Annual Conference exemplifies best in TEI, sets stage for busy 2005.

During TEI's Annual Conference in October, I had the opportunity to salute the founders of the organization for their foresight and vision in creating TEI six decades ago. The Institute's 60th anniversary celebration also afforded me the distinct honor of meeting and visiting with 21 of my predecessors. From 90-year-old Morris Rinehart (who joined TEI in 1952, served as president 30 years ago, and delighted the conference with his reminiscences and his good humor) to my immediate predecessor, Ray Rossi, these fine men and women had the vision and the fortitude to advance our founders' dream of creating the preeminent association of business tax executives. They did this by working tirelessly to provide unending opportunities to in-house tax professionals for networking, education, and advocacy. We owe them all a debt of gratitude.

The sites and sounds of New Orleans (plus the excitement of the baseball playoffs, especially for this New England native) gave conference participants plenty to talk about in addition to taxes, conference governance, and the fast-approaching presidential election. What drew us to the Big Easy, however, was not the excellent food, the invigorating music, or the beads or baubles of Bourbon Street. What drew us to this year's Annual Conference is what has drawn tax executives to Institute meetings for six decades--outstanding educational sessions and unparalleled networking opportunities. Thus, the conference allowed the Institute to demonstrate the progress we have made on several objectives:

* By holding one top-notch session after another, we enabled members to be current and stay current. From a "teaser" about the Institute's forthcoming corporate tax department survey to a highly charged session on the IRS's new Schedule M-3 to several sessions on the just-passed 2004 tax bill, the conference helped equip TEI members to deal with the year-end and ongoing challenges of being tax executives in an ever-changing tax world.

* By scheduling industry sessions and other networking opportunities, we are making it possible for members to be connected and stay connected. The conference also gave registrants the chance to "test drive" the Institute's revamped Internet site as well as to visit with representatives of the accounting, law, and other tax product and service firms that graciously sponsored the conference.

* By having sessions involving senior government officials--IRS Chief Counsel Don Korb, SEC Chief Accountant Donald Nicolaisen, LMSB Commissioner Debbie Nolan, and the Treasury's Tax Legislative Counsel Helen Hubbard--we enabled members to have a voice (and to have their voices heard during extensive question periods) on important issues involving corporate government, tax guidance priorities, and audit and compliance initiatives.

Setting the Stage for 2005

It's remarkable how much has happened since the New Orleans conference. The American Jobs Creation Act was formally enacted, and the Treasury Department and IRS reached out to TEI for assistance in establishing guidance priorities. The United States held a presidential election, the results were known within 24 hours, and the winner pledged to make tax reform one of his top priorities. The FASB moved forward on its project to refine the standards for accounting for income taxes (and, in particular, the treatment of "uncertain tax positions" under FAS 109). (One measure of the issue's importance is the record attendance at our two-day FAS 109 seminar.) Of related significance are efforts by the SEC and PCAOB to revise and clarify their rules on the level and type of tax services that accounting firms can perform for their attest clients. And, finally, the Treasury Department prepared to issue new regulations governing practice before the IRS, and the IRS issued final instructions for Schedule M-3 and signalled that corporations will soon be required to file their returns electronically.

All of these items portend a busy and eventful year for tax executives and TEI in 2005. Indeed, TEI's work on these initiatives has already begun. For example, following up on invitations issued by Helen Hubbard and Don Korb in New Orleans, the Institute's committees developed a comprehensive list of issues that needed to be resolved under the 2004 tax act. The list, which addressed both "what do I need to know before briefing the Board of Directors" and "what will I need to know to file my company's return," was submitted to the IRS and Treasury in advance of a November 1 conference call. (The Institute's questions, focused primarily on the repatriation, manufacturing deduction, and executive compensation provisions, are posted on our website.) Those questions have spawned additional ones from our members, which we have passed along to the IRS and Treasury.

Schedule M-3--The Value of Having a Seat at the Table

Another example where TEI's efforts are ongoing is Schedule M-3. The new form, which is intended to advance the government's goal of making transactions more transparent, cannot help but increase compliance costs in the short term (especially on a transitional basis). The form holds the promise, however, of making audits more efficient for both the IRS and taxpayers. While some practitioners have reportedly suggested the Schedule M-3 would not have been developed but-for TEI's involvement, that explanation--while flattering to a certain extent--facilely overstates the Institute's influence. To be sure, TEI has long subscribed to the view that having a seat at the table is better than walking away from it. That said, a review of the Institute's written comments on Schedule M-3 (reprinted in the July-August 2004 issue) belie the notion that TEI "rolled over and played dead" on the initiative. Thus, while TEI's work can be seen in the final form (and instructions), I remain convinced that the project would have proceeded in any event and, more important, that the final product is better for TEI's involvement.

This issue of the magazine contains more examples of where TEI's involvement has made a positive difference. Thus, the Senate has followed its pre-election ratification of the U.S.-Barbados tax treaty with its approval of the protocol to the Dutch treaty. And the OECD has announced that, following comments by TEI and others, it would delay the issuance of commentary relating to the attribution of profits for purposes of the permanent establishment rules. Finally, the agendas for TEI's four Canadian liaison meetings in Ottawa (which were held the first week of December) demonstrate that the mutual interests of government and taxpayers can be furthered by working collaboratively.

Tools for Staying Connected

One of TEI's goals for the year is itself to be more transparent in what it is doing, what it has done, and what the effects of its efforts have been. We have made strides on all these fronts. Hence, a visit to www.tei.org will not only enable members to access our recent submissions (including our list of Jobs Act issues), but will also provide an avenue for members to submit their ideas for our impending U.S. liaison meetings with the Treasury Department, IRS, and Joint Committee on taxation. Please take the time to submit your ideas--to [e-mail] or judith.zelisko@brunswick. com--so your voice can be heard. Equally important, we have added a distinct "Advocacy" button to our menu bar, allowing members to easily find an up-to-date Advocacy Scorecard as well as background on how to become involved in TEI's efforts.

Attention should also be called to the significantly increased activity on the website's issue forums. Whether your question relates to the IRS's pilot Compliance Assurance Process, due diligence checklists, or the FASB's most recent pronouncement, you can share your questions and ideas--or tap into those of your colleagues in other companies--simply by logging on. And while you are at it, please check out your chapter site. Incidentally, many chapters have posted information about their meetings on their publicly accessible sites.

Finally, we invite your feedback on a change we made in the last issue of The Tax Executive (and are continuing)--the addition of an "Advocacy At a Glance" box to help you navigate your way through the magazine.

Season's Greetings

On behalf of the Institute's Board of Directors and its staff, I extend the season's greetings to all members of the Institute and other readers of The Tax Executive. May 2005 bring you health, happiness, and professional fulfillment.

Judith P. Zelisko

International President

Sponsor Acknowledgments

Tax Executives Institute expresses its appreciation to the following firms that sponsored the 2004 Annual Conference:

Platinum: Baker & McKenzie * Deloitte & Touche LLP * Ernst & Young LLP * KPMG LLP * Mayer, Brown, Rowe & Maw LLP * McKee Nelson LLP * PricewaterhouseCoopers LLP * RIA * Taxware, L.P.

Gold: ADP Tax Credit Services * CrossBorder Solutions * Ducharme McMillen & Associates, Inc. * Foley & Lardner LLP * Liquid Engines, Inc. * NetProfit, Inc. * Ryan & Company * Sutherland Asbill & Brennan LLP * Vertex Inc. * Wachovia Exchange Services, Inc.

Silver: Alston & Bird LLP * Baker & Hostetler LLP * Fenwick & West LLP * Jones Day * King & Spalding LLP * Miller & Chevalier Chartered * Thompson Hine LLP

Bronze: CBIZ Valuation Group, Inc. * Duane Morris LLP * Grant Thornton LLP * Location Management Services, LLC * Management Insights, Inc. * McDermott Will & Emery LLP * Morrison & Foerster LLP * Planitax, Inc. * Robert Brakel & Associates Ltd.