Scottsdale hosts TEI's 61st annual conference: more than 600 TEI members and guests gathered at the Westin-Kierland Hotel in Scottsdale, Arizona, in October to hear updates on tax policy issues at the federal and state level from government keynoters and experienced practitioners.
Turning to the IRS's currency initiative, Mr. Everson reported that the IRS's experience with the Schedule M-3 has been positive. Noting that for corporate taxpayers, transparency fosters better behavior, Mr. Everson suggested that public disclosure of the Schedule M-3 (or of information such as set forth on the M-3) could benefit companies over the long term.
The Commissioner praised the IRS's Compliance Assurance Process (CAP), noting that the audit program has doubled the number of participants over the first year's 17 taxpayers. He added that, if the use of CAP increases, the IRS must determine new methods of performance measurement because enforcement measures will not be effective. He predicted that with the advent of e-filing, within two or three years, corporate audits will bear little resemblance to the way in which they are conducted today.
Turning to continuing areas of concern, Commissioner Everson noted that the tax gap has received increased scrutiny. He mentioned three critical IRS needs for addressing the gap: (i) funding for the IRS's current infrastructure; (ii) augmenting the IRS's resources; and (iii) finding legislative solutions such as increasing third-party reporting.
On the second day of the conference, IRS Chief Counsel Donald L. Korb discussed his office's efforts to recruit and retain tax professionals. Explaining that Counsel's office will lose approximately 30 percent of its workforce over the next few years, he said that the IRS is trying to provide more opportunities for advancement. The Chief Counsel also referred to a recent notice to overhaul the way in which the office provides case-specific guidance. One corporate tax issue was resolved in about six hours under the new procedures and another in less than a month, he stated.
Mr. Korb then addressed 10 key things tax practitioners should know about what tax administrators do:
* Tax practitioners are the system's line of defense against abuse;
* Sunshine is the best disinfectant for preventing abuse;
* The potential revenue base is highly concentrated in a relatively small number of firms;
* People who want to avoid or evade tax are often smarter than we are;
* The number of "touches" of taxpayers by the taxing authority is more effective than audits;
* Your case may be more important to the IRS than you think it should be and vice versa;
* It takes more time than you may think to implement changes to the tax code;
* Tax administrators have a policy role with respect to the tax system;
* Tax administrators have some responsibility to protect the public fisc; and
* One person--such as former IRS Commissioner Charles Rossotti--can make a difference.
State tax issues took center stage during a luncheon address by Harley T. Duncan, Executive Director of the Federation of Tax Administrators, on the first day of the conference. Referring to TEI as "one of the premier organizations and one of the strongest supporters of good tax administrators," Mr. Duncan gave an overview of state finances and the role of the tax administrator.
"Tax administration involves drawing some lines," the FTA spokesman concluded, "but we should work with you to get the right result." Adopting the same theme as IRS Chief Counsel Korb, Mr. Duncan discussed five things that tax executives should keep in mind about state tax administrators:
* The tax administrator is responsible for compliance continuum;
* The tax administrator is necessarily involved in line drawing;
* The tax administrator has a responsibility to protect the public fisc;
* The tax administrator has a policy role with respect to the tax system; and
* The tax administrator respects processes
During the three days of technical sessions, conference participants were able to attend several sessions focusing on financial reporting developments. First, a plenary session on Working with the Corporate Audit Committee highlighted the concerns and issues of the corporate audit committee. A second plenary session on FIN 48: The Uncertain Accounting for Tax Uncertainties explored the technical accounting rules and practical aspects of implementing the new FASB interpretation. Finally, a concurrent session addressed The Use of Technology in Tax Provisions.
The IRS's recent regulations on the treatment of "repairs" were the subject of another session, and the agency's final regulations on the manufacturing deduction were also covered. Other federal tax sessions were devoted to reviewing current trends in executive compensation and exploring the ambiguities of the treatment of settlement payments under section 162(f).
Former IRS Appeals Chief David Robison was on hand to discuss the trends and developments in Appeals. In other sessions on IRS administrative practices, member and practitioner panels reviewed the hot topics of the day and also provided a post-mortem on the first year of the IRS's e-filing mandate.
The Multistate Tax Commission's recent proposal to require companies to file a spreadsheet reconciling reported state taxable income and apportionment factors for all states and the District of Columbia was the subject of a panel discussion including Shirley Sicilian, MTC General Counsel. Other state and local tax sessions included an update on recent developments, a review of legislative developments in Texas, and a session on the state tax treatment of pass-through entities.
Robert Green, former Director of International Tax Programs for the IRS, participated in a session on transfer pricing, including the use of technology to document transfer-pricing methodologies. Other international tax sessions included recent international tax developments (including the revised section 482 services regulations and decisions of the European Court of Justice), internal restructuring transactions, foreign currency and hedging transactions, the outcome of selected transactions under the U.S. economic substance doctrine and Canada's general anti-avoidance rules, and an update on commodity tax developments.
In addition to the technical and industry sessions, the popular corporate tax management workshops returned on Wednesday afternoon as optional bonus sessions following the morning's Industry sessions.
During Tuesday night's banquet, TEI President David L. Bernard presented the Institute's Honorary Membership award to former TEI president Ralph J. Weiland. In his remarks, Mr. Bernard noted that Mr. Weiland was a long-time member of the Federal Tax Committee, where as chair he helped direct the Institute's response to the enactment of the Tax Reform Act of 1986. Mr. Bernard also referred to Mr. Weiland's service as chair of the IRS Administrative Affairs Committee in 1990-1991.
"During his term as [1993-1994] President," Mr. Bernard stated, "Ralph was actively involved in preparing the Institute for the celebration of its 50th anniversary, including the development of a history of the Institute, Serving the Profession: Tax Executives Institute at Fifty." Mr. Bernard called the adoption of a Mission Statement for TEI "one of the major accomplishments of Ralph's term." Still another, he added, was the continuation of TEI's practice of filing technical submissions and amicus briefs on important issues facing the business tax community.
Mr. Bernard also presented TEI's President's Award to Roger Wheeler of the Detroit Chapter. The TEI president explained that, as an active member of the Institute for more than 23 years, "Roger has held leadership roles at all levels of the organization, including the Chapter Board of Directors, Chapter Representative to the Institute's Board of Directors, Regional Vice President, and a member of the Executive Committee." In addition, Mr. Bernard said, "Roger served as Vice Chair of the Federal Tax Committee, and Chair of the Corporate Tax Committee. Roger was also instrumental in creating the Detroit Chapter's Customs committee and encouraging individuals with Customs experience to join TEL" He also cited Mr. Wheeler's work on a 2002 task force on attracting women and minorities to TEI's leadership and his most recent service as chair of the corporate Tax Management Committee.
Photo highlights of the conference begin below.
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|Date:||Nov 1, 2006|
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