On September 8, 2023, the Internal Revenue Service (IRS) issued a press release that starting in October 2023, the agency will begin mailing compliance letters to partnerships as part of its increasing focus on large partnerships and complex partnership returns. These compliance letters will likely impact partnerships with over $10 million in assets; however, the IRS maintains a broader goal of increasing audit activity and examinations of large partnerships and high-income taxpayers.
Recent developments across the three branches of government address the tax treatment of syndicated conservation easement transactions. The US Tax Court first held as invalid the notice designating the transactions as listed transactions. The Treasury and IRS then issued modified guidance in the form of proposed regulations, addressing the notice and comment deficiencies cited by the court. Finally, Congress enacted legislation separately addressing issues presented by these transactions.
As a result of COVID-19, construction on a number of renewable energy projects has been repeatedly delayed, potentially jeopardizing valuable tax benefits under the investment credit provisions. Such provisions require taxpayers to make continuous progress toward completion of the project once construction has begun.