The IRS today announced changes to the “Compliance Assurance Process” (CAP) program for 2019. The IRS will shift the start of the application period to October 1, 2018, and it will close on November 30, 2018.
As noted in the IRS release (IR-2018-174), the proposed changes are designed to improve operation of the program, make the best use of limited government resources, and to ensure the sustainability of the program. Changes will be effective for the upcoming 2019 application period, with additional changes expected the following year and into the future.
The CAP program allows large corporate taxpayers to work collaboratively with an IRS team to identify and resolve potential tax issues before tax returns are filed. The CAP program began as a pilot program in 2005 with 17 taxpayers. It was made permanent in 2011, and now includes 169 taxpayers. The CAP program consists of three phases: CAP, pre-CAP (provides interested taxpayers with a roadmap of the steps required for gaining entry into CAP), and the Compliance Maintenance program (for taxpayers who have been in CAP, have fewer complex issues, and have established a track record of working cooperatively and transparently with the IRS).
The changes and reinforcement of existing policies are intended to ensure that engagement by taxpayers and the IRS are consistent with the original objectives of the program.
Additional changes are anticipated for the following CAP cycle and into the future.
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