Statement of Objectives TCJA International Tax Modeling Tool 04-08-2020.pdf

Statement of Objectives

Tax Cuts & Jobs Act (TCJA) International Modeling Tool

1.0 PURPOSE

Provide software tool to Internal Revenue Service (IRS) revenue agents that will allow them to efficiently review tax return information in order to identify tax compliance risks and model potential taxpayer planning strategies as a result of international tax law changes brought about by the Tax Cuts & Jobs Act (TCJA) of

2017.

2.0 BACKGROUND

The Department of the Treasury, Internal Revenue Service (IRS) in support of the

Cross Border Activities (CBA) Practice Area within LB&I is seeking information on a tool that allows for extensive modeling of international tax rules introduced by the

TCJA of 2017 ,and existing tax low provisions. In addition the IRS is seeking information on how the tool could be customized to fit the IRS’ tax enforcement needs, training on how to use the tool, maintenance, with the eventual goal of integrating the tool into the IRS’ operations.

The Cross-Border Activities Practice Area within the Large Business &

International (LB&I) Division of the IRS is charged with enforcing taxpayer compliance with many of the new TCJA international business provisions. LB&I has approved a TCJA International Compliance Strategy and providing revenue agents the tools to efficiently identify compliance issues. Understanding taxpayer planning is integral to the strategy’s success.

OBJECTIVES

1. Provide revenue agents with helpful tools in the field

Revenue agents will be able to use this tool to more efficiently identify issues, which will save thousands of hours of time in the planning, development, and resolution phases of a tax examination.

2. Provide better service to taxpayers

The tool will allow IRS examiners to more efficiently conduct examinations by focusing their information requests and issue development on the most material compliance issues, which will reduce the amount of time that taxpayers will be required to spend on IRS examinations.

Statement of Objectives Page 2

Tax Cuts & Jobs Act (TCJA) International Modeling Tool

3. Ensure the tool is flexible enough to meet the needs of the Internal

Revenue Service Large Business & International Division

The tool must be capable of modeling on the various types of taxpayers in the

IRS Large Business & International Division (LB&I) taxpayer population. The model would allow revenue agents to run different models so that they can better understand how changing certain items of income, deductions, and credits will affect the taxpayer’s ultimate liability.

4. Ensure that training is provided to IRS employees who will be using the tool.

The tool will need to be user friendly, so that IRS agents in the field would be comfortable using it and to ensure proficiency in its use.

5. Procure a tool is compatible with IRS systems

The tool must be able to interface with various taxpayer data sets that the IRS maintains, such as MeF data, data in XML formats, and the IRS’ compliance data warehouse (CDW)

6. Procure a tool that can be maintained by the IRS

The IRS would need to understand the programming that runs the tool, receive training on how to maintain the tool, and ultimately have IRS personnel make updates to the tool.