ATL report on a development that ain’t going to make Big Law happy..
Last week, the IRS announced that it will use its increased funding from the Inflation Reduction Act to shift more attention to high-income individuals, partnerships, and corporations. While this announcement covered may topics, including digital assets such as cryptocurrencies, foreign bank account reporting (FBAR) compliance, and scams to name a few, it has specifically named certain large law firms for close scrutiny.
By the end of the month, the IRS will open examinations of 75 of the largest partnerships in the U.S. that represent a cross section of industries including hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms and other industries. On average, these partnerships each have more than $10 billion in assets.
The IRS also plans to contact 500 partnerships via mail in early October. These partnerships have a discrepancy on their balance sheets with over $10 million in assets. The IRS believes that this discrepancy without an explanation could be an indicator of potential noncompliance.
To determine which partnerships to audit, the IRS will use artificial intelligence (AI) to help with the selection process.
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