Appeals is the only administrative function of the Service with authority to consider settlements of tax controversies and has the primary responsibility to resolve these disputes without litigation to the maximum extent possible. Appeals’ mission is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. Appeals accomplishes this mission by considering protested and Tax Court cases, holding conferences, 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 IRC 7803(a)(3). See Pub 5170, Taxpayer Bill of Rights. For more information, see IRM 8.1.1, Appeals Operating Directives and Guidelines.

The authority delegated to Appeals Team Case Leaders as to their respective cases is found in Delegation Order 8-8 (Rev. 1), IRM 1.2.47, Servicewide Policies and Authorities, Delegation of Authorities for the Appeals Process.

The Director, Case and Operations Support (COS) is the executive responsible for designing, developing, delivering, and monitoring short and long-range tax administration policies, programs, strategies, and objectives for the Appeals organization.

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

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

Planning, Quality and Analysis (PQA) provides trends and data analyses and detailed summary reports for Appeals.

See IRM 8.1.1-1 Exhibit, Common Terms Used in Appeals, for common terms and definitions used in IRM Part 8. Terms listed in this exhibit are not included in this section.

The table lists commonly used acronyms and their definitions:

This IRM is the primary source of guidance on this program.

Authors, reviewers and managers can find helpful information on these websites:

Effective July 6, 2016:

The ATCL/AO will take the following actions within 45 calendar days of receipt of a newly assigned and/or transferred case (i.e., date of CR/NR), except as stated in IRM 8.7.11.2.1 (4) below:

If the ATCL/AO determines that a conference is not appropriate, in lieu of sending Letter 5157, Letter 3808, Letter 3808-A, or another contact letter, within a reasonable time frame, the ATCL/AO will:

The ATM will be reasonable in extending the contact time frame if circumstances (e.g., leave, workload, case complexity or other priorities) prevent the ATCL/AO from meeting them. If the ATM extends the time frame, the ATCL/AO will document this decision and the agreed upon time frame in the CAR for the case. The statute verification time frame shall not be extended beyond 45 calendar days. if the contact time frame is extended beyond 75 calendar days, then the ATM will contact the taxpayer/representative by correspondence providing a status of the case and to whom the case is assigned.

The team leader recommends disposition of the work unit. Any understanding reached at an interim level on an issue-by-issue basis between a team member and a taxpayer or representative is tentative and must fit in with recommendations of the team leader who must be fully acquainted with the strengths and weaknesses of issues and their proposed disposition.

Team members are responsible for considering their portion of the work assignment independently unless the manager believes authority over a team member's issue rests with the team leader. The team leader will ascertain that the required concurrence is obtained from Technical Guidance or International.

The team leader and team members are responsible for providing LB&I the opportunity to consider and timely review and comment on new information or evidence presented by the taxpayer. See IRM 8.7.11.6.3, for more information and documentation requirements.

Periodic team meetings are held to discuss the possible impact of each member's issues on those of other members, to define objectives and to otherwise coordinate team activities. The team leader is consulted on technical and procedural questions consistent with the degree of independence given the team members by the team leader.

The team leader is responsible for meeting target dates and identifying and attempting to eliminate obstacles when problems are encountered by team members. Periodically, the team leader's ATM is updated on the progress and informed of any problems that may develop in the case.

When disagreements/differences arise between team members (including members from Technical Guidance and International), please see IRM 8.1.1.1(6), Accomplishing the Appeals Mission, for additional information.

The ATCL has settlement authority on all related work units assigned. However, the ATCLTM may propose a change to the proposed settlement. If there is a disagreement between the ATCL and the ATCLTM and an agreement is not reached, the issue will be resolved by the Area Director. Both the ATCL and the ATCLTM will sign Form 5402 for all work units. The ATCLTM’s signature on Form 5402 will confirm that the ATCLTM has no proposed changes to the settlement. The ATCL will then counter-sign the closing documents.

Team members are responsible for preparing Appeals Case Memoranda (ACMs) for the issues assigned to them. The team leader coordinates preparation of the ACM and Form 5402 except where a case within the work unit is handled entirely by one team member. If the team leader resolves an issue assigned to a non-Technical Guidance or International team member without the member's agreement, the team leader must prepare the ACM for that issue. If the team leader revises the team member's ACM, the team leader will provide a copy of the revised ACM to the team member within a reasonable time.

Team members are responsible for providing the Large Case Quarterly Status Report to the team leader by the 5th business day of the month following the end of the quarter. This report is mandatory for all team members assigned to ATCL team cases.

The team leader is responsible for statute of limitations control except in a multi-case unit where cases are assigned to another team member; then, the team member to whom the case is assigned is responsible.

When assigned a case, immediately examine all returns to determine the statute of limitation expiration date and to verify the expiration date appearing on the case summary card. See IRM 8.7.11.2.1.

It’s the team leader’s full responsibility for obtaining the proper consents to extend the period of assessments, when necessary, even when a portion of the case is separated and assigned to a team member. Although the team member may take action to extend the statute on his/her assignment, the team leader is responsible for assuring the statutes are protected.

Because a team leader case generally takes a significant period of time to resolve, request statute extensions to cover the time frame. A team leader case assignment may involve numerous corporations, partnerships, etc., which must be reviewed to verify any unique statutes.

There are many unusual statute situations which require special consideration, such as:

The team leader is responsible for determining the completeness of the administrative file - whether all related returns are present, whether the protest, rebuttal and the power of attorney, etc., are included.

As part of the preliminary review, verify LB&I reviewed the protest and made an adequate written response. Verify rebuttals from specialists when protested issues are based in whole or in part on specialists, e.g., international examiners, engineers, economists, etc. The lack of an adequate review and rebuttal of the protest is sufficient reason to return the case to the examiner.

During preliminary review of the case, note important aspects of the case such as Joint Committee requirements, claims, tentatives, new issues, Appeals Coordinated Issues, Practice Areas, Practice Networks, and/or Campaign issues.

ATCLs/AOs are not investigators or examining officers and may not act as such. Therefore, ATCLs/AOs will conduct a preliminary review of a case as soon as possible to determine whether the case must be returned to Examination. While taxpayers may present new information or evidence to Appeals, the presentation of new factual information generally will require that the case be returned to Examination. See IRM 8.2.1.5, Returning a Case to Examination, for general guidelines for returning a case.

These guidelines apply to LB&I-sourced work excluding Primary Business Code (PBC) 315, International Individual Compliance (IIC) cases. Use the following chart to determine when information is returned to LB&I:

In instances where new information (see Item 1 or 2 above), is provided by the taxpayer during Appeals consideration, the ATCL/AO may offer Rapid Appeals Process (RAP) to resolve the Appeals-ready issues (issues that do not require additional analysis or investigative action).

For those cases where the taxpayer provides information in response to a question or request from Appeals to clarify or corroborate information contained or referenced in the RAR, Protest, or Rebuttal or makes a new argument (not including new information), the ATCL/AO will promptly send the information package or argument with all supporting information to LB&I, allowing at least 45 days for written review and comment (subject to ex parte requirements). An extension of time can be granted if mutually agreed. See IRM 8.6.1.6.6 , Taxpayer Raises New Theory or Alternative Legal Argument, for procedures on retaining jurisdiction. LB&I handles these requests for review of information on a priority basis and makes additional contact with the taxpayer as necessary to perform a complete review of the additional information.

See IRM 8.6.1.6.7, Jurisdiction Released, for procedures on returning a case to the originating function.

Conduct a team orientation meeting to discuss the nature, number and complexity of the issues or cases in the team case work unit.

With the concurrence of the team leader and team member's ATM, the team leader assigns work to team members commensurate with their grade. This may be by specific issues, by cases, or any other appropriate division of the work.

Consolidate interrelated issues or problems when assigning issues to avoid overlap.

After the team members have an opportunity to review the file and their assigned issues, each should determine the need for outside assistance, e.g., valuation, technical advice, information reports, etc. These needs must be identified as early as possible and discussed with the team leader. The requests for assistance are prepared by the AO handling the particular issue and are routed through the team leader for approval.

The team discusses tentative target dates and those issues or procedures which may impede the prompt closing of the case and decide the actions necessary to prevent delay.

It is suggested a separate file be created for each issue. The file should contain all relevant information regarding that issue, such as sections of the Revenue Agent’s Report (RAR), engineer's report, conference notes, rough draft supporting statements, etc.

It is desirable to discuss and agree upon these target dates at the first meeting with the taxpayer. The goal is to set firm dates, agreed to by Appeals and the taxpayer, and to resolve specific issues. Furnish the taxpayer with a list of team members and their respective work assignments. Clearly define the role and authority of the team leader and team members for the taxpayer.

Apply the aspects of Fast Track Settlement to the team leader case process as a means of efficient resolution.

The team will discuss and develop a complete list of questions to be addressed by the parties (taxpayer and LB&I) during the pre-conference and taxpayer conference. To comply with the ex parte requirements, a copy of the questions to the LB&I team must be shared with the taxpayer.

After the planning conference is complete, the team leader will complete the ACDS Electronic Work Plan (See IRM 8.7.11.8.5) incorporating the agreements reached with the taxpayer or his/her representative.

The team leader is responsible for planning and controlling the progress of the work unit. Although initial responsibility to follow up (requests for corroborating information from taxpayers, requests for information from Headquarters, Justice Department or other sources) lies with the team member assigned that segment of work, the team leader monitors this aspect of the team's actions.

The team leader must be involved in the case management practices of all team members. This is accomplished by periodic monitoring, issue reviews, mandatory written feedback, if applicable, or other appropriate techniques. Each team member's manager ensures the team member maintains a written activity record which includes the team member's contacts with the taxpayer and all significant actions on the case.

When faced with complicated technical issues, contact available resources early. For example, obtain input from Counsel, Headquarters, the Appeals Technical Specialist and/or the taxpayer prior to the pre-conference and planning conference.

Contact Examination immediately upon case assignment to ensure the Appeals team has access to the entire administrative file on a particular issue for effective discussion at the preconference meeting.

Contact the Appeals Technical Specialist for a coordinated issue paper or informal advice on any coordinated issue as early as possible.

Ongoing communications, whether in the form of conferences between the team or other communications between Appeals and LB&I are encouraged. Open lines of communication greatly expedite the completion of the case when the taxpayer presents new arguments or there are other developments which were not anticipated at the time of the pre-conference meeting. Always keep in mind ex parte communication provisions do apply.

Return the case to LB&I for consideration if the taxpayer presents new information or evidence. See IRM 8.6.1.6.5 , Taxpayer Provides New Information. If Appeals receives a case that is not fully developed and the taxpayer does not provide any new information, attempt to settle the case on factual hazards. The case will not be returned for further development.

The team conference work plan reflects the long-term plan for completion of the work unit with realistic target dates. The participation of the taxpayer's representative is an integral part of the planning process. Furnish the taxpayer's representative a copy of the plan (consistent with disclosure and privacy statutes). In addition to long-term planning, use the team conference work plan to outline the next quarter's contemplated actions on the work unit, including follow-ups. It should reflect a plan for further actions and not solely serve as a report on work unit status.

The team leader is responsible for the preparation and development of the work plan, with participation by all team members. In some instances the work plan will be used as the schedule of adjustments.

The team leader forwards the work plan to his/her ATM for approval within 30 days after the opening conference. Work plans are kept in the local office and available for Area office monitoring.

The team leader updates the work plan quarterly, or more frequently when warranted, by noting significant progress; new problems encountered and plans for solving them; and any revisions of the overall work plan or target dates, including reasons for such revisions.

The ACDS electronic work plan will be utilized by the team leader for all Appeals Team Cases. The format of the electronic work plan ensures the following items are addressed:

Some of the above items may not be determinable at the date the work plan is first drafted. Add them when reasonably determined as part of the periodic updating of the work plan.

As soon as practical at the end of each quarter, the team leader prepares a narrative for the manager to include:

The cases involve significant:

Upon receipt of a case, the ATCLTM will consider whether a screening panel is necessary.

The ATCLTM will assign the case to the ATCL advising that the case may need a screening panel.

After collaboration with the ATCL, the ATCLTM will make the final decision on whether a working panel is needed.

The screening panel will be a minimum of two ATCLs and the ATCLTM.

Selection of the ATCLs will be made by the ATCLTM and may cross ATCL Operations’ lines due to resources or ATCL expertise in a specific issue.

The Screening Panel Checksheet will be prepared individually or collectively by the screening panel. The ATCLTM and the ATCLs will promote a team approach in preparing the checksheet.

The ATCLTM will review the Screening Panel Checksheet from the panel members and make a final determination as to whether a working panel is necessary and which issues will be assigned to the working panel.

Issues not requiring a working panel will be worked by the ATCL assigned the case.

There are many benefits of a working panel that include:

Each panel member is responsible for the full scope of the issues before the panel.

The purpose of the conference is to discuss the issues, protest, and LB&I's written rebuttal to the protest. A frank discussion of the issues adds to Appeals' knowledge of the case.

The taxpayer is notified of, and given an opportunity to participate in, any pre-conference in accordance with requirements involving ex parte communications.

The need for any additional resources, specialists or expert witnesses, etc., are discussed at this meeting which serves to establish lines of communication between Appeals and LB&I that are maintained throughout consideration of the case. Always keep the ex parte communication provisions firmly in mind.

LB&I is encouraged to share its views on the disputed issues, including its assessment of litigating hazards and the strategies involved in setting up adjustments on particular issues. However, the conference is not used as a vehicle for securing a commitment from Appeals to defend any particular issues, commit to particular settlement positions, or otherwise "negotiate" the settlement posture of Appeals on the case.

Unless an exception is agreed to between LB&I and Appeals, hold a pre-conference on all LB&I cases designated as team leader cases in Appeals. LB&I may request a conference on other LB&I cases. If LB&I does not request a conference on a LB&I case and Appeals believes a conference would be helpful, Appeals may initiate the conference.

The team leader is responsible for arranging the conference. Conferences on non-team leader cases are arranged by the team leader following a written request to LB&I for the conference or the receipt of a request for a conference.

An Appeals request for a conference must be signed by a team leader or ATM. A request from LB&I is initiated by the case manager/group manager (or other official as determined by LB&I). A conference request from LB&I should accompany the file when it is received by Appeals. If Appeals desires a conference, make the request as soon as possible after receipt of the case.

If LB&I and Appeals agree a pre-conference is not useful in any case for which a conference is required, document the file with a memorandum signed by appropriate officials from each function specifying no pre-conference is desired by either LB&I or Appeals. In Appeals, the memorandum must be signed by an ATM or Area Director.

These procedures do not prohibit conferences on other types of cases; e.g., cases with industry-wide impact, specialized industries or coordinated issues. Neither do they prohibit other communication and discussion of issues between AOs and agents or specialists. Make sure the ex-parte provisions of Rev. Proc. 2012-18, are followed.

The Appeals team usually consists of the team leader and team members assigned to the case. Participation by management is determined by area and local guidelines.

The LB&I team usually consist of the case manager or group manager, revenue agents, international agents or other specialists as appropriate to the issues in dispute. LB&I determines the involvement of other managers.

Associate Area Counsel is invited to participate in pre-conferences on all docketed cases. Either LB&I or Appeals may request the participation of Counsel in the pre-conferences on non-docketed cases.

In accordance with the guidance for ex parte communications, the taxpayer (or representative) is also given an opportunity to participate in the pre-conference meeting. Please see Rev. Proc. 2012-18.

A rough draft ACM is a written document which includes a substantive discussion of the facts and law presented in the RAR and taxpayer's protest.

Prepare rough draft ACMs on all significant protested issues prior to the first taxpayer conference on that issue. Team members are responsible for finalizing the ACM for their issues.

Review the Lists of Compliance Coordinated Issues and Appeals Coordinated Issues contained on the Appeals web site.

Make a referral to Appeals Technical Guidance or International following the procedures contained in IRM 1.4.28, Appeals Manager Procedures and IRM 8.2.1, Agreed Pre-90-Day Income Tax Cases, before scheduling the initial conference on the coordinated issue.

Advise the taxpayer the issue is coordinated and any settlement of the issue requires the review and concurrence of the Technical Specialist (Technical Guidance or International).

Forward a rough draft of the ACM (and any related documents requested by the Technical Specialist such as copies of documents, RAR, protest, closing agreements, etc.) to them, whether the Technical Specialist is a team member or not. The Technical Specialist may waive this requirement after discussing the issue with the ATCL/AO.

Before the settlement is finalized, send the rough draft ACM (and any related documents) to the Technical Specialist for any further guidance.

Send the Technical Specialist a copy of the portion of the final ACM and Closing Agreement, if any, which discusses the coordinated issue.

If the Technical Specialist concurs with the proposed disposition of the coordinated issue, note this on Form 5402.

If the Technical Specialist does not concur with the proposed disposition of the coordinated issue, attach a copy of the Technical Specialist's memorandum (rebuttal) to the ACM. See IRM 8.7.3.4, Review and Concurrence Procedures, for procedures on how to resolve the dispute.

If the coordinated issue is designated for litigation in a specific case by the Office of Chief Counsel do not consider settlement of the issue in the designated case.

Post settlement conferences are only available for cases originating from LB&I and worked by a team leader in Appeals (ATCL or an AO assigned as a team leader). See IRM 8.7.11.3.

Post settlement conferences can occur at the request of either Appeals or LB&I.

If both Appeals and LB&I agree that it is not necessary, the post settlement conference can be waived.

The Office of Appeals is an independent and impartial forum for both the government and the taxpayer to resolve disputes without litigation, and in doing so, promotes voluntary compliance by demonstrating the fairness and effectiveness of the tax administration system. See IRM 8.1.1.1, Accomplishing the Appeals Mission.

With respect to the prohibition on ex parte communications:

Appeals should not discuss matters pertaining to LB&I’s case development in open years (i.e., years not yet considered and closed by Appeals) during a post settlement conference.

Examples of permissible post settlement conference discussions with respect to open years include:

Examples of impermissible post settlement conference discussions with respect to open years include:

Before requesting a post settlement conference, the LB&I team and manager should carefully review the relevant ACM. The ACM in a team case thoroughly sets forth the settlement reached and the rationale for it. From the ACM, revenue agents may discern the terms of the settlement and its impact. In rare case where the ACM does not adequately relate the foregoing, a post settlement conference may be requested by the LB&I Team Manager. The request should be routed to the ATCL who worked the case or the ATM of the AO (team leader) who worked the case.

The request should be made within 45 days of Appeals’ closure of the case in IMS, or 45 days from the receipt of the e-mail transmitting the ACM if IMS was not utilized.

Any request to address specific questions should be made at the time the request for a post settlement conference is made.

LB&I participants may include the LB&I Team Manager, revenue agents, and others who contributed to the development of the issue including their immediate manager. The LB&I Team Manager, in consultation with the assigned ATCL or team leader, determines the LB&I participants.

Appeals participants may include the ATCL or team leader, team members and any others who contributed to the resolution of the issue. The manager of any of the Appeals team members may also participate.

IRS Chief Counsel is invited to attend on all docketed LB&I cases. Counsel may attend post settlement conferences on non-docketed cases at the request of either LB&I or Appeals.

The ATCL or team leader identifies and discusses with the LB&I Team Manager the need to limit the number of participants in the post settlement conference.

Post settlement conference discussions are informal.

The conference may not be recorded or transcribed.

Although LB&I may submit written questions in advance of the conference, Appeals responses will generally be communicated orally at the conference.

Appeals ordinarily will not produce copies of its note made in preparation for or taken at the conference except in its sole discretion.

If the Schedule of Adjustments doesn’t give the page numbers for the issues, use a Table of Contents. The Table of Contents may include the page number from the revenue agent’s report, the taxpayer’s protest, or other pertinent documents.

For a lengthy ACM with numerous issues, an Executive Summary provides a reader with an overview of all information up front.

The Executive Summary is similar to a Summary and Recommendation for an issue; both are brief and up front. In fact, the Executive Summary is the first page(s) of a large or complex case ACM. It may include:

The basic format of the Schedule of Adjustments for large or complex cases is the same, but there may be a need to add "Additional Features." If the additional columns won’t fit on the page, show the schedule in landscape format to accommodate the extra columns. Here is a list of some items to use in the schedule in addition to those in the standard Schedule of Adjustment:

If the schedule is developed when the case is first assigned, it can serve as the basis for the issue status schedule in the large case work plan.

The four sections of an ACM: Summary and Recommendation, Brief Background, Discussion and Analysis, and My Evaluation, work for even the most complex of cases. The complexity of the issue dictates the length and structure of the longer narrative. The following sections give some guidance in preparing your ACM.