Archives: IRS Appeals

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Virtual IRS Appeals – A New Frontier?

The Internal Revenue Service Office of Appeals (IRS Appeals) recently announced that it will offer a new virtual “face-to-face” option in the form of web-based communication to taxpayers and representatives to resolve tax disputes. IRS Office of Appeals Pilots Virtual Service, IRS (July 24, 2017. This announcement comes on the heels of other changes at … Continue Reading

IRS Funding Woes Likely To Continue

The House Appropriations Committee (HAC) yesterday released the fiscal 2018 Financial Services and General Government Appropriations bill, which sets forth proposed annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission, and other related agencies. The proposal will be considered in the subcommittee today. For text of the … Continue Reading

Appeals Large Case Pilot Program Draws Criticism

In October 2016, the Internal Revenue Service (IRS) revised the Internal Revenue Manual (Manual) 8.6.1.4.4 to provide IRS Appeals Division (Appeals) with discretion to invite representatives from the IRS Examination Division (Exam) and IRS Office of Chief Counsel (Counsel) to the Appeals conference. Many tax practitioners opposed this change, believing that it undermines the independence … Continue Reading

To Agree or Not to Agree, That Is the Question

The last few years have seen significant changes in audit procedures employed by the Internal Revenue Service (IRS). These changes range from the new Information Document Request (IDR) procedures to substantial changes at the IRS Appeals level. This post focuses on the IRS’s attempt to develop an agreed set of facts before a case is … Continue Reading

ABA Section of Taxation Response to Recent Changes to IRS Appeals

We have covered on several occasions the changes in the past year to the IRS Appeals process. See here, here, here, here and here. The reactions from taxpayers and practitioners to the recent changes has, for the most part, been negative. On May 9, 2017, the American Bar Association Section of Taxation provided comments to the … Continue Reading

The IRS’s Assault on Section 199 (Computer Software) Doesn’t Compute

Internal Revenue Code Section 199 permits taxpayers to claim a 9 percent deduction related to the costs to develop software within the U.S. The relevant regulations and their interpretation, however, place substantial restrictions on claiming the benefit. Moreover, the regulations and the government’s position haven’t kept up with the technological advances in computer software. Before claiming … Continue Reading

Taxpayer Advocate Questions IRS CID’s Narrow Reading of the Taxpayer Bill of Rights

On March 30, 2017, the US Treasury Inspector General for Tax Administration (TIGTA) published a report identifying numerous violations of taxpayer rights from 2012 to 2014 by the Internal Revenue Service Criminal Investigation Division (IRS CID) in structuring cases. TIGTA examined over 300 investigations for structuring in this time period and identified 21 cases in … Continue Reading

Acting IRS Chief Counsel appoints new Deputy Chief Counsel (Operations)

The Acting Chief Counsel announced that effective April 1, 2017, Drita Tonuzi will serve as the Deputy Chief Counsel (Operations), in Washington DC.  In this position, Ms. Tonuzi will provide legal guidance and litigation support to the Internal Revenue Service (IRS) and the Departments of Treasury and Justice in all matters pertaining to the administration … Continue Reading

Fast Track Settlement Now For SB/SE Taxpayers

Today, the Internal Revenue Service (IRS) released Revenue Procedure 2017-25 extending the Fast Track Settlement (FTS) program to Small Business / Self Employed (SB/SE) taxpayers.  The IRS’s SB/SE group serves individuals filing Form 1040 (US Individual Income Tax Return), Schedules C, E, F or Form 2106 (Employee Business Expenses), and businesses with assets under $10 … Continue Reading

IRS Issues IPU on Summons of Foreign Owned US Businesses

On January 30, 2017, the Internal Revenue Service (IRS) released an International Practice Unit (IPU) on the use of a summons under IRC Section 6038A (IRC Section 6038A Summons) when a US corporation is 25-percent owned by a foreign shareholder.  See IPU here. The IPU describes the steps that the IRS should take when issuing … Continue Reading

National Taxpayer Advocate 2016 Report – Penalties

Every year, the Taxpayer Advocate Service’s (TAS) Annual Report to Congress provides a unique perspective regarding the workings of the Internal Revenue Service (IRS) and how the IRS relates to the vast majority of taxpayers. That insight is particularly valuable when the IRS chooses to assert penalties—one of the most policy-driven decisions that the IRS … Continue Reading

National Taxpayer Advocate 2016 Report – IRS Appeals and Alternative Dispute Resolution

In its annual report to the US Congress, the Taxpayer Advocate Service (TAS) had a lot to say about IRS Appeals and the (lack of) use of other alternative dispute resolution (ADR) techniques. In this post, we will highlight what the TAS had to say in this area. IRS Appeals Undoubtedly, one of the Internal … Continue Reading

IRS Audits and IRS Appeals — A Year in Review

This year has been marked with substantial changes in the manner in which the Internal Revenue Service (IRS) operates. Shrinking resources and retiring IRS professionals have marred the IRS and its efficiency. The pervasive theme for 2016 was trying to do the job with fewer resources.  For example, IRS audits continue to devolve with standardized … Continue Reading

IRS Announces New Chief of IRS Appeals

In further changes to the Internal Revenue Service (IRS) Appeals Division, it was recently announced that Donna C. Hansberry will replace Kirsten B. Wielobob as chief of IRS Appeals. Ms. Hansberry is currently the deputy commissioner of the Tax Exempt and Government Entities Division. She started as a trial attorney for the IRS Office of Chief … Continue Reading

More Changes to IRS Appeals Procedures

In a letter dated November 4, 2016, IRS Chief of Appeals Kirsten Wielobob provided some clarification regarding the authority of the Appeals Team Case Leaders (ATCLs) to settle cases, revisions to IRM section 8.6.1.4.4 permitting other IRS employees to attend conferences, clarifications to conference practices, and revisions to how Appeals handles section 9100 relief determinations. … Continue Reading

The Interplay Between Tax Planning and IP Planning

On November 3, 2016, we presented at the Chicago Tax Club’s symposium regarding tax planning and intellectual property (IP) planning within a multinational corporation. The presentation covered various areas, including the importance of coordination between IP and tax groups when engaging in IP planning, the differences in the IP arena and the tax arena with respect … Continue Reading

Tax Controversy Options

Knowing your options for a US Federal tax controversy is helpful in creating a sound and efficient strategy. The attached chart depicts the typical options involved in a US Federal tax controversy, from the IRS’s examination of the return, through administrative appeals, litigation in Tax Court, Circuit Court appeal, and to ultimate assessment of tax.… Continue Reading

IRS Appeals – Changes Afoot?

IRS Appeals cases within the Large Business and International (LB&I) division that involve a significant number of issues, a significant amount of money, or highly complex issues are typically assigned to a “team” of IRS Appeals officers. The Appeals Team Case Leader (ATCL), however, has “complete control” of the case, is “independent” from the IRS … Continue Reading

IRS Updates Rules Regarding Appeals Conferences

The Internal Revenue Service (IRS) has revised the Internal Revenue Manual (IRM) regarding Appeals Conferences.  Below is a summary of material changes to IRM 8.6.1, effective October 1, 2016: The IRM was revised to reflect that most conferences in Appeals will be conducted by telephone.  The revision also provides guidance for when in-person conferences are appropriate … Continue Reading

Protecting Confidential Taxpayer Information in Tax Court

Taxpayers value confidentiality, particularly if there is a dispute with the IRS that involves highly-sensitive trade secrets or other confidential information. Not surprisingly, complex tax litigation often raises the question of what confidential information has to be “made public”—through discovery responses or the introduction of exhibits or testimony in a deposition or at trial—so that … Continue Reading

IRS Updates List of Items Requiring National Office Review

On June 30, 2016, the Internal Revenue Service (IRS) issued Chief Counsel Notice 2016-009, which can be found here. In the notice, the IRS updated the list of issues that require IRS National Office review (the List). The List indicates those issues or matters raised by IRS field examiners that must be coordinated with the … Continue Reading

IRS Issues New Procedures to IRS Appeals for Requesting Assistance from Exam in Docketed Tax Court Case

On June 24, 2016, the Internal Revenue Service (IRS) issued a memorandum (AP-08-0616-0003, available here) to the IRS Appeals Division (Appeals) providing new, uniform procedures for requesting assistance from the Examination Division (Exam) in docketed Tax Court cases. The guidance implements standard procedures that would treat petitioners similarly. Currently, when petitioners provide new information to … Continue Reading

IRS Wages ‘Campaigns’ against Taxpayers

Late last year, the Internal Revenue Service’s (IRS’s) Large Business and International (LB&I) division announced that it would restructure its organization. The restructuring was precipitated by shrinking resources and a shifting environment. A primary feature of the restructuring is the end of the continuous audit program (where the IRS audits a large taxpayer year after … Continue Reading
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