Patricia Sweeney Comments on IDR Enforcement Procedures in Tax Notes Today

"New IDR Rules May Not Bring More Summons Enforcement"
Tax Notes Today

Patricia Sweeney commented on the enforcement of new Internal Revenue Service (IRS) Large Business and International Division (LB&I) information document request (IDR) procedures during an American Law Institute webcast. The Department of Justice (DOJ) may want to spend its limited time and money in areas other than summons enforcement, which involves long factual disputes with taxpayers, Sweeney said. "I think the enthusiasm for [the summonses] will wane really fast, particularly if the summonses are too broad."

LB&I recently released three related directives that create new enforcement procedures, which mandate that agents communicate with taxpayers prior to issuing an IDR. However, for the first six months under the new regime, IRS examiners will not be graded on how they perform with the new procedures. "So the hiccups of the rollout will be on the taxpayers as we go forward," Sweeney said. She added that exam teams are supposed to set a target completion date for the review, included on the IDR, by which time they must inform the taxpayer that the review is complete. There is no enforcement mechanism to hold agents to that target date, however. The target date requirement is limited to the exam team telling the taxpayer that the review is complete, not whether it is dropping an issue of the exam, she said.

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