1. AN INTRODUCTORY LOOK AT IRS APPEALS Presented by Jay L. Wein

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3. FACTOID Page 3 THE IRS CODE CONTAINS MORE THAN 2 MILLION WORDS, WHICH IS FOUR TIMES AS MANY AS THE NOVEL, WAR AND PEACE.

4. INTRODUCTION Page 4 In 1927, the IRS established an administrative appeal process to resolve tax disputes without litigation.

5. RESTRUCTURING AND REFORM ACT OF 1998 Page 5  In 1998, in response to independent hearings, Congress specified 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)

6. MISSION Page 6  The Mission of the Office of Appeals 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.

7. IRS ORGANIZATION CHART Page 7

8. THE OFFICE OF APPEALS Page 8  Every year, the Office of Appeals helps over 100,000 taxpayers resolve their tax disputes without going to Tax Court.  The Appeals Office is an independent organization from the IRS whose mission is to help taxpayers and the government resolve tax disagreements.  Appeals DOES NOT take sides in a dispute; rather they offer an objective point of view on each individual case.

9. THE OFFICE OF APPEALS Page 9  Appeals also offers mediation services through Fast Track Settlement, Early Referral, and other mediation programs.  These mediation programs are designed to help taxpayer’s resolve disputes at the earliest possible stage in the audit or collection process.  The Appeals Office is the only level of administrative appeal within the IRS.

10. Page 10  Appeals role is to objectively and independently assess the hazards of litigation and to develop a fair and impartial settlement based on that evaluation.  Independence means Appeals exercises their independent judgment surrounding both the legal and factual disagreements in arriving at a particular settlement offer. INDEPENDENCE OF APPEALS

11. Page 11  Appeals evaluates the relative quality of the evidence presented by all parties and must consider all Court Cases, Regulations, Revenue Rulings, Procedures and other published IRS guidance.

12. WHEN TO APPEAL Page 12  Law is unclear  Facts are not well established  Differing opinions or interpretations of law and/or facts  Conflicting court decision (Golson Rule)

13. GETTING STARTED WITH APPEALS Page 13  If you’ve received an IRS letter stating that your case qualifies to be reviewed with Appeals then the following topics will help you get started.  Is Appeals the place for you?  Preparing an Appeals Request  What can you expect from Appeals?

14. GETTING STARTED (cont’d)  The IRS will send you a report and/or letter that will explain the proposed adjustments or collection action. The letter also states you have the right to request a conference with an Appeals or Settlement Officer and will explain how to make your request for a conference.  In addition to examination adjustments, many other issues can be appealed such as civil penalties, interest [in some cases], trust fund recovery penalties, offers in compromise, liens and levies. Page 14

15. Page 15  Appeals is the place for you if ALL of the following apply:  You receive a letter from the IRS explaining your right to appeal the IRS’s decision.  You do not agree with the IRS’s decision.  You are not signing an agreement form they sent you.  If all of the above are true, then you may be ready to request an Appeals conference or hearing. IS APPEALS THE PLACE FOR YOU ?

16. IS APPEALS THE RIGHT PLACE FOR YOU? Page 16  Appeals is not for you if ANY of the following apply:  The correspondence you received from the IRS was a bill and there was no mention of Appeals.  You did not provide all information to support your position to the Examiner during the audit.  Your only concern is that you cannot afford to pay the amount you owe.

17. BE PREPARED Page 17  If you request an Appeals conference, be prepared with records and documentation to support your position.  Appeals conferences are informal meetings. A taxpayer may represent themselves or have an attorney, accountant, or an individual enrolled to practice before the IRS deal with Appeals.  If the taxpayer plans to have their representative speak with Appeals, a copy of a completed Power of Attorney, Form 2848, must be submitted.

18. PREPARING A REQUEST FOR APPEALS Page 18 Small Case Request  You can prepare a small case request instead of a written protest if the total amount of any one tax period is $25,000 or less.  Send a letter requesting Appeals consideration.  Indicate the changes you do not agree with and the reason you don’t agree.  For specific guidance in preparing a small case request/protest, refer to Form 12203, Request for Appeals Review.

19. FORMAL WRITTEN PROTEST Page 19 Prepare a formal written protest for all of the following situations:  If the total amount of any one tax period is greater than $25,000.  Employee plan and exempt organization cases without regard to the dollar amount at issue.  Partnership and S corporation cases without regard to the dollar amount at issue.

20. FORMAL WRITTEN PROTEST (cont’d) Page 20 A formal written protest must incorporate the following :  Your name, address, social security number, and daytime telephone number.  A statement that you want to appeal the IRS findings to the Appeals office.  A copy of the letter showing the proposed changes and findings you don’t agree with (or the date and symbols from the letter).

21. FORMAL WRITTEN PROTEST (cont’d) Page 21  Indicate the tax periods or years involved.  List all the changes you do not agree with and why you don’t agree.  State the facts supporting your position on any issue that you do not agree with.  Cite the law or authority, if any, on which you are relying.  Sign the written protest under the penalties of perjury.

22. COLLECTION APPEALS PROGRAM (CAP) Page 22 Collection Appeals Program (CAP) is generally quick and available for a broad range of collection actions. However, you cannot go to court if you disagree with the Appeals decision.  You may go through the CAP process if you’ve received any one of the following notices:  Notice of Federal Tax Lien  Notice of Levy  Notice of Seizure  Denial or Termination of installment Agreement

23. COLLECTION DUE PROCESS (CDP) Page 23 Collection Due Process (CDP) is available if you receive one of the following notices. If you disagree with the Appeals decision, you may be able to take your case to court.  Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (Lien Notice)  Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing  Notice of Jeopardy Levy and Right of Appeal  Notice of Levy on Your State Tax Refund and Notice of Your right to a Hearing (Levy Notices)  Notice of Levy and Notice of Your right to a Hearing.

24. CDP PROCEDURE Page 24  You have 30 days to request a hearing to preserve your right to go to Court.  Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing.  For more information please refer to Publication 1660, Collection Appeals Rights.

25. YOUR APPEAL RIGHTS Page 25  For further information on the appeals process and information on how to stop interest from accruing on any anticipated liability, refer to Publication 5 Your Appeal Rights and How to Prepare a Protest if You Don’t Agree, and Publication 556, Examination of Returns, Appeal Rights and Claims for Refund. You can also refer to Publication 1660, Collection Appeal Rights. Learn more about Appeals in IRS.gov where you will find information about alternative dispute resolution processes, domestic specialty operations, international programs and more.

26. YOUR APPEAL RIGHTS Page 26  You can also learn more about the Appeals process by reviewing The Appeals Examination Process and The Appeals Collection Process YouTube videos. Get the latest Appeals news, information, and settlement guidelines by following the IRS News and IRS Tax Professionals Twitter accounts as well.

27. WHAT YOU CAN EXPECT Page 27  If your case qualifies for an appeal, an Appeals employee will review the issues of your case with a fresh, objective perspective and schedule a conference with you. Appeals conferences are informal and conducted by correspondence, telephone or in person. Most differences are settled in these appeals without expensive and time consuming court trials. Appeals will consider any reason you have for disagreement, except for moral, religious, political, constitutional, conscientious objection or similar grounds.

28. APPEALS COMMITMENTS Page 28  Explain your appeal rights and the Appeals process.  Listen to your concerns, be courteous and professional.  Be timely and responsive.  Be fair and impartial.

29. YOUR RESPONSIBILITIES Page 29  In your protest requesting an appeal, list all issues with which you disagree and why, and tell Appeals how you understand the facts and the law.  Give Appeals any additional information or documentation that will be helpful to your case within the timeframe specified. If you present new information that you did not provide to the auditor or revenue officer, Appeals may refer that information for further consideration. You will receive their comments, and have an opportunity to respond.

30. CASES/EXAMPLES Page 30  Discussion of Appeals Cases

31. QUESTIONS Page 31  I will be happy to entertain any questions at this time.

32. CAPITAL PUNISHMENT Page 32 Definition: CONGRESS COMES UP WITH A NEW TAX