The Large and Mid-Size Business Division (LMSB) of the IRS is implementing an Industry Issue Focus (IIF) approach to compliance as part of its overall issue management strategy. The goals of this approach are:
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Consistency in resolution across industry lines
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Improved currency
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Increased coverage of non-compliant taxpayers by maximizing limited resources
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Greater oversight on and accountability for important issues
Under this approach, compliance issues are identified by the field through examinations, Schedule M-3 reviews, and other sources. These issues are prioritized or tiered based on how prevalent they are across industry lines and the level of compliance risk they present.
IIF Fact Sheet has the goals of Industry Issue Focus strategy.
Tiered Issue Focus Strategy Frequently Asked Questions
Former IRS Commissioner Mark W. Everson summarized some of the greatest compliance challenges facing the Large and Mid-Size Business Division (LMSB) in testimony to the Senate Committee on Finance. Those challenges are reflected in the Tier I and Tier II issues.
Tier I Issues are of high strategic importance to LMSB and have significant impact on one or more industries.
Tier II Issues reflect areas of potential high non-compliance and/or significant compliance risk to LMSB or an industry.
Tier III Issues represent the highest compliance risk for a particular industry segment and require consistent treatment for taxpayers within the industry.
Industry Issue Focus Strategy Flow Chart
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