LMSB presents the Quality Examination Process with LMSB Commissioner Heather Maloy.

Hi. I'm Heather Maloy, Commissioner of the IRS Large and Mid-size Business division.

Over the years LMSB has introduced a variety of tools to help our agents and taxpayers work together more effectively. An example is the Joint Audit Planning Process which we've used to engage you, our taxpayers, in planning tax examinations.

Today, I would like to tell you about how, with your help, we've improved the Audit Planning Process. Our new initiative the Quality Examination Process or QEP, builds on the Joint Audit Planning Process, but it goes further.

It sets the foundation for better communication between LMSB agents and taxpayers and helps us become more consistent in how we do our work.

Let me give you some background. In early 2009, LMSB launched a review of the Joint Audit Planning Process to determine how well it was working and how it could be improved. We conducted survey and focus groups, talked with revenue agents, specialists, and other managers, as well as taxpayers and stakeholder groups.

The research signaled some real opportunity for improvement. While most agents and managers said they were engaging taxpayers in joint audit planning, many thought the current process was burdensome and time-consuming.

Bottom line -- agents said they found the process useful, but it needed to be streamlined to give them more flexibility in managing their examinations and you, the taxpayer, more opportunity for involvement.

You told us about your concerns, too. One of the biggest issues was consistency. While some taxpayers said their agents had involved them in joint audit planning, others said that they had never been invited to participate in exam planning at all.

In addition, taxpayers wanted a better understanding of the overall audit process from beginning to end, as well as dispute-resolution options available to them.

You also wanted earlier and more consistent involvement from specialists and counsel.

As a result of these findings, we decided to make two changes.

First, we are eliminating the Joint Audit Planning Process as a separate standalone approach.

In addition, we are eliminating the current audit planning and monitoring checklist.

In their place, we are introducing a new tool -- the Quality Examination Reference Guide.

This new guide is intended for use by our agents and teams. It outlines the key activities and milestones necessary to complete a quality examination for both the IRS and taxpayers. We will be updating our Internal Revenue manual accordingly. Our second change involves placing a much greater emphasis on effective communication and coordination throughout the examination.

In today's tax environment, effective communication is essential Our view is that both agents and taxpayers have roles to play in making the exam relationship work.

We are providing our taxpayers with a new tool -- a printed publication entitled "Achieving Quality Examinations through Effective Planning, Execution and Resolution."

It outlines the exam process from start to finish. And like the reference guide I just mentioned, it includes key milestones and responsibilities but with less technical detail.

As part of improving communication and consistency, we are asking our agents and teams to deliver and discuss this publication with taxpayers at the start of every new examination.

This will help ensure that taxpayers know in advance  how the audit will proceed and which, in turn, will help you better plan and manage your resources. Our goal is to minimize surprises, improve dialogue, and make the exam process more efficient and effective.

Service to taxpayers is a central part of our mission at the IRS. By starting every exam with a positive approach to communication and committing to keep the dialogue going throughout the exam, both the service and the taxpayer stand a better chance of arriving      at a timely resolution. We hope that engaging with our taxpayers in this way will lead to greater transparency and compliance.

We have an obligation to explain the exam process and help you understand your responsibilities. I am convinced that the way to do this is through clear, consistent communication and effective coordination. The changes I have just discussed will help.

I encourage you to speak to your examiner or your exam team if you have any questions.

Thank you so much for listening, and thank you for working with us to make the examination process more effective.