SAN DIEGO – Paul Handleman, now a couple of months into retirement from the Internal Revenue Service Office of Chief Counsel, waxed nostalgic from the initial interview question: "How would the world be different if you had not been at the center of the development of consequential tax credit regulations and guidance?"
"Your first question reminds me of the movie It's a Wonderful Life," Handleman said during the Northern California Record interview. "If I had never worked at the IRS, how would the world of tax credit regulations be different?"
Looking back over an IRS career that spanned three decades, during which Handleman observed the adoption of the Low-Income Housing Tax Credit and the New Markets Tax Credit, it's difficult to imagine the tax world any other way.
Handleman pointed out that no innovations within the IRS are unilaterally done.
"I was the author and reviewer of numerous pieces of tax credit guidance, especially regulations," Handleman said. "All formal guidance is approved by the Office of the Assistant Secretary of the Treasury for Tax Policy. At the IRS, guidance is approved by the Commissioner's office and the Chief Counsel's office. In my area, which had jurisdiction over the Low-Income Housing Tax Credit, New Markets Tax Credit, Rehabilitation Credit, Research Credit, and other credits, we had numerous layers of review. Guidance is drafted and reviewed by many, mostly a collaboration between attorneys in Chief Counsel, such as myself, and the Treasury counterparts."
No work was done on guidance unless the U.S. Treasury agreed guidance was necessary, Handleman said.
"We wouldn't work on guidance unless Treasury agreed that the guidance was necessary," he said. "Every year, Treasury and the IRS Office of Chief Counsel where I worked publish the Priority Guidance Plan detailing anticipated published guidance."
This was not an arduous process, Handleman said.
"I was very dedicated to my job and, more importantly, I enjoyed it," he said.
Some of these guidance projects included the various tax credits for which he now is known.
"I think that the IRS issued more and better guidance due to my work," he said. "I worked closely with IRS examiners and outside tax practitioners on the need for guidance. I spoke regular before numerous tax credit groups, which allowed me to understand tax credit issues. To my surprise, not many people where I worked liked public speaking. It was not required for the job. Attending conferences and hearing what tax practitioners identified as major issues help me steer Treasury toward more effective guidance."
Tax credits such as the LIHTC and NMTC are listed in the tax code as social programs, from which investors benefit from the credits and low-income people receive benefits in subsidized rents and jobs, Handleman said.
"Treasury and the IRS are regularly lobbied by lawyers, accountants and consultants representing investors, developers, syndicators, and property management companies, but not tenant groups or groups representing low-income people," he said. "In drafting guidance, I tried, along with others, to keep in mind the ultimate beneficiaries of the programs and how our guidance will affect them. I like to think that I kept Treasury focused on the true purpose of the programs, which is to help low-income people and low-income communities."
His time at the IRS wasn't all about tax credits, Handleman said.
"In fact, since 2004, about half of my work related to the domestic production activities deduction under Section 199," he said. "As I was promoted I had to supervise other tax attorneys. Therefore, my work on tax credit guidance decreased as I had to delegate and assign work to others."
As his retirement date approached this past March, Handleman said his office was working on guidance to eliminate regulatory and administrative redundancies between federal programs. He also voiced pride in his close work with IRS field examiners involved various tax provisions, especially Grace Robertson, IRS senior program analyst for LIHTC.
"She was responsible for working with the state housing offices administering LIHTC and she supervised revenue agents in the field auditing taxpayer returns," Handleman said. "She and I worked closely for 15 years before her retirement in 2014."
Handleman is spending his retirement in San Diego in a home he shares with his spouse and their 10-year-old Cardigan Welsh Corgi, Beans.
"I enjoyed my time at the IRS and miss the people," he said. "I had a good group of attorneys working for me."