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Daily Tax Report: International

Scope of IRS Income-Sourcing Rules Called Into Question

June 3, 2020, 4:19 PM

The IRS was told during a public hearing that withholding tax rules aimed at preventing profit shifting aren’t broad enough to capture all the potential businesses engaging in it.

The one witness at the Wednesday hearing on proposed rules (REG-100956-19) told officials that the agency must be more effective in attacking profit shifting structures and how transfer pricing principles will be incorporated into the final version of the rules.

The rules should be expanded to reflect more kinds of production activities that create income, which would help the IRS in its ongoing effort to collect tax on U.S.-sourced...

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