- 8.7.11 Working Appeals Team Cases
- 22.214.171.124 Introduction to Working Appeals Team Cases
- 126.96.36.199 Appeals Team Case Leader (ATCL) Position
- 188.8.131.52 Team Conference Procedures
- 184.108.40.206 Grading Team Case Work Assignments
- 220.127.116.11 Preliminary Review of Case by Team Leaders
- 18.104.22.168.1 Team Leader Review of the Statute of Limitations
- 22.214.171.124.2 Team Leaders Determination of Adequacy of RAR, Protest and Rebuttal to Protest
- 126.96.36.199.3 Returning a Case to LB&I
- 188.8.131.52 Tax Computation Specialist (TCS) Involvement in Team Cases
- 184.108.40.206 ATM Selection of Team Leader and Team Members
- 220.127.116.11.1 Team Leader Assignment of Work to Team
- 18.104.22.168.2 Team Member Planning Meeting
- 22.214.171.124.3 Pre-Planning Conference Contacts
- 126.96.36.199.4 Ongoing Communications
- 188.8.131.52.5 Team Conference Work Plan
- 184.108.40.206 Pre-Conference Meeting
- 220.127.116.11.1 Purpose of Pre-Conference Meeting
- 18.104.22.168.2 Requesting a Pre-Conference Meeting
- 22.214.171.124.3 Who Participates in a Pre-Conference Meeting
- 126.96.36.199.4 Rough Draft ACM
- 188.8.131.52 Partial Agreements on Team Cases
- 184.108.40.206 Post Settlement Conference
- 220.127.116.11 Final Appeals Case Memorandum (ACM) Preparation
- 18.104.22.168.1 Table of Contents
- 22.214.171.124.2 Executive Summary
- 126.96.36.199.3 Schedule of Adjustments
- 188.8.131.52.4 Complex Issue Discussion
- 184.108.40.206 Closing Team Cases
- 220.127.116.11 Docketed Cases
- 18.104.22.168 Evaluation of Team Members' Performance
Part 8. Appeals
Chapter 7. Technical and Procedural Guidelines
Section 11. Working Appeals Team Cases
March 16, 2015
(1) This transmits revised IRM 8.7.11, Technical and Procedural Guidelines, Working Appeals Team Cases.
(1) IRM 8.7.11 is updated to incorporate IG AP-08-0714-004, Implementation of the Appeals Judicial Approach and Culture (AJAC) Project Examination and General Matters - Phase 2 changes.
John V. Cardone
Director, Policy, Quality and Case Support
This section discusses procedures for working team cases in Appeals. These cases are received from Large Business and International (LB&I) and are generally assigned to an Appeals Team Case Leader (ATCL). However, in some instances a senior Appeals Officer (AO) is assigned as team leader. Therefore, these procedures are used by both ATCLs and AOs who are team leaders on a team case.
A team case work unit generally requires the use of Appeals Officers (AOs) as team members in addition to the team case leader. It has a level of difficulty and impact characterized by the presence of extremely complex issues in dispute. Each team case work unit involves:
Significant amounts of money at issue. While the determination of "significant" is left up to the Appeals Team Manager (ATM), the tax in dispute is generally $10 million or more; or
A significant number of issues, some of which are highly complex, for the team case leader to coordinate. The team case leader generally works some of the significant issues. The ATM determines whether the work unit contains a significant number of issues on a case-by-case basis.
See IRM 22.214.171.124, Accomplishing the Appeals Mission for further information.
Use of Issue Management System (IMS) is mandatory for working LB&I case. Cases carded into Appeals Centralized Database System (ACDS) after February 6, 2012, must be worked in IMS in order to provide feedback to LB&I. ACDS will remain the Appeals system of record for case management and recording time on cases. An OnLine 5081 is required to gain access to IMS.
Each user should request the "IMS-PRODUCTION-LMSB USER ACCESS" application and add a statement indicating an Examination Return Control System (ERCS) ID is not required.
Verify the case is in IMS. If the case is not in IMS, ask your ATM to search the APS inventory in IMS for cases that are not currently in your Appeals IMS Case Inventory.
Additional information on the various roles in IMS and training modules can be found on the Appeals BSP IMS Website.
Use of Secure Enterprise Messaging System (SEMS) is optional. Information on SEMS can be found at, http://appeals.web.irs.gov/atcl/default.htm.
The ATCL promotes timely resolution of large complex work units received from LB&I. He/she has settlement authority and is responsible for simultaneously managing at least two major work units on a continuing basis.
An ATCL considers no more than two consecutive cycles of the same taxpayer, unless there has been an intervening cycle considered by an another ATCL or AO, or unless there are special circumstances determined by management.
After initial discussions between the ATCL and his/her ATM, the ATCL has complete control of the case.
The ATCL has settlement authority for all work unit assignments. However, the ATCL's proposal of settlement may be subject to the concurrence of Domestic/International Operations. See IRM 126.96.36.199.1 for review and concurrence requirement for Coordinated Issues. Refer also to IRM 188.8.131.52(3). The ATM may propose a change to the proposed settlement and if an agreement cannot be reached, the issue is resolved by the Area Director.
The ATCL controls several work units concurrently, depending on their complexity and special characteristics. When appropriate, he/she is assigned complex work units not meeting the criteria in IRM 184.108.40.206(2) above.
The Area office may recommend the establishment of a ATCL position, depending on workload. The position may be filled temporarily or permanently, or may require a detailee. A request to establish a new ATCL position must be submitted for approval to the Chief, Appeals with a justification for the establishing the position.
A team approach is used in the absence of a formally established ATCL position. Two or more Appeals Officers (AOs) can form a team, pooling proficiency to resolve all issues expeditiously. A team leader is assigned when a team approach is used.
Appeals Officers of any grade are assigned to teams, and support personnel are used as needed.
When an LB&I case is assigned to an AO who later determines a team effort would expedite completion of the work unit, the manager assigns more personnel.
Generally, team leaders can consider no more than two consecutive cycles of the same taxpayer, unless there has been an intervening cycle considered by another AO or unless there are special circumstances determined by management.
The team leader recommends disposition of the work unit. Any understanding reached at an interim level on an issue-by-issue basis between a team member and a taxpayer or representative is tentative and must fit in with recommendations of the team leader who must be fully acquainted with the strengths and weaknesses of major issues and their proposed disposition.
Team members are responsible for considering their portion of the work assignment independently unless the manager believes authority over a team member's issue rests with the team leader. The team leader will ascertain that the required concurrence is obtained from Domestic/International Operations.
The team leader and team members are responsible for providing LB&I the opportunity to consider and timely review and comment on new information or evidence presented by the taxpayer. See IRM 220.127.116.11, Receipt of New Assignment, for more information and documentation requirements.
Periodic team meetings are held to discuss the possible impact of each member's issues on those of other members, to define objectives and to otherwise coordinate team activities. The team leader is consulted on technical and procedural questions consistent with the degree of independence given the team members by the team leader.
The team leader is responsible for meeting target dates and identifying and attempting to eliminate obstacles when problems are encountered by team members. Periodically, the team leader's ATM is updated on the progress and informed of any problems that may develop in the case.
When disagreements/differences arise between team members (including members from Domestic/International Operations), please see IRM 18.104.22.168(6) for additional information.
The ATCL has settlement authority on all related work units assigned. However, his/her manger may propose a change to the proposed settlement and if an agreement cannot be reached, the issue is resolved by the Area Director.
Team members are responsible for preparing Appeals Case Memoranda (ACMs) for the issues assigned to them. The team leader coordinates preparation of the ACM and Form 5402 except where a case within the work unit is handled entirely by one team member. If the team leader resolves an issue assigned to a non-Domestic/International Operations team member without the member's agreement, the team leader must prepare the ACM for that issue. If the team leader revises the team member's ACM, the team leader will provide a copy of the revised ACM to the team member as soon as practical.
The Area Director decides who signs Form 5402. However it may be delegated to the ATM.
The team leader is responsible for statute of limitations control except in a multi-case unit where cases are assigned to another team member; then, the team member to whom the case is assigned is responsible.
Portions of team case leader work units assigned to individual AO team members are graded on the basis of complexity and difficulty of the assigned portion. Team leader control varies and must be considered in determining the grade level to assign to a team member's portion.
The tentative grade of a team member's assignment is determined as if it were a work unit standing alone but taking into consideration the expected degree of control.
The final grade of the assignment must reflect the actual impact of team leader control and related limitations on the team member's responsibility for decision making, presenting results, and other relevant factors. Depending on the degree actually experienced, those factors may result in a lower final assignment grade.
IRM 22.214.171.124, Returning a Case to Examination - ATE, discusses some of the reasons for returning a case. The list is not all inclusive.
Regardless of what the reason is, discussions must be held and an agreement reached between Appeals and LB&I management on actions required by LB&I before the case is accepted by Appeals.
When assigned a case, immediately examine all returns to determine the statute of limitation expiration date and to verify the expiration date appearing on the case summary card.
There must be at least 365 days remaining on the statute of limitations when the case is received in Appeals. If a case is returned to Examination, there must be at least 210 days remaining on the statute of limitations when the case is received in Examination and at least 180 days remaining when the case is returned to Appeals.
Full responsibility for obtaining the proper consents to extend the period of assessments, when necessary, is the team leader's even when a portion of the case is separated and assigned to a team member. Although the team member may take action to extend the statute on his/her assignment, the team leader is responsible for assuring the statutes are protected.
Since a team leader case generally takes a significant period of time to resolve, request statute extensions to cover the time frame. A team leader case assignment may involve numerous corporations, partnerships, etc., which must be reviewed to verify any unique statutes.
There are many unusual statute situations which require special consideration, such as:
Successors in Interest - If, since the last statute extension, there has been a successor in interest, it is necessary to determine who is authorized to sign for the predecessor corporation and it is necessary to determine the proper captions to use. One of the sources for determining this information is the Board of Directors resolution. It is also advisable to consult with local Counsel in making this determination. See IRM 126.96.36.199.2.5 regarding merged corporations.
For consolidated income tax returns, one consent will suffice to cover all companies included in the consolidated tax return, but the years included on a single consent must be years during which the group is considered to have remained in existence. See IRM 188.8.131.52.2.1 regarding successors for a group of affiliated companies that filed a consolidated return.
TEFRA Considerations - TEFRA creates problems concerning statutes. See TEFRA IRM 8.19 for additional information on TEFRA cases and IRM 8.21 for additional information on statutes.
Reference Returns - If it is determined a consent is unnecessary, prepare a memorandum for the file (or other approved form) setting out the facts. Attach the original of the memorandum to the return, and give a copy to APS to update ACDS.
Returns Held Off Site - In situations where the original returns are held off site, which is a practice in a number of offices, copies of all consents, POAs, and the front page of the returns must be kept by the team leader.
The team leader is responsible for determining the completeness of the administrative file - whether all related returns are present, whether the protest, rebuttal and the power of attorney are included, etc.
As part of the preliminary review, verify LB&I reviewed the protest and made an adequate written response. Verify rebuttals from specialists when protested issues are based in whole or in part on specialists, e.g., international examiners, engineers, economists, etc. The lack of an adequate review and rebuttal of the protest is sufficient reason to return the case to the examiner.
During preliminary review of the case, note important aspects of the case such as Joint Committee requirements, claims, tentatives, new issues, Appeals Coordinated Issues, Industry Specialization Program issues, to name a few.
Appeals hearing officers are not investigators or examining officers and may not act as such. Therefore, Appeals hearing officers will conduct a preliminary review of a case as soon as possible to determine whether the case must be returned to Examination. While taxpayers may present new information or evidence to Appeals, the presentation of new factual information generally will require that the case be returned to Examination. See IRM 184.108.40.206, Returning a Case to Examination, for general guidelines for returning a case.
These guidelines apply to LB&I-sourced work excluding Primary Business Code (PBC) 315, International Individual Compliance (IIC) cases. Use the following chart to determine when information is returned to LB&I:
TYPE OF INFORMATION RECEIVED ACTION TO BE TAKEN (1) Taxpayer provides Appeals with information that LB&I previously requested during the examination Appeals will release jurisdiction of the case to LB&I (2) Taxpayer, on its own initiative, provides Appeals with information not previously shared with LB&I during the examination Appeals will release jurisdiction of the case to LB&I (3) Taxpayer provides information in response to a question or request from Appeals to clarify or corroborate information contained or referenced in the RAR, Protest or Rebuttal Appeals will provide LB&I with an opportunity to review and comment on the information within a specified time frame (4) Taxpayer makes a new argument (not including new information) Appeals will provide LB&I with an opportunity to review and comment on the new argument within a specified time frame
In instances where new information (see Item 1 or 2 above), is provided by the taxpayer during Appeals consideration, the ATCL may offer Rapid Appeals Process (RAP) to resolve the Appeals-ready issues (issues that do not require additional analysis or investigative action).
For cases where no issues are yet settled (agreed in principle by Appeals and the taxpayer) at the time new information is received, the ATCL will determine if RAP is appropriate for the unsettled issues (no agreement in principle between Appeals and the taxpayer) and ensure the taxpayer is aware of the RAP option. If the taxpayer and LB&I elect to address the issues using RAP, Appeals will retain jurisdiction to resolve those issues. After working the issues via RAP and securing closing or partial agreement forms on the agreed issues, Appeals will release jurisdiction to address the new information or issue. On LB&I-sourced cases where RAP is not being utilized, jurisdiction will be released to address new information or new issues and make a determination.
For cases involving unsettled and settled issues at the time new information is received, the ATCL will determine if RAP is appropriate for the unsettled issues and ensure the taxpayer is aware of the RAP option. If the taxpayer and LB&I agree to address the issues using RAP, Appeals will retain jurisdiction to work those issues. After working the issues via RAP and securing closing or partial agreement forms on the agreed issues, Appeals will release jurisdiction to address the new information or issue and make a determination.
For those cases where the taxpayer provides information in response to a question or request from Appeals for clarification and for those cases where the taxpayer makes a new argument (not including new information), the Appeals hearing officer will send the information or argument with all supporting information to LB&I, allowing at least 45 days for written review and comment (subject to ex parte requirements). An extension of time can be granted if mutually agreed.
See IRM 220.127.116.11.7, Jurisdiction Released, for procedures on returning a case to the originating function.
Generally, team leader cases are assigned to a Large Case Tax Computation Specialist. For purposes of this subsection, the Large Case Tax Computation Specialist is referred to as the TCS.
Within 120 days of assignment of the case to the TCS, the TCS completes a thorough review to verify the accuracy and completeness of the RAR tax computations. The review includes creation of a computer accessible file (or utilization of a computation disk received from Examination) to be used during Appeals consideration of the case to make interim or "what if" computations and to do the final tax computation.
Promptly discuss and resolve with LB&I any discrepancies discovered between the Examination RAR and Appeals' computations. Bring errors affecting the proposed tax liability to the taxpayer's attention for up-front resolution during the planning conference.
In addition to handling the largest and most complex international and domestic cases within Appeals, the TCS interacts with corporate taxpayer representatives to resolve issues such as complex depreciation, investment tax credit, future interests, adjustments to capital structure, valuation and cost analysis, and change of accounting methods.
The TCS may appear as the Government’s expert witness giving testimony in court proceedings on the tax effect of controversial tax adjustments in complex corporate tax cases.
The ATM selects a senior AO who has excellent technical and case management skills to act as team leader.
After discussion with the team leader, the ATM selects the other members of the team. Appeals Officers' case loads and capabilities are considered when making the selection of team members. Appeals Officers of any grade may be team members.
Tax Computation Specialists and paraprofessionals can be used as team members in appropriate circumstances.
The team leader sends all team members a memorandum welcoming them to the team and explaining his/her expectations. It also details the team member's responsibilities. Templates with suggested language is found on the ATCL web site.
The procedures for mandatory referrals to Appeals Domestic/International Operations are contained at IRM 1.4.28.
Conduct a team orientation meeting to discuss the nature, number and complexity of the issues or cases in the team case work unit.
The ATM or designee will mail Letter 4046 (CG) , Appeals Team Case Leader Uniform Acknowledgement Letter, or other approved Uniform Acknowledgement Letter (UAL), to the taxpayer and/or representative.
With the concurrence of the team leader and team member's ATM, the team leader assigns work to team members commensurate with their grade. This may be by specific issues, by cases, or any other appropriate division of the work. .
Consolidate interrelated issues or problems when assigning issues to avoid overlap
After the team members have an opportunity to study the file and their assigned issues, each should determine the need for outside assistance, e.g., valuation, technical advice, information reports, etc. These needs must be identified as early as possible and discussed with the team leader. The requests for assistance are prepared by the AO handling the particular issue and are routed through the team leader for approval.
The team member is responsible for providing the Large Case Quarterly Status Report to the team leader by the 5th business day of the month following the end of the quarter. This report is mandatory for all team members.
The team discusses tentative target dates and those issues or procedures which may impede the prompt closing of the case and decide the actions necessary to prevent delay.
It is suggested a separate file be created for each issue. The file would contain all relevant information regarding that issue, such as sections of the examiner's report, engineer's report, conference notes, rough draft supporting statements, etc.
It is desirable to discuss and agree upon these target dates at the first meeting with the taxpayer. The goal is to set firm dates, agreed to by Appeals and the taxpayer, and to resolve specific issues. Furnish the taxpayer with a list of team members and their respective work assignments. Clearly define the role and authority of the team leader and team members for the taxpayer.
Apply the aspects of Fast Track Settlement to the team leader case process as a means of efficient resolution.
The team will discuss and develop a complete list of questions to be addressed by the parties (taxpayer and LB&I) during the pre-conference and taxpayer conference. To comply with the ex parte requirements, a copy of the questions for LB&I must be shared with the taxpayer.
After the planning conference is complete, the team leader will complete the ACDS Electronic Work Plan (See IRM 18.104.22.168.5) incorporating the agreements reached with the taxpayer or his/her representative.
The team leader is responsible for planning and controlling the progress of the work unit. Although initial responsibility to follow up (requests for corroborating information from taxpayers, requests for information from Headquarters, Justice Department or other sources) lies with the team member assigned that segment of work, the team leader monitors this aspect of the team's actions.
The team leader must be involved in the case management practices of all team members. This is accomplished by periodic monitoring, issue reviews, mandatory written feedback or other appropriate techniques. Each team member's manager ensures the team member maintains a written activity record which includes the team member's contacts with the taxpayer and all significant actions on the case.
When faced with complicated technical issues, contact available resources early. For example, obtain input from Counsel, Headquarters, the Appeals Technical Specialist and/or the taxpayer prior to the pre-conference and planning conference.
Contact Examination immediately upon case assignment to ensure the Appeals team has access to the entire administrative file on a particular issue for effective discussion at the preconference meeting.
Contact the Appeals Technical Specialist for a coordinated issue paper or informal advice on any industry issue as early as possible.
Ongoing communications, whether in the form of conferences between the team or other communications between Appeals and LB&I are encouraged. Open lines of communication greatly expedite the completion of the case when new arguments are presented by the taxpayer or there are other developments which were not anticipated at the time of the pre-conference meeting. Always keep in mind ex parte communication provisions do apply.
Return the case to LB&I for consideration if the taxpayer presents new information or evidence. If Appeals receives a case that is not fully developed and the taxpayer does not provide any new information, attempt to settle the case on factual hazards. The case will not be returned for further development.
If the taxpayer provides information in response to a question or request from Appeals to clarify or corroborate information contained or referenced in the RAR, Protest or Rebuttal, or makes a new argument, Appeals will promptly refer the information package along with all supporting information to LB&I allowing at least 45 days for written review and comment (subject to ex parte requirements) and granting an extension of time if mutually agreed. See IRM 22.214.171.124.6 for procedures on retaining jurisdiction. LB&I handles these requests for review of information on a priority basis and makes additional contacts with the taxpayer as necessary to perform a complete review or additional information.
The team conference work plan reflects the long-term plan for completion of the work unit with realistic target dates. The participation of the taxpayer's representative is an integral part of the planning process. Furnish the taxpayer's representative a copy of the plan (consistent with disclosure and privacy statutes). In addition to long-term planning, use the team conference work plan to outline the next quarter's contemplated actions on the work unit, including necessary follow-ups. It should reflect a plan for further actions and not solely serve as a report on work unit status.
The team leader is responsible for the preparation and development of the work plan, with participation by all team members. In some instances the work plan will be used as the schedule of adjustments.
The team leader forwards the work plan to his/her ATM for approval within 30 days after the opening conference. Work plans are kept in the local office and available for Area office monitoring.
The team leader updates the work plan quarterly, or more frequently when warranted, by noting significant progress; new problems encountered and plans for solving them; and any revisions of the overall work plan or target dates, including reasons for such revisions.
The ACDS electronic work plan will be utilized by the team leader for all Appeals Team Cases. The format of the electronic work plan ensures the following items are addressed:
Identification of team members;
A list of unagreed issues and assignments to team members and the corresponding Uniform Industry Listing (UIL) codes if required;
Identification of problems or factors that may cause delays and the corresponding plan of action; and
A projection of when the initial conferences will be held and the approximate number of conferences that may be required.
A realistic estimated completion date for the work unit. This date is determined only after it has been discussed with both the team members and the taxpayer. If the work plan estimated closing date is different from the estimated closing date entered on CIRS, revise the estimated closing date on CIRS.
Some of the above items may not be determinable at the date the work plan is first drafted. Add them when reasonably determined as part of the periodic updating of the work plan.
As soon as practical at the end of each quarter, the team leader prepares a narrative for the manager to include:
Review of significant accomplishments (conferences held, issues settled, etc.);
Procedural and/or administrative problems encountered and proposed solutions;
Problem areas encountered requiring coordination outside the area (Examination, Competent Authority, Engineering, Technical, etc.,) and proposed solutions; and
Actions to be taken in the next quarter, with target dates.
If the information in (7) above is contained in the CIRS Reports or in conference memorandums prepared during the quarter, the requirements of this section are considered met.
This text establishes guidelines for conferences (pre-conferences) held between Appeals and LB&I on certain protested cases. The pre-conferences take place prior to Appeals' meeting with the taxpayer. These guidelines are minimum standards for communication between Appeals and LB&I.
The pre-conference procedures apply to all LB&I cases meeting Appeals' definition of a team case. The procedures may be used for LB&I cases which do not meet the definition of a team case and for other cases upon election by either LB&I or Appeals. For definition of a team case, see Introduction to Working Appeals Team Cases found at the beginning of this IRM.
The purpose of the conference is to discuss the issues, protest, and LB&I's written rebuttal to the protest. A frank discussion of the issues adds to Appeals' knowledge of the case.
The taxpayer is notified of, and given an opportunity to participate in, any pre-conference in accordance with requirements involving ex parte communications.
The need for any additional resources, specialists or expert witnesses, etc., are discussed at this meeting which serves to establish lines of communication between Appeals and LB&I that are maintained throughout consideration of the case. Always keep the ex parte communication provisions firmly in mind.
LB&I is encouraged to share its views on the disputed issues, including its assessment of litigating hazards and the strategies involved in setting up adjustments on particular issues. However, the conference is not used as a vehicle for securing a commitment from Appeals to defend any particular issues, commit to particular settlement positions, or otherwise "negotiate" the settlement posture of Appeals on the case.
Unless an exception is agreed to between LB&I and Appeals, hold a pre-conference on all LB&I cases designated as team leader cases in Appeals. LB&I may request a conference on other LB&I cases. If LB&I does not request a conference on a LB&I case and Appeals believes a conference would be helpful, Appeals may initiate the conference.
The team leader is responsible for arranging the conference. Conferences on non-team leader cases are arranged by the team leader/AO following a written request to LB&I for the conference or the receipt of a request for a conference.
An Appeals request for a conference must be signed by a team leader or ATM. A request from LB&I is initiated by the case manager/group manager (or other official as determined by LB&I). A conference request from LB&I should accompany the file when it is received by Appeals. If Appeals desires a conference, make the request as soon as possible after receipt of the case.
If LB&I and Appeals agree a pre-conference is not useful in any case for which a conference is required, document the file with a memorandum signed by appropriate officials from each function specifying no pre-conference is desired by either LB&I or Appeals. In Appeals, the memorandum must be signed by an ATM or Area Director.
These procedures do not prohibit conferences on other types of cases; e.g., cases with industry-wide impact, specialized industries or coordinated issues. Neither do they prohibit other communication and discussion of issues between AOs and agents or specialists. Make sure the ex-parte provisions of Rev. Proc. 2012–18, are followed.
The Appeals team usually consists of the team leader and AOs assigned to the case. Participation by management is determined by area and local guidelines.
The LB&I team usually consist of the case manager or group manager, revenue agents, international agents or other specialists as appropriate to the issues in dispute. LB&I determines the involvement of other managers.
Associate Area Counsel is invited to participate in pre-conferences on all docketed cases. Either LB&I or Appeals may request the participation of Counsel in the pre-conferences on non-docketed cases.
In accordance with the guidance for ex parte communications, the taxpayer (or representative) is also given an opportunity to participate in the pre-conference meeting. Please see Rev. Proc. 2012-18.
A rough draft ACM is a written document which includes a substantive discussion of the facts and law presented in the RAR and taxpayer's protest.
Prepare rough draft ACMs on all significant protested issues prior to the first taxpayer conference on that issue. Team members are responsible for finalizing the ACM for their issues.
When a partial agreement for workunits over $1 million is secured, additional steps must be taken to close the existing ACDS record with the partial agreement information so Appeals results can be captured timely. Submit a request to APS for a new ACDS record to control the remaining unagreed issues/tax periods. APS instructions for this process are provided in IRM 8.20.6,Partial (Interim) Assessments on Workunits Over $1 Million.
If one tax year was agreed in a multiple-year unit, rather than part of the issues within one tax year, only include the unagreed tax years in the new work unit.
This procedure applies only to assessable partial agreements. Both a Form 870 and a stipulation of agreed issues, entered by the Tax Court, must be secured on docketed cases.
This procedure may also be used when Appeals settles one or more issues in a case and returns the case to Examination for consideration of new issues raised by the taxpayer or new information or evidence presented by the taxpayer.
Review the Lists of Compliance Coordinated Issues and Appeals Coordinated Issues contained on the Appeals web site.
Make a referral to Appeals Domestic/International Operations following the procedures contained in IRM 1.4.28 and IRM 8.2.1 before scheduling the initial conference on the coordinated issue;
Advise the taxpayer the issue is coordinated and any settlement of the issue requires the review and concurrence of the Technical Specialist;
Forward a rough draft of the ACM (and any related documents requested by the Technical Specialist such as copies of documents, RAR, protest, closing agreements, etc.) to them, whether the Technical Specialist is a team member or not. The Technical Specialist may waive this requirement after discussing the issue with the Appeals Officer/ATCL.
Send the rough draft ACM (and any related documents) to the Technical Specialist before the settlement is finalized.
Send the Technical Specialist a copy of the portion of the final ACM and Closing Agreement, if any, which discusses the coordinated issue.
If the Technical Specialist concurs with the proposed disposition of the coordinated issue, note this in item 11 on Form 5402.
If the Technical Specialist does not concur with the proposed disposition of the coordinated issue, attach a copy of the Technical Specialist's memorandum (rebuttal) to the ACM. See IRM 126.96.36.199 for procedures on how to resolve the dispute.
If the coordinated issue is designated for litigation in a specific case by the Office of Chief Counsel do not consider settlement of the issue in the designated case.
At the conclusion of all team cases, the ATCL will forward the final ACM, Form 5402 and related documents to the LB&I Team Manager using encrypted email, as well as extend an invitation to attend the Post Settlement conference. However the conference can be waived if both Appeals and LB&I agree it is not necessary.
IRS Chief Counsel is invited to attend this conference on all docketed LB&I cases. Counsel may attend post settlement conferences on non-docketed cases at the request of either LB&I or Appeals.
The purpose of the post-settlement conference is to discuss the settlement reached and its subsequent impact on the taxpayer. The conference is intended to supply LB&I with information that may be helpful in the audit of subsequent cycles of the taxpayer and assist in identifying those issues which may be susceptible to resolution by application of LB&I's DO 4-25 settlement authority.
This conference is not intended to be a critique of the settlement nor is it intended to replace, in any way, LB&I's "dissent" procedures. It is solely intended to communicate the resolution of the case to the LB&I team.
See IRM 188.8.131.52.9 for guidance on dissent procedures.
There are some special features to include in the large or complex case ACM. Because of the complexity of some cases, any or all of the following features may be used:
If the Schedule of Adjustments doesn’t give the page numbers for the issues, use a Table of Contents. The Table of Contents may include the page number from the revenue agent’s report, the taxpayer’s protest, or other pertinent documents.
Description ACM Page RAR Page Protest Page Executive Summary 1 Schedule of Adjustments 3 Legal Expenses 5 1 4
For a lengthy ACM with numerous issues, an Executive Summary provides a reader with an overview of all information up front.
The Executive Summary is similar to a Summary and Recommendation for an issue; both are brief and up front. In fact, the Executive Summary is the first page(s) of a large or complex case ACM. It may include:
Background of the taxpayer, industries, foreign sub/parent, products, name changes, stock exchange listing, mergers and acquisitions, etc. If the information to present is lengthy or complex, make the background a separate section.
The most significant issues and results.
Joint Committee jurisdiction or consideration.
Collection Concerns – accounts receivable dollar inventory (ARDI) considerations
Audit history – prior litigation of the taxpayer, rollover or recurring issues, results of other cycles, carry backs that affect retention rates, etc.
Domestic/International Operations – identification of issues, approval, variances from written positions, etc.
External assistance – technical advice (formal and informal), competent authority, etc.
Future years – potential claims, closing agreements, letters of understanding.
Provide a discussion of the factors impacting the settlement that occurred subsequent to LB&I completing its consideration, or that are outside the Appeals hazards evaluation. For instance, a change in tax law, new controlling case law, or a whipsaw issue that had to be conceded. These type issues need to be noted as items that would have required adjustments to be made by Examination, or in other words, the adjustments would not be the result of an Appeals hazard settlement.
The basic format of the Schedule of Adjustments for large or complex cases is the same, but there may be a need to add "Additional Features" . If the additional columns won’t fit on the page, show the schedule in landscape format to accommodate the extra columns. Here is a list of some items to use in the schedule in addition to those in the standard Schedule of Adjustment:
Team member name listed next to their assigned issues is optional.
Page references to the RAR, protest, and ACM are optional but are helpful and often part of a work plan.
Identification of Domestic/International Operations coordinated issues where applicable. If no Domestic/International Operations issues exist in the case, this column is not needed. However, make an affirmative statement to this effect as a footnote on the Schedule of Adjustments.
Indicate rollover or recurring issues with a "yes" or "no" , to alert Examination of their settlement authority under Delegation Order 4-25. Make a complete statement about the delegation authority in the Summary and Recommendation section of the issue discussion. If no rollover or recurring issues exist for a particular case no column is needed, however, make an affirmative statement to this effect as a footnote on the Schedule of Adjustments.
If the schedule is developed when the case is first assigned, it can serve as the basis for the issue status schedule in the large case work plan.
The four sections of an ACM: Summary and Recommendation, Brief Background, Discussion and Analysis, and My Evaluation, work for even the most complex of cases. The complexity of the issue dictates the length and structure of the longer narrative. The following sections give some guidance in preparing your ACM.
Prior ACM – Many LB&I subsequent cycles have identical issues. If they are resolved on the same basis as the prior cycle, then it’s appropriate to cite the prior ACM rather than repeat the discussion in detail. If such a reference is made, attach a copy of the prior ACM. The Summary and Recommendation section may then be all that is needed in the current ACM.
Examination Settlement Authority – If Exam DO 4-25 is applicable to the issue for subsequent cycles, make a complete statement about the delegation authority in this section.
Combining Issues - LB&I cases may involve issues that need to be discussed together. If so, combine the discussion into one section.
This is the main section for a detailed discussion of any issue. Along with the Schedule of Adjustments and the initial framing of the issue, this section serves as the rough draft ACM. Make this section clear and concise by providing yourself and the reader with a blueprint or outline of the discussion to follow. In a complex issue discussion, good structure is essential.
After a lengthy issue discussion, this section serves as a recap of the relevant factors and the weight assigned to each. This analysis clearly illustrates the settlement rationale and is particularly important on complex issues and those with hazards of litigation settlements.
At the conclusion of an Appeals team case, the ATCL uses encrypted email to forward a copy of the final ACM and related documents to Outlook email address, *AP ATCL ACM@irs.gov.
A central point of contact designated by the Director, ATCL Operations, maintains the Outlook mailbox. This individual uses encrypted email to forward copies of the ACM, Form 5402 and related documents to the LB&I Office of Pre-Filing and Technical Guidance (PFTG).
These procedures are used for docketed cases. LB&I is not expected to review and comment on the taxpayer's petition before receipt of the case by Appeals. However, Appeals must provide LB&I with a copy of the petition for review and comment in every docketed case to which these procedures apply. LB&I reviews the petition to the extent LB&I has knowledge of the facts and issues in dispute.
A key part of the pre-conference meeting is planning the timetables and resources needed to respond to new information presented by the taxpayer. Give recognition to the time frames established by the rules of the Tax Court in setting priorities for the examination of new information and response to taxpayer positions. For limitations and procedures concerning Appeals and LB&I consideration of new issues raised in docketed cases, see the subsection entitled Appeals Authority Over Docketed Cases in IRM 8.4.1, Appeals Docketed Cases.
The team case leader gives appropriate feedback on team member performance, in a timely manner, to both the team members and their managers. The feedback is a meaningful evaluation of the performance of the particular team member on the case. The feedback is structured around the critical elements of the team member, to the extent they apply to the work done on the case.
The feedback is given on an on-going basis and no later than when a team member's work on the case is substantially completed; for example at the completion of conference activities or at the time the team member prepares the ACM on his or her assigned issues. At a minimum, interim or final feedback is provided prior to the team member's annual appraisal and mid-year review.
The ATM of the team member, not the team case leader or team, is responsible for appraising the performance of AOs on team case assignments. Although the team leader must provide mandatory written feedback on the case, any written assessments of members' work performance for purposes of personnel actions is made by the manager.
When an AO below the level is given a developmental team member assignment, the team leader gives timely oral feedback and provides constructive comments regarding performance.