- 8.7.11.1 Introduction to Working Appeals Team Cases
- 8.7.11.2 Appeals Team Case Leader (ATCL) Position
- 8.7.11.3 Team Conference Procedures
- 8.7.11.4 Receipt and Control of Cases by Appeals Processing Services (APS)
- 8.7.11.5 Grading Team Case Work Assignments
- 8.7.11.6 Preliminary Review of Case by Team Leaders
- 8.7.11.7 Tax Computation Specialist (TCS) Involvement in Team Cases
- 8.7.11.8 ATM Selection of Team Leader and Team Members
- 8.7.11.9 Pre-Conference Meeting
- 8.7.11.10 Partial Agreements on Team Cases
- 8.7.11.11 Post Settlement Conference
- 8.7.11.12 Final Appeals Case Memorandum (ACM) Preparation
- 8.7.11.13 Closing Team Cases
- 8.7.11.14 Docketed Cases
- 8.7.11.15 Evaluation of Team Members' Performance
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This section discusses procedures for working team cases in Appeals. These cases are received from LMSB Compliance and are usually assigned to an Appeals Team Case Leader (ATCL). However, in some instances a senior Appeals Officer (AO) is assigned as team leader. Therefore, these procedures are used by both ATCLs and AOs who are team leaders on a team case.
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A team case work unit generally requires the use of Appeals Officers (AOs) as team members in addition to the team case leader. It has a level of difficulty and impact characterized by the presence of extremely complex issues in dispute. Each team case work unit involves:
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Significant amounts of money at issue. While the determination of "significant" is left up to the Appeals Team Manager (ATM), the tax in dispute is generally be $10 million or more; or
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A significant number of issues, some of which are highly complex, for the team case leader to coordinate. The team case leader handles at least some of the significant issues personally.
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The ATM determines whether the work unit contains a significant number of issues on a case-by-case basis.
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The Appeals Team Case Leader (ATCL) promotes timely resolution of large complex work units received from LMSB Compliance. He/she has settlement authority and is responsible for simultaneously managing at least two major work units on a continuing basis.
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An ATCL considers no more than two consecutive cycles of the same taxpayer, unless there has been an intervening cycle considered by an another AO or unless there are special circumstances determined by management.
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After initial discussions between the ATCL and his/her Appeals Team Manager (ATM), the ATCL has complete control of the case.
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The ATCL has settlement authority for all work unit assignments. However, the ATM may propose a change to the proposed settlement and if an agreement cannot be reached the issue is resolved by the Area Director.
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The ATCL controls several work units concurrently, depending on their complexity and special characteristics. When appropriate, he/she is assigned complex work units not meeting the criteria in IRM 8.7.11.1(2) above.
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The Area office may recommend the establishment of a ATCL position, depending on workload. The position may be filled temporarily or permanently, or may require only a detailee. A request to establish a new ATCL position must be submitted for approval to the Chief, Appeals. The submission must contain workload justification for the establishing the position.
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A team approach is used in the absence of a formally established ATCL position. Two or more Appeals Officers (AO)s can form a team, pooling proficiency to resolve all issues expeditiously. A team leader is assigned when a team approach is used.
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Appeals Officers of any grade may be assigned to teams, and support personnel may be used as needed.
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When an LMSB Compliance case is assigned to an AO who later determines that a team effort would expedite completion of the work unit, the manager may assign more personnel.
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Generally, team leaders can consider no more than two consecutive cycles of the same taxpayer, unless there has been an intervening cycle considered by another AO or unless there are special circumstances determined by management.
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The team leader recommends disposition of the work unit. Any understanding reached at an interim level on an issue-by-issue basis between a team member and a taxpayer or representative must fit in with recommendations of the team leader who must therefore be fully acquainted with the strengths and weaknesses of major issues and their proposed disposition.
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Team members are responsible for developing their portion of the work assignment independently unless the manager believes that authority over a team member's issue rests with the team leader.
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The team leader and team members are responsible for giving LMSB the opportunity to timely review and comment on any significant new information or evidence presented by the taxpayer. See IRM 8.2.1.4, Receipt of New Assignment by Appeals Officer, for more information and documentation requirements.
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Periodic team meetings may be held to discuss the possible impact of each member's issues on those of other members, to define objectives and to otherwise coordinate team activities. The team leader may be consulted on technical and procedural questions consistent with the degree of independence given the team members by the team leader.
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The team leader is responsible for meeting target dates and identifying and attempting to eliminate obstacles when problems are encountered by team members. Periodically, the team leader's ATM is updated on the progress and informed of any problems that may develop in the case.
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Disagreements between team members in the handling of an issue are resolved by the team leader. Any other disagreements are resolved by the team leader's ATM.
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The team leader has settlement authority for all work unit assignments. However, his/her manger may propose a change to the team leaders proposed settlement and if an agreement cannot be reached the issue is resolved by the Area Director.
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Team members are responsible for preparing ACM's on the issues assigned to them. The team leader coordinates preparation of the Appeals Case Memorandum (ACM) and Form 5402 except where a case within the work unit is handled entirely by one team member. If the team leader resolves an issue assigned to a member without the member's agreement, the team leader must write the ACM for that issue.
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The Area Director decides who signs Form 5402. However it may be delegated to the ATM.
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The team leader is responsible for statute of limitations control except in a multi-case unit where cases are assigned to another team member; then, the team member to whom the case is assigned is responsible.
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Follow the general procedures covered in IRM 8.20.5, Processing and Establishing New Receipts, for receiving a new team leader case and establishing it on ACDS.
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When establishing team leader cases on ACDS, it is important to remember the Appeals office that originates the work unit controls the work unit as a key case with an AO in the originating office designated as the team leader. All other supporting Appeals offices which have team members (including those in the same office as the team leader) control the work unit as a team member reference work unit.
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The key case is referred to as a team leader case.
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On the case inventory screen, enter information following normal procedures except for the following:
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FEATRCD — Enter TL
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On the return information screen, enter information following normal procedures.
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Update the team case on ACDS with feature code "TL" . Select "Input one TM on case for this TL Case"
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Use the drop down menu to choose the "current Area AOC" this is the Area AOC where the team member is located.
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TIN - Enter a separate modifier (A through J) at the end of the TIN for each team member.
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TYPE - Enter REF to identify this as a reference return.
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FEATRCD - Enter TM to identify this as a team member case.
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KEYCASE - Enter the information from the team leader case.
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Do not enter any return information.
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Portions of team case leader work units assigned to individual AO team members are graded on the basis of complexity and difficulty of the assigned portion. Team leader control varies and must be considered in determining the grade level to assign to a team member's portion.
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The tentative grade of a team member's assignment is determined as if it were a work unit standing alone but taking into consideration the expected degree of control.
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The final grade of the assignment must reflect the actual impact of team leader control and related limitations on the team member's responsibility for decision making, presenting results, and other relevant factors. Depending on the degree actually experienced, those factors may result in a lower final assignment grade.
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IRM 8.2.1.6, Preliminary Review of Case, discusses the reasons for returning a case and the list itself is not all inclusive.
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Regardless of what the reason is, discussions must be held and an agreement reached between Appeals and LMSB management as to actions necessary by LMSB before the case is accepted by Appeals.
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Immediately examine all returns when cases are assigned to determine the statute of limitation expiration date and to verify the expiration date appearing on the case summary card.
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Full responsibility for obtaining the proper consents to extend the period of assessments, when necessary, is the team leader's even when a portion of the case is separated and assigned to a team member. Although the team member may take action to extend the statute on his/her assignment, the team leader is responsible for assuring the statutes are protected.
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Since a team leader case generally takes a significant period of time to resolve, request statute extensions that account for this time frame. A team leader case assignment may involve numerous corporations, partnerships, etc., which must be reviewed to verify any unique statutes.
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There are many unusual statute situations which require special consideration, such as:
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Successors in Interest - If, since the last statute extension, there has been a successor in interest, it is necessary to determine who is authorized to sign for the predecessor corporation and it is necessary to determine the proper captions to use. One of the sources for determining this information is the Board of Directors resolution. It is also advisable to consult with local Counsel in making this determination.
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TEFRA Considerations - TEFRA creates all kinds of unique problems concerning statutes. See TEFRA IRM 8.19 for additional information on TEFRA cases and IRM 8.21 for additional information on statutes.
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Reference Returns - If it is determined a consent is unnecessary, prepare a memorandum for the file (or other approved form) setting out the facts. Attach the original of the memorandum to the return, and give a copy to APS to update their statute controls.
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Returns Held Off Site - In situations where the original returns are held off site, which is a practice in a number of offices, copies of all consents, POAs, and the front page of the returns are kept by the team leader.
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The team leader is responsible for determining the completeness of the administrative file - whether all related returns are present, whether the protest, rebuttal and the power of attorney are included, etc.
Note:
Often the file contains numerous powers of attorney and so exercise care when determining who is the proper representative.
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As part of the preliminary review, verify that LMSB reviewed the protest and made an adequate written response. Verify Rebuttals from specialists when protested issues are based in whole or in part on specialists, e.g., international examiners, engineers, economists, etc. The lack of an adequate review and rebuttal of the protest is sufficient reason to return the case to the examiner.
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During preliminary review of the case, note important aspects of the case such as Joint Committee requirements, claims, tentatives, new issues, Appeals Coordinated Issues, Industry Specialization Program issues, and so on.
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Generally, team leader cases are assigned to a Large Case Tax Computation Specialist. For purposes of this subsection, the Large Case Tax Computation Specialist is referred to as TCS.
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Within 120 days of assignment of the case to the TCS, the TCS completes a thorough review to verify the accuracy and completeness of the RAR tax computations. The review includes creation of a computer accessible file (or utilization of a computation disk received from Examination) to be used during Appeals consideration of the case to make interim or "what if" computations and the final tax computation.
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Promptly discuss and resolve any discrepancies discovered between the Examination RAR and Appeals' computations with LMSB. Bring errors affecting the proposed tax liability to the taxpayer's attention for up-front resolution during the planning conference.
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In addition to handling the largest and most complex international and domestic cases within Appeals, the TCS interacts with corporate taxpayer representatives to resolve issues such as complex depreciation, investment tax credit, future interests, adjustments to capital structure, valuation and cost analysis, and change of accounting methods.
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The TCS may appear as the Government’s expert witness giving testimony in court proceedings on the tax effect of controversial tax adjustments in complex corporate tax cases.
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The Appeals Team Manager (ATM) selects a senior AO who has excellent technical and case management skills to act as team leader.
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After discussion with the team leader, the ATM selects the other members of the team. Appeals officers' case loads and capabilities are considered when making the selection of team members. Appeals officers of any grade may be team members.
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Tax Computation Specialists and paraprofessionals can be used as team members in appropriate circumstances.
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The procedures for mandatory referrals to Appeals Technical Guidance are contained at IRM 1.4.28.
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Conduct a team orientation meeting to discuss the nature, number and complexity of the issues or cases in the team case work unit.
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Mail Letter 4046 (CG), Appeals Team Case Leader Uniform Acknowledgement Letter, or other approved Uniform Acknowledgement Letter (UAL), to the taxpayer.
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With the concurrence of the team leader's ATM, team leader's assign work to team members commensurate with their grade. This may be by specific issues, by cases, or any other appropriate division of the work. Consolidate interrelated issues or problems when assigning issues to avoid overlap.
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After the team members have had an opportunity to study the file and their assigned issues, each should determine the need for outside assistance, e.g., valuation, technical advice, information reports, etc. These needs must be identified as early as possible and acted upon immediately.
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Requests for information or other assistance is prepared by the AO handling the particular issue. The AO must let the team leader know when these actions are taken.
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The team discusses tentative target dates and those issues or procedures which may impede the prompt closing of the case and decide the actions necessary to prevent delay.
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It is suggested that a separate file be created for each issue. The file would contain all relevant information regarding that issue, such as sections of the examiner's report, engineer's report, conference notes, rough draft supporting statements, etc.
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It is desirable to discuss and agree upon these target dates at the first meeting with the taxpayer. The goal is to set firm dates, agreed to by Appeals and the taxpayer, and to resolve specific issues. Furnish the taxpayer's representatives with a list of team members and their respective work assignments. Clearly define the role and authority of the team leader and team members for the taxpayer.
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Apply the aspects of Fast Track Settlement to the team leader case process with an eye toward more efficient resolution of cases.
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Where all issues cannot be promptly considered, establish priorities for discussions. However, furnish the taxpayer's representatives a complete list of information needed on all aspects of the case, so that such data can be accumulated even though some issues may be scheduled for later discussion.
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After the planning conference is complete, the team leader completes the Team Conference Work Plan. The agreements reached with the taxpayer or his/her representative are incorporated into the work plan.
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The team leader is responsible for planning and controlling the progress of the work unit. Although initial responsibility to follow up (requests for information from taxpayers, offices, Headquarters, Justice Department or other sources) lies with the team member assigned that segment of work, the team leader monitors this aspect of the team's actions.
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The team leader must be involved in the case management practices of all the team members. This is accomplished by periodic monitoring, issue reviews, mandatory written feedback or other appropriate techniques. Each team member's manager ensures that the team member maintains a written activity record which includes the team member's contacts with the taxpayer and all significant actions on the case.
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When faced with complicated technical issues, contact available resources early. For example, obtain input from Compliance, Counsel, the National Office, the Appeals Technical Guidance Coordinators or Specialist and/or the taxpayer prior to the preconference and planning conference.
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Contact Compliance immediately upon case assignment to ensure the Appeals team has access to the entire administrative file on a particular issue for effective discussion at the preconference meeting.
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Contact the Appeals Technical Guidance Coordinator or Issue Specialist for a coordinated issue paper or informal advice on any industry issue as early as possible.
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Ongoing communications, whether in the form of conferences between the team or other communications between Appeals and LMSB are encouraged. Open lines of communication greatly expedite the completion of the case when new arguments are presented by the taxpayer or there are other developments which were not anticipated at the time of the pre-conference meeting.
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Effective communication during this phase can reduce or eliminate the need to return the case, or specific issues, to LMSB for further development. Always keep in mind ex parte communication provisions referred to in paragraph (3) below do apply.
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Any significant material presented to Appeals which was not made available to LMSB are promptly referred accordingly for timely review and comment. LMSB handles these requests for review of information on a priority basis and makes additional contacts with the taxpayer as necessary to perform a complete review of additional information.
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See IRM 8.2.1 for guidance on returning new material to LMSB for review.
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The team conference work plan reflects the long-term plan for completion of the work unit with realistic target dates. The participation of the taxpayer's representative is an integral part of the planning process. Furnish the taxpayer's representative a copy of the plan (consistent with disclosure and privacy statutes). In addition to long-term planning, use the team conference work plan to plan the next quarter's contemplated actions on the work unit, including necessary follow-ups. It should reflect a plan for further actions and not serve as solely a report on work unit status.
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The team leader is responsible for the preparation and development of the work plan, with participation by all team members.
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The team leader forwards the work plan to his/her ATM for approval within 30 days after the opening conference. Work plans are kept in the local office and available for Area office monitoring.
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The team leader updates the work plan quarterly, or more frequently when warranted, by noting significant progress; new problems encountered and plans for solving them; and any revisions of the overall work plan or target dates, including reasons for such revisions.
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The newly designed electronic work plan will be utilized by the team leader for all Appeals Team Cases. The format of the electronic work plan ensures the following items are addressed:
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Identification of team members;
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A list of unagreed issues and assignments to team members;
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Identification of problems or factors that may cause delays and the corresponding plan of action; and
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A projection of when the initial conferences will be held and the approximate number of conferences that may be required.
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A realistic estimated completion date for the work unit. This date is determined only after it has been discussed with both the team members and the taxpayer. If the work plan estimated closing date is different from the estimated closing date entered on CIRS, revise the estimated closing date on CIRS.
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Some of the above items may not be determinable at the date the work plan is first drafted. Add them when reasonably determined as part of the periodic updating of the work plan.
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As soon as practical at the end of each quarter, the team leader prepares a narrative for the manager to include:
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A review of significant accomplishments (conferences held, issues settled, etc.);
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Procedural and/or administrative problems encountered and proposed solutions;
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Problem areas encountered requiring coordination outside the area (Examination, Competent Authority, Engineering, Technical, etc.,) and proposed solutions; and
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Actions to be taken in the next quarter, with target dates.
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If the information in (7) above is contained in the CIRS Reports or in conference memorandums prepared during the quarter, the requirements of this section are considered met.
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This text establishes guidelines for conferences (pre-conferences) held between Appeals and LMSB Compliance (LMSB) on certain protested cases. The pre-conferences take place prior to Appeals' meeting with the taxpayer. These guidelines are minimum standards for communication between Appeals and LMSB.
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These procedures do not preclude the return of a case by Appeals to LMSB for additional development. Neither do they preclude the concurrent handling of issues in Appeals while LMSB works other issues returned for development. A decision to return a case, in whole or in part, is made solely by Appeals. See IRM 8.2.1 for information regarding the grounds for returning a case to LMSB.
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The pre-conference procedures apply to all LMSB cases meeting Appeals' definition of a team case. The procedures may be used for LMSB cases which do not meet the definition of a team case and for other cases upon election by either LMSB or Appeals.
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The purpose of the conference is to discuss the issues, protest, and LMSB's written rebuttal to the protest. A frank discussion of the issues adds to Appeals' knowledge of the case. It also helps to identify additional information that may be needed on the issues.
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The taxpayer is notified of, and given an opportunity to participate in, any pre-conference in accordance with requirements involving ex parte communications.
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The need for any additional development, resources, specialists or expert witnesses, etc., are discussed at this meeting. It is expected the meeting serves to establish lines of communication between Appeals and LMSB that are maintained throughout consideration of the case. Always keep the ex parte communication provisions firmly in mind.
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LMSB is encouraged to share its views on the disputed issues, including its assessment of litigating hazards and the strategies involved in setting up adjustments on particular issues. However, the conference is not used as a vehicle for securing a commitment from Appeals to defend any particular issues, commit to particular settlement positions, or otherwise "negotiate" the settlement posture of Appeals on the case.
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Unless an exception is agreed to between LMSB and Appeals, hold a pre-conference on all LMSB cases designated as team leader cases in Appeals. LMSB may request a conference on other LMSB cases. If LMSB does not request a conference on a LMSB case and Appeals believes that a conference would be helpful, Appeals may initiate the conference.
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The team leader is responsible for arranging the conference. Conferences on non-team leader cases are arranged by the team leader/AO following a written request to LMSB for the conference or the receipt of a request for a conference.
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An Appeals request for a conference must be signed by a team leader or ATM. A request from LMSB is initiated by the case manager/group manager (or other official as determined by LMSB). A conference request from LMSB should accompany the file when it is received by Appeals. If Appeals desires a conference, make the request as soon as possible after receipt of the case.
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If LMSB and Appeals agree that a pre-conference is not useful in any case for which a conference is required, document the file with a memorandum specifying that no pre-conference is desired by either LMSB Compliance or Appeals and signed by appropriate officials from each function. In Appeals, the memorandum must be signed by an ATM or Area Director.
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These procedures do not prohibit conferences on other types of cases; e.g., cases with industry-wide impact, specialized industries or coordinated issues. Neither do they prohibit other communication and discussion of issues between AOs and agents or specialists. But see Exhibit 8.1.3-1 for guidance on making such contacts and providing for taxpayer participation.
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The Appeals team usually consists of the team leader and AOs assigned to the case. Participation by management is determined by area and local guidelines.
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The LMSB team usually consist of the case manager or group manager, revenue agents, international agents or other specialists as appropriate to the issues in dispute. LMSB determines the involvement of other managers.
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Associate Area Counsel is invited to participate in pre-conferences on all docketed cases. Either LMSB or Appeals may request the participation of Counsel in the pre-conferences on non-docketed cases.
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In accordance with the guidance in Exhibit 8.1.3-1 relating to ex parte communications, the taxpayer (or representative) is also given an opportunity to participate in the pre-conference meeting.
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A rough draft Appeals Case Memo (ACM) is a written document which includes a substantive discussion of the facts and law presented in the RAR and taxpayer's protest.
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Prepare rough draft ACM's on all significant protested issues prior to the first taxpayer conference on that issue. Finalize the ACM on an issue-by-issue basis by the team members responsible for the issue(s).
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All work units over $1 million on which a partial agreement was received and an interim assessment was processed are split on ACDS to capture Appeals results. This results in one closed agreed unit and one unagreed unit open in the AO's inventory.
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If one tax year was agreed in a multiple-year unit, rather than part of the issues within one tax year, only the unagreed tax years is included in the new work unit.
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This procedure applies only to assessable partial agreements. Both a Form 870 and a stipulation of agreed issues, entered by the Tax Court, must be secured on docketed cases.
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This procedure may also be used when Appeals settles some issues in a case and then returns the balance of the case to Examination as a premature referral.
Note:
As a second alternative, upon returning some issues to LMSB at the beginning of Appeals consideration, the remaining issues can be retained in Appeals under the Early Referral procedure. This requires the agreement of LMSB and the Taxpayer. See IRM 8.26.4, Alternative Dispute Resolution Processes, Early Referral.
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Close ACDS for the original work unit with partial assessment results.
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WUNO (Work Unit Number)-Change the work unit number to a manually assigned number.
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NOTE-Enter the original work unit number.
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FEATRCD-Enter Code PA (partial assessment).
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CLOSINGCD-Enter 03 for non-docketed, or 08 for docketed.
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DATECLSD-Date sent to APS.
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PropdTax-Change to the amount pertaining to the agreed issue/year. (This amount will be provided by the appeals officer or the technical staff.)
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RevsdTax-Enter the amount of the partial assessment.
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Create a new work unit on ACDS to reflect the unagreed issues/years which remain open in the appeals officer's inventory:
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WUNO (Work Unit Number) -- Change the computer generated number to the original number.
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ASGNDATE (assigned date), REQAPPL (request appeals date), RECDATE (Received date), CREATED dates - Enter the original dates.
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FEATRCD-Enter PA (partial assessment).
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NOTE-Enter work unit number, total hours, and partial assessment amount of the closed partially assessed work unit. When the remaining work unit is ultimately closed, this information will be used to complete Items 800/801 and 804 on Form 5403. (The partial assessment amount must be combined with the final revised deficiency/overassessment amount to arrive at the total amount for Item 800/801.
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TOTHRS-Will remain-0-.
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PropdTax-Enter the remaining unagreed deficiency. This amount will be provided by the appeals officer or the technical staff.
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Review the Lists of Compliance Coordinated Issues and Appeals Coordinated Issues contained on the Appeals web site.
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Make a referral to Technical Guidance following the procedures contained in IRM 1.4.28 and IRM 8.2.1 before scheduling the initial conference on the coordinated issue;
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Advise the taxpayer the issue is coordinated and any settlement of the issue requires the review and concurrence of the Technical Guidance Coordinator (TGC);
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Forward a rough draft of the Appeals Case Memo (ACM) (and any related documents requested by the TGC such as copies of documents, RAR, protest, closing agreements, etc.) to them, whether the TGC is a team member or not. The TGC may waive this requirement after discussing the issue with the Appeals Officer/ATCL.
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Send the rough draft ACM (and any related documents) to the TGC before the settlement is finalized.
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Send the TGC a copy of the portion of the final ACM and Closing Agreement, if any, which discusses the coordinated issue.
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If the TGC concurs with the proposed disposition of the coordinated issue, note this in item 11 on Form 5402.
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If the TGC does not concur with the proposed disposition of the coordinated issue, attach a copy of the TGC's memorandum (rebuttal) to the ACM. See IRM 8.7.3.4.1 for procedures on how to resolve the dispute.
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If the coordinated issue is designated for litigation in a specific case by the Office of Chief Counsel do not consider settlement of the issue in the designated case.
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Appeals invites LMSB Compliance to attend and hold a post closing conference on all LMSB cases. This conference can be waived if both Appeals and LMSB think it is not necessary on any particular case.
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IRS Chief Counsel is invited to attend this conference on all docketed LMSB cases. Counsel may attend post-settlement conferences on non-docketed cases at the request of either LMSB or Appeals.
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The purpose of the post-closing conference is to discuss the settlement reached and its subsequent impact on the taxpayer. The conference is intended to supply LMSB with information that may be helpful in the audit of subsequent cycles of the taxpayer and assist in identifying those issues which may be susceptible to resolution by application of LMSB's settlement authority.
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This conference is not intended to be a critique of the settlement nor is it intended to replace, in any way, LMSB's "dissent" procedures. It is solely intended to communicate the resolution of the case to the LMSB team.
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There are some special features to include in the large or complex case ACM. Because of the complexity of some cases, any or all of the following features may be used:
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Table of Contents
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Executive Summary
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Schedule of Adjustments - with additional features
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Complex Issue Discussion and Analysis
Note:
The Schedule of Adjustments is not optional; adding special features to the standard Schedule of Adjustments is optional.
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If the Schedule of Adjustments doesn’t give the page numbers for the issues, use a Table of Contents. The Table of Contents may include the page number from the revenue agent’s report, the taxpayer’s protest, or other pertinent documents.
Description ACM RAR Protest Page Page Page Executive Summary 1 Schedule of Adjustments 3 Legal Expenses 5 1 4
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For a lengthy ACM with numerous issues, an Executive Summary provides a reader with an overview of all information up front.
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The Executive Summary is similar to a Summary and Recommendation for an issue; both are brief and up front. In fact, the Executive Summary is the first page(s) of a large or complex case ACM. It may include:
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Background of the taxpayer, industries, foreign sub/parent, products, name changes, stock exchange listing, mergers and acquisitions, etc. If the information to present is lengthy or complex, make the background a separate section.
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The most significant issues and results.
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Joint Committee jurisdiction or consideration.
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Collection Concerns – accounts receivable dollar inventory (ARDI) considerations
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Audit history – prior litigation of the taxpayer, rollover or recurring issues, results of other cycles, carry backs that affect retention rates, etc.
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Technical Guidance – identification of issues, approval, variances from written positions, etc.
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External assistance – technical advice (formal and informal), competent authority, etc.
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Future years – potential claims, closing agreements, letters of understanding.
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Provide a discussion of the factors impacting the settlement that occurred subsequent to Compliance completing its consideration, or that are outside the Appeals hazards evaluation. For instance, a change in tax law, new controlling case law, or a whipsaw issue that had to be conceded. These type issues need to be noted as items that would have required adjustments to be made by Compliance, or in other words, the adjustments would not be the result of an Appeals hazard settlement.
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The basic format of the Schedule of Adjustments for large or complex cases is the same, but there may be a need to add "Additional Features" . If the additional columns won’t fit on the page, show the schedule in landscape format to accommodate the extra columns. Here is a list of some items to use in the schedule in addition to those in the standard Schedule of Adjustment:
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Team member name listed next to their assigned issues is optional.
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Page references to the RAR, protest, and ACM are optional but are helpful and often part of a work plan.
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The identification of Technical Guidance coordinated issues where applicable. If no Technical Guidance issues exist in the case, this column is not needed. However, make an affirmative statement to this effect as a footnote on the Schedule of Adjustments.
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Indicate rollover or recurring issues with a "yes" or "no" , to alert Compliance of their settlement authority under Delegation Order 4-25. Make a complete statement about the delegation authority in the Summary and Recommendation section of the issue discussion. If no rollover or recurring issues exist for a particular case no column is needed, however, make an affirmative statement to this effect as a footnote on the Schedule of Adjustments.
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If the schedule is developed when the case is first assigned, it can serve as the basis for the issue status schedule in the large case work plan.
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The four sections of an ACM; Summary and Recommendation, Brief Background, Discussion and Analysis, and My Evaluation, work for even the most complex of cases. The complexity of the issue dictates the length and structure of the longer narrative. The following sections give some guidance in preparing your ACM.
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Prior ACM – Many LMSB subsequent cycles have identical issues. If they are resolved on the same basis as the prior cycle, then it’s appropriate to cite the prior ACM rather than repeat the discussion in detail. If such a reference is made, attach a copy of the prior ACM. The Summary and Recommendation section may then be all that is needed in the current ACM.
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Examination Settlement Authority – If Exam DO 4-25 is applicable to the issue for subsequent cycles, make a complete statement about the delegation authority in this section.
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Combining Issues - LMSB cases may involve issues that need to be discussed together. If so, combine the discussion into one section.
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This is the main section for a detailed discussion of any issue. Along with the Schedule of Adjustments and the initial framing of the issue, this section serves as the rough draft ACM. Make this section clear and concise by providing yourself and the reader with a blueprint or outline of the discussion to follow. In a complex issue discussion, good structure is essential.
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After a lengthy issue discussion, this section serves as a recap of the relevant factors and the weight assigned to each. This analysis clearly illustrates the settlement rationale and is particularly important on complex issues and those with hazards of litigation settlements.
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When a case has a balance due over $10 million, send a copy of:
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Form 5402
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Appeals Case Memorandum (ACM)
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Settlement Computations
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Agreement or Decision Document
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Form 2859
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Special Handling Instructions
to the Chief Financial Office Staff at the following address:
Kansas City Service Center
Attention: Diana Shepard CFO:F:A
2306 East Bannister Road - STOP 1035
Kansas City, MO 64131 -
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These procedures are used for docketed cases. LMSB Compliance is not expected to review and comment on the taxpayer's petition before receipt of the case by Appeals. However, Appeals must provide LMSB with a copy of the petition for review and comment in every docketed case to which these procedures apply. LMSB Compliance reviews the petition to the extent LMSB has knowledge of the facts and issues in dispute.
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A key part of the pre-conference meeting is planning the timetables and resources needed to respond to new information presented by the taxpayer. Give recognition to the time frames established by the rules of the Tax Court in setting priorities for the examination of new information and response to taxpayer positions. For limitations and procedures concerning Appeals and LMSB Compliance consideration of new issues raised in docketed cases, see Appeals Authority Over Docketed Cases in IRM 8.4.1, Appeals Docketed Cases.
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The team case leader gives appropriate feedback on team member performance, in a timely manner, to both the team members and their managers. The feedback is a meaningful evaluation of the performance of the particular team member on the case. The feedback is structured around the critical elements of the team member, to the extent they apply to the work done on the case.
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The feedback is given on an on-going basis and no later than when a team member's work on the case is substantially completed; for example at the completion of conference activities or at the time the team member prepares the ACM on his or her assigned issues. At a minimum, interim or final feedback is provided prior to the team member's annual appraisal and mid-year review.
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The ATM of the team member, not the team case leader or team, is responsible for appraising the performance of AOs on team case assignments. Although the team leader must provide mandatory written feedback on the case, any written assessments of members' work performance for purposes of personnel actions is made by the manager.
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When an AO below the level is given a developmental team member assignment, the team leader gives timely oral feedback and provides constructive comments regarding performance.