The U.S. Internal Revenue Service hopes to hire 300 more agents to scrutinize multinational corporations' tax returns, shifting scarce resources into the international arena, a senior agency official said on Monday.
To help shift resources to international work, the IRS is offering buy-outs to agents doing domestic work, said Steven Miller, a deputy IRS commissioner, speaking at a tax conference.
The IRS in recent years has been boosting its focus on international tax filings, increasing the number of agents to 856 last year from 13 in 2001.
"We're not done yet," Miller said.
Facing a 2.5 percent budget cut for fiscal 2012, the IRS cannot grow the size of its work force, tax professionals have said. Some employees are being reassigned to international work while private-sector recruits have also been brought aboard.
Meanwhile, the agency will increasingly examine businesses with assets between $10 million and $250 million, Miller said.
Special scrutiny will also be extended to partnership businesses, where earnings are taxed on the individual side of the code. These "pass-through" companies account for more than half of all U.S. business income.
"We are seeing a significant increase in the percent of flow-through filings and we need to pay attention to it," Miller said.
The IRS is also analyzing new data on businesses filing "uncertain tax positions," Miller said.
Beginning in 2010, companies had to tell IRS where they think a dispute could occur over tax payments, deductions or credits.
There were 133 businesses, or 3 percent of all UTP filings, that did not meet IRS requirements. Those businesses that erred will not need to refile for 2010, but will be examined by IRS for future years.
Ironically, large accounting firms prepared the incorrect UTP filings, Miller said.
"Too many of these failed disclosures were actually prepared by large accounting firms, and I'm not sure how that happens," he said, without naming names.
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