IRS adds new compliance campaigns on fuel credit, research issues (LB&I division)

IRS adds new compliance campaigns

The IRS Large Business & International (LB&I) division continues to expand its list of compliance campaigns today by adding two new campaigns—bringing the current total to 53 compliance campaigns.

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As included on the IRS website (last updated February 27, 2020), the new campaigns concern:

  • Section 6426 fuel credit. The compliance campaign is briefly described by the IRS as follows: 

LB&I is initiating a campaign for taxpayers who received fuel mixture credits under ... section 6426, but did not treat the credits as a reduction in their excise tax liability under section 4081. See Sunoco Inc. v. United States, 908 F.3d 710 (Fed. Cir. 2018), cert. denied, Sup. Ct. Dkt. No. 18-1474 (2019). The goal of this campaign is to use issue-based examinations to bring taxpayers who maintain that the credits are merely refundable credits, which do not affect the deduction for any excise tax liability, into compliance.

  • Research issues: The compliance campaign is briefly described by the IRS as follows: 

The research issues campaign will address research credit and research and experimental expenditures issues. Issues involving the research credit and research and experimental expenditures under sections 41 and 174 are some of the most prevalent tax issues within LB&I, utilizing significant examination and taxpayer resources. The campaign will employ various treatment streams including issue-based examinations, form updates, and requests for guidance. Other treatment streams will be considered as the campaign progresses. The campaign objective is to promote voluntary compliance, focus resources on the highest risk research issues and increase consistency of examinations.

A separate release on the IRS website (dated February 27, 2020) reflects that the following six compliance campaigns have been “retired” as having been concluded:

  • Deferral of cancellation of indebtedness income campaign
  • Deferred variable annuity reserves and life insurance reserves IIR campaign
  • Section 48C – Energy credits campaign
  • Section 965 – Taxpayer awareness campaign
  • Land developers - Completed contract method (CCM) campaign
  • TEFRA linkage plan strategy campaign

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