TEI Meeting Agenda Addresses Pending Legislation, Tax Reform Initiatives

II. Pending Legislation

A. Administration's Fiscal 2007 Budget Proposals

The Administration's fiscal 2007 budget proposals are scheduled to be released two days prior to the meeting. We invite a discussion of the business tax provisions that are included in the proposals as well as the likelihood of proposals to reduce the corporate tax rate.

B. Codification of Economic Substance (S. 2020)/Tax Shelters

In connection with the federal government's 2006 budget and tax reconciliation process, the Senate has approved the Tax Relief Act of 2005 (S. 2020), which includes a proposal to codify the economic substance doctrine. There is no counterpart provision in the House-passed tax reconciliation bill. TEI recently submitted a letter to the congressional tax-writing committees urging them (again) to reject the proposal to codify the economic substance doctrine.

In TEI's view, consistent enforcement is the key to stopping abusive transactions and enforcement depends upon having information about transactions of interest. With all the refinement of the disclosure regulations under section 6011 and the penalty provisions (including the new understatement and disclosure penalties under sections 6662A and 6707A, respectively), the revision of Circular 230, and the development and implementation of Schedule M-3, much has been done to enhance disclosures and curb abuses. Indeed, there is evidence that the enforcement efforts have substantially curtailed the marketing of such transactions and raised the tax planning bar to implementing transactions.

Codifying the economic substance doctrine is, in TEI's view, unnecessary and counterproductive. It would further complicate the system, confuse taxpayers and revenue agents, raise significant issues of statutory construction, impede the courts' ability to rely on existing precedent, interfere with legitimate commercial transactions, and potentially frustrate IRS efforts to combat abusive transactions.

In the past, the Treasury has opposed codification of the flexible, judicially created economic substance doctrine. We invite a discussion of whether the Treasury continues to oppose the latest legislative proposal. We also invite a discussion of whether the Treasury believes that the current tools designed to curb tax shelters are working or should be given additional time to work before additional legislative changes are enacted. Finally, we invite a discussion of whether other regulatory initiatives are under consideration to enhance disclosures, curb tax shelter activities, or promote settlement of outstanding disputes. For example, is the IRS or Treasury considering additional tax return disclosures or other general reconciliation schedules in addition to the Schedule M-3 for corporations (1120-C, -S, -PC, or -L) or partnerships (1065)?

C. Extension of the Research and Experimentation Credit

Several temporary provisions of the Internal Revenue Code have been extended (or re-enacted retroactively following expiration) with regularity. Most notable among those provisions is the research and experimentation credit, which again expired as of December 31, 2005. The credit provides an important incentive for the conduct of research activities in the United States. TEI has long contended that this provision cannot serve its legislative purpose if taxpayers are unable to know whether it will remain in effect from year to year because taxpayers need stability in their budget process for the incentive to be fully realized. Moreover, gaps in the periods covered by the credit not only impair the provision's incentive effect but also spawn administrative burdens on taxpayers. During the meeting we invite a discussion of the Treasury's view on (1) the prospects for temporarily extending the credit with retroactive effect and (2) making the credit a permanent part of the current Code.

III. Tax Reform

On November 1, 2005, the President's Advisory Panel on Tax Reform presented its recommendations to Treasury Secretary John Snow, who called the panel's report a "starting point." As we understand it, those options are now being analyzed by Treasury with a view toward making recommendations to the White House, which, in turn, will make its recommendations to Congress.

Based on news reports, there is currently no timeline for action. With Congress focused on 2006 (and likely 2007) budget and tax reconciliation bills, incremental fixes and patches to the Internal Revenue Code, as well as ongoing debate over the permanency or extension of various tax provisions, the current year seems the time to "set the stage" with further deliberation and study of tax reform and with congressional action deferred until 2007.

TEI believes that there are four overarching principles that should guide the tax reform process. The first is simplicity and administrability of the system. The current Internal Revenue Code is much maligned for its complexity and lack of administrability. To be sure, the tax system that ultimately emerges from tax reform may not be simple, but it can be simpler than the current system. The second principle is competitiveness. In a global economy, the U.S. tax system should promote rather than hinder the competitiveness of U.S. businesses. Many industrialized and emerging nations have recently lowered their corporate tax rates without significantly expanding their tax bases. The Treasury should consider the overall competitiveness of the U.S. tax system as well as the extent to which the system discourages or promotes incremental U.S. business investment. Third, there needs to be a balance in the tax burden among sectors of the economy and, especially, between the individual and business components. Any proposal that robs Peter to pay Paul will always have the support of Paul, but that proposal may not be the right mix of reform options that will promote the growth of the economy and competitiveness of U.S. businesses. Finally, because of the linkage between the federal and state tax bases, the ripple effect of tax reform on the states must be kept in the forefront of considerations.

During the liaison meetings, we invite a discussion of:

• The Treasury's initial reactions to the Tax Reform Commission's Proposals, including whether the Treasury has a preliminary view on pursuing incremental changes to the current system, accepting the Reform Commission's income tax proposal as a base for further consideration and study, or adopting a consumption tax (either as an add-on tax system or as a replacement for the current income-based system);

• The timetable for the Treasury's activities and actions;

• The timing and scope of business input to the Treasury; and

• Prospects for concrete actions such as elimination of the corporate alternative minimum tax and repeal or mitigation of the limitations on the deductibility of corporate capital losses (e.g., by increasing the carryforward period or permitting the offset of ordinary income with capital losses, perhaps with an annual dollar limitation on the amount offset).

A. Commendation: In-House Tax Professionals' Advice Excluded from Section 10.35 of Revised Circular 230

On May 18, 2005, the Treasury and IRS released final regulations amending the regulations governing practice before the IRS. The revisions clarify that in-house tax practitioners are to be treated as a distinct category of tax professionals for purposes of Circular 230 and that written advice provided by in-house counsel to the employer for purposes of determining the employer's tax liability is excluded from the definition of a covered opinion under section 10.35 of Circular 230.

TEI commends the Treasury and IRS for recognizing that the application of section 10.35 to in-house tax practitioners would have raised numerous issues and might have impaired the provision of sound and timely tax advice to the practitioner's employer. We agree that written advice provided by in-house counsel should be excluded from the definition of a covered opinion under section 10.35 and that the other provisions of Circular 230, especially section 10.37, adequately address the professional responsibility of in-house counsel when providing advice to their employer.

B. Clarification of Definition of Employer for Purposes of Section 10.35

Circular 230 omits an express definition of the term "employer." Representatives of the IRS and Treasury have explained that the government declined to define "employer" in order not to unduly limit the scope of the in-house carve-out. In other words, the government's thinking is that for purposes of Circular 230 "employer" is to be construed broadly to include entities beyond the employee's W-2 employer and even beyond the affiliated group of corporations of which the employee's W-2 employer is a part.

This approach is wholly sensible since company tax department employees often render tax advice and compliance services for many entities beyond their immediate W-2 "employer." Hence, TEI previously recommended that the IRS and Treasury confirm in future guidance that the term employer (i) is to be construed broadly and (ii) encompasses all members of the controlled group of corporations (as defined in section 267(f)(1)(A) without the exclusion of section 267(f)(1)(B)) as well as other controlled entities (e.g., partnerships, which do not pay taxes per se, and controlled foreign and domestic corporations that are owned by any member of the controlled group) for which the in-house counsel is expected to provide tax advice within the scope of his or her employer/employee relationship. The scope of the term employer should also extend to the "employer's" VEBA, charitable foundation, pension or profit-sharing plans (as well as other deferred compensation trusts, such as rabbi trusts, established by the employer), and include advising a foreign parent corporation on any U.S. tax obligations or filing requirements.

We invite the Treasury's views on TEI's recommended clarification of the scope of the term "employer" as well as the timing of, and prospects for, changes to the Circular 230 regulations.

V. Other Regulatory Actions and Initiatives

A. Commendation: Notice 2006-6 Elimination of Book-Tax Difference Category of Reportable Transactions

Based on a review of the Forms 8886, Reportable Transaction Disclosure Statement, and Schedules M-3 received during the 2005 filing season, the IRS and Treasury announced in Notice 2006-6 that the book-tax difference category of reportable transactions under Treas. Reg. § 1.6011-4 is no longer necessary. As a result, taxpayers who complete Schedule M-3 and adequately disclose their financial and tax accounting reporting differences are no longer required to file Form 8886 and separately report significant book-tax differences. The Notice is effective for transactions occurring on or after January 6, 2006. The IRS and Treasury anticipate issuing temporary and proposed regulations under § 1.6011-4 to remove the significant book-tax difference (currently set forth in § 1.6011-4(b)(6)) from the categories of reportable transactions.

TEI commends the Treasury and IRS for concluding that the Schedule M-3 supplies substantially all the information that IRS agents require in order to examine significant book-tax accounting differences. Elimination of the duplicative reporting burden of Form 8886 was one of the promised benefits of implementing Schedule M-3. We recommend that the IRS and Treasury consider making the effective date of the coming regulations under Treas. Reg. § 1.6011-4 be for transactions occurring after December 31, 2005 (or, for taxpayers with 52-53 week fiscal periods, the end of the taxpayer's applicable fiscal period). As long as a taxpayer's tax period and return encompasses the effective date of the change, significant book-tax differences preceding the effective date will be disclosed on the taxpayer's Schedule M-3 even without a Form 8886.¹ Specifically, the requirement to file Forms 8886 for significant book-tax difference transactions occurring during the five-day stub period in January of 2006 is redundant to the Schedule M-3 and imposes an unnecessary burden on taxpayers to identify and report the items. Indeed, the requirement to file Form 8886 could likely be eliminated retroactively to as early as January 1, 2005, for all book-tax difference transactions as long as the taxpayer's return includes a Schedule M-3 for the taxable period.

B. Taxation of Cross-License Agreements

The longstanding and well-settled treatment of cross-licensing agreements (CLA) is that they constitute a netting arrangement that does not result in the recognition of income to the extent the rights exchanged are of equal value. For example, in Private Letter Ruling 7739073 (July 1, 1977), the taxpayer entered into a CLA with a Japanese corporation (N), under which taxpayer granted N an irrevocable, non-exclusive license under patents it owned; N granted the taxpayer the same license under patents it owned; and N paid taxpayer lump-sum cash payment. To enable N to benefit from certain Japanese tax laws, the parties entered into a separate agreement under which N would sell the taxpayer an undivided one-third interest in three of the U.S. patents that had already been sold to the taxpayer under the first agreement. Under the second agreement, N can prevent taxpayer from selling or otherwise transferring the licenses. The IRS ruled that -- "[s]ince for all practical purposes the taxpayer is not acquiring anything for its payment to N" under the second agreement -- the transaction in substance was a CLA under which the only taxable payment to the taxpayer under U.S. law was the lump-sum payment determined by netting the payment due taxpayer under the first agreement with the taxpayer's costs under the second agreement.

TEI understands that the IRS is considering issuing additional guidance on the treatment of CLAs, perhaps in the nature of a technical advice memorandum (TAM). The Institute urges the government to reaffirm the treatment of CLAs in PLR 7739073.

The longstanding treatment of CLAs takes a practical approach essentially providing companies the freedom to operate in different jurisdictions and to develop their own know-how without fear of becoming entangled in costly litigation. TEI submits that an exchange of covenants affording taxpayers the "freedom to operate" is virtually impossible to value. Moreover, in many cases, any value received by one party is equal to the value transferred by the other. Any other result could have a negative effect on the competitiveness of U.S. companies and increase the potential for international disputes.

During the liaison meeting, the Institute invites a discussion of Treasury's involvement in potential guidance on this issue.

C. Proposed Cost Sharing Regulations

On August 22, 2005, the IRS and Treasury issued proposed regulations under section 482 of the Internal Revenue Code, relating to the methods to be used to determine taxable income in connection with a cost sharing arrangement (CSA). TEI filed comments on those regulations and testified at the hearing on December 16, 2005.

1. General. Regrettably, the new rules proceed from an assumption that taxpayers use cost sharing abusively to disguise the transfer of intangible property outside the United States to an affiliate (often located in a tax haven) at a value substantially less than the fair market value of the intangible property. The regulations are intended to ensure that, where buy-in payments must be made, such compensation is based on the arm's-length value of what is being transferred. The "investor model" approach prescribed in the proposed regulations, however, goes beyond ensuring that buy-in payments are based on an arm's-length analysis. The investor model requires that two separate transactions be analyzed (i.e., the buy-in payment and the cost sharing contribution) as though they were a single investment decision based on an expectation of a given overall return.

For the reasons set forth in TEI's comments, the proposed regulations threaten to undermine congressional intent to permit companies to conduct their affairs in an effective and cost-efficient manner and will discourage companies from entering into new, and continuing to use existing, cost sharing arrangements. In the extreme, the proposed regulations may discourage U.S.-based R&D, because they would create an incentive for locating R&D (and the premium profits that accompany R&D under the proposed regulations) outside the United States.

2. Investor Model. The "investor model" suffers from a number of infirmities, including the assumption that the contributor of non-routine intangibles enjoys all the residual profits of the ongoing development of those intangibles. It also vitiates the notion that there is any risk-sharing in a cost-sharing arrangement. Moreover, the model's premise -- that a cost sharing arrangement is akin to an investor's managing a diversified portfolio -- is unsound. In a CSA, there is little, if any, opportunity for any party to manage risk through diversification or to divest itself of underperforming assets -- characteristics of a true investment. Finally, the model is inconsistent with the realities of intangible development. By allocating all residual profit to the external contributions, the regulations ignore the value that the ongoing research efforts (funded by all CSA participants) may contribute to the resulting intangibles. Any abuses that may occur with respect to the offshore transfer of intangibles can be better dealt with through application of the existing rules under Treas. Reg. § 1.482-4 and do not require an upheaval of the existing cost sharing regulations. Finally, there are a whole host of practical administrative concerns surrounding the use and determination of the discount rate to be applied to the financial projections used in the investor model.

3. Other Comments. Other issues addressed in TEI's comments include the treatment of an existing R&D workforce in place as a contribution requiring a buy-in; the requirements to compensate for contributed intangibles over the entire life of the CSA as though the CSA intangibles have a constant value over the life of the CSA; the prohibition on the contribution of make-or-sell rights; and the requirement to share results on an exclusive geographical basis.

In the interest of time, TEI would be pleased to discuss its other comments on the proposed cost-sharing rules in a separate meeting. TEI's principal concern is that there are numerous instances where the regulations impose unnecessary administrative burdens, fail to comport with business realities, or fail to reflect what arm's length parties would do in a CSA.

4. Timing of Final Regulations/Prospects for Changes. The IRS and Treasury have received a substantial number of comments and recommendations in respect of the proposed regulations. We invite a discussion of the prospects for changes to the proposed regulations, the treatment of potential transition issues (including whether disputes under the current rules would be resolved under the current or final rules), as well as the anticipated time for issuance of the final regulations.

D. Section 199 Income Attributable to Domestic Production Activities

1. Item-by-Item Determination and Shrink-Back Rule. Under Prop. Reg. § 1.199-1(c)(1), qualified production activity income (QPAI) is determined on an item-by-item basis (and not, for example, on a transaction-by-transaction, product-line-by-product-line, or division-by-division basis) and is the sum of the QPAI of all such items. Under Prop. Reg. § 1.199-1(c)(2)(i), the term "item" means the property offered for sale to customers that meets all the requirements of Prop. Reg § 1.199-1(c)(2)(i) and Prop. Reg. § 1.199-3. If the property offered for sale does not meet these requirements, a taxpayer must treat as the item any portion of the property that meets the requirements. The latter rule is referred to as the "shrink back" rule.

Regrettably, the shrink-back rule will impose an extraordinarily onerous burden on most taxpayers because their systems are, for the most part, not designed to track income or receipts from the components of items sold. (Indeed, many taxpayers will have difficulty even determining what their "items" are.) As a result, taxpayers should, at a minimum, be permitted to make simplifying assumptions with respect to sales, exchanges, etc., of products that incorporate qualified and nonqualified components that are subject to the shrink-back rule. Specifically, taxpayers should be permitted to elect to apportion their gross receipts between the qualified and nonqualified components based on the relative cost of a qualified item incorporated in the property sold. For example, assume a taxpayer sells a shoe for $50. The shoe consists of a U.S.- manufactured sole that costs the taxpayer $2 to produce and an imported "upper" that costs $18 to purchase and attach to the sole. Assume the assembled shoe that is sold is not qualifying property because the taxpayer does not manufacture, produce, grow, or extract (MPGE) the shoe "in whole or significant part in the U.S." Under the shrink-back rule, however, the soles manufactured by the taxpayer would qualify. Under these facts, the taxpayer should be permitted to allocate 10 percent ($2/$20) of the shoe receipts, or $5, to the qualified component.

2. Exclusion of Separately Itemized Freight Receipts from DPGR. The proposed regulations generally provide that gross receipts derived from the performance of services do not qualify as domestic production gross receipts (DPGR). Prop. Reg. § 1.199-3(h)(4) provides an exception for certain embedded services that permits taxpayers to include in DPGR gross receipts derived from a qualified warranty, a qualified delivery, and a qualified installation, so long as the price of such services or non- qualified property is not separately stated in the agreement, bargained for by the customer, or offered by the taxpayer. Many sales agreements and invoices, however, separately state such amounts for reasons generally unrelated to federal income taxes (e.g.,government contracts often require such details).

TEI recommends that the regulations be revised to permit gross receipts for services that are an "integral part of" or "incident to and necessary for" the delivery of MPGE property be included in the taxpayer's DPGR. When a taxpayer receives an advance payment for goods or for a long-term contract amount, such receipts are includible in income immediately where they are an "integral part of" the goods. Under Treas. Reg. § 1.451-5(a)(3), an advance payment for the sale of goods includes amounts received for services that are an integral part of the provision of the goods. Taxpayers are not permitted to apply a different method of accounting to any portion of an advance payment related to delivery, installation, or other service component associated with the goods or long-term contract. Moreover, the inclusion in income of the portion of the advance payment that relates to the service component does not depend on whether the amount is separately stated or bargained for. Similarly, under Treas. Reg. § 1.460-1(d)(1), a taxpayer is permitted to segregate and separately account for receipts for non long-term contact activities only where an amount is not "incident to and necessary for" the production of the property subject to the long-term contract. In TEF's view, where an embedded service -- such as freight -- is an "integral part" of or "incident to and necessary for" the taxpayer's delivery of QPP, the amount should be included in the taxpayer's DPGR.

3. Attribution of Partnership Activities and Income to Partners for Determination of QPAI. Prop. Reg. § 1.199-5(g) provides in part that "an owner of a pass-thru is not treated as conducting the qualified production activities of the pass-thru entity. . . . Accordingly, if a partnership manufactures . . . QPP within the United States . . . and . . . sells . . . the property to a partner who then . . . sells . . . the property [to a third party], the partner's gross receipts from the latter . . . sale . . . are not treated as DPGR under section 1.199-3." This provision effectively eliminates from the partner's calculation of QPAI any potential DPGR from the revenue on the sale to a third party of product that was purchased from the partnership.

On the other hand, Prop. Reg. § 1.199-3(h)(7) sets forth a special rule that attributes the activities of an oil and gas partnership to the partners in the partnership. Under this special rule, a partnership's extraction, refining, or processing of oil or natural gas, or other products that are distributed in-kind to one or more partners, are attributed to each partner, resulting in the gross receipts derived by the partners from the ultimate sale of the oil or natural gas or products being considered DPGR. Without the special rule, the gross receipts derived by the partners from the sale of the oil, natural gas, or other products would not qualify as DPGR because the property was not MPGE by the partners, and the partnership would not have derived any gross receipts from the property (to be allocated to the partners) because the property was distributed in-kind to the partners. Although we understand that the special rule is necessary to take account of historical practices in the oil and gas industry, we do not believe the special rule should be limited to oil and gas partnerships that distribute their property in kind. The fundamental rationale for entering into an in-kind distribution partnership (i.e., risk sharing of production activities) is present in many other industries including chemical or petrochemical production, electric power production, and movie production, and those taxpayers should be able to qualify for the special rule as well. Indeed, any taxpayer that can restructure its manufacturing activities as an in-kind distribution partnership should be able to qualify for the special rule and attribute the MPGE activities to the partners to whom the property is distributed in kind.

4. Intercompany Interest Payments. Although the preamble and examples in Prop. Reg §§ 1.199-7(d), (e), and (f) set forth guidance addressing when intercompany payments should be treated as DPGR or non-DPGR within a consolidated group, the extent to which certain intercompany payments affect the calculation of QPAI is unclear. For example, intercompany loans generate interest income to one member of an affiliated group and expense to another member that fully offset in the calculation of taxable income. It is unclear in calculating QPAI, though, whether the gross or net interest expense is to be allocated and apportioned between DPGR and non-DPGR. We recommend that Treasury clarify that only net interest expense is to be allocated and apportioned to DPGR since that is the amount that would be allocable if the separate companies were divisions of the same corporation.

5. Timing of Final Regulations. Treasury and IRS officials have indicated that the section 199 rules will be promulgated as final regulations as soon as possible in order to afford taxpayers the time necessary to implement the changes necessary for their systems. We agree that the early issuance of final regulations is crucial for taxpayers. Nevertheless, we urge Treasury to remain open to issuing further guidance as taxpayers identify issues in complying with the regulations.

F. Status Reports

1. U.S.-Canada Protocol. We understand that the United States and Canada have renewed negotiations over the income tax convention between the two countries. We invite an update on the status of the negotiations. We also invite a discussion of the prospects for elimination (or further reduction) of withholding taxes, especially on interest from related and unrelated parties as well as on dividends. Withholding taxes constitute an unnecessary friction on cross-border payments and TEI submits that nil withholding provisions would better promote the integration of the U.S. and Canadian economies.

2. Section 482 Services Regulations. In September 2003, the IRS and Treasury issued proposed regulations providing guidance on the treatment of controlled services transactions under section 482 and the allocation of income from intangibles. TEI commented on those regulations in December 2003. Now that the proposed cost-sharing regulations have been released, we would appreciate an update on the status and timing of final section 482 services regulations.

3. Guidance on Entertainment Use of Corporate Aircraft. In Notice 2005-45, the IRS and Treasury provided initial guidance on the computation of aircraft costs that are to be disallowed because of the entertainment use of an aircraft by "specified individuals." The notice, however, does not define "entertainment." We request an update on the status of regulations, the current thinking on the definition of "entertainment," as well Treasury's reaction to the numerous comments suggesting that the methodology prescribed by the notice skews the aircraft expenses toward entertainment use. A threshold inquiry under the statute is whether the primary purpose of a flight is business or entertainment. If the primary purpose of a flight is business (i.e., 50 percent or more of the passengers are on the flight for business reasons), the incremental cost of carrying additional passengers with an "entertainment" purpose is quite small and the methodology in the Notice overallocates expenses to the entertainment purpose.

4. Status of Transfer Pricing Report Mandated under the 2004 Tax Act. The American Jobs Creation Act directed the Treasury to conduct studies and report back to Congress in respect of (1) the effectiveness of the section 482 regulations, especially in respect of the treatment of intangible property; (2) the effect of the section 163(j) earnings stripping rules on the tax base and jobs in the United States; (3) U.S. tax treaties, including the effectiveness of anti-abuse provisions; and (4) the effect of section 7874 on corporate inversions. What is the status of the various studies?

5. Dual Consolidated Loss Rules. In May 2005, the IRS and Treasury issued new proposed regulations under section 1503(d) addressing the treatment of losses that may be available for use in multiple jurisdictions. TEI filed comments on those regulations and Treasury representatives recently expressed sympathy for the administrative burdens and complexity of complying with these rules. In the comments, it was noted that tax arbitrage reflects legitimate differences in how different tax systems address complex commercial and legal issues. We invite a discussion of the prospects for simplification of, and changes, to the proposed dual consolidated loss regulations.

6. Withholding on Stock Option Reporting. In a Field Directive dated March 14, 2003, IRS examiners were instructed, solely for penalty purposes, not to challenge the timeliness of employment and withholding tax deposits exceeding $100,000 that arise from the exercise of the stock options, as long as the deposits are made within one day of the settlement date of the option. In comments filed in June 2003, TEI urged that the Treasury and IRS issue rules of administrative convenience for FICA, FUTA, and income tax withholding related to NQSO exercises that are similar to those set forth in Notice 2001-73. Most NQSO plans are administered through stock brokers and the cash for the exercise price and employment and withholding taxes is not available to the employer on the date of exercise. We also suggested that employers be permitted to make the requisite tax deposits within a reasonable period of time following the settlement date. A reasonable period of time for making the deposit following the employer's receipt of notice from the broker that an option has been exercised would, at a minimum, be no earlier than the deposit date for the employer's next regularly scheduled payroll processing period for "cash" wages.

Is further guidance anticipated in this area?

B. Treasury Department Staffing. The Treasury Department announced a number of promotions and additions to its Office of Tax Policy staff on October 21, 2005. TEI applauded the announcement of those changes. We invite a discussion of the need and prospects for securing additional staff resources for the Office of Tax Policy.

VI. Conclusion