IRS announces the end of tiered issues

BY SALLY P. SCHREIBER, J.D.

Effective Aug. 17, 2012, the IRS will no longer use the tiered management process to set examination priorities and address important issues in the Large Business & International division (LB&I). Instead, it will examine the former Tier I, II, and III issues and assess risk in the same manner as any other issue in an examination (LB&I-4-0812-010). As part of this process, all industry director directives (IDDs) on tiered issues are withdrawn.

In place of the tiered issue process, the LB&I Division is developing a knowledge management system consisting of Issue Practice Groups (IPGs) and International Practice Networks (IPNs), which will provide IRS examination teams with technical advice. Relevant guidance from the former IDDs will be retained on the IPG and IPN websites. Other guidance will be updated. 

Issue tiering, a practice established in 2006, involved separating examination issues into one of three tiers (for a more complete explanation, “IRS Tiered Issues,” Corporate Taxation Insider, Jan. 28, 2010):

  • Tier I issues were those of high strategic importance that had a significant impact on one or more industries.
  • Tier II issues were those with significant compliance risks that were emerging issues or issues that the IRS needed to further develop its position on.
  • Tier III issues were those that presented a high compliance risk for a particular industry. 


In place of the tiered issue process, the new IPGs and IPNs (currently being piloted by the IRS) are designed to foster knowledge sharing across LB&I and the Office of Chief Counsel.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.