Minutes of TEI-Treasury Department liaison meeting.

• Position: Tax Executives Institute

March 2, 2011

On March 2, 2011, a delegation from Tax Executives Institute met with Michael F. Mundaca, U.S. Assistant Secretary of the Treasury for Tax Policy, and other representatives of the Treasury Department's Office of Tax Policy. The following minutes were prepared by Tax Executives Institute, and although reviewed by the Office of Tax Policy, they have not been formally approved by the Department.

Introductory Comments

On behalf of the U.S. Treasury Department's Office of Tax Policy, Assistant Secretary for Tax Policy Michael F. Mundaca welcomed TEI President Paul O'Connor and the other members of the delegation from Tax Executives Institute to the liaison meeting. Mr. Mundaca said that he was pleased to meet with TEI to discuss the issues of interest to the business community. The delegations for the Treasury Department and TEI are set forth below:

Department of Treasury Delegation

Michael F. Mundaca, Assistant Secretary (Tax Policy)

Emily S. McMahon, Deputy Assistant Secretary (Tax Policy)

Jeffrey Van Hove, Acting Tax Legislative Counsel

George H. Bostick, Benefits Tax Counsel

Mark J. Mazur, Deputy Assistant Secretary for Tax Analysis

Manal S. Corwin, International Tax Counsel

Michael J. Caballero, Deputy International Tax Counsel

Henry Louie, Deputy to the International Tax Counsel for Treaty Affairs

TEI Delegation

Paul O'Connor, EMD Millipore, TEI International President

David M. Penney, General Motors of Canada Limited, TEI Senior Vice President

Carita R. Twinem, Spectrum Brands, Inc., TEI Secretary

Terilea J. Wielenga, Allergan, Inc., TEI Treasurer

Rodney C. Bergen, The Jim Pattison Group, TEI Executive Committee

Michael J. Bernard, Microsoft Corporation, TEI Executive Committee

Charles N. Macfarlane, Chevron Corporation, TEI Executive Committee

Janice L. Lucchesi, Akzo Nobel, Inc., TEI Executive Committee

Kelly, A. Nall, Hewlett-Packard Company, TEI Executive Committee

Mitchell E. Salamon, American Airlines, TEI Executive Committee

James P. Silvestri, Eisai Inc., TEI Executive Committee

John A. Mann, Walgreen, Inc., Chair, TEI Federal Tax Committee

Donald J. Rath, Synopsys, Inc., Chair, TEI Financial Reporting Committee

Mark C. Silbiger, The Lubrizol Corporation, Chair, TEI IRS Administrative Affairs Committee

Timothy J. McCormally, TEI Executive Director

Eli J. Dicker, TEI Chief Tax Counsel

Jeffery P. Rasmussen, TEI Tax Counsel

Daniel B. De Jong, TEI Tax Counsel

Benjamin R. Shreck, TEI Tax Counsel

Tax Reform

Mr. Mundaca noted President Obama's call in the State of the Union Address to forge a bipartisan consensus on revenue-neutral corporate tax reform focused on job creation and competitiveness. In pursuing this course, the Administration has reached out to the corporate community, think tanks, academia, and other stakeholders for input. Mr. Mundaca said concern has been expressed to the Administration that any reform effort should take into account non-corporate business income earned through pass-through entities and sole proprietors because it does not make sense to reform the Code just with respect to corporate business income.

Mr. Mundaca continued that recent hearings on tax reform in Congress may raise a question as to whether focusing solely on business tax reform is a viable approach. If the reform effort were to encompass both business and individual income taxes, however, a question exists whether reform could be accomplished in 2011. In contrast, an effort devoted to corporate income tax might be able to come to fruition this year, for example, through broadening the base and lowering the corporate rate to achieve the President's goal of revenue-neutral reform. He added that any reform of the corporate income tax code would necessarily have to address its international aspects, such as deferral and foreign tax credit issues.

Mr. Mundaca invited TEI's views on tax reform in general and, in particular, on what TEI may see as a path forward. Mr. O'Connor thanked Mr. Mundaca for the opportunity to meet with him and other members of the Office of Tax Policy staff. With respect to tax reform, Mr. O'Connor stated that TEI's diverse membership makes it difficult to advocate on specific items, but that the Institute generally supports good tax policy and administration. There followed a discussion of not only TEI's role in the tax reform process but also on the fact that segments of the Institute's membership will likely engage through various industry groups. Mr. Macfarlane explained that engagement both through TEI and separately is likely, with the Institute itself addressing compliance, administration and simplicity. In this regard, Mr. Macfarlane pointed to TEI's "Guideposts for Tax Reform," published in October 2009, as an indication of where TEI will likely engage on tax reform.

Mr. O'Connor asked for Mr. Mundaca's...