Washington (Dec. 5, 2002) -- The Internal Revenue Service's Large and Mid-Size Business Division is launching a new streamlined examination process to focus on issues most significant to the return under examination.The "Limited Issue Focused Examination" initiative, nicknamed "LIFE," will involve a formal Memorandum of Understanding between the IRS and taxpayer to govern key aspects of the examination. The MOU will contain dollar-limit thresholds, established on a case-by-case basis, below which the IRS will agree not to raise issues and the taxpayer will agree not to file claims. This is intended to create an atmosphere where the examination process is less difficult, less time-consuming, less expensive and less contentious.

"LIFE is a two-way street," said LMSB Commissioner Larry Langdon. "Making it work will require taxpayers and the IRS to work cooperatively. Many of the resource benefits of this approach to taxpayers and the IRS will flow from taxpayers meeting the commitments they make at the commencement of a focused examination."

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