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February 16, 2023

New pilot phase for CAP program participants will allow IRS review

  • The IRS has added the Bridge Plus phase to the Compliance Assurance Process (CAP) program.
  • Bridge Plus will give participants in the Bridge phase a chance to have the IRS review their tax position before filing.
  • Participation in Bridge Plus will be limited to 2022 Bridge-phase participants that the IRS Large Business & International (LB&I) recommends.

On February 13, 2023, the IRS announced (IR-2023-25) a new pilot phase of its Compliance Assurance Process (CAP) program called Bridge Plus, which will be available to certain taxpayers who are considered low risk and approved by IRS Large Business & International (LB&I). In response to taxpayers' concerns, Bridge Plus allows the IRS to review eligible taxpayers' returns for compliance before they file.


CAP, a cooperative pre-filing program available to certain large taxpayers, began as a pilot program in 2005 and was made permanent in 2011. It generally allows the IRS and taxpayers to reach agreement on the treatment of various tax issues before a return is filed.

The CAP Program currently has three phases: (1) the CAP Phase (when the IRS and taxpayer resolve all or most tax positions before filing a tax return); (2) the Compliance Maintenance (CM) Phase (when the IRS, at its discretion, adjusts the level of review of the tax year based on the complexity and number of issues); and (3) the Bridge phase (when the IRS will not accept any taxpayer disclosures, review any issues or provide any assurances). The Bridge phase was developed in 2019 for taxpayers whose risk of noncompliance did not warrant continuous use of LB&I examination resources. Applicants can remain in the Bridge phase for two consecutive years and then return to the CAP Phase or Compliance Maintenance Phase for the subsequent tax year.

To be eligible for the 2023 CAP program, applicants must (1) have assets of $10 million or more; (2) be a US publicly traded corporation that is legally required to submit SEC Forms 10-K, 10-Q and 8K; and (3) not be under investigation by, or in litigation with, the IRS or any other government agency that would limit the IRS's access to current tax records. Returning CAP participants that do not meet the second requirement may be grandfathered into the program if they commit to provide the IRS with financial statements prepared in accordance with US GAAP.

The application period for the 2023 CAP program was September 15, 2022 through November 15, 2022, with the IRS notifying accepted applicants in February 2023 (see Tax Alert 2022-1419).

Bridge Plus

The IRS said it was adding Bridge Plus in response to consistent feedback from taxpayers that being placed in the Bridge phase did not allow IRS review or assurances. Taxpayers that want to participate in Bridge Plus will be required to submit book-to-tax reconciliations, credit utilization and other supporting documentation after finalizing their audited financial statement. IRS will conduct a risk assessment of the documents to determine whether the taxpayer is suitable for Bridge Plus.

A taxpayer that is accepted into Bridge Plus will have to submit a draft return 30 days before filing the tax return. The taxpayer will be instructed to file a return if the IRS finds that the draft return is consistent with the earlier submission. The taxpayer will then be issued a full acceptance letter for the filed return.


With Bridge Plus, the IRS is improving an aspect of the CAP program that has left taxpayers dissatisfied since the Bridge phase was introduced. Bridge Plus aligns with the CAP program's purpose of engaging in open, transparent and cooperative relations between taxpayers and the IRS. The commitment to review should give taxpayers more comfort and certainty in their filing positions.


Contact Information
For additional information concerning this Alert, please contact:
Tax Policy and Controversy
   • Kirsten Wielobob (
   • Richard Fultz (

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