20 April 2021Accounting & tax analysis

IRS continues to squeeze micro-captives with new office of promoter investigations

The Internal Revenue Service (IRS) has established an office of promoter investigations (OPI) to expand on the work its promoter investigations coordinator (PIC) began in the summer of 2020.

Lois Deitrich has been appointed to lead the office as acting director, taking over the work the IRS has been pursuing for the past year under Brendan O'Dell, who was selected as the PIC in early 2020.

Deitrich has served at the IRS for 20 years, having previously served as the director of the southwest area of small business and self employed (SB/SE) field examination, overseeing abusive transaction investigations for that business. She has also served as director of exam case selection and exam quality and technical support.

OPI sits within SB/SE but Deitrich will work on agency-wide compliance issues, including coordination of promoter activities with promoter teams in other business divisions, including large business and international and tax exempt and government entities. She serves as the principal advisor and consultant to IRS division commissioners and deputy commissioners on issues involving promoters of abusive transactions and the schemes they peddle.

IRS Commissioner Chuck Rettig said the office will increase the tax authority’s focus on promoters of abusive tax avoidance transactions. “This office will coordinate efforts across multiple business divisions to address abusive syndicated conservation easements and abusive micro-captive insurance arrangements, as well as other transactions," he explained.

Before the OPI was created the SB/SE division completed a realignment of field examination employees who work on promoter investigations, bringing them under a single director within the field exam division.

De Lon Harris, commissioner, SB/SE exam, said this realignment will continue to strengthen the department’s internal compliance efforts.

“Bringing these agents together, in combination with the creation of the service-wide OPI, will help strengthen our compliance work and is yet another opportunity to increase our capacity to conduct these investigations," he added.