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MSP #7: APPEALS

The Inclusion of Chief Counsel and Compliance Personnel in Taxpayer Conferences Undermines the Independence of the Office of Appeals

TAS Recommendations and IRS Responses

1
1.

TAS RECOMMENDATION #7-1

Compile quantitative data regarding the efficiency and outcomes of pilot proceedings and publish that data when the pilot is complete.

IRS RESPONSE TO RECOMMENDATION: Appeals considers qualitative data more informative than quantitative data in evaluating the success of this pilot. The cases involved in the pilot are Appeals’ largest and most complex cases, involving unique, varied, and non-homogenous issues. Therefore, an analysis of quantitative data alone is unlikely to inform a conclusion about the success of the pilot. A better evaluation of the pilot is whether the parties to the dispute found the process helpful, and whether the Appeals Officer obtained a better understanding of the substance of the dispute that was useful in formulating a settlement basis with the taxpayer.

CORRECTIVE ACTION: N/A

TAS RESPONSE: Appeals considers qualitative data more informative than quantitative data in evaluating the success of this pilot. The cases involved in the pilot are Appeals’ largest and most complex cases, involving unique, varied, and non-homogenous issues.  Therefore, an analysis of quantitative data alone is unlikely to inform a conclusion about the success of the pilot.   A better evaluation of the pilot is whether the parties to the  dispute found the process helpful, and whether the Appeals Officer obtained a better understanding of the substance of the dispute that was useful in formulating a settlement basis with the taxpayer.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

2
2.

TAS RECOMMENDATION #7-2

Carefully consider and publish the reactions of taxpayers and tax practitioners who participate in the pilot.

IRS RESPONSE TO RECOMMENDATION: The IRS Independent Office of Appeals will carefully consider and publish the reactions of taxpayers and tax practitioners who participate in the pilot on the IRS website at www.irs.gov.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS Independent Office of Appeals will carefully consider and publish the reactions of taxpayers and tax practitioners who participate in the pilot on the IRS website at www.irs.gov.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

3
3.

TAS RECOMMENDATION #7-3

Regardless of the pilot’s outcome, only include Counsel and Compliance in appeals conferences with taxpayers’ consent. To the extent taxpayers do not agree to this participation, offer the parties the possibility of nonbinding mediation as a means of resolving or narrowing their differences through collaborative exploration of factual and legal disputes prior to an appeals conference.

IRS RESPONSE TO RECOMMENDATION: The IRS Independent Office of Appeals will make decisions about the participation of Compliance and Counsel at Appeals conferences after the conclusion of the pilot.

CORRECTIVE ACTION: N/A

TAS RESPONSE: TAS continues to believe that including Counsel and Compliance in Appeals conferences against the wishes of taxpayers compromises Appeals’ independence and jeopardizes its mission.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

4
4.

TAS RECOMMENDATION #7-4

If the participation of Counsel and Compliance continues after the pilot, restrict this participation to ATCL cases, other than in exceptional circumstances.

IRS RESPONSE TO RECOMMENDATION: The IRS Independent Office of Appeals will make decisions about the participation of Compliance and Counsel at Appeals conferences after the conclusion of the pilot.

CORRECTIVE ACTION: N/A

TAS RESPONSE: At a minimum, if the participation of Counsel and Compliance is adopted in the future, it should be limited  to large cases under the jurisdiction of LB&I.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

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