IRS Partnership Audits
Experienced New York Partnership Tax Attorneys for High Stakes IRS Audits
The Internal Revenue Service has prioritized partnership tax compliance in recent years. According to the agency’s data, partnerships are responsible for some of the nation’s largest tax deficiencies, and partnerships are also frequently used as tools to execute abusive tax avoidance schemes. Individuals who also need help with broader IRS considerations sometimes review firm background before reaching out.
Most partnerships operate legitimately, and most partners work to meet their federal tax obligations at both the individual and entity levels. But this does not stop the IRS from conducting audits. When in doubt, revenue agents tend to assume noncompliance, which increases the need for experienced New York Partnership Tax Attorneys and support from IRS Tax Audit Lawyers.
IRS Partnership Audit Defense Lawyers in New York
If you are preparing for an IRS partnership audit, it is important to engage experienced defense counsel promptly. You must be prepared to demonstrate compliance to the extent possible and address any allegations of noncompliance that arise. Some examples of issues that frequently surface during IRS partnership audits include:
- Failure to report taxable partnership income
- Failure to withhold or pay estimated taxes
- Use of multi tiered partnership structures for tax mitigation purposes
- Use of partnership assets, such as aircraft or yachts, for personal purposes
- Claiming personal travel or other personal expenses as partnership tax deductions
- Improper calculation of taxes owed in connection with partner distributions
- Improper calculation of taxes owed on mergers, acquisitions and other partnership level transactions
These examples represent only a portion of the issues that can expose partnerships and individual partners to penalties. When facing an audit, it is important to understand which issues are likely to arise and to develop an organized response strategy. Some taxpayers examine related matters to better understand how the IRS evaluates partnership records.
In mid 2024, the IRS announced new steps to combat abusive partnership transactions that it believes allow taxpayers to avoid paying what they owe. These steps include the use of artificial intelligence tools to identify risk indicators for potential partnership tax fraud and prioritizing enforcement in areas such as basis shifting transactions. With additional IRS resources from the Inflation Reduction Act, the number of partnership audits is expected to rise significantly in the coming years.
Preparing for an IRS Partnership Audit
If the IRS is preparing to audit your partnership, or if an audit is already underway, it is important to take immediate action. One of the most important steps is proactively identifying any compliance related issues. Our New York Partnership Tax Attorneys and IRS Tax Audit Attorney team can help pinpoint any concerns and begin building a focused defense strategy. We prioritize clarity, complete documentation and strategic communication to avoid unnecessary consequences.
Some partnerships that also deal with ERC or ACA related concerns may benefit from additional compliance insight as they prepare for broader IRS scrutiny.
Speak with a New York Partnership Tax Attorney at Thorn Law Group
To speak with a New York partnership tax attorney at Thorn Law Group in confidence, please call (914) 534-6004 or contact us online. We will arrange your initial consultation promptly.
