For over 30 years, the Taxation Section has sent an annual delegation of tax attorneys to Washington, D.C., to present papers on issues of concern to California tax practitioners. The ideas for these tax law improvements come from work with clients (including pro bono ones), research and teaching. Generally, the proposals aim to simplify the law, make it more equitable, modernize it, and/or improve enforcement. The proposals represent the views of the authors and are not the official views of the California Lawyers Association or its Taxation Section.

2023 Washington, D.C. Delegation

The Delegation serves a variety of functions. The most important is to make a substantive contribution to the federal tax laws. The Delegation also familiarizes government officials with the experience and concerns of California tax lawyers. Past Delegations have raised the awareness of government tax officials of the California bar and have enhanced our ability to play a significant role in federal tax policy. Read More

2023 Table of Contents | May 16-17, 2023

1. EXPAND THE DEPENDENT CARE CREDIT BY REMOVING THE “SAME PRINCIPAL PLACE OF ABODE” REQUIREMENT OF IRC §21
   [paper not yet available; see executive summary included in item #20 below]
   

• Saba Shatara and Campbell McLaren

2. PROPOSED REVENUE PROCEDURE TO STANDARDIZE THE INFORMATION CORPORATIONS GIVE SHAREHOLDERS TO SHOW THAT STOCK IS QSBS

• Andrew Gradman

3. PROPOSED CHANGES TO THE TAX TREATMENT OF LOSSES INCURRED BY TAXPAYERS WHO INVEST IN CRYPTOCURRENCY, VIRTUAL CURRENCY, AND OTHER DIGITAL ASSETS UNDER IRC § 165

• Charles J. Taylor

4. PROPOSED CHANGES TO THE PENALTY FOR FAILURE TO REPORT FOREIGN GIFTS RECEIVED BY A UNITED STATES PERSON UNDER IRC SECTION 6039F

• Daniel W. Soto and Michael E. Romero

5. PROPOSAL FOR IRS TO PROVIDE CLARIFICATION TO THE IRS WEBSITE AND RELATED RESOURCES REGARDING AN ENTITY’S ABILITY TO RETAIN ITS HISTORIC EIN IN A DOMESTIC ENTITY REORGANIZATION AND THE PROCESS FOR DOCUMENTING SUCH CHANGE

• John C. Miles

6. PROPOSED CHANGES TO INTERNAL REVENUE CODE, SECTION 36B REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN

• Andrew D. Allen, Nicola Liu, Kendall Keshtkar, and Anthony Cipriano

7. GET OUT OF 1993, AND INTO 2023: MOVING THE SUBSTANTIATION REQUIREMENTS FOR CHARITABLE CONTRIBUTIONS OUT OF THE PAST AND INTO THE PRESENT

• Gregory Zbylut

8. PROPOSED CHANGES TO ENSURE APPROPRIATE SAFEGUARDS FOR IMPOSITION OF APPRAISER PENALTIES UNDER IRC § 6695A

• Avram Salkin, Robert S. Horwitz and Gary Markarian

9. PROPOSED CHANGES TO JUDICIAL JURISDICTION FOR ASSESSABLE PENALTIES AND FOREIGN INFORMATION PENALTIES

• Edward M. Robbins, Jr. and Michael Greenwade

10. PROPOSED CHANGES TO COMPUTATION OF THE IMPUTED UNDERPAYMENT UNDER THE BBA PARTNERSHIP AUDIT REGIME PURSUANT TO IRC SECTION 6225(b)

• Sandra R. Brown-Bodner, Michel Stein, and Philipp Behrendt

11. RETHINKING TAX RETURN PREPARER PENALTIES AND OTHER WAYS TO INCREASE OVERSIGHT OF TAX PROFESSIONALS

• Kevan P. McLaughlin

12. PROPOSED GUIDANCE REGARDING THE TREATMENT OF ENCUMBERED ASSETS IN LATE ALLOCATION OF GST EXEMPTION AND QUALIFIED SEVERANCES UNDER IRC §§ 2631(a) AND 2642(a)(3), (b)

• Elizabeth Glasgow and Brian Tsu

13. MAKING IRC SECTION 197 MORE RELEVANT AND SIMPLER FOR TODAY’S DIGITAL ECONOMY

• Annette Nellen

14. DEFINITIVE GUIDANCE ON U.S. TAX CLASSIFICATION AND REPORTING REQUIREMENTS FOR CROSS-BORDER RETIREMENT CONTRIBUTIONS, EARNINGS AND DISTRIBUTIONS IN COUNTRIES WITH HYBRID SOCIAL SECURITY REGIMES

• Marsha Dungog and Jennifer Silvius

15. APPLYING A SAFE HARBOR UNDER THE QUALIFIED APPRAISAL RULES

• Robin Klomparens

16. PROPOSAL FOR CLARIFICATION REGARDING THE EXTENDED DUE DATE TO FILE FORM 3520 FOR DUAL RESIDENTS TAKING A TREATY POSITION AS NONRESIDENTS AND FILING FORM 1040NR

• Raúl Villareal Garza and Pedro E. Corona

17. EXPANDING THE TAX ATTRIBUTES SUCCEEDED BY BANKRUPTCY ESTATE: A PROPOSAL TO THE IRS TO ISSUE ADDITIONAL REGULATIONS UNDER IRC SECTION 1398(g)

• “Dennis” Nguyen

18. IMPROVING FILING EFFICIENCIES AND REPORTING COMPLIANCE FOR TAXABLE GIFTS AND FILING OF FORM 709

• Kristin N. Capritto and Wayne R. Johnson

19. THE NEED FOR CROSS-AGENCY ENFORCEMENT OF FATCA TAX FRAUD—WITH NEW TOOLS PROVIDED BY ANTI-MONEY LAUNDERING ACT OF 2020: FRAUD THAT UTILIZES THE U.S. FINANCIAL SYSTEM VIA PROFESSIONAL ENABLERS
    For a summary of this paper, please see the executive summary below at #20. The author can be reached by contacting the section at Taxation@calawyers.org.

• Patrick Martin and Daniel C. Silva

20. EXECUTIVE SUMMARIES OF ALL 19 PAPERS

These ideas for these papers were generated by the work the authors do for clients including pro bono ones, and from teaching and research activities. Generally, these recommendations would simplify the tax law, make it more equitable, update certain tax laws, and/or improve compliance and enforcement. 

The views expressed in each paper are those of the particular author(s) and not necessarily those of the California Lawyers Association or its Taxation Section. Although the authors or reviewers of any paper might have clients or employers affected by the rules addressed in that paper, no such person was specifically engaged by a client or employer to participate in that proposal.

Past Delegations

2022 WASHINGTON, D.C. DELEGATION

This delegation was led by Kevan P. McLaughlin:

1. Marsha-laine Dungog, Jennifer S. Silvius, and Jonathan Garbutt, Advocating for Administrative Guidance on the US Tax Treatment of Canadian Registered Plans (The Canadian Tax-Free Savings Account and Retirement Compensation Arrangement) as Foreign Trusts Subject to Annual Information Reporting Requirements (Forms 3520, 3520-A) (IRC §§ 6048, 6677)
2. Annette Nellen, Proposal for a Tax Form for Ease and Transparency of Reconciling Information Reports on Form 1040
3. Andrew Gradman, QOZ Planning When Penalties are a Certainty
4. Jason Galek, Minna Yang, and Miranda Freeman, Proposed Changes to Treatment of Water Rights as Property Eligible for Charitable Deduction Under IRC § 170
5. Patrick Martin and Anuar Estefan, The Need for Tax Residency Clarity for Those ‘Green Card Holder’s’ Who Have Lost Their Lawful Permanent Residency Status as a Matter of Law
6. Robin Klomparens, Crummey is Crummey
7. James Creech, Dennis Leonard, and Justin Miller, A Creative Critique of the Current Cryptic Rules for Taxing Crypto

2021 WASHINGTON, D.C. DELEGATION – MAY 10 – 11, 2021

This delegation was led by Kevan P. McLaughlin:

1. US Composite Income Tax Reporting For Non-resident International Business Travelers
2. Suggestions for Improving Tax Compliance Through Greater Tax System Transparency and Accountability
3. Solidifying the Exclusion for Cancellation of Indebtedness Income Related to Home Loan Reductions
4. Proposed Revision of the Income Tax “Grantor Trust Rules” and Corresponding Provisions of the Estate and Gift Tax Rules
5. Making Z Connection: Changes the IRS Should Implement to Reach Generation

The Delegation serves a variety of functions. The most important is to make a substantive contribution to the federal tax laws. The Delegation also familiarizes government officials with the experience and concerns of California tax lawyers. Past Delegations have raised the awareness of government tax officials of the California bar and have enhanced our ability to play a significant role in federal tax policy.

2020 WASHINGTON, D.C. DELEGATION

This event was cancelled due to the COVID pandemic; papers in progress were moved to 2021.

2019 Washington, D.C. Delegation

The Delegation met with key government officials at IRS National Office, Treasury Department, Joint Committee on Taxation, House Ways and Means Committee, Senate Finance Committee, United States Tax Court and Department of Justice Tax Division.

The following tax practitioners presented the papers listed below:

1. James Creech: Request for Additional Guidance Relating to Virtual Currency and Other Blockchain Based Rewards
2. Marsha Laine Dungog and Liguo Cooper Xu: Advocating for the Canadian Registered Education Savings Plan and Registered Disability Savings Plan to be Exempt From Annual Foreign Trust Reporting Requirements
3. Robert S. Horwitz and Jonathan Kalinski: Clarifying Provisions on the Assessment and Collection of Foreign Information Reporting Penalties
4. Kurt K. Kawafuchi, Caroline D. Ciraolo, and Judy Y. Lee: The Need for Administrative and Statutory Relief for Executors and Fiduciaries Seeking to Resolve Exposure under the Federal Priority Act, 31 U.S.C. § 3713, Arising From Potential Tax Liabilities of Decedents and Incapacitated Taxpayers
5. Robin L. Klomparens: When Will Modifications of a By-Pass Trust be Respected for Basis Step-up
6. Patrick W. Martin: The Need to Close the “FATCA LOOPHOLE” to Preserve the Integrity of FATCA and U.S. Tax Enforcement Efforts
7. John C. Miles and Eric D. Swenson: Request for Guidance Regarding Making Proper S Corporation Consents on Form 2553, Election by a Small Business Corporation
8. Justin T. Miller and Martin Behn: Adverse Enough to be a Non-Grantor Trust
9. Silvio Reggiardo III, Esq. and Kristin N. Capritto, Esq.: Creating Uniformity in Partial Interest Discounts with Safe Harbor Valuation Discount Tables
10. Barbara Rhomberg: Technical Corrections and Additional Guidance Needed for New Charitable Deduction Substantiation Regulations Under §170
11. Kaelyn J. Romey: Amending the U.S. Tax Court Subpoena Rules & Forms to Conform to the Federal Rules of Civil Procedure, Streamlining Pretrial Discovery
12. Raúl Villarreal Garza: Providing Relief to United States Persons that Inadvertently Became United States Shareholders of Controlled Foreign Corporations as a Result of Repealing IRC §958(b)(4)
13. Steven L. Walker and Adria S. Price: Comments and Proposed Guidance on the IRS’ Revocation or Denial of Passport in Case of Certain Unpaid Taxes Under Internal Revenue Code Section 7345
14. Gregory Zbylut: An Actor, a Producer and a Director Walk into a Bar…and They’re all the Same Person; How the Lack of Clear Definitions in Section 199A Creates Confusion

2018 WASHINGTON, D.C. DELEGATION

The 2018 D.C. Delegation was held May 7 – 8, 2018. Kurt Kawafuchi led the delegation.

1. Andrew S. Atkin and William Choi, The IRS or The Treasury Department Should Issue Guidance Clarifying That Disqualified Persons Are Permitted to Guarantee Legal Obligations of a Private Foundation
2. Shirley Chin and Wolfram Pohl, Clarifying That an Integral Analysis is Not REquired For Storage Devices to be a Part of Solar Energy Property under Regulation 1.48-9(d)(3), Through IRS Published Guidance
3. James Creech, Amendment of IRC Section 152(e) In Order to Better Reflect Taxpayer Reality and Ensure Taxpayer Safety
4. Marsha-laine Dungog and Roy Berg, Clarifying Subpart F and PFIC Income Inclusion Upon Renunciation of U.S. Citizenship
5. Robin L. Klomparens and Kristin N. Capritto, An Uncertain Future: How the Potential Clawback Muddies the Estate and Gift Tax Waters
6. Robert S. Horwitz and Carolyn M. Lee, Extending the Statute of Limitations for Claiming Innocent Spouse Relief (IRC §6015(b), (c))
7. Dennis I. Leonard and Alison B. Arnold, Helpful Suggestions for Improving Compliance with Information Regarding Beneficiaries Acquiring Property From a Decedent (Form 8971) and the Associated Basis Consistency Requirements
8. Kevan P. McLaughlin, Proposed Changes to IRS Earned Income Tax Credit (EITC) (Or More Broadly Now, Refundable Tax Credits and Head of Household Filing Status) Due Diligence Standards Under IRC § 6695(g) (Treas. Reg. §§ 1.6695-2, 1.6695-2T)
9. John Miles and Liliana Menzie, Request for Guidance Regarding The Relevance Requirement of The Check-The-Box Regulations
10. William H. Quealy, Jr., Request for Procedures to Obtain Relief From the Timely Reporting Requirement of Section 1.482-1(a)(3) of the Internal Revenue Regulations 

2017 Washington, D.C. Delegation Set for April 30 – May 2, 2017

The 2017 D. C. Delegation was held April 30 – May 2. Rebecca O’Toole  led the delegation.

1. Noah Metz, Proposal To Allow Earned Income From The Prior Tax Year To Count As Earned Income For The Succeeding Tax Year For Purposes Of Computing The Earned Income Tax Credit.
2. Jonathan Amitrano and Lisa Nelson, The Continuation Penalty Found in IRC Section 6038, 6038A, and 6038D Should Be Amended to Require Notice Be Sent to the Taxpayers Last Known Address
3. Robin Klomparens, Proposal to Allow Permanent Relief for Late Portability Elections Under Certain Circumstances
4. Helen Cheng and Dina Nam, Bridging the Gaps Between Expatriating Individuals, Immigration Officials, and the Department of Treasury (IRC 877A)
5. Raul Villareal Garza and Patrick Martin, 8858 – Requiring notice without statutory authority
6. Pedro E. Corona and Marsha Laine Dungog, Clarifying the United States Income Treatment of Mexican Retirement Funds (AFORES) Owned by US Persons
7. Michelle B. Graham, Kelina Smith and Katie Swafford, Changing Reporting Requirements to Conform to Non-Securities-Based Crowdfunding
8. Justin T. Miller, Have Your Cake and Eat It Too: Charitable Deductions for Charitable LLCs
9. James Creech, Expanding the Fringe Benefits Allowed Under IRC Section 132 to Better Reflect Modern Means of Shared Transit
10. Andrea Ross, Proposed Guidance Under Section 1014 Regarding the Basis of Grantor Trust Assets Following the Grantor’s Death
11. Sherrie Boutwell and Evan Giller, Retirement Plans for Non-Profits- IRC 403(b), Revenue Procedure 2013-12 & Revenue Procedure 2016-51 

2016 Washington, D.C. Delegation Set, May 1-3, 2016

The 2016 Delegation was held on May 1-3. Kaelyn Romey led the Delegation. The following tax practitioners presented the papers listed below:

1. Kevan P. McLaughlin, Esq., and James C. Counts II, CPA, CTFA: Proposed Changes to the Certified Professional Employer Organization (“CPEO”) Program (IRC §§ 3511 and 7705)
2. Veronica Long: Proposed Change to Allow Liability Netting for Partnerships Subject to Involuntary Conversion
3. Kay Guinane and Cherie Evans: Gap between Tax and Sanctions Law: Blocking Lifesaving Aid from Vulnerable Populations
4. Patrick W. Martin and Agustin Ceballos: Guidance Needed Regarding Federal Estate Taxation of Exchange Traded Funds Owned by Nonresident Aliens
5. Roy A. Berg and Marsha-laine Dungog: The United States Income Tax Treatment of Australian Superannuation Funds Owned by U.S. Persons
6. Robert Denham and Robin L. Klomparens: Proposal to Clarify Community Property Basis Adjustment Rules for Surviving Domestic Partners and Nonresident Spouses
7. Mark C. Morris and Jared P. Werner: Proposed Guidance Under Internal Revenue Code § 1014(b)(1), (3)
8. Julie Treppa: Improved Guidance for Non-Profit Organizations Utilizing New Markets Tax Credits to Better Serve Low-Income Communities
9. Alexandra Eaker Pérez & Mark P. Laemmle: Federal Refundable Excise Tax Credits: A Justification for Exclusion from Gross Income
10. Liliana Menzie and Steven L. Walker: Form W-9 or W-8BEN? The Proper Classification of a Dual Resident Taxpayer for Purposes of Documenting Status with a Foreign Financial Institution under the Foreign Account Tax Compliance Act

2015 Washington D.C. Delegation, May 3-5, 2015

The 2015 Delegation was held on May 3-5. Thomas Giordano-Lascari led the Delegation. The following tax practitioners presented the papers listed below:

1. Aubrey Hone, Josh Maxwell and Alexis Binazir: Provin A Negative: What Is Reasonable Cause? U.S. Offshore Reporting Obligations and the Average International Taxpayer
2. N. Aaron Johnson and Jenni Harmon: Clarifying Standards for Trade or Business Real Estate Under IRC Section 108(A)(1)(D)
3. Bill Finestone, Chip Parks and Susan Leahy: Tired of Being Exhausted: Wait and See Approach to the Probability of Exhaustion Test for Charitable Remainder Annuity Trusts
4. Robert Denham: Proposal to Clarify Portion Rules That Determine When a Power Holder Other Than the Grantor Is Treated as the Owner of Trust Income
5. Robin Klomparens and Dick Kinyon: Wishlist for Changes in Portability
6. Justin Miller: Section 682 Spousal Support Trusts: The Need to Define “Income”
7. Michael Karlin and Liliana Menzie: Request for Guidance Regarding Dual Residents Under Treasury Regulations Section 301.7701(B)-7 Who Are
   Treated as Nonresident Aliens of the United States
8. Paul McCullum: Bitcoin – Property or Currency
9. Greg Zbylut: The Bankruptcy Trap – Fixing the 523(a) Problem
10. Robert Horwitz and Jeremiah Coder: Ensuring Due Process in IRS Credit Offsets
11. Patrick Martin: Reasons Why U.S. Citizens Abroad Need a TIN Other Than a SSN

2014 Washington, D.C., Delegation, May 4-6, 2014

The 2014 Delegation was held on May 4-6. Andrea Kushner Ross led the Delegation. Selected delegates met for the first time with officials from the Department of Justice Tax Division, including the Assistant Attorney General in charge of the Tax Division. The following tax practitioners presented the papers listed below:

1. Alexandra Eaker & Ashley Kerins: IRS Rank & Church Tax Inquiries: An Analysis Of Proposed Treasury Regulations Under § 7611
2. Courtney Nash Gardner & Jorge Lopez: Proposed Guidance for Donor Advised Funds
3. Douglas L. Youmans & N. Aaron Johnson: Information Letter Notice 2013-0036 And Why California’s Anti-Deficiency Statutes Convert Recourse Debt To Nonrecourse Debt
4. Dennis Leonard & Jason Schingler: Using a “Formula” General Power of Appointment to Resolve Income Tax Basis “Step Up” Issues in The Age Of Portability and a Request for Clarification Regarding Rev. Proc. 2001-38
5. Patrick Martin: Covered Gifts & Bequests: The Need For Guidance (5+ Years Out)
6. John W. Prokey & Alison B. Merino: Portability, QTIP Elections, and the Effect On Fiduciaries
7. David L. Rice & Lisa O. Nelson: Proposal to Expand the Scope and Definition for “Person” to Allow for Third Parties in Alter Ego and Nominee Cases/Investigations to Obtain Notice of Such Potential Alter Ego or Nominee Investigation Prior to Liens or Levys Being Filed and/or Notice Before Levy
8. Robin Komoparens & Irnina Rospotnyuk: Achieving Simplicity: Extending the Annual GST Tax Exclusion to Direct Skips to Trusts and to Indirect Skips (IRC § 2642(c))
9. Jeffrey A. Titus: The Effective Tax Administration Hardship Offer-in-Compromise: Improving the Standards of Review and Increasing the Acceptance Rates
10. Robert S. Horwitz & Steven L. Walker: The Modification and Compromise of Restitution Orders in Criminal Tax Cases
11. Gregory A. Zbylut: A Proposal for Modifying the 36-Month Rule Imposed by Treas. Reg. 1.6050P-1(b)(2)(ii)(H)