Extract to table

The effective management of these IDRs — including the timely negotiation of scope, the assertion and preservation of applicable privileges, and the avoidance of enforcement escalation — must be implemented from the outset of the examination

The privilege protocols established in the Privilege Protocol Memorandum dated June 10, 2022 must be carefully observed in connection with all IDR responses to ensure that no privileged materials are inadvertently disclosed to the IRS examination team

While this provision is primarily invoked in the context of repeated or duplicative examinations, it is relevant to IDR management because it establishes the principle that the IRS's information-gathering authority is not unlimited and must be exercised within reasonable bounds

The most current version of this directive (referenced herein as the "LB&I IDR Enforcement Process Directive") sets forth the three-step escalation framework that the IRS must follow before resorting to compulsory process (summons)

The LB&I IDR Enforcement Process The LB&I division has adopted a formalized IDR enforcement process that establishes a structured escalation framework that the IRS must follow before it may seek compulsory process in the form of an administrative summons

Under the Powell standard, the IRS must demonstrate that: 1