If you want evidence of the scope of TEI’s advocacy activity, you need to look no further than the Table of Contents of this issue of The Tax Executive. The issue contains high-quality submissions on several topics of keen interest to TEI members and their companies — from business 1099s, to the OECD’s intangibles transfer pricing initiative, to Washington State’s emergency rules relating to nexus and sales factor sourcing.
The Institute prepared position papers on these subjects because our committees — respectively, the Federal Tax Committee, chaired by John Mann of the Chicago Chapter; the European Direct Tax Committee, chaired by An Theeuwes of the EMEA Chapter; and the State and Local Tax Committee, chaired by Linda Dickens of the Dallas Chapter — determined that the issues involved transcended individual taxpayers or industries and demanded attention. Upon reviewing the submissions (which are available on our website on a real-time basis),
I’m confident you will agree that the Institute’s committees and legal
staff have done an exemplary job of analyzing government actions,
identifying policy flaws and administrative concerns, and developing
alternatives to address the government’s legitimate concerns in less burdensome ways.
The effectiveness of TEI’s advocacy work, of course, is not proven by how long or well written its comments, briefs, and testimony are; it’s demonstrated by whether they are persuasive, that is to say, how policy-makers respond to the Institute’s comments and proposals for change. And that is also demonstrated by this issue’s Table of Contents, specifically, by Michael Desmond and Ronald Buch’s article entitled “Practical Considerations for Schedule UTP … an Addendum.” The article, which follows up on Mike and Ron’s article in the July-August issue, discusses the changes the Internal Revenue Service made to Schedule UTP (and the draft instructions) to take into account comments made by TEI and others. I commend it to you, not only as guidance on what taxpayers must disclose and other aspects of the IRS’s latest “game-changing” initiative but as an example of the value of the Institute’s advocacy.
As TEI members know, Announcement 2010-9 and Schedule UTP struck a real nerve in the corporate community, prompting the largest outpouring of comments since the Tax Reform Act of 1986. While few of us welcomed the Announcement 2010-9 and draft schedule UTP — and many of us would still wish it away — fairness requires that we acknowledge the process the IRS used in refining the draft schedule. To put it simply, the IRS engaged in extraordinary outreach efforts to taxpayers and the tax-practitioner community, and the end product is much better because of the process the IRS used. I think those involved in this project can take pride in the fact that the final Schedule UTP adopted many recommendations made by TEI (and others), including —
- elimination of the requirement that taxpayers identify the maximum tax adjustment;
- elimination of the category to disclose positions that are not audited because of administrative practice;
- clarification of the “Concise Description” requirement;
- a five-year phase-in of the Schedule based on taxpayer asset size; and
- affirmation of the IRS’s “Policy of Restraint.”
In TEI’s testimony at the IRS’s October hearing on the schedule, we proposed further refinements for the schedule, and particularly stressed the need for the IRS to clarify the process for UTP review and selection of returns for audit, as well as for specific training for examining agents.
There are still open questions about the schedule, most particularly, the potential reaction of field agents to the information reported on the schedule. Commissioner Douglas Shulman, LB&I Commissioner Heather Maloy, and Chief Counsel William Wilkins have repeatedly assured taxpayers that Schedule UTP is about issue identification and that field agents will be trained about proper uses of the schedule. The IRS has asked not only for patience as the schedule is rolled out, but also for vigilance in alerting senior IRS leaders of any challenges that may arise. That request is both reasonable and one that TEI is behooved to accept.
I have written at length about TEI’s approach to Schedule UTP for two reasons. First, it is an important project for our members. Second, the project — the IRS’s response to it — confirms the importance of becoming engaged. TEI has been an effective partner in tax administration because we’ve always believed that having a place at that table is better than walking away from it.
Accordingly, I invite all of you to consider getting involved in TEI’s advocacy efforts. Hearkening back to the theme the Institute adopted for the year, join us and you will grow with us. I guarantee that you won’t regret it.
Annual Conference Recap
The next issue of The Tax Executive will have a complete report on the Institute’s 2010 Annual Conference, but I want to take this opportunity to thank the Institute’s Chicago Chapter for its wonderful hospitality. Cathy Stevens of Brunswick Corporation and other members of the chapter’s Hospitality Committee did an absolutely splendid job of making our more than 500 registrants feel at home.
From preparing gift bags for conference participants (containing goodies from Chicago-area companies plus helpful information about the things that make the Windy City special) to staffing a welcome desk to putting together a series of drawings that held the attention of our entire group at our Sunday evening Welcome
Reception, the chapter — and the array of professional firms and companies that supported its efforts — did a truly remarkable job. I would also be remiss if I did not thank everyone for the courtesies extended to my family and me during the conference. The experience underscored the specialness of TEI.
The next issue will also include a report on the Honorary Membership awards presented to Past Presidents Sol Coffino and Dave Bernard, and the Institute’s recognition of Mary Lou Fahey, who will retire as TEI’s General Counsel at the end of 2010. The recognition of Mary Lou went beyond a recitation of her accomplishments a member of TEI’s legal staff for the last 22 years. To focus solely on those runs the risk of diminishing her overall contributions to the Institute. Mary Lou cares deeply about TEI’s credibility, reputation, and professionalism, and has worked every day to advance them. She is an exemplary tax lawyer and a consummate professional, but she’s much more than that: She is also a caring person and a great friend. I got to know Mary Lou at the Annual Conference in 1989, which was held in Toronto, and our friendship — and my respect for her as a lawyer and a person — has grown stronger and deeper over the years.
As we considered how best to celebrate Mary Lou’s tenure at TEI, we concluded it would be most appropriate to make a donation to a charity that she feels a particular affinity toward. It did not take us too long to identify the charity: Susan G. Komen for the Cure. Mary Lou — who began her victory over breast cancer with surgery 20 years ago — truly walks the talk: She not only participates in the Race for the Cure, but not infrequently opens her wallet for the cause. We also concluded that while the Institute itself would make a donation, we would make it possible for others — TEI chapters, current and former leaders, staff, and practitioners to whom Mary Lou was particularly close — to participate. I am absolutely delighted to announce that, as a result of our fairly limited outreach, we received donations from 120 individuals and organizations, and that their aggregate donations totalled more than $55,000. I am exceptionally proud that 31 chapters made donations. I thank everyone who contributed to this effort. (A list of contributors will be printed in the next issue.) If you want to add your own donation, please visit www.komen.org or send your check to Susan G. Komen for the Cure, Attn: Donor Services, P.O. Box 650309, Dallas, TX 75265-0309. What’s more, I want to thank Mary Lou for the character she displayed in mastering breast cancer, and for being a role model (and a comrade in arm) for others who have been afflicted by this pernicious disease. And, on behalf of the entire membership, I thank her for her service to TEI and wish her well in retirement.
Acknowledgments
TEI gratefully acknowledges the support of the following firms that, as of September 1, had become sponsors of the Institute’s
65th Annual Conference:
Platinum Gold Silver
Bingham McCutchen LLP ADP Alston & Bird LLP
Deloitte & Touche LLP Baker & McKenzie LLP Baker Botts L.L.P.
Ballentine Barbera Group Baker Hostetler
Ernst & Young LLP BDO USA, LLP BNA/Tax Management
Grant Thornton LLP Bureau Van Dijk Covington & Burling LLP
KPMG LLP Ceteris Ivins, Phillips & Barker
Mayer Brown LLP CORPTAX, Inc. Latham & Watkins LLP
Crowe Horwath LLP Miller & Chevalier Chartered
PricewaterhouseCoopers LLP DuCharme, McMillen & Associates Morgan, Lewis & Bockius LLP
Sutherland Asbill & Brennan LLP Duff & Phelps Corporation Pepper Hamilton LLP
Thomson Reuters Fenwick & West LLP Skadden, Arps, Slate, Meagher & Flom LLP
Vertex, Inc. Jefferson Wells Longview Solutions Gold
McDermott Will & Emery LLP Chamberlain, Hrdlicka, White, Williams
McGladrey & Martin
True Partners Consulting LLC
White & Case LLP