October 2008 Introduction to Appeals

OFFICE OF APPEALS 2 Appeals Founded In 1927, the IRS established an administrative appeal process to resolve tax disputes without litigation. Restructuring and Reform Act of 1998 Specifies that the IRS reorganization plan must “ensure an independent appeals function within the Internal Revenue Service, including the prohibition in the plan of ex parte communications…” Section 1001(a)(4). Mission Resolve tax controversies, without litigation, on a basis which is fair and impartial to both the government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.

OFFICE OF APPEALS 3 Commissioner Chief of Staff Deputy Commissioner Operations Support Acting Commissioner, Small Business/ Self-Employed Chief Information Officer Chief Counsel Chief, Appeals National Taxpayer Advocate Chief Financial Officer Chief Human Capital Officer Chief, Agency-Wide Shared Services Commissioner, Wage and Investment Commissioner, Large and Mid- Sized Business Commissioner, Tax Exempt and Government Entities Chief, Criminal Investigation Chief, EEO and Diversity Chief, Communications and Liaison Director, Office of Professional Responsibility Deputy Commissioner Services and Enforcement Director, Research, Analysis, and Statistics Director, Whistleblower Office Director, Office of Privacy, Information Protection & Data Security IRS Organization Chart

OFFICE OF APPEALS 4 Chief, Appeals Director, EEOD (AWSS)Director, Art Appraisal Services Director, Communications Director, Strategy and Finance Strategic Planning/ Measures Analysis Management and Administration Finance Business Systems Planning Appeals Quality Measurement System Learning & Education Director, Technical Services Director, Field Operations – East Area 1 - Manhattan Area 2 - D.C. (Collection) Area 3 - Nashville Area 4 - Philadelphia Director, Field Operations – West Area 7 - Houston Area 8 - San Francisco Area 9 - Riverside ATCL – Los Angeles TCS - Plantation Technical Guidance Tax Policy & Procedure Collection & Processing Tax Policy & Procedure Exam, TE/GE,& ADR Processing Director, International Deputy Chief, Appeals Appeals Organization Chart

OFFICE OF APPEALS D.C. Washington Oregon Northern California Nevada Idaho Montana Wyoming Utah Arizona Colorado New Mexico Texas Oklahoma Kansas Nebraska Arkansas Louisiana Alabama Mississippi Florida Georgia South Carolina North Carolina Tennessee Kentucky Virginia South Dakota North Dakota Minnesota Iowa Missouri Illinois Wisconsin Michigan Indiana Ohio WV Pennsylvania New York Maine VT NH MA NJ CT MD Area 1 Area 4 Area 7 Area 8 Southern California FRC Campus OGC Campus Area 3 PHC Campus MEC Campus BRC Campus CIC Campus Area 9 Alaska Hawaii DE RI Area 2: Collection (all Collection cases from Areas 1, 3, 4) Area 2: Collection (all Collection cases from Areas 1, 3, 4) Appeals Field Operations

OFFICE OF APPEALS 6 Guiding Principles and Core Values Independence and Ex Parte One Appeals Getting the right work to the right employee at the right time to get the right decision Collaboration and Feedback Innovation and Creativity

OFFICE OF APPEALS 7 How Does Taxpayer Get to Appeals? Collection Due Process (lien/levy) Offer–in–Compromise Innocent Spouse Penalty Appeals Coordinated Industry Cases Industry Cases Examination (non-LMSB) Other (CAP, TFRP, FOIA, etc)

OFFICE OF APPEALS 8 Types of Case in Appeals Examination –Audits –Claims for Refund/Abatement –Post-assessment Penalty Appeals Collection –Collection Due Process –Collection Appeals Program –Offers in Compromise –Trust Fund Recovery Penalty

OFFICE OF APPEALS 9 Sources of Cases Generated by Field Compliance –More complex issues –Requires more time to resolve –Complexity drives need for more technically experienced employee Generated by Campus Compliance –Less complex issues –Requires less time to resolve –Easily resolved through correspondence or by telephone

OFFICE OF APPEALS 10 Offering a Fresh Look … Supports an administrative dispute resolution process Supports a dispute resolution process that is separate and independent from Compliance Supports the joint goals of the government’s need for an efficient tax system and the taxpayer’s need to have their case fairly and impartially considered without having to go to court

OFFICE OF APPEALS 11 The Appeals Process Compliance forwards a complete administrative case file Case is received by Appeals –Assigned by Appeals Team Manager to an Appeals employee –“Welcome to Appeals” letter issued Quality review of case file by Appeals employee assigned the case

OFFICE OF APPEALS 12 The Appeals Process (cont’d.) Appeals employee considers –Facts –Tax Law –Treasury Regulations –Case Law –Revenue Rulings, Revenue Procedures, and other technical guidance Appeals employee honors the prohibition against ex parte communications Communications with taxpayer –Correspondence –Telephone –Face to face conference

OFFICE OF APPEALS 13 The Appeals Process (cont’d.) Settlement considerations –Settlement authority –Hazards of litigation Negotiations complete –Fair –Impartial Managerial review Implementation of final resolution Case closed from Appeals

OFFICE OF APPEALS 14 Alternative Dispute Resolution Early Referral Fast Track Mediation Fast Track Settlement Post-Appeals Mediation Arbitration

OFFICE OF APPEALS 15 Our Employees – Appeals Officers Appeals Officers FieldCampus Average Years of Service 2824

OFFICE OF APPEALS 16 Our Employees – Settlement Officers Settlement Officers FieldCampus Average Years of Service 2520