United States: Internal Revenue Service Releases Directive On Information Document Request Enforcement Process

Keywords: IRS, Directive, Information Document Request Enforcement Process, IDR Enforcement, Taxpayers

On November 4, 2013, the Internal Revenue Service (IRS) released its highly-anticipated Large Business and International Directive on Information Document Request Enforcement Process (the Directive). The Directive builds on earlier guidance to describe a collaborative process for issuing new Information Document Requests (IDRs) and outlines a new three-step mandatory enforcement process if a taxpayer fails to satisfactorily respond to an IDR.

The new IDR enforcement process is notable because it appears to limit an IRS Examiner's discretion to extend the deadline for responding to an IDR. Taxpayers should carefully review the Directive to understand how new IDRs will be issued and what is required of them. Taxpayers should prepare to work with their IRS Examiners in the next few months to ensure a smooth transition to the new IDR process.

New Process for Issuing IDRs

On June 18, 2013, the IRS issued guidance describing three general requirements that must be met before a new IDR is issued. The Directive provides additional detail on how the IRS will issue new IDRs and raises several points for taxpayers to consider.

The Directive requires all IDRs to be issue-focused. It obligates the Examiner to discuss the issue and how the information requested relates to that issue. Further, it states that the IRS should provide a draft copy of the IDR and discuss its contents with the taxpayer prior to issuance. Lastly, although the Directive states that the IRS and the taxpayer should agree on a response date, the IRS Examiner "will set a reasonable response date" if agreement cannot be reached.

The Directive appears to rely on extensive collaboration between the taxpayer and the IRS before a final IDR is issued. Taxpayers may be able to take advantage of this opportunity by working with the IRS to narrowly tailor and clearly draft IDRs to capture the precise information being sought. However, this collaboration will require the taxpayer to assist the IRS in understanding its reporting positions before an IDR is finalized. In addition, nothing requires the different IRS Examiners to work together when issuing IDRs; as such, taxpayers should track negotiations with the IRS to ensure that multiple IDRs are not due on the same date, and avoid overlap in subject matter. If the information requested in the IDR is not received by the response date, the Examiner will follow the new IDR enforcement process.

New Process for Enforcing Compliance with IDRs

If the IRS believes that a taxpayer has failed to fully respond to an IDR, it will initiate a three-step summons enforcement process. This summons enforcement process is mandatory, and it deprives the Examiner of the authority to act unilaterally to extend the deadline for responding. Because features of the new enforcement process contemplate IRS communications with employees at various levels of seniority in the taxpayer's organization, internal tax practitioners should consider informing their superiors of the new process.

If a taxpayer fails to fully respond by the deadline in the IDR, the IRS Examiner will first issue a "Delinquency Notice." The IRS Examiner is expected to issue the Delinquency Notice within 10 days of the IDR response date, and should give the taxpayer no more than 15 days to comply. However, the Directive gives the IRS Territory Manager discretion to extend the 15-day deadline for responding if the circumstances warrant such an extension.

If the Taxpayer fails to comply with the deadline in the Delinquency Notice, the IRS will issue a "Pre-Summons Letter." The Pre-Summons Letter will be signed by the Territory Manager, and should generally be sent within 14 days of the deadline in the Delinquency Notice. However, the Pre-Summons Letter will not be sent to the same employee who received the Delinquency Notice. Instead, the Directive requires that it be sent to that person's direct supervisor.

The Pre-Summons Letter should allow the taxpayer an additional 10 calendar days from the date of the letter to comply, but the Director of Field Operations can approve an extension if warranted. In addition, the Directive requires that the IRS Examiner discuss the Pre-Summons Letter with IRS Counsel before issuance, and the Director of Field Operations must be made aware of it prior to issuance. If the taxpayer fails to comply with the Pre-Summons Letter, the Examiner is to issue a summons.

If the taxpayer misses the deadline in the Pre-Summons Letter, the IRS Examiner will prepare a Summons and coordinate its issuance with assigned Counsel. If the taxpayer fails to comply, the IRS will seek to enforce the summons in US District Court.

Issues to Consider

The new directive is effective January 2, 2014. IDRs outstanding as of that date that do not comply with the Directive are to be reissued, and will be subject to the new enforcement process upon reissuance.

The Directive raises several important issues for taxpayers to consider as they adapt to the new IDR process. First, the Directive appears to remove any discretion on the part of the Examiner to extend a deadline contained in an IDR. Taxpayers have expressed concern that this lack of discretion could lead to increased summons enforcement activity, and the Directive appears to bear out that concern: it states that the enforcement process "is mandatory and has no exceptions." However, although the Directive states that Delinquency Notices and Pre-Summons Letters should contain general deadlines, IRS officials can agree to extend those deadlines. Taxpayers who find that they cannot meet an initial IDR deadline should consider negotiating extended reply dates upon receipt of a Delinquency Notice or Pre-Summons Letter.

Taxpayers should also recognize that the new enforcement process may negatively affect the relationship between the Examiner and the employee responsible for negotiating the final IDRs. The Directive requires that the Pre-Summons Letter be sent to that employee's superior; employees should update their superiors regularly about the IDR response process to avoid any potential surprises.

Taxpayers should also recognize that the IRS will involve IRS Counsel early in the IDR enforcement process, to "ensure[] that Counsel is prepared to enforce IDRs through the issuance of a Summons when necessary." Taxpayers should act accordingly and consider involving counsel to assist in responding to final IDRs, Delinquency Notices, or Pre-Summons Letters touching upon sensitive issues.

Lastly, taxpayers should remind the IRS that it is obligated to review IDR responses in a timely manner and inform the taxpayer whether its responses are satisfactory within the deadlines contained in the final IDR.

Previously published 5 November 2013

Visit us at mayerbrown.com

Learn more about our Tax Controversy and Tax Transactions & Consulting practices.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions