IRS Outlines Procedures for Appeals Conference Program

ATCL Conferencing Initiative Update

In May of 2017, the IRS Independent Office of Appeals began an initiative in which some Appeals Team Case Leaders (ATCLs) invite IRS Compliance to participate in the non-settlement portion of the Appeals conferences for the largest, most complex, cases in Appeals. Under the initiative, both parties are present at the conference while each presents its position regarding the issues in dispute. Consistent with the quasi-judicial role of Appeals in resolving tax disputes, this initiative relies on Compliance and the taxpayer and the taxpayer's representative to participate in focused discussions so that Appeals can identify, narrow and resolve factual or legal differences. After the conference, settlement discussions are held between Appeals and the taxpayer and/or their representative, without Compliance present. This initiative is limited to the largest and most complex business tax disputes handled by Appeals; the initiative does not apply to the vast majority of cases heard by Appeals.

Appeals' overall aim regarding this initiative is to conduct conferences in a manner that furthers the interest of good tax administration. The Appeals mission is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. The insight that Appeals gains from an open discussion of positions in these largest and most complex cases could help to facilitate case resolution.

Over the past two years, Appeals has listened closely to comments from both external and internal stakeholders and, where appropriate, adjusted how we conduct conferences under the initiative. For example, early during the initiative there was confusion as to what portion of Appeals conferences Compliance would attend. We subsequently made clear that settlement discussions for cases in this initiative would be held between the ATCL and the taxpayer and their representative, without Compliance present. We also clarified that, while mediation is available, it may only be utilized if both parties agree to mediate. This initiative was never intended to change the traditional Appeals session into a required mediation session. For additional questions and answers about the initiative, see ATCL Conferencing Initiative FAQs.

Appeals has decided to continue the initiative for another year, through May 1, 2020, and to conduct a formal survey of participants in cases worked and closed within the initiative. The taxpayer survey, conducted by an independent, third-party survey organization, will begin in Fall 2019 for cases closed by that time, and will continue through the end of the initiative so that all cases closed during the initiative are included in the survey. In addition, an internal survey will be administered to Compliance and Appeals personnel that participated in the initiative.

Some stakeholders have suggested that conferences under the initiative would progress most efficiently if taxpayers, representatives, and Compliance personnel all have a consistent understanding of the roles and responsibilities of the parties and the sequence of events during a conference. In response to this suggestion, Appeals is including here as exhibits guidelines used by ATCLs to conduct conferences under this initiative. Appeals invites comments from the public about these guidelines, and whether they help to facilitate an orderly and productive appeals conference.

Comments about the guidelines will be accepted through November 8, 2019 and should be sent to:

Exhibit 1: Process and Procedures (PDF)

Exhibit 2: Sample Agenda for Expectations Call (PDF)

Exhibit 3: Expectations Letter to Taxpayer and/or their Representative (PDF)

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Exhibit 1: Process and Procedures

The ATCL has overall responsibility for planning and controlling the progress of the case throughout this process. The ATCL is responsible for:

• organizing an Appeals Team;

• holding an Expectation's Conference Call with all parties present, including the Appeals Team, Compliance and the Taxpayer and/or their Representative, to;

  • address administrative issues, including date, time, location and names of attendees at the conference;

  • discuss the role of each participant at the conference;

  • discuss case file concerns involving TEFRA issues, statutes, Joint Committee review issues, etc.;

  • confirm and address unagreed issues on the Schedule of Adjustments; o identify and address any barriers to settlement that were previously identified;

  • set forth expectations and ground rules for the conference; and

  • follow-up by mail or, if appropriate, by e-mail with an Expectations Letter to the Taxpayer, which reiterates the points made during the call.

• distributing any upfront questions to the parties with responses required at least 2 weeks prior to the conference (responses will be shared with the parties);

• requiring both parties to provide any new arguments or information not in the administrative file no later than 45 days prior to the conference;

• hosting a conference in which both parties are present while each presents its position regarding the issues in dispute;

• focusing conference participants on discussions so that Appeals can narrow or resolve factual or legal differences; and

• maintaining ongoing communications.

Compliance will be excused after both parties have made their presentations, and all relevant questions have been addressed to the satisfaction of the ATCL. Settlement negotiation will then begin between Appeals and the Taxpayer and/or their Representatives.

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Exhibit 2: Sample Agenda for Expectations Call

(This sample agenda provides guidelines for the ATCL to follow with the actual agenda being customized for each individual case.)

Introductions

Purpose of Meeting

Conferencing Initiative

Administrative Matters

Review the issues that will be addressed

Set expectations and vision for the conference

In advance of conference

Discuss the role each participant will have at the conference

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Exhibit 3: Expectations Letter to Taxpayer and/or their Representative

(This sample letter provides guidelines for the ATCL which may be customized for each individual case.)

This case is part of the ATCL Conferencing Initiative. The ATCL Conferencing Initiative involves the largest and most complex cases in Appeals. As part of the initiative, both parties will be present while the other party presents their position on the issues. Consistent with the quasi-judicial role of Appeals in resolving tax disputes, this initiative relies on both Compliance and the Taxpayer and/or their Representative participating in focused discussions so that Appeals can narrow or resolve factual or legal differences. After the conference, Compliance will be excused, and settlement discussions will be between Appeals and the Taxpayer and/or their Representative. After the case is closed, you will receive an anonymous survey to provide you with an opportunity to provide feedback concerning the initiative.

This letter is a follow-up to our recent phone call on {insert date} in which we discussed your case, set expectations regarding the Appeals process and scheduled a conference. We encourage both parties to continue to discuss any relevant disagreements prior to the conference in order to reach agreement on any factual and legal differences. We hope that any discussion will result in a narrowing of the scope of the dispute which will result in a more productive conference on {insert date}.

During the recent phone call, we verified the issues that will be addressed at the conference. At the conference, Compliance or the Taxpayer and/or their Representative will lead off with their presentation. Each party should be prepared to present their issues and respond to any questions. As we discussed, after the conference please be prepared to work towards a settlement with Appeals.

In advance of the conference, any new arguments or information must be provided no later than 45 days prior to the conference in order to be considered. Each participant should provide written responses to any follow-up questions from Appeals at least 2 weeks prior to the conference. Responses will be shared with the parties. Each participant should immediately notify Appeals when it has been determined that an issue or argument will be dropped and, therefore, no longer pursued within Appeals.

Appeals remains the decision maker on the disputed issues. Appeals will facilitate discussion between the parties (Compliance and the Taxpayer and/or their Representative) and assess the strengths and weaknesses of both sides to help resolve the issues. Compliance and the Taxpayer and/or their Representative have a role during the conference to explain their positions to assist Appeals in narrowing or resolving factual or legal differences.

If you have questions or want to discuss this process, you can contact me at the phone number listed at the top of this letter. Thank you for your cooperation.