- 8.6.1 Conference and Issue Resolution
- 184.108.40.206 Introduction to Discussion on Conferences
- 220.127.116.11 Transfer Procedures
- 18.104.22.168 Communications with the Taxpayer and/or Representative
- 22.214.171.124.1 Leaving Information on Answering Machines/Voice Mail
- 126.96.36.199.2 Using Fax/E-eFAX to Communicate
- 188.8.131.52.3 Change of Address
- 184.108.40.206.4 Copies of Written Communications
- 220.127.116.11.5 Relief from Separate Notice Requirements [Section 3201(d) of RRA '98]
- 18.104.22.168.6 Unique Identifying Number on Correspondence
- 22.214.171.124 Conference Techniques Used by Appeals Technical Employees (ATEs)
- 126.96.36.199.1 Conference Practice
- 188.8.131.52.2 Change of Appeals Technical Employee (ATE) After Initial Contact
- 184.108.40.206.3 Right of Consultation with Representative
- 220.127.116.11.4 Participation in Conferences by IRS Employees
- 18.104.22.168.5 Virtual Service Delivery (VSD)
- 22.214.171.124 Audio and Stenographic Recording of Conferences
- 126.96.36.199.1 Raising Frivolous Issues During an In-Person Conference
- 188.8.131.52.2 Recording Requirements
- 184.108.40.206.3 Procedures for Audio Recordings
- 220.127.116.11 New Issues and Reopening Closed Issues
- 18.104.22.168.1 Defining a New Issue
- 22.214.171.124.2 General Guidelines
- 126.96.36.199.3 Burden of Proof when Government Raises New Issues
- 188.8.131.52.4 Taxpayer Raises New Issue
- 184.108.40.206.5 Taxpayer Provides New Information
- 220.127.116.11.6 Taxpayer Raises New Theory or Alternative Legal Argument
- 18.104.22.168.7 Jurisdiction Released
- Exhibit 8.6.1-1 Virtual Service Delivery (VSD) Locations
Part 8. Appeals
Chapter 6. Conference and Settlement Practices
Section 1. Conference and Issue Resolution
August 24, 2016
(1) This transmits revised IRM 8.6.1, Conference and Settlement Practices, Conference and Issue Resolution.
(1) This IRM section was revised to change references from “face-to-face” conferences to “in-person” conferences in the following sections:
IRM 22.214.171.124, Introduction to Discussion on Conferences
IRM 126.96.36.199.1, Conference Practice
IRM 188.8.131.52.1.1, In-Person Conferences: Case Assistance
IRM 184.108.40.206, Audio and Stenographic Recording of Conferences
IRM 220.127.116.11.1, Raising Frivolous Issues During an In-Person Conference
IRM 18.104.22.168.2, Recording Requirements
(2) This IRM was revised to reflect that most conferences in Appeals are conducted by telephone and to make that the default method. The revision also provides guidance for when in-person conferences are appropriate.
(3) Moved transfer procedures to IRM 22.214.171.124.
(4) Deleted IRM sections:
IRM 126.96.36.199.1, Transfers of Nondocketed Cases
IRM 188.8.131.52.2, Transfers for the Convenience of Taxpayers
IRM 184.108.40.206.4, Procedures to Transfer Cases Within Appeals
IRM 220.127.116.11.5, Procedures to Deny Transfers
(5) Added IRM 18.104.22.168.1.2, In-Person Conferences: Circuit Riding.
(6) This IRM also provides guidance for requesting case assistance.
(7) Language was added in IRM 22.214.171.124.4 to state that Appeals has the discretion to invite Counsel and/or Compliance to the conference.
(8) Definition of a New Issue was updated in IRM 126.96.36.199.1(2)
(9) Removed “issue” from IRM 188.8.131.52.5(2).
(10) Editorial changes throughout.
John V. Cardone
Director, Policy, Quality and Case Support
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 8.1.1, Appeals Operating Directives and Guidelines, under Exhibit 8.1.1-1, Common Terms Used in Appeals. As an integral part to accomplishing the Appeals mission, schedule conferences on dates that are reasonably convenient for taxpayers and/or their representatives and the ATE. Appeals uses various conference methods; however, most conferences are held by telephone.
See IRM 184.108.40.206, Transfer Procedures, for information about transferring.
Conference procedures for Appeals Team Case Leaders (ATCLs) are covered in IRM 8.7.11, Working Appeals Team Cases.
When conducting conferences with taxpayers and/or representatives, it is important that all Appeals personnel provide a unified position in the settlement of an issue. See IRM 220.127.116.11, Accomplishing the Appeals Mission, for further information.
This section provides guidance involving the transfer of a case (e.g., inventory balancing) within Appeals.
Appeals will transfer:
Type of Case: Transfer to: Coordinated Industry Case (CIC) 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) The first protesting partner’s return in a Partnerships not covered by the TEFRA provisions of IRC 6221 – IRC 6234 The Appeals Office with jurisdiction over the partnership return. For more information about Non- TEFRA entities, See IRM 18.104.22.168.1.2, Protest
Employee Plans (EP) and Exempt Organizations (EO) Cases from TE/GE
Cases containing Employee Plan (EP) and/or Exempt Organization (EO) issues from a source other than TE/GE
A pension plan deduction, on Form 1120, may be disallowed due to the employer’s use of incorrect actuarial assumptions. Factors to consider include, for example, the level of difficulty of the case and the workload of the offices.
The designated Appeals Office with expertise in these issues. See IRM 8.7.8, Tax Exempt and Government Entities (TE/GE) Cases, for Exhibit 8.7.8-1, List of Employee Plans and Exempt Organizations Areas Case contains issues requiring specialized knowledge The Appeals Office with expertise in these issues
Area Directors may approve or deny a transfer in the interest of tax administration.
If there is a disagreement between the Area Directors, they must set forth the reasons for denying a transfer and request approval of the denial in a memorandum to the appropriate executive for action.
Docketed cases in Appeals’ jurisdiction are generally assigned for consideration to an employee in the Appeals office designated on the docket list.
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:
Employee plan cases
Exempt organization cases
Estate tax cases
Gift tax cases
Cases with international issues
TEFRA key cases
When required, docketed cases containing certain issues are referred through the automated 13381 system to the appropriate Appeals Team Manager (ATM) for assignment to the Technical 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:
Compliance Coordinated Issues (Feature Code IS)
Appeals Coordinated Issues (Feature Code AI)
Appeals Emerging Issues (Feature Code EM)
Abusive Tax Avoidance Transactions (ATAT) (Feature Code LT)
Penalties related to ATAT issues
Certain valuation issues in connection with personal property and works of art
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 22.214.171.124.1, Leaving Information on Answering Machines/Voice Mail, and IRM 126.96.36.199.2, Using Fax/Enterprise e-Fax (E-eFax) to Communicate.
IRM 188.8.131.52.3, Change of Address, contains instructions for verifying and/or updating a taxpayer's address.
IRM 184.108.40.206.4, Copies of Written Communications, contains procedures for providing copies of communications to taxpayers, when a valid Power of Attorney exists.
IRM 220.127.116.11.5, Relief from Separate Notice Requirements [Section 3201(d) of RRA ‘98)], 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.
The ATE's badge number must be included on all written correspondence to the taxpayer and/or the representative. See IRM 18.104.22.168.6, Unique Identifying Number on Correspondence.
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, Confidentiality and Disclosure of Returns and Return Information.
Guidelines for leaving information on answering machines/voice mail may be found in IRM 22.214.171.124.1, Leaving Information on Answering Machines/Voice Mail.
Appeals employees must remember to protect tax information when using the fax machine or E-eFAX. IRC 6103 provides details on the confidentiality and disclosure rules that must be followed when working with taxpayer return or taxpayer return information.
IRM 126.96.36.199, Facsimile Transmission of Tax Information, specifically addresses the use of faxes.
In addition, Appeals employees should be familiar with the provisions of IRM 188.8.131.52, Practice Before Appeals, which details what each Appeals employee must verify before disclosing information of a confidential nature.
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:
Use a cover sheet, identifying the person for whom the information is intended and the number of pages being faxed.
If faxing to the taxpayer, avoid including specific confidential information, other than name and phone number, on the cover sheet.
If faxing to an authorized third party, use that person’s name on the cover sheet – not the taxpayer’s [IRM 184.108.40.206 (11)].
Use the standard caveat found in IRM 220.127.116.11 (12) on all fax cover sheets. The standard language is on the fax cover sheet generated from ACDS.
Fax the information in an order in which the cover sheet will become the first page covering the faxed tax information.
IRM 18.104.22.168(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.
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.
Verify the taxpayer's address. On a joint module, verify the address for each spouse. See the following IDRS commands that might be useful in verifying the taxpayer's address on Master File:
ENMOD (IRM 22.214.171.124)
SPARQ (IRM 126.96.36.199)
IMFOL"E" (IRM 2.3.51, Exhibit 2.3.51-13)
BMFOL"E" (IRM 2.3.59. Exhibit 2.3.59-13)
If the taxpayer provides an address that does not match the address posted on Master File, advise the taxpayer to update his or her address with the IRS using:
Form 8822, Change of Address; or
Form 8822-B, Change of Address or Responsible Party - Business.
If the case is docketed, also advise the petitioner to update his or her address with the United States Tax Court. The petitioner can obtain Form 10, Notice of Change of Address, from the Tax Court's website at www.ustaxcourt.gov.
Determine the need to update the taxpayer's address on Master File. Prior to requesting a Master File update, ensure the change is being made as the result of clear and concise notification in accordance with Rev. Proc. 2010-16. This guidance explains how the Service is informed of a change of address. When so informed, update the taxpayer's Master File record to the new address.
Original notices and other written communications are required to be sent to the taxpayer.
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.
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.
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.
In a docketed U. S. Tax Court case, address and send all written communications to the Counsel of Record, if any. See IRM 188.8.131.52.1, 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.
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.
Form 8821, Tax Information Authorization, allows taxpayers to authorize individuals, corporations, firms, organizations, or partnerships to inspect and/or receive confidential tax information including written communications. It cannot be used to appoint a representative. For more information on Form 8821, see IRM 184.108.40.206.7.2, or IRM 220.127.116.11.3 for more information on Form 8821 - Tax Information Authorization.
Section 3201(d) of Restructuring and Reform Act of 1998 (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.
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:
Appeals is not required to send initial contact letters separately to each spouse under section 3201(d) of RRA ‘98 because the letters do not contain a notice required by statute; however, Appeals is not precluded from sending them separately.
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 26 CFR 301.6212-2.
Send notices required by statute in separate mailings to each spouse using the last known address.
Section 3705(a) of the Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to include on any manually generated correspondence to a taxpayer or authorized representative the name, telephone number, and unique identifying number of an employee who can be contacted with respect to the correspondence. In the IRS, the unique identifying number is an employee’s 10-digit Smart ID badge number. Manually generated correspondence includes faxes and e-mails.
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."
Conference techniques used by ATEs vary depending on the types of cases but there is no substitute for preparation, judgment, and common sense when conducting an Appeals conference. The ATE should provide the taxpayer with an explanation of the Appeals process and notification that the taxpayer might be contacted by an outside contractor to participate in a survey.
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.
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.
Complete the conference timely and make an accurate and prompt decision to ensure the least amount of delay. Inform the taxpayer and/or representative of the final decision of the Internal Revenue Service regarding the amount of tax liability, or other issues in dispute.
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.
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.
Make multiple attempts to initiate a personal contact with the taxpayer or representative by telephone or by correspondence. During personal contact, discuss whether an alternative conferencing method (other than telephone) is necessary based on the unique facts and circumstances of the case.
Except as set forth below, hold conferences by telephone. Hold conferences on dates that are reasonably convenient for taxpayers and representatives and the ATE.
Offer a taxpayer requesting an in-person conference a virtual conference as an alternative when the technology for a virtual conference is available (see Virtual Service Delivery (VSD), discussed below). If the taxpayer declines the opportunity for a VSD conference:
Document the taxpayer’s decision in the Case Activity Record (CAR)
Input code "VSDX" in the LOC7 field.
There may be situations in which an in-person conference, including circuit riding should be held to help reach resolution. The decision to hold an in-person conference can be made upon the request of the taxpayer or at the suggestion of the ATE. The ATM must concur with the decision. Appeals will consider the following facts and circumstances in making the decision to hold an in-person conference:
There are substantial books and records to review that cannot be easily referenced with page numbers or indices
The ATE cannot judge the credibility of the taxpayer’s oral testimony without an in-person conference
The taxpayer has special needs (e.g. disability, hearing impairment) that can only be accommodated with an in-person conference
There are numerous conference participants (e.g., witnesses) that create a risk of an unauthorized disclosure or breach of confidentiality
An alternative conference procedure (e.g., Post Appeals Mediation (PAM) or Rapid Appeals Process (RAP)) involving separate caucuses will be used
Another IRM section specific to the workstream calls for an in-person conference
The ATE will communicate the decision regarding the in-person conference to the taxpayer and/or representative.
The assigned ATE will request case assistance from an assisting ATE who will participate in the in-person conference when the assigned ATE’s Post of Duty (POD):
Does not accommodate in-person conferences, or
Is not reasonably convenient for the taxpayer or representative, or
Does not conduct circuit riding
The assigned ATE’s ATM will access the Appeals Case Support Intake SharePoint to submit a case assistance request. APS will route the request to an ATM with ATEs in the assisting POD. The ATM will identify the assisting ATE, and notify the assigned ATE’s ATM.
The assigned ATE will:
Contact the assisting ATE to arrange a mutually convenient date and time for the conference
Schedule the conference
Provide any documents the assisting ATE may need to review prior to the conference
Lead the conference by telephone and remain responsible for settlement recommendations and case closing
The assisting ATE will be present at the in-person conference. The ATEs will confer and share observations regarding the case after the conference (or during the conference in a separate conversation, if necessary).
If on the day of the conference, the taxpayer submits documents that need to be processed (e.g., payment, original delinquent return, etc.), the assisting ATE will process/forward the information to the appropriate office and provide a copy to the assigned ATE. If new information is presented, follow the procedures in IRM 18.104.22.168.5, Taxpayer Provides New Information.
The assisting ATE will charge time to Case Related Assistance.
If the assigned ATE is in a POD that conducts circuit riding, the ATM will allow circuit riding to a mutually convenient location when the address of the taxpayer, representative, or business (for business entities) is more than:
100 miles from a customer-facing VSD site, or
150 miles from the nearest Appeals Office (Area Directors have the discretion to deviate from these mileage limitations).
The ATM will allow circuit riding if the nearest Appeals Office cannot take the case due to high inventories or lack of technical expertise, or if there is no convenient alternative.
ATEs will circuit ride at least quarterly to meet the needs of taxpayers.
In the states where Appeals no longer has a presence or has a small presence, the designated circuit riding location is shown below:
State with Small or No Appeals Presence Designated Circuit Riding Location Alaska Anchorage Arkansas Little Rock Idaho Boise Kansas Wichita Montana Helena North Dakota Fargo Rhode Island Providence South Dakota Aberdeen Vermont Burlington Wyoming Cheyenne
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 Collection Due Process (CDP) cases, however, where the ATE has had prior involvement, the case must be reassigned. See IRM 22.214.171.124.1, No Prior Involvement.
In cases where the prior involvement rule does not require transfer, the ATM or the Area Director may authorize a change in assignment where the circumstances warrant.
The ATE will refer a taxpayer directly to the ATM 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 only before the ATE has begun to substantively consider the case. If the taxpayer requests that the case be transferred during the conference/hearing process, refer the request to the ATM.
The ATM will evaluate the taxpayer's request and/or concerns and determine whether the case should be transferred to another ATE. The ATM will communicate the decision directly to the taxpayer/representative.
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 126.96.36.199.3, Representatives Qualified to Practice Before Appeals.
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.
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 188.8.131.52.3.2, Bypass of a Representative.
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.
Where a recognized representative has unreasonably delayed or hindered the appeal process by failing to furnish, after repeated requests, non-privileged information necessary for Appeals consideration, the ATE may request permission from his/her ATM to contact the taxpayer directly for such information. With the ATM’s consent, the ATE may notify the taxpayer that he/she has determined that 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.
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 to the taxpayer to supply such non-privileged information. See IRC 7521(c) and the regulations thereunder.
The authority for bypass procedures is found in Statement of Procedural Rules §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.
The ATE does not have the authority to bypass a "Counsel of Record" (COR), so these procedures don't apply to a COR. See IRM 184.108.40.206.1, Attorney of Record in Docketed Cases, for detailed information about the COR.
Appeals has the discretion to invite Counsel and/or Compliance to the conference. The prohibition against ex parte communications must not be violated. See Rev. Proc. 2012-18. Appeals may also request that other experts attend conferences.
See other IRM Part 8 sections for participation by IRS employees in cases under the Alternative Dispute Resolution (ADR) Program. This includes IRM 220.127.116.11.7, Participants, that reflects Appeals' discretion to have Counsel, the originating function, or both participate in a Post-Appeals Mediation proceeding for a Non-Collection Case.
Virtual Service Delivery (VSD) employs teleconferencing technology that permits parties to conduct virtual face-to-face conferences from remote locations. VSD technology is installed in a number of IRS locations known as VSD “support” sites, including all six Appeals Campus locations, which Campus ATEs can use to conduct VSD conferences. VSD technology is also installed in a number of “customer-facing” sites, where taxpayers and representatives can go to conduct VSD conferences. Customer-facing VSD sites include:
Some IRS posts of duty,
Partner sites, and
Two Low Income Taxpayer Clinics (LITCs), for taxpayers represented by these LITCs.
ATEs will follow these procedures with respect to VSD:
Step Action 1. These conditions must be met for a VSD conference:
The ATE is co-located with VSD equipment
The taxpayer or representative is located within 100 miles of a VSD customer-facing location, (see Exhibit 8.6.1-1)
The taxpayer is not raising frivolous issues listed in Notice 2010-33 (or its successor notice), and
The taxpayer is not raising frivolous issues reflecting a desire to delay or impede the administration of Federal Tax Laws for a CDP hearing request.
2. Schedule an agreed-upon date and time (keeping in mind the impact of different time zones on both parties). The ATE will:
Document the taxpayer’s decision in the CAR,
Input code “VSDA” in the LOC7 field,
Reserve the VSD equipment at his/her location for the agreed-upon date and time, using local procedures, and
Reserve the customer-facing equipment for the agreed-upon date and time using the Outlook Reservation System. (Does not apply to LITC cases).
3. The ATE will provide the following information to the taxpayer:
Address and room number of the customer-facing equipment (Does not apply to LITC cases),
Any local contact information the taxpayer will need at the site to gain access to the equipment or instructions for its use (Does not apply to LITC cases), and
Instructions on how to make last minute contact with the ATE if the taxpayer will be late or encounters difficulties with access or use of the VSD equipment.
4. The ATE will advise the taxpayer to submit copies of relevant documents (by mail or FAX) so that they are received at least 10 business days in advance of the scheduled conference.
While new information may be visually presented to the ATE at the conference, it is recognized that ATEs need time to review and consider such information before making final decisions that affect the resolution of a case. As such, expectations a taxpayer or representative may have for immediate decisions in such situations are unwarranted.
5. If the conference is delayed or canceled due to technical problems, the ATE will document the reason for the delay or cancellation in the CAR, and either:
Reschedule an additional virtual conference if the taxpayer requests it, or
Reschedule a telephone conference
6. ATEs may take their laptop computers with them as they conduct VSD conferences to avail themselves of the use of the laptops in the same manner they are used during phone conferences and daily work. The VSD equipment in the support site offices is located near a network connection.
In general, ATEs willl follow the above procedures when taxpayers who are represented by an LITC clinic with VSD technology request a VSD conference.
Prohibition Against Recommending Representation - IRS personnel are prohibited from making recommendations to taxpayers with respect to securing assistance from any specific individual, firm, or group, including LITCs. Do not recommend that the taxpayer seek assistance from any specific LITC. The taxpayer can obtain information about LITCs in Pub 4134, Low Income Taxpayer Clinic List.
Additional information is available on the VSD SharePoint site to further assist the ATEs with their VSD responsibilities. Visit Appeals Campus Operations Virtual Service Delivery Employee Resources on Appeals' Campus Operations SharePoint site for detailed instructions.
Audio and stenographic recordings are allowed on Appeals cases scheduled for in-person conferences if a request to record is made pursuant to IRC 7521(a), Recording Interviews.
In-person conferences are not 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.
In addition, taxpayers with issues deemed frivolous, who still desire an in-person conference, are allowed an opportunity to raise specific relevant issues in response to the Appeals letter advising them they do not qualify for an in-person conference.
This section applies only to in-person conferences, and not telephone conferences.
Some taxpayers, who initially raised frivolous issues, then raise specific relevant issues and are given an in-person recorded conference, try to discuss frivolous issues during the recorded conference.
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.
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.
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.
IRC 7521, which was part of the Taxpayer Bill of Rights 1 (TBOR1), provides for audio recordings. Notice 89-51, 1989-1 C.B. 691 contains guidance for allowing 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.
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 recording of an in-person IRC 6330 hearing. See Keene v. Commissioner 121 T.C. 8 (2003).
Follow the provisions in Notice 89-51, 1989-1 C.B. 691, or its successor, when allowing recordings in cases within Appeals’ jurisdiction. Audio recordings are allowed on all types of cases that have in-person conferences on issues that are not deemed frivolous. In these cases, taxpayers 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.
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 an in-person conference; and
the taxpayer has given a 10-day advance notice.
The stenographer must have one of the following credentials to be allowed to make a stenographic recording in Appeals.
Court reporter of the United States District Court.
An independent reporter qualified to take depositions for use in United States District Court.
Licensed or certified by any state to be a court reporter or to take depositions.
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.
The Appeals webpage contains helpful information on audio conference procedures, including how to identify yourself and participants on the recording. Also, see IRM 18.104.22.168.3, Procedures for Audio Recordings.
Video recordings are not allowed.
Procedures in Notice 89-51, 1989-1 C.B. 691 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.
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.
At the outset of the recording, the ATE conducting the conference identifies himself or herself and states the following information:
name of case
purpose of the proceeding
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.
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.
State on the tape when the conference or recording session ends. Retain Appeals tapes in the case file.
Process any payments or costs for copies of Appeals tapes given to taxpayers, per the provisions of Notice 89-51, 1989-1 C.B. 691.
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 22.214.171.124.
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 appropriate Director of 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.
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 of Operations with oversight of the case. See IRM 126.96.36.199. The following explains references contained within this Policy Statement:
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.
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 a 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.
Reference to a serious administrative omission regarding non-mutual concession cases includes criticism of an issue by the Joint Committee.
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.
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.
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, or
Recommended by Counsel to be raised on behalf of the Commissioner in the course of review for the issuance of a statutory notice of deficiency.
A new issue is a matter not raised during Compliance's consideration. Any issue not raised by Compliance in the report (e.g., 30-Day Letter) or rebuttal and disputed by the taxpayer is a new issue.
A new theory or alternative argument is not a new issue. See IRM 188.8.131.52.2(3), General Guidelines.
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.
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.
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.
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.
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 184.108.40.206.3, New Issues in Docketed Cases.
The burden of proof is on the government when it raises a new (affirmative) issue in a docketed case.
Appeals gives full, fair, and impartial consideration to the merits of each new issue a taxpayer raises once the originating function has had an opportunity to examine the issue.
If the taxpayer raises a relevant new issue and there will be less than 210 days remaining on the statute of limitations when the originating function receives the case, solicit a consent to extend the statute of limitations. If the taxpayer will not sign a consent, follow the procedures in IRM 220.127.116.11.3.1, Protecting statutes, General Guidelines, to protect the statute.
If the taxpayer raises a new issue and there will be at least 210 days remaining on the statute of limitations when the originating function receives the case, follow the procedures in IRM 18.104.22.168.7, Jurisdiction Released, to return the case.
For LB&I source cases, see IRM 22.214.171.124.3Returning a Case to LB&I.
If a taxpayer repeatedly raises a new issue as a delay tactic, refer to IRM 126.96.36.199.5, Taxpayer Provides New Information.
For estate cases, see IRM 188.8.131.52, Estate Cases Worked in Appeals.
New information or new evidence is any item or document related to a disputed issue that the taxpayer did not previously share with the examiner, and in the judgment of the Appeals hearing officer, merits additional analysis or investigative action by Examination.
Additional analysis means categorizing, sorting, or reviewing large volumes of records, or requiring additional steps or reasoning to reach a conclusion.
Investigative action means actions required for fact finding, to make inquiries or to verify the authenticity of an item.
If a taxpayer provides information in response to a question or request from Appeals to clarify or corroborate information contained or referenced in the examination report, Protest or Rebuttal, such information will not be provided to Compliance for review and comment, unless subject to the provisions of IRM 184.108.40.206.3(2) for returning a case to LB&I.
If the case is IRS Campus-sourced (including claims, PENAPs, International penalties, and International Individual Compliance (IIC) - Tax Examiner cases as identified on Form 3198), determine if it meets the exception after receiving all new information. If the case meets the exception, review the new information and proceed with normal consideration. If the case does not meet the exception, go on to paragraph (3).
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If the taxpayer provides new information or evidence and there will be less than 210 days remaining on the statute of limitations when the originating function receives the case, solicit a consent to extend the statute of limitations. If the taxpayer will not sign a consent, inform the taxpayer that you cannot consider the new information because the originating function has not had an opportunity to review it. Proceed with normal consideration of the case. If you cannot reach settlement, follow the procedures in IRM 220.127.116.11.3.1, Protecting Statutes, General Guidelines, to protect the statute.
If the taxpayer provides new information or new evidence and there will be at least 210 days remaining on the statute of limitations when the originating function will receive the case, consider the following conditions before releasing jurisdiction:
The evidence is relevant to the proposed deficiency; and
The evidence is not already in or referenced in the case file; and
The evidence requires investigative action or additional analysis.
If ALL conditions are met, release jurisdiction and return the case to the originating function. See IRM 18.104.22.168.7, Jurisdiction Released.
If any condition is NOT met, proceed with normal consideration.
Where a taxpayer or recognized representative unreasonably delays the process by intentionally submitting new information or raising new issues multiple times to impede the process, after obtaining approval from the ATM, the Appeals hearing officer will notify the taxpayer or representative that the case will not be returned to the originating office for consideration of the new information or new issues and will make the determination based on factual hazards. The Appeals hearing officer will document the CAR accordingly.
For information received in LB&I sourced cases, see IRM 22.214.171.124.3, Returning a Case to LB&I.
Primary Business Code (PBC) 315, (IIC) field (Revenue Agent and Tax Compliance Officer) cases, should be worked following the procedures and guidelines outlined in this section.
If the taxpayer raises a relevant new theory or alternative legal argument and the case is an SB/SE field, office examination, or an LB&I case, follow these steps:
Step Action 1. Return the information package to the original exam group. 2. Prepare an INTERIM customized Form 5402 using ACDS APGolf. Include the following information: 3. Update the following in CARATS: 4. Prepare Letter 5209 to the taxpayer. Sign it but do not date or mail it. Include a copy for the file and representative, if any, and envelope(s) for mailing. Letter 5209 advises taxpayers that you are sending their new theory or argument to the original exam group to assign to an examiner for review and comment and retaining jurisdiction of their case. 5. Submit the case to the ATM for approval. If approved, the ATM will mail the letters and forward the information package to the original Examination Group.
For LB&I sourced cases, also see IRM 126.96.36.199.3 , Returning a Case to LB&I
The ATM will send the information package along with all supporting information to Exam, allowing at least 45 days for written review and comment (subject to ex parte requirements) and granting an extension of time, if mutually agreed.
Follow these procedures to release jurisdiction and return a case to the originating function:
Step Action 1. Determine where to send the case:
SB/SE field and office examination sourced cases and LB&I cases – return case to the Examination Technical Services location that serves the originating Exam group.
IRS Technical Services
For all other cases - refer to the Case Routing tab on the Appeals Home Page at http://appeals.web.irs.gov/APS/caserouting.htm.
2. Prepare a customized Form 5402 using ACDS APGolf.
Include the following information:
[Reason for releasing jurisdiction (i.e., Taxpayer provided new information, Taxpayer raised a new issue, etc.)]
Return case to [Originating function’s address (i.e., Technical Services, IRS Campus, etc.)]
Use Closing Code 20.
3. Prepare Letter 5209 to the taxpayer. Sign it but do not date or mail it. Include a copy for the file and representative, if any, and envelope(s) for mailing by APS. Letter 5209 advises taxpayers that you are returning the case to the originating function and the reason, i.e., because they raised a new issue, submitted new information, etc., and releasing jurisdiction of their case. 4. Submit the case to the ATM for approval and processing. The ATM approves the case closure, closes the case on the ATM Case closing screen, and gives it to APS. APS closes the case on ACDS, mails Letter 5209 , and returns the entire administrative file to the originating function using Form 3210.
For LB&I sourced cases, also see IRM 188.8.131.52.3, Returning a Case to LB&I.
For virtual face-to-face interactions, Campus ATEs will access VSD equipment located in one of the six (6) Campus Appeals offices (i.e. "support sites" ), while the taxpayers and/or their representatives will access VSD equipment located in one of the "customer-facing" VSD sites. For Low-Income Tax Clinic (LITC) cases, special procedures apply. Visit Appeals Campus Operations Virtual Service Delivery Employee Resources on Appeals' Campus Operations Share Point site for detailed instructions.
|Appeals Support Sites||Location|
|Brookhaven Campus||Holtsville, New York|
|Philadelphia Campus||Philadelphia, Pennsylvania|
|Florence Campus||Florence, Kentucky|
|Memphis Campus||Memphis, Tennessee|
|Ogden Campus||Ogden, Utah|
|Fresno Campus||Fresno, California|
|IRS||949 E. 36th Avenue - Anchorage, Alaska 99508|
|IRS||550 West Fort Street - Boise, Idaho 83724|
|IRS||700 E. San Antonio - El Paso, Texas 79901|
|Partner||7 N. 31st Street, Billings - Montana 59101|
|IRS||700 W. Capital, Little Rock - Arkansas 72201|
|IRS||51 S.W. First Avenue - Miami, Florida 33130|
|IRS||7180 9th Ave. North, Pensacola - Florida 32504|
|Partner||721 N. Cincinnati Street, Spokane - Washington 99202|