Michael F. Mundaca

Assistant Treasury Secretary for Tax Policy (since Sept. 2009)

(Courtesy OECD Web Site)

Why He Matters

Tax day may only come once a year for most Americans, but collecting revenue for the federal government is an around-the-clock effort that requires a massive expenditure of institutional energy. At the center of that effort is Mundaca, the acting head of the Treasury Department's Office of Tax Policy.

Working closely with the Internal Revenue Service (IRS), Mundaca's Office of Tax Policy (OTP) implements and enforces the nation's tax laws by administering the Internal Revenue Code. The OTP also helps negotiate foreign tax treaties for the U.S., agreements that are tremendously important in the current era of multinational corporations. The treaties facilitate the exchange of tax information between countries, data that can often be used by the IRS to track down tax evaders.

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Background

At a Glance

Career History: Deputy Assistant Secretary for International Tax Affairs, Treasury (2007-2009); Partner, Ernst and Young (2002-2007); Various positions at Treasury (1997-2002)
Hometown: Staten Island, N.Y.

Alma Mater: Columbia University, B.A.(philosophy and physics),1986; University of Chicago, M.A. (philosophy), 1988; University of California, Berkeley, J.D., 1992; University of Miami, LL.M., 1997
Spouse: Gina

Path to Power

Mundaca grew up in Staten Island, N.Y., but his family ties extend far beyond the five boroughs. His father, Fred Mundaca, emigrated to the U.S. from Chile when he was just a teenager. After meeting his wife, Irene, in Staten Island, Fred took on an arduous work schedule, attending Staten Island Community College during the day while working night shifts at the Postal Service.

Fred's degree from the community college helped him land a job at IBM, where he spent the rest of his working career. The Mundacas saved up enough money to move out of the West Brighton housing projects and set their two children on the path to college.

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The Issues

The OTP develops projections for future government revenue based on proposed changes to the tax code. As acting assistant secretary of tax policy, Mundaca uses the OTP's revenue projections to advise Treasury Secretary Timothy Geithner on tax issues. That role gives Mundaca significant clout on recurring issues such as the alternative minimum tax and tax cuts.

Tax Enforcement

During a Senate Finance Committee hearing in November 2009, Mundaca expressed strong support for the burgeoning effort to increase compliance with U.S tax laws.

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"Non-compliance undermines confidence in the fairness of our tax system and fosters further non-compliance," Mundaca said. "It also results in a de facto tax increase on compliant taxpayers, who must pay more because others fail to pay what they owe."

President Obama made tighter enforcement of the tax code one of the early priorities of his administration. In his 2010 budget proposal, Obama asked Congress to fund the hiring of 800 government employees to pursue Americans who stash away money overseas.

The Treasury Department and the IRS signaled their renewed focus on tax enforcement when they took on the Swiss Bank UBS in 2009. After months of negotiations, the Swiss government agreed to let UBS turn over the names of American clients with more than $248,200 in an account.

Mundaca hailed the UBS agreement as the beginning of a new era in tax enforcement. "The UBS case, the agreements we are signing, the legislative proposals and the enforcement efforts are all meant to send one message, which is that if you owe tax to the U.S., we are going to use every tool we have available to get that," Mundaca said.

E-Commerce

During his first stint at Treasury, Mundaca was deeply involved in the thorny taxation questions surrounding electronic commerce. He participated in negotiations on the topic at meetings of the Organization for Economic Cooperation and Development and was a staffer on the Congressional Advisory Commission on Electronic Commerce.

Mundaca laid out his personal views on e-commerce tax jurisdiction during testimony before a Senate Finance subcommittee in 2006.

That year, Mundaca said that established precedent in U.S. tax treaties, which uses the concept of "permanent establishment" to determine tax jurisdiction for a business, is a suitable legal mechanism for the digital age. "[The permanent establishment standard] has created needed uniformity, predictability, and certainty for multinational corporations and other taxpayers."

Mundaca cautiouned that developing a new framework for international tax treaties, tailored more closely to e-commerce, would be daunting. "Gaining a global consensus around a new standard would be difficult, if not impossible," he said.

The Network

Mundaca's career in the federal government has spanned three presidencies and four Treasury secretaries. He worked alongside Lawrence Summers - now the head of President Obama's National Economic Council - when he was President Clinton's Treasury secretary from 1999 to 2001.

President Obama's nomination of Mundaca for assistant secretary of tax policy was a recommendation from Secretary Geithner.

Campaign Contributions

Mundaca gave $300 to an Ernst and Young political action committee in 2004, 2005 and 2006, but has never donated directly to a candidate, according to the Center for Responsive Politics.

Additional Resources