The Internal Revenue Service has updated its rules for how its Office of Appeals is allowed to communicate with other parts of the IRS when a taxpayer or the taxpayer’s representative is not present.
The IRS said the updates are necessary because the agency has changed some of its business practices and adopted new ones since issuing the previous version of the rules in October 2000. The updated rules, outlined in Revenue Procedure 2012-18, address “ex parte” communications, or communications between the Office of Appeals and other parts of the IRS that occur without the taxpayer or the taxpayer’s representative being given an opportunity to participate in the communication.
The new rules implement a provision in the IRS Restructuring and Reform Act of 1998, aimed at ensuring that the Office of Appeals remains an independent vehicle for settling audit and collection-related disputes between taxpayers and the IRS. As part of the IRS, but operating independently from the agency’s compliance functions, the Appeals office is supposed to serve as one of the checks and balances in the U.S. system of tax administration.
“Our mission is to impartially resolve tax disputes, without litigation, in a way that is fair to both the taxpayer and the government,” said Appeals chief Chris Wagner in a statement. “Independence is the cornerstone of Appeals, and we believe these new ex parte rules will help us carry out our mission more effectively by providing everyone involved with the clear and consistent guidance they need.”
In one key change from the 2000 ex parte communication rules, the Appeals office will no longer participate on issue management teams but can be briefed by the teams, as long as the discussion remains generic rather than case specific. The teams include representatives from various IRS components, typically Compliance and Counsel, and the meetings usually involve general discussions of how to handle technical issues or procedural matters.
In addition, the revenue procedure issued Wednesday includes several changes suggested during a public comment period, following the issuance of a proposed revenue procedure last summer. For example, when there is a breach of the ex parte communication rules, Appeals employees will now ask the affected taxpayer or their representative for input on the appropriate remedy. The appropriate remedy will then be determined by a senior management official.
“I am pleased that the revenue procedure provides safeguards and procedures to preserve independence, while still ensuring that Appeals has access to the full and frank legal advice that it needs,” said IRS chief counsel William Wilkins.
The Office of Appeals resolves more than 100,000 tax cases each year. More information about the Office of Appeals and the appeals process is available on IRS.gov.
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