Changes to the IRS Appeals Process

At the 2014 IRS National Tax Forum, Appeals Team Manager Phillip A. Oyoto announced that appeals officers will no longer act as examiners or investigators during the IRS appeals process. John V. Cardone, IRS Director of Policy, Quality and Case Support stated in a July 2nd memo that under the Appeals Justice Approach and Culture project, Appeals will maintain a quasi-judicial approach when handling cases in the interest of enhancing the perception that the Office of Appeals is impartial, fair and independent.

Although Appeals will generally not return cases to Examination for further development, a case may be returned if:

  • the case lacks a protest or the protest, if required, does not state the taxpayer’s position, lacks detail or does not meet the requirements explained in Publication 5, Your Appeals Rights and How to Prepare a Protest If You Don’t Agree
  • a specific event must occur or an action must take place in order to enable Appeals to adequately evaluate the case
  • Technical advice was pending at the time of referral
  • Potential fraud, malfeasance or misrepresentation of a material fact is discovered or
  • The taxpayer has new information or evidence

The desired result is that Appeals will only hear cases that are completely developed and that officers will not conduct investigations. New information and new evidence offered by the taxpayer will be sent back to the originating function for consideration. According to the July 2nd memo, a fully developed case has all relevant information well-documented with an easy-to-follow audit trail. In cases that are not fully developed and in which no new information has been provided by the taxpayer, Appeals will attempt to settle the case based on uncertainty regarding which facts a court would find to be true or factual hazards. If a taxpayer or representative is found to be unreasonably delaying a case by submitting new information, the case will not be sent to Examination. In these instances, the officer can make a decision based on his or her assessment of the factual hazards.

The new IRS appeals process may raise questions among everyday taxpayers who do not fully understand the implications of the recent changes. Gary Kaplan is a CPA who is qualified to assist taxpayers who are undergoing the IRS appeals process. Individuals who would like to learn more about filing an appeal may visit www.gkaplancpa.com to connect with an experienced tax professional.