Heather Maloy, Commissioner for Large Business and International, has expressed the intent of the IRS to seek feedback regarding the new information document request (IDR) procedures. The new procedures are designed to increase efficiency and develop more communication between the examiner and the taxpayer. Specifically, the procedures directs an examiner to issue a draft IDR intended to provide the taxpayer a chance to review it prior to issuance of the formal IDR and provides for a three step process of enforcement.
These procedures should allow taxpayers and examiners to discuss the purpose of information requests, as well as any limitations or difficulties in acquiring requested information. This in turn should allow the examiner to issue a final IDR with a more narrow scope that focuses on information and documents that will assist the examiner in resolving the matter while giving the taxpayer an appropriate amount of time to respond. If the taxpayer does not respond to the IDR or provide the required information the examiner must issue a delinquency notice, followed by a pre-summons letter, and ultimately a summons.
This new IDR process has been in effect since March 3, 2014. In an effort to improve efficiency and effectiveness, LB&I will seek formal internal and external comments on the new procedure. This formal process will be in addition to the hundreds of internal online comments already received. It will be important for tax practitioners to voice any concerns they may have about the IDR procedures going forward. alliantgroup has extensive experience in dealing with the new IDR procedures. If you have any questions regarding the procedures or a specific audit situation, please contact our Tax Controversy Services group.