New York Chapter
Holds 16th Annual LB&I Conference

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From left: DeLon Harris, Tom Wharton, Cathy Jones, Roland Barrel, Barbara Harris, and Kevin Brown.
From left: Reinhard Schmuck, Lori Matulewicz, Paul Darcy, Sharon Katz-Pearlman, and Matt Lerner.







On September 19, 2017, the IRS held its LB&I Northeastern Compliance Practice Area (NECPA) conference in New York City. The conference originated on the heels of 9/11 in October 2001 as the IRS Financial Services conference co-sponsored by LB&I and TEI’s New York Chapter. As the IRS has evolved, so has the conference.

The conference kicked off with a panel on LB&I examination process updates headed by Barbara Harris, director of NECPA, with Catherine L. Jones, director of field operations—North Atlantic, and DeLon Harris, director of field operations—Mid-Atlantic. This has been an annual feature of the conference. The New York Chapter was fortunate to be joined by Kevin M. Brown, partner, PWC, and Roland Barral, of counsel, Skadden, Arps, Slate, Meagher & Flom LLP. There was a lively discussion of the LB&I examination process, information document requests (IDRs) such as the Acknowledgment of Facts request, campaigns, and prefiling agreements.

Next came a timely panel on the BBA New Partnership Regulation regarding partnership audits. This panel included Drita Tonuzi, deputy chief counsel (operations), and Joy Gerdy-Zogby, counsel (procedures and administration), both from the IRS, with Julie Canty, partner, Ernst & Young, and Alysse McLoughlin, partner, McDermott Will & Emery.

The IRS released the proposed regulations in June after an earlier attempt was withdrawn in response to the Trump administration’s memorandum freezing guidance. According to Tonuzi, the IRS’ original goal was to release the proposed regulations before October 2016, but “unfortunately we didn’t quite make that date and then we got caught up in the change of administration.” According to Tonuzi, the IRS’ goal was to finalize the guidance by December 31, 2017. “That time is quickly approaching [and] we’re going to do the best we can,” she said, adding that “we are mindful that you folks have asked us to prioritize our projects” to provide certainty where it is needed earliest.

The third panel of the day covered recent changes at Appeals, procedural considerations, and resolution tools and delved deeper into the Acknowledgment of Facts IDR. The Chapter was fortunate to have returning conference regulars Reinhard Schmuck, program manager in the IRS Appeals Office, and Paul Darcy, IRS senior counsel, along with Sharon Katz-Pearlman, principal, KPMG, and Matthew D. Lerner, partner, Sidley Austin. As expected, the hot topic was the potential presence of examination employees in Appeals conferences.

“At the end of the day, it goes back to our Appeals mission, which is we are supposed to act in a manner that is fair and impartial to both the taxpayer and the government,” Schmuck said. He added, “I don’t really see the harm in having an open dialogue between the exam team, counsel, and the taxpayer and representative.”

The conference closed with a session on global tax issues, including transfer pricing update/global environment, BEPS (base erosion and profit shifting), transfer pricing practice, and corporate inversions. A lively discussion took place, with John Hughes, director of the IRS’ Advance Pricing and Mutual Agreement Program, and Justin Campolieta, special trial attorney (tax), also at the IRS, joined by Kristine Riisberg, principal, Deloitte; Marc Levey, partner, Baker & McKenzie; and Thomas R. May, partner, Baker & McKenzie.

Plans are already underway for next year’s conference.

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