EO International Tax Department;

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TAe wew department
came into being none too
soon since the U.S. law
affecting international
operations underwent
a major overhaul in
1962 and has been in a
constant state of
evolution ever since.
tQue pasa aqui?
Who are these people
who, when you speak
of the Internal Revenue
Service, respond by talking
of the "fiscal authorities" or the
"Board of Inland Revenue"? Mention
something as well known to all of
us as "taxes" and they, without correcting you, end up
speaking of "impuestos," "impots" or even "levies."
Most of us face up to the annual chore of preparing
our personal income tax returns, even if we do so with
some degree of fear and trepidation. But if you think
you have it rough, consider the tax specialists in the
International Tax Department, based in Executive
Office. This group must attempt to be expert in the
U.S. tax laws applicable to international operations and
at the same time have a working familiarity with the
laws of almost a hundred other countries. Headed by
partner Frank Oatway, who works closely with partner
Dave Bertrand, the department acts as a central source
of specialized knowledge, enabling the Firm to provide
authoritative answers to the tax questions raised by our
multinational clients.
The department was organized in the late 1950s to
help deal with what was fast becoming one of the most
complex areas of the U.S. tax laws. The new depart­ment
came into being none too soon since the U.S. law
affecting international operations underwent a major
overhaul in 1962 and has been in a constant state of
evolution ever since.
Coordinating these laws with those of other coun­tries
presents a challenging task to the group of special­ists
Frank directs. While freely accepting this challenge,
he is quick to point out that the department does not
pretend to be the sole source of knowledge on the sub­ject.
"Many practice offices have their own designated
specialists who are as expert as the members of our
group. Although we frequently serve clients directly,
just as often our 'client' is this domestic practice office
tax specialist looking for concurrence.
"Each office in the DH&S organization has experts
in its geographic area. We do not attempt to duplicate
these sources of knowledge. However, many of our
clients' problems involve the correlation of a foreign
country's laws with our own or the interrelationship of
two or more sets of foreign laws. The key to successful
planning is often in the ability to bring all of this H&S
and DH&S expertise to bear on the one problem. This
is the role that we attempt to fill. We become familiar
with foreign tax systems and try to help the client make
his decision not just in the context of one country, or
even of one country in relation to the United States, but
in the context of his entire worldwide operation."
When foreign offices require information on domes­tic
tax laws, they turn to this department as the author­ity
on the subject unless the inquiry involves a specific
client already served by a domestic practice office. "We
are specialists in U.S. tax laws first," Frank points out,
'With a particular knowledge of their foreign applica­tion."
In this capacity the department answers ques­tions
from the simple ("What is the amount of the
personal exemption?") to the complex ("How do we
devise an appropriate structure for the acquisition of a
U.S. public company?"). Occasionally it is called upon
to exercise diplomatic skills, for example, when a
foreign office or client wants to know how the United
States can insist that the foreign parent of a U.S. cor­poration
report its subsidiary's inventories on the LIFO
basis if LIFO is not an acceptable accounting practice
in the parent's home country.
While these direct client activities account for about
half the department's time and are viewed as the prime
responsibility, they are only part of the complement of
services it can provide. Another major responsibility
involves the coordination of the U.S. tax work of
foreign offices as it relates to the program for rendering