IRS began 1,589 partnership examinations in FY2025, a 76% drop in two years
IRS partnership examination starts fell about 76% from FY2023 to FY2025, from 6,709 to 1,589, Treasury data cited by CPA Practice Advisor show. Large-corporation starts rose to 1,483, and the 2015 Bipartisan Budget Act's centralized regime still governs any partnership the IRS picks.
The Investor · Invest desk
Key figures: IRS partnership examination starts were 1,589 in FY2025, against 4,106 in FY2020 and 6,709 in FY2023, the level reached after a 63% rise from FY2020.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Partnership exam starts, FY2025 | 1,589 exam starts | 3 | |
| Partnerships, FY2020 | 4,106 exam starts | 15 | |
| Partnerships, FY2023 | 6,709 exam starts | 1 |
What happened
- High-income individual examination starts fell from 4,326 in FY2023 to 3,692 in FY2025, a smaller decline than the one in partnership cases.
- Before the fall, a 2025 TIGTA report found partnership starts had risen 63%, from 4,106 in FY2020 to 6,709 in FY2023.
- According to TIGTA, staffing in the IRS Pass-Through Entities program shrank by more than 20% during 2025, and the watchdog said the agency would have to revisit its coverage goals for large partnerships.
Why it matters
- exposure A partner in a firm that is picked can be hit on several returns, because one partnership issue can move that partner's taxable income, loss deductions and self-employment tax across multiple years.
- decision A partnership weighing cuts to exam-readiness work still faces live IRS campaigns on losses above partner basis, sales of partnership interests and limited-partner self-employment tax, so the saving buys exposure on those issues.
- contradiction The data do not show rising risk for high earners: individual high-income starts fell 14.7%, and the only increase reported in their share of exams, from 5.2% to 8.8%, stops at FY2023.
Starts count cases, not examiner hours, and the categories moved by very different amounts. Partnership starts fell by 5,120 [12]. Large-corporation starts rose by 83, from 1,400 to 1,483 [13]. The added corporate work therefore replaces about 1.6% of the partnership work that stopped [17]. If a large-corporation case absorbs many times the hours of a partnership case, the hours could balance better than the counts do, and the article does not report hours.
The level matters as much as the direction. Starts went from 6,709 to 2,285 in FY2024 and then to 1,589 [3]. That last figure is 38.7% of the 4,106 recorded in FY2020 [15], so the two-year fall erased the 63% rise TIGTA documented [1] and kept going, to 61.3% below the FY2020 starting point [15].
The article attributes the decline to reduced enforcement resources and points to TIGTA's finding that the Pass-Through Entities program lost more than 20% of its staff during 2025 [6]. A staff loss of that size does not by itself produce a 76% fall in starts [12], though the two periods do not line up exactly. We think part of the gap is long cases. Of the 82 largest partnerships selected for examination, 43 (52.4%) were still open [7][16], and if those cases are slow and examiner-heavy they could crowd out new starts. The article does not make that link, so it is our inference. It fails if starts stay near 1,589 after those 43 close, because that would point to changed selection criteria and not to capacity.
The article's headline says BBA assessments can affect individual partners. The text stops, at the point where it introduces the centralized regime that the Bipartisan Budget Act of 2015 created [8], before it explains how. Its author, the Tax Law Offices of David W. Klasing, represents high-income individuals and partnerships in civil tax examinations [11]. The firm argues that fewer audit starts should not be mistaken for abandoning high-income or partnership enforcement [18].
What to watch
- Treasury's FY2026 performance data on partnership examination starts, against the 1,589 recorded for FY2025.
- The IRS reassessment of large-partnership coverage goals that TIGTA said the staffing loss would require.
- How many of the 43 open large-partnership examinations close, and whether new selections replace them.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence58
- Adoption
- Insufficient
- Hype gap+10
- Incentives75
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
A 2025 TIGTA report found that partnership examination starts increased 63%, from 4,106 in FY 2020 to 6,709 in FY 2023.
- [2]
Over the same FY2020 to FY2023 period, the share of individual examinations analyzed by TIGTA involving returns reporting more than $400,000 increased from 5.2% to 8.8%.
- [3]
Treasury's latest performance data show partnership examination starts fell to 2,285 in FY 2024 and 1,589 in FY 2025, a roughly 76% decline from FY 2023.
- [4]
High-income individual examination starts declined from 4,326 in FY 2023 to 3,692 in FY 2025.
- [5]
Large-corporation examination starts increased from 1,400 in FY 2023 to 1,483 in FY 2025.
- [6]
TIGTA reported that the IRS Pass-Through Entities program lost more than 20% of its staff during 2025 and concluded that the agency would need to reassess its large-partnership examination coverage goals.
- [7]
TIGTA reported that 82 of the largest U.S. partnerships were selected for examination, with 43 of those examinations still open.
- [8]
The Bipartisan Budget Act of 2015 created the centralized partnership audit regime, and Congress fundamentally changed how the IRS examines partnerships.
- [9]
One disputed issue may affect several returns: a partnership deduction can change an individual partner's taxable income, an outside-basis adjustment can determine whether partnership losses were deductible, and self-employment tax may turn on the limited-partner exception; an examination can reach multiple entities, partners and tax years.
- [10]
Current IRS Large Business and International compliance campaigns address partnership losses exceeding partner basis, sales of partnership interests, and self-employment tax positions involving limited partners, among other partnership issues.
- [11]
The article's author, the Tax Law Offices of David W. Klasing, says its dual-licensed tax attorneys represent both high-income individuals and partnerships in sophisticated civil tax examinations.
- [12]
Partnership examination starts fell by 5,120 between FY2023 and FY2025, a 76.3% decline.
- [13]
Large-corporation examination starts rose by 83 between FY2023 and FY2025.
- [14]
High-income individual examination starts fell by 634, or 14.7%, between FY2023 and FY2025.
- [15]
FY2025 partnership starts (1,589) are 38.7% of the FY2020 level (4,106), or 61.3% below it.
- [16]
43 of the 82 selected large partnerships is 52.4% of examinations still open.
- [17]
The 83 additional large-corporation starts equal about 1.6% of the 5,120 partnership starts lost.
- [18]
The article says fewer audit starts should not be mistaken for abandoning high-income or partnership enforcement.
Sources
1 independent publisher whose own reporting we read for this story.
Topics and entities
Follow any of these and your For You feed starts watching them — no settings page required.
Entities
- Tax Law Offices of David W. KlasingFollow
- Bipartisan Budget Act of 2015Follow
- CPA Practice AdvisorFollow
- Treasury Inspector General for Tax AdministrationFollow
- Internal Revenue ServiceFollow