IRS Extending the Tax Assessment Period

Restricted Consents  (Part I)

In addition to extending the length of the assessment statutory period, consent agreements may also limit further examination or appeal activities to specific tax issues. These agreements are called “restricted consents” and have either a fixed or open-ended date of expiration. It is the Service’s position that the taxpayer has a right to request a restricted consent; however, as a general rule, the Service will not enter into restricted consents unless all of the following conditions exist:

1) The number of unresolved issues that must be covered by the restricted consent does not make it impractical to do so.

2) The scope of the restrictions must be clearly and accurately described for all the unresolved issues.

3) The issues not covered by the restricted consent are agreed and provision is made for assessing any deficiency or employment tax liability or, under certain circumstances, scheduling any over- assessment (refund or credit) for the agreed issues.

4) The appropriate Service official approves the use of a restricted consent.

5) The terms and language in the restricted consent are approved by IRS Counsel prior to the consent being signed by the parties.

IRS Publication 1035 (TTT 04/06/2021)