Tax Bytes: Week of July 28, 2025

Tax developments

IRS issues interim guidance to streamline LB&I audit procedures and promote alternative settlement programs

Significant updates from the IRS Large Business & International (LB&I) Division will take effect on August 1, 2025. These changes aim to streamline audit procedures and promote alternative dispute resolution programs.

This guidance specifically addresses:

• Removal of Acknowledgment of Facts (AOF): The AOF Information Document Request will become optional from August 1 to December 31, 2025, and will be fully eliminated in 2026 to reduce audit complexity and taxpayer burden.
• Enhanced Fast Track Settlement (FTS) procedures: LB&I will implement stricter oversight of FTS applications, requiring supervisory review and written concurrence for denials to encourage broader use and transparency.
• Clarification on Accelerated Issue Resolution (AIR): The guidance confirms AIR applies to Large Corporate Compliance (LCC) cases, resolving recurring issues efficiently by leveraging prior audit outcomes.

Read our full alert here. 

IRS removes willfulness checkbox from Form 14457, easing path for voluntary disclosures

In a significant policy shift, the IRS has revised Form 14457, Voluntary Disclosure Practice Preclearance Request and Application, the cornerstone of its Voluntary Disclosure Practice (VDP), by removing the controversial “willfulness checkbox.” This change, effective with the July 2025 version of the form, marks a major win for taxpayers and tax professionals who have long criticized the checkbox as a deterrent to participation in the program.

In short, the removal of the willfulness checkbox from the updated VDP form incentivizes taxpayers who were previously wary about admitting that they had willfully failed to disclose information to the IRS to – after consultation with their advisors and attorneys – reconsider whether entering VDP is a viable and wise option in their situation.

Read our full briefing here. 

Recent Eversheds Sutherland Tax insights 

Energy Transition Series - Exploring One Big Beautiful Bill and the impacts on renewable energy tax credits

During this 30-minute webinar, Eversheds Sutherland tax attorneys Wes Sheumaker, Frank Comparetto and Brighid O’Donoghue discuss the key energy tax provisions of the One Big Beautiful Bill (OBBB), including those affecting the availability of energy tax credits; planning considerations and commercial implications for renewable energy projects; and the new law’s impact on M&A. The webinar covers an overview of key legislation and what has changed, analysis on what these shifts mean for the renewable energy sector and commercial implications for development and construction and the impact on M&A.

Tax Pros Hope for Regs to Resolve One-Month Deferral Quandary [subscription required]
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If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.