Continuity, challenge, change ... and a record of accomplishment.

It has become custom for TEI's President to devote his last column both to reviewing the Tax Executives Institute's activities and accomplishments during the year and to acknowledging the contributions and good efforts of those who helped move the Institute forward. I am pleased to continue that tradition.

Last August, TEI's Board of Directors embraced an ambitious set of goals and objectives under the general rubric of "[C.sup.3]--Continuity, Challenge, and Change." The Board acknowledged that for six decades TEI has served its members and advanced its education, networking, and advocacy goals by responding to changing circumstances. Accordingly, the Institute committed itself to--

* Continue those practices, processes, and traditions and respond to and advance the members' needs;

* Challenge ourselves to dispassionately review TEI's activities with a view toward assessing their ongoing value in a dramatically evolving world; and

* Change our practices and programs (and creating new ones) to better equip TEI to assist tax executives in fulfilling their obligations to their companies, their profession, and society at large.

The Board identified specific initiatives in six areas to advance the Institute's mission, and I am pleased to report that the organization achieved significant progress on most of them.

Membership: Listening ... and Learning

To better serve the business tax community, TEI developed a membership satisfaction survey that we mailed right after the beginning of the year. Twenty-seven percent of TEI members responded, and what they told us about themselves, their experiences with and opinions of TEI's programs and services, and their evolving professional needs will enable the Institute to better serve them (and their colleagues) in the future.

The survey reveals that the top three challenges facing the corporate tax professional are (1) financial accounting and reporting (including Sarbanes-Oxley); (2) keeping up to date with changing laws and regulations; and (3) increased workload but dwindling resources. A summary of the survey results is reprinted in this issue, and while many of the core results are not surprising--for example, we've long "known" that networking at the chapter level is a key benefit of membership--the survey contains much data to be mined in the coming months. We will be sharing the complete results (more than 600 pages of tables, charts, and narrative comments) with the presidents of the local chapters at this year's Leadership Seminar, and will be working with them to make appropriate changes in our local and Institute-level programs.

One other membership initiative deserves mention: the Institute's first-ever membership "sale." Launched in January, the Board of Directors invited tax executives to "give TEI a try" for only $100 through June 30, 2007. It was our hope that the special offer would entice many tax professionals to sample what TEI has to offer. We haven't been disappointed: The Institute has seen its membership soar past 6,000 for the first time in history, and while it remains a stretch objective, there's a possibility that TEI will welcome 1,000 new members in the fiscal year that ends on June 30.

Governance and Structure

As TEI grows, it becomes more diverse, and the organization's continuing success depends on having a nimble, responsive structure. Accordingly, we set out to review the Institute's By-Laws and its governance model and to make changes in response to, among other things, our growth in Europe and Asia. TEI's Task Force on Structure and Governance (chaired by David Penney) did yeoman's work. Thanks to David and the Task Force members for their diligent efforts. The group's first set of recommendations prompted a spirited, sometimes passionate, discussion at the March meeting of the Board of Directors. Following that meeting, the Task Force fine-tuned its recommendations, and in June the Board approved a set of By-Law changes. If approved by the membership at the 2006 Annual Meeting of Members, the changes will position TEI's leadership to better reflect and serve its members. (A full report on the By-Law proposals will be included in the next issue.)

One other note on the Institute's changing to keep up with the times: The June meeting of the Board--where the By-Law amendments were presented for approval--marked TEI's first web-based Board meeting.

Financial Stewardship 

Another of TEI's internal-looking set of objectives focused on securing the Institute's financial future. Vince Alicandri, the Institute's Treasurer, worked with the staff and our outside auditors not only to refine and ensure adherence to our internal controls, but also to revise the Institute's investment policy and practices to increase our yield without compromising the safety and liquidity of TEI's assets. Similarly, the Institute's sponsorship program (which has played a significant role in TEI's not having to increase dues since 1990) has been re-evaluated from top to bottom. We also renewed our affinity relationship with RIA, which yields significant discounts to our members and royalty payments to TEI.

Education Remains a Key Focus

Most TEI members first learn of the Institute in connection with a chapter or Institute-level education program, and our membership survey confirms that the delivery of high-quality educational content remains an extremely important goal. This past year our Institute-level programs attracted more than 3,500 registrations. From seminars on financial reporting and IRS audits and appeals, to week-long courses of state & local and international taxation, to programs on the short-term imperatives of section 965 and the long-term implications of tax reform and uncertain tax positions, the Institute delivered timely, excellent training to the in-house tax community.

I am especially pleased that our conferences continue to attract top-notch government speakers, such as Treasury Secretary Snow and IRS Commissioner Everson, which has spurred media coverage of our programs. Finally, I am pleased that our Senior Tax Executive Conference--focusing as much on management issues as on tax topics--has become a mainstay of TEI's education calendar.

Advocacy

Last August, it appeared that the topic of tax reform would dominate TEI's technical activities this year. Although that has not proven to be the case, the Institute's technical committees have had plenty to keep them busy. Consistent with our members' increased focus on financial reporting issues, our Financial Accounting Task Force (chaired by Neil Traubenberg) devoted considerable time to the FASB's uncertain tax positions initiative, and I am convinced that TEI's comments contributed significantly to the process.

Similarly, TEI's ability to bring value to our members in the state and local area manifested itself not only in our exemplary brief in the Cuno case (involving the constitutionality of state tax incentives), but also in the collaborative approach we've taken in dealing with the Multistate Tax Commission. Combined with our ongoing efforts in Canada, our burgeoning advocacy in Europe and Asia, and our involvement on ensuring the confidentiality of tax return information, our state and local efforts show why nearly two-thirds of the membership rate TEI's advocacy work as "important" or "extremely important."

Perhaps our most sustained advocacy effort this year has been corporate e-filing, where TEI has not only raised important concerns about the IRS's mandate but also devoted considerable resources to helping the IRS refine its initiative. TEI members--and the IRS--owe a debt of gratitude to the TEI members and staff who contributed to our efforts.

I began my comments on advocacy by noting that tax reform did not dominate the scene as many people had anticipated. That doesn't mean, however, that much important preliminary work has not been done. Our Task Force on Fundamental Tax Reform (chaired by Lisa Norton) has developed a set of general principles that will guide the Institute (and, we hope, the Congress) in addressing this issue. TEI's Executive Committee earlier this spring completed work on an "op-ed" piece on "Four Things that Matter" in reforming the corporate tax system, which we have submitted to newspapers around the country. (It's also reprinted in this issue.)

Communications and Networking

The op-ed piece mentioned above is just one part of TEI's enhanced communication strategy. Last summer, the Institute committed itself to raising both its profile and, more important, the profile of corporate tax executives and tax departments generally. TEI has been cited in a large number of articles, and I am especially pleased that the Institute's goals and activities were the subject of a cover story in International Tax Review. We have also worked to increase our outreach to our own members, sending them periodic updates and working continually to enhance our website. Much work remains to be done, but those members and staff who worked on these initiatives should take pride in the Institute's accomplishments.

Thank You One and All

I owe a debt of gratitude to my colleagues and staff at Microsoft Corporation for their support. I also offer thanks to all the members of the Institute who helped make this past year such a exhilarating experience for me. From the Executive Committee and Regional Vice Presidents to the committee members who worked on submissions, from Board members who called me with their views to our exemplary staff, and from everyone who selflessly contributed to TEI's activities to my wonderful family who supported me throughout the year--you have made this year both rewarding and memorable. Serving as TEI President has been an honor and a highlight of my professional career. Thank you for letting me serve the organization as International President.

Michael P. Boyle

International President