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LB&I memo on activities postponed, continued and resuming (COVID-19)

LB&I memo on activities postponed

The Commissioner of the IRS Large Business and International (LB&I) Division issued a memorandum—LB&I-04-0620-0011 (June 26, 2020)—addressing which LB&I compliance activities are postponed; which will continue through July 15, 2020, and beyond; and which will resume beginning July 15, 2020.

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The memorandum [PDF 60 KB] was issued in response to the coronavirus (COVID-19) pandemic, and supersedes prior memoranda that previously announced the suspension of certain LB&I compliance activities. Read TaxNewsFlash

LB&I activities postponed, continuing, and resuming

The new LB&I memorandum provides LB&I activity to be postponed through July 15, 2020, includes the following:

  • LB&I will not start an examination of any new return unless it falls within the list of activities continuing through July 15, 2020.
  • Except for certain cases, managers have discretion on prior, subsequent, and related returns associated with an existing examination.

The memo also lists LB&I activity continuing through July 15, 2020, including:

  • Compliance assurance process, large corporate compliance, FATCA, qualified intermediary (QI) programs and current open examinations—these are to proceed as usual, but without in-person contact.
  • New examinations arising from voluntary disclosure practice cases, claims, and other pre-refund verification programs—these are to proceed as usual, but without in-person contact.
  • Work is to continue on the following campaigns, but without in-person contact:
    • Syndicated conservation easements
    • Micro captive insurance
    • Section 965
    • Tax Cuts and Jobs Act (TCJA) implementation
    • Existing and any new campaigns to be assessed for purposes of categorizing as postponed or continuing with clear communications to follow on which ones are continuing through July 15, 2020
  • Workload reviews of existing inventory will continue.
  • Examiners can charge time to new cases (e.g., audit planning) when taxpayer contact will not be made until after July 15—for example, “high income” Form 1040 returns and related entities.
  • Prior time limits on classification activities are suspended.
  • Other consensual work initiated by taxpayers—these are to proceed as usual, but without in-person contact and include, for example, pre-filing agreements and refund claims.

Lastly, the LB&I memo provides that beginning July 15, 2020, all LB&I operations will resume under “normal procedures” except for:

  • Appointments (whether in-person or virtual) are to be scheduled for August 2020 or later, depending upon the facts and circumstances of the taxpayer.  Accommodations are to be made to support virtual LB&I work.
  • Regarding IDR enforcement, LB&I examiners are instructed to note the temporary suspension of the IDR enforcement process.

The LB&I memo concludes that while every possible situation cannot be anticipated:

… it remains vitally important for all LB&I employees to be sensitive to their own and the individual circumstances of taxpayers to determine the appropriate tax administrative actions commensurate with our respective situation. 

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