The IRS Large Business & International (LB&I) division continues to expand its list of compliance campaigns, with 40 campaigns identified and selected to date. An increase in IRS activity related to the Self-Employment Contributions Act (SECA) tax campaign has been observed.
Tax professionals have observed an increase in IRS activity related to the Self-Employment Contributions Act (SECA) tax campaign. Specifically, several taxpayers have received various forms of communication from the IRS indicating that the examiners are initiating requests for information related to whether partners have subjected their distributive share of income from a partnership to self-employment tax under section 1402. The requests were generated within the last month, so it is still too early in the process to know how the IRS will address the issue or how taxpayers will respond.
Taxpayers that have been contacted by the IRS with respect to an audit that may involve the SECA tax issue need to consider appropriate action steps including consulting with a tax professional.
Campaigns represent the IRS’s shift from entity-based to issue-based examinations, with a focus on those issues that have been determined to present a risk of noncompliance. The IRS’s stated goal with its campaign initiative is to improve tax return and issue selection and make the greatest use of limited IRS resources. Each campaign is addressed using one or more “treatment streams” that include issue-based examinations, soft letters encouraging voluntary self-correction, and stakeholder outreach.
Read the full list of the LB&I campaigns
Three recent campaigns that are of particular interest to pass-through entities are summarized by the IRS as follows (read the IRS release (March 13, 2018)):
For more information, contact a KPMG tax professional:
Miri Forster | +1 (973) 315-2631 | firstname.lastname@example.org
Deborah Fields | + 1 (202) 533-4580 | email@example.com
Curtis Wilson | + 1 (202) 533-3376 | firstname.lastname@example.org
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