Paul L. Caron

Friday, July 26, 2013

IRS Is Pursuing 'Stateless Income' Tax Enforcement

Reuters:  IRS Pursuing 'Stateless Income' Tax Enforcement:

The IRS is pursuing tax enforcement cases against companies over the issue of "stateless income," a senior agency official said on Wednesday in a reference to corporate profits that are not taxed by any country.

Erik Corwin, an IRS deputy chief counsel, said there were international tax disputes with companies, "most involving consequences of complex restructurings designed either to create stateless income or to affect a tax efficient repatriation. So those are a family of cases that are in the pipeline and being looked at," he told tax lawyers in a speech in Washington.

Asked by reporters later to elaborate on any litigation, Corwin declined to comment. But tax lawyers said the references to stateless income and profits held offshore could signal a new enforcement approach by the IRS.

"I have not heard the IRS use the term before," Edward Kleinbard, who coined the "stateless income" phrase in a 2007 research paper [also here], said in a telephone interview. He is a former chief of staff to the congressional Joint Committee on Taxation and now a professor at the University of Southern California Gould School of Law.

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