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Proposed transfer of IRS appeals office opposed by AICPA.

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In a letter to Internal Revenue Service Commissioner Margaret Richardson, the American Institute of CPAs strongly opposed the proposed transfer of the IRS Office of Appeals to the chief counsel's office. The proposal is part of a reorganization plan called "Reinventing the IRS."

In his letter to Richardson, Harvey L. Coustan, chairman of the AICPA tax executive committee, recognized administrative problems exist in the current arrangement, in which responsibility and control for taxpayer appeals are split between the chief counsel and the commissioner's office. But he said the transfer would have a negative effect, bolstering "a public perception of an administrative system in which no impartial administrative healing is available."

He also said the change would make it more difficult for smaller taxpayers to have an efficient, cost-effective means of settling cases.

"An appeals office that is part of the chief counsel's office will encourage taxpayers to seek legal counsel at a stage in which they often are represented by CPAs under the present structure," Coustan said, adding such a move would create a pretrial atmosphere "less conducive to settlement."

Appeals officers, Coustan continued, currently have authority to settle cases based on all relevant circumstances--including the hazards of litigation. But if appeals officers' career success depends on pleasing the chief counsel, Coustan argued, they will be hesitant to settle cases in which the chief counsel has taken a position contrary to the taxpayer's.

"The chief counsel's office is responsible for establishing precedent to support IRS positions," said Coustan. He then characterized this function as inconsistent with "an environment that should project both fact and perception of impartiality."

He concluded that the AICPA believes that "every taxpayer should have the right to an independent, objective consideration of IRS disputes at the administrative level. If the service has administrative concerns over the split of responsibility and control, we recommend appeals be transferred back to the commissioner or to the ombudsman's office."
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Article Details
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Dec 1, 1993
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