¹ Only public companies are subject to the following rules: (1) Securities Exchange Act of 1934 reporting requirements; (2) Sarbanes-Oxley Act of 2002 (SOA) Section 404, which requires management of a public company to report on internal control over financial reporting and to assess its effectiveness which, in turn, requires the auditor to attest to and report on that assessment; and (3) Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2 (3/9/04), which also includes risk-assessment requirements. Public and private companies are subject to Financial Accounting Standards Board Statement No. 109, which governs accounting for taxes (assuming the company has audited financial statements), and general compliance/cost control/risk management considerations.

² See Arlinghaus, “Goal Setting and Performance Measures - by Tax Professionals in Fortune 500 Companies,” Tax Executive (11/1/98), Tables XIV and XX, available at www.findarticles.com/p/articles/mi_m6552/is_6_50/ai_53510352.

³ See id. at Table VII (42.1% of responses).

⁴ See id. at Table X.

⁵ See JCT, Report of Investigation of Enron Corporation and Related Entities Regarding Federal Tax and Compensation Issues, and Policy Recommendations, Volume 1: Report, Part I (JCS-3-03, February 2003), available at www.house.gov/jct/s-3-03-vol1.pdf (hereinafter, “JCT Report”).

⁶ See JCT, Federal Income Tax Aspects Of Corporate Financial Structures (JCS-1-89, 1/18/89), p. 5–14 (describing vast increase in corporate debt between 1984 and 1987).

⁷ General Utilities & Operating Co. v. Helvering, 296 US 200 (1935).

⁸ Sometimes defined as “…the economic impact of the retail chain, from forcing smaller competitors out of business and driving down wages to keeping goods cheap, inflation low and productivity high”; see Kuntz, “Buzzwords,” NY Times (12/28/03), section 4, p. 2.

⁹ See JCT Report, note 5 supra, at Part II.A.4.

¹⁰ See Tax Risk Management: The Evolving Role of CTOs (Ernst & Young LLP, 2004).

¹¹ See SEC, Final Rule: Strengthening the Commission’s Requirement Regarding Auditor Independence (Rel. Nos. 33-8183; 34-47265; 35-27642; IC-25915; IA-2103, FR-68, File No. S7-49-02, 1/28/03), available at www.sec.gov/rules/final/33-8183.htm.

¹² See Korb, “Schemes, Shelters and Abusive Transactions,” 2005 TNT 25-61 (December 2003).

¹³ See id.

¹⁴ “Board Adopts Standard on Remediation of Material Weaknesses, Rules on Auditor Independence and Tax Services,” available at www.pcaob.org/News_and_Events/News/2005/07-26.aspx; see also News Notes, “Tax Work by Auditors,” p. 585, this issue.

¹⁵ Treasury Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service.

¹⁶ See Arthur Young & Co., 465 US 805 (1984).

¹⁷ Ann. 2002-63, IRB 2002-27, 72.

¹⁸ See KPMG, 237 FSupp2d 35 (DC DC 2002).

¹⁹ TD 9165 (12/17/04), modified by TD 9201 (5/18/05); see Buschel, Tax Practice & Procedures, “Circular 230: New Rules on Written Tax Advice,” p. 641, this issue.