Publication 5125 Publication 5125, the LB&I Examination ProcessPDF outlines the LB&I Examination Process (LEP) which provides an issue-based approach for conducting professional examinations from the first contact with the taxpayer through the final stages of issue resolution. LEP establishes roles and responsibilities for both LB&I examiners and taxpayers and sets specific expectations with respect to claims for refund. However, not all examinations are the same in scope, size, and complexity; therefore, portions of the publication may be more applicable to some cases than others. Publication 5125 highlights key factors in each phase of the examination including Planning, Execution and Resolution. IRM 4.46.1 provides general information and key definitions for LEP. IRM 4.46, sections 3, 4 and 5 provide the LEP planning, execution, and resolution procedures. Below are some of the key factors identified in Publication 5125: LB&I Examination Process (LEP) Publication 5125 Sets clear expectations for LB&I examiners, taxpayers, and representatives. Examiners are expected to work transparently in a collaborative manner with taxpayers to understand their business and share the issues that have been identified for examination. Encourages taxpayers and/or representatives to work transparently with examiners to provide an overview of business activities, operational structure, accounting systems and a global tax organizational chart. Establishes expectations for working collaboratively to develop audit steps, timelines and providing appropriate personnel to actively assist in the development of the issue(s) identified. Claim for Refunds Requirements Requires adherence to Treas. Regs. 301.6402-2 and 301.6402-3. Defines a designated period for the acceptance of informal claims. Allows for early identification of issues and resource needs in the exam planning stage. Issue Driven Examination Process Focuses the right resources on selected issues. Encourages collaboration within issue teams where every examiner and their managers are equally responsible and accountable for the examination. Leverages knowledge transfer among technicians. Establishes case timelines as determined by the most complex issues. Provides examiners an optional issue-driven risk analysis form (13744-I). Issue Development Model Relies on active dialogue and fact sharing. Seeks ongoing acknowledgement of facts to ensure accurate tax determinations. Updates IRM 4.46 to include the directives issued on the Information Documentation Request (IDR) Process. Introduces the "Acknowledgment of Facts" IDR process for cases heading to Appeals. LB&I examiners will discuss this publication at all opening meetings.
