Bloomberg Tax Publishes Olivier De Moor Article on Preparing for IRS Hedge Fund Audits
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“Hedge Funds Should Take These Steps to Prep for IRS Tax Audits,” an article by Akin tax partner Olivier De Moor, has been published by Bloomberg Tax.
The article discusses the Internal Revenue Service’s recent announcement of the start of an audit campaign focused on high-income earners, partnerships, large corporations and certain promoters. The campaign specifically cited hedge funds and real estate investment partnerships as the types of partnerships that would be audited.
Olivier notes that the announcement “is part of an overall plan to prioritize tax enforcement of complex partnership arrangements that investment funds and their investors commonly use, and to increase the audit rate of taxpayers involved. It follows prior steps that include the adoption of a new US partnership tax audit program in 2015 (referred to as the Bipartisan Budget Act, or BBA, after the statute that adopted it), and the rollout of an IRS pilot program in 2021 that focused on information gathering.”
He then offers a series of possible steps to follow regarding how to prepare for the BBA process, what to do when an audit notice arrives, and what to know about the heightened potential for audits.
Olivier closes by concluding, “[G]iven the anticipated increase in audit activity, it would be prudent for fund sponsors and their investors to assess their readiness and monitor their exposure to future audits under the BBA partnership tax audit program.”
Click to read the full article here.
