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IRS to Prioritize Tax Compliance for Complex Pass-Through Entities in the US


The IRS Large Business and International Division has initiated a significant expansion plan to intensify its focus on high-income compliance issues and high-net-worth individuals. As part of this effort, the agency is launching a nationwide hiring initiative to reinforce its enforcement capabilities.


In September 2023, the IRS introduced an ambitious and unprecedented campaign aimed at enhancing fairness in tax compliance. The initiative specifically targets high-income earners, large corporations, partnerships, and individuals involved in exploiting the country's tax laws.


Over the past decade, audit rates for certain taxpayer segments have seen a decline. To address this issue, the IRS plans to leverage cutting-edge technology, including artificial intelligence, to assist its compliance teams in detecting tax evasion and identifying emerging compliance challenges.


The upcoming year will witness a more comprehensive approach to IRS compliance efforts. This will encompass an expanded focus on digital assets, driven by a prior review that revealed a potential 75% non-compliance rate in digital currency exchange records. Additionally, there will be increased scrutiny of foreign bank account reporting (FBAR) violations.


This initiative is part of the IRS's commitment to ensuring equitable tax compliance while modernizing its enforcement strategies.


Contacts

If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact info@act.london or your usual A.C.T. contact.

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