The Internal Revenue Service is reorganizing several of its units concerned with international tax compliance and transfer pricing to bolster its enforcement efforts.
The IRS said Wednesday that it plans to move its Advance Pricing Agreement program, which is designed to work out pre-filing agreements on transfer pricing issues with multinational corporate taxpayers. The program will shift from the office of the IRS Chief Counsel to a Transfer Pricing Director office in the Large Business & International division’s operations.
In addition, the IRS Mutual Agreement Program, which deals with the bilateral resolution of transfer pricing disputes with U.S. treaty partners, will move over to the same Transfer Pricing Director office.
The realignment will result in a new “Advance Pricing and Mutual Agreement program” under the direction of a single executive. The IRS also plans to increase the staff available to the two program areas. The IRS said the combined office would allow the agency to reduce the time it needs to complete advance pricing agreements and to resolve transfer pricing disputes with treaty partners in other countries. The Office of Chief Counsel will continue to help analyze and resolve the legal issues.
In addition, to facilitate coordination with treaty partners across the globe, the IRS said it would adjust its competent authority and international coordination functions under an Assistant Deputy Commissioner (International). This office will coordinate international activities across all the IRS operating divisions, as well as oversee the IRS Exchange of Information program and the IRS’s participation in the Joint International Tax Shelter Information Centre. It will also manage the activities of the IRS Tax Attaches in the agency’s foreign posts of duty.
The Assistant Deputy Commissioner (International) will also coordinate IRS participation at the Organization for Economic Cooperation and Development and other non-governmental organizations, support the Treasury Department in negotiating tax treaties and tax information exchange agreements, and pursue competent authority agreements with treaty partners on issues other than transfer pricing.
“Improving how we manage transfer pricing compliance and continuing to develop our capacity to coordinate effectively with our treaty partners is ever more critical to our job,” said IRS Commissioner Doug Shulman in a statement. “These latest changes move forward to fulfilling one of my top priorities—meeting the challenge of tax administration in a global economy.”
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