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December 13, 2018

IRS Appeals Guidance on In-Person Conferences

IRS Appeals

Houston Tax Attorney

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The IRS Office of Appeals has been making changes to how it conducts appeals conferences.  In this past few years, these changes have made it difficult to obtain an in-person conference.  The IRS recently issued interim guidance AP-08-1118-0013 to authorize appeals to allow for more in-person conferences.

About the IRS Office of Appeals

The IRS Office of Appeals provides a method for taxpayers to have IRS determinations reviewed by another IRS employee before the determination is final. 

considering the hazards of litigation.   Appeals is often an excellent forum for resolving tax disputes.  Appeals officers are instructed to be impartial.  Unlike most other IRS employees, appeals officers are authorized to settle cases by evaluating the hazards of litigation.  

The IRS Office of Appeals employs less than 1,000 appeals officers.  These appeals officers are located in groups that are situated in most larger metropolitan areas.  Appeals sometimes staffs or has an appeals officer travel to meet taxpayers at offices in smaller cities that are not too far from the larger appeals office.  

For example, when I was employed by the IRS Office of Appeals in Chicago, we would have an appeals officer travel an hour and half north to Milwaukee once every few weeks to hold conferences there.  When none of the appeals officers wanted to make the trip and travel funds were limited, Appeals closed the Milwaukee office.  Taxpayers in Milwaukee had to travel to Chicago or conduct their conferences on the phone.  But phone conferences are often not preferred–by appeals officers or by taxpayers.

The IRS Appeals Conference

The appeals conference process is informal.  Taxpayers are generally allowed to present any and all evidence even if it would not necessarily be admissible under the rules of evidence.  The only limitation is generally a preference that the lower function, which is often the IRS auditor, have had an opportunity to review the evidence first.  

The appeals conference is often used to help the appeals officer evaluate voluminous or complex records and to present the taxpayer’s testimony to provide missing information that has bearing on the matter.   This gets to the question of how a taxpayer can present information to the IRS appeals officer if they are not afforded an in-person conference?  

The In-Person Conference

The IRS Office of Appeals has generally tried to honor the taxpayer’s request for an in-person conference.  This is particularly true for larger and more significant cases that originate from IRS revenue agents and cases where the taxpayer lives in a city where Appeals has an office.  

Appeals has struggled with handling cases that originate from other offices, such as cases that originate from the IRS service centers located in cities where Appeals does not have an office. 

This difficulty stems from the IRS budget cuts and lack of travel funds and the dwindling number of appeals officers as retiring appeals officers are not replaced.  It was also impacted by the large backlog of cases Appeals had yet to work (the backlog of cases is now down significantly, as the IRS exam function has been auditing less given the budget constraints which has resulted in fewer cases in Appeals).  This has resulted in Appeals not offering in-person conferences for smaller matters handled by IRS tax compliance officers and collection matters.  

In late 2017, the IRS issued Interim Guidance AP-08-1017-0017 which provided something for taxpayers to point to when requesting in-person conferences.  This guidance only applied to the larger cases the ability to have in-person conferences.  The smaller matters and collections cases were not included.

The New Interim Guidance

The new interim guidance is for the benefit of taxpayers who have smaller matters and collections cases.  

The guidance provides that if an in-person conference is requested and the assigned Appeals officer’s office cannot accommodate in-person conferences, the case will be sent to an Appeals office that can accommodate the request. It also provides that Appeals will use its best efforts to schedule the in-person conference at a location that is reasonably convenient for both the taxpayer and Appeals.

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