TAX SHELTER REGS COULD BE HARMFUL TO SMALL BUSINESSES.

• Position: Corporate tax shelter regulations - Brief Article - Statistical Data Included

CPAs around the country have supported changes to the nation's corporate tax shelter rules, but caution Congress that any changes must include protections for America's "Main Street" businesses.

According to the AICPA's task force on shelter regulations, draft temporary and proposed regulations, 1,6011-4T, 301.6111-2T and 301.6112-1T, are overly broad in reach and applicability.

For example, a transaction is subject to a special regime of standards and penalties if it has tax avoidance as "a significant purpose." In addition, certain broad factors are deemed to have such a purpose, including permanent differences between book and tax accounting.

The draft regulations provide special sanctions for large corporate taxpayers involved with such transactions. Large is defined as more than $10 million in gross receipts. According to the AICPA, this definition would include many wholesalers, grocery stores and other average businesses unlikely to be involved in abusive tax...