The IRS is strengthening its efforts to pursue fraudulent and/or tax avoidance transactions with the establishment of the Office of Promoter Investigations. On April 19, 2021, the IRS announced the appointment of Lois Dietrich to the position of Acting Director. IRS Commissioner Chuck Rettig stated, “by establishing the Office of Promoter Investigations, we are continuing our increased focus on promoters of abusive tax avoidance transactions, which we have demonstrated over the last year.”
The Office of Promoter Investigations is technically within the Small Business/Self-Employed Division. However, it will coordinate efforts with other IRS divisions including Large Business & International, Tax Exempt/Government Entities, the Office of Fraud Enforcement, and Criminal Investigations to target promoters of transactions that the IRS has deemed abusive.
Promoters and other coordinators of syndicated conservation easements and abusive micro-captive insurance arrangements have been specifically designated as targets of the Office of Promoter Investigations. These investigations and audits will involve sensitive matters with fraud and criminal implications. Taxpayers who are targets of these investigations should consider retaining counsel for these sensitive matters to ensure that discussions with their representatives come under the umbrella of the attorney-client privilege.
For more information and guidance on these matters, please contact me.