 Here's a quick summary of our latest reports on Direct File use, large partnership examinations, and IRS's SharePoint security controls.
Direct File Activity for the 2025 Filing Season During the 2025 Filing Season, the IRS estimated that 32 million taxpayers would be eligible for Direct File. However, only 751,000 taxpayers registered to use it, 59 percent of which didn't end up using it to submit a tax return. IRS attributed lower than expected usage to confusion about availability and a lack of outreach. In October 2025, the Department of the Treasury announced that the IRS would suspend Direct File. Direct File Usage Increased for the 2025 Filing Season
Compared to the 2024 Filing Season  For more information: The IRS Has Yet to Develop a Successful Strategy for Examining Large Partnership Returns IRS data show large partnership filings (assets greater than or equal to $10 million) increased from more than 140,500 in 2011 to nearly 335,000 in 2023. However, examination rates fell from 2.7% to below 0.1% during the same time period.  The IRS has traditionally experienced high no-change rates on closed partnership examinations, meaning that the examination produced no adjustments to the partnership's return. In October 2023, the IRS issued 483 soft letters (Letter 6585) to partnerships with balance sheet discrepancies. While these aren't examinations, failure to respond or provide adequate documentation to the letter may lead to one. Of the 483 soft letters sent, the IRS didn't receive responses for 163 letters, rejected 182 responses for insufficient evidence or inadequate documentation, and accepted 138 responses. The IRS did not pursue examinations based on these responses due to resource constraints and limited time remaining on the assessment statute of limitations (the IRS generally has three years from the date a return is filed to examine it). Separately, the IRS is examining 82 of the largest U.S. partnerships (most exams were ongoing as of December 2025).
For more information: SharePoint Online Access and Security Controls Need Improvement SharePoint Online (SPO) is a cloud-based service used to store, share, and manage organizational content, including sensitive data and other confidential information. SPO replaced the IRS's SharePoint 2013, which was no longer supported by the vendor. We found the IRS needs to strengthen SPO access and security controls. Of more than 18,000 SPO sites reviewed, 52% lacked audit logs and 47% did not report an access control method. Missing audit logs limited site administrators' abilities to verify and ensure that appropriate access was granted. We also found the migration to SPO took two years longer than originally scheduled. This resulted in the IRS paying more than $1 million to maintain its older system. These delays were caused by a contractor hired to assist the IRS with certain tasks related to the migration.
For more information:
Having trouble viewing this email? View it as a Web page.
| 
No comments:
Post a Comment