With trillions of dollars in cross-border financial activity, U.S. tax authorities and others around the world exchange information with each other to administer and enforce compliance with the tax laws of their respective countries. GAO was asked to (1) identify and describe all income tax treaties and other such agreements between the United States and other countries, (2) describe the volume of exchange activity, types of information exchanged between the United States and its treaty partners, and request processing times, and (3) identify opportunities to improve the effectiveness of current U.S. information exchange processes and procedures. GAO analyzed agreement documents, IRS data on information exchanges, and interviewed program officials and the users of exchanged information.
Recommendations for Executive Action
|Internal Revenue Service||To identify opportunities to improve the administrative processes and procedures that the IRS uses to exchange information between the United States and its treaty partners, the Commissioner of Internal Revenue should determine the key types of information that exchange program managers could use to ensure the program is working as well as possible. The commissioner should specifically require the collection of (1) consistent and accurate data on specific tax information exchange cases, such as the extent to which requests for information are satisfied and the type of information requested, and (2) feedback from information exchange program users on how well the program is working and how it might be improved.|