The Compliance Maintenance (CM) Phase is a part of the IRS's Compliance Assurance Process (CAP) Program. It is designed for taxpayers who have demonstrated a high level of compliance and cooperation with the IRS. Here are the key aspects of the CM Phase:
- Eligibility: To be eligible for the CM Phase, a taxpayer must have completed at least one CAP cycle through post-file. Additionally, the taxpayer and the IRS must have an effective CAP process in place and a history of concluding post-file examinations timely. The taxpayer should generally have a history of receiving full acceptance letters and have relatively few issues to be considered.
- Review Level: In the CM Phase, the IRS, at its discretion, will adjust the level of review of the tax year based on the complexity and number of issues. This phase relies on the same provisions as the CAP Phase, including the same Memorandum of Understanding (MOU) and criteria.
- Disclosures: Taxpayers in the CM Phase are required to continue making open, comprehensive, and contemporaneous disclosures of their completed business transactions.
- Annual Application: After the taxpayer’s annual application for the CAP Program, the Large Business and International (LB&I) division will consider if the CM Phase or another phase is appropriate. This consideration will take into account the taxpayer’s history of compliance, cooperation, and transparency in the CAP Program.
- IRS Discretion: The IRS has the discretion to adjust the level of review based on the complexity and number of issues for the tax year under consideration.
In summary, the CM Phase is a streamlined compliance process for taxpayers who have demonstrated consistent compliance and cooperation with the IRS, allowing for a potentially reduced level of review based on the taxpayer's history and the complexity of their tax issues.
Sources:
IRM Part 25. Special Topics. Chapter 29. Tax Compliance Check. Section 1. Standard Tax Compliance Checks for Suitability and Monitoring
IRM Part 4. Examining Process. Chapter 46. LB&I Examination Process. Section 1. General Information and Definitions
IRM Part 5. Collecting Process. Chapter 19. Liability Collection. Section 16. Compliance Services Collection Operations (CSCO) Clerical Procedures
IRM Part 21. Customer Account Services. Chapter 1. Accounts Management and Compliance Services Operations. Section 3. Operational Guidelines Overview
IRM Part 4. Examining Process. Chapter 50. LB&I Compliance Integration. Section 3. Large Corporate Compliance Program
