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Deputy Commissioner (LB&I) Flax Discuss Revised Procedures and Priorities During COVID-19 Pandemic

Client Alert | 1 min read | 11.04.20

On October 5, Nikole Flax, Deputy Commissioner, LB&I, provided an update on LB&I’s revised procedures and priorities during the COVID-19 pandemic, including the CARES Act, electronic submissions and virtual interactions, the Large Corporate Compliance Program, LB&I Campaigns, and the CAP program. A video of Ms. Flax’s presentation at the 34th Annual Crowell & Moring Managing Audits and Appeals Seminar may be found here.

Ms. Flax discussed LB&I’s recent announcement that it is considering rescinding Revenue Procedure 94-69. Rev. Proc. 94-69 provides special procedures for taxpayers that are subject to the former Coordinated Examination Program to show additional tax due or make disclosures to avoid the imposition of accuracy-related penalties for negligence, disregard of rules or regulations, or substantial understatement of income tax under IRC section 6662(b)(1) and (b)(2). Ms. Flax explained that Rev. Proc. 94-69 was written for an old program that no longer exists, so “[a]t a minimum, it needs to be cleaned up, because the words don’t match right now.” Ms. Flax stated that there is not a set timeframe for a decision and that the IRS would need time to consider the comments submitted by interested parties. Critics have noted that Rev. Proc. 94-69 creates disparity among LB&I taxpayers and fails to support the broader tax administration effort to improve the accuracy and reliability of returns at the time of filing.

Ms. Flax also discussed the rollout of a Large Partnership Compliance Program slated for 2021. She explained that it would be similar to the Large Corporate Compliance Program, including selecting entities for audit using data analytics. This announcement comes on the heels the IRS’s recent efforts to gear up for new BBA efforts, including the launch of a new BBA centralized partnership audit webpage, available here. The webpage provides resources for taxpayers where they can find regulations and other guidance and instructions related to the Partnership Representative (PR), electing out of the centralized audit regime, Administrative Adjustment Requests (AARs) and what to expect during a BBA administrative proceeding.

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Client Alert | 3 min read | 06.12.26

DOJ Guidance Backs Away From Disparate Impact Liability

On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”...

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