Tax Notes Quotes Niles Elber on State of IRS Examinations

IRS staff reductions and funding cuts could hamper efforts to crack down on abuse of Puerto Rico tax incentives as the Justice Department begins seeking criminal charges related to misuse of the tax breaks.

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The White House also recently proposed cutting IRS funding by $2.5 billion in its fiscal 2026 budget. That would reduce funding to its lowest level since 2002.

Although the IRS has been aggressively pursuing campaign-related audits, it is likely that ongoing examinations won't be completed and new ones won't be opened, Niles Elber of Caplin & Drysdale said. That could be problematic for the IRS because it cannot pursue criminal cases once the statute of limitations has closed, he added.

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