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REPRESENTATION BEFORE REPRESENTATION BEFORE APPEALSAPPEALS

Dennis G. PhillipsDennis G. Phillips

WHAT WE WILL DISCUSSWHAT WE WILL DISCUSS

Fast Track MediationFast Track Mediation Appeals JurisdictionAppeals Jurisdiction Ex-Parte CommunicationsEx-Parte Communications Basics of Hazards of LitigationBasics of Hazards of Litigation

A new service A new service offered to offered to

Taxpayers by the Taxpayers by the Internal Revenue Internal Revenue

ServiceService

Fast Track MediationFast Track Mediation

Assistance for Compliance Assistance for Compliance

functions in resolving cases functions in resolving cases

withoutwithout sending case to sending case to

AppealsAppeals



• Acts as neutral mediatorActs as neutral mediator

• Assists in a neutral locationAssists in a neutral location

• Works with TP and Compliance officer Works with TP and Compliance officer

• Has no settlement authorityHas no settlement authority

• Is not arbitratorIs not arbitrator

Appeals Officer


Advantages to TPAdvantages to TP

Expedited resolution—Expedited resolution—

30-40 days 30-40 days

No written protest requiredNo written protest required

Potentially less costlyPotentially less costly

• Fast Track Mediation is generally available Fast Track Mediation is generally available

for:for:

– All non-docketed casesAll non-docketed cases

– Trust Fund Recovery CasesTrust Fund Recovery Cases

– Offers in Compromise Offers in Compromise

– Collection Due Process (CDP) cases Collection Due Process (CDP) cases

• Mediation was not available for case Mediation was not available for case deficiencies of more than $100,000 during the deficiencies of more than $100,000 during the pilot, but that has been liftedpilot, but that has been lifted


Excludes certain types of Excludes certain types of casescases

Penalty appeals & SC OIC’sPenalty appeals & SC OIC’sConstitutional Type Constitutional Type ArgumentsArguments

Liens, levy, seizures (CAP Liens, levy, seizures (CAP cases)cases)



Starting the process:Starting the process:- - The TP or Compliance can initiate FTMThe TP or Compliance can initiate FTM

- Both parties must enter into an - Both parties must enter into an agreement to mediateagreement to mediate

- No formal protest or unagreed report - No formal protest or unagreed report (RAR) need be submitted(RAR) need be submitted

- Can be held with or subsequent to - Can be held with or subsequent to Manager’s closing conferenceManager’s closing conference

• Mediation is voluntary; any party may withdraw from FTM at any time

1. Either party can request FTM, but both must sign an “Agreement to Mediate”

2. FTM can resolve disputes within 40-days3. The TP does not relinquish any appeal rights by

requesting FTM4. Both the TP and the IRS must agree to any proposed

resolution5. Voluntary mediation will result in more satisfied

customers

Appeals’ responsibility Appeals’ responsibility includesincludes

Income taxIncome tax Estate gift taxEstate gift tax Employment taxEmployment tax Excise taxesExcise taxes Offers-in-compromiseOffers-in-compromise Penalty appealsPenalty appeals Abatement of interest Abatement of interest Administrative costs under IRC Section 7430 Administrative costs under IRC Section 7430

Appeals’ responsibility (cont.)Appeals’ responsibility (cont.)

Jeopardy levies Jeopardy levies Recommendations concerning Recommendations concerning

settlement offers in refund suits settlement offers in refund suits Refund claims and JCC Refund claims and JCC Appealed overassessmentsAppealed overassessments

Appeals does not settle:Appeals does not settle:

Controlled issuesControlled issues ISP cases designated for litigationISP cases designated for litigation National Office agreements with National Office agreements with

taxpayers taxpayers Technical advice memoranda Technical advice memoranda Changes of accounting methodChanges of accounting method

SETTLEMENT CONFERENCESETTLEMENT CONFERENCE

Informal.Informal. Appeals independent role in the IRS - Appeals independent role in the IRS -

Fresh look.Fresh look. Settlement is the goalSettlement is the goal Settlements proposed based on facts Settlements proposed based on facts

of case and/or uncertainty of law -- of case and/or uncertainty of law -- hazards concepthazards concept

Settlements recommended must be Settlements recommended must be approved by manager.approved by manager.

PRESENTING YOUR CASEPRESENTING YOUR CASE

DO YOUR RESEARCH PRIOR TO DO YOUR RESEARCH PRIOR TO CONFERENCECONFERENCE

TRY TO CONVEY THAT YOU ARE TRY TO CONVEY THAT YOU ARE OPEN MINDED.OPEN MINDED.

BE POLITE.BE POLITE. TAKE NOTES OF ALLOWANCES TAKE NOTES OF ALLOWANCES

BEING MADE BY THE APPEALS BEING MADE BY THE APPEALS OFFICER.OFFICER.

““DON’TS” IN APPEALSDON’TS” IN APPEALS

Don’t go in unprepared.Don’t go in unprepared. Don’t argue frivolous issues.Don’t argue frivolous issues. Don’t talk down to Appeals OfficerDon’t talk down to Appeals Officer Don’t submit fraudulent documents.Don’t submit fraudulent documents. Don’t try to arbitrarily settle cases on a Don’t try to arbitrarily settle cases on a

percentage.percentage.

EX-PARTE EX-PARTE COMMUNICATIONSCOMMUNICATIONS

Appeals cannot have communications with Appeals cannot have communications with another Service function without the another Service function without the participation of the taxpayer or taxpayer’s participation of the taxpayer or taxpayer’s representative.representative.

Appeals may ask questions that involve Appeals may ask questions that involve ministerial, administrative or procedural ministerial, administrative or procedural matters and do not address the substance matters and do not address the substance of the issues.of the issues.

New Issues Raised in AppealsNew Issues Raised in Appeals

Not raised casuallyNot raised casually Indiscriminately or haphazardlyIndiscriminately or haphazardly

New Issues Raised in AppealsNew Issues Raised in Appeals

Appeals consideration is Appeals consideration is notnot an an extension of the audit. extension of the audit.

NEWNEW

ISSUEISSUE

Expediting your case through Expediting your case through AppealsAppeals

Set realistic target dates.Set realistic target dates. Follow up in writing the target dates Follow up in writing the target dates

discussed.discussed. If the Appeals person is not meeting If the Appeals person is not meeting

agreed upon target dates, then you should agreed upon target dates, then you should contact the Appeals Team Manager.contact the Appeals Team Manager.

What Are Hazards of Litigation?What Are Hazards of Litigation?

Hazards Settlement DefinedHazards Settlement Defined

An intermediate resolution of an An intermediate resolution of an issue based upon the fact that there issue based upon the fact that there is substantial uncertainty in the is substantial uncertainty in the event of litigation as to how the event of litigation as to how the courts would interpret and apply the courts would interpret and apply the law or as to what facts the court law or as to what facts the court would find.would find.

HAZARDS SETTLEMENTHAZARDS SETTLEMENT

Hazards can involve facts or legal doubts.Hazards can involve facts or legal doubts. Often there are layers of hazards or Often there are layers of hazards or

multiple hazardsmultiple hazards Usually many pieces to determine hazardsUsually many pieces to determine hazards Remember, hazards determination is Remember, hazards determination is

meant to reflect the chances if litigatedmeant to reflect the chances if litigated

Specific Factual Hazards Specific Factual Hazards

Undeveloped administrative fileUndeveloped administrative file Lack of evidence to support Lack of evidence to support

adjustments adjustments All facts not knownAll facts not known

Specific Factual Hazards (cont.)Specific Factual Hazards (cont.)

Inability to obtain required evidence to support Inability to obtain required evidence to support case:case:

Lost administrative filesLost administrative filesDiscovery period expiredDiscovery period expiredNo original payor documentNo original payor document

W-2W-2 Form 1099Form 1099


Admissibility of evidenceAdmissibility of evidenceRelevancy of evidenceRelevancy of evidenceAuthenticity of evidenceAuthenticity of evidence


Competency of evidenceCompetency of evidenceBest evidenceBest evidenceHearsayHearsayComplete documentsComplete documents


Availability of witnesses:Availability of witnesses: DeceasedDeceased Unavailable for other Unavailable for other

reasonsreasons Cannot be locatedCannot be located

subpoena

Legal HazardsLegal Hazards

Absence of precedent:Absence of precedent: Evaluate taxpayer’s evidenceEvaluate taxpayer’s evidence Evaluate government’s evidenceEvaluate government’s evidence Ambiguous lawAmbiguous law Legislative history silentLegislative history silent Ambiguous Congressional intentAmbiguous Congressional intent

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