Post on 11-Jan-2016
description
Large & Mid-Size Business Division
LMSB International Realignment
NTEU Briefing
Washington, DCAugust 2010
DISCUSSION DOCUMENT
CONFIDENTIAL – DO NOT DISTRIBUTE
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Background
The IRS has identified increased compliance risk resulting from greater complexity of international tax laws and business structures
LMSB International is charged with providing guidance and support within LMSB on international issues and cases and leading IRS’ service-wide international tax strategy
Under the Large Business and International Expansion (LB&IE) Initiative, LMSB International will be positioned to (1) enhance the IRS’s focus on transfer pricing and on offshore and international individual compliance, (2) expand its overseas attaché staff, and (3) develop new international metrics
Objectives
Augment and structure International organization to be successful in managing all service-wide international issues by:
(1) Aligning international strategy with the frontline
(2) Consolidating international specialists to optimize knowledge and allocation of resources
(3) Developing a Transfer Pricing Practice that coordinates closely with APA
Realign LMSB to realize the vision of strategic issue focus, eliminate geographic barriers to expertise, improve collaboration between its examiners and policy makers
Executive Summary
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Highlights of Proposed Change
The name of the Large and Mid-size Business (LMSB) will change on Oct. 1 to the Large Business and International division (LB&I)
The new LB&I division will realign from Industries and Pre-Filing & Technical Guidance (PFTG). International specialists and issue specialists, field specialist economists, international technical advisors, and related staff—approximately 875 employees in total—will move to the existing International organization, reporting to the Deputy Commissioner, International
The realigned LB&I will continue to serve the same population of taxpayers — corporations, subchapter S corporations and partnerships with assets greater than $10 million as well as certain high wealth individuals
LB&I will include a transfer pricing director, who will continue piloting the new transfer pricing practice, and a chief economist, who will oversee the IRS’s economic positions pertaining to transfer pricing
LB&I is also charged with overseeing the implementation of the recently enacted Foreign Account Tax Compliance Act (FATCA). Signed into law in March, FATCA will substantially improve international information reporting, increasing international transparency and compliance
Heather C. Maloy will continue serving as Commissioner of LB&I. Michael Danilack, Deputy Commissioner, International, will head the realigned global unit. Paul D. DeNard will continue serving as Deputy Commissioner (Operations)
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LMSB CommissionerLMSB Commissioner
LMSB Organizational Chart – Existing State
Field Organization Total StaffTotal
International Staff
International Staff
East West
FIELD SPECIALISTS 1222 134 76 58
CTM 838 142 49 93
FS 795 155 150 5
HMT 995 100 61 39
RFPH 805 138 71 67
NRC 910 178 94 84
PFTG 163 28
TOTAL 5728 875
NE 386
LMSB’s current structure illustrates wide dispersal of international specialists
Deputy CommissionerInternational
(Total Int’l Staff: ~549)
Deputy CommissionerInternational
(Total Int’l Staff: ~549)
Deputy CommissionerOperations
(Total Ops Staff: ~6080)
Deputy CommissionerOperations
(Total Ops Staff: ~6080)
CTMCTM
NRCNRC HMTHMT
FSFS
RFPHRFPHGHWGHW
ICS&PICS&PTA&ICTA&IC M&FM&F
EEOEEO
JITSICJITSIC RWI (PSP)RWI (PSP) PQASPQAS BSPBSP PFTGPFTG Field Specialists
Field Specialists
Deputy East
West
East
West
East
West
East
West
East
West
455292 12 3786 163 163 1222
838
795
995910
80543
458
364
501
471451
438
360
424
641
565
Man. 380
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The realignment directly responds to challenges in the existing structure that make it difficult to link international strategy to frontline expertise
Challenges with Existing LMSB Structure
The current distribution of international specialists throughout LMSB creates the following challenges:
Impeding collaboration and program management
Creating geographic barriers to expertise
Separating International Examiners (IEs) from National Office policy makers
Preventing the strategic selection of workload
Benefits of Realigned LB&I Division
Centralizing international specialists will provide the following benefits:
Identifying emerging international compliance issues more quickly
Removing geographic barriers, allowing for the dedication of IRS experts to the most pressing international issues
Increasing international specialization among IRS staff by creating economies of scale and improving IRS international coordination
Ensuring the right compliance resources are allocated to the right cases
Consolidating oversight of international information reporting and implementing new programs, such as the Foreign Account Tax Compliance Act (FATCA)
Coordinating the Competent Authority more closely with field staff that originate cases, especially those dealing with transfer pricing
Otherwise centralizing and enhancing the IRS’s focus on transfer pricing
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Director, Int’l Strategy & Service-Wide Coordination
Director, Int’l Corporate Taxation
(ICT)
AgreementCoord
LB&ICommissioner
Director, Int’l Individual Taxation
(IIT)
DFOInt’l Corp Tax
East
DFOInt’l Corp Tax
West
Int’l Corporate Tax Strategy
Director, Transfer Pricing
EA EA EA
Deputy Commissioner, International
IRS Commissioner
Int’l TAs
Foreign Payments
Competent Authority
EOI & JITSIC
Service-Wide
Strategy
2 2211 1
1
4122222618
18
Deputy, Int’l Individual Tax
Terr Mgr Territory 1
Terr Mgr Territory 2
Terr Mgr Territory 3
Terr Mgr Territory 5
Int’l Individual Tax Strategy
IOC / FRC GHW
Campus Compliance
Unit
66
80
64
45
74
Terr Mgr Territory 4
36
2 12
TBD
The realigned LB&I international structure will bring IEs, economists, and other international specialists together, supported by executives
LB&I International Future State Organization
Economists East
76
TerritoriesTerritoriesTerritoriesTerritories 385 TerritoriesTerritoriesTerritoriesTerritories 293
Economists West
58
Senior Advisors
Executive Assistant
Chief Economist
1
482 TAs 8
482 Issue Specialists
47
IRS Deputy Commissioner for
Services & Enforcement
Changes from Current State International specialists and Economists shift to
International to emphasize issue focus Transfer Pricing specialization area includes 482
Issue Specialists, 482 TAs, and a Chief Economist
Changes from Current State International specialists and Economists shift to
International to emphasize issue focus Transfer Pricing specialization area includes 482
Issue Specialists, 482 TAs, and a Chief Economist
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22
11
22
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The realignment will impact International Examiners and specialists, though most impacted employees will remain in their current group
Impacted employees are those assigned to the following Standard Position Descriptions (SPDs): – 91987 - GS-512-12 International Examiner – 91983 - GS-512-13 International Examiner– 96628 - GS-512-14 International Issue Specialist – 94734 - GS-512-14 Senior International Examiner
Details on Employee Impact
Most of the impacted employees will remain in their current group and the group will be realigned in its entirety
Employees who are currently in blended groups comprised of both domestic agents and IEs may be realigned to a different group:
– If IEs are in a blended group, they will be realigned to an International group
– If domestic agents are in a blended group which is managed by a team manager who is assigned to an International team manager SPD, the domestic agents will be realigned to a domestic group and remain in their current industry
International examiners will no longer control cases.
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LMSB foresees no change to employees' workstations, PODs, SPDs (other than organizational locations) or critical job elements as a result of this initiative. Flexi-place and AWS arrangements will likewise remain unchanged
Two domestic groups in Manhattan, Group 1031 and Group 1197, currently part of the Financial Services Industry, will be realigned to the International organization due to the specialized work they do related to qualified intermediaries and withholding respectively. They will function as they do currently and will continue to control their case work
LMSB's Economists, who currently are part of the Field Specialist organization, will be realigned to International, due to the fact that more than 90% of their work is international in nature. Their realignment will provide a uniform and consistent approach to international issues. The two current Economist territories will be realigned in tact under a new executive
The support staff who are assigned to any of the above impacted groups will be realigned with their groups
The realignment will impact International Examiners and specialists, though most impacted employees will remain in their current group (cont.)
Additional Details on Employee Impact
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Several pending decisions related to the international realignment are still being considered
Description of Pending Decisions
Migration of International Examiners and Specialists in Non-IE Groups: We are still determining the process and criteria for deciding where and how to migrate international examiners and other international specialists who currently reside in blended groups, including those in the Global High Wealth Industry (Article 15, Section 2A.1)
Transition of IE Case Control for Current Inventory: We are still determining how to best transfer and complete cases that international examiners are currently controlling
Any other potential issues identified during the briefing