Partnerships: 2024 tax compliance and strategies
ARTICLE | February 14, 2025
Authored by Schlenner Wenner & Co
As tax year 2024 approaches, partnerships must prepare for new challenges in compliance, heightened documentation demands, and increased IRS enforcement. Regulatory changes, reporting requirements for foreign investors, and the impending use of artificial intelligence by the IRS are essential elements to consider. Accountants are advising partnerships to leverage tax compliance technology to handle these complex requirements and demanding deadlines. This technology can help mitigate risk and automate processes, freeing up valuable resources.
Among the key considerations for tax year 2024 are utilizing estimates, documenting allocations, and understanding special considerations for lower-tier partnerships. Accountants also emphasize the importance of staying abreast of recent developments and updated forms. Partnership tax advisors suggest that partnerships review and utilize the Partnership tax filing checklist 2024 to ensure a smooth tax filing season.
The IRS has signaled its intention to ramp up audit rates by almost tenfold on large, complex partnerships with assets over $10 million. This is driven by the IRS' use of artificial intelligence to identify noncompliance. Areas of focus that might trigger an audit include discrepancies in reports, inconsistent information, and irregularities in income or expenses. Partnerships, particularly in industries like private equity and real estate, are advised to be vigilant about their compliance and reporting to avoid attracting unnecessary IRS scrutiny. Properly preparing for tax year 2024 can help partnerships avoid potential financial and operational setbacks.
The IRS offers pertinent tax information for partnerships https://www.irs.gov/businesses/partnerships. However, please feel free to contact any of our offices with questions and/or clarification.
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