The Internal Revenue Service intends to improve international tax administration in an effort to reduce the tax gap.
As part of that effort, the IRS said it would increase its outreach to international taxpayers, as well as taxpayers in U.S. territories such as Guam, Puerto Rico and the U.S. Virgin Islands, while it beefs up enforcement. "We are challenged by a lack of information reporting on many cross-border transactions," said the IRS in a page recently posted on its Web site.
The IRS intends to strengthen its information reporting and withholding systems, enhance its access to international data, and "ensure adherence to professional standards by tax professionals."
The IRS also wants to improve its cooperation with treaty partners to identify inappropriate tax arbitrage and abusive schemes, and provide greater transparency on cross-border transactions. One goal is to detect financial criminal activity involving offshore entities.
Modernization of technology, staff and business processes will play a role in the effort. The IRS hopes to improve its systems for capturing and using information reported by treaty partners to improve U.S. taxpayer compliance.
The agency intends to identify the workforce skills it needs to address emerging international issues and develop training for its employees so they can get these skills. The IRS will also improve its forms and processing systems, and assess its referral systems and resources to make sure that high-risk issues are dealt with in a timely way.
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