JOSEPH ALI Director, Technical Guidance Internal Revenue Service- Appeals Joe Ali is the Director for Appeals Technical Guidance.

Transcription

1 JOSEPH ALI Director, Technical Guidance Internal Revenue Service- Appeals Joe Ali is the Director for Appeals Technical Guidance. In this position, he is responsible for managing, and directing the Area wide operations of appeals officers located throughout the United States. Technical Guidance ensures nationwide uniform and consistent settlement of specific issues. The Appeals mission is to resolve tax disputes without litigation; it provides an efficient, independent administrative appeal process for all taxpayers. Joe is a CPA and CGMA..

2 Resume Leonard Steinberg is the Principal of Steinberg Enterprises, LLC. He is a federally licensed Enrolled Agent (EA) and a Certified Management Consultant (CMC). Mr. Steinberg specializes in small business and nonprofit organizations. The tax practice consists of comprehensive tax services including preparation, planning, problem resolution and representation services. The organization prepares all types of business and personal tax returns (e.g. Proprietorship, Partnership, S-Corp and C-Corp, Exempt Organizations, Payroll, Sales and Use, Estates, Trusts and Foundations). Mr. Steinberg handles personal, business, nonprofit, estates, trusts, foundations, divorce issues, bankruptcy filings, and tax court preparation. His representation services include advocacy for all federal issues before the Internal Revenue Service and state tax issues. He negotiates Installment Agreements and Offers in Compromise. He represents his clients with Collection Due Process Hearings, Appeals, and Trust Fund Recovery Penalty issues. Mr. Steinberg was involved with tax national issues through his appointment to the Federal Taxpayer Advocacy Panel from 2001 through 2004, representing individuals and small businesses for the State of New Jersey. He was Chairman of the Small Business/Self-Employed Subcommittee. Mr. Steinberg was member of the Small Business Advisory Committee (SBAC) of the Financial Accounting Standards Board (FASB) dealing with financial reporting issues for public and private companies. Mr. Steinberg has testified at 3 different invitations before the House of Representatives Committee on Small Business and the Subcommittee on Regulatory Affairs. Mr. Steinberg has made business and tax presentations at professional seminars sponsored by the Internal Revenue Service, Paychex, and Jewish Vocational Services to companies and practitioners throughout the metropolitan area. He also lectured nationally for Lorman Education Services in the subject areas of Internal Controls and Fraud Detection and Prevention, Nonprofit Management, and Federal taxation. He has taught Accounting, Bookkeeping, and Internal Controls and Fraud Detection and Prevention at Mercer County Community College.

3 EDUCATION BACKGROUND IRS courses in Taxation, (Continuing Professional Education for an Enrolled Agent). Certificate in Financial Planning (courses in Insurance, Investments, Taxation, and Employee Benefits/Pension Plans, and Estate Planning), College for Financial Planning. Certificate of Advanced Study, Accounting, Hofstra University. MBA, International Business and Finance, Hofstra University. Advanced Professional Certificate in Computer Information Systems, New York University Graduate School of Business Administration. BA, Economics, Yeshiva University. PROFESSIONAL AFFILIATIONS Enrolled Agent, Licensed by the U.S. Treasury Department Financial Accounting Standards Board (FASB), member of the Small Business Advisory Committee 2006 to present US Department of the Treasury appointee to the Taxpayer Advocacy Panel (TAP) of the IRS ( ). Chairman of the Small Business/Self Employed Payroll Tax Committee National Association of Enrolled Agents, President ( ), New Jersey Chapter IRS, New Jersey Practitioner s Liaison Committee member (2005 present) Fellow of the National Tax Practice Institute National Association of Tax Practitioners The Financial Planning Association Certified Management Consultant by the Institute of Management Consultants Institute of Management Consultants, Treasurer ( ), New Jersey Chapter Institute of Management Accountants New Jersey Association of Professional Mediators R 1:40 Qualified Mediator on the New Jersey roster of court-approved mediators Tax advisor to the Small Business and Entrepreneurship Council, Vienna, Virginia TEACHING EXPERIENCE and SPEAKING ENGAGEMENTS Presenter at IRS New Jersey Working Together Seminars in areas of Examinations, Collections, Appeals, and Tax Research Methods, 2008 present. Instructor in Accounting, Bookkeeping (profit and nonprofit) and Tax at Mercer County Community College, Lecturer in Internal Controls, Nonprofit Management, Federal Tax Issues and Corporate Finance Jewish Vocational Services (2008 to present), Paychex (2011) and Lorman Education Services ( ). Instructor in Nonprofit Management, Princeton Adult School, Instructor in Social Security and Financial Planning, West Windsor Adult Education, Lecturer, Professional Ethics, National Association of Tax Professionals, Seminar speaker to the New Jersey Chapter of the Institute of Management Consultants regarding operating a successful consulting practice.

4 CIVIC ACTIVITIES SCORE, Counselor to small business entrepreneurs with current business and federal and state tax issues, 2010 to present. Member, Princeton Regional Chamber of Commerce Public Policy Committee, President, Wantagh, NY Scholarship Fund, 1997 to Vice President and Member, Wantagh, NY Board of Education, Board liaison for $10 million-dollar district facilities renovation project, Board liaison to district s Budget Advisory Committee, Co-Chair, Wantagh, NY Board of Education Budget Advisory Committee,

5 Matthew Hutchinson Matt graduated Rutgers University in 2004 and began his IRS career in 2005 as a revenue agent. He began as a manager in 2012 in the Edison post of duty. After a year and half, Matt became a manager in the Cherry Hill office for field agents.

6 Examination / Fast Track Settlement Resource Page Appeals Landing Page on irs.gov Appeals At A Glance Appeals - An Independent Organization Appeals Mediation Programs Form Application for Fast Track Settlement Pub 5022 Fast Track Settlement IRM Part 8 - Appeals Rev Proc Pub 1 Your Rights As A Taxpayer IRS Videos - Appeals Update

7 Small Business/Self Employed (SB/SE) Fast Track Settlement (FTS) Joseph Ali June 2017

8 SB/SE FTS Alternative Dispute Resolution Program Provides opportunity for SB/SE taxpayers to expedite case resolution at earliest possible level

9 FTS - Background Announcement Announcement Announcement Announcement News Release SB/SE FTS Nationwide Expansion Revenue Procedure

10 Foundation of FTS All parties in the case participate in the FTS session FTS Official Trained in mediation techniques Delegated settlement authority (Delegation Order 8-9) 60-day resolution goal

11 FTS is Initiated Generally, offered and/or requested prior to the issuance of SB/SE s 30-day letter Always prior to issuance of Statutory Notice of Deficiency

12 FTS Procedures The taxpayer and SB/SE complete Form 14017, Application for Fast Track Settlement, provided all eligibility requirements have been met Appeals confirms and accepts the application FTS session arranged by FTS Official FTS Official facilitates discussions utilizing mediation techniques and settlement authority, if necessary

13 FTS Eligibility Non-docketed cases Fully-developed cases

14 FTS Exclusions Taxpayers who did not act in good faith, failed to cooperate, or unduly delayed the audit process Correspondence cases worked solely at a campus Collection cases Whipsaw issues Frivolous issues TEFRA cases

15 FTS Agreement Reached Parties sign Form FT Session Report acknowledging the disposition of the issues Report of final agreed issues will be prepared and executed by taxpayer and/or representative Case closed by SB/SE

16 No FTS Agreement Reached Taxpayer retains all appeal rights 30-day letter will be issued, if appropriate Taxpayer will prepare formal protest, if required Case sent to Appeals for traditional Appeals consideration Case assigned to a different Appeals Officer (not the same FTS Official) All Appeals notes taken during the session will be destroyed

17 Prohibition of Ex-Parte Communications Does not apply to communications arising in FTS because the FTS official is: facilitating a negotiated settlement not acting in his/her traditional settlement role

18 FTS Benefits - IRS Reduced burden on IRS resources SE/SE prepares fewer 30/90 Day Letters SB/SE retains jurisdiction, the case file, statute control and will process final adjustments Appeals prepares a brief Case Memorandum, if applicable

19 FTS Benefits - Taxpayer Significantly reduces taxpayer s overall IRS experience on cases where a resolution has been reached Reduced interest costs Fewer IRS contacts Lower representation fees

20 Resources Revenue Procedure IRM Publication 5022

21 Office of Appeals June 1, 2017

22 O F F I C E O F A P P E A L S The mission of Appeals is to resolve tax controversies, without litigation, on a basis that 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. Page 2

23 To accomplish our mission and comply with statutory mandate, we must remain independent of the IRS Compliance functions O F F I C E O F A P P E A L S Independence and impartiality are core values Important that Appeals Officers (AO) do not perform Compliance functions 3

24 IRS Compliance division responsible for protecting the government s interest through process of assessing and collecting correct amount of tax O F F I C E O F A P P E A L S Compliance is responsible for being first finder of fact when it comes to investigating and analyzing information 4

25 O F F I C E O F A P P E A L S How do we accomplish the Mission of Appeals: Listening and considering both sides; Consider and evaluate all arguments and available information; and Independently determine the best settlement of the tax dispute by weighing the hazards of litigation. There are: Factual Hazards; Legal Hazards; Evidentiary Hazards Administrative Guidelines Page 5

26 O F F I C E O F A P P E A L S Section 1001(a) of the IRS Restructuring and Reform Act of 1998 (RRA 98) required that the Commissioner ensure an independent Appeals function, including the prohibition of ex parte communications between Appeals personnel and other IRS personnel to the extent that such communications appear to compromise the independence of the Appeals personnel. Page 6

27 O F F I C E O F A P P E A L S Ex Parte communication is any communication that takes place between any Appeals employee and employees of other IRS functions, without the taxpayer/representative being given an opportunity to participate in the communication. Does not include Counsel in a Docketed Case Not all communications are within the scope of the term ex parte communication. Page 7

28 Appeals is the only administrative function of the Service with authority to consider settlements of tax controversies using Hazards of Litigation. O F F I C E O F A P P E A L S Appeals Officers Consider: Factual Arguments Legal Arguments Hazards of Litigation determination Appeals Officers propose a settlement based upon their analysis Proposed settlements are reviewed and approved by the Appeals Team Managers (ATM) ATM has settlement authority Page 8

29 Collection Appeals Function The Collection Appeals function resolves cases involving Collection Due Process, Offer in Compromise, Trust Fund Recovery Penalties, Jeopardy Levies and Collection Appeals Program (CAP) cases. O F F I C E O F A P P E A L S Examination Appeals Function The Examination Appeals function resolves general docketed and nondocketed case generated from the IRS examination functions. Specialized Examination Programs & Referrals Function The Specialized Examination Programs & Referrals function resolves a variety of specialized programs such as international issues, tax computations, innocent spouse, TEFRA, and penalty appeals. Case and Operations Support Function This executive area includes all support functions including Tax Policy. Page 9

30 O F F I C E O F A P P E A L S Campus Small Business and Self Employed Exam Large Business and & International Field Collection Tax Exempt and Government Entities

31 O F F I C E O F A P P E A L S Liability for income, estate, gift, employment and excise taxes, and penalties. Abatement of interest. Collection issues (CDP, OIC, TFRP) Cases with no immediate tax consequence i.e. NOL s TEGE related issues Exempt Organization determinations, Employee Plans, FSLG, and Tax Exempt Bonds Cases in both pre 90 day and 90-day cases. (Non Docketed / Docketed) Page 11

32 O F F I C E O F A P P E A L S This revenue procedure updates Rev. Proc , C.B. 720, to clarify and describe the practices for the administrative appeals process in cases docketed in the United States Tax Court (Tax Court). Almost all docketed cases will continue to come to the Office of Appeals exceptions that allow the Office of Chief Counsel to withhold a case apply in only limited circumstances and require approval at a senior level within Counsel. Page 12

33 O F F I C E O F A P P E A L S Qualifications for practice are defined in Circular No Attorneys, CPAs, enrolled agents are qualified. Return preparers are not qualified. Page 13

34 O F F I C E O F A P P E A L S The Protest is your response to the examiner s 30-day letter or for collection actions: CDP would be Form or written equivalent, (an EH request must be made within one year after CDP notice first issued), for an OIC uses F13711 or written equivalent, TFRP follow the small case format discussed below, for CAP Field case use Form 9423 and for ACS/Campus oral request or use Form Page 14

35 O F F I C E O F A P P E A L S If tax at issue per period is $25,000 or less, you need only state the changes not agreed with, and why, and request Appeals consideration. If the amount exceeds $25,000, the taxpayer must prepare a written protest that includes the facts supporting the position, and the applicable law. The examiner is expected to review (and rebut in writing, where appropriate) assertions of fact and arguments raised in the protest. Page 15

36 O F F I C E O F A P P E A L S Explain your Appeals rights and the process Listen to your concerns Be courteous and professional Be timely and responsive Be FAIR and IMPARTIAL Page 16

37 O F F I C E O F A P P E A L S In your protest, list all issues with which you disagree and why, and tell us how you understand the facts and the law Listen to our explanation of your appeal rights and the Appeals process, including the timeframe to resolve your case Provide relevant information, but understand it may be sent back to Compliance Let us know the best time to contact you Page 17

38 O F F I C E O F A P P E A L S Provide all information It s important that you provide all requested and/or relevant info to the auditor or revenue officer who works your case Waiting to provide such info to Appeals will generally result in case being returned to auditor or referred to the revenue officer for consideration of the new information Either one may cause delays Page 18

39 Response times can vary depending on type of case and time needed for review O F F I C E O F A P P E A L S Taxpayers can expect to hear from Appeals within 90/120 days of filing protest If more than 120 days elapse without hearing from us, contact the office where you sent your request Pa ge 19

40 O F F I C E O F A P P E A L S The Appeals Officer will: Fairly and impartially review the facts and circumstances Obtain additional written information and testimony from the taxpayer if necessary Determine if the auditor correctly applied the law Research additional law and court cases as appropriate Consider the hazards of litigation Page 20

41 O F F I C E O F A P P E A L S What happens during an Appeals Conference Page 21

42 We Listen to Taxpayer s position O F F I C E O F A P P E A L S Explain the Issues and the Relevant Tax Law Settlement? Page 22

43 O F F I C E O F A P P E A L S Appeals offers personal contact for taxpayers in all cases Informal By correspondence, telephone, or faceto-face meeting No moral, religious, constitutional, conscientious objections, or similar grounds Page 23

44 O F F I C E O F A P P E A L S Most cases resolved by telephone, but other options include: Correspondence Virtual service delivery (working toward better virtual options for the future) In person (including circuit riding) if factors satisfied Appeals may invite Counsel or Compliance to participate in a conference Page 24

45 O F F I C E O F A P P E A L S Tax in dispute is generally $10 million or more; or There is a significant number of issues - some of which are highly complex. Page 25

46 O F F I C E O F A P P E A L S Appeals considers three types of litigating hazards Factual Evidentiary Legal AOs also may consider how the courts might interpret the law, what facts the court might find, whether certain information would be admissible or what weight such information might be given as evidence Page 26

47 O F F I C E O F A P P E A L S Regarding the substantive merits of an issue, both an Appeals Technical employee and Compliance employees evaluate the same authorities, i.e., the Code, regulations, rulings, case law, etc., so an issue with a predictable litigation outcome should ideally be resolved at the Compliance level. The principle difference is where there are strengths and weaknesses to both sides, so that neither side should ordinarily make a full concession. In that situation, Appeals can reach a settlement of that issue that reflects its litigating hazards, such as a 60%-40% split of the issue. Page 27

48 How would a Judge decide? O F F I C E O F A P P E A L S Issues are seldom Black & White Consider the various shades of grey Appeals Officer will evaluate: The evidence presented Legal Arguments Raised Testimony Presented Credibility of Witnesses Credibility of the Taxpayer Page 28

49 O F F I C E O F A P P E A L S Full Concession: The facts and application of law and court cases support the taxpayer s position Full Sustention: The facts and application of law and court cases support the Government s position Intermediate Settlement: The facts are not totally clear, and/or the law is gray and/or court cases are both pro/con for the taxpayer and Government: Percentage settlement based on hazards of litigation Only Appeals has the authority to settle cases based on the hazards of litigation Page 29

50 O F F I C E O F A P P E A L S This is the result when: You don t show up. (It happens!) We disagree on what the trier of fact is likely to conclude, or what law the court will apply. We disagree on allocation of uncertainty as to either of these, or even if we agree on the litigating hazards, the chances of a Government loss are so small as to represent nuisance value, that we cannot concede. Page 30

51 O F F I C E O F A P P E A L S In a deficiency case that we received in a non-docketed status, Appeals mails to the taxpayer a deficiency notice by registered or certified mail giving the taxpayer 90 days (150 days outside the US) to appeal to the United States Tax Court. If the taxpayer fails to file a petition with the Tax Court within the 90 day period the Commissioner is authorized and required to assess the tax. Page 31

52 O F F I C E O F A P P E A L S If no agreement is reached in a case is which was received by Appeals in a docketed status (i.e., the notice of deficiency was already issued by Examination), Appeals will transfer the case to Counsel to prepare for trial before the Tax Court. Page 32

53 O F F I C E O F A P P E A L S 33

54 O F F I C E O F A P P E A L S Important to cooperate with Compliance, because fully developed cases: Avoid unnecessary delays Support Compliance s role Support Appeals mission Support fair and impartial Appeals involvement Support expedited resolution 34

55 Appeals offers programs to expedite case resolution O F F I C E O F A P P E A L S Fast-Track Settlement (FTS) Fast-Track Mediation Collection (FTMC) Early Referral Post-Appeals Mediation (PAM) Rapid Appeals Process (RAP) Page 35

56 O F F I C E O F A P P E A L S Thank you! Page 36