David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: CI status.

When IRS Criminal Investigations Chief Jim Lee took over the department in late 2020, he had several initiatives he was looking to implement. Now, two years later, one of his first initiatives, the Advanced Collaboration Data Center, will be ready to launch later this year.

To learn more about it, Tax Notes legal reporter Nathan Richman caught up with IRS CI Deputy Chief Guy Ficco to chat about the project as well as other CI initiatives. We'll hear more from Nate about that in just a minute.

Nate, welcome back to the podcast.

Nathan Richman: Thanks for having me.

David D. Stewart: Could you tell us a bit about Deputy Chief Ficco?

Nathan Richman: Well, he's what you might call a CI lifer. He started at the division as a student and has been there ever since.

David D. Stewart: All right. Could you tell us what you talked about?

Nathan Richman: In addition to the Advanced Collaboration Data Center, the ACDC, we discussed CI's recent analysis of its use of Bank Secrecy Act data and the division's continuing efforts to find fraudsters stealing from COVID[-19] relief programs.

David D. Stewart: All right, let's go to that interview.

Nathan Richman: Welcome to the podcast.

Guy Ficco: Good morning. Thank you for having me. Really excited to talk with you for the next several minutes.

Nathan Richman: Well, let's start pretty straightforwardly. First let's get to know you. What brought you to CI?

Guy Ficco: I am an IRS Criminal Investigation lifer, as I like to call it. I basically, my entire adult career, I started as what we used to call a student co-op position with IRS Criminal Investigation in 1995.

[I] worked with IRS Criminal Investigation while I was a senior, through this part-time process, and then converted to a special agent shortly after I graduated. My family ties bring me to the IRS. My older sister is a revenue officer — or was a revenue officer. She's now, in recent years, moved over to Appeals. But we are an IRS family, and starting in 1995 for myself, going through the academy and Federal Law Enforcement Training Center in 1996, and then moving on.

[I] started in the New York field office — most of my time in downtown Manhattan. But I was up there for about 14 years and then came down to Washington D.C. [and] spent time as a supervisory special agent, an assistant special agent in charge.

I was very involved with the voluntary disclosure, the offshore voluntary disclosure program in 2009-2010, and such. And then I was our director of special investigative techniques, which essentially runs our national undercover program.

I was our special agent in charge of the Philadelphia field office for a couple of years and then came back to headquarters right before the pandemic — started March 1, 2020. [I] ran our operations policy and support section, which later became global operations because we brought international back in, and was luckly enough and fortunate enough to be promoted to deputy chief in July of 2022.

And [it's been] probably seven months or so in the position. And [I'm] really loving the position and working alongside Chief Jim Lee and the rest of the IRS senior leadership team.

Nathan Richman: Especially when he sends you off to some of the fun junkets.

Guy Ficco: Well, we try to balance that out between the two of us so that we're not both away for extended periods of time. Chief Lee, particularly through some of his involvement with the J5, which we'll probably talk about in a little bit, has been very active and traveled to numerous locations in support of that.

I've gotten a few myself. I went to the ILEA Budapest last year, the International Law Enforcement Academy in Budapest, and I got a chance to observe training with some of the countries over there that our international training team was putting on. It was a phenomenal experience, and [I] very much enjoyed that and seeing the real impact of transferring our expertise to these developing nations.

Nathan Richman: As you said, we're going to get to the J5 in a moment, but first I've been hearing from Chief Lee since he took over about this really interesting new project that apparently is getting close to ready, this Advanced Collaboration Data Center. Can you give us some of the details on what this new project will do and how close it is to ready?

Guy Ficco: Yeah, we're very excited about ACDC, Advanced Collaboration Data Center, and what it's going to bring. But I think to really do it justice, I have to do a little bit of historical back backtracking on our historical context of it.

In about 2014, CI made the decision to establish a cybercrime unit in Washington D.C. and then shortly thereafter established a western cybercrime unit (CCU) in [the] Los Angeles field office. [W]e've been operating with those two as our real guidepost, leading units in the space, and have produced some phenomenal investigations, which I'm sure you're aware of, and your audience is aware of.

Predominantly in the money laundering, not necessarily in tax, but we're shifting, and I expect some more tax successes to come.

Nathan Richman: A lot of the big darknet takedowns.

Guy Ficco: Yes. And so, the CCUs were established, and then in the other now 18 field offices — we have 20 field offices in CI now — these have cyber coordinators. But as you can imagine, the software and the contractor support, which is so needed in these investigations, was predominantly dominated by the two CCUs.

So in 2020, IRS CI took a look at our headquarters structure and decided to make some changes. And as such, I mentioned earlier in my bio about operations and international operations coming together to form global operations. Well, that was one move, but the other move was we elevated our cyber section to an executive level. And as part of that, recognizing that this is here to stay and as good as we are, we need to continue to get better. It's like the old sports adage. If you're staying the same, you're falling behind.

We recognized that, and the ACDC is a real linchpin of that. So our plan with that is to really have the contractor support all the applications, all the software and tools housed in that ACDC, which will be in Northern Virginia. And those other field offices will have those opportunities to either remotely work with those applications or physically come to Northern Virginia and be housed for a day or two or a week or two or longer as needed in order to tap into those resources. We think that's going to elevate our investigations around the rest of the country.

So that's kind of internally what our plan there is. And then, some of the partnerships, we really want this to be a public-private partnership, to be a model for others.

Nathan Richman: Let me just bear down on this to clarify something. Are the partnerships different from the contractors? Or is this a mostly unified Venn diagram?

Guy Ficco: I think it's going to be heavily tilted towards the contractors, but I do think we're going to have financial institutions that'll be in there. I do think, longer term, we'll have more of academia that we're going to look to leverage in there as well.

Beyond the public-private partnership, then more of a total government approach as well. We've got commitments from other agencies. HSI (Homeland Security Investigations) has told us they will be placing us at least one or two agents, or analysts, at the center. We've talked with Treasury FinCEN, and we think they're going to be looking to participate as well.

Again, maybe not a full-time commitment, but they'll have opportunities, and we're hoping that this is really going to be a model that we can be proud of and that can take these type of investigations forward.

Nathan Richman: Are the cybercrimes units going to continue, or is some of the personnel going to be relocated, or the whole unit's going to be relocated to the ACDC?

Guy Ficco: The cybercrime units are going to remain. I think just via geography, I think that the D.C. cybercrime unit will probably have more direct interaction with the ACDC because it's going to be obviously in the same metro area. But the CCUs, as we call them, will remain and will continue to be a very pivotal part of our model for success.

And to answer your question about — I'm sorry, you sort of opened with, "When can we expect it?" As you mentioned, Chief Lee has been the chief since, I think, October of 2020, and we've been talking about it probably since shortly around that time.

We are hopeful now for a late spring opening, mid- to late spring opening. We've had a few delays. Some of them were foreseen; some of them were unforeseen. Like many of the people in your listening audience, there's been supply side issues, and a few other items that when you start working with government — development of locations — tend to pop up that are not necessarily intuitive to you.

So we're hopeful. We've been going with the adage, "We're hoping for June for the opening." As Chief Lee sometimes quips, "We don't specify what year, June, but we're hopeful it's June 2023."

Nathan Richman: I was going to joke about it the last time he mentioned a month before that was the statement, "March-ish."

Guy Ficco: Yeah.

Nathan Richman: But it sounds like it's June-ish, now.

Guy Ficco: Well, yeah, and maybe I'm deliberately setting lower standards, and if it does get done before June that would be phenomenal, and we'll certainly do some kind of public announcement of that. That will go out, probably, through our LinkedIn or Twitter pages.

Nathan Richman: Can you tell us some of the differences between what the ACDC will do and some of the prior initiatives, like the National Coordinated Investigations Unit or some of these global partnerships? 

Guy Ficco: Well, I think the NCIU, or National Coordinated Investigative Unit, was born probably about five years ago. That is really an internal section in CI, which builds algorithms off of data, and big data that has national scope, and tries to come up with algorithms that will produce investigative leads out to field offices.

NCIU is going to remain. We've continued to develop that section. We've worked with our civil counterparts when appropriate on some cross-business organization, cross-business unit initiatives. And that's going to remain.

Again, focused on data, not necessarily specific individuals. The data sort of leads, and then there's a determination as to what is demonstrating potential badges of fraud, and what would be more appropriate in the civil context. So that's going to remain.

Some of these financial institution collaborations — and we could talk about the GFIS (Global Financial Institutions Summit) or the Wolfsberg Group, we can talk about that — I think that is driven towards the collaboration between the financial institutions. Although I mentioned that we would ideally have a financial institution, bank professionals, either housed at ACDC, or more appropriate maybe, participate and attend meetings at ACDC and collaborate. They're separate entities, and ACDC will be a government-led initiative that will have the other collaboration from those other groups, such as financial institutions.

Whereas the banks, I think they're trying to determine what works for their AML (anti-money-laundering) compliance, and what works [for] cross-nation enforcement or collaboration, I guess, may be more appropriate.

I think you probably saw, and some of your listeners would've seen, about a month ago Chief Lee released a one-pager, a one-page document on BSA (Bank Secrecy Act) data and how that is leveraged by our agents on our investigations. I think it's pretty powerful. It's just a great reinforcement that the financial institution professionals, when they do that work to identify suspicious activity reports, that it doesn't go into a black hole. It's utilized by us, and by our agents, to both identify investigations as well as support investigations.

So I think that'll continue, and [we're] very, very proud of our work with the financial institutions, very proud of our work with organizations like ACAMS (Association of Certified Anti-Money Laundering Specialists) or FIBA (Financial & International Business Association) and other anti-money-laundering associations as well.

Nathan Richman: So basically the NCIU is people using tools, and the ACDC is going to be a big warehouse filled with tools.

Guy Ficco: Exactly. And the ACDC, I would imagine, because of the way it's going to be staffed with some of these contractor support, and the ever-changing landscape of crypto and transactions and such, those tools are going to be cutting edge.

They will be able to develop and house those tools. Whereas NCIU, as you accurately said, will be utilizing those tools as well as other data tools, data-driven ideas, algorithms and such, to analyze the information that is provided to them.

Nathan Richman: We mentioned the J5 before and that's one of CI's most prominent global partnerships. But what's going on with the J5, and what challenge number are we up to?

Guy Ficco: Challenge number that, that's actually — I didn't prep for that number. It's got to be, I think we've got to be up to at least three or four, by now. I unfortunately have never had the privilege of attending one of the challenges and seeing how they work. I've been told we basically lock people in a room for 24 hours and say, "Get to work, and come out with great results." I've seen the results, and there's been some great stuff.

Yeah, the challenge is something that, like I said, it's got to be three or four that we're up to. It's actually a concept, and I'm going to reverse my talking here, and go back just two minutes before [when] we talk[ed] about the BSA violations. We essentially took that same concept. We got together internal and external CI people. We didn't lock them in a room, but we kind of gave them a directive to come up with metrics and statistics and ideas that would accurately reflect the great work. I think through that process we probably identified about 40 or so that we then whittled down to the roughly dozen or so that made it into that presentation.

So I think that the challenge is going to continue. I don't know what the focus will be on for 2023, but there will be a challenge this year.

Nathan Richman: Let's backtrack just a little bit more and start — I should have let you continue. Just give our audience the basics of the J5. What does it stand for, and who's involved?

Guy Ficco: Oh yeah. So the J5 is the joint chiefs of tax enforcement, the criminal tax enforcement, for five like-minded countries in terms of our tax system.

So it's the United States, which is represented by IRS Criminal Investigation. It's Canada; it's the United Kingdom; it is the Netherlands; and it is Australia. It was founded, I think as the story goes, when those chiefs happened to be together at, I think it was an OECD conference, and they started talking about ways that they could take the concept of some of the great work that OECD does and try to implement [it].

It's grown dramatically. I think when we first started, there was just a couple, maybe a handful of investigations that were collaborative across the five countries. And now there're dozens and dozens and dozens, and great work. And the chiefs keep to the spirit of trying to have communications amongst the chiefs on a monthly basis and get together in person every few months. But I will say it's a challenge because the number of investigations that spawned that the United States is involved with is more than just a couple of people could handle and investigate.

So we've really started leveraging our different field offices around the country to really be the investigating agents on these J5 joint chiefs attacks investigations.

Chief Lee has been in place for almost, well, two and a half years or so. I believe there's been a few turnovers of some of the other chiefs. And I think that's good, and I think as new blood starts, new ideas and such, and new direction starts coming into the group, I think it's going to allow it to even grow further and take on some new ideas and such.

Nathan Richman: So speaking of growth, as we've heard repeatedly, the J5 is not going to be the J6, the J7. But in 2022 there was this new companion, I guess. Would we call it a conference or a group? The Global Financial Institutions Summit. Can you tell us much about that?

Guy Ficco: So the Global Financial Institutions Summit, and there was a GFIS meeting, as we call it, in New York in December. It was largely represented by the large financial institution, the Wolfsberg Group, and other large banks like that.

It's just allowing another mechanism, and I'll say, each J5 country has got robust public-private partnerships with financial institutions, and others. But there wasn't a collaborative group, together. So United States had some relationships, United Kingdom had some relationships, Australia had some relationships, but the logic or methodology behind the GFIS is to leverage all of those relationships together in an avenue and a vehicle that all the countries could benefit from, that are in the J5.

And the GFIS is really — that's the birth of that. It's kind of in its infancy at this point. There's been that limited number of meetings, but we expect that's going to continue to grow as our joint operations are going to continue to grow between the countries. So I think that's really the method of it.

Nathan Richman: So, two meetings, so far. Is there a third planned?

Guy Ficco: I believe there's a third planned. I don't have any specifics or details, and I can't break any news to your audience on that one. But I would imagine that there will be a third planned for 2023.

Nathan Richman: You were mentioning the BSA data a moment ago, and as you mentioned, Chief Lee convened a big announcement about CI's use of Bank Secrecy Act data. As I recall from that, Chief Lee said this was not a one-off announcement. These announcements are going to be regular. Why did you guys start that series of announcements?

Guy Ficco: I'm sure there were others who had similar experiences, but for me personally, I was participating in Mexico City last spring at a sit-up, a strategic dialogue on illicit finance, and I was sitting next to FinCEN acting Director Him [Himamauli] Das. We were talking with the [financial intelligence units] down there in Mexico, and I mentioned at that point, that 15 percent of IRS subject criminal investigations were initiated from BSA data. And Director Das almost fell off his chair because I don't think he'd heard that stat before. He really thought that was phenomenal.

And then subsequent to that, Chief Lee had a conversation with Director Das, and we got our wheels sort of spinning, and under Chief Lee's direction we thought, "We've got a ton of this data; we should leverage it."
Because through all of my management career, anytime I speak to bank professionals, or in forums, the common refrain is, "We're doing all this work. You never tell us if our work means anything," because we can't, because active investigations, we don't tell — grand jury rules, and others. So we're not telling them, so they don't get that payoff, they don't understand that the work is so valuable to us.

I think Director Das, in his experience, had a similar situation with regulators and congressional oversight. So getting the wheel spinning, we were like, "We can do this." And then under Chief Lee's leadership, we had our SAC (special agent in charge) of our Los Angeles field office, Tyler Hatcher, really led the working group and brought together internal people from CI, from IRS Civil BSA, some bank professionals, FinCEN, we had Treasury involved. And it was a multimonth process to get where we were comfortable, where we were able to release that last month.

I'll say, from me, and I'm a bit of a data geek here, a data nerd, I look at that. And it's great information that goes outward to the public to say, "Yeah, this is important." But I also look at it and say, "There's tremendous opportunities to look at this and try to improve efficiencies."

So when we talk about 2.0 and 3.0, which I think Chief Lee has mentioned, we're going to continue to try to perfect what data goes outward, but we're also going to look internally and say, I don't have it in front of me, but say there are 90 percent of our investigations, for example, that use BSA data. "What are the other 10 percent? Why aren't they using BSA data?"

Because as an investigator, I really can't think of many cases in my career in which I wouldn't want to tap into BSA data. Or at least check to see whether or not it was there. So I think that this is going to be a multistep process. We're at 1.0, and yeah, I think 2.0 and 3.0 are going to be coming. I think you're going to be hearing different releases from IRS CI over the next [one to] three years.

Nathan Richman: Can you tell our audience what particular stats you drew for 1.0, and even better, what more stats will be specifically in 2.0?

Guy Ficco: We have an internal tracking system in CI, which we call CMAS. That really tracks our cases, and it tracks what applications were utilized, how a case initiates. It tracks the number and the time. And when you see our annual report, prosecution rate, conviction rate — all that information comes from CMAS.

1.0 predominantly came from that system. We've kind of exhausted what we can get from that system. Now the question is, what else can we gleam from? So I think we're working with a couple of our internal data scientists to see whether or not there are additional reports that are maybe outside of that CMAS system, or potentially maybe there is some more tracking that's in CMAS that we can pull from.

I don't think we're going to be pulling from any magic database like a DOJ database or anything. I think it's still going to be internal CI data, and I can't really preview any one specific thing. 1.0 was just released, and Chief Lee has basically told me, "All right, let's let this one sit a little bit and then we'll sort of get our ducks in a row."

I do think it's going to be collaborative, again. I do think we'll get with Director Das and the FinCEN team. I think they've done some similar, or are doing some things right now, which I think they plan to talk about in the future.

We'll get with them, and then, before the end of 2023, there'll probably be a second release, which will look at some data a slightly different way.

Nathan Richman: Going to change gears a little bit suddenly and notably, at this point. So as you mentioned earlier, we're a few years into this pandemic, and there were all those big programs at the beginning. I like to think of those as giant pots of honey to which, I think of them as fraudster flies, are attracted.

I've been hearing a lot about [how] CI from the beginning was going after Paycheck Protection Program (PPP) fraud, and we've heard about all sorts of other investigations. How are those investigations going, and do you have any sorts of interesting recent case counts, perhaps? Have you guys done much with, publicly yet, with the employee retention credit filings?

Guy Ficco: So yeah, to your point, when the pandemic hit and through congressional action, different relief was spawned, it did create this tremendous collaborative effort across the government to respond. IRS CI was right at the forefront with other agencies and really utilized our financial investigative expertise in those investigations. As you said, the majority of those investigations were [Small Business Administration] driven with PPP and EIDL (economic injury disaster loan).

We've averaged, and I'll throw a stat out there, direct investigative time, which is the percent of time that our field agents spend on investigations. Since the summer of 2020, we've averaged approximately 7 percent to 7.5 percent of our direct investigative time has been spent on COVID[-19] related fraud.

Now the majority, not entirely, but the majority of our SBA response, the PPP and EIDL investigations, would fall into nontax investigations. But there were, and there have been and there continued to be, other tax components. You talk about refundable credits that are certainly paramount and still ongoing with some of those investigations. And CI has been [and] is continuing to be involved.

I'm looking down at my notes here to try to get an accurate read of cases, but as of January 31, so just a couple of weeks ago, CI had indicted more than 10 cases. I think it's 11 cases, ERC cases, across the country. And of them, a couple of them have been sentenced, but the other ones are still ongoing, in the indictment phase.

Nathan Richman: Yeah, I was just going to mention, I saw the Bassett-Warr and COS Accounting indictment that just came out of Utah. Very useful to know that they were not the only ones being hit, so far.

Guy Ficco: Yeah, that was a very big case, the Utah case that you cited. That was I believe in excess of $11 million in false and fraudulent claims or credits that were claimed. So yeah, that was one. But there are a couple other ones out there as well.

Nathan Richman: One of the other hot-button issues we've been hearing about the IRS a lot lately is $80 billion of new funding. What is CI going to get from that? By which I mean, what's your cut? And what are you guys going to do with it?

Guy Ficco: So that is a great question, and what I can tell the audience is, it's not that CI is going to get a particular check sent to them, or an earmark from that money. Just to put it in context, and your listeners probably know this, but IRS and I'll put it specifically to CI, is significantly smaller than what it was in years past. And just to sort of put a bow on that, when I started as I mentioned in 1995, we had about 3,500 special agents. We had close to 5,000 employees.

Sitting here today we have about 2,100 special agents, and about 3,000 employees. So we're about 60 percent the size that we were. And even before the [Inflation Reduction Act] and the $80 billion was passed, CI had been able to hire special agents. We've been aggressively hiring for the last several years.

Nathan Richman: Finally, defeating attrition. Right?

Guy Ficco: Well finally, and it's interesting you say that; I was just actually reporting out in another forum, from FY20, FY21, FY22, CI hired approximately 420 special agents in that time. We lost about 410 agents in that time to attrition. So yes, we are beating attrition, but we are only slightly beating attrition.

Now I think over the next several years, if we can continue to hire at that pace, I do think that we'll forecast to start plussing up, not to the levels anywhere near we were in 1995, but to —

Nathan Richman: Maybe get up to 2,500 special agents.

Guy Ficco: That would be a great target, or maybe even north of that if we can continue to go for this same rate for the next several years. As we speak here, I got an email right before we began, that our new announcement, our new 1811 special agent announcement hit USA Jobs today. So we're excited that we've got this — this announcement will be open for a while, hopefully the entirety of 2023. And we hope that we're going to be able to get in some really good professionals and increase our numbers.

So you asked me a question about IRA and the $80 billion. Hiring, we believe that we have the funding. IRA is going to just increase that funding to allow us to hire, but really where IRA is going to really come in, it's going to allow us to devote money to resources like investigative technology and development, which is really going to take the tools. And we talked earlier about ACDC, and we talked about NCIU, and some other areas inside CI. That investigative technology money would allow us to develop tools that we think is going to take us forward.

So there's not a specific cut that is going to go to CI, but I'm confident that through the process, and through the process that IRS and Treasury are putting forth, I think CI — provided that money is there for the entirety of its time — we'll be well taken care of to be able to function and actually improve our effectiveness through the life of that IRA money.

Nathan Richman: Plus, you guys are hoping for some more and better fraud referrals, right?

Guy Ficco: We are absolutely hoping for more and better fraud referrals, but it's the tail wagging the dog. I mentioned CI staffing dropping so much. As you know, the staffing of our frontline revenue agents and revenue officers dropped so dramatically. And in order to get fraud referrals, they have to develop fraud. And when you have fewer and fewer personnel on the front end developing fraud, less and less actually get to CI.

So we're hoping that, through their hiring, that this is going to create some opportunities and some more fraud development for us and criminal fraud referrals here in the future.

Nathan Richman: Well, thanks a bunch. That's been a lot of really interesting, useful information, and hopefully our audience comes away correctly afraid of you guys.

Guy Ficco: Well, I don't want to scare everybody. I appreciate the time you've given me, and if I could take my last 15 seconds, as I mentioned the special agent announcement. I'll do a recruitment plug to you.

As I said, I'm an IRS family, but I've been doing this for almost 28 years now, and I think if you've got or you know somebody who's got that financial investigative expertise and wants a career in federal law enforcement, I think IRS CI is a great opportunity, and we look forward to getting a ton of really qualified applicants to hopefully join our special agent ranks here in the future.

Nathan Richman: Well, as I said, thank you again for joining us and for sharing the inner workings of CI.

Guy Ficco: Thank you very much sir, and thank you to your audience, for listening to me talk for the last little bit.

David D. Stewart: And now, coming attractions. Each week we highlight new and interesting commentary in our magazines. Joining me now is Executive Editor for Commentary Jasper Smith. Jasper, what will you have for us?

Jasper B. Smith: Thanks, Dave. In Tax Notes Federal, Jamison Shipman examines the challenges the IRS faces in determining when to deny exemption applications. Jennifer Ray and Cap Pritchett examined the relationship of a recent Tax Court decision, Clark Raymond, to allocations of gain by private equity funds on dispositions of investments.

In Tax Notes State, Tony Santiago provides guidance on navigating the generational tax leadership turnover. Darien Shanske and David Gamage argued that states should conform to the recently enacted corporate alternative minimum tax to combat corporate profit shifting.

In Tax Notes International, Robert van Brederode explains why he believes taxpayers should have standing to sue in cases of unauthorized government spending. Three Chiomenti lawyers discuss Italy's new tax regime on crypto assets and voluntary disclosure.

In Featured Analysis, Robert Goulder examines the ousting of former U.K. Chancellor of the Exchequer Nadhim Zahawi.

And now, for a look at what's new and noteworthy in our magazines, I'm joined by Sharon Katz-Pearlman, a shareholder with Greenberg Traurig's global tax practice in New York. Sharon, welcome to the podcast.

Sharon Katz-Pearlman: Hi, thanks for having me.

Jasper B. Smith: Yes. So we're here to discuss your Tax Notes International cover article titled, "Definitely Not Boring: The U.N. Tax Committee and OECD Collide." So can you start off today by giving us maybe a brief overview of your article, please?

Sharon Katz-Pearlman: Sure. So the article really focuses on a resolution at the United Nations last November, just a couple of months ago, and the resolution was called: A Resolution for the Promotion of Inclusive and Effective International Tax Cooperation at the United Nations. And it had been put forth by Nigeria on behalf of a group of African countries that were seeking direct involvement from the United Nations into the international tax cooperation community. And it specifically asked that the U.N. take steps needed to ensure inclusive international tax cooperation and coordination.

The resolution was adopted, ultimately. There was some concern, and the U.S. mission to the United Nations submitted a letter kind of outlining some concerns, that this resolution might be starting to creep into the work, the extraordinary work really, of the OECD in bringing together so many countries around a platform and an approach to global tax. And I think what struck everyone was the use of the word inclusive, because inclusivity is the bedrock of the OECD's inclusive framework, and BEPS, and everything else. So why, then, do we need this resolution?

The United States actually tried to amend this resolution, or pending resolution. It was not amended. It went through just as it had been laid out by the Nigerian delegation. And then the budget resolution that went along with the resolution itself, specifically asked for the Committee of Experts on International Cooperation in Tax Matters, which is a group within the United Nations, to focus on this issue. And so the article talks about, how do you reconcile this, and what does it mean? And I think that that's the reason for the cover photo, with Tax Notes, with the two giant bulls with their horns interlocking. Like, two giants collide.

The article really gives, I think, a kind of good history at that point about this U.N. Tax Committee, and it's been around for a long time. It's been around actually since 1968, in one form or another, and many people even in the tax world are completely unaware that this committee exists. I was completely unaware until I was approached, and asked if I would consider being appointed to it, and I really had never heard of it. And I said, "Sure." And so, I served for four years on one of the subcommittees on tax dispute resolution avoidance and the mutual agreement procedure. So a lot of competent authority, transfer pricing focused issues.

The committee itself is composed of revenue authorities from a number of developing jurisdictions, and the subcommittees reflect the same composition. So, many revenue authorities, representatives from a number of jurisdictions. There were business practitioners, there were taxpayer representatives that were on the subcommittee. I was one of those. We had a couple of us, academics, and we also had input from the OECD. Extraordinary input from Sandra Knaepen, who heads the OECD's Tax Certainty Unit now, she's amazing. And Jeffrey Owens, who was Pascal Saint-Amans' predecessor, leading the Tax Policy unit, also just extraordinary insights. And we worked together for four years. So the goal of that committee is to provide a voice to developing countries.

And that is, I think, where the Nigerian resolution comes from. A feeling that maybe the OECD's voice is the voice of 38 large established countries, and not so much the voice of developing countries. And that's been a theme that's been around for a while. That's not new to this, it's been around.

So after going through the resolution, and what is this U.N. committee, the article really just raises the questions like, "Well, what now? How does this get reconciled? What is the work of the U.N. committee, now? How do they get involved?"

I think it's a lot of questions, and I just think it is fascinating. Hence, the title, "Definitely Not Boring." I don't have the answers. I think this is going to be really an amazing thing to watch unfold over the next year or two.

Jasper B. Smith: Yeah. Well, you touched on the idea or the notion, that this committee is relatively unknown even among tax practitioners. And certainly, it is an interesting dynamic that they've created. But was there anything, specifically, that prompted you to write about this topic?

Sharon Katz-Pearlman: So I heard about this resolution, and because it was related to tax, and it was in the United Nations, and because of my work on one of their subcommittees, I started reading about it. And just started thinking, "This is interesting. How is this actually going to work?"

And it was really, that's what started me off, just learning that this resolution was out there. Then digging into the history of the resolution, finding out that the U.S. mission... I mean, it's really fascinating, and I don't think it's.... Pardon the, like, tax geeky fascinating.

I think it's just interesting, from just a very broad policy perspective, that you can have these two giant bodies that are working in the same space. And yeah, there's an issue here. Is the U.N. coming too late in the game to the work of the OECD? And is there a chance that things can be derailed, or a conflict could develop? Because nobody would want that.

So the question, how do you get this input in here now, and can you get this input in now? I don't know. I just thought it was so interesting. And so, as I was reading about it I was thinking, "Wow, this is just so interesting." And I just have always, since obviously I'm a tax lawyer, and I focus on tax controversy. Which is definitely not boring. But my whole career, people are like, "What area of practice are you in?" I say, "Tax," and you can see it on their face. They're like, "Oh, eh, boring." It is not boring.

And I think that this, and watching what is unfolding and look, the work of the OECD is in the newspaper every day. This is no longer just for tax people. So I was just fascinated by thinking through, how is this going to play out? So that's why I just sat down and started writing the article.

Jasper B. Smith: Wonderful. Well, I agree with you. There's nothing boring, definitely, about this article. It was very informative to me, and engaging, and I appreciate you choosing us for the publication forum.

Sharon Katz-Pearlman: Happy to. Thanks.

Jasper B. Smith: So Sharon, can you tell our listeners where they can find you online, if they want to?

Sharon Katz-Pearlman: Yeah, sure. Obviously at the Greenberg Traurig website, I am there. And then I am on LinkedIn, as well. So feel free to message me there, or reach out there.

Jasper B. Smith: OK, sounds good. Well, thanks again for your time, and for coming on the podcast today.

Sharon Katz-Pearlman: Thanks again for having me.

Jasper B. Smith: You can find Sharon's article online at taxnotes.com, and be sure to subscribe to our YouTube channel, Tax Notes, for more in-depth discussions on what's new and noteworthy. Again, that's Tax Notes, with an S. Back to you, Dave.

David D. Stewart: That's it for this week. You can follow me online @TaxStew, that's S-T-E-W, and be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a feature episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or a review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.