In news greatly welcomed by the tax community, IRS Large
Business and International (LB&I) Commissioner Heather C. Maloy
announced in a directive issued in late August that the IRS is
ending its Tiered Issue Program.1 Practitioners'
experiences were that the Tiered Issue Program frequently delayed
IRS audits and administrative appeals and greatly increased
taxpayer costs in resolving disputes with the IRS.
The Tiered Issue Program was initially created to combat the
proliferation of marketed tax shelter transactions. The program was
implemented to create uniform, coordinated positions and ensure
that all taxpayers in the same shelter were treated
consistently.
The IRS, however, expanded the program beyond tax shelters and
listed transactions. If the IRS identified an issue as a Tier 1
issue, the national issue coordinator's approval was needed
before the IRS would enter into a settlement of the issue with a
taxpayer. The national issue coordinators also exercised
