IRS Simplifies Intangibles Settlement Program

WASHINGTON - The Internal Revenue Service today announced a modification to its Intangibles Settlement Initiative to make it simpler and less burdensome for both the IRS and affected taxpayers.

As originally announced last month, settlement offers would have applied to all acquisitions on disputed tax returns, whether or not the IRS had raised an issue about the intangibles related to a specific acquisition. After further consideration, the IRS has decided to limit the settlement offer to those acquisitions for which it raises an intangible issue in audits begun before April 1, 1994. The settlement will not cover unchallenged acquisitions, which a future audit could question.

The basic terms of the offer remain the same, including the 15 percent minimum concession, the 50 percent cost recovery approach and the requirement that the offer apply to all intangibles for a given acquisition.

The IRS also announced that additional instructions for computing the offer, as well as examples applying its two settlement approaches, are available at its Freedom of Information Reading Room in Washington.

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