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ARTICLE · 03 OCTOBER 2023

IRS Announces Sweeping Enforcement Effort Targeting Partnerships

Holland & Knight
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The IRS announced a "sweeping" and "historic" enforcement effort focused on partnerships and is establishing a special group within its Large Business and International (LB&I) Division...

United StatesTax
Lee S. Meyercord
Lee S. Meyercord
Mary McNulty
Mary McNulty
Abbey Benjamin Garber
Abbey Benjamin Garber
James Dawson
James Dawson
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The IRS announced a "sweeping" and "historic" enforcement effort focused on partnerships and is establishing a special group within its Large Business and International (LB&I) Division to focus exclusively on large and complex pass-through entities. According to IRS Commissioner Daniel Werfel, "[w]e are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns." Therefore, the new unit "will leverage Inflation Reduction Act (IRA) funding to disrupt efforts by certain large partnerships to use pass-throughs to intentionally shield income to avoid paying the taxes they owe." This expands the IRS' recent increased focus on partnerships. We've seen a significant increase in partnership audits in the last several years.

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