WASHINGTON, D.C. — The Internal Revenue Service has announced a set of procedural reforms aimed at improving the efficiency and transparency of audits involving large corporate taxpayers. Issued through an Interim Guidance Memorandum (IGM), the changes are designed to reduce examination cycle times and foster a more customer-focused, collaborative approach.
The memo, titled Reinforcing the Customer Focused, High Efficiency Large Business & International Examination Process, outlines several key measures intended to streamline audit processes, accelerate resolution of tax issues, and improve overall consistency in enforcement.
Among the most significant changes is the planned phase-out of the Acknowledgement of Facts (AOF) Information Document Request process. Citing limited effectiveness and its tendency to delay examinations, the IRS will discontinue the AOF process by 2026. Taxpayers may still opt to use AOF through the end of 2025, allowing time for industry feedback before the change becomes permanent.
The IRS also expanded the applicability of its Accelerated Issue Resolution (AIR) process to include Large Corporate Cases—those previously handled under the Coordinated Examination Program. AIR agreements enable resolution of issues across all open tax years within a single audit cycle, providing quicker tax certainty for both taxpayers and the agency.
Additionally, the memo introduces tighter oversight on the denial of Fast Track Settlement (FTS) requests. Going forward, any FTS denial will require enhanced internal review and approval, with the aim of encouraging broader access to alternative dispute resolution options.
According to the IRS, these initiatives support its ongoing efforts to modernize large business examinations, reduce unnecessary delays, and strengthen voluntary compliance through more timely and transparent interactions.
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