Wednesday, July 11, 2007

Back Taxes: IRS Appeals Chief Offers Taxpayers a "Fresh Look"

IRS Appeals Chief Sarah Ingram reported on July 10, 2007 how taxpayers may take advantage of the IRS Appeals process after their interaction with the IRS Examinations or Collections Divisions has come to an end. Ingram reported how the Appeals Division strenuously maintains its impartial resolution of taxpayer concerns.

After taxpayers receive their determination letter from the IRS Examinations or Collection Divisions, they may take their case to the Appeals Division to get what Ingram termed "a fresh look." She reported that Appeals attempts to be unbiased, remain fair, make impartial decisions regarding both the taxpayer and the IRS and, therefore, maintain public confidence in the federal tax system. Ingram even pointed out that, while the appeals process is unavailable to taxpayers in federal district court, those who have received their statutory notice of deficiency and even filed a claim in the U.S. Tax Court may still take the case to the IRS Appeals Division.

Settlement Guidelines

Acting proactively, Ingram reported that the Division will deem tax shelters and cutting edge issues to be "coordinated issues" and publish settlement guidelines, stating the Division's opinion with regard to them. To create these guidelines Appeals seeks input from practitioners, affected taxpayers, and the affected taxpayer community at large to help officials understand the issue in more detail. The guidelines are then published on the IRS's website at,,id=108652,00.html. With this move, the Appeals Division seeks to promote horizontal equity among taxpayers, efficiency and transparency in the tax administrative process. Ingram offered the advice to tax practitioners that "it's a good idea to have the discussion at the beginning of your case as to whether there are coordinated issues."

Ex parte Rights
Ingram also reported that the Appeals Division continues to strongly enforce a taxpayer's right to be aware of, and participate in, discussions between Appeals and other branches of the IRS during the appeals process. If taxpayers suspect that this prohibited communication has occurred, Ingram advises them to report it immediately to the Appeals officer in charge of their case.

If the prohibited communication indeed occurred, the IRS will share the communication with the taxpayer and offer them the opportunity to present their side of the issue to Appeals --what Ingram called "bringing sunshine" to the issue. If the U.S. Tax Court finds that such communication has occurred, Ingram pointed out that the court may reassign the case to a different Appeals officer in order to preserve the "fresh look."

"This is something which is very important to our organization," she added.

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