FEI’s Committee on Taxation Debates Reform, Other Topics

During the meeting, held Feb. 18-19 in Washington, D.C., the committee discussed several timely topics in corporate taxation, including tax reform, upcoming U.S. Treasury regulations and guidance, implementation of the Organization for Economic Cooperation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) project, European Union (EU) state aid cases, and income tax accounting changes at the Financial Accounting Standards Board (FASB).

On the topic of federal tax policy, the COT continued to discuss the prospects for tax reform in 2016 and beyond, and considered the potential impact of the presidential candidates’ tax policy platforms on the reform debate in Washington. The committee also received an update on the priorities for federal regulations and guidance concerning taxes in the remaining months of the Obama administration.

In addition, the committee heard an update  from Karen Lapsevic, Managing Director, Technical Activities, FEI, on FEI’s involvement in the Coalition for Efficient & Effective Tax Administration (CEETA), which is working with Congress and the IRS Large Business & International Division (LB&I) to improve the IRS examination process.

Another long-standing concern of the COT is the OECD/G20 BEPS project. The committee reviewed the U.S. Treasury’s proposed country-by-country reporting regulations with Michael Cornett, and Stephen Blough, both Principals, Washington National Tax, KPMG, and learned what companies should know as they begin to prepare for complying with the new requirements. In particular, the committee discussed practical considerations of companies’ first country-by-country report, given the gap between the OECD’s first-filing deadlines and the later first-filing deadlines in the U.S. Treasury’s proposal.

Continuing with international tax issues, the COT had a confidential presentation on the EU state aid cases and the impact on U.S. multinational companies doing business in the EU. The committee walked through three cases in which there was a negative European Commission (EC) decision regarding the tax benefits granted by EU member states. If the decisions are upheld, the companies that received the state aid may owe taxes to the member states that provided the benefit.

Finally, the COT received an update from E&Y Partner Katrina Kimpel, and Claire Marble, Manager, E&Y, on income tax accounting proposals and projects pending at the FASB, as well as an update on SEC comment letter trends and restatement statistics of companies audited by the Big 4. The committee discussed proposals on intercompany transactions and disclosures about government assistance. The COT and FEI’s Committee on Corporate Reporting (CCR) sent a joint comment letter to the FASB on Feb. 10 to comment on the government assistance disclosure project.

The COT’s next meeting will be May 19-20 in Washington, D.C. For more information on FEI’s Committee on Taxation, contact Karen Lapsevic, Managing Director, Technical Activities, at 202-626-7809 or [email protected].