TEI comments on pending tax bills: July 2004.

• Position: Tax Executives Institute

In July 2004, Tax Executives Institute sent the following letter to the members of the House Ways and Means Committee and the Senate Finance Committee on S. 163, the Jumpstart Our Business Strength (JOBS) Act, and H.R. 4520, the American Jobs Creation Act of 2004. A copy of the letter was also sent to the Senate conferees. The letter follows up on TEI's March 10, 2004, and June 3, 2004, comments on the pending legislation.

The Senate and House of Representatives have both passed tax bills (S. 1637 and H.R. 4520) to repeal the FSC/ETI provisions of the Internal Revenue Code and enact various international, domestic, and administrative provisions. While supportive of efforts to bring our tax laws into compliance with WTO mandates, Tax Executives Institute opposes several provisions that represent poor tax policy.

As the preeminent association of in-house business tax professionals, TEI believes the following provisions should be stricken as ill-advised and counterproductive:

* Reject the "Clarification" of the Economic Substance Doctrine. Codification of the economic substance doctrine is unnecessary and would potentially interfere with legitimate business transactions. The proposal should be rejected.

* Reject the CEO Declaration Requirement. This proposal to require a company's chief executive officer to sign a declaration concerning the federal income tax return would waste corporate resources without enhancing accountability. The provision should be excluded from the final legislation.

* Reject the Whistleblower Provision. The proposal to award a 15-to-30 percent bounty to individuals providing information on underpayments by corporate and other taxpayers and to...