This article was originally published in Reuters.
The IRS said in a March 30 notice that they had sought input on a possible national security exemption when crafting the original rule. Subsequent consultations with the Defense Department and Treasury prompted the exemption, the IRS said.
But, in a letter this week to the Treasury, the FACT Coalition, which represents 100 groups including organizations on tax fairness, government ethics and international poverty, said the agencies had provided no “reasoned analysis justifying creation of the national security exception.”
“The notice’s creation of an immediate national security exception to the (country-by-country) reporting requirement is arbitrary and capricious,” the FACT Coalition wrote in the April 30 letter.