From: Captive International
Close inspections of microcaptives by the US Internal Revenue Service (IRS) are expected to continue, and potentially ramp up, in light of increased funding for the federal agency.
The 2022 Inflation Reduction Act earmarked an additional $80 billion in funding for the IRS over the next ten years, which it is expected to use to hire 87,000 members of staff, including agents and 200 experienced lawyers.
The implications of this were examined in a CICA 2023 panel session titled ‘Small captive tax audits and litigation – today’s status, tomorrow’s changes’.
The panel consisted of Kacie Dillon, partner at the Law Offices of Woolston & Tarter, Charles Lavelle, partner at Denton Bingham Greenebaum, and Amy Lewis, senior vice president and finance & tax director at Captive Resources.
While the IRS hiring plan appears substantial, the panel said that the agency will have 52,000 members of staff who are eligible to retire or resign over the next decade. So the total number of IRS staff might not increase by the full 87,000 figure.