This article is for a business owner that has international implications and how the IRS is extending the suspension of information document request (IDR) enforcement procedures.

Abstract: In a memo, the IRS’s Large Business & International division recently announced an extension of the suspension of enforcement procedures involving information document requests. This article provides background on the procedures and describes the extension as well as some exceptions.

In a memo, the IRS’s Large Business & International division (LB&I) recently announced an extension of the suspension of information document request (IDR) enforcement procedures. Here are the pertinent details.

Background

On March 13, 2020, the President declared a national state of emergency because of the COVID-19 pandemic. On March 25, 2020, the IRS announced that, as part of its People First Initiative, it was suspending all in-person contacts and some compliance actions through July 15, 2020. Specifically, the IRS announced that it wouldn’t start new field, office and correspondence examinations unless a new examination was necessary to protect the government’s interests.

In March 2020, the LB&I said that IDR enforcement procedures would be suspended through July 15, 2020. Then, in April 2020, the LB&I clarified its compliance priorities for the period ending July 15, 2020. Generally, it wouldn’t begin new return examinations before July 15, 2020. However, LB&I managers had the discretion to open an examination into previous year, subsequent year and related returns associated with an existing examination.

Extension and Exceptions

In a memo issued at the very end of 2020, the LB&I says it would generally extend the suspension of IDR enforcement procedures through June 30, 2021. Also, in general, the LB&I exam activities will continue under normal procedures — with some exceptions — through June 30, 2021, “and thereafter.” Exceptions include:

Appointments. Whether in person or virtual, an appointment can still be scheduled depending on the facts and circumstances of a taxpayer. While in-person contact is allowed, the IRS will continue to support performing work virtually to accommodate employees or taxpayers who may have concerns about in-person contact.

A hold on new Discriminate Analysis Score (DAS). The IRS uses DAS, a computer model, to score examination potential for corporate returns with total assets of $10 million or more. These cases will continue. IRS managers have discretion in approving previous, subsequent and related returns associated with an existing DAS examination.

More time

If you believe you may be subject to IDR enforcement procedures, the extended deadline affords you more time to assess your exposure and identify your obligations. Your CPA can assist you with the process.

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