George Hani discusses the transition to a more measured, transparent approach to tax compliance planning in light of the Internal Revenue Service making permanent its Compliance Assurance Process (CAP). “The IRS has taken incremental steps in getting there, but there's no question they are trying to get resolution earlier and earlier in the process,” Hani said. “And it's not just their idea. Some of this is driven by corporate taxpayers who want to have certainty sooner.” The program is being embraced after companies were required to disclose any unresolved tax issues in financial statements, as well as uncertain tax positions in their tax returns on Schedule UTP.
 
First introduced in 2005, CAP has grown from a pilot program with 17 companies to one with 140 corporate taxpayers participating. CAP allows companies to have their tax returns essentially audited before they are filed, reducing the reserves companies must set aside to settle unresolved tax issues, and cutting the interest expenses companies might accrue to settle old tax disputes where penalties and interest might apply.