IRS Extends Permanent Invitation to Exam to Attend Appeals Conferences

By and on September 8, 2017

On May 1, 2017, the IRS issued FAQs concerning its recent practice of inviting IRS Examination Agents (Exam) into the Appeals discussion. The FAQs make clear that Exam will now be routinely invited to Appeals conferences. The release premises this procedural shift on perceived efficiencies of having Exam stay during the taxpayer’s rebuttal presentation. The FAQs explain, however, that settlement discussions with the taxpayer will be held without Exam present. This is an important clarification, and the FAQs explain that this new process is different from Rapid Appeals.

Practice Point: It is clear that diminishing resources have put substantial pressure on the Appeals process. In several recent Appeals sessions, Exam has been invited to stay for our clients’ rebuttal to Exam’s presentation. After the taxpayers’ presentation, Appeal tries to elicit a back-and-forth communication between the taxpayer and Exam, putatively to ensure that all of the relevant facts are developed and agreed upon. Exam typically has counsel at these Opening Conferences, which tends to make Exam more of an advocate as opposed to the traditional developer of the facts and of the IRS’s audit position. This two-way communication seems to be an attempt to morph the Appeals session into some type of mini-mediation akin to a FastTrack session. Taxpayers therefore must take care to plan their settlement strategy, as the line between development of the facts and discussion of the hazards can be blurry. While in some cases it might be useful to negotiate in the presence of the Exam team, we have found that more progress typically is made when Exam leaves the room.

AvatarJean A. Pawlow






Kevin SpencerKevin Spencer
Kevin Spencer focuses his practice on tax controversy issues. Kevin represents clients in complicated tax disputes in court and before the Internal Revenue Service (IRS) at the IRS Appeals and Examination divisions. In addition to his tax controversy practice, Kevin has broad experience advising clients on various tax issues, including tax accounting, employment and reasonable compensation, civil and criminal tax penalties, IRS procedures, reportable transactions and tax shelters, renewable energy, state and local tax, and private client matters. After earning his Master of Tax degree, Kevin had the privilege to clerk for the Honorable Robert P. Ruwe on the US Tax Court. Read Kevin Spencer's full bio.

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