The Chief of the IRS Independent Office of Appeals (Appeals) has set out information about Appeals including the fact that the entire Appeals process for non-docketed cases has recently been taking approximately 7-8 months.
Appeals' function is to resolve tax controversies without litigation on a basis that:
- is fair and impartial to both IRS and the taxpayer;
- promotes a consistent application and interpretation of, and voluntary compliance with, federal tax laws; and
- enhances public confidence in the integrity and efficiency of IRS. (Code Sec. 7803(e)(3))
The Appeals Chief set out a number of facts, etc. about Appeals, including:
Appeals has an overall staff of approximately 1,240 employees, mostly Appeals Officers and Settlement Officers. An Appeals Officer typically handles matters involving audit-related issues like penalties or additions to tax. For some complex matters, Appeals Officers may work as a team with other Appeals Officers. A Settlement Officer typically handles matters involving collection matters like whether IRS followed proper procedures when imposing a lien or proposing a levy for unpaid taxes.
Appeals is unique within tax administration, because it has the authority to compromise the amount of tax owed to resolve a dispute. This means Appeals can offer taxpayers a settlement based on the probable outcome if their case were to go to court. Appeals calls this "evaluating the 'hazards of litigation.'" The Chief noted that not every dispute merits a compromise and some issues do not raise hazards of litigation.
When IRS makes a determination regarding tax liability, it will provide the taxpayer with a notice. If you receive an IRS notice and your case is eligible for an appeal, the notice will explain your appeal rights. At that point, if you disagree with IRS determination, you can request an appeal. The next step is to write down, either in a formal protest or simple statement, the issues with which you disagree and why. It’s important to remember that you should make your appeal request with the IRS compliance person who worked your case. That employee then will be able to send your appeal request, along with your case file, to Appeals.
Taxpayers can also come to Appeals after filing a petition in the United States Tax Court to dispute the IRS compliance action.
Once your case arrives in Appeals, Appeals will assign it to an Appeals Officer or Settlement Officer depending on the type of case. Appeals' goal is to have the assigned Appeals employee contact you by mail or telephone within approximately 30 days of receiving your case; however, it is taking longer these days due to pandemic-related delays and other resource constraints.
You may request to view the non-privileged part of the Compliance file prior to meeting with Appeals.
If you are unable to locate an important document that might help explain your position, please try to explain the document, why it isn’t available and what steps you took to try to obtain copies, etc.
Appeals Officers and Settlement Officers try to resolve cases after holding a taxpayer conference or by correspondence. But, some complex cases may take more than one conference to resolve.
The time it takes for Appeals to work your case depends on several factors, including the type of case, the facts of the case, the complexity of the issues, the availability of legal precedents, other legal theories involved and Appeals’ determination of the hazards of litigation. If you have petitioned the Tax Court prior to coming to Appeals, you have a “docketed” case and the time involved will also be affected by dates and timeframes established by the court and beyond Appeals’ ability to control.
Cases received directly from a compliance function that have not been petitioned to the Tax Court are referred to as “non-docketed” cases. Recently, for non-docketed examination or collection appeals, the entire process, from the time your case is received in Appeals to the time it is resolved or closed in Appeals, takes on average 7 or 8 months.
Appeals has set out the following goals:
- Increasing staffing;
- Adopting secure digital messaging to communicate with taxpayers electronically;
- Expanding taxpayer access to videoconferences so they can meet with Appeals “face-to-face” even during the pandemic;
- Expanding internal paperless processes to allow Appeals to process cases more quickly.