Tax News Update    Email this document    Print this document  

September 7, 2023

LB&I announces new 2024 CAP program application period with some program changes

  • The application period for the 2024 Compliance Assurance Process (CAP) program is September 6, 2023 — October 31, 2023.
  • The IRS will replace the Bridge phase with the Bridge Plus phase.
  • The IRS has included a new questionnaire on cross-border activities that will become mandatory with the 2025 CAP cycle.

The IRS's Large Business and International division (LB&I) has announced (IR-2023-164) that it is currently accepting new applications for its Compliance Assurance Process (CAP) program for tax year 2024. The application period runs from September 6, 2023 to October 31, 2023.

The updates to the program include (1) replacing the Bridge phase with Bridge Plus and (2) a new Form 14234-E, Cross-Border Activities Questionnaire (CBAQ), to cover specific international issues.

The IRS will notify participants if they are accepted into the program in February 2024.


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. To be eligible for the 2024 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.

Taxpayers currently in CAP cannot have more than one filed return and one unfiled return open on the first day of the applicant's CAP year. New applicants can have no more than three tax years open on the first day of the applicant's tax year (and they must agree that the open years will close no later than 12 months after the first day of its tax year).

CAP phases

The CAP Program currently has three phases as well as a "pilot phase" that was launched in April 2023: (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); (3) the Bridge phase (when the IRS will not accept any taxpayer disclosures, review any issues or provide any assurances); and (4) the pilot Bridge Plus phase (when the IRS reviews eligible taxpayers' returns for compliance before they file).

Bridge and Bridge Plus phases

The Bridge phase was developed in 2019 for taxpayers whose risk of noncompliance did not warrant continuous use of LB&I examination resources. Applicants could 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.

In 2023, the IRS added the Bridge Plus phase in response to feedback from taxpayers that being placed in the Bridge phase did not allow IRS review or assurances (see Tax Alert 2023-0301), which provided taxpayers certainty as to their filing positions. Taxpayers that want to participate in Bridge Plus are required to submit book-to-tax reconciliations, credit utilization and other supporting documentation after finalizing their audited financial statements. The IRS then conducts a risk assessment of the documents to determine whether the taxpayer is suitable for Bridge Plus. A taxpayer that is accepted into Bridge Plus must 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.

Changes to the 2024 CAP program

The 2024 CAP program has made some changes to previous requirements.

Bridge Plus phase

The IRS said that about 50% of the taxpayers invited to be considered for the Bridge Plus phase accepted. The IRS said that "due to positive feedback, both internally and externally," as well as the quality of the submissions and taxpayer cooperation, the IRS will continue the Bridge Plus phase and send invitations in early 2024.

The IRS said it is then planning to replace the Bridge phase with the Bridge Plus phase in 2024, meaning that participation will be mandatory. "This will be a significant change to the program and taxpayers are welcome to submit comments to the IRS concerning this change to Given that the Bridge Plus process does not begin until the taxpayer's tax year has ended, the projected start time for 2024 Bridge Plus would be Spring of 2025 for calendar year end taxpayers," the IRS said.

Cross-Border Activities Questionnaire (CBAQ)

The IRS has been using the CAP Research Credit Questionnaire (CRCQ) and the Material Intercompany Transactions Template (MITT) to gather information from taxpayers at the beginning of the CAP process to identify international issues, and the resource and timing needed to address these issues.

The IRS said it has developed the new CBAQ, which is in draft status, to address more specific international issues. The form will not be required for the 2024 CAP cycle but will be required for the 2025 CAP cycle. The IRS asked for feedback to be submitted to by January 31, 2024, before they finalize the form.


The significant changes to the CAP program display the IRS's continued commitment to enhancing the program consistent with its intent. Bridge Plus will provide the certainty that many taxpayers have complained the Bridge phase lacked. The new CBAQ form builds on the success of the IRS's current forms that gather research credit and transfer pricing information up front, which allows the IRS to better identify issues meriting attention or confirm that issues do not warrant the expenditure of IRS resources.


Contact Information
For additional information concerning this Alert, please contact:
Tax Policy and Controversy
   • Kirsten Wielobob (
   • Bryon Christensen (
   • Trevor T. Wetherington (

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