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D.C. Bar Hosts Tax Experts for Comprehensive Conference

By Jeffery Leon and John Murph

February 13, 2019

Despite the threat of wintry weather, tax professionals from private firms, think tanks, academia, and the U.S. Treasury and IRS came together on January 29 for the 2019 Tax Legislative and Regulatory Update Conference. The daylong event, sponsored by the D.C. Bar Taxation Community and the Georgetown University Law Center, attracted more than 200 participants for breakout sessions on topics such as corporate tax, international tax, and compensation and benefits taxation post-Tax Cuts and Jobs Act (TCJA) of 2017. Scott Levine, a partner at Jones Day and chair of the conference, delivered the opening remarks.

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Here are some highlights from the conference:

Updates and Predictions
Following Levine’s remarks, the plenary session provided a legislative update of the latest tax law developments. Moderated by Janice A. Mays of PricewaterhouseCoopers LLP, the panel included Thomas A. Barthold, chief of staff of the Joint Committee on Taxation; Randy Gartin, Republican chief tax counsel on the House Ways and Means Committee; Andrew Grossman, Democratic chief tax counsel on the House Ways and Means Committee; Tiffany Smith, Democratic chief tax counsel on the Senate Committee on Finance; and Mark Warren, Republican staff on the Senate Committee on Finance. The discussion covered key issues such as the TCJA, the Joint Committee Bluebooks, and predictions for the tax code post-2019.

Corporate Tax
In the session “Corporate Taxation: Cross-Border M&A Planning Post-TCJA,” Levine engaged with panelists Devon M. Bodoh, a partner at Weil Gotshal & Manges LLP; Melinda Harvey, senior counsel at the IRS Office of Associate Chief Counsel; Jeffrey G. Mitchell, associate chief counsel at the IRS; and Timothy S. Shuman, a partner at McDermott Will & Emery, on the topics of asset sales, controlled foreign corporation stock, post-transaction integration, and liability issues under section 965 of the tax act.

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Impact of TCJA
Nancy Abramowitz, professor of practice of law and director of the Janet R. Spragens Federal Tax Clinic at American University, and Alexandra Thornton, senior director of tax policy at the Center for American Progress, detailed how the TCJA has affected low-income taxpayers and families.

“The big change in the new system is that there are no more personal exemptions. That would have been $4,150 per person in any household. That’s gone. In exchange for that, there is a larger standard deduction,” Thornton said, explaining that the new standard deduction is more beneficial to people who are already better off financially. She also reported that the child credit was increased to $2,000 and the refundability increased to $1,400, but one of the big disadvantages now is that each child listed as a dependent needs to have a Social Security number.

Abramowitz gave some grave news about low-income workers, particularly contractors without employee benefits. “The poorest of the poor pay the heaviest income taxes because they don’t get any benefits from the deductions,” Abramowitz said. “If you’re trying to live on a contractor income of about $12,000 to $14,000 a year — maybe you have a child, maybe you don’t — you’re faced with the choice of food on the table or paying these expensive taxes. If you don’t pay them until the end of the year, the penalties just keep piling up.”

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Opportunity Zones
In the “Opportunity Zones” session, moderator Richard G. Blumenreich, principal at KPMG, was joined by panelists Gary Hecimovich, a partner at Deloitte Tax LLP, and John W. Lettierri, CEO of the Economic Innovation Group. They talked about the first year of the TCJA’s opportunity zones program and how it differs from traditional tax incentives. The program seeks to spur long-term investments in economically distressed areas nationwide, Lettieri said. It is “intended to be an equity tool that is flexible to pair with those other state and local incentives; it would also fill a gap in equity capital in many struggling communities.”