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TEC Initiatives Editor:
Editor’s
note: Prof. Purcell is Chair of the AICPA Tax Divisions
Tax Executive Committee. DC Currents heightens awareness of the Tax
Divisions activities and apprises readers of tax policy, technical
issues and other practice support matters. A a senior technical committee of the AICPA, the Tax Executive Committee (TEC) is authorized to speak for the Institute on tax matters and is also designated by governing Council as a standard-setting body. However, numerous other committees, technical resource panels (TRPs) and task forces initiate and develop proposed solutions to policy issues and technical and tax administration problems, for consideration and approval by the TEC. They also initiate proposals for valuable products and services for members in tax practice. Since the last cut-off date for this column (June 15, 2005; see TTA, August 2005), the TEC met once (August 1819, 2005) and exercised its review function on several projects. TEC actions taken after Sept. 15, 2005 will be reported in a future column.
Disaster Assistance The Tax Division has taken steps to assist the victims of Hurricane Katrina and other recent natural disasters. Members of the AICPAs Washington, DC professional staff and volunteer members of various AICPA Tax Division groups have met with IRS officials to discuss appropriate administrative action that will assist taxpayers and tax advisers who have unique compliance issues as a result of the destruction. An updated Disaster Area Tax Practice Guide, which includes information revised for the victims of Hurricane Katrina, is available at http://tax.aicpa.org/Resources/Disaster+Area+Tax+Guide.htm. The AICPA and the IRS have announced an agreement to jointly staff Federal Emergency Management Agency disaster recovery centers, to provide victims with assistance in obtaining disaster-related tax relief.
Self-Governance Activities The TEC continues to monitor the development of proposed Statement on Standards for Tax Services No. 9, Quality Control. Recognizing the significant effect on tax practice from the recent changes to IRS Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service, it formed a task force to address both the monitoring of issues in the implementation of the changes and educational outreach efforts to inform the membership of the tax practice implications. The TEC also has extensively discussed the appropriate response to the exposure draft of Proposed Statement on Standards for Valuation Services, Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset.
Technical Activities Charitable governance: On July 22, 2004, the AICPA submitted comments on the Senate Finance Committees (SFCs) staff discussion draft of legislation on charitable governance. The comments, with a strong focus on auditing and accounting-related issues, were prepared by the Exempt Organizations Taxation Technical Resource Panel (chaired by Harvey Berger) and the Not-for-Profit Expert Panel (chaired by Steve Kattell), and approved by the TEC. On that date, the AICPA also participated in a roundtable discussion of the draft legislation. It continues to meet with the SFC and the House Ways and Means Committee to assist in clarifying and further developing the legislation.
Employee benefits:
On
June 30, 2005, the TEC submitted comments to the IRS on a proposed
amendment to the Sec. 401(k) and (m) regulations covering designated
Roth contributions. The comments, prepared by the Employee Benefits TRP
(chaired by Cindy Dwyer), generally support the proposed regulations.
However, the letter did note a number of instances requiring further
elaboration, such as clarifying the meaning of separate accounts, the
relationship between the five-year aging rules for Roth 401(k) plans and
Roth IRAs, and the effect on Roth 401(k) contribution accounts of the
2010 sunset of the Economic Growth and Tax Relief Reconciliation Act of
2001. The comments On Aug. 16, 2005, the TEC submitted comments (also prepared by the Employee Benefits TRP) to the Service on proposed amendments to the Sec. 415 regulations. While these comments are generally supportive, they ask for clarification on (1) classifying compensation payments following the severance of employment relationships, (2) correcting excess contributions and (3) applying the regulations to plans that cover nonresident foreign nationals who have no U.S.-source income and are paid in foreign currency. Estates and gifts: On July 28, 2005, the TEC submitted individual letters to members of the SFC (with copies to key staff members), reiterating the AICPAs positions on estate and gift tax reform. The letter summarized the suggestions for reform noted in the AICPAs Study on Reform of the Estate and Gift Tax System, which is available at http://tax.aicpa.org/Resources/Trust+Estate+and+Gift/Legislation, then click on Study on Reform of the Estate and Gift Tax System. State and local taxation: On July 18, 2005, Karen Boucher represented the AICPA before the Multistate Tax Commission (MTC), by participating in a public hearing on the MTCs Model Statute. Ms. Bouchers comments were prepared by the State and Local Taxation TRP (chaired by Dan Peterson) and reviewed by the TEC. The AICPA supports the attempt to bring consistency to diverse state laws in this area, but expressed concerns over (1) potential Constitutional issues, (2) the narrow (and possibly discriminatory) computation of some components of the model legislation and (3) the need for consistency in exceptions between foreign and U.S. entities and exceptions for intangibles and interest expense addbacks. Tax reform: The TEC continues to analyze tax reform proposals. The Tax Reform Task Force (chaired by Pam Pecarich, a former TEC chair), is finalizing a major report that studies the chief proposals for fundamental tax reform. This report should be available to readers at the AICPAs website (www.aicpa.org ) in the near future.
Conclusion Through its various task forces, TRPs and committees, the TEC continues to monitor numerous other projects. The Tax Division is committed to providing the best service possible to AICPA members. Leadership and membership appointments for committees and TRPs for the current committee year, which started in October 2005, have been completed. However, members who would like to volunteer to assist in Tax Division activities should contact Ed Karl at (202) 434-9228 or ekarl@aicpa.org. Members having suggestions for new services or products should contact Bill Stromsem at (202) 434-9227 or wstromsem@aicpa.org. |
