Large foreign companies with U.S. subsidiaries, take note: The IRS is looking your way. On Oct. 19, IRS Commissioner Daniel Werfel announced that the tax agency would be sending compliance alerts to about 150 U.S. subsidiaries of foreign corporations the IRS believes don’t pay “their fair share of tax on the profit they earn on their U.S. activity.” Werfel claims these companies improperly use transfer pricing so they can repeatedly report losses or extremely low margins. In the same teleconference, Werfel also said the IRS is expanding its corporate compliance program and may soon audit companies with more than $24 billion in assets and approximately $526 million in annual taxable income.
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