NOTE: This headliner is current through the publication date. Since changes may have occurred, no guarantees are made concerning the technical accuracy after the publication date.
Headliner Volume 220
December 17, 2007
Millions of U.S. citizens and businesses of all types and size participate in the global economy, along with growing numbers of foreign persons and businesses with U.S. tax responsibilities. All indications are that the phenomenon of globalization will only increase, and with it, world-wide challenges for tax administration.
To deal more effectively with the increasing globalization of individual and business taxpayers, the IRS developed a servicewide cross-functional approach to address emerging international issues. This cross-functional cooperation addresses international customer service and compliance issues across every IRS operating division.
The plan to improve voluntary compliance with international tax provisions and reduce the tax gap attributable to international transactions includes three strategic goals:
Improve Taxpayer Service
International tax law is extremely complex. Providing international taxpayers and taxpayers in the U.S. territories with assistance and clear and accurate information before they file their tax returns helps avoid unintentional errors and reduces unnecessary contacts afterwards.
To achieve this, IRS will improve service options for international/U.S. territories taxpayers by:
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Enhancing customer service options for international/U.S. territories taxpayers.
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Delivering targeted education and outreach to taxpayers with international/U.S. territories transactions and enhancing our partnership with tax practitioners involved in the preparation of international/U.S. territories returns.
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Exploring opportunities for expanded e-filing of international/U.S. territories forms.
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Identifying opportunities for burden reduction through forms revisions, legislative proposals, and procedural changes.
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Providing earlier guidance to taxpayers on international/U.S. territories tax issues through pre-filing tools.
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Identifying and developing guidance on priority international issues.
Enhance Enforcement of Tax Laws
Non-compliance in international/U.S. territories is a significant area of concern and focus. The lack of information reporting on many cross-border transactions is a real challenge.
To properly identify, address, and pursue emerging issues, IRS will:
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Improve examination coverage, identify emerging compliance issues.
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Increase issue specialization to address complex transactions.
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Strengthen information reporting and withholding systems.
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Improve cooperation with treaty partners to identify and address abusive schemes.
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Identify and address process improvements in the mutual agreement program.
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Encourage tax professionals to adhere to professional standards and provide effective oversight to ensure accountability of professional responsibilities.
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Detect and deter financial criminal activity and abusive transactions that involve offshore entities and cross border transactions.
Modernize the IRS through its People, Processes and Technology
As the flow of trade and capital moves more easily across borders, the global marketplace is developing at an ever increasing rate. The fast pace of change in the global economy requires an equally fast pace of change within the IRS.
IRS must strategically manage resources, associated business processes, and technology systems to effectively and efficiently meet international service and enforcement missions. To achieve this IRS will:
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Identify workforce skills needed to address emerging international/U.S. territories issues and develop a training plan.
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Provide the tools needed to accurately and timely respond to taxpayer inquiries.
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Improve the systems for capturing and utilizing information reported by treaty partners.
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Identify opportunities to improve international/U.S. territories forms and the related processing systems to ensure appropriate information is available for risk assessment and issue identification.
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Assess system and resources devoted to referrals of international/U.S. territories issues to ensure high risk issues are addressed in a timely manner.
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Identify and develop baselines and measures to better assess the international/U.S. territories tax gap and progress in reducing it.
A very important part of this approach has already begun in LMSB, but it is time to take the next steps to address the growing presence of international issues for our taxpayers.
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