The IRS is getting ready to go after what it refers to as “large, complex partnerships” as part of its drive to chase rich tax violators with tens of billions of dollars in additional financing.
By fiscal 2025, the IRS expects to have doubled the audit coverage for partnerships with $10 million or more in assets compared to fiscal 2021 levels.
IRS Faces Challenges in Auditing Complex Partnerships
The IRS is aimed at specific legal and commercial entities, but according to new study from the government’s internal watchdog, these structures need to be specifically recognized if the IRS is to recover the unpaid taxes.
The Government Accountability Office, or GAO, stated in a report released on Thursday which the IRS has neither defined or created guidance on what constitutes a large, complicated partnership or devised procedures to guarantee that extra audits focus on such partnerships.
They are able to be nested within other partnerships in networked or circular constructions that are so intricate they may resemble a maze of spiderwebs or elaborate Byzantine jewels.
Since the IRS wants to audit more partnerships, the lack of a definition presents a problem, according to the report.
The IRS responded to the criticism by acknowledging the definition’s fuzziness and stating that it is attempting to be more specific.
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IRS Aims for Additional Financing to Catch Tax Cheats
In Washington, on May 4, 2021, a sign is shown outside the Internal Revenue Service facility.
The IRS published guidelines on Friday, February 3, 2023, advising taxpayers to delay submitting their tax returns for 2022 if they got a special tax refund or payment from their state the previous year since the IRS is unsure of the taxability of the payments.
The IRS is getting ready to go after what it refers to as “large, complex partnerships” as part of its drive to chase rich tax cheats with tens of billions of dollars in additional financing.
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