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Wednesday, March 21, 2012

IRS Forms 'SWAT Team' to Go After Corporate Tax Cheats

IRS SwatReuters, IRS Forms 'SWAT Team' for Tax Dodger Crackdown:

The IRS is staffing up with high-powered talent to crack down on companies shifting profits from country to country to lower their tax bills, a strategy the agency has targeted before with only limited success.

The IRS showed its elevated concern on the issue, known as "transfer pricing," last May by hiring Samuel Maruca to fill the newly created post of transfer pricing director. He has since brought aboard specialists from Big Four audit firms KPMG and Ernst & Young, as well as law firm Mayer Brown and boutique consultancy Horst Frisch.

Maruca, who came from law firm Covington & Burling, is still recruiting. He told Reuters the agency previously had "had a difficult time attracting and retaining economists." Now, he said, the IRS's international group "has significant external hiring authority."...

"Anybody who thinks the IRS can ultimately enforce transfer pricing is either an eternal optimist or delusional," said Richard Harvey, a tax professor at Villanova University and former senior adviser to the IRS's Shulman. The staff changes and hiring at IRS "will help them on the margins," Harvey said. "But they're still fighting a very difficult battle where the deck is stacked against them."

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