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IRS Announces More LB&I Campaigns!

The Internal Revenue Service (IRS) Large Business and International (LB&I) Division continues to churn out new audit “campaigns.” For our prior coverage, please click here. The most recent set of campaigns were announced on April 16, 2019, bringing the grand total to 53 campaigns since the program’s initial release on January 13, 2017. The IRS explains that the goal of the campaigns is to “improve return selection, identify issues representing a risk of non-compliance, and make the greatest use of limited resources.” The three new LB&I campaigns are listed below, verbatim by title and description. Captive Services Provider Campaign The section 482 regulations and the OECD Transfer Pricing Guidelines provide rules for determining arm’s length pricing for transactions between controlled entities, including transactions in which a foreign captive subsidiary performs services exclusively for the parent or other members of the multinational group. The...

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Statutes of Limitation and International Taxes

In late 2017, we provided a brief overview of statutes of limitation in the international tax context. At that time, we noted a forthcoming article on the subject.  We are pleased to report that our expanded article on the subject has been published in the January-February 2018 edition of the International Tax Journal.  The full article can be viewed here.

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IRS Releases Several Transfer Pricing Directives

The Internal Revenue Service (IRS) Large Business and International (LB&I) Division recently released several directives (LB&I Directives) geared toward transfer pricing. LB&I acknowledges that significant LB&I resources are devoted to transfer pricing issues, and such issues make up a substantial portion of the LB&I inventory. It appears that these directives are aimed at ensuring that LB&I resources are utilized in the most efficient and effective manner on transfer pricing issues. A link to each LB&I Directive and a short summary is provided below. Interim Instructions on Issuance of Mandatory Transfer Pricing Information Document Request (IDR) in LB&I Examinations This LB&I Directive advises LB&I examiners that it is no longer necessary to issue the mandatory transfer pricing information document request (IDR) to taxpayers that have filed Form 5471, Information Return of U.S. Person with Respect To Certain Foreign...

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Statutes of Limitation in the International Tax Context

As most taxpayers know, under Internal Revenue Code (Code) Section 6501(a), the Internal Revenue Service (IRS) generally has three years after a tax return is filed to assess any additional tax. However, Code Section 6501 provides several exceptions to this rule, including but not limited to the following. False or fraudulent returns with the intent to evade tax (unlimited assessment period) Willful attempt to defeat or evade tax (unlimited assessment period) Failure to file a return (unlimited assessment period) Extension by agreement (open-ended or for a specific period) Adjustments for certain income and estate tax credits (separately provided in specific statutes) Termination of private foundation status (unlimited assessment period) Valuation of gifts of property (unlimited assessment period) Listed transactions (assessment period remains open for one year after certain information is furnished) Substantial omission of items (six-year assessment period)...

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