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LB&I Issues Memo on New Compliance Program

MAY 21, 2019

LB&I-04-0419-004

DATED MAY 21, 2019
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Citations: LB&I-04-0419-004
[Editor's Note:

For the entire memo, including an attachment, see the PDF version.

]

Effective Date: May 21, 2019
Expiration Date: May 20, 2021
Affected IRM: New IRM 4.50.3

Date: May 21, 2019

MEMORANDUM FOR
ALL LARGE BUSINESS AND INTERNATIONAL DIVISION EMPLOYEES

FROM:
Douglas W. O'Donnell
Commissioner, Large Business and International Division

SUBJECT:
Interim Guidance on Implementation of the Large Corporate Compliance (LCC) Program

Purpose: This memorandum is being issued to communicate to Large Business and International (LB&I) employees changes to the administrative process for the selection and delivery of large corporate tax returns.

Background: The IRS historically worked large corporate examinations through the Coordinated Examination Program (CEP), which subsequently became the Coordinated Industry Case (CIC) program. The CIC program has been a key component of the annual compliance plan in LB&I. IRM 4.46.2, LB&I Guide for Quality Examinations, Administrative Matters and Annual Compliance Plan, details the workings of the current CIC program. Numerous other IRM provisions address planning, development, staffing, and other aspects of the CIC program and the treatment of CIC cases in Appeals. To improve case selection through the use of automation and advanced data analytics, LB&I is replacing the CIC program with a successor program, the LCC program.

Procedural Change: Effective with the issuance of this memorandum, the LCC program will supersede the CIC program within LB&I for the selection of large corporate cases. Beginning with the 2017 tax year, returns that meet the LCC criteria will be included in the LCC audit selection process. Based on automated pointing criteria, LB&I tax returns will be classified as LCC work. LCC returns will be classified into categories of risk based on data analytics. LB&I will determine compliance treatment streams to be applied to LCC returns based upon the return's overall category of risk and available resources. Project Code 0548 has been assigned to the LCC Program. Taxpayers that participate in the Compliance Assurance Process (CAP) are not included in the LCC program.

Once an LCC return is determined to present a degree of risk that warrants examination, the LB&I case manager and relevant personnel will use the LB&I examination process to conduct a risk analysis to determine what issues exist on referred returns and whether and how to approach any LCC audit. The tax years to be included in a particular cycle started under the LCC program will be determined by the LB&I case manager and relevant personnel.

Prior CIC cases will be completed and closed as CIC cases. Over time, all IRM provisions currently addressing procedures for CIC cases will be updated. Until such updates occur, LB&I employees are instructed to treat all IRM references to the CIC program to also refer to the LCC program.

Revenue Procedure 94-69 will continue to apply to any taxpayer currently in the CIC and the new LCC program. This revenue procedure is currently under review.

Employees and managers should submit any questions about the LCC program by email to *LB&I LCC Program.

Effect on Other Documents: This guidance will be incorporated into a new LCC IRM 4.50.3 by a date not to exceed two years from the date of this memo. IRM 4.46.2 will be made obsolete. CIC terminology will be replaced by LCC terminology in the various affected IRM sections as they are updated. A list of affected IRM sections is attached.

Effective Date: May 21, 2019

Attachment

cc:
www.IRS.gov

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