DCCurrents: IRS refocuses large business operations, highlights international and global high-wealth cases.

• Author: Goldstein, Benson S.

THE IRS HAS DONE MUCH TO REFOCUS the work of its former Large and Midsize

Business (LMSB) Division. Last summer, Commissioner Douglas Shulman announced that the IRS was changing the name of the LMSB to the Large Business and International (LB&I) Division. Like LMSB's prior jurisdiction, the LB&I will continue to focus on corporations, S corporations, and partnerships with total assets of $10 million or more.

The name change reflects that the IRS's international strategy is intensifying. In announcing the reorganization, Shulman stated, "Every day, we are moving forward in our international compliance efforts. Bringing together our top international personnel in this new group will help us advance our global tax administration efforts and ensure focus and fairness in a critical area for our nation" (IR-2010-88).

The IRS sees the LB&I realignment as strengthening international compliance by:

* Helping the IRS identify emerging international compliance issues more promptly;

* Allowing the agency to dedicate its professional staff to the most pressing international issues;

* Increasing international specialization among IRS staff;

* Enabling the IRS to coordinate competent authority issues more closely with field staff; and

* Centralizing and enhancing the IRS's focus on transfer pricing.

This column provides highlights of some of the LB&I's new or emerging initiatives, including (1) LB&I's Global High Wealth Industry Group, (2) a second offshore disclosure initiative, and (3) the concept of a joint audit process between the United States and other countries.

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Global High Wealth Industry Group Cases

In launching LB&I last summer, Commissioner Shulman announced the establishment of a Global High Wealth Industry Group within LB&I. The group focuses on bolstering the tax compliance of high-wealth persons, with a particular emphasis on reviewing complex legal structures and passthrough entities, such as partnerships, limited liability companies, trusts, private foundations, and other enterprises. Tax Notes Today reports that the new LB&I industry group has approximately 100 staff members reviewing 250 enterprises, with about 40 active cases outstanding (Coder, "IRS Close to Announcing Details of New Offshore Disclosure Program, Official Says," 2011 TNT 15-1 (January 24, 2011)).

The Global High Wealth Industry Group has been established at a time when the IRS is making a concerted effort to increase the examination rate of...