For the Press
Tax Analysts Releases Video and Supplementary Article Examining Audit Proof Businesses and the Challenge They Pose for the IRSApril 7, 2014
FALLS CHURCH, Va. – Tax Analysts, the nonprofit provider of federal, state, and international tax news and analysis, today released a video and supplementary article examining how some businesses are effectively audit proof.
The animated video, which is approximately three minutes long, explains how the IRS audits businesses, who the agency chooses to audit, and why some kinds of large partnerships are essentially audit proof.
The article, written by contributing editor Amy S. Elliott, says that widely held partnerships may consist of thousands of direct partners, many of whom might themselves be partnerships. Because the agency has a limited capacity to issue the partners bills for additional taxes due, an audit is less likely.
Widely held partnerships, like many large private equity firms, oil and gas partnerships, and hedge funds, pose an audit challenge for the IRS. While auditing corporations is similar to auditing individuals, auditing partnerships is much more difficult.
“In many cases, before issuing the partner-level notices, the IRS has to manually pull the returns of tens and sometimes hundreds of thousands of partners – a process officials have generally decided isn’t worth the time or expense to bother with or improve upon,” Elliott writes. “Believing their businesses are essentially audit proof, some partners don’t worry that the IRS might question the hundreds of billions of dollars’ worth of items claimed on their returns.”
As part of its public education mission, Tax Analysts seeks to establish transparency in the tax laws and more dialogue between tax authorities and taxpayers. Through these and other efforts, Tax Analysts works to ensure that the tax laws are applied fairly and equally to taxpayers across the country.
Watch the video and read the article at TaxAnalysts.com.
For more information or to speak with Elliott, please contact Shaima Cardillo at 703-531-4852 or email@example.com.