TEI meets with IRS, Treasury, and Hill Staff.

Led by TEI President Ray Rossi, a delegation of members of TEI's Executive Committee and its Federal, IRS Administrative Affairs, and International Tax Committees participated earlier this year in annual liaison meetings with the IRS Large and Mid-Size Business Division and the Treasury Department's Office of Tax Policy. Separate meetings were held with IRS Commissioner Mark Everson and other officials from the IRS National Office, and with Chief of Staff George Yin and his staff at the Joint Committee on Taxation, as well as other congressional staff.

TEI's meeting with the Treasury Department focused on four sets of recently issued regulations. In respect of the proposed section 482 services regulations, the Institute discussed issues relating to the retention of the cost safe harbor, the modification of the simplified cost-based method, and the development of a periodic list of what the government considers "low-margin" services. The organization also sought clarification of the effective date for the final research tax credit regulations. The Institute also commended the department for issuing the more simplified capitalization rules and for narrowing the confidentiality filter of the tax shelter disclosure regulations. Turning to legislative issues, the Institute positively noted the simplification proposals in the Bush Administration's 2005 budget, but expressed concern about the proposed use of private debt collection agencies to collect unpaid taxes. TEI also expressed reservations about certain aspects of the Administration's proposals in respect of adding another penalty relating to corporate tax shelters.

During the LMSB meeting, the Institute discussed the IRS's recent "breakthrough" initiative, which is aimed at making audits more current. Several TEI representatives participated in all-day meetings in December and January on ways to fundamentally shift the agency's approach to and process for ensuring compliance with the tax laws for large corporate taxpayers. During the liaison meeting, LMSB officials reported that proposals flowing from the "breakthrough" meeting would be released later this spring. Other topics discussed during the meeting were the revamping of Schedule M, tax shelter disclosures, and the advance pricing agreement program.

The IRS's currency initiative was the primary subject of the Institute's meeting with Commissioner Everson. The meeting with the Joint Committee staff and other congressional staff included issues relating to pending legislation, the APA program, and simplification of the tax laws.

The agendas for the Institute's meeting with LMSB and the Treasury Department are included in this issue of the magazine, beginning on page 135. Minutes will be posted on TEI's website in April, and will be reprinted in The Tax Executive's May-June issue.