Council Members Present

Edward M. Deron
Thomas J. Kenny
Sherill Siebert
David B. Deutsch
Eric M. Nemeth
Jay A. Kennedy
Charles M. Lax
Michael O. Love
Henry P. Lee
Trevor T. Wetherington

Ronald T. Charlebois, Business Entities
Mary Jo Larson, Employee Benefits
Jess A. Bahs, Practice & Procedure
John M. Neberle, State & Local
George H. Runstadler, III, Estates & Trusts

Shirley A. Kaigler
Anthony J. Caputo
Steve Z. Ettinger

George Gregory, Past Council Chairperson
Dennis M. Mitzel, Past Council Chairperson
Reginald J. Nizol, Past Council Chairperson
Eric T. Weiss, Ex-Officio, Past Council Chairperson

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 Jay A. Kennedy to accept the minutes, the motion was unanimously carried.

B. TREASURER'S REPORT.

A one-month summary of activity for the period of March 2003 was distributed by Eric Nemeth. He further distributed a reconciliation of the Taxation Section's records with the State Bar of Michigan's records for the period October 1, 2003 through March 31, 2003. Eric indicated that they were reconcilable within $43.50. In addition, he indicated that the State Bar of Michigan had mistakenly charged the Tax Section with a professional coordinator fee that would be reversed. Furthermore, Eric indicated that he would prepare for the next meeting of the Tax Council a comparison of the financial activity to date for the year with the budget established for the fiscal year 2002-2003.

Eric next reported that he had received a thank you note from Michele Halloran, Director of the Tax Clinic atMSU-DCL, thanking the Tax Section for its generous contribution of $2,500 to its fellowship fund. Michele indicated that the contribution would be matched dollar-for-dollar and would be instrumental in reaching the Tax Clinic's goal to raise $52,000 to support the cost of a two-year fellowship. Eric also provided those present with background on the Tax Clinic and his involvement with the program, being an adjunct professor at the law school. Eric confirmed that Michele would be present at the Summer Tax Conference and would be available to answer further questions about the Tax Clinic and its various programs.

C. COUNCIL ACTIVITIES.

Ed Deron asked for reports and was advised of the following:

1. After Hours Tax Law Series. Although Shirley Kaigler was not present, she had submitted a written report. Shirley first indicated she had met with Mary Hiniker of ICLE to discuss topics, speakers, and meeting dates for the 2003-2004 After Hours Tax Law Series. Based upon attendance at past courses and with the concurrence of Shirley, it was suggested that the Taxation Section consider reducing the number of courses from five to four each year. A complete schedule of attendance at programs for the last three years was included in Shirley's report.

Shirley next reported that ICLE proposed continuing the programs on Tuesday afternoons from 3:00 p.m. to 6:00 p.m. and suggested dates of October 28, 2003; November 18, 2003; January 13, 2004; and February 17, 2004. For topics, Shirley recommended "Hot Topics in State and Local Taxation; Hot Topics in Estate and Gift Tax; Estate Planning with Retirement Plans; and Assessing Corporate Tax Shelters." After a brief discussion, the Members of the Council agreed that "Assessing Corporate Tax Shelters" should be replaced with "Tax Aspects of Buying or Selling a Business" and/or "Business Succession Planning." Finally, Shirley requested volunteers or suggestions for speakers for each of these programs.

2. Summer Tax Conference. Although Tony Caputo was not present, he had submitted a brief report. Tony indicated that all of the speakers were confirmed, and the outlines had been received for the 2003 Summer Tax Conference. As of May 2, 2003, only 16 people had registered. Ed Deron reported that he was aware of at least 9 more registrations that were in the "pipeline." It was agreed that each Member of the Tax Council needed to encourage members of their own firm to attend. Also, the Chairpersons were asked to distribute 2003 Summer Tax Conference brochures at future meetings.

With regard to the 2004 Summer Tax Conference, Henry Lee reported that many decisions needed to be made as soon as possible. With respect to sponsorship, Henry inquired whether the Tax Council had any objection to more than one sponsor for the program. It was agreed that multiple sponsors from different disciplines would be acceptable. It was suggested that Henry first contact Standard Federal Bank, which has sponsored the last two Summer Tax Conferences and give them the first opportunity for 2004. Henry also indicated he had discussed sponsorship with Craig Stout of Stout Risius Ross, Inc., who was interested.

With regard to speakers, Henry had spoken with Lawrence Katzenstein, a nationally known speaker on gift and charitable planning. Although not committed, Mr. Katzenstein was eager to participate. It was agreed that a new group of speakers may enhance next year's attendance. Henry also requested Tax Council's consideration of the scope of the presentations for the 2004 Summer Tax Conference. It was believed that a different approach from prior conferences may enhance the attendance. Consideration will be given to more basic presentations or presentations limited to a single tax discipline.

Henry next distributed a list of potential locations for the 2004 Summer Tax Conference. The list included: The Grand Hotel at Mackinac Island, The Inn at Bay Harbor, The Otsego Club and Resort in Gaylord, Shanty Creek/Cedar River Village, and The Soaring Eagle Hotel and Casino. After a brief discussion of each location by consensus vote, The Soaring Eagle Hotel and Casino was selected. Henry noted that this facility has been utilized by many other State Bar of Michigan sections and groups for meetings. It was also agreed that the weekend of June 24 through June 26 of 2004 would be the preferable date.

3. Tax Court Luncheon. Tom Kenny reported that the next scheduled Tax Court docket for Detroit was September 28, 2003. To date, no judge has yet been appointed. Once that occurs, Tom will attempt to schedule a luncheon at that time.

4. Directory. Trevor Wetherington indicated he was proceeding with the preparation of a "electronic" version of the Directory. In order to proceed, he inquired whether any member of Tax Council had a prior version of the Directory in electronic form. It was suggested that Trevor contact the printer of the last Tax Section Directory to determine if they may have retained a copy.

5. Michigan Bar Journal. Tom Kenny reported that the September 2004 Michigan Bar Journal would have a tax theme, and as such the Tax Section would be responsible for providing articles. Tom indicated that further details would probably not be available until the fall or winter of 2003. At that time, he anticipated soliciting articles from Tax Section Members.

6. Michigan Tax Lawyer. David Deutsch reported that he was working on the next edition. He requested all Committee Chairpersons to submit reports as soon as possible. Furthermore, David indicated that he had already in hand a long article from Sebastian V. Grassi and a short article on employee benefits. He further indicated he was still awaiting receipt of additional articles at this time. Although Steve Ettinger was not present, David also reported he had begun the transition process with Steve for future editions of the Michigan Tax Lawyer.

7. Annual Meeting. Jay Kennedy reported that he had secured State Senator Nancy Cassis, Chairperson of the Michigan Senate Finance Committee, to speak. Senator Cassis will speak at that time on new state tax legislation. Her presentation will begin at approximately 10:15 a.m., following the regular meeting of the State Bar of Michigan Taxation Section.

Ed Deron reported that the State Bar of Michigan will limit their annual meeting to a day and a half and will no longer rotate locations. As such, all future programs will be held in Lansing until further notice. Ed indicated that a number of the Sections will no longer hold their annual meetings in conjunction with the State Bar of Michigan's Annual Meeting. Ed noted that the petition he circulated at the Tax Council's last meeting, amending its bylaws to permit the Tax Section to hold its annual meeting at another time and location, would be voted upon at the September 12, 2003 annual meeting.

8. Internet. Mike Love reported that he was working with the State Bar to update the Tax Section's "home page" and the link from the State Bar web site. Information concerning the 2003 Summer Tax Conference and the annual meeting would be placed on the Tax Section's web site as soon as possible.

9. Federal and State Tax Legislation. Tom Kenny distributed an extensive report provided by the Michigan Chamber of Commerce concerning pending tax legislation. A copy of that report is included with the minutes of the meeting. Tom also provided a brief report concerning the status of the streamlined sales tax project as well as legislation concerning the taxation of members of limited liability companies.

10. Membership Outreach Coordinator. Steve Ettinger was not present and provided no written report.

11. Treasurer's Advisory Group. Ed Deron reported that he was still awaiting word whether the new State Treasurer will form any advisory groups and, if so, whom they will be comprised of and when they will meet.

D. COMMITTEE REPORTS.

1. Business Entities. Ron Charlebois reported that the next meeting of the Business Entities Committee would be held jointly with the Practice & Procedure Committee and is scheduled for Tuesday, May 13, 2003, at 1:30 p.m. at the law offices of Howard & Howard. The program would be in the form of a panel discussion and cover current and future policies and procedures regarding the collection of taxes from limited liability companies, including the personal liability of members and managers. The panel members would include Michael Antovski of Sommers Schwartz Silver & Schwartz, P.C.; Donna Donovan, Director of Tax Policy for the State of Michigan; and Alexandra E. Nicholaides, Area Counsel for the Internal Revenue Service.

2. Employee Benefits. Mary Jo Larson reported that the Employee Benefits Committee last met on Friday, April 11, 2003. Approximately 30 Committee Members were in attendance. Nancy Keppelman and David Ledermann spoke on nondiscrimination regulations issued by the Internal Revenue Service dealing with cash balance plans. Furthermore, John Eggertsen spoke on HIPPA and Larry Schiller spoke on 401k safe harbor plans.

Mary Jo next reported that another meeting of the Employee Benefits Committee is scheduled for June 24, 2003 at 4:00 p.m. at the offices of Honigman, Miller, Schwartz and Cohn, LLP in Detroit. Bruce Karem of the Internal Revenue Service will speak on Section 457(b) and Section 403(b) plans.

Finally, Mary Jo indicated that the Employee Benefits Committee had co-sponsored the Great Lakes Area ASPA/IRS Employee Benefits Conference held in Chicago on May 1 and May 2, 2003. Both Sherill Siebert and Chuck Lax served on the Steering Committee for the conference and were also moderators for the program.

3. Estates & Trusts. George Runstadler first reported that the committee had met on Wednesday, April 30, 2003. The speaker for the program was Jeffrey Getty of National City Bank of Wilmington, Delaware. Mr. Getty spoke on the topic of asset protection planning in light of the Craft decision, the proliferation of Dynasty Trusts, and the economic and litigious climate we live in. The program was sponsored by National City Bank and took place at the Birmingham Community House in Birmingham, Michigan. Approximately 30 people were in attendance.

George then reported that the next meeting of his committee would be a joint meeting with the Practice & Procedure Committee. The meeting was scheduled for May 28, 2003 at 3:00 p.m. in the Fifth Third Bank Offices in Town Center, Southfield, Michigan. The program would focus on valuation discounts in light of the Kimball case. The speaker at the program would include from the IRS Alexandra E. Nicholaides and John Stevens of Area Counsel's Office; James Naddeo, Appellate Conferee; and Lorraine New, Supervising Attorney of the Estate and Gift Tax Audit Group. George indicated that this program would likely be very successful inasmuch as he had already received 28 confirmations of attendance.

Finally, George reported that a meeting of his committee would likely be scheduled in July or August of 2003 to discuss distribution planning from qualified retirement plans and IRA's. George asked for suggestions for speakers for this program.

4. Practice & Procedure. Jess Bahs confirmed the two upcoming joint meetings that had been previously discussed in these minutes. The May 13, 2003 meeting is scheduled with the Business Entities Committee to consider collection of taxes from limited liability companies and their members and managers. Furthermore, Jess confirmed the May28, 2003 meeting with the Estates & Trusts Committee to consider valuation discounts. He also confirmed the anticipated large attendance at the May 28, 2003 meeting, attributing it to the timeliness of the topic, the interest among the joint committees and the Internal Revenue Service's participation in the program.

5. State & Local. John M. Neberle reported that the State & Local Committee concluded a very successful meeting on March 13, 2003, where the guest speaker was Michigan State Treasurer, Jay Rising. John indicated this was the first meeting of this nature attended by Mr. Rising. Approximately 30 Members were in attendance. Treasurer Rising's presentation principally dealt with proposed "loophole closures." He indicated, however, that the administration was having difficulty pursuing the closures due to objections from the Michigan Chamber of Commerce and other groups.

John next reported that no further meeting of his committee had been scheduled at this time due to uncertainty over the administration's tax policy and program.

E. OTHER REPORTS.

Probate & Estate Planning Liaison. George Gregory reported that the Probate & Estate Planning Section has:

1. Established a listserve for its members.

2. Agreed in principal with the Michigan Bankers Association concerning revisions to the Uniform Principal and Income Act.

3. Begun work on the adoption of the Uniform Trust Code.

4. Been working on a specialization and certification project with ICLE.

5. Scheduled the 43rd Annual Probate & Estate Planning Institute for May 15 through May 17, 2003 at the Grand Traverse Resort, and on June 13 and 14, 2003 at the MSU Management Education Center in Troy, Michigan.

F. OLD BUSINESS. None.

G. NEW BUSINESS.

Ed Deron reported that there had been further activity on the Estate of Richard Lacks, Sr., Deceased case. The State of Michigan has filed an Application for Leave to Appeal in the matter. The estate has filed a response. Additionally, Ed reported that he had received a copy of the Appellant's reply brief and that if anyone was interested in any of these materials, to contact him by email, and he will see that copies are made available tothem.

Ed next reported that he had received a letter from Christopher Hastings, the Acting Chairperson of the Unauthorized Practice of Law Committee with the State Bar of Michigan. This letter solicited the comments of the Tax Council with respect to the practices of the State of Michigan, Department of Environmental Quality that allow agency staff members to legally act as an advocate for the agency in contested case hearings. It was also noted that a letter had been received from the Attorney General's Office supporting the idea and suggesting legislation that would recognize this as an exception to the general prohibition dealing with the unauthorized practice of law by lay persons.

A discussion took place concerning the Tax Council's position. It was noted by Tax Council Members that tax practitioners frequently deal with non-attorneys who engage in activities that approach the practice of law. For example, certified public accounts, insurance agents, benefit consultants, etc. frequently perform the same or similar services as those provided by attorneys. Eric Nemeth volunteered to prepare comments on behalf of Tax Council. Those comments would be circulated to Tax Council Members for their review and comment.

Ed indicated that the next meeting of the Tax Council would take place on June 28, 2003, at 8:00 a.m. at the Double JJ Resort in conjunction with the 2003 Summer Tax Conference.

Jay Kennedy suggested that Tax Council consider inviting two law students that participated in Michele Halloran's Tax Clinic program to join her at the 2003 Summer Tax Conference as guests of the Tax Section. It was noted that this had actually been discussed with Steve Ettinger at our prior meeting as part of an outreach initiative with tax law students. It was agreed that these students would be offered registration at no cost for the Summer Tax Conference; however, they would be obligated to pay for hotel rooms and other incidentals. On motion duly made by Jay Kennedy and seconded by Eric Nemeth to ask Michele Halloran to invite two law students to attend the Summer Tax Conference with her as guests, the motion was unanimously carried.

There being no further business, a motion to adjourn and proceed to the Past Presidents' Dinner was made by Henry Lee and seconded by John Neberle. After unanimous consent, the meeting was adjourned at 5:34 p.m.

Respectfully submitted,

Charles M. Lax
Secretary

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