New IRS Pass-Through Unit Is No Quick Fix to Partnership Worries

The IRS’s new unit to tackle concerns around pass-through entities could take years to fully stand up, and will face down a complex and opaque slice of the tax code that many say needs reforming.

The agency announced the unit in September and said it will kick off next year as a part of the IRS’s Large Business & International Division with a mandate to pursue companies such as S Corps and partnerships that the agency says are being used to avoid taxes by “passing through” their income to partners.

It won’t be easy: Whole teams will have to be ...