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This letter to Rep. Amo Houghton outlines AICPA support for the proposed international tax simplification bill H.R. 285. In the letter, various provisions are the bill are listed as reducing complexity and compliance burdens.
May 1, 2003
The Honorable Amo Houghton
Chair, Subcommittee on Oversight
House Ways and Means Committee
1110 Longworth House Office Building
Washington, D.C. 20515
Re: Support for H. R. 285, Fairness, Simplification and Competitiveness for American Business Act of 2003
Dear Chairman Houghton:
The American Institute of Certified Public Accountants (AICPA) is pleased to provide our strong support for H.R. 285, the Fairness, Simplification and Competitiveness for American Business Act of 2003. The AICPA is the national, professional organization of certified public accountants comprised of more than 350,000 members. Our members advise clients on federal, state, and international tax matters, and prepare income and other tax returns for millions of Americans. They provide services to individuals, not-for-profit organizations, small and medium-sized businesses, as well as America's largest businesses.
As global trade increases, legislative changes, such as those in H.R. 285, are needed to allow U.S. businesses to react more nimbly and on a par with foreign competitors having less complex tax systems. H.R. 285 is both timely and a welcome simplification proposal.
Reducing Complexity and Compliance Burdens
In particular, the AICPA supports the following provisions, which would greatly simplify compliance:
· Expanding the Subpart F de minimis rule (section 101);
· Deleting overlapping provisions by, for example, repealing the foreign personal holding company and foreign investment company rules (section 104);
· Repealing the CFC rules on foreign base company sales and services income (section 106);
· Reducing the number of foreign tax credit baskets to three (section 108);
· Eliminating the reporting requirements for foreign-owned domestic corporations with immaterial cross-border transactions (section 306);
· Allocating interest on a worldwide basis (section 310); and
· Rationalizing the foreign tax credit rules (Title II).
The current foreign tax credit rules often result in double taxation and leave many taxpayers with excess foreign tax credits. Extending the carryover period, allowing recharacterization of overall domestic losses, and repealing the alternative minimum tax foreign tax credit limitation would significantly reduce this double tax burden and enhance competitiveness.
The AICPA would be happy to offer our further assistance on this legislation. Please contact me at (202) 414-1705; Andrew Mattson, Chair of the International Tax Technical Resource Panel, at (408) 369-2566; or Eileen Sherr, AICPA Technical Manager at (202) 434-9256.
Sincerely,
Robert A. Zarzar
Chair, Tax Executive Committee
cc: The Honorable William M. Thomas, Chairman, House Ways &Means Committee
The Honorable Charles B. Rangel, Ranking Minority Member, House Ways & Means Committee
The Honorable Charles E. Grassley, Chairman, Senate Finance Committee
The Honorable Max Baucus, Ranking Minority Member, Senate Finance
Mr. Hugh Hatcher, Tax Legislative Assistant to Rep. Houghton
Mr. Bob Winters, Chief Tax Counsel, Staff Director and Special Counsel, House Ways & Means Committee
Ms. Allison Giles, Majority Chief of Staff, House Ways & Means Committee
Mr. John Kelliher, Chief Counsel, House Ways & Means Committee
Mr. James Clark, Chief Tax Counsel, House Ways & Means Committee
Mr. Greg Nickerson, Tax Counsel, House Ways & Means Committee
Mr. Jon Sheiner, Tax Legislative Assistant to Rep. Rangel
Ms. Janice Mays, Democratic Chief Counsel, Ways & Means Committee
Mr. John Buckley, Democratic Chief Tax Counsel, Ways & Means Committee
Mr. John Angell, Staff Director, Senate Finance Committee
Mr. Russell Sullivan, Chief Tax Counsel, Senate Finance Committee
Ms. Anita Horn Rizek, Democratic Tax Counsel, Senate Finance Committee
Mr. Kolan Davis, Republican Staff Director and Chief Counsel, Senate Finance Committee
Mr. Mark Prater, Republican Chief Tax Counsel, Senate Finance Committee
Mr. George Yin, Chief of Staff, Joint Committee on Taxation
Mr. H. Benjamin Hartley, Senior Legislation Counsel, Joint Committee on Taxation
Mr. E. Ray Beeman, Legislation Counsel, Joint Committee on Taxation
Mr. David G. Noren, Legislation Counsel, Joint Committee on Taxation
Mr. Thomas A. Barthold, Senior Economist, Joint Committee on Taxation
Ms. Pamela F. Olson, Assistant Secretary for Tax Policy, Treasury Department
Ms. Helen Hubbard, Tax Legislative Counsel, Treasury Department
Ms. Barbara M. Angus, International Tax Counsel, Treasury Department
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