IRS Layoffs Could Spark Use of Abusive Tax Shelters, Tax Pro Says

Tax attorney Lee Meyercord was quoted in a Tax Notes article exploring how reductions in IRS staffing will affect partnership and other audits. Government employees and industry practitioners have expressed concerns that layoffs at the agency, in particular staff who focus on partnerships, will lead to an increase of abusive tax shelters that rely on partnership structures. Ms. Meyercord described her experience advising clients amid the turnover, saying some have been assigned new agents but that audits are still continuing. For now, she reiterated, processes are moving forward, even if it remains unclear how workforce reductions will ultimately affect the IRS' partnership audit procedures.

"They haven't been closed [with] no change; they were sort of paused," she said. "But now the new agent is starting to reach out to contact me, and those are moving forward. So I think the audits that have been opened will continue to proceed."

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