* Mid-size businesses to get more scrutiny
* Renewed focus on partnership businesses
By Patrick Temple-West
WASHINGTON, March 26 The U.S. Internal Revenue
Service hopes to hire 300 more agents to scrutinize
multinational corporations' tax returns, shifting scarce
resources into the international arena, a senior agency official
said on Monday.
To help shift resources to international work, the IRS is
offering buy-outs to agents doing domestic work, said Steven
Miller, a deputy IRS commissioner, speaking at a tax conference.
The IRS in recent years has been boosting its focus on
international tax filings, increasing the number of agents to
856 last year from 13 in 2001.
"We're not done yet," Miller said.
Facing a 2.5 percent budget cut for fiscal 2012, the IRS
cannot grow the size of its work force, tax professionals have
said. Some employees are being reassigned to international work
while private-sector recruits have also been brought aboard.
Meanwhile, the agency will increasingly examine businesses
with assets between $10 million and $250 million, Miller said.
Special scrutiny will also be extended to partnership
businesses, where earnings are taxed on the individual side of
the code. These "pass-through" companies account for more than
half of all U.S. business income.
"We are seeing a significant increase in the percent of
flow-through filings and we need to pay attention to it," Miller
The IRS is also analyzing new data on businesses filing
"uncertain tax positions," Miller said.
Beginning in 2010, companies had to tell IRS where they
think a dispute could occur over tax payments, deductions or
There were 133 businesses, or 3 percent of all UTP filings,
that did not meet IRS requirements. Those businesses that erred
will not need to refile for 2010, but will be examined by IRS
for future years.
Ironically, large accounting firms prepared the incorrect
UTP filings, Miller said.
"Too many of these failed disclosures were actually prepared
by large accounting firms, and I'm not sure how that happens,"
he said, without naming names.
(Reporting By Patrick Temple-West; Editing by Eric Beech)