TREASURY REPORT: LIKE-KIND EXCHANGES REQUIRE OVERSIGHT TO ENSURE TAXPAYER COMPLIANCE

The September 17, 2007  Report ( reference number: 2007-30-172 )  indicates the Treasury is concerned taxpayers performing 1031 exchanges are underreporting gain because there is little IRS oversight of 1031 at the present time. The Report has three recommendations that the IRS has agreed to pursue:

1) The IRS will study compliance and reporting issues involving 1031 tax deferred exchanges from tax returns selected by the National Research Program. As a result of this study, the IRS anticipates recommending target audit areas for exchanges by the end of summer in 2008.

2) By January 2008, the IRS will be revising their information on the IRS website and in a number of IRS forms and publications to provide additional guidance regarding the need for taxpayers performing 1031 exchanges to file Form 8824.

3) The IRS will be offering more guidance on 1031 exchanges of second and vacation homes that are not used exclusively by the taxpayer. The IRS is concerned that some may have been encouraging taxpayers to exchange non-qualifying second or vacation homes.

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This entry was posted on Monday, October 8th, 2007 at 12:31 pm and is filed under 1031 Tax deffered exchange. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.