Yesterday, the Large Business and International Division (“LB&I”) of the IRS announced six new compliance campaigns. Faced with continued budget cuts, LB&I reprioritized its compliance work into designated “campaigns,” wherein it directs resources across taxpayers and industries on specific issues that face high risk of noncompliance. It announced the first 13 campaigns on January 31, 2017, added 11 more on November 3, 2017 and five more on March 13, 2018. The new campaigns focus on disparate foreign and domestic issues. They are:
(1) Interest Capitalization for Self-Constructed Assets
(2) F3520/3520-A Non-Compliance and Campus Assessed Penalties
(3) Forms 1042/1042-S Compliance
(4) Nonresident Alien Tax Treaty Exemptions
(5) Nonresident Alien Schedule A and Other Deductions
(6) Nonresident Alien Individual Tax Credits
In its announcement, the IRS describes each campaign in detail and how it may approach ensuring compliance with the campaign issue.
If a taxpayer has an item related to a campaign, it makes it that much more likely that her return will be selected for examination. Thus, it is important that taxpayers continue to keep up to date on the latest campaigns and make sure their files are audit-ready if a campaign may related to them.