LB&I Examination Process - Resolving the Examination - Issue Resolution

Sep 16, 2026

Revised IRM 4.46.5 establishes procedures for resolving issues during the LB&I examination process. The resolution phase aims to reach mutual agreement on the tax treatment of each examined issue early and in a quality manner, improving resource utilization and providing tax certainty through open, meaningful discussions. It guides issue teams in factual development, applying law to facts, using appropriate issue resolution tools, managing involvement, and completing the examination through closing agreements and required steps.

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Reading Time3 min

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Part 4. Examining Process

Chapter 46. LB&I Examination Process

Section 5. Resolving the Examination

4.46.5 Resolving the Examination

4.46.5.1 Overview

4.46.5.2 Issue Resolution

4.46.5.3 Resolution vs. Settlement

4.46.5.4 Issue Resolution Tools

4.46.5.5 Management Involvement in the Issue Resolution Process

4.46.5.6 Closing Agreements

4.46.5.7 Completing the Examination

Part 4. Examining Process Chapter 46. LB&I Examination Process Section 5. Resolving the Examination 4.46.5 Resolving the Examination 4.46.5.1 Overview 4.46.5.2 Issue Resolution 4.46.5.3 Resolution vs. Settlement 4.46.5.4 Issue Resolution Tools 4.46.5.5 Management Involvement in the Issue Resolution Process 4.46.5.6 Closing Agreements 4.46.5.7 Completing the Examination Manual Transmittal March 09 , 2016 Purpose ( 1) This transmits revised IRM 4 .46.5 , LB&I Examination Process, Resolving the Examination . Scope Not all examinations are the same in scope , size , and complexity; therefore , portions of this IRM may be more applicable to some cases than others. Material Changes ( 1) Rewrote and streamlined this IRM to incorporate the issue driven examination as described in Publication 5125 , LB&I Examination Process. (2) Included discussions on issue resolution , factual development, applying the law to the facts, and interpretation of the law in IRM 4 .46.5.2. (3) Modified and included changes to Appeals working with Exam including new Appeals policy and new statute requirements. (4) Clarified subsection 4.46.5.4.2.3 on Accelerated Issue Resolution (AIR) . (5) Removed obsolete subsection 4.46.5.6 , Settlement Authority, and renumbered subsequent subsections. (6) Included the new dissent procedures for disagreements with Appeals determinations. (7) All references to "Technical Advisors (TA)" were removed. (8) All references to LB&I Compliance Issues labeled as "Tier I, Tier II or Tier III" have been removed. (9) All references to Rev. Proc. 2000 43 on ex parte communications with Appeals were updated to Rev. Proc. 2012 18. ( 10) Editorial corrections made throughout. ( 11) Material from IRM 4 .46.7 has been modified and included in this IRM as follows: | IRM 4 .46.7 cite | Title | New IRM cite | | --- | --- | --- | | 4.46.7.2 | Closing a Case | 4.46.5.10 | | 4.46.7.2.1 | Completing the Examination | 4.46.5.7 | | 4.46.7.2.2 | Partial Closings | 4.46.5.10.1 | | 4.46.7.2.3 | Files and Workpapers | 4.46.5.10.2.1 | | 4.46.7.2.4 | Review of Case | 4.46.5.8 | | 4.46.7.2.4.1 | Assistance from PFTG LQMS | 4.46.5.8.1 | | 4.46.7.2.5 | Forwarding for Appeals Actions | 4.46.5.7.4 | | 4.46.7.2.6 | Closing Actions | 4.46.5.10.2 | | 4.46.7.2.6.1 | Closing Agreements Process | 4.46.5.6 | | 4.46.7.2.7 | Conference with Appeals | 4.46.5.11 | | 4.46.7.2.7.1 | Procedures for LB&I Cases | 4.46.5.11.1 | | 4.46.7.2.7.2 | Requesting a Pre Conference | 4.46.5.11.2 | | 4.46.7.2.7.3 | Participation in Pre Conference | 4.46.5.11.3 | | 4.46.7.2.7.4 | Other Communications with Appeals | 4.46.5.11.4 | | 4.46.7.2.7.5 | Applications to Docketed Cases | 4.46.5.11.5 | | 4.46.7.2.7.6 | Post Settlement Conference | 4.46.5.14 | | 4.46.7.2.7.7 | Direct Examination Time for Conference Procedures | 4.46.5.14.1 | | 4.46.7.2.7.8 | Dissent Procedures for Disagreements with Appeals Determinations | 4.46.5.15 | | 4.46.7.3 | Assessment of Team Members Performance | 4.46.5.16 | | 4.46.7.3.1 | Performance Assessment | 4.46.5.16.1 | | 4.46.7.4 | Post Examination Management Critique | 4.46.5.17 | | 4.46.7.4.1 | Post Examination Critique Objectives | 4.46.5.17.1 | | 4.46.7.4.2 | Critique with the Examination Team | 4.46.5.17.2 | | 4.46.7.4.3 | Scope of Critique | 4.46.5.17.3 | | --- | --- | --- | | 4.46.7.4.5 | Critique with Taxpayer | 4.46.5.17.4 | | 4.46.7.4.6 | Documentation of Post Examination Critique | 4.46.5.17.5 | | 4.46.7.4.7 | Carryover Adjustment Schedule | 4.46.5.9.2.1 | | 4.46.7.4.8 | Recurring Issues | 4.46.5.9.2 | | 4.46.7.4.9 | Disposal of Critique | 4.46.5.17.5 | | Exhibit 4.46.7 2 | Agenda for Post Examination Critique | Exhibit 4.46.5 1 | Effect on Other Documents IRM 4 .46.5 dated July 22 , 2011 is superseded. Audience All LB&I personnel Effective Date (03 09 2016) Susan L. Latham Director, Program and Business Solutions (PBS) Large Business and International Division 4.46.

FAQs

What is the primary goal of the resolution phase in the LB&I examination process?

To reach a mutual agreement on the tax treatment of each issue examined at the earliest appropriate point in the examination in a quality manner, supporting resource utilization and tax certainty through open and meaningful discussions.

What must an issue team discuss to resolve an issue?

An open discussion in three areas: factual development, the law that applies to the facts, and each party’s interpretation of the law.

How are facts handled during factual development?

Relevant facts must be identified and presented clearly and effectively, distinguishing facts from opinions; the facts should not include opinion, personal inferences, biases, or prejudices, and evidence relied upon must be documented clearly.

Sep 16, 2026

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