Ron Wyden Leads Senate Finance Committee Consideration Of Nominees To The US Tax Court

2 months ago

The Senate Finance Committee held a hearing to consider 3 nominees to the US Tax Court.

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Transcript

00:00The Finance Committee will come to order. The Committee meets this morning to discuss

00:05three nominations to the U.S. Tax Court. I'll begin with Jeffrey Arbeit, who has served

00:10for nearly a decade as Legislation Counsel with the staff of the Joint Committee on Taxation.

00:16He works there, focused on some of the most complicated issues of tax law, including international

00:21taxation, as well as financial assets, transactions, and markets. Mr. Arbeit also brings private

00:27sector experience and clerked on the tax court, and suffice it to say, we understand

00:34we've got a fair number of guests in the House from the Joint Committee on Taxation, big

00:39fans of Jeffrey Arbeit, and we welcome them, and we appreciate all the work that JCT does

00:44for us. I'll take the opportunity to repeat what I said at the last hearing, when Kashi

00:49Wei's nomination was up for discussion. We are big fans, as I just touched on, of the

00:56good people over at JCT. We couldn't do our jobs without their professionalism and expertise.

01:01As sorry as we are to lose them when these nominations come up, our loss is the country's

01:07gain.

01:08Next up, Kathy Fung is a Deputy Area Counsel at the IRS Office of Chief Counsel. She's

01:13held multiple positions there since 2009. Like Mr. Arbeit, she also brings very valuable

01:19private sector experience, previously served as an attorney advisor for a tax court judge.

01:25Benjamin Geider has experience spanning a decade and a half advising clients on a variety

01:30of tax issues. Those include low-income housing and tax-exempt bonds. He's currently an affordable

01:36housing attorney and a member of the American Bar Association Forum on Affordable Housing

01:41and Community Development Law.

01:43So I'll just wrap up, because I think we've got three very talented nominees today by

01:49saying we appreciate their willingness to serve on the tax court. The tax court is an

01:54essential feature of our tax system and it's the best opportunity Americans have to dispute

01:59a bill before they actually have to pay. It's a major source of fairness for taxpayers and

02:04it relieves a lot of pressure that would otherwise fall on other parts of the judicial system.

02:10So big thanks to our nominees. We look forward to questions and answers. Senator Crapo.

02:17Thank you, Mr. Chairman, and I second your comment on the importance to American taxpayers

02:23to have fairness and what they hope for to get out of the tax court.

02:28I also welcome our three nominees, Mr. Arbite, Ms. Fung, and Mr. Geider.

02:33Congratulations on your nominations and thank you all for your willingness to serve.

02:39This committee convened last month to consider three other nominees to be judges for the U.S.

02:44tax court. During that hearing, I discussed the tax court's unique role as a forum for the

02:49resolution of disputes between taxpayers and the IRS. The tax court plays a vital role in the

02:57maintenance of our tax laws and the judges nominated to these positions must be prepared

03:02to carry out their duties with the highest degree of skill and integrity. It is essential to keep

03:09the tax court staffed with highly qualified judges to ensure that taxpayers receive fair,

03:15impartial, and efficient hearings. If confirmed, each of you will play a

03:21critical role in upholding the public trust in our nation's tax system,

03:28which American taxpayers expect and deserve. I thank each of our nominees for their dedication

03:35to our country. I look forward to hearing your testimony today and thank you again, Mr. Chairman.

03:41Thank you, Senator Crapo. Brief introduction for our nominees. We touched on your background

03:47earlier. Jeffrey Arbeit, clerk on the tax court, served for nearly a decade as legislative counsel

03:53over a joint committee on taxation. Kathy Fung, clerk on the tax court,

03:57has held several important positions in the IRS Office of Chief Counsel. Ben Geider has worked

04:02for a decade and a half advising his clients on a variety of issues. Thank you again to our

04:07nominees. What we're going to do is we'll enter your prepared remarks into the record. They'll be

04:13included in their entirety. Mr. Arbeit, why don't you proceed and then we'll have some questions.

04:19Thank you, Chairman Wyden, Ranking Member Crapo, and distinguished members of the committee.

04:24Testifying before you today is an honor. I'm grateful to President Biden for nominating me

04:30to be a judge on the United States Tax Court. I also want to thank the Senate Finance Committee

04:34staff for their guidance throughout this process. For the last nine years, I've had the privilege of

04:41serving members of Congress, including members of this committee, as a lawyer on the nonpartisan

04:46staff of the Joint Committee on Taxation. My days have been spent working closely on policy,

04:51from its origin as an idea, to its progression to a draft, to the long process of refining language

04:58and mechanics, all on a nonpartisan basis. During my time at the Joint Committee on Taxation,

05:03I've been privileged to work with members and their staff across the political spectrum

05:07on a wide variety of issues affecting taxpayers, both large and small.

05:13If confirmed, my focus will shift from proposals regarding what the law might be to cases disputing

05:19what the law is. Most cases before the tax court involve individuals, and in many cases,

05:25those individuals represent themselves. Their time before the court can be life-changing.

05:30I will seek to serve them as I have served you, fairly and evenly. I will also strive to apply

05:37the lessons I learned clerking for Judge James S. Halpern of the United States Tax Court,

05:42without whose support I would not be here today. Clerking for Judge Halpern taught me to assess

05:48opposing arguments, think critically about differing interpretations of the law, and express

05:54complicated concepts clearly in writing. Above all, he demonstrated how to treat all taxpayers

06:00fairly and with compassion. I cannot thank him enough. I also want to thank Professor Ted Sims

06:06of Boston University Law School, my former colleagues at Sullivan and Cromwell, and my

06:11current colleagues at the Joint Committee on Taxation, especially our Chief of Staff, Tom

06:16Barthold. Finally, I want to thank my parents, Susan and Robert, my sister, Miriam, and her partner,

06:23Jillian Schmidt. I appreciate the opportunity to appear before you today,

06:28and I look forward to answering your questions.

06:31Mr. Guider.

06:35Good morning. Thank you, Chairman Wyden, Ranking Member Crapo, and other esteemed members of the

06:40Finance Committee. I am extremely grateful to all of you, as well as your staff members,

06:45for the opportunity to testify before you today. I am thankful to the President for nominating me

06:50to serve on the United States Tax Court, and to his staff for their help throughout this process.

06:56I would also like to thank my wife, Julia, and our children, Benjamin, June, and Sarah. I would

07:01not be here without their love and support, nor would I be here without the love and support of

07:06my parents, Ben and Linda Guider. Thank you to them and to all my family and friends who have

07:11played roles large and small in my presence here today. Finally, I would also be remiss if I did

07:17not express my gratitude to Kelly Longwell, my mentor and colleague. As attorneys, we learn and

07:23grow by reading, researching, and practicing the law, but our mentors add invaluable perspective

07:29and experience, which benefits us immeasurably along the way. Thank you to her and to all the

07:35other attorneys whose knowledge, support, and guidance have helped me in my journey here.

07:40For the last 15 years, I've spent my career at Coates Rose and then Longwell Reese as a tax

07:44credit lawyer, specializing in low-income housing and historic rehabilitation credits,

07:49and working through the challenges that taxpayers encounter in earning those credits. I've seen how

07:54the tax code can be a tool to restore a building in a neighborhood that badly needs revitalization

08:00or to provide housing for individuals or families of low and moderate income.

08:05It has been incredibly rewarding to represent clients who believe in such work.

08:09I've devoted my legal career to work that benefits communities, especially those of low and moderate

08:14income. I would like to continue that spirit of service by being a judge of the tax court

08:19in the service of our country and its taxpayers, particularly those who find themselves before the

08:23tax court and may be of limited experience or resources. I believe that the experience and

08:29knowledge I've gained and the analytical mindset and abilities I've developed over my career would

08:35serve me well as a judge on the tax court, a position that demands those attributes.

08:40If confirmed, I will be methodical, fair, and impartial as I apply the law to the facts of

08:45each case before me. Senators, it would be an honor to serve our country in the capacity of

08:50judge on the tax court. If confirmed, I pledge to perform the job to the best of my abilities

08:55for the duration of my term. Thank you again for the opportunity to be here today.

09:01It is truly an honor and I look forward to any questions that you may have.

09:05You'll have some. Thank you, Mr. Geider. Ms. Fung.

09:10Senator Wyden, Ranking Member Crapo, and distinguished members of this committee,

09:15thank you for giving me the opportunity to be before you today to consider my nomination to

09:19serve as a judge on the United States tax court. I am grateful to you and your staff for your time

09:24and for scheduling this hearing today. It is truly a privilege to be nominated as a judge

09:29for the United States tax court. I am grateful to President Biden for nominating me for this

09:34important position. I would like to acknowledge my parents who are attending to my dad's surgery

09:39today and watching the live feed in California. Their sacrifices and support have allowed me to

09:44be in a position to appear before you today. I would like to thank my siblings for their

09:48encouragement and enthusiasm in this process. My brother, Tony, flew in from Seattle to be

09:54with me today, and my sister, Sandra, who lives in New York, is also watching us on the live feed.

09:59I would like to acknowledge Judge Robert A. Weary, Jr., a now a retired judge on the United

10:04States tax court, for his fellowship and mentorship. And I want to acknowledge my

10:08friends and colleagues who provide support to me every day. They are my D.C. family,

10:12and many of them are here with me today. I am the child of immigrant parents. My mother

10:17arrived in this country as a child, along with her parents and four siblings by boat.

10:22My father arrived in this country as a young adult separated from his parents.

10:27Each of my parents left their birth country for a better life and the promise of achievable

10:31opportunities. Through them, I have seen the epitome of hard work, perseverance, and integrity.

10:37As my parents pursued their American dream, they instilled in my siblings and me a tireless and

10:42principled work ethic. I have taken their experiences and lessons to heart and followed

10:47their example as the framework with which I have approached my career and my life.

10:53The tax court has always been a special place for me. It's where I started my legal career as an

10:57attorney advisor to Judge Wherry and where I witnessed the daunting tasks that self-represented

11:02taxpayers face when presenting their cases. I am sensitive to the fact that standing before a judge

11:08may be the first time taxpayers have had the opportunity to interact with their government.

11:13This backdrop shapes what would be my judicial comportment if I am confirmed. I pledge to listen

11:19to all facts with an open mind and to treat all taxpayers fairly and with the respect that all

11:24taxpayers should expect and deserve from their government. Over the past 20 years in private

11:29practice and in the government, I learned about complex tax issues both in the guidance and

11:34litigation areas. I represented large corporate taxpayers in their tax controversy and litigation

11:40and I devoted my time to representing taxpayers pro bono through low-income taxpayer clinics.

11:45At the IRS Office of Chief Counsel, I gained knowledge in drafting regulations

11:50to aid taxpayers in providing certainty to accomplish effective tax administration.

11:55In all instances, I have been a faithful public servant in applying the tax laws

11:59with diligence, integrity, and fairness. If confirmed, I would continue this responsibility

12:04to the American people in partially applying the law to the facts of each case.

12:1020 years ago, I embarked on my first legal job as an attorney advisor at the United States Tax Court.

12:15If confirmed, it would be my greatest honor to rejoin the tax court family,

12:19support the court's mission to resolve tax disputes expeditiously, and continue my

12:24government service as a judge. Thank you for your consideration. I look forward to your questions.

12:28Thank you very much. All of you have outlined your views very well and let me make sure everybody

12:36understands where we are. We've got some obligatory questions that we have to ask each of the nominees

12:41so we'll go through that and get an answer from each of you. First, is there anything that you're

12:46aware of in your background that might present a conflict of interest with the duties of the

12:50office to which you've been nominated? We'll just go right down the row. Mr. Arbeit. No. Mr. Geider.

12:55No. No. Very good. Do you know of any reason, personal or otherwise, that would in any way

13:00prevent you from fully and honorably discharging the responsibilities of the office to which you've

13:03been nominated? Mr. Arbeit. No. No. No. Third, do you agree without reservation to respond to any

13:11reasonable summons to appear and testify before any duly constituted committee of the Congress

13:15if you are confirmed? Mr. Arbeit. Yes. Yes. Yes. Finally, do you commit to providing a

13:24prompt response in writing to any questions addressed to you by any senator of the committee?

13:29Yes. Yes. Yes. Okay. So let me start it this way without going into all the details of my shady

13:39past. Before I was in public service, I ran the legal aid program for the elderly, for senior

13:45citizens, I was director of the Gray Panthers, and I saw particularly how often Americans,

13:52particularly the elderly, but people of all ages, just found the court system incomprehensible and

13:59really couldn't figure out how it might work to address, you know, their concerns. And so we made

14:07a special focus of trying to help those folks win their way successfully through the judicial system

14:13and many taxpayers who appear before the tax court are not represented by counsel. So whenever

14:19I think about the tax court, I think about those days with seniors and at legal aid, and these

14:24folks appear before the tax court, they don't have counsel, they're representing themselves pro se,

14:30come to court on a tax issue, which certainly can be confusing and certainly sometimes be

14:37intimidating. And I'd like to just go down the row, we'll start with you, Mr. Arbite,

14:43and have each of you describe in the best way possible what you feel you can do to make sure

14:52that they're going to get a fair shake in that court. Mr. Arbite. Chairman Wyden, you're correct.

14:58Going before the tax court can be life-changing. If confirmed, I will make sure all taxpayers know

15:04their rights and understand the legal process, which is essential for a fast and fair resolution

15:11of their cases. There are many opportunities for this even before a trial. To give just one example,

15:17I will make sure taxpayers know when they may have access to pro bono legal representation,

15:22whether through a clinic, a law firm, or some other service. So, Mr. Guider, also, I've gone

15:30through your qualifications and your background, and I'm going to support your nomination. I know

15:37that this has not been an area that you have spent a lot of time on, so I'd be very interested

15:44in what you'd like to do, given your particular background, to make sure that those folks who

15:52don't have counsel and come into this system, this odd kind of structure for them, what you can do

16:00to make sure they get a fair shake. Certainly. Thank you, Senator. I do come from somewhat of a

16:07different world, but I think I do have experience, you know, working with clients, and while they're

16:14not pro se before the tax court, they may have limited experience. So, I've found myself in

16:19situations where I've needed to sort of explain things to them, and I think I could, you know,

16:25carry that approach forward into this service. I think my first step at the court would just be

16:32about communication with those litigants, you know, via the court website or email communications or

16:39mailers, just so that they understand the status of their case or the procedures that they need

16:45to undergo to process it successfully. So, there would be that kind of outreach. I might, you know,

16:52in advance of hearing day, set up an informational call so they can call in and learn about what to

16:58expect day of, what to bring with them, just so that they can be better prepared for the process.

17:04And then, I think, you know, whether when they're appearing before me, whether it's via Zoom

17:09or in a courtroom, just treating them with respect and dignity and patience and understanding that

17:17they're coming from a place where they might not understand the process very well. Were some of

17:22those conversations you had in, as we always say, our previous life in terms of housing and the like,

17:28were some of those instances where you were trying to explain to people some of the housing issues

17:33that you were working on? Yes, Senator. I mean, that revolved around housing issues as well as,

17:39you know, the portions of the code that related to those relevant credits and, you know, perhaps

17:46the portions of the code that relate to partnership law, which is often how those

17:50transactions are structured. That's a piece of cake. Everybody knows partnership. I see all the attorneys in the

17:56background howling. Okay, thank you. That was what I was interested in hearing from you.

18:02Ms. Fung, your thoughts. What are you going to do when confirmed? Because I believe we're going to

18:09get all three of you confirmed and we've been working in a bipartisan way, Senator Crapo, Senator

18:15Cassidy. We're all trying very hard to get this done quickly because we know people need this

18:21service and your thoughts, Ms. Fung. Yes, Senator. Certainly every taxpayer deserves to be heard and

18:27especially in someone who is pro se in a fair and impartial forum. I would essentially

18:35ensure that they have all the information that they need before trial. I would specifically point

18:40them to the tax court's website where there is information on how the process of a tax court

18:46case works and I would schedule pre-trial meetings or conferences to ensure that they understood

18:53the process from essentially my standpoint and that they had an introduction to the process.

19:00Good. I very much appreciate your answers and I'd like you three with our other three to be part of

19:08the group that really in the future people talk about as exceptionally committed to throwing open

19:15this odd, you know, system. My wife basically told me at one point, she said, I'm going to marry you

19:23because you're not really a real lawyer. You said, you know, you're somebody who runs the legal aid

19:31program for the elderly and the like and, you know, I think that's an expression of what a lot of

19:36people feel when they're up against this bizarrely unusual system for people who don't have the

19:42experience and I'd like to see you all go into the history books as the group that really made a

19:49difference in terms of taking this oddly complicated system and making it intelligible

19:54to folks who don't have power, don't have clout, don't have counsel and Senator Crapo.

19:59Well, first of all, thank you, Mr. Chairman, for your questions because they are exactly

20:04the line of questioning that I want to pursue and so, and I have, I also very much appreciated

20:10the answers that each of you have already given to this. I don't want you to just restate what

20:15you just said. I'm going to go through a little bit of a question here along the same lines that

20:20Senator Wyden did and just ask you to make a brief statement, a commitment that you will work

20:27to achieve fairness in the judicial system that you will administer. But to lead up to that,

20:33as Senator Wyden has already said, the tax code is often perceived particularly by those who do

20:39not have the resources to hire, you know, an army of lawyers to help them. It's incomprehensible.

20:48I can remember in terms of the complexity of the tax code, this is going back about 15 or 20 years

20:54so I may have the recollection wrong here, but it seems to me that one of our national magazines

20:59about 15 or 20 years ago created a family of four example and gave it a few little tax twists

21:07and then hired three or four different tax preparer types to do the taxes for this family of

21:13four. Not a super complicated deal, but just some things with a few tax issues in it. And of the

21:20people that they hired to do the tax returns for these, for this sample family, they got three or

21:26four different answers for what the tax return ought to look like. The code is that complicated

21:34and when you can imagine a citizen who's brought into court by the IRS, one of the more feared

21:42agencies in the United States, they're in, they are scared when they come into your courtroom

21:52and they want to know that they're going to get fairness. And so that's exactly

21:56where my questions come down. Add to this the fact that the IRS Office of Chief Counsel is

22:03responsible for representing the government in matters before the tax court and it will be there

22:08in the courtroom in every one of these cases. And the American people know that. And I think that

22:14what, I know that what Senator Wyden and I are both angling for here is just a solid commitment

22:20from you that you will assure that the taxpayers receive fairness. I don't need you to go into a

22:26detailed explanation, but just please give me that commitment that the taxpayers will receive

22:31fairness in your courtrooms. Thank you, Member Crapo. Thank you. You're absolutely correct.

22:38Fairness is the foundation of our court systems and needs to be the foundation of our tax system.

22:46And so, as a judge, I commit to treating all taxpayers fairly and evenly. And, you know,

22:53part of that is communication and making sure that there are no surprises, that they know what's

22:58coming, they understand their rights, they understand the process. All right. Thank you.

23:01Mr. Guider, just quickly, will you assure that there will be fairness in your courtroom?

23:05Yes, absolutely, Senator. Ms. Fung? I also commit to fairness in the courtroom, Senator.

23:12All right. Now, the reason I wanted you to be quick is because I have a second question,

23:16and it's another angle on this very issue. Less than two weeks ago, the Supreme Court overturned

23:25the legal doctrine that courts should defer to an agency's interpretation of an ambiguous statute,

23:31the so-called Chevron Doctrine. In light of this court case, there will be heightened importance

23:38for judicial awareness of agencies' actions and review of agencies' interpretations of the very

23:45law that will be interpreted in your courtrooms. If confirmed, and upon initial impression,

23:52how would you face this challenge of scrutinizing regulatory actions? For example, would you be

23:59willing to rule that a Treasury regulation is invalid if the guidance does not align

24:06with the statutory language and the legislative history? Mr. Arbeit.

24:12Thank you, Member Crapo. Thank you. The foundation of every legal analysis is

24:20finding an interpretation that is consistent with the statute and that reflects the intent of

24:25Congress. So, yes. Mr. Guider.

24:29Senator, thank you. Yes, the Supreme Court has said that, you know, the tax court, for example,

24:36will no longer simply defer to the agency's interpretation. We have to conduct, you know,

24:41assuming I'm confirmed, conduct our own analysis of the code and the regulation. So, I will be

24:48fully prepared to do that. Thank you. Ms. Fung.

24:51Yes, Senator. Essentially, looking at the law as provided and looking at everything in terms of

24:59intent and, obviously, the goal is to get to the right answer. And so, that's what we need to do

25:05in terms of looking at the law before us. Thank you. Thank you, Mr. Chairman.

25:11Thank you. And as you could tell, both of us are very interested in seeing something resembling

25:19a more comprehensible judicial system, a fair system. Just one point with respect to Chevron,

25:24because, you know, my guess is this is going to be a lawyer's full employment program for many,

25:31many years in terms of wending its way through the courts and everybody's interpreting it.

25:36What's important, and I'm going to do everything I can to build bipartisan support here in the

25:40committee and in the Senate for following congressional intent, because that's really,

25:47if we're going to hold people accountable, if you get an election certificate, you're

25:51writing the law, you're spelling things out, we want it followed. I don't believe we've got any

25:57members on their way. Senator Crapo, is there anything you want to add? Okay. I will just add

26:06that we very much appreciate all three of your presentations here today. Based on what I have

26:12heard, I strongly support these nominations. I'm going to urge all members to do so. Senator Crapo

26:19and I work hard to proceed in a bipartisan way here, and Senator Cassidy and others have been

26:26talking with us, and I support all three of you, Jeffrey Arbeit and Kathy Fung. Both of you clerked

26:32on the tax court. You've held government posts where they developed extensive tax experience.

26:37Mr. Geiter has worked for a decade and a half advising clients on a variety of tax issues,

26:43and that's why I was particularly interested in your ideas on how we're going to help people get

26:48a fair shake who are out there in the system by themselves. So I intend to support you three. We're

26:55going to try to get all six of the applicants through. I'd like to do, I think Senator Crapo

27:01would like to do it as soon as we possibly could, and we're targeting before the Senate leaves for

27:08the August break, and if there's any additional information that the three of you have that you'd

27:15like us to consider, please get it to us. And regarding questions for the record for the

27:19Senators, the deadline to submit questions for the record will be this Monday, July 15th at 5 p.m.

27:26The deadline is firm. We thank everyone for their cooperation, and our hearing is adjourned.

Ron Wyden Leads Senate Finance Committee Consideration Of Nominees To The US Tax Court

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