In a memo LB&I-04-0621-0005 (6/16/2021), the IRS's Large Business & International division (LB&I) has said it is extending the suspension of information document request (IDR) enforcement procedures through September 30, 2021, and that other exam activities will continue under normal procedures (with some exceptions) through September 30, 2021. An IDR is issued on IRS Form 4564, Department of the Treasury/Internal Revenue Service Information Document Request. It is a form that the IRS uses during a tax audit to request information from the taxpayer.
- In March 2020, LB&I said that IDR enforcement procedures would be suspended through July 15, 2020. (IRS memo: Approval for Deviation from IDR Process and Enforcement Control Number: LB&I-04-0320-0007 (3/25/2020))
- In April 2020, LB&I clarified its compliance priorities for the period ending July 15, 2020. Generally, LB&I would not begin new return examinations before July 15, 2020. However, LB&I managers had the discretion to open an examination into prior year, subsequent year and related returns associated with an existing examination.
- In a December 2020 memo, LB&I said it was extending, in general, the suspension of IDR enforcement procedures through June 30, 2021.
In addition, in general, the LB&I exam activities would continue under normal procedures (with some exceptions) through June 30, 2021 "and thereafter." Exceptions to this rule were:
- Appointments (whether in person or virtual) could be scheduled depending upon the facts and circumstances of the taxpayer. While in-person contact was allowed, IRS would continue to support performing its work virtually to accommodate its employees or taxpayers who may have concerns with in-person contact, which may require the need for statue extensions. Virtual appointments would continue to be conducted by WebEx or teleconference.
- The hold on new Discriminate Analysis Score (DAS, a computer model the IRS uses to score examination potential for corporate returns with total assets of $10 million or more) cases would continue. IRS managers would have discretion in approving prior, subsequent, and related returns associated with an existing DAS examination.
The IRS has extended the guidance in the December 2020 memo through September 30, 2021. While the December 2020 memo said that the LB&I exam activities would continue under normal procedures (with some exceptions) through June 30, 2021 "and thereafter," the new memo says that the LB&I exam activities will continue under normal procedures (with some exceptions) through September 30, 2021. It deletes the "and thereafter" language.
This memo extends the approval period to deviate from IDR enforcement procedures and applies to the IDR enforcement process for taxpayers who are unable, due to the COVID-19 pandemic, to respond timely to an IDR. Notwithstanding this deviation, managers retain the discretion to continue with the IDR enforcement process when in their judgment the interests of tax administration warrant, for example cases with short statues or fraud development.
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