New Audit Campaigns Announced by the IRS Large Business and International Division

February 12, 2021

By Richard Shapiro

The IRS Large Business and International Division (“LB&I”) continues to identify new audit campaigns. For an entire list of active campaigns, please consult the IRS website. On January 27, 2021, two campaigns were added:

Taxable Asset Transactions – Matching Buyers and Sellers

Parties that enter into asset taxable transactions (under either IRC Sec. 1060 or IRC Sec. 338(h)(10)) must report the transaction under either Form 8594 or Form 8883 (each an “Asset Allocation Statement”). The applicable form must be attached to their tax return. The campaign addresses LB&I business entities that either did not report a transaction on Form 8594 or Form 8883, or that reported the transaction inconsistent with the other party’s reporting of the transaction.

Puerto Rico – Individual Investors Act

This campaign addresses taxpayers who have claimed benefits through Puerto Rico Act 22 – “Act to Promote the Relocation of Individual Investors to Puerto Rico” – without meeting the requirements of IRC Sec. 937 (“Residence and Source Rules Involving Possessions”). As a result, according to the IRS, these individuals may be excluding income subject to U.S. tax or failing to file and report income subject to U.S. tax. This campaign also addresses those individuals who have met the requirements of IRC Sec. 937 but may be erroneously reporting U.S. source income as Puerto Rico source income in order to avoid U.S. taxation.

See also:

About Richard J. Shapiro

Richard Shapiro, Tax Director and member of EisnerAmper Financial Services Group, has more than 40 years' experience in federal income taxation, including the taxation of financial instruments and transactions, both domestic and international.

About Miri Forster

Miri Forster, Co-Leader of the Tax Controversy practice, has over 20 years of experience providing tax dispute resolution services to public and private corporations, partnerships and high net worth individuals on a wide range of technical and procedural issues.

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