The mission of the IRS Independent Office of Appeals (Appeals) is to resolve federal tax controversies without litigation on a basis which is fair and impartial to both the Government and the taxpayer, promotes a consistent application and interpretation of, and voluntary compliance with, the federal tax laws, and enhances public confidence in the integrity and efficiency of the IRS. Appeals accomplishes its mission by considering protested and Tax Court cases and negotiating settlements in a manner which ensures Appeals employees act in accord with the Taxpayer Bill of Rights (TBOR) in every interaction with taxpayers. See IRM 8.1.1.1, Accomplishing the Appeals Mission.

The requirement for an organizational measure of quality for the IRS was established as part of the Restructuring and Reform Act of 1998 (RRA 98) under 26 CFR 801.6(b), Quality Measures.

26 CFR 801.6(b) states that quality measures focus on whether IRS personnel:

The Director, Case and Operations Support (C&OS) has the executive responsibility for designing, developing, delivering, and monitoring short and long-range tax administration policies, programs, strategies, and objectives for the Appeals organization.

The Director, Policy, Planning, Quality and Analysis is responsible for providing technical and procedural guidance to Appeals employees and establishing and maintaining policies and standard procedures for Appeals work streams.

The Policy Analyst shown on the Product Catalog page as the originator is the assigned author of this IRM.

AQMS data can be generated down to the Area level. There are three reports available through ACDS for AQMS results.

AQMS also generates an annual performance report for stakeholders. This report provides data to aid in:

The table lists commonly used acronyms and their definitions:

Appeals Quality Measurement System Webpage

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.

AQMS results are used to assess the performance of Appeals as an organization. AQMS results are not, under any circumstances, used to measure the individual performance of Appeals employees. AQMS is designed and intended as a useful tool for executive and top level managers to use in determining strengths and weaknesses of the quality of the Appeals process.

Any feedback or other work products generated from AQMS are not used as a substitute for case reviews, case file reviews, on the job visits and workload reviews.

Closed cases are selected for AQMS review by a random sampling process that provides a statistically valid measurement with 95% confidence level (plus or minus 10% error rate) to the Area level for an annual period. The case sampling system is designed to ensure a representative number of cases are selected from each Appeals Area.

The criteria used in selecting the representative case samples are Collection (Examples: CDP, TFRP, OIC, etc.) or Non-Collection (Examples: Income tax, Employment tax, PENAP, etc.) types.

In addition to randomly selected cases, Closed Case Reviews may be conducted on certain types of cases at the request of Appeals Executive Management.

AQMSSELECT is the indicator automatically set when the case is selected for AQMS review based on programmed criteria.

When APS closes a case selected for AQMS review, ACDS generates an automated and completed AQMS Coversheet. APS will print and attach the coversheet to the case file. Upon closing the case, APS ensures documents identified on the form are included in the case file. APS then forwards the selected closed case to the appropriate AQMS reviewer/office as identified on the form. APS closing procedures for AQMS designated cases can be found in IRM 8.20.7, Account and Processing Support Manual, Closing Procedures.

The AQMS rating system provides an objective, consistent, and equitable scoring system for selected cases and emphasizes Standards identified as key factors for ensuring an acceptable quality Appeals process.

The AQMS rating system consists of eight key Standards for Non-Collection Appeals cases and seven key Standards for Collection Appeals cases.

Quality Standards provide objective criteria upon which case quality is evaluated. Each one provides concise statements of Appeals' expectations of a quality work product.

Each Quality Standard contains one or more Attributes that define the prerequisite of a quality case and reflect Appeals' goals.

Some Attributes have Reason Codes. Reason Codes are specific examples of actions or tasks that are contrary to Appeals’ goals.

Each Attribute is worded as a question. When rating aspects of cases relevant to an Attribute, the AQMS reviewer assigns an answer of MET, NOT MET, or NOT APPLICABLE to each applicable Attribute. For an Attribute with Reason Codes, the rating of the Attribute is determined based on whether any of the Reason Codes for the Attribute are selected.

Reason Codes provide detailed information used for analytical purposes. The Reason Codes are used as a management tool to identify the cause(s) of a missed Attribute.

Narrative comments are required for some Reason Codes and Attributes. A narrative comment is a brief summary of the AQMS reviewer’s observations about a given Attribute or Reason Code. They are used to explain the reasons Attributes are rated NOT MET and to further explain why a Reason Code was selected. They are also used to provide favorable comments.

The rating assigned to an Attribute by the AQMS reviewer is a component of the overall score of the related Standard.

The AQMS Review Check Sheet is a form outlining the Quality Standards, Attributes, and Reason Codes. AQMS reviewers use the check sheet to systematically score each case. See IRM 8.1.7.4 and IRM 8.1.7.5.

The check sheet outlines the criteria for rating each Standard and includes a comment section for each Standard, Attribute, and Reason Code.

When completing the check sheet, AQMS reviewers take into account the significance of both positive and negative aspects of the case file and their respective impact on the Standards, Attributes, and/or Reason Codes.

For many of the Attributes or Reason Codes, AQMS reviewers are required to use the comment section to discuss NOT MET ratings on any Attribute or Reason Codes and they are asked to share favorable comments regarding Standards and Attributes. AQMS reviewers must ensure their comments are meaningful, clear and easily understood.

The check sheet is updated annually.

To provide statistically valid data on case quality for Appeals, it is important to have consistency among the reviewers in evaluating cases and to have a procedure in place to evaluate consistency.

Consistency checks are performed by having reviewers independently evaluate the same case and comparing the consistency of the ratings for each Attribute and the selection of Reason Codes.

Group meetings are held by the AQMS reviewers to discuss specific aspects of the consistency reviews and methods to ensure consistency in the review of cases.

Each year AQMS issues a report containing the statistical findings for Non-Collection case reviews and for Collection case reviews. Recommendations for each Appeals Organizational Function are included in the report. The Annual Report identifies recommendations for improvement and areas in which Appeals should focus.

The AQMS Reviewer’s Desk Guide should be used when interpreting or analyzing the AQMS reports. The AQMS Reviewer's Desk Guide is designed to provide review and rating guidance to AQMS reviewers. The AQMS Reviewer’s Desk Guides, check sheets, and the AQMS Annual Reports are posted on the AQMS website.

Standard 1 measures whether Appeals:

The IRS is committed to providing taxpayers with customer service that facilitates easier interactions with the IRS, provides assistance with taxpayers' needs as necessary, and delivers professional treatment. This requires that Appeals keep taxpayers appropriately informed throughout the Appeals process and give them sufficient time to present their case.

Respecting taxpayers’ rights involves both advising them of their rights and observing those rights in Appeals' actions. Appeals must always keep the taxpayers’ rights as the top priority.

For Standard 1 to be rated at the maximum allowable score, the following actions must be taken on the case:

To keep the taxpayer and/or representative informed about the status of the case, contact should be initiated timely and continue throughout the Appeals process.

Standard 2 measures whether the Appeals settlement is supported by a well-reasoned analysis of facts and law. Issues referred to Appeals are controversial and rest upon judgment and opinion on which reasonable people may hold divergent views. Resolving these issues requires consideration of all relevant facts and law.

The AQMS reviewer will not substitute personal preference for the judgment of the Appeals Technical Employee (ATE) when the decision is fairly supported by facts and applicable law.

Standard 2 is rated at the maximum allowable score when the following occurs:

Standard 3 measures the accuracy of the tax and penalty computations prepared by the AOs, ATCLs, etc. who do their own computations and whether correct closing information was provided for the computation of interest.

Standard 3 includes a review of the following:

The AQMS reviewer uses reasonable judgment to determine what is considered an error. The AQMS reviewer clearly demonstrates an error causing an incorrect tax or penalty, not merely a possible or potential error.

Standard 3 is rated at the maximum allowable score when the following occurs:

Standard 4 measures whether the Appeals Case Memorandum (ACM) adequately explains and documents the rationale and merits of each settlement or unagreed disposition. The ACM is the written record prepared by the ATE that provides the principal support for the case conclusion and/or report.

The ACM must adequately explain the conclusions reached in the Appeals process as well as reflect the significant and relevant information gathered during the process.

The ACM is the document used to assist management in reviewing the case decision as well as providing feedback on the case settlement to Compliance.

Standard 4 is rated at the maximum allowable score when the following occurs:

Standard 5 measures the timeliness of actions taken by the ATE during the time span required to complete the case and the use of time relative to the complexity of the issues. This includes whether actions are initiated timely and continue throughout the Appeals process.

Timeliness as a Standard is rated relative to the type and circumstances of each case.

The focus of this Standard is the overall time management of the case.

Standard 5 is rated at the maximum allowable score when the following occurs:

Standard 6 measures whether important procedural aspects of Appeals Non-Collection cases are performed. There are numerous procedural actions Appeals must comply with during the processing of a case.

Standard 6 is used by AQMS reviewers to measure whether general procedural requirements of Appeals Non-Collection cases are followed, such as conducting a prompt preliminary review of the case, validating case/taxpayer information, soliciting payment and offering payment options, and following the statute of limitation and case closure guidelines and procedures.

Special case procedures, such as those required for Joint Committee, TEFRA/BBA and penalty appeals cases, are also measured under Standard 6.

Standard 6 is rated at the maximum allowable score when the ATE follows general and special case procedures relevant to the circumstances of the case.

Standard 7 measures the accuracy of the tax and penalty computations prepared by the Tax Computation Specialist (TCS), whether correct closing information is provided by the TCS for the computation of interest, and whether the TCS time span and time applied are appropriate.

This Standard includes consideration of the following:

The reviewer uses reasonable judgment in determining what is considered an error. The reviewer clearly demonstrates an error causing an incorrect tax or penalty, not merely a possible or potential error.

Standard 7 is rated at the maximum allowable score when the following occurs:

Standard 8 measures the following actions taken by Tax Examiners (TE).

Standard 8 is rated at the maximum allowable score when the following occurs:

Standard 1 measures whether Appeals:

Appeals is required to keep taxpayers appropriately informed throughout the Appeals process, address the taxpayers' needs and give them sufficient time to present their case.

Respecting taxpayers’ rights involves both advising them of their rights and observing those rights in Appeals actions. Appeals must always keep the taxpayers’ rights as the top priority.

For Standard 1 to be rated at the maximum allowable score, the following actions must be taken on the case:

To keep the taxpayer and/or representative informed about the status of the case, contact should be initiated timely and continue throughout the Appeals process.

Standard 2 measures whether the Appeals settlement is supported by a well-reasoned analysis of facts and law. Issues referred to Appeals require consideration of all relevant facts and law.

The AQMS reviewer will not substitute personal preference for the judgment of the ATE when the decision is fairly supported by facts and applicable law.

Standard 2 is rated at the maximum allowable score when the case file reflects a quality decision.

Standard 3 measures the accuracy of the tax, penalty, interest and other computations. This Standard includes:

Standard 3 is rated at the maximum allowable score when the AQMS reviewer determines the relevant computations are correct.

Standard 4 measures whether the Appeals Case Memorandum (ACM) adequately explains and documents the rationale and merits of each settlement or unagreed disposition. The ACM is the written record prepared by the ATE that provides the principal support for the case conclusion and/or report.

The ACM must adequately explain the conclusions reached in the Appeals process as well as accurately reflect the significant and relevant information gathered during the process.

The ACM is the document used to assist management in reviewing the case decision as well as providing feedback on the case settlement to Compliance.

Standard 4 is rated at the maximum allowable score when the following occurs:

Standard 5 measures the timeliness of actions taken by the ATE during the time span required to complete the case, and the use of time relative to the complexity of the issues. Once a case is received by the ATE, subsequent actions should be initiated timely throughout the Appeals process.

Timeliness as a Standard is rated relative to the type and circumstances of each case. The focus of this Standard is the overall time management of the case.

Standard 5 is rated at the maximum allowable score when the time span is appropriate for the actions taken, time applied is commensurate with the work performed, and the case kept moving throughout the Appeals process.

There are numerous procedural actions Appeals must comply with during the processing of a case. Standard 6 measures whether important procedural aspects of Appeals Collection cases are performed.

Special Appeals Collection case procedures, such as those required for Collection Due Process, Offer in Compromise, Collection Appeals Program, and Trust Fund Recovery Penalty cases, are also measured under this Standard.

Standard 6 is rated at the maximum allowable score when the ATE follows general and special case procedures relevant to the circumstances of the case.

Standard 8 measures the following actions taken by APS employees on Collection cases:

Standard 8 is rated at the maximum allowable score when the following occurs: