IRS Appeals Archives - Page 9 of 14

IRS Wages ‘Campaigns’ against Taxpayers

by Chelsea Hess, Kevin Spencer and Robin L. Greenhouse | Jun 29, 2016 | IRS Appeals, IRS Audits, IRS Guidance, Uncategorized

Late last year, the Internal Revenue Service’s (IRS’s) Large Business and International (LB&I) division announced that it would restructure its organization. The restructuring was precipitated by shrinking resources and a shifting environment. A primary feature of the restructuring is the end of the continuous audit program (where the IRS audits a large taxpayer year after year for decades) and a move to an issue focused, coordinated attack—to wit, the new IRS “Campaign” methodology. Although this program is clearly in its infancy, practitioners are starting to see how the IRS is implementing their latest project.

In essence, IRS campaigns are a centralized risk identification strategy. The IRS has leveraged its knowledge throughout its system, identified the most serious tax issues and allocated its resources to those issues. The emphasis then, is off specific taxpayers and on to specific tax issues. (more…)

IRS Commissioner Asks Congress to Overturn Loving

by Joshua M. Ellenberg and Kevin Spencer | Apr 22, 2016 | Appellate Courts, IRS Appeals, Uncategorized

Following a report by the US Government Accountability Office (GAO) that criticized the Internal Revenue Service (IRS) for failing to protect taxpayer financial information from cybersecurity threats, IRS Commissioner John Koskinen has requested that US Congress give the IRS the power to license tax preparers. Prior efforts by the IRS to regulate paid tax preparers by forcing them to pass a competency exam and meet continuing education requirements had been struck down in a 2013 federal district court decision which was later affirmed unanimously by the US District Court for the District of Columbia in Loving v. IRS, 742 F.3d 1013 (DC Cir. 2014).

Having failed to achieve its goal in court, in 2014 the IRS turned to Capitol Hill to grant it the authority to enforce nationwide certification requirements on independent tax return preparers. Imposing competency requirements on tax return preparers is an idea supported not only by the IRS but also by National Taxpayer Advocate Nina E. Olsen and other tax policy leaders. Proponents have long argued that government regulations are needed to address ineptitude among “mom-and-pop” tax preparers and unscrupulousness among other preparers who take advantage of uninformed taxpayers. Efforts to pass the legislation in Congress, however, had stalled.

Now, Commissioner Koskinen is using the recently issued GAO report to renew the push to established minimum standards for tax preparers. It would seem unlikely, however, that these new efforts will bear any fruit.

IRS Updates Appeals Procedures for Tax Court Cases

by Robin L. Greenhouse and McDermott Will & Emery | Mar 25, 2016 | Alternative Dispute Resolution, Court Procedure Matters, IRS Appeals, IRS Guidance, Settlements, Trial Courts, Uncategorized

On March 23, 2016, the Internal Revenue Service (IRS) issued Rev. Proc. 2016-22, 2016-15 IRB 1, which clarifies and describes the practices for the administrative appeals process in cases docketed in the Tax Court. The stated purpose of the revenue procedure is to facilitate effective utilization of appeals and to achieve earlier development and resolution of Tax Court cases.

Previously, the procedures for the appeals process of Tax Court cases was contained in Rev. Proc. 87-24, 1987-1 C.B. 720. In October 2015, the IRS released a proposed revenue procedure updating the rules and requesting public comments. Three substantive comments were received and considered by the IRS, resulting in changes to the proposed revenue procedure. Rev. Proc. 2016-22 states that some of the suggestions that were not adopted may be addressed in other IRS guidance materials.

The general rule followed by the IRS is that all cases docketed in the Tax Court that have not previously been considered by IRS Appeals will be transferred to Appeals unless the taxpayer notifies IRS counsel that it wants to forego settlement consideration by Appeals. This rule is subject to certain exceptions, most notably if the case has been designated for litigation by the IRS. The revenue procedure also provides that “[i]n limited circumstances, a docketed case or issue will not be referred if Division Counsel or a higher level Counsel official determines that referral is not in the interest of sound tax administration.” Although no definition is provided, examples are provided of: (1) a case involving a significant issue common to other cases in litigation for which the IRS maintains a consistent position; or (2) cases related to a case over which the Department of Justice has jurisdiction. Referral to IRS Appeals will generally occur within 30 days of the case becoming at issue in the Tax Court, which can be either the date the Answer is filed by the IRS or a Reply (if required) is filed by the taxpayer.

The revenue procedure clarifies, and limits, the role of IRS counsel when a case is referred to Appeals. Unlike Rev. Proc. 87-24, the new revenue procedure provides that Appeals has sole discretion to determine whether IRS counsel may participate in any settlement conference and will consider input from the taxpayer on this point. It also clarifies that when a case is forwarded to Appeals for consideration, “Appeals has the sole authority to resolve the case through settlement until the case is returned to Counsel.” In the past, taxpayers were concerned about the ability of IRS counsel to disrupt a settlement reached with Appeals. If a settlement is reached with Appeals, IRS counsel’s involvement is ministerial in that counsel should only review any decision document signed by the taxpayer for accuracy and completeness before signing the decision document on behalf of the IRS and filing it with the Tax Court.

The new revenue procedure should also be a welcome development for estate tax cases given that there is no statutory provision to extend the [...]

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