1. Advancing the Vision LMSB 1 22 nd Annual High Technology Tax Institute IRS Practice and Procedures

2. Advancing the Vision LMSB 2 IRS Practice & Procedures u LMSB Organization u LMSB Culture and Philosophy u LMSB Significant Issues u LMSB Initiatives u Effect of e-filing

3. LMSB Commissioner Deputy Commissioners International (U.S. Competent Authority) Financial Services Retailers, Food, Pharmaceuticals, & Healthcare Natural Resources & Construction Communications, Technology, & Media Heavy Manufacturing & Transportation Field Headquarters : Strategy, Research & Program Planning Performance, Quality Assurance, & Audit Assistance Management & Finance Equal Employment Opportunity & Diversity Business Systems Planning Pre-filing & Technical Guidance Communications & Liaison Field Specialists Frank Ng, D irector Deborah Nolan - Commissioner Bruce Ungar – Deputy Commissioner Frank Ng - Deputy Commissioner International Walter Harris Director: Barry Shott John RisacherKeith Jones Patricia Chaback Henry Singleton Paul DeNardDon McPartlandHelen BoltonKelly CablesLavena Williams, ActingDave Bass William Williams, Acting Director Director: LMSB Organized By Industry Revised: 08/24/06 LMSB Division Counsel Division Information Officer

4. Advancing the Vision LMSB 4 LMSB Industry Structure Industry Director Director, Field Operations Territory Manager Team Manager Revenue Agent Executive Assistant Headquarters Staff

5. Advancing the Vision LMSB 5 Patricia Chaback Industry Director Oakland, CA JoAnn Bank Director of Field Operations West Oakland, CA Vacant Territory Manager, San Francisco 8 Teams Maria Hwang Territory Manager, San Jose 7 Teams Ramona Feliciano Territory Manager, Denver 6 Teams Maureen Szoztak Territory Manager, Seattle 7 Teams Nancy Bronson Int’l Territory Manager, San Francisco 8 Teams Cheryl Claybough Director of Field Operations East Iselin, NJ Paul Rinaldi Territory Manager, New York 10 Teams Carl Stewart Territory Manager, NJ North 7 Teams Woody Howell Territory Manager, Stoneham 8 Teams Lavena Williams Territory Manager, Atlanta 7 Teams Mark Chan Territory Manager, Boston 8 Teams Kay Fenton Executive Assistant, Oakland, CA Communications, Technology & Media Industry

6. Advancing the Vision LMSB 6 Communications, Technology & Media Industry Territory Manager DFO Audit Team Located In State (DFO-East) Audit Team Located In State (DFO-West)

7. Advancing the Vision LMSB 7 IRS Practice & Procedures LMSB Culture and Philosophy LMSB VISION STATEMENT We are a world class organization responsive to the needs of our customers in a global environment while applying innovative approaches to customer service and compliance. We apply the tax laws with integrity and fairness through a highly skilled and satisfied workforce, in an environment of inclusion where each employee can make a contribution to the mission of the team. We apply the tax laws with integrity and fairness through a highly skilled and satisfied workforce, in an environment of inclusion where each employee can make a contribution to the mission of the team.

8. Advancing the Vision LMSB 8 IRS Practice & Procedures LMSB Culture and Philosophy LMSB CULTURAL BELIEFS: We are a World Class Organization We are a World Class Organization We Apply Innovative Approaches to Achieve Compliance We Apply Innovative Approaches to Achieve Compliance We Apply the Tax Laws with Integrity and Fairness We Apply the Tax Laws with Integrity and Fairness We Create an Environment of Inclusion and Have a High Level of Employee Engagement We Create an Environment of Inclusion and Have a High Level of Employee Engagement

9. Advancing the Vision LMSB 9 IRS Practice & Procedures LMSB Culture and Philosophy LMSB CULTURAL BELIEFS: We are a World Class Organization. We are a World Class Organization. We Apply Innovative Approaches to Achieve Compliance. We Apply Innovative Approaches to Achieve Compliance. I improve compliance through the use of pre-and post-filing tools and treatment. We Apply the Tax Laws with Integrity and Fairness. We Apply the Tax Laws with Integrity and Fairness. I ensure compliance with the tax laws and treat taxpayers in a fair and equitable manner. I use appropriate service and enforcement tools commensurate with taxpayer behaviors. We Create an Environment of Inclusion and Have a high Level of Employee Engagement We Create an Environment of Inclusion and Have a high Level of Employee Engagement

10. Advancing the Vision LMSB 10 IRS Practice & Procedures LMSB Significant Issues u Represents issues that require organizational focus and emphasis u Issues with significant direct exam time u Issues resulting in controversy with taxpayers u Material issues with high tax impact u Issues with significant future impact on resources

11. Advancing the Vision LMSB 11 IRS Practice & Procedures LMSB Top Compliance Issues Transfer of Intangibles OffshoreAbusive Hybrids Universal Fund Service FTC Generators §199 Domestic Production Transfer Pricing §965 Foreign Earnings Repatriation R&E Credit Claims §409A Executive CompensationMixed Service Costs Tax Shelters & Promoters

12. Advancing the Vision LMSB 12 IRS Practice & Procedures LMSB Tax Administration Currency Initiative Currency Initiative Strategic Specialization Strategic Specialization Schedule M-3 Schedule M-3 E-file Mandate E-file Mandate Compliance Initiative Projects Compliance Initiative Projects

13. Advancing the Vision LMSB 13 IRS Practice & Procedures LMSB Initiatives Tools to Provide Certainty in the Uncertain World Industry Issue Resolution (IIR) Industry Issue Resolution (IIR) Pre-Filing Agreements (PFA) Pre-Filing Agreements (PFA) FIN 48 Compliance Assurance Program (CAP) Compliance Assurance Program (CAP) Fast Track Appeals Fast Track Appeals Early Referrals Early Referrals LIFE LIFE

14. Advancing the Vision LMSB 14 IRS Practice & Procedures EFFECT of E-File u Reducing Burden u Re-value information requested on Tax Forms u Continued Collaboration with External including expansion $10 to $50 million market segmetn u Significantly Improved Data Analysis u Legislation