FEI Tax Committee sets agenda for '03.

• Author: Prysock, Mark
• Position: Washington Insights - Financial Executives International

In light of November's surprise election results, which saw Republicans solidify their hold on the House of Representatives and retake control of the Senate, FEI's Committee on Taxation has settled on an aggressive agenda to pursue during the 108th Congress.

Committee members agreed that two general principles would govern the agenda: 1) there must be some indication that the Congressional tax-writing committees will address the issue in the next year; and 2) the issue must be specific enough to allow FEI to play a decisive role in the outcome.

For example, while FEI certainly supports any effort to eliminate the corporate alternative minimum tax (AMT)--and will remain active in the broad-based coalition working to achieve this--we recognize that the debate will require enormous resources and will only be won by the collective efforts of numerous business groups. FEI's Tax Committee will devote the bulk of its efforts to several more targeted items:

* CEO signatures on corporate tax returns. Last year, Senate Democrats included a provision in the (failed) pension reform bill that would have required CEOs to sign their companies' federal income tax returns. In the committee report accompanying the bill, Senate staffers explained that the intent of the provision was to "elevate the level of care given to the preparation of those returns."

FEI's Tax Committee sent a letter to all members of the Senate Finance Committee urging them to remove the provision from the pension bill during floor consideration. We argued that companies already spend enormous resources preparing their federal, state and local returns. We also pointed out that 1) current law already requires a corporate officer to sign the returns under penalty of perjury; 2) returns are examined by independent parties; and 3) IRS auditors are well-equipped to detect fraudulent filings. Lastly, we suggested an alternative approach to this issue: We encouraged company boards to designate Chief Tax Officers to attest to the accuracy of corporate returns.

Fortunately, Congress did not complete work on the pension reform bill in the 107th Congress. However, most Congressional insiders believe this issue will resurface in tax shelter legislation, likely to be introduced early this year. FEI's Tax Committee has already started discussions with key House and Senate staffers in an attempt to derail the effort.

* Public disclosure of corporate tax returns. Last year, Sen. Charles Grassley...