A Preview of 2017 IRS Audits and Appeals

With a new tax year comes new changes to IRS policies procedures. As 2016 taught us, it is impossible to anticipate what the IRS may do next; however, it is possible to forecast the direction the IRS is heading by looking at what big changes occurred in the past year. In this vein, IRS audits and appeals have noticeable themes: First, regarding IRS audits in the upcoming year, some speculate that the IRS is going to primarily focus on international claims and issues.[1] This continues the trend from 2016, which saw increasing use of Formal Document Requests and summonses by the IRS to seek foreign-based documentation.[2] In addition, the IRS saw significant success from its crackdown on international tax evasion, collecting over $10 billion.[3] It is likely the IRS will try to continue this success by increasing scrutiny of international positions that taxpayers may claim on their tax returns as well as uncovering concealed assets.

Second, regarding IRS appeals, taxpayers can expect that the IRS appeals office will operate slower and be less effective than it has in the past.[4] Notably, the Chief of IRS Appeals was replaced near the end of 2016, with Donna C. Hansberry stepping up to the plate.[5] This has been speculated to foreshadow more changes to come.[6] Given that recent changes regarding appeals conferences have removed power from IRS appeals officers and made it so most conferences will occur telephonically rather than in person, future changes may further eviscerate what was once a powerful and reliable IRS division in resolving complicated tax collection issues.[7]

With the new year just beginning and with the Trump administration just weeks away from taking control, there likely won’t be long to wait before finding out whether these predictions are accurate or what other sweeping changes arise from the presidential transfer. Perchance 2017 will mark the turning point for what some argue is much-needed tax reform...

–By Tony Nasser, Esq., Barnes Law

Tony Nasser is an attorney licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] http://www.natlawreview.com/article/irs-audits-and-irs-appeals-year-review

[2] Id.

[3] http://www.forbes.com/sites/robertwood/2016/10/24/irs-offshore-account-collections-top-10-billion-fatca-hunt-continues/#24f276fe711a

[4] http://www.natlawreview.com/article/irs-audits-and-irs-appeals-year-review

[5] http://www.natlawreview.com/article/irs-announces-new-chief-irs-appeals

[6] http://www.natlawreview.com/article/irs-audits-and-irs-appeals-year-review

[7] See http://www.natlawreview.com/article/irs-updates-rules-regarding-appeals-conferences