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COVID-19 Relief Law - IRS Audits to Resume July 15

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The Internal Revenue Service ("IRS") announced an increase in their audit program for new and existing audits. 

High income individuals,  high worth non-filers, non-filing tax preparers and licensed professionals are the latest targets of increased IRS audit activity. The IRS plans to start these new audit initiatives, some of which are continuations or expansions of previous or ongoing audit programs on July 15. (See IR-2020-59).

The high income audits will be linked to a related entity audit. And with mandatory reporting for certain transactions, the IRS has been able to mine data that it can use to expand audits of high income individuals.

A Treasury Inspector General for Tax Administration ("TIGTA") report issued May 29, 2020 showed that 9% of the $441 billion tax gap each year is attributable to high net worth and high income non-filers. In response, the IRS is initiating the high net worth non-filer program, a project of the new Anti-Fraud Office.

Finally, non-filing tax return preparers be wary. TIGTA recently reported thousands of return preparers did not file a personal tax return to report their income and the IRS has isolated the top violators to track down. These cases will be sent to collections, revenue agents and the Criminal Investigation Division. The intentional failure to file a tax return is a crime. Taxpayers can try making a voluntary disclosure. A properly made voluntary disclosure can help ensure that the case is handled by the civil division but the IRS does not have to accept any voluntary disclosures. Taxpayers must make the voluntary disclosure before the IRS begins the audit to qualify for voluntary relief.

For any questions or assistance, please contact the Tax Attorneys at Fazzio Law, we are in your corner!

Category: COVID-19 Relief Law

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