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TEC Inititiatives
Editor:
Editor's note: Professor Purcell is a member of the Tax Executive Committee. DC Currents is designed to heighten awareness of the AICPA Tax Division's work and keep readers apprised of Division activities involving tax policy, technical issues and other practice support matters. Author’s note: The significant contributions made by the Tax Division's leadership and technical managers have been crucial to the Division's success. Vice President Gerry Padwe, Directors Ed Karl and Bill Stromsem, and Managers Jim Clark, Carol Ferguson, Benson Goldstein, Marc Hyman, Bonner Menking, Eileen Sherr, George White and Lisa Winton collaborate with many volunteers in vigorously representing members, producing valuable products and providing essential services to members.
Since the last cut-off date for this column (March 15, 2002, see TTA, May 2002, p. 326), the Tax Executive Committee (TEC) met once (June 10–11, 2002) and exercised its review function on several projects. TEC actions taken after June 15, 2002 will be reported in a future column.
Administrative Issues As reported in the May, 2002 column, the TEC established the Scope of Services Task Force (chaired by Ron Katch), to monitor a Congressional proposal to restrict members' ability to provide tax services to audit clients. The task force met once and is preparing responses to actions taken by both the House and the Senate. At the June meeting, the TEC reviewed a preliminary draft of Interpretation 1-2 of the Statements on Standards for Tax Services. The new interpretation would address tax planning and include tax-shelter guidance.
Technical Activities Expatriate taxation. On March 21, 2002, the TEC provided the House Ways and Means Committee and the Senate Finance Committee with a Technical Comment Paper on expatriation tax proposals. Prepared by the Expatriation Tax Task Force (chaired by Evelyn Capassakis), the paper addressed proposals intended to deal with expatriation to avoid tax. In addition, the paper suggested ways to reduce complexity and improve ease of administration. It also pointed out areas requiring further consideration. National Taxpayer Advocate. On March 26, 2002, the TEC submitted comments to the IRS Oversight Board. Prepared by the Relations with the IRS Committee (chaired by James Dougherty), the comments addressed the organization and operation of the Office of the National Taxpayer Advocate and reinforced the crucial role the office can play in assisting small businesses. E-filing. On May 14, 2002, the TEC commented on HR 586 (Title II), the Taxpayer Protection and IRS Accountability Act of 2002. It addressed (1) a proposed April 30 due date for electronic return filing; (2) funding for low-income tax clinics; (3) changes in estimated tax penalties and interest; (4) changes in the collection process; and (5) a proposed means of enhancing communication between the IRS and taxpayers. INDOPCO issues. Also on May 14, 2002, the TEC submitted its observations to Treasury and the IRS on Ann. 2002-9, on the deduction and capitalization of expenditures incurred in acquiring, creating or enhancing intangible assets. The remarks, prepared by the Tax Accounting Technical Resource Panel (TRP) (chaired by Bob Kilinskis), discussed the regulatory guidance needed to address capitalization issues in light of the Supreme Court's decision in INDOPCO, Inc. International. On May 24, 2002, the TEC submitted comments on HR 4151, the Fairness, Simplification and Competitiveness for American Business Act of 2002, to the House Ways and Means Committee. The comments, prepared by the International Tax TRP (chaired by Andrew Mattson), strongly supported many of the changes contemplated in the bill and its predecessor, HR 4047. However, the TRP suggested that (1) Section 106 be rewritten immediately to treat the European Union as one country and (2) Section 313, which would repeal the extraterritorial income (ETI) regime, be omitted, because the history of ETI involves policy and delicate political negotiations. IRS Priority Guidance List. On May 29, 2002, the TEC submitted suggestions to Treasury and the IRS on the 2002/2003 IRS-Treasury Published Guidance Priority List. After studying the proposed list, the Tax Division's task forces and committees commented on and suggested areas in which guidance is lacking. In addition, the TEC reemphasized reducing the complexity of compliance, with clearer rules, safe harbors (when appropriate) and consistent definitions. Tax shelters. The Task Shelter Regulations Task Force (chaired by Debbie Pflieger) continues to monitor tax-shelter developments. On May 31, 2002, the TEC submitted comments on S 2498, the Tax Shelter Transparency Act, expressing concerns about, among other issues, the magnitude of proposed penalties and the standards proposed to delineate activities to which such penalties would be applied. At the Spring Tax Division meeting, TEC representatives and various task forces studying these issues briefed attendees on the most recent developments.
Conclusion Through its various task forces, TRPs and committees, the TEC continues to monitor numerous other projects. The TEC and other Tax Division committees are committed to providing the best service possible to AICPA members. Any member who would like to volunteer to assist in Tax Division activities or would like to suggest new services or products should contact Bill Stromsem at (202) 434-9227 or wstromsem@aicpa.org . |
