TEI--Commissioner of Internal Revenue Liaison meeting minutes: March 1, 2012.

On March 1,2012, a delegation from Tax Executives Institute met with Douglas H. Shulman, Commissioner of Internal Revenue, and other senior officials of the Internal Revenue Service. The following minutes were prepared by Tax Executives Institute. Although reviewed by the Internal Revenue Service, they have not been formally approved by the agency. The agenda for the meeting was published in the January-February 2012 issue of The Tax Executive and on TEI's website.

IRS Commissioner Douglas H. Shulman welcomed TEI President David M. Penney and the TEI delegation. He noted the importance of the liaison meetings to facilitate open discussion on issues of common interest, which promotes better tax administration. On behalf of TEI, Mr. Penney expressed the Institute's thanks to the Commissioner for the IRS's ongoing commitment to active dialogue. The IRS and TEI delegations are set forth below.

IRS Delegation

Douglas H. Shulman

Commissioner of Internal Revenue

Steven T. Miller

Deputy Commissioner (Services and Enforcement)

William J. Wilkins

Chief Counsel, Internal Revenue Service

Paul D. DeNard

LB&I Deputy Commissioner (Operations)

Michael Danilack, III

LB&I Deputy Commissioner (International)

Chris Wagner

Chief, Office of Appeals

Stephen A. Whitlock

Director, Whistleblower Office

Erik Corwin

Deputy Chief Counsel (Technical)

John Lipold

Chief, Relationship Management, National Public Liaison

Carol A. Campbell

Deputy Chief of Staff to the Commissioner of Internal Revenue

Candice V. Cromling, Director

Office of National Public Liaison

Kathryn L. Gregg

Manager, LB&I Stakeholder Liaison

Jane K. Agule

Program Analyst, National Public Liaison (Communications & Liaison)

TEI Delegation

David M. Penney

General Motors of Canada Limited

TEI President

Carita R. Twinem

Spectrum Brands Holdings, Inc.

TEI Senior Vice President

Terilea J. Wielenga

Allergan, Inc.

TEI Secretary

Mark C. Silbiger

The Lubrizol Corporation

TEI Treasurer

Daniel R. Goff

Xilinx, Inc.

TEI Executive Committee

C.N. (Sandy) Macfarlane

Chevron Corporation

TEI Executive Committee

Brian C. Ugai

Starbucks Coffee Company

TEI Executive Committee

Robert L. Howren

BlueLinx Corporation

Chair, TEI Federal Tax Committee

Michael J. Bernard

Microsoft Corporation

Chair, TEI IRS Administrative Affairs Committee

Jocelyn P. Krabbenschmidt, amazon.com

Chair, TEI International Tax Committee

Donald J. Rath

Synopsys, Inc.

Chair, TEI Financial Reporting Committee

Timothy J. McCormally

TEI Executive Director

Eli J. Dicker

TEI Chief Tax Counsel

Jeffery P. Rasmussen

TEI Senior Tax Counsel

Daniel B. DeJong

TEI Tax Counsel

Benjamin R. Shreck

TEI Tax Counsel

Commissioner's 2012 Priorities

Mr. Shulman reported that budget cuts and expanded responsibility have forced the IRS to do more with less. Budget reductions have included $200 million eliminated from targeted programs, and $300 million from core operations. While efficiency gains have been achieved in some areas, the depth of the cuts has adversely affected some core operations. For example, phone and paper processing times have increased as a result of reduced resources. The large number of tax provisions expiring at the end of 2011 will create additional pressure on the IRS in 2012, Mr. Shulman stated that major tax reform appears unlikely to occur before the November election, but he noted that significant tax legislation could be enacted during the lame duck session of Congress.

Mr. Shulman summarized two key pieces of the IRS's strategy with respect to large business taxpayers. First, the IRS will focus on responsibly engaging with large business to provide taxpayers with additional certainty. While some corporate taxpayers may choose to litigate issues, most desire the certainty that comes from earlier resolution of issues. Initiatives in this area include Fast Track Settlement, the implementation of Schedule UTP, Pre-Filing Agreements, and innovative work in the international arena such as joint audits. Second, there has been a marked increase in the IRS's focus on international issues. Within LB&I, there are efforts to better understand the businesses being audited and the context and purpose of significant transactions. This represents a significant change for the IRS, resulting in better and more efficient service by avoiding unproductive issues.

Resources and Budget

Ms. Wielenga noted taxpayers' awareness that the IRS continues to juggle an increasing...