IRS rolls out new international tax issue-based compliance campaigns

Service may eventually eliminate FATCA withholding on gross proceeds

The IRS’s Large Business and International (LB&I) division has recently announced several new international tax compliance campaigns as part of its most recent compliance campaign release. Initially rolled out in Jan. 2017, the LB&I division will be targeting several specific compliance issues as part of a new audit strategy referred to as ‘campaigns.’ This campaign based audit strategy is designed to help build a supportive infrastructure inside LB&I and redefine large business compliance work. Taxpayers should take note because these campaigns are important indicators of where the IRS will spend its audit resources.

Since the initial roll out, the LB&I division has issued six separate releases – Nov. 2017, Mar. 2018, May 2018, July 2018, Sept. 2018, and Oct. 2018 – identifying a plethora of campaign items, ranging in focus from pass-through compliance to international tax withholding.  Of the LB&I campaigns announced thus far, 25 are issue-based compliance campaigns directed at businesses and taxpayers with foreign operations or activity.

Below is a listing of the international tax specific campaigns of the most recent release (Oct. 2018), along with the specific practice area, treatment stream (planned IRS method of addressing noncompliance) and the lead executive. The IRS previously acknowledged that some of its campaigns may require modification because of the enactment of the Tax Cuts and Jobs Act and it is continuing to review the law’s impact.