“After extensive review, we believe this program continues to provide benefit for taxpayers and tax administration,” said Large Business and International (LB&I) Commissioner Doug O’Donnell. “The program is intended to provide taxpayers and IRS certainty on the treatment of certain tax issues even before the return is filed, while reducing the chance of potential disagreement and lengthy examinations.”

• * The 2019 application period will open Oct. 1, 2018, for existing CAP taxpayers who meet the program eligibility requirements, including suitability criteria.
  
  
• * As part of the application, taxpayers will be required to provide a preliminary list of material issues for the year, and, if applicable, specified transfer pricing issue information and research credit information. This preliminary list will be the starting point for discussions with the IRS to reach an agreed issues list, which will be used to determine the issues that will be reviewed and will be key in allocating resources for the case.
  
  
• * As part of the LB&I division’s overall efforts to ensure that resources are deployed appropriately, the resources devoted to the CAP program will be allocated as part of annual planning. In future years, resource availability may determine the number of taxpayers in the program or whether all issues can be addressed.
  
  
• * Effective communication and prompt resolution of issues are key components of CAP.  Both taxpayers and LB&I will be subject to additional requirements in these areas. For example, certain transfer pricing issues may be required to be resolved via the Advance Pricing Agreement program. LB&I will establish a 90-day goal for issue resolution.  Disagreements will be sent to Appeals on a timelier basis to encourage quick resolution of issues.
  
  
• * To promote timely resolution of each year’s issues, taxpayers will be required to provide a representation letter within 30 days of return filing and time frames will be implemented for IRS post-file review.  Taxpayers and IRS will jointly monitor progress metrics and provide input for subsequent year cycles.
  
  
• * A Compliance Maintenance phase of CAP will continue, but will be modified.  As part of Compliance Maintenance, some taxpayers determined to be lowest risk may continue in the program without IRS review of a particular year.
  
  

The IRS said that further changes might happen in the future, such as opening the program up to more taxpayers or requiring applicants to provide certification of a tax control framework. The IRS is also considering whether issue-based resolutions may be appropriate as the program is expanded. As the service gains more experience with the current crop of changes, further modifications will be made as appropriate.