Santa Clara Valley Chapter Hosts Tax Shelter Panel Discussion.

On August 24, 40 Santa Clara Valley Chapter members attended a panel discussion of the Administration's legislative proposals relating to corporate tax shelters.

Tom Durham, partner with Mayer, Brown & Platt, provided an excellent overview of the evolvement of the judicial doctrines relating to tax shelter type transactions -- substance-over-form, step-transaction, business purpose, economic substance, and sham transaction.

Paul Crispino and Don Longano presented a summary of Treasury Department and Joint Committe on Taxation staff proposals. Paul, who is currently with GE Investments Corp., was most recently associate tax legislative counsel at the Treasury Department and helped draft the Treasury white paper on corporate tax shelters. Don, who is currently with Pricewaterhouse-Coopers, served as chief tax counsel for the Ways and Means Committee from 1993 to 1995. In discussing the proposals, there was a consensus among the speakers that the definition of tax shelter is over vague and will likely lead to a flood of disclosures on corporate tax returns. Paul's and Don's insights into the government's rationale for the proposals very informative. Especially enlightening and troubling was the fact that the very premise upon which the government is operating (that corporate tax shelter activity is proliferating and poses a significant threat to our tax system) is NOT substantiated by solid empirical data.

Jim Holden, partner with Steptoe & Johnson, led discussions relating to the adequacy of the current rules and professional responsibilities of corporate tax departments. Jim and the other panelists agreed that the current rules are generally adequate, if not effectively enforced, and that the potential compliance gains that are...