Page 119 - International Taxation IRS Training Guides

Exam Tips:

Rate
Reconciliation Schedule

the Rate Reconciliation schedule for potential
 Review

exam
risk indicators:

• ETR i s
unusually low compared to US statutory federal rate of
21%

trends downward from year to year (may indicate
• ETR
significant
shifting of profits offshore and not taken into
for US tax purposes because of certain planning)
account

variations from year to year
• Large ETR

significantly lower than industry peers
• ETR is

• Large,
Unusual or Questionable (LUQ) items in the tax rate
reconciliation

• e.g.,
provision for restructuring line item

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