Many Americans try to avoid thinking about tax season until the day they sit down to fill out and file their tax returns. However, a more proactive approach can be effective, especially when it comes to taxes for businesses and large corporations.
The IRS is currently accepting applications for the 2024 Compliance Assurance Process (CAP). Consulting a tax attorney is a wise decision to see if you are eligible and ensure that everything goes smoothly come tax season. Here is what you need to know about the CAP program.
The IRS Large Business and International (LB&I) Division started the Compliance Assurance Process program in 2005 as a pilot program. In 2011, it became permanent. The program aims to help corporate taxpayers improve their federal tax compliance.
The CAP program allows taxpayers to resolve any issues before they file for that tax year. You can review your tax records and transactions before filing, which helps you avoid fees or amendments to your tax forms later.
Applications for the 2024 CAP program opened on September 6, 2023. The application period runs until October 31, 2023. Applicants then have to wait until February 2024 to know if they will be participants in the program.
If you want to apply for CAP, a tax attorney can help you. When you need advice about federal tax compliance, it’s helpful to have a professional on your side, whether or not you qualify for the CAP program.
To apply for the 2024 CAP program, your corporation must be a publicly traded corporation with at least $10 million in assets. You must also submit SEC Forms (10-K, 10-Q, 8-K).
If your corporation is under investigation by any government agency, you cannot apply for the CAP program, as it could limit the IRS’s access to your tax records.
If you are a new applicant, your corporation cannot have more than three open tax years starting on the first day of the CAP program. An open tax year refers to any tax return that is still subject to questioning or auditing.
You might wonder what to expect from this program. The CAP Program consists of three distinct phases.
This pre-filing review works to resolve any issues or questions that would otherwise prevent your corporation from fulfilling tax compliance. As the taxpayer, you’ll provide all the materials and facts the IRS needs.
In cases of returning applicants with a history of limited issues and full cooperation, the IRS may adjust the level of review. This does, however, also require you to be as transparent and cooperative as possible.
In 2023, the IRS introduced the Bridge Plus phase for companies at risk of noncompliance. If you are in the bridge phase, the IRS will not accept any of your materials for review. After two years in the bridge phase, the IRS typically accepts corporations into the CAP phase. The bridge phase allows you to submit a draft return 30 days before filing your actual return. Assuming it is consistent, the IRS will instruct you to submit your return.
If you’re concerned about your tax compliance or are facing penalties from the IRS, contact the experienced tax attorneys at Levy & Associates, Inc. With decades of experience, our team is ready to advocate for and inform you in any way we can.
Contact us today at 800-TAX-LEVY.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.