IRS Reopens Real-Time Audit Application Process for Public Companies

| 9/19/2019

The IRS Compliance Assurance Process (CAP) is an IRS Large Business & International Division examination program designed to provide publicly traded companies with certainty by resolving issues before the companies file their tax returns. The IRS stopped accepting applications for new participants in the program after 2015 but announced on Sept. 12, 2019, that it is reopening the program to new applicants for the 2020 CAP year. The application period will run from Sept. 16, 2019, to Oct. 31, 2019, and around Jan. 31, 2020, the IRS will notify applicants if they are accepted into the program. 

To be eligible to participate in the CAP program, a new applicant must:

  • Have at least $10 million in assets
  • Be a U.S. publicly traded corporation required to file SEC forms 10-K, 10-Q, and 8-K
  • Not be involved in an investigation by or litigation with a government agency that would limit the IRS’ access to tax records
  • Not have more than a certain number of open years, with exceptions and special rules for new applicants currently under examination

The CAP program recently was revised to require increased transparency and cooperation from applicants and participants. The amount of information required on the initial application and the process for a company once it is accepted into the program require a substantial commitment from the company’s tax department. While the benefits of being in the CAP program can be significant for many U.S. public companies, the investment and amount of detailed information required to be provided in real time might be more than some companies are prepared to undertake.

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Rochelle Hodes
Rochelle Hodes
Principal, Washington National Tax