They are replete, however, with legal analysis, of the sort demanding sharp logical thinking. That the judges could divide over the result is a consequence of the murky precedents available to them.
I doubt the case will be appealed. I wonder if it will cause Chief Counsel to open a regulations project that settles the entire "temporary absence" issue for purposes of all the provisions that incorporate it. I do not doubt that the case will inspire a law review article or a student paper.
Friday, March 09, 2007
From a reader comes a very instructive response. It not only addresses the book search question but also highlights another aspect of the student-to-practitioner transition at the root of Larry's inquiry.
The reader shared these thoughts:
I’ll offer my experiences with respect one area of tax law, partnership tax. A bit unexpectedly, I found myself practicing tax law after law school (long story). I had taken basic tax and corporate tax in law school, but soon found myself deeply immersed in partnership tax, including drafting and reviewing the tax provisions of partnership agreements. Of course I did so under the guidance of more senior folks, and so was not completely on my own. Still, I wished not to look like a complete idiot. My strategy to get up to speed on partnership tax in a practice-oriented way was as follows:Students in my Graduate Tax Program Partnership Taxation course would rebel at the thought of digging through that much material, but there's really no substitute for digging in (or, as is so nicely phrased, rinsing, lathering, and repeating). What the reader did was to structure a Partnership Taxation course that was surely more challenging because it wasn't arranged or structured as a partnership course would be. Yes, it works. But it takes a serious and time-intensive focus. Note that the reader did have senior practitioners giving advice and guidance. That matters so much, and yet the shift of law practice from profession to business makes finding that sort of mentoring ever more difficult.
• Read "The Logic of Subchapter K" by Laura and Noel Cunningham. Rinse, lather, repeat. I read this book cover-to-cover at least 4 times. It is only a basic substantive introduction, but it manages to place partnership tax in a conceptual framework so that you can actually digest more detailed substantive research.
• Terry Cuff has written a series of articles on partnership tax, including many that focus on drafting partnership agreements. Read them all.
• Howard Abrams likewise has a series of practical articles on partnership debt, allocations, tax aspects of real estate partnerships, etc. I found them incredibly clear. Read them all.
• PLI does a seminar every year called “Planning for Domestic & Foreign Partnerships, LLCs, Joint Ventures, & Other Strategic Alliances” and publishes the associated articles in red books. These books often have practical, in-depth examinations of particular partnership tax questions.
• Liberally consult the McKee treatise, BNA portfolios, and of course the primary sources for answers to specific, substantive questions.
• Find a partnership agreement that you are pretty sure is not completely messed up from a tax perspective. If you are on your own, check out one of the forms in the McKee treatise at your local law library, or look in the SEC filings on Edgar for a partnership agreement done by a well-known firm. Try to understand the deal, and try to think about all possible ways in which money could come in and out of the partnership (debt, income, sale of a capital asset, payments to partners, payments to non-partners, etc.), and in what order the money could come in or out. Try to figure out how the agreement accounts for these things.
None of these sources advises on how to get and talk to clients, or other essential skills for tax practice. However, they may provide a useful bridge between simply reading the primary sources and trying to do something like draft a complicated partnership agreement.
Yet all of this effort is for one area of taxation. Even when someone focuses his or her practice on a particular area of tax, it is impossible to avoid other areas. The reader surely had to deal with C Corporations and S Corporations. Needing to understand and recognize estate, gift, and generation-skipping tax issues when structuring partnerships is not unusual. Lurking in the wings are subjects such as income taxation of trusts and estates, tax procedure, taxation of real estate transactions, and international taxation (which, to be fair, is far more than one topic or one course). If I continue I might find myself getting sidetracked into my "12 2-credit courses are insufficient for an LL.M. (Taxation) degree" argument, so I'll stop the litany of tax subjects.
One can compile a similar list of materials to consult for each of the many tax subjects a practitioner will encounter. When put together, the reading load will be immense. Given time, it could be handled by a diligent, focused, determined, and bright recent graduate. Unfortunately, rarely is time given. Note that the reader ended up practicing tax law and being assigned partnership tax matters after law school. It would not be unusual for someone in the reader's position to be assigned a partnership matter, a real estate investment matter, an S corporation stock sale, and several other tax issues within a few months of graduation. An LL.M. (Taxation) program takes one year if pursued full-time, and two to five years if done as a part-time arrangement. Even the most devoted tax devotee cannot read an entire tax program's worth of assignments within several months of law school, whether or not the assigned workload was removed. I wonder how many law students know that within weeks after taking the bar examination they will be immersed, and perhaps in areas of law, such as tax law, that weren't on their radars.
The more I think about Larry's question and the reader's experience, the more I wonder what is happening in the law schools. To those who claim that there is no way three years of law school can prepare a person for the sort of situation in which the reader, and many other law graduates, were put, I suggest that law school be expanded so that sufficient years are available to provide time to do the course work required for the underlying LL.B. and the J.D. To those who claim that most law students do not know what area of law, or area of tax, they will be practicing when they graduate, I suggest that law students be encouraged to enroll in courses that prepare students to "practice tax law through research and problem-solving." That's what lawyers do. They research and analyze materials so that their clients can avoid problems or if, unfortunately, a problem arises, it can be solved.
Here's a suggestion that is in the form of a request. Is it possible for practitioners, collectively or through a committee, to examine law school courses and to make two lists. One list would begin, "If we see these courses on your transcript, we are confident that the time you invested in academic pursuits have equipped you for a career in which you identify, prevent, and solve problems through legal research, skillful analysis, and proficient writing:" The other list would begin, "If we see too many of these courses on your transcript, we suspect either you looked for a law school experience lacking in rigor or were ineptly advised to focus on concerns of little relevance to law practice." In an environment resonating with the stress of loan-saddled law students looking for employment and anguishing about that search, lists such as the ones I propose, coming not from me but from practitioners, would have a most interesting effect on the academy.
Wednesday, March 07, 2007
I've enjoyed your recent posts on tax books. * * * I noticed, however, that none of your book recommendations aim towards new law school graduates and soon-to-be practitioners. I searched your blog for relevant posts, but I did not find anything.I responded to Larry, and I want to share that response, though I am editing it in an attempt to make it better.
That said, I would appreciate if you would recommend some essential books for new tax law practitioners. I took a course in basic federal income tax and I learned a little bit about researching tax law, but I could not advise a client based on this experience. I'm looking for books that will set me on the path to learning how to practice tax law through research and problem-solving. I see many books at Thomson and Lexis, but I really don't know if any of these books will suffice.
It's difficult to identify books that are aimed directly at the law school graduate who wants to develop his or her skills as a tax practitioner. The books I've reviewed in MauledAgain are directed toward people who are not tax professionals, generally to give them a general overview of relevant income tax law and to provide them with ideas on how they can keep records and structure their financial affairs in ways that make life easier for their tax advisors and preparers.
I'm unaware of any book that takes the approach, "ok, so you graduated with basic tax and want to do more tax work." Perhaps it's because going that route takes either practice experience under someone's tutelage, or an LL.M. (Taxation), or both. Tax law is so voluminous and so intricate that someone wanting to practice tax law and advise paying clients on what they should and shouldn't do needs more than just a book.
I shared with Larry what I did, long before I enrolled in law school tax classes. When I was in college I took a job with an accounting firm, because accounting was one of my areas of concentration within my academic discipline. The partners at the firm had me do a variety of tasks, and when the tax assignments came along, I took to them well. Thereafter, the partners funneled a variety of tax return preparation, tax return review, and tax research tasks in my direction. Naturally, I was somewhat apprehensive, because I did not have much in the way of formal tax education or tax practice experience.
My solution was to read the CCH Master Tax Guide. I read it from cover to cover. Some parts made sense. Others required a second or third review. Eventually, I acquired enough of a background that it became possible to understand most of the rules that I subsequently encountered.
When it came time to enroll in law school tax courses, I started to read some BNA Tax Portfolios and student treatises in areas that interested me. I entered law school planning to practice tax, and by the time I was enrolled in my first tax course I had decided I wanted to teach. Along the path of preparing for that goal, I learned that the supplemental materials I had been reading were, and continue to be, among those assigned in LL.M. (Taxation) courses. So in a way I self-taught. Yet what I learned was primarily substantive law.
What Larry describes is a different skill, one that can be described as "how to practice." Success as a tax practitioner requires not only a deep understanding of the substantive law, but also responsibilities such as finding clients, managing cases, matters and an office. It also requires a facility for explaining things to clients and other attorneys, a gift for exercising sound judgment, and a knack for using discretion appropriately. For these talents, I know of no book. Life, in all its fullness, is the teacher. Tax folks will appreciate that feeble twist on words.
Even those of us who think earning an LL.M. (Taxation) is the better path to a tax practice career, it does not provide the intellectual and professional development fostered by time in an office, with clients, and with guidance from more experienced practitioners. Books can bring familiarity with substantive tax law. But they can no more bridge the gap between the academy and the practice world does the academy itself. Perhaps, when and if legal education adapts itself to law practice and loosens its attachment to theory, fewer and fewer law graduates will need to ask the sort of question that Larry posed.
If I am wrong, and there exists a book that addresses the matters Larry described, let me know. I would be eager to give it some time in the small spotlight of this blog.
Monday, March 05, 2007
This is more than a tax book. Although its primary focus is on the federal income and self-employment taxes, among its pages are paragraphs and a chapter addressing business decisions, entity selection, record keeping, and the relationship of various types of expenditures to business activities.
The book begins, not surprisingly, with a chapter that differentiates employment from self-employment. It then turns to a general chapter on business expenses, followed by chapters dealing with start-up costs, advertising and similar expenses, communication costs, travel expenses, business education, rent and office-in-home deductions, inventory and supplies, and a "write-off wrap-up" focus on deductible and non-deductible expenses. Then, because as the author explains, people starting business meet expenses before they receive income, comes the income chapter. The book closes with two chapters on record keeping and one on the tax system generally.
June Walker has designed a variety of charts, side boxes, paragraph icons, examples, and stories to help the reader get a grip on the subject matter. The appendices include a glossary, and forms and worksheets appear throughout. Many of the stories are based on real-life, yes-this-happened-to-someone stories, some of which fall into the and-be-glad-it-wasn't-you category.
"Self Employed Tax Solutions" is not aimed at tax professionals. Tax professionals will find the book too simple. There are no footnotes, no Code cites, no long quotations from regulations, no case synopses. But that doesn't mean the book isn't useful for tax professionals. The book makes a fine gift for clients, particularly those who mention that they plan to start a business and those who somehow can't understand the professional's annual warnings about record keeping. The book, in other words, is not a substitute for a tax return preparer, but a recipe for making his or her job easier and the client's wallet or purse not as lighter as it otherwise would be.
June Walker is a financial and tax consultant to entrepreneurs in the United States and Europe, with a clientele that is exclusively self-employed individuals. She has been featured in Business Week, has been interviewed on national and local radio, has participated in webcasts, and has offered seminars for the self-employed.
To learn more about "Self Employed Tax Solutions" visit http://www.junewalkeronline.com and http://junewalkeronline.blogspot.com/. To order, go to this specific page or call 1-800-243-2329.
Friday, March 02, 2007
As I hunted for the story, I discovered what appears to be the original California proposal. Though it suggested a $300 bond, it appears to be the basis for the plan described in last evening's news story. Here is the explanation from the original California provides the rationale:
How, exactly, would this work in California? The state could launch every California Kids Account with a onetime, $300 deposit, while encouraging after-tax contributions (not to exceed $1,000 per year) into the accounts of children in households below the state's median income. The accounts would build up tax-free. Assuming low-income families managed to save or leverage just $50 per month, this small investment would grow to nearly $19,000 when the child turns 18 -- enough to comfortably cover the first three years of tuition and fees at a public university in California. If the child does not use the account for college, it grows to $34,000 by age 30 and $185,000 by age 65. Besides post-secondary education and training, California Kids Accounts could only be used for a down payment on a first home or rolled over into a retirement savings account; if the account is used any other way, the at-birth deposit must be returned to the state, along with penalties and taxes. The accounts also provide a perfect catalyst and centerpiece to build the financial literacy of all young Californians. At $160 million a year, this relatively small investment -- it's less than three-tenths of one percent of the state's $100 billion budget -- would be transformative.It appears from this Corporation for Enterprise Development reportthat four countries (Singapore, Great Britain, Canada, and Hungary) have implemented similar plans.
California could learn from other pioneers on this front. Beginning next year, each of the 700,000 kids born in the U.K. annually will receive about $400 each in a "Child Trust Fund," with the poorest one-third of kids getting about $800. The idea is to create a "stakeholder" society and help ensure that children have opportunities that their parents may not have had. In Canada, "Learning Bonds" will soon be established at birth to help low-income students save for college. In Kentucky, the Republican secretary of state and the Democratic state treasurer plan to launch a "Cradle to College" initiative, which would establish a 529-type college savings account for every newborn in Kentucky so that no residents would need to forgo college because they cannot afford it. Finally, bipartisan legislation called the ASPIRE Act -- led by unlikely U.S. Senate bedfellows Rick Santorum (R-Pennsylvania) and Jon Corzine (D-New Jersey) -- was introduced in Congress last July to create a savings account at birth for each of the million kids born in the U.S. Clearly, the idea is catching on, and California has a great opportunity to lead the nation on this path-breaking idea.
The plans are not identical. The differences are critical. The United Kingdom presents money to all newborns, though it doubles the amount for children from the poorest 1/3 of families. Canada limits the program to children from low-income families. Hungary provides additional payments to the children of low-income families. Singapore makes payments for all children, but the amount increases as the number of children in the family increase.
Does it make sense to use tax revenues in this manner? It depends. Putting money into funds to benefit poor children makes sense when the alternative is transferring money to the parents of those children, who don't have the discipline, foresight, or ability to set money aside for the education of their offspring. On the other hand, I just don't understand the rationale for transferring tax revenues into accounts for the benefit of wealthy children or the children of wealthy individuals. It is not the role of government to provide tax revenues to the wealthy. It is tempting to think that even those who advocate government transfer payments for the benefit of the poor would join with those who object to government transfer payment programs generally and oppose plans that fund wealthy families in this manner.
Yet that did not happen in Hungary. Perhaps Hungary, emerging from years of living under communism, has too few wealthy individuals to warrant concern. Singapore seems intent on encouraging population growth, as the economic incentive increases as the size of the family increases. At least the United Kingdom's program does more for the poor, but why transfer public funds to rich children? Canada seems to have it right.
Because I don't have access to the technical language of the newest California proposal, I don't know if it is more like the program in Canada or the one in Hungary. So it's impossible to critique the proposal or predict what will happen. I'm sure this is not the last we will hear about these types of proposals.
Wednesday, February 28, 2007
Two weeks ago, a recent graduate of the law school, who focused on tax and is practicing in the tax field, passed along the URL for a blog called Indexed. According to the blog author, Jessica Hagy, the blog "is a little project that lets me make fun of some things and sense of others. I use it to think a little more relationally without resorting to doing actual math." The graphs and charts that she uses are clever because of the way in which they are used. Most of her drawings, and yes, they are drawings and thus artistic, are wacky, sarcastic and cynical. That's why I like Indexed. Yes, there are some tax observations among the hundreds of visualizations, such as Write It All Off, with the legend "when they walk into a bar, the tab is tax-deductible," Lattes = Higher Property Taxes, What Do You Make? A Mess, and It's Tax Deductible. Most of them don't deal with tax, at least not directly, but some do touch on questions of law, politics, economics, retirement, and money. Give yourself 20 minutes and go visit.
Yesterday, Paul Caron of the TaxProf blog passed along his take on a new blog, Visual Tax. Written by Orval, the blog's objective is "visualizing how tax works by applying engineering methods." What inspired Visual Tax is Orval's re-entry into the world of preparing his or her annual tax return. Orval was very unimpressed with IRS instructions, particularly with their "wordiness" and "almost total absence of explanation for the rationale behind some of the tax rules." Orval is "appalled" to see pages of tables that are "nothing more than a tabulation of simple linear equations." So Orval treats us to graphs and equations.
Orval has tackled the question of tax rates. It is interesting to see what most tax practitioners take for granted undergo an examination by someone with a different educational and experiential background. I don't see, though, how the equations that Orval derives would be a better substitute for IRS instructions. Take a look and try to imagine one hundred million tax booklets being mailed out by the IRS with equations of this sort peppering the pages.
I do take issue with several of Orval's points. First, the instructions are not the place to include the rationale behind the tax law. The traffic sign with the instruction "NO TURN ON RED" would be much less effective if it included the rationale for placing the sign at that particular intersection. Second, Orval lives up to the stereotype of engineers as people who struggle with words. Somehow, from reading instructions and perhaps the Code itself, Orval concludes:
The income used in the tax equation is known as the adjusted gross income, it is essentially calculated as follows for your workpay:If one of my students did this on a basic tax exam, he or she would earn an F in the twinkling of an eye. The removal of certain items from nominal salary generates the portion of gross income attributable to compensation. Then certain deductions are subtracted to arrive at adjusted gross income. Then other deductions, either itemized deductions or the standard deduction, along with personal and dependency exemptions, are subtracted, and the result is taxable income. I wonder if Orval looked closely at the charts in the instructions, or tracked through a Form 1040 with an engineer's careful scrutiny.
* start with your nominal salary
* remove a number of special items: social security, 401k contributions, ... and you get your taxable income
* remove the exemptions, these are usually amounts that are not directly related to any real expenses
* remove deductions, these are usually amounts that correspond to specific expenses that are considered useful for the society, at least as seen by Congress
* presto, you have your adjusted gross income.
Oral is correct, that the tax law is complex, and thus the equations derived from it are complex, because of special interests that persuade the Congress to enact provisions applicable to tiny segments of the population. Perhaps with a bit of a push, Orval can be moved into the slowly growing group of citizens that understands the true source of tax agony, tax complexity, and tax nonsense: the Congress and not the IRS.
Yet Orval has done me several favors. When the legal philosophers challenge my approach to the law by claiming I'm treating law as an engineering device, I can send them to Visual Tax and say, "No, here is what an engineer would be doing." I do want to be around when they access Visual Tax so I can see their faces. What Orval has demonstrated is the falsity of the propositions that "tax is all numbers," "tax is full of math," and "practicing tax doesn't require subjective reasoning as do other areas of the law."
Orval also gives me an object lesson to share with the students in my courses who bristle at my insistence on accuracy, diligence, and precision. When they continue to complain about the ineffectiveness of generalities as grade-earning expressions, in contrast to some other law courses, I can point them to Visual Tax and explain that if I really wanted to do what they claim I am doing, this is what the powerpoint slides and their notes would resemble. Ouch.
Finally, Orval has inspired me to ponder the possible advantages of a joint law and engineering degree. Surely engineers would benefit from learning to work with words. And lawyers can benefit from approaching problems with an engineer's constructive inspections. Just what the Dean wants: another proposal from me.