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New appeals policies: Appeals Judicial Approach and Culture Guidelines.

Phase One of this new appeals prncess heLyai, with a july 18, 20 1:3. Department of the Treasury memo providing guidance to the Oftier tit Appeals personnel for executing the revised procedures.

This memo stated that the Appeals Judicial Approach and Culture (AJAC) project is returnittg Appeals to a quasi-judicial 'approach in the way it handles cases to enhance customer perceptions of a lair, impartial and independent Appeals. That guidance stated that Appeals would not raise new issues or reopen issues agreed to by taxpayers and the Compliance Division.

Appeals will release jurisdiction when the texpayer provides new information, though the release criteria may var based on Appeals' workload, keeping Appealls officers from acting as investigators.

Phase two of this plan, effective Sept. 2, 2014, finalized the interim guidance. A Jul 2 memo to Appeals staff from John V. Cardone, IRS director of policy, quality and case supporl, stated that Appeals will not generally return cases to Compliance for further development. However, he outlined certain circumstances as grounds for returning a case, including (but not limited to):

* The case is missing a protest, or the protest, when required, fails to set forth the taxpayer's position, lacks detail or fails to meet the requiremests of Publication 5;

* Some action must be taken or some event must occur before Appeals can adequately consider the case;

* Technical advice was pending at the time of the referral;

* Appeals discovers potential fraud, malfeasance or misrepresentation of a material fact; or

* The taxpayer provides new information or evidence.

Appeals will (ink hear cases that are fully developed; hearing officerswill not do their own invesfigations and will send any new issues raised it. evidence sbmitted In the taxpayer during the appeal back to the originating function for consideration.

This memo defines a fully developed yeti case as one that has all pertinent evidence wend, wurrwntrd yid., an casv t() audit trail enerally, the case ciitilans the evidence needed to support the revenue agent's proposed adjustnients.

Appeals will attempt to settle a GIs based on factual hazards if it is not ray ckTehiped and the taxpayer has provided no new information or evidence. 'I'he memo also hist nuts the stall that if the taxpayer or representative -unreascmably delays the process In intentionally submitting new inlormation or raisin, new issues multiple times, the case will nt it be sem 10 CmIllpflarICV for more analysis il it tprals officer can make a determination based on the assessnwitt of the factual hazards ol lit nation. Previewittg the final guidance. Appeals Team Manager Philip A. Oyofo said at the Aug. 20 IRS Ntaitional Tax Ihrurn that Appeals will no longer he examineN, investigattws collectors. The focus will be on milling also.

Oyofo and Matthew N. McLaughlin, another team manager, further stated that taxpayers try to raise new issues in Appeals, the cases Would Ix.. sent back to Compliance. "Appeals on't raise new issues, period," Mci. itughlin said.

Thcsc managers said if Appeals receives a case that is not well-developed, it will work to settle the case based on the available information rather than trying to further expand the case.

"We encourage taxpayers to provide Compliance with all the information so the case can be adequately developed," Oyofo said. He emphasized that the case should only be sent to Appeals if an impasse is reached. He said that Appeals then trv to settle the cas hasecl oil actual haztrds. Thrrukjoritv I eases won'te sent luck, he said.

However, Appeals will not further develop a case or take investigative action.

Orli) urged laNpaVerS to consider IRS Options to residvc eases early, including last-track settlement. mediation and earl referral.

Collection Activity

McLaughlin said Appeals will no longer investigate finaii tal siatements OF do work such as accessing third-party databases lin- information on the financial situations of taxpayers that want to submit offers. He said that there will be no coordination of investigation between Appeals and Collections.

Complia.nce officers will make the initial decision [by all offers submitted by taxpayers during collection due process proceedings, and all offers in compromise will I ic initially worked by Compliance.

However, Appeals will:

* Identify the disputed issue;

* Ask the taxpayer For substantiation:

* Refer new information to Compliance. if needed: and

* Sustain rejections of rs only under the same basis for what the offer was initially rejected by Compliance.

McLaughlin said that taxpayers should present all documents and arguments to Complialice without -saving- anything lin. Appeals. "taxpayers also should Ix aware of issues that can and cannot be raised during appeals and understand chat some information may lie returned to it. review and investigation.

by Stuart R. Josephs, CPA

Stuart R. Josephs, CPA, has a San Diego-based Tax Assistance Practice that specializes in assisting practitioners in resolving their clients' lax questions and problems. He is chair of the Federal Subcommittee of CalCPA's Committee on Taxation. You can reach him at 16191469-6999 or
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Title Annotation:Fed Tax
Author:Josephs, Stuart R.
Publication:California CPA
Geographic Code:1USA
Date:Oct 1, 2014
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