New realities of 2002.

• Author: Ashby, Robert L.
• Position: President's Page

No multi-year plan, strategic plan, or crystal ball could have predicted how differently the tax world is today from a year ago. A year ago, the country was looking at budget surpluses, and the debate was over how to spend excess revenues most effectively. Today, the prospect of budget deficits looms large, and efforts to enact an economic stimulus bill seem almost futile, supplanted by preoccupation with the implications of the Enron collapse on topics as far ranging as retirement security, tax shelters, stock options, and the relationship of outside auditors to their clients.

On the regulatory front, too, the contrast is equally dramatic, though more positive. A year ago, companies were contending with provocative, even hostile, research tax credit regulations and resigned to fighting "the INDOPCO wars" on a foxhole-by-foxhole basis. Today, we are busy analyzing a new set of R&D credit rules that, while far from perfect, are more reasonable and grounded in reality, and we are studying a framework for comprehensive guidance on capitalization issues that hold the promise of moderating the drain those issues have been on both IRS and taxpayer resources.

Finally, on the tax compliance front, we are clearly living in a new world, with the IRS's Large and Mid-Size Business Division seeking to issue more guidance, more quickly (through its Industry Issue Resolution process among other things), and to streamline what is now known as "the post-filing process" through Fast Track Appeals and other programs. We are dealing, too, with a refocused effort on tax shelters, with a renewed emphasis on disclosure that features both the carrot of a penalty waiver and the stick of mandatory IDRs.

Educational Initiatives

The ying and yang of the tax world in 2002 makes this year a particularly challenging one for tax executives. As it has for more than a half a century, Tax Executives Institute has striven to be in the thick of things, through a balance of educational, networking, and advocacy activities. For example, in January the Institute hosted a telephone seminar on the new research tax credit regulations that teed up significant policy and tax compliance issues and, based on the evaluations received from the record number of participants, was successful in giving TEI members what they needed to cope with the new rules. In late February, we held our annual seminar on IRS audits and appeals, which featured the best practitioners in the country discussing...