TEC Initiatives

Editor:
Thomas J. Purcell III
Begley Professor of Accounting
Creighton University
Omaha, NE

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 (Dec. 1, 2000; see TTA, February 2001), the Tax Executive Committee (TEC) met once and exercised its review function on several projects. TEC actions taken after March 1, 2001 will be reported in a future column.

Structural Changes

As reported in the February column, the Tax Practice Responsibilities Committee (TPRC) has been formed, with Dan Mendelson, former chair of the Member Tax Practice Improvement Committee (MTPIC), as its chair. The TPRC's initial work will be to focus on the proposed regulations that deal with (and drastically change) Circular 230. The TPRC has formed the Statements on Standards for Tax Services (SSTSs) Tax Shelter Task Force, which will study tax shelter professional practice and determine whether the SSTSs adequately address the needs of ethical practice in this highly controversial area.

The MTPIC, now chaired by Jay Starkman, has several projects underway. Among these projects is overseeing a task force that is developing a practice guide for members to use in complying with the Gramm-Leach-Bliley Act. This legislation, enacted in 1999, deals with the disclosure of nonpublic personal information. The Federal Trade Commission oversees this legislation, and has passed regulations that mandate certain disclosures to clients, effective July 1, 2001. (For additional information on the regulations, go to www.ftc.gov/privacy/glbact/glbsub1.htm .)

There has been considerable discussion on the efficacy of the changes made by the 1999 reorganization of the Tax Division. The TEC formed the Reorganization Effectiveness Task Force, headed by Jeff Porter, to assess the reorganization's impact on the division. The task force has conducted surveys and interviews, and will have a preliminary report for the TEC in March.

Technical Activities

When meeting outside Washington D.C., the TEC invites representatives from local accounting firms to join in discussions of agenda items. At its January meeting in Phoenix, representatives from the Arizona Society of CPAs joined the TEC for some of its deliberations.

The TEC has spent extensive time discussing the work of the Estate Tax Repeal Task Force, chaired by Roby Sawyers. Members of the task force, as well as the TEC leadership and Tax Division senior staff, met with legislative and administrative officials to discuss the contents and approach of the study produced by the task force. The TEC discussed it at length at the January meeting, as well as in other ongoing communications. The result of the task force's efforts are contained in "The Study on Reform of the Estate and Gift Tax System," which analyzes some possible changes to the transfer tax system, focusing on simplicity, reduction of compliance burdens, administrative concerns and revenue issues. While not advocating any particular policy choice, the study provides a neutral perspective on this very politically charged issue. (The executive summary to the study follows this column.)

At the January meeting, the TEC approved Tax Policy Concept Statement Number 1, "Guiding Principles of Good Tax Policy: A Framework for Evaluating Tax Proposals." This statement was prepared by the Fundamental Tax Reform Task Force, chaired by Annette Nellen, and the Tax Legislation and Policy Committee, chaired by Don Longano. Statement No. 1 provides a framework for addressing proposed changes to existing tax rules. It was made available to the membership on the AICPA Website in March of this year.

The TEC was invited to testify at the first IRS Oversight Board public meeting in March. David Lifson, immediate past chair, was scheduled to appear for the TEC. (His testimony will be discussed in upcoming columns.)

As previously reported (TTA, September 2000), the TEC, in conjunction with the American Bar Association (ABA) and Tax Executive Institute (TEI), prepared joint comments on tax simplification. The TEC recently learned that Treasury Secretary O'Neill's briefing book contained these joint simplification recommendations.

Through its various task forces, technical resource panels and committees, the TEC continues to monitor numerous other projects, including tax shelter activity, the proposed research and development regulations, Internet taxation and e-filing. With tax legislation proposed, the Tax Division will be appropriately analyzing the provisions that might become law in the foreseeable future.

Conclusion

The TEC and other Tax Division committees are committed to providing the best service possible to AICPA members. Any member with suggestions for services or products that they would like to be provided should contact Bill Stromsem at (202) 434-9227 or wstromsem@aicpa.org .