The IRS Large Business and International (LB&I) Division has added five new targeted compliance campaigns. These campaigns are part of a continuing effort to refocus the LB&I toward issue-based examinations. The campaign approach replaces the tiered issue approach the LB&I used previously. The IRS began following the new approach in January 2017 with a list of 13 campaigns, and it announced 11 additional campaigns in November 2017.
The new campaigns are:
- Costs facilitating Section 355 transactions. Enforce compliance by requiring costs facilitating Section 355 transactions, such as spinoffs, split-offs, and split-ups, to be capitalized.
- Self-Employment Contributions Act tax. Identify partners who are not paying self-employment tax on their distributive share of income from a partnership in which they provide service, including limited partners and limited liability company members. Increase compliance with the law as supported by recent court decisions.
- Partnership stop filer. Identify and address issues with partnerships that have stopped filing tax returns but continue to have economic transactions that should be reported to their partners.
- Sale of partnership interest. Identify and address issues with taxpayers that improperly report or do not report the sale of a partnership interest.
- Partial disposition election for a building. Ensure compliance with the partial disposition election for buildings enacted as part of the 2014 tangible property regulations.
The LB&I Division previously indicated that more campaigns will continue to be released in the coming months.