Corporate tax shelter legislation: comments on Senate Finance Committee's preliminary staff discussion draft.

July 21, 2000

On July 21, 2000, Tax Executives Institute submitted the following comments to the Senate Committee on Finance on draft legislation relating to corporate tax shelters. The Institute's comments focused on a "Preliminary Staff Discussion Staff" that the Finance Committee released on May 24. The comments took the form of a letter to Senators William V. Roth and Daniel Patrick Moynihan, who are respectively, the Chairman and Ranking Minority Member of the Committee. The comments supplement the Institute's March 9, 2000, testimony before the Finance Committee, which was reprinted in the March-April issue of The Tax Executive. Signed by TEI's President Charles W. Shewbridge, III of the Atlanta Chapter, the Institute's July 21 letter was prepared under the aegis of the Institute's Corporate Tax Shelter Task Force, whose chair is Philip G. Cohen of the New York Chapter.

On behalf of Tax Executives Institute, I am pleased to submit the following comments on the Preliminary Staff Discussion Draft on Corporate Tax Shelters, which was released by the Committee on Finance on May 24, 2000. As the preeminent association of business tax professionals, TEI has a vital interest in the development of meaningful, effective, and properly targeted legislation relating to corporate tax shelters.

At the outset, TEI commends the Finance Committee for the salutary process it has adopted with respect to this important issue. If Congress is to ensure that taxpayers, practitioners, and promoters have sufficient incentive to comply with the tax law without unduly interfering with legitimate business transactions, it must thoroughly assess the situation, analyze various approaches to address the situation, and not rush to judgment. TEI is pleased that the Finance Committee has subscribed to this view. In particular, the Institute is grateful for the two opportunities it has been given to testify before the Committee, first on April 27, 1999, and more recently on March 9, 2000.

More specifically, TEI applauds the Committee's decision to release the Preliminary Staff Discussion Draft for public comment. Too frequently in the past, neither members of Congress nor the affected taxpayers have had a reasonable opportunity to review legislative language on a before- the-fact basis. Rather, exigencies have forced members of the tax-writing committees to base their decisions on narrative descriptions of various proposals, with the actual bill language not being released, or perhaps even developed, until after deliberations have ended. The Committee's deliberate approach here has made it possible for members and the public to scrutinize the specific proposals in a timely manner and therefore to identify problems with, or raise questions, about the proposals when it is still possible to do something about them (other than through a post hoc "technical correction" process).

Equally important, TEI very much appreciates the willingness of the Committee's staff to meet with us and to discuss openly our concerns about possible legislative approaches to the tax shelter issue and, indeed, whether legislation is necessary in light of judicial, regulatory, administrative, and other developments. The transparency of the process has contributed to an atmosphere in which the areas of disagreement have been fully explored and constructively narrowed. Nevertheless, while many of the concerns raised by TEI and other parties in formal testimony have been satisfactorily addressed in the Preliminary Staff Discussion Draft (for example, we strongly endorse the staff's rejection of a codified business purpose test), other issues require further analysis and refinement (e.g., the definition of "corporate tax shelter" and proposals to double the substantial understatement penalty, to eliminate the reasonable cause exception, or to require a senior officer to attest to the facts underlying particular transactions). These comments address the open issues, not only supplementing TEI's formal testimony before the Committee but also our oral comments to members of the staff, both before and after the release of the Preliminary Staff Discussion Draft.

Background

Tax Executives Institute was established in 1944 to serve the professional needs of in-house tax practitioners. Today, the Institute has 52 chapters in the United States, Canada, and Europe. Our more than 5,000 members are accountants, attorneys, and other business professionals who work for the largest 2,800 companies in the United States and Canada; they are responsible for conducting the tax affairs of their companies and ensuring their compliance with the tax laws. TEI members deal with the tax code in all its complexity, as well as with the Internal Revenue Service, on almost a daily basis. Most of the companies represented by our members are part of the IRS's Coordinated Examination Program, pursuant to which they are audited by a team of IRS agents on an ongoing basis. TEI is dedicated to the development and effective implementation of sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike.

As a professional association of in-house tax executives, TEI offers a different perspective on corporate tax shelters from other organizations that have presented their views to the Committee. The Institute does not represent the so-called tax shelter promoters and developers (including investment bankers) who either sell or facilitate the transactions. Nor do we represent the professional advisers (be they attorneys or accountants) who opine on the legitimacy of the arrangements. Rather, TEI's members work directly for the corporations that regularly enter into business transactions that require an analysis of their tax benefits and burdens. These companies have professional staffs dedicated to minimizing their tax liability while ensuring compliance with the law. To this end, these companies evaluate particular transactions (whether developed by their own staffs or brought to the companies by outside advisers or promoters), decide whether or not these offerings pass muster -- not only in terms of the substantive requirements of the tax law but, importantly, in terms of their own business needs and corporate culture -- and, if they proceed, report the transactions on their tax returns and defend them on audit. Ultimately, of course, these companies face potential exposure to sanctions (and public opprobrium) should their analysis of a transaction not be sustained. In other words, TEI's members are in the thick of it; they are obliged, first, to ensure their companies' compliance with the state, local, federal, and international tax laws and, second, to serve the companies' shareholders by ensuring that they pay only the taxes required by law. We along with the government have the most at stake in trying to craft an equitable tax system that is administrable.

Overview

From the outset, TEI has acknowledged that over-aggressive tax-advantaged products are being marketed and agreed that this poses a challenge to the efficacy of the tax system. The Institute firmly believes that the key to stopping such abuses is the effective administration of the tax law. To be sure, the law should be changed if the law needs to be changed, but a plethora of new penalty provisions -- or the misguided codification of the economic substance doctrine (which, happily, the staff has rejected) -- is no substitute for strong, but fair, enforcement of the laws that are already on the books. In other words, the IRS must do more to challenge and curtail questionable transactions, including raising practitioner standards, and where appropriate, asserting penalties more frequently.

For this reason, the Institute applauds the creation of the IRS Office of Tax Shelter Analysis to identify, quantify, and develop comprehensive approaches to dealing with tax shelters (including the issuance of needed guidance). Without the IRS's focused involvement in the process -- without its input on defining the nature and scope of the problem and the administrative steps that it can and should take under current law -- legislative proposals to stanch tax shelter activity may well miss the target and impede the conduct of legitimate business transactions.

TEI's detailed testimony before the Committee in March 2000 identified a number of issues that we believe are critical to the enactment of meaningful and effective tax shelter legislation. As previously stated, while certain issues have been addressed, many significant ones remain. The Institute's principal concerns are addressed in the balance of this letter. Please be assured that TEI remains ready to elaborate on these comments as well as to respond to questions.

Definition of "Corporate Tax Shelter"

Under the Preliminary Staff Discussion Draft, the definition of the term "corporate tax shelter" is critical. Under proposed section 6662A(c)(1), the term is defined as "any arrangement if -- (A) a significant purpose of such arrangement is the avoidance or evasion of Federal income tax, and (B) a large corporation participates directly or indirectly in the arrangement." Paragraph (2) of section 6662(A)(c) further provides that certain arrangements, by virtue of the presence of "tax shelter indicators," will be deemed to have a significant purpose of avoiding or evading tax. These tainted arrangements include --

   * Arrangements where the reasonably expected pretax profit of the large
   corporation from the arrangement is insignificant relative to the
   reasonably expected net tax benefits to the large corporation from the
   arrangement.

   * Arrangements involving a tax-indifferent party where --

   () the arrangement results in taxable income to the tax-in-different
   participant materially in excess of such participant's economic income,

   () the arrangement permits the large corporation to characterize items of
   income, gain, loss, deduction, or credit in a more favorable manner than it
   could without the involvement of the tax-indifferent participant, or

   () the arrangement results in the recognition of income or gain to the tax-
   indifferent participant and such recognition results in a non-economic
   increase in the basis of any asset held by the large corporation.

   * Arrangements where the reasonably expected net tax benefits to the large
   corporation are significant, and --

   () the arrangement involves a tax indemnity or similar agreement for the
   benefit of the large corporation (subject to certain exceptions),

   () the arrangement is reasonably expected to create a permanent difference
   between an item's treatment for tax purposes and its treatment for
   financial reporting purposes, or

   () the arrangement is designed so the large corporation incurs little, if
   any, additional economic risk.

The draft legislation also provides, in proposed section 6662A(c)(2)(d), that "reasonably expected pretax profit" and "reasonably expected net tax benefits" will be determined on a present value basis as of the date the large corporation enters into the arrangement, using a discount rate specified in section 1274(d), and using assumptions and determinations that are reasonable as of such date.

TEI is very much concerned about the ambiguity and expansive scope of the proposed definition of corporate tax shelter. The statutory language is replete with ambiguous, subjective terms, including --

   * "Significant purpose" to avoid or evade tax;

   * "Reasonably expected pretax profit [that] ... is insignificant relative
   to the reasonably expected net tax benefits";

   * "Taxable income ... materially in excess of the participant's economic
   income";

   * "Reasonably expected net tax benefits [that] are significant";

   * "A tax indemnity or similar agreement [other than] a customary indemnity
   agreement in an acquisition or other business transaction if ... a party to
   the arrangement [] has a meaningful economic interest in the arrangement";

   * "[The arrangement] is reasonably expected to create a permanent
   difference between [the tax and financial accounting treatment of an
   item]";

   * "[The arrangement] is designed so that the large corporation incurs
   little (if any) additional economic risk"; and

   * "A present value basis ... using assumptions and determinations that are
   reasonable as of [the date the transaction is entered into]."

In addition, under proposed section 6662A(d)(1), the penalty would not be imposed if the taxpayer "reasonably believes" that it "should" prevail, the taxpayer has a "material" nontax business purpose, and the taxpayer meets the disclosure requirements of proposed section 6662(d)(4). Similarly, under proposed section 6662A(d)(2), the penalty rate would be reduced to 20 percent with respect to any item if either --

   * the taxpayer "reasonably believes" that it "more likely than not" will
   prevail, the taxpayer has a "material" nontax business purpose, and the
   taxpayer meets the disclosure requirements of section 6662A(d)(4), or

   * the taxpayer "reasonably believes" that it "will" prevail, and the
   taxpayer has a material nontax business purpose.

TEI recognizes that the Internal Revenue Code is replete with less-than-wholly objective provisions and that absolute certainty is not possible in view of the extraordinarily complicated nature of the global economy. We submit, however, that the cumulative effect of all the subjective terms in the Preliminary Staff Discussion Draft (especially those italicized above) is a set of proposals that may at worst be recklessly broad in scope and at best extraordinarily ambiguous and therefore burdensome to apply. Thus, we are concerned that the draft legislation may sweep in a plethora of legitimate business transactions, which would invariably burden not only taxpayers but also the IRS. The Institute submits that any legislation in this area should be carefully targeted. For example, we believe Congress erred in 1997 when it supplanted the "principal purpose" test of prior law with the current "significant purpose" test. That change, while perhaps well intentioned, ignored the mind-numbing complexity of current law that makes the certainty it presumed impossible to achieve.

In addition, to avoid a potential torrent of unnecessary disclosures (which could have the effect of creating a "needle in the haystack" scenario), we suggest that the legislation require a combination of factors rather than the presence of a single "tax shelter indicator." Such an approach was taken by the Department of the Treasury and the Internal Revenue Service in their recent tax shelter disclosure regulations that, while themselves requiring refinement, may prove a useful model for the Committee.(1) Another salutary change would be the elimination of the permanent book-tax accounting treatment prong of proposed section 6662A(c)(2)(D) because it is overbroad.(2) There are many ordinary and legitimate business transactions that create such differences and including this as an indicator may engender a flood of needless disclosures and impose a significant and unnecessary burden on taxpayers and the IRS. Finally, we commend to the Committee the Institute's June 5 comments to the Treasury Department and IRS on how the definition of "corporate tax shelter" can be efficaciously narrowed.

Application of Penalty to Large Corporations

Under proposed section 6662A(e)(2), the penalty would apply only to "large corporations," which the Preliminary Staff Discussion Draft defines as any corporation with gross receipts in excess of $10 million. First, TEI believes that the Preliminary Staff Discussion Draft errs in limiting the draft legislation's application to corporate taxpayers. We submit that any legislation should apply to all taxpayers.

In addition, TEI questions the draft legislation's establishment of a gross-receipts threshold for the imposition of the new penalty. The Institute believes it would be more appropriate to key any threshold to the size of the transaction (or the extent of the tax benefits), not the size of the taxpayer.

Scope of the Disclosure Provisions

Under proposed section 6662A(d)(2), the 40-percent penalty would be cut in half in certain circumstances where, among other things, the taxpayer meets the disclosure requirements in proposed section 6662A(d)(4). (Other prerequisites to reducing the penalty to 20-percent are discussed below.) As previously stated, TEI is concerned that the draft legislation would force the disclosure of myriad routine business transactions, which will impose significant burdens on both affected taxpayers and the IRS. We are especially concerned about the level of detail required in respect of each disclosed transaction involving a "large tax benefit" (i.e., expected net tax benefits of greater than $5 million). Again, we believe that, in refining the legislation, Congress can usefully refer to the Treasury Department and IRS's recent corporate tax shelter disclosure regulations (modified as recommended by TEI and other commentators).

Proposed Doubling of the Substantial Understatement Penalty

The Preliminary Staff Discussion Draft would double the substantial understatement penalty to 40 percent in respect of any "corporate tax shelter understatement." (Under proposed section 6662A(d)(2), the penalty would be reduced to 20 percent in certain circumstances.) Even assuming that the term "corporate tax shelter understatement" can be satisfactorily defined, TEI has significant reservations about the proposed doubling of the penalty. There is no evidence, anecdotal or otherwise, that the efficacy of the current penalty regime would increase by raising the rate above an already high 20 percent.(3) TEI believes that consistency, certainty, and fairness in the application of the penalty play a bigger role in deterring noncompliance than racheting the penalty rate up to a Draconian level.

Indeed, we suggest that a fundamental problem with the administration of the current penalty is that the rate is so high that it is rarely asserted against corporate taxpayers. Where penalties are disproportionate compared with the conduct involved, agents may be inhibited from asserting such penalties. Witness, for example, the penalty for errors involving qualified plans before the intermediate sanction rules were enacted. Because the stated penalty -- revocation of exempt status -- was uniformly considered too harsh, agents rarely ever asserted it.(4) Thus, while administrative steps should be taken to address the certainty of application, TEI does not believe the level of the accuracy-related penalty should be increased.

Standards for Reducing the Penalty

Under proposed section 6662A(d)(2), the penalty rate would be reduced to 20 percent with respect to any item if either --

   * the taxpayer "reasonably believes" that it "more likely than not" will
   prevail, has a "material" nontax business purpose, and meets the disclosure
   requirements of section 6662A(d)(4), or

   * the taxpayer "reasonably believes" that it "will" prevail and has a
   material nontax business purpose.

In addition, under proposed section 6662A(d)(1), the penalty would not be imposed at all where the taxpayer "reasonably believes" that it "should" prevail, the taxpayer has a "material" nontax business purpose, and the taxpayer meets the disclosure requirements of proposed section 6662(d)(4).

TEI submits that the standards set forth in the Preliminary Staff Discussion Draft are so amorphous that they will be difficult to apply.(5) Stated differently, although there may theoretically be differences between the "will prevail," "should prevail," and "more likely than not will prevail" standards, we suggest the differences disappear in practice since the application of the section 6662A penalty will only become an issue if the IRS determines that the taxpayer "does not prevail." The ephemeral nature of the standards is only underscored by the presence of the "reasonable belief" standard as a component of the penalty-reduction provision. To avoid the problems associated with the shifting sands of the draft's multiple standards, TEI recommends that there be a single level of penalty (20 percent) and, further, that the penalty always be waived where the taxpayer makes appropriate disclosures.

Public Disclosure of Penalties in Excess of $1 Million

Under proposed section 6116, taxpayers would be required to report to their shareholders if a penalty of more than $1 million is imposed. Although proponents of this proposal have expressed the view that public disclosure of penalties may encourage compliance, the Institute has significant reservations about its application. First, we believe Congress should move cautiously in using the tax laws to modify shareholder reporting requirements, especially since corporations are already required to disclose material tax items on their financial statements. Secondly, although recognizing that a balance must be struck, TEI believes the staff proposal may have attached too little significance to the deleterious effect that may accompany a congressional decision to breach taxpayer confidentiality by requiring disclosure of corporate tax shelter penalties exceeding $1 million. TEI believes that the confidentiality of taxpayer information, including the results of audits, is an essential element of America's voluntary, self-assessment system and, accordingly, proponents of breaching taxpayer confidentiality, even for principled reasons, have a heavy burden to overcome.

Proposed Repeal of the Reasonable Cause Exception

Under the Preliminary Staff Discussion Draft, the IRS would have no discretion to waive the penalty even where the taxpayer can demonstrate that it acted with reasonable cause and in good faith. This proposed strict liability regime stands in marked and disappointing contrast to current law where, under section 6664(c)(1) of the Code, no penalty will be imposed in respect of any portion of the underpayment for which there is reasonable cause if the taxpayer acted in good faith. Strict liability penalties will almost by definition produce harsh and unjust results. What is more, there is no evidence to suggest that the in terrorem effect of a no-fault penalty regime would have a positive effect on compliance, especially in light of the complicated nature of the tax code and the expansive scope of the Preliminary Staff Discussion Draft. Indeed, those who propose that Congress enact a strict liability regime seem to have forgotten the essence of proposals to reform the Code's interest and penalty provisions -- that penalties should be designed either to punish purposeful misbehavior or to provide an incentive to behave properly (not to punish foot faults) -- or have rejected the overall lessons of Congress's 1997 decision to strengthen taxpayer rights as part of the IRS restructuring legislation.

Because TEI believes the enactment of a strict liability penalty is wholly inappropriate, the Institute supports the retention of the reasonable cause exception.(6)

Senior Officer Attestation Proposal

Although TEI has consistently supported efforts to enhance the disclosure of transactions justifying IRS scrutiny (through improved regulations or legislation if necessary), the Institute believes the Preliminary Staff Discussion Draft is significantly flawed in proposing that a disclosure statement must be "signed, under penalties of perjury, by the chief financial officer or other senior officer with knowledge of the facts." TEI recognizes that some proponents of proposed section 6662A(d)(4)(A)(ii) have characterized such an attestation requirement as essential, or even the linchpin, to any successful effort to curb abusive tax shelters. That argument, however, is specious, representing a misapprehension of the role of the tax department as well as the CFO. The proposal unjustifiably impugns the integrity and professionalism of both CFOs and corporate tax professionals, and blithely ignores how the attestation requirement would adversely affect the examination process.

Stated bluntly, the senior officer attestation proposal obfuscates the issue because it proceeds from a faulty premise that companies do not enter into major transactions knowingly and that the people who prepare and sign billion-dollar corporate returns do so cavalierly. Corporate tax returns are already filed under penalties of perjury. To intimate, as some proponents have, that the attestation requirement is necessary because corporate tax officials will not otherwise be able to resist questionable transactions is without basis. And in TEI's view, the proposal does not advance the goal of sound tax administration.(7) Similarly, it is without basis for proponents to say that a company's CFO and other senior officers would permit abusive transactions but for the sanctions that might flow from the proposal. Thus, the proposal unfairly diminishes and caricatures CFOs and corporate tax officials by suggesting that the former are too craven and the latter too weak to ensure compliance with the law.

Equally important, the attestation proposal would be burdensome to comply with. First, as previously discussed, the volume of attestations required could be immense. Second, since most CFOs are not tax experts, they will of necessity turn to others (specifically, corporate tax officials or outside tax advisers) to compile the necessary background documents and prepare the required attestations. The resources required to comply with the proposal, again without any demonstrable need, should not be ignored.

In addition, TEI believes the attestation proposal poses a serious threat to the efficient operation of corporate tax return preparation and, especially, the examination processes. If enacted, the proposal could lead to focusing not on the underlying transaction but on the attestation. Hence, during an IRS examination, the key question would not be whether a transaction passes muster under the law, but rather "what did the senior officer know and when did he know it?" Such inquiries could well result in intrusive or threatening examination practices that the IRS Restructuring Act was enacted to prevent.(8) Indeed, the proposal could easily spawn suspicion and distrust about the entire return preparation and examination process comparable to that which existed during the era of the infamous "Eleven Questions" (relating to facilitation payments to foreign persons) in the 1970s.

In summary, the senior officer attestation proposal represents a Siren's song that should be rejected. The IRS and Treasury would be better advised to develop effective audit strategies and to build the case for the appropriate assertion of a penalty.

Proposals Relating to Other Parties to Corporate Tax Shelters

The Preliminary Staff Discussion Draft contains several provisions relating to parties other than the taxpayers. For example, proposed section 6662A(d)(5)(B) would provide that taxpayers cannot rely on certain opinions to establish their reasonable belief. In addition, the draft legislation would modify the corporate tax shelter registration rules and increase the penalty for a promoter's failure to maintain a list of corporate tax shelter participants from $50 to 50 percent of the promoter's fees for each violation. The draft legislation would also expand the current law aiding and abetting penalty and enhance the standards applicable to income tax return preparers.

TEI agrees that a notable deficiency in the current system is the lack of downside risk to those who promote corporate tax shelters, including the tax advisers whose opinions have proven essential to the marketing of tax shelters. Thus, we support efforts to enhance opinion standards and to make promoters and their advisers accountable for their roles in developing and promoting transactions that are clearly beyond the pale. We submit, however, that care must be taken not to overreact to the need for some action. First, although we believe it appropriate to clarify that a taxpayer cannot rely on an opinion that is premised on unreasonable factual assumptions,(9) we are wary about endorsing a provision that would dictate the form and contents of an adviser's opinion. Second, we are concerned that the expanded aiding and abetting penalty could unduly interfere with a taxpayer's ability to obtain competent, independent tax advice on transactions. Finally, we believe it is essential to provide promoters and advisers with appropriate due process rights in respect of any sanctions asserted against them.

The Institute continues to analyze the provisions of the Preliminary Staff Discussion Draft relating to other parties to corporate tax shelters, and will submit further comments as appropriate.

Conclusion

Tax Executives Institute appreciates this opportunity to present its views on the Preliminary Staff Discussion Draft relating to corporate tax shelters. Any questions about the Institute's views should be directed to either Michael J. Murphy, TEI's Executive Director, or Timothy J. McCormally, the Institute's General Counsel and Director of Tax Affairs. Both individuals may be contacted at [phone].

(1) A copy of TEI's comments on the proposed and temporary corporate tax shelter regulations, which were submitted to the IRS on June 5, 2000, is attached. [Editor's Note: The Institute's comments on the tax shelter regulations are reprinted elsewhere in this issue of The Tax Executive.]

(2) For example, the exercise of nonqualified stock options by employees creates a permanent book-tax accounting difference -- and corporate tax benefit -- that is clearly contemplated by the Code. Other common transactions creating permanent book-tax differences include the dividends-received deduction and the gross-up inclusion under section 78 that is required in order to claim the deemed-paid foreign tax credit pursuant to section 902 or 960.

(3) TEI submits that those who minimize the deterrent effect of a 20-percent penalty, averring it as merely constituting another "cost of doing business," fail to understand both the mathematics of the situation and the aversion of companies (especially publicly held companies) to having any penalty imposed.

(4) A collateral effect of the excessive pension plan penalty was to discourage taxpayers from disclosing and correcting errors for fear that the action could result in disqualification. With the advent of the employee plans compliance resolution system and its graded rewards and penalties (i.e., intermediate sanctions and penalties), taxpayers are much more willing to voluntarily disclose errors for administrative resolution.

(5) The distinction between "should prevail" and either "will prevail" or "more likely than not will prevail" is important, of course, because it would affect whether disclosure eliminates entirely or only cuts in half the 40-percent penalty.

(6) TEI has previously testified that the scope of the reasonable cause exception should be clarified. Specifically, the Institute believes that before a tax adviser's opinion can be cited to avoid a penalty, the taxpayer must be able to demonstrate that the opinion is based on the actual facts of the taxpayer's transaction and not an assumed set of facts.

(7) That corporate tax officials are called upon to develop or review proposed transactions that may or may not carry significant tax consequences and that ultimately may or may not "work" is not a sign that "something is terribly wrong" that needs redressing. It is part of their jobs. In our view, they are quite capable of taking responsibility for doing so, and if they do not, then they should be subject to appropriate sanctions. Thus, TEI strongly believes it is both unnecessary and unwise to enact legislation dictating where in the corporate structure that responsibility lies.

(8) Specifically, we are concerned that revenue agents might use the possible assertion of penalties against the CFO as a lever in their negotiation of the underlying tax treatment with the corporate tax director. Thus, the discussion could go, as follows: "If you don't concede the merits of this transaction, I am going to refer your boss's attestation to the criminal investigation division."

(9) TEI has long believed that the Treasury Department and IRS have sufficient authority under current law to foreclose a taxpayer's unreasonable reliance on tax opinions.