4.60.4  LB&I International Programs

Manual Transmittal

February 03, 2015

Purpose

(1) This transmits revised IRM 4.60.4, International Procedures, LB&I International Programs.

(2) This IRM provides guidance and technical information with respect to international operations within LB&I.

Material Changes

(1) Text previously contained in IRM 4.60.4, International Enforcement Programs, has been revised to reflect the organizational changes within LB&I International.

(2) The scope of responsibility of the various International programs has been revised to more accurately reflect the goals and objectives of the respective functions.

Effect on Other Documents

IRM 4.60.4 dated 09-01-2004 is obsolete.

Audience

LB&I, SB/SE, TEGE, and W&I management and examiners

Effective Date

(02-03-2015)

Sharon Porter
Acting Director, International Business Compliance (IBC)
Large Business and International Division

4.60.4.1  (02-03-2015)
Deputy Commissioner (International) LB&I

  1. The Deputy Commissioner (International) has oversight responsibility for all IRS International efforts and cross-functional cooperation. The Deputy Commissioner, International, serves as the United States Competent Authority for purposes of U.S. Tax Treaty administration. International is responsible for international tax compliance activities with regard to U.S. multinational enterprises, foreign entities with U.S. operations and activities, U.S. citizens and residents residing outside the United States or with offshore activities, and non-resident aliens with U.S. business or investment activities. International also has responsibility for IRS activities with the Organization for Economic Cooperation and Development (OECD), oversight of the Offshore Voluntary Disclosure Program (OVDP), and for implementation of the Foreign Account Tax Compliance Act (FATCA).

  2. The following offices report directly to the Deputy Commissioner (International):

    1. Director, International Strategy

    2. Assistant Deputy Commissioner International (ADCI)

    3. Director, International Business Compliance (IBC)

    4. Director, International Individual Compliance (IIC)

    5. Director, Transfer Pricing Operations (TPO)

4.60.4.2  (02-03-2015)
Director, International Strategy

  1. The Director, International Strategy serves as an expert advisor to the Deputy Commissioner International on a wide range of high-level and sensitive international issues and oversees development and implementation of all aspects of our international strategic program, including risk assessment, data management, trend analysis, training, and knowledge management.

  2. The Director, International Strategy oversees the International Matrix, which is the foundation for the International Program's compliance strategy, collaborative networks, training programs, and data management. The Matrix arrays all areas of international tax (as applicable to both business and individual taxpayers) into a relatively simple framework. The Matrix organizes international tax based on the planning context of the taxpayer and focuses on the areas where the tax stakes for that taxpayer are the highest.

  3. Other responsibilities include:

    1. Developing a strategy for the design and delivery of technical training in areas of international taxation as directed by the Deputy Commissioner (International)

    2. Providing strategic guidance to the International Practice Networks (IPNs) regarding knowledge management

    3. Staying abreast of a broad range of current developments, trends, policy considerations, legislative proposals and legal matters, especially those related to increasing business globalization and its effects on US tax administration, and the internal climate that affects policies of the Internal Revenue Service in order to assist the Deputy Commissioner (International) in setting priorities and objectives for the Division

    4. Advising on and participating in building partnerships with stakeholder groups that focus on international tax matters, such as the International Fiscal Association, Financial Executives International, and the Tax Executives Institute, liaises with them on behalf of LB&I and the Deputy Commissioner (International) and participates in their stakeholder events

    5. Analyzing and making recommendations on technical issues related to compliance priorities and policies, return filing improvements, unique program evaluation and assessment ideas and techniques, the development of additional retrieval means and uses of large and mid-size business industry data, and new program areas or revised program priorities

    6. Working closely with the Chief Counsel and the Division Counsel on technical positions and regulatory and litigation issues affecting taxpayers servicewide

  4. IPNs serve as a community of International agents and other international specialists who share common experiences, interests, and/or expertise in a particular issue area aligned with the major segments of the International Matrix and provide opportunities for everyone to share knowledge, discuss best practices, and otherwise interact on our most challenging issues.

4.60.4.3  (02-03-2015)
Assistant Deputy Commissioner International (ADCI)

  1. The Assistant Deputy Commissioner International (ADCI) oversees many aspects of tax treaty administration, including the Treaty Assistance and Interpretation Team (TAIT), the Exchange of Information Program, Joint International Tax Shelter Information Centre (JITSIC), and LB&I's support of the Treasury Department in Treaty and Tax Information Exchange Agreement (TIEA) negotiations and implementation of Intergovernmental Agreements. The ADCI also oversees and coordinates LB&I's foreign posts, the U.S. Territories, cross-BOD strategic initiatives, and participation in non-governmental organizations such as Organization for Economic Cooperation & Development (OECD) and the Inter-American Center of Tax Administrations (CIAT). ADCI also assists with a myriad of issues related to the implementation of the Foreign Account Tax Compliance Act (FATCA), including implementation issues with Intergovernmental Agreements.

4.60.4.3.1  (02-03-2015)
Exchange of Information (EOI)

  1. The EOI Program Office administers and coordinates all exchanges of information under:

    1. Tax treaties

    2. Tax information exchange agreements (TIEAs)

    3. FATCA intergovernmental agreements (excluding exchanges relating to transfer pricing and mutual agreement proceedings coordinated by the Advance Pricing and Mutual Agreement (APMA) program and the Treaty Assistance & Interpretation Team (TAIT))

    4. Specific requests to and from foreign governments

    5. Spontaneous exchanges of information

    6. Automatic exchanges of information

    7. Mutual collection assistance requests (MCARs)

      Note:

      See IRM 4.60.1 for more information about these types of requests.

  2. Other responsibilities include:

    1. Supporting the simultaneous examination (SEP) and criminal investigation (SCIP) programs

    2. Arranging industry-wide exchanges of information that involve industry or economic sector trends, operating practices, and pricing and other general policies

      Note:

      This does not involve specific taxpayer information. See IRM 4.60.1.10 for more details.

    3. Providing return information to CI and Counsel in order to fulfill mutual legal assistance requests (MLATs)

      Note:

      MLATs may afford the power to summon witnesses, compel the production of documents, issue search warrants, and serve process. See IRM IRM 4.60.1.8 and IRM 11.3.28.3.1 for more details.

4.60.4.3.2  (02-03-2015)
Treaty Assistance and Interpretation Team (TAIT)

  1. (1) The Treaty Assistance and Interpretation Team (TAIT) is responsible for addressing all tax treaty and tax information exchange agreement (TIEA) issues and cases arising within the U.S. Competent Authority program, other than those pertaining to transfer pricing or other allocation cases. Other responsibilities of this office include:

    1. Developing and managing the International Practice Network (IPN) devoted to treaty issues commonly encountered in examinations

    2. Providing International field personnel a central point of contact for addressing all matters (other than issues arising under the associated enterprises article or the business profits article) pertaining to tax treaties and TIEA

    3. Negotiating mutual agreements with treaty partners

    4. Supporting the Treasury Department in negotiations of treaties/protocols and TIEAs

    5. Developing training materials and delivering training programs for field personnel.

4.60.4.3.3  (02-03-2015)
Joint International Tax Shelter Information Centre (JITSIC)

  1. JITSIC is a support function providing assistance to all IRS Operating Divisions, and its members include the United States, Australia, Canada, China, France, Germany, Japan, South Korea, and the United Kingdom. It is responsible for:

    1. Enhancing global compliance and enforcement efforts through exchange of information on a real-time basis

    2. Providing support for joint audits conducted between member countries

    3. Addressing the emerging compliance and strategic aims of each member country

    4. Enabling members, through collaboration, to reduce time required to bring complex tax issues to conclusion

    5. Answering any and all inquiries relating to abusive tax avoidance transactions, arrangements and schemes involving member countries

    6. Providing feedback to the Field as to the status of an issue and working with the member countries to resolve the issue on an expedited basis

4.60.4.3.4  (02-03-2015)
International Individual Taxpayer Assistance (IITA)

  1. Responsibilities include:

    1. Identifying gaps in international taxpayer service, determining segments and population impacted, developing recommendations for improvement, and implementing the action plan

    2. Developing answers to FAQs and flowcharts on basic international tax topics identified in customer surveys

    3. Reviewing, redesigning, and annually updating IRS.gov pages pertaining to international taxpayers to improve access to information

    4. Verifying the availability of IRS forms and publications on IRS.gov

4.60.4.3.5  (02-03-2015)
IRS Post Tax Attachés and Revenue Service Representative

  1. The IRS has tax attachés who are senior IRS officials for non-criminal tax issues located in three foreign posts: London, Paris, and Frankfurt. Additionally, the IRS has a Revenue Service Representative in Plantation, FL that performs similar functions to a tax attaché. Responsibilities include:

    1. Serving as the senior IRS official in the post of duty

    2. Serving as the Commissioner's representative in these foreign jurisdictions for all matters delegated by the LB&I Deputy Commissioner International

    3. Supporting continually evolving roles and responsibilities to address changing needs and priorities of international tax administration

4.60.4.3.6  (02-03-2015)
International Meetings, Travel, and Visitors Program

  1. Responsibilities include:

    1. Organizing international meetings through the International Visitors Program

    2. Coordinating presentations with appropriate IRS offices to present to visiting government officials from other countries on the IRS’ programs and policies

    3. Processing passports, visas, and country clearances for personnel (except for Chief Counsel) traveling outside the U.S. for IRS business

  2. Also see IRM 4.62.1, International Relations, International Visitors Program, for additional information.

4.60.4.3.7  (02-03-2015)
U.S. Territories Program

  1. Responsibilities include:

    1. Addressing technical issues resulting from certain IRC sections unique to the U.S. territories

    2. Administering the Tax Coordination and Tax Implementation Agreements between the IRS and each U.S. territory tax department

    3. Coordinating and addressing technical issues that cross IRS operating divisions, including cover over payments to the territory tax departments

4.60.4.4  (02-03-2015)
Director, International Business Compliance (IBC)

  1. International Business Compliance (IBC) is the organization within LB&I International responsible for providing tax compliance coverage of international business transactions. Responsibilities include:

    1. Conducting examinations of international transactions and issues impacting business taxpayers

    2. Providing technical, policy, and procedural guidance related to international business transactions

    3. Monitoring compliance with the Qualified Intermediary (QI) program and the Foreign Account Tax Compliance Act (FATCA).

    4. Managing international-wide data demands, improving data availability and quality, and enabling proactive shaping of data policy and regulations

    5. Collaborating, networking, and sharing knowledge related to Business Inbound and Business Outbound issues

  2. This office consists of:

    • Field Operations

    • Foreign Payments

    • International Data Management

4.60.4.4.1  (02-03-2015)
IBC Field Operations

  1. IBC Field Operations is comprised of groups of International Examiner revenue agents (IEs), economists, and other specialists aligned by territories. Field Operations responsibilities include:

    1. Applying international issue-specific expertise in administering tax compliance for multinational entities

    2. Leading knowledge management for IBC international tax technical issues

    3. Developing training

    4. Elevating emerging issues for further guidance consideration

  2. International Field Members are encouraged to participate on one or more Issue Practice Networks (IPNs). The IPNs are communities of employees seeking to network in broad areas of international compliance providing international employees the opportunity to both learn from and teach their colleagues.

4.60.4.4.2  (02-03-2015)
Foreign Payments Practice (FPP)

  1. Foreign Payment and International Reporting provides oversight of non-resident alien withholding tax matters with an emphasis on Servicewide coordination of technical issues, compliance, processing and other information relating to non resident aliens. The program focuses resources through coordinated development of informational and educational material, improved forms and publications, processing capabilities and compliance strategies.

  2. Responsibilities include:

    1. Integrating LB&I's compliance resources and subject matter expertise for Chapter 3 (non-resident) reporting and withholding, the Qualified Intermediary regime, Chapter 61 reporting and withholding, and FATCA

    2. Overseeing teams of withholding international examiners, as well as a Program Office responsible for coordinating international information reporting and withholding compliance strategy, planning, analysis and training activities

4.60.4.4.3  (02-03-2015)
International Data Management (IDM)

  1. International Data Management (IDM) oversees the implementation of the Foreign Accounts Tax Compliance Act (FATCA) and improving the efficiency and flexibility of the data required for effective international tax administration. IDM responsibilities include:

    1. Managing and modernizing LB&I's international data capabilities, with an aim to improve the availability and accessibility of international tax data

    2. Processing an increasing volume of international tax information due to growing international tax activity and greater exchange of information between treaty partners

    3. Managing FATCA data, whose implementation has heightened the need to deal effectively with information on cross-border investments

4.60.4.5  (02-03-2015)
Director, International Individual Compliance (IIC)

  1. IIC has responsibility for the following taxpayer population:

    1. U.S. citizens living abroad or in U.S. Territories. LB&I examiners share responsibility with SB/SE and TE/GE for examinations for U.S. citizens living in U.S. territories

    2. U.S. citizens or resident aliens who hold income producing assets in a foreign country

    3. U.S. citizens who claim the foreign earned income exclusion or foreign tax credit

    4. Non-resident aliens who have effectively connected income

    5. U.S. Individuals with offshore transactions (including Voluntary Disclosure Program)

    6. Non-resident aliens who have a U.S. filing requirement

  2. IIC taxpayers file three main types of forms:

    1. Form 1040 with an international feature, such as foreign address or Form 2555 (Foreign Earned Income Exclusion)

    2. Tax return specific to the territory

    3. Form 1040NR

  3. IIC also:

    1. Provides technical, policy, and procedural guidance related to audits of international issues impacting individual taxpayers

    2. Identifies and delivers individual workload and cases via PSP and Campus Compliance Unit

    3. Collaborates through International Practice Networks (IPNs), to share knowledge related to Individual Inbound and Individual Outbound issues

  4. This office consists of:

    • Field Operations

    • Centralized Withholding Agreements

    • Offshore Compliance Initiatives

    • Planning and Special Programs

4.60.4.5.1  (02-03-2015)
IIC Field Operations

  1. Field Operations is comprised of groups of revenue agent and tax compliance officers that are responsible for administering tax compliance for U.S. citizens residing abroad or in U.S. territories, and non-resident aliens who have a U.S. filing requirement. Field Operations duties include:

    1. Providing additional coverage for international tax issues on Form 1040 or 1040NR through its Campus Compliance Unit (CCU). The CCU works closely with Wage and Investment to expediently address emerging international tax schemes, and focuses on taxpayers who misapply treaty benefits

    2. Conducting the Offshore Voluntary Disclosure Program (OVDP) which coordinates the disclosures and return filings under various offshore voluntary disclosure programs.

  2. International field members are encouraged to participate on one or more Issue Practice Networks (IPNs). The IPNs are communities of employees seeking to network in broad areas of international compliance providing international employees the opportunity to both learn from and teach their colleagues.

4.60.4.5.2  (02-03-2015)
Centralized Withholding Agreements (CWA)

  1. The Centralized Withholding Agreement (CWA) program provides assistance to non-resident alien athletes and entertainers (NRAAE) performing independent personal services in the U.S. so that they understand and meet their U.S. tax obligations. The CWA program also:

    1. Calculates NRAAE's withholding based upon net income at graduated rates after allowing for deductions against gross income

    2. Identifies venues where NRAAE not requesting a CWA are performing and educates them on their tax withholding requirements

    3. Coordinates with IBC withholding groups in identifying industries/venues that either need outreach or exam support

4.60.4.5.3  (02-03-2015)
Offshore Compliance Initiatives (OCI)

  1. OCI promotes voluntary compliance with U.S. tax and foreign information reporting laws through strategic enforcement actions directed at identifying U.S. taxpayers involved in abusive offshore tax schemes and the banks, other financial institutions and third parties that provide, facilitate or enable their offshore financial arrangements and structures. OCI also:

    1. Conducts information gathering and data analysis activities to identify promoters or facilitators of abusive offshore schemes for compliance activities

    2. Participates in international forums for the purpose of improving voluntary compliance, sharing best practices and leveraging resources

    3. Focuses on taxpayers who did not report offshore activity through application of tax treaties

    4. Provides technical and procedural guidance on international issues associated with offshore arrangements

4.60.4.5.4  (02-03-2015)
IIC Planning and Special Programs

  1. IIC Planning & Special Programs (PSP) is responsible for:

    1. Supporting workload identification, case-building and delivery for examiners in IIC (e.g., revenue agents, tax compliance officers, tax examiners)

    2. Providing automation support to field groups (e.g., AIMS, ERCS, IDRS, and RGS), and compliance program monitoring and reporting

    3. Performing workload identification and case building of specific issues for other BODs

4.60.4.6  (02-03-2015)
Director, Transfer Pricing Operations

  1. LB&I has established a dedicated team of specialists headed by a single senior executive and encompasses both the Advance Pricing and Mutual Agreement program (APMA) and the Transfer Pricing Practice (TPP).

4.60.4.6.1  (02-03-2015)
Advance Pricing and Mutual Agreement Program (APMA)

  1. APMA was formed as a consolidation of Advance Pricing Agreement (APA) program and those Competent Authority functions (including mutual agreement procedures) related to transfer pricing. The APMA program responsibilities include:

    1. Managing APAs (agreements between a taxpayer and the IRS for a prospective term of years by which the IRS agrees not to make any adjustments for transactions covered by the APA if the taxpayer files its returns consistent with the agreed transfer pricing methodology)

    2. Resolving actual or potential transfer pricing disputes in a principled, cooperative manner, as an alternative to the traditional examination process

4.60.4.6.2  (02-03-2015)
Transfer Pricing Practice (TPP)

  1. Transfer Pricing Practice (TPP) is comprised of a team of specialized transfer pricing professionals with a field examination focus. TPP duties include:

    1. Assisting examination teams to identify appropriate transfer pricing issues and cases for audit

    2. Advising examination teams on appropriate analysis of issues and of the best transfer pricing method to apply

    3. Assisting examination teams in resolving transfer pricing issues and in communicating positions clearly and persuasively, both orally and in writing

    4. Ensuring consistent and coordinated support of transfer pricing issues before Appeals, Competent Authority, and, if necessary, in litigation

    5. Assisting in identifying emerging transfer pricing issues

    6. Coordinating with LB&I leadership, Division and Associate Chief Counsel, APMA, and IPNs to ensure consistently strong administration of transfer pricing throughout the IRS

  2. TPP members are encouraged to participate on one or more Issue Practice Networks (IPNs). The IPNs are communities of employees seeking to network in broad areas of international compliance providing international employees the opportunity to both learn from and teach their colleagues.


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