revenue agents Archives - TAX CONTROVERSY 360

IRS Continues Hiring Trend; Looks to Add over 400 Revenue Agents in the SB/SE Division

by Kevin Spencer, Evan Walters and McDermott Will & Emery | Jul 18, 2022 | IRS Guidance

The Internal Revenue Service (IRS) recently announced that it will hire 470 new revenue agents into the Small Business Self Employed (SB/SE) division. This effort is part of a larger IRS staffing initiative, following a January 2022 announcement that the IRS plans to hire 200 lawyers to assist with litigation efforts, a March 2022 announcement that the IRS plans to hire more than 200 technology specialists and another March 2022 announcement that it would fill more than 5,000 positions in its processing centers in Austin, Texas; Kansas City, Missouri and Ogden, Utah. This latest announcement continues the trend of reversing a decline in enforcement activities to improve taxpayer compliance.

Practice Point: The IRS has lost a tremendous amount of revenue agents over the last 10 years. This new effort to increase the number of personnel was much needed for an already overworked and overburdened agency. We do expect that the IRS will also continue to increase its efforts to ensure that taxpayers are uniformly compliant with the tax laws.

IRS Issues Practice Unit on Section 965 Transition Tax

by Kevin Spencer and McDermott Will & Emery | Mar 24, 2021 | IRS Audits, IRS Guidance, Tax Reform

One of the most pressing audit issues for large taxpayers today centers on the Internal Revenue Code (Code) Section 965 transition tax. The Internal Revenue Service (IRS) has designated Code Section 965 as a campaign issue and is actively auditing taxpayers’ transition tax calculations and positions, along with other tax reform items. The stakes are high, particularly given the potential to pay this tax over a period of eight years.

On March 23, 2021, the IRS released a Practice Unit that provides an overview of the Code Section 965 transition tax with references to relevant resources. Unfortunately, unlike some other Practice Units, guidance is not provided as to the type of information revenue agents should be requesting from taxpayers.

Practice Point: Practice Units are presentation-type materials compiled by the IRS as a means for collaborating and sharing knowledge among IRS employees. They provide helpful guidance to revenue agents in the form of an overview of the law in a specific area, examination tips and guidance and references to relevant resources. Although the Code Section 965 transition tax Practice Unit does not provide insights into the types of questions and information that revenue agents may seek on audit, it is still useful for taxpayers to review to understand the IRS’s perspective in this area.

IRS LB&I Division Announces Its New Year’s Resolutions

by McDermott Will & Emery, Kevin Spencer and McDermott Will & Emery | Feb 6, 2019 | IRS Audits, IRS Guidance, Tax Reform, Uncategorized

Each New Year, many of us look back on the previous year’s activities, and determine what we want to accomplish in the coming year – lose weight, start exercising, read more tax articles, etc. The Internal Revenue Service (IRS) Large Business & International (LB&I) Division memorialized its New Year’s resolutions for 2019 in Publication 5319. So, for taxpayers with more than $10 million in assets, you may want listen up and see what the IRS has in store for 2019!

LB&I’s goals come during a time of significant reduction in workforce and increase in responsibilities. LB&I experienced a significant reduction in workforce between October 2017 and October 2018, reducing its workforce by a net of 344 employees (down from 4,868 to 4,524) spread across several positions. This included 18 individuals in leadership, 218 revenue agents and 25 tax examiners. With the exception of tax law specialists, which remained at 24, every other position saw a reduction in personnel. This reduction in personnel comes at critical point for LB&I, as it undoubtedly spent much of its time and resources last year working on guidance necessary to implement the substantial changes made by the Tax Cuts and Jobs Act enacted in late 2017. It will continue to be responsible for training and compliance related to those changes. (more…)