July 11, 2020

Volume X, Number 193

July 10, 2020

Subscribe to Latest Legal News and Analysis

July 09, 2020

Subscribe to Latest Legal News and Analysis

IRS Appeals Large Case Pilot Program Ends

More than three years ago, the Internal Revenue Service (IRS) revised the Internal Revenue Manual to provide IRS Appeals Division (Appeals) with discretion to invite representatives from the IRS Examination Division (Exam) and IRS Office of Chief Counsel (Counsel) to the Appeals conference. The IRS also started a three-year initiative for taxpayers under the Large Business & International (LB&I) Division with cases assigned to Appeals Team Case Leaders (ATCLs). Under the initiative, LB&I personnel from Exam and Counsel were invited to the non-settlement portion of the taxpayer’s Appeals conference to test whether the participation of both parties would assist Appeals in narrowing and resolving complex factual and legal differences.

The IRS announced that the initiative ended on May 1, 2020. The IRS has invited comments from the public about the initiative and its effectiveness. Such comments should be submitted by August 31, 2020.

The practice of inviting Exam team members and Counsel to the taxpayer’s Appeals conference generated significant controversy. In response to taxpayer concerns, certain clarifications were made. These included making clear that personnel from Exam and Counsel were not to participate in settlement discussions and mediation should not be used by ATCLs as a method of securing a settlement.

We have represented several taxpayers where Exam team members and Counsel have participated in the taxpayer’s Appeals conference. In some instances, Exam and Counsel did not hesitate to interrupt our presentation, disrupting the flow of the conference. When this occurred, we would request that the ATCL exert more control over the conference and prevent any interruptions until we had finished a point. We also had instances where ATCLs would ask Exam and Counsel what they thought was a fair settlement, which we did not view as appropriate.

Practice Point: Taxpayers and practitioners, particularly those anticipating upcoming Appeals conferences, may want to consider submitting comments on this issue. Our experience is that it is much easier to resolve matters on favorable terms when taxpayers and their representatives can speak directly to ATCLs without having everything filter through Exam team members and Counsel. Moreover, there is a mechanism in which you can change a typical Appeals conference into more like a mediation where Exam is involved in the negotiations; it is called Rapid Appeals. But when Exam is entrenched in its position, from our experience, the sooner you can discuss the issue directly and solely with the Appeals Officer, the better.

© 2020 McDermott Will & EmeryNational Law Review, Volume X, Number 127

TRENDING LEGAL ANALYSIS


About this Author

Andrew R. Roberson tax attorney McDermott Will. Andy handles tax cases in Federal court, United States Tax Court
Partner

Andrew R. Roberson is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  Andy specializes in tax controversy and litigation matters, and has been involved in over 30 matters at all levels of the Federal court system, including the United States Tax Court, several US Courts of Appeal and the Supreme Court. 

Andy also represents clients, including participants in the CAP program, before the Internal Revenue Service Examination Division and Appeals Office, and has been successful in settling...

312-984-2732
Kevin Spencer, McDermott Will & Emery LLP , Tax Litigation Attorney
Partner

Kevin Spencer is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm's Washington, D.C., office.  He focuses his practice on tax controversy and litigation issues. 

Kevin represents clients in complicated tax disputes in court and before the Internal Revenue Service (IRS) at the IRS Appeals and Examination divisions.

In addition to his tax controversy practice, Kevin has broad experience advising clients on various tax issues, including tax accounting, employment and reasonable compensation, civil and criminal tax penalties, IRS procedures, reportable transactions and tax shelters, renewable energy, state and local tax, and private client matters. After earning his Master of Tax degree, Kevin had the privilege to clerk for the Honorable Robert P. Ruwe on the US Tax Court.

202-756-8203