Thieving IRS Commissioner Douglas Shulman: "IRS should do company audits with other countries"

US Internal Revenue Service Commissioner Douglas Shulman said the agency should audit multinational corporations jointly with other countries as part of a growing coordination in enforcing tax laws.

"We have begun a dialogue to take international cooperation to the next level," Shulman today told a Washington conference organized by the Organization for Economic Cooperation and Development. "I believe this should include joint examinations with other nations," he said. The Paris-based organization supports economic growth and world trade.

International cooperation thus far has focused primarily on sharing information.

Joint audits would decrease the "burden on businesses and individuals trying to comply with the law, and help tax authorities consistently enforce the tax law on a global basis," Shulman said.

A number of cross-border tax-evasion cases in the last two years, including a case in which an employee of Liechtenstein's LGT Group bank identified thousands of people with deposits in the bank, have led some nations to increase their tax- enforcement efforts with other countries.

The US has pushed to strengthen a network of global tax treaties by insisting they provide for enhanced record-sharing. The US is also working with authorities in Canada, Australia, Japan and the UK. to share intelligence on tax shelters and on the banks, lawyers and accountants that promote them.

Information Centre

In 2004, those nations established the Joint International Tax Shelter Information Centre, with offices in Washington and London. So far, the center said, it has stopped one scam involving bogus claims for foreign tax credits. The center also has said it recovered $US100 million by exposing a scheme in which brokers prepared made-to-order artificial losses on futures and options contracts.

The proposal Shulman discussed would require IRS agents to coordinate audits of multinational companies with their counterparts at revenue agencies in other countries to resolve issues that arise in cross-border transactions.

One such issue is the way products are priced when they are sold between subsidiaries or between a subsidiary and a parent company. These pricing structures can shift income from countries with high tax rates to those with lower rates, and are often the subject of disputes between companies and tax authorities.

LNK

Thieving IRS Commissioner Douglas Shulman: "IRS should do company audits with other countries"

Thieving IRS Commissioner Douglas Shulman: "IRS should do company audits with other countries"

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