Beginning in 2015, the Internal Revenue Service (IRS) is requiring additional mandatory reporting of values within IRAs and Roth IRAs. Essentially, the IRS is looking more closely at IRAs that hold hard-to-value assets, especially in years that a distribution or deemed distribution have been made. If the assets were undervalued at the time of distribution, a taxpayer could be subject to a 50 percent penalty for the undervaluation and underpayment of tax. According to UHY LLP, the IRS also may use this information as the basis for an audit to determine whether prohibited transactions have occurred.