In a luncheon address Monday, Rossotti said the IRS intends to target its enforcement resources in the following areas: trusts and other pass-through entities such as partnerships and S-corporations; corporate shelters that abuse the complexity of the tax code; accumulations of unpaid payroll tax balances in the hands of various companies, and erroneous refunds, Dow Jones reported.

According to the report, Rossotti outlined several measures to improve efficiency of compliance operations at the agency. Among them: the agency will use fewer front-line field agents to provide assistance to taxpayers in the coming filing season than in the past couple of years. Instead, a staff of education and outreach experts, rather than the enforcement troops, will supplement the ranks of the IRS's full-time customer support staff during peak periods, Dow Jones said.

Rossotti reportedly told conference attendees that the move would provide a "double benefit" - a more knowledgeable staff to answer taxpayer questions and "better continuity in our compliance casework," Dow Jones said.

In addition, the IRS plans to centralize the process of selecting tax returns for examination, a process that has traditionally been done on a regional basis. Centralization will enable the IRS to better determine how to best use its information-matching capabilities, according to the report.

The agency plans to match data on information returns filed by "pass-throughs" such as trusts, partnerships and S-corporations to the individual returns where the taxable income generated by such entities is supposed to show up, Rossotti reportedly told the group.

According to the article, the Service mainly matches 1099s, forms on which financial institutions report items such as interest and dividends, and W2s, where employers report wages to individual returns.

-- SmartPros News Staff

Send comments to information@smartpros.com

Back to NewsLine