Tax Lawyer's Blog

IRS Commissioner, Doug Schulman, addressed the 21st George Washington University International Tax Conference on Monday and said,

Tax administrators and tax professionals find themselves with a new, heightened and highly visible global role.

It’s fair to say that U.S. taxpayers’ attitudes and perceptions about the taxes they pay reflect the changing world around them.

We must recognize that many taxpayers are now looking at the world through a new economic prism – one that draws sharp lines in the taxpayer spectrum, such as global corporations versus the typical family filing a 1040 return with a W-2 attached to it.   

Call it Wall Street versus Main Street. 

Schulman said that the IRS will be closely scrutinizing the tax structurings of American multinational firms:

[W]e have also seen some corporations constructing transactions to avoid tax entirely on certain income, or trying to go beyond the avoidance of double taxation and engage in “double-dip” transactions whereby they get a deduction or credit for the same amount in two countries. 

To borrow a line from Hamlet, “There’s the rub.” 

When the Commish tells a group of America’s top international tax planners that the IRS is coming after their clients, you’d better listen:

The average American taxpayer who is being buffeted daily by fierce economic winds also feels they have been asked to shoulder most of the risk associated with rescuing the economy.

Call it what you will – fallout or consequences – but I believe that the events of the past year will create increased public pressure on corporate taxpayers to adhere to not only the letter of the law, but the spirit of their home country law.

Author’s Prediction: With money flying out of the government’s coffers like evil from pandora’s box, I think the next few years will see a geometric increase in the IRS’s efforts to find, assess, and, if appropriate, prosecute non-compliant taxpayers.

Go here for the Commissioner’s entire speech.

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