TEI's statement to IRS oversight board: May 1, 2013.

• Position: Tax Executives Institute

On May 1, 2013, TEI's International President, Carita Twinem, provided testimony on behalf of TEl to the IRS Oversight Board in connection with the Board's public forum on advancing tax administration. Ms. Twinem's written comments, which are reproduced below, focused on improving international tax administration and addressed three broad themes: 1) transparency, 2) commercial awareness, and 3) clear and certain pathways to resolution. Patrick Evans, TEI's Chief Tax Counsel, assisted Ms. Twinem in the preparation of her comments.

**********

I am Carita R. Twinem, Vice President-Tax for Spectrum Brands Holdings, Inc., located in Madison, Wisconsin, and I am here today in my capacity as International President of the Tax Executives Institute. The IRS Oversight Board was created pursuant to the IRS Restructuring and Reform Act of 1998 to improve the IRS so that it may better serve the public and meet the needs of taxpayers. On behalf of TEI, I am pleased to submit this statement in conjunction with the Board's May 1, 2013, Public Forum on Advancing Tax Administration.

Today, our worldwide international tax systems are at a critical juncture. Our economies are becoming globally integrated as a result of advances in technology, the increasing mobility of capital, and the increasing importance of services and intangible assets as value drivers in the global supply chain. This dynamic environment presents taxpayers and tax administrators around the world with significant challenges to develop or refine approaches to tax compliance and administration that properly reflect these new realities. My remarks today focus on three broad themes that we believe should inform their efforts: 1) transparency, 2) commercial awareness, and 3) clear and certain pathways to resolution.

Background on Tax Executives Institute

Tax Executives Institute was established in 1944 to serve the professional needs of in-house tax practitioners. Today, the Institute has 55 chapters located in the United States, Canada, Europe, and Asia. Our 7,000 members are accountants, attorneys, and other business professionals who work for 3,000 of the leading global companies and are responsible for conducting the tax affairs of their companies and ensuring their compliance with the tax laws. TEI represents the business community as a whole, and our members work with the tax code in all its complexity, as well as with the Internal Revenue Service, on almost a daily basis. Many of our members work for companies that are under continual examination by the IRS's Large Business & International Division. TEI is dedicated to assisting the development and effective implementation of sound tax policy, to promoting the uniform and equitable enforcement of the tax laws, and to reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike. We are proud of our record of working with regulators, including the Internal Revenue Service and the Canada Revenue Agency, as well as the Organisation for Economic Co-operation and Development, and other authorities to develop best practices and help improve tax administration.

Discussion

Over the past few decades, U.S. companies have, at an ever accelerating pace, expanded nearly all facets of their business operations into foreign jurisdictions. At the same time, however, the U.S. worldwide international tax system has become outdated and dauntingly complex. This has created significant compliance challenges for U.S. multinationals and administrative challenges for the IRS. Complying with the tax laws of foreign jurisdictions is also complex, particularly in light of the different languages, economic systems, and customs that multinationals confront when attempting to comply with foreign tax requirements.

Most multinational businesses view tax liabilities (and the associated compliance costs) as business expenses that must be managed like any other expense. Multinationals possess neither unlimited time nor unlimited resources to dedicate to their tax compliance and reporting obligations. Indeed, owing to the economic downturn, business taxpayers (and the IRS alike) are struggling to do more with less. Nevertheless, multinationals continue to strive to "get it right" the first time within the practical constraints of their business resources.

Against this background, obtaining certainty and avoiding unanticipated outcomes are key objectives when managing business issues, and multinational enterprises place a high value on their ability to finalize tax positions in a timely and efficient manner. Three aspects of international tax administration are central to achieving these objectives. First, transparent relationships with tax administrators --multinationals seek to partner with tax administrators to create transparent, cooperative relationships that foster certainty and efficiency and benefit both parties...