IRS Commits to Ramp Up Partnership Audits
By: Cooper Melvin, CPA, JD
In September 2023, the IRS announced a special subdivision of the Large Business and International Division will be dedicated to pass-through entity audits. Partnerships have long been a target of IRS audits, but the IRS has thus far lacked the resources to execute its plans. This new division allows the IRS to dedicate a whole team for this purpose using existing resources and new staff as the IRS continues to onboard new mid-career level staff. The IRS announced that it is opening exams on 75 of the country’s largest partnerships as one of its first actions of the new division. In addition, it will soon mail 500 compliance letters to “large” partnerships with ongoing balance sheet compliance issues.
The Large Business and International Division’s focus is on entities reporting $10 million or more in assets. Therefore, BMSS partnership clients owning more than $10 million in assets need to be ready for the IRS’ new focus. BMSS is committed to assisting partnerships through the compliance process and consulting on any audits as a result. Please contact your BMSS advisor if you are concerned about the new division or become subject to an IRS audit by calling (833) CPA-BMSS or visiting our website for contact information.