CIAT General Assembly Large Business Verification Sectorial Specialization Elvin Hedgpeth LMSB, US IRS

IRS Taxpayer Specialization IRS Business Operating Divisions IRS Business Operating Divisions Large and Mid Size Business Large and Mid Size Business Small Business and Self-Employed Small Business and Self-Employed Wage and Investment Wage and Investment Tax Exempt and Governmental Entities Tax Exempt and Governmental Entities

Large Corporate Specialization LMSB Specialization Industry Specialization Industry Specialization Issue Specialization Issue Specialization Examiner Specialization Examiner Specialization

Industry Specialization LMSB Industries LMSB Industries LMSB organized into 5 Industry Segments LMSB organized into 5 Industry Segments Retail, Food, Pharma, & Healthcare Retail, Food, Pharma, & Healthcare Financial Services Financial Services Heavy Manufacturing Heavy Manufacturing Natural Resources Natural Resources Communications, Technology & Media Communications, Technology & Media

Industry Specialization RFPH RFPH food and beverage, retailing, pharmaceuticals, agricultural commodities and farms food and beverage, retailing, pharmaceuticals, agricultural commodities and farms Financial Services Financial Services commercial banking, savings and loans, securities and other financial services, health care and insurance commercial banking, savings and loans, securities and other financial services, health care and insurance

Industry Specialization Heavy Manufacturing Heavy Manufacturing air and ground transportation, aerospace, motor vehicles, shipping, construction and real estate air and ground transportation, aerospace, motor vehicles, shipping, construction and real estate Natural Resources Natural Resources oil and gas, mining, forest products and utilities oil and gas, mining, forest products and utilities Communication Technology Communication Technology Production of computers; media (including communications and software); sports franchises Production of computers; media (including communications and software); sports franchises

LMSB Organized By Industry Commissioner Deborah Nolan Deputy Commissioner Frank Ng International (U.S. Competent Authority) Financial Services & Healthcare Retailers, Food & Pharmaceuticals Natural Resources Communications Technology & Media Heavy Manufacturing, Construction & Transportation Field: Head- quarters: Strategy, Research, & Program Planning Quality Assurance & Performance Management Director, Management & Finance Equal Employment Opportunity & Diversity Business Systems Planning Pre-filing & Technical Guidance Communications & Liaison Field Specialists Bob Green Elvin Hedgpeth

Issue Specialization Technical Advisors Technical Advisors For each Issue, Technical Advisor is responsible for: For each Issue, Technical Advisor is responsible for: Coordinated Issues Coordinated Issues Emerging Issues Emerging Issues Law, Accounting, and Procedures Law, Accounting, and Procedures Training, Tools, and Reference Materials Training, Tools, and Reference Materials

Issue Specialization Some Issues covered by Technical Advisors Some Issues covered by Technical Advisors Aerospace, Agricultural, Air Transportation, Banking, Commercial and Savings & Loan, Foreign Banking, Biotech Study, Cafeteria Plans/Executive Compensation, Capitalization (Includes certain Meals & Entertainment Issues), Change in Accounting Method, Chemical Study, Classified/Government Contracts, Consolidated Returns, Construction, Cooperatives, Corporate Owned Life Insurance (COLI), High Technology, Entertainment, Environmental, Extraterritorial Income Exclusion, Financial Products, Food & Beverage, Foreign Joint Ventures and Partnerships, Foreign Mergers & Acquisitions, Foreign Sales Corporations, Foreign Tax Credit, Forest Products, Gaming, Healthcare, High Technology, Insurance (Blue Cross Blue Shield/Health, Captive and Offshore Transactions, Life, Property and Casualty), Transfer Pricing, International Penalties, Inventory, Leasing, Maquiladora, Media, Mergers & Acquisitions, Mining, Motor Vehicle, Offshore Compliance, Partnerships, Petroleum, Pharmaceutical, Private Placement Insurance, Railroad, Research Credit, Security & Financial Services, Shipping, Software Access, Sports, Telecommunications, Trucking, Utilities, Vacation Pay Aerospace, Agricultural, Air Transportation, Banking, Commercial and Savings & Loan, Foreign Banking, Biotech Study, Cafeteria Plans/Executive Compensation, Capitalization (Includes certain Meals & Entertainment Issues), Change in Accounting Method, Chemical Study, Classified/Government Contracts, Consolidated Returns, Construction, Cooperatives, Corporate Owned Life Insurance (COLI), High Technology, Entertainment, Environmental, Extraterritorial Income Exclusion, Financial Products, Food & Beverage, Foreign Joint Ventures and Partnerships, Foreign Mergers & Acquisitions, Foreign Sales Corporations, Foreign Tax Credit, Forest Products, Gaming, Healthcare, High Technology, Insurance (Blue Cross Blue Shield/Health, Captive and Offshore Transactions, Life, Property and Casualty), Transfer Pricing, International Penalties, Inventory, Leasing, Maquiladora, Media, Mergers & Acquisitions, Mining, Motor Vehicle, Offshore Compliance, Partnerships, Petroleum, Pharmaceutical, Private Placement Insurance, Railroad, Research Credit, Security & Financial Services, Shipping, Software Access, Sports, Telecommunications, Trucking, Utilities, Vacation Pay

Examiner Specialization Examiner Skill Specialization Examiner Skill Specialization Computer Audit Specialists Computer Audit Specialists Economists Economists Employment Tax Specialist Employment Tax Specialist Engineers Engineers Financial Product Specialists Financial Product Specialists International Examiners International Examiners

Examiner Specialization Computer Audit Specialist -- Access taxpayer’s computerized data for use by the audit team, in addition to providing expertise in the development and projection of audit results utilizing statistical sampling techniques. Financial Products Specialist – Provide assistance in the examination of issues in the area of financial products and transactions (i.e. derivative instruments traded and sold in the global market place)

Examiner Specialization Economists – Provide assistance during an examination in determining the fair economic representation of tax related transactions. Provide Industry Specific research skills in conducting studies and in analyzing information in addition to acting as expert witnesses in litigated cases. Issues : Transfer Pricing, Economic Substance, Valuation

Examiner Specialization Employment Tax Specialists – Conduct employment tax audits concurrently with LMSB income tax examinations and work with internal/external stakeholders to identify and resolve barriers to employment tax compliance. Engineers – Provide engineering, valuation and appraisal support services to revenue agents, estate tax attorneys and others throughout IRS operating divisions.

Examiner Specialization International Examiner International Examiner Provide assistance during an income tax examination in verifying and determining the correct tax liability associated with international transactions. Provide assistance during an income tax examination in verifying and determining the correct tax liability associated with international transactions. Issues : Transfer Pricing, Foreign Tax Credit, Subpart F, Permanent Establishment, Sourcing Issues : Transfer Pricing, Foreign Tax Credit, Subpart F, Permanent Establishment, Sourcing

Specialization Case Study Case Study The following case study highlights IRS use of specialists in the examination of one of its large corporate taxpayers: The following case study highlights IRS use of specialists in the examination of one of its large corporate taxpayers: