TITLE: IRS Opens 2027 CAP Applications: What International Ecommerce Sellers Need to Know
The IRS has opened applications for the 2027 Compliance Assurance Process (CAP). Eligible corporations must apply by 30 October 2026.
This update matters to larger international sellers, especially foreign-owned US C corporations operating through Amazon FBA, Shopify, digital services, or cross-border group structures.
The CAP can help eligible businesses resolve significant federal tax issues with the IRS before filing their return. However, it is not available to every international seller.
Apply by 30 October 2026 for earlier tax certainty
The IRS announced the application window in IR-2026-107, published from Washington, DC, on 8 September 2026.
Key dates include:
- Application period: 1 September to 30 October 2026
- IRS acceptance notifications: February 2027
- CAP year: 2027
- Applicant type: Eligible corporations and qualifying existing CAP partnerships
The IRS launched CAP in 2005. It uses transparent, cooperative interaction between large corporate taxpayers and the IRS to identify and resolve tax issues before a return is filed.
This approach can provide greater certainty. It can also reduce the risk of significant issues emerging for the first time during a later IRS examination.
Understand how CAP works before you apply
CAP is based on real-time issue resolution. You provide the IRS with relevant information about your tax positions, transactions, and financial reporting. The IRS then works with you to identify and resolve material issues before the federal tax return is submitted.
For an international seller, this may include questions involving:
- Intercompany charges between a US company and its overseas parent
- Transfer pricing for goods, services, technology, or intellectual property
- Cross-border financing and management fees
- Revenue recognition across Amazon, Shopify, and direct sales channels
- Foreign currency accounting
- Related-party transactions
- Differences between audited accounts and the US tax return
CAP does not mean the IRS automatically accepts every position. It also does not remove the need for complete records, accurate calculations, or timely filings.
You must continue to meet the programme’s information, disclosure, and cooperation requirements. Accepted taxpayers must also sign and follow a CAP Memorandum of Understanding.
Check whether your foreign-owned US corporation qualifies
A privately held foreign-owned US C corporation may qualify. The IRS eligibility requirements include all of the following:
- Assets of at least $10 million.
- No investigation or litigation with a government agency that would limit the IRS’s access to current corporate tax records.
- The applicant must either be:
- A US publicly traded corporation required to file SEC Forms 10-K, 10-Q, and 8-K; or
- A privately held C corporation, including a foreign-owned corporation, that agrees to provide the required financial statements.
For a private foreign-owned US C corporation, the financial reporting requirements are particularly important. You must be prepared to provide:
- Annual audited financial statements
- Unaudited quarterly financial statements
- Statements prepared under US GAAP, IFRS, or another method approved by the IRS
- Financial statements specific to the applying corporation
- An unqualified opinion from an independent auditor
- A reconciliation of audited net income or loss to Schedule M-3, line 4(a), covering worldwide consolidated net income or loss
Parent-company accounts alone are not enough. The financial statements must relate specifically to the US corporation applying to CAP.
Review the IRS CAP eligibility and suitability criteria before deciding whether your structure is ready.
See how CAP could help a cross-border ecommerce group
Consider a UK-based ecommerce group with a US C corporation. The US company owns more than $10 million in inventory, fulfilment assets, receivables, and other US business assets.
The company sells through Amazon FBA and Shopify. It also pays intercompany fees to its UK parent for technology, management, marketing, and product support. Its annual accounts are audited under IFRS.
In this example, the company may be able to apply for CAP if it satisfies all other IRS requirements.
During the CAP process, the company could work with the IRS to address questions such as:
- Whether intercompany service charges are properly documented
- Whether transfer pricing calculations support the reported results
- How inventory and fulfilment costs should be allocated
- How related-party transactions reconcile to the corporation’s US tax return
- Whether the tax treatment of cross-border payments is consistent with the company’s records
Resolving these issues before filing can improve reporting consistency. It can also help the business avoid discovering a material federal tax problem after the return has been submitted.
Acceptance is not guaranteed. The IRS will assess both eligibility and suitability.
Know when CAP does not apply
Many overseas ecommerce sellers operate in the United States through a foreign-owned, single-member LLC that is treated as a disregarded entity for federal income tax purposes.
CAP generally does not apply to that structure because CAP is designed primarily for eligible corporations, including qualifying C corporations.
A foreign-owned disregarded LLC may instead have separate reporting responsibilities, including:
- Form 5472 reporting for certain reportable transactions
- A pro forma Form 1120 filing
- Proper tracking of contributions, distributions, and related-party payments
- US sales tax registrations and filings where state nexus exists
- Marketplace and fulfilment reporting
- Records supporting cross-border transactions
The exact filing position depends on the entity’s ownership, tax classification, activities, and transactions. Do not assume that an LLC has no US filing requirement simply because it is disregarded for federal income tax purposes.
An LLC that has elected to be taxed as a C corporation may need to assess CAP eligibility differently. Confirm the entity classification before preparing an application.
Separate federal CAP from sales tax and VAT compliance
CAP relates to federal corporate income tax administration. It does not replace state-level sales tax compliance.
An international seller may still need to manage:
- State sales tax registrations
- Economic nexus thresholds
- Marketplace facilitator rules
- Sales tax return filings
- Exemption certificates
- Amazon FBA inventory movements
- Shopify transaction data
- VAT obligations in the UK or Europe
- GST obligations in other markets
This distinction is important. Joining CAP would not make an ecommerce business compliant across every US state or overseas jurisdiction.
You need a complete compliance process that connects bookkeeping, tax calculations, sales tax, VAT, and year-end accounts.
Prepare your 2027 CAP application now
Do not wait until October to begin assembling the required documentation. Start reviewing your corporate structure, financial statements, and intercompany agreements well in advance of the 30 October 2026 deadline. Early preparation gives you time to address any gaps in your records and ensures you can provide the IRS with the detailed information CAP demands.
