Tax Executives Institute - Federation of Tax Administrators meeting; minutes December 9, 1994.

• Position: Liaison Meeting Special

On December 9, 1994, Tax Executives Institute held its annual liaison meeting with representatives of the Federation of Tax Administration, an organization of state tax commissioners. The minutes of the meeting, in which representatives of the Committee on State Taxation (COST) also participated, are reprinted below.

1. Introduction

   On behalf of the Federation of Tax Administrators (FTA), James W. Wetzler welcomed the delegation from Tax Executives Institute, Inc. (TEI). On behalf of Tax Executives Institute, TEI President Linda B. Burke thanked the FTA for meeting with the Institute.

   At the request of the FTA, representatives of the Committee on State Taxation (COST) also participated in the meeting. Representing COST were the following (individuals whose names are marked with an asterisk are also TEI members): Henry A. Duitsman(*) of General Mills, Inc.; Charles Drury of E.I. Dupont de Nemours, Inc.; Richard E. Perkins* of General Electric Company; Kenneth C. Stewart(*) of Georgia-Pacific, Inc.; and J. William McArthur, Executive Director of COST.

2. Report on Illinois Developments

   Mr. Wagner invited taxpayer groups to become more involved in Illinois with the Department of Revenue (DOR) observing that, based on the agenda items presented for discussion, it was clear that there were a number of areas of mutual concern, particularly in securing legislative changes on administrative matters. Mr. Wagner reported that Illinois was establishing an electronic bulletin board system (BBS) to permit taxpayers to obtain copies of statutes, regulations, rules, policy information bulletins, and tax forms by fax. He said that the BBS would be in operation by January 16, 1995.

   Mr. Wagner next reported that there had been a number of changes in administrative procedure in Illinois. Specifically, as of December 1, 1994, appeals hearing officers (who formerly reported to the General Counsel Division of the Department) report directly to the Director of Revenue. Mr. Wagner said that the new reporting relationship, coupled with the promulgation of a rule prohibiting ex parse contacts between the trial lawyers from the General Counsel Division and administrative hearing officers, will expand the actual and perceived independence of hearing officers. Mr. Wagner added that, in connection with the reorganization of the hearings division, an informal conference unit had been established to expedite resolution of unagreed examination issues prior to issuance of a formal assessment notice. The goal, he said, was to reduce the number of unagreed cases.

   Mr. Wagner said that, with the assistance of the IRS District Directors in Illinois, the Department of Revenue had undertaken to publish a joint IRS-DOR newsletter to keep taxpayers better informed on administrative and substantive developments. He concluded by encouraging TEI Chapters in Chicago and St. Louis to become involved in the DOR's commissioner's advisory group to enhance communications on administrative and substantive tax matters.

   Ms. Burke thanked Mr. Wagner for his report and expressed the Institute's commitment to follow-up on his

   invitation for greater participation in the Illinois commissioner's advisory group.

3. Training Program for New Commissioners

   Ms. Burke observed that the results of the November elections at the state level implied a high turnover among state administrative positions. Since TEI is an organization devoted to training, she said, TEI would be pleased to participate in the FTA's training seminar for new commissioners and their staffs. TEI could provide background on an important constituency group for new state commissioners--business taxpayers. Mr. Wetzler thanked Ms. Burke but demurred, explaining that the New Commissioners' Seminar (to be held in March) already had a very full--indeed, overflowing--agenda. He continued that a session at the forum would be devoted to identifying stakeholder groups, the purpose of which was to make the new commissioners aware of stakeholders such as TEI. Mr. Wetzler asserted that there was little opportunity for interaction at the forum and suggested that TEI would gain as much by submitting written materials as through attending. For its part, he said, the FTA encourages new commissioners to follow up with TEI and other groups in local, face-to-face meetings.

   Mr. Drury observed that one of the purposes of the New Commissioners' Seminar was to identify and discuss emerging substantive and administrative issues. He suggested that business taxpayers should participate to help frame the issues. Mr. Wetzler responded that the only instructors at the forum would be incumbent commissioners and their staffs. He explained that, if TEI or COST were invited to participate, questions might arise whether other groups should also be invited in order to provide balance. Mr. Wetzler said that he could not justify inviting some groups but not others and candidly expressed a desire to avoid tax policy debates at the forum, especially with the limited time available.

   Mr. Duitsman stated that the suggestions had been made because it was important to elevate and intensify the dialogue between taxpayers and the FTA. He referred to the recent initiatives concerning revenue agents' reports in the State of New York and the FTA task force of taxpayers and States in respect of issues raised by the use of electronic data interchange (EDI) technology as examples of collaborative efforts to resolve issues of mutual concern. He suggested that the FTA apprise taxpayers of its concerns in respect of emerging issues in order to focus the debate, permit the most efficient use of resources, and facilitate timely resolution of issues.

4. Uniformity Initiatives

   Mr. McCormally referred to the agenda item concerning uniform substantive and administrative positions among the various states. He noted that detailed position papers had been previously submitted independently by TEI and COST and discussed in prior years'liaison meetings. He requested an update from the various States concerning their position on the various issues.

   Mr. Wetzler noted that a joint MTC/FTA-taxpayer task force had recently proposed a uniform apportionment formula for financial institutions. He reported that...