Liaison meetings with IRS commissioner, LMSB, and Treasury Department top advocacy agenda: TEI urges staged implementation of e-filing mandate; institute reiterates opposition to codifying of economic substance doctrine; independence of appeals undermined by IRS shelter, TEI asserts.

• Position: Recent Activities

Taxes hardly dominated the headlines in January (except for the National Taxpayer Advocate's criticism of the Internal Revenue Code's EITC refund program), but that does not mean that Tax Executive Institute's committees were not busy. Indeed, the Institute's Federal, International, and IRS Administrative Affairs Committees used the last part of 2005 and the first month of 2006 to reiterate their positions on important issues of tax administrations and to develop the technical agendas for TEI's 2006 Washington liaison meetings.

In early February, TEI will hold separate meetings with the Commissioner of Internal Revenue, officials of the Large and Mid-Size Business Division, and the U.S. Treasury Department's Office of Tax Policy. Among the issues to be discussed are the most recent version of a statutory economic substance requirement, the IRS's electronic filing program for corporations, and the need for the agency to safeguard the independence of Appeals--all of which were addressed in separate technical submissions--as well as the cost sharing regulations and LMSB's Compliance Assurance Process.

TEI's delegation to the liaison meetings will be led by TEI President Michael Boyle of the Seattle Chapter who remarked that "the meetings provide the Institute with the opportunity for critical dialogue with the government on the issues of the day for tax executives." The agendas for and minutes of the liaison meetings will be reprinted in the next issue of the magazine.

E-Filing Mandate

In a pre-holiday letter to the congressional tax committees, TEI urged Congress to exercise its oversight authority in respect of the IRS's mandate that large corporate taxpayers electronically file their tax returns. To forestall a hasty and chaotic filing season, TEI said, the mandate should be phased in over several fling seasons, with e-filing for 2005 tax returns being voluntary and the scope and speed of implementation of the mandate being based on incremental results and actual experience and not artificial deadlines.

TEI's letter December 20 noted that the mandate was issued in January of 2005 "without proper consultation with affected taxpayers and will impose significant burdens on the business community without any assurance that the IRS will have adequate systems, procedures, and personnel in place to receive and process the data and capabilities to effectively analyze that data to fulfill its audit and compliance responsibilities."

Taking a step...