The tax law is famously complex. When asked how many pages are in the current version of Treasury Regulations, a former senior IRS official once responded that it could not be determined because the tax law changed so frequently. One of the anomalies of our self-assessment system is that every citizen and resident is responsible for understanding and implementing this extremely complex law when they file their tax returns each year.
Under these circumstances, it is no surprise that most taxpayers turn to professional return preparers, accountants or tax lawyers to help them report and pay the correct amount of tax. But what is the correct amount of tax? As Judge Learned Hand famously noted, “there is nothing sinister in so arranging one’s affairs as to keep taxes a low as possible … for nobody owes any public duty to pay more than the law demands … .”1 The complexity of the tax law combined with taxpayers’ legitimate desire to pay as little as legally possible puts a lot of pressure on the government to communicate the law clearly and on tax practitioners to understand what the law means.
That is why programs like the New York University Tax Controversy Forum are so important. They provide an opportunity for government representatives and private practitioners to come together in a neutral and objective environment to share perspectives and exchange ideas on how the tax law should be interpreted and applied. This year’s Forum was a prime example of that, bringing together 24 officials from the IRS and DOJ with 29 private tax practitioners to speak on 17 different panels and programs. With more than 225 people in the audience, this year’s Forum was another great success.
The Forum opened on Thursday evening with the usual special skills workshop. This year’s workshop was entitled, Taking Your Case to Tax Court: From Petition through Discovery to Trial. The Honorable Paige Marvel, Chief Judge of the United States Tax Court, together with Peter Scharff of the Office of Chief Counsel and Frank Agostino provided tips on the procedures and realities of taking a case to Tax Court. From techniques on how to structure a Petition, to what the stipulation of facts should look like, though how to conduct discovery, the audience learned what works and what does not in Tax Court cases.
Friday morning kicked off with a series of updates from a number of divisions within the DOJ and the IRS. Acting Assistant Attorney General Caroline Ciraolo and Deputy Assistant Attorney General, Appellate & Review, Diana Erbsen explained current enforcement initiatives at the DOJ, including the department’s increased focus on prosecutions for egregious failures to pay employment taxes. Next, IRS Criminal Investigation Division Deputy Chief Donald Fort discussed CID’s focus on traditional tax cases that do not involve any other criminal activity and the IRS’s continued emphasis on international tax cases. Participants then heard from Barbara Harris and Pamela Drenthe, both from the IRS Large Business and International Division, who described the recent reorganization of LB & I and how the IRS would be identifying and working issues in the coming year.
Darren Guillot, Director of Field Collection for the Small Business and Self-Employed Division of the IRS discussed IRS plans for audits of smaller taxpayers, collections initiatives and identity theft issues. Lee Martin, Director of the IRS Whistleblower Office provided insight into how the IRS whistleblower program works and what makes a good whistleblower claim. Finally, the audience heard from Nina Olson, the National Taxpayer Advocate, who talked about the challenges that the IRS has been dealing with over the past few years in terms of funding and limited resources.
The first panel program of the day was an “Overview of Changes to Partnership Audits.” Drita Tonuzi, IRS Associate Chief Counsel (Procedure and Administration) and Clifford Warren, IRS Special Counsel (Passthroughs and Special Industries) provided insight into how the IRS would administer the new partnership audit rules. Armando Gomez and Diana Wollman pointed out a few of the many difficulties that the IRS and taxpayers will encounter when the rules begin to apply.
The morning wrapped up with the Keynote Address from IRS Chief Counsel William Wilkins. His remarks, which are reprinted in this issue of the Journal of Tax Practice and Procedure, focused on the priorities and activities of the IRS Office of Chief Counsel over the past year.
The afternoon was divided into a series of three sessions with three tracks each. The programs included “Practical Issues Arising From Changes to Partnership Audits,” “Ins and Outs of Collection Due Process Cases,” “Use and Abuse of the Fifth Amendment,” “Challenging Tax Regulations Under the Administrative Procedures Act,” “Privileges, Ethics and the Boundaries of Zealous Advocacy,” “How to Stop a Civil Tax Audit from Becoming a Criminal Prosecution,” “Contesting Withholding Tax Liabilities Arising from Payments to Foreign Persons,” “Civil and Criminal Enforcement of Employment Tax Liabilities” and “Foreign Asset Reporting Penalties and Prosecutions.”
The Eighth Annual NYU Tax Controversy Forum was a huge success, which was attributable in no small measure to my co-chair Drita Tonuzi, IRS Associate Chief Counsel for Procedure and Administration. Drita suggested many of the timely topics and inspired numerous IRS attorneys and agents to participate on panels or simply attend the conference. We could not have done it without her. I would also like to thank our many sponsors who are listed here in no particular order: Eisner Amper; Meadows Collier Reed Cousin Crouch & Ungerman; McDermott Will & Emery; Sullivan & Cromwell; Chamberlain Hrdlicka; KPMG; DLA Piper; Hochman Salkin Rettig Toscher & Perez; Caplin & Drysdale; Skadden Arps Slate Meagher & Flom; Akerman; Cleary Gottlieb; Greenberg Traurig; Citrin Cooperman; Wolters Kluwer; Morvillo Abramowitz Grand Iason & Anello; Sills Cummis & Gross; Latham & Watkins; Agositino & Associates; PWC; Roserberg Martin Greenberg; Mayer Brown; Marcus Neiman & Rashbaum; Sutherland Asbill & Brennan; Ian M. Comisky; Friedman, LLP; Roberts & Holland; and Johnson Moore.
If you have not been yet, the NYU Tax Controversy Forum is a great opportunity to hone your skills, stay on the cutting edge of tax litigation and audit issues, network and have fun. Next year’s Forum is scheduled to take place at the Crowne Plaza at the end of June 2017. We hope to see you there!
1 S.R. Newman, CA-2, 47-1 ustc ¶9175, 159 F2d 848, 850–851 (Learned Hand dissenting).
This article is reprinted with the publisher’s permission from the Journal of Tax Practice & Procedure, a bi-monthly journal published by CCH, a part of Wolters Kluwer. Copying or distribution without the publisher’s permission is prohibited. To subscribe to the Journal of Tax Practice & Procedure or other CCH, a part of Wolters Kluwer Journals please call 800-449-8114 or visit CCHGroup.com. All views expressed in the articles and columns are those of the author and not necessarily those of CCH, a part of Wolters Kluwer or any other person.