IRS intends tougher, speedier audits of middle-market and flow-throughs

Steven T. Miller, IRS Deputy Commissioner, Service and Enforcement, spoke to the Tax Executives Institute (TEI) on March 26, 2012 about current issues faced by the IRS and proposed actions that are being discussed internally there.

Specifically, Mr. Miller stated that he wants the IRS

". . . to move more deeply into the mid-market - those firms and partnerships between $10 and $250 million in assets. Up to now, our presence in the mid-market – where we currently have about 11.9 percent coverage – hasn't been as robust as we would like it to be. But I believe many mid-market corporations may have the same issues as larger entities and perhaps additional issues as well. As UTP transitions into more segments of the community this may become clearer."

He also commented that ". . . we need to move more deeply into flow-through work across the IRS. We are seeing a significant increase in the percentage of flow-through filings, and we need to pay attention to it." To accomplish this shift, Mr. Miller intends primarily to decrease the amount of resources dedicated to audits of coordinated industry cases taxpayers (companies that are continually being audited), while also altering the information document request (IDR) process, increasing the use of summonses for late responses to IDRs and barring new facts or arguments from being considered by Appeals. Read a copy of Mr. Miller's remarks at the TEI conference.

Bob Adams, partner, Washington National Tax
Patti Burquest, principal, Washington National Tax
Leeah Fontaine, manager, Washington National Tax