The IRS recently announced that as of October it will no longer offer in-person or “face-to-face” settlement conferences with its Appeals Officers, except in a few, very limited circumstances. Settlement discussions will now be held with IRS Appeals through “phone and fax”. A blog post on these new settlement conference rules is at The End of an Era: IRS Ends In-Person Settlement Conferences.
Apparently due to concerns among tax practitioners (including this author) that “Appeals has conflated [the new rules] to limit access to [IRS Appeals Officers], conferences, and case resolution,” the Chief of the IRS Appeals Office, Kirsten Wielobob, recently wrote a letter to the tax community expressing her views on the new rules.
In this letter, Ms. Wielobob stated that the IRS “revised our in-person conference practices effective October 3, 2016, to clarify our procedures for taxpayers, to better allocate resources, and to get the right work to the right Appeals employee. We found that some language in our letters erroneously suggested that taxpayers need to request an in person (or face-to-face) conference to take full advantage of the appeals process. This misperception often resulted in taxpayers requesting an in-person conference when the case could be resolved by other methods, such as by telephone. In addition, our centralized Campus locations cannot accommodate in-person conferences. Prior policy required us to automatically transfer cases from the Campus to the Field whenever taxpayers requested to meet face-to-face. This generally resulted in a mismatch between the complexity of the case and the skill level of the employee. Automatic transfers also delayed case resolution and caused us to incur additional shipping costs, while our data shows that the majority of these cases were ultimately resolved by telephone with no in-person conference. Appeals is continuing to offer in personal contact for all cases, and in person conferences where Appeals determines that it will aid in resolving cases. Taxpayers will continue to have a range of conference options depending on the nature of their case – telephone, correspondence, virtual service delivery, and in-person, which includes circuit riding; however, Appeals will not transfer cases solely upon taxpayer request. The changes are not intended to shift the paradigm from in-person conferences as a resolution tool. By putting in place business rules around when Appeals provides in-person conferences, the changes shift the decision from the taxpayer to Appeals.”
Ms. Wielobob states that “[h]ow Appeals engages in case resolution is key to our role in tax administration. We continually evaluate and periodically revise what we do and how we do it to ensure we function not just in ways to support our mission, but also with the utmost integrity in our process.”
The recent statements by Ms. Wielobob are encouraging, and do offer hope to taxpayers and the tax practitioner community that Appeals is not seeking to become “more efficient” by shifting away from the traditional and time-honored practice of personally meeting and sitting down with an IRS Appeals representative to resolve a tax dispute with the IRS. While Appeals offers data that many of its cases are in fact resolved through telephone conferences, without the need for an in-person meeting, this author believes that many of these cases are relatively simple cases, with more straight-forward issues and also with lower tax amounts generally in dispute.
The new IRS Appeals settlement conference rules expressly do not allow an in-person settlement conference with an Appeals representative, except in very few limited circumstances including whether the taxpayer himself wants to meet with the Appeals Officer to “provide oral testimony” and where “there are substantial books and records to review that cannot be easily referenced with page numbers or indices.” The complexity of the issues involved in an administrative tax appeal, the amount of the taxes in dispute, and the background, knowledge and skill of the assigned Appeals Officer are not to be taken into consideration under the new rules.
The recent statements by the IRS Appeals Chief run counter to the express limits of the new settlement conference rules. If the views expressed by Ms. Wielobob in her recent letter are truly those of the IRS Appeals Office, practitioners would encourage Appeals to make further revisions to its written settlement conference rules including the addition to rules authorizing the Appeals Team Manager to consider other issues, such as case complexity, the size of the taxes at issue, and the background/knowledge/skill of the Appeals Officer to be assigned given the issues involved in the tax appeal.
