Fix the Tax Code Friday: Targeted Enforcement

IRS Commish Doug Shulman has not been shy about talking about targeted enforcement. Targeted enforcement – the idea of cherry picking certain target groups to investigate or examine – is nothing new: it’s happened for years. In fact, as a young lawyer, I remember FLPs (Family Limited Partnerships) being called out under the Clinton Administration. But the IRS hasn’t been all that eager to talk about it. Until now.

Shulman has been very open about the fact that it’s happening and very happy to say what’s being targeted. Right now, the IRS seems to be circling the tank around three main areas:

  1. Offshore accounts
  2. Pass through entities (esp s corporations and LLCs)
  3. High wage earners

Areas of targeted enforcement vary depending on what’s happening in the world, who’s in the White House and how many resources are available. Previous efforts have included self-employeds with Schedule C and Family Limited Partnerships.

So today’s Fix the Tax Code Friday question is two-fold:

Do you think targeted enforcement makes sense? And if does, it is fair?