IRS Forms SWAT Team, Terrifying Absolutely No One
The U.S. government announced today the formation of an “IRS SWAT Team,” perhaps the least intimidating name for a collection of presumably tough guys since my 2009 fantasy football team was christened “The Fightin’ Amish.”
The SWAT team — comprised primarily of former Big 4 auditors and attorneys — will be charged with cracking down on “transfer pricing” — companies that shift overseas profits from country to country in search of favorable tax rates.
Transfer pricing is a booming field of global tax law. It involves multinational corporations that are constantly moving goods, services and assets from one subsidiary to another in different countries and how they account for these “transfers.”
By carefully manipulating the pricing of such moves, companies can effectively shift profits to low-tax countries from high-tax ones, lowering their overall tax costs.
Governments in the developing and developed world, many of them faced with crushing deficits, are working to curb transfer pricing because it reduces corporate tax revenues.
