In a memo, the IRS Tax Exempt and Government Entities (TEGE) Division has relaxed rigid timelines, through July 15, 2020, related to information document request (IDR) enforcement procedures with respect to certain taxpayers who may be unable to respond timely to IDR requests because of the coronavirus (COVID-19) pandemic.
Background.
On March 13, 2020, the President issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) in response to the ongoing coronavirus (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the IRS “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate.”
The IRS Large Business and International (LB&I) Division has previously suspended, through July 15, 2020, IDR enforcement procedures with respect to certain taxpayers who may be unable to respond timely to IDR requests because of the COVID-19 crisis. See IRS division suspends some information document request enforcement (03/31/2020).
Deviation from enforcement procedures.
According to the memo, there will be a temporary deviation from the IDR enforcement procedures found in TEGE functional Internal Revenue Manual sections EO/FSL- 4.75.10.7.3, ITG-4.86.5.10.1.1, TEB- 4.81.5.11.2, and EP- 4.71.1.7 through July 15, 2020.
The temporary deviation relaxes the more rigid timelines detailed within these IRM sections that would otherwise result in enforcement actions due to untimely or incomplete IDR responses.
The memo allows “an increased reasonable application of business judgment” by examination agents and managers in the exercise of duties related to IDR requests and follow-ups.
The memo notes that exam personnel can and should as appropriate continue issuing and receiving IDRs. The memo only applies to the IDR enforcement process for taxpayers who are unable, due to the COVID-19 pandemic, to respond timely or completely to an IDR.
Notwithstanding the memo, managers retain the discretion to continue with the IDR enforcement process when in their judgment, the interests of tax administration warrant. Examples here could include cases with short statutes, listed transactions, fraud development, or other situations as necessary and appropriate.
To continue your research on power of IRS agents to request documents, in general, see FTC 2d/FIN ¶T-1180 et seq.; United States Tax Reporter ¶76024.
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