Section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 112 Stat. 685 (RRA 98), required the Commissioner to develop and implement a plan to reorganize the Internal Revenue Service to ensure an independent Appeals function. RRA specifically directed that the plan include the prohibition of ex parte communications between appeals officers or settlement officers and other IRS employees to the extent that those communications appear to compromise the independence of Appeals. In accordance with the directive, the Department of the Treasury and the IRS issued guidance in Revenue Procedure 2000-43, 2000-2 C.B. 404.

Treasury and the IRS issued Notice 2011-62, 2011-32 I.R.B. 126 (Aug. 8, 2011), and Revenue Procedure 2012-18, which amplified, modified and superseded Rev. Proc. 2000-43. Rev. Proc. 2012-18 provides guidance concerning the ex parte communication rules and the application of RRA 98 section 1001(a)(4).

Consistent with RRA 98 section 1001(a)(4), Rev. Proc. 2012-18 does not adopt the formal ex parte procedures that would apply in a judicial proceeding. It is designed to ensure the independence of the Appeals organization while preserving the role of Appeals as a flexible administrative settlement authority, operating within the IRS’s overall framework of tax administration responsibilities.

The Taxpayer First Act of 2019, H.R. 3151, amended IRC 7803 and established the “Internal Revenue Service Independent Office of Appeals,” further re-emphasizing Appeals’ independence.

Rev. Proc. 2012-18, effective on May 15, 2012, serves as the authority for Ex Parte Communications.

The ex parte communication rules in this IRM and Revenue Procedure 2012-18 do not create substantive rights affecting the taxpayer’s tax liability or the IRS’s ability to determine, assess or collect the tax liability (including statutory interest and any penalties, if applicable).

All IRS employees, including Appeals employees, are responsible for ensuring compliance with the ex parte communication rules. See IRM 8.1.10.6. All employees are encouraged to seek managerial guidance whenever they have questions about the propriety of an ex parte communication.

Appeals managers are responsible for monitoring compliance with the ex parte communication rules during their daily interaction with employees, workload reviews and closed case reviews.

Appeals monitors ex parte communication breaches through the Ex Parte Report System. The system generically describes each breach of the ex parte rules and does not record case or employee specific information.

Appeals reports the number of ex parte communication breaches in the quarterly Business Performance Review (BPR) to the Commissioner. Appeals Policy is responsible for providing data and information for the report.

The following table contains key definitions:

The table below lists common acronyms used in this section:

Additional Ex Parte program information can be found in:

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

Certain taxpayer data and information is used universally by multiple IRS functions, including Appeals. Routine account inquiries, transcript requests, and other similar inquiries in an electronic environment are not considered "communications" because they do not involve dialogue or interaction between Appeals and an originating function.

Not all database inquiries are exempt because some databases are used exclusively by an originating function to maintain a record of case activities as part of their efforts to examine or collect tax. For instance, revenue officers enter their collection activities or case histories electronically on the Integrated Collection System (ICS). Even though the revenue officer's ICS history up to the time the case is referred to Appeals is part of the administrative file, the originating function may not include gratuitous comments in the case history if the substance of the comments would be prohibited if they were communicated to Appeals separate and apart from the administrative file. However, it is permissible for the originating function to maintain and include routine contemporaneous comments or statements in the case history that are pertinent to its consideration of the case even if the substance of these comments or statements would be prohibited if they were communicated to Appeals separate and apart from the administrative file. See section 2.03(4)(d) of Revenue Procedure 2012-18, Contents of Administrative File.

Database inquiries that include history entries up until the date the case is referred to Appeals (e.g., via Form 14461, Transmittal of CDP/Equivalent Request Hearing), which are considered part of the administrative file, are appropriate. In contrast, inquiries that include history entries beyond the referral date are prohibited. See the example below regarding this guideline:

For a discussion of the rules applicable to the administrative file, see section 2.03(4) of Revenue Procedure 2012-18, Administrative File, and IRM 8.1.10.4.2 below.

For a discussion on curing ex parte communication breaches, see IRM 8.1.10.6 below.

Not all communications between Appeals and employees of originating functions are prohibited, even if ex parte. This section outlines instances of permissible communications, specifically:

Briefings on generic, noncase-specific discussions of issues, including Appeals' participation in collaborative efforts with Counsel and originating functions in developing Service-wide settlement initiatives are also permissible. See section 2.04 of Revenue Procedure 2012-18, Participation in Multifunctional Meetings, and IRM 8.1.10.3 above for additional details.

Appeals domestic and international technical specialists may participate in certain communications detailed in section 2.03(12) of Revenue Procedure 2012-18, Review of Coordinated Issues, without offering the taxpayer/representative an opportunity to participate.

If a taxpayer appeals the decision made by an originating function, that function transmits the administrative file to Appeals. The administrative file is not considered to be an ex parte communication within the context of Revenue Procedure 2012-18. However, the originating function is precluded from placing in the administrative file notes, memoranda or other documents not normally generated in the ordinary course of developing the case, if the reason for including the material is to influence Appeals. Examples may include:

The originating function is permitted to include in the transmittal a neutral list of unagreed issues, without discussion, and to indicate which ones, if any, are coordinated issues.

It is permissible for the originating function to contemporaneously include in the administrative file statements or documents that are pertinent to their consideration of the case after the taxpayer requests Appeals’ consideration, even if the substance of those comments, statements, or documents would be prohibited if they were communicated to Appeals separate and apart from the administrative file. See section 2.03(4)(d) of Revenue Procedure 2012-18, Administrative File, Contents of Administrative File. Actions taken and documented in accordance with the originating function’s established procedures are considered part of the administrative file and do not violate the ex parte communication rules.

When a taxpayer requests Appeals’ review of an action or decision by Collection, the action or decision is generally limited to a particular issue or to a particular tax and period. Collection is not prohibited by this review from continuing to collect unpaid taxes for the tax period(s) subject to Appeals’ review (except the making of a levy in the case of a timely-requested IRC 6330 hearing) or for other tax periods that are not the subject of the appeal. Unlike the Examination function, which evaluates liability for each tax period separately, Collection must evaluate the taxpayer’s financial condition as a whole, including sources of enforced collection, when considering how best to collect a taxpayer’s unpaid taxes. Evaluation of a taxpayer’s financial condition, for example, is important when considering collection alternatives, whether the taxpayer is eligible for a Currently Not Collectible status based on hardship, or whether the taxpayer is eligible for a levy release or withdrawal of a Notice of Federal Tax Lien. Appeals is similarly required to evaluate a taxpayer’s financial condition and therefore statements or documents added to the administrative file by Collection after the taxpayer requests Appeals’ review may be relevant to Appeals’ decision. Statements or documents contemporaneously added to the administrative file by Collection do not violate the ex parte communication rules if they are made in connection with Collection’s continued efforts to work with the taxpayer to resolve the tax debt(s) or further evaluate the taxpayer’s financial condition and are in accordance with established procedures.

See sections 2.01(1)(a)(i), 2.03(2)(a)(vi), and 2.03(4) of Revenue Procedure 2012-18 for additional information on the administrative file.

For a discussion on curing ex parte communication breaches, see IRM 8.1.10.5 below.

Taxpayers occasionally have more than one case or issue pending with different IRS functions, including Appeals. This typically occurs with large corporate taxpayers. See generally section 2.03(13) of Revenue Procedure 2012-18, Taxpayers with Multiple Open Cases.

Taxpayers may also have multiple cases involving the same issue pending with Appeals in both docketed and nondocketed status, in which case the ex parte communication rules apply differently.

Because the ex parte communication rules may apply differently depending on the status of the case, Appeals employees considering cases involving taxpayers with multiple open cases must carefully follow the ex parte communication guiding principles in section 2.02(6) and the operative rules detailed throughout this IRM and sections 2.03, 2.06, 2.07, and 2.08 of Revenue Procedure 2012-18.

The Chief Counsel is the legal adviser to the Commissioner and all IRS officers and employees, including Appeals, on all matters pertaining to the interpretation, administration and enforcement of the internal revenue laws and related statutes. Appeals employees are generally entitled to obtain legal advice from Office of Chief Counsel attorneys and are permitted to do so under the ex parte communication rules. However, Appeals employees should not communicate ex parte regarding an issue in a case pending before them with a field attorney if the field attorney personally provided legal advice regarding the same issue in the same case to the originating function or personally served as an advocate for the originating function regarding the same issue in the same case. This restriction generally does not apply to reviewers and national office attorneys. However, if those persons are essentially functioning like a field docket attorney, then the restriction on ex parte communications applies to them. See also section 2.06 of Revenue Procedure 2012-18, Communications with Counsel. The rules and limitations are illustrated by the following examples:

IRM 8.6.3.5, Conference and Settlement Practices, Requests for Legal Opinion, along with the following sections in Revenue Procedure 2012-18 contain guidance on communications with Counsel:

Appeals employees generally are not bound by the legal advice that they receive from the Office of Chief Counsel. Appeals employees independently evaluate the strengths and weaknesses of the specific issues in the cases assigned to them and make an independent judgment concerning the overall strengths and weaknesses of the cases they are reviewing and the hazards of litigation. Legal advice is but one factor that Appeals will take into account in its consideration of the case. See IRM 8.6.4.1, Fair and Impartial Settlements per Appeals Mission, and IRM 8.6.2, Conference and Settlement Practices, Appeals Case Memo Procedures.

The restriction on Counsel communicating ex parte with Appeals only applies while Appeals is performing its duties of evaluating the strengths and weaknesses of the specific issues in specific cases and the overall hazards of litigation for those cases. If an Appeals employee is not functioning in that capacity, for example, if an Appeals employee is preparing a statutory notice of deficiency, this restriction on ex parte communications does not apply. At this stage of the case, the Appeals employee has concluded that the case will be closed as unagreed and is no longer attempting to settle the case. Therefore, Appeals may seek legal advice from Counsel in connection with the review of the draft statutory notice of deficiency, even if the Counsel attorney previously provided advice to Examination regarding one or more of the same issues in the same case.

The ex parte communication rules generally do not apply to communications between Appeals and Counsel in connection with cases docketed in the United States Tax Court. See section 2.06(2) of Revenue Procedure 2012-18.

See IRM 8.1.10.4.5 and section 2.03(10)(c) of Revenue Procedure 2012-18 concerning communications with Counsel in docketed CDP cases.

Discussions between Appeals employees and originating function employees involving CDP cases must be held in accordance with the ex parte communication guiding principles found in section 2.02 of Revenue Procedure 2012-18, Guiding Principles.

IRC 6320 and IRC 6330 contain specific requirements relating to Appeals hearing officers conducting CDP hearings. Communications pertaining to the following fall within the ministerial, administrative, or procedural matters exception per section 2.03(2)(a)(xi) of Revenue Procedure 2012-18 and are permissible without providing the taxpayer/representative an opportunity to participate:

Although the ex parte communication rules generally do not apply to docketed cases, CDP cases that are remanded by the Tax Court for either further consideration or reconsideration by Appeals fall into a different category. IRC 6320(b)(3) (liens) and IRC 6330(b)(3) (levies) require that the Appeals employee assigned to the remanded CDP case be impartial in his/her review of the remanded issue. This, in turn, requires application of similar considerations to the ex parte communication rules for nondocketed cases.

When a case is remanded to Appeals, the Counsel attorney who handled the CDP case in Tax Court will prepare a memorandum containing the following:

Examples of special requirements the Counsel memorandum might detail include:

The Counsel attorney's memorandum may include legal analysis or legal advice to the extent necessary to fully explain the court's instructions, but should not include a discussion about the credibility of the taxpayer or the accuracy of the facts presented by the taxpayer. Per section 2.03(10)(c)(i)(A) of Revenue Procedure 2012-18 , Counsel will provide a copy of the memorandum to the taxpayer/representative.

Counsel may communicate deadlines relating to the remanded CDP case to Appeals without providing the taxpayer/representative an opportunity to participate because that is a permissible communication within the ministerial, administrative, or procedural matters exception.

The Appeals employee assigned to the remanded CDP case may seek legal advice in connection with the remanded case from the same Counsel attorney who is handling the Tax Court case.

The Counsel attorney handling the Tax Court case will review Appeals' supplemental Notice of Determination before Appeals issues it to the taxpayer for the limited purpose of ensuring Appeals has fully complied with the Tax Court's remand Order.

See also sections 2.03(10), Communications with Originating Function, Collection Due Process, and 2.10(2), Remedies Available to Taxpayers, Collection Due Process Cases, of Revenue Procedure 2012-18.

Appeals maintains many different ADR programs. Specifically, Fast Track Settlement and Fast Track Mediation involve Appeals employees serving as mediators or facilitating settlement discussions while jurisdiction of the case is still with Examination or Collection. The prohibition against ex parte communications between Appeals employees and originating function employees does not apply in these ADR programs because the Appeals employees are not acting in their traditional Appeals settlement role. Ex parte communications, such as a private caucus between the Appeals mediator and Examination or Collection employees during the course of the mediation session, is permissible under the ex parte communication rules.

The ex parte communication rules do not apply in Post Appeals Mediation (PAM) because Appeals is a party to the proceeding and, in that capacity, Appeals is not acting in its traditional settlement role. As part of the PAM process, section 12.01 of Rev. Proc. 2014-63, General Provisions, Communication with IRS and Counsel Permitted, further provides Appeals with the discretion to communicate ex parte with the Office of Chief Counsel or the originating function in preparation for or during the mediation session.

The ex parte communication rules do apply to Appeals' consideration of an issue under the Early Referral process or the Accelerated Issue Resolution program.

See section 2.05 of Revenue Procedure 2012-18, Alternative Dispute Resolution, for further details.

A taxpayer/representative has the option of granting a waiver on a communication-by-communication basis or a waiver covering all communications that might occur during the course of Appeals’ consideration of a specified case.

When discussing an ex parte communication waiver with a taxpayer or representative, make sure:

A written waiver is recommended but not required. A written waiver signed by the taxpayer or representative provides both the taxpayer/representative and Appeals with a record of the date the waiver was granted and the communication(s) covered, which helps avoid possible misunderstandings or misinterpretations.

Similarly, a written revocation of the ex parte communication waiver is recommended but not required.

If a waiver is granted verbally by the taxpayer/representative, document the case activity record with:

See section 2.01(3)(c) of Revenue Procedure 2012-18, Opportunity to Participate, Waiver, for additional information.