The Internal Revenue Service (IRS) has established a new office that will coordinate efforts across multiple business divisions to address abusive syndicated conservation easements and ‘abusive micro captive insurance arrangements’ as well as other transactions, according to IRS commissioner Chuck Rettig.
The new office of promoter investigations (OPI) will further expand on the efforts of the promoter investigations coordinator that started last year.
Lois Deitrich, a 20-year veteran of the agency, has been appointed as the OPI’s acting director.
Deitrich, who started her IRS career in 2001 as a will take over the work the agency has been pursuing for the past year under Brendan O'Dell, who was selected as the promoter investigation coordinator in early 2020.
In her new role, Deitrich will work on agency-wide compliance issues, including coordination of promoter activities with promoter teams in other business divisions, including large business and international, tax exempt/government entities, the office of fraud enforcement, and criminal investigations.
She will serve as the principal advisor and consultant to IRS division commissioners and deputy commissioners on issues involving promoters of abusive transactions and the schemes they peddle.
The OPI will also develop strategic plans, programmes and policy.
Rettig, says: "By establishing the OPI, we are continuing our increased focus on promoters of abusive tax avoidance transactions, which we have demonstrated over the last year.”
Prior to the creation of OPI, the small business/self-employed (SB/SE) division completed a realignment of field examination employees who work on promoter investigations.
The realignment brought SB/SE revenue agents under a single director within the field exam division, increasing the focus and attention they apply to investigations going forward.
The IRS explains that with additional training, resources and applied analytics, SB/SE will bring improved focus on identifying, investigating and taking necessary enforcement action to halt promotion of abusive transactions.
De Lon Harris, commissioner, SB/SE Exam, says that the realignment of field employees will continue to strengthen the internal compliance efforts within SB/SE.
"These groups are exclusively dedicated to investigating those who peddle abusive tax schemes. Bringing these agents together, in combination with the creation of the service-wide OPI, will help strengthen our compliance work and is yet another opportunity to increase our capacity to conduct these investigations,” Harris adds.
“Our promoter office will strategically focus resources to help expand detection and deterrence efforts of promoter work across the IRS."
Earlier this month, the IRS urged participants in ‘abusive micro captive insurance arrangements’ to exit these transactions as soon as possible.
In a recent response to the IRS’ warnings, the Self-Insurance Institute of America (SIIA) says that while the IRS continues activities related to captive insurance, it must also move towards recognising what an appropriate structure is, and issue appropriate guidelines to that purpose.
