(KJ): Where did your career start?

(DZ): When I was 15 years old I graduated from high school early and went into music. My brother was a musical Conductor but I eventually shifted my interests and decided to go to school for film at New York University where I graduated with a film degree at 19. After I graduated from NYU I decided to move to Washington DC where I had a lot of family history. It was in Washington that I got involved in politics and started working for Senator Grassley on the Hill. While working for Senator Grassley, I completed my Law Degree at George Mason at night and went on to commute to New York University Law School to earn my LLM. After completing my degrees, I decided to practice law and went to Lionel Sawyer & Collins in Reno, Nevada. I ended up becoming the utility infielder covering a lot of different tax issues at the firm including partnerships, LLC's, state and local, non-profit, individual, litigation and basically the whole gambit of tax issues at the firm.
By a stroke of coincidences, Senator Grassley found himself as the Chairman of the Senate Finance Committee in 2001. There were very good Tax Counsels on the Senate Finance Committee and some are still there but I was the only person on his staff that had a long history of working with him and who had a tax background and was a tax lawyer. There were not many people who had a long connection with Grassley that also had a tax background who were close to him and had experience working with him. I happened to be one of the few people with the experience and this is the reason, I believe, I was asked to come back to the Hill when he took over the Chairmanship of the Senate Finance Committee.


(KJ): Can you explain what you do on a daily basis on the Senate Finance Committee?

(DZ): The Chairman wants his staff to be very active and come forward with ideas, proposals and suggestions for the Committee. A lot of the daily work involves speaking with organizations, groups and academia and reading papers and letters from constituents, thinking about issues and speaking with the Internal Revenue Service and the Treasury about making improvements in the tax code. A lot of discussion also revolves around being more effective in our legislation and tax cuts. During Chairman Grassley's tenure, we have had several major tax cuts and I have been involved on the team with these tax cuts. I think Senator Grassley working together with Senator Baucus and his staff has brought a lot more scrutiny to look at the tax provisions. I think the hallmark of the Committee is the bipartisan work we have done together. The Committee has looked closely at the Sec 482 and international tax areas. We have done a lot of research looking at the programs that the IRS has implemented in these areas and continue to look at what we can do in this area. We also have reforms in the tax shelter area and are looking closely at charities. There are many different things that make up the day for the Committee including hearings and drafting legislation. We also benefit greatly from the support of the Joint Committee on Taxation. Our primary goal is to be assisting the Chairman of the Senate Finance Committee in setting the Policies and making certain everything gets taken care of for the work of the Committee.


(KJ): Who is currently on the Senate Finance Committee?

(DZ): There will be some changes at the beginning of the year that has not been made official yet. However, you can go to http://finance.senate.gov and see who is currently on the Committee.


(KJ): Dean, I want to ask you a sensitive question! What is your experience dealing with whistleblowers?

(DZ): It is very interesting dealing with whistleblowers. I have dealt with them for many years and from all walks of life. Senator Grassley is a real champion of whistleblowers and he has done a lot to protect them. Senator Grassley says that they have been "treated like a skunk at a picnic". It should be interesting for your readers to know that Senator Grassley has just passed a bill that greatly expands the rewards for whistleblowers on tax issues. Senator Grassley has been a Champion in the False Claims Act which has brought in billions of dollars from people who blow the whistle on waste fraud and improper billings to the government. We are very pleased to get this passed as it has been a priority for Senator Grassley and it has taken a couple of years to get it into law so we can start seeing some real changes. Now whistleblowers come forward for different reasons, sometimes for purely altruistic reasons and some have an axe to grind. Just because you have an axe to grind does not necessarily mean you are not accurate. We need to have documentation to show how grounded the story is. It is important to get documentation and to substantiate what they are saying and where they are coming from. It is very difficult psychologically for a whistleblower to break out of their company because they have friends in the company. An organization can treat a whistleblower as if they have committed a crime to tell the truth and this can be damaging and a difficult road for the whistleblowers. I respect what they do and it requires a lot of handholding with whistleblowers. However, they have been dealt with a tough deck of cards. We have learned so much from them so it is definitely worth the time. Not all of them work out but many of them do so. It was interesting conducting the Enron investigation which I was a part of the investigation team. We learned so much from the whistleblowers as to what was going on. It really brought home how important is was for the administration to encourage whistle blowing since it told us what was really going on. Having an open environment is really a strength for companies today! People need to feel like they can speak freely and not be treated badly for it. When a company has an open culture it will benefit them and strengthen them.


(KJ): My clients are working overtime to maintain the integrity of their records; SOX Compliance is an important issue to all of them. What is your view on SOX Compliance?

(DZ): I think that people are certainly more focused and more understanding that they need to get things in order. There are good changes that have come about as a result of SOX Compliance but ultimately it takes cultural changes at a company for people to really embrace it. If a company is seen to being open to criticisms and concerns that are raised and that the benefits are very real, then it makes a difference. The Finance Committee has done an enormous amount of work to try and teach the companies to learn the lessons of SOX and the importance of the Corporate Board. However, we have seen very bright Board Members on a Corporate Board switch to non-profit organizations and leave everything they have learned at the door. Senator Grassley recognizes this is an important area and he is trying to bring a greater sense of responsibility to the work done on a tax exempt board. We work very closely with charities and we still have a ways to go. We will need to work on another set of reforms that are necessary to ensure these tax exempt organizations are doing all they can to encourage the best governance practices.


(KJ): What does the future look like the United States Senate Finance Committee?

(DZ): It is going to be a new day for the United States Senate Finance Committee because Senator Max Baucus from Montana is taking over the Chairmanship . However, Senator Grassley and his Finance staff have a very good working relationship with him. Senator Baucus has a lot of interest in closing the tax gap and this means there will be a lot of elbow grease to get this right! When you give away tax breaks there is not much complaining because people are pretty happy; however, closing a loophole and getting it right is much tougher. When you tighten something there are many people who know your phone number and they call and give you their views, so it is a lot tougher! Some of the things we will be looking at are getting the administration involved and looking at the work of the Internal Revenue Service, including collection due process and reform and penalties to make certain that everything is working in these areas. Senator Grassley wants the Internal Revenue Service to have the tools to go after the bad actors while still protecting tax payer’s rights.


(KJ): Dean, what advice would you give to anyone desiring a career in tax in Washington?

(DZ): People who are interested in a government position in Washington must understand that it tends to be a fairly tight circle. Although the US Finance Committee is a smaller group we know the folks on the Joint Tax Committee, the Treasury Department and the major players at the Internal Revenue Service and it gets you into the circle. If there is an interest in working in a government role it is important to let yourself be known now even if there is not a position because when something opens up we will be aware that you are interested. If folks are interested in a very specific area they may want to go to another shop as it is very rare that we have the abilities to have just one staff that wakes up everyday thinking about just corporate Tax reform. A s an example, we have a lot of things that come on our plate on the Senate Finance Committee as opposed to other areas. The Treasury Department Tax Policy Group and the Chief Counsels Office at the Internal Revenue Service are two groups well worth considering as they have very good leadership.


(KJ): Who do you primarily work with in your role?

(DZ): As mentioned earlier, we work with IRS and Treasury a great deal as well as individuals from academia. However, of interest to your readers we certainly also work with corporations who have representatives that they send to Washington DC. We really appreciate hearing from these folks and having them come to talk to us is a very good approach because we like to hear what they are doing. If you have an issue to present to the Committee it is worthwhile to have people to present the issue who thoroughly understand it and who can present it to us in a very informed and thoughtful manner. For those who are reading this newsletter, I want to tell you not to be shy about coming to Washington DC. If you are a corporate Tax Counsel, please come on in! We will be happy to make the time to speak with you. It is very useful for us to hear about what is going on at the front lines as these discussions tend to be give and take discussions. We like to ask questions about how everything works. People should be prepared to answer in detail how everything works and operates so it is an engaged discussion. It is always very useful for us to understand how things are operating and what roadblocks people experience.

(KJ): Dean, thank you for the time you have taken to answer these questions. Your perspective is very valuable to our readers. We appreciate the time you have taken to share your experience with us.

Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Kathleen@etsearch.com

If you would like to contact Dean Zerbe we will be happy to forward a message directly to him at your request. Please email all requests to > Kathleen@etsearch.com .