Servicewide Approach to International Tax Administration |
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The IRS will improve tax administration to deal more effectively with the increase of globalization of individual and business taxpayers. This will be accomplished through Servicewide cross-functional cooperation in addressing emerging international issues. The priority will be to improve voluntary compliance with the international tax provisions and to reduce the tax gap attributable to international transactions. Our approach to international tax administration includes the following components:
Strategic Goal 1: Improve Taxpayer Service
International tax law is extremely complex. Providing international taxpayers and taxpayers in the U.S. territories (American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands) 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, we will improve service options for international/U.S. territories taxpayers, enhance outreach, provide tools for earlier certainty on complex issues, and strive for burden reduction in the international/U.S. territories tax law arena.
Strategic Initiatives:
- Enhance customer service options for international/U.S. territories taxpayers to encourage voluntary compliance with complex international/U.S. territories tax laws.
- Deliver targeted education and outreach to taxpayers with international/U.S. territories transactions and enhance our partnership with tax practitioners involved in the preparation of international/U.S. territories returns.
- Explore opportunities for expanded e-filing of international/U.S. territories forms.
- Identify opportunities for burden reduction through forms revisions, legislative proposals, and procedural changes.
- Provide earlier certainty to taxpayers on international/U.S. territories tax issues through pre-filing tools and achieving greater currency of audits.
- Contribute to identifying and developing guidance on priority international issues.
Strategic Goal 2: Enhance Enforcement of Tax Laws
As globalization continues to grow, tax planning is increasingly focused on minimizing the worldwide effective tax rate. In this context, international/U.S. territories non-compliance is a significant area of concern and focus. We are challenged by a lack of information reporting on many cross-border transactions. The ease of utilizing complex international structures and cross-border transactions results in constantly evolving compliance issues. To properly identify, address, and pursue such emerging issues, we will strengthen reporting requirements; enhance IRS access to international data; ensure adherence to professional standards by tax professionals; and, increase industry and global issue focus by aligning resources to cases and issues with the highest compliance risk.
Strategic Initiatives:
- Improve examination coverage, identify emerging compliance issues, and increase issue specialization to address complex transactions.
- Strengthen our information reporting and withholding systems to ensure we receive the appropriate information and use it effectively in our compliance and withholding tax efforts.
- Improve cooperation with treaty partners to identify and address inappropriate tax arbitrage and abusive schemes, achieve greater transparency on cross-border transactions, and identify and address process improvements in the mutual agreement program.
- Encourage tax professionals to adhere to professional standards and provide effective oversight to ensure accountability of professional responsibilities.
- Detect and deter financial criminal activity and abusive transactions that involve offshore entities and cross border transactions.
Strategic Goal 3: 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 our organization. We must strategically manage resources, associated business processes, and technology systems to effectively and efficiently meet international service and enforcement missions. To achieve this, we will improve our resource capabilities to leverage international expertise throughout the IRS and modernize information systems to improve service and enforcement.
Strategic Initiatives:
- Identify workforce skills needed to address emerging international/U.S. territories issues and develop a training plan to address the needed skills.
- Provide IRS employees the tools needed to accurately and timely respond to taxpayer inquiries.
- Improve the systems for capturing and utilizing information reported by treaty partners to enhance compliance of U.S. taxpayers.
- 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.
- Assess system and resources devoted to referrals of international/U.S. territories issues to ensure high risk issues are addressed in a timely manner.
- Identify and develop baselines and measures to better assess the international/U.S. territories tax gap and our progress in reducing it.
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Page Last Reviewed or Updated: October 17, 2007