▶ 0:19:56Will come to order the committee meets to discuss three nominations to the U.S. tax court. I will begin with jeffrey arbeit, who served for nearly a decade as legislation counsel on the joint committee of taxation. He works there focused on some of the most complicated issues in tax law, including international taxation as well as financial assets, transactions of markets. Mr. arbeit also brings private sector experience as clerk on the tax court.
▶ 0:20:24We understand we have a fair number of guests in the house from the joint committee on taxation. Big fans of jeffrey arbeit. We welcome them and appreciate the work they do for us. We are big fans, as I just touched on because of the good people over at gct. We could not do their jobs -- our jobs without their professionalism and expertise.
▶ 0:20:55Our loss is the country's gain. Next, cathy fung is the deputy area council of the irs office of chief counsel. She has held multiple positions there since 2009. With Mr. arbeit, she brings valuable private sector experience, previously served as an attorney advisor for a tax court judge. Benjamin guider has experienced a decade and a half advising clients on a variety of tax issues. Those include low income housing and tax-exempt bonds.
▶ 0:21:26He is currently an affordable housing attorney and member of the american bar association. I will just wrap up because I think we have three very talented nominees today by saying I appreciate their willingness to serve on the tax court the tax court is an essential feature of our tax system and the best opportunity americans have to dispute a bill before they actually have to pay.
▶ 0:21:52It is a major source of fairness for taxpayers and relieves pressure that would otherwise fall on other parts of the judicial system. Big thanks to our nominees.
▶ 0:22:03Sen. Crapo: Thank you Mr. chairman. I second your comment on the importance to american taxpayers to have fairness out of the tax court. I also welcome our three nominees. Congratulations on your nominations and thank you all for your willingness to serve.
▶ 0:22:29Sen. Crapo: This committee convened last month to consider three other nominees to be judges for the U.S. tax court. During that hearing, I discussed the tax court's unique role as a forum for the resolution of disputes between taxpayers and the irs. The tax court plays a vital role in the maintenance of our tax laws and the judges nominated to these positions must be prepared to carry out their duties with the highest degree of skill and integrity.
▶ 0:22:58Sen. Crapo: It is essential to keep the tax court staffed with highly qualified judges to ensure taxpayers receive fair, impartial, and efficient hearings. If confirmed, each of you will play a critical role in upholding the public trust in our nation's tax system. Which american taxpayers expect and deserve. I thank each of our nominees for their dedication to our country.
▶ 0:23:26Sen. Crapo: I look forward to hearing your testimony today and thank you again cut Mr. chairman.
▶ 0:23:32Chair Wyden: A brief introduction for our nominees, we touched on your background earlier. Jeffrey arbeit served for nearly a decade as legislative counsel at the joint committee on taxation. Cathy fung has held several important positions in the irs office of chief counsel and guider has worked advising clients on a variety of issues. Thank you to our nominees. We will enter your prepared remarks into the record.
▶ 0:24:02Chair Wyden: They will be included in their entirety. Then we will have some questions.
▶ 0:24:12Mr. Arbeit: Thank you. Testifying before you today is an honor. I'm crippled to president biden nominating me to be a judge on the united states tax court. I want to thank the senate finance committee staff for their guidance throughout the process. For the last nine years, I have had the privilege of serving members of congress come a including members of this committee, as a lawyer on the nonpartisan staff of the joint committee on taxation.
▶ 0:24:39Mr. Arbeit: My days have been spent working on policy from its origin as an idea this progression to a draft to the long process of refining language and mechanics in a nonpartisan basis. During my time with the joint committee on taxation, I have been privileged to work with members across the little spectrum on a variety of issues affecting taxpayers.
▶ 0:25:03Mr. Arbeit: If confirmed, my focus will shift from proposals regarding what the law might be to cases disputing with the law is. Most cases before the tax court involve individuals and in many cases those individuals are present themselves. Their time before the court can be life-changing. I will seek to serve them as I have serve you, fairly and evenly. I will strive to apply the lessons I have learned clerking for the united states tax court.
▶ 0:25:33Mr. Arbeit: Without his support, I would not be here. Clerking for the judge taught me to assess opposing arguments, think critically about differing interpretations of the law, and express complicated concepts clearly in writing. Above all, he demonstrated how to treat all taxpayers fairly and with compassion. I cannot think him enough. I want to thank professor ted sims.
▶ 0:26:00Mr. Arbeit: My former colleagues, my current colleagues at the joint committee of taxation, and especially our chief of staff. Finally, I want to thank my parents met my sister, and her partner. I appreciate the opportunity to appear before you today and I look forward to answering your questions.
▶ 0:26:22Mr. Guider: Good morning. Thank you, members of the finance committee. I'm grateful to all of you and your staff members for the opportunity to testify before you today. I am thankful to the president for nominating me to serve on the united states tax court and to his staff for their help throughout the process. I would like to thank my wife and our children.
▶ 0:26:50Mr. Guider: I would not be here without their love and support, nor would I be here without the love and support of my parents. Thank you to them and all my family and friends who have played roles large and small in my presence here today. Finally, I would be remiss if I did not express my gratitude to my mentor and colleague.
▶ 0:27:14Mr. Guider: We learn and grow by researching and practicing the law, but our mentors add perspective and experience which benefits us along the way. Thank you to her and all the other attorneys whose knowledge and guidance have helped me in my journey here. For 15 years, I have spent a career as a tax credit lawyer specializing in low income housing and historic rehabilitation credits and working through challenges taxpayers encounter in earning those credits.
▶ 0:27:43Mr. Guider: I have seen how the tax code can restore a building in a neighborhood that needs revitalization or provide housing for individuals or families of low and moderate income. It has been rewarding to represent clients who believe in such work. I have devoted my legal career to work with those communities, especially those of low and moderate income.
▶ 0:28:07Mr. Guider: I would like to continue that spirit of service by being a judge in the tax court and serving those who find themselves before the tax court with limited experience or resources. I believe the experience and knowledge I have gained and the abilities I have developed over my career will serve me well as a judge on the tax court, a position that demands those attributes. If confirmed, I will be fair and impartial as I apply the law to each case performing.
▶ 0:28:36Mr. Guider: It would be honored to serve our country in the capacity of judge on the tax court. If confirmed, I pledged to perform the job to the best of my abilities for the duration of my term. Thank you for the opportunity to be here today. It is an honor and I look forward to any questions you may have.
▶ 0:28:56Chair Wyden: We will have some.
▶ 0:28:58Ms. Fung: Senator and members of this committee, thank you for giving me the opportunity to be before you today to consider my nomination to serve as judge on the united states tax court. I'm grateful to you and your staff for your time in scheduling this hearing. It is a privilege to be nominated as a judge for the united states tax court. I'm grateful to president biden for nominating me for this important position.
▶ 0:29:26Ms. Fung: I would like to knowledge my parents, who are attending to my dad's surgery today. Their sacrifices and support have allowed me to appear before you today. I would like to thank my siblings for their encouragement and enthusiasm. My brother flew in from seattle to be with me today and my sister is also watching us on the live feed.
▶ 0:29:48Ms. Fung: I would like to knowledge a retired judge on the united states task force for his fellowship and mentorship and I want to knowledge my friends and colleagues who provide support to me every day. They are my D.C. family and many of them are here today. I am the child of immigrant parents. My mother arrived in this country as a child along with her parents and four siblings by boat. My father arrived in this country as a young adult separated from his parents.
▶ 0:30:16Ms. Fung: Each of my parents left their birth country for a better life and the promise of achievable opportunities. Through them, I have seen the a pity me of hard work, perseverance, and integrity. As my parents pursue the american dream, they instilled in my siblings and me a tireless work ethic. I have taken their lessons too hard and followed their example as a framework with which I have approached my career and life.
▶ 0:30:43Ms. Fung: The tax court has always been a special place for me, where I started my legal career and where I witnessed the tasks that taxpayers face when resenting their cases. I'm sensitive to the fact that standing before a judge may be the first time taxpayers have had the opportunity to interact with their government. This backdrop shapes what would be my judicial comportment if I'm confirmed.
▶ 0:31:08Ms. Fung: I pledge to listen to all facts with an open mind and treat taxpayers fairly and with the respect that all taxpayers should expect and deserve from their government. Over the past 20 years in private practice and the government, I learned about complex tax issues and litigation areas. I represented corporate taxpayers and devoted my time to representing taxpayers pro bono through low income tax clinics.
▶ 0:31:37Ms. Fung: I gained knowledge in drafting regulations to aid taxpayers and provide certainty. In all instances, I have been a faithful public servant in applying tax laws with diligence, integrity, and fairness. If confirmed, I would continue this responsibility to the american people in and partially applying the law to the facts of each case. 20 years ago, I embarked on my first job as an attorney advisor at united states tax court.
▶ 0:32:06Ms. Fung: If confirmed, it will be my honor to rejoin the tax court family and support the mission to resolve taxes and continue my government service as a judge. Thank you for your consideration.
▶ 0:32:19Chair Wyden: All of you have outlined your views very well. Let me make sure everybody understands where we are. We have some obligatory questions we have to ask each of the nominees. We will go through that and get an answer from each of you. Is there anything you are aware of in your background the might present a conflict of interest to the duties of the office to which you have been nominated?
▶ 0:32:41Mr. Arbeit: No.
▶ 0:32:42Mr. Guider: No.
▶ 0:32:44Ms. Fung: No.
▶ 0:32:45Chair Wyden: Do you know of any reason that would prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated?
▶ 0:32:54Mr. Arbeit: No.
▶ 0:32:55Mr. Guider: No.
▶ 0:32:56Ms. Fung: No.
▶ 0:32:58Chair Wyden: Do agree to respond to any reasonable summons to appear and testify before any duly constituted committee of the congress?
▶ 0:33:07Mr. Arbeit: Yes.
▶ 0:33:08Mr. Guider: Yes.
▶ 0:33:09Ms. Fung: Yes.
▶ 0:33:11Chair Wyden: You commit to providing a prompt response in writing to any questions addressed to you by any center of the committee?
▶ 0:33:18Mr. Arbeit: Yes.
▶ 0:33:19Mr. Guider: Yes.
▶ 0:33:20Ms. Fung: Yes.
▶ 0:33:22Chair Wyden: Let me started this way. Without going into details of my shady past, before I was in public service iran the legal aid program for senior citizens and I saw particularly how often americans, particularly the elderly but people of all ages, found the court system and comprehensible and could not figure out how it might work to
▶ 0:33:54Chair Wyden: Address their concerns, so we made a special focus of trying to help those folks win their way successfully through the judicial system. Any taxpayers who appear before the tax court are not represented by counsel. When I think about the tax court, I think about those days with seniors and legal aids and these folks do not have counsel. They are representing themselves.
▶ 0:34:20Chair Wyden: They come to court on a tax issue, which can be confusing, and sometimes intimidating, and I will elect to go down the road -- row and have each of you describe in the best way possible what you feel you can do to make sure they are going to get a fair shake in that court.
▶ 0:34:46Mr. Arbeit: Going before the tax court can be life-changing. If confirmed, I will make sure all taxpayers know their rights and understand the legal process, which is essential for a fast and fair resolution of their cases. There are many opportunities for this even before a trial. To give one example, I will make sure taxpayers know they may have access to pro bono legal representation through the clinic, a law firm, or another service.
▶ 0:35:17Chair Wyden: I have gone through your qualifications and background and I am going to support your nomination. I know this has not been an area you have spent a lot of time on, so I would be interested in what you would like to do, given your particular background, to make sure those folks who do not have counsel and come into this system, this odd kind of structure for them, what you can
▶ 0:35:49Chair Wyden: Do to make sure they get a fair shake.
▶ 0:35:52Mr. Guider: I do come from somewhat of a different world, but I think I do have experience working with clients. While they are not before the tax court, they may have limited experience, so I found myself in situations where I have needed to explain things to them and I think I could carry that approach forward into this service.
▶ 0:36:18Mr. Guider: I think my first step at the court would be about communication with those litigants via the court website or email communications so they understand the status of their case or procedures that they need to undergo to process it successfully. So there would be that kind of outreach.
▶ 0:36:42Mr. Guider: I might set up an informational call so they can call in and learn about what to expect day of, what to bring with them so they can be better prepared for the process and then I think when they are appearing before me, whether via zoom or in a courtroom, just treating them with respect and dignity and understanding that they are coming from a place where they might not understand the process well.
▶ 0:37:12Chair Wyden: Were some of those conversations instances where you were trying to explain to people housing issues that you were working on?
▶ 0:37:27Mr. Guider: Yes, around housing issues as well as portions of the code that related to relevant credits and perhaps portions of the code that relate to partnership law, which is often transactions --
▶ 0:37:42Chair Wyden: That is a piece of cake. Everyone knows partnership. That is what I was interested in hearing from you. What are you going to do when confirmed? I believe we are going to get all three of you confirms. We have been working in a bipartisan way. We are all trying hard to get this done quickly because we know people need this service. Your thoughts?
▶ 0:38:14Ms. Fung: Every taxpayer deserves to be heard, especially in a fair and impartial form. I would essentially ensure they have all the information they need before trial.
▶ 0:38:28Ms. Fung: I would point them to the tax court's website, where there is information on how the process of a case works and schedule pretrial meetings or conferences to ensure they understood the process from my standpoint and that they had an introduction to the process.
▶ 0:38:51Chair Wyden: I appreciate your answers. I would like you three to be part of the group that in the future people talk about as exceptionally committed to throwing open this odd system. My wife basically told me at one point, I am going to marry you because you are not really a real lawyer.
▶ 0:39:19Chair Wyden: You are somebody who runs a legal aid program for the elderly and the like. I think that it is an expression of what a lot of people feel when they are against this unusual system for people who do not have the experience and I would like to see you all go into the history books as the group that made a difference in terms of taking this complicated system and making it intelligible to folks who do not have power or counsel.
▶ 0:39:50Sen. Crapo: Thank you for your questions because they are the line of questioning I want to pursue. I also appreciated the answers each of you have given. I ch of you have given. I do of you have given. I do not ou have given. I do not want ve given. I do not want yougiven. I do not want you iven. I do not want you to n. I do not want you to just restate what you just said.
▶ 0:40:06Sen. Crapo: I am going to go through a little bit of a question along the same lines and ask you to make a brief commitment that you will work to achieve fairness in the judicial system that you will administer.
▶ 0:40:23Sen. Crapo: To lead to that, as already said, the tax code is often perceived particularly by those who do not have resources to hire an army of lawyers to help them, is income principal -- incomprehensible.
▶ 0:40:45Sen. Crapo: This is going back 15 or 20 years, but it seems one of our national magazines 15 or 20 years ago created a family of four example and gave it a few tax twists and then hired three or four different tax preparer types to do the taxes for this family. Not a complicated deal, but just a few tax issues.
▶ 0:41:09Sen. Crapo: Of the people they hired to do the tax returns for this sample family, they got three or four different answers for what the tax return onto look like. The code is that complicated and you can imagine a citizen who is brought into court by the irs caught one of the more feared agencies in united states, they are scared when they come into your courtroom.
▶ 0:41:41Sen. Crapo: They want to know that they are going to get fairness, so that is where my questions come down. And to this the fact that the irs office of chief counsel is responsible for representing the government in matters before the tax court and it will be there in the courtroom and everyone of these cases and the american people know that.
▶ 0:42:05Sen. Crapo: I know what senator wyden and I are both angling for is just a solid commitment from you that you will assure that the taxpayers receive fairness. I do not need a detailed explanation, but give me that commitment, that taxpayers will receive fairness in your courtrooms.
▶ 0:42:24Mr. Arbeit: Thank you. You are correct. Fairness is the foundation of our court systems and needs to be the foundation of our tax system. As a judge, I commit to treating all taxpayers fairly and evenly and part of that is communication and making sure there are no surprises, that they know what is coming and understand the process.
▶ 0:42:51Sen. Crapo: Will you assure there will be fairness in your courtroom?
▶ 0:42:55Mr. Guider: Absolutely.
▶ 0:42:58Ms. Fung: I also commit to fairness in the courtroom.
▶ 0:43:02Sen. Crapo: I wanted you to be quick because I have a second question. Is another angle on this issue. Less than two weeks ago, the supreme court overturned the legal doctrine that courts should be fair to an agency/ interpretation of an ambiguous statute.
▶ 0:43:24Sen. Crapo: In light of this court case, there will be heightened importance for judicial awareness of agencies' actions and review of interpretations of the law that will be interpreted in your courtrooms. If confirmed and upon initial impression, how would you face this challenge of scrutinizing regulatory actions?
▶ 0:43:47Sen. Crapo: Would you be willing to rule that a treasury regulation is invalid if the guidance does not align with the statutory language and legislative history?
▶ 0:44:01Mr. Arbeit: Thank you. The foundation of every legal analysis is finding an interpretation consistent with the statute and that reflects the intent of congress, so yes.
▶ 0:44:21Mr. Guider: Yes. The supreme court has said the tax court will no longer simply defer to the agency's interpretation. We have to conduct our own analysis of the code and regulation, so I will be prepared to do that.
▶ 0:44:44Ms. Fung: Essentially, looking at the loss provided and everything in terms of intent and obviously the goal is to get to the right answer, so that is what we need to do in terms of looking at the law before us.
▶ 0:44:56Sen. Crapo: Thank you.
▶ 0:44:58Chair Wyden: Thank you. You can tell both of us are very interested in seeing something resembling a more comprehensible judicial system. With respectful chevron commit my guess is going to be a lawyer's full improvement program -- implement program for many years.
▶ 0:45:24Chair Wyden: It is important to him and I'm going to do everything I can to build bipartisan support here in the committee and senate, for following congressional intent because that is really, if we are going to hold people accountable, if you get an election certificate, we want to follow that. I do not believe we have any members on their way. Is there anything you want to add? Ok.
▶ 0:45:52Chair Wyden: I will add that we appreciate all three of your presentations here today. Based on what I have heard, I strongly support these nominations. I am going to urge all members to do so. Senator crapo and I work hard to proceed in a bipartisan way here . Senator cassidy and others have been talking with us. I support all three of you.
▶ 0:46:21Chair Wyden: Jeffrey arbeit and cathy fung, both of you clerked on the tax court. Mr. guider has worked for a decade and a half advising clients on a variety of tax issues. I was interested in your ideas on how we are going to help people get a fair shake out there in the system by themselves, so I intend to support you three. We will try to get all six applicants through.
▶ 0:46:50Chair Wyden: I think we would like to do it as soon as we could and we are targeting before the senate leaves for the august break. If there's any additional information that the three if you have you would like us to consider, please get it to us. Regarding questions for the record for the senators, the deadline to cement questions for the record will be this monday, july 15 at 5:00 p.m.. The deadline is firm.
▶ 0:47:18Chair Wyden: We thank everyone for their cooperation and are hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]