Senators Want CEOs To Vouch For Tax Compliance

by Mike Godfrey, Tax-News.com, Washington

21 April 2005

The corporate world has criticised a new measure approved by the Senate Finance Committee on Tuesday requiring US chief executive officers to assume ultimate responsibility for the veracity of their company's tax statements.

Under the new measure, which has been added on to the $1.1 billion Highway Reauthorisations and Excise Tax Simplification Act 2005, each CEO would have to declare in writing that their corporation's federal tax return complies fully with the Internal Revenue Code.

It is hoped that this provision would act as a disincentive for companies to use dubious tax planning and sheltering schemes.

However, the Financial Services Roundtable, a group representing the interests of businesses in the banking, insurance and securities industries, believes that the measure will add an unnecessary burden to the day to day workload of CEOs.

"This provision adds countless hours of a CEO's time, without any meaningful result," remarked Scott Talbot, vice president of the FSR, according to Dow Jones Newswires.

Talbot added that the tax experts employed by firms to prepare tax returns would be much better placed to make such declarations.

"These experts, not the CEOs, are in the best position to sign corporate tax returns and assume personal responsibility," he argued.

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