The IRS has announced a new appeals process to begin September 2nd, which hopefully will benefit taxpayers trying to settle their cases. At the 2014 IRS Nationwide Tax Forum in August, it was announced that “the focus is going to be on settling cases” and that “the Appeals staff will not raise new issues.” The stated goal is to enhance customer perceptions of a fair, impartial, and independent Office of Appeals.
The real change appears to be that Appeals Officer will settle cases on the basis of the facts that have already been developed, and not bring into the settlement conference other issues which might lie within the current tax case under consideration, but which have not previously been brought up during Examination or by a Compliance Officer.
However, they will be exceptions. The Appeals Officer may return a case to the Exam staff for further development under certain circumstances, which include:
- A required protest is missing, or fails to accurate set forth the taxpayer’s position, or includes the needed details.
- Another action or event is required before Appeals can consider the case.
- Technical advice is still pending.
- Evidence of potential fraud emerges.
- The taxpayer provides new information or documentation.
If carried out as announced, this will change the role of Appeals Officers by limiting the scope of their work to a hearing only–no investigations. Consequently, if new issues are raised by the taxpayer or new documentation presented, the case will go back to Exam or the previous office working on the case. This actually could cause the settlement of a case to take more time than under the current procedures.
Tax practitioners will be watching carefully to gauge how these new procedures are implemented and how they affect their taxpayer clients.