IRS Launches Pass-Through Compliance Unit

Published: Oct 23, 2024

The IRS launched a new Pass-Through Unit to audit partnerships, trusts, and S corps. This unit will focus on complex, high-wealth entities and aims to improve exam efficiency and taxpayer experience.

 

The IRS announced on Oct. 22, 2024, that the new Pass-Through Unit has started operations. The new unit will audit partnerships, trusts and S corporations of all sizes and will be part of the Large Business & International (LB&I) Division. 

 

Commissioner Danny Werfel said, “…we will be able to reverse our historically low audit rates for complex arrangements employed by certain high-wealth individuals and large entities, while at the same time improving the taxpayer experience through a more tailored exam approach.” 

 

The announcement also included the disclosure that the IRS has “…launched examinations of 76 of the largest partnerships with average assets over $10 billion that includes hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms and many other industries.” 

 

Topics:

You May be Interested in

  • The IRS May Owe Your Clients Money from the COVID Period
    Recent court decisions have opened a largely overlooked opportunity for significant tax refunds based on mandatory disaster relief under IRC Section 7508A during the federally declared COVID-19 disaster period. As a result, interest and penalties assessed during this period may be invalid and refundable, and some taxpayers who received refunds may also be entitled to unpaid overpayment interest. While uncertainty remains and the IRS may resist such claims, timely protective refund filings are critical to preserve clients rights as the statute of limitations continues to run.
  • TXCPA Advocates for Accounting’s Recognition in Definition of Professional Degrees for Student Loan Eligibility
    TXCPA submitted a formal comment to the U.S. Department of Education urging recognition of accounting as a professional degree program to protect graduate-level federal loan access and strengthen the future CPA pipeline.
  • The Verdict is In. The Texas Franchise Tax is GILTI, Raising New Questions and Potential Issues
    Beginning with the 2026 report year, the Texas Comptroller will align the franchise tax with the current Internal Revenue Code, likely requiring GILTI to be included in total revenue. This change raises sourcing, statutory and potential constitutional questions for businesses with foreign operations, creating new uncertainty and possible tax impacts.
More News

Support the Next Generation

Donate to TXCPA scholarships and help aspiring accountants achieve their goals.

Scholarships