IRS nonfiler strategy.

• Author: Peterson, Shirley D.
• Position: Includes response by IRS Commissioner Shirley Peterson

Following up on a meeting held on August 25, 1992, at the IRS National Office, Tax Executives Institute wrote the following letter to IRS Commissioner Shirley D. Peterson concerning the Institute's participation in the IRS's nonfiler initiative. The meeting also included representatives of the ABA Section of Taxation, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, and the National Society of Public Accountants. The Commissioner's response is printed on page 482.

Thank you very much for your letter dated September 17, with which you enclosed the minutes of the August 25 nonfiler strategy meeting. TEI appreciates the opportunity to participate in the meeting and looks forward to working with the Internal Revenue Service in pursuing its goals of helping delinquent taxpayers get back into the tax system and thereby improving voluntary compliance.

The Unique Status of TEI

As discussed during the meeting, TEI is unique. The other professional tax groups represented at the meeting are composed of individuals who seek clients -- businesses or individuals -- from the taxpaying public at large. TEI's members do not. TEI members are employed by corporations to work in the corporation's tax department -- they have a single client, their corporate employer. They do not solicit business from the public at large and, except with respect to their employer's tax returns, do not engage in tax-preparation activities.(1) Consequently, in the course of their professional activities, TEI members are unlikely to encounter individual nonfilers.

This does not mean, however, that the Institute is unwilling or unable to assist the IRS in implementing its nonfiler strategies. Rather, it is to emphasize that TEI's ability to do so will be circumscribed by the professional environment in which the Institute and its members operate.

The Scope of Corporate Nonfiling

Before discussing the particular initiatives outlined in the minutes of the August 25 meeting, we wish to emphasize the need for the IRS to focus on the right targets. Approximately 2,000 corporations are represented by the Institute's nearly 4,700 individual members. Although there can be no doubt that some corporations do not meet their tax filing obligations, TEI is convinced that none of the companies represented by the Institute falls within the nonfiler category. It is counterintuitive -- indeed, fanciful -- to suggest that a corporation that retains one or more in-house tax professionals would not satisfy its filing obligation. This is especially the case since a majority of TEI members represent CEP taxpayers and an even larger number work for publicly traded companies (which, of course, must...