Creighton Professor And Chairman Aicpa Tax Committee Tells Congress No Significant Problems Arise During 2006 Tax Filing Season
Washington -- No significant problems have arisen during the 2006 tax filing season, the American Institute of Certified Public Accountants (AICPA) told Congress today as the end of the tax filing season approaches. Tax practitioners are “generally pleased” with the IRS's performance this year, Tom Purcell, Chair of the AICPA's Tax Executive Committee and an Associate Professor of Accounting and Professor of Law at Creighton University in Omaha, testified at a hearing by the House Ways and Means Subcommittee on Oversight.
Purcell highlighted the benefits of tax simplification in his testimony stressing that it “will improve future filing seasons through a reduction in tax return errors and taxpayer susceptibility to abusive tax shelters.”
Purcell also addressed a range of other topics in his testimony before Congress today, as the hearing focused not only on the tax filing season, but also on the IRS's budget for 2007 and tax administration issues.
The IRS's fiscal year 2007 budget should be fully funded, Purcell said, in order to allow the IRS “to efficiently and effectively administer the tax laws and collect taxes.” With respect to the proposed 15.1% funding cut for the IRS' Business Systems Modernization (BSM) program, he said AICPA cannot easily determine “whether this size level of a cut is prudent.” However, Purcell told the Subcommittee it is “critical for Congress to provide the Service with the appropriate funding levels for the modernization effort.”
Achieving e-filing goals offers administrative efficiencies and budgetary savings to the IRS and benefits for taxpayers, he said. Purcell testified that during this tax filing season the AICPA is closely consulting with the IRS on implementation of the mandatory e-file program that requires large corporations and tax exempt organizations to file returns electronically. “The IRS must remain mindful of the difficult experience that taxpayers and the agency had with the mandatory large partnership e-file program rolled-out several years ago,” he said.
Purcell cautioned, “Our members remain concerned about a number of implementation issues, such as the potential for security breaches and the ability of the IRS's computer systems to handle peak load demands by taxpayers. Even though this is the first filing season for implementation of the mandatory e-file program, we cannot over-emphasize the need for the Service to also adopt a posture of flexibility on critical implementation decisions for next year's filing season, as the e-file thresholds will drop even further, subjecting middle-sized market corporations and exempt organizations to the mandatory program.”
Regarding the increased user fee costs announced in December 2005, Purcell said, “We are concerned these dramatic increases in user fees will result in a substantial reduction in general taxpayer use of such critical IRS programs as private letter ruling and accounting method change requests. We believe any actions that discourage use of these programs could result in greater compliance costs for taxpayers and enforcement costs for the IRS over the longer-term.”
The American Institute of Certified Public Accountants (www.aicpa.org) is the national, professional association of CPAs, with approximately 330,000 members, including CPAs in business and industry, public practice, government, and education. It sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state and local governments; and non-profit organizations. It also develops and grades the Uniform CPA Examination.