Fiscal Year 2020 List of Planned Audits Treasury Inspector General for Tax Administration

Compliance and Enforcement Relief From Penalties for Early Distributions From Individual Retirement Plans.

Determine whether the Automated Underreporter Program is identifying and working the most productive cases where taxpayers potentially owe tax dollars.

Program to check on 10 percent tax on early distribution from retirement plans.

Suitability Tax Compliance Checks for IRS and Contractor Employees +Identify the types of suitability tax compliance checks that the IRS conducts of IRS employees, contractor employees, and applicants for employment with Federal agencies to determine whether these tax checks are appropriate for their purpose, comply with applicable authorities, and use consistent definitions and criteria for tax compliance.

Schedule C Audit Selection Determine whether the IRS’s systemic and non-systemic methods and processes for scoring, selecting, and delivering tax returns, of nonfarm sole proprietors with

Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), are effective at identifying potential noncompliance.

Withholding Compliance of Partnerships.

Foreign Partners Determine the effectiveness of the IRS’s efforts in ensuring withholding compliance of partnerships with foreign partners.

Large Business and International Division’s Corporate Return Case Selection Issues

Review the selection process, use of resources, and examination productivity for corporate returns.

Compliance Issues for Certain Cash Based Industries. Evaluate the IRS’s examination and education approach to certain cash based industries, including legal marijuana operations (e.g., medical marijuana production and use).

Virtual Currency Exchange Audits (audit number: 201830034)Evaluate the IRS’s efforts to ensure the accurate reporting of virtual currency transactions as required under U.S. Code (U.S.C.) Titles 26 and 31.

Use of Currency Transaction Report Data for Compliance Purposes

Evaluate the tax filing noncompliance of taxpayers who have received Currency Transaction Reports, and evaluate the accuracy of that data in the IRS’s information systems.

High-Income/High-Wealth Nonfiler Strategy.

Determine whether the IRS is effectively addressing high-income/high-wealth nonfilers and whether the new nonfiler strategy and related plans sufficiently include this segment of nonfilers.

Non-Payment by High-Income Taxpayers .Determine whether the IRS is effectively addressing non-payment of taxes by high-income taxpayers and the impact of such non-payment on overall payment compliance.

Efforts to Comply With Internal Revenue Code Section 6405Assess the effectiveness of the IRS’s efforts to identify and examine returns with refunds in excess of $2 million ($5 million for C corporations).

Tax Return Preparers Who Owe Significant Penalties and Taxes.  Evaluate the IRS’s actions taken to ensure that tax return preparers are in compliance with their tax obligations.

Reasonable Compensation Determination in Examinations of Closely Held S Corporations and Their Shareholders,Determine whether the IRS has implemented policies, procedures, and practices to ensure that compensation is considered in examinations of closely held S Corporations and their shareholders.

Earned Income Tax Credit Examinations.Determine the effectiveness of the IRS’s Earned Income Tax Credit Examination Strategy.

Correspondence Examinations. Determine the IRS’s effectiveness in the selection and examination of correspondence audits.

Expatriation Tax. Determine the effectiveness of the IRS’s efforts in ensuring compliance with the expatriation tax provisions under Internal Revenue Code (I.R. C.) Sections (§§ ) 877 and 877A and its efforts to reduce taxpayer burden.

Recipients of Form 1099-K – Nonfilers and Underreporters. Determine whether the IRS is identifying and addressing taxpayers with underreported Form 1099-K, Merchant Card and Third Party Network Payments, income or with Form 1099-K income who did not file a tax return.

Small Business/Self-Employed Division’s High Income High Wealth Strategy.

Evaluate the IRS’s efforts to ensure tax compliance of high-income individuals.Tracking the Costs of the Private Debt Collection Program. Determine whether the IRS is effectively tracking and reporting all costs related to the Private Debt Collection program as required by I.R.C. § 6306.

Large Business and International Division’s Document Matching

Determine whether the IRS has adequate controls in place to ensure that the amount reported as withheld on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, are actually reported on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, and are remitted to the IRS. Assistance to Members of the Military.

Evaluate the IRS’s assistance to current and former members of the military who are or have served in a combat zone or received a combat-related disability severance payment.

Efforts to Address Withholding Reporting and Payment Noncompliance.Assess the IRS’s progress to make improvements to its Federal tax withholding processes and procedures.

Affordable Care Act: Selection and Resolution of Noncompliant Employers Subject to the Employer Shared Responsibility Payment.

Evaluate the IRS’s identification and selection of nonfilers, and the notification, selection, and resolution processes to ensure Applicable Large Employer compliance with the Employer Shared Responsibility Provision. Self-Employed Simplified Employee Pensions

Determine whether the IRS has sufficient controls to prevent and detect improper deductions for contributions made by self-employed taxpayers to their Simplified Employee Pension plan accounts.

Using John Doe Summons Data to Ensure Cryptocurrency Tax Compliance (audit number: 202030001)Determine whether the IRS has an effective program to identify unreported virtual currency income using John Doe Summons Information and other means of analysis (Form 1099-K, Schedule D, Capital Gains and Losses, etc.) .

Treatment of Large Refunds Under Internal Revenue Code Section 6405 Threshold number:  Determine whether the IRS is effectively assessing the compliance risk of large refunds that are under the I.R.C. § 6405 dollar threshold, including potentially fraudulent refunds.

Fuel Tax Credits – Follow-up, Determine whether the IRS is adequately considering the fuel tax credit claimed by individual taxpayers and follow up on past recommendations.