The IRS Large Business and International (LB&I) division released its FY 2020 Focus Guide outlining its strategic goals and staffing projections.

LB&I said its priority focus for the year is to improve case selection and assign more productive work, while reducing the amount of general discretionary work. In addition, LB&I will be increasing campaign work and focusing on tax reform work later this year.

Major initiatives

LB&I continues its use of data analytics to aid with decision-making, improve outcomes, and increase productivity.

LB&I said it is committed to implementing the following program priorities:

• Integrating the Tax Cuts and Jobs Act (TCJA) into operations
• Enhancing the Large Corporate Compliance (LCC) Program
• Monitoring the Compliance Assurance Process (CAP) program
• Continuing to improve the Campaign Compliance Program
• Continuing to implement the large partnership audit procedures in the Bipartisan Budget Act of 2015 (BBA)

In addition, LB&I will be increasing the number of audits for pass-through entities; will continue to focus on virtual currency, syndicated conservation easements, and micro-captive insurance; and will implement new activities related to the Taxpayer First Act. LB&I is also working on a centralized policy office "to ensure accountability, consistency and coordination of LB&I policies and procedures."

The FY2020 Focus Guide is the first since 2010 that shows an increase in hiring with a recognition that this hiring trend is continuing.

Implications

The Focus Guide confirms LB&I's continued focus on enforcement activities. Particularly noteworthy is the increase in staffing, along with LB&I's intention to replace discretionary work with work generated through the campaign program, including campaigns that will be focused on the provisions of the TCJA. An increase in TCJA-related audit activity will present challenges to both LB&I and taxpayers given the unsettled nature of the law. LB&I also highlighted an increase in audit activity for pass-through entities. These audits may also present challenges for both LB&I and taxpayers, as they will be executed under the BBA provisions, which are a significant departure from the prior pass-through audit procedures under TEFRA.

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