Daily Tax Update - January 31, 2017: IRS Announces Rollout of LB&I Campaigns

IRS Announces Rollout of LB&I Campaigns:  The IRS Large Business and International (LB&I) division has announced 13 initial issue-based campaigns.  LB&I is moving toward issue-based examinations and a “compliance campaign” process in which audit resources are grouped around specific issues of concern.  The campaigns have been identified as part of this process and will guide the formation of “treatment streams to achieve compliance objectives.”

The 13 campaigns selected for this initial rollout are:

  • Energy credits under section 48C
  • Offshore Voluntary Disclosure Program (OVDP) applicants who applied for pre-clearance into the program but were either denied access to OVDP or withdrew from the program of their own accord
  • Section 199 domestic production activities deductions by multi-channel video program distributors and TV broadcasters
  • Micro-captive insurance transactions described in Notice 2016-66
  • Transactions between commonly controlled entities that provide taxpayers a means to transfer funds from the corporation to related pass through entities or shareholders
  • Deferred variable annuity reserves and life insurance reserves
  • “Basket transactions” described in Notices 2015-73 and 74
  • Large land developers that construct in residential communities that use the completed contract method of accounting
  • Identifying, linking and assessing tax to the terminal investors in TEFRA partnership examinations
  • S corporation losses claimed in excess of basis
  • Repatriation structures being used for purposes of tax free repatriation of funds and proper reporting of repatriations
  • Identifying Form 1120-F non-filers
  • Transfer pricing issues for US distributors of goods sourced from foreign-related parties

The announcement states that more campaigns will continue to be identified, approved, and launched in the coming months.