The memo outlines plans to phase out the acknowledgement of facts process by 2026, expand accelerated issue resolution to large corporate cases, and strengthen review of fast track settlement denials.
The US Internal Revenue Service (IRS) released IR-2025-77 on 25 July 2025, in which it announced a memorandum highlighting changes aimed at reducing case cycle times for corporate taxpayers, making examinations more customer-driven, consistent, and efficient.
The Interim Guidance Memorandum (IGM), Reinforcing the Customer Focused, High Efficiency Large Business & International Examination Process, fosters a culture of collaboration with taxpayers to resolve issues.
These changes are intended to enhance taxpayer service and tax administration by streamlining examination resources, facilitating timely issue resolution, and expediting tax certainty.
The memo provides guidance for:
- Phasing out Acknowledgement of Facts (AOF) Information Document Request process in examinations by 2026 – The AOF Information Document Request process will be eliminated due to concerns over limited value and extended timelines. Until Dec. 31, 2025, taxpayers may choose whether to use AOF. This proposed phase-out approach builds in an opportunity for stakeholder feedback before any permanent changes.
- Expanding Use of Accelerated Issue Resolution (AIR) to Large Corporate Cases – The memo clarifies that AIR applies to Large Corporate Cases (formerly under the Coordinated Examination Program). AIR closing agreements allow resolved issues to apply across all filed return years in the current audit cycle.
- Stronger review of Fast Track Settlement (FTS) denials – To support broader use of the FTS process, the IRS now requires additional internal reviews and approvals before denying a taxpayer’s request.
Throughout implementation of these changes in 2025 and 2026, the IRS welcomes and encourages feedback from the public.
Feedback can be sent to *LBI Policy Feedback”.
