IRS Issue Number: 2023-38
The IRS’ focus continues on high-income compliance issues, with its plans to hire 3,700 more people and use AI to create a special area focusing on large or complex pass-through entities. While the new Unit will be housed in the IRS Large Business and International (LB&I) division, according to IRS Commissioner Danny Werfel, “[t]his is another part of our effort to ensure the IRS holds the nation’s wealthiest filers accountable to pay the full amount of what they owe…We are honing-in on areas where we believe non-compliance among our wealthiest filers has proliferated over the last decade of IRS budget cuts, and pass-throughs are high on our list of concerns. This new unit will leverage Inflation Reduction Act funding to disrupt efforts by certain large partnerships to use pass-throughs to intentionally shield income to avoid paying the taxes they owe.”