- 1.2.17 Policy Statements for Appeals Activities
- 126.96.36.199 Introduction to the Appeals Process related Policy Statements
- 188.8.131.52 Policy Statement 8-1
- 184.108.40.206 Policy Statement 8-2 (Rev. 1) (Formerly P-8-49)
- 220.127.116.11 Policy Statement 8-3 (Formerly P-8-50)
- 18.104.22.168 Policy Statement 8-24
- 22.214.171.124 Policy Statement 8-36
- 126.96.36.199 Policy Statement 8-47
- 188.8.131.52 Policy Statement 8-48 (Rev. 1)
- Exhibit 1.2.17-1 All Active Policy Statements for the Appeals Process
Part 1. Organization, Finance, and Management
Chapter 2. Servicewide Policies and Authorities
Section 17. Policy Statements for Appeals Activities
September 09, 2016
(1) This transmits revised IRM 1.2.17, Servicewide Policies and Authorities, Policy Statements for the Appeals Process.
(1) This IRM revision contains the following editorial changes.
In IRM 184.108.40.206, change erroneous date of June 2, 2017 to correct date of June 2, 2016.
In IRM 220.127.116.11, correct the record to remove the superfluous phrase, "Except as provided in Policy Statement P-4-66, " which was rendered obsolete by Manual Transmittal 1218-196, effective October 25, 1988.
Insert missing citation tags throughout the section.
Servicewide Policy, Directives and Electronic Research
This IRM contains Policy Statements which relate to the Appeals Process. Each Policy Statement is categorized by the process to which it belongs. Policy Statements apply to all Service personnel involved in the type of program, activity, function, or work process covered by them.
Any Policy Statement approved after this revision of IRM 1.2.17 is posted to IRS.gov and can be accessed through the FOIA Reading Room website, https://www.irs.gov/uac/recently-approved-delegation-orders-and-policy-statements, under the heading "Recent Delegation Orders and Policy Statements." They will remain on the web until the next revision is made to this IRM.
Appeals Administrative Dispute Resolution Process
Pursuant to the Internal Revenue Service Restructuring and Reform Act of 1998, P.L. 105–206, and Treasury Directive 63–01, this Policy Statement reaffirms the principles of the Appeals administrative dispute resolution process. Since 1927, when the Internal Revenue Service established an administrative appeal to resolve tax disputes without litigation, taxpayers and Appeals have reached mutual agreement in the vast majority of disputed cases.
As the Service shifts toward becoming a more customer-oriented agency, the Internal Revenue Service's commitment to the Appeals administrative dispute resolution process is reaffirmed by the following principles:
Taxpayers are generally entitled to appeal many disputes arising under the Internal Revenue Code, regulations and procedures. They are also entitled to an explanation of the Appeals process, and to have a timely conference and resolution of their dispute.
Appeals offices are separate from and independent of the IRS office that proposed the adjustment. Issues should be fully developed by compliance functions before an administrative appeal.
The Appeals Office is the only level of appeal within the IRS, and generally is the principal administrative function that exercises settlement authority to resolve tax disputes for cases that are not docketed in the U.S. Tax Court. Rev. Proc. 2016-22 or subsequent procedure, describes when cases docketed in the U.S. Tax Court are referred by Chief Counsel to Appeals for consideration of settlement. The Chief, Appeals, as the administrative dispute resolution specialist in tax matters for the Commissioner, has line authority over Appeals operations throughout the United States.
The Service supports the development and use of alternative dispute resolution (ADR) techniques by Appeals to create an administrative forum, independent of compliance functions, to efficiently prevent or resolve disputes. Appeals is encouraged to survey its customers and expand ADR test programs to enhance taxpayer service.
Mutual concession cases closed by Appeals will not be reopened by Service except under certain circumstances
A case closed by Appeals on the basis of concessions made by both Appeals and the taxpayer will not be reopened by actions initiated by the Service unless the disposition involved fraud, malfeasance, concealment or misrepresentation of 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, and then only with the approval of the Appeals Director of Field Operations or Appeals Director of Technical Services.
Requirements for reopening mutual concession cases at taxpayer's request
Under certain unusual circumstances favorable to the taxpayer, such as retroactive legislation, a case closed by Appeals on the basis of concessions made by both Appeals and the taxpayer may be reopened upon written application from the taxpayer, and only with the approval of the Appeals Director of Field Operations or Appeals Director of Technical Services. The processing of an application for a tentative carryback adjustment or of a claim for refund or credit for an overassessment (for a year involved in the prior closing) attributed to a claimed deduction or credit for a carryback provided by law, and not included in a previous Appeals determination, shall not be considered a reopening requiring approval. A subsequent assessment of an excessive tentative allowance shall likewise not be considered such a reopening. The Chief of Appeals may authorize, in advance, the reopening of similar classes of cases where legislative enactments or compelling administrative reasons require such advance approval.
Non-mutual concession cases will not be reopened by Service except under certain circumstances
A case closed by Appeals on a basis not involving concessions made by both Appeals and the taxpayer will not be reopened by action initiated by the Service unless the prior disposition involved fraud, malfeasance, concealment or misrepresentation of material fact, an important mistake in mathematical calculation, or such other circumstances that indicates that failure to take such action would be a serious administrative omission, and then only with the approval of the Appeals Director of Field Operations or Appeals Director of Technical Services. The discovery that a return contains unreported income, unadjusted deductions, credits, gains, losses, etc. resulting from the taxpayer's participation in a listed transaction will constitute a serious administrative omission warranting reopening.
Requirements for reopening non-mutual concession cases at taxpayer's request
A case closed by Appeals on a basis not involving concessions made by both Appeals and the taxpayer may be reopened by the taxpayer by any appropriate means, such as by the filing of a timely claim for refund.
Conferences not granted in 90-day cases in absence of unusual circumstances
If a taxpayer had an Appeals conference in the prestatutory notice status, or if the opportunity for such a conference was accorded but not availed of, there will be no Appeals conference granted in the 90-day status after the mailing of the statutory notice of deficiency, in the absence of unusual circumstances.
Conference rights of taxpayer with reviewing officer
Where the Appeals representative recommends acceptance of the taxpayer's proposal of settlement, or, in the absence of a proposal, recommends action favorable to the taxpayer, and said recommendation is disapproved in whole or in part by reviewing officer in Appeals, the taxpayer shall be so advised by such reviewing officer and upon written request shall be accorded a rehearing before such reviewing officer. The Appeals Office may disregard this rule where the interests of the Government would be injured by delay, as for example, a case involving the imminent expiration of the period of limitations, dissipation of assets, etc.
Consideration to be given to offers of settlement
Appeals will ordinarily give serious consideration to an offer to settle a tax controversy on a basis which fairly reflects the relative merits of the opposing views in the light of the hazards which would exist if the case were litigated. However, no settlement will be made based upon nuisance value of the case to either party. If the taxpayer makes an unacceptable proposal of settlement under circumstances indicating a good-faith attempt to reach an agreed disposition of the case on a basis fair both to the Government and the taxpayer, the Appeals official generally should give an evaluation of the case in such a manner as to enable the taxpayer to ascertain the kind of settlement that would be recommended for acceptance. Appeals may defer action on or decline to settle some cases or issues (for example, issues on which action has been suspended nationwide) in order to achieve greater uniformity and enhance overall voluntary compliance with the tax laws.
Appeals Settlement Authority
Appeals is the only administrative function of the Service with authority to consider settlements of tax controversies, and as such has the primary responsibility to resolve these disputes without litigation to the maximum extent possible.
"Split-Issue" and "Specific Dollar" Settlements Permitted Under Certain Circumstances
Appeals may consider and accept proposals for "split issue" settlements. A split-issue settlement is the settlement of an issue for a percentage or a stipulated amount of the tax in controversy that if litigated, would result in a decision completely for the Government or the taxpayer.
Appeals may consider and accept proposals for "specific dollar" settlements. A specific dollar settlement is the settlement of a case for a percentage or stipulated amount of the tax in controversy that approximates the amount that would have been reached by computing the tax.
Split issue and specific dollar settlements are not appropriate in cases involving issues affecting prior or subsequent tax periods not included in the settlement, such as adjustments to depreciation/depletion, carryovers, carrybacks, or other reoccurring issues.
Crosswalk including old policy statement numbers
|New Number||Old Number||Title|
|8-1||8100-1||Appeals Administrative Dispute Resolution Process|
|8-2||8-49||New issues not to be raised by Appeals|
|8-3||8-50||Mutual concession cases closed by Appeals will not be reopened by Service except under certain circumstances|
|8-24||8610-6||Conferences not granted in 90-day cases in absence of unusual circumstances|
|8-36||8610-3||Conference rights of taxpayer with reviewing officer|
|8-47||8610-2||Consideration to be given to offers of settlement|
|8-48||8710-3||"Split-issue" and "specific dollar" settlements permitted under certain circumstances|