We had a great joint meeting in Boston with the Real Property, Trust and Estate Law Section at the end of September. There were approximately 1,100 in attendance, and I was inspired by the enthusiasm about the activities of the Tax Section for the coming year. We have a lot of work to do, and we are going to have a good time doing it.
Our friends in government appeared in strength at many of our Committee meetings, with 106 government and judicial personnel in attendance (including 92 speakers). At the Partnerships and LLCs Committee, Ossie Borosh, Senior Counsel, Office of Tax Legislative Counsel, reported that the regulations under sections 707 and 752 were released on the day of the meeting and described the contents of the new regulations. This was an exciting announcement, leading to a number of thought-provoking questions about the workings of the new regulations. The presentation demonstrated the high standards for Tax Section meetings. Similarly, at the Corporate Tax Committee, Kevin Jacobs, Senior Technician Reviewer, Office of Associate Chief Counsel (Corporate), and Filiz Serbes, Branch Chief, Associate Chief Counsel (Corporate), reported that the regulations under section 385 had been sent to the Office of Management and Budget for final review, and they described the contents of the new regulations in general terms. Again, the government speakers responded to many questions from attendees, providing an excellent introduction to these new developments for corporate tax practitioners. The regulations were released not long after the meeting on October 13, 2016, and were published in the Federal Register on October 21, 2016.
Cathy Hughes, Attorney-Advisor, Office of Tax Legislative Counsel, addressed our group about the proposed section 2704 regulations. She noted that the proposed regulations have been misconstrued. The effect of disregarding a disregarded restriction is not intended to be as pervasive as indicated in the comment criticisms.
At the Plenary Session, Barbara Angus, Chief Tax Counsel, House Committee on Ways and Means, reported on the Committee’s ambitious plans to reform the Tax Code with a goal of making the country’s businesses more competitive. These plans, described as “A Better Way,” were released by the House Republicans this past June as a blueprint for lowering individual and corporate rates, lowering capital gains rates, and creating a border adjustable, international business tax system.
Committee Programs and Law Improvement Programs
In addition to the exciting developments described above, our Committees conducted consistently excellent programs at the Boston meeting—some 153 separate offerings! Clearly, these programs are valuable benefits for our members.
We also have been busy on the law improvement front. In response to a request from the House Committee on Small Business, the Administrative Practice Committee, through their chair, George Hani, organized informational testimony about the impact of Internal Revenue Service examinations on small businesses. Jennifer Breen, one of the Committee’s vice chairs, presented the testimony and appeared with Julian Kim (Vice-Chair, Government Relations) and Sheri Dillon (Council Director) at the hearings on behalf of the Section. You can read the written testimony and also view a video clip on our website.
We have six technical comment projects in development, and there are seven more under discussion. I look forward to seeing these projects progress.
Each Committee is urged to undertake at least one law improvement or government submission project per year. Please be on the lookout for appropriate comment projects and, even better, volunteer to assist in developing a Section response to a request for comments.
New Diversity Requirements
As I mentioned in my last column and in my remarks at the Plenary Session in Boston, the ABA Board of Governors has approved a new policy requiring speaker diversity in all ABA-sponsored CLE programs that involve three or more speakers. For programs with three or four speakers, there must be at least one diverse speaker. For programs with five to eight speakers, there must be two diverse speakers. For programs with nine or more, there must be three. If the program does not comply, CLE credit will be denied.
These requirements are not effective until March 1, 2017, but we should begin our work to comply, panel by panel, as soon as possible. The Tax Section has done well in achieving our diversity goals, with about 38% diverse representation on our panels, in the aggregate, at our meeting last May. The focal point for this compliance effort will be our Committee Chairs as they formulate plans for the upcoming meetings. The Committee Chairs will then work with Scott Michel (Vice-Chair, Committee Operations) to ensure technical compliance with the ABA’s new diversity requirements as well as with the Section’s diversity guidelines which also embrace diversity in firm representation, geography, and age. Please contact either me, Scott Michel, Joan Arnold (Vice-Chair, CLE), or Ty Hansen (the Section’s Acting Director) with any questions about this effort.
Pro Bono and Public Service
The Section has a number of successful pro bono and public service programs born out of a commitment to pro bono and public service that dates back many decades. Every year since 2009, we have funded two recent law school graduates (Brunswick Fellows) for two-year Public Service Fellowships designed to provide representation for low-income taxpayer communities. The Section also participates in the Tax Court Calendar Call, Volunteer Income Tax Assistance, and Adopt-A-Base programs. All of us have an obligation to give back to the tax system, and participation in one or more of these Tax Section programs is a great way to do that.
Funding is required to support these programs. As described later, the Section currently is dealing with significant budget issues. Without additional funding, the Council must continually reassess these programs as part of the process of reconciling budgetary and programming needs.
The Tax Assistance Public Service (TAPS) endowment has been established to address funding issues, make permanent the Brunswick Public Service Fellowship program, and remove the program from the vicissitudes of the Section’s budget.
The TAPS endowment received an initial contribution of $2.5 million from the Section’s reserves. The endowment has an additional fund-raising goal of $2.5 million for a total of $5 million, the income from which is designed to support the Brunswick Fellows for the foreseeable future.
Approximately $425,000 of the additional $2.5 million has been raised, but there remains much to do to raise the remaining target over the next three years. All of the Section’s officers have made commitments, but we need broader support. I encourage each of you to make your own commitment to the TAPS effort and show your support for the Section’s efforts to provide assistance to the underserved. The blue ribbon on your Section Meeting name badge shows that you have made a commitment. I look forward to seeing many more blue ribbons at future Section Meetings.
As ABA President Linda Klein has emphasized, new member recruitment is Job One. The Tax Section is a great value proposition, both from the standpoint of national technical tax information and networking opportunities. Please make an effort to recruit one or two new members this year and tell them about the rewards of membership in the Section.
This year, the ABA has introduced a new membership program where LL.M. students (in addition to regular J.D. students) will be allowed to join without paying dues, so long as they are students. In addition, if a student enrolls as a premium member (only $25), that student is offered a $250 discount on the BAR/BRI review course. More details are available at www.abaforlawstudents.com.
Law Student Tax Challenge
Speaking of law students, in September the Section kicked off the 16th Annual Law Student Tax Challenge (LSTC), and as I am writing this, many J.D. and LL.M. teams are scrambling to prepare their materials to meet the LSTC’s critical November deadline. This highly popular competition, conceived and organized by our Young Lawyers Forum (YLF), is a great way for law students to showcase their knowledge and gain valuable exposure to the tax law community. On average, more than 60 two-person teams compete in the J.D. Division and more than 40 two-person teams compete in the LL.M. Division. Many of our past winners move on to become active in the Section. For example, one such winner, Anne-Marie Rabago, is featured in the Interview section in this issue of ATT.
Based on the written work product, which is due November 4, six teams from the J.D. Division and four teams from the LL.M. Division will be selected to receive a free trip (including airfare and accommodations for two nights) to the Section’s 2017 Midyear Meeting this January. Each team will defend its submission before a panel of judges, including some of the Section’s most experienced tax practitioners, Tax Court judges, and other prominent government officials. This is truly a great opportunity for members to participate as judges. In the past several years, I have truly enjoyed teaming with several of our YLF members, senior representatives of the Internal Revenue Service, including Deborah Butler (former Associate Chief Counsel), Bill Paul (past Section Chair and current Deputy Chief Counsel), and Karen Hawkins (former OPR Director and current Chair-Elect of the Section) and several Tax Court judges (including Judges Cohen, Marvel, Panuthos, and Wherry). Please consider volunteering to serve as a judge and taking advantage of this opportunity to engage with the LSTC law student competitors who have demonstrated a real interest in tax. They are the future of our profession.
One critical issue that our Immediate Past Chair, George Howell, mentioned in his last column and I mentioned in my first column is our Section’s current budget deficit. Our expenses have been just about the same over the past three years, but our revenues have declined due to reduced membership, reduced corporate sponsors, and reduced external CLE revenues. Your Section officers, Council directors, and Section staff will be reviewing every significant expenditure and revenue item to reconcile the deficit.
Items we have already addressed include the Companion Events and the Companion Breakfasts offered at Section Meetings. Due to minimal participation and growing, excessive costs, these items have been discontinued. In lieu of the Section-sponsored companion activities, our Section Meeting staff will coordinate with any companions interested in local sightseeing activities (several longstanding companions will also assist), and all companions with a name badge will be allowed access to our regular Hospitality area for breakfast.
The first-time attendees’ dinners at Section Meetings, likewise, have become costly and poorly attended. We have eliminated this event, but we will be redoubling efforts to make first-time attendees feel included at the meeting, beginning with the complimentary Welcome Reception on Thursday evening.
The Section Reception on Friday evening has also seen significant increases in costs and declines in attendance (even with the $80 ticket charge, the cost to the Section is two and one-half times the ticket price). It will be discontinued for the Midyear Meeting in January. Instead, it is being considered to extend the Young Lawyers/Diversity Reception (a complimentary event) for all until 7:30 p.m. to underscore the Section’s interest in providing more inclusive yet budget-friendly events that all attendees can enjoy. Continuing developments on this will be reported.
On the revenue side, it is worth noting that we have not raised Section meeting registration fees since 2012, despite increasing costs. Council, therefore, voted to increase meeting registration fees for Section Member, non-Section Member and non-ABA attendees, beginning with the 2017 Midyear Meeting in Orlando. Section Meeting fees for young lawyers, academics, and public-sector attendees, however, have not been raised.
Similarly, Section dues have not been raised in four years. Council approved an increase to $75, effective in September 2017.
The Section is committed to providing full value for your membership, and we welcome your comments as we work through this process. I will use my column in ATT to continue to keep you informed as our budgetary issues are addressed.
At the Boston meeting, I noted in my remarks to the Plenary Session that many of our Section officers, Council directors, and Committee officers are recognized, from time to time, for their hard work, such as fine tax lawyers like Terry Cuff from Partnerships and LLCs, and Mark Silverman and Bob Wellen from Corporate Tax. There are, of course, many active members in our Section that also deserve to be recognized.
Two that I commended from the podium at the Boston meeting were Jordan Weiss of Los Angeles, California, who has participated for many years with the Partnerships and LLCs Committee and served as Vice Chair of the former Committee on Business Cooperatives and Agriculture, and Prof. Bill Lyons, formerly of Lincoln, Nebraska, and now of Castine, Maine, who has served since 2007 as Associate Editor-in-Chief of The Tax Lawyer.
If there are others that you believe should be recognized, I hope you will let us know. The Section would not be what it is today without the efforts of its many unsung heroes.
We are looking forward to the Midyear Meeting, which will be held January 19-21, 2017, at the Hilton Bonnet Creek and Waldorf Astoria in Orlando, Florida.
Due to a scheduling conflict that none of us could have predicted would become the culminating event of a highly unusual election year, our nation’s Presidential Inauguration will take place during the Midyear Meeting on Friday, January 20, 2017. We are working with the hotel to accommodate meeting attendees who may wish to follow the Inauguration Day events. In any event, for those interested in the outcome of the election, the conversation at the meeting is certain to be lively. I look forward to seeing you there!
In my first months as Chair, I have enjoyed getting to know the Section staff more closely. I would be remiss in closing if I did not recognize their many efforts on behalf of the Section and, in particular, the many contributions of Ty Hansen, as our Acting Executive Director. ■