Council Members Present

Edward M. Deron
Anthony J. Caputo
Sherill Siebert
Henry P. Lee
Eric M. Nemeth
Thomas J. Kenny
Charles M. Lax
Steve Z. Ettinger
Shirley A. Kaigler
Trevor T. Wetherington

Mary Jo Larson, Employee Benefits
Jess A. Bahs, Practice & Procedures
John M. Neberle, State & Local

David B. Deutsch
Jay A. Kennedy
Michael O. Love
Ronald T. Charlebois, Business Entities, Chairperson
George H. Runstadler, III, Estates & Trusts, Chairperson

George Gregory

A. MINUTES.

The minutes of the previous meeting of the Council had been previously distributed. Various comments were received pertaining to prior minutes. Those comments have been incorporated therein. There being no other comments, on motion duly made by Henry Lee and seconded by Sherill Siebert to accept the minutes, the motion was unanimously carried.

B. TREASURER'S REPORT.

A two-month summary of activity for the period January 1, 2003 through February 28, 2003 was distributed by Eric Nemeth. Eric indicated that it would be supplemented with a year-to-date summary of activity. He also indicated that since substantially all of the Section's revenues have been received for the year and very few expenses incurred, the Section's cash position was exceptionally strong. Eric reported that as of February 28th, the Section had available $106,177.49. Furthermore, Eric complimented the Section Members on the quality of vouchers that they have been submitting for reimbursements and, as such, allowing him to process those requests quickly.

C. COUNCIL ACTIVITIES.

Ed Deron asked for reports and was advised as follows:

1. After Hours Tax Law Series. Shirley Kaigler reported that the next and final program for the year was scheduled for March 18, 2003. This program, which is titled "Essential Qualified Retirement Plan Documents," will be presented by Chuck Lax and Gary M. Remer.

Next, Shirley reported that she will be meeting shortly with representatives of ICLE to consider the 2003/2004 program. Following that meeting, she will solicit speakers and topics from Tax Council Members. She did, however, indicate that Steve Ettinger has already offered several members of the faculty of the Cooley Law School Masters of Tax Program to participate. Eric Nemeth suggested that Shirley consider a program or programs addressing the Internal Revenue Service's tax shelter initiatives and offshore credit card initiatives.

2. Summer Tax Conference. Tony Caputo reported that the brochure had been printed and was available for mailing. The first group of brochures has been forwarded to the mailing service and will be distributed shortly. Tony next indicated that he would be forwarding copies of the brochure to the major Chicago CPA and law firms with the hope that they may send representatives, due to their proximity, to the Muskegon area.

Tony also reported that the Friday evening rodeo should be "great fun." Eric Nemeth provided a testimonial and indicated that both he and his family had attended the rodeo on many occasions. Eric also indicated that he could provide suggestions for local restaurants if anyone called or sent him an email.

Henry Lee reported that he was beginning to formulate plans for the 2004 Summer TaxConference. Henry had already talked with Tony Caputo and had scheduled meetings with Mike Love, Sherill Siebert and Chuck Lax to solicit their input. Initially, Henry reported that he would like to find a new location for the program, preferably in either Southeastern or Southwestern Michigan. Also, Henry indicated that he would attempt to solicit attendance at the program not only from the Tax Section, but also the Probate Section. With regard to the type of program to be offered, Henry indicated that his desire was to put on a "how to" program for practitioners and not merely provide overviews of the speakers' subject matter. Presumably, this will be fleshed out over the next few months.

3. Tax Court Luncheon. Tom Kenny reported that the Tax Court docket had been expanded to March 24th, 25th, and 26th. Although Judge Laro had originally declined our invitation, Tom hoped that with the expanded docket he would find time to join the Council for a luncheon. If Judge Laro did agree, Tom would email Section Members informing them of the arrangements.

4. Directory. Trevor Wetherington indicated that he would like to consider with the Council how the next edition of the Directory should look. Trevor distributed an outline with background information and a description of the options that he believed should be considered. He first reported that he was unable to determine whether any Michigan Bar Section had an on-line directory of its members. He next observed that much of the reference information that had historically been included in the past concerning IRS and Department of Treasury personnel, was uniquely available in the Directory.

Trevor next polled the Council to determine how many Members used the Directory. Only half of those present indicated that they had used the Directory to locate a Member more than five times during the last year. A greater number of those present indicated that they used the reference material on a regular basis.

Trevor then described the four options that he considered to be available:

a. A full printed Directory comparable to those produced in the past.

b. A printed Directory that only included reference material or minimal membership information.

c. An on-line Directory and/or reference guide, which would be password protected.

d. A Directory and/or reference materials that would be available by email in an Adobe document, as well as diskettes or CD ROMs for those Members who are not on the Internet.

At this point a complete discussion of the four alternatives took place. Various observations were made during this discussion. They included:

a. The last Directory cost the Tax Section approximately $22,000 to produce. Furthermore, this Tax Section had budgeted $20,000 for the next edition. The cost of producing an email Directory would be dramatically less than printing paper copies.

b. Historically, the cost of the Directory had been subsidized by outside sponsorship. National City Bank had contributed a substantial amount to sponsor the last Directory. It was noted that it was unlikely that National City Bank, or any other bank today, would commit a substantial amount of funds to this sponsorship.

c. It was noted that an email Directory could be easily updated on a regular basis. Instead of updating the Directory every two years as Tax Council has historically done, it could be updated every three to six months and forwarded to Members at a modest cost.

d. It was observed that many institutions and other organizations have stopped producing "paper materials" and regularly utilize "new technologies" for transmitting information, reference materials, etc. Steve Ettinger observed that younger lawyers will be most comfortable with this approach to disseminating membership information.

At this point, Trevor moved for the Tax Council to authorize the next edition of the Directory to be distributed by email and diskette/CD ROM. Although a few Members expressed their desire to retain a "traditional paper copy" of the Directory, the Tax Council approved Trevor's motion.

5. Michigan Bar Journal. Tom Kenny reported that he had contacted Fred Baker who is in charge of theme issues in the Michigan Bar Journal. Tom indicated that a taxation theme last appeared in the Michigan Bar Journal in June of 2001. Furthermore, he was informed that it would likely be August or September of 2004 before the Tax Section could put together another theme issue. Tom indicated that he would advise the Tax Section as soon as a date could be confirmed.

6. Michigan Tax Lawyer. Although David Deutsch was not present, he had submitted a written report. First of all, David indicated that the Winter edition of the Michigan Tax Lawyer had been sent to the Turgeon Group for editing. As such, the Winter edition should be mailed to subscribers before the end of March.

With regard to the Spring/Summer edition, David reported that he had a feature article written by Sebastian V. Grassi relating to GST tax and a commitment from Christopher J. Pardi to write a short article in the area of employee benefits. He did, however, indicate that he was still awaiting a feature article in the area of practice and procedures and one short article on any other subject matter. Shirley Kaigler commented that these articles would be needed no later than April 15, 2003 in order to publish and distribute the edition with an advertisement for the 2003 Summer Tax Conference.

7. Annual Meeting. Jay Kennedy was not present and provided no written report.

8. Internet. Mike Love was not present and provided no written report.

9. Federal and State Tax Legislation. Tom Kenny reported that there had been many state tax legislative proposals. He indicated, however, that he would defer his report and allow John Neberle to describe those proposals during his Committee Report.

10. Membership Outreach Coordinator. Steve Ettinger began his report by inquiring whether there were any student Members of the Tax Section. No one present could answer that question. It was noted that the State Bar would allow students to join at a reduced rate. The student could then select committee memberships thereafter. It was also noted that funds were budgeted each year by the Tax Section for membership outreach purposes.

Steve Ettinger next reported that he would like to develop a program for encouraging student participation in the Section. An obvious focus would be all of the LLM/Taxation candidates at the various Michigan law schools. Furthermore, those who were teaching basic tax courses in the law schools could also be an important source. It was suggested that all LLM/Taxation candidates, as well as all tax law professors, be included on the Tax Section list serve and receive notices of Section events. At the conclusion of Steve's report, it was suggested that Steve organize a more formal membership outreach program for law students and provide a report at the next Tax Council meeting.

11. Treasurer's Advisory Group. Ed Deron reported that he was still awaiting word whether the new State Treasurer will form an advisory group and, if so, when they will meet.

D. COMMITTEE REPORTS.

1. Business Entities. Although not present, Ron Charlebois submitted a written report. In that report, Ron advised that he had secured Michael Antovski, an attorney from Sommers Schwartz, to present a report to the Committee on the possible State law theories and potential actions of the Michigan Department of Treasury in seeking the collection of unpaid LLC assessments from individual members/managers. No firm date had been set; however, it is anticipated that the meeting will occur during the month of April. Ron also reported that he was hopeful that Donna Donovan, Michigan Director of Tax Policy, could attend and participate. Finally, Ron reported that he had contacted both John Neberle and Jess Bahs concerning the possibility of co-sponsoring the meeting if Ms. Donovan agrees to attend.

2. Employee Benefits. Mary Jo Larson reported that the next meeting of the committee would take place Friday, April 11, 2003. Nancy Keppelman and David Ledermann will speak on the work that they have done in preparing comments for the ABA on the proposed nondiscrimination regulations issued by the IRS to deal with cash balance plans. Furthermore, John Eggertsen will present a welfare benefit topic, while Larry Schiller will speak on "401k Safe Harbor Traps for the Unwary."

Mary Jo next reported that another meeting of the committee is scheduled for June 24, 2003 at the offices of Honigman, Miller, Schwartz and Cohn, LLP in Detroit. Bruce Karem of the IRS will speak on Section 457(b) and Section 403(b) plans.

Mary Jo further reported that the Employee Benefits Committee will serve as a co-sponsor of the upcoming Great Lakes Area ASPA/IRS Employee Benefits Conference. That conference will take place in Chicago on May 1 and May 2, 2003. Sherill Siebert and Chuck Lax serve on the Steering Committee for the conference. As a sponsor, the Committee has provided a list of its Members for invitation purposes. This, however, was conditioned upon a commitment that the list would be used for no other purpose.

Finally, Mary Jo indicated that Brock Swartzle and she had submitted an article to the Michigan Tax Lawyer entitled "The Constructive Receipt Doctrine - Is Ignorance Bliss?" The date of publication is unknown.

3. Estates & Trusts. George Runstadler was not present and provided no report.

4. Practice & Procedures. Jess Bahs reported that he was attempting to schedule a joint committee meeting with other committee chairpersons. Jess indicated that he has had attendance difficulties with committee meetings, unless they are scheduled jointly with other committees.

5. State & Local. John M. Neberle reported that the State & Local Committee would meet on Thursday, March 13, 2003, at the offices of Howard & Howard in Lansing, Michigan. The guest speaker for the program will be Michigan State Treasurer, Jay Rising, who will speak to the group on his views of tax administration, the value of advisory groups, and other miscellaneous matters. It was noted that this would likely be the first appearance by the new Treasurer at a business organization type meeting. A copy of the Committee meeting's agenda, as well as an outline entitled "Legislation Necessary to Implement Loophole Closure Measures - Fiscal Year 2004 Executive Budget" is attached to these minutes. John indicated that Mr. Rising would likely address, during the meeting, the Governor's directive to oversee $100 million of "loophole closings."

E. OTHER REPORTS.

Probate & Estate Planning Liaison. George Gregory submitted summaries of the December 14, 2002 and January 18, 2003 Probate & Estate Planning Section Council Meetings. Those summaries are attached to these minutes.

George summarized those reports by noting the following:

1. The Probate & Estate Planning Section will hold its annual meeting separate from the State Bar of Michigan's annual meeting. It is scheduled as an all-day program. The program will include committee meetings, a Council meeting, and "focus group meetings" to determine the interests of Section Members.

2. The Section continues to negotiate with the Michigan Bankers Association concerning revisions to the Uniform Principal and Income Act.

3. A study is being organized by the Section concerning the Uniform Trust Code.

F. OLD BUSINESS. None.

G. NEW BUSINESS.

Eric Nemeth proposed that the Tax Section contribute $2,500 to the MSU-DCL Tax Clinic, which is attempting to raise $52,000 to support the cost of a two-year fellowship.

The Tax Clinic provides tax services for low income taxpayers in the community. Participants in the Tax Clinic prepare tax returns, Offers In Compromise, as well as other routine communications with the IRS and the Department of Treasury.

Eric next observed that the Tax Section has been derelict for many years in community outreach endeavors. Furthermore, at this time, the Tax Section has available substantial funds, which could be in part devoted to this program. Eric further indicated that he was personally familiar with the program inasmuch as he is an adjunct professor at the law school, and has assisted Michele Halloran, the MSU-DCL Tax Clinic Director, in developing the program.

It was moved by Eric Nemeth and seconded by Tony Caputo that $2,500 be contributed to the MSU-DCL Tax Clinic at this time. The motion was unanimously approved.

It was suggested that Eric invite Michele Halloran to appear at our next Tax Council meeting, which will take place in May, to provide further information on the Tax Clinic. It was even suggested that Michele be given the opportunity to also appear at the upcoming Summer Tax Conference.

Ed Deron next reported that an amendment to the Tax Section's bylaws was needed. It had been recommended by the State Bar of Michigan that the bylaws be amended to provide that the annual meeting of the Section could be held either in conjunction with the Annual Meeting of the State Bar of Michigan, or at such other time and place as may be arranged by Council. A petition signed by ten (10) Members of the Section was needed to initiate the change. Specifically, Section 1 of Article VII of the bylaws would be amended to read as follows:

Section 1. The annual meeting of the Section shall be held at the Annual Meeting of the State Bar of Michigan, or in the same city or place as such Annual Meeting of the State Bar of Michigan, or at such other time and place as may be arranged by the Council, with such program and order or business as may be arranged by the Council.

Once the petition has been finalized, the proposed change would be published in the Michigan Tax Lawyer and voted on at the next annual meeting, which would take place on September 12, 2003 in Lansing.

Ed Deron next reported that he had received from Joe Bonventre a copy of the Opinion issued by the Michigan Court of Appeals in the Lacks case. It was noted that both the Probate & Estate Planning Section and the Taxation Section had submitted an amicus brief. A copy of the opinion is available by contacting Ed Deron.

Ed then reported that he had received a brochure from the Chicago-Kent Tax Institute. Their program is scheduled for May 1 and May 2, 2003. Anyone desiring information on the Institute should contact Ed directly. It was suggested that Tony Caputo contact the Chicago-Kent Tax Institute and request they repay the favor by distributing brochures on our Summer Tax Conference.

Finally, Ed Deron indicated that the next meeting was scheduled for May 8, 2003 at the Skyline Club in Southfield, Michigan. A business meeting is planned for 4:00 p.m. to be followed by the Past Presidents' Dinner at 6:00 p.m.

There being no further business, a motion to adjourn was made by George Gregory and seconded by Trevor Wetherington. After unanimous consent, the meeting was adjourned at 10:30 a.m.

Respectfully submitted,

Charles M. Lax
Secretary

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