In an effort to improve compliance, the Large Business and International Division (LB&I) has announced 13 initiatives where they will focus resources and training.
1. Energy Credits – to verify that the credits are only claimed for energy projects approved by the Department of Energy on which the IRS has approved the allocation of the credit;
2. OVDP Declines-Withdrawals – to identify taxpayers who have misapplied the Offshore Voluntary Disclosure Program (OVDP) because they either were denied access to the program or withdrew from the program;
3. Domestic Production Activities Deduction – a review of multi-channel video programming distributors and TV broadcasters that claim the section 199 deduction, but they are not the initial producers of the program;
4. Micro-Captive Insurance Campaign – a review of transactions described in Notice 2016-66 where a taxpayer reduces taxable income by treating contracts with a related company as insurance contracts;
5. Related Party Transactions Campaign – transactions between related parties;
6. Deferred Variable Annuity Reserves & Life Insurance Reserves IIR Campaign – an industry issue resolution initiative to determine appropriate amounts for tax reserves for deferred annuities and life insurance contracts;
7. Basket Transactions – a review of financial transactions that attempt to defer and treat ordinary income and short-term capital gain as long-term capital gain;
8. Completed Contract Method – a review of situations where developers are deferring gain from construction of a development until the entire development is complete;
9. TEFRA Linkage Plan Strategy – addressing issues related to assessing tax on terminal investors;
10. S Corporation Losses – improve identification of circumstances where S corporation shareholders are claiming losses in excess of their basis;
11. Repatriation – identify taxpayers who do not report repatriations as taxable income;
12. Form 1120-F Non-Filers – identify foreign companies doing business in the U.S. that do not file the 1120-F; and
13. Inbound Distributor – concern that U.S. distributors of foreign produced goods are not reporting adequate income from that activity.