An audit is an IRS examination of an individual or business tax return, to verify its accuracy. An IRS Tax Audit can be one of the scariest situations a person or business can face. Often times the IRS has a distinct advantage because the average person doesn’t know enough tax law to defend him/herself against an audit.
As we wrote about in our last five posts, the IRS continually analyzes compliance levels for entities, issues and industries by conducting hundreds of compliance projects and initiatives each year. On Oct. 1, the beginning of the Internal Revenue Service’s fiscal year the IRS has announced emerging or significant areas that it will prioritize for the coming year.
Sixth target area for IRS tax audits:
Partnership returns for abusive transactions and unreported income. This is a new area of emphasis for the IRS. Expect the IRS to target large loss partnerships and specific abuses that emerge from early findings in this project.
Look out for our next two posts for the remaining audit areas.