New York City and Long Island CPA Firm Gettry Marcus CPA, P.C., Discusses the Latest IRS Business Audit Strategy

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Top New York City and Long Island CPA firm Gettry Marcus comments on latest IRS business audit strategy, including Fast Track and new IDR processes.

The IRS has made several changes to its examination (aka "audit") functions that are designed to expedite the process and relieve some burden on business taxpayers.

These include the expansion of the Fast Track Settlement (FTS) program for small business, self-employed (SB/SE) taxpayers and a new process for issuing information document requests (IDRs) in large case audits. Gettry Marcus CPA, P.C., a leading accounting and business valuation firm, comments on latest IRS business audit strategy.

The IRS launched the FTS program in 2005 to help small business taxpayers expedite case resolution. Small business FTS is modeled on a similar program for taxpayers in the IRS Large Business and International (LB&I) Division.

The goal of small business FTS is to complete cases within 60 days of their acceptance into the program. Under FTS, taxpayers under examination with issues in dispute work directly with IRS representatives from SB/SE's Examination Division and Appeals to resolve those issues. An Appeals Officer, trained in mediation, serves as a neutral party and employs dispute resolution techniques to facilitate settlement between the parties.

To request to participate in small business FTS, the taxpayer and the SB/SE Group Manager should submit Form 14017, Application for Fast Track Settlement. The taxpayer or the IRS examination representative may initiate Fast Track for eligible cases, usually before a 30-day letter is issued.

If the case is accepted and an agreement is reached, the IRS will use established issue or case closing procedures and applicable agreement forms, including preparation of a Form 906 specific matters closing agreement, if appropriate. If the case is not accepted, the IRS explained that SB/SE or Appeals will inform the taxpayer of the basis for this decision and discuss other dispute resolution opportunities.

Small business FTS is generally available if:

  •     Issues are fully developed
  •     The taxpayer has stated a position in writing or filed a small case request for cases in which the total amount for any tax period is less than $25,000
  •     There are a limited number of un-agreed issues

Small business FTS is unavailable for Collection Appeals Program, Collection Due Process, Offer-In-Compromise and Trust Fund Recovery cases, except as provided in any guidance issued by the IRS; correspondence examination cases worked solely in a Campus/Service Center site; and cases in which the taxpayer has failed to respond to IRS communications.

Information Document Requests

The IRS Large Business & International (LB&I) Division has issued a new directive (LB&I-04-1113-009) that expands on an earlier directive from in June (LB&I-04-0613-004) by itemizing the requirements for IRS agents preparing information document requests (IDRs). The new directive also outlines the mandatory three-part enforcement process for taxpayers that do not respond timely to an IDR. While IDRs are common for large business taxpayers, the IRS also uses them in auditing certain small business issues.

For more information about the June and November IRS directives, visit the Gettry Marcus tax news page.

Gettry Marcus CPA, P.C., a top New York City and Long Island CPA firm with offices in Woodbury, Long Island and New York City. We provide accounting, tax, and consulting services to commercial businesses, high net worth individuals and various industries which include Real Estate and Health Care. We have one of the premier and most credentialed Business Valuation, Litigation and Forensic Accounting Groups in the New York Area. Our experience in diverse industries and a highly talented and experienced professional staff gives us the ability to share valuable insights into our clients’ businesses, to better understand their goals and problems and to help them attain the vision they have for their company.

Gettry Marcus is "Always Looking Deeper" to build value for our clients.

Media inquiries: Contact Fayellen Dietchweiler at 516-364-3390 ext. 225 or at fdietchweiler (at) gettrymarcus (dot) com

If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.

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Scott Darrohn
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Fayellen Dietchweiler
Gettry Marcus
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