SB/SE Burden Reduction Issue Committee Meeting Minutes

March 7, 2006
3:30 PM ET
Teleconference

Program Owner

• Bayder, Helene — Program Owner

Designated Federal Official

• Ramirez, Sandra — Manager, DFO — Brooklyn, NY

Committee Members Present (These attendees count for quorum)

• Barry, Shaun — Franklin Square, NY
• Behnkendorf, Larry — Waterford, MI
• Bly, Bill — Wayne, PA
• Cordeiro, Daryll — Mobile, AL
• Guthman, Howard — St. Paul, MN
• Hafer, Donna — Burlington, KY
• Kasturi, Srinivasan — West Orange, NJ, Chair
• Landauer, Steven — Davenport, IA
• O’Donnell, Marie — Riverwoods, IL
• Reading, Sheri — Albuquerque, NM

Committee Members Absent

• Bland, Sandra — Washington, DC
• Gursey, Gregory — Anchorage, AK
• Rue, Thomas — Mechanicsville, VA

TAP Staff

• Knispel, Marisa — Analyst
• Odom, Meredith — Management Assistant

Other Attendees

• Clevend, Tammy — Analyst, OTBR
• Welsh, Kathy — Analyst, OTBR
• Knights, Meglan — Analyst, OTBR
• Hanson, David — Commerce Clearing House (CCH)
• Candace Ewell — Small Business Administration (SBA)

Roll Call

Welcome
Kasturi welcomed all members and guests. If need be, he said, meetings could be extended an extra _ hour. While working on the recommendations for Form 2553, Kasturi noticed that not all members participated with comments on the issue. He encouraged them to be more proactive next time.

The Joint Committee had an administrative meeting and discussed the Annual meeting which will be held in November. The issue process and timeline slideshow that was created for chair training will be shared with all members.

FTF Meeting Date/Location Update
The Meeting will be held in St. Paul or Minneapolis, Minnesota on
June 14 - 17, 2006. Meeting times are to be established.

Replacement for Michael Chessman
Beth Tucker is the interim director.

New Issue: Office in Home Deduction
Welsh presented the committee with a new project to work on: Form 8829 (expenses for home business use). This Form is very difficult for taxpayers to fill out. We need to come up with ideas to simplify this form. One way is to create a standard deduction per square foot for the business use of the home just as there is a standard mileage rate for the business use of a car. OTBR is working with Counsel to see if this can be established via regulation or revenue procedure. There are other issues to work around in terms of depreciation because by law, it’s deemed “allowed or allowable”. Even if the taxpayer doesn’t take the deduction if he has claimed to have an office in the home and then sells his residence, the taxpayer needs to do a sale recapture of that depreciation. The issue with taxpayers that file married filing joint that are claiming more than one office must be also be considered.

Welsh indicated that OTBR is addressing the issue of multiple Form 8829 and creating a simpler Form 8829EZ. The idea is to establish a standard deduction by a rate factor and quickly come to a deduction amount. There are some legal issues that must be addressed. Changes on the Form have to also be applied to farmers as well as impact on the Form 2106. There are 2.5 million taxpayers that file Form 8829. The number could be higher but OTBR suspects that many do not file it because it is such a complex form. The OTBR is aiming to simplify the calculation not to change the requirements to obtain the decution.The target date to have this completed is tax year 2008.

Kasturi suggested forming a subcommittee to look into this issue. He also said that subcommittees will rotate until there is a need for standing subcommittees.

Subcommittee Report-Out
Subcommittee East/West
S-Election Process
Guthmann spoke about the proposal the subcommittee wrote on the S-Election Process. He’s waiting on comments from the other members. Knights told the committee that she will be using this proposal in the future She recommended that the Committee elaborate on the Goal Statement of their proposal.and that they incorporate Bland’s comments. Ramirez agreed and explained that the purpose of the goal statement is to give the ultimate goals you want the IRS to achieve. Guthmann suggested presenting solutions to the issues without considering changes to the law. Knights promised to give the Committee her feedback on the proposal by Friday, March 10th.

Public Input
Ewell thanked the Committee and stated that she enjoyed the meeting.

Next Meeting
April 4, 2006, 3:30 P.M. ET