IRS Launching New S Corp Compliance Study

IRS LAUNCHING NEW SUB CHAPTER S COMPLIANCE STUDY*

Now that IRS has just about wrapped up work on the first phase of the National Research Program audits that targeted individual taxpayers, IRS is shifting attention to Sub Chapter S corps and other pass-through entities. The IRS will select 5,000 Sub S returns for detailed scrutiny in a study that will last about two years. IRS will use data gained from NRP audits and the S corporation study to modify the parameters by which they select returns for audit in an effort to better target compliance efforts and reduce the number of “no change” audits.

*From the 6/30/05 NSAlert.