July 21, 2024

Teaching Tax Law Critically And The Earned Income Tax Credit

Teaching Tax Law Critically And The Earned Income Tax Credit

Professor Diane Kemker of DePaul College of Law shares her argument for more coverage of the earned income tax credit in tax law casebooks to improve inclusivity.

This transcript has been edited for length and clarity.

David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: casebook case study.

While tax law is shaped by Congress, Treasury, and the courts, tax education is shaped by professors and experts who write textbooks and casebooks. These authors are gatekeepers whose work influences what subjects and areas of tax law are highlighted in classes.

Our guest this week has raised concerns over the lack of coverage of the earned income tax credit in tax law casebooks, and the message that sends to those studying tax law.

Here to talk more about this is Tax Notes legal reporter Caitlin Mullaney. Caitlin, welcome back to the podcast.

Caitlin Mullaney: Hi, Dave. Thank you so much for having me. It’s always a joy to be on the podcast.

David D. Stewart: Now I understand you recently spoke with someone about this. Could you tell us about your guest?

Caitlin Mullaney: Yes, I did. I recently spoke with professor Diane Kemker. She’s a visiting professor at DePaul University College of Law in Chicago. Professor Kemker has written extensively on racial and gender equity in different areas of the law and has frequently been cited by state and federal appellate courts.

David D. Stewart: Could you give us an overview of what all you discussed?

Caitlin Mullaney: Absolutely. We discussed the article that professor Kemker recently authored, “Cracking Open the Tax Casebook: Genre, Ideological Closure, and the Earned Income Tax Credit.” The article explores the lack of coverage in tax law casebooks of the earned income tax credits and resulting audits, which disproportionately affect millions of the poorest Americans, and the message this lack of inclusion sends to the students of tax law.

Professor Kemker uses literary theory concepts to explain that what is needed is an intervention into the creation of tax law casebooks to expose the ideological closure that takes place, paving the way for more inclusive teachings.

David D. Stewart: All right, let’s go to that interview.

Caitlin Mullaney: Professor Kemker, first of all, welcome to the podcast. Thank you for being here today.

Diane Kemker: And thank you so much for having me.

Caitlin Mullaney: Now, professor, before we get into the article, you’ve authored several other articles and books covering a wide array of social issues in the law. Would you like to tell us a little bit about your academic interests and a little more about what inspired this article on the earned income tax credit?

Diane Kemker: I would be happy to. Throughout my career as a law school professor and scholar, what has interested me the most are intersections between anti-discrimination law and the interests of marginalized communities and core doctrinal areas that are part of the legal curriculum. In general, that’s the way I would characterize my work is taking an anti-discrimination or intersectional angle on a familiar doctrinal area.

When I began writing in the tax area after I got an LLM in taxation law during a sabbatical, now seven or eight years ago, I brought that same approach to thinking about the tax law. One of my works in progress started then and is still not done, and the title of that is “U.S. v. Windsor Was Also a Tax Case.” So the case involving Edith Windsor, which brought down part of the Defense of Marriage Act prior to Obergefell, is an estate tax case.

Among the little attended to parts of that case, obviously its LGBTQ aspect is very prominent; much less prominent is a consideration of some of its race- and class-based dimensions. It was a challenge to a very large estate tax bill. It was litigated as a refund. Well, only multimillionaires pay estate taxes, and only multimillionaires are in a position to pay them and then spend years seeking a refund. These were Park Avenue lesbians, and I say that not as an epithet or as a joke; it happens to be true. They lived on Park Avenue, and their view of the world reflected that.

That’s just not attended to in most of the scholarship about how this case struck down DOMA, nor on the tax side is that part of it attended to. That’s been a continuing theme that then, I think, is reflected in what I’m doing now, which are a couple of different projects having to do with the earned income tax credit or the earned income credit — it’s referred to both ways — and some of the race-based dimensions of IRS enforcement priorities, especially with respect to it.

Caitlin Mullaney: Thank you. That’s such an interesting area of the law that I feel like is so commonly overlooked, as you discussed in the article, which jumping into now you discussed the earned income tax credit and the lack of coverage it receives in current casebooks. Can you elaborate on what your general findings were in analyzing the chosen casebooks?

Diane Kemker: Sure. So in the three books that I talk about, the coverage ranges from a few paragraphs to a few pages in books that are between 600 and about 1,000 pages long. Two of them do not discuss in any detail even the dollar amount of the credit, how many people claim it, and none of them discuss in the detail that I think is really called for audit rates and the effect of these audits on their claimants.

Nor is the coverage in casebooks generally inclusive of statistics about underclaiming of this tax credit. It’s only claimed by about 80 percent of the people who are eligible for it. The IRS brags about that. That strikes me as shocking in some ways. They’re walking down the street handing out free money, and only four out of five people are picking it up. That doesn’t seem to me something they ought to be bragging about.

This too is not talked about very much, nor the fact that when there is an earned income tax credit audit, it freezes even the part of that taxpayer’s refund that is not in dispute. Because earned income tax credit claimants are America’s poorest working taxpayers, it should go without saying that they need the money and that it imposes an extreme hardship to be deprived even of the part of their refund that is not in dispute. So these aspects of IRS enforcement go almost completely underattended to in tax law casebook.

Caitlin Mullaney: In the article, you analyzed three separate tax law casebooks. Was there a reason for those selected works?

Diane Kemker: There is. Each is, in a general way, a leading book in the area, but of course, there are many more than three casebooks in this field, like in most. All of them are books that I either have taught from or am currently teaching from. So that’s first.

Second, one of them, the book that’s often referred to by Freeland, although it is now authored by Stephen A. Lind, Daniel J. Lanthrope, and Heather M. Field, is the leading tax law casebook in the country. It’s in use at more than 100 U.S. law schools out of a little over 200. It is also the longest and one of the most comprehensive, so I regard what it includes and excludes as especially important. It is the canonical casebook. It’s been in print for 50 years, and it’s now in its 20th edition.

From my point of view, most other tax casebooks have been created by people who were taught from that casebook, or taught from that casebook and decided that they wanted to take an approach different enough that it was worth writing another casebook. But it’s really the canonical tax law casebook.

John A. Miller and Jeffrey A. Maine, the second of the books that I talk about, is the book from which I taught advanced federal taxation at Chapman University in California a couple of years ago, and there are a lot of things that I like about that book, although we may get to some of the things that I’m not so crazy about.

The way that book is set up, each chapter front loads its problems before they give you the material you’ll use to solve those problems, which I think is interesting, and it’s a problem method casebook. It is one, and if we may have a chance to talk about this a little more, that teeters on the brink of being a textbook that’s not a casebook. It has a small enough number of cases and they are excerpted so severely that it’s almost not a casebook. So it’s in a way at an opposite extreme.

And then the Joel S. Newman, Bridget J. Crawford, and Dorothy A. Brown book is the book from which I’m currently teaching federal income tax now at DePaul, and part of what’s notable about that book is that it has the most diverse critical author team.

Freeman has added to the authorial group Bridget Crawford of Case and Dorothy Brown, now at Georgetown, who are two — I would say two of, but really they are the two, I think leading, working female critical and feminist tax authorities. Their impact on the book is beginning to make itself felt, in some ways more in the teacher’s manual than in the book itself. So that’s the third of them.

Caitlin Mullaney: As most law students and professors do know, these casebooks, as you mentioned, are often updated every few years or when a large-scale development might require an update. With such regular updates, how is this issue of a lack of coverage of such important topics not addressed?

Diane Kemker: Well first, we do want to keep in mind that the earned income tax credit itself dates back to 1975. So it is not new. It is an anti-poverty program built into the tax code that is not new.

Only the Freeland book, of the books that I currently am reviewing, was in print at that time. All the others were written in an environment in which this was already a piece of the tax code. So the lack of attention in a general way to matters of both race and poverty is pretty endemic to this area of legal pedagogy. It doesn’t matter that times change because it’s just not the focus of these casebooks.

There is one casebook that is not in the article now, though I’m considering revising to include it, that does devote considerably more space. There is actually a chapter on the earned income tax credit in the book by Joseph Bankman, Daniel N. Shaviro, Kirk J. Stark, and Edward D. Kleinbard. That book is also in a very late edition, so it’s been published for many years.

What’s striking about that chapter for my point of view is that although it gives significantly more attention to the earned income tax credit as an anti-poverty program, so it’s more poverty and class aware, it contains no discussion of race and very little discussion of the enforcement issues. It is not really a significantly more intersectional approach, although it does pay more attention to some of the class- and poverty-based issues. That is a notable distinction. Exactly how best to incorporate it, I’m not sure yet.

Caitlin Mullaney: With these problems of casebooks and the current update process highlighted, one argument that you might see would be an abandonment of casebooks, an argument that you actually reject in the article. What might be the negative effects of going to the full extreme of removing casebooks completely?

Diane Kemker: It’s important to keep in mind that casebooks continue to be the gold standard for textbooks in law school because they reflect a huge amount of scholarship and research over many years, even beyond a single person’s lifespan, as I talk about. There are very few tax law instructors, myself absolutely included, who know even a fraction as much as casebook author groups know. Putting together materials entirely on one’s own is not only a huge amount of work, but for most instructors, students won’t trust that they’re actually getting what they need, and that can create its own really problematic classroom dynamic.

I think the case method is one in which I am still basically a believer. Notwithstanding some of the things I’m going to say that are quite critical, these are the authoritative materials of our discipline. Lawyers have to be able to work with them, and that means law students have to be able to work with them. That’s my concern about more problem method casebooks or textbooks.

Legal problems do not present themselves in the world to you like that. They come in a mess of facts and learning how to figure out what law controls the situation your client is in. I don’t see that there’s any shortcut around reading cases. So I’m a casebook advocate while also being a critic.

Caitlin Mullaney: That brings us straight into the title of your article, the concept of cracking open the tax casebook. What would that mean in the overall picture of the tax law education?

Diane Kemker: Realistically, I’m of course aware that most tax professors and probably most tax law students don’t really care about things like a rhetorical analysis of a tax law casebook or indeed of any casebook.

But I do think that coming to understand how texts do what they do, what the sources of textual authority are and how they are embodied in physical objects in the form of books or their electronic equivalents, how words on the page that all look the same are not the same, is a very important skill for lawyers and law students to have.

I teach first-year students in a variety of subjects, and it comes home to me every year that they actually have to be taught that the part of the textbook that is an excerpt from a case is judges making law. And the part that is just the casebook authors talking is just people talking.

Inevitably at the beginning, students will cite indiscriminately, as if what’s on page 16 said by a member of the U.S. Supreme Court writing for the majority is no different in its level of authority from what the casebook author says in note two. You have to learn. You have to learn to read these materials.

That’s part of what I’m getting at is to stop seeing the casebook as a transparent container of neutral contents and instead understanding in a sophisticated way how texts do what they do. That is at the place where what literary scholars do and what lawyers do overlaps.

Caitlin Mullaney: You state in the article that your casebook criticism is different from prior critiques with your use of literary theory concepts, specifically the interaction of genre reform and ideological closure. How is it possible that these concepts that are associated with literature have a place in books filled with tax cases and legal decisions?

Diane Kemker: This is a very important question, of course. It’s the biggest burden of persuasion that I have in the article. Why does this matter? Why is this a legitimate or useful, helpful, productive, fruitful way to think about the tax law casebook or any law school casebook?

So first, although we often think of genre as a way of describing works of fiction, like novels or movies. Is it a rom-com? Is it chick-lit? Is it a western? Is it science fiction? Even nonfiction texts also have genre. An example that I use in the article is Italian cooking. Suppose we have three different books about Italian cooking: a travel book, a book about the history of food and cooking in Italy, and a cookbook. All of these are nonfiction books. They have the same subject matter, but you would know in an instant which of them you were reading. How? Because of genre conventions. The genre conventions that distinguish a recipe from history, from journalism or a travel log or something like that.

So understanding that anything that we are reading has genre conventions that it either obeys or doesn’t obey. How that sets up our expectations of what we’re going to find in the text, what happens if we don’t find it there, what the author is asking us to do as we interact with the text, how we engage in meaning giving, which is what’s happening when we’re reading and interpreting a text.

These things absolutely apply outside of fiction. Bringing it into the textbook context sets up not just the two-way relationship where we have our author and our reader in relation to the text, but an additional character in that drama, the instructor, and each of these mediate between the others in various ways.

That’s part of why supplementing is challenging because in supplementing a text, the instructor is inserting themselves in between the reader and the text. It takes a lot of authority to do that, and you spend political capital when you do that. If you’re persuasive, you can also accumulate capital with your students by doing that, by bringing in materials that are meaningful to them and that help them to make more intelligible their own reactions to the text even when those reactions seem not to be what the author intends.

But all of these are ways in which students in law school are relating to texts, facilitated by instructors who are giving them reading assignments and standing up in front of the text, talking about what’s in it. Becoming more self-aware about that, I think, is a worthwhile part of the educational enterprise.

Caitlin Mullaney: Can you elaborate on the role that these concepts have played within the exclusion of the earned income tax credit from the critical tax law education?

Diane Kemker: I can, and that’s what really inspired this as I became more and more interested in the earned income tax credit, substantively, as I began studying it, understanding it more substantively, putting it into the context of IRS enforcement priorities and then going to the casebooks and finding just nothing there.

It’s not just that these issues end up often at the back of the book, to the extent that they’re talked about, which means that many instructors will never get there because most books are read more or less from the beginning and straight through. But that if I wanted to teach about it, I was going to have to go outside the four corners of the book to do it with all the difficulties that that presented, which then got me to thinking about why. Why do tax law casebooks have the priorities that they have?

Why are many multiples of pages spent on some obscure rule about when the holders of patents can deduct certain things? Not saying that that is not important to those who it affects, but it surely cannot possibly affect as many people as, for example, the earned income tax credit.

That’s of course not the only possible standard for how many pages you devote to something in a book that may have educational purposes of another kind. But when you look at the book as a whole, you begin to see whose interests are the interests that matter, what is conveyed to students about what sorts of questions matter, which sorts of taxpayers matter, which sorts of events that have economic and tax-related implications in people’s lives matter. When you do that, you get what I regard as a pretty skewed picture. It goes hand in hand with the tone that is taken in many books, which I understand.

It’s not that I don’t understand it or at times sympathize with it, but a tone that I think is meant to encourage a distancing from the real interests of people who are deeply affected by these tax laws. I do understand why it might make sense to compare the tax code or the representation of taxpayers against the government as to a game with a very complicated set of rules.

But if it would strike us as strange to do that if you were teaching the law of capital punishment, it should strike us as strange to do that when you’re teaching tax law because whether you have enough money to meet your basic needs is actually a matter of life and death. Whether you can take a complete deduction for your patent research expenses is probably not.

Again, I don’t mean to be ganging up on any particular deduction, but when we think about time spent in class, which is precious — time we ask students to spend reading and thinking, inevitably to some degree putting themselves in the place of either the taxpayer, the taxpayer’s council, the government, government council — who and what are you thinking about all the time, and what is happening somewhere off stage, beneath or below the concern of the serious tax lawyer or tax student? That’s my concern.

Caitlin Mullaney: Going off of that, in your casebook analysis, you discussed the different author inclusions of race, gender, and class issues present within different legal concepts. Was there anything that stood out to you on the way the authors chose to address these areas and their analysis?

Diane Kemker: There are a couple things that have stood out to me as I’ve spent time with these casebooks in this analytical mode as opposed to which piece do I have my students read, and when, which is the usual practical way that you deal with a casebook, and that is that the inclusion of matters of race, gender, and class is rare.

One of the consequences of that is that it can easily lead the student to think that short list of places where it’s mentioned are the only places where it matters because otherwise wouldn’t you be mentioning it everywhere that it matters. So there’s that. The second thing, and I look forward to the Newman, Crawford, and Brown book in subsequent editions moving in a direction I would like to see where this is concerned, but it is very rare that the analysis is in any way intersectional.

For example, most casebooks now in talking about community property and income splitting, talk about gender. They talk about traditional marriage roles and the difference in the tax situation between two approximately equal earners and two very disparate earners — why there are tax advantages, if there’s a big disparity in earnings, for one of them to stop earning altogether. That’s typically a wife in a traditional arrangement. The ways in which the tax code doesn’t just reflect but actually rewards that arrangement of one’s intimate life.

Casebooks today mostly have something to say about the way that is gendered. Precious few bring that together with the long-term economic consequences of no access to same-sex marriage, or the race dimensions of economic discrimination against people of color as a result of which it was much likelier that both spouses would have to work and that their incomes would be much closer to one another’s because of the nature of the work and a variety of other economic factors.

Even when you get a little bit of that sense that the tax code is not neutral about, for example, how people arrange their intimate lives, it is not neutral. Basically, a really sophisticated intersectional approach is not there. It’s there in an article here or there.

Dorothy Brown has done a huge amount of work on this. Her recent book, The Whiteness of Wealth, brings a lot of that together in a very effective way. What I’m looking for is for some of that to make its way into the casebook where she’s a member of that editorial team.

Caitlin Mullaney: Now let’s discuss the use of language by the authors in their limited mentions of the earned income tax credit. In your analysis of Fundamentals of Federal Income Taxation, you note that the authors present an image of trustworthy IRS versus an untrustworthy earned income tax recipient. Can you expand on this?

Diane Kemker: Yes. In talking about earned income tax credit enforcement, especially through correspondence audits, which is the primary way that those claimants are audited, it can be very tempting, I think, to adopt wholesale the IRS’s own official line, which is that very significant enforcement resources have to be dedicated to it because of its allegedly very high error rate.

I’m obviously not in a position to assess whether the error rate is as high as they say it is, but let’s say it is. Let’s say that the error rate really does approach or even exceed 50 percent. Fifty percent of all earned income tax credit claimants are claiming the wrong amount.

One of the things the IRS never says is whether they’re overclaiming or underclaiming. We actually don’t know whether these errors cancel each other out. We don’t know whether these errors are actually costing the fisc very much, even if the error rate is as high as they say.

In the casebooks, when there’s any discussion of this at all, it is usually in the context of its error rate with no one, from my point of view, asking what seems to be a pretty obvious question, which is, almost 50 years into the earned income tax credit, can’t we make it simpler?

These are America’s poorest, hardest-working taxpayers. Why is it so hard to get it right? These studies, by the way, include returns prepared by tax preparers. So it’s not just that people are doing this all on their own. The error rate is just as high when people pay. So not only are they out of pocket to have had their tax return prepared, but as often as not, those folks make mistakes too.

Part of this, if we really are going to get a little bit into it, is many earned income tax credit claimants have, from an IRS point of view at least, relatively untraditional family formations, and who can and who can’t claim a child ends up at the center of this. Either both parents are claiming a child when they shouldn’t, or the child is showing up in one place but not in the other. They’re showing up as a dependent on one, but the tax credit’s being claimed by the other and so on. It’s important to keep in mind that we’re not talking about people who are engaged in elaborate tax fraud.

We’re talking about a credit that runs into $5,000 at the high end, even the biggest mistakes. These are nickels and dimes, when we think about the fisc, when we think about the entirety of what is collected by the IRS. I’m not in the position, of course, to assess whether they really are making this many mistakes, but we ought to be asking why if that’s true and not demonizing working people paying their taxes who are only trying to get what the Congress has told them they are entitled to.

Caitlin Mullaney: As you previously noted, the Federal Income Taxation: Cases, Problems, and Materials book had a significantly greater length and more prominent explanation of the earned income tax credit than the other two books. Did the greater space dedication provide a superior inclusion over the other two casebooks?

Diane Kemker: Yes. From my point of view, it’s better not just because more is better, though in some ways I think more is better simply because of the importance that is awarded to it, but also because it’s a much more thorough and much more intersectional approach. I hope they continue to go further in the same direction. I’m glad that’s the book from which I’m teaching because otherwise the reality is I would probably be supplementing with material from that casebook if I were teaching from another one.

Caitlin Mullaney: Great. And I think that circles us back around to your determination that what’s needed is for the tax law casebook to be cracked open. What do you see as the next steps to improve an inclusivity of the earned income tax credit and other underemphasized social issues into the tax law education?

Diane Kemker: There are a few different things that I’m trying to accomplish, both through my own work and by amplifying the work of others. The way that it’s going to come into the tax law casebooks is by beginning to show up in notes and problems, and authors being urged to expand their coverage of it for reasons that can be made meaningful to them, the largest scale of those reasons which Alice Abreu at Temple Law School has explored over the course of her whole career is increasing the inclusivity of the tax bar itself has to start in the law school classroom.

The classroom has to be made to be an inclusive space for those who otherwise would feel like this is an area of the law that holds no interest for them. I think of this as a two-way process. It’s something I discussed in another article about teaching critical tax. Because tax law is an elective, most of the people who self-select into it are probably, in fairness, not also taking the critical race theory seminar.

This may be the only place they are exposed to some of these more critical ideas. If they see that those too are part of the law of tax, that’s an important message to be sent. By the same token, historically underrepresented students who find themselves in the tax law classroom — I think it is important for them to feel that the concerns of the communities of which they are a part are also reflected in the casebook. All of these casebooks emphatically say that tax law touches everything. What then counts as everything matters a lot.

Caitlin Mullaney: Well, thank you so much for that. Sadly, that’s all the time we have for today. I want to thank professor Kemker for coming on the podcast.

Again, I want to refer any interested people to professor Kemker’s article entitled “Cracking Open the Tax Casebook: Genre, Ideological Closure and the Earned Income Tax Credit.” And thank you again to Diane Kemker for coming onto the podcast today.

Diane Kemker: Thank you so much again for having me. Everyone who writes articles hopes that they will be read with this degree of care and attention, so I appreciate it.