The Internal Revenue Service announced today, Aug.27, 2020, that the application period for the 2021 Compliance Assurance Process (CAP) program is now open. The application period runs Sept. 1 to Nov. 13, 2020. The IRS will inform applicants if they’re accepted into the program in February 2021.
The Large Business and International (LB&I) Division developed the Compliance Assurance Process (CAP) to improve the federal tax compliance of large corporate taxpayers. According to the IRS, CAP allows “the IRS and taxpayer work together to achieve tax compliance by resolving issues prior to the filing of the tax return.” The objective of the program is to minimize the length of post-filing examinations through real-time monitoring of transactions, review, and issue resolution. If a corporate taxpayer is admitted to CAP, the program requires strict compliance with IRS deadlines for disclosure of material items and responses to request for information.
To be eligible to apply for the CAP program, the applicant must be a U.S. publicly held corporate taxpayer with a legal requirement to prepare and submit SEC Forms 10-K, 10-Q, and 8-K, and assets of $10 million or more. A CAP taxpayer must not be under investigation by, or in litigation with, the IRS or any Federal or State agency which would limit access to current corporate tax records. If currently under IRS examination, the taxpayer must not have more than one filed return and one unfiled return open on the first day of the applicant’s CAP year.
If you are a corporate client interested in applying for the CAP program, or would like additional information about the CAP program, please contact a member of the RSM Tax Controversy group to further discuss CAP program requirements. The Tax Controversy group can also assist with determining eligibility for applying to the program and assist with the application process.