For new taxpayers accepted to the CAP Program, if the examination team determines that prior year material issues should be examined, any unexamined returns that are placed under examination will be treated as one filed return for purposes of the return criterion. These returns must be closed by the first day of the third CAP year, or the applicant may not be eligible to participate in the third CAP year.
Sources:
IRM Part 4. Examining Process. Chapter 46. LB&I Examination Process. Section 5. Resolving the Examination
