IRS Opens Application Period for 2026 CAP Program

The IRS Large Business and International Division announced the start of the application period for the 2026 CAP program. The application period opened Sept. 3, 2025, and runs through Oct. 31, 2025. The IRS will inform applicants in February 2026 whether they have been accepted into the program.

The CAP program is targeted toward large taxpayers and aims to resolve potential issues between taxpayers and the IRS in real time, prior to taxpayers filing returns. By participating in the CAP program, eligible taxpayers can gain certainty regarding complicated tax positions and might be able to avoid the high monetary and time-consuming costs of protracted tax controversies with the IRS.

Crowe observation

The incentives for taxpayers to participate in the CAP program, including efficiently and quickly resolving potential issues with the IRS prior to filing returns, could be diminished as steep IRS budget cuts reduce the number of audits the IRS is able to perform, thereby reducing overall audit risk, especially for large, complex taxpayers.

Highlights of 2026 CAP program

Much of the 2026 CAP program is the same as 2025 and continues to include updates that began in 2025, including:

• The 2025 expanded criteria for eligible applicants continues. Prior to the 2025 CAP program, participation was limited to U.S. publicly held corporations. Beginning in 2025, privately held C-corporations, including foreign-owned corporations, are eligible to participate in the CAP program. Privately held applicants are required to submit audited financial statements specific to the taxpayer applying to the CAP program prepared in accordance with U.S. GAAP, international financial reporting standards, or another permissible method. 
• Prior to 2026, the IRS did not accept a taxpayer into the CAP program if the statute of limitations on assessment was open for more than one filed return and one unfiled return as of the first day of the CAP applicant’s tax year. An exception applied if an additional tax year statute was open due to an outstanding Inflation Reduction Act or CHIPS and Science Act tax issue. For 2026, taxpayers can have up to three open tax years as of the first day of the CAP applicant’s tax year provided the taxpayer’s examination team confirms that it is feasible that examination of the open years could close within 12 months after the CAP applicant’s tax year.

Looking ahead

While taxpayers that participate in the CAP program identify significant benefits, strict limitations on eligibility and significant transparency requirements mean that the CAP program is not suitable for all taxpayers. Taxpayers interested in participating in the 2026 CAP program should consult their tax adviser to determine whether the CAP program would be a good fit for them and whether they are eligible to apply.