Carolyn Schenck Weighs in on IRS Auditing in Tax Notes

The widespread loss of staff at the IRS doesn’t necessarily mean practitioners can expect less thorough audits, according to former officials.

The IRS may be coming off a year in which it lost about a quarter of its 100,000-strong workforce, but it continues to dig into audits on high-income and corporate taxpayers, former IRS Commissioner Charles Rettig said March 5 at the Federal Bar Association Tax Law Conference.

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Carolyn A. Schenck of Caplin & Drysdale added that while some practitioners might be seeing fewer audits, those that they do see are “deeper.”

“Just in the cases that they do have, my experience is that they’re doubling down on them, and maybe it’s because those are the cases that they have adequately staffed at this point,” said Schenck, former IRS national fraud counsel.

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It can’t be discounted how much institutional knowledge left the agency last year amid a wave of resignations, according to Schenck.

“Most of the areas that I think require deep expertise really come in the area of partnership structures, international transactions, transfer pricing, some more sophisticated tax planning strategies,” Schenck said, noting that staff with experience in those areas “can’t be replaced overnight.”

To read the article in full, please visit Tax Notes’ website.