LB&I Not Opening New Exams, But Still Working on Voluntary Disclosures During COVID-19

In a memo entitled LB&I-04-0420-0009: LB&I Compliance Priorities During the COVID-19 Pandemic the IRS Large Business & International (LB&I) Division has clarified its compliance priorities for the period beginning April 14, 2020 and ending July 15, 2020.

This memorandum provides additional guidance regarding LB&I compliance activities which are postponed or allowed through July 15, 2020.

I. Activity Postponed through July 15, 2020

• LB&I will not start an examination of any new return unless it falls within Category II below.
• No time should be charged to new Discriminate Analysis Score (DAS) cases without Senior Director approval.
• Managers have discretion on prior, subsequent, and related returns associated with an existing examination.

II. Activity Continuing

•  Compliance Assurance Process, Large Corporate Compliance, FATCA, Qualified Intermediary programs and current open examinations: proceed as usual, but without in-person contact.
• New examinations arising from Voluntary Disclosure Practice cases, claims, and other pre-refund verification programs: proceed as usual, but without in-person contact.
• Work should continue on Syndicated Conservation Easements campaign, Micro Captive Insurance campaign, IRC 965 campaign and any future campaign related to the Tax Cuts and Jobs Act; but without in person contact. Existing and any new campaigns will be assessed for purposes of categorizing as postponed or allowed with clear communications to follow on which are allowed.
• Workload reviews of existing inventory will continue.
• Examiners can charge time to new cases (e.g., audit planning) where taxpayer contact will not be made until after the emergency declaration is lifted.
• Prior time limits on classification activities are suspended.
• Other consensual work initiated by taxpayers: proceed as usual, but without inperson contact, for example, Pre-Filing Agreements, Refund Claims.

While the IRS cannot anticipate and provide guidelines for every possible situation, it remains vitally important for all LB&I employees to be sensitive to the individual circumstances of taxpayers and provide them with the appropriate tax administrative actions commensurate with the taxpayer’s situation.