One important feature of every audit is the request and
collection of relevant taxpayer materials by the Internal Revenue
Service (IRS). Such materials are typically collected through the
rules and procedures associated with an Information Document
Request (IDR). However, for audits that involve the
collection of foreign-based documentation, the Internal Revenue
Code (Code) provides a modified set of rules under the Formal
Document Request (FDR) procedures outlined in Code Section 982.
Code Section 982(c)(1) authorizes the IRS to issue an FDR to any
taxpayer to request "the production of foreign-based
documentation." An FDR supplements the IRS's summons
authority and its purpose is to discourage taxpayers from delaying
or refusing to disclose certain foreign-based documentation to the
IRS. Taxpayers should be aware of FDR procedures because failure to
respond – either through substantial compliance or some
alternative permissible action – within the statutory
