Thursday, November 1, 2018

5 New LB&I Audit Campaigns Include FATCA Compliance

 
 
According to Law360  on October 30, 2018 the Internal Revenue Service released five additional compliance campaigns, which are areas the agency will focus on during audits of the largest corporations, including one that addresses requirements under the Foreign Account Tax Compliance Act.
The IRS’ Large Business and International Division said it has identified five additional compliance campaigns since announcing an overhaul to its audit procedures in 2015. Now with a total of 50 campaigns, the agency’s audit revamp involves moving toward issue-based examinations instead of the old approach of placing large multinational businesses under continuous audit by a rolling team of examiners.

“The campaigns are the culmination of an extensive effort to redefine large business compliance work and build a supportive infrastructure inside LB&I,” the IRS said in a statement. “Campaign development requires strategic planning and deployment of resources, training and tools, metrics and feedback.”
One Of The Five New Campaigns Announced ... Addresses “Those Entities That Have FATCA Reporting Obligations But Do Not Meet All Their Compliance Responsibilities.”
Under FATCA, which took full effect in 2014 after Congress passed it in 2010, Americans must report if they hold more than $50,000 in foreign assets. In addition, foreign financial institutions must disclose information on U.S. taxpayer accounts to the IRS through intergovernmental agreements.

The FATCA campaign comes after the Treasury Inspector General for Tax Administration, the agency watchdog, published a report in July that found although the IRS had spent nearly $380 million to carry out FATCA, the agency “is still not prepared to enforce compliance” with it.

Another campaign announced Tuesday involves focusing on individuals who have claimed foreign tax credits without meeting the requirements to do so.

 Another campaign targets the use of offshore service providers, which facilitate the creation of foreign entities and tiered structures “to conceal the beneficial ownership of foreign financial accounts and assets, generally, for the purpose of tax avoidance or evasion,” according to the IRS.

The other two campaigns announced Tuesday involve “delinquent-filed” 1120-F forms — the U.S. income tax return of a foreign corporation — and an effort to address the consequences of certification delays and “the burden of amended return filings” regarding the work opportunity tax credit.

When the agency first announced a reorganization to the LB&I division, it said the process involved winding down the coordinated industry case program of continuous audits and targeting areas for examination on the basis of compliance risks instead. Since then, there were scant details on how exactly large business audits, where businesses are suspected of evading taxes on significant sums of money, will change under the new regime.

Then, in January 2017, the IRS released the long-awaited list of campaigns, which included focuses on enterprise activities, cross-border activities and pass-through entities. There were 13 campaigns included in the first batch.
 
Have an IRS Tax Audit Problem? 
 
   
Contact the Tax Lawyers at 
Marini & Associates, P.A. 
 
 
for a FREE Tax HELP Contact us at:
Toll Free at 888-8TaxAid (888) 882-9243
 

No comments:

Post a Comment