Tax 670_Week 9_ Dicussion_ Post 8

The Taxpayer Collaborative Issue Resolution (TCIR) initiative stands as a valuable program for

taxpayers' advantage. TCIR aims to foster a cooperative approach between taxpayers and the IRS in

promptly addressing significant matters arising in the same taxable year they occur. Opting for TCIR

instead of enduring a lengthy post-audit examination spanning two to three years can safeguard

taxpayers from potential long-term financial implications. Moreover, by actively engaging taxpayers

in issue identification and resolution, the TCIR process streamlines resource utilization for the

department, a crucial aspect given prevailing budget uncertainties. Notably, the IRS, in its August

2020 update, opened its doors to new applicants interested in the TCIR initiative. Demonstrating

the program's paramount importance, the IRS could explore implementing a fee structure, thereby

achieve an acceptable level of assurance regarding the accuracy of the taxpayer’s filed tax return

and to substantially shorten the length of the post filing examination.”

I think this is an excellent program for taxpayers who are eligible as it reduces the stress involved

with audits from the IRS and drastically lowers the chance of having to pay a hefty fine if there are

misstatements found. Also, I feel that companies would be able to minimize fraudulent activity by

being in this program as it does put a spotlight on the company with the IRS as they are always

auditing the company and looking for issues. On the same note, if a company is trying to hide

something from the IRS such as revenue or fraudulent activity, they would be wary of entering into

this program.

I have not been able to find any information on if they companies need to pay the IRS a fee for

employee base for this program and accept even more companies into it.

The IRS relies on taxpayer’s self-compliance regarding the filing and accuracy of their tax returns.

Often the IRS will audit returns for compliance, and in hopes, the funds will generate revenue for

the department. All returns are reviewed for mathematical or clerical errors and items not

unallowable by law in the preliminary phase. After the initial process, the IRS takes a mythological

approach to selecting the returns it will audit and then will begin the examination process by

correspondence, office, and field examination.

Once the review concludes, the taxpayer receives a report of the proposed adjustments, if any. If

the taxpayer agrees with the statement, i.e., the overstatement or underpayment, they pay the tax

and move on. However, if they disagree with the statement and bill, they have 30 days to protest

will accumulate until the bill is paid or rescinded. Sometimes the penalties and interest can be 50%

filing examination, if any, of the tax return for that taxable year may be unnecessary, or if

necessary, may be completed promptly (Opper, 2011). Waiting two or three years in an audit

examination without CAP could cost the taxpayer in the long run. The CAP process is less time-

consuming when the taxpayers collaborate in identifying and resolving issues, which means the

department will use its resources effectively and efficiently, especially with budget uncertainties.

References

Opper, L. M. (2011). Compliance assurance process. Tax Executive, 63(6), 413-415,417-419,421.

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