Legislative & Administrative, Congress, & Treasury

Steptoe & Johnson LLP maintains an active and successful tax legislative practice. We perform extensive tax legislative work for a diverse range of businesses and industries, including communications and technology, entertainment, energy, insurance, finance and investment, and consumer products. We work with domestic and foreign businesses, trade associations, and pension plans. Members of Steptoe’s tax legislative practice possess extraordinary experience in all technical tax areas and advocate our clients’ positions before Congress, Treasury, and the IRS. Mark Silverman, head of the tax practice group, was named one of the “Top Ten Tax Lawyers in Washington” by Legal Times. Steptoe’s tax practitioners are consistently ranked among the “best” lawyers in the United States and globally.  

Members of our tax practice have served as advisors to the key tax writing committees, and are former Administration officials. We have excellent contacts and working relationships with key legislative staff and top Treasury and IRS officials. In addition, we are experienced in all facets of the legislative process, from drafting and analyzing legislation, writing testimony and testifying on behalf of clients before Congress, devising legislative strategies, monitoring legislative activities, and performing other advocacy work before Congress, Treasury, and the IRS. Our tax legislative team is also knowledgeable about compliance with the Lobbying Disclosure Act and federal election and campaign finance laws. Members of Steptoe’s tax team are highly sought out as speakers around the world and have authored extensive publications on contemporary tax topics. 

We represent our clients in presenting their points of view on tax policy matters pending before the Congress, the Treasury Department, and the IRS. In this practice, we maintain regular contact with Congressional tax staff, and Treasury and IRS officials. We counsel various industry groups and corporations in obtaining revisions to, and clarifications of, pending legislation. We assist our tax clients in developing their legislative objectives and strategies. Similarly, once legislation has been enacted, we represent our clients before Treasury and the IRS with respect to the issuance of regulations under the new law. Our regular contacts with tax policy officials enable us to respond quickly in providing information to our clients and in presenting our clients' concerns to those officials. These contacts are enhanced because a number of our tax partners are former government officials.

To highlight a recent tax legislative achievement, we led efforts to successfully modify a provision relating to “cash-rich split-offs” in the Tax Increase Prevention and Reconciliation Act of 2005. In addition, we worked with a number of clients to oppose a provision in TIPRA codifying the economic substance doctrine. Steptoe has also played a leading role in spearheading legislative efforts that would reduce or eliminate the corporate capital gains tax.  On the opposite end of that spectrum, we have also worked on technical corrections to recently enacted legislation. These legislative efforts have included meetings with members of Congress on the House Ways and Means and Senate Finance Committees, top committee tax staff, and other Congressional staff members. We are also currently working with the Treasury Department,and the IRS on various regulations relating to so-called tax shelters, section 355(e), and the loss disallowance for consolidated return taxpayers. 

Daily Tax Update:  An important part of Steptoe’s tax legislative practice is the Daily Tax Update. Its reputation as a timely source for breaking tax news is recognized across the country by our tax clients, tax practitioners, Members of Congress, and Congressional staff who use it to learn what is happening in our nation's capital and to get an insider's viewpoint on significant tax developments.  The DTU provides a concise summary of breaking federal tax news in Washington highlighting the latest tax developments from Capitol Hill, including tax bills introduced in Congress, major tax legislation, significant regulations, and other administrative guidance issued by the Treasury Department and IRS, and major tax opinions from various courts. The DTU is provided to subscribers by about 4 p.m. each day via email, free of charge.

Representative Matters

Legislative Projects

• Section 355 “Cash-Rich Split-offs”: Worked on behalf of clients to modify proposed amendments to the section 355 involving “cash-rich split-offs.”  Our efforts resulted in significant and material modifications to the legislative proposal.
• Section 355(e): Worked on behalf of clients to mitigate the impact of section 355(e) on spin-off transactions.
• Section 470: Working on behalf of clients to modify section 470. 
• Economic Substance: Worked on behalf of a number of clients to oppose the proposed codification of economic substance.  The Senate versions of several tax bills have included this provision.  However, this provision has been eliminated in Conference.
• Section 269: Worked on behalf of a client to oppose a proposed amendment to section 269 that was designed to correct a perceived loophole, which was purportedly exploited by Enron.  The proposed amendment was not included in the Conference version of the American Jobs Creation Act (the bill that became law).
• Corporate Capital Gains:  Currently working on behalf of a client to reduce or eliminate the corporate capital gains tax.  Worked to include language in section 1201 that provides that the corporate capital gains rate will apply to the lesser of a corporation’s net capital gain or taxable income.
• Shelter Legislation: Worked on behalf of clients to mitigate the impact of proposed changes to the tax shelter reporting rules, which were eventually enacted as part of the American Jobs Creation Act. 
• International Tax Reform: Worked as an outside advisor to the Senate Finance Committee on recent International Tax Reform proposals. 
• Homeland Investment (Repatriation of Foreign Dividends): Advised Congressional staffs regarding the development and enactment of section 965, the tax rate reduction on earnings distributed from controlled foreign corporations.
• Foreign Tax Credits: Worked with a client to draft a legislative proposal to neutralize the adverse effects of foreign tax credit basket consolidation on overall foreign loss accounts. 

Regulatory Projects 

• Tax Shelter Regulations: Working on behalf of clients to mitigate the impact of the recent statutory changes to the shelter reporting rules.
• Repatriation: Working on behalf of a number of clients to shape guidance under the Homeland Investment repatriation provision regarding the impact of acquisitions on the base period calculation, and regarding the “APB 23” limitation.
• US-Japan Income Tax Treaty: Obtained the issuance of bilateral interpretive guidance under the US-Japan income tax treaty regarding the withholding tax rate on interest paid to financial services businesses.
• Section 355(e) Plan Regulations: Worked on behalf of clients to modify the scope of the plan regulations.
• Proposed No Net Value Regulations: Working on behalf of client to modify the scope of the proposed regulations.
• Consolidated Return Regulations Relating to Intra-Group Debt: Advised IRS and Treasury on revisions to regulations.
• S Corporation Regulations: Worked on behalf of client to revise section 1374 regulations.  Revised regulations were issued in 2005.
• Loss Disallowance Regulations: Worked on behalf of clients to clarify new loss disallowance regulations.
• Foreign Tax Credit Arbitrage Transactions: Working with clients to limit the scope of guidance on leveraged investments involving foreign tax credit on arbitrage.

News, Seminars & Events

• Codification of Economic Substance Doctrine - Is It an Idea Whose Time has Come and Gone?

Publications & Speaking Engagements

• S Corporation Rules and the Use of S Corporations as Acquisition Vehicles
  June 2006, Practising Law Institute
• S Corporation Rules and the Use of S Corporations as Acquisition Vehicles Appendix
  June 2006, Practising Law Institute
• Economic Substance Doctrine: Sorting Through the Federal Circuit's "We Know It When We See It" Ruling in Coltec
  December 31, 2006, The Tax Executive (November-December 2006)
• Mark Silverman Moderates Panel, Matthew Lerner Speaks, on Administrative Practice and Court Procedure, Practice at ABA Tax Section Midyear Meeting