Executive Summary

Objective and Scope

Background

Results

Conclusion

Appendix I - Detailed Objective, Scope, and Methodology

Appendix II - Major Contributors to This Report

Appendix III - Report Distribution List

Appendix IV - Survey of International Examiner Revenue Agents

Appendix V - Survey of International Enforcement Program Managers

Appendix VI - Management's Response to the Draft Report

Executive Summary

In 1991, the Internal Revenue Service (IRS) established the International Field Assistance Specialization Program (IFASP) to provide technical assistance in the examination of certain complex international tax issues so that there would be, among other benefits, increased revenue raising capabilities, fewer disputes due to better developed issues, and less time spent on examinations. The IRS developed the program because of the rapid growth of international tax issues during the 1970s and 1980s. Likewise, the IRS recognized it had a relatively inexperienced workforce in the international enforcement area.

The resources devoted to the IFASP are relatively small (approximately $1.5 million annually), considering its 8 specialists are responsible for assisting approximately 631 international examiners in areas of complex international tax law. To meet their responsibilities, IFASP specialists are expected to deliver a program of direct field assistance by providing written audit techniques and guidelines, continuing professional education, and documents outlining the IRS’ position on complex areas of international tax law. Given the program’s limited budget and high expectations, we determined if the management information system (MIS) of the IFASP provided reliable measures to document the performance of the program.

The IFASP is an important resource to the International Enforcement Program and is staffed with experienced international examiners who are trained in complex areas of international law. However, there are limitations with the MIS that kept us and the IRS from determining whether the IFASP was realizing the benefits expected when the IFASP was implemented. In addition, the IFASP’s customers suggested actions could be taken to enhance the way services are delivered.

The IFASP was established to support and improve international examinations that annually result in billions of dollars of recommended additional taxes. The IFASP’s eight specialists were well-trained, experienced international examiners. The specialists had, collectively, 122 years of experience in the IRS’ International Program, and each of the specialists earned at least 80 hours of continuing professional education in international tax issues during the last 2 years.

We conducted 2 surveys and received responses from 67 international examiners on 1 survey, and 60 group managers and 9 attorneys that were management officials in the Office of the Associate Chief Counsel (International) on the other. The results in both surveys showed strong support for the IFASP. In the survey of the international examiners, 64 percent of the respondents indicated that the IFASP involvement helped them in their examination and most said they would use IFASP again. Eighty-seven percent of the management officials believed that the IFASP assistance improved the quality of examinations.

Ideally, effective MISs enhance program accountability by supplying managers with critical information for documenting performance, measuring progress towards achieving goals, and reporting accomplishments – in short, whether the benefits are being realized. However, neither the IRS nor we could quantify how much actual effect the IFASP has had on international tax issues or if more examinations could have benefited from the IFASP. Moreover, international examination assessments are trending downward, the number of examinations with international tax issues is increasing, and the IFASP customers suggested actions could be taken to enhance the way services are delivered. Because of these conditions, we believe there are opportunities to enhance the program.

One improvement lies with linking the IFASP indicator in the International Case Management System (ICMS) to the specific issues that the IFASP helped develop. Not specifying in the ICMS database which issue(s) the IFASP was involved with makes it difficult, if not impossible, to measure the effect the IFASP has on any given issue or examination. Another opportunity for improvement lies with improving the way the IFASP delivers its services. IFASP assistance is usually requested and given over the telephone. While the telephone can be an efficient way to communicate on an individual basis, our survey of international examiners and managers suggests that the IRS management has not fully leveraged the benefits of communications technology. Approximately 82 percent of respondents indicated that they would like to exchange more information electronically with the IFASP through the IRS’ Intranet.

The Commissioner, Large and Mid-Size Business Division, should take steps to improve the MIS by better linking the IFASP to specific issues listed in the ICMS. Further, the IFASP’s service delivery could be enhanced by receiving and disseminating more information electronically.

Management’s Response: The Commissioner, Large and Mid-Size Business Division, agreed with our recommendations. The LMSB Division is currently in the process of revising and incorporating the ICMS into the Coordinated Examination Management Information System (CEMIS). As part of the revision they will add an IFASP involvement indicator to specific issues listed on CEMIS.

The LMSB Division is also in the process of providing all of its employees secured Intranet access so they can communicate from the audit site. The Division is developing a referral process for specialists to provide services to all IRS personnel, and the IFASP electronic referral will be included in this process.

Management’s complete response to the draft report is included as Appendix VI.

Objective and Scope

Our objective was to determine if the management information system (MIS) of the International Field Assistance Specialization Program (IFASP) provided reliable measures to document the performance of the program. The audit tests were focused in the following areas:

• Assessed the experience, training, and activities of IFASP specialists in Calendar Years 1998 and 1999 by reviewing the Internal Revenue Service’s (IRS) personnel records, monthly IFASP reports, travel vouchers, and the Administrative Corporate Education System (ACES).
• Evaluated how successful the IFASP was in meeting its business objectives by analyzing examination results in the International Case Management System (ICMS) and the Audit Information Management System (AIMS).
• Analyzed the responses to our surveys from 60 international managers, 67 international examiners, and 9 attorneys that were management officials in the Office of the Associate Chief Counsel (International).

The audit was performed in accordance with Government Auditing Standards from November 1999 through May 2000. On-site tests were performed in the National Headquarters. In addition, our survey of managers, international examiners, and attorneys allowed us to obtain information about the IFASP from 29 IRS district offices and the Office of the Associate Chief Counsel (International).

Appendix I outlines the detailed objective, scope, and methodology of this review. Major contributors to this report are listed in Appendix II.

Background

The IRS established the IFASP in 1991 because of the rapid growth of international tax issues during the 1970s and 1980s. The IRS recognized that it had a relatively inexperienced workforce in the international enforcement area. The IFASP was designed to provide technical assistance in the examination of certain complex international tax issues so that there would be, among other benefits, increased revenue raising capabilities, fewer disputes due to better developed issues, and less time spent on examinations.

The IRS annually expends approximately $1.5 million for IFASP salaries, benefits, travel and overhead costs. Each of the eight IFASP specialists is assigned a specific area within international tax law. The specialists are expected to provide international examiners with written audit techniques and guidelines, continuing professional education, and documents outlining the IRS’ position on international tax issues. The IFASP also provides assistance to the Office of Associate Chief Counsel (International) by:

• Acting as a liaison with international examiners in the field.
• Providing advice on the development of new regulations, rulings, procedures and tax forms, and on the development of Advance Pricing Agreements.

Results

The IFASP is an important resource to the International Enforcement Program and is staffed with experienced international examiners who are trained in complex areas of international law. However, there are limitations with the MIS that kept us and the IRS from determining whether the IFASP was realizing the benefits expected when the IFASP was implemented. In addition, the IFASP’s customers suggested actions could be taken to enhance the way services are delivered.

The International Field Assistance Specialization Program Is an Important Resource to the International Enforcement Program

The IFASP was established to support and improve international examinations that annually result in billions of dollars of recommended additional taxes. Our evaluation of the program found its specialists to be experienced international examiners that maintain their skills through continuing professional education.

The IFASP specialists collectively had 122 years of experience in the IRS’ International Program. In addition, the ACES shows that each of the specialists earned at least 80 hours of continuing professional education (CPE) in international tax issues during the last 2 years. Many of the CPE hours were earned teaching international tax issues to IRS’ revenue agents and other tax professionals.

To better understand the level of service the IFASP provides, we sent questionnaires to all 95 international examiners listed as consulting with an IFASP specialist in Fiscal Year (FY) 1998 or 1999 and received 67 completed responses. Questionnaires were also sent to 70 international group managers and 17 attorneys that were management officials in the Office of the Associate Chief Counsel (International). We received responses from 60 group managers and 9 attorneys.

In our survey of international examiners 64 percent indicated that IFASP assistance helped them in the examination and most said they would use the IFASP again. For example, one respondent stated:

Our survey of international group managers and attorneys that were management officials in the Office of the Associate Chief Counsel (International) was also positive. Eighty-seven percent of the managers indicated that IFASP assistance improved the quality of examinations.

Our analysis of questionnaire responses identified other reasons why the IFASP is an important resource for the International Enforcement Program. We found that most international examiners liked the objective and neutral perspective the IFASP provides and would use the program’s services in the future.

Our complete analyses of the responses of international examiners, group managers, and attorneys are presented in Appendices IV and V.

Weaknesses in Measuring and Delivering Program Services

We analyzed IRS information systems to determine the IFASP involvement in examinations of returns with international tax issues. The analysis showed that international examiners used IFASP assistance in 390 returns examined with international tax issues in FYs 1998 and 1999. The returns contained 3,052 (8.8 percent) of the 34,662 examined issues and $5.9 billion (15.5 percent) of the $38 billion in adjustments recommended to tax return line items.

In another analysis comparing international examination results from FYs 1993 to 1999, we found the following:

• Number of examinations: The total number of tax returns with international tax issues examined increased about 76 percent, from 1,558 in FY 1993 to 2,747 in FY 1999. The program annually recommends that taxpayers pay approximately $2.1 billion in additional taxes.
• Direct audit hours: A comparison of FY 1993 and FY 1999 shows that the IRS invested 91 percent more hours in examining returns with international tax issues in FY 1999 than in FY 1993.
• Additional recommended taxes per audit hour: The overall ratio decreased 17 percent during this time, from $4,474 to $3,731.
• Number of examinations closed with a disagreement: As with the increase in the number of returns examined, the total number of examinations that were closed with a disagreement increased about 5 percent. However, the ratio of examinations closed with a disagreement declined from 39 percent in FY 1993 (608 of 1,558 examined returns) to 23 percent in FY 1999 (639 of 2,747 examined returns).

Our evaluation of the program indicates a combination of factors that could contribute to the trends, some of which are outside the immediate control of the IRS. For example, changes in the world economy can affect the number of returns with international tax issues that warrant examination. Legislative and administrative changes, such as changes in the law or Treasury Regulation, can also affect program trends.

The IFASP was designed to provide technical assistance in the examination of certain complex international issues so that there would be, among other benefits, increased revenue raising capabilities, fewer disputes due to better developed issues, and less time spent on examinations. Effective MISs enhance program accountability by supplying managers with critical information for documenting performance, measuring progress towards achieving desired goals, and reporting accomplishments – in effect, assessing whether the benefits are being realized.

However, neither the IRS nor we could quantify how much actual effect the IFASP has had on international tax issues or if more examinations could have benefited from the IFASP. Moreover, international examination assessments are trending downward, the number of examinations with international tax issues is increasing, and the IFASP customers suggested actions could be taken to enhance the way services are delivered. Because of these conditions, we believe there are opportunities to enhance the program.

One improvement opportunity concerns overcoming limitations with the MIS to better measure the progress the IFASP makes towards delivering the benefits expected when it was established. Enhancing management information would likely improve accountability and may encourage the IFASP to become more involved in the complex examination issues requiring their specialized knowledge. On a larger scale, more IFASP involvement in examinations could further boost the efforts of the new Large and Mid-Size Business (LMSB) Division to emphasize the international area. The LMSB Division is part of the overall IRS effort to modernize itself into four divisions, and it has an emphasis on global tax administration.

A critical item of management information would be a link in the MIS between the IFASP involvement and the specific international issue it assisted in developing. Currently, the ICMS database lists all issues that were adjusted during an examination and contains an indicator showing if the IFASP provided assistance during a particular examination.

However, the system was not designed to identify which specific issues involved the IFASP. Some examinations with international tax issues can have as many as 95 issues adjusted per tax year, and the IFASP’s involvement is generally limited to 1 or 2 issues. Not specifying in the ICMS database which issue(s) the IFASP was involved with makes it difficult, if not impossible, to measure the effect the IFASP has on any given issue or examination.

Identifying the IFASP with specific issues on the ICMS database could also help to better understand the characteristics of issues on the ICMS database, and thereby surface needs for the IFASP’s assistance more proactively. For instance, an analysis could be performed to identify the type, dollar amounts, and number of disputed issues listed on the ICMS database by office. A large increase in the number of disputes may indicate a need for more direct IFASP involvement, or for educational efforts structured towards a particular issue or issues.

Another opportunity for improvement lies with improving the way the IFASP delivers its services. In reviewing the IFASP specialists’ monthly activity reports, we found the IFASP’s assistance is usually requested and given over the telephone. While the telephone can be an efficient way to communicate on a one-to-one basis, our survey results suggest that IRS management has not fully leveraged the benefits of communications technology.

For example, a few managers and international examiners indicated that they had problems contacting the IFASP for assistance while approximately 82 percent indicated that they would like to exchange more information electronically with the IFASP through the IRS’ Intranet. In addition, 80 percent of the international examiners expressed the need for the IFASP to expand its assistance into other complex areas of international tax law.

Although the IFASP does rely heavily on the telephone for its one-on-one contacts, it recognized the need to use the IRS’ Intranet to communicate more broadly and efficiently with managers and revenue agents. During our review the IFASP began developing an electronic site on the IRS’ Intranet that describes its services, lists contact telephone numbers, and provides a forum for exchanging ideas. IRS officials told us that the cause for previous inaction is that most international examiners did not have easy access to the IRS’ Intranet.

In addition to ensuring international examiners have easy access to IRS’ Intranet, an electronic referral form for assistance could be developed. The form would provide the IFASP with an efficient way to: (1) control and monitor international examiner questions, (2) identify new, emerging issues that may warrant its assistance, (3) identify training needs, and (4) avoid problems associated with relying on the telephone, like missing calls.

The Commissioner, LMSB, should:

1. Improve the MIS by linking the IFASP to specific issues listed in the ICMS.
2. Ensure international examiners gain greater access to the IRS’ Intranet so that the IFASP can accumulate and disseminate more information electronically, including an electronic referral form for IFASP assistance.

Management’s Response: The Commissioner, Large and Mid-Size Business Division, agreed with our recommendations. The Division is currently in the process of revising and incorporating the ICMS into the Coordinated Examination Management Information System (CEMIS). As part of the revision they will add an IFASP involvement indicator to specific issues listed on CEMIS.

The LMSB Division is also in the process of providing all of its employees secured Intranet access so they can communicate from the audit site. This will allow IFASP and other specialists to accumulate and disseminate information electronically. The Division is developing a referral process for specialists to provide services to all IRS personnel, and the IFASP electronic referral will be included in this process.

Conclusion

Opportunities exist to enhance the ability of the IFASP to provide assistance to the International Enforcement Program - a program that annually recommends taxpayers pay approximately $2.1 billion in additional taxes from the examination of international tax issues. One avenue of improvement lies with linking the IFASP indicator in the ICMS to the specific international issues that the IFASP helped develop, while another is to accumulate and disseminate more information electronically through the IRS’ Intranet.

Detailed Objective, Scope, and Methodology

Our objective was to determine if the International Field Assistance Specialization Program’s (IFASP) management information system provided reliable measures to document the performance of the program. On-site tests were conducted in the Internal Revenue Service’s (IRS) National Headquarters. In addition, our survey of international managers, international examiners, and attorneys that were management officials in the Office of the Associate Chief Counsel (International) allowed us to obtain information about the IFASP from 29 district offices and the Office of Chief Counsel. The specific audit tests included the following.

1. Reviewed Volume II of the IFASP (IRS Document 7847) to obtain documentation outlining the program’s purpose, features, and benefits.
2. Assessed the experience, training, and activities of IFASP specialists in Calendar Years 1998 and 1999 by analyzing IRS personnel records, Fiscal Year (FY) 1999 IFASP reports, FY 1999 IFASP travel vouchers and the Administrative Corporate Education System.
3. Analyzed the IRS’ FY 1998 and 1999 International Case Management System data to determine the level of involvement IFASP specialists had in the examination of international issues.
4. Analyzed the IRS’ FY 1993 though 1999 Audit Information Management System data to determine the impact the IFASP had on revenue and to identify disagreements from the examination of international issues.
5. Surveyed 95 international examiners from 24 IRS district offices, involved in a universe of 95 cases with international issues, to identify factors that affect the effectiveness of the IFASP; we received 77 responses of which 67 responses were completed. We also surveyed 70 international group managers from 29 IRS district offices, and 17 management officials in the Office of the Associate Chief Counsel (International), and received 69 responses.

Major Contributors to This Report

Gordon C. Milbourn III, Associate Inspector General for Audit (Small Business and Corporate Programs)
Philip Shropshire, Director
Frank Dunleavy, Audit Manager
Earl Charles Burney, Senior Auditor

Debra Dunn, Auditor

William Tran, Auditor

Report Distribution List

Deputy Commissioner Operations C:DO
Commissioner, Large and Mid-Size Business Division LM
Director, Pre-Filing and Technical Guidance LM:PFT
Manager, International Technical Advisors LM:PFT:ITA
Director, Legislative Affairs CL:LA
Office of Management Controls CFO:A:M
National Taxpayer Advocate C:TA
Office of the Chief Counsel CC
Director, Office of Program Evaluation and Risk Analysis M:O
Audit Liaisons:
Deputy Commissioner Operations C:DO
Commissioner, Large and Mid-Size Business LM

Appendix IV – Survey of International Examiner Revenue Agents

1. The International Case Management System (ICMS) indicates that the International Field Assistance Specialization Program (IFASP) provided assistance on your case:
   Taxpayer Name: «NAME»

TIN: «TIN»

Tax Period: «LastOfTAX_PERIOD» is this true? Number Percentage

Yes, continue with the remainder of the survey. 67 87.01

No, please stop. Do not continue. The ICMS
data is in error. 10 12.99

2. Circle the Uniform Issue List (UIL) code designation for the tax issue that IFASP assisted you with on this case?

«UIL1» «UIL2» «UIL3» «UIL4»

«UIL5» «UIL6» «UIL7» «UIL8»

«UIL9» «UIL10» «UIL11» «UIL12»

«UIL13»«UIL14» «UIL15» «UIL16»

«UIL17»«UIL18»

or enter ________ . ____ - ____

3. Who made the decision to requested IFASP assistance on this case? (One answer only.)

Number Percentage

International Examiner (IE) 55 82.09

International Group Manager 7 10.45

IE and IE Group Manager 1 1.49

CEP Team Coordinator 1 1.49

CEP Case Manager 0 0.00

Other, please specify 2 2.99

Don’t know. 0 0.00

No response 1 1.49

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

4. Area of IFASP specialist expertise that assisted you on this case? (Multiple answers allowed.)

Number Percent

Transfer Pricing (Section 482) 31 46.27

Cost Sharing (Section 482) 4 5.97

Foreign Tax Credits 16 23.88

Subpart F 5 7.46

Section 936 4 5.97

International Penalties 4 5.97

Foreign Sales Corporation (FSC) 10 16.42

Permanent Establishment 1 1.49

Don’t know. 0 0.00

No response 4 5.97

5. How did you request assistance from IFASP?

Number Percent

Telephone / voice mail 56 83.58

Electronic mail (e-mail) 0 0.00

Other, please specify 7 10.45

Telephone / voice mail and Other 3 4.48

Don’t know. 0 0.00

No response 1 1.49

6. In your opinion, do you see the informality of requesting and receiving assistance from the IFASP specialist as beneficial to you?

Number Percent

Yes, definitely beneficial (5) 58 86.57

Yes, somewhat beneficial (4) 8 11.94

Neither beneficial or detrimental (3) 0 0.00

No, somewhat detrimental (2) 0 0.00

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

No, definitely detrimental (1) 0 0.00

Don’t know (0) 0 0.00

No response 1 1.49

7. How did the IFASP specialist provide you assistance?

Number Percentage

Telephone only 22 32.84

On Site Visitation only 3 4.48

Written opinion only 0 0.00

Telephone and written opinion 5 7.46

Both telephone and on site visit 30 44.78

All 5 7.46

Don’t know 0 0.00

No response 2 2.99

8. If the advice was in written form what was provided?

Number Percentage

Nothing, no written information was provided34 50.75

Issue position paper 4 5.97

Copies of court opinions 1 1.49

Issue position paper and court opinion 1 1.49

Copies of congressional committee reports 0 0.00

Other, please specify 9 13.43

Don’t know 1 1.49

Nothing, no written information was provided
and other 4 5.97

No response 13 19.40

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

9. How much time did you spend directly discussing and resolving the issue with the IFASP specialist?

Number Percentage

1–3 hours 26 38.81

4-6 hours 13 19.40

7-9 hours 7 10.45

10 or more hours 19 28.36

Don’t know 1 1.49

No Response 1 1.49

10. Effect of IFASP assistance on the dollar amount of the proposed adjustment?

Number Percentage

Increase the amount of the adjustment. 23 34.33

Decrease the amount of the adjustment. 2 2.99

Increase and decreased the amount of the
adjustment 1 1.49

No-Change in the amount of the adjustment. 30 44.78

Eliminated the adjustment. 4 5.97

Changed the issue to another issue. (For
example from a section 482 services issue
to a section 482 intangibles issue. 0 0.00

Don’t know. 4 5.97

No Response 3 4.48

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

11. In your own opinion, did the assistance IFASP provide increase the sustainability of the issue you identified?

Number Percentage

No, their help weakened the issue a great deal. (1) 1 1.49

No, their help somewhat weakened the issue. (2) 0 0.00

Their help made no difference (3) 10 14.93

Yes, their help somewhat strengthened the issue. (4) 14 20.90

Yes, their help strengthened the issue a great deal. (5) 29 43.28

Don’t know. (0) 1 1.49

Not applicable. (6) 10 14.93

No response 2 2.99

12. In your opinion, do you see IFASP specialist independence from the case as an advantage that provides an objective and neutral viewpoint concerning international tax issues?

Number Percentage

Yes, definite advantage (5) 40 59.70

Yes, somewhat of an advantage (4) 18 26.87

Neither an advantage or disadvantage (3) 5 7.46

No, somewhat of a disadvantage (2) 1 1.49

No, a definite disadvantage (1) 0 0.00

Don’t know (0) 1 1.49

No response 2 2.99

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

 

13. Did IFASP assistance provide critical information that you were previously unaware of that allowed you to more fully develop the issue?

Number Percentage

Yes, information was critical (5) 18 26.87

Yes, information was somewhat critical (4) 21 31.34

No, information was helpful but not critical (2) 24 35.82

No, information useless (1) 2 2.99

Don’t know (0) 0 0.00

No response 2 2.99

14. What kind of critical information or assistance did IFASP involvement provide to you that allowed you to more fully develop the issue? (Mark all that apply.)

Number Percentage

Identify pertinent court cases 14 20.90

Identify other code sections not previously
considered 13 19.40

Identify relevant income tax treaty provisions 1 1.49

Identify pertinent congressional committee
reports 1 1.49

Assist in the interpretation of Treasury
regulations 46 68.66

Identify pertinent Revenue rulings 10 14.93

Identify pertinent Revenue procedures 3 4.48

Identify audit techniques and provide
issue development experience 32 47.76

Assist in writing Technical Advice
Memorandums (TAMs), Field Service
Advices (FSAs), and Technical
Assistance (TA) 5 7.46

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

 

Serve as a liaison with Associate Chief
Counsel (International) for tax law
interpretation 15 22.39

Assist with an Advance Pricing
Agreement (APA) 3 4.48

Assist with Competent Authority 0 0.00

Other, please specify 11 16.42

Not applicable. 3 4.48

No response 2 2.99

15. Approximately how much time did IFASP assistance save you on developing the issue on the case?

Number Percentage

Added time. (1) 3 4.48

None. (2) 6 8.96

Saved less than one week. (3) 18 26.87

Saved one to two weeks. (4) 7 10.45

Saved more than two weeks. (5) 10 14.93

Don’t know. (0) 22 32.84

No Response 1 1.49

16. Approximately how many cases in the past three years have you requested assistance or discussed issues with an IFASP specialist?

Number Percentage

One case. 10 14.93

Two to three cases. 36 53.73

Four to five cases. 12 17.91

Five to six cases. 5 7.46

More than six cases. 2 2.99

Don’t know. 1 1.49

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

No response 1 1.49

17. Have you attended training where an IFASP specialist was an instructor in the last three years?

Number Percentage

Yes. Please go to question 18. 64 95.52

No. Please go to question 20. 2 2.99

Don’t know. 0 0.00

No response 1 1.49

18. What type of International training did you attend where an IFASP specialist was an instructor?

Number Percentage

International Examiner Unit I 1 1.56

International Examiner Unit II 3 4.69

International Examiner Unit III 13 20.31

Continuing Professional Education (CPE) 61 95.31

Group Meetings / Workshops 22 34.38

Interactive Video Teleconference (IVT) 43 67.19

Not applicable 0 0.00

19. Was the IFASP specialist teaching the course knowledgeable about their area of expertise?

Number Percentage

Not knowledgeable at all about the issue area. (1) 0 0.00

Somewhat knowledgeable about the issue area. (2) 0 0.00

Above average knowledge about the issue area. (4) 17 26.56

Superior knowledge about the issue area. (5) 46 71.88

Don’t know. (0) 1 1.56

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

20. Based on your experience using IFASP to help develop an international tax issue how likely would it make you to contact them in the future?

Number Percentage

Would not contact them. (1) 0 0.00

Less likely to contact. (2) 2 2.99

More likely to contact (4) 22 32.84

Extremely likely to contact (5) 42 62.69

Don’t know. (0) 0 0.00

No response 1 1.49

21. In your opinion, what international tax issues should IFASP expand into that it is currently not covering? (Number from one to eight with one being the highest priority.)

__3__ Tax Haven and Money Laundering Issues

__4__ International Electronic Commerce

__1__ Foreign Acquisitions, Reorganizations and Mergers

__2__ Computerized audit programs to extract pertinent international data and identify potential audit areas.

__5__ Increase the number of transfer pricing IFASP specialist.

__6__ Increase the number of Foreign Tax Credit IFASP specialist.

__7__ Other, please specify ________________________________________________

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

Control Number: «Control_Number»–A

22. What improvements would you like to see in the IFASP? (Number from one to four with one being the highest priority.)

__3__ Intranet chat facility to allow International Examiners and IFASP Specialist to exchange facts, technical, legal and other information on a case.

__1__ Intranet web page containing library of unpublished IRS position and white papers related to International Tax Issues.

__2___ Electronic mail (e-mail) access for all International Examiners so they could contact IFASP specialist and provide written summaries and receive written responses.

__4___ Intranet IFASP referral form where the International Examiner would identify the case, tax period, issue by UIL code and provide a brief summary for the IFASP to review.

23. Would you use an IFASP specialist on another case?

The survey was conducted during March and April of 2000. The survey was mailed to all international examiners that had one or more cases identified on the International Case Management System as receiving assistance from an International Field Assistance Specialization Program specialist on cases that closed during Fiscal Years 1998 and 1999.

Response Rate

Mailings

Appendix V – Survey of International Enforcement Program Managers

(Manager and Counsel Survey)

(Manager and Counsel Survey)

1. Please indicate your position?

Number Percent

International Group Manager 59 85.51

Management Official Associate Chief Counsel
(International) 9 13.04

Group Manager 1 1.45

2. Have you personally worked with an IFASP specialist in the last two years?

Number Percent

Yes. 58 84.06

No. 11 15.94

3. Have you recommended that an employee(s) reporting to you request assistance from IFASP during the last two years?

Number Percent

Yes. 62 89.86

No. 7 10.14

4. Area of IFASP specialist expertise that assisted you or your group in the last two years? (Multiple answers allowed.)

Number Percentage

Transfer Pricing (Section 482) 53 76.81

Cost Sharing (Section 482) 29 42.03

Foreign Tax Credits 50 72.46

Subpart F 28 40.58

Section 936 20 28.99

International Penalties 25 36.23

Foreign Sales Corporation (FSC) 41 59.42

Permanent Establishment 8 11.59

No response 4 5.80

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

5. What kind of assistance was provided?

Number Percent

Case assistance defined as assistance with an
issue on a specific taxpayer case such as identify
audit techniques, provide issue development
experience or help in drafting a Field Service
Advice or Technical Assistance request. 59 85.51

General assistance defined as assistance with an
area of tax law not specific to a particular case. 30 43.48

Assistance in developing an Advance Pricing
Agreement. 16 23.19

Assistance in developing new Treasury Regulations. 6 8.70

Assistance in developing Revenue Rulings or
Revenue Procedures. 8 11.59

Assistance in developing new tax forms. 5 7.25

Assistance with competent authority. 11 15.94

Assistance with tax treaty. 7 10.14

No response 5 7.25

6. How did you request assistance from IFASP?

Number Percent

Telephone / voice mail 56 81.16

Electronic mail (e-mail) 0 0.00

Other, please specify 1 1.45

Telephone/voice mail and Electron mail 3 4.35

Telephone/voice mail and other 4 5.80

All of the above 1 1.45

No response 4 5.80

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

7. In your opinion, do you see the informality of requesting and receiving assistance from the IFASP specialist as beneficial to you?

Number Percent

Yes, definitely beneficial (5) 61 88.41

Yes, somewhat beneficial (4) 5 7.25

Neither beneficial or detrimental (3) 0 0.00

No, somewhat detrimental (2) 0 0.00

No, definitely detrimental (1) 0 0.00

No response 3 4.35

8. How did the IFASP specialist provide you assistance?

Number Percent

Telephone only 9 13.04

On Site Visitation only 0 0.00

Written opinion only 0 0.00

Both telephone and on site visit 36 52.17

All 12 17.39

Telephone and written opinion 1 1.45

Telephone only, On Site Visitation only, and Both
telephone and on site visit 2 2.90

Telephone only, and On Site Visitation only 2 2.90

On Site Visitation only and Both telephone and
on site visit 2 2.90

No response 5 7.25

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

9. If the advice was in written form what was provided?

Number Percent

Nothing, no written information was provided 32 46.38

Issue position paper 5 7.25

Copies of court opinions 1 1.45

Copies of congressional committee reports 0 0.00

Other, please specify 7 10.14

Nothing, no written information was provided, and
other 1 1.45

Issue position paper and copies of court opinions 4 5.80

Issue position paper, copies of court opinions and
other 1 1.45

Issue position paper, copies of court opinions and
Congressional committee reports 1 1.45

No response 17 24.64

10. How much time did you spend directly discussing and resolving the issue with the IFASP specialist?

Number Percent

None. 5 7.25

1–3 hours 20 28.99

4-6 hours 5 7.25

7-9 hours 6 8.70

10 or more hours 27 39.13

No response 6 8.70

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

11. In your opinion, do you see IFASP specialist independence from the case as an advantage that provides an objective and neutral viewpoint concerning international tax issues?

Number Percent

Yes, definite advantage (5) 51 73.91

Yes, somewhat of an advantage (4) 12 17.39

Neither an advantage or disadvantage (3) 2 2.90

No, somewhat of a disadvantage (2) 0 0.00

No, a definite disadvantage. (1) 0 0.00

No response 4 5.80

12. Did IFASP assistance provide critical information that you were previously unaware of that allowed you to make a more informed decision concerning an issue?

Number Percent

Yes, information was critical (5) 31 44.93

Yes, information was somewhat critical (4) 19 27.54

No, information was helpful but not critical (2) 11 15.94

No, information useless (1) 0 0.00

Not applicable. 2 2.90

No response 6 8.70

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

13. What kind of critical information or assistance did IFASP involvement provide to you that allowed you to more fully develop the issue? (Mark all that apply.)

Number Percent

Identify pertinent court cases 31 44.93

Identify other code sections not previously considered 19 27.54

Identify relevant income tax treaty provisions 9 13.04

Identify pertinent congressional committee reports 7 10.14

Assist in the interpretation of Treasury regulations 47 68.12

Identify pertinent Revenue rulings 12 17.39

Identify pertinent Revenue procedures 10 14.49

Identify audit techniques and provide issue
development experience 49 71.01

Assist in writing Technical Advice Memorandums
(TAMs), Field Service Advices (FSAs), and
Technical Assistance (TA) 15 21.74

Serve as a liaison with Associate Chief Counsel
(International) for tax law interpretation 27 39.13

Assist with an Advance Pricing Agreement (APA) 15 21.74

Assist with Competent Authority 10 14.49

Served as a liaison between the International
Examiner and Chief Counsel (International) attorney
to provide a clear understanding of the facts and
circumstances surrounding the issue 23 33.33

Assist in developing new income tax forms 4 5.80

Assist in developing new Treasury Regulations 3 4.35

Assist in developing new Revenue Rulings or
Revenue Procedures 4 5.80

Other, please specify 8 11.59

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

14. In your opinion, did the assistance of IFASP improve the quality of the end product?

Number Percent

Yes, their assistance improved the quality of the
end product. (5) 48 69.57

Yes, their assistance somewhat improved the
quality of the end product. (4) 12 17.39

Their help made no difference. (3) 5 7.25

No, their assistance somewhat decreased the
quality of the end product. (2) 0 0.00

No, their assistance decreased the quality of the
end product. (1) 0 0.00

No response 4 5.80

15. Did IFASP assistance save you time?

Number Percent

Yes. 58 84.06

No. 11 15.94

16. Approximately how much time did IFASP assistance save you?

Number Percent

Added time. (1) 0 0.00

None. (2) 5 7.25

Saved a few hours. (3) 5 7.25

Saved a day. (4) 3 4.35

Saved more than one day, but less than a week. (5) 22 31.88

Saved more than one week. (6) 24 34.78

No response 10 14.49

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

17. Approximately how often over the last year have you requested assistance or discussed issues with an IFASP specialist?

Number Percent

None. (1) 7 10.14

Once. (2) 7 10.14

Twice. (3) ` 14 20.29

Three times. (4) 12 17.39

More than three times. (5) 28 40.58

No response 1 1.45

18. Approximately how often over the last year have you recommended that an employee reporting to you request assistance or discuss an issue with an IFASP specialist?

Number Percent

Never.. (1) 6 8.70

Once. (2) 6 8.70

Twice. (3) 9 13.04

Three times. (4) 13 18.84

More than three times. (5) 34 49.28

No response 1 1.45

19. From your observations how knowledgeable was the IFASP specialist that assisted you in their area of expertise?

Number Percent

Not knowledgeable at all about the issue area. (1) 1 1.45

Somewhat knowledgeable about the issue area. (2) 1 1.45

Above average knowledge about the issue area. (4) 13 18.84

Superior knowledge about the issue area. (5) 50 72.46

No response 4 5.80

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

20. How many IFASP specialists did you consult with for help?

Number Percent

None. Please go to question 24. 4 5.80

One. Please go to question 24. 12 17.39

Two 9 13.04

More than two 41 59.42

No response 3 4.35

21. If you contacted multiple IFASP specialists, within the same specialty area, was the advice you received from the IFASP specialists consistent? (If you answered "None" or "One" on question 20, skip this question.)

Number Percent

Yes, the advice is the same no matter which IFASP
specialist is called as long as they are given the
same facts. Please go to question 24. (5) 19 38.00

Yes, the advice is somewhat similar most of the
time no matter which IFASP specialist is called as
long as they are given the same facts. Please go to
question 24. (4) 17 34.00

No, the advice is different most of the time between
IFASP specialist even though they are given the
same facts. Please go to question 22. (2) 0 0.00

No, the advice is always different between IFASP
specialist even though they are given the same facts.
Please go to question 22. (1) 0 0.00

No response 14 28.00

22. If the advice was inconsistent, did you inform the IFASP specialist?

Number Percent

Yes 0 0.00

No 0 0.00

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

23. Did they resolve the differences and provide a uniform recommendation?

Number Percent

Yes 0 0.00

No 0 0.00

24. Have you attended training where an IFASP specialist was an instructor in the last three years?

Number Percent

Yes. Please go to question 25. 61 88.41

No. Please go to question 27. 8 11.59

25. What type of International training did you attend where an IFASP specialist was an instructor?

Number Percent

International Examiner Unit I 4 6.56

International Examiner Unit II 8 13.11

International Examiner Unit III 13 21.31

Continuing Professional Education (CPE) 60 98.36

Group Meetings / Workshops 23 37.70

Interactive Video Teleconference (IVT) 45 73.77

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

26. Was the IFASP specialist teaching the course knowledgeable about their area of expertise?

Number Percent

Not knowledgeable at all about the issue area. (1) 0 0.00

Somewhat knowledgeable about the issue area. (2) 0 0.00

Above average knowledge about the issue area. (4) 11 18.03

Superior knowledge about the issue area. (5) 49 80.33

No Response 1 1.64

27. Based on your experience and those of the employees reporting to you that have used IFASP to help on an international tax issue how likely would it make you to contact them in the future?

Number Percent

Would not contact them. (1) 0 0.00

Less likely to contact. (2) 1 1.45

More likely to contact (4) 16 23.19

Extremely likely to contact (5) 49 71.01

No Response 3 4.35

28. Do you encourage or discourage your employees to use of IFASP?

Number Percent

Encourage. 67 97.10

Discourage. 0 0.00

No Response 2 2.90

 

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

29. In your opinion, what is management’s reason for not using IFASP when it is appropriate?

Number Percent

Delay the planned closing date of the examination. 12 17.39

Inconsistent with taxpayer relations objective. 0 0.00

Delay the planned closing and inconsistent with
taxpayer relations objective 3 4.35

Other, please specify 33 47.38

Delayed the planned closing and other 5 7.25

No response 16 23.19

Most Common Other responses

Number

Reluctance of Case Manager to include IFASP in
case. 6

Time limitations 2

IFASP will not add value 4

IFASP not interested in our issues 3

30. In your opinion, what international tax issues should IFASP expand into that it is currently not covering? (Number from one to eight with one being the highest priority.)

__6___ Tax Haven and Money Laundering Issues

__4___ International Electronic Commerce

__1___ Foreign Acquisitions, Reorganizations and Mergers

__3___ Computerized audit programs to extract pertinent international data and identify potential audit areas.

__5__ Increase the number of transfer pricing IFASP specialists.

__7___ Increase the number of Foreign Tax Credit IFASP specialists.

__2___ International Corporate Tax Shelters.

__8___ Other, please specify________________________________________________

Treasury Inspector General for Tax Administration – Office of Audit

INTERNATIONAL FIELD ASSISTANCE SPECIALIZATION PROGRAM (IFASP)

CONTACT AND ASSISTANCE – SURVEY QUESTIONNAIRE

(Manager and Counsel Survey)

Control Number: 2–«Control_Number»–A

31. What improvements would you like to see in the IFASP? (Number from one to four with one being the highest priority.)

__2__ Intranet chat facility to allow International Examiners and IFASP Specialists to exchange facts, technical, legal and other information on a case.

__3___ Intranet web page containing library of unpublished IRS positions and white papers related to International Tax Issues.

__1___ Electronic mail (e-mail) access for all International Examiners so they could contact IFASP specialists and provide written summaries and receive written responses.

__4___ Intranet IFASP referral form where the International Examiners would identify the case, tax period, issue by UIL code and provide a brief summary for the IFASP to review.

32. Would you use an IFASP specialist again to assist you?

Number Percent

Yes. 65 94.20

No, why 0 0.00

No Response 4 5.80

33. Do you have any other suggestions to help improve IFASP?

The survey was conducted during March and April of 2000. The survey was mailed to all managers of international groups identified as closing cases on the International Case Management System during Fiscal Years 1998 and 1999. The survey was also sent to attorneys that were management officials in the Office of the Associate Chief Counsel (International).

Response Rate

Mailings

Management’s Response to the Draft Report

The response has been removed due to its size. To see the complete response, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.