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Wireless Access Code: 9166703926

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Strategic alliance with MWE China Law Offices (Shanghai)

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The American Coalition for Taxpayer Rights (“ACTR”) for CWAGStephen M. Ryan, Esq.McDermott Will & Emery600 13th Street, N.W.Washington, D.C. [email protected]. 202-756-8333 (O)

Stephen M. Ryan, Esq. [email protected] Coalition for Taxpayer Rights Tel. 202-756-8333 (O)

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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 (2nd Story)

– TaxSlayer

– CCH Small Firm Services (UTS)


4

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


5

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


6

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)


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STATES SPONSORING FREE FILE PROGRAMS

AL

TN

ID

AR

MNNY

ND

VT

WV

AZ

MS

OR

SC

IA

MI

OK

MO

NM

MT

MD

DE

CO

WY

NV

WA

SD

KS

OH

PACT

NH

TX

AK

KY

GA

NC

RI

MA

VA

FL

LA

MD

ME

UT

NE

NJCA

Free File States (23)

No Income Tax States (9)

State creates its own tax software and/or e-filing system (18)

1

IN

WI

HI

IL

CA

DC

DE

MD


8

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 (2nd 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


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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


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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

Wireless Access Code: 9166703926

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Wireless Access Code: 9166703926. Boston Brussels Chicago Düsseldorf Houston London Los Angeles Miami Milan Munich New York Orange County