Comments on revenue offset provisions in Senate tax reconciliation bill: January 10, 2006.

On January 10, 2006, TEI President Michael P. Boyle sent a letter to Representative William Thomas, Chairman of the House Ways & Means Committee, and Senator Charles Grassley, Chairman of the Senate Finance Committee, urging that several of the revenue offset provisions in S. 2020, the Tax Relief Act of 2005, be rejected. The bill is the Senate-passed version of the tax reconciliation portion of the government's 2006 fiscal year budget. TEI's comments were filed in anticipation of a conference committee to reconcile the Senate's version of the tax provisions with the House-passed bill (H.R. 4297).

On behalf of Tax Executives Institute, I am writing to express TEI's opposition to certain revenue offset provisions contained in S. 2020, The Tax Relief Act of 2005, approved by the Senate. Identical or substantially similar provisions included in bills previously passed by the Senate have been previously rejected, most recently in H.R. 3, the Safe Accountable, Flexible, and Efficient Transportation Equity Act of 2005. The provisions should not be enacted in connection with the tax reconciliation measures currently pending in Congress relating to the federal government's 2006 fiscal year budget.

As the preeminent global association of in-house business tax professionals, TEI is dedicated to the development and effective implementation of sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the costs and burdens of administration and compliance to the benefit of taxpayers and government alike. The Institute is committed to maintaining a system that works--one that builds upon the principle of voluntary compliance and is consistent with sound tax policy, one that taxpayers can comply with, and one in which the IRS can effectively perform its audit function without unduly burdening taxpayers.

S. 2020, the Tax Relief Act of 2005 (hereinafter "the bill"), was approved by the Senate on November 18, 2005. The revenue offset provisions in the bill that are of concern to TEI have no counterparts in the Tax Relief Extension Reconciliation Act of 2005 (H.R. 4297), which was approved by the House of Representatives on December 8, 2005. A conference to reconcile the measures is expected soon.

TEI urges that the following provisions not be included in the final tax reconciliation bill.

Codification of the Economic Substance Doctrine and Related Provisions. Section 511 of the bill resurrects prior proposals to...