TEI-U.S. Treasury Department liaison meeting.

March 11,2010


On March 11, 2010, Tax Executives Institute held its annual liaison meeting with the Office of Tax Policy of the U.S. Department of the Treasury. The agenda for the meeting is reprinted below. Minutes of the meeting will be published in a subsequent issue.

Welcome and Introductions

Pending Legislation

  1. Administration's FY 2011 Tax and Budget Proposals. The FY 2011 Budget contains several provisions of particular interest to the business community that we would like to discuss:

    i. Research and Development Credit--We applaud the Administration for proposing to make permanent the research and development credit as of January 1, 2010. Uncertainty about the future availability of the credit diminishes its incentive effect. For example, it is difficult for taxpayers to factor the credit into long-term decisions to invest in research projects that will not be initiated and completed prior to the credit's expiration.

    ii. Check-the-Box--We applaud the Administration for withdrawing its proposal to repeal the "check-the-box" rules.

    iii. Taxation of Cell Phone Usage--We applaud the Administration's decision to recommend changes to section 280F(d)(4) (removing cell phones and other email devices from the definition of listed property) consistent with TEI's comments and affirm our support for the moratorium on audits of cell phone usage.

    iv. Codification of the Economic Substance Doctrine--TEI continues its opposition to the codification of the economic substance doctrine for the reasons set forth in our letter dated December 4, 2009, to the chairs and ranking members of the House and Senate tax-writing committees. We invite a discussion about the prospects for introducing a "reasonable cause" exception to the imposition of the related strict liability penalty.

    v. Outbound Transfers of Intangible Property--The Administration's proposal on outbound transfers of intangible property would subject to taxation under Subpart F so-called excessive returns on income from intangibles shifted out of the United States to related controlled foreign corporations subject to a low effective tax rate. We invite a discussion about the method chosen to provide a backstop to section 482 to prevent abuse and its effect on competitiveness.

  2. Tax Reform--Given the Administration's current priorities, what is the status of the Administration's proposals to reform the international provisions of the Code and, indeed, its plans for broad-based, fundamental tax reform?

    Regulatory Actions and Other Initiatives

  3. Announcement 2010-9. Announcement 2010-9 (2010-7 IRB 408) represents the latest step in the IRS's continuing effort to identify transactions and areas of risk that should be the focus of its examination resources. In line with Forms 8275 and 8886, and Schedule M-3, it is designed to assist the IRS in more efficiently analyzing--rather than searching for--transactions. TEI is preparing written comments on Announcement 2010-9. We welcome...

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