The Internal Revenue Service (IRS) has been busy of late producing internal guidance for its examiners (both specialists and non-specialists) for use in auditing foreign and cross-border transactions. Taxand USA discovers more.
This process began with the release of 44 International Practice Units (IPUs) made public in December 2014, at which time the IRS announced it would soon be releasing another 100 IPUs. As ambitious as that seemed at the time, the IRS has been making good on that promise.
At the time of this article’s publication, the IRS had published 29 IPUs related to cross-border tax issues in 2016 alone and another 23 IPUs in the last three months of 2015. In total, the IRS has published 113 to date.
The rapid pace at which cross-border IPUs are being produced suggests that the IRS wants to better inform and instruct its staff on such transactions and tax matters.
It also might suggest that the IRS views these issues as a source of low-hanging fruit in stemming the tide of tax minimisation or avoidance from both corporate and individual taxpayers. Therefore, it is worthwhile to consider how the IRS is thinking about international tax issues—issues that might often be overlooked and that can lead to negative and sometimes harsh tax treatment under United States tax law.
Discover more: Clues to the IRS game plan
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All non-US persons, whether they be individuals or corporations that have some US business operations, however small, should review the state of their internal documentation to ensure they can support any positions taken, to defend against possible IRS inquiries and quickly take corrective steps as necessary if any omissions are discovered related to prior years.
