TEI, Commissioner of Internal Revenue, and Large Business & International Division liaison meeting.

• Position: TECHNICAL SUBMISSIONS

On February 23-24, a delegation from Tax Executives Institute met with the Commissioner of Internal Revenue, John Koskinen, and senior officials of the Internal Revenue Service and with the Treasury Department's Assistant Secretary for Tax Policy, Mark Mazur, and senior officials of Treasury's Office of Tax Policy. The detailed agenda TEI submitted to the Commissioner of Internal Revenue and Large Business & International Division is below.

TAX EXECUTIVES INSTITUTE--COMMISSIONER OF INTERNAL REVENUE AND LARGE BUSINESS & INTERNATIONAL DIVISION LIAISON MEETING February 23, 2016 AGENDA

1. Welcome and Introductions

2. Commissioner's Vision of the "Future State" of the IRS and 2016 Priorities

   Responding to unprecedented budget and staffing challenges, the IRS has begun to retool its operations and deploy new ways of fulfilling its mission. TEI appreciates the vision and leadership Commissioner Koskinen and his executive leadership team are providing to the agency at this challenging time, and we look forward to working with IRS officials in the implementation phase of these new initiatives.

   During the past year, Commissioner Koskinen and other IRS executives have spoken about the "Future State"--i.e., where the IRS wants to be in the next five years--and the operational and technological advances necessary to achieve that goal. We invite a discussion of Commissioner Koskinen's vision of the Future State and how large-business taxpayers' interactions with the IRS will differ in this new environment. We also invite discussion of the time horizon for implementing these initiatives and the Commissioner's other priorities for 2016.

   It was recently reported that the IRS intends to roll out an online system that would allow individuals to self-correct a previously filed return within some parameters without the need to file an amended return. (1) We invite discussion on the scope of self-corrections that will be available and whether the IRS intends to extend this same opportunity to large-business taxpayers.

3. Agency-Wide Budget and Staffing

   Last December, as part of the spending bill that funds federal agencies through September 2016, Congress approved a $290 million increase in the IRS's budget. This welcome boost marks the first IRS funding increase over the past five fiscal years. Nevertheless, the current IRS budget remains roughly $1 billion below its 2010 funding level. TEI's members have begun experiencing first-hand the impacts of these cuts: communications with IRS Service Centers have suffered, exam and appeals cycle times have increased, and agent morale in the field seems to be at an all-time low.

   We invite discussion of staffing expectations for fiscal 2016 in this challenging environment. Questions of particular importance to TEI members include:

   * Will the hiring freeze that has significantly impacted the IRS's work with large-business taxpayers be loosened?

   * Will there be positive or negative changes in levels of Agency resources allocated to LB&I and the sections of Chief Counsel and Appeals that work with large-business taxpayers?

   * Are there any large-business programs that will be directly impacted by these resource constraints?

   It has been reported that the IRS's fiscal 2017 budget proposal will divide requested funds among four agency priorities: taxpayer services, enforcement, operations support, and business systems modernization. (2) The proposal will also identify specific funding levels the IRS seeks for designated initiatives and request that Congress hold the agency accountable for achieving promised results. (3) We invite discussion of this new budget strategy and, in particular, of large-business taxpayer initiatives that will be identified to support specific funding levels.

4. LB&I

   1. Budget/Staffing

      LB&I has been hard-hit by the IRS's decreasing budget. The division is losing a significant number of experienced agents and executives, the hiring freeze is hindering the search for replacements, and reductions in training budget are making it more difficult to fill gaps in expertise. TEI's members work with LB&I professionals on a daily basis and are concerned about the impacts of these staffing issues and budget cuts. To inform TEI member expectations, we invite discussion of near-term implications of these challenges in the context of expected increases or decreases in current year staffing, program challenges resulting from resource constraints, and impact on specialists.

      One area of particular concern to TEI members is staffing levels of the Advance Pricing and Mutual Agreement program (APMA). The OECD's BEPS project has increased international tax enforcement activities around the world and will pose significant challenges to both U.S. multinationals and the U.S. government. We invite discussion of LB&I's budget and staffing plans for APMA and the steps this operating unit is taking to prepare for the inevitable increase in activity.

   2. Division Reorganization & Centralized Risk Assessment

      1. How the Reorganized LB&I Division Will Function in Practice

         LB&I is in the midst of a division-wide restructuring of both its operating structure and its examination process. This is a unique, yet challenging...