Daily Tax Update - April 9, 2015: IRS Commissioner Warns of More Burdensome Business Audits and Less Corporate Guidance

IRS Commissioner Warns of More Burdensome Business Audits and Less Corporate Guidance:  Speaking at an Urban-Brookings Tax Policy Center event on April 8, IRS Commissioner John Koskinen described several challenges faced by the IRS, including budget cuts.  Commissioner Koskinen stated that “[t]he negative impacts of our underfunding extend to the business side as well.  It might sound like good news to corporations that we’re conducting fewer audits, but the ones we do are likely to be more burdensome, because we have fewer examiners with specialized training who understand complex business issues.  As for tax law guidance needed by businesses, we are having to target our resources more to retail issues involving individuals and 1040s.  That means guidance sought for more highly specialized issues in the corporate arena will likely suffer as a result.”

IRS Updates FAQs on FATCA IDES System:  The IRS has updated FAQs regarding the International Data Exchange Services (IDES) system that allows the IRS to exchange taxpayer information with foreign tax authorities.  The FAQs include new questions and answers addressing data format, transmission of data, and encryption.  The IRS also released Publication 5216, which describes certain technical issues relevant to notifications that foreign financial institutions, direct reporting non-financial foreign entities, and host country tax authorities will receive from the IRS with respect to their FATCA reporting.