CEO signature on corporate tax returns (S. 1971): August 22, 2002.

On August 22, 2002, TEI President Drew Glennie submitted a letter to Senators Max Baucus and Charles Grassley--Chair and Ranking member, respectively, of the Senate Finance Committee--objecting to a provision in pending legislation (S. 1971, the National Employee Savings and Trust Equity Guarantee bill) that would require the Chief Executive Officer of corporations to sign the corporate tax return. The letter was prepared under the aegis of TEI's IRS Administrative Affairs Committee, whose chair is David L. Bernard of Kimberly-Clark Corporation.

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On behalf of Tax Executives Institute, I am writing to express TEI's opposition to legislation requiring a company's Chief Executive Officer to sign the corporate tax return. The proposal, which has been added as section 511 of S. 1971, the National Employee Savings and Trust Equity Guarantee (NESTEG) bill, would amend section 6062 of the Internal Revenue Code. Because the provision misapprehends the CEO's role in the preparation of company tax returns and could adversely affect tax administration, TEI recommends that it be abandoned. If Congress determines that the integrity of corporate income tax returns warrants an expanded scope and higher level of internal scrutiny than is currently required, TEI suggests requiring a company's independent audit committee to annually authorize the chief tax officer to sign the corporate income tax return. Additional measures to complement the annual authorization are suggested below.

As the preeminent association of business tax professionals, TEI has a substantial interest in maintaining the integrity and vitality of America's self-assessment tax system. TEI's 5,300 members are accountants, attorneys, and other business professionals who work for 2,800 of the leading companies in the United States, Canada, and Europe. TEI's members work on tax issues, and with the IRS, on a daily basis. They are responsible for conducting the tax affairs of their companies and ensuring their compliance with the tax laws. As a professional organization, the Institute is firmly dedicated to the development and effective implementation of sound tax policy, to promoting 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. The Institute is committed to maintaining a system that works--one that builds upon the principle of voluntary compliance and is consistent with sound tax policy, one that taxpayers can comply with, and one in which the IRS can effectively perform its audit function without unduly burdening taxpayers.

These goals can only be achieved through the members' adherence to the highest standards of professional competence and integrity. To ensure compliance with the law, TEI's Standards of Conduct exhort the members to "present the facts required in tax returns and all the facts pertinent to the resolution of questions at issue with representatives of the government imposing the tax." As important, the members "recognize an obligation to make an affirmative contribution to the sound administration of the tax laws, and to the adoption of sound tax legislation, by cooperation and consultation with the persons charged with those functions, having due regard for the interests of society, as well as the interests of the company and its employees." In this latter regard, TEI has consistently supported adequate funding for the IRS and has worked with both IRS personnel and Congress to restructure the organization and to...