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Business Tax

IRS Opens Compliance Assurance Process to New Corporate Applicants

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

For the first time in four years, the IRS is accepting new corporate applicants for the Compliance Assurance Process (CAP) from Sept. 16 to Oct. 31, 2019.

The IRS launched CAP in 2005 to improve federal tax compliance by large corporate taxpayers. In CAP, the IRS and taxpayer work together to achieve tax compliance before the taxpayer files its tax return. According to the IRS, CAP allows the IRS to substantially shorten the length of a post-filing examination because many issues are worked out between the IRS and the taxpayer before the taxpayer files its return. New applicants to CAP have not been accepted since 2015.

The IRS announcement states that new corporate applicants meeting the eligibility requirements can apply for CAP using Form 14234, Compliance Assurance Process (CAP) Application. The application period runs from Sept. 16 to Oct. 31, 2019. The IRS will let applicants know if they’ve been accepted into the program around Jan. 31, 2020.

To be eligible for CAP, new applicants must:

  • have assets of $10 million or more;
  • be a U.S. publicly traded corporation with a legal requirement to prepare and submit SEC Forms 10-K, 10-Q, and 8-K;
  • not be under investigation by, or in litigation with, any government agency that would limit the IRS’s access to current tax records; and
  • if currently under examination, must not have more than one filed return and one unfiled return open on the first day of the applicant’s CAP year.

According to frequently asked questions posted on the IRS website, once accepted into CAP, the corporation must sign a Memorandum of Understanding with the IRS.

Read the full article and IR News Release 2019-154 on Checkpoint.

 

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