| WASHINGTON, March 18
WASHINGTON, March 18 Multinational businesses
that often fight with the U.S. Internal Revenue Service over
their worldwide taxes may be dropped from an IRS program meant
to smooth corporate audits, a senior IRS official said on
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
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,"
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.
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.