During the past year (2007-2008), the OBA Taxation Law Section was engaged in a number of activities. One, following considerable discussion at the November 2007 Annual Meeting about actions taken by Taxation Section officers/board during the prior year, the Taxation Section voted to amend its by-laws to allow for consideration of section proposals including legislative proposals by mail and e-mail. These amended by-laws were submitted to the OBA Board of Governors.

Second, the Taxation Section formed a special study group. Those who were included in the study group at its initial organization and meeting included Stephen P. Flowers, Richard B. Kells, Honorable Tom Kemp, Chairman, Oklahoma Tax Commission, Sheppard F. Miers Jr., Robert O. O'Bannon and Ashley Williams. The study group held five scheduled telephone conference meetings in the months of March through July 2008. In addition, the study group members drafted, exchanged and took under consideration certain documents, conferred individually as needed and appropriate to expedite its work, and exchanged thoughts and ideas on different subjects being considered by e-mail and telephone on several other occasions.

The study group took under consideration two primary subjects related to Oklahoma tax laws and administration thereof, which were:

(1) The feasibility and advisability of enactment of the ABA Model State Administrative Tax Tribunal Act (State Office of Administrative Tax Hearing Act); and

(2) The establishment of an independent Appeals Office within the Oklahoma Tax Commission for taxpayer informal requests for review without or prior to formal administrative protest under 68 O.S. § 221 (Oklahoma Tax Commission Rule - Appeals Office).

While Chairman Kemp participated in the initial conference and activity of the study group, he expressed his view to the study group that the enactment of the ABA Model State Administrative Tax Tribunal Act in Oklahoma, or any comparable law, is not needed nor advisable and that the existing law governing administrative and/or judicial hearings of taxpayer protests and appeals is fair and appropriate, and should be retained. Chairman Kemp asked to not actively participate further in the activities or actions of the study group because of his express and explicit opposition to any such change in state law, and his concern that his participation might be interpreted or considered as assisting in furthering any recommendation that might be made by the study group that would involve change of the law in this context. Nothing recommended by the study group to you in this memorandum or otherwise should be interpreted or considered as having in any way been recommended, endorsed, agreed upon or to be attributed to any recommendation, statement or action of Chairman Kemp. We note our appreciation of Chairman Kemp's joining in the initial conferences and organizational activity of the study group and sharing his views and recommendations with us on all the matters discussed. He provided very helpful insight on the importance of these subjects to the Tax Commission and the administration of tax laws in the state of Oklahoma that were of real benefit to the study group and the Taxation Section.

After the teleconference meetings of the study group, it was proposed that a version of the ABA Model State Administrative Tax Tribunal Act be drafted that would take into consideration several points made to the study group chair last year by OBA President William Grimm, which were presented to the study group prior to its first meeting. A redraft of the Model Act was made and circulated to the members of the study group. It was also proposed at the July meeting that the revised Oklahoma version of the Model Act, with changes recommended by Mr. Grimm, and other changes to coordinate it with Oklahoma law and reflect thoughts of study group members, be completed in draft and submitted with a recommendation that it be made a part of the OBA 2009 Legislative Program.

The study group also discussed a proposal that had been previously made by the Taxation Section to establish an independent Appeals Office at the Tax Commission to consider taxpayer appeals informally, similar to the IRS appeals procedure. Following these discussions, a proposed administrative Rule for the Tax Commission to establish and maintain an independent Appeals Office was drafted and revised by members of the study group.

By majority vote of its members, the study group recommended to the Taxation Section that the proposed State Office of Administrative Tax Hearings Act be furnished to all members of the Taxation Section with a request that they vote for or against the section proposing it to the OBA to be made a part of the OBA 2009 Legislative Program. The study group also by majority vote recommended the proposed rule to establish and maintain an Appeals Office, at and within the Tax Commission, be furnished to all members of the Taxation Section with a request that they vote for or against it being proposed for adoption. The officers/board of the Taxation Section by majority vote approved sending both measures to the full membership for their vote.

Third, the Taxation Section members voted to send both proposals (State Office of Administrative Tax Hearing Act and the Oklahoma Tax Commission Rule - Appeals Office) to the OBA Board of Governors for its approval and inclusion in the OBA 2009 Legislative Program.

Fourth, the Taxation Section leadership reached out to the tax law faculty at the three Oklahoma law schools (University of Oklahoma, Oklahoma City University and University of Tulsa) to get their input and express our support for the teaching of tax subjects and development of new attorneys practicing in the tax area. Further, Taxation Section leadership discussed with the law schools the creation of a modest grant program for outstanding tax law students. At the November 2008 Annual Meeting, the Taxation Section membership will be asked to approve such program which will result in the awarding of an annual modest grant ($500) to the outstanding tax student at each law school. The selection would be made by the law school and the Taxation Section would send a representative to speak about the "tax practice" and make the award.

Fifth, the monthly leadership (offices/board) calls were opened up to the entire membership of the Taxation Section. Outside of one law professor, there were no members who regularly took advantage of this program.

Sixth, as it has done for a number of years, the Taxation Section along with the Business and Corporate Law Section co-sponsored a one day seminar on LLC's by John M. Cunningham.

Seventh, for the first time, the Taxation Section along with the OSCPA co-sponsored an advanced tax law seminar on the tax consequences of doing business as an LLC by John Cunningham.

Eighth, the Taxation Section participated again with the National Association of State Tax Sections and will send a representative to its annual meeting which will be in San Francisco.

Ninth, at the November 2008 Annual Meeting, the Taxation Section will present a tax related ethics CLE program.

Kenneth L. Hunt
Chairperson