Washington (Sept. 17, 2003) -- Internal Revenue Service and state tax officials have established a new nationwide partnership to combat abusive tax avoidance. Under agreements with individual states, the IRS will share information on abusive tax avoidance transactions and those taxpayers who participate in them.

The agreements creating this partnership are designed to enable both state and federal governments to move more aggressively in the fight to ensure all taxpayers pay their fair share. Forty states and the District of Columbia joined the IRS in announcing the signing of agreements. More states are expected to sign the agreement in the weeks ahead.

"This agreement marks a milestone in state and federal cooperation," said IRS commissioner Mark W. Everson. "From today forward, we will work together combating abusive tax schemes. We will share information and coordinate case management. This agreement effectively extends the resources of the IRS and the states.”

Under the partnership, the IRS will exchange information about abusive tax avoidance transaction leads with participating states, allowing the IRS and state agencies to avoid duplication and to piggyback on the results of each other’s work. The states and the IRS will then share information on any resulting tax adjustments, reducing the need for duplicating lengthy taxpayer examinations by both a state and the IRS.

“The states and the IRS share a common goal to dry up abusive schemes,” said Stephen M. Cordi, President of the Federation of Tax Administrators and deputy comptroller of Maryland. “This new partnership will strengthen overall tax administration at the federal and state levels and present a united compliance front against those taxpayers tempted by improper avoidance transactions.” The Federation of Tax Administrators (FTA) represents all state tax agencies in the 50 states, the District of Columbia and New York City.

In addition to greater cooperation in sharing leads in the area of abusive tax transactions, the partnership with the states includes joint outreach activities to the public to more effectively counter the claims of those marketing tax schemes and scams.

-- WebCPA staff

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access