Some of the key reasons that E-Commerce raises tax issues are as follows:

1. Location. Existing tax systems tend to determine tax consequences based on where the taxpayer is physically located. Hence, existing laws relating to Direct and Indirect taxes have developed definitions of what constitutes the location of suppliers and consumers of goods and services. There are small differences between the definitions for the two types of taxes. Generally the location is determined by reference to whether there exists a "permanent" or "fixed" place of business or, where there is no business, the usual residence. The presence of a network server might constitute a place of business, but probably only where it is part of a range of human and technical resources used to deliver a complete business transaction i.e. it is used to advertise, take orders, process payments and make deliveries.

2. Types of Products. E-commerce allows for some types of products, such as newspapers and music CDs, to be delivered in digitized form, rather than in tangible form. The digitized products raise issues at the state level as to whether sales tax applies and in which state income is generated for state income tax purposes. It also raise federal issues regarding the type of revenue generated and how it is to be reported. See Overview to Federal Domestic Tax Considerations for an Internet Company, by Professor Annette Nellen, San Jose State University.

3. Latest Marketing Techniques. The Internet has introduced new ways of selling and buying goods and services. For instance, anyone no matter where they located can offer their unwanted items to a worldwide group of potential buyers via auction sites, such as E-Bay. Also, the Internet can be used to link business buyers and sellers through exchange web sites where sellers post what they have to sell and buyers post what they need to buy. Almost, all of these sites can operate without human intervention . Additionally, the Internet has increased the use of bartering, with respect to exchange of web banners that serve as advertisements. These new marketing techniques raise various tax issues at all levels. At the federal domestic level, issues include whether an exchange intermediary or broker should be accounting for inventory, and what amount of information reporting should be required for low-value bartering transactions? See Overview to Federal Domestic Tax Considerations for an Internet Company, by Professor Annette Nellen, San José State University.

4. Types of Transactions. Because, the Internet allows paperless transactions and use of electronic cash, thus it raises administrative concerns for the Internal Revenue Service as to whether transactions were properly reported, whether an audit trail exists, and whether new reporting rules are needed. The U.S. Treasury is aware of the looming tax compliance problems. In its 1996 report, the U.S. Treasury expressed its fears of this as follows:

"The major compliance issue posed by electronic commerce is the extent to which electronic money is analogous to cash and thus creates the potential for anonymous and untraceable transactions."

These anonymous transactions, and the use of anonymous money, create a huge problem for tax compliance. The U.S. Treasury rightly sees this as one of the most important issues in the taxation of e-commerce. Another significant category of issues involves identifying parties to communications and transactions utilizing thesenew technologies and verifying records when transactions are conducted electronically. In a speech entitled, "Tax Administration in a Global Era," Treasury Secretary Summers stated:

"The Internet provides new ways for tax administrations, such as the IRS, to improve the ease and transparency of tax collection. But new technology also raises certain problems. In a world where cyber-transactions are growing at a rapid pace, tax administrations face the challenge of adapting existing tax systems to an economy that increasingly ignores physical borders. In such a world, it will be easier for companies to avoid tax collectors by operating worldwide through web-sites based in jurisdictions that are unwilling to share taxpayer information."

He will also make calls to "resolve without amnesty and without animosity the status of the millions of illegal immigrants that are here right now," according to White House spokesman Scott Stanzel.

On the immigration issue Bush is facing a new congressional leadership that is friendlier to his views but is also facing the same dynamics that scuttled his last attempt: a cooperative Senate but bipartisan opposition in the House.

House Speaker Nancy Pelosi, a Democrat, has told the White House she cannot pass a bill with Democratic votes alone, nor will she seek to enforce party discipline on the issue.

Bush will have to produce at least 70 Republican votes before Pelosi considers a vote on comprehensive immigration legislation, a task that might be difficult for a president with low approval ratings.

Meanwhile, the Democratic Party's conservatives, particularly freshmen who seized their seats from Republicans, had to weather a barrage of attacks on the issue before their victories in November last year, and are not eager to relive the experience.

A recently leaked White House presentation devised after weeks of closed meetings with Republican senators suggests some hardening of Bush's positions.

The new proposals will suggest that illegal alien workers apply for three-year work visas, renewable indefinitely at a cost of 3,500 U.S. dollars each time.

In order to obtain a green card that would make them legal permanent residents, they would have to return to their home countries, apply for re-entry at a U.S. embassy or consulate, and pay a fine of 10,000 dollars.

More green cards would be made available to skilled workers by limiting visas for parents, children and siblings of U.S. citizens.

Temporary workers would not be able to bring their families into the country.

Key Democrats have said the plan would unacceptably split families while creating a permanent underclass of temporary workers with no prospects of fully participating in U.S. society.

Cline tried to sue Ashland Inc., Chevron Phillips Chemical, and ExxonMobil Corp., which produced the benzene he believed caused his disease. The judge presiding over the case ruled in favor of the defendants, stating that Cline waited too long to sue.

The judge’s ruling was based on a 1979 precedent that held that the two-year statute of limitations begins on the date of the last incidence of chemical exposure.

In Alabama, another precedent allows lawsuits only by persons who can show “manifest harm” or demonstrable injury. But because Cline’s illness was not diagnosed until 1999—four years after his last exposure—there was no allowable time period during which he could have sued, according to both precedents.

Cline’s lawyer, Leslie Brueckner, is arguing that the state ruling violated the 14th amendment, denying Cline due process of law.

If the U.S. Supreme Court accepts the case, oral arguments should begin sometime in the fall or winter.

Two lawyers from Godfrey & Kahn, S.C. were among 17 people recognized as outstanding volunteers by The Milwaukee 7 at its recent advisory council meeting: Christine Liu McLaughlin, shareholder and member of the Labor & Employment Practice Group in the firm’s Milwaukee and Waukesha offices, and Mark C. Witt, shareholder and member of the Corporate Practice Group in the firm’s Milwaukee office. The awards were presented in appreciation of McLaughlin’s and Witt’s professional connections that helped open the door to many CEOs during the Milwaukee 7 CEO Call Program.

The Milwaukee 7, launched in September 2005, was formed to create a regional, cooperative economic development platform for the seven counties of southeastern Wisconsin: Kenosha, Milwaukee, Ozaukee, Racine, Walworth, Waukesha and Washington. The CEO Call Program includes a team of 135 volunteers who have visited with the CEOs of 450 companies to aggregate information for a more systematic understanding of the business climate and address concerns to help attract, retain and grow diverse businesses and talent.

Christine Liu McLaughlin
McLaughlin provides counsel on an array of issues including hiring, discipline and termination; family and medical leave; federal and state disability discrimination; federal and state civil rights and fair employment; sexual and other unlawful harassment; workplace violence; contingent workforce; and affirmative action and compliance. She has conducted workshops and seminars on these and other employment law topics in Wisconsin as well as nationally. Additionally, McLaughlin was instrumental in the creation and implementation of Legal Resource Training, Godfrey & Kahn’s interactive training service initiated as a proactive tool to help clients avoid employment litigation.

McLaughlin is a member of the Society for Human Resource Management and the Human Resource Management Association of Southeastern Wisconsin.

Mark C. Witt
Witt’s practice is focused on business law, mergers and acquisitions, corporate finance, private equity and venture capital. Mark has been involved in numerous public and private business transactions as counsel to buyers, sellers, lenders and investors. He also is experienced in international business transactions and restructurings, including private equity and hedge fund investments in Asia. He assisted with the creation of Godfrey & Kahn's Shanghai office.

Witt serves as Chairman of the Board of Directors of the YMCA Holton Youth Center, and is a member of the Advisory Board of WIN-Milwaukee, and the Board of Directors of the Milwaukee Curling Club.

Founded in 1957, Godfrey & Kahn maintains offices in Milwaukee, Madison, Appleton, Green Bay, and Waukesha, WI; Washington, DC; and Shanghai, PRC. With more than 190 attorneys, Godfrey & Kahn provides legal and business advice to clients ranging from small businesses and governmental entities to large privately and publicly held national and international companies.

http://www.gklaw.com

Monica M. Goodling, one of the key aides who took part in planning the firings of eight US Attorneys who was formerly on voluntary leave from her post as special counsel to the US Attorney General, submitted her resignation without cause Friday. Goodling's resignation, effective Saturday, is the third by a Department of Justice official involved in the controversy. On Tuesday, Goodling told the House Judiciary Committee that she would not speak to the committee about her role in the firings, and stated through her lawyer, John Dowd, that she would seek protection under the Fifth Amendment if the committee issued her a subpoena.

Documents and records released by the DOJ in late March show that Goodling participated in multiple meetings planning the firings over a period of 12 months. Goodling was also involved in a April 6, 2006 telephone conversation with Sen. Pete Domenici (R-NM). Domenici had complained to the Bush administration concerning the speed of former Albuquerque US Attorney David Iglesias' investigation of local Democrats before the November 2006 elections. Dowd characterized any questioning of his client a "perjury trap" while citing the recent conviction of Lewis Libby in the CIA leak case.

On Monday, Sen. Patrick Leahy (D-VT), chair of the US Senate Judiciary Committee, rejected attempts by the Bush administration to move up the date that US Attorney General Alberto Gonzales is scheduled to testify. In March, Kyle Sampson, former chief of staff to Gonzales, who had resigned, told the Senate Judiciary Committee that the prosecutors were fired for political reasons rather than for poor performance as the Justice Department has claimed.