IRS Enhances Pre-Filing Agreement Program to Support LB&I Taxpayers

by | Jul 21, 2025 | Federal Tax, Main Tax Min, Tax Minimization, Tax News | 0 comments

The IRS updated its Pre-Filing Agreement program to help large businesses resolve tax issues early and reduce audit risk. Key changes include a streamlined process and new tools for eligibility and documentation.

The Internal Revenue Service (IRS) has made improvements to its Pre-Filing Agreement (PFA) program, aimed at providing greater certainty for large business and international (LB&I) taxpayers.

Detailed in IR-2025-69 on June 17, 2025, the updates are designed to expand access to cooperative tax compliance strategies that prevent disputes before they arise. The PFA program allows LB&I taxpayers to streamline the process of proactively addressing potential tax issues before filing, reducing audit risks and encouraging voluntary compliance.

Key enhancements to the Pre-Filing Agreement program include:

  • An updated webpage with program statistics, overview of the PFA process, and links to dispute prevention resources
  • Step-by-step instructions with guidance on submitting a PFA request, including response timelines and what to expect after submission
  • Resources to determine whether a PFA request is appropriate for their specific tax situation, along with documentation requirements to support submission
  • Revised instructions for aligning PFA submissions with tax filing deadlines

For more information or to access the updated resources, taxpayers can visit the IRS’s official PFA program webpage.

Protect Your Business

The R&D tax credit is a powerful incentive—but only when used responsibly. As the IRS adjusts their audit processes and enforcement capabilities, businesses must be vigilant about who they trust to prepare their claims.

  • Ask the right questions: If a vendor promises a large credit, ask how they plan to get there. If the explanation sounds like a “slick used car salesman,” it probably is.

Read more: R&D Credits: Big Box Myths and Cutting Edge of “Quick and Easy”

  • Know your threshold: For small companies, having six full-time equivalent engineers typically justifies pursuing the credit. Anything less may not be worth the risk or cost.

Read more: A Guide for PE Firms: Hidden R&D Tax Credit Value in #6engineers

Eligible for R&D Credits?

Any company that develops new or improved products, processes, or software—in some cases, whether profitable or not—may qualify for these lucrative credits. Wondering if you are eligible to take advantage of lucrative research credits that could cut your federal and state tax liability? 

Find out here! Eligible for Lucrative R&D Credits?

Disclaimer: This content is for educational purposes only and is not intended, nor should it be relied upon, as legal, tax, accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented. 

Talk to a Business Tax Advocate

Read more

Follow Follow