The IRS is taking substantial heat from the US Senate regarding its decision to hire an outside law firm to assist with an investigation into Microsoft’s alleged activities to shift profits offshore as part of a tax reduction strategy. The IRS audit staff, the “IRS Office of Chief Counsel and Justice Department employ excellent attorneys who should be more than able to conduct an examination without turning over interviews and document requests to private contractors,” scolded the Senate Finance Committee Chairperson.
This raises concerns about how an agency, who consistently decries their underfunding, could pay $1,000 an hour to outside contractors for taxpayer examinations can only be conducted by Treasury officials unless Congress approves different legal measures. The committee is concerned that the IRS has undertaken an “unprecedented expansion of the role of outside contractors in the examination process, and one that violates” federal provisions.
One aspect is clear: the IRS and the US Justice Department are cracking down on all US companies and individuals who use offshore strategies to hide assets or income, or otherwise shelter themselves from US tax exposure. If you have received a letter from a foreign bank, or are concerned about the status of your FBAR reporting or OVDP we invite you to contact us for a free consultation at 866-631-3470.
