IRS identifies five new LB&I compliance campaigns | KPMG | US

IRS identifies five new LB&I “compliance campaigns”

IRS identifies five new LB&I compliance campaigns

The IRS Large Business and International (LB&I) division today announced five new “compliance campaigns” to be added to the list of previously identified compliance campaigns under LB&I's issue-based compliance work. Today’s items brings the total number of compliance campaigns to 24.

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The LB&I compliance campaigns focus on issue-based examinations and a compliance campaign process—that is, compliance issues “at risk” require certain responses from the IRS. The compliance campaigns reflect IRS efforts to redefine large business compliance work and build a supportive infrastructure inside LB&I. 

Today’s release (posted on the IRS website) lists the topics of the five campaigns as:

  • Costs that facilitate a section 355 transaction
  • SECA tax (specifically concerning partnerships and limited liability companies)
  • Sale of partnership interest
  • Partnership "stop filer"
  • Partial disposition election for buildings

KPMG observation

This new group of campaigns, much like the first 24 campaigns, are focused somewhat narrowly, and three of the five concern passthrough entities. While several of the newly identified campaigns suggest the potential for treatments other than examinations, the list does not specify what other techniques the IRS might use to validate or mitigate the compliance risks that might be associated with these five identified issues.

In today’s announcement, the IRS describes campaigns as the “culmination of an extensive effort to redefine large business compliance work.” However, since the IRS last updated the list of compliance campaigns, there had been only limited action and visibility associated with the first two groups of campaigns. With today’s release, it remains to be seen how and when taxpayers might encounter these five new campaigns. The new campaigns may have relevance both for taxpayers currently under audit and for other taxpayers with tax returns containing the issues covered in the particular campaigns.

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