AudioDigest*

Reducing risk: Section 1441, the IRM, and the impact on financial institutions and multinational entities

The IRS has taken significant steps to become smarter, more efficient, and more aggressive at identifying instances of noncompliance with section 1441 amongst financial institutions and multinational entities. In addition to identifying withholding taxes as a Tier I issue, the IRS has conducted a Voluntary Compliance Program, trained approximately 700 agents to better recognize noncompliance, and developed a new Form 1042 examination guide.

This guide, which is part of the Internal Revenue Manual (IRM), provides specific directives to revenue agents and assures consistent compliance and enforcement in this area. Fortunately, the IRM also serves as a blueprint for financial institutions and multinational businesses to ensure compliance with the section 1441 rules so they can address the specific areas where the IRS will focus during a Form 1042 examination.

During this podcast, panelists from PwC's IRS Service Team, Maria Murphy, Todd Larsen, and Candace Ewell, provide insight on why the IRS has made this a Tier I issue and why they wrote the IRM, identify key areas where IRS revenue agents are likely to review, discuss IRS enforcement and compliance efforts associated with Form 1042 examinations with respect to multinational companies, highlight the primary industries identified by the IRS as being likely to have compliance failures, and outline key items that withholding agents should review to assess their own level of compliance.

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