The IRS has stated the following as among the top areas of noncompliance:
• Sham business losses;
• False or inflated business deductions;
• Abusive Schedule A deductions; and
• False claims for the Earned Income Tax Credit (EITC)
The IRS has a stated goal of increasing tax compliance among high-income or high-wealth taxpayers (with income of $200,000 or more). The are testing a new audit approach that will focus on taxpayers who are most at risk for non-compliance such as those who control multiple or tiered entities, or have more than one flow-through business.
The IRS plans to conduct approximately 2,000 compliance visits to return preparers. To determine compliance with the earned income credit requirements, proper recordkeeping, and use of the preparer tax identification number (PTIN).