Changes in the industry specialization program.

• Author: Monaco, John J.
• Position: Coordinated Examination Program

In the late seventies, the Internal Revenue Service recognized that its Examination personnel could not hope to be familiar with the many accounting and business practices peculiar to all the different industries. The IRS also identified the necessity for greater communication and coordination among the various IRS regions and individual examiners working similar cases. As a result, the Industry Specialization Program was initiated to promote better identification and development of issues under examination and ensure uniform and consistent treatment of issues throughout the examination cycle. This concept has been expanded to International Issues and Employee Plans/exempt Organization Issues.

The IRS currently has 20 nationwide industries that comprise Examination's Industry Specialization program. There are four International Issue Specialists and two Exempt Organization Industry Specialists. Industry Specialists not only advise case managers on current issues identification and development, but are also charged with the responsibility of keeping abreast of emerging issues that affect the industry.

Today, the Industry Specialization Program maintains these broad range goals. Its role, however, has been expanded to encompass the concepts of Compliance 2000 - that is, to reduce taxpayer burden, meet the needs of our stakeholders, and increase the understanding of tax laws.

Just What Does this Mean to our Specialists

and Revenue Agents in the Field?

Not only will they identify emerging or developing issues, but they will attempt to do so prior to returns being filed. We are asking our specialists to work with our stakeholders. Our goal is to reach the point where the corporate taxpayers can file a correct corporate tax return the first time. Naturally, differences of opinion will always be a part of our business. When this occurs, we hope to issue clarification in the form of regulations or rulings before the tax return that contains these issues comes under examination.

What Will the Effect of this Be on our Current

Coordinated Issue Process?

Since it is not always possible to recognize all potential issues before taxpayers file their returns, the coordinated issue procedures will remain the cornerstone of the Industry Specialization Program. As a result of the examination process, we will continue to identify issues warranting this coordination.

In short, we will first attempt to clarify the law and to simplify procedures. Formal and...