In continuation of a program originally started in Jan. of 2017, the Large Business & International (LB&I) Division of the IRS has announced six new issue-based compliance campaigns, adding to the 29 campaigns previous announced (in March 2018, Nov. 2017 and at launch in Jan. 2017). These campaigns are intended to focus LB&I efforts on areas with the highest risk of noncompliance. As with previous campaigns, issues are identified both through LB&I data analysis and the suggestions of IRS compliance employees.
In addition to announcing the six campaigns detailed below, the IRS also acknowledged that some previously announced campaigns may need to be modified on account of the Tax Cuts and Jobs Act of 2017. The IRS will communicate the results of these modifications at a later date.
The following table summarizes the new campaigns, including the practice areas, focus, treatment stream and lead executive:
Campaign |
Practice area |
Focus |
Treatment stream |
Lead executive |
Interest capitalization for self-constructed assets |
Enterprise activities |
Requirement to capitalize interest expense incurred during the production period of certain real and/or personal property, by the producer of such property |
Issue-based examinations, education soft letters, and educating taxpayers and practitioners to encourage voluntary compliance |
Scott Ballint |
Forms 3520/3520-A non-compliance and campus assessed penalties |
Withholding & international individual compliance |
Penalties potentially applicable to late, incomplete or missing filings with respect to foreign trusts |
Examinations and penalties assessed by processing functions for late/incomplete forms |
John Cardone |
Forms 1042-1042-S Compliance |
Withholding & international individual compliance |
Withholding, deposit and reporting requirements for payments of certain U.S.-source income to foreign persons |
Examinations and other treatment streams not detailed in the release |
John Cardone |
Nonresident alien tax treaty exemptions |
Withholding & international individual compliance |
Appropriateness and proper documentations of treaty claims by nonresident alien individuals |
Examinations, outreach/education, and other treatment streams not detailed |
John Cardone |
Nonresident alien schedule A and other deductions |
Withholding & International Individual Compliance |
Validity (including substantiation) of deductions claimed by nonresident alien individuals |
Examinations, outreach/education, and other treatment streams not detailed |
John Cardone |
Nonresident alien tax credits |
Withholding & international individual compliance |
Validity of education and dependent-related credits claimed by nonresident alien individuals |
Examinations, outreach/education, and other treatment streams not detailed |
John Cardone
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