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Vol. 36 No. 3 - June 2017

Tax Reform Discussions and Other Developments

From the Chair

Tax Reform Discussions and Other Developments

We are now heading into the last part of this 2016-2017 Tax Section year, having most recently completed the Section’s May Meeting in Washington—the third and largest meeting in our annual cycle of Section meetings. We have made good progress on many tasks, not least of which is the vital role of educating and informing our members and the public at large about tax reform.

Most U.S. states and many local governments raise revenues through the imposition and collection of sales and use taxes. Compliance with the welter of sales and use tax laws that impact interstate commerce is becoming increasingly complicated. Even the best, most expensive software may not be accurate. In the last few years, another complication has arisen as an increasing number of states have begun to challenge the long-standing Supreme Court decision in Quill Corp. v. North Dakota, that limited the exercise of state tax jurisdiction over nonresident businesses.

On March 17, 2017, the U.S. District Court for the District of Nevada issued its decision in Sexton, becoming the first court outside of the District of Columbia to adopt the D.C. Circuit’s holding in Loving. While the acceptance of Loving outside the District of Columbia is not surprising, Sexton potentially extends the reach of Loving outside of the tax return preparation context and calls into question the regulation of advice rendered by tax professionals.

Battat v. Commissioner, 148 Tax Ct. 2 (2017), is a deficiency case in which the IRS determined a 2008 deficiency of more than $1.7 million, with additional amounts totaling $426,772. The petitioners attempted to disqualify Tax Court judges through a motion for recusal and, alternatively, a declaration that the President’s power in section 7443(f) to remove Tax Court judges (after notice and hearing for cause due to “inefficiency, neglect of duty, or malfeasance in office”) is unconstitutional. The opinion in the case provides a good historical review of the development of the Tax Court from the original Board of Tax Appeals, established as an independent agency in the Executive Branch, to an Article I court.

A recent decision by the Canadian Federal Court of Appeal in BP Canada Energy Company v. MNR reversed the judgment of the lower court and held that the Canada Revenue Agency (CRA) is not entitled to routinely demand access to taxpayers’ tax accrual working papers in the course of an audit. Taxpayers view this as a welcome curtailment of the CRA’s broad audit powers, reinforcing the public interest in encouraging full disclosure to independent financial statement auditors.

On November 1, 2016, the IRS issued Notice 2016-66, designating certain micro-captive insurance arrangements under section 831(b) as “transactions of interest” that, the IRS contends, have “a potential for tax avoidance or evasion.” The designation requires participating taxpayers and their advisers to file disclosures by May 1, 2017.

As a nation, we owe a great deal to our veterans for the sacrifices they make in service to this country. The active duty challenges faced by soldiers are enormous, but veterans also encounter well-documented obstacles when they transition back to civilian life. Catherine Strouse, a 2016-2018 Christine A. Brunswick Public Service Fellow, works at the Legal Aid Society of San Diego (LASSD) to help struggling veterans returning from active duty understand the special rules applicable to them. ATT recently contacted Catherine (CS) to discuss the important work she is doing through her Fellowship.

As I read the Second Edition of A Practitioner’s Guide to Tax Evidence in preparation for writing this foreword, I was struck by how many questions it answered that students and practitioners had asked me in the past few years. The book provides a useful guide for the practitioner preparing for a Tax Court trial or evaluating a case for settlement. Re-reading it in its entirety reminded me that I should be consulting it more often.

ATT welcomes readers to submit book and article reviews on tax topics that may be of interest to our members.

To the tune of Love and Marriage by Sammy Cahn and Jimmy Van Heusen and introduced by Frank Sinatra in the 1955 TV production of Thornton Wilder’s “Our Town.”

The Section of Taxation is pleased to honor Nina E. Olson as the recipient of its 2017 Distinguished Service Award in recognition of her service to the profession, service to the government, and service to the Section of Taxation.

The Section of Taxation is pleased to announce the recipient of the 2017–2019 Christine A. Brunswick Public Service Fellowship.

Government submissions are a key component of the Section's government relations activities. View our most recent submissions here. The full archive is available to the public on the website.

During the December IRS courtesy call, led by chair William H. Caudill, the Tax Section addressed recent procedural changes regarding lien release certificates related to Form 4422.

The Tax Lawyer, the nation’s premier tax law journal, is published quarterly as a service to members of the Tax Section.

Produced in cooperation with the Tax Section and published by ALI-CLE, The Practical Tax Lawyer offers concise, practice-oriented articles to assist lawyers with all aspects of tax law.

Registration for the 2017 IRS Nationwide Tax Forums is now open. Designed for tax professionals, the forums provide a wide range of educational programming, which is developed and presented by representatives of the IRS, the ABA Tax Section, and other national tax-related organizations.

ABA Tax Times (ATT) is looking for volunteers to join its ranks as associate editors to assist in writing and acquiring articles for publication.

ABA Tax Section meetings are a great way to get connected, get educated, and get the most from your membership!

Listen at your convenience to high-quality tax law CLE on a variety of topics.

Opportunities are available to enhance your visibility, grow your network, and expand your reach at ABA Section of Taxation meetings.

A must-read for anyone preparing for trial before the U.S. Tax Court, the Second Edition will take the reader step-by-step through the Federal Rules of Evidence as applied by the Tax Court and brings coverage of Tax Court opinions current through early 2017.

Did you know that Tax Section members have access to thousands of pages of cutting-edge committee program materials presented at Section of Taxation Meetings?

The ABA has recently released "Enhancing Justice: Reducing Bias," a bench book which examines the different approaches that courts can use to lessen the impact of implicit bias.

The Section of Taxation thanks the sponsors and exhibitors of the 2017 May Meeting.

Thomson Reuters Checkpoint Catalyst™ delivers tax research framed in an entirely new way, so you see the clarity, color and context you need to get the whole picture of each business tax issue.

Volume 36


August 2017

June 2017

February 2017

November 2016

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ABA Tax Times (ISSN 2381-5868) (formerly the NewsQuarterly) reports on developments pertaining to taxation, Tax Section news and meeting updates, and other information of professional interest to Tax Section members and other readers.

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