Wireless Access Code: 9166703926

The American Coalition for Taxpayer Rights (“ACTR”) for CWAG

Stephen M. Ryan, Esq.

McDermott Will & Emery 600 13 th Street, N.W.

Washington, D.C. 20005 [email protected]

Tel. 202-756-8333 (O)

www.mwe.com

Boston Brussels Chicago Düsseldorf Houston London Strategic alliance with MWE China Law Offices (Shanghai) Los Angeles Miami Milan Munich New York Orange County Paris Rome Silicon Valley Washington, D.C.

© 2012 McDermott Will & Emery. The following legal entities are collectively referred to as “McDermott Will & Emery,” “McDermott" or “the Firm”: McDermott Will & Emery LLP, McDermott Will & Emery AARPI, McDermott Will & Emery Belgium LLP, McDermott Will & Emery Rechtsanwälte Steuerberater LLP, MWE Steuerberatungsgesellschaft mbH, McDermott Will & Emery Studio Legale Associato and McDermott Will & Emery UK LLP. These entities coordinate their activities through service agreements. McDermott has a strategic alliance with MWE China Law Offices, a separate law firm. This communication may be considered attorney advertising. Prior results do not guarantee a similar outcome.

CWAG: WHO IS THE AMERICAN COALITION FOR TAXPAYER RIGHTS (“ACTR”)?

  ACTR is a 501(c)(6) Made up of 2 components: tax preparation companies and financial service settlement companies  We help prepare approximately 90 million of the 140+ million individual federal income tax returns   We provide approximately 18.6 million of the nearly 20 million RTs ACTR tax preparation companies: – – – – – – – H&R Block Intuit Jackson Hewitt Liberty Tax Tax Act (2 nd Story) TaxSlayer CCH Small Firm Services (UTS) Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 3

Continued: WHO IS ACTR?



The tax companies’ offerings range from:

– In person – Do-it-yourself software (DIY) – “Professional” software (used by CPAs, lawyers, other preparers) 

ACTR financial services companies:

– H&R Block – Refund Advantage – Republic Bank and Trust – Santa Barbara Tax Products Group Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 4

CHARACTERISTICS OF TAX PREPARATION MARKETPLACE

 In 1999, 1.25 million taxpayers used private sector on-line products. In 13 years the industry (not just ACTR members) has gone from about 1% of taxpayers to 80% of taxpayers using Internet and electronic tax-preparation products  The states and federal government did not pay for this change, but have benefited mightily,

e.g

.: – – – lower cost of processing returns reduced errors in returns since software corrects routine taxpayer errors taxpayers benefit in reduced burden and cost  Industry marked by innovation, fierce competition and change  Software capabilities continue to increase, but not price  Competition is fierce within sectors (

e.g

., DIY), and between sectors (DIY v. stores v. professionals)  Example: A recent market entrant less than 10 years old has become the #3 company in the industry in a decade Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 5

ACTR COMPANIES AND “FREE FILE”: THE FEDERAL SYSTEM (IRS) AND 23 STATES

 Industry has combined to provide free tax preparation and electronic filing for the lowest 70% of federal taxpayers (translates to $57K AGI and below)  ACTR companies provide many of those free services to the poor and underserved (H&R Block, Intuit, Liberty, TaxAct, Taxslayer)  23 states have “Free File” programs which include free state returns, coordinated with the federal program (map on next slide)  18 other states pay to create “competitive” software  GAO has said the costs of producing such software and the low take-up rate of state software do not justify IRS adopting such a model  ACTR is not Free File, but 6 of the 7 ACTR tax preparation companies are also Free File companies (H&R Block, Intuit, Jackson Hewitt, Liberty Tax, Tax Act, TaxSlayer) Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 6

1 OR WA ID CA CA NV Free File States (23) No Income Tax States (9) State creates its own tax software and/or e filing system (18)

STATES SPONSORING FREE FILE PROGRAMS

UT AZ MT WY CO NM NH VT ND SD NE KS OK MN IA MO AR WI IL MS MI IN KY TN OH WV SC AL GA PA VA NC NY TX LA FL ME CT NJ MA RI DC AK HI Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 7

BEING AN INDUSTRY LAWYER PRE DODD-FRANK HAD ITS ADVANTAGES!



National Bank Act preemption was an easy win for industry attorneys:

–

e.g.,

Pacific Capital Bank v. Connecticut, 542 F.3d 341 (2 nd Cir. 2008) –

e.g.,

Pacific Capital Bank v. Milgram (New Jersey), No. 08-0223 (FLW), 2008 U.S. Dist. LEXIS 19639 (D.N.J. Mar. 13, 2008) 

With new concurrent jurisdiction of the CFPB and states under Dodd-Frank, life is more exciting

Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 8

WHAT IS ACTR PREPARED TO DO WITH THE ATTORNEYS GENERAL COMMUNITY?

 We want to reach a consensus with you (IRS and CFPB) that will stabilize the regulatory regime, federal and state, for a pro-consumer, pro transparency agenda. We are prepared to volunteer for binding “best practices” to uplift the consumer experience  We want to drive a common understanding of what is good policy with respect to tax settlement bank products with you and the CFPB. We believe this can be done before the 2013 tax season, but in any case, certainly before 2014  We can support initiatives to help you combat identity theft in the tax arena  We can serve as a resource for you with respect to our industry Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 9

ACTR/ATTORNEYS GENERAL COMMUNITY, CONTINUED



There are things we must do to protect our industry, including:

– We will oppose any effort to claim the RT is a “loan” product in litigation, legislation or regulation (we believe this is an attempt to ban the product) – We will continue to resist any attempt to dis-intermediate our industry from taxpayers/customers Stephen M. Ryan, Esq. [email protected]

American Coalition for Taxpayer Rights Tel. 202-756-8333 (O) 10

Wireless Access Code: 9166703926