A busy year-end is the precursor of an even busier 2003. (President's Corner).

What a whirlwind of tax activity 2002 has been. Twelve months ago, tax executives were busy analyzing a comprehensive set of new research tax credit regulations, an "advanced notice of proposed rulemaking"--an unfamiliar creature to many tax professionals--on the capitalization of expenses, and an IRS disclosure initiative concerning tax shelters. They were grappling with pending economic stimulus legislation. In addition, they were engaged in "watchful waiting" as management and accounting practices in a few isolated companies were challenged and the disclosures of corporate malfeasance grew to scandalous proportions.

A year later, these issues retain their vitality. We're analyzing just released regulations implementing the INDOPCO ANPR, awaiting final R&D and tax shelter regulations, and anticipating a new round of legislative proposals to spur the stubborn, but languid economy. Moreover, we are bracing for these developments amidst the uncertainty spawned by the Sarbanes-Oxley Act, the auditor independence regulations issued by the Securities and Exchange Commission, and what they portend in terms of tax directors' ability to efficiently manage their companies' tax affairs and their interaction with their supervisors and the audit committee.

And, of course, we are doing all these things--a year ago and today--often with reduced staff and increased workload, for the tax research, planning, compliance, and audit work our companies face has not abated.

In this environment, prudent tax executives must take advantage of the opportunities available to them to maximize their effectiveness. That's where TEI comes in. For nearly six decades, the Institute has been a voice for effective tax policy and administration. The diversity of our membership--combined with an unassailable commitment to both competence and collegiality in dealing with our counterparts in government--imbues our activities with enviable credibility. Whatever the issue--from tax shelters and Sarbanes-Oxley to records retention, business activity nexus, and international tax reform--TEI will remain involved. The more members who participate in our educational and advocacy programs, the more we can accomplish. Accordingly, I ask all members to make a New Year's Resolution to step up their activity in TEI. If your experience is anything like mine, you'll be rewarded ten-fold for your efforts.

Canadian Activities Take Center Stage

A careful reader may have noticed that none of the activities listed in the preceding paragraphs concerns the Canadian tax system. That does not mean that TEI's Region I has been moribund. Quite the opposite. If you peruse the table of contents or flip through this issue, you will find evidence that TEI is second to none in its commitment to the consultative process with the Department of Finance and the Canada Customs and Revenue Agency.

For example, in early December delegations from our two Canadian committees held five liaison meetings with government officials. These meetings with the Department and Finance and CCRA, on both income and excise (GST) issues--together with a separate meeting with officials of the Department of Justice--gave our members the opportunity to present views on myriad technical and policy issues, and demonstrated the richness and depth of TEI's relationships with government. I want to thank Glenn Wickerson, our Vice President for Canadian Affairs; Martina Krummen, chair of the Canadian Commodity Tax Committee; and Monika Siegmund, chair of the Canadian Income Tax Committee, for their tireless efforts in developing the agendas for the meetings, handling the logistics, and managing the process of following up. Thanks, too, goes to the committee members themselves and to the Institute's legal staff.

In addition to the liaison meetings, three other Canadian activities merit notice. In late September, I had the opportunity to address the Canadian Tax Foundation's Annual Conference in Toronto, briefly reviewing a number of Institute priorities and initiatives and, quite candidly, emphasizing the benefits of TEI membership. A little more than a month later, I was called to Ottawa to meet with Elinor Caplan, Minister of National Revenue, as part of her Advisory Board, focusing on the CCRA's "Future Directions" initiative, which strives to build upon the momentum established by the creation of "the Agency," to streamline tax administration, and strengthen the consultative process.

Between the Canadian Tax Foundation's meeting and the session with Minister Caplan, I had the honor to testify on the Institute's behalf before the Standing Committee on Finance of the Canadian House of Commons as part of the government's pre-budget deliberations. The hearing--which was held in Calgary--afforded the Institute the opportunity to present its views on the major challenges facing the Canadian tax system. I am pleased that one of TEI's recommendations--the repeal of the Large Corporations Tax--has already been embraced by the Standing Committee.

What Lies Ahead

From the Canadian liaison meetings, TEI has shifted its attention south of the 54th parallel. Our liaison meetings with the Department of Treasury's Office of Tax Policy, and the IRS's Large and Mid-Size Business Division have been scheduled for February, and I know that our commit tee chairs--Dave Bernard, Bruce Maggin, and Mitch Trager--would welcome your suggestions. In March, the Institute will meet with officials of the IRS National Office, including the acting or new Commissioner (depending on the time table for appointing a successor to Charles Rossotti).

The IRS Commissioner will not be the only new face in Washington in 2003. The Bush Administration has shuffled its economic team, most notably nominating John Snow to become Secretary of the Treasury. On Capitol Hill, too, there will be significant changes. Come January, there will be a historic realignment of the government--with the House of Representatives, Senate, and White House all being controlled by the same political party. The phenomenon of a united government--which prevailed for the first six months of the Bush Administration--brings with it the promise of quicker, more coordinated action.

Time will tell how TEI's priorities--tax reform and simplification among them--will be affected by the shift in government, but one thing is certain: There will not be a dearth of issues to address.

Annual Conference

Although the Institute's advocacy activities these past few months have been invigorating (if at times exhausting), a true highlight of the fall was the Institute's Annual Conference. The conference, which was held in Canada for the first time in more than a dozen years, gave my first TEI chapter (Toronto) the opportunity to shine, and its leaders did not falter or fail. Chapter President Bob Westlake and his colleagues deserve our thanks for their efforts. Thanks, too, to the Canadian Tax Foundation which, together with the Toronto Chapter, hosted a "Welcome to Canada" refreshment break.

The conference also gave the Institute's committees the opportunity to excel, and they responded by planning three tracks of sessions that drew not only crowds but encomiums. The central complaint I heard was that, with so many excellent choices running concurrently, it was often difficult to decide which session to attend.

I was especially pleased to present awards to four topnotch recently retired tax professionals. Reg Kowalchuk, Chuck Shewbridge, and Tom Nee--all former Presidents of the Institute--brought honor to the Institute during their terms and class to our Tuesday banquet where TEI presented them with Honorary Membership Awards. The same can be said of Raoul Gratton, a long-time member of the Montreal Chapter whose service to and enthusiasm for the Institute unquestionably qualified him to receive the President's Award.

I would be remiss if I did not express my appreciation to everyone for the courtesies extended to my family during the conference.

Season's Greetings

On behalf of the Institute's Board of Directors, I am pleased to extend the season's greetings to all members of the Institute and other readers of The Tax Executive. May 2003 bring you and your families health, happiness, and personal fulfillment.

J.A. (Drew) Glennie
International President