TEI liaison meetings: commissioner of internal revenue and large business & international division liaison meeting.

• Position: TECHNICAL SUBMISSIONS

On February 26,2015, a delegation from Tax Executives Institute met with John A. Koskinen, Commissioner of internal Revenue, and other officials of the Internal Revenue Service. 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 was published in the May/June 2015 issue of Tax Executive magazine and on TEI's website.

IRS Delegation

John A. Koskinen, Commissioner of Internal Revenue

John M. Dalrymple, Deputy Commissioner Services and Enforcement

William J. Wilkins, IRS Chief Counsel

Kirsten Wielobob, Chief Appeals

Heather C. Maloy, Commissioner, Large Business and International (LB&I) Division (by phone)

Douglas O'Donnell, Deputy Commissioner (International), LB&I

J. David Varley, Director, Transfer Pricing Operations (Acting)

Nikole Flax, Special Assistant to the Chief, Appeals

Thomas Brandt, Chief Risk Officer

Kimberly Edwards, Director, Field Operations (North West) Acting (by phone)

Rosemary Sereti, Assistant Deputy Commissioner for Services and Enforcement

Terry Lemons, Chief, Communications and Liaison

John Lipoid, Chief, Relationship Management, Office of National Public Liaison

Kathryn Gregg, Stakeholder Liaison Program Manager, LB&I

TEI Delegation

Mark C. Silbiger, The Lubrizol Corporation, TEI International President

Charles N. (Sandy) Macfarlane, Chevron Corporation, TEI Senior Vice President

Janice L. Lucchesi, TEI Secretary

Robert L. Howren, BlueLinx Corporation, TEI Treasurer

Paul Magrath, AstraZeneca Canada, Inc., TEI Executive Committee

Karen E. Miller, FusionStorm, TEI Executive Committee

Gary P. Steinberg, Level 3 Communications, Inc., TEI Executive Committee

David E. Stevens, Cook Inlet Region, Inc., TEI Executive Committee

Ernest N. Gates, Wal-Mart Stores, Inc., Chair, TEI IRS Administrative Affairs Committee

Gary P. Hickman, Oldcastle, Inc., Chair, TEI Federal Tax Committee

Eli J. Dicker, TEI Executive Director

W. Patrick Evans, TEI Chief Tax Counsel

Benjamin R. Shreck, TEI Tax Counsel

Lee Gillespie-White, TEI Corporate Counsel

Welcome and Introductions

Mr. Silbiger expressed his gratitude for the open dialogue between the Commissioner, TEI members, and the IRS's operating divisions during TEI's annual liaison meetings and thanked the Commissioner and members of his staff for hosting the meeting and taking the time to meet with the Institute's delegation.

Commissioner's 2015 Priorities

The Commissioner welcomed TEI and outlined the major challenges the IRS is facing with budget cuts. He added that the IRS must continue to work effectively even while facing declining resources. One of the ways to manage resource constraints, he said, is to move more quickly into the digital world. Questions that are facilitated by digital exchanges allow for quick responses.

The ultimate goal, he said, is to become more efficient, even while facing added tax administration responsibilities, such as the Affordable Care Act reporting regulations, implementation of the Achieving a Better Life Experience Act, and the certification requirement for professional employer organizations.

The Commissioner summarized the range of items on the IRS's agenda, including cyber security to avoid ID theft and refund fraud, and improper payments of the earned income tax credit, among others. He noted that the IRS may ask for Form W-2 in January, when certain states receive them, to start the filing season earlier.

Leveraging Stakeholders

The Commissioner said that TEI is a valued stakeholder and stressed the importance of hearing concerns from various IRS constituencies and receiving constructive feedback. He added that the idea of conducting a joint training program with TEI was intriguing and he would be delighted to pursue the opportunity if appropriate. He noted that the IRS is currently partnering with tax preparers on training.

TEI's delegation added that it would like to further interact with the IRS to complement TEI's business knowledge with the IRS's technical knowledge to their mutual benefit. The ensuing discussion focused on how to make collaboration on both technical and procedural matters affordable and workable.

The Commissioner agreed that the fair administration of the tax process was a joint goal that required more joint training. He said he was pleased to learn at a Forum on Tax Administration meeting that the compliance assurance process (CAP) was identified as a successful example of how a tax authority can work collaboratively with large business taxpayers. Collaboration can lead to agreement between taxpayers and the IRS on issues to address and, in many instances, is a more efficient way to achieve revenue administration goals than a traditional audit. He added that he had a recent discussion about the CAP program on Capitol Hill.

Compliance Assurance Process

The TEI delegation said that the CAP program is a model for best practices in tax administration and that the monthly conference calls between TEI's CAP subcommittee and LB&I officials who oversee the CAP program are a good example of communications between taxpayers and the IRS where issues can be discussed and efficiently resolved in an informal setting. TEI's delegation expressed enthusiastic interest in continuing these informal interchanges with new LB&I leadership. TEI outlined some concerns with the evolution of CAP, including that some auditors tend to revert to traditional audit practices, rather than recognizing they are operating in the CAP environment and adhering to established materiality thresholds. In addition, there are difficulties in examining research credit...