Agreement Announced for the Simultaneous
Examination of Tax Returns
Between the United States & Korea

The Internal Revenue Service today announced the signing of a formal working arrangement covering simultaneous examination of tax returns between the United States and Korea. Simultaneous examinations make it possible for tax treaty partners to exchange information and to coordinate the tax treatment of individuals and businesses with activities in more than one country.

Under agreement, both countries will meet to plan and coordinate their audits. Each country will then separately examine the taxpayers under its jurisdiction, but during each state of the examinations, both countries will exchange information in accordance with the tax treaty between them.

The tax treaty between the U. S. and Korea authorizes exchanges of information to carry out treaty purposes and to prevent tax evasion. Information obtained in the exchanges will be used to supplement the information taxpayers and other submit to the IRS. Specific treaty terms protect confidentiality of taxpayer information exchanged by both countries.

This is the tenth such working arrangement the United States has formalized with another country. The other nine working arrangements are with Canada, the United Kingdom, France, Germany, Italy, Japan, sweden, Australia, and the Philippines.

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