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The Professor Is In: Frank Colella

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Lubin Clinical Professor Frank Colella, JD, talks the importance for business students to have a grounding in law, recent tax developments, and more!

Lubin Clinical Professor Frank Colella, JD, has worn many hats at Pace over the years. After receiving his BBA from Pace in 1984, he proceeded to embark upon a career as a tax lawyer, yet remained heavily involved in the University over the years—first as a member of the alumni board of directors, and later, as a faculty member.

This month, we had the privilege of chatting with Colella about a myriad topics—why it’s important for business students and aspiring entrepreneurs to be versed in law, recent changes in federal tax law and what that means for individual taxpayer rights, and an eclectic dinner party for five.

You’re a professor of legal studies and taxation at Lubin. Why is it important for businesses students to be well-versed in legal studies?

Mainly because of the number of times someone runs into legal situations. I mean a legal situation well-short of an actual lawsuit. Something as often encountered as a contract, for example, you should have some idea of the legal principles behind the transaction and the exposure that you might have if either side doesn’t live up to the terms of the agreement.   

There are a lot of legal issues that typically confront businesses. From IPintellectual propertylaw, to contract law, negligence, property, tax law, and employment law, just to mention just a few. Then, even with careful planning, you may wind up in court. Most people may find themselves involved in civil litigation. And the unlucky few may find themselves confronting the criminal law.

With the growing popularity of startup culture, particularly in tech, it appears that students have a growing interest in entrepreneurship. How do your two fields of expertise lay an important foundation for any aspiring entrepreneur?

Tax law is one of my true loves. In addition to teaching it, I’m also a tax lawyer by profession. Tax questions such as choice of entity considerations, for example, are often important parts of the initial startup company’s decision making process. The tax consequences of how it is formed impact not only the initial owners, but potential future investors in the business.

“How do I set this business up?” Should it be an LLC, a corporation, a partnership—and what are the tax consequences that flow from that choice is a question that confronts all entrepreneurs. So, for people who are interested in entrepreneurship, an entry-level tax course would be a solid step in addressing those issues. 

So that’s an interesting intersection between law and tax. Law governs the actual entity itself; how do you create a corporation, how do you create a partnership; and then the tax code governs the tax consequences that flow from that entity selection.

Is there anything you’re currently working on that you’re particularly excited about?

My other true love is constitutional law. Both of those interests intersect with my research into “procedural due process.” Last July, the Taxpayer First Act (TFA) was passed and signed into law. It included significant changes to the procedures that affect the rights of taxpayers and how they interact with IRS. One provision was the creation of the “Independent Office of IRS Appeals”—which increased the independence the IRS appeals office from the rest of the IRS. If you’ve been audited and disagree with the outcome, you don’t have to go to court immediately. Instead, you can bring your case to the IRS Appeals Office for review. The TFA change provides the appeals office more latitude in resolving taxpayer cases.

I’ve recently written and spoken about the TFA. I spoke at the American Bar Association Tax Section’s meeting in San Francisco, in early October, on the impact of the TFA changes that impact appeals. I’ve also spoken on the TFA for the NYS Society of CPAs—as well as writing for their membership on the “new” IRS Appeals Office. That is focused or the rights taxpayers have when they deal with the IRS. Not specifically the amount of tax owed, but how it is assessed or collected from the taxpayer. It’s separate and apart from the computation of the amount owed. That is what I’m interested in and currently researching—the procedural due process rights of taxpayers.

What do you like most about working at Pace?

I’ve been at Pace for a long time. I was a student at Pace in the early '80s, in the '90s I was on the alumni board of directors, in the 2000s I was an adjunct professor, and then I became a full-time clinical professor five years ago.

Pace is a great place to be a student, professoror really any part of the Pace family. I love the collegiality and the people. There’s so many fun and interesting people that you can interact with in a given day. Not just the colleagues in my department, but the professors in other departments. And then there are my students, who always come up with interesting ways to look at subjects that I’ve taught 20 times. There’s never a dull momentif you want to use that cliché.

You’re hosting a dinner party for four—you can invite anybody, living or dead. Who would you dine with?

That’s a tricky one! I would definitely include Jack Kerouac and Allen Ginsburg, because I’m a beat generation kind of guy. Maybe Steve Prefontaine, who died tragically younghe was one of America’s all-time greatest runners. And Barbara Stanwyck, who was easily one of the greatest actresses of her generation, and she hasn’t received the acclaim she deserves. That group would certainly make for a lively dinner party!