As we have recently discussed, Internal Revenue Service (IRS) Appeals has been making a number of changes to their administrative review process in the last few years. While many of these changes have been driven by lack of resources, others—like the standing invitation of Exam into the Appeals process—have the potential to undermine the independence of Appeals, which has historically been a vital component of the taxpayer’s right of redress with the Service.
In this week’s American Bar Association conference in Austin, Texas, IRS Appeals clarified that, for field cases worked by revenue agents, taxpayers may still receive in-person conferences, despite recent pronouncements that phone conferences are the preferred or default method. Conferences in campus cases (or correspondence audit cases) will still be generally handled by telephone, but there will eventually be a move to in-person conferences by request. Campus cases are being treated differently because they are often managed in locations remote from the taxpayer without adequate facilities for in-person meetings. Guidance will be issued to IRS employees regarding these changes.
As Taxpayer Advocate Nina E. Olson noted, these changes are helpful but not enough. In particular, Olson expressed dismay that campus cases were not being included in the change. Roughly 75 to 80 percent of IRS examinations are conducted by correspondence. In these cases, there is a great need for personal contact with the taxpayer, but no single person within the Service is assigned to a case.
Practice Point: The new announcement provides practitioners with additional support for their requests for in-person Appeals conferences. In our experience, an in-person conference is frequently much more productive than one by phone, and practitioners should request these whenever possible.