On November 3, 2017, the Internal Revenue Service (IRS) Large Business and International (LB&I) division identified 11 new examination compliance “campaigns.” We have extensively discussed LB&I’s “campaign” examination process, including posts on Understanding LB&I “Campaigns” and Run for Cover – IRS Unveils Initial “Campaigns” for LB&I Audits.
The IRS identified the 11 new campaigns “through LB&I data analysis and suggestions from IRS compliance employees.” The new campaigns are:
- Form 1120-F Chapter 3 and Chapter 4 Withholding Campaign
- Swiss Bank Program Campaign
- Foreign Earned Income Exclusion Campaign
- Verification of Form 1042-S Credit Claimed on Form 1040NR
- Agricultural Chemicals Security Credit Campaign
- Deferral of Cancellation of Indebtedness Income Campaign
- Energy Efficient Commercial Building Property Campaign
- Corporate Direct (Section 901) Foreign Tax Credit
- Section 956 Avoidance
- Economic Development Incentives Campaign
- Individual Foreign Tax Credit (Form 1116)
Practice Point: The IRS’s salvo represents the “second wave” of LB&I’s issue-focused compliance work. Indeed, the IRS noted that “[m]ore campaigns will continue to be identified, approved and launched in the coming months.” It is clear that the IRS is focusing its resources on these campaigns, and has developed significant internal expertise on these issues. If you have one of the identified issues, consider being proactive and preparing an audit ready-file as the issue will likely be examined.