IRS Appeals Division Slashes Taxpayer Rights According to the Brager Tax Law Group

LOS ANGELES, Sept. 21, 2016 -- The IRS announced that effective October 1, 2016, it will rarely conduct Appeals Conferences in-person, except under specific circumstances.  “The IRS Appeals Division has long been the place where most taxpayers have their last shot at settling their case,” says Dennis Brager, founder of the Brager Tax Law Group and former Senior Trial Attorney IRS’ Office of Chief Counsel. “This new cost cutting measure by the IRS will, undoubtedly, lead to more litigation and for middle-class taxpayers, who find it difficult to pay for legal representation, it will mean that more of them will wind up with tax bills that exceed their true liability.”

According to the IRS website, the mission of the Appeals Division is to 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. “Unfortunately,” continues Brager, “this new policy will not further that mission, and indeed will impede it.”

One consequence of denying in-person conferences is eliminating the right to record Appeals hearings. Generally, Internal Revenue Code Section 7521 allows taxpayers the right to record in-person meetings with the IRS. Originally, the IRS position was that Appeals was not subject to Section 7521. However, the Tax Court has held otherwise. The right to record an interview is, however, limited to in-person meetings, not telephone or video meetings.

A taxpayer, who requests an in-person conference, is supposed to be offered a video conference IF the IRS has a nearby (generally within 100 miles) facility for so-called VSD (Virtual Service Delivery). “It’s not clear from the IRM where all of those VSD sites are,” states Brager. “The IRM mentions only 10 such customer facing locations.”

Internal Revenue Manual (IRM) 8.6.1.4 blandly entitled “Conference Practices” provides that ALL conferences will be held by telephone except under the following circumstances:

• There are substantial books and records to review that cannot be easily referenced with page numbers or indices
• The Appeals Team Employee cannot judge the credibility of the taxpayer’s oral testimony
• The taxpayer has special needs (e.g. disability, hearing impairment). There are numerous conference participants (e.g., witnesses) that create a risk of an unauthorized disclosure or breach of confidentiality
• An alternative conference procedure (e.g., Post Appeals Mediation or Rapid Appeals Process) involving separate caucuses will be used
• Another IRM section specific to the workstream calls for an in-person conference

“By wiping out most in-person appeals, the IRS has put taxpayers at a significant disadvantage in presenting their cases,” concludes Brager.

With a worldwide client base, the Brager Tax Law Group, a tax litigation and controversy firm, handles civil and criminal tax disputes with the IRS and other taxing entities. For an appointment, call the Brager Tax Law Group at 800.380.8295.

Contact:
Zarina Leviste
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