Are the Latest IRS Tax Compliance Initiatives Impacting Businesses?
The Internal Revenue Service (IRS) has recently announced a series of new initiatives aimed at improving tax compliance among large corporations and high-income individuals. This push comes on the heels of the successful 2023 filing season, bolstered by investments from the Inflation Reduction Act (IRA). At the same time, the IRS has been actively enhancing customer service and modernizing technology, including the launch of the business tax account.
Enforcing Tax Compliance Among Large Corporations and High-Income Individuals
To ensure that large corporations and high-wealth individuals fulfill their tax obligations, the IRS has implemented several strategic measures:
- Large Foreign-Owned Corporations Transfer Pricing Initiative: The IRS is intensifying efforts to combat tax avoidance strategies employed by the U.S. subsidiaries of foreign companies, focusing particularly on transfer pricing abuses.
- Expansion of the Large Corporate Compliance Program: The Large Business & International Division’s (LB&I) Large Corporate Compliance program has been expanded to include an additional 60 audits of the largest corporate taxpayers, utilizing a combination of advanced technologies and subject matter expertise.
- Crackdown on Abuse of Repealed Corporate Tax Break: Following the repeal of a corporate tax deduction provision in 2017, the IRS is actively addressing non-compliance and high-risk claims associated with the deduction, resulting in significant victories in recent court cases.
- Prioritization of High-Income Cases: The IRS is ramping up efforts to pursue high-income individuals who have failed to file taxes or pay recognized tax debts, with a focus on cases involving substantial sums owed.
Improving Taxpayer Service
The IRS is committed to helping taxpayers navigate the tax system effectively and has undertaken several initiatives to enhance customer service:
- Community Assistance Visits: The IRS is organizing temporary Taxpayer Assistance Centers in underserved areas, enabling taxpayers to receive in-person assistance where traditional IRS services might not be easily accessible.
- Opening Taxpayer Assistance Centers: The IRS has opened several Taxpayer Assistance Centers across the country, providing increased accessibility to IRS services, particularly in rural areas.
- Online Service Enhancements: The IRS has launched the business tax account, enabling businesses to manage various aspects of their tax affairs online. Additionally, taxpayers can now respond to notices and submit forms electronically, improving the efficiency of interactions with the IRS.
Modernizing IRS Technology
The IRS is undergoing a significant technological overhaul, aiming to enhance service delivery and streamline operations:
- Digitalization: The IRS is making strides in the digitalization of paper returns, which will ultimately improve data accuracy, expedite processing, and enable better customer service.
With these comprehensive efforts, the IRS is striving to foster a fairer tax environment while simultaneously providing more accessible and efficient services for businesses and taxpayers. For more information on the latest developments and resources, visit the IRS website.
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