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The US IRS will prioritize tax compliance for complex pass-through entities

As part of the IRS Large Business and International Division's initiative to focus more attention on high-income compliance issues and high-net-worth individuals, they will be expanding the division through a new hiring initiative across the US to support their increased enforcement efforts.


In September 2023, the IRS announced a significant effort to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, large corporations, and promoters who abuse tax laws. They have noticed a decline in audit rates for certain taxpayer segments over the last decade and plan to utilize new technology, including artificial intelligence, to assist their compliance teams in detecting tax evasion and identifying emerging compliance threats.


Within the next 12 months, the IRS has broader compliance work planned. This includes an expanded focus on digital assets due to a high non-compliance rate discovered during an initial review of digital currency exchange records. Broader compliance work is also planned for the next year, which includes an emphasis on digital assets and increased scrutiny of FBAR violations.


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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