Scottsdale hosts TEI's 61st annual conference: more than 600 TEI members and guests gathered at the Westin-Kierland Hotel in Scottsdale, Arizona, in October to hear updates on tax policy issues at the federal and state level from government keynoters and experienced practitioners.

IRS Commissioner Mark W. Everson opened TEI's three-day Annual conference on October 23, noting that the overall climate for addressing non-compliance has improved significantly. "A balance between service and enforcement has been brought back into the system," he stated, adding that the credibility of the IRS's enforcement program has been restored. Referring to the public's perception of corporate behavior, the Commissioner advised that "American business can do better--and must do better--concerning the image it projects."

Turning to the IRS's currency initiative, Mr. Everson reported that the IRS's experience with the Schedule M-3 has been positive. Noting that for corporate taxpayers, transparency fosters better behavior, Mr. Everson suggested that public disclosure of the Schedule M-3 (or of information such as set forth on the M-3) could benefit companies over the long term.

The Commissioner praised the IRS's Compliance Assurance Process (CAP), noting that the audit program has doubled the number of participants over the first year's 17 taxpayers. He added that, if the use of CAP increases, the IRS must determine new methods of performance measurement because enforcement measures will not be effective. He predicted that with the advent of e-filing, within two or three years, corporate audits will bear little resemblance to the way in which they are conducted today.

Turning to continuing areas of concern, Commissioner Everson noted that the tax gap has received increased scrutiny. He mentioned three critical IRS needs for addressing the gap: (i) funding for the IRS's current infrastructure; (ii) augmenting the IRS's resources; and (iii) finding legislative solutions such as increasing third-party reporting.

On the second day of the conference, IRS Chief Counsel Donald L. Korb discussed his office's efforts to recruit and retain tax professionals. Explaining that Counsel's office will lose approximately 30 percent of its workforce over the next few years, he said that the IRS is trying to provide more opportunities for advancement. The Chief Counsel also referred to a recent notice to overhaul the way in which the office provides case-specific guidance. One corporate tax issue was resolved in about six hours under the new procedures and another in less than a month, he stated.

Mr. Korb then addressed 10 key things tax practitioners should know about what tax administrators do:

* Tax practitioners are the system's line of defense...