Michael Desmond, the Treasury Department's tax legislative counsel, plans to leave his post this summer, a Treasury spokesman said yesterday.

The spokesman said he does not know where Desmond may go, but sources indicate he is likely to land a job in the private sector.

"In my experience working with Mike Desmond in the last two years on the tax-exempt bond area, I've found him to be extremely supportive and very smart in providing a helpful perspective on all of our guidance," said John J. Cross 3d, an attorney with the Treasury Department's office of tax policy. "He made a huge constructive contribution to the entire domestic tax system over which he supervised the guidance."

As tax legislative counsel, Desmond reviewed all of the guidance issued by the Treasury, including the guidance on municipal bonds. He joined the department in 2004.

Desmond was involved with several issues of interest to the municipal market, including the development of new Circular 230 regulations, which govern the practice of tax lawyers that come before the IRS. Bond lawyers, who typically give the opinions that bonds are tax-exempt, are considered to be among the tax practitioners covered by Circular 230. Desmond worked on revisions proposed in December 2004 that would have toughened Circular 230 requirements, but the revisions that applied to municipal bond opinions have not been finalized.

Desmond also was closely involved in developing guidance for the Tax Increase Prevention and Reconciliation Act. The law, enacted in May 2006, retroactively applied disclosure requirements and a penalty to parties to tax shelter transactions, including 15 sale-in, lease-out and lease-in, lease-out transportation deals.

The Treasury proposed rules on July 6, 2007, that would favorably interpret the law's provisions to exempt the SILO and LILO deals, but those have not been finalized.

Prior to joining the government, Desmond worked as an attorney with the Washington firm McKee Nelson LLP. He also was employed as a trial attorney by the Justice Department's Tax Division.

 

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