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 Speaking at a conference, Michael Danilack, a deputy U.S. IRS
commissioner, raised concerns about "transfer pricing" disagreements
that complicate a voluntary audit program the tax agency operates
with big U.S. companies.
Transfer pricing refers to cross-border movements of capital and
assets by multinationals from one unit to another. The tax treatment
of such transactions is frequently disputed and consumes a lot of
time and resources for the IRS and large corporations.
To help simplify and speed up corporate audits, the IRS in 2011
started a program, known as the "compliance assurance process," or
CAP, where companies can resolve potential tax issues before they
file their tax returns each year.
"There is ... a question of whether or not a taxpayer who has a
myriad transfer pricing issues should be in CAP at all," Danilack
said.
He said that "no one is on the verge of being thrown out of CAP."
But he added, "If we're not getting transfer pricing work done in
the timeframe set for CAP then maybe there is a dialogue that needs
to take place."
TAX DODGERS WARNED
Speaking on another panel at the same conference, a senior Justice
Department official talked tough about tax dodging, particularly
involving Americans' use of offshore bank accounts.
"We are committed to making the use of foreign bank accounts for
U.S. tax evasion an extremely unattractive proposition," said
Assistant Attorney General Kathryn Keneally, who heads the Justice
Department's tax division.
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Just minutes after her statements, two U.S. senators called on the
Justice Department to seek extraditions from Switzerland of bankers
accused of aiding Americans in tax evasion.
"Even if a request is unsuccessful, it will inform both Switzerland
and its citizens that the United States is ready to make full use of
available legal tools to stop facilitation of U.S. tax evasion and
hold alleged wrongdoers accountable," said senators Carl Levin, a
Michigan Democrat, and John McCain, an Arizona Republican, in a
letter to the Justice Department.
(Editing by Kevin Drawbaugh and David Gregorio)
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