Newly released IRS Data Book numbers confirm decline in audit rates
A number of factors have led to a decline in IRS examinations over the past few years, and a dearth of IRS examiners could cause that trend to continue.
Representations & Examinations
IRS audit rates decreased most for wealthy, GAO finds
In a study, the US Government Accountability Office finds that the Internal Revenue Service’s individual tax audit rates decreased by 72% during 2010–2019, and by a greater percentage for higher-income taxpayers than for lower-income ones.
Definition of ‘immediate supervisor’ clarified for penalty purposes
The immediate supervisor who must approve IRS penalties is the person who directly supervises the work of the examining agent in an examination.
Tax Court blows the whistle on whistleblower claim
A whistleblower is not entitled to an award where information provided did not directly result in the tax collected by the IRS.
Taxpayer First Act changes innocent spouse relief
Changes significantly affect how an innocent spouse case is prepared and places an increased burden on return preparers who interact with a taxpayer who potentially has an innocent spouse claim.
Your federal tax privilege checklist
Tax practitioners can rely on several doctrines to preserve the confidentiality of client communications, but they must follow appropriate procedures and provide clear documentation to protect the privilege in IRS exams or legal proceedings.
When does the centralized partnership audit regime not apply to partnership-related items?
Proposed regulations provide that the IRS may determine that the centralized partnership audit regime does not apply to adjustments to partnership-related items under certain conditions.
IRS considers ‘obsoleting’ Rev. Proc. 94-69, requests comments
The IRS’s LB&I Division requested comments regarding the potential obsolescence of Rev. Proc. 94-69, under which certain large corporations may be treated as filing “qualified amended returns” after the commencement of an IRS examination.
Centralized partnership audit regime changes proposed
The IRS issued rules on two special enforcement matters for purposes of the unified partnership audit rules.
Common sense and reasonable cause for IRS penalties
One of the biggest, yet most misunderstood, penalty defenses is that a tax position was based on reasonable cause and the taxpayer acted in good faith.
PTIN user fees reinstated
The IRS said it would once again begin charging fees to issue preparer tax identification numbers to return preparers for 2021.
PTIN fees proposed to be lower when reinstated
The IRS has proposed to lower the fee it charges for preparer tax identification numbers (PTINs) when PTIN fees are reinstated.
IRS spotlights requirement to have a written information security plan
The IRS launches fresh efforts to promote awareness of data security issues.
New due-diligence standards for head-of-household filing status
The TCJA and the PATH Act expanded the penalties on tax return preparers who fail to follow due-diligence procedures when clients claim certain credits or head-of-household filing status.
D.C. Circuit reinstates IRS PTIN fee
The IRS has authority to charge a user fee for preparer tax identification numbers, a federal appeals court held, paving the way for the agency to reinstate the charges for obtaining and renewing a PTIN.
IRS can again charge preparers for PTINs
The IRS has authority to charge a fee for obtaining or renewing preparer tax identification numbers.
Court upholds IRS PTIN fees
The IRS has authority to charge a user fee for preparer tax identification numbers (PTINs) a federal appeals court held, paving the way for the agency to reinstate the charges for obtaining and renewing a PTIN.
IRS finalizes tax preparer due-diligence regs.
The IRS issued final regulations on the penalty that applies to tax return preparers who fail to exercise due diligence in preparing returns for taxpayers who are claiming head-of-household filing status, the earned income tax credit, the child tax credit, the additional child tax credit, or the American opportunity tax credit.
Paid preparer’s checklist expands to include head-of-household, other tax credit questions
Practitioners should be aware of changes to the due-diligence requirements for returns that claim the earned income tax credit, the American opportunity tax credit, and/or the child tax credit.
A substantial-authority scorecard and example for excluding Sec. 1202 gain for a carried partnership interest
Keeping a “scorecard” of the weight of authorities on a particular position can be helpful to determine the objective merits of a tax position.
