Annual Compliance Arrangements with Large Corporate Taxpayers
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| United States of America 1.30 The United States Internal Revenue Service (IRS) developed the Compliance Assurance Process (CAP) in 2005. The CAP was developed to avoid years of uncertainty about a large corporation’s actual tax liability IRS audits of the tax returns lodged by large corporations were taking, on average, four years to complete. With the CAP, the IRS and taxpayers agree on how to report tax issues before their return is filed. Compliant and cooperative taxpayers can receive a streamlined IRS review of their tax return through its Compliance Maintenance process. 1.31 The United States Government Accountability Office (GAO) assessed the CAP process and in August 2013 released its report Corporate Taxi iCompliance: IRS Should Determine Whether Its Streamlined Corporate Audit Process is Meeting Its Goals. The report noted that while anecdotal evidence indicated that CAPs maybe effective in ensuring compliance, increasing certainty and saving resources, the IRS had not succeeded at assessing whether or not the CAP was achieving its goals. Recommendations made by the GAO included that the IRS evaluate the process develop measures and targets for the goals and consistently capture data to track goal progress. 47 Netherlands 1.32 ACAs are similar to the horizontal monitoring approach undertaken by the Dutch Tax Administration. Horizontal monitoring is based on mutual trust, transparency and understanding, with respective roles and responsibilities set out in a mutual agreement. 46 ibid, p. 88. 47 GAO, Corporate Tax Compliance IRS Should Determine Whether Its Streamlined Corporate Audit Process Is Meeting Its Goals, August 2013, p. 27. ANAO Report No 2014–15 Annual Compliance Arrangements with Large Corporate Taxpayers 38 integrated into the assessment of the overall compliance strategy. 46 Of particular relevance to the ATO’s administration of ACAs was that similar initiatives were being implemented in the United States of America and the Netherlands. 1.29 More broadly, the OECD reported that cooperative compliance arrangements can assist revenue agencies to improve compliance by large corporate taxpayers. In this regard, it highlights the importance of transparency, disclosure and good governance systems on the part of both parties to reduce uncertainties over entities tax positions. Download 1.48 Mb. Share with your friends:
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