IRS Opens Applications for 2026 Compliance Assurance Process

The IRS has officially announced the opening of the application period for the 2026 Compliance Assurance Process (CAP), starting September 3, 2025, and closing October 31, 2025. This marks a key opportunity for large corporate taxpayers to gain pre-filing certainty on complex tax positions before their returns are filed.

What Happened

• The IRS confirmed in its August 18, 2025 release that applications for the 2026 CAP program will be accepted for nearly two months this fall.

• CAP provides real-time audit resolution by allowing taxpayers and the IRS to work together throughout the year to identify, analyze, and resolve issues prior to filing.

• Participants will be notified of selection by February 2026, with entry contingent on the IRS’s capacity and the taxpayer’s eligibility.

  
  

Why It Matters

For taxpayers and advisors, the CAP offers significant advantages:

• Early Certainty: Tax positions are reviewed before filing, reducing exposure to later disputes.

• Reduced Controversy: Resolving issues in real time can save years of litigation or prolonged audits.

• Efficiency: Participation lowers administrative costs for both taxpayers and the IRS.

  
  

However, entry into CAP is highly competitive and generally limited to the largest and most complex taxpayers, often with substantial international operations or transfer pricing risks.

For tax professionals, this means:

• Preparing applications that highlight transparency, cooperation, and readiness is crucial.

• Clients with high audit exposure especially in industries like tech, pharma, and financial services should be prioritized for evaluation.

• Advisors must prepare for enhanced documentation and continuous disclosure obligations once accepted.

  
  

What’s Next

• Application Window: September 3 – October 31, 2025.

• Notification of Acceptance: February 2026.

• Program Participation: Begins with the 2026 filing cycle.

  
  

Tax professionals should act now to:

1. Identify clients eligible for CAP.

2. Begin assembling necessary disclosures and supporting documentation.

3. Map potential audit-sensitive positions to present in the application.

   
   

The CAP program continues to reflect the IRS’s shift toward collaborative compliance with the largest taxpayers an approach that may influence future mid-market audit strategies.

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