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The New IDR Procedures: Issue-focused at a cost
The Large Business & International Division (LB&I) of the IRS, which generally has jurisdiction over businesses with assets in excess of $10 million, said earlier this year that changes would be made to certain tax examination procedures, including the Information Document Request (IDR) procedures. An IDR is a formal written request by an examining IRS agent for taxpayer documents that will give the agent more information about the taxpayer, more information about a transaction reported in the return under examination, or more evidence-requested in many different forms-as may be desired by the examiner.
The IDR procedures, anticipated effective January 1, 2014, will now be issue-focused, but this will come with a price. Extremely rigid rules for responding to IDRs will mean certain taxpayers or their representatives will have to take a proactive approach to these requests to avoid being caught off-guard during an examination.
While the new IDR rules do not currently apply to non-LB&I taxpayers, they probably will in the future, once proven of value to the IRS in LB&I cases.
For an example showing how the rules could affect an examination, read our full article. |
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Eide Bailly's National Tax Office serves as a resource for clients to help analyze complex tax issues related to business decisions. Our professionals are committed to helping clients stay informed about tax news, developments and trends through various specialty areas, including cost segregation studies, wealth transfer, state and local taxation, international tax, tax exempt organizations and tax legislation. |
