The IRS Large Business and International (LB&I) Division set
a May 1 effective date for certain changes in the examination
process for large taxpayers. This change in process shifts the
IRS's focus to an issue-based approach.
Publication 5125, "Large Business and
International Examination Process," was released by the
IRS on Feb. 26 and provides "an organizational approach for
conducting professional examinations from the first contact with
the taxpayer through the final stages of issue
resolution."
This publication follows an
LB&I reorganization that is intended to change the way the
IRS examines large businesses. The LB&I division has
jurisdiction over business taxpayers with more than $10 million in
assets, as well as certain global high wealth individuals and
taxpayers with international compliance issues.
The examination process outlined in the publication focuses on
three stages familiar to most large taxpayers: planning, execution
and resolution. While those stages have been part of the IRS's
quality examination process for some time, LB&I's goal is
to set forth guidelines and responsibilities within these
parameters for both the IRS and taxpayers, encouraging a system of
cooperation, transparency and responsiveness.
One area of controversy with regard to the new publication is
LB&I's policy of limiting informal claims for a refund to
the 30-day period beginning with the opening conference. Citing
resource challenges, the IRS says that refund claims submitted
after that 30-day period must be filed as formal claims for a
refund, using Forms 1120X or 1040X or Form 843. Informal claims
relating to an issue under examination, however, may be accepted
after the 30-day period ends.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
