LB&I directive - Guidance to IRS field examiners on establishing FBAR examination cases 

April 1:  The IRS today posted a Large Business & International (LB&I) directive providing guidance to IRS field examiners on the use of Master File Transaction (MFT) code C6 when establishing an FBAR* examination case. LB&I-04-1213-010 (posted April 1, 2014, and dated March 18, 2014)

*FBAR = Report of Foreign Bank and Financial Accounts (FinCEN Form 114)

The LB&I directive intends for all FBAR examination files to be maintained on the same system and to provide for consistent IRS exam inventory control procedures. The directive includes, as an attachment, instructions for establishing an FBAR examination case file.

The directive notes that Internal Revenue Manual procedures require an IRS examiner to secure the consent of the Territory Manager before commencing an FBAR exam. Without such approval, an IRS agent is not to question the taxpayer about issues related to FBARs.

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