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George Hani Comments on IRS's Large-Business Audit Update in Law360

Subtitle
"IRS Update on Large-Business Audits Too Vague, Critics Say"

Law360

George Hani commented on the Internal Revenue Service's (IRS's) update to the audit processes of their Large Business and International (LB&I) Division. The division will now conduct issue-based audits for 13 "campaigns," but did not specify how the campaigns will be conducted. The IRS also introduced new language, such as "treatment streams," that lack clear definition. Hani said the term "treatment stream" may be intentionally vague so as not to bind the IRS on exactly how it is going to gain compliance, which could be done through other potential means such as issuing new regulations. "The choice of the phrase treatment stream is new and purposely vague so as they have maximum flexibility to decide later exactly how they're going to address a particular area of noncompliance," he said, adding that targeted campaigns are likely to increase in the contentious area of transfer pricing and more guidance from the individual campaign executives assigned by the IRS is expected. "Perhaps more than what they included would be nice," he said, "but the anticipation is that the individual campaigns will be the ones that are more forthcoming or charged with getting the word out about what the IRS view is on a particular issue."