As is so often the case, the Tax Section continues to be involved in a number of interesting and impactful areas that demonstrate the importance of the Section to our members, tax officials, and the development of tax policy.
Technical Meetings with IRS and the Treasury Office of Tax Policy
On December 10, 2019, members of the Tax Section met with representatives of the IRS and the Treasury Office of Tax Policy (Treasury) to discuss issues of common interest and to share ideas and proposed solutions. We were fortunate to have in attendance IRS Commissioner Charles P. Rettig (a former Vice Chair of Administration) at our meeting with the IRS, and Assistant Secretary for Tax Policy David Kautter at our meeting with Treasury.
At our meeting with the IRS, topics for discussion were wide-ranging, from limitations on IRS requests for client lists in promoter penalty investigations to technical issues arising when individuals are treated both as a partner and as an employee of the same partnership. Other topics included the elimination of attorneys within the IRS Office of Professional Responsibility; the impact of recently proposed regulations on the calculation of built-in gains and built-in losses under section 382; tax matters involving cryptocurrency; interest deductibility; foreign taxes; and various administrative matters.
At our meeting with Treasury, we discussed many of the same topics raised with the IRS, as well as the proposed regulations under section 451 dealing with recognition of income by accrual method taxpayers. Members of the Tax Section, IRS and Treasury continue to work on these issues, and the Tax Section intends to provide comments on some of these issues in the future.
As you may expect, considerable work goes into the preparation and planning for these meetings. The Tax Section is particularly grateful for the help of members who prepared for and participated in these meetings, as well as the representatives of the IRS and Treasury who attended. Like our members, the IRS and Treasury representatives spend considerable time and effort preparing for and participating in these meetings, and we truly appreciate that effort.
The Midyear Meeting
The Midyear Meeting in Boca Raton was extraordinarily successful, attracting more than 1,000 attendees. Our committees provided more than 100 insightful CLE panels on a number of interesting topics, proving again that the Tax Section truly provides best-in-class CLE. Of particular note, I want to recognize the work undertaken by the Young Lawyers Forum (YLF) and the Diversity Committee for presenting an excellent “Tax Bridge to Practice” series. The program included a conversation with Chief Judge Maurice B. Foley of the U.S. Tax Court, a panel dealing with ethical issues that attorneys face when representing clients before the IRS, and a panel involving the exchange of information with state and local tax authorities. If you have not attended the Tax Bridge to Practice series in the past, I invite you to do so at one of our upcoming meetings. The Section must continue to support the impressive work done by our YLF and Diversity members.
This year I was privileged to attend a number of sessions of the Annual Law Student Tax Challenge. This program is in its 19th year, and the J.D. and LL.M. students do an excellent job of preparing and defending answers to thorny real-world tax problems. Congratulations are in order for Amanda Krugler and Scott Sullivan of the University of Kentucky College of Law, who were awarded first place in the J.D. Division, and Jennifer Breton and Joshua Runyan of Temple University Beasley School of Law, who were awarded first place in the LL.M. Division. Information about the competition winners and video clips from oral rounds are available in the Young Lawyers Corner of this issue of ABA Tax Times.
The Tax Section presented a number of awards and honors at the Midyear Meeting in recognition of the achievements of deserving members. For the first time in the Tax Section’s history, there were three recipients of the Janet Spragens Pro Bono Award. The Section honored Hardin Matthews for his tireless work on behalf of low-income taxpayers in the Boston area, and Kelley Miller and Larry Sannicandro for their important contributions to a project to provide tax relief to exonerated individuals. Congratulations to these three recipients for all of their hard work on these pro bono activities.
Equally important is recognition of the work of our Public Service (Brunswick) Fellows. The Tax Section, through the Tax Assistance Public Service (TAPS) fund, sponsors a two-year fellowship for recent law school graduates to provide tax-related legal assistance to the underserved. Each year, the Tax Section sponsors up to two fellows who work for sponsoring non-profit organizations. Our current fellows are Omeed Firouzi, who works with Philadelphia Legal Services, and Evan Phoenix, who works with Bet Tzedek Legal Services in Los Angeles. These two are doing outstanding work on behalf of the Tax Section and underserved populations. ABA Tax Times interviewed Omeed Firouzi in the Summer 2019 issue, and this issue features an interview of Evan Phoenix.
At our Plenary Session, Patricia (Trish) Refo, the ABA President-Elect, spoke to the Section about the importance of its volunteer work and government submissions. Trish encouraged attendees to become active in pro bono matters, and to recommend ABA and Tax Section membership to others because of the value that such membership provides. Trish is a partner of our former Vice Chair for Pro Bono and Outreach, Bahar Schippel.
The keynote speaker at the Plenary Session was IRS Chief Counsel Michael J. Desmond. Michael, of course, was formerly a member of the Tax Section’s Council and an active participant in the Section’s Standards Committee. Michael focused on the role of litigation in tax administration. He noted the IRS’s role in balancing a taxpayer’s rights to go to IRS Appeals with the need for IRS to designate a case for litigation. Michael described the internal IRS review process where the IRS decides whether to deny a taxpayer’s request for Appeals review, and he is personally involved in that review process. You can listen to Michael’s remarks here.
The TAPS fund is an endowed fund with the mission of supporting tax-related public service programs of the Tax Section. As an endowed fund, only the income earned on the TAPS fund may be used to support the Tax Section’s public service programs. Currently, the income from the TAPS fund is used to support the Brunswick fellows. Please make a commitment to donate to the TAPS fund so that the Tax Section can increase its support of worthwhile pro bono activities.
I am pleased to report that budgetary cuts made by Council over the past five fiscal years have resulted in a permanent reduction of over $500,000 in Tax Section annual expenses.
Tax Section leadership continues to look for ways to reduce expenses and still provide the superior level of services that our members have come to expect. In that regard, Tax Section leadership is looking at ways to reduce hotel expenses over the mid- to long-term. Because of our need for substantial meeting space, the Tax Section has had only a limited number of cities in which it can book space. Moreover, hotels must be booked four to five years in advance in order to obtain the best deal for the Tax Section. As part of the planning process, Tax Section staff will be looking at ways to reduce the need for meeting space so that the Tax Section may take advantage of holding meetings in lower cost venues. This will be a long-term initiative, and we welcome the input of our Committees and members in this process.
Despite our cost-cutting initiatives, and the fantastic work of Tax Section staff in generating revenue and holding down expenses, the Tax Section is projected to incur meaningful deficits on a going-forward basis. To alleviate those projected deficits, Council voted at the Fall Meeting to increase membership dues from $75 per year to $105 per year. The ABA Board of Governors approved the dues increase on February 13, 2020, effective for the fiscal year beginning September 1, 2020. Members will see the dues increase in invoices to be mailed in May.
I want to let you know that Council did not take this action lightly. First of all, unlike other Sections, Divisions and Forums of the ABA, the Tax Section receives no general revenue support from the ABA. In return for conceding ABA general revenues, the ABA has granted the Tax Section more autonomy with respect to certain of its activities. In effect, the Tax Section is “on its own” with respect to revenues and expenses, and Council determined that the fiscally sound approach was to increase dues and thereby reduce projected deficits.
Tax Section leadership continues to look for ways to generate new revenue (e.g., additional sponsorships) and control expenses. We invite our members to share their thoughts with Tax Section leadership concerning revenue generation and cost containment. We all want the Tax Section to continue to be on a firm financial footing so it can continue to support pro bono activities, and continue to provide the level of services that our members expect and deserve.
Tax Section Staff
Special thanks are due to our Tax Section staff for their hard work in connection with the Midyear Meeting. The Midyear Meeting went off flawlessly, and the Section has received a number of compliments on the food and location. Great job!
The Upcoming May Meeting
There is considerable excitement around the upcoming May Meeting. First of all, the Section will change the May Meeting hotel location for the first time in decades. The new location will be the Marriott Marquis, and the May Meeting runs from April 30 to May 2, 2020. In addition to world-class CLE, we will have the formal launch of the “Women in Tax Forum” initiative. The Plenary Session will feature a tribute to Justice Ruth Bader Ginsburg and the late Professor Martin D. Ginsburg for their contributions to gender equality. Justice Ginsburg will attend the Plenary Session. Registration is now open – and I look forward to seeing you there! (3/18/20 update: Due to COVID-19, the May Tax Meeting has been cancelled.) ■