AICPA tax section accomplishments in '2007.

• Author: Hoops, Jeffrey R.

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The year 2007 was a busy one for the AICPA Tax Section and the tax team. The Tax Section serves the public interest by helping AICPA members to be the most trusted professional providers of tax services, advocating sound tax policy and effective tax administration. As chair of the Tax Executive Committee, I am pleased to report that we made great progress in fulfilling our mission and delivering on all elements of our strategic plan. Here are some of the highlights.

Tax Policy Advocacy

The first part of the year was dominated by discussions about closing the tax gap. The tax gap, which is estimated to be more than $345 billion, is the difference between what taxpayers should pay each year in taxes and what they actually pay. Many factors contribute to the tax gap, including income underreporting by individuals and small businesses, the use of aggressive tax shelters, and improper basis calculations when reporting gains and losses.

Members of the Tax Division participated in several panel discussions organized by the IRS and Treasury on the causes of the tax gap and potential ways to close it. The AICPA surveyed the entire Tax Section

membership after the tax filing season to get a practitioner perspective on the issue. The survey results were shared with the IRS and Treasury and were summarized in this column in the November 2007 issue of The Tax Adviser. In June, the AICPA joined the American Bar Association Tax Section, the Tax Executives Institute, and other groups in sponsoring a two-day conference on the tax gap.

Another issue that grabbed significant attention in 2007 was the patenting of tax strategies. The U.S. Patent and Trademark Office has issued more than 60 tax-strategy patents, and more than 100 are pending. The AICPA is opposed to tax-strategy patents and wrote a white paper discussing the problems associated with issuing them (available at http://tax.aicpa.org/Resources/Tax+ Patents/AICPA+Urges+Congress+to +Address+Tax+Strategy+Patents.htm). The institute was instrumental in bringing this issue to the attention of Congress and actively supported several legislative proposals to ban tax-strategy patents, including H.R. 1908, Patent Reform Act of 2007, a comprehensive patent reform bill passed by the House of Representatives, and S. 2369, a bill providing that certain tax planning inventions are not patentable, introduced by Senators Max Baucus (D-MT) and Chuck Grassley (R-IA).

In May, much to the...