FALLS CHURCH, Va., April 18, 2014 (GLOBE NEWSWIRE) -- Tax Analysts, the nonprofit provider of federal, state, and international tax news and analysis, today welcomed a report from the Government Accountability Office confirming that the IRS audits less than 1 percent of large partnerships – a major problem that Tax Analysts first reported in 2012.
On April 7 Tax Analysts released a video and follow-up 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 comprise thousands of direct partners, many of whom might themselves be partnerships. Because the IRS has a limited capacity to issue the partners bills for additional taxes due, an audit is unlikely. Widely held partnerships, such as 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."
"The auditing of large partnerships is a complicated but important issue," said Tax Analysts President and Publisher Christopher E. Bergin. "Our video explains it in simple language that all taxpayers can understand. It is well worth watching."
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.
For more information or to speak with Bergin or Elliott, please contact Shaima Cardillo at 703-531-4852 or firstname.lastname@example.org.
About Tax Analysts
Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies, as well as academics, rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.
CONTACT: Shaima Cardillo, 703-531-4852 email@example.com
Source: Tax Analysts