The Commissioner of the IRS Large Business & International division (LB&I) announced in a memorandum to LB&I employees (LB&I-04-0320–0007) that it was suspending most information document request (IDR) enforcement procedures through July 15, 2020, due to the declaration of emergency from COVID-19. The memo said LB&I would later reevaluate whether a further extension was needed.

While IRS employees may still issue and receive responses to IDRs, relief is available for those affected by the pandemic. The memo specified that it "applies to the IDR enforcement process for taxpayers who are unable, due to the COVID-19 pandemic, to respond timely to an IDR." In such cases, the IRS's usual enforcement procedures, which include the issuance of summonses for the requested information, will not be employed. Managers still have the discretion to continue with the IDR enforcement process if they think it is warranted, however, such as for cases with "short statutes, listed transactions, or fraud development."

Implications

As always, clear and timely communications with IRS exam teams is key. To the extent possible, affected taxpayers with approaching IDR due dates should proactively reach out to their exam team to alert the team to the fact that the taxpayer's business operations have been affected by COVID-19. Establishing the crisis as the reason for the taxpayer's inability to timely respond should, according to the memo, protect the taxpayer from IDR enforcement activities.

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