handbook-tb

Wei Cui4.4 Organization of tax administrationThe occurrence of taxable transfers of domestic assets among nonresidentscan be erratic, which makes the decision to assign dedicatedtax administration personnel to collect tax on such transfers difficult.However, non-reporting non-residents — whether they are transferorsor transferees — are like domestic taxpayers who do not file taxreturns: special efforts have to be made to detect them and bring theminto compliance. It is not clear that any country’s tax authority hasdeveloped well-articulated strategies for dealing with this predicament.In many OECD countries, where both tax administration andthe study of tax administration are generally more developed thanelsewhere, the scope of capital gains taxation on non-residents tendsto be limited. They therefore offer limited expertise insofar as taxingcapital gains of non-residents is concerned.In the United States, for example, an Internal Revenue Service(IRS) publication from 2010 states that a study of the collection ofFIRPTA tax was only “planned” and data was “not yet available”. 52Moreover, the “planned” study was based only on returns filed bytransferees who had withheld tax from the gross proceeds of sales ofUnited States real estate interest (including shares of United Statescompanies that hold United States real estate) by foreigners. 53 No dataseems to be separately available to the IRS on transferor self-reportingof sale of United States real property interests, and there is no signof any data on audits (if any) of transferors or transferees. In fact,the United States did not attempt to measure non-resident taxpayercompliance until 2008, and even the new attempt to do so is designedonly for individual taxpayers. 5452Melissa Costa and Nuria E. McGrath, “Statistics of Income Studies ofInternational Income and Taxes,” (2010) Vol. 30, No. 1 Statistics of IncomeBulletin, available at http://www.irs.gov/pub/irs-soi/10intertax.pdf, at 192.53Ibid. The most recent IRS Bulletin on Foreign Receipts of United StatesIncome, relating to the year 2010, also reports only FIRPTA withholdinginformation and no information about transferor self-assessment. See ScottLuttrell, “Foreign Recipients of U.S. Income, 2010,” (2013) Statistics of IncomeBulletin, available at http://www.irs.gov/pub/irs-soi/13itsumbulforrecip.pdf.54See United States Internal Revenue Service, “The Tax Gap and InternationalTaxpayers,” (2008), available at http://www.irs.gov/Businesses/The-132