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TEC Inititiatives
Editor:
Editor’s note: Professor Purcell is a member of the AICPA Tax Division’s 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.
As this column goes to press, the Tax Division's leadership and senior staff are monitoring and responding to developments that could limit members' ability to provide tax services to audit clients. The Division is forming a task force to assist in this ongoing effort. The status of the task force's activities will appear in a future column. Since the last cut-off date for this column (Dec. 15, 2001, see TTA, February 2002, p. 128), the Tax Executive Committee (TEC) met once (Jan. 16–17, 2002) and exercised its review function on several projects. TEC actions taken after March 15, 2002 will be reported in a future column.
Administrative Issues Through its committees, technical resource panels (TRPs) and task forces, the TEC continues to monitor the effects of the 1999 Tax Division re-organization. The Division modified the format of its meetings and expanded solicitation of volunteers. Current task forces studying these issues should complete their charges by June, at which time the TEC will consider their recommendations and make changes as appropriate.
Technical Activities Abusive tax shelters. On Jan. 3, 2002, the TEC offered comments on temporary and proposed regulations on (1) tax shelter disclosure statements, (2) corporate tax shelter registration and (3) the requirement to maintain a list of investors in "potentially abusive" tax shelters. The comments, developed by the Tax Shelter Regulations Task Force (chaired by Debbie Pflieger), addressed the four most pressing concerns remaining after the 2000 and 2001 regulatory revisions: 1. Fee and tax-reduction threshold exceptions to the list-maintenance requirements; 2. The "no reasonable basis" standard; 3. Fee issues related to disclosure; and 4. Confidentiality. Circular 230. In a related matter, on Jan. 7, 2002, the TEC provided supplemental comments to the IRS and Treasury on proposed amendments to Circular 230. The comments, developed by the Circular 230 Task Force (chaired by John Gardner), expressed concern that the use of "filters" or "indicators" to identify transactions that require higher due diligence standards for tax opinion letters does not satisfactorily solve the abusive-tax-shelter identification problem. IRS FY 2003 budget. On Jan. 14, 2002, the TEC submitted a letter to Treasury supporting the full $9.9 billion funding the IRS requested for fiscal-year 2003. Some members of Congress are unwilling to provide full funding due to deficiencies in the Service's technology inventory management practices. The TEC is concerned that withholding funds from the IRS will make it more difficult for the Service to discharge its responsibilities adequately. Cutting funds will exacerbate taxpayers' frustrations in dealing with the IRS and will adversely affect the Service's plans to modernize its equipment and electronic capabilities. The TEC is coordinating a response to the Bush Administration's FY 2003 budget proposals. It is performing a limited review to identify the proposals that (1) require immediate attention, (2) require follow-up by committees and TRPs and (3) are not controversial. Prop. Regs. Sec. 1.469-7. On February 14, the TEC issued comments to the IRS on this proposed regulation, which addressed the treatment of self-charged income and expense items. The comments were developed by members of the Self-Charged Items Task Force (chaired by Nicholas S. Lascari). NRP. TEC representatives held several discussions with the IRS on the National Research Program, the Service's replacement for the TCMP. The TEC continues to monitor this new initiative. Notice 2001-76. On February 28, the TEC gave Treasury and the IRS comments on this notice, which contained proposed new rules on the availability of the cash method to certain small businesses. The comments, prepared by a sub-group (chaired by Annette Nellen) of the Tax Accounting TRP, addressed implementation and other issues raised by this proposal.
Education Through its representative (Jane Rubin), the TEC gave the Precertification Education Committee significant comments on the need for revising the professional expectations for entry-level tax knowledge, skills and attitude. On March 4, Ms. Rubin made a presentation to the committee on the TEC's behalf, urging it to give more attention to improving the AICPA Model Tax Curriculum, so as to recruit more students with an interest in tax careers.
Conclusion Through its various task forces, TRPs and committees, the TEC continues to monitor many 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 who has suggestions for new services or products should contact Bill Stromsem at (202) 434-9227 or wstromsem@aicpa.org. |
