KPMG report: IRS announcement of new large partnership audits
The IRS recently announced it will focus more attention and resources on partnerships
The IRS recently announced it will focus more attention and resources on partnerships
The IRS recently announced it will focus more attention and resources on partnerships, the wealthy, and other high earners that have seen sharply decreasing audit rates in the past decade and to utilize artificial intelligence to “help IRS compliance teams better detect tax cheating, identify emerging compliance threats, and improve case selection tools.”
Specifically, the IRS stated in IR-2023-166 (September 8, 2023), that it would by the end of September send notices of examination to 75 partnerships with an average of $10 billion in total assets, and during October send an additional 500 “soft notices” to partnerships with over $10 million in assets and tax returns showing discrepancies in the millions of dollars between end-of-year balances and beginning balances the following year. According to the announcement, the IRS believes this discrepancy is an indicator of potential non-compliance. The IRS said the selected taxpayers did not attach required statements explaining their differences. Partnerships receiving the notices may be added to the audit work stream, depending upon their response.
Read an October 2023 report* [PDF 93 KB] prepared by KPMG LLP that discusses this latest IRS audit initiative.
*This article originally appeared in Bloomberg’s Tax Management Memorandum (October 16, 2023) and is provided with permission.
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