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TEC Initiatives 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.
Since the last cut-off date for this column (Sept. 15, 2001, see TTA, November 2001, p. 782), the Tax Executive Committee (TEC) met once in person (Oct. 28–31, 2001), held a telephone conference call and exercised its review function on several projects. TEC actions taken after Dec. 15, 2001 will be reported in a future column.
Tax Division Administrative Issues Although the TEC did not take specific action itself, members of the TEC, the Tax Division and the AICPA were instrumental in assisting the IRS to create tax relief for the victims of the September 11 terrorist attacks on New York City and Washington, DC. At its October meeting, the TEC considered other options (such as practitioner guidance and Tax Division volunteers) to further assist those harmed by these acts. Pam Pecarich, chair of the TEC, on Dec. 13, 2001, sent a letter to IRS Commissioner Rossotti, expressing strong reservations about the tone and language of the proposed IRS e-filing advertising campaign. While the AICPA supports the move toward increasing e-filing as an acceptable form of tax compliance, Ms. Pecarich expressed concern that the Service's approach could mislead the public by appearing to endorse certain practitioners, implying that e-filing totally eliminates the need for paper returns.
Technical Activities Automatic consent for change in accounting method. The TEC issued comments to the Service about possible revisions to Rev. Proc. 99-49. The Tax Accounting Technical Resource Panel (TRP), chaired by Joe Schneid, prepared the commentary. It addressed some of the problems practitioners have experienced in implementing the procedure. Abusive tax shelters. The TEC continues to monitor tax shelter developments. On August 3, the Senate Finance Committee released another draft legislation on abusive tax shelters. As reported in the November 2001 column, on September 10, Ms. Pecarich responded to the draft, identifying areas with which the TEC continues to be concerned. The comments are now available at www.aicpa.org/letters/abusive_tax_shelters.htm . In early December, the TEC issued comments on temporary and proposed regulations on (1) tax shelter disclosure statements (Sec. 6011), (2) corporate tax shelter registration (Sec. 6111) and (3) the maintenance of lists of investors in potentially abusive tax shelters (Sec. 6112). The Tax Shelter Regulations Task Force, chaired by Debbie Pfleiger, prepared these comments. Circular 230. In mid-December, the TEC supplemented comments it previously submitted to Treasury on Circular 230, expressing serious reservations about the use of filters or indicators to identify tax shelter transactions. Initially, the TEC comments questioned the definition of a tax shelter for purposes of requiring higher due-diligence standards for opinion letters. Following those initial comments, several members of the Circular 230 Task Force, chaired by John Gardner, and the Tax Practice Responsibilities Committee, chaired by Dan Mendelson, discussed the need for further clarification with Treasury representatives.
Tax Simplification In late November, the TEC approved Tax Policy Concepts Statement (TPCS) No. 2, titled "Guiding Principles for Tax Simplification." Prepared by the Tax Legislation and Policy Committee, chaired by Don Longano, this TPCS identifies principles that the AICPA believes should be considered as guidelines when analyzing tax legislative action. The AICPA submitted a draft at the ABA/AICPA/TEI Invitational Conference on Tax Law Simplification on December 4, held in Washington, DC. The Invitational Conference was held in response to the recent tax simplification recommendations made by the Joint Committee on Taxation. Panels at the day-long event on Capitol Hill focused on individual, corporate and international tax issues responsible for considerable complexity, including dependent care and child credits, the earned income tax credit and education incentives; corporate and individual alternative minimum tax (AMT); and capitalization and depreciation. House Ways and Means Committee Chair William M. Thomas estimated the cost of repealing the individual AMT at "half a trillion dollars"; thus, his first choice for simplification was to eliminate the corporate AMT ($26 billion) as part of a compromise economic stimulus bill. Copies of the papers and proceedings from the conference will be available in the near future.
Conclusion Through its various task forces, TRPs and committees, the TEC continues to monitor several other projects. The Tax Division will analyze regulatory implementation of the Economic Growth and Tax Relief Reconciliation Act of 2001 and will continue to monitor judicial and regulatory guidance on prior law. Guided by its Tax Policy Concept Statements, the Division will continue to apply rigorous analysis to significant proposals for additional tax reform and simplification. The TEC and other Tax Division committees are committed to providing the best service possible to AICPA members. Any member with suggestions for additional services or products should contact Bill Stromsem at (202) 434-9227 or wstromsem@aicpa.org. |
