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Tax Executives Institute, Inc. Regions V & VI IRS Liaison Meeting May 14, 2012 Quality Examination Process (QEP). Katheryn N. Houston, DFO-East, Natural Resources & Construction, LB&I Ralph Portell Moderator. QEP - Background.

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Tax Executives Institute, Inc.Regions V & VI IRS Liaison MeetingMay 14, 2012Quality Examination Process (QEP)

KatherynN. Houston,DFO-East, Natural Resources & Construction, LB&I

Ralph Portell


Qep background
QEP - Background

  • On June 1, 2010, LB&I introduced the Quality Examination Process (QEP).

  • The QEP builds on and replaces:

    • Joint Audit Planning Process

      • Developed in 2003

      • Joint effort between LB&I and Tax Executives Institute (TEI).

  • Joint Audit Planning Process Objectives:

    • Improve communication between the IRS and taxpayers during the early planning phases


    • The QEP emphasizes communication and consistency throughout the entire examination, from planning, to execution, to final resolution.

Feedback on joint planning process
Feedback on Joint Planning Process

  • Feedback from LB&I revenue agents / managers:

    • Too complex and burdensome

    • Not applicable smaller IC cases.

    • Resulted in less team control of exams and caused delays

    • Process favored taxpayers’ interests over IRS’ strategic goals

    • Managers and agents expressed a desire for more flexibility to manage the Process

  • Feedback from taxpayers, TEI and other stakeholders:

    • Many reported not knowing about the Joint Audit Planning Process

    • Many thought IRS agents needed better training in using the Process.

    • Better training of IRS managers and senior staff in risk analysis, materiality thresholds, and the importance of pre-IDR meetings.

    • There should be a thorough discussion of resolution options/tools upfront

    • The IRS should formalize shared expectations about the exam process.

    • IRS agents should ensure earlier / more consistent inclusion of specialists in the audit planning process

What changed
What Changed

  • Facilitate and improve communication between examiners and taxpayers and (hopefully) lead to a smoother, faster examination cycle.

  • Incorporated best practices from the Joint Audit Planning Process

  • Eliminate the 39 pages from Joint Audit Planning Process Guide.

  • Revise training

  • Expanded the focus to improving communication and coordination throughout the entire exam cycle.

  • Develop a comprehensive QEP Reference Guide

  • Agents are to review and discuss the publication with taxpayers at the inception of every examination

Quality exam process
Quality Exam Process

  • Effective June 1, 2010,

  • IRS revenue agents distribute and reviewing Publication 4837 with taxpayers.

  • The core element of the QEP are:

    • Taxpayer involvement and engagement.

    • Agents are to ensure that taxpayers are aware at all times what issues are being addressed in the examination,

    • How they can help make the resolution process faster and more effective.

  • IRM 4.46 has been updated to reflect the addition of QEP

  • Publication 4837 and the QEP Reference Guide are now posted on IRS.GOV.

Quality examination process
Quality Examination Process

Questions? and Discussion!