LB&I opens application period for 2024 CAP program

The IRS Large Business and International (LB&I) Division announced the start of the application period for the 2024 CAP program. The application period runs from Sept. 6 through Oct. 31, 2023. The IRS will inform applicants of whether they have been accepted into the program in February 2024.

Crowe observation

LB&I appears committed to continuing CAP despite the significant examination resources needed to maintain the program. Unless eliminated by the current Congress, the additional funding from the Inflation Reduction Act of 2022 should help.

Much of the 2024 CAP program is the same as 2023. However, LB&I announced two important updates:

• LB&I released a draft of Form 14234-E, “Compliance Assurance Process (CAP) Cross Border Activities Questionnaire (CBAQ),” which is intended to gather information related to specific international issues. Though taxpayers can complete and submit the new form as part of the 2024 application process, it currently is not required. However, once the form is finalized, submission of Form 14234-E will be added as a requirement for the 2025 CAP cycle.
• The Bridge phase, which was introduced in 2019 to provide a less intensive experience for eligible returning CAP taxpayers, has been revised. Beginning in 2024, the Bridge Plus pilot program, which was announced earlier this year, will replace Bridge and will be mandatory for those taxpayers wishing to remain in the Bridge program. Because the Bridge Plus process does not begin until a taxpayer's tax year has ended, the projected start time for 2024 Bridge Plus would be spring of 2025 for calendar year-end taxpayers.

Looking ahead

Despite the effort required to apply for and participate in the CAP program, taxpayers that participate in it have identified significant benefits. The IRS stated in its strategic operating plan that it would like to expand the program, but it is unclear from the updates made for 2024 how it intends to do that. Taxpayers interested in participating in the 2024 CAP program should consult with their tax advisers to determine whether CAP would be a good fit for them, as well as whether they are eligible to apply.