What is now considered as the “abusive use of partnerships,” and why would this matter to the IRS? The agency recently released IR-2024-166, which is intended to provide “new guidance to stop partnerships from using sophisticated tax-free transactions that lack economic substance” to avoid paying taxes. . The IRS continues to...
IRS Focuses Scrutiny on High-Income Taxpayers, Partnerships and Corporations
New issues come into focus as the IRS focuses scrutiny on high-income taxpayers, partnerships and corporations, as well as those who promote the abuse of tax rules. The IRS has formally given notice that it intends to refocus attention from working-class taxpayers to wealthy and high-income audit targets. The notice,...
The 20 Percent Deduction for Pass Through Income
The tax bill presented for the President's signature contains the 20 Percent Deduction for pass through income for the majority of US partnerships, S Corporations and sole proprietorships. Under existing tax law, business profits were passed through to the individual and taxed at their personal income rate. The top individual...
New Tax Plan Presents Challenges for IRS Auditors
The new tax plan presents challenges for IRS auditors as we all await the final draft of tax reform legislation in Washington. The primary concern centers around the ability of wealthy US taxpayers to "reap massive windfalls" by simply reclassifying income as "pass-through business income." The most recent "final" plan...
States ask the IRS to Clarify New Partnership Audit Rules
The "Multistate Tax Commission" adds their voice to the discussion as states ask the IRS to clarify new partnership audit rules and how assessments and adjustments at the entity level will affect how income will be impacted at the state level. The Commission wrote a letter to the IRS requesting...
Changes to Partnerships and LLCs Required by IRS
There are substantial changes to partnerships and LLCs required by the IRS as part of the Bipartisan Budget Act (BBA) which are scheduled to take effect January 1, 2018. The US Treasury Department issued new rules in January of this year which will substantially impact tax matters for partnerships as...
IRS Large Business and International Division Targeting TEFRA Violations
The IRS Large Business and International Division (LB&I) will be targeting TEFRA violations in partnerships based upon recent changes in partnership related tax law. TEFRA (The Tax Equity and Fiscal Responsibility Act of 1982) regulations applying to partnerships created a set of consolidated IRS audit (examination), processing and judicial procedures which...
IRS Audit Rules for Partnerships Changing
The IRS audit rules for partnerships continues to evolve and change. In the fall of 2015 Congress passed the "Bipartisan Budget Act" that contained changes to the audit process for partnerships that goes into effect January 1, 2017. The old IRS audit rules for partnerships was based primarily upon the...