Since the last cut-off date for this column (March 1, 2003; see Purcell, "TEC Initiatives," TTA, May 2003, p. 288), the TEC met once (June 2-3, 2003) and exercised its review function on several projects. TEC actions taken after June 9, 2003, will be reported in a future column.
The Tax Division Strategic Planning Task Force II Strategic Implementation (chaired by Tom Purcell) met May 5-6, 2003, to develop strategies and tactics to implement the goals of the Tax Division's proposed strategic plan. These were discussed by the TEC at the June meeting. The TEC will consider adoption of the final plan at its August 2003 meeting.
At the June meeting, the TEC received a report from Mike Mares, chair of the Statements on Standards for Tax Services (SSTS) Tax Shelter Task Force, on its review of SSTS Interpretation 1-2, Tax Planning, which was exposed to the membership on Dec. 11, 2002. The draft can be found at www.aicpa.org/members/div/tax/ sstsint.asp. After reviewing the public comments, the TEC will consider the Interpretation at the August meeting.
Tax practice. On March 11, 2003, the TEC provided comments to the IRS on the policy questions raised on the (final) amendments to Circular 230, released on July 26, 2002 (REG-122380-02).The comments, prepared by the Tax Practice Responsibilities Committee (chaired by Dan Mendelson), focused on (1) the reorganization of the Office of the Director of Practice; (2) the definition of practice and who may practice; (3) enrolled agents and eligibility for enrollment; (4) sanctions and disciplinary proceedings; (5) contingent fees; and (6) confidentiality agreements. The comments may be found at www.cpa2biz.com/ ResourceCenters/Tax/Tax+Practice/ AdvNoticeComments.htm.
On April 8, 2003, the TEC submitted comments (prepared by the IRS Practice and Procedures Committee, chaired by Jim Dougherty) to the IRS on proposed regulations that would limit the defenses available to taxpayers when the IRS proposes accuracy-related penalties in certain cases. The comments indicated that the proposed regulations as currently drafted are overly broad. The AICPA expressed concern that an IRS examiner might use the threat of a penalty as a negotiating tool for resolving issues and, thus, it did not support the removal of the reasonable cause exception as a defense to a penalty under Secs. 6662 and 6664 for taxpayers involved with "reportable transactions."
Taxpayer rights. On March 25, 2003, the TEC (chaired by Bob Zarzar), submitted a letter to the House Ways and Means Committee in response to its March 12, 2003 request for comments on taxpayer rights proposals. The TEC comments addressed: (1) an April 30 due date for electronically filed returns; (2) low-income tax clinics; (3) penalties and interest; (4) the collection process; and (5) better ways of communicating with taxpayers. The full text of the TEC'S letter can be found at www. cpa2biz.com/ResourceCenters/Tax/ Legislative%2c+Administrative%2c+ Judicial/WaysMeans.htm.
Tax shelters. The TEC, both as a separate body and through its task forces, assisted in preparing an AICPA member letter on tax shelters, issued by Barry Melancon and Bob Zarzar, and sent on March 24, 2003. The letter can be found at www.aicpa.org/members/ div/tax/shelters.asp.
Tax accounting. On April 21, 2003, the TEC provided Treasury and the IRS with comments on the proposed regulations that would provide guidance on the deduction and capitalization of acquiring, creating or enhancing intangible assets. Although the comments (prepared by the Tax Accounting TRP'S Capitalization Task Force, chaired by Bob Kilinskis) generally supported the overall proposed rules' simplification efforts, the AICPA expressed concern about how the proposed rules will distinguish deductible/amortizable investigatory costs and capitalizable transaction costs. The comments can be found at www.cpa2biz.com/Resource Centers/Tax/Tax+Accounting/ INDOPCO_regs.htm.
International tax. On May 14, 2003, the TEC responded to the proposed repeal of the earned income exclusion for citizens or residents living abroad (Sec. 911).The comments, prepared by the International Taxation TRP (chaired by Andy Mattson), opposed the proposal to repeal this provision as part of the Jobs and Growth Tax Relief Reconciliation Act of 2003. The final bill signed by the President did not repeal Sec. 911.
At the June meeting, the TEC received a preliminary report from Rachelle Bernstein, chair of the Tax Legislation and Policy Committee, on Tax Policy Concept Statement #3: Guiding Principles for Tax Law Transparency. The TEC intends to take final action on this document at its August meeting.
In a jointly issued letter on March 25, 2003, the AICPA, in conjunction with the American Bar Association and the Tax Executives Institute, commented to Treasury Secretary Snow on the tax simplification aspects of the Administration's 2004 Budget Proposals. The text of the comments can be found at www.cpa2biz.com/Resource Centers/Tax/Legislative%2c+ Administrative%2c+Judicial/ABA_AICPA_TEI.htm.
On April 21, 2003, the TEC commented to the House Ways and Means Committee on the IRS budget, in a letter prepared by the IRS Practice and Procedures Committee (chaired by Jim Dougherty). The comments addressed: (1) the IRS budget; (2) Electronic Tax Administration; (3) enforcement; (4) collection strategies; and (5) the IRS workforce, and can be found at www. cpa2biz.com/ResourceCenters/Tax/ Legislative%2c+Administrative %2c+Judicial/filing_season_testimony. htm.
On May 14, 2003, the TEC commented on the temporary and proposed regulations that would reduce the maximum exclusion for the sale of personal residences. The comments, prepared by the Individual Income Taxation TRP (chaired by Patricia Thompson) and the Residence Sale Exclusion Task Force (chaired by Norm Solomon), can be found at www.cpa2biz.com/Resource Centers/Tax/Individual/Personal Residence.htm.
Through its various task forces, TRPs and committees, the TEC continues to monitor numerous other projects. The TEC and other Tax Division committees are committed to providing the best service possible to AICPA members. Members who would like to volunteer to assist in Tax Division activities should contact Ed Karl at (202) 434-9228 or firstname.lastname@example.org. Members having suggestions for new services or products should contact Bill Stromsem at (202) 434-9227 or wstromsem @aicpa.org.
Editor's note: Professor Purcell is a member of the Tax Executive Committee.
DC Currents heightens awareness of the AICPA Tax Division's work and keeps readers apprised of Division activities involving tax policy, technical issues and other practice support matters.
Editor: Thomas J. Purcell III, J.D., Ph.D., CPA
Associate Professor of Accounting and Professor of Law
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|Title Annotation:||Tax Executive Committee of the AICPA|
|Author:||Purcell, Thomas J., III|
|Publication:||The Tax Adviser|
|Date:||Aug 1, 2003|
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