HB + HBS Recent Successes
Tax Relief for Growing Companies
Thanks to an unintended provision in the 2017 federal tax overhaul, a number of growing companies across the country faced daunting tax liabilities on anticipated commission income for policies which had not been renewed and which the companies had no legal right to receive.
The effect of this provision would be to create a tax obligation on tens of millions of dollars in phantom income which had not yet come in the door. Severely stunted growth, major layoffs and/or bankruptcy would be among the few viable options for these companies if the statutory provision were allowed to stand without regulatory clarification regarding intent.
As a result of the efforts of Husch Blackwell Partner, Jason Reschly, and Husch Blackwell Strategies Principal, Adam Sachs, the Joint (House-Senate) Committee on Taxation (JCT) recently clarified that the troublesome provision in the Tax Law did not apply to our client’s circumstances. In a rather extraordinary move, the JCT set forth our client’s particular situation as a formal example of how the provision should not be applied.
The Department of Treasury is currently drafting proposed rules which should provide further guidance regarding the implementation of this particular provision. Reschly and Sachs remain on hand to ensure their client’s interest are adequately protected as this regulatory process continues to advance.
Wastewater Treatment / Disposal Permit
It took seven years for entrepreneur John Crowe and his team to work through the tedious approval process and receive a license to treat and remove sludge from sunbaked New Mexico oil fields.
With high level support from HBS Board Member, Catherine Hanaway, and HBS Principal, Adam Sachs, it took less than seven months to receive state approval for Crowe’s company to treat and dispose of wastewater at the same site in New Mexico.
Not only did this outcome benefit Mr. Crowe by significantly shortening the timetable for realizing a return on his real estate investment, it advanced the outgoing Governor’s policy objective of bringing environmentally friendly wastewater treatment technologies to market.
Cleaner water for New Mexico citizens, and quicker returns on a client’s significant capital investment; another successful government solution brought to you by Husch Blackwell Strategies.
Wire Act Reversal
For decades, the U.S. Department of Justice (DOJ), Congress and most Courts held the view that the Federal Wire Act banned internet gambling in the United States. That all changed, however, when the DOJ’s Office of Legal Counsel (OLC) issued a contrary Opinion that the Wire Act did not extend to online gambling, effectively leaving it to the states to decide whether or not to legalize such activity.
A long-time Husch Blackwell client and major industry player objected to this unexpected DOJ action. With support from Husch Blackwell, it established a broad-based coalition of gaming companies and public interest groups to push back against the opinion. The client and its coalition hired Husch Blackwell Strategies Principal, Adam Sachs, to advocate on its behalf in Washington.
Advancing the legal view that the OLC wrongly construed the legislative history of the Wire Act, and the policy view that Congress not the DOJ should be considering the societal implications of allowing internet gambling to expand in the United States, Mr. Sachs worked with a team of Washington-based lawyers and lobbyists to re-establish the federal government’s long-standing ban.
Adam’s efforts included drafting, identifying Congressional champions, and securing the introduction and co-sponsorship of legislation (“Restore America’s Wire Act”) to overturn the DOJ’s Opinion; serving as one of the coalition’s public spokesmen with television, radio and print media outlets; preparing witnesses for Congressional hearings before the House Committees on Energy & Commerce and the Judiciary; providing strategic advice regarding a complementary effort to apply pressure on DOJ to withdraw its 2011 Opinion; and managing Congressional outreach to the White House and DOJ on behalf of the Coalition.
In January 2019, DOJ General Counsel Rod Rosenstein formally issued a 23-page letter withdrawing its prior 2011 Opinion, embracing our Coalition’s argument that the OLC had incorrectly construed the statutory language and legislative history in reaching its earlier conclusions.
The effect of the DOJ’s recent action will be to afford Congress an opportunity to consider the serious policy implications before allowing internet gambling to expand in our country. This is an unqualified success for Mr. Sachs and his HBS team, which is now poised to represent the interests of the Coalition as Congress continues to consider this important issue.