IRS Appeals Announces a Return to In-Person Settlement Cases

The IRS and taxpayers often disagree in tax audits and other tax-related matters. The IRS Office of Appeals was established as a separate and independent office within the IRS, whose mission is to resolve these tax disputes, and without the need to go to court.

One of the benefits of dealing with IRS Appeals is the flexibility offered to taxpayers and their representatives. Taxpayers and their representatives were afforded the opportunity to meet “face-to-face” with an IRS Appeals representative and to informally discuss a resolution of the tax dispute.    These IRS Appeals representatives – “Appeals Officers” – are often located in offices near the taxpayer.

On October 1, 2016, however, the IRS announced it was moving away from in-person or “face-to-face” settlement conferences in tax cases. These settlement discussions would now take place via phone and fax, except in a few, very limited circumstances. This announcement did not sit well with the tax community as it eliminated the long-held ability to personally meet with and present issues, arguments and documents to the Appeals Officer for settlement purposes. Moreover, in more complex tax disputes, it would often be impossible to adequately present all the information and arguments so that the Appeals Officer could meaningfully consider the case for settlement purposes.

After a year of telephone settlement conferences, the IRS has now mostly returned to its prior settlement conference practice. The announced new procedures, which became effective October 16, 2017, provides that IRS Appeals will “use its best efforts to schedule an in-person conference on a date and at a location that is reasonably convenient for the taxpayer and Appeals.” These new procedures apply only to IRS field cases, however – i.e. those cases, such as audits and tax collection matters arising from tax examination or collection action involving local IRS representatives. For audits and tax collection-related disputes that arise through one of the IRS’s regional campuses, however, the previous rules still apply and no in-person settlement conference will be offered. IRS Appeals did announce they are reviewing the procedures for these campus settlement conferences, and further guidance from the IRS may be forthcoming. After more than a year of having telephone settlement conferences with IRS Appeals, it seems now that the IRS has finally got the message.  A return to “face-to-face” or in-person settlement conferences is certainly welcome.