Newsflash: Partnership Audits of Private Equity Firms on the Rise

March 31, 2016

There has been buzz in the tax and private equity communities about the rise in audits of private equity firms by the Internal Revenue Service (“IRS”). This has been fueled by the restructuring of the IRS’ Large Business & International group, a report by the Government Accountability Office analyzing IRS audits of “large” partnerships, and public statements by IRS officials of the IRS’ intent to apply more resources to audits of partnerships, “mid-market” companies and high net worth individuals, rather than large corporations. Most recently, practitioners and journalists have heard reports of an uptick in audits of private equity firms and rumors that the IRS has selected, or will be selecting, 100 private equity firms for audit.

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