Government keynoters highlight 55th Midyear Conference.More than 600 in-house tax professionals participated in Tax Executives Institute's 2005 Midyear mid·year
1. The middle of the calendar or academic year.
a. An examination given in the middle of a school year.
b. midyears A series of such examinations. Conference--the Institute's annual spring meeting which has been held in Washington, D.C., for 55 years. Although Washington's famous cherry blossoms
Cherry Blossoms is one of the oldest and largest international marriage agencies still in operation today. did not arrive until afterwards, the conference was resplendent re·splen·dent
Splendid or dazzling in appearance; brilliant.
[Middle English, from Old French, from Latin resplend with networking opportunities and educational sessions. "A resounding re·sound
v. re·sound·ed, re·sound·ing, re·sounds
1. To be filled with sound; reverberate: The schoolyard resounded with the laughter of children.
2. success," declared TEI 1. (communications) TEI - Terminal Endpoint Identifier.
2. (text, project) TEI - Text Encoding Initiative. President Judith Zelisko, in expressing her appreciation for the hard work of the Institute's technical committee chairs, who developed the program, and the moderators, speakers, and panelists whose efforts made the Midyear Conference a reality.
Treasury Secretary John Snow made his second appearance at a TEI conference during the event. Other keynote speakers were Senate Finance Committee Chairman Charles Grassley, IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. Commissioner Mark Everson, and the Executive Director of the President's Advisory Panel on Federal Tax Reform, Jeffrey Kupfer.
Technical sessions on myriad federal, international, Canadian, and state and local tax issues included sessions focused on implications of the American Jobs Creation Act of 2004, Schedule M3 implementation issues In the Business world, companies frequently set-up a connection between which they transfer data. When the connection is being set-up, it is referred to as implementation. When issues occur during this phase, they are known as implementation issues. , FASB's draft statement on uncertain tax positions, financial reporting issues, and other topics both timely and practical. Photographic highlights of the conference appear elsewhere in this issue.
E-Filing, Tax Shelters tax shelter: see tax exemption. Dominate Commissioner's Remarks
IRS Commissioner Mark W. Everson Mark W. Everson (born September 10, 1954) is the incoming President and Chief Executive Officer of the American Red Cross. In April 2007, The Board of Governors of the American Red Cross unanimously approved him for those positions, effective May 29, 2007. delivered the conference's opening address on Monday, April 4, which was broadcast live on C-SPAN. The Commissioner covered a plethora of comments, including the IRS's efforts to increase audit currency, its role in federal tax reform, and the implementation of the 2004 tax act. For example, he reported that the IRS is working with the Securities and Exchange Commission and the Public Company Accounting Oversight Board The Public Company Accounting Oversight Board (or PCAOB) (sometimes called "Peekaboo") is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act, a 2002 United States federal law, to oversee the auditors of public companies. to identify possible abuses. In addition, he noted positive results from the United States' partnership with Australia, Canada, and the United Kingdom in exchanging information on international transactions. He also provided an update on the progress of the pilot Compliance Assurance Process (CAP) program, where the IRS works audit issues in "real time" before the company's return is filed. Currently, 18 companies are involved, and the project is moving ahead. Finally, Commissioner Everson noted the IRS will be working to improve the Advance Pricing Agreement An Advance Pricing Agreement (APA) is an agreement between a taxpayer and the IRS on an appropriate transfer pricing methodology (TPM) for some set of transactions at issue (called "Covered Transactions"). program.
It was the agency's recent mandate concerning the e-filing of corporate returns, however, as well as the IRS's continuing efforts in respect of tax shelters" that dominated the extensive question-and-answer period. One member raised a question about the government's more frequent practice of imposing penalties in respect of certain transactions, and in response, the Commissioner gave a spirited defense of the practice. He acknowledged that the IRS might not always "get it right," but insisted that if agency withheld action except when it was 100-percent confident of victory, the tax system would be disserved. Commissioner Everson reported that the IRS has made significant progress on its enforcement goals. He warned that the agency continue to step up compliance efforts and suggested that those who try to play the system will regret it later.
E-filing, too, was a topic on which the Commissioner engaged his TEI audience. In response to a question about mandatory e-filing for corporate returns, the Commissioner expressed confidence in the ability of software vendors to deliver compliant programs in time for filing 2005 returns electronically. When audience members expressed skepticism about the government's time line (especially in the aftermath of Schedule M-3 and the burdens imposed by the Sarbanes-Oxley Act See SOX. ), the Commissioner challenged the business tax community to respond with the same alacrity a·lac·ri·ty
1. Cheerful willingness; eagerness.
2. Speed or quickness; celerity.
[Latin alacrit and ingenuity that it had demonstrated in implementing the American Jobs Creation Act. He acknowledged TEI's assistance in identifying myriad implementation issues, reiterated the IRS's commitment to developing reasonable rules in respect of the granting of hardship waivers, and assured the audience that, if appropriate, the agency would modify the e-filing mandate.
Keeping the Economy Strong
During Monday's luncheon, the Honorable John W. Snow, Secretary of the Treasury, discussed administration progress in making tax cuts permanent, tax reform, and social security reform. Secretary Snow noted that the American economy is doing well, but cautioned that important work lies ahead to keep the path clear for a solid economic future. Permanency per·ma·nen·cy
Permanence: tourists who were in awe of the permanency of the great pyramids of Egypt.
Noun 1. of the tax cuts is necessary, but fundamental, lasting improvement to the tax code will be key. In addressing tax reform, the Secretary acknowledged that the no one would know better than the conference attendees that the tax code has "grown larger, bulkier, more burdensome, and lethargic with every passing year." He commended the President's Advisory Panel on Federal Tax Reform for its work thus far, concluding this portion of his remarks by saying he looks forward to receiving the panel's recommendations.
The bulk of Secretary Snow's remarks were centered on Social Security. He noted that the nation is moving closer to achieving meaningful reform. The Secretary discussed the recent Trustees' report and describe the fundamental issue with the present system as one of "basic arithmetic." He said the Bush Administration is committed to fixing the system without increasing taxes, and championed voluntary personal accounts derived from a portion of current payroll taxes Payroll Tax
Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. .
The View from Capitol Hill
The Honorable Charles E. Grassley, the senior Senator from Iowa and Chairman of the Senate Finance Committee, addressed conference attendees on Tuesday morning and outlined his priorities for the coming year in respect of taxes. He voiced concern over the growing complexity of the tax code, expressing the readiness of the Finance Committee to receive and consider the recommendations of the President's Panel on Federal Tax Reform. He added that he expected the Finance Committee to conduct hearings on tax reform and simplification later in the year. He outlined five lessons for tax policymakers in addressing tax reform and simplification:
* Do no harm.
* Anticipate as many future consequences as possible.
* Look for ways to make things easier for taxpayers.
* Give the IRS good guidance.
* Adhere to adhere to
verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful
2. these principles in a partisan environment.
Chairman Grassley also reported that the Finance Committee was looking at the tax provisions expiring at the end of 2005. He wants to ensure that a thoughtful review of the merits of these provisions, focusing on efficiency.
Senator Grassley concluded his remarks addressing the topic of enforcement. He said that the Finance Committee's work in respect of codification The collection and systematic arrangement, usually by subject, of the laws of a state or country, or the statutory provisions, rules, and regulations that govern a specific area or subject of law or practice. of the economic substance doctrine continues, predicting that the issue will not go away anytime soon. He also discussed the committee's extensive review of the Advance Pricing Agreement program. While he agreed that the APA (All Points Addressable) Refers to an array (bitmapped screen, matrix, etc.) in which all bits or cells can be individually manipulated.
APA - Application Portability Architecture program has demonstrable de·mon·stra·ble
1. Capable of being demonstrated or proved: demonstrable truths.
2. Obvious or apparent: demonstrable lies. value, the Chairman promised that the program would be revised if the review uncovered significant problems.
Prospects for Federal Tax Reform
Jeffrey F. Kupfer, Executive Director for the President's Advisory Panel on Federal Tax Reform, spoke during the luncheon on Tuesday. He provided an informative review of the Panel's activities over its three months of operation. The panel's work can be divided into two stages. The first stage was a comprehensive review of the existing system, so panel members grasp its complexity, fairness, and affect on economic growth. He explained that the panel has tried to involve the public as much as possible, and all hearings are open to the public and are webcast. Additionally, the panel launched a website where they continue to post comments from the public (the website is www.taxreformpanel.gov.
Mr. Kupfer announced that the second stage of the panel's work (devoted to developing proposed solutions) was just beginning, and he invited submissions and comments on tax reform plans that have been developed, in addition to ideas for specific changes to the existing tax code. He added that the submissions should address how the proposal makes the tax system simpler, fairer, and promotes economic growth. Mr. Kupfer concluded by noting that the Advisory Panel will spend the next round of meetings evaluating specific proposals.
Other Government Speakers
Conference participants also heard from George A. Manousos, Tax Specialist from the U.S. Department of the Treasury; Donald B. Thomas, Project Manager with the Financial Accounting Standards Board Financial Accounting Standards Board (FASB)
Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). ; and Nicholas J. DeNovio, IRS Deputy Chief Counsel (Technical). Mr. Manousos participated on panel discussing the domestic manufacturing deduction under the 2004 Tax Act. Mr. Thomas addressed the FASB's draft statement on uncertain tax positions. DeNovio spoke on recent regulatory guidance, focusing in particular on guidance related to the 2004 Tax Act.
LMSB LMSB Large and Mid-Size Business Bonus Sessions
After the Institute's conference program formally ended, attendees had the opportunity to participate in "bonus sessions" offered by the IRS LMSB Division. This was the third time in as many years LMSB has held these extra sessions. This year, there were sessions on IRS service and enforcement initiatives and tools, the nuts and bolts nuts and bolts
The basic working components or practical aspects: "[proposing] of international tax, e-filing, and implementation and administration of Schedule M-3.