8.6.1  Conference and Issue Resolution

Manual Transmittal

November 14, 2013

Purpose

(1) This transmits revised IRM 8.6.1, Conference and Settlement Practices, Conference and Issue Resolution.

Material Changes

(1) This IRM section was revised as follows:

IRM 8.6.1.1 (4) Added language to emphasize the "One Voice" concept of issue resolution.
IRM 8.6.1.2.1 Moved IRM 8.20.6.9.1, Transfers of Nondocketed Cases from IRM 8.20.6 (dated 01-18-2011).
IRM 8.6.1.2.2 Moved IRM 8.20.6.9.2, Transfers for the Convenience of Taxpayers from IRM 8.20.6 (dated 01-18-2011) and updated procedures.
IRM 8.6.1.2.3 Moved IRM 8.20.6.9.3 , Transfers of Docketed Cases Within Appeals from IRM 8.20.6 (dated 01-18-2011) and updated procedures.
IRM 8.6.1.2.4 Moved IRM 8.20.6.9.4, Procedures to Transfer Cases Within Appeals from IRM 8.20.6 (dated 01-18-2011).
IRM 8.6.1.2.5 Moved IRM 8.20.6.9.6, Procedures to Deny Transfer from IRM 8.20.6 (dated 01-18-2011).
IRM 8.6.1.3 Moved Communications with the Taxpayer and/or Representative from IRM 8.6.1.2. Added current requirements for designating up to two authorized representatives to receive copies of notices and other communications sent by IRS. Added a Note to clarify that IRS employees are not prohibited from providing a copy of a notice or communication to a representative if the box is not checked. This section now reflects that a separate Form 2848 should be completed for each taxpayer. Added requirement for ATE to send all written communications to the Counsel of Record.
IRM 8.6.1.4 Moved Conference Techniques Used by Appeals Technical Employees from IRM 8.6.1.3.
IRM 8.6.1.4.3 Moved IRM 8.20.6.9.5(3) from IRM 8.20.6 (dated 01-18-2011) to IRM 8.6.1.4.3.1. Added procedures to IRM 8.6.1.4.3 for bypassing an authorized representative where the representative has unreasonably delayed or hindered the appeal process.
IRM 8.6.1.4.4 (3) Added information from IRM 8.26.5.4.7, Participants - to identify participants in the Post-Appeals Mediation (PAM) process.
IRM 8.6.1.5 Moved Audio and Stenographic Recording of Conferences from IRM 8.6.1.4. Added guidance that this section applies to face-to-conferences, and not telephone conferences.
IRM 8.6.1.5 (old) Removed IRM 8.6.1.5, Effect of Compliance Action since this information isn't necessary in IRM 8.6.1.
IRM 8.6.1.6 Revised IRM 8.6.1.6 to incorporate the contents of Interim Guidance AP-08-0713-03 for implementation of the Appeals Judicial Approach and Culture (AJAC) Project.
IRM 8.6.1 Several editorial changes were made to this IRM section.

Effect on Other Documents

This IRM supersedes IRM 8.6.1, Conference and Settlement Practices, Conference and Issue Resolution, dated August 15, 2012. Interim Guidance Memorandum AP-08-0713-03, Implementation of the Appeals Judicial Approach and Culture (AJAC) Project, which was issued on July 18, 2013 is incorporated into this IRM revision.

Audience

Appeals employees

Effective Date

(11-14-2013)


Susan L. Latham
Director, Policy, Quality and Case Support 

8.6.1.1  (11-14-2013)
Introduction to Discussion on Conferences

  1. This section covers procedures used by Appeals Technical Employees (ATEs) who conduct conferences for the purpose of resolving issues in dispute. A description of ATEs can be found in IRM 8.1.3.3(3). As an integral part to accomplishing the Appeals mission, schedule conferences on dates and at locations reasonably convenient to taxpayers and/or their representatives. Also offer to schedule telephone conferences, and when convenient for the taxpayer, conduct conferences by correspondence.

  2. See IRM 8.6.1.2, Transfers of Cases Within Appeals and Returns, for information about transferring or returning a case.

  3. Conference procedures for Appeals Team Case Leaders (ATCLs) are covered in IRM 8.7.11, Working Appeals Team Cases.

  4. When conducting conferences with taxpayers and/or practitioners, it is important that all Appeals personnel provide a unified position in the settlement of an issue. See IRM 8.1.1.1, Accomplishing the Appeals Mission, for further information.

8.6.1.2  (11-14-2013)
Transfers of Cases Within Appeals

  1. This section provides guidance involving the transfer of a case within Appeals. See IRM 8.6.1.2.4 for procedures to transfer the administrative file.

  2. When considering the need to return a case to the originating Compliance office (referred to as a "premature referral)" , the ATE should review IRM 8.2.1.4, Receipt of New Assignment by an ATE and IRM 8.2.1.5, Returning a Case to Examination - ATE.

8.6.1.2.1  (11-14-2013)
Transfers of Nondocketed Cases

  1. Work units which are part of a Coordinated Industry Program (CIP) case, should be transferred to the Appeals Office that serves the primary territory or area for the case. See IRM 4.46, LB&I Guide for Quality Examinations for the definition of a Coordinated Industry Case (CIC).

  2. Where partnerships are not covered by the TEFRA provisions of IRC 6221 – IRC 6234, the "key case" concept still applies. Appeals will transfer the first protesting partner's return from some other area to the Appeals Office with jurisdiction over the related partnership return. For more information about Non-TEFRA entities, see IRM 8.19.9.2.1.2, Protest.

  3. Cases appealed from the Employee Plans (EP) and Exempt Organizations (EO) business units [under Tax Exempt and Government Entities (TEGE) Operating Division] should be sent to the designated Appeals Offices where Appeals Officers are located with expertise in these issues. See IRM 8.7.8 for Exhibit 8.7.8–1, List of Employee Plans and Exempt Organizations Areas.

    1. Cases containing Employee Plan (EP) and/or Exempt Organization (EO) issues may also originate in the Small Business/Self-Employed (SBSE) Division or Large Business & International (LB&I) Division. For example, a pension plan deduction, on Form 1120, may be disallowed due to the employer’s use of incorrect actuarial assumptions. Such cases may be transferred to an Appeals Office with expertise in the subject matter. Factors to consider include, for example, the level of difficulty of the case and the workload of the offices. Contact the appropriate Appeals TEGE area office regarding guidelines concerning the transfer of these cases.

    2. Welfare benefit issues such as cafeteria plans, COBRA continuation health care coverage and voluntary employees' beneficiary associations (VEBAs) may also be transferred to the Appeals Office with expertise in exempt organization matters. Consult the appropriate Appeals TEGE area office regarding guidelines concerning the transfer of these cases.

8.6.1.2.2  (11-14-2013)
Transfers for the Convenience of Taxpayers

  1. A taxpayer or representative may request a transfer to any Appeals Office. See IRM 8.1.1.1(3).

  2. An Appeals Office will transfer jurisdiction of a case when the transfer does not conflict with the provisions of IRM 8.6.1.2.1, IRM 8.6.1.2.3, or other workstream specific guidance. See IRM 8.22.5 , Collection Due Process, IRM 8.23, Offer in Compromise, and IRM 8.24.1, Collection Appeals Program for specific exceptions to transfers for a face to face conference. See IRM 8.6.1.2.3 for transfers involving docketed cases.

  3. See IRM 8.6.1.4.1, Reasonable, Convenient Conference Opportunities (Circuit Riding), for decisions involving "Circuit Riding" .

8.6.1.2.3  (11-14-2013)
Initial Assignment and Transfers of Docketed Cases in Appeals’ Jurisdiction

  1. Docketed cases in Appeals’ jurisdiction are generally assigned for consideration to an employee in the Appeals office designated on the docket list. Follow the procedures in IRM 8.1.1.1(3) if the petitioner or counsel of record requests a transfer for a face-to-face conference.

  2. The general docketed case assignment principles in paragraph (1) above are modified for certain types of cases that are transferred in Appeals to designated offices for assignment to employees who specialize and have expertise in the subject matter. Such case types include the following:

    1. Employee plan cases

    2. Exempt organization cases

    3. Estate tax cases

    4. Gift tax cases

    5. Cases with international issues

    6. TEFRA key cases

  3. When required, docketed cases containing certain issues are referred through the automated 13381 system to the appropriate Appeals Team Manager for assignment to the Technical Guidance Coordinator or specialist as a team member or a consultant. See IRM 8.7.3, Domestic and International Operations Programs and IRM 8.18.1, Valuation Assistance Procedures. The following issues must be referred to a specialist:

    1. Compliance Coordinated Issues (Feature Code IS)

    2. Appeals Coordinated Issues (Feature Code AI)

    3. Appeals Emerging Issues (Feature Code EM)

    4. Abusive Tax Avoidance Transactions (ATAT) (Feature Code LT)

    5. Penalties related to ATAT issues

    6. Engineering issues

    7. Certain valuation issues in connection with personal property and works of art

  4. Transfers of docketed cases under any other circumstances may only be made as follows:

    1. Transfers between Appeals Offices “within the same area” must be approved by the Area Director.

    2. Transfers between Appeals Offices “in different areas” must be agreed upon by the Area Directors for the transferring and receiving areas. If they cannot agree, the proposed transfer may be referred to the Chief, Appeals for decision.

8.6.1.2.4  (11-14-2013)
Procedures to Transfer Cases Within Appeals

  1. Use Form 3210, Document Transmittal, to transfer cases between Appeals Offices. Addresses may be obtained from Document 6209, IRS Processing Codes and Information, or refer to the addresses listed under "Case Routing" on the Account and Processing Support (APS) page of the Appeals web site at http://appeals.web.irs.gov/APS/caserouting.htm.

  2. Form 3210 is used to send the case file to the receiving Appeals Office. Two copies of Form 3210 will be attached to the case file. A third copy of Form 3210 will be held in suspense by the transferring office. Any necessary approvals of the Appeals Area Directors or the Chief, Appeals will be obtained and documented in the file before transferring a case.

  3. To indicate acceptance of the case, the receiving office will acknowledge receipt by signing and dating the appropriate boxes on the form and returning a copy of the signed Form 3210 to the transferring Appeals Office. If some reason exists for "not accepting a transfer" , the receiving office will return the case with an explanation. Contact by telephone or E-mail is suggested, before returning the case.

  4. The receiving office should notify the taxpayer of the transfer after accepting jurisdiction of the case.

8.6.1.2.5  (11-14-2013)
Procedures to Deny Transfer

  1. If circumstances indicate that an otherwise allowable case transfer would be undesirable or disadvantageous to the Service, the transfer may be denied as follows:

    1. Denials of transfers between Appeals Offices "within an area " must be approved by the Area Director.

    2. Denials of transfers between Appeals Offices "in different areas" must be agreed upon by the Area Directors for the areas involved. If they cannot agree, the proposed denial may be referred to the Chief, Appeals, for decision.

  2. A memorandum - that sets forth the reasons for denying a transfer and that requests approval of the denial - should be routed to the appropriate official(s) for action.

8.6.1.3  (11-14-2013)
Communications with the Taxpayer and/or Representative

  1. This subsection provides directions on the use of answering machine/voice mail and faxes when communicating with the taxpayer and/or the representative. See IRM 8.6.1.3.1 and IRM 8.6.1.3.2.

  2. See IRM 8.6.1.3.3 for the procedures in place for providing copies of communications to taxpayers, when a valid Power of Attorney exists.

  3. The subsection also provides guidance on preparing written communications when working with taxpayers who file a joint return. It outlines relief from the separate notice requirements of Section 3201(d) of RRA '98.

  4. The ATE's badge number must be included on all written correspondence to the taxpayer and/or the representative. See IRM 8.6.1.3.5.

  5. In addition, this subsection provides instructions for the ATE to explain the Appeals process and include an explanation that the taxpayer might be contacted to complete a customer satisfaction survey. See IRM 8.6.1.3.6.

8.6.1.3.1  (11-06-2007)
Leaving Information on Answering Machines/Voice Mail

  1. Answering machines and voice mail are frequently used when communicating with taxpayers, representatives, and other IRS employees. These systems are not secure and may not be used to transmit sensitive information, including tax information, except under the provisions of IRC 6103.

  2. Guidelines for leaving information on answering machines/voice mail may be found in IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail.

8.6.1.3.2  (11-06-2007)
Using a Fax Machine to Communicate

  1. Appeals employees must remember to protect tax information when using the fax machine. IRC 6103 provides details on the confidentiality and disclosure rules that must be followed when working with taxpayer return or taxpayer return information.

  2. IRM 11.3.1.11, Facsimile Transmission of Tax Information, specifically addresses the use of faxes.

  3. In addition, Appeals employees should be familiar with the provisions of IRM 8.1.6.1, Practice Before Appeals, which details what each Appeals employee must verify before disclosing information of a confidential nature.

  4. Faxed information is not sealed and little protection is guaranteed at the receiving end. To protect confidential tax information, certain precautions must be taken. At a minimum employees should:

    1. Use a cover sheet, identifying the person for whom the information is intended and the number of pages being faxed.

    2. If faxing to the taxpayer, avoid including specific confidential information, other than name and phone number, on the cover sheet.

    3. If faxing to an authorized third party, use that person’s name on the cover sheet – not the taxpayer’s (IRM 11.3.1.11(11)).

    4. Use the standard caveat found in IRM 11.3.1.11(12) on all fax cover sheets. The standard language is on the fax cover sheet generated from ACDS.

    5. Fax the information in an order in which the cover sheet will become the first page covering the faxed tax information.

  5. IRM 11.3.1.11(9)(a) indicates that the taxpayer must provide "authorization to fax" and "authorization where to fax" prior to transmission. In addition, employees must inform the taxpayer of potential disclosure risks and document this in the taxpayer’s file. These requirements are reiterated in the IRS Information Protection Briefing available through ELMS.

  6. If any doubt exists as to security of the faxed information, employees should mail the information to the taxpayer’s address of record or furnish it to the taxpayer at the Appeals conference.

8.6.1.3.3  (11-14-2013)
Copies of Written Communications

  1. Original notices and other written communications are required to be sent to the taxpayer.

  2. The taxpayer may submit a completed Form 2848, Power of Attorney and Declaration of Representative to authorize one or more eligible individuals to represent the taxpayer before IRS.

  3. On line 2 (of Form 2848), the taxpayer must check the box - below the representative's name and address - if the taxpayer wants the IRS to routinely send copies of notices and communications to the representative(s) and so long as the notice or correspondence is within the scope of the representation authority of the representative. IRS can send copies of notices and communications up to two individuals. If the taxpayer does not check the boxes, the ATE will not routinely send copies of notices and communications. The ATE is not required to send forms, publications, and other related material with the notices unless another IRM section specifically states that such form, publications, and other related material is required to be sent.

    Note:

    ATEs are not prohibited from providing a copy of a notice or communication to a representative if the box is not checked.

  4. Furnish copies of communications received from the taxpayer to the authorized representative if the communications have a direct bearing on the nature of his/her representation.

  5. In a docketed U. S. Tax Court case, address and send all written communications to the Counsel of Record, if any. See IRM 8.4.1.15.1, Attorney of Record in Docketed Cases. Also, see Appeals' web page at http://appeals.web.irs.gov/tech_services/docketed/docketed.htm for additional information.

  6. See 26 CFR 601.506 for additional information about Conference and Practice Requirements. Also, see Form 2848 , Form 2848 Instructions, and Publication 947 , Practice Before the IRS and Power of Attorney.

    Note:

    A separate Form 2848 should be completed for each taxpayer.

8.6.1.3.4  (11-06-2007)
Relief from Separate Notice Requirements (Section 3201(d) of RRA '98)

  1. Section 3201(d) of RRA ‘98 requires that, wherever practicable, any notice relating to a joint return be sent separately to each individual filing the joint return. The phrase "any notice" , at a minimum, covers all notices required to be sent by statute. However, some notices not required by statute may be includible if they relate to the collection of the taxpayers’ joint and several liabilities or to any adjustment that may result in the issuance of a statutory notice of deficiency under IRC 6212.

  2. In certain instances, Letter 967(CG), Letter Transmitting Consent Extending Period of Limitation, does not have to be sent separately to joint return taxpayers. The Right to Refuse, allowed by IRC section 6501(c)(4)(B), now included on the Form 872, satisfies the requirements of section 3201(d) when one Letter 967 and one Form 872 are sent to spouses filing jointly as long as Appeals is confident that the spouses live at the same address. To ensure that both spouses receive their rights, Appeals must:

    • receive either one Form 872 - signed by both spouses or

    • receive two Forms 872 - one signed by each spouse.

      Note:

      If a Form 872 with only one signature is received, a separate Letter 967 and Form 872 must be sent to the spouse who did not sign the Form 872.

  3. Appeals is not required to send initial contact letters separately to each spouse under section 3201(d) because the letters do not contain a notice required by statute; however, Appeals is not precluded from sending them separately.

  4. To summarize, the following table presents the actions that must be taken by Appeals when working joint returns:

    If ... Then ...
    Sending any type notice or correspondence Document what was sent and whether it was a separate mailing or a joint mailing to the spouses. If it is a joint mailing, document why a separate mailing was not used.
    Spouses have different mailing addresses Send all notices and correspondence in separate mailings to each spouse.
    Spouses have the same mailing address Send notices required by statute in separate mailings to each spouse.
    All other documents can be sent using joint mailing.
    One or both spouses have not indicated a new mailing address All notices and letters must be sent to the last known address within the meaning of Reg. 301.6212-2.
    Send notices required by statute in separate mailings to each spouse using the last known address.

8.6.1.3.5  (11-14-2013)
Unique Identifying Number on Correspondence

  1. Section 3705(a) of the Restructuring and Reform Act of 1998 (RRA 98) requires manually generated correspondence to include the name, telephone number, and unique identifying number of an employee who can be contacted with respect to correspondence. In Appeals, the unique identifying number is an employee’s badge number. The number to enter is the right-most seven digits on the front of the employee's badge number.

  2. Manually generated correspondence includes faxes and e-mails.

  3. It is mandatory to include the unique identifying number on all correspondence to the taxpayer and/or the taxpayer's representative.

  4. All forms of communication generated on APGolf automatically include the employee’s badge number if the employee’s ACDS profile is updated to include the badge number. Employees should update their own ACDS profile to include their badge number. To update your ACDS profile, click on the "PERSONNEL" button from the ACDS top menu, then "Update Profile," then "badge number." Enter the 10-digit badge number and click "submit update."

    Note:

    When APGolf is not used, the correspondence, fax and/or e-mail require the employee badge number be manually inserted if the number has not been previously provided.

8.6.1.3.6  (10-25-2011)
Requirement to Advise Taxpayer of Customer Satisfaction Survey

  1. At the beginning of the Appeals process, the ATE should provide the taxpayer with an explanation of the Appeals process. In some situations, evidence of providing taxpayers with IRS publications can serve as adequate documentation that the proper action was taken and/or explanation was provided to the taxpayer at the appropriate time in the Appeals process. As part of the explanation of the Appeals process, the ATE will explain that the taxpayer might be contacted at the conclusion of the process to participate in a customer satisfaction survey. In regards to the customer satisfaction survey, the ATE will explain the following:

    1. The taxpayer might be contacted by an outside contractor and asked to participate in a customer satisfaction survey.

    2. The taxpayer's participation in the survey is voluntary.

    3. The survey will not ask for personal or financial information of any kind.

    4. The results of the survey will be used to further improve the Appeals process and service to our customers.

  2. The ATE should update the case activity record to reflect that an explanation was provided about the customer satisfaction survey.

8.6.1.4  (11-06-2007)
Conference Techniques Used by Appeals Technical Employees (ATEs)

  1. Conference techniques used by ATEs vary depending on the types of cases but there is no substitution for preparation, judgment, and common sense when conducting an Appeals conference.

  2. Be thoroughly prepared for all aspects of a case. This maximizes the possibility of closing the case with one conference while resolving the disputed issues in a quasi-judicial manner. It is essential to have an open mind and genuine interest in achieving a mutually acceptable agreement.

  3. Set realistic target dates for the taxpayer and/or the representative to submit additional information, and proposal and counterproposal settlements. Ensure they understand the need to adhere to the dates set.

  4. Completing a conference timely and making accurate and prompt decisions enables the taxpayer to know with the least amount of delay, the final decision of the Internal Revenue Service regarding the amount of tax liability, or other issues in dispute.

  5. Appeals conferences are informal to promote frank discussion and mutual understanding. Do not consider ideological kinds of arguments. Handle conferences objectively with a goal of reaching a sound decision based upon the merits of the issues in dispute.

  6. Conduct conferences in an open atmosphere that fosters cooperation in the resolution of disputes. Above all, it is of utmost importance to be a good listener.

8.6.1.4.1  (11-06-2007)
Reasonable, Convenient Conference Opportunities (Circuit Riding)

  1. Hold conferences on dates and in locations reasonably convenient to taxpayers and representatives. Generally, use Appeals offices, sub-offices, or other IRS-staffed posts of duty that are not temporary or part-time locations. However, managers may approve holding conferences at other sites when feasible and necessary to provide a convenient conference opportunity. Ordinarily, the amount in dispute is not an important factor in approving another conference site.

  2. Hold the number of conferences to a minimum. A frank discussion of the facts and law ordinarily brings a case to a prompt conclusion.

8.6.1.4.1.1  (06-08-2010)
Circuit Riding

  1. Evaluate the merits of all circuit riding requests and consider the reasons the taxpayer and ATE needs to meet face-to-face. Some factors to consider:

    • The case involves factual issues that would merit a face-to-face meeting

    • There are substantial books and records to review. Since Appeals is not the first finder of fact, arrangements should be made through the Appeals Team Manager to have a revenue agent or Tax Compliance Officer available to review any substantial books and records before and/or during the conference

    • The taxpayer will be present and the ATE will be able to determine the credibility of the oral testimony

    • The taxpayer has presented valid reasons why he/she cannot come to the nearest Appeals Office. These reasons could include the special needs of a disabled or low-income taxpayer.

    • The distance the taxpayer would have to travel would be unreasonable or cause a hardship

  2. Allow circuit riding when the taxpayer's residence (or business address for business entities) is more than 150 miles from the nearest Appeals Office.

    1. Area Directors have the discretion of reducing the number of miles based on their geographic reality or on a case-by-case basis.

  3. Allow circuit riding if the nearest Appeals Office cannot take the case due to high inventories or lack of technical skills, or if there is no convenient alternative.

  4. ATEs will circuit ride at least quarterly to meet the needs of each and every taxpayer.

  5. In the states where Appeals no longer has a presence, has a small presence, or may not have the technical expertise, the designated circuit riding location is shown below:

    State with No Appeals Presence Designated Circuit Riding Location
    Arkansas Little Rock
    Idaho Boise
    Kansas Wichita
    Montana Helena
    North Dakota Fargo
    Rhode Island Providence
    Vermont Burlington
    Wyoming Cheyenne
    Alaska Anchorage

8.6.1.4.2  (06-08-2010)
Change of Appeals Technical Employee (ATE) After Initial Contact

  1. Generally, a taxpayer does not have the right to a conference with an ATE other than the one assigned to his or her case. In CDP cases, however, where the ATE has had prior involvement, the case must be reassigned. See IRM 8.22.2.2.4.5 for rules about determining if the Appeals technical employee had prior involvement.

  2. In cases where the prior involvement rule does not require transfer, the Appeals Team Manager or the Area Director of the Appeals Office, may authorize a change in assignment where the circumstances warrant.

  3. The ATE will refer a taxpayer directly to the Appeals Team Manager to discuss (i) any concern raised by the taxpayer about the ATE, including the ATE's perceived impartiality and/or (ii) a request to have the case reassigned. The request will ordinarily be considered after the taxpayer has received the Uniform Acknowledgement Letter but before a conference/hearing is conducted. If the taxpayer requests that the case be transferred during the conference/hearing process, refer the request to the Appeals Team Manager.

  4. The Appeals Team Manager will evaluate the taxpayer's request and/or concerns and determine whether the case should be transferred to another ATE. The Appeals Team Manager shall communicate the decision directly to the taxpayer/representative.

8.6.1.4.3  (11-14-2013)
Right of Consultation with Representative

  1. If a case is in Appeals jurisdiction and a valid Form 2848, Power of Attorney and Declaration of Representative, is on file for the period(s) and the type of liability, contact the representative. When sending correspondence, send the original to the taxpayer and also send a copy of all correspondence to the representative. The ATE should document the Case Activity Record (CAR). See IRM 8.1.6.1.3, Representatives Qualified to Practice Before Appeals.

  2. IRC 7521(b)(2) requires an officer or employee of the Internal Revenue Service to stop the interview whenever a taxpayer wishes to consult with a representative qualified to represent the taxpayer before the Internal Revenue Service.

  3. A taxpayer's involvement with Appeals is voluntary, so the need to "bypass an authorized representative" should be highly unlikely. In those rare occasions where an ATE determines that it is appropriate to "bypass a representative", the employee should follow procedures shown in IRM 8.6.1.4.3.2.

8.6.1.4.3.1  (11-14-2013)
Taxpayer Consultation with Representative

  1. If a taxpayer indicates, during a conference, that he or she wishes to consult with a qualified representative or otherwise seek advice, the conference must be suspended. If necessary, the conference should then be rescheduled. The ATE will allow the taxpayer a reasonable amount of time to complete this right of consultation. The ATE should document the CAR accordingly.

8.6.1.4.3.2  (11-14-2013)
Bypass of a Representative

  1. Where a recognized representative has unreasonably delayed or hindered the appeal process by failing to furnish, after repeated request, non-privileged information necessary for Appeals consideration, the ATE may request the permission of his/her immediate supervisor to contact the taxpayer directly for such information. With the supervisor's consent, the ATE may notify the taxpayer that he/she believes the representative is responsible for unreasonable delay or hindrance of the Appeals process. The ATE will document the CAR with sufficient facts to show how the appeal process was being delayed or hindered.

  2. The ATE will prepare a written notice of such permission, briefly stating the reason why it was granted. Such notice will be given to both the recognized representative and the taxpayer together with a request of the taxpayer to supply such non-privileged information. See IRC 7521(c) and the regulations thereunder.

  3. The authority for bypass procedures are found in Treasury Regulation §601.506(b). A bypass permits an ATE to contact a taxpayer directly to request information necessary to complete Appeals consideration. The representative still continues to represent the taxpayer and is provided copies of all correspondence provided to the taxpayer.

  4. The ATE does not have the authority to bypass a "Counsel of Record" (COR), so these procedures don't apply in regards to a COR. See IRM 8.4.1.15.1 for detailed information about the COR.

8.6.1.4.4  (11-14-2013)
Participation in Conferences by IRS Employees

  1. If advisable, Appeals may request representatives of the Compliance, Area Director, engineering, or other experts to attend conferences.

  2. Generally, Area Counsel is not involved in Appeals conferences but may be present in cases where Department of Justice recommends criminal prosecution and the fraud penalty is contested.

  3. See other IRM Part 8 sections for participation by IRS employees in cases under the Alternative Dispute Resolution (ADR) Program. This includes IRM 8.26.5.4.7, Participants, that reflects Appeals' discretion to have Counsel, the originating function, or both to participate in a Post-Appeals Mediation proceeding for a Non-Collection Case.

8.6.1.5  (11-14-2013)
Audio and Stenographic Recording of Conferences

  1. Audio and stenographic recordings are allowed on Appeals cases scheduled for face-to-face conferences. Taxpayers and their authorized representatives who request such recordings are advised their request may be allowed, if they qualify for a face-to-face conference, pursuant to the following procedures.

  2. Face-to-face conferences are no longer offered to, or allowed for taxpayers who only raise frivolous issues and/or arguments, or other issues such as those concerning moral, constitutional, religious, conscientious, political, or similar grounds.

  3. In addition, taxpayers with issues deemed frivolous, who still desire a face-to-face conference are allowed an opportunity to raise specific relevant issues in response to the Appeals letter advising them they do not qualify for a face-to-face conference.

    Note:

    Taxpayers who say they have relevant issues must state what the issues are and must provide necessary information before a face-to-face meeting is scheduled.

  4. Taxpayers who raise specific relevant issues and provide necessary information are allowed a face-to-face conference and are allowed to audio record such conference if a request to record is made pursuant to IRC 7521(a).

  5. This section applies only to face-to-face conferences, and not telephone conferences.

8.6.1.5.1  (11-06-2007)
Raising Frivolous Issues During a Face-to-Face Conference

  1. Some taxpayers, who initially raised frivolous issues, then raise specific relevant issues and are given a face-to-face recorded conference, try to discuss frivolous issues during the recorded conference.

  2. Attempt to discuss the specific relevant issues. However, if it becomes apparent the taxpayer can no longer be persuaded to discuss only relevant issues, terminate the conference.

  3. IRC 7521(a) authorizes both taxpayers and the IRS to audio record in-person interviews dealing with the determination or collection of taxes. These in-person interviews are initiated by the IRS for the purpose of gathering information regarding a taxpayer's tax liability, income or assets.

  4. Unlike interviews with Collection and Examination, conferences with Appeals are new hearings requested by the taxpayer, where the taxpayer raises issues for consideration. On that basis, IRC 7521(b)(1) does not apply to Appeals.

8.6.1.5.2  (11-14-2013)
Recording Requirements

  1. IRC 7521, which was part of the Taxpayer Bill of Rights 1 (TBOR1), provides for audio recordings. It allows the taxpayer to audio record any in-person interview relating to the determination or collection of any tax as long as there is a 10-day advance notification.

  2. Although the IRS previously determined the provision was not mandatory for Appeals because Appeals conferences are not taxpayer "interviews" , the Tax Court found that under IRC 7521 a taxpayer must be permitted to make an audio record of a IRC 6330 hearing. See Keene v. Commissioner 121 T.C. 8 (2003).

  3. Audio recordings are allowed on all types of cases that have face-to-face conferences on issues that are not deemed frivolous. In these cases, the taxpayer must follow the requirements of IRC 7521. They must give ten (10) days advance notice of their intent to audio record, and provide their own recording equipment. Appeals also makes an audio recording of the conference with IRS equipment.

  4. Follow the provisions of Notice 89-51, 1989-51 C.B. 691, or its successor, when allowing recordings in cases within Appeals jurisdiction.

  5. Allow stenographic recordings by court reporters if all the following conditions are met:

    • the court reporters have the credentials listed below;

    • the taxpayer qualifies for a face-to-face conference; and

    • the taxpayer has given a 10-day advance notice.

  6. The stenographer must have one of the following credentials to be allowed to make a stenographic recording in Appeals.

    1. Court reporter of the United States District Court.

    2. An independent reporter qualified to take depositions for use in United States District Court.

    3. Licensed or certified by any state to be a court reporter or to take depositions.

  7. Appeals audio records any conference stenographically recorded by the taxpayer and requests a copy of the stenographer’s record. If Appeals determines the costs of obtaining the stenographic record are too high, a copy of the record is not secured.

  8. The Appeals webpage contains helpful information on audio conference procedures, including how to identify yourself and participants on the recording.

  9. Video recordings are not allowed.

  10. Procedures in Notice 89-51 require ten (10) calendar days advance notice before a conference is recorded. If the taxpayer does not give the required ten-day notice, Appeals may, using its discretion and availability of IRS recording equipment, conduct the conference as scheduled, or set a new date.

  11. Inform the Appeals Team Manager (ATM) about these recording situations. Two Appeals employees must be present at recordings where frivolous/constitutional, et. al., arguments have previously been presented.

8.6.1.5.3  (11-06-2007)
Procedures for Audio Recordings

  1. At the outset of the recording, the ATE conducting the conference identifies himself or herself and states the following information:

    • date

    • time

    • place

    • name of case

    • purpose of the proceeding

  2. All participants, including the ATE, must personally identify themselves and consent to the making of an audio recording. If an additional participant arrives or a participant leaves, verbally state this on the tape.

  3. When written records are presented or discussed during the proceeding, describe them in sufficient detail to permit identification when compared to other documents in the case file. If more than one tape is necessary to record the conference, each subsequent tape must be identified by giving the case name and date.

  4. State on the tape when the conference or recording session ends. Retain Appeals tapes in the case file.

  5. Process any payments or costs for copies of Appeals tapes given to taxpayers, per the provisions of Notice 89-51.

8.6.1.6  (11-14-2013)
New Issues and Reopening Closed Issues

  1. Policy Statement 8–2 (formerly P-8-49) states that Appeals will not raise new issues and will not reopen an issue on which the taxpayer and the Service are in agreement. See IRM 1.2.17.1.2.

    Note:

    Although Appeals will not raise new issues, Appeals hearing officers will notify their ATMs if they identify a new systemic issue. ATMs will report the identification of new systemic issues to their Area Directors, who, in consultation with the Director, Field Operations, Campus Operations or Specialty Operations will decide if the new systemic issue requires Compliance’s attention. If a systemic issue may be present, Appeals will notify the appropriate Compliance executives and personnel. The Appeals hearing officer will not raise a new issue in the disposition of the pending case except upon a showing of fraud or malfeasance, or misrepresentation of a material fact.

    Note:

    A systemic issue is an issue that requires a change or modification to an established procedure, process or operation (e.g., training issues, computer program, campus procedure for processing claims). These are issues that potentially impact more than one taxpayer.

  2. Policy Statement 8–3 (formerly P-8-50) states the policy of the IRS concerning the reopening of cases previously closed by Appeals. Mutual concession cases will not be reopened based on action initiated by the Service except when the disposition involved fraud, malfeasance, concealment or misrepresentation of a material fact, an important mistake in mathematical calculation or discovery that a return contains unreported income, unadjusted deductions, credits, gains, losses, etc., resulting from the taxpayer's participation in a listed transaction. Reopening the case requires the approval of the Appeals Director with oversight of the case, either, Field Operations, Campus Operations, or Specialty Operations. See IRM 1.2.17.1.3. The following explains references contained within this Policy Statement:

    1. Reference to a case closed on a basis of concessions made by both Appeals and the taxpayer, means a non-docketed case closed by a Form 870-AD or closing agreement.

    2. Reference to a case closed on a basis not involving concessions made by both Appeals and the taxpayer, means a non-docketed case closed by other than a Form 870-AD type of agreement. For example: A case closed by Form 870 or similar form, or closed by reason of failure of the taxpayer to file a timely petition with the United States Tax Court following issuance of a statutory notice of deficiency by Appeals, or an excise or employment tax case closed without agreement as to the assessment.

    3. Reference to a serious administrative omission regarding non-mutual concession cases includes criticism of an issue by the Joint Committee.

      Note:

      Appeals will not reopen a case (whether initiated by the taxpayer or the Service), if the case was closed with finality. See IRM 8.7.7.13.1, Audit Reconsideration Cases.

  3. Under Policy Statement 8-3, no approval is required to reopen previously closed cases in the following situations:

    • To allow carrybacks provided by law which were not taken into account in a prior closing.

    • To assess an excessive portion of a tentative allowance.

    • To adjust matters previously reserved by the government or by the taxpayer in an agreement. See IRM 8.6.4, Reaching Settlement and Securing an Appeals Agreement Form.

  4. See IRM 8.7.7, Claim and Overassessment Cases, for procedures in cases where the taxpayer files a claim for refund in a case previously closed by Appeals.

8.6.1.6.1  (11-14-2013)
Defining a New Issue

  1. The restrictions on raising a new issue (Policy Statement 8–2) or reopening a closed case (Policy Statement 8-3) do not apply to new issues raised by taxpayers. For purposes of this IRM section, the term "new issue" means issues identified by Appeals in non-docketed cases.

    Note:

    Reopening a previously agreed issue or raising a new issue has the same implications, and is, for all practical purposes, one and the same. Therefore, for purposes of this section, treat reopening an agreed issue the same as raising a new issue.

  2. A new issue is a matter not raised during Compliance's consideration.

  3. A new theory or alternative argument is not a new issue. See IRM 8.6.1.6.2(3), General Guidelines.

    Note:

    A change in computation is not a new issue.

8.6.1.6.2  (11-14-2013)
General Guidelines

  1. Appeals will not raise new issues and will focus dispute resolution efforts on resolving the points of disagreement identified by the parties. The Appeals process is not a continuation or an extension of the examination process.

  2. Appeals will attempt to settle a case on factual hazards when the case submitted by Compliance is not fully developed and the taxpayer has presented no new information or evidence.

  3. In resolving disputes, Appeals may consider new theories and/or alternative legal arguments that support the parties' positions when evaluating the hazards of litigation in a case. However, the Appeals hearing officer will not develop evidence that is not in the case file to support the new theory or argument.

  4. The discussion of new or additional cases (or other authorities, e.g., revenue rulings or revenue procedures) that supports a theory or argument previously presented does not constitute consideration of a new issue.

  5. In docketed cases, the Appeals hearing officer will consider a new issue affirmatively raised by the government in pleadings and may consider any new evidence developed by Compliance or Counsel to support the government's position on the new issue. The Appeals hearing officer’s consideration of a new issue in a docketed case will take into account that the government has the burden of proof. See IRM 8.4.1.15.3, New Issues in Docketed Cases.

8.6.1.6.3  (11-14-2013)
Burden of Proof when Government Raises New Issues

  1. The burden of proof is on the government when it raises a new (affirmative) issue in a docketed case.

8.6.1.6.4  (11-06-2007)
New Issues Raised by Taxpayer

  1. Appeals gives full, fair, and impartial consideration to the merits of each new issue raised by a taxpayer. If such an issue is based upon important evidence, such evidence is ordinarily referred to IRS Compliance for verification.

  2. ATEs generally frame each issue separately in the Appeals Case Memo, and do not offset the issue against a Compliance raised issue unless there is an obvious and compelling reason to do so (e.g., Appeals allows depreciation on the acquisition of an asset which is expensed by the taxpayer and fully disallowed by IRS Compliance.)


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