Wednesday, January 27, 2010

US IRS moves to uncover tax shelters

From the New York Times:

"The Internal Revenue Service said on Tuesday that it would require large corporations to reveal basic information about their tax transactions, a surprise move intended to root out questionable or illegal tax shelters.

Under the plan, companies with assets of at least $10 million that also file broader disclosures with the Securities and Exchange Commission would be required each year to provide the I.R.S. with information about tax transactions that might be challenged by the agency."

Good stuff - and judging by the reaction from the pinstripe infrastructure, this one may have bite.

“This is a massive, very important shift,” said Robert Willens, an accounting and tax expert in New York. “Corporations have treated audits as a game of ‘come see what you can find, we’re not going to volunteer stuff,’ and now the balance of power will shift to the I.R.S.”

The Internal Revenue Service (IRS) spends a quarter of its time in routine corporate audits simply trying to ferret out issues, IRS Commissioner Doug Shulman said.

“That is inefficient and a terrible waste of time. . . The goal is simple: to cut down on the time it takes to find an issue and to complete an audit.”

Makes sense.


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