The IRS Compliance Assurance Process: A Program That Promises Certainty, But Delivers…Well, More IRS

The IRS has long advertised the Compliance Assurance Process (CAP) as a win-win: taxpayers get certainty on their returns upfront, and the IRS gets to “save resources” by avoiding messy audits years later. On paper, it sounds like an efficiency dream. In reality? CAP has become the poster child for inconsistent application, bureaucratic delays, and what feels like an ever-shifting set of goalposts.

The IRS Compliance Assurance Process (CAP)

Sales Pitch vs. The Reality

The premise is simple: taxpayers submit their return positions for review in real time, the IRS evaluates them, and both sides shake hands on certainty. But here’s the kicker: more time and resources are often spent by the Service not auditing than it would have taken to just audit the return normally.

Much of that inefficiency stems from the Treaty and Transfer Pricing (TTP) Division, which used to be led by Jennifer Best. TTP, by design, is supposed to bring expertise and consistency to complex global issues like transfer pricing and treaty positions. Instead, it often serves as a bottleneck — dragging out reviews for months, sometimes years, while taxpayers wait in limbo. And now, Jennifer Best has been promoted to Deputy Commissioner of Large Business & International. Insert collective eye roll here.

A Patchwork of Rules and No Two Taxpayers Treated Alike

One of the biggest gripes about CAP is the inconsistent application of its rules. Eligibility is held up, expanded, restricted, then expanded again — depending on who’s running the show at the moment. Taxpayers have been removed from the program for reasons that would be overlooked for others, or worse, they get stuck in a holding pattern where “eligibility” becomes a moving target.

Even more frustrating: whether your company is treated fairly can depend on nothing more than geography. The IRS has carved the country into Compliance Practice Areas (CPAs): Western, Eastern, and North Eastern. And taxpayers quickly learn that the “CAP experience” can feel wildly different depending on which Senior Director oversees your footprint. One director’s group may push for collaborative solutions; another may default to endless information requests. Fairness and consistency? More like a compliance roulette wheel. There was also this pointless competition between senior directors to get more taxpayer's into CAP. Pointlessly traveling for meetings on audit sites without a real need, guised under employee engagement, and really only to talk to one taxpayer. . . the employee's hated it, the taxpayers got big heads, and the exec didn't add value. Talk about fraud, waste and abuse - HELLO TIGTA!

The Problem With Not Auditing

CAP was supposed to streamline resolution of issues, but the truth is the Service often spends more effort proving why it isn’t auditing than if it had just conducted a straightforward exam. Entire teams get pulled into endless reviews of memos, transfer pricing documentation, and treaty implications — only to hit the pause button over and over again. Instead of providing real-time certainty, the IRS has turned CAP into a game of bureaucratic “kick the can,” where unresolved issues get deferred, re-deferred, and then sent back for “further study” by another group. Some taxpayers have watched the same transfer pricing question ping-pong between divisions for three, four, even five filing cycles with no resolution in sight. By the time the IRS finally decides whether to actually take a position, the tax years in question are ancient history and the “certainty” taxpayers were promised has evaporated. That’s not efficiency; that’s just bureaucratic procrastination dressed up in a three-letter acronym.

Why the Program Lingers On

So why does CAP still exist if it burns resources, frustrates taxpayers, and ties up IRS talent that could actually be auditing? Simple: the program doesn’t really have a reject button once a taxpayer meets the eligibility criteria. If you qualify, the IRS can’t easily kick you out, so the machine keeps

When you're stuck in the CAP cycle, and childhood flashbacks happen.

grinding even when it’s obvious the process isn’t working. And because CAP doesn’t charge fees — unlike private-sector alternatives such as APA filings — taxpayers have little downside in applying.

In fact, you can even see who’s in the program using public filings, which makes the pool of participants transparent. The real kicker is that when the Service doesn’t like the metrics that come out of CAP (say, completion rates or issue resolution stats), it just redefines them, spins the narrative, and claims another “successful” year. Translation: more work for IRS personnel, more frustration for taxpayers, and yet another year where the CAP program survives, not because it delivers value, but because it’s politically easier to pretend it does.

The Bottom Line

For taxpayers, CAP often feels like chasing certainty from an institution that can’t quite decide what certainty looks like. For the IRS, it’s a resource sinkhole dressed in the language of modernization. And for those of us who’ve seen this from the inside, the program’s failures aren’t shocking — they’re structural.

The irony? CAP was built to build trust between taxpayers and the IRS. Instead, it highlights exactly what taxpayers fear most: inconsistent rules, regional disparities, and a process that can waste years of time without delivering any true assurance.

What It Means for Taxpayers

If your business is considering CAP, here’s the unvarnished truth: don’t mistake enrollment for certainty. What you may actually be signing up for is years of waiting, endless rounds of documentation, and a program that can quietly move the goalposts at any moment. The IRS likes to say CAP provides real-time resolution. In reality, it often provides real-time frustration.

That doesn’t mean you’re powerless. With the right strategy, you can mitigate the delays, cut

through the noise, and position yourself to navigate CAP more effectively — or decide whether it’s even worth participating at all. That’s where former IRS insiders can make all the difference.

I oversaw the Compliance Assurance Program and its technical analyst. I engaged with the senior leadership team and identified metrics for the program, I wrote policy for the CAP program and lived this program from the inside for years. At ExFed Tax, We know the players, the politics, and the pitfalls. More importantly, we know how to help taxpayers push past the bureaucratic drag and get to outcomes that matter. Because when it comes to CAP, the only thing worse than being audited is being not audited forever.