26 06 2019

IRS Opens US Compliance Assurance Program To Applicants

On June 14, 2019, the US Internal Revenue Service announced that it is looking for new applicants for the Compliance Assurance Process (CAP), a cooperative compliance program aimed at publicly traded corporate taxpayers.

Launched in 2005, the CAP is designed to improve federal tax compliance by resolving issues prior to the filing of a tax return through interactions between the IRS and taxpayers. New applicants to CAP have not been accepted since 2015.

The CAP requires a contemporaneous exchange of information related to a taxpayer's proposed return positions and its completed events and transactions that may affect federal tax liability. According to the IRS, successful conclusion of the CAP allows the IRS to achieve an acceptable level of assurance regarding the accuracy of the taxpayer's filed tax return and to substantially shorten the length of the post filing examination.

To be eligible for CAP, applicants must:

Have assets of USD10m or more;
Be a US publicly-traded C-Corporation with a legal requirement to prepare and submit Forms 10-K, 10-Q, and 8-K to the Securities and Exchange Commission;
Not be under investigation by, or in litigation with, the IRS or another government agency that would limit the IRS's access to current corporate tax records; and
If currently under examination, must not have more than one open filed return and one open unfiled return on the first day of the applicant's CAP year, unless an exception applies.
To apply for the CAP, taxpayers must submit a statement of interest by July 26, 2019. This statement should include the taxpayer's name and Employer Identification Number, and should provide answers to the following questions:

Reasons for applying to be in the CAP program;
The tax years currently or recently under IRS examination;
Significant and material issues of concern to be addressed in the CAP; and
The nature of any transfer pricing activity.