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♫♫ NINA OLSON: Good morning, everybody.

Everyone here in the IRS auditorium and then all those folks out where we´re streaming this conversation.

This is the first in a series of conversations with the National Taxpayer Advocate.

The idea arose because I´ve been going around the world and meeting with lots of different people working in tax in lots of different disciplines, and it seemed to me that it would be a really nice thing to bring that back to the IRS so folks could hear about some of the different work that people are doing throughout the world dealing with taxation and tax administration.

And because this week is the American Anthropological Association annual meeting in Washington, DC, and there are thousands of anthropologists wandering around the district right now, there is a panel at that program dealing with taxation with five anthropologists and myself.

And since these folks were over here, I thought it would be really fun to have them come to the IRS for our inaugural conversation.

So, this is going to be a very interesting perspective.

We don´t normally hear about taxation and cultures of tax, agencies in cultures of taxpayers from that perspective.

And so that´s what we´re going to spend the morning with.

And we´ll have the panel presentations, and then we´ll open it up for a conversation, and that would include you all in the audience being able to ask questions.

And I think there´s a way for folks online -- is that correct?

-- to be able to send in questions?

Is that correct? So, good.

So then we can get some of those, as well.

We have five speakers this morning -- Lotta Bjorklund Larsen is from Linkoping University in Sweden, and she is an economic anthropologist, which she thinks taxation is an absolutely fascinating practice.

So right there, that distinguishes her from everybody else.

She has worked a long time with the Swedish Tax Agency and has published a book called "Shaping Taxpayers: Values in Action at the Swedish Tax Agency." Benedicte Brogger is a professor at the Norwegian Business School in Norway, and she studies business development and innovation, and she has a PhD in social anthropology.

And at present, she is the Dean of the MBA program at the BI Norwegian School of Business.

And then we have Emer Mulligan, and Emer is a senior lecturer at the National University of Ireland in Galway.

And she lectures in taxation and finance, and she´s the former head of the J.E. Cairnes School of Business and Economics at the National University of Ireland in Galway.

She´s a Fulbright-CRH Scholar, and she´s also an International Fellow at the University of Exeter´s Tax Administration Research Centre, which is a really interesting center and sponsors a conference every year where a lot of good research on tax is presented.

And if you´re interested, you can go to the TARC website and see some of the work that they´ve presented.

Johanna Mugler is from Universitat -- I did say it -- Bern, Switzerland.

And she joined the Department of Social Anthropology there as a lecturer and researcher, and she, too, holds a PhD in social anthropology.

And her work is really focusing on understanding how people and institutions are accomplishing complex social phenomena, like accountability, justice, redistribution, and equality -- just a small topic, not very challenging.

Kiran Aziz is a lawyer.

She´s with the Norwegian Business School in Norway, and she´s working as a lecturer and researcher there.

She´s responsible for developing, delivering tax-law courses on all university levels while simultaneously conducting research with two programs on tax policy, and the first one includes cooperation with the World Bank in developing various guidance, and the other is a really important project called The Fair Tax Project with the European Union, and several folks on this panel are involved in the Fair Tax Project.

And if you´re interested in that, you could Google Fair -- F-A-I-R -- cap letters, Tax and see what comes up under that.

So I think Lotta is going to start, so I just hand it to you.

LOTTA BJORKLUND LARSEN: Thank you, Nina, so much for this invitation and also for this lovely introduction.

We are really flattered to be the first visitors here discussing these things with you.

So I have the pleasure to starting, and I would talk a little bit about ethnography, because this probably, as Nina also said, not the usual suspects here at the IRS, where you´re using methodologies.

So, what is ethnography?

Ethnography is a systematic study of a group of people, of their traditions, of their culture, habits, and especially of their world view.

We try to understand how they see the world.

And ethnography aims to understand societal or cultural phenomena from the perspective of the people we study.

So it is about being there.

Doing ethnography is about being there, talking to them, seeing what they do, seeing what they say, trying to understand them.

This is what anthropologists do around the world, studying so many different issues, and we have chosen to study taxation, and we found it, as was said, quite interesting.

Yes, could I have the first, please?

So, what I will speak about today is about my work at the Swedish Tax Agency, which I wrote a book about, as Nina briefly mentioned here, "Shaping Taxpayers: Values in Action at the Swedish Tax Agency." And I will just take a little bit of snippets from the book to try to make you understand a little bit about what ethnography can do for our understanding and, in my perspective, then, how this agency strives for legitimacy in Sweden.

So, I was interested in how the employees at the Swedish Tax Agency sees the Swedish taxpayers.

So bear that in mind when I speak now.

So, how does this Agency strive for legitimacy?

What does an ethnographic perspective on taxation imply?

And what insights about legitimacy can be held?

But first of all, how do I see it, legitimately?

Next, please.

First of all, a little bit about the Swedish Tax Agency.

In service, citizens currently hold this bureaucracy in highest esteem of all Sweden´s governmental agencies, and there are about 500 of them, so that´s quite a feat.

And also, to the background, that we have one of the highest tax rates of the world on income taxes.

So, how it collects a considerable amount of money from each taxpayer while being the governmental institution Swedes are most positive towards sort of begs looking into.

It becomes an interesting object of study.

So, are Swedes a nation of masochists?

One can question that.

Or rather, I would say, are there lessons to be drawn from an apparently successful nation of tax collectors, both for implementing an effective compliance regime and for imagining the kind of persons that pay taxes.

Next, please.

It has been proposed that the foundation of functioning welfare state is a tax system that is widely accepted and considered fair and legitimate.

Yet to appreciate the legitimacy of the tax system, it also has to be understood more broadly.

Our gaze has to reach beyond the legal structure and the aims to see how the system is supplied and interpreted.

Taxpayers have to regard the tax administration to be efficient.

"Don´t mess with our tax money," so to say.

That it treats all taxpayers equally and that taxpayers and tax administration share an understanding of what the interpretation of law implies.

Legitimacy is historically produced in a way of exacting authority.

It´s something that also expresses morale and that guides how society at large responds to law, politicians, and bureaucracy.

Legitimacy is therefore also steeped in tradition.

Like Rome, it is not built in a day.

So legitimacy in taxation is thus not just obtained but has to be continuously maintained and tended to.

I think a good metaphor is a garden.

You have an idea of how it should look like, but it has its annual rhythm with specific tasks.

You have to move the lawn, you have to trim the trees, you have to remove the weeds, and so on.

And even if you do this work, there are external factors.

Sometimes it rains too much, sometimes too little, and so forth.

There are bugs, there are animals -- it has to be tended to.

To this background, how does the Swedish Tax Agency accomplish such a standing of being legitimate?

This was my overt question to the Agency, and they invited me to follow a risk-assessment project to see how they were with such issues -- broadly, how legitimacy is made.

So, the Agency performs a number of these risk-assessment projects yearly in order to address issues that put it at risk of failing to collect the right tax, so to say, as ordered by the Swedish Parliament.

It is the analysis unit of the Agency that is responsible for the project.

I followed, so to say, the birth, the upbringing, the disciplining, and final burial of the report -- a risk-assessment project report -- produced by a task force of analysts.

The report lived for about three years, from initiation to final version.

It was a thing in the making, so to say, of seeing it done.

And it also took me to many places around the Agency.

This project addressed faulty cost deductions among smaller business entities.

What type of costs were the issue, why were they done, how they were done, and also how much.

Basically, one could see its taxpayers or is tax cheating.

But why invite an anthropologist to do this?

I was actually given access -- and I will tell you more about all the material I gathered.

But I had addressed issues in my previous work written about work paid under the table or performed off the books, so to say, but mine was, for them, a new perspective.

They thought I brought something new to the table, which they haven´t understood.

I think that I´ve searched for it for a while, but I haven´t found a science that addressed it.

So they thought they could learn something from my work, from my way of posing questions doing research and finding insights.

So I signed a confidentiality agreement, of course, like all employees do, and the project I followed is also somewhat anonymous.

I couldn´t publish the figures that came out of the reports.

I couldn´t say exactly what type of cost deductions it was about or the type of small businesses, and so forth.

But it was not that that I was interested in.

I was interested in the type of knowledge and what they thought about when they tried to make us do right as taxpayers.

So, as a result of calibration, this work continues in various capacities.

I´ve held courses at the Swedish Tax Agency, held a course together with one of their employees a couple of weeks ago at the HMRC in London, and we discuss things, we meet for lunches, we continue to form projects together.

And, also, in this Fair Tax Project we currently do, they have very much invited us to do work on them and for them, so to say.


So, what I did, I followed a report in the making.

I did participant observation and interviews.

So, a participant observation is being them, talking to them, listening to them.

So I was basically at all meetings when the work was collectively done to this report for three years.

I was at presentation for management and for meetings with the Director General -- only the first one, and I write about why I wasn´t asked to go to the other ones.

I was at the research company that was asked or, obviously, was hired to do a survey.

And I was also at the Agency´s Random Audit Control department in the city of Orebro.

I was also copied on basically all e-mail correspondence that addressed this project and all the reports and all the material that was made to do this.

And then, of course, I was there, sitting in the same room, we went and had coffee together, we had lunch together, and we had many, many discussions about what was at work.


So, one of the things I -- Oops.

Not everything came on there.

"Ethnography in/of meetings" it says on there.

So, I was here in boring conference rooms.

I saw when they draw on the white tables.

You know, all these things.

And to see how an idea developed to file a report is, to say the least, revealing of how the Agency makes taxpayers comply.

Although this is, of course, only one of many, many risk-assessment projects, it allowed me to see many different aspects of the agency at work, so to say.

And I saw how they interpreted the law, or rather, listened, of course, to how they interpreted the law, how they referred to tax-compliance research, how they looked at statistics and also created statistics, how they had the tacit knowledge of why people do these faulty cost deductions.

They read the media articles, they discussed their friends, who had their own little shops and enterprises and so forth.

And I followed how they created surveys and ran their controls and how they talked about the values, the strategies they, as Tax Agency employees, should have in their contact.

Yes. The analysts -- one of the things they created was a survey, and there were like five, six versions of it done on Excel sheets like this.

They were deliberate in crafting, and then they engaged this research company to carry it out.

They conducted an extensive telephone survey for calling up 2,000 respondents.

So I interviewed people at this management team, and I also sat with Stina, one of the callers, who showed me how they worked through.

So, she had a screen where phone numbers to respondents kept popping up, and the call, how it was answered, and all the questions that come up.

Just one little impression of being there, seeing what she´s doing.

One call starts with a young girl responding that the contact person named on the screen who Stina asked for is never on site.

The young girl offers a mobile-phone number instead.

When this number is called, a man responds, and Stina introduces the purpose of the survey in an alert voice while she leans back into her chair and folds her hands.

The man responds quite reluctantly when he learns about its purpose.

He has a distinct dialect from the north of Sweden and gives an impression of almost ineptitude and ignorance.

"It is the girls at the office who know, you know?" he says.

He responds passively and slowly, starting each answer with, "I think," "Um...," and from this initial, almost down response, he sharpens his answers and seems increasingly on guard as the questionnaire comes to an end.

He really ponders on his final replies.

And Stina is not surprised, she tells me afterward.

She initially pointed out the anonymity of the survey and repeats it towards the end when the time comes to answer what she calls the "porn" question.

"Have you made any of these cost deductions yourself?" I, of course, question what she means with "porn." It comes from an earlier survey she had participated in, she said, where they had made regarding whether people watched porn on the Internet or not.

Hardly anyone did, according to responses, and she says the relation between positive answers and actual practice is probably the same with these cost deductions.

All involved in this survey thought that it was really well planned and executed with a valid number of respondents.

However, we can question what surveys, as a method, can say about a societal phenomena such as doing these faulty cost deductions and see why the outcome of the survey, in the end, was considered, if not useless, at least greatly constrained.

Another thing I participated in was the random motive control, who carry out these audits.

And as a commonly used method of the Agency, the purpose is to identify knowledge, create an unpredictable audit mechanism, and perhaps also set an example.

This particular one took 4,000 mandates to carry out.

400 taxpayers to be audited, 10 days per auditee, so to say.

And it was 40 auditors who worked with it.

So, to get statistically relevant numbers, it was very important to make the auditors work uniformly.

Each one had 17 forms to follow, from initial call to the taxpayer to closing the one after 10 days.

Any decision of accepting cost deductions should be the same across the board, across all the auditors.

It ought to be a secure way of working, and this department takes great pride in carrying out these tasks uniformly and securely.

So, the legal expert at the department said -- and you can read here what is said -- "In our contact with the taxpayer, we must be empathetic and considerate.

These amounts are usually fairly small.

We want to show that we think of our relationship with the taxpayers as long-term.

We have to show empathy.

This has not always been the case, and it is difficult to change our approach.

We have worked a lot on our service attitude over the last 5, 10 years, which has taken on an increasingly distinct form.

We want to create confidence, as taxpayers, then, are more prone to comply." So, yes, there is contact and also visit at the taxpayer´s office.

And in the secure and uniform way of working, they also showed empathy -- for example, allowing a taxpayer to get away with half of the cost deductions made although he did not have supporting evidence for doing so because the costs seemed reasonable.


So, what insights can be had in an ethnography of a successful Agency?

That´s the small snippets I gave you examples of.

The report in the making I followed was, in the end, not published.

The new insights the product created was deemed to have a negative impact on tax compliance and, thus, also on the Agency´s hard-earned legitimacy among the Swedish population.

The content of the report challenged the values the Agency says it holds and applies to society and was therefore buried.

The cost deductions they were looking for cannot be controlled and are not always to pin down if legal or not, as their Director General asked them.

Would our decisions hold on court?

Secondly, lo and behold, the results on the random audit control and the survey was contradicting.

People do not do what they say they do always.

And they are not consistent in their decisions.

A chance may be taken one day at deducing a cab ride in the bookkeeping ledgers while a similar cab ride be rejected the next day.

Which brings us back to thinking about the porn question.

You might also say that you never deduct cab rides for private purposes, regardless of what you do.

And thirdly, taxation plays very different roles in different countries, but the general message to take home for a well-functioning tax agency is it has to pay careful attention in its application of law and with room of maneuver it has to all the knowledge the TASC authority has about taxation.

So, obviously, recognizing whether law is subject for interpretation, tax-compliance research, statistics, tacit knowledge, media articles, anecdotes, hunches, surveys and random audit controls, et cetera, et cetera.

And also, not to forget the values they say they imply.

Tax Agency employees have to behave uniformly and securely, secure results, they have to be empathetic, cooperative, and reasonable, and all this has to be recognized.

Thank you.

BENEDICTE BROGGER: Good morning, and thanks to Nina, who has invited us here.

It´s great to be here.

And tell you a little more about our research.

This Fair Tax Project that Nina mentioned, that´s an EU-funded project on fair taxation, conditions for fair taxation, tax for social justice, and taxes for growth, how to reconcile these policies.

And in the Nordic countries, we have been studying cooperative compliance initiatives, how to collaborate with taxpayers to enhance compliance.

And as you probably know, compliance levels are quite high already in the Nordic countries.

But taxes are also high and innovation is high.

And this is sort of the new Nordic tax puzzle that underlies our research.

And I´ve done research on collaboration.

That´s the buzzword that really I was so happy when Lotta invited me into this project.

I worked with unions and management.

I worked with municipalities and businesses.

I worked with business in society and the role between business and society.

And then come tax -- had never thought about that before.

And it´s so central, and it´s so, in a sense, exotic topic.

So I´m going to share with you -- we´re halfway in this project -- what I have seen from -- I call this "The Rules of Engagement: Changing Relations Between Large Taxpayers and the Norwegian Tax Agency." And you see that little spot in red on top of there?

That´s Norway.

I mean, it´s as far north as you can possibly come.

And the rules of engagement that you will hear about, that´s of a government office called The Central Tax Office for Large Taxpayers.

In Norwegian, it´s even more tongue-twisting.

It´s Sentralskattekontoret for Storbedrifter.

And that´s something that you imagine on a nameplate on a door in a corridor far down there in a big bureaucracy in a maze of offices -- dusty offices -- with a lot of paper, and that´s right.

It is a door in there and many offices.

But it´s also an agile, proactive, highly competent unit.

And I´m going to open that door a little down in the presentation, just a little, how do they engage with large national Norwegian corporations.

Because how we see it is that part of the explanation for the level of trust of Norwegian companies and the level of compliance is the way that the Tax Agency with work them, their rules of engagement.

But before I present that, before I open this door, I´ll just give you some background on Norway.

Can you please, one more?

No, not that one.

Yeah, that one.

About taxes in Norway and the tax administration in Norway.

And please bear with me if you already know all this.

I just needed to present it as a backdrop to understand what this Sentralskattekontoret for Storbedrifter are doing.

Thank you.

Next one?

Norway has a very strong central government.

It´s quite a small country, little population, and a very strong government.

It should be a picture of a parliament atop there, and then comes Ministry of Finance, and we have a very powerful Ministry of Finance.

And then comes the Tax Norway, the Tax Agency, and it´s divided.

These divisions change every now and then, so you don´t need to look at all the details.

It´s just to show you that this is a strong and close-knit organization, and it´s divided into five regional offices, so they cover the whole of the country.

So it´s not fragmented.

It´s what Parliament, or at least what the Finance department says -- goes all the way down.

This is a Norwegian ski area, you know.

The regional offices are full-service offices out in the different parts of the country, but they are still -- and this is an important premise to understand how this central office works.

Next one.

Little bit.

What is the state income?

What are the taxes?

How is the division of taxes?

You see, we have social taxes, 27%.

That´s a very high number.

About half is paid by the employers and half by the employees.

And that´s for benefits, maternity leaves, pensions -- all of it is covered with this tax.

And the companies administer -- they deduct.

You have the same system here, I think.

The VAT is quite high.

Income and capital tax is 20%.

And this is the projected income from 2018.

But what makes the Norwegian economy special is our oil and petroleum, and we have a very high income from that.

Next year, I think we´ll be 17%.

That´s low.

It has been much higher.

But with the lowering of the oil prices, that goes down.

But that means we are kind of a resource-dependent economy, which has its benefits but also its disadvantages.

And the rest of the income are different kinds of fees.

So now you know sort of a little bit about the taxes and the central office work with corporate taxes and the VAT, just so you know.

Okay. We have the next one.

Our tax system is progressive and redistributive.

There have been some regressive elements the last years.

But it´s also tax as a policy instrument in Norway.

It´s used for social equality measures and for innovation.

And the tax design tries to keep these separate and not mixed up and try to balance.

The support for innovation and support for business and support for the economic side, which basically means lowering taxes, and in the other hand, to increase benefit programs and to enhance the general welfare.

So it never seems to find the right balance, so there has been a number of reforms over the years.

And we are pushing hard on innovation to reduce our dependency on oil for many difference reasons.

And also, the taxes come in here.

So taxes are not just about revenue.

It´s about the kind of life we want, the kind of state we want to have, and what can taxes contribute.

Okay. Yeah.

So, this is the background information.

So, now to open the door to the Central Tax Office for Large Enterprises.

I have circled it here on the map of the tax of Norway.

It´s actually three offices that work with the largest companies in Norway.

And they seem to be at the bottom of the hierarchy -- they´re not.

They´re very important, and they have a direct line up to the Tax Director and also the Ministry of Finance.

They´re very influential.

And it provides guidance to taxpayers, administration, and tax filings.

Just the ordinary tasks of a tax agency.

And the Central Tax Office, or it´s called SFS in Norwegian.

It has its census as all the largest companies in Norway.

And it´s companies with an annual turnover more than 3 billion Norwegian kroner, which would be...


I won´t try to do the math in my head.

1 US dollar is about 8 Norwegian kroner.

Gives you a kind of perspective.

It also includes companies with very complex tax affairs and companies on the special tax regimes and high-net-worth individuals, as well.

So they have all kind of complex corporate tax issues.

And if we can continue.

No, I´ll stop.

The census of SFS comprise 1% of all companies in Norway, and that´s quite a small number, and they provide 80% of corporate taxes.

So the cases they have -- they really make a difference -- is really millions at stake, both for the government and for the companies.

So what they do has a high-revenue effect, but it also has a high effect because these are the powerful companies in Norway, and they have an impact, an opinion, on the the Tax Agency.

And this office was established in 1992 in relation with the tax reform that ended the Social Democrat era in Norway.

And when taxes were reduced considerably, tax base was broadened, and that was before the opening of the inner market of the EU and before Norway decided not to join the EU.

We didn´t know that. It was preparation.

And the office was established to help the companies adapt to the new conditions, internationalize, and it was also to iron out the wrinkles in the new tax law, because Norway didn´t have that experience with a market economy.

So everybody needed experience, so it´s a kind of mutual help in setting up this office.

10 years later, they set up something called Forum for Large Taxpayers.

That was a more arm´s-length distance between then the companies and the Tax Agency.

So the Social Democrat model of close collaboration, there was more distance, it was more laissez-faire.

It was more, "Okay.

You are there, and then, we govern by goals than this direct face-to-face, balance of interest that had been earlier.

Then came the 2008, with the OECD initiatives, and that was also the time of the increasingly complex international tax situation.

And that was hard on everyone, because how to find out what´s right?

Where´s the line between compliance and noncompliance.

And then, last year, the office was reorganized, and I see you nodding, because this is the pattern in all countries, I think, that all have had to deal with.

And SFS, in this period, has maintained the same way of working.

If you could please, next one.

And that´s something they call "The SFS Way," and it´s a culture.

And they started in 1992 to develop this culture.

And the first director, he was very firm, and he was very strict about how to approach the corporations, how to work with them, both ways.

And they recruited highly competent tax officers and also people who have pedagogical skills and who are calm and who had special skills in working with these kind of complex situations.

A meeting with a corporation about the tax affairs -- for a company, it´s an emergency situation.

They don´t want the other to know about a visit from the taxman, only if it goes into the court.

But in Norway, tradition is we try to avoid the courts as long as we possibly can.

If things can be solved out of court, that´s best.

So, the SFS way was to establish one point of contact between a corporation and the tax agency.

So they only dealt with the top level of the corporation and face-to-face contact and realtime controls, and that was a quite radical approach at that time in 1992.

They did what they called parallel assessment and control.

So the contact person would follow the corporations they´re responsible in every media, and when anything came up, they would call.

They have a meeting, they would make a contact, say, "Okay.

What´s happening here?" And the philosophy better helped them get it right the first time than make, wait and see, and then have a terribly expensive control afterwards.

And that was the philosophy from the start.

And they have teams -- generalist/specialist rotation teams -- and intense team learning and support.

They told me, when I was having an interview, one said, "The first meeting I came to in my corporation, and I met a wall of black suits, and they were tax lawyers and tax advisers and the corporations." And then, to have that support from other people in the organization, that is crucial.

So it´s a quite open discussion internally in the SFS office, and that is really part of the way that they can work so advanced, so far out into the corporations that they actually do.

And they also publish this book.

It´s called "Company Tax In Practice," and in that book, that´s the 2012 edition, and it´s the 4th edition since the office started.

Every case, every ruling is in that book, and that means that companies can go there and have a look.

"What has SFS done before?

What are they likely to do now?

How do they interpret it?" And they do that as a service to the community, to also take down the tension of working with the tax authorities.

And they participate in this Forum for Large Companies.

They are out in universities.

They are really actively engaging also with the law community.

So they are a presence.

It´s a very low-key presence.

They´re hardly in the newspapers, but I found this picture, and that´s the recent director, the top management of SFS, in the local newspaper, and they´re in a building.

You wouldn´t believe. It´s not flashy.

It´s an old 1960s, drawn-back building.

They really walk the talk, the way they operate.

And then, finally, these rules of engagement that I wanted to share with you.

And I have drawn out -- It´s not rules of engagement as such.

It´s not a doctrine that says, "You engage this and that way on that doctrine." But it´s enough of a systematic that I want to say it a rule of engagement.

They have something called the Blue Book, and they have something called the Pink Code, and they have cultural values, and it´s gathered in there.

And they train the new employees in these values and in this way of behavior.

And I wanted the five rules of engagement that I have seen to be crucial.

One, on the use of words.

They say to the new people coming in, "You´re so powerful.

The words you use, their power is enhanced." So if you say, "This is very suspicious," then that´s really very suspicious.

You cannot use the word "very," that we use all over the place without actually meaning much.

They´re very concerned.

Never use the word "very," because that adds so much weight in the mind of the taxpayer.

So all the words you use and the tone you use really make a difference.

So they are very concerned with how to engage with words.

So that´s the one rule of engagement.

The other one, maintain active contact at all times with the company.

And that doesn´t mean to pester them, that doesn´t mean to give them a feeling that they are being looked over the shoulder all the time.

It´s also a matter if a change in tax law, they offer to, you need to discuss this.

And also, the companies call SFS and especially the tax lawyers call them.

If they come across a tax scheme that they haven´t met before, they know they can call SFS and get qualified input about it without the SFS suspecting anything, without sort of starting a potential case.

Two minute, yes.

And then, equality before the law.

That is a very important principle.

And also, the companies expect the tax authorities to maintain a level playing field.

It´s acceptable to have differences between different industries that the tax regimes okay but not different treatment between companies.

And then, word spreads around very, very quickly.

So they´re very concerned it´s equality before the law.

But that also means that, if there is a conflict, if there is a disagreement, they´re very trained to say that, "Even if I´m very angry, even if I get very hurt in the situation in meeting the company, that shall not affect my judgment." That´s hard sometimes, and that´s also why there´s the team and the team support.

So they´re working on this all the time, and this is a never-ending story, so they work to maintain these rules.

And then, taxpayer dignity is very important, and the principle "Do not embarrass the taxpayers." Do not use a kind of negative input to try and force the decision that you want or force them to comply.

And that also relates to the last point, risk management.

They know there´s some companies who don´t want to pay taxes, and they know there´s some companies that maybe have an incompetent head of tax or have not implemented proper tax-management routines internally, and then, they must deal with these companies in different ways, so they have to manage these kinds of risks in the way they engaged with the corporations.

And this way of dealing with a corporation has created a level of trust and a possibility to thematize compliance and noncompliance without making an actual judgment, and that makes it possible, also, to comply, actually, and to do it perhaps not always willingly but as a kind of necessity.

So this is the story of the door.

I closed the door.

A brief little intro into a fascinating office that´s a treasure, that´s an heirloom, and it needs to be shined every now and then.

So, thank you.

NINA OLSON: So, now we will have Emer.


Good morning, everybody, and thanks to Nina for the invite.

It´s something of a privilege, actually, to be invited to address you here this morning.

I´ve worked in taxation in some shape or other since 1986, and I´m now reflecting on my life since Benedicte described at as somewhat exotic.

And I think in all my years, I´ve never considered what I do in any way remotely exotic.

But I´ve got a new narrative since this morning.

In any event, next slide please.

So, I´m involved in a fairly significant research program back at NUI Galway, and I guess it straddles three areas.

Firstly, I look at governance, tax planning, and processes in multinationals.

Then, I look at social policy, citizenship, and taxation, and, finally, regulatory relationships and compliance in the tax arena.

And I guess what I´m going to focus on this morning is a little example, a little insight into an area of research involving parts one and three of my overall program.

I am a former tax manager with PricewaterhouseCoopers, and I guess the older I get, the less interested I get excited about little technical nuances in legislation and the more excited and interested I get in perspectives and interactions of the various stakeholders involved, if you like, in the tax landscape, both nationally and internationally.

I´m not sure if that makes quite an anthropologist just yet, but my colleagues here are convincing me that I just might be one.

Next slide, please.

I was involved in a particular conference back in about 2008 at which I spoke which gave rise to a particular issue of, in academic terms, in any event, an important tax journal, which is called "Critical Perspectives on Taxation." And I joined with a number of colleagues following that -- believe it or not, there was a demand for it -- to come up with a very particular journal edition, if you like, which would start to look at taxation a little bit differently throughout academia, because the predominant paradigm, as you might expect, is an economics one.

And we were looking at this quite differently.

And in our editorial, I guess the spirit of the editorial to the journal edition is summarized here.

And it really is this recognition that, globally, tax touches every citizen.

In some way or another, it matters to everybody.

And yet it´s what we´d call a marginalized field of inquiry.

Why is it that, essentially, the economics paradigm, if you like, is the predominant one?

And my position here is not one paradigm being better than another.

It´s the need for different types of lenses on the same issue, if you like.

It also tends to be, as many of you know, quite rule-bound, so we´re searching for a right, wrong answer.

"Is it tax deductible?

Is it not?

Is the transfer price the right price?" Whatever the context is.

However, in my own teaching, as well, I´ve moved towards really trying to get students to see, is tax anything more than just a cost to be managed in a business?

Is it anything more than just a personal cost to me as a citizen of a country?

And I think this is what makes tax in the P&L, the profit and loss, account of an organization potentially different to all the other overheads.

So, they´re all costs, but yet if you´re sitting from a CFO position or whatever, is it anything more than a cost to be managed?

And we were involved, all of us, particularly, I guess, through the business-school communities and universities, we´re involved in educating, if you like, the future set of accountants, tax managers, if you like.

And I had an interesting experience last year where I covered a topic called Tax Ethics, which some people believe is an oxymoron, but I do cover it, nonetheless, with master´s students.

And in the course of the evaluations, three people actually questioned the necessity of that topic.

So I think we have a long way to go, because I said, "Look, we´re just moving on here.

We´re moving on to a big-four company.

Our job is going to be tax minimization in accordance with the legislation.

And I was one of those.

I haven´t gone to the other side or anything like it, right?

I understand both sides.

But it´s just, from a very early age, people who tend to choose a lot of these careers already have made up their mind of "What´s the main currency?

How does this actually work in practice?" So just moving on, then.

You can skip the next slide, actually, altogether.

Yeah, move to that one, please.

So, essentially, I´ve been involved in a body of work looking at how multinationals manage themselves from a tax point of view.

This is not a tax technical piece of work.

It´s very much looking at, if you like, the social reality within which tax people work.

Unfortunately, to date, the only perspective I have is that of tax executives, hence the wonderment of coming to speak with you today, because they have views, believe it or not, on the IRS.

And it would be wonderful, at some point, to get the IRS views on some of the same items.

So, I have spoken with very, very senior VP positions, basically, in tax or tax and trade, and I focused initially on the Silicon Valley area.

So it´s an anonymous study, but they´re very large IT companies, so we can all start to guess where maybe some of them are from.

And I´ve also spoken to them over a 10-year period.

So, back in 2005 and 2015 more recently when I was lucky enough to have a six-month stint in the Harvard Kennedy School of Government.

And I focused on four areas, but for the purposes of the talk this morning, I´m just going to give a snippet on one particular dimension.

So I was focusing on strategy, tax-risk management, performance measurement of tax and how that drives certain behaviors within organizations, and then, that relationship with the external environment.

I´ll focus just on TRN for now and only within that two aspects, because, believe it or not, there´s more reputation at risk in dealing with international tax jurisdictions.

But I also would like to share with you at the end maybe a number of quotations that these tax executives delivered to me on their relationship with you guys.


And how they would see that today.

And there´s lots of good stuff being said, but maybe I won´t focus too much on that today, and we´ll see where we get with some of the other observations.

Next slide, please.

So, in terms of risk management, then, very, very quickly, what did I find were the main drivers of tax risks?

This is all according to them now.

This isn´t literature speaking.

This is the voice of the executives.

So, obviously, you´re always going to get the changing regulatory environment to which they need to respond and the whole big, big area of dealing with multiple tax jurisdictions.

As these companies are expanding, somebody said they thought the IRS was bad until they started dealing with some other countries, right?

So, relativities, in terms of dealing with different tax jurisdictions becomes a big issue for these companies.

This was at 2005.

I was dealing with the post-Sarbanes-Oxley world, so what they said is, "We´ve gone back to paperwork." In fact, in one of the VPs offices, she showed me the height of paper, which they were very happy if anyone from the IRS wanted to come in and look through.

So it was like, "Give them everything -- lots more data, lots more information." Next slide, please.

Keep flicking a couple of times until you get the whole picture up, right?

Because it is this mad.

So, this is, according to them, how they would describe to me their tax strategy, for example, and their tax-risk management.

So, some of them were conservative and some of them, I´m never sure how to interpret aggressive but not slimy.

Some of them are cautiously aggressive.

What you´ll note is the use of the aggressive versus conservative.

This is the language, if you like, of it.

Very surprisingly, at the time, and this is something that has changed is, very few formalized tax-risk management strategies, as in documented, "What´s our policy on X, Y, and Zed?" What are their mechanisms?

Well, most of them, as you can imagine, they like to talk to you to get advance rulings, where possible.

That´s not possible in every jurisdiction.

I think a nice one to look at here, however, is this one, which is "Follow the leader." So, sometimes it´s just, "I´m going there because others have gone there before me," right?

And we all do a little bit of "follow the leader." And you know what?

In tax world, it´s something similar.

So, particularly, some of the smaller companies would look at what some of the larger companies are doing, and they would assume it´s been fully tax-vetted if you like and, therefore, it´s a legitimate tax thing to do.

Okay. Moving on.

So, the two areas of risk, then, were reputational risk.

So having said a little bit about overall how they see their risk, their kind of profile if you like, if we looked a little bit at reputation risk, this was huge and has got even bigger.

So in 2005, tax was beginning to get on that public agenda much more, if you remember, post-Sarbanes-Oxley, but it´s ramped up completely since then.

But probably the main point of this slide is, that "Wall Street Journal" test, they all talked about, okay?

None of them quite told me it meant you got fired the next day, but they were all terribly, terribly worried about it.

It certainly left you on the back foot.

As a VP for tax, if you reached the front of the newspaper for that reason, that was a problem.

The CEO factor, specifically, is to do with the tax compliance level of the senior executives themselves, in respect of their own personal taxes.

So that needs to be fully in order, because that negatively impacts on, obviously, the reputation of the company, as well.

Next slide, please.

Again, on this, because I´m only giving you a flavor of it, but I´d like to maybe focus on the last one where the response was often that increased regulation is an overkill, right?

But critically, this talked about a few bold companies that are causing trouble for the rest of them.

And I actually think that´s an important message and one we don´t get out, I guess, through populist media that frequently, which is a lot of the VPs feel tax is getting a bashing, right?

Tax in the corporate world is getting a bashing.

But actually, even themselves will say, "We know there´s a couple of seriously aggressive taxpayers, and it´s almost ruining the game for everybody else, if you like, okay?

And ruining the reputation." So I think maybe a little bit of balance, in terms of coverage, needs to be considered.

Next one, then.

Always kind of put this up just for the fun because I even thought it was funny when he said it, which, for him, the fun has gone out of tax.

And I´m not even going to say what I think he meant.

You can just reflect on that one.

So the secondary, then, is the area if international tax jurisdictions, the second area of risk, if you like, that I was just giving a talk on today, which I think you might find interesting from your own perspective.

A general sense that foreign tax audits were becoming more aggressive.

Also, the idea of totally unreasonable positions.

I was rather shocked in one particular case where they literally said sometimes they just get what they call a crazy estimate of a tax bill from a foreign tax jurisdiction.

And the starting point is, "That´s right," and you are left as the taxpaying company to defend your position and negotiate down, if you like.

But there was no basis for the figure.

It was literally an estimate without any evidence as to how they came up with the figure.

And this is how some of the foreign jurisdictions are dealing with the US companies, and that sometimes is why they´re pulling out of certain jurisdictions.

They´re finding international jurisdictions, some of them, extremely unreasonable.

And, of course, the conflicting message, which I guess maybe even talks to something Benedicte spoke about earlier about the importance of consistent messaging across various issues.

So maybe flick on two slides to what I call "What´s changed since 2005?" Right?

So, again, sticking with my two areas, reputational risk and, secondly, international jurisdictions.

So, with reputational risk, what´s happened is, everybody is talking about tax.

Obviously, the media coverage, generally, has gone up, and I know that´s obviously the case in the US.

It´s certainly the case in Ireland.

I wonder why.

But, for example, you´ve got your European Commission.

We´ve got talk of sweetheart deals and maybe one or two large American companies that are being taken to task within the commission.

But social media is very, very significant.

I´m sure you get this, that people are talking about tax that never talked about tax before.

We have social-justice groups for whom tax has become top of their agenda.

They´re also now employing, that didn´t back in 2005, but more and more, they, too, are employing tax experts to do the tax talking, if you like.

And I guess a big drive on openness and transparency, and I think this is something that´s possibly on its way to tax administrations, as well.

And whilst there´s certainly an understanding, sensitivity around tax data, et cetera, I think we are getting to the point where fuller disclosures from administrations, both in terms of what´s happening, vis-a-vis taxpayers, and the administration´s own activities, I think we´re moving towards more and more transparency.

And that is where, quite frankly, the social-justice groups do a very, very good job in pushing that agenda.

So it´s got kind of complicated.

Maybe when the guy said it was more fun back in 2005 or pre-2005, all these other people weren´t involved in the conversation.

Moving on, we´ve got two fairly topical ones, which is obviously the Starbucks.

And one of my interviews said, "I´m still stumped by why Starbucks paid the UK HMRC anything, more than they needed to," okay?

Almost gave a donation and, as I´m sure you´re aware, when they gave that donation, I think the HMRC took some time to change their rules and regulations so that they could actually take it, because there was no provision under which they could take the donation, if I call it that, from Starbucks.

Next one.

We´ve got Apple there.

And lookit -- the headline here is "Apple finds out it took the tax game too far." So watch the language here.

It´s actually the term "tax game," which is interesting just from the way -- Look, these are headlines.

These are headline grabbers, and that one certainly worked.

Skip the next one, maybe, which is public debate, and I´ll stick with this one, which I thought this was a good once back in New York Times, 2011.

And remember, what I´m trying to see is what´s changed/shifted between ´05 and ´15.

So this was a reference to General Electric and specifically to the team within General Electric, where they talked about their company´s slogan.

Sorry, yeah.

The company´s slogan here being, "Imagination at work," which fit it very well what they maintained with General Electric´s tax team.

But I suppose, from my point of view, in terms of watching this from a social and an institutional perspective and who are the players, the team includes in this company officials not just from the Treasury but also from the IRS and virtually all the tax- writing committees in Congress.

And this is something that maybe in the Q&A or in the discussion part later, this kind of revolving door, if you like, something maybe it would be interesting to discuss, and certainly, it´d be interesting getting your perspectives on it.

Moving on, then, to the international tax jurisdictions.

Well, you don´t need me to tell you what´s changed.

We´ve got BEPS.

As all have said, we went from SOX to BEPS.

We´ve got the EU Action Plan for Corporate Tax System, we´ve got international exchange of information, FOI all over the place, and arguably significant -- certainly in the Irish case but I think worldwide -- significant enhanced revenue powers.

Obviously, the global recession, and I suppose what´s interesting, that happened since ´05, and that really led to I suppose what we might call a tug-of-war around the world for exchequer returns.

So if the pie gets smaller, how it´s split becomes even more and more important.

So something I think all our panel here would be conscious of is how the conversation around tax changes, depending on the economic climate on that day.

And if we´re very highly principled and of a highly principled tax system, it really shouldn´t matter what the economic climate is.

So I´m just going to skip on to two slides to the heading that says "Perspectives on the IRS," because I´ve been given my time warning by the boss.

So here´s a couple of quotes just for maybe a little reflection, and we can go back to some of them at the end.

So, CAP is the Compliance Assurance Program, which I´m sure you´re familiar with.

We found that business can´t wait for the IRS to make up its mind.

So this is a very significant issue, particularly for IT companies, and it really doesn´t matter about whether it´s just in the context of compliance/assurance process but responsiveness when they want advance rulings, et cetera, et cetera.

Lots of companies talk about the business opportunity being gone before they can get some kind of response from the IRS.

"I would not engage with them," being the IRS, "in a program unless I was really sure who I was dealing with." So this comes back to the issue of relationship, and again, with large businesses particularly, that notion of having, if you like, a customer relationship manager and whether it´s appropriate that that should remain to be the same person through a 5-, 10-year period, I think there are question marks around that, as well.

However, there was a very significant -- and I really want to emphasize this -- empathy and understanding, if you like, by the senior VPs, that they felt what has happened with the IRS is, you don´t simply have the resources that are needed to do the job as well, if you like, as it was done maybe 15, 20 years ago.

And they see this as a real, real problem, and they see that, ultimately, it´s costing them more money, where questions, they feel, that are being raised are inappropriate, if you like, just sometimes through lack of experience, maybe.

Strong reference made to a lot of retirement, a lot of pooling of resources, can´t replace people.

We´ve had this back in Ireland, too.

We´ve had it across all public sector, I guess.

But this is a big, big issue, and I just wanted to get that point across that they do understand that that is an issue for you.

Two slides on, and I´m going to finish on this point.

There are more, and I hope the slide deck will be made available, because I think there are some nice quotations here.

But the one that I think maybe we should think a little bit about is the middle of this quote, where they say that the IRS has changed from a collection agency to a metrics agency.

So their idea here, really, was that -- and we have this back in Ireland, we have it in universityland, where we´ve all got that wonderful thing called KPIs, your key performance indicators.

And I guess what the companies are saying is that they´ve become more aware of you guys being driven by your own metrics, but your own performance indices, if you like, right?

And I think the issue here is, the more that´s understood in the taxpaying community, one might cynically say they focus on trying to help you deliver your metrics, then, and now we´ve got a nice little maybe relationship back again.

So I think it´s just to be aware that there is a sense that it´s more metrics- than principles-based is the direction you´re going because you´re under such pressure on resources, so you say, "Right.

Well, at least let me deliver my XKPIs," or whatever, and that the problem then is, in the context of a game, it´s a new set of rules.

It´s a new way of working with you.

So I think when we start to drive ourselves, if that is true, by metrics, we need to understand that metrics of a certain nature drive a certain behavior.

So, that old saying, "What gets measured gets done," so we need to be sure we´re measuring the right thing, I guess.


I didn´t get to say all my points, but hopefully, I´ve given you a flavor of the richness.

And as I said, my final slide calls for a voice that I think isn´t particularly being heard through some of our research, with obviously the exception of Lotta´s fantastic, in-depth work in the context of The Swedish Agency, but I think we need to hear in the public voice a little bit more from the tax administrations.

Thank you very much.

NINA OLSON: So, I do recommend that everybody look at the slides and the quotes from the slides just throughout.

They´re really fascinating to read.

So, Johanna.

JOHANNA MUGLER: Before I start my presentation, I also just want to say how delighted I am to have the opportunity to present here some of my work to you.

And I´m not as distinguished a tax expert or tax researcher as my panel here -- I´m new to tax -- but I´m doing research on the making of international tax law.

And while I have conducted a lot of conversations over the last year with international tax experts around the world from private and the corporate sector, from the OECD in Paris, and the state representatives and tax diplomats or tax negotiators, there are moments in the research where especially tax experts working for treasury departments or finance departments and from tax authorities considered talking to anthropologists an inappropriate communication and are afraid of the consequences and the effects if they engage in such communications for their work environment.

And so when I received Lotta´s and Nina´s invitations for this panel, I just thought how terrific and to have an opportunity to maybe overcome some of these fears to show us how we are working and what we are interested in.

And so thanks a lot for having us here.


As I said, in my current research, I explore how international tax policy is being made in practice, and I especially focus on the current negotiations around value creation, which grew out of the OECD, G20, and Base Erosion and Profit-Shifting initiative.

And while my research is not, per se, about tax compliance, it is somehow indirectly very centrally connected to tax compliance, and it is about the contestations of corporate fiscal responsibilities or about the fights between different groups of taxpayers and the fights between different countries.

As you are probably all too familiar with, or what Emer also just said, since the last financial crisis, there have been loud, public demands in various countries, including the UK, France, Germany, the US, Australia, but it was in other countries, that multinationals are not, and I quote, "Paying their fair share of corporate income tax." And when global and national tax directors and COOs of these multinationals defended their companies´ tax structures as legal or in full compliance with the law and insisted that we pay what we owe, politicians and also public representative bodies often insisted that, "We´re not accusing you of being illegal.

We are accusing you of being immoral." So the bottom line of these public campaigns and also the state inquiries was that, acting within the limits set by tax law was not sufficient for MNEs anymore to qualify as morally responsible taxpayers anymore.

And the BEPS Project can be seen as a response by political leaders of the G20 countries to kind of react to these various forms of public outcries.

And while the OECD, Center for Tax Policy and Administration in Paris, they have worked on Base Erosion and Profit Shifting issues for over 20 years or some of the issues even longer, they never had the political backup to take the ideas and proposals further, as several interview partners pointed out to me.

So, when the OECD managed to get the mandate from the G20 to update international tax laws and to ensure that profits are taxed where real economic activity takes place and where value is created, that was a real game-changer, as various policymakers pointed out to me.

I´m in the beginning of the research, so I´m sharing more the questions and my methodology with you than results, so I´m very interested, if we have discussions, to point me in the right directions or have questions.

So, what I´m doing firstly is, I´m trying to answer the simple question with my research, "What needed to happen, in practice?" It´s such a big reform project -- the biggest in international tax law since inception in the 1920s -- what needed to happen that such a big project gets launched in the first place.

And who is in charge of such a big reform project?

I explore who´s officially and unofficially involved in the negotiation and the making and updating of international tax policy within that initiative.

And the kind of aim of the research is to come up with factors which can explain who or what can direct the negotiations and for what reasons.

In other words, whose interests are being heard or not heard, and for what reasons?

In order to answer these questions, I document the actors who were involved in the BEPS Project and the decision-making processes within that initiative.

To collect data, I follow meetings in Paris at the OECD´s conference center, public-owned close one, and I do document analysis, and further interview off the record, current and former staff members from the OECD Centre for Tax Policy and Administration in Paris, national delegates to the working parties, and the Committee of Fiscal Affairs, and tax lawyers and tax advisers from the corporate and private sector, academics, and also tax experts from civil-society representatives.

And I speak to these people at the OECD at the Conference Centre or at the Centre for Tax Policy, at their respective offices, I speak to them on park benches, if necessary, in museums, or on the phone, and also at major international tax conferences taking place worldwide.

In the meetings at the OECD, they were all closed to the public, so each meeting I want to attend, I need to renegotiate the access or the countries have to be asked whether they mind whether I´m participating.

The public ones are open.

And the international tax conferences are sometimes -- You just have to pay a very heavy fee, but you are, as an anthropologist, welcome to attend them.

So this year, I attended one in the International Fiscal Association in Rio, the OECD/USCIB Conference in Washington, and next week, I will go to India for the Indian International Association annual conference.

And I´m interested in these interviews or in these conversations with this group of people, especially in their experiences with the decision-making processes within the BEPS Project.

So how they reflect on issues like global tax fairness, diplomatic, technical, and strategic skills, concepts of accountability, understandings and practices of accountability, or concepts like regulatory capture or revolving doors.

What do they think about these cliches which are very common in political sciences?

And I´m specifically interested in their ideas that they can kind of reflect on the specific constraints each of these policy-shapers and -makers are going to have to deal with.

That´s the first thing I´m doing.

So I´m looking at the actual processes of trying to document who´s actually meeting where, whom, when, and where, and what are they talking about, and then I´m trying to make them reflect about the processes.

And the second thing is, which is also typical for anthropological work is, we´re kind of contextualizing and historicizing the interactions we see and observe at these meetings, so within the BEPS Project.

So, for example, I asked, "How did these people, or we, get to a situation in the first place where an increasing number of people worldwide call longstanding and very well established tax-planning structures ´immoral,´ unfair, and raise up against?" So how did the idea, for example, become common practice that so much value is created and therefore profits booked in places like Bermuda where only two people and a dog live.

As a tax director of a large American multinational said recently in an interview with me.

And the fascinating thing for me right now, at the point in my research, is that many people I speak to in the international tax-making community, they agree that it´s strange that so much value gets created in these islands where hardly anyone lives.

So, some corporate tax lawyers call it paper games, which big-four tax advisers learned from the books of Wall Street bankers in the ´90s.

They were looking at their books, and they saw how much money they weren´t making, and they felt, "We want to do something similar in tax," and they started to come up with these IP-shifting structure, which they then started to sell to their clients.

Some former national delegates call these things just plain wrong, immoral, a disease of our time and democracies.

Some advisers trace it back to the idea that intellectual property can be separated from the people who invented it, which goes back to the 1920s and the League of Nations.

But they also say it is not so strange, because capital and intellectual property is, according to their views, the most valuable thing in a company.

The most interesting answer, because it reflects the shift between moral and legal ideas, was given to me recently by our tax lawyer, who also works for one of the most valuable tech companies in the world, and he said, "Of course it used to be malpractice to book profits where no real economic activity happens," but at the same time, he insisted that what his company does nowadays is legal, although people, hereby referring to public hearings and inquiries, might not like it.

He then also explained to me that the money is also just not lying around, as everyone at the OECD are always saying, that it´s not just lying around in Bermuda, as he says, but used by venture capitalists who financed the startup industry, which is a very risky business, which then also justifies returns to two people and a dog, as he said.

Last thing, which is interesting, is that all the people I talk to say we should pay more corporate income tax, whether it´s US multinationals or Swiss multinationals or British multinationals.

I´m not at the point of the research yet where we will talk more deeply about why do I think this and why they don´t implement it.

So, what I´m tracing right now is how these certain tax-planning practices around value creation move from being considered a malpractice to being legal to, again, being framed as immoral and unfair, but, also, how these different actors -- from the state, from the corporate, from the private sector or academics, public representative bodies -- how do they draw the lines and the categorizations differently and for different reasons?

I believe this is very important to get an insight into the tax policy coming to you´s value and belief systems, which is, in turn, important for understanding the constraints and the working conditions of policymakers, but, also, about the kind of bigger game between different groups of taxpayers within a country, but, also, increasingly, internationally.

To sum up, international tax is a field where, until recently, the subject matter -- namely, legal and economic specialists in government and industry -- were working on policy issues in a relative vacuum, as they say.

And it is the field which received, over the last years, an immense amount of lay interest.

And some of the tax advisers always make fun of when they read something in "The Washington Post" or "New York Times" when journalists make mistakes when they write about international tax.

And so, there is this immense lay interest, but, also, there are these kind of waves of moralization and re-politicization.

So, I believe an anthropological approach to study such a field may be useful because -- and I´m adding a bit upwards what Lotta already maybe said -- our main research question in anthropology is often, why do specific people do things on a regular basis and without much thinking, but which appear to the casual observer, the outsider, or the layperson as strange, as unreasonable, as exotic?

Or, in my field, one could say, as I quote, unfair and immoral." So, our main working attitude in anthropology is that we should not talk about people, but with people, and explore their specific context of action and the belief or value system -- as Lotta says, their world view -- and that, most of the time, we will then find out that they have very good reasons for their, I quote, exotic, strange, and unfair and immoral behavior.

So, I believe anthropologists, because their time frame for research is very long -- I mean, we work on issues for 10 years, often, and the research budget is big because we are allowed to just hang out in places for weeks, for months, compared to colleagues in the political science, for example -- they need to get their data within six weeks.

It has, also, institutional reasons why we´re equipped to do these very long forms of research where it´s difficult to get access sometimes.

So, I think we´re equipped to explore very difficult to access context and explain people´s specific constraints of their action, and hereby, make all the actor´s reasoning for the actions more understandable to a wider audience.

This might not help to create immediately a fairer tax system or more tax compliance, but I believe, for the research I´m conducting, by shedding some light into the production of international tax-policy making, by showing who´s in charge, which has effects about who can be held accountable, by showing what are these people actually doing when they negotiate, when they working with and against each other, what are their values they cherish, we can give insights into the constraints of international policy-making.

This kind of knowledge of how things work in practice can bring back a certain trust into the international tax system and maybe can specify public and political contestations over fiscal accountabilities, and thereby, also specify fiscal accountability demands, I would say.

This is something very subtle, but I believe it´s something important in this increasingly international tax chaotic world, as you colleagues in Treasury and other world treasury departments say.

So, thank you very much.

[ Applause ] NINA OLSON: I think that dog is the most valuable dog in the world.

We all need to find that dog.

Okay, Kiran, our last, but not least, speaker.

KIRAN AZIZ: Thank you very much.

I´m very delighted to be here, as everybody else has expressed that.

I thought I would add something with the introduction Nina gave of me, because I have been at the Norwegian Business School for a year, but pastly, I have worked as a lawyer with international tax, so I have been working for the multinational companies who had to deal with the IRS, so I have the perspective from the other side.

In addition to fair tax, the other part of the researching program I´m working with is World Bank, where we are looking into how asset owners and asset managers can identify and manage tax risk in their investments.

And the purpose is to develop some practical guidelines, especially for the Norwegian institutional investor, which they can use when they are doing due diligence and have more focused and responsible tax practices.

So, we are currently taking stock of good practices, challenges, and where the field is in international context.

And now we´re to today´s topic.

The purpose is to give you a brief introduction about what tax amnesty is in the Norwegian context.

And I´m aiming to cover these topics.

And if the timer allows me, I´d really love to hear, what´s your perspective on tax amnesty in the US?

So, tax amnesty, in general, is a way for taxpayers to pay a defined amount in exchange of forgiveness for previous tax liability to one or more tax periods and without fear of criminal prosecution.

It typically expires when some authority begins a tax investigation to past-due taxes.

We could say that it is one of the voluntary compliance strategies to increase tax base and tax revenue.

And in Norway, tax amnesty is regulated by law.

It has been in place since 1947 in the Norwegian Tax Act, and it is known as "voluntary correction." In Norway, it´s a permanent, and not time-limited scheme, so calling it "tax amnesty" is misleading, at least in the Norwegian context, even if it´s known as "tax amnesty," because the main rule is, if you are a tax resident of Norway, you are taxable for your worldwide income and wealth, like it´s in a lot of other countries.

And regardless of whether the income of the world is taxable or no, you still need to report that in your tax return.

But we do know that, for various reasons, people don´t do that.

In order to grant tax amnesty, certain conditions need to be fulfilled.

It is applicable for both physical taxpayers and for companies, but my focus will be typically on physical taxpayers, because that´s what tax amnesty has been used for in Norway.

And in order to grant tax amnesty, what you need to do -- that you need to report about your previously taxed liabilities to tax authorities up front -- they get knowledge of it.

So, the crucial element is that you need to be proactive and give sufficient and correct information when you´re asked for tax amnesty.

And if you meet the condition, you will grant tax amnesty, but you still need to pay taxes, but what you will avoid is to be imposed 30% taxes in addition to what you were supposed to pay in taxes, and, of course, no criminal prosecution will follow.

And one important assumption for the tax authorities to grant you tax amnesty is that you do it correctly forward on and that you comply with the rules.

So, that´s the basic ground of tax amnesty in Norway.

So, how has it worked in Norway?

Even if the regulation was in place for many years, it is mainly the past 10 years where tax amnesty has been used.

And it was one case in 2007 where the mayor of Oslo and his family had several bank accounts in Switzerland.

And within the family, the bank accounts were known as the "aunts in Switzerland," and they were, of course, not reported in their tax return.

And this was disclosed by one of the biggest newspapers in Norway.

So, apart from big discussion, it also led to the mayor gave his resignation due to a lack of trust among the people and the political leadership.

But the good outcome of this was that this really set tax amnesty on agenda among the authorities, and a lot of people got an awareness about the tax-amnesty scheme, and people started to report about their wealth and income outside of Norway.

So, since 2007, 2,100 people have been granted tax amnesty.

This has resulted in an increase of taxable income with about 2.6 Norwegian billion krones and wealth of 71 billion.

So, the Norwegian state has been entitled to increase their taxes for about 1.6 billion Norwegian krones, which is $200 million US.

And it shows that it has worked for Norway.

And for Norway´s sake, tax amnesty is a good combination of control, but, at the same time, voluntary correction.

It is in favor for both tax authorities and for the taxpayers.

As you all know and it has been emphasized that the global tax landscape is changing rapidly, leading to new requirements for new responsible tax practices.

The international tax system is being reformed by BEPS.

And one important part of that, and then it will be fully implemented, is the Common Reporting Standard, which is to create a high level of access to data from revenue authorities.

And one important part of Common Reporting Standard is the automatic exchange of information between the countries.

By the end of September, Norway started to receive financial information from 50 countries, such as the UK and Luxembourg, and 50 more countries will be included the next year, along with Switzerland.

And both Luxembourg and Switzerland are known as a tax haven in Europe, and Norway has already had the great value of Common Reporting Standard and their tracking exchange of information.

Just the previous week, they have received information about 82,000 bank accounts from 2,300 financial institutions.

And these 82,000 bank accounts had a total amount -- 128 billion Norwegian krones.

Most of it has probably been deported, but probably not all.

And by the 1st of September, the Tax Director in Norway -- he gave the last warning to people to report about any non-complying tax liabilities, as applying for tax amnesty could be late for a lot of people.

And the tax authorities -- they could report that the queries they received related to tax amnesty were doubled four times compared to the last year.

Even if they were hoping for more big fishes, it was more minor cases, such as pension in the UK or a vacation house in Spain.

So, will tax amnesty still be relevant in Norway with all the new regulation in place?

And according to the Norwegian tax authorities, they say that, yes, it will still be relevant, even if there is more regulation in place focusing on transparency -- the reason is that there are possibilities for tax evasion.

And the unique thing with tax amnesty in Norway is that it´s applicable for both domestic and foreign affairs.

So you never have a guarantee whether there will be room for tax evasion, and people misuse that room.

And the other thing is the reason for why it has been working in Norway is basically because, in Norway, there is a high level of trust between taxpayers and the tax authorities.

People know that they will come to the tax authorities and apply for tax amnesty, they will meet the predictability, which is intended by the rules, and the tax authorities -- they´ll communicate in line with what the practice is.

So, this was a brief introduction, and I hope we can use maybe five minutes, if the agenda allows me -- now maybe we can use on the US perspective on tax amnesty.

Unless you have any questions -- I´ll take that, as well.

NINA OLSON: Well, you know, maybe I´ll sort of hit this off, and then people in the audience and those viewing will be sending in some questions.

But you were asking, what about the United States?

And I am speaking only as the NTA, but I am speaking as the NTA, that there are, to my way of thinking, three general practices, although the IRS does not call them "amnesties." One very much in our law, even before our current Internal Revenue Code, was the authority for the federal government to compromise debts to the United States, and we call that "offer in compromise." That authority went back to about 1865, post-Civil War debts that were accruing because of -- I don´t know -- the Civil War.

And in the context of the tax code, there´s now a provision in the law that allows the IRS, the Secretary and the Commissioner, to compromise a tax for various reasons -- for doubt as to collectibility -- you can´t afford to pay it -- you already know what the debt is -- doubt as to liability, because you really don´t think you owe it, but for various procedural reasons, there´s no other avenues to make that case, and then, for reasons of equity, public policy, or economic hardship that you would compromise.

And then, there´s a longstanding position that the program that the IRS has had, which is a voluntary disclosure program, that you can come in and let the IRS know that you haven´t been filing or there are some transactions that the IRS itself -- the rules are, really, that the IRS has not found this out already.

And there, you would then be protected from criminal investigation and criminal conviction, but you would obviously need to pay the tax and the penalty and the interest.

In the context of international, since 2009, there have been various offshore initiatives, which I´ve been highly critical of -- settlement initiatives.

And I think your key point here about there´s a high level of trust between tax authorities and taxpayers -- I think, from 2009 until, probably, even last year, this program, these initiatives, have been constantly evolving, and there have been constant iterations.

And I think the hallmark has been that there has been zero trust between the taxpayers themselves and the tax authorities, partly because many people came in expecting one thing, and they found out another.

There´s a complete lack of transparency on the part of the IRS´s decision-making in these cases.

Taxpayers are given decisions about whether they qualify for it or not, but they´re not able to talk to the people who are actually reviewing and making the decisions and seeing the basis for that.

And I think that, early on, they decided to treat all taxpayers who hadn´t disclosed income as all evaders.

And when you have a tax system that treats you -- if you´re a US citizen, an accidental US citizen -- you have no contact with the United States, but by virtue of your birth, you´re a US citizen and you´re taxable on your worldwide income, and then, suddenly, you´re being told that you have to pay tax on your worldwide income and you had no idea that you had to, and then, to be looked at as somebody that has been hiding something all along, that just immediately erodes trust.

So, although through fear, I think, they got a lot of people in, when you look at the early statistics, it´s very disturbing.

And my reports to Congress have outlined that.

I think, over time, they made some improvements in the program, and we still feel that there need to be many more, but I think that initial lack of trust and that the basis for people coming in was fear is very marked and has tainted that entire program and created an antagonistic environment, rather than come in.

And I think that´s actually very different from the offer-in-compromise program, where it´s viewed as a collection alternative and it´s part of the normal tools that we have, and people are not necessarily painted with that brush of getting a special deal or something.

There´s still a little bit of that in the offer in compromise program, but it´s clearly, in my opinion, and in the cases that I have personally worked on, I see that fear element a lot and the distrust element.

So, now I´ll open it up for comments or discussion.

KIRAN AZIZ: Thank you.

NINA OLSON: If people on the panel want to talk about it or you want to say something more, that´s fine.

KIRAN AZIZ: I´m done. NINA OLSON: Okay, good.

All right, folks. We´ve got some time.

I don´t know whether we´ve had questions, or, Emer, maybe you want to pick up some of your comments about the perceptions of the IRS or what -- we´ve got folks here.

Or do you want to say something?

LOTTA BJORKLUND LARSEN: I want to speak about that one.

NINA OLSON: Okay. Sorry.

Can we get back to the slide in Lotta´s presentation?


EMER MULLIGAN: Just maybe could I pick up, actually, just exactly the point you made about the taxpayer, for example, never knowing they had to pay a tax on worldwide income.

There is a saying, which is ignorance is no excuse when it comes to not being in compliance with our laws.

And I would raise the question as to whether tax, however, is different.

So, if you go out in a car and you don´t pay your car tax, for example, and the police stop you, and you say, "Oh, I didn´t realize I needed to have car tax," it´s pretty lame, right?

Doesn´t everybody know you have to have car tax?

Doesn´t everybody know you should be insured, et cetera, et cetera?

Well, there´s a point at which you have to find out, or there´s a point at which somebody needs to tell you.

But the thing is, these other kind of law-abiding things, if you like, are pretty simple.

You buy a car tax -- you have it.

It´s a cost, based on the size of engine or whatever.

It´s not that complicated.

But income tax is much more complicated than that.

It´s more complicated than corporate tax, actually, in many, many ways.

So, I actually think we say to citizens in Ireland, in the US, wherever, that, "Once you start working, this thing called tax happens somehow." But there is no compulsory education.

By and large, you can go into the workforce, and most people, no matter how well-educated they are, actually struggle with reading their pay slips.

It´s as simple as that.

If I gave you all your pay slips today, would you all be able to -- I really hope the answer is "yes," considering the building I´m in -- that you´d be able to say you understand them, and then, that you would be able to do something about it if it´s wrong?

So, how would I know how to do it?

And in Ireland, we have a couple of companies, for example, and they offer services to personal taxpayers on the basis of no-refund, no-fee basis.

That´s how confident they are that so many taxpayers are entitled to more tax credits than they´re actually claiming.

That´s some business model, isn´t it, when you think about it.

So, I think we need to think about tax as different to what I´d call some other kind of not quite life skills, but of things that start to happen when you start to work, when you start to grow up, I suppose.

A tax is one of them.

And as an educator now, you probably think I´m trying to fight for more education work, but I think there really is a need to bring tax in as an obligatory subject, where almost nobody should be allowed work unless you understand your taxes.

That´s quite an extreme, perhaps, but unless you understand a few basic principles -- generally, however, Nina, I guess, if you look at things like international income, being a little flippant for a moment, it´s hard to get any sympathy if you say, "Gosh, I didn´t know I had to pay tax on my international income." A lot of taxpayers would say, "I wish I had your problem." But, anyway, that´s just a little flippancy.

NINA OLSON: Well, I think that, again, the IRS´s system of taxation is so unique, with respect to its international taxpayers -- that you´re subject to taxation on your worldwide income if you´re a US citizen or you´re a resident of the United States, and residency is not immigration-law residency, but the tax-code residency.

And we now have the highest level of renunciations of US citizenship around the world, and almost all of it is related to the activity in the tax world.

And maybe that´s right -- people were enjoying the pleasures of US citizenship, although I think most people just didn´t even think about it.

They had a primary citizenship where they lived, and that was their lives.

And, again, my point is, and I have so many letters and e-mails about this.

We´ve been focusing on large entities, but people having accounts overseas for their family members that are in other countries and had no concept whatsoever that that was putting them in violation of the laws.

They really didn´t think about them.

And in many cases, they had already paid tax on that income -- it was post-tax income that they were putting into those accounts, and they were faced with penalties that were terrifying to them.

And the IRS´s chest-thumping about that in those early years brought people in, but it´s not particularly the picture that you want of your tax agency if you´re trying to get cooperative compliance and voluntary compliance going forward -- it´s coerced compliance, which makes people view the tax agency as illegitimate.

"You have illegitimately used your power against me." And if you´d come in and said, "Well, tell us about your account, and go and sin no more," a lot of those people would feel very differently about the United States.

And I think that´s something that the tax agency needs to think about constantly -- constantly.

So, you want to say something.


I can just add to that.

I have several colleagues and friends who are either born in the US or have citizenship here and lived all their life, more or less, in Sweden and are struggling with this.

And the only people who benefit are some tax advisers in between, right?

But what I wanted to ask is more how the Swedish Tax Agency has very, very deliberately worked with, first, us as employees of trying to simplify the systems and, also, based in tax compliance research, try to always get away the report responsibility from the taxpayer per se and put it into the employer or someone else´s hands.

So, more and more information is just streamlined and coming directly and doing basically outside the taxpayer, and, thereby, also simplifying it.

I spend most of the time 10 minutes on my annual income.

And you can just verify it in the app or so on.

So I just wanted to ask to the audience here how the IRS works with these things.

I don´t know how much of the decision-making is with you, or is it with Congress, or where does it lie, and if this impact of tax-compliance research has on your task?

NINA OLSON: We have some research folks here, so I´ll let them speak to some of it.

But I will say that, again, the United States has a very hybrid model.

And we have a very strong private sector that is involved in tax-return preparation, and they have actively fought against the IRS following the Swedish model or many other models among most tax agencies now around the world, which is providing whatever information the agency has into a pre-populated form.

They have argued that letting the IRS prepare a return is giving Big Brother all sorts of hands up and things.

I keep saying, "Well, we already have this information," but never mind.

But, so, there´s actually, in the tax-reform bill right now that´s being considered by the Senate and the House, language that would prevent the IRS from creating any such thing like a pre-populated return and competing with the private sector.

So, I think there´s that.

Having said that, I think the IRS could make available to people, and I think it´s struggling with people right now how to do that within cyber-security protections, the data that we do have available to taxpayers to use in their own personal preparation of returns, whether they use software or they do it themselves or whatever, but make it available.

But I cannot see it ever becoming as easy as what you all have and somebody sending out a form that says, "Here´s what we know about you.

If that is correct, say ´yes,´ or don´t do anything.

If it´s not correct, correct it." The other thing about the United States´ tax agency is we don´t have some critical information about people because of the things that we need to know in order to get the right answer about how much tax they pay because of the things we run through the Internal Revenue Code, so that the largest anti-poverty program in the United States for families is run through the Internal Revenue Code, the Earned Income Tax Credit.

And that´s based on your family structure from year to year, how many children you have, whether you´re married, what your income level is, and, unlike some countries, we don´t know how many children you have.

And it´s not even your biological child -- there has to be a relationship, but, then, you also have to live with the person for more than half the year.

We don´t know that, and so the taxpayer has to tell us.

So, as long as those programs are run through the tax system, for tens of millions of taxpayers, we can´t compute their returns.

So, our system is complex.

I don´t know whether anybody wants to chime in on that observation.

You´re all such a quiet group.

BENEDICTE BROGGER: While you think, I can just add an unexpected consequence in Norway of the pre-filled-in forms is that people just say, "Just do it," and they don´t go in and check.


BENEDICTE BROGGER: So now the tax authorities have to remind people and take responsibility again for them actually checking on those.

They say, "Why should we?" And it´s not a protest.

I mean, it´s not. NINA OLSON: Right.

BENEDICTE BROGGER: It´s just it´s convenient.


And that goes to Emer´s point about education, because when I´m on the Hill and I´m talking to people about the complexity of the provisions, and we´ve made the complexity of the tax law the number-one most serious problem for taxpayers more times than I can remember.

But when we´re on the Hill and we´re talking about something and I´ll say, "Well, how you´re designing this provision is really going to be complex for taxpayers and they´re going to make errors, and then the IRS is going to have to track those errors, and this is just a mess." And they say, "But people file electronically, so software will take care of it." And so, the existence of tax software has, in some ways, made it simpler, but it´s also been a facilitator of greater complexity overall in the code, and it´s also eliminated people´s awareness of what´s happening with their tax returns.

So the machine just spews out.

You put in numbers.

You don´t know where the numbers show up on the forms.

It spews out something.

You sign it.

And if you answered a question the wrong way, there´s no protection for you if you did that wrong.

You can´t go and sue the company.

You didn´t understand.

So it reduces the tax literacy of people, rather than increasing it, and it enables more complexity.


KIRAN AZIZ: Nina, in Norway, the population is 5 million.

I would say that it´s quite easy to file a tax return in Norway, compared to the US.

People have a fear of dealing with tax authorities and tax returns because they find "tax" adds something technical.

For them, they would rather just accept than doing something with that.

NINA OLSON: I think there´s a population in the United States that will accept that if they get a letter from the IRS, but there are others.

I´ve always felt that there´s a continuum of noncompliance, going from people don´t understand what they´re doing and they make mistakes to active evasion and gamesmanship and risk-taking.

And somewhere in that line are people who feel that they´re fudging -- they´re not cheating, they´re fudging.

Dan Ariely talks about some of the work that he´s done that, in golf, people think it´s okay to sort of tap the ball with your foot, but it´s not okay to pick it up and move it two inches.

And so, one is an overt act, and the other is something else, and so those sorts of rationales.



Yes, Rusty.

You want to get to the mic.

Mic, please.

RUSTY: I actually have two questions.

One question is for Ms.

Larsen about the Swedish system.

You mentioned research pilots of the Swedish Tax Agency was doing.

In these research examinations or audits, did you penalize the taxpayers?

Was the agency penalizing the taxpayers who were found noncompliant participating in these audits?

Were they penalized with penalties, or were they compensated?

Because then, maybe some taxpayers were complaint, but they have to go through the expense of going through that.

Then, my second question is for Professor Brogger.

It regards the rules of engagement.

So, the rule of engagement of how you engage taxpayers -- Thank you.

NINA OLSON: Don´t worry.

RUSTY: So, well, now it does.

So, for the rules of engagement, are these rules somewhere in the manual for employees, are employees evaluated for these rules, or is there anything that is codified, maybe in the code or regulations, so the taxpayers know what these rules of engagement are, that the agency´s not abusing its power?

And just to comment before I go -- that I was really impressed with the voluntary correction provision in the code in Norway.

That´s probably what we need, because what we see, and it was in Nina´s reports, that in our offshore disclosure program, they are asked, oftentimes, to change the rules as it goes, and participants complain that frequently asked questions on the website would change daily, and they needed to print out PDFs to even show to the agent, "This is the rule you had yesterday." LOTTA BJORKLUND LARSEN: Thank you for your question.

The random audit control -- I guess that´s what you refer to.

It´s part of the general audit controls.

Why do they call it random?

Because it was statistically selected.

So, it´s part doing a regular audit and part for research purposes.

And therefore, the taxpayers were also treated in the regular rhythm of doing an audit.

So I think the manager of the entire department had to go in and sign it four different times when the audit was done.

And therefore, also, if they had found really illegally made cost deductions, because, in this case, they only looked at the cost deductions, then I don´t know if they were fined, but they were asked to correct their deductions.

So it was part of the regular tax agency audit, yes.

BENEDICTE BROGGER: And thank you for the question about the rules of engagement.

It´s a very good question.

As I said, the taxpayers don´t know about these rules of engagement.

It´s not doctrine.

It´s not a formal document spelling out these rules.

It´s more the internal cultural values and the internal blue book.

It´s kind of how to behave when you engage with the taxpayers.

On the other hand, the taxpayers also know what to expect, because there has been a change in the organization, and that has meant new employees in, who are not familiar with the SFS way.

And when we have interviewed companies, they have noticed, and they see that they´re not behaving the way they used to, and they are getting more skeptical as to saying that, "This is not the SFS way." And the SFS is responding to this and changing.

So we see that there is this interchange between the taxpayers.

NINA OLSON: So, is SFS listening to what the companies are saying?

BENEDICTE BROGGER: Yes, absolutely.


BENEDICTE BROGGER: And it trickles in -- this information trickled in.

And I followed some of the exchanges between the companies and the SFS in some cases, and that has given some feedback, and then they see the response.

So, yes, they don´t know, it´s not formally, and they cannot go and say that, "You´re supposed to behave like this," but on the other hand, if they don´t behave, they can send the message via channels and via the forum.

And this, I guess, gets back to this question of being voluntary.

A lot of this is voluntary.

A lot of this is kept on the relational level.

So, without formalizing it too much, so making up to the judgment of the people involved, and that is also a fear that, if you or we mess too much with the system, that means, if the tax agency don´t have legitimacy, then the welfare state will not have the legitimacy.

And if people start thinking that we don´t have to pay for our companies, for our welfare state, then that will be a loss for everyone.

So these innovations that they try out in compliance and digital -- it´s followed very, very closely and monitored very closely for the legitimacy.

It wasn´t quite an answer to your question -- it a little broader, but the way the tax agency engaged with the taxpayers comes up again and again and again.

NINA OLSON: I just remember that, several years ago, when I was meeting with a Swedish tax official and he was sort of walking through, and this sort of led me to Lotta.

But when he was walking me through the history of the Swedish Tax Agency audit function and he was talking about the ´70s, and he said the attitude of the auditors was to be hunters and hunt taxpayers and how they were trying to change that.

And I thought, "What´s the opposite of that?" It´s gatherers.

What? I don´t know.

But it really got me thinking about, what is an audit, after all?

I mean, you can think about it, and this goes to your metrics point, as well, is that you can think about it, "Well, we got in this many dollars." And there are rules in the Internal Revenue Code that say that we cannot measure people by the number of dollars that they bring in, that they assess, or they collect, but that´s still this subtext here.

That´s the point of the audit -- to uncover noncompliance and assess the tax.

And I´ve always thought that the point of an audit is -- and I´ve said this before -- education, that we´re educating the taxpayer about what the agency thinks is not appropriate, but we´re also being educated by the taxpayer about what they need to do and what they view as appropriate in their line of business, in their world view, in their context.

And the communication, the education goes both ways.

The assessment is a by-product of that, but is not the point of the audit.

And if you don´t have that education function, then you may have to do audits and audits and audits and audits of the same taxpayer over and over and over again, or similar taxpayers, and that is, just from a business point of view, a real waste of resources in a time when there are no resources.

So, I think we have to end.

But I think merely just that last little thing shows just how important it is to understand the context of taxation and use a different discipline to look at something that we all thought was just about rules and numbers, when it´s really all about relationships with the government, with the tax agency, between taxpayers, et cetera.

I just really want to thank you all for being here.

I think you´ve raised an incredibly high bar for these conversations.

Now I´m going to have to think what to do next.

But thank you so much for taking your time.

I´m so grateful to you.

WOMAN: Thank you.

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