IRS Announces New Anti-Abusive Tax Avoidance Pact With States

by Mike Godfrey, for LawAndTax-News.com, Washington

18 September 2003

The US Internal Revenue Service (IRS) announced on Tuesday that it has established a new nationwide partnership agreement designed to combat abusive tax avoidance.

Speaking following the signing of the partnership agreements between the IRS and the forty participating states (plus the District of Columbia), IRS Commissioner, Mark W. Everson explained that:

'This agreement marks a milestone in state and federal cooperation. From today forward, we will work together combating abusive tax schemes. We will share information and coordinate case management. This agreement effectively extends the resources of the IRS and the states.'

Treasury Assistant Secretary for Tax Policy, Pam Olson echoed this sentiment, announcing that:

'In the past few years, the Treasury Department has worked closely with the IRS to ensure that the IRS has the necessary information and tools to fully and fairly enforce the tax laws and to combat abusive tax scams and transactions. By joining forces with the states, we take another important step in those efforts.'

Under the terms of the new partnership arrangement, the IRS will exchange information about abusive tax avoidance schemes with the participating state authorities in order to avoid duplication of effort, and to allow both parties to benefit from research already undertaken.

The states and the IRS will then share information on any tax adjustments which result, thus eliminating the need for duplicate tax investigations to be conducted by the state and federal authorities.

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