Steve Schneider
The Opportunity Zone Expo Podcast
The Human Side of Tax Law
Transcription
Jack: Welcome back everybody to the OZExpo Podcast. I'm your host Jack Heald and here with me today is Steve Schneider, who is a partner at Baker and McKenzie. Steve, welcome to the show.
Steve: Thank you for having me here.
Jack: It's a pleasure. Tell us a little bit about Steve Schneider, the work you do at Baker McKenzie. What is your expertise? What do you focus on?
Steve: I'm a tax partner at Baker and I'm head of what we call a pass-through taxation group, which covers real estate, private equity in general, M&A transactions that particularly involve a pass through end, estates and a lot of partnerships, REITs, things like that. And so the QOZ fits right smack in the middle of our scope.
Jack: What's the mix of Opportunity Zone business that's been coming your way? Is it starting to ramp up? Is it still relatively a small part of your work?
Steve: You know, it is really ramped up I think a lot in anticipation of the regs that just came out, the round two I call them because people don't have a whole lot of time to get the full benefit. So, I would say the last few months in particular have been quite strong and more and more people are coming by. So, as a percentage right now, I still do a lot of different things. So, maybe half at this point. But that's a huge percentage of anything, you know.
Jack: Wow, my gosh. 50% wow, that's astonishing. But it is a great program. Now I'm going to ask you to do something for me. If I recalled that the second round, the guidance was about 168 pages, which is about 167 and a half more than I'm willing to read. Have you got a high-level overview for us of what came out of that?
Steve: There are a lot of things that came out. Most things were anticipated, but they really cleaned up a lot of the safe harbor so that you can feel more comfortable that you are within the guidance in what is the required level of improvement to property, how to make it work for operating businesses. They covered a lot of those practical questions. They also clarified that you could make distributions out of a fund, and allow some flexibility of giving people some cashflow to pay their taxes perhaps. And in 2026 they covered effective sales of property before the 10-year hold, half of the 10-year old. And just a whole bunch of things. Mostly to make the practicalities work. They didn't completely solve all the problems. But they did give it a good try.
Jack: Any surprises pleasant or otherwise?
Steve: You know, there's a few things that were a little bit of a surprise. One of the biggest things people asked for was the ability to have property asset sales as opposed to what the statutes seems to imply which is you would need to exit by selling the fund interest. And what they said is, yes, you can have assets sales after the 10-year holding period and the investor can make an election and, essentially push that basis adjustment to the assets. But it was an imperfect solution.
And I think maybe it was an oversight, but what they said was you get a step up to the assets, but they seem to limit it to just the capital gain portion of the assets. So, if you had some recapture inside the entity, it looks to me like you were still better off selling interest in the fund itself as opposed to the assets. And also if you had some non-QOZ assets, which the rules allow you to have some amount, but they didn't seem to get you to step up for those if the assets are sold as opposed to the interest is sold. I'm not sure that was intentional. It may have been a drafting, but at the material, that was probably the biggest surprise.
They made some clarifications, which I think people thought it might be coming, but had some uncertainty. The general partner of the Qualified Opportunity Fund, one of the questions was could that general partner get the tax benefit with respect to the return it receives on its carried interest. IE not the skin in the game cash he puts, but the carry and they said no. So, I think a lot of the folks, that may have been hopeful, maybe they could get that covered for now, not covered. And, so those are two things. And they also confirmed what, I think was relatively clear in the statute that if there is a sale during the 10-year window, an asset-level sale before you get the basis step up, normal tax rules apply. So, there's no exemption if the fund sells assets in that 10-year window unless you do a 1031 exchange, or some other deferral mechanism, that is going to be taxable. And I think some people were hopeful that maybe they would exercise their statutory rights in the regulations to expand an exception. They just felt they did not have that authority. So those are probably the biggest things.
Jack: I can tell just from the summary you just gave us that you are going to get a lot of interest in your expertise as a result of this. Good stuff. I want to know, how does a guy decide to take his career in the direction of tax law or tax accounting? How'd you end up on this path that took you here to Baker Mckenzie? And not just professionally, but what were the personal influences?
Steve: Well, don't all kids wish to grow up to be a tax lawyer?
Jack: Well, I know most of us do. Yeah. But you know..
Steve: Yeah, but still not everybody. I do come by it honestly. My father was an IRS agent so I do have some tax in the background, but he also was a farmer part-time and I recognized that working the farm was not a way to actually make a living, at least not in any fashion that I would actually want. And so, that definitely influenced me to go to school. And I don't know if it was just hereditary or not, but I happened to be very good at tax and other things too. And it had happened to be something that interested me, the logic of it. I went to a county school and got my accounting degree as well. So, it's quite an interesting field and quite the talk at parties, although it seems to be they only want to know how to not pay their tax.
Jack: Yeah. Those sound like fun parties.
Steve: Exactly.
Jack: So, where'd you grow up? Where'd you go to school?
Steve: I grew up in Missouri and it was on a farm in the middle of the state and then, when to accounting school at Mizzou, University of Missouri. I went to law school at WashU in Saint Louis. And then after that, the lure of the starting my career at the, somewhat underappreciated organization, known as the Internal Revenue Service, brought me to DC for four years of writing tax regulations and then thereafter, I spun out into the private sector. So, I left the IRS in ’98. But, the beauty of being in DC inside the beltway is that there's a lot of camaraderie.
Jack: Oh yeah. I can imagine.
Steve: You want to know the best tax joke. Know what? I'll tell you a story though. When I first moved to DC, I had one day before I started with the IRS and I was a visiting Mount Vernon and went back to my car to go home and there were two older couples in his fancy car that had a flat tire and growing up on a farm and having flat tires all the time because I grew up gravel roads, you know, I knew how to change a flat tire in record speed. So, I changed their tire within five to 10 minutes. And they looked at me in amazement of having it changed that quickly and they said, how can we thank you? And I said, “Well just tell people that the IRS actually did something nice for you.”
Jack: So, Steve, I also see that you are an adjunct professor at Georgetown teaching something in the law school there. Tell us a little bit about that. I'm fascinated about people who actually teach but are practitioners as well. Tell us about that.
Steve: Sure. I've been teaching or co-teaching a course on drafting partnership and LLC agreements since 2005 and just really trying to have the school of hard knocks that I had to learn on, trying to at least give people a better foundation so they may not have as many bruises and cuts us as I di trying to learn the system. These practical courses unfortunately don't exist nearly as often as they should.
Jack: Oh yeah.
Steve: They should be mandatory and there's five other courses I could think of doing. I just only have time for the one course to do.
Jack: You've been doing that for what, 13 years, 14 years?
Steve: Yeah. I think this was the 14th year and my co teacher was actually my office mate at the IRS when I started out of law school. So we were both in the pastors division together.
Jack: Well it must be quite a popular course, I'm guessing are able to keep coming back and doing that.
Steve: Yeah, I mean, there's always people signing up because there's prerequisites of having partnership tax, that knocks out some people. But without that prereq, I have to have some foundation of knowledge to teach it. Really, it's amazing how these practical courses could be extended well beyond students, you know, traditional students and into the workplace. There's some LLMs but I tell you, the best students are the older students that come in here that…
Jack: Oh, I can imagine
Steve:…had to go through a little bit of the school of hard knocks.
Jack: Yeah. Curious how many students go through a class and, and how long does the class run?
Steve: So, it's just a one-credit class, so it’s seven, two-hour sessions and we average 25 students. I would say early on when it was brand new, there were more, because there was a backlog.
Jack: Is that like a quarter? Does it run a quarter? Four times a year.
Steve: Yes, but I just teach it once a year.
Jack: Oh yeah, okay.
Steve: So, I only have so much time in the day.
Jack: Okay. Well, very good. Well, let's talk about the Opportunity Zone program itself in terms of Baker McKenzie and the work that you were doing. I'm part of a networking group and they say, what do you get? What do you give? And I think that's a good question. What do you get? What do you give?
Steve: I think that, we're really getting the full spectrum of folks coming in from people who may own property already in a Qualified Opportunity Zone that are figuring out the best way to maximize that value and if they're selling the property, what they hopefully get as far as types of investors. It's also folks that are looking to buy, they don't already own and making sure that they buy it in the right way and structuring all the legal documents.
And there's also the fund, true fund, type of clients where we're representing people that are setting up, more traditional, widely-held, funds with larger dollar amounts that are going to make multiple investments. Nice thing about the Qualified Opportunity Fund concept is a fund can be as simple as two people together and your traditional joint venture vehicle, and you just follow the procedural requirements and it becomes a fund or it can be the more traditional fund with a broader audience of investors and investments.
So, I think that our advice, what were giving on that is we're providing advice to the funds themselves, drafting the PPMs the fund documents. We're helping people through the timelines of what they need to do it by when helping people evaluate whether they're going to meet the qualifications. Are they improving the property enough? What is the property, how to navigate this very uncertain world of changing rules. I think now finally with the regulations that came out last week, you will see a whole lot more people move forward with plans that they were working on but not quite ready to pull the trigger on yet. And that's what we're experiencing and we're having people come out of the woodwork. It was questions.
“Hey, I've got this kind of, does this work?” One of the quirks in the new guidance was that you have to have a trade or business and active trader business to make it qualifying. And the IRS slipped in that triple net lease properties was not considered an active trader business. Well, that knocks out a lot of folks that are in zones that may have more passive leased real estate. And now we have to rethink through how to make that work. So, I think the guidance that helps a lot, but it's also throwing in a few zingers that we now need to help people work through.
Jack: What is it that you think you bring to the game? Both in terms of innate talents -- you know, things you were born with -- and qualities that you've developed that make you well-suited to the work you do and good at the work you do. I'm trying to get a little insight into who Steve Schneider is.
Steve: I think the biggest strength that's relevant to this, is the logical ability to follow complex roles and complex facts. Marry them together, and be able to provide an answer that is actually comprehensible. And, the ability to take all these seemingly incomprehensible rules and facts and put them together and actually say, “Yes, this works,” or “This will only work if we do X, Y and Z” is something that really fits to a core strength I have. I mean, I had never really planned on going to law school until the last minute as I was graduating from accounting school. I wanted to be able to use those qualities beyond just filling out tax returns, and this allowed me to do it. And things like the QOZ or, or other quirky things like real estate investment trust rules or anything where there's just tons of quirks. It really makes it fun.
Jack: Do you see in your life where there are other areas that innate gifting that innate talent expresses itself? Outside of accounting and tax type work.
Steve: Hmm. Well, and I am logical in everything I do, which can sometimes drive people crazy, but, I think that just taking everything step by step, procedural, has it advantages in whatever you do in life. Whether it be your own personal investing, or just helping people who have random questions. So, you can help analyze, help them through a situation. Logic is a helpful trait.
Jack: We could, we could go down that rabbit hole for a long ways. I'm fascinated with the workings of the human mind. So, when people say stuff like that, I’m like a dog with a bone. It's hard for me to let go of it. But I'm going to.
Steve: Although, brother-in-law reminded me just the other day that there was a character in the original star Trek who was, not human, a droid. And they said, sometimes logic can go too far.
Jack: Oh, well, yeah. There's an awful lot of evidence that almost none of our decision making is actually rational. The only rational decisions that we ever make or the very small ones. Everything else is driven by emotion and then justified rationally.
Steve: We won't get into politics.
Jack: Yeah. So, what do you do for fun? What's, what's, a relaxing enjoyable day or weekend look like for you?
Steve: Yeah, I like real estate and not just professionally, there's a lot of what I do, but I also like it for fun. So, I have a few properties that I own and I just like to keep track of the real estate markets and different opportunities. So, that's kind of a fun thing. But other than that, it's mostly family stuff. I've got two young children. My 10-year-old recently joined, I guess they just call it Scouts now. They lost boys.
Jack: Yeah.
Steve: But that's been a real fun thing and be able to let me relive things that maybe I didn't even live the first time around. So…
Jack: Were you a Scout?
Steve: I was in Cub Scouts for one year, but didn't follow through because nobody would drive me to things so. But so I'll drive him and it's fun and we get to go camping. We get learn how to repair bicycles and all these fun things. It's amazing the stuff that's available to children.
Jack: Yeah. So, I want you to put on your imagination hat now. This is one of my favorite questions. You get to be king of the world for one day and you get to solve one problem and one problem only. What's that one problem you're going to solve?
Steve: I assume you're not going to limit it to tax, correct?
Jack: Oh no. You're king of the world. I had one guy say he was going to eliminate robo calls, which I thought would be a really good thing.
Steve: I think I would eliminate barriers to people really seeing each other. I think Internet is the biggest barrier people put between themselves. The walls that people can create and feel they're different than somebody else. The computer is that the biggest wall I've ever seen in my life. And I think the more you can tear that down, the better you are. It was take your kid to work day yesterday. And, I saw all the kids from all the different people that work here. And it was the most diverse group I'd seen. Because there were kids from all people at the office. No matter what title and I saw that there were no barriers and we create them later, I would like to get rid of them.
Jack: See, that's the kind of stuff I live for to hear, that kind of thing. These kind of conversations, you know when it gets below the surface and then dives into the humanity of things. Thank you. I appreciate that and appreciate your sharing that with us. Well Steve. I see that we've been going for a good while here. I don't want to overstay our welcome, any last words to leave us with before we sign off?
Steve: No. And the only thing I would say back to the original topic is that I know the IRS felt that this reg package was sort of the end all the be all and the third package was going to be released and other less important topics like penalties. I do hope that there is some cleanup because I think that folks are still scratching their head even after reading these regs a few times. So, I think that the IRS, if they're listing, will have it in their hearts to perhaps clarify some things maybe a month from now when we have more questions. And I know that they talked about finalizing all the regs, all three sets come the next proposal in one big fell swoop, which would mean a cleanup is a fair amount down the line. But hopefully we could get a little bit more before that. Yes, there are some questions that will need to be cleared up.
Jack: Well, Steve, if folks want to get ahold of you or Baker McKenzie to follow up with anything we've talked about or asking more questions, what's the best way to do that?
Steve: The easiest way is to look up on the website if you just type in, Steve Schneider tax, and it'll pop up. There's a lot of Steve Schneider's, not that many. Steve Schneider tax and then the bigger website or LinkedIn or anything will pop right up. Or the various articles published on various topics will pop up.
Jack: Very good.
Steve: I that just told you it was a bad thing with walls. It's a good thing in many ways otherwise.
Jack: Yeah, it really is. So, we will, we will post the Baker McKenzie website, probably with your bio page on the podcast website so folks can find you. We'll, if it's been a pleasure talking with you and getting to know you. I am Jack Heald for the OZExpo podcast and Steve Schneider of Baker Mckenzie. We will talk to you next time.
Announcer: This podcast is for informational purposes only and does not constitute legal tax or investment advice. For specific recommendations, please consult with your financial, legal, or tax professional.
Steve: Thank you for having me here.
Jack: It's a pleasure. Tell us a little bit about Steve Schneider, the work you do at Baker McKenzie. What is your expertise? What do you focus on?
Steve: I'm a tax partner at Baker and I'm head of what we call a pass-through taxation group, which covers real estate, private equity in general, M&A transactions that particularly involve a pass through end, estates and a lot of partnerships, REITs, things like that. And so the QOZ fits right smack in the middle of our scope.
Jack: What's the mix of Opportunity Zone business that's been coming your way? Is it starting to ramp up? Is it still relatively a small part of your work?
Steve: You know, it is really ramped up I think a lot in anticipation of the regs that just came out, the round two I call them because people don't have a whole lot of time to get the full benefit. So, I would say the last few months in particular have been quite strong and more and more people are coming by. So, as a percentage right now, I still do a lot of different things. So, maybe half at this point. But that's a huge percentage of anything, you know.
Jack: Wow, my gosh. 50% wow, that's astonishing. But it is a great program. Now I'm going to ask you to do something for me. If I recalled that the second round, the guidance was about 168 pages, which is about 167 and a half more than I'm willing to read. Have you got a high-level overview for us of what came out of that?
Steve: There are a lot of things that came out. Most things were anticipated, but they really cleaned up a lot of the safe harbor so that you can feel more comfortable that you are within the guidance in what is the required level of improvement to property, how to make it work for operating businesses. They covered a lot of those practical questions. They also clarified that you could make distributions out of a fund, and allow some flexibility of giving people some cashflow to pay their taxes perhaps. And in 2026 they covered effective sales of property before the 10-year hold, half of the 10-year old. And just a whole bunch of things. Mostly to make the practicalities work. They didn't completely solve all the problems. But they did give it a good try.
Jack: Any surprises pleasant or otherwise?
Steve: You know, there's a few things that were a little bit of a surprise. One of the biggest things people asked for was the ability to have property asset sales as opposed to what the statutes seems to imply which is you would need to exit by selling the fund interest. And what they said is, yes, you can have assets sales after the 10-year holding period and the investor can make an election and, essentially push that basis adjustment to the assets. But it was an imperfect solution.
And I think maybe it was an oversight, but what they said was you get a step up to the assets, but they seem to limit it to just the capital gain portion of the assets. So, if you had some recapture inside the entity, it looks to me like you were still better off selling interest in the fund itself as opposed to the assets. And also if you had some non-QOZ assets, which the rules allow you to have some amount, but they didn't seem to get you to step up for those if the assets are sold as opposed to the interest is sold. I'm not sure that was intentional. It may have been a drafting, but at the material, that was probably the biggest surprise.
They made some clarifications, which I think people thought it might be coming, but had some uncertainty. The general partner of the Qualified Opportunity Fund, one of the questions was could that general partner get the tax benefit with respect to the return it receives on its carried interest. IE not the skin in the game cash he puts, but the carry and they said no. So, I think a lot of the folks, that may have been hopeful, maybe they could get that covered for now, not covered. And, so those are two things. And they also confirmed what, I think was relatively clear in the statute that if there is a sale during the 10-year window, an asset-level sale before you get the basis step up, normal tax rules apply. So, there's no exemption if the fund sells assets in that 10-year window unless you do a 1031 exchange, or some other deferral mechanism, that is going to be taxable. And I think some people were hopeful that maybe they would exercise their statutory rights in the regulations to expand an exception. They just felt they did not have that authority. So those are probably the biggest things.
Jack: I can tell just from the summary you just gave us that you are going to get a lot of interest in your expertise as a result of this. Good stuff. I want to know, how does a guy decide to take his career in the direction of tax law or tax accounting? How'd you end up on this path that took you here to Baker Mckenzie? And not just professionally, but what were the personal influences?
Steve: Well, don't all kids wish to grow up to be a tax lawyer?
Jack: Well, I know most of us do. Yeah. But you know..
Steve: Yeah, but still not everybody. I do come by it honestly. My father was an IRS agent so I do have some tax in the background, but he also was a farmer part-time and I recognized that working the farm was not a way to actually make a living, at least not in any fashion that I would actually want. And so, that definitely influenced me to go to school. And I don't know if it was just hereditary or not, but I happened to be very good at tax and other things too. And it had happened to be something that interested me, the logic of it. I went to a county school and got my accounting degree as well. So, it's quite an interesting field and quite the talk at parties, although it seems to be they only want to know how to not pay their tax.
Jack: Yeah. Those sound like fun parties.
Steve: Exactly.
Jack: So, where'd you grow up? Where'd you go to school?
Steve: I grew up in Missouri and it was on a farm in the middle of the state and then, when to accounting school at Mizzou, University of Missouri. I went to law school at WashU in Saint Louis. And then after that, the lure of the starting my career at the, somewhat underappreciated organization, known as the Internal Revenue Service, brought me to DC for four years of writing tax regulations and then thereafter, I spun out into the private sector. So, I left the IRS in ’98. But, the beauty of being in DC inside the beltway is that there's a lot of camaraderie.
Jack: Oh yeah. I can imagine.
Steve: You want to know the best tax joke. Know what? I'll tell you a story though. When I first moved to DC, I had one day before I started with the IRS and I was a visiting Mount Vernon and went back to my car to go home and there were two older couples in his fancy car that had a flat tire and growing up on a farm and having flat tires all the time because I grew up gravel roads, you know, I knew how to change a flat tire in record speed. So, I changed their tire within five to 10 minutes. And they looked at me in amazement of having it changed that quickly and they said, how can we thank you? And I said, “Well just tell people that the IRS actually did something nice for you.”
Jack: So, Steve, I also see that you are an adjunct professor at Georgetown teaching something in the law school there. Tell us a little bit about that. I'm fascinated about people who actually teach but are practitioners as well. Tell us about that.
Steve: Sure. I've been teaching or co-teaching a course on drafting partnership and LLC agreements since 2005 and just really trying to have the school of hard knocks that I had to learn on, trying to at least give people a better foundation so they may not have as many bruises and cuts us as I di trying to learn the system. These practical courses unfortunately don't exist nearly as often as they should.
Jack: Oh yeah.
Steve: They should be mandatory and there's five other courses I could think of doing. I just only have time for the one course to do.
Jack: You've been doing that for what, 13 years, 14 years?
Steve: Yeah. I think this was the 14th year and my co teacher was actually my office mate at the IRS when I started out of law school. So we were both in the pastors division together.
Jack: Well it must be quite a popular course, I'm guessing are able to keep coming back and doing that.
Steve: Yeah, I mean, there's always people signing up because there's prerequisites of having partnership tax, that knocks out some people. But without that prereq, I have to have some foundation of knowledge to teach it. Really, it's amazing how these practical courses could be extended well beyond students, you know, traditional students and into the workplace. There's some LLMs but I tell you, the best students are the older students that come in here that…
Jack: Oh, I can imagine
Steve:…had to go through a little bit of the school of hard knocks.
Jack: Yeah. Curious how many students go through a class and, and how long does the class run?
Steve: So, it's just a one-credit class, so it’s seven, two-hour sessions and we average 25 students. I would say early on when it was brand new, there were more, because there was a backlog.
Jack: Is that like a quarter? Does it run a quarter? Four times a year.
Steve: Yes, but I just teach it once a year.
Jack: Oh yeah, okay.
Steve: So, I only have so much time in the day.
Jack: Okay. Well, very good. Well, let's talk about the Opportunity Zone program itself in terms of Baker McKenzie and the work that you were doing. I'm part of a networking group and they say, what do you get? What do you give? And I think that's a good question. What do you get? What do you give?
Steve: I think that, we're really getting the full spectrum of folks coming in from people who may own property already in a Qualified Opportunity Zone that are figuring out the best way to maximize that value and if they're selling the property, what they hopefully get as far as types of investors. It's also folks that are looking to buy, they don't already own and making sure that they buy it in the right way and structuring all the legal documents.
And there's also the fund, true fund, type of clients where we're representing people that are setting up, more traditional, widely-held, funds with larger dollar amounts that are going to make multiple investments. Nice thing about the Qualified Opportunity Fund concept is a fund can be as simple as two people together and your traditional joint venture vehicle, and you just follow the procedural requirements and it becomes a fund or it can be the more traditional fund with a broader audience of investors and investments.
So, I think that our advice, what were giving on that is we're providing advice to the funds themselves, drafting the PPMs the fund documents. We're helping people through the timelines of what they need to do it by when helping people evaluate whether they're going to meet the qualifications. Are they improving the property enough? What is the property, how to navigate this very uncertain world of changing rules. I think now finally with the regulations that came out last week, you will see a whole lot more people move forward with plans that they were working on but not quite ready to pull the trigger on yet. And that's what we're experiencing and we're having people come out of the woodwork. It was questions.
“Hey, I've got this kind of, does this work?” One of the quirks in the new guidance was that you have to have a trade or business and active trader business to make it qualifying. And the IRS slipped in that triple net lease properties was not considered an active trader business. Well, that knocks out a lot of folks that are in zones that may have more passive leased real estate. And now we have to rethink through how to make that work. So, I think the guidance that helps a lot, but it's also throwing in a few zingers that we now need to help people work through.
Jack: What is it that you think you bring to the game? Both in terms of innate talents -- you know, things you were born with -- and qualities that you've developed that make you well-suited to the work you do and good at the work you do. I'm trying to get a little insight into who Steve Schneider is.
Steve: I think the biggest strength that's relevant to this, is the logical ability to follow complex roles and complex facts. Marry them together, and be able to provide an answer that is actually comprehensible. And, the ability to take all these seemingly incomprehensible rules and facts and put them together and actually say, “Yes, this works,” or “This will only work if we do X, Y and Z” is something that really fits to a core strength I have. I mean, I had never really planned on going to law school until the last minute as I was graduating from accounting school. I wanted to be able to use those qualities beyond just filling out tax returns, and this allowed me to do it. And things like the QOZ or, or other quirky things like real estate investment trust rules or anything where there's just tons of quirks. It really makes it fun.
Jack: Do you see in your life where there are other areas that innate gifting that innate talent expresses itself? Outside of accounting and tax type work.
Steve: Hmm. Well, and I am logical in everything I do, which can sometimes drive people crazy, but, I think that just taking everything step by step, procedural, has it advantages in whatever you do in life. Whether it be your own personal investing, or just helping people who have random questions. So, you can help analyze, help them through a situation. Logic is a helpful trait.
Jack: We could, we could go down that rabbit hole for a long ways. I'm fascinated with the workings of the human mind. So, when people say stuff like that, I’m like a dog with a bone. It's hard for me to let go of it. But I'm going to.
Steve: Although, brother-in-law reminded me just the other day that there was a character in the original star Trek who was, not human, a droid. And they said, sometimes logic can go too far.
Jack: Oh, well, yeah. There's an awful lot of evidence that almost none of our decision making is actually rational. The only rational decisions that we ever make or the very small ones. Everything else is driven by emotion and then justified rationally.
Steve: We won't get into politics.
Jack: Yeah. So, what do you do for fun? What's, what's, a relaxing enjoyable day or weekend look like for you?
Steve: Yeah, I like real estate and not just professionally, there's a lot of what I do, but I also like it for fun. So, I have a few properties that I own and I just like to keep track of the real estate markets and different opportunities. So, that's kind of a fun thing. But other than that, it's mostly family stuff. I've got two young children. My 10-year-old recently joined, I guess they just call it Scouts now. They lost boys.
Jack: Yeah.
Steve: But that's been a real fun thing and be able to let me relive things that maybe I didn't even live the first time around. So…
Jack: Were you a Scout?
Steve: I was in Cub Scouts for one year, but didn't follow through because nobody would drive me to things so. But so I'll drive him and it's fun and we get to go camping. We get learn how to repair bicycles and all these fun things. It's amazing the stuff that's available to children.
Jack: Yeah. So, I want you to put on your imagination hat now. This is one of my favorite questions. You get to be king of the world for one day and you get to solve one problem and one problem only. What's that one problem you're going to solve?
Steve: I assume you're not going to limit it to tax, correct?
Jack: Oh no. You're king of the world. I had one guy say he was going to eliminate robo calls, which I thought would be a really good thing.
Steve: I think I would eliminate barriers to people really seeing each other. I think Internet is the biggest barrier people put between themselves. The walls that people can create and feel they're different than somebody else. The computer is that the biggest wall I've ever seen in my life. And I think the more you can tear that down, the better you are. It was take your kid to work day yesterday. And, I saw all the kids from all the different people that work here. And it was the most diverse group I'd seen. Because there were kids from all people at the office. No matter what title and I saw that there were no barriers and we create them later, I would like to get rid of them.
Jack: See, that's the kind of stuff I live for to hear, that kind of thing. These kind of conversations, you know when it gets below the surface and then dives into the humanity of things. Thank you. I appreciate that and appreciate your sharing that with us. Well Steve. I see that we've been going for a good while here. I don't want to overstay our welcome, any last words to leave us with before we sign off?
Steve: No. And the only thing I would say back to the original topic is that I know the IRS felt that this reg package was sort of the end all the be all and the third package was going to be released and other less important topics like penalties. I do hope that there is some cleanup because I think that folks are still scratching their head even after reading these regs a few times. So, I think that the IRS, if they're listing, will have it in their hearts to perhaps clarify some things maybe a month from now when we have more questions. And I know that they talked about finalizing all the regs, all three sets come the next proposal in one big fell swoop, which would mean a cleanup is a fair amount down the line. But hopefully we could get a little bit more before that. Yes, there are some questions that will need to be cleared up.
Jack: Well, Steve, if folks want to get ahold of you or Baker McKenzie to follow up with anything we've talked about or asking more questions, what's the best way to do that?
Steve: The easiest way is to look up on the website if you just type in, Steve Schneider tax, and it'll pop up. There's a lot of Steve Schneider's, not that many. Steve Schneider tax and then the bigger website or LinkedIn or anything will pop right up. Or the various articles published on various topics will pop up.
Jack: Very good.
Steve: I that just told you it was a bad thing with walls. It's a good thing in many ways otherwise.
Jack: Yeah, it really is. So, we will, we will post the Baker McKenzie website, probably with your bio page on the podcast website so folks can find you. We'll, if it's been a pleasure talking with you and getting to know you. I am Jack Heald for the OZExpo podcast and Steve Schneider of Baker Mckenzie. We will talk to you next time.
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