Minutes of TEI-LB&I liaison meeting.

• Position: Tax Executives Institute

March 1, 2011

On March 1, 2011, a delegation from Tax Executives Institute met with Heather C. Maloy, Commissioner of the Internal Revenue Service's Large Business & International Division, and other LB&I officials. The following minutes were prepared by Tax Executives Institute and, although reviewed by the IRS, they have not been formally approved by the agency. The agenda for the meeting was submitted in advance and has been published on TEI's website.

LB&I Commissioner Maloy welcomed TEI President Paul O'Connor and the TEI delegation. On behalf of TEI, Mr. O'Connor thanked the IRS for its ongoing commitment to an active dialogue with taxpayers. The IRS and TEI delegations to the meeting are set forth in the accompany boxes.

IRS Delegation

Heather C. Maloy, LB&I Commissioner

Paul D. DeNard, LB&I Deputy Commissioner (Operations)

Michael Danilack, III, LB&I Deputy Commissioner (International)

Cheryl P. Claybough, Director, Pre-Filing and Technical Guidance

Deborah T. Palacheck, Senior Advisor to the LB&I Commissioner

Thomas Brandt, Director, Planning, Analysis, Inventory & Research

John E. Hinding, Director, Advance Pricing Agreement Program

Richard D. Fultz, Deputy Division Counsel

Drita Tonuzi, Deputy Division Counsel

Jane K. Agule, Program Analyst, IRS National Public Liaison

Kathryn L. Gregg, Manager, LB&I Stakeholder Liaison

TEI Delegation

Paul O'Connor, EMD Millipore, TEI International President

David M. Penney, General Motors of Canada Limited, TEI Senior Vice President

Carita R. Twinem, Spectrum Brands, Inc., TEI Secretary

Terilea J. Wielenga, Allergan Inc., TEI Treasurer

Rodney C. Bergen, The Jim Pattison Group, TEI Executive Committee

Michael J. Bernard, Microsoft Corporation, TEI Executive Committee

Janice L. Lucchesi, Akzo Nobel, Inc., TEI Executive Committee

C.N. (Sandy) Macfarlane, Chevron Corporation, TEI Executive Committee

Kelly A. Nall, Hewlett-Packard Company, TEI Executive Committee

Mitchell E. Salamon, American Airlines, TEI Executive Committee

James P. Silvestri, Eisai Inc., TEI Executive Committee

John A. Mann, Walgreen Co., Chair, TEI Federal Tax Committee

Donald J. Rath, Synopsys, Inc., Chair, TEI Financial Reporting Committee

Mark C. Silbiger, The Lubrizol Corporation, Chair, TEI IRS Administrative Affairs Committee

Timothy J. McCormally, TEI Executive Director

Eli J. Dicker, TEI Chief Tax Counsel

Daniel B. De Jong, TEI Tax Counsel

Jeffery P. Rasmussen, TEI Tax Counsel

Benjamin R. Shreck, TEI Tax Counsel

LB&I 2011 Priorities

Ms. Maloy said that the LB&I's 2011 priority is to focus its resources as effectively and efficiently as possible to identify areas of noncompliance, streamline case and issue selection processes, work cases and resolve issues as early as possible, issue guidance where needed, and generally increase certainty and consistency of treatment for all taxpayers. A number of the items on the Institute's agenda, including the Quality Examination Process (QEP), Schedule UTP implementation, and the Compliance Assurance Process (CAP) are part of the Division's efforts, she said. In addition, alternative processes, such as Fast Track Settlement and the Industry Issue Resolution program, are being used more frequently to expedite issue resolution and expand the reach of the IRS's examination processes.

Examination-Related Matters A. IRS Realignment--LMSB to LB&I.

Mr. O'Connor observed that it has been six months since the Division's realignment and invited a discussion about the effect of the reorganization on the Division's programs and procedures. Ms. Maloy said that International issues have consistently been a high priority for examination of large business taxpayers. As part of the reorganization, approximately 300 international examiners were transferred to LB&I from the Wage & Investment and Small Business/ Self Employed Divisions. Middle market companies in the general examination program that rarely saw an IRS examiner in the past are now more likely to be examined, she added. Mr. Danilack observed that international issues require special expertise and knowledge; by consolidating all international examiners into a single division, the agency will be better able to coordinate its examination approach across all IRS divisions. He said that the changes reflect a need to concentrate resources and instill a single, integrated mindset on global issues. There will be few procedural changes, he added, saying that the realignment will help focus field and national expertise. Mr. DeNard added that international examiners will be better able to share their international expertise and industry knowledge.

Ms. Lucchesi inquired about the status of the industry issue focus (or tiered-issue) examination program. Ms. Maloy responded that no new issues have been added to the tiered-issue program since she became the Commissioner, but several issues have been moved to "monitoring" status. She explained that the IRS needs a mechanism to coordinate its examination and resolution of significant complex issues to ensure consistent treatment of taxpayers. The agency is reviewing the efficacy of the tiered-issue program in achieving that objective.

2. Quality Examination Process-An Update

   Mr. Silbiger commended the IRS...