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January 9, 2023

Acting IRS Commissioner affirms continued participation in ICAP

Speaking at the Institute on Current Issues in International Taxation on December 15, 2022, Douglas O'Donnell, the Acting Commissioner of the IRS, stated that, while the International Compliance Assurance Program (ICAP) could be improved, the IRS will continue to participate in the program.


ICAP was created by the Organisation for Economic Cooperation and Development to provide taxpayers greater tax certainty on international tax issues. Taxpayers may voluntarily enter ICAP, which facilitates co-operative engagements between multinationals and tax authorities in their local jurisdictions. ICAP allows multinationals to present their tax position to several tax administrations simultaneously in a more cooperative environment than a typical audit. Although a taxpayer cannot receive legal certainty that their tax positions will be accepted through ICAP, the program can reduce the likelihood the taxpayer will be audited and allows the taxpayer to develop relationships with multiple tax administrations. The IRS has continuously participated in ICAP since 2018, the year it was rolled out as a pilot program. Currently, 21 additional tax administrations participate in ICAP.

Continued IRS participation in ICAP

Speaking about ICAP, O'Donnell stated that "[b]uilding the process out was complicated" due, at least in part, to tax administrations holding differing views on the risks associated with a transaction. ICAP has also been expensive to administer, he said. However, the COVID-19 pandemic has forced tax administrations to change the how they operate, streamlining and accelerating the risk assessment process, he added.

For the IRS, one of the benefits of ICAP has been the opportunity to speak with business leaders who operate outside of the tax world about what their companies do, according to O'Donnell. While noting that ICAP still needs a lot of work, O'Donnell affirmed the IRS's continued participation in the program and hoped to see even more taxpayers participate.


ICAP is likely to continue to be modified in the future as the OECD, the IRS and other tax administrations gain more experience with the program. While ICAP may not be right for every multinational taxpayer, it can provide greater and cost-effective tax certainty, particularly if the IRS begins to limit, as has been suggested, the number and types of APA applications to be accepted in the future (see Tax Alert 2022-1597).


Contact Information
For additional information concerning this Alert, please contact:
National Tax Department, International Tax and Transactions Services, Transfer Pricing
   • Ryan J. Kelly, Americas ITTS Tax Controversy Leader (
   • Hiro Furuya (
   • Ameet Kapoor (
   • Carlos M. Mallo (
   • Marla McClure (
   • Donna McComber (
   • Mike McDonald (
   • Tom Ralph (
   • Craig Sharon (
   • Kent Stackhouse (
   • Thomas A. Vidano (
   • Heather Gorman (
   • Giulia Di Stefano (
   • Carolina Figueroa (
   • Mitch Gibson (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor