Challenges identified ... and met. (President's Corner).

It seems like yesterday that I was installed as Tax Executives Institute's 2002-2003 International President and had the honor of standing in front of the Board of Directors to present an ambitious set of goals and objectives for the year. In reality, nearly a year has elapsed since that meeting. I want to use the occasion of my last "President's Corner" column to provide an accounting of the progress we have made, to outline some of the challenges that lie ahead, and to offer thanks to those who have made my term as President rewarding and memorable.

Professionalism: The Mark of TEI and its Members

Last August, TEI's Board adopted eight operational priorities, ranging from promoting the professionalism of the Institute's members to conducting a membership satisfaction survey to enhancing communications between the Institute and its members to building a world-class website. I am pleased to report that we have moved forward on all our objectives, and though the details will be recounted in TEI's 2003 Annual Report, it is appropriate here to highlight our key activities.

The corporate accountability scandals of the last few years triggered intense (and continuing) scrutiny of the business community. Combined with the government's renewed thrusts on tax shelters, Enron, WorldCom, and similar cases have presented numerous opportunities to emphasize and enhance the Institute's high standards. Hence, during the year, we devoted considerable resources to educating our members about the implications of the Sarbanes-Oxley Act, including conference sessions, numerous chapter meetings, and a telephone seminar that attracted more than 1,000 participants. First on the issue of auditor independence and more recently on the mandate of documenting and refining internal controls, TEI has been at the forefront of identifying the challenges and helping to craft solutions for tax executives that further the goal of corporate accountability without imposing unrealistic and excessive requirements. I am especially pleased that our views on auditor independence, which we filed with the Securities and Exchange Commission, were incorporated in significant part in the SEC's final regulations.

Guarding against overreaction and helping shape professional, realistic solutions to complicated problems has also been a hallmark of TEI's continuing efforts in respect of tax shelters. Long an advocate of a balanced disclosure regime and targeted enforcement actions in respect of abusive, marketed tax products, the Institute weighed in early and often, not only in meetings and filings with Treasury Department officials, but also with Congress and key legislative aides. We voiced strong concerns about how a change in the IRS's policy of seeking tax accrual work-papers would play itself out in the field, and I am convinced that our actions sensitized the IRS's leadership to the need to exercise care. I am also convinced that our persistent but professional efforts in respect of the tax shelter disclosure regulations resulted in more measured final rules. Finally, although it is important to remain vigilant, tax executives should take heart that proposals to codify an economic substance test have to date not been enacted.

One final legislative project deserves attention here: Proposals to require chief executive officers to sign corporate tax returns. When it was first suggested last summer that CEOs be required to sign corporate tax returns, TEI was quick to point out the policy and practical problems with the proposal. While embracing the goal of enhancing corporate accountability, TEI explained that requiring CEOs to sign corporate tax returns would not advance that objective and indeed would place undue burdens on fully compliant companies, distract senior management from pressing duties of managing the business and dealing with customers, and potentially impede competitiveness. Thus, TEI recommended that the proposal be set aside not to "let the CEO off the hook"--indeed, we noted that he or she is already held accountable, both civilly and criminally, for the company's affairs--but for wholly practical reasons. Finally, we suggested that, if anything were to be done, Congress should focus on the CEO's responsibility to reasonably ensure that appropriate processes and personnel are in place for the company's compliance with the tax code. The Institute will continue its work in this area.

Professionalism means more than educating ourselves or advocating responsibly and effectively on issues affecting our companies' bottom lines. It also includes reaching out to our colleagues in the IRS and CCRA, and taking stands on issues affecting the tax system generally. The Institute excelled here, too. In addition to our top-notch liaison meetings in Washington and Ottawa, we testified before the IRS Oversight Board and Congress on issues as diverse at the IRS's training needs and budget (as well as the possible outsourcing of collection activities), participated in IRS-sponsored web-casts, and cosponsored educational programs with the IRS, including the LMSB bonus sessions following our Midyear Conference and the New York Chapter's joint financial services conference.

Assessing Member Needs ... and Satisfying Them

Several of the Institute's priorities related to better positioning TEI to meet our members' evolving needs. We began by conducting a membership survey to assess the members' "wants and wishes" in respect of education, networking, and advocacy. We are gratified by the response to the survey, the results of which were summarized in the March-April issue of The Tax Executive.

Overall, TEI members are pleased with the Institute's operations and direction, but the survey identified a number of areas where the Institute can, should, and will do more for its members. For example, during the coming year we will be experimenting with "webcasting" and otherwise refining our distance-learning strategy. In addition, later this year a proposal will be presented to the Board of Directors for TEI to conduct a comprehensive tax department survey. (It has been a decade since our last study was published.) We will also be moving ahead with a corporate management seminar, which will focus on the needs of senior tax executives.

Building a Refined Web Presence

One specific area identified in the membership satisfaction survey--but known even before the results were compiled--is the need to refine TEI's Internet strategy. Currently, TEI actually maintains three websites: "TEI Online," a members-only site hosted by PricewaterhouseCoopers that features a series of discussions forums, a library, and a job bank; an e-commerce, or "Member Services," site that is linked to TEI's membership database and allows members to register for programs, pay their dues, and access an online directory; and www.tei.org, a public site that contains information on TEI's advocacy efforts, educational programs, and other activities.

The goal of our initiative is to build an integrated site that requires members (and other approved users) to log in only once (currently there are two logins and passwords required), facilitates more flexible and robust discussion forums (including the ability to create ad hoc forums), features sites hosted by the Institute's 53 chapters, and enhances the TEI network by permitting easier communication between and among the Institute, its leaders, and the membership at large.

Although much work has been done on this priority, much remains to be done. I thank the members and staff who have devoted considerable time and attention to the project. A time table for launching the new site will be announced soon.

Concluding Thoughts

TEI is a remarkable organization. In my view, it has an influence and effectiveness out of proportion to the size of its membership. This is due to several things, not the least of which is a dedicated and committed cadre of leaders, members, and staff. Through their collective efforts, the Institute (including its chapters and regions) hosted more than 600 top-notch educational programs that, without exception, were outstanding. Through their collective efforts, the Institute held liaison meetings with state, provincial, and federal tax policy makers and administrators that gave voice to the practical, real-world concerns of tax executives and--happily--often produced good results. Through their collective efforts, the Institute advocated on the major tax issues of the day, before Congress, the Canadian Parliament, the Supreme Court, many states and provinces, the European Union, and the OECD. And through their collective efforts, the Institute moved to make itself a more efficient, effective organization.

For the past year, I have had the honor to serve as TEI President and to see first-hand what the dedication and hard work of the members can produce. Many challenges lie ahead, but based on the vantage point of the last year, I have every confidence that TEI will continue to rise to the occasion and move forward. I offer collective thanks to our chapter leaders, the Board of Directors, and the committee chairs. I offer thanks, too, to the Institute's frequently "unsung heroes," the members who contribute, quietly, in myriad ways--from sharing their insights and ideas at a chapter meeting (or in a TOL posting), to returning a phone call from a member of another chapter whom they don't even know, to responding positively to requests for assistance from committee chairs or staff.

A special thank you is due to the members of the Institute's Executive Committee who responded to every challenge, every hiccup, every opportunity with professionalism, good judgment, and pride. I especially want to offer my thanks and gratitude to each and every member of the TEI staff without whose assistance TEI would not be the organization it is today. Finally, I am grateful for the good relationships that were nurtured during the year and the new friendships that were formed. The support that TEI and its members showed to me--and my family--will never be forgotten.