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How to Prepare for IRS Attention

The IRS is giving more attention to mid-sized corporations.

Many corporations' CFOs have teams of accountants to back them up as they deal with filing yearly financial reports, and an article from CFO World suggests everyone should batten the hatches to prepare for a new wave of attention from the Internal Revenue Service.

According to the source, the agency is adding to its own workforce in order to drive up enforcement revenues - a tactic that is working so far - and it will be broadening its scope in the coming months to target middle-market companies.

Tigta research indicates that companies reporting assets of at least $10 million went through 7 percent more examinations in fiscal 2010, and those with $250 million or more saw 9 percent more, the magazine reports.

Michael Dolan of KPMG's Washington National Tax Group told the source that in order to prepare, companies should check that they observe all the requirements under the IRS' Compliance Assurance Process, and that they encourage the tax and business teams in the corporation to work together.

Organizations that fail to prepare and review their own books before the IRS does could end up paying hefty fines. Bloomberg reports that the Tribune Company recently settled with the IRS over alleged tax law violations, and will pay $7 million to the agency.