Hold on Tight—It’s 2018!

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As we closed out 2017, there was no shortage of apprehension, uncertainty, and stress around the tax world, as Congress and the White House sought to complete work on far-reaching tax legislation. To be sure, the sausage-grinding exercise that passed for tax reform bore little resemblance to the order and decorum that largely characterized the tax reform process that took place in the mid-1980s, the last time Congress successfully undertook a major overhaul of the Internal Revenue Code. For many—or perhaps even most—of you who might not have been around back then, Dan Rostenkowski (D-Illinois), chair, House Committee on Ways and Means; Senator Robert Packwood (R-Oregon), chair, Senate Finance Committee; and Reagan White House Chief of Staff James Baker, working with numerous legislators and staff members (including more familiar names like Hank Gutman and David Brockway), came together to help enact major tax legislation.

That was then.

The efforts having recently been completed starkly reflect a lack of careful and thorough public consideration of the pros and cons supporting these statutory provisions, thus exposing everyone to the prospect of undiscovered and unintended consequences, as the legislative process shifts from enacting laws to implementing them. The corporate AMT/R&D conflict is but one example—there will be more. And given the vast goodwill that currently exists in Congress, the prospects of a “technical corrections” bill are uncertain at best.

Against this background, TEI waded into the tax reform debate, recognizing that our greatest and unparalleled strength—i.e., the breadth and diversity of our membership—was also our greatest limitation. Because we will never knowingly advocate for one industry position to the detriment of another, frequently we sit out issues, notwithstanding a desire to engage.

Yet, as many of you have observed, we were able to successfully leverage our members’ industry experience in two important ways. First, we identified areas in the legislation that will add compliance burdens (e.g., increased FTEs, new and different information and documentation requirements, etc.) to the jobs we do and the departments we serve. And, second, we identified some of the financial statement and reporting impacts that the provisions may have. In short, these are two of TEI’s “lanes of expertise” where we can speak—and be heard. Just as important, given the volume of Treasury regulations that will likely be required to interpret the new Code provisions, the work done regarding the proposed legislation will serve as the basis for significant—and, we hope, productive—discussions with Treasury about how to craft regulations to minimize compliance burdens. The upcoming liaison meetings with both IRS and Treasury (targeted for February 2018) and, we hope, with FASB shortly thereafter will present opportunities for TEI to share its perspective and help shape the regulatory framework.

So, who did that work? Well, you did!

Under the leadership of John Mann (Chicago Chapter) and TEI’s tax reform task force, eleven working groups were formed to examine the legislation and identify compliance and implementation challenges that might result as well as ways to potentially mitigate them. From industries like aerospace and defense to financial services to insurance and many more, our members rolled up their sleeves and dug in, and I am very proud of their work on behalf of the Institute.

But our efforts are only starting. During our Midyear Conference, built around the theme “Transforming the Tax Function—From Tax Reform to the Digital Economy,” we will examine how tax reform, in all of its dimensions, may affect you and your company’s operations. The conference has a track dedicated exclusively to tax reform. I encourage you to visit my18.tei.org, to review our program and register.

Finally, congratulations to the members and leaders of our Canadian income tax and commodity tax committees as well as to Fraser Reid, regional vice president, Region I, for the successful series of liaison meetings with the Canada Revenue Authority and the Department of Finance. The meetings provided multiple opportunities for our members to continue to build connections with Canadian tax authorities, and they provided numerous opportunities to stay engaged on a variety of issues. The substantive discussions and active engagement that occurred represents TEI at its best. Thank you also for all the courtesies that were extended to me during my visit to Ottawa.

I am energized about the activity and progress we are making on all fronts, and I look forward to seeing you at a chapter or national event or hearing from you with an idea or feedback about how to make TEI an even more member-focused organization.

Warm regards,

 

 

 

Robert L. Howren
TEI International President

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