December 4, 2002

The TAP members for the Area Four Committee met via telephone on Wednesday, December 4, 2002. The purpose of the meeting was to discuss taxpayer issues.

Members in Attendance:

• James Abraham
• Robert Burke
• David Cain
• Ivan Cotman
• Thad Davis
• Robin Gausebeck
• Richard Greenberg
• Glenn Hall
• Larry Lexow
• Joe Meissner
• Dick Murphy
• Teresa Smedley
• Richard Morris

TAP Analyst: Mary Ann Delzer
TAP Program Manager: Sandy McQuin

Roll call was taken. Minutes approved from the 11/18/2002 meeting.

Discussion of Issues
Form 990-Greenberg contacted four non-profit organizations to capture their concerns about 990 filing. All of the organizations felt filing to be essential to monitor fraud in the non-profit area. However, they were in favor of modifications or simplifications.
ACTION: Greenberg to write report on his interviews and forward to sub-committee.

Burke stated that most non-profits need to prepare audited financial statements to any possible "funders." Form 990 is an important part of the financial package.

Smedley shared her concerns about the small non-profits who do not look for outside funding such as the Little Leagues, but who are impacted simply because the filing requirement is not indexed as are other forms.

Gausebeck stated that she saw the issue as an index problem, which could be corrected with a change in the threshold or perhaps with a copy of the organizations annual report on their letterhead instead of a return.
ACTION: Sub-committee will prepare a report for January meeting.

SIMPLE IRA - Lexow contacted several providers in the financial products industry who agreed a technical correction is all that would be needed to fix the problem.
ACTION: Delzer will send Cotman the background material on the issue.
ACTION: Lexow and Cotman will have a conference call and prepare a report for January.

Just-in-time Notification - Smedley shared that the previous work done on the issue by the CAP has been misplaced and so the sub-committee needs to get input from preparers to proceed. Lexow stated he had examples from the qualified plan area such as the Form 5500 not available until May, but filing due in July. Cain shared his experience with not receiving Publication 1194 until March when the filing season is almost over.
ACTION: Smedley will hold a conference call and the sub-committee will prepare a report for January meeting.

30% Depreciation - Gausebeck reported that she researched the issue and found that although it is complicated to do, and may have AMT consequences, taxpayers can opt out of the 30% depreciation schedule as they can Section 179. Practitioner with this concern was contacted and is satisfied with the explanation. Issue closed.

Simplification/reduction of excise tax paid by private foundations- Delzer read the report provided by Malcolmson. Abraham stated he never received the issues materials and was hesitant to have the committee move forward until he could review the issue.
ACTION: Delzer to send Abraham the issue materials. ACTION: Malcolmson and Abraham to have a conference call and prepare a report for January.

New Issues
Delzer reported four issues were received since the last meeting.

1. ITIN and the State of Wisconsin- Wisconsin will not issue a refund if the name and ITIN on the tax return are different from the SSN on the W-2s. In addition, criminal penalties for preparers who file returns of an individual who use SSN of another. Issue brought to TAP as may affect VITA/LITC programs.
   No ACTION.
2. Increase in allowable capital loss-Concern that $3000.00 capital loss has not been increased since 1986.
   ACTION: Abraham will develop letter to send issue to Joint Committee.
3. Caller with concerns about backup withholding on foreign bank accounts. Caller stated notification should be given to foreign account holders.
   ACTION: Delzer to research backup withholding notification and to report in January.
4. Dozens of letters received from individuals concerned with sec 1.861-1.
   ACTION: Delzer to send letter in response.

Outreach Report
In Wisconsin the TAP has the opportunity to attend Surgent's Tax Camp in De Pere on January 13,2003. Also in Wisconsin, Delzer, with the assistance of W&I Stakeholder Partnerships, Education and Communication, was able to share outreach materials with over 2000 tax professionals attending "Tax Insight" annual income tax school.

As a result of the contacts made with the non-profit community, Greenberg will develop a web statement available to organizations wishing to share the TAP message with their members. ACTION: Greenberg to write web statement and forward to Delzer for help in editing.

Action Items
Toll free service was the only item from the previous agenda. ACTION: Committee will monitor toll free service as the filing season begins and report at February meeting.

Office Report
Delzer reported that McGurn has accepted a new position. She will be assuming his duties and be the analyst for Area 5 as well.

Discussion was held about a face-to-face meeting. Delzer advised the committee that Junkins has concerns about a face-to-face meeting outside of Area 4. Junkins requested the committee consider Cincinnati as an alternative. ACTION: Delzer will discuss this alternative with Meldman and report at January meeting.

Next Scheduled meetings:

• January 8, 2003, 11:00 a.m. CT
  Agenda items due to Delzer by December 27, 2002
  1. Sub-committee reports
  2. New issues
  3. Outreach report
• February 5, 2003, 11:00 a.m. CT