Some corporate taxpayers eligible for IRS CAP pilot on prefiling feedback

The IRS is piloting changes in the Bridge phase of its Compliance Assurance Process (CAP) program that provides prefiling return review for some large corporate taxpayers.

In a news release published Monday, the IRS said the pilot phase, called Bridge Plus, was developed in response to taxpayer comments about the Bridge phase, which is part of the CAP program.

The CAP program began in 2005 to resolve tax issues through open, cooperative, and transparent interactions between the IRS and taxpayers before they filed a return. In 2019, the IRS developed the Bridge phase in CAP for taxpayers whose low risk of noncompliance indicated they did not need IRS compliance review.

During the Bridge phase, the IRS does not accept any disclosures, conduct any reviews, or provide any assurances. Taxpayers in the Bridge phase, however, told the IRS that they missed the IRS review, which led to the development of Bridge Plus.

Under the new pilot phase, taxpayers must provide book-to-tax reconciliations, credit utilization, and other supporting documentation shortly after their audited financial statement is finalized. These documents will be risk-assessed by the IRS to determine if the taxpayer is suitable for Bridge Plus.

Taxpayers accepted into Bridge Plus must submit a draft return 30 days before filing. The IRS team will review the return for consistency with the taxpayer’s previous submission, after which the taxpayer will be advised to file a return. If the filed return also is consistent, then the taxpayer will receive a full acceptance letter.

The pilot will be offered to CAP participants that were in the Bridge phase for 2022 and have been recommended to participate in Bridge again in 2023. The IRS will notify CAP taxpayers if they are eligible to participate in the pilot.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.