TAX ANALYSIS.

The article presents a discussion on the reactions of the U.S. Internal Revenue Service (IRS) to suggestions on reopening closed cases and restricted consents. To the suggestion that a closing agreement be used in virtually every audit, it would appear to be wholly impracticable. On the other hand, a taxpayer is never refused a closing agreement solely because it gives no advantage to the government. With respect to the raising of new issues, the IRS suggests that new issues are never to be raised capriciously, indiscriminately, promiscuously or haphazardly and are never, under any circumstances, to be raised for bargaining purposes. Essentially the new policy on closed cases will foreclose reopening of an audited return unless: there is evidence of fraud, malfeasance, collusion, concealment or misrepresentation of a material fact; the prior closing involved a clearly defined substantial error based upon an established IRS position existing at the time of the prior examination; other circumstances are present that indicate failure to reopen would be a serious administrative omission.