IRS Changes Compliance Assurance Process Program

The IRS has changed the Compliance Assurance Process (CAP) program for 2019. CAP is a cooperative pre-filing program for some of the largest taxpayers. The IRS made the changes in order to keep the program consistent with its original objectives.

2019 Compliance Assurance Process Program Changes

First, the 2019 application period will open October 1, 2018, for existing CAP taxpayers who meet the program eligibility requirements, including suitability criteria.  The IRS will also close the application period on November 30, 2018. This will give affected taxpayers more time to assess the proposed changes.

Second, as part of the application, taxpayers will have to provide a preliminary list of material issues for the year. If applicable, taxpayers will also have to provide specified transfer pricing issue information and research credit information.

Third, the IRS will allocate resources to the CAP program as part of its annual planning. This is part of the IRS’s overall efforts to ensure that it deploys resources appropriately.

Fourth, since effective communication and prompt resolution of issues are key components of CAP,  additional requirements will apply to both taxpayers and IRS in these areas.

Fifth, taxpayers will have to provide a representation letter within 30 days of return filing. Deadlines will also apply to the IRS post-filing review. This is intended to promote timely resolution of each year’s issues.

Finally, the IRS will continue the Compliance Maintenance phase of CAP, but it will be modified.

TheIRS hopes these proposed changes will:

  1. improve the program’s operation,
  2. make the best use of limited government resources, and
  3. ensure the program is sustainable.

The changes are effective for the 2019 application period. The IRS also expects to make edditional changes for the following year and into the future.


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All stories by: CCHTaxGroup