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Large corporations and
When considering large partnerships For partnerships
Special rules may apply to classes
the filing of a QAR, of taxpayers pursuant to Regs. Sec. subject to
taxpayers and tax 1.6664-2(c)(4)(ii). Currently, Rev. Proc. examinations at the
advisers should 2022-39, effective on Nov. 17, 2022, partnership level,
addresses how QARs are used by tax-
carefully review payers subject to the Large Corporate an Administrative
the limitations for Compliance Program (LCC) or Large Adjustment Request
Partnership Compliance Program.
filing a QAR in Care must be taken in complying with (AAR) pursuant to
the regulations; the procedure, as it states that any dis- Sec. 6227 is filed
closure that does not meet its specific
those exceptions requirements — different from other instead of a QAR.
are detailed and QAR processes — will be considered
complex. inadequate, and no penalty protection treatment on or omission from the
will be provided.
original return.
That revenue procedure replaces It is a well-established principle
■ The date on which the IRS serves a long-standing Rev. Proc. 94-69, which of tax law that a nonfraudulent
summons relating to the tax liability of addressed QAR-type disclosures in the amended income tax return filed
a person, group, or class that includes IRS continuous audit program (the after a fraudulent original return
the taxpayer (or passthrough entity Coordinated Industry Case Program cannot undo the unlimited statute of
in which the taxpayer has an interest) (CIC)) and was needed because the con- limitation for civil fraud assessments
with respect to which the taxpayer tinuous nature of those exams otherwise (see Badaracco, 464 U.S. 386 (1984); see
claimed any benefit — directly or rendered the QAR process inapplicable. also Brown, T.C. Memo. 1996-416).
indirectly — on the return to be The LCC replaced the CIC in 2019, If there is any possibility that the IRS
amended; or and until the long-awaited Rev. Proc. might assert fraud with regard to the
■ The date on which the IRS announces 2022-39 arrived, a taxpayer that histori- original return, the taxpayer should be
by certain listed guidance published cally was subject to the CIC was allowed advised to seek advice from an attorney
in the Internal Revenue Bulletin a to rely on Rev. Proc. 94-69. knowledgeable in criminal tax matters.
settlement initiative to compromise Both the CIC and the LCC (includ- This approach is consistent with the
or waive penalties regarding a listed ing large partnerships) involve a very AICPA’s Statement on Standards
transaction (although the IRS may small number of taxpayers, so those for Tax Services No. 6, Knowledge
waive this requirement or identify a taxpayers and their advisers must pay of Error: Return Preparation and
later date by which a taxpayer that careful attention to the specific and Administrative Proceedings.
participated in the listed transaction sometimes complex requirements for From Kip Dellinger, CPA, Sherman
must file a QAR). eligibility under Rev. Proc. 2022-39 and Oaks, Calif. ■
Rules similar to the above apply to an the application of its provisions. When
undisclosed listed transaction. An undis- the taxpayer is either not eligible to Contributor
closed listed transaction is a transaction utilize the procedure or chooses not to,
that is the same as, or substantially simi- the taxpayer may qualify for the normal Kip Dellinger, CPA, is the senior tax
lar to, a listed transaction for which the QAR filing requirements. partner at Kallman + Logan & Co. LLP
in Sherman Oaks, Calif. He serves on
taxpayer claimed tax benefits that was
not previously disclosed by the taxpayer Fraud issues: The other edge the AICPA Tax Practice and Procedures
pursuant to IRS disclosure requirements. of the sharp tool Committee and is a past chair of the
When considering the filing of a In evaluating whether to file an AICPA Tax Practice Responsibilities
QAR, taxpayers and tax advisers should amended income tax return — includ- Committee and a past member of the
carefully review the limitations for filing ing a QAR — the taxpayer and tax Tax Executive Committee. For more
a QAR in the regulations; those excep- adviser must consider the possibility of information about this column, contact
tions are detailed and complex (see Regs. the IRS’s asserting fraud with regard thetaxadviser@aicpa.org.
Sec. 1.6664-2(c)(3)). to the items to be disclosed and their

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