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IRS announces five new large business audit campaigns

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Tax Hot Topics newsletter The IRS Large Business and International division (LB&I) announced five new compliance campaigns on March 13.

The audit campaigns are part of a strategy in the large- and mid-sized business arena to move toward more issue-focused examinations. The strategy arose from a 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 non-compliance through the campaigns by way of “treatment streams,” which will feature a mix of issue-focused examinations, externally published guidance, practitioner outreach and soft letters.

This latest batch of campaigns, which focus mostly on partnership tax issues, brings the total number of campaigns up to 29. The IRS has yet to remove a campaign from its list. In January 2017, the IRS released its first batch of 13 campaigns and followed up in November 2017 with 11 more.

The five newest campaigns are:

  • Costs that facilitate a Section 355 transactions, such as spin-offs
  • Self-Employment Contributions Act (SECA) tax for partners and limited liability company members
  • Partnership that stop filing returns
  • Treatment and character of the sale of partnership interests
  • Partial disposition election for buildings

The treatment streams for these campaigns vary, and may include the issuance of guidance or soft-letters, but the IRS has indicated that each campaign will also include an element of issue-based examinations.

Contact
Liz Askey
Managing Director
Tax Practice Policy & Quality
T +1 202 521 1513

Shamik Trivedi
Senior Manager
Washington National Tax Office
T +1 202 521 1511

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