A year ago, when I became TEI’s President, few TEI members likely envisioned the buffeting that the economy would endure or the changes to be wrought to the political landscape. I know I didn’t. August 2010 seems such long time ago. Before the 2010 election and the ascendancy of the Tea Party. Before the worsening of the sovereign debt crisis in Europe. Before the debt ceiling debate in the United States. Before an almost single-minded devotion to deficit reduction crowded out discussion of what, in those quiet days of yesteryear, seemed transcendent — a focus on jobs — and truly possible — a debate on tax reform.
What I had no trouble imagining a year ago, however, is that TEI would respond — and respond well — to whatever challenges came our way. I am delighted to report that is precisely what happened. Last year, TEI adopted the theme of “Join Us, Grow with Us,” and we pursued objectives relating to our educational, advocating, networking, and management activities that would advance that theme and TEI’s overall mission of serving the in-house tax community. We made progress in all four areas.
Educating: Meeting the Challenges of a Changing World
While tax reform has (once again) taken a back seat to other priorities, the tax world has not been moribund. Policymakers and tax administrators have not been idle, and the uncertainty that characterizes the world economy has does nothing to mute the demand for companies to be more tax efficient and to do more with less. With every ruling or regulation, every court case, and every initiative emanating from the OECD or EU, tax executives have found themselves in need of comprehensive, affordable training.
And, as it has since 1944, the need has been met by TEI. During the past year, at the Institute level, TEI held 10 educational programs, which drew registrations nearly aggregating 2,000. They ranged from our week-long courses on Federal, International, and State & Local taxation, to advanced seminars on specialized topics (Consolidated Returns, Financial Reporting, International Tax Planning and Compliance, IRS Audits and Appeals, and the IRS’s new Schedule UTP) to the capstones — our Annual and Midyear Conferences.
Special mention is due our Schedule UTP seminar and annual tax controversy seminar. The IRS’s initiative on the reporting of uncertain tax positions has been a major focus of TEI’s since it was announced in January 2010. Thus, it was only natural for us to hold a special one-day meeting on UTP once the final schedule was released. As for the audits and appeals seminar, it has long been a mainstay of TEI’s curriculum, and 2011 marked the second time we offered an additional day devoted to managing foreign tax audits. Dollar for dollar, minute for minute, there is not a better, more comprehensive program with a more distinguished, sharing faculty.
I am especially proud of the Continuing Education Committee’s work on our two conferences. The fall conference in Chicago featured presentations by numerous governmental officials (including Heather Maloy of LB&I, Steven Miller of the IRS, and Stephen Shay and David Ernick of the Treasury). In addition, registrants were able to choose among sessions on topics as varied as the IRS’s new Quality Examination Program, accounting method changes, OECD and Latin American developments, and the codification of the economic substance doctrine.
The Midyear, too, played to TEI’s strength (and our Washington location). We had speeches by two U.S. Senators, IRS Commissioner Douglas Shulman, and LB&I Deputy Commissioner Michael Danilack. And the technical sessions continued TEI’s tradition of excellence, with a provocative panel on the “hard realities and no easy choices” associated with corporate tax reform and sessions on constitutional challenges to state taxes, managing a diverse workforce, and a plethora of other topics.
The earlier phrase “at the Institute level” is an important qualifier, because the programs TEI managed out of our Washington office were just the tip of a very large iceberg of outstanding conferences, seminars, and boot camps held by our chapters and regions. From Singapore to London, from Boston and Montreal to Seattle and San Jose, from Atlanta and Houston to Minneapolis and Milwaukee, TEI held nearly 600 educational programs this past year. As travel and training budgets continue to be scrutinized, the “local option” — affording in-house tax professionals excellent training without requiring them to get on a plane or check into a hotel — has taken on even greater significance. I congratulate TEI’s local leaders for responding so effectively to the changing realities of the tax education market.
Advocating: Sharing the Indispensable View of the Taxpayer
While the tax reform debate in the United States did not advance very far this year, TEI’s technical committees did not lack for work. I am exceptionally proud of TEI’s advocacy activities during my term as President. We not only followed up and followed through with our prior comments on Schedule UTP (for example, suggesting items for inclusion on the IRS’s online FAQs), but we stepped up our already considerable interaction with the OECD (on both direct and indirect tax matters) as well as the European Union (where we offered detailed comments on the future of the VAT).
In Canada, too, our work continued. Demonstrating that diligence is often rewarded, our 25 years of advocating for a corporate loss transfer system yielded rewards as the government launched a major consultation on the topic. We also contributed to Parliament’s pre-budget consultations, submitted comments on proposed legislation, and held four liaison meetings in Ottawa.
TEI’s U.S.-focused committees also kept pace. For example, our state and local portfolio continued to grow. We filed “friend of the court” briefs with the Supreme Court in an important economic nexus case from Iowa and with the California Supreme Court in two cases — one involving the State’s 20-percent substantial understatement penalty and the other relating to how remedies should be fashioned when a tax provision is found to be unconstitutional. We also submitted comments with Washington State’s Department of Revenue on nexus and sales factor sourcing. Finally, we received (and accepted) invitations to serve on state advisory boards in Louisiana and Georgia.
On the federal side of the ledger, we grappled with topics as expansive as FATCA, Business 1099s, and the IRS’s regulation of tax practitioners, as well as Schedule UTP. Add in our annual liaison meetings with the IRS, LB&I, and the Treasury Department, plus countless meetings and phone calls on the practical implications of what is being contemplated or proposed (or in the case of the Business 1099s, what was enacted), and you have proof positive of TEI’s value, not only to the membership but to the tax community at large.
Networking: We Are Not Alone
Call me old-fashioned, but I like looking people in the eye, reading their body language, shaking their hand. When TEI was founded in 1944, that was the primary way people interacted — or in modern parlance, networked. Face-to-face interaction remains a critical part of TEI, with our members talking confidentially with one another at local and Institute-level meetings. This past year, we’ve made strides to broaden in-person networking opportunities for Chief Tax Officers by hosting breakfast discussions at our conferences, and several chapters have also held CTO-focused events.
As TEI becomes more and more a global organization, however — and as the world becomes flatter — face-to-face communications are not the only way of networking. Increasingly, we interact remotely, though websites, blogs, listservs, and myriad other technological means. For this reason, TEI has devoted considerable time and attention to revamping our website to increase its utility as an effective communications, education, and networking tool. We have created a
LinkedIn presence and a Twitter feed, and are weighing whether and how much a presence we should have on Facebook (and Google+). None of these tools, however, has value in and of itself. They are collectively valuable only if they advance the organization’s mission of creating a network of tax professionals who can learn from, and are willing to help, their colleagues. Help us do that by giving us your feedback.
Managing: Preparing for the Future
One of TEI’s major undertakings this past year was conducting a strategic review of our sources of revenues. Prompted by the economic recession, the review also provided the opportunity to scrutinize expenses and to consider how best to ensure TEI’s ongoing fiscal health. The Revenue Review Task Force recommended that TEI revise its reserve policy and concluded that adjustments were necessary in our investment strategy, our level of dues (which had not been adjusted for two decades), and our program fees (some of which had not been changed for a decade). The long-term implications of the review will play out in the coming months and years, but I would be remiss if I did not thank the task force — Ray Gwydir, David Penney, Mark Silbiger, and Teri Wielenga, as well as Timothy McCormally and Debbie Giesey from the staff — for their thoroughness and professionalism in preparing the report.
Another goal this year was to manage the departure from the staff of long-time General Counsel Mary Lou Fahey, who retired last December after contributing to the Institute’s success for two decades. Ben Shreck’s joining our legal staff allowed TEI’s advocacy efforts to continue unabated. In addition, our IT/website team became fully staffed with the addition of Terry Wilson and Paul Mulgrew. I remain convinced that TEI’s staff is second to none, and I thank them all for their efforts.
Thank You
When I became Institute president, I told the Board of Directors that TEI’s continued status as the preeminent organization for business tax professionals depended on how we responded to economic, demographic, and technological developments. I expressed confidence that TEI would succeed because it is filled with extraordinary people. The last year has reaffirmed that confidence. We have moved forward because of the dedication and efforts of countless extraordinary people — from Executive Committee members, Board members, and chapter presidents to committee chairs and all active members. I owe a debt of gratitude to all of them. I also owe thanks to my wife, Janet, as well as to my colleagues at EMD Millipore and Merck KGaA of Darmstadt, Germany.
It has been an honor for me to serve as TEI President.
