By Arielle Borsos and Victor Jaramillo ( June 21, 2018, 2:52 PM EDT) -- On May 21, 2018, the Internal Revenue Service Large Business and International division added foreign trust information reporting to its "compliance campaigns," signaling that the IRS sees a "compliance risk" in this area that requires a targeted response to achieve compliance objectives. LB&I first announced its use of compliance "campaigns" in January 2017 as part of its move toward issue-based examinations. Since its initial rollout, LB&I has identified a total of 35 campaigns it believes present compliance risks and corresponding "treatment streams" it will employ to improve taxpayer compliance. Such "treatment streams," include issue-focused examinations, soft notices or letters, voluntary self-correction, practitioner outreach and, in certain instances, published guidance. With respect to the foreign trust campaign, LB&I indicated that it will take a "multifaceted approach" to improving compliance, including through the use of "examinations and penalties assessed by the campus when forms are late or incomplete." Accordingly, individuals who have foreign trust reporting requirements now face an increased risk of IRS audit, as well as the assessment of penalties, which can be quite substantial in this area, and should be sure they are in compliance with the complex reporting obligations associated with foreign trusts....