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In-Person IRS Appeals Conferences Are Here to Stay

On November 28, 2018, the IRS issued a memorandum to its Appeals division employees, providing guidance on how and where to conduct Appeals conferences with taxpayers. As we have previously reported, the IRS Appeals division has been in flux for the last several years constrained by limited resources, retiring Appeals Officers, and an ever-growing case load. Because taxpayers have a right to seek redress before an independent Appeals Officer, the IRS has been exploring different ways to use technology to hold virtual taxpayer conferences. Numerous taxpayers, however, continue to believe that an in-person conference is the most efficient and beneficial way to resolve their differences with the IRS. Apparently, the IRS recognizes this as well.

In a memorandum to Appeals employees, the IRS provides “interim” guidance for in-person conferences. The memo includes revisions to the Internal Revenue Manual. Of particular note is the ability of IRS Appeals to send cases to offices that can accommodate in-person conferences. Additionally, there is a clear mandate to hold Appeals conferences (upon approval of a manager) in “other federal buildings, when feasible and necessary to provide a conference opportunity.”

Practice Point: We are big fans of in-person Appeals Conferences. Although holding a conference over the phone or through some internet portal may save travel time and expense, it is typically a poor substitution for face-to-face negotiations. Consider how much easier it is to tell your daughter that she cannot go to the mall with her friends on the phone versus to an in-person plea! An Appeals Officer measures the settlement possibilities by a “hazards of litigation” standard. Part of that analysis may include sizing up the taxpayer and representative, their case, and willingness to “go all of the way.”




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 (e.g., when there are substantial books and records to review that cannot be easily referenced with page numbers or indices, or when there are numerous conference participants that create a risk of an unauthorized disclosure or breach of confidentiality).
  • IRM 8.6.1.4.1.2, In-Person Conferences: Circuit Riding was added.  If the assigned Appeals employee is in a post of duty that conducts circuit riding, circuit riding will be permitted when the address of the taxpayer, representative or business (for business entities) is more than 100 miles from a customer-facing virtual conference site or 150 miles from the nearest Appeals Office.  Area Directors have the discretion to deviate from these mileage limitations.  Circuit riding will also be allowed if the nearest Appeals Office cannot take the case due to high inventories or lack of technical expertise, or if there is no convenient alternative.
  • Language was added in IRM 8.6.1.4.4 to state that Appeals has the discretion to invite Counsel and/or Compliance to the conference.  The IRM notes that the prohibition against ex parte communications must not be violated and references Rev. Proc. 2012-18.
  • The definition of a new issue was updated in IRM 8.6.1.6.1(2).  The IRM retains prior language stating that a new issue is a matter not raised during Compliance’s consideration and adds that any issue not raised by Compliance in the report (e.g., 30-Day Letter) or rebuttal and disputed by the taxpayer is a new issue.

The revised IRM 8.6.1 is available here.




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