TEI Regions V & VI IRS Liaison Meeting

1. TEI Regions V & VI IRS Liaison Meeting Kathy Robbins, Acting NRC Industry Director May 14, 2012

2. LB&I International Function Recently revised structure Douglas Shulman, IRS Commissioner Commissioner Large Business & International Steve Miller, IRS Deputy Commissioner for Services & Enforcement EOI Program Treaty Unit JITSIC Michael Danilack, Deputy Commissioner (International) Doug O’Donnell, Assistant Deputy Comm’r (Int’l) Foreign Posts Service-wide Strategy Sam Maruca, Director, Transfer Pricing Operations Kathy Robbins, Director, International Business Compliance (IBC) Rosemary Sereti, Director, International Individual Compliance (IIC)

3. LMSB International Large Business and International Division Director International Individual Compliance (IIC) IRS Commissioner Commissioner Large Business & International Dep. Comm. for Services & Enforcement Deputy Commissioner (International) Director, International Individual Compliance (IIC) EA Tech. Coord. & Training Campus Compliance Unit Nonresident Compliance Initiatives Offshore Compliance Initiatives Central Withholding Program DFO, IIC Terr Mgr Territory 1 Terr Mgr Territory 2 Terr Mgr Territory 3 Terr Mgr Territory 4 Terr Mgr Territory 5 Future Territory 6

4. LB&I International Function Revised structure EOI Program Treaty Unit JITSIC Deputy Commissioner (International) Assistant Deputy Comm’r (Int’l) Foreign Posts Service-wide Strategy Sam Maruca, Director, Transfer Pricing Operations Nancy Bronsen, West Director, APMA Deputy Director Tom Ralph, Central Matt Hartman, East Combined MAP/APA team 4

5. Large Business and International Division Director, International Business Compliance (IBC) Draft Structure as of 2/6/2012 Director, International Business Compliance Kathy Robbins Washington DC EA – Operations Margie Maxwell Washington DC EA – Technical Donald Murray Columbus OH DFO, IBC East Howard Martin Downers Grove IL DFO, IBC West Carol Poindexter Downers Grove IL Foreign Payments Program Stuart Mann Iselin NJ Training Nieves Narvaez Houston TX International Practice Networks Nanette Hamilton San Jose CA Territory 1 Theodore Setzer New York NY Territory 8 John Hinman Troy MI Inbound Martha Regan Phoenix AZ Territory 9 David Oyler Downers Grove IL Territory 2 Anna Petinova New York NY Outbound Violette Walter Bloomington MN Territory 10 Glen Duncan Farmers Branch TX Territory 3 John Evancho Edison NJ Territory 11 Jackie Topping Phoenix AZ Territory 4 Orrin Byrd Atlanta GA Territory 5 (Foreign Payments) Vacant Territory 12 Vacant Territory 7 (Economists) Lynn Redmond Indianapolis IN Territory 14 (Economists) Dave Jackson Farmers Branch TX

6. Integrated International Program Strategy Metrics Training Networks Data INTERNATIONAL MATRIX

7. The International Matrix The suite of core technical areas that serve as the foundation by which our strategy, training, networks, and data management are developed and utilized

8. Information Gathering Foreign Currency Treaties The “Four Faces” of the Matrix Income Shifting Deferral Planning FTC Management Repatriation BUSINESS OUTBOUND Income Shifting Repatriation/ Withholding Jurisdiction to Tax Inbound Financing BUSINESS INBOUND Jurisdiction to Tax Offshore Arrange- Ments Foreign Tax Credit Pass-Thru Entities Foreign Corporations INDIVIDUAL OUTBOUND Jurisdiction to Tax US Business Activities US Investment Activities INDIVIDUAL INBOUND Corporate Organizations/ Transactions

9. IBC Focus for 2012 • International Practice Networks • Training • Phase Training • Monthly Centras – Continued CPE • Hiring • IBC has internal authorization to move 200 domestic agents to International • International has external authority to hire 100

10. Program Areas of Focus: Three of the areas IBC is currently focusing: • Forms 1120F • Joint Audits • Withholding and FATCA

11. Forms 1120F • Three categories of Forms 1120F we are addressing • Filed Forms 1120F • Protective Forms 1120F • Non Filers

12. Forms 1120F • Have created 1120F Task Team to look at all areas and develop strategies.

13. Protective 1120Fs • Ability to claim deductions • Statute date

14. Joint Audit – Definition Joint Audit is where: Two or more countries Join together to form a single team to Examine issue(s) or transaction(s) Of one or more related taxable persons With cross-border business activities. 14

15. Joint Audit – Definition Taxpayer jointly makes presentations and shares information with the countries The joint audit team will include Competent Authority representatives, joint audit team leaders and examiners from each country. 15

16. Joint Audit Process • Benefit taxpayers by reducing time and cost to address multiple audits with common factual issues • Fully coordinated audit from start to finish for all compliance activities • Allows for acceleration of the Mutual Agreement procedure by early involvement of the Competent Authority where double taxation involved.

17. Joint Audit Process • Important to keep open channels of communication with the taxpayer throughout the joint audit process. • Cooperation of taxpayer and their advisors will be a key factor in securing a satisfactory outcome. • Best if examination years/cycles and processes of countries are the same.

18. Joint Audit Benefits • Development of enhanced relationships between revenue bodies and taxpayers • Providing certainty for taxpayers • Reduction in compliance costs for taxpayer • More effective management of tax issues in real time

19. Withholding and FATCA • Creation of new Territory to address Chapter 3 Withholding • Currently have QI and USWA groups in New York • Territory to also be first responders to issues relating to FATCA