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February 16, 2017 From the Chair

Interesting Times

By William H. Caudill, Norton Rose Fulbright LLP, Houston, TX

As I write this column, we are well into the Tax Section’s 2016–2017 year.  I am pleased that we have made good progress on many tasks, but there is much that remains to be accomplished, not least of which is how we as tax lawyers will prepare for the tax reforms that will likely come our way as a result of this last election cycle and how the Section can contribute to the process. As has been said many times over the last several months, “May you live in interesting times,” aptly describes our current environment.  Whether you believe this is good or not, we, as tax lawyers, are in for an interesting ride. 

Tax Reform and Law Improvement

The Tax Section should not involve itself in partisan politics as the process unfolds, but we should respond to the several proposals that have been advanced.  As past Section Chairs and I have urged, the Tax Section should be prepared to lend its voice to those of others who seek to reform our tax system, to make it simpler, fairer, and more transparent.

We were fortunate at our Joint Fall Meeting last year to have had the Chief Tax Counsel of the House Ways and Means Committee, Barbara Angus, present an outline of the Committee’s ambitious proposals to reform the Internal Revenue Code with a goal of making our nation’s businesses more competitive.  Those proposals, entitled “A Better Way,” were released last June as a blueprint for lowering individual and corporate tax rates, lowering capital gains tax rates, and creating a border-adjustable, international business tax system.  With Ms. Angus’ presentation at the Joint Fall Meeting, we have advanced the timetable for our learning about and working with these proposals.

One way that the Section continues to lend its voice is through commenting on legislative and regulatory matters, an effort that has taken on greater significance with the shrinking resources available to the Internal Revenue Service.  We have been requested to provide more government submissions on an urgent basis.  I encourage each of you to become involved in one or more law improvement projects with your Committee.  You will find participation in these projects to be one of the most rewarding aspects of your Section membership.

Midyear Meeting

Approximately 1,000 people attended our Midyear Meeting in Orlando.  Consistent with the high standards of the Section, 35 of our committees presented well over 100 CLE panels on a broad array of current practical and policy-related topics. I commend our very active Young Lawyers Forum (YLF) and Diversity Committee for organizing an impressive number of programs, including a four-hour “Tax Bridge on the Road” program with introductory sessions on crowd funding transactions, expert witnesses in Tax Court, Subpart F, and section 385. In addition, the Diversity Committee presented panels focusing on cultural issues affecting family business succession planning and providing economic stimulus to low-income communities. The YLF also presented a session on the nuts and bolts of criminal tax.  If you have not attended programs put on by our Diversity Committee or YLF in the past, I hope you will plan to do so at the May Meeting in Washington.  The Diversity Committee and the YLF are the future of the Section, and they deserve our support.

ABA President-Elect Hilarie Bass attended the Council meeting on Thursday morning.  At our meeting, President-Elect Bass emphasized that recruiting new members continues to be “Job One” for all ABA members, including Tax Section members. The task presents new challenges as we devise strategies to attract millennials, a generation known to be less inclined to join professional organizations. We know that retention rates increase significantly when ABA members become active in a Section or other entity. Please do your part to recruit one or two young lawyers to the Section and help us discover how to encourage them to stay.

President-Elect Bass also outlined a number of projects that the ABA will undertake at home and abroad during her tenure. At home, one of her initiatives will be to engage the various stakeholders—outside the law school accreditation process—in developing innovations for the legal education system to address the challenges facing new and future lawyers. Beyond our borders, through its Rule of Law Activities, the ABA is exploring how it might assist the Viet Nam Bar Federation in increasing the number of lawyers in that country to help instill the rule of law.

G. William (Bill) Hoagland, Senior Vice President for the Bipartisan Policy Center with more than 30 years of government service (including 4 years as Policy Advisor and top budget aide to the Senate Majority Leader and 20 years as Director of the Senate Budget Committee) presented the keynote address entitled “The Federal Budget, Guns-Butter—Debt & Taxes” at Saturday’s Plenary Session.  Bill is widely recognized as one of the brightest and most experienced individuals on budget and tax issues in the country.  His presentation on U.S. budget issues was well done and inspired us all as to our obligations as responsible citizens.  You can listen to Bill’s presentation and view his materials here.

The Section also presented a number of awards and honors at the Midyear Meeting, most notably the Janet Spragens Pro Bono Award to C. Wells Hall III of Charlotte, North Carolina.  I am delighted to recognize Wells for his extraordinary efforts on behalf of the military and the Section’s Adopt-A-Base program.  The Section also welcomed the incoming class of Nolan Fellows: Elizabeth Blickley of Potomac, Maryland, Matthew Cooper of Arlington, Virginia, Nikki Hasselbarth of Baltimore, Maryland, Vanessa Lafleur of Baton Rouge, Louisiana, Rafi Mottahedeh of Chicago, Illinois, and Susanna Ratner of Philadelphia, Pennsylvania.  You can read more about Wells and our Nolan Fellows program inside this issue of ABA Tax Times.  Please join me in congratulating them on their well-deserved honors.

I want to thank the Section’s staff, led by our Acting Director, Ty Hansen, for all their hard work in connection with the Midyear Meeting.  We are fortunate to have the opportunity to work with such a talented and highly motivated group of individuals.  I also want to thank the Section’s Committees for organizing such outstanding panels.  Once again, all of them assured a successful and well-run meeting.

Law Student Tax Challenge

In its 16th year and enjoying immense success, the Annual Law Student Tax Challenge finals, organized by our Young Lawyers Forum, were held during the Midyear Meeting. Congratulations to Tyler Johnson and Anna Peckjian of Northwestern University Pritzker School of Law, who were awarded first place in the J.D. Division, and Samuel Hampton and Daniel Neumeyer of the University of Washington School of Law, who were awarded first place in the LL.M. Division.  The competition winners and video clips from the oral rounds are available in the Young Lawyers Corner section of this issue of ABA Tax Times.

Pro Bono, Public Service, and TAPS Endowment

The Section has strong pro bono and public service programs.  We have funded recent law school graduates (Brunswick Fellows) for two-year 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 programs is a great way to do that.

Funding is required for these programs.  As described later, the Section currently is suffering significant budget issues, and these programs must be reconsidered by Council in the process of reconciling these issues.

The endowment for the Tax Assistance Public Service (TAPS) program has been established to address those funding issues, make permanent the public service fellows 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 $500,000 of the additional $2.5 million has been raised, and we will work to raise the remaining target over the next three years.  All of the Section’s officers and Council members have made commitments, but we need broader support.  I encourage each of you to make your own commitment to the TAPS effort.  The blue ribbon on your meeting name badge shows that you have made a commitment.  Please consider obtaining your own blue ribbon.

Budget Deficit

A critical issue that I have previously mentioned in my columns 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 sponsorships, and reduced external CLE revenues.  The Section continues to review every significant expenditure while we strive to maintain the important networking opportunities and events that support our goals and add value for Section members.  The Council is also considering increases to the Section’s dues and meeting registration fees.

Unsung Heroes

As I noted in remarks to the Plenary Session at the Orlando meeting, many of our officers, directors and Committee leaders are recognized, from time to time, for their hard work, such as Shelly Banoff from the Partnerships and LLCs Committee and Eric Solomon from Corporate Tax, but there are many other hard-working participants in our Section who also deserve to be recognized.

Two that I commended from the podium are Prof. Linda M. Beale of Detroit, Michigan, who serves as the Supervising Editor of our ABA Tax Times and as a Vice Chair of the Publications Committee. She is a past Chair of the Standards of Tax Practice Committee and is also a member of the Government Submissions, Corporate Tax, and Financial Transactions Committees. I’d also like to recognize Craig A. Houghton of Fresno, California, who served for many years as Chair of the Business Cooperatives and Agriculture Committee, and is a member of the Corporate Tax, Government Submissions, Individual and Family Taxation, S Corporations, and Sales, Exchanges and Basis Committees.

If there are others whom you believe should be recognized in this way in the future, please let me or our Acting Director, Ty Hansen, know.

Looking Forward

Next up is the May Meeting.  I encourage you to attend this meeting, which will be held May 11-13, 2017, in its traditional location at the Grand Hyatt in Washington, D.C.  The May Meeting is always our most well-attended meeting, full of excellent CLE and many opportunities to hear from and interact with our government guests.  I am confident that it will be a rewarding experience for all who attend.  I hope to see you there.