IRS emphasis on partnership audits - What you need to know

IRS Hot Topics
Information published by the IRS shows a major change in the types of tax returns companies are filing due to changes in their business structures. Many companies are now choosing to operate with flow-through entities, including S Corporations and limited-liability companies, instead of corporate form. In 2009, partnerships and Subchapter S corporations represented 175,316 of all tax returns filed within the jurisdiction of Large Business and International (LB&I), compared to 80,643 Forms 1120 and 1120F filed. Thus, partnerships represent 68% of all the tax returns in LB&I inventory of available work. This trend of filing flow-through returns is expected to continue to increase over the next five years, and we estimate the percentage of such returns will approach 75% of LB&I inventory by 2014.

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