For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
Nov. 3 — The Internal Revenue Service will prioritize examining corporations, promoters of abusive tax schemes and individuals who have the potential to be significantly noncompliant during fiscal year 2016, an agency official said.
The Small Business/Self-Employed Division, where Examination is housed, is shifting its focus to C corporations, S corporations and partnerships, said Shenita Hicks, who directs Examination. Her unit is “attempting to evaluate and identify processes to address the business filing taxpayer,” she said Nov. 3 at an American Institute of CPAs tax conference.
The IRS has conducted fewer audits across nearly every category of taxpayers as the agency has received reduced levels of funding in the past five years. Commissioner John Koskinen has said the declining funding levels from Congress are directly tied to a 30 percent decrease in audit revenues, a problem he predicts will worsen in the coming years if the agency doesn't receive additional funding (see related story in this issue).
We're Still Watching
“That's not to say we won't have a presence in the 1040 arena, because we still will,” Hicks said, referring to Form 1040, U.S. Individual Income Tax Return.
The SB/SE Division is working with a “lead development center” to identify some of the most egregious promoters of abusive tax schemes. This center is able to gather information from multiple sources to select those who will undergo exam, she said. The agency is also using data and algorithms compiled from a variety of tools to identify individual taxpayers who are severely noncompliant.
The IRS is also beginning to prepare examiners for a new partnership audit regime that will increase the number of entities audited and how adjustments are collected.
The Service is educating examiners about how to identify and address partnership issues, Hicks said. There are also training efforts on how to deal with fraudulent tax return preparers.
Budget legislation (H.R. 1314) signed by President Barack Obama Nov. 2 simplifies the procedures for the IRS to audit and collect adjustments from complex partnerships, which historically have been audited at a much lower rate than similarly sized C corporations (211 DTR G-2, 11/2/15).
To contact the reporter on this story: Laura Davison in Washington at email@example.com
To contact the editor responsible for this story: Brett Ferguson at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)