Remembering Matthew, Ken, and Phil: three giants who changed the practice of tax.

• Author: Olson, Pamela F.
• Position: Matthew Rosen, Ken Gideon and Phil Mann - Testimonial

In the span of a few short months, the tax world lost three individuals--Matthew Rosen, Ken Gideon, and Phil Mann--who each left an indelible mark on tax law and tax practice. All three were affable, witty, and wise and possessed impeccably good judgment. They cared deeply about their families, friends, colleagues, and clients. Even among giants of the tax bar, they were giants. I had the great fortune of counting two of them as partners and all three as friends and mentors. What follows is a short recounting of their contributions to the tax world.

Ken Gideon (1946-2016)

I first met Ken Gideon when he was President Ronald Reagan's nominee to be chief counsel for the Internal Revenue Service. A partner at Fulbright & Jaworski in Houston when President Reagan nominated him, he was just thirty-four years old but had already chaired an important committee of the ABA Tax Section--Court Procedure--and grappled with the impact of audits of mass-marketed partnership tax shelters on the IRS and U.S. Tax Court. Designing a means for the IRS and Tax Court to manage the inventory of audits and docketed cases was one of Kens most significant contributions to the tax system. Congress enacted the partnership audit provisions in 1982 that came to be known as the TEFRA audit provisions. Though not a model of administrative simplicity, the TEFRA audit provisions featured significantly in how the IRS and Tax Court got a handle on the burgeoning number of cases, and they survived until December 2015, a month before Kens passing.

Ken brought to the IRS an exquisite appreciation of the importance of transparency. Transparency today is associated with demands for more information from and about taxpayers by taxing authorities, NGOs, and politicians. Transparency's meaning as a key measure of a tax system's quality has been largely forgotten. Transparency in the context of a tax system means that taxpayers know what the rules are and what is required of them. Although Ken could savor the intricate beauty of a complex design, he understood that complexity that baffled mere mortals would undermine respect for the system and that the system depended on taxpayers voluntarily doing what the law required. He also understood the danger of uncertainty in the tax law. Antiavoidance rules might be unavoidable, but his default position was that clear rules, not smell tests or how something looked to the tax collector, should determine outcome.

A fiscal conservative and a native of Lubbock, Texas, Ken was no advocate of big government, but he firmly believed in fiscal responsibility--that the government should collect enough in taxes to cover the obligations its duly elected leaders had enacted. Similar fiscal conservatism earned former Senator Bob Dole the epithet of "tax collector for the welfare state." But labels didn't trouble Ken or prevent him from doing what he thought was right. Sticks and stones, he would say, leaving you to complete the rhyme. In addition to the partnership audit provisions, the 1982 legislation--the Tax Equity and Fiscal Responsibility Act--was loaded, as its name implies, with revenue-raising compliance provisions and reversals of so-called supply-side tax cuts enacted just the previous year. Ken's role as chief counsel was to ensure the production of guidance on an expedited schedule so that affected parties could comply. He delivered. I had the responsibility for drafting regulations on withholding on interest and dividends, a provision so controversial that Congress repealed it a few days after it took effect. But that repeal was three months after the IRS had produced 200 pages offinal regulations and only seven months after the statute was enacted, a feat made possible by Kens organizational skills, management style, and ability to cut to the chase (a favorite expression of his), and the confidence in his judgment he had earned from his colleagues.

That was not Ken's sole experience with controversial revenue-raising provisions. He went back to Fulbright & Jaworski in 1983, but returned to...