As part of its , the agency five months ago appointed Sam Maruca, a partner at the law firm of Covington & Burling, to head its Large Business and International Division's transfer pricing operation. Maruca augmented his staff with some 30 junior and senior economists at the end of September, and has opened additional field offices in Chicago, Dallas and New York, said Trauman.

These freshly minted IRS agents not only will boost collections, but, as a result of a reorganization, also will see transfer pricing disputes through from investigation to resolution. "Going forward, you have the same individuals working the case and negotiating the outcome," said Trauman. "We should see things begin to speed up."

Another way the IRS is trying to improve its act is through increasing reliance on its Compliance Assurance Process, started in 2005 with 17 hand-picked pilot participants and had ramped up to 140 taxpayers by the start of this year, according to Michael P. Dolan, director of practice, procedure and administration at KPMG's Washington National Tax Group.

Under CAP, a company is required to fully disclose information concerning completed transactions and its proposed treatment of all material issues. The IRS is then supposed to conduct "near-real time" audits of each disclosed tax position, with the parties attempting to reach and record "Individual Resolution Agreements" on each issue. If the return is submitted in a way that complies with these agreements, the IRS accepts the return as filed.