TAX NEWS - 2010

New IRS quality examination process - IRS Tax

On June 9, 2010, the IRS Large and Midsize Business Division (LMSB) launched the Quality Examination Process. This process replaces the previous Joint Audit Planning Process and is intended to provide an organized, consistent framework for administering examinations. The focus of the program is to encourage greater interactivity and involvement in the audit process by taxpayers. IRS examiners should begin implementing these processes on examination starting on or after June 1, 2010.

As part of the launch of the Quality Examination Process, the IRS issued a guide and a publication that gives a detailed overview of the process and is to be shared with taxpayers. These documents emphasize the importance of a cooperative relationship between the IRS and the taxpayer. While the Quality Examination Process does not include new audit initiatives, processes, tools, or techniques, the procedures outlined in the process are an accumulation of the best practices for managing an examination and include:

- Examination planning
     . Pre-audit
     . Preliminary meetings and discussions
     . Involvement of IRS counsel, technical advisors, and specialists

- Examination execution
     . Scope of exam
     . Exam timeline / monitoring progress
     . Information document requests (IDRs)

- Examination resolution
     . Issue resolution / notices of proposed adjustments – Form 5701

Although the new process is effective for examinations starting after June 1, 2010, it is important to consider whether these procedures can be implemented in current examinations.