IRS Official: Partnerships to Be ‘Top Priority’ for SB/SE Exams in 2014

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Partnership and other passthrough entity returns will be the “top priority” of the examination function of the Internal Revenue Service's Small Business/Self-Employed Division over the next 12 months and beyond, SB/SE Commissioner Faris Fink said.
Speaking Nov. 5 at the American Institute of CPAs National Tax Conference in Washington, Fink said the division is shifting its focus from exams of corporate returns to that of passthrough entities. Passthrough entities, including S corporations and sole proprietorships, comprise almost 95 percent of all business entities in the U.S., according to IRS statistics.
Developing the right strategies to identify issues and specific taxpayers for examination will be not be an easy task for the agency, Fink said. “The Service has for a long time focused its energy on corporations. Frankly, we're a little bit behind the curve in getting around to developing a partnership strategy,” he said.

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