Model recordkeeping and retention regulation: January 10, 1997.

On January 10, 1997, Tax Executives Institute submitted the following comments to the Multistate Tax Commission on the Model Recordkeeping and Retention Regulation that had been developed by the Electronic Data Interchange Audit and Legal Issues Task Force of the Federation of Tax Administrators. TEI was pleased to have several representatives serve on the FTA Task Force (and its workgroups), who participated in the development of the model regulations. The comments were developed under the aegis of the Institute's State and Local Tax Committee whose chair is Christopher W. Baldwin of Gannett Co., Inc. Among the members of the Institute contributing to the comments were Barbara Barton of Electronic Data Services Corporation, Mark D. Loftis of Northern Telecom, Inc., Barbara A. Timek of AT&T, Charles Wooding of First National Bank of Chicago, Bill Zornes of Western Auto Supply Company (who chairs TEI's Tax Information Systems Committee), Robert E. Dobie of AFG Industries, Inc., and Fred H. Montgomery of Sara Lee Corporation.

Tax Executives Institute (TEI) is pleased to provide support for its members who have participated in the Federation of Tax Administrator's Task Force on Electronic Data Interchange (EDI) Audit and Legal Issues (hereinafter the "Task Force"). The Task Force's working groups and steering committees, consisting of business tax professionals and state tax administrators, have been seeking common ground and approaches to adapt existing state tax rules to emerging issues, particularly in the application of electronic data interchange to business transactions. Among the Task Force's first accomplishments is the Model Recordkeeping and Retention Regulation, which was the subject of the December 10, 1996, hearing by the Multistate Tax Commission.

Background

Tax Executives Institute is a professional association of nearly 5,000 accountants, lawyers, and other tax executives who are responsible for managing the tax affairs of their companies. TEI members must contend daily with the interpretation, application, and enforcement of business tax laws. We represent a cross-section of the business community across North America and are dedicated to the development and effective implementation of sound tax policy. We are similarly committed to the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike. TEI believes that the diversity, training, and experience of its members enable it to bring a unique and balanced perspective to the policy and administrative issues raised by the Model Recordkeeping and Retention Regulation.

General

In March 1996, the Steering Committee of the Task Force on EDI Audit and Legal Issues (consisting of representatives from the Committee on State Taxation, Federation of Tax Administrators, Institute of Property Taxation, Multistate Tax Commission, and Tax Executives Institute), released a two-part report: Appendix A sets forth a model state regulation to govern the retention of taxpayer records, particularly those generated or retained electronically; Appendix B contains an explanation and commentary on the regulation. Because EDI records are so intertwined with other information systems and cannot be...