Introduction to Appeals. October 2009

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1 Introduction to Appeals October 2009

2 Appeals Founded In 1927, the IRS established an administrative appeal process to resolve tax disputes without litigation. Restructuring and Reform Act of 1998 Specifies that the IRS reorganization plan must ensure an independent appeals function within the Internal Revenue Service, including the prohibition in the plan of ex parte communications Section 1001(a)(4). Mission Resolve tax controversies, without litigation, on a basis which is fair and impartial to both the government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. OFFICE OF APPEALS 2

3 IRS Organization Chart Chief Counsel Chief, Appeals National Taxpayer Advocate Commissioner Chief of Staff Chief, EEO and Diversity Director, Research, Analysis, and Statistics Chief, Communications and Liaison Director, Office of Professional Responsibility Director, Whistleblower Office Deputy Commissioner Services and Enforcement Deputy Commissioner Operations Support Director, Office of Privacy, Information Protection & Data Security Acting Commissioner, Small Business/ Self-Employed Commissioner, Wage and Investment Chief Information Officer Chief Financial Officer Commissioner, Large and Mid- Sized Business Commissioner, Tax Exempt and Government Entities Chief, Agency-Wide Shared Services Chief Human Capital Officer Chief, Criminal Investigation OFFICE OF APPEALS 3

4 Appeals Organization Chart Chief, Appeals Deputy Chief, Appeals Director, EEOD (AWSS) Director, Art Appraisal Services Director, Communications Director, Strategy and Finance Director, Technical Services Director, International Director, Field Operations East Director, Field Operations West Strategic Planning/ Measures Analysis Technical Guidance Area 1 - Manhattan Area 7 - Dallas Management and Administration Tax Policy & Procedure Collection & Processing Area 2 - D.C. (Collection) Area 8 - San Francisco Finance Tax Policy & Procedure Exam, TE/GE,& ADR Area 3 - Nashville Area 9 - Riverside Area 4 - Philadelphia ATCL Los Angeles Business Systems Planning Processing TCS - Plantation Appeals Quality Measurement System Learning & Education OFFICE OF APPEALS 4

Alaska Appeals Field Operations Area 8 Washington Area 3 Area 1 Maine Oregon Idaho Montana North Dakota South Dakota Minnesota Wisconsin Michigan VT NH New York CT MA RI Northern California FRC

5 Alaska Appeals Field Operations Area 8 Washington Area 3 Area 1 Maine Oregon Idaho Montana North Dakota South Dakota Minnesota Wisconsin Michigan VT NH New York CT MA RI Northern California FRC Campus Nevada Southern California OGC Campus Utah Arizona Wyoming Colorado New Mexico Nebraska Kansas Oklahoma Iowa Missouri Arkansas Illinois Indiana Tennessee MEC Campus Ohio CIC Campus Pennsylvania PHC Campus NJ MDDE WV North Carolina South Carolina Virginia D.C. Hawaii Texas Georgia Area 2: Collection (all Collection cases from Areas 1, 3, 4) Area 9 Louisiana Area 7 Area 3 OFFICE OF APPEALS

6 Our Employees Appeals Officers Appeals Officers Field Campus Average Years of Service OFFICE OF APPEALS 6

7 Our Employees Settlement Officers Settlement Officers Field Campus Average Years of Service OFFICE OF APPEALS 7

8 Guiding Principles and Core Values Independence Objectively assess facts/evidence Develop fair & impartial settlement offer Ex Parte Communications Getting the right work to the right employee at the right time to get the right decision Collaboration and Feedback Innovation and Creativity OFFICE OF APPEALS 8

9 Types of Cases in Appeals Collection Due Process (lien/levy) Offer in Compromise Innocent Spouse Penalty Appeals Coordinated Industry Cases Industry Cases Examination (non-lmsb), 30 day letters & docketed Other (CAP, TFRP, FOIA, etc) OFFICE OF APPEALS 9

10 Types of Cases in Appeals Examination Audits Claims for Refund/Abatement Post-assessment Penalty Appeals Docketed Cases Collection Collection Due Process Collection Appeals Program Offers in Compromise Trust Fund Recovery Penalty OFFICE OF APPEALS 10

11 Sources of Cases Generated by Field Compliance More complex issues Requires more time to resolve Complexity drives need for more technically experienced employee Face to face conference Generated by Campus Compliance Less complex issues Requires less time to resolve Easily resolved through correspondence or by telephone Taxpayer requests Face to Face Conference OFFICE OF APPEALS 11

12 Offering a Fresh Look Supports an administrative dispute resolution process Supports a dispute resolution process that is separate and independent from Compliance Supports the joint goals of the government s need for an efficient tax system and the taxpayer s need to have their case fairly and impartially considered without having to go to court OFFICE OF APPEALS 12

13 The Appeals Process Compliance forwards a complete administrative case file Case is received by Appeals Assigned by Appeals Team Manager to an Appeals employee Welcome to Appeals letter issued Appeals brochure Quality review of case file by Appeals employee assigned the case OFFICE OF APPEALS 13

14 The Appeals Process (cont d.) Appeals employee considers Facts, Quality of information provided by taxpayer & in case file Tax Law Treasury Regulations Case Law Revenue Rulings, Revenue Procedures, and other technical guidance Appeals employee honors the prohibition against ex parte communications Communications with taxpayer Correspondence Telephone Face to face conference OFFICE OF APPEALS 14

15 The Appeals Process (cont d.) Settlement considerations Settlement authority Hazards of litigation Negotiations complete Fair, Impartial Tax Calculations Managerial review Implementation of final resolution Case closed from Appeals OFFICE OF APPEALS 15

16 Alternative Dispute Resolution Early Referral Fast Track Mediation (SBSE) Fast Track Settlement (LMSB, SBSE {select cities} & TEGE) Post-Appeals Mediation Arbitration OFFICE OF APPEALS 16

17 Alternative Dispute Resolution 779,00.html Publication 4167 Appeals Introduction to Alternative Dispute Resolution OFFICE OF APPEALS 17

18 Ex Parte Communication Basic Definition: One side only; by or for one party; done for or on behalf of one party only Judicial Use: A ex parte activity is an order, injunction, or other judicial proceeding or communication taken or granted for the benefit of one party without notice to or contest by any person with an adverse interest. OFFICE OF APPEALS 18

19 Independence of Appeals Careful blend of working effectively with Compliance in the overall interest of sound tax administration, and Remaining independent of Compliance functions in order to make decisions that are fair and impartial to both the Government and the Taxpayer. OFFICE OF APPEALS 19

20 Ex Parte Communication Section 1001 (a) of RRA 98 (4) Ensure an independent appeals function within the Internal Revenue Service, including the prohibition in the plan of ex parte communications between appeals officers and other Internal Revenue Service employees to the extent that such communications appear to compromise the independence of the appeals officers OFFICE OF APPEALS 20

21 Ex Parte Communications All communications that take place between Appeals and another IRS function without the participation of the taxpayer or representative. OFFICE OF APPEALS 21

22 Ex Parte Communication Applies to All Types of Communications Oral Written Manual or Computer OFFICE OF APPEALS 22

23 Ex Parte Communication Rev Proc Prohibit certain communications between Appeals & another Service function Without participation of taxpayer To extent such communications appear to compromise the independence of Appeals OFFICE OF APPEALS 23

24 Ex Parte Communication Rev Proc No prohibition on communications: Ministerial matters Administrative matters Procedural matters That do not address the substance of issues in case OFFICE OF APPEALS 24

25 Ex Parte Communication Rev Proc Taxpayer may elect to waive ex parte prohibition OFFICE OF APPEALS 25

26 Ex Parte Communication Prohibited Communications Accuracy of facts presented by taxpayer Relative importance of the facts to determination Relative merits or alternative legal interpretations of authorities cited in protest or in report prepared by originating function Originating function s perception of the demeanor or credibility of taxpayer OFFICE OF APPEALS 26

27 Ex Parte Communication Prohibition on Communications Applies to pre-conference meetings between Appeals & Compliance Does not apply to post-settlement conference between Appeals & Compliance Does not apply in context of industry wide Technical Guidance coordination meetings, meetings of Compliance Councils or Policy Boards Does not apply to communications between Appeals & the Commissioner OFFICE OF APPEALS 27

28 Ex Parte Communication Prohibition on Communications Applies to communications between Appeals and IRS attorney who participated in the development of the disputed issue Does not apply to docketed cases OFFICE OF APPEALS 28

29 Resources Publication 556 Examination of Returns, Appeal rights, and Claims for Refunds OFFICE OF APPEALS 29

Checkpoint Payroll Sources All Payroll Sources

Checkpoint Payroll Sources All Payroll Sources Alabama Alaska Announcements Arizona Arkansas California Colorado Connecticut Source Foreign Account Tax Compliance Act ( FATCA ) Under Chapter 4 of the Code