How to handle a "fishing expedition" request from the IRS
Identify overly-broad information document requests early
At the beginning of every IRS exam, taxpayers receive a series of information document requests (IDRs) designed to help the IRS gather data required to complete the exam. Three of these IDRs are fairly standard: IDR 1, Tax Shelter IDR and Transfer Pricing IDR. Next, the IRS sends issue-focused IDRs designed to get the more specific information needed to investigate the tax issue at hand.
If you receive an IDR that seems overly-broad or not focused on the issue under exam, also known as a “fishing expedition IDR”, you should be careful in your response.
In a recent webcast, we shared the hallmarks of these broad information document requests and how taxpayers should work with the IRS to clarify these requests. Watch our discussion now. To view the entire webcast, please see Tax controversy update: Hot topics for 2017.