Yesterday, November 4, 2013, the IRS issued a directive to its Large Business and International examiners and specialists regarding a soon-to-be implemented Information Document Request (“IDR”) enforcement process. The new IDR enforcement process, currently set to take effect January 2, 2014, requires examiners in the Large Business and International division to use a three step enforcement process when a taxpayer does not timely respond to an applicable IDR. The enforcement process only applies to IDRs issued (1) on or after June 30, 2013 and (2) in accordance with recent IRS guidelines requiring issue-focused requests and a discussion between the examiner and the taxpayer establishing a response date. The thirteen requirements for issuing IDRs are provided in Attachment 1 to the November 4 directive and guidelines on issuing IDRs are detailed in a June 18, 2013 directive.
If a taxpayer does not timely respond to a IDR that is subject to the new enforcement process, a three step process is set in motion, consisting of: (1) a Delinquency Notice providing a set amount of time to comply, (2) if the taxpayer does not provide a complete response to the IDR by the date set in the Delinquency Notice, a Pre-Summons Letter requiring response by another set date, and (3) if a complete response to the IDR is not provided by the response date in the Pre-Summons Letter, a Summons for the information.
Although this new enforcement process for the Large Business and International Division will take effect January 2, 2014, the directive states that no Delinquency Notices will be issued prior to February 3, 2014. Corporate taxpayers who receive an IDR that is dated June 30, 2013 or after may be subject to the new enforcement process and should be aware of both the revised audit process (as detailed in the June 18, 2013 directive) and the response dates required by such process and the new enforcement process discussed in the November 4, 2013 directive.