The IRS Large Business and International (LB&I) division announced on Jan. 31 a list of 13 different “campaigns” the government would pursue as part of its move toward issue-based examinations affecting large and midsized businesses.
These campaigns come as part of a recent restructuring of LB&I by the IRS in the wake of resource constraints. The campaigns are identified by the IRS through data analysis, suggestions from IRS compliance employees and feedback from the tax community. The IRS’s goal is to identify and reduce noncompliance through the campaigns, which will feature a mix of issue-focused examinations, externally published guidance, practitioner outreach and soft letters. The initial list of campaigns is likely to be expanded, and some campaigns may be removed in favor of others.
The 13 initial examination campaigns are:
- Section 48C energy credit
- Declines and withdrawals of the Offshore Voluntary Disclosure Program
- Section 199 domestic production activities deduction (DPAD) deductions by multi-channel video program distributors and TV broadcasters
- Micro-captive insurance arrangements
- Related-party transactions between commonly controlled entities
- Deferred variable annuity reserves and life insurance reserves
- Basket transactions
- Land developers and the completed contract method
- Tax Equity and Fiscal Responsibility Act linkage
- S corporation losses claimed in excess of basis
- Repatriation of foreign earnings for middle-market taxpayers
- Form 1120-F nonfilers
- Inbound distributors
The IRS anticipates partnering with various stakeholder groups to disseminate more information on these campaigns, which will be largely managed by the appropriate executive within LB&I. While there is still some ambiguity regarding how the campaigns will be administered and regarding how they will supplement or supplant other IRS examinations, it is expected that many of these details will be revealed in the near future by the IRS.
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