Appeals develops settlement guidelines when an issue is coordinated by LMSB (see LMSB procedures in IRM 4.40.2, Technical Advisor Program - Program Responsibilities and Duties). These issues along with the Appeals Technical Guidance Coordinators are listed on the Appeals Web site at http://appeals.web.irs.gov/ispaci/ispcoord.htm. For the public, they are also listed at www.irs.gov/appeals.

Once Compliance issues a Coordinated Issue Paper (CIP), the level of coordination in Appeals will increase if the issue has not already been coordinated as an Appeals Coordinated Issue. Effective with the date of the issuance of the CIP, the AO must get the review and concurrence of the Appeals Technical Guidance Coordinator before finalizing a settlement with the taxpayer. The CIP will be used as a resource which explains the legal position of the government, however, Appeals is not required to follow it. In determining the appropriate settlement, the AO and Technical Guidance Coordinator will consider the taxpayer’s position and make an independent assessment of the litigating hazards based on all available information.

The procedures outlined in IRM 1.4.28.9, Referrals to Appeals Technical Guidance, and IRM 8.2.1.6 , Appeals Officer’s Preliminary Review of Case, require Appeals Officers to refer all cases containing coordinated issues to Technical Guidance.

Based on workload and scheduling, the Coordinator may be assigned as a team member or a consultant on the case. The Coordinator’s review and concurrence of the settlement of the Compliance coordinated issue is always required if Compliance has issued a CIP, whether or not there is an approved Appeals Settlement Guideline (ASG).

Issues will be de-coordinated with the approval of the Chief, Appeals. Factors considered are the de-coordination by Compliance or a prolonged period of inactivity in Appeals.

An Appeals Coordinated Issue (ACI) is an issue or category of case with Servicewide impact or importance, requiring coordination to ensure uniformity and consistency nationwide.

The Director, Technical Guidance recommends an issue for coordination to the Director, Technical Services who is the approving official.

The identification and selection of an ACI is usually due to the fact that a particular issue or a category of case involves geographically diverse persons or entities and/or is common to:

The ACI program encompasses any of the following:

Appeals coordinates an issue in all industries in which the issue appears even though Compliance may coordinate it in only one industry. Generally, the Technical Guidance Coordinator for the industry or specialty area in which the issue is coordinated by Compliance is the primary Coordinator and will have review and concurrence responsibility on the issue. The primary Coordinator will consult with other Technical Guidance Coordinators who also have the issue in their industry or specialty area.

The procedures outlined in IRM 1.4.28.9 and IRM 8.2.1.6 require the AOs to refer all cases containing coordinated issues to Technical Guidance.

Based on the Technical Guidance Coordinator’s workload and scheduling, the Coordinator may be assigned as a team member or a consultant on the case. The AO must get review and concurrence from the Coordinator on all legal and factual issues prior to finalizing the settlement with the taxpayer. (Review and concurrence is not required on a Category of Case, although a referral is still required.)

The Appeals coordinated issues along with the Technical Guidance Coordinators are listed on the Appeals Web site at http://appeals.web.irs.gov/ispaci/apcoordissues.htm . For the public they are listed at www.irs.gov/appeals.

An emerging issue is an issue that has surfaced in an industry or specialty area in a number of Appeals cases or it is understood that cases will be coming to Appeals in the near future with the issue. The issue is not coordinated but may be in the proposed stage for coordination; however, in the judgment of the Coordinator, there is a current need to address some of the key aspects of the issue with Appeals Officers to assist them in the early stages of consideration of the issue and to promote consistency in the treatment of the issue in Appeals.

Upon identifying possible emerging issues within their industry and specialty areas, Technical Guidance Coordinators will discuss the issues with their Appeals Team Manager (ATM).

If the ATM concurs with the recommendation for designation, the Coordinator will forward a memorandum for the signature of the Director, Technical Services through the Director, Technical Guidance designating it as an emerging issue.

IRM 1.4.28.9 and IRM 8.2.1.6 require AOs to refer all cases containing issues listed on the Appeals emerging issue list to Technical Guidance.

Based on workload and scheduling, the Technical Guidance Coordinator may be assigned as a team member or a consultant on the case. At a minimum the Coordinator for the industry or specialty area will provide the AO an information package, so the AO can gain insight into the issue, industry or specialty area (before holding a conference, if possible).

The Appeals List of Emerging Issues is also listed on the Appeals Web site at ISP/ACI/Emerging Issues - http://appeals.web.irs.gov/ispaci/emergingissues.htm . For the public they are listed at www.irs.gov/appeals.

The Technical Guidance Coordinator will develop settlement guidelines for newly coordinated Compliance issues and legal or factual ACI issues. The settlement guidelines will be structured as outlined in the exhibit ( See Exhibit 8.7.3-1.) A signature page will also be included as shown in the exhibit ( See Exhibit 8.7.3-2..) The initial draft of the ASG should be completed and forwarded to the Director, Technical Guidance for Counsel’s review within 180 days of the issuance of the Coordinated Issue Paper.

Within the 180 day period, Coordinators will submit draft ASGs through their ATM to the Technical Guidance Technical Advisor for Appeals official comment. The Technical Advisor will forward the ASG to Field Operations and the Technical Guidance ATMs for a 30-day comment period.

The Coordinator, in working with his/her ATM and the Director, Technical Guidance, will consider any comments received, and if necessary, revise the draft ASG and submit it through their ATM to the Director, Technical Guidance for review by Counsel.

Revised settlement guidelines are required to be written within three months of any new court decision, ruling, or other occurrence significant enough to change what the Coordinator considers the appropriate settlement range or position for that issue, regardless of whether the decision is favorable or unfavorable to the government. With respect to new court decisions, the start of the three months will be in the judgment of the Appeals Coordinator because he or she may have to wait and see if the decision is appealed, an Action of Decision is issued, or some other event occurs that might affect the weight the decision is given when reconsidering the appropriate settlement range.

See Exhibit 8.7.3-3. This exhibit contains additional procedures for preparing and submitting guidelines.

Appeals Settlement Guidelines are available only to IRS personnel who have a need to know, e.g.,

Do not give the guidelines to taxpayers or their representatives. Taxpayers may make a request under the Freedom of Information Act (FOIA) since portions of the guidelines are exempt from disclosure. Also, redacted copies are now available as part of the FOIA reading room and can be found under the Appeals section of the www.irs.gov/appeals web site.

When contacted by an AO either through the referral process or other contact, the Technical Guidance Coordinator will:

Make a referral to Technical Guidance following the procedures contained in IRM 1.4.28.9 and IRM 8.2.1.6 before scheduling the initial conference on the coordinated issue;

Advise the taxpayer that the issue is coordinated and that any settlement of the issue requires the review and concurrence of the Technical Guidance Coordinator;

Forward a rough draft of the Appeals Case Memo (ACM) (and any related documents requested by the Coordinator such as copies of documents, RAR, protest, closing agreements, etc.) to the Coordinator, whether the Coordinator is a team member or not. The Coordinator may waive this requirement after discussing the issue with the AO.

Send the rough draft ACM (and any related documents) to the Coordinator before the settlement is finalized.

Send the Coordinator a copy of the portion of the final ACM and Closing Agreement, if any, which discusses the coordinated issue.

If the Coordinator concurs with the proposed disposition of the coordinated issue, note this in item 11 on Form 5402.

If the Coordinator does not concur with the proposed disposition of the coordinated issue, attach a copy of the Coordinator’s memorandum (rebuttal) to the Appeals Case Memorandum. See IRM 8.7.3.4.1. for procedures on how to resolve the dispute.

If the coordinated issue is designated for litigation in a specific case by the Office of Chief Counsel do not consider settlement of that issue in the designated case.

Delegation Order 4-25 (as revised) (formerly Delegation Order 247) allows Large and Mid-Size Business (LMSB) Team Managers and Small Business Self Employed (SBSE) Territory Managers to settle coordinated issues (at the Compliance level), when Appeals Settlement Guidelines have been approved.

The Compliance managers must get the review and concurrence of both the Appeals Technical Guidance Coordinator and the Compliance Technical Advisor for the issue prior to finalizing a settlement with the taxpayer. (See IRM 4.46.5, LMSB Guide for Quality Examinations, Issue Development, Proposal and Resolution, for a discussion of LMSB's procedures.)

When the LMSB Team Manager or the SBSE Territory Manager contacts the Appeals Technical Guidance Coordinator, the Coordinator will:

In the case of an approved settlement of a coordinated Compliance or Appeals issue where the result is"Contrary to Service Position " and the settlement is a full concession without offsetting consideration, the procedures described in IRM 8.6.3.5.2 apply in accordance with the following.

When preparing Form 4368, Transmittal to National Office Appeals:

If the approved settlement is at the Compliance level under Delegation Order 4-25 (as revised),

A thorough discussion of the Competent Authority and the Mutual Agreement Procedure (MAP) can be found at IRM 4.60.3. Rev Proc 2006-54, 2006-49 IRB 1035 contains the procedures for taxpayers seeking competent authority assistance. Section 8 of Rev Proc 2006-54, 2006-49 IRB 1035 describes the Simultaneous Appeals Competent Authority procedure.

Taxpayers who do not agree with the correctness of an allocation adjustment may pursue their right of an administrative appeal before requesting competent authority consideration, or request the Simultaneous Appeal procedure.

See IRM 8.7.3.7.2, Potential Competent Authority Cases, for information concerning Appeals procedures, responsibilities and authority when the taxpayer is seeking a resolution of the issue in Appeals prior to requesting competent authority consideration.

A taxpayer may file a MAP request for competent authority consideration any time during the U.S. tax determination process.

If the request is filed while the case is still under examination, Compliance will continue to work on all issues not covered by the request. Where issues are raised which are not under competent authority consideration and the taxpayer is not in agreement, Compliance will proceed with the case and issue a 30-day letter. In protesting the unagreed issues, the taxpayer need not address any unagreed issue that is under consideration by the competent authority. Following the receipt of the taxpayer’s protest, Appeals procedures shall be initiated with respect to all unagreed issues not under competent authority consideration.

When a request for competent authority consideration is filed while a case is in Appeals, the Appeals Officer suspends settlement discussions on the subject issue and forwards the MAP request to the Compliance Area Director, Attn: Program Manager (International). Appeals attaches to the request the following items:

The following guidelines should be followed for handling Appeals cases with potential competent authority issues.

When a potential competent authority issue is present in a case, additional care must be given to preparing the Appeals Case Memo (ACM). The special features section of the Form 5402, Appeals Transmittal and Case Memo, is used to indicate that a potential competent authority issue is present in a case. This feature should be marked "X" regardless of how Appeals resolves the issue (i.e., unagreed, partial settlement or full concession by either the taxpayer or government).

When drafting an ACM describing the proposed settlement of a potential competent authority issue, the Appeals Officer is to bear in mind that this document may be used by the Director, International in negotiating the resulting double taxation with treaty partner countries. Accordingly, the ACM is to provide as much information as possible concerning the Appeals Officer’s reasoning, which led to the proposed settlement. Explain in full the rationale and weight given to the various factors resulting in a partial or full concession by the government. This information will enable the competent authority at some later date to assure that taxpayers do not abuse the Appeals and competent authority functions by gaining additional reductions in tax from the competent authority for the same factors considered by Appeals.

A Form 870-AD"Offer to Waive Restrictions on Assessment and Collection of Deficiency in Tax and Accept Overassessment" is used to obtain an agreement on a potential competent authority issue. A modification of the agreement form for settlement with reservations is required. See IRC 8.6.4.4.2, Modification of Agreement for Settlements With Reservations, for suggested language).

This section discusses the Appeals Technical Procedures and Guidelines for Appeals Review Panels under the Canada-United States Income Tax Convention (1980) as amended from time to time (referred to as "Convention " ). The Technical Procedures and Guidelines are used by Appeals personnel.

The United States Competent Authority (CA) assists taxpayers with respect to matters covered in the Mutual Agreement Procedure (MAP) provisions of tax treaties.

The Canadian and United States CAs agreed to establish principles, guidelines, and procedures to resolve disagreements in respect of the underlying facts and circumstances in cases referred to under the MAP article of the Convention.

The CAs established the binding procedures to determine the underlying facts and circumstances of a specific MAP case where factual disagreements persist. The procedures involve the Appeals organizations of Canada Revenue Agency (CRA) and the United States Internal Revenue Service (IRS), respectively.

It is expected that Appeals Review Panels will be requested by the CAs to determine underlying facts and circumstances in Competent Authority, Advance Pricing Agreement, and simultaneous Appeals and Competent Authority cases.

To ensure uniform nationwide treatment of complex issues relating to pricing and shipment of foreign produced crude oil and by-products, the LMSB Director, Natural Resources and Construction, under Delegation Order No. 153 (as revised), has the sole authority to:

Each Appeals office has jurisdiction of protested cases but with authority restricted by the LMSB Director, Natural Resources and Construction, determination on the controlled issues, namely:

When controlled issues or issues directly related to the controlled issues are protested, the appeals office will forward a copy of the written protest, together with all supporting material, to the LMSB Director, Natural Resources and Construction for evaluation. The appeals officer should advise the taxpayer that the protest relating to controlled issues was forwarded to the LMSB Director for their position on the taxpayer's controlled issues.

The Director, Natural Resources and Construction generally will grant the taxpayer a conference to discuss the protest and the Service's proposed position on the disputed issue. This conference, if held, constitutes the one level of administrative appeal on the controlled issue(s) described in Delegation Order No.153 (as revised).

After careful consideration of all information, arguments, and other material, LMSB Director, Natural Resources and Construction will, in a disposition memorandum, advise Appeals of his or her determination on the controlled issues.