How Does Appeals Notify You of Their Involvement in the Case

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Over the past year, the decision by Appeals to no longer hold face to face meetings and the subsequent partial reversal of that decision served as the highest item of interest regarding Appeals. Taxpayers with cases involving controversies large enough to warrant assignment to an Appeals Officer in the field can now obtain a face to face conference with Appeals again. Taxpayers whose cases do not have sufficient dollars at issue continue to be sent to the back of the bus because the low dollar amount of their controversy means their cases get assigned to low graded Appeals employees who reside in the six Service Centers where Appeals has employees.

One of the concerns that Appeals has in allowing the case of a taxpayer with a small amount of tax at issue to meet with a “live” Appeals employee in a face to face meeting is that the case is scored for assignment to a low graded Appeals employee and in the local offices Appeals does not have low graded employees, or enough low graded employees, so it needs to send these case to the Service Centers where the low graded Appeals employees reside. Because of the limited geographical availability of these employees and the fact that Service Centers do not really accommodate meetings with taxpayers, taxpayers with smaller dollars at issue continue to have the pleasure to deal with the IRS via phone and fax just as they did during the examination phase of their case.

On the listserv for clinicians who work on cases involving low income taxpayers, a new issue concerning Appeals emerged recently. The new issue involves the manner in which Appeals notifies the taxpayer, or the representative, of the assignment of the case in Appeals. Several individuals posting to the listserv reported receiving contact via phone instead of mail of the assignment of the Appeals employee and some reported that in that phone contact the Appeals employee also wanted to discuss the merits of the case. Because the phone contact came “out of the blue” with no opportunity for the person receiving the call to prepare for the discussion, the representatives receiving these calls invariably sought to put off the discussion of the case with varying degrees of success. In questioning the Appeals employee about the approach of calling out of the blue to discuss a case with prior correspondence, some representatives received the explanation that Appeals no longer sent letters in order to save money.

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Donna Hansberry, the Director of Appeals, attended the most recent Low Income Taxpayer Clinic conference on December 7 to discuss the interplay between Appeals and those representing low income taxpayers. She did not seem to be aware of any changes within Appeals that stopped the employees from sending letters to taxpayers and representatives upon assignment of the case and that encouraged Appeals employees to “cold call” taxpayers or representatives seeking to discuss the case. She asked that attendees send her information about this practice and also solicited comments on what Appeals should adopt as the best practice for notifying taxpayers and representatives of the case assignment as well as notifying them of the time (and for taxpayers owing sufficient money, the place) for holding the Appeals conference.

One of the slides she used in her presentation showed that the number of Appeals employees in the past three years. She said that the number has dropped by 1/3 since 2010. The number of cases has dropped but not by the same percentage.

Another slide she displayed showed the breakdown of the caseload in Appeals which is now heavier on collection cases than examination cases.

Because Donna solicited feedback on this issue, PT will be glad to collect feedback and forward it to her. If you have experienced the type of cold call described above, let us know by sending in a comment. We also will forward to her suggestions on how to make the interaction with Appeals work best. Do you want a letter immediately upon assignment of the case to an Appeals employee letting you know the name, address, fax number and phone number of the employee and then another letter setting up the conference? Is there a way to reduce the number of letters and still allow you to properly prepare for the Appeals conference? Let us know your thoughts so we can pass them along or pass them along directly to Appeals.

 

Comments

  1. David M. Fogel says:

    I have had three such “cold calls” from Appeals Officers in the past year. Since I don’t know whether these are legitimate calls from Appeals employees or phone scams attempting to obtain tax information about my clients, I would prefer to receive a letter immediately upon assignment of the case to an Appeals employee letting me know the name, address, fax number and phone number of the employee, and then either a letter or a telephone call setting the date and time for the telephone conference.

  2. I thought that IRS policy was to never cold-call a taxpayer by phone to discuss taxpayer information. Scammers regularly make such calls and my impression was that IRS was trying to educate the public that they should never disclose tax information to someone who telephoned claiming to be from the IRS.

  3. Our practice is 95% tax controversy work…after filing for a CDP hearing or equivalency hearing, we have always received a telephone call out of the blue from an Appeals Officer, but the majority come from Settlement Officers. Very, very rare is it that an Officer will agree and allow us to call them back in one to three days. The majority of the officers are put off with our request.

    And for CAP Appeals, the Officers will stress thier need to get this case closed in three days. All of this has lead to the ‘rubber stamp’ treatment.

  4. I received a “cold call” from the Ogden Service Center in November 2016, regarding a 2014 return filed by clients who had omitted an IRA distribution. The call was in response to a letter I sent on October 17, 2016, agreeing to assessment of income tax and section 72(t) excise tax (early distribution from a retirement account), but disputing the 20% Section 6662(d) penalty. My letter requested that the case be assigned to a Penalty Appeals Officer. It also stated that I could be contacted by phone, correspondence or email if additional information was required. The Ogden IRS caller asked me if I was sure I wanted to appeal. Taken somewhat aback, I answered that if I were not sure, I wouldn’t have asked for it.

    I did not make a note of the caller’s name or identification number because I initially thought it involved only a clerical notification, either from the correspondence-audit office or the Appeals office, that my case would be forwarded as requested. It was only after a brief discussion that the caller told me, “I can tell you that you are not going to win.” I later found out that the caller was the Appeals officer assigned to the case (IRS employee number 1000847142). As the Queen ordered (Alice in Wonderland), “Sentence first–verdict afterward.”

    The call was followed up with a letter from the Appeals officer, dated November 28, 2016, informing me of a telephone conference call on January 12, 2017. Before then, I noticed (probably should have done this sooner) that the 72(t) penalty could be reduced with the exception allowing distributions to be used for payment of medical expenses. I brought this up during the phone call, and the Appeals officer agreed to consider it. I advised my clients to drop the Section 6662(d) appeal in return for IRS decreasing the Section 72(t) tax. They signed the Form 870 to that effect, a couple weeks later.

    The increase in income tax was $4,466 and the Section 72(t) excise tax was $1,872. After credit for withholding on the unreported IRA distribution, the total amount owed was $5,575 and the Section 6662(d) penalty was $1,115. I still don’t think the penalty applies when the income tax is less than $5,000 — and I am asserting that position, so far unsuccessfully, in another case. But sometimes “the better part of valor is discretion” (Falstaff, in 1 Henry IV , 5:4).

  5. Norman Diamond says:

    “Taxpayers whose cases do not have sufficient dollars at issue continue to be sent to the back of the bus because the low dollar amount of their controversy means their cases get assigned to low graded Appeals employees who reside in the six Service Centers where Appeals has employees.”

    Oh, so is that why an ordinary taxpayer can’t even find out from Appeals what the substance is of the IRS’s complaint? The only way to get a competent Appeals officer is to find some way to generate more dollars of controversy?

    Of course a “live” meeting isn’t great unless the IRS reopens offices that it used to have in embassies and consulates, but still, assignment of a competent Appeals officer might be able to work wonders. For example they might inform the taxpayer of what’s missing or what’s mutually contradictory in IRS administrative records, and contact payers.

    “taxpayers with smaller dollars at issue continue to have the pleasure to deal with the IRS via phone and fax just as they did during the examination phase of their case.”

    We did? The Settlement Officer said there should have been an earlier phase, and I’ve gradually figured out that there was supposed to be an examination phase. But my demands for examination have been ignored — except in Tax Court, where the IRS used Greene-Thapedi’s case to prevent examination.

    One time I got a cold call from someone who wasn’t an Appeals officer but I guess in collections. The caller said she wanted to verify my identity by her giving me the last 4 digits of my social security number and me giving the rest. For the moment let’s ignore that the US government had already illegally disclosed my entire social security number to the public. Rules of some courts (not Tax Court) say the last 4 digits of social security numbers are supposed to be disclosed and the rest redacted. Any scammer could get that part from court proceedings and trick the taxpayer, if they weren’t able to get the rest from Axciom or some techniques that have been partially published. So I asked for the caller’s phone number, did a Google search on the phone number, and called back. The call had been legit. The person still didn’t tell me what was missing and what was mutually contradictory in administrative records or anything else helpful though.

  6. Preference certainly would be adequate notice by written letter upon case assignment to an Appeals Office employee with contact information details, scheduled telephone conference or requested method for mutual scheduling availability. This enables us to also be adequately prepared with the case file, documents etc. Random or surprise calls inappropriately put us, as the taxpayer’s representative, in an immediate information compromised situation especially when we’re not prepared for a call or in another appointment. My experience has been that these calls generally come in the evenings after general office hours and returning their calls are most often sent to voice mail further contributing to delays unnecessarily. I realize many IRS employees work from home remotely, IMO they should still extend reasonable time and professional courtesy to us. In the services efforts to reduce costs associated with letters mailings, phone calls to schedule a telephone conference would be appropriate. However, the surprise calls to discuss a pending case I feel are inappropriate.

  7. I received a ‘cold call’ from collections after an OIC rejection. Client had submitted documents to support financial position to formalize a new installment agreement that was subsequently rejected. The cold call was to advise me that the IA proposal was too low to accept and a higher counter offer was calculated. I was given three days to call Mr. Glenn, from the Covington KY office, to advise the client and decide. Client, very busy, took longer than three days to call me, within seven days called Mr. Glenn and I, the representative, to offer evidence. We received the message ‘this number is not receiving calls at this time.’ Both the client and I, tried this number again, 8 times over the next week, receiving the same recording. There was no opportunity to leave a message. I advised the client to keep making voluntary payments in the same amount as before the OIC was rejected, or the IRS takes further action for the past due amount. My concerns are as mentioned, how do we know these calls are legitimately from IRS employees when we don’t receive written communications. I was focusing on what was being stated and the caller did not offer any ID number.

  8. I’ve gotten cold calls (without letters) twice regarding appeals within the last year. Given identity theft issues I’m not willing to discuss a matter without proof that I’m dealing with an Appeals Officer. In one case, the Appeals Officer read me documentation (including the letter I had sent to request the appeal) so it was very clear she was who she said she was. However, in the second case the Appeals Officer (at a service center) wanted to have a full conference in three days (which wasn’t possible given my schedule; I was leaving on a scheduled vacation the next day), wouldn’t give me information to prove his identity, and (as others have commented) was basically not looking at the needs of a tax professional. I told him I’d call him back when I got back from my vacation. I reached out to my IRS practitioner liaison to confirm his identity, and we did get the matter successfully resolved when I returned from my vacation.

    I *did* receive a letter for my most recent appeal this past June (all three appeals were roughly the same liability), so I was wondering if the IRS had gone back to sending letters.

  9. Caleb Smith says:

    I’ve had two cold-calls in the last two weeks, both on docketed cases. One (from Fresno, not shockingly) had the simple and concise request of sending “everything that proves the case,” as soon as possible. The other was far more reasonable, and just wanted to introduce herself and set up a later conference.

    • To Caleb Smith: I agree that cooperation with Appeals is generally a good idea even on docketed cases. But what are they going to do to you, if you don’t? I had a case involving EIC and CTC where the children in question were under three years old. The standard request from IRS correspondence audit was for school records and medical records. The kids weren’t in school and if they went to a doctor, it was with their mother, whose Medicaid paid for it, and not their grandparents, with whom they lived. The only evidence we had was the testimony of the taxpayers, and they weren’t going to fly to Fresno for a meeting that wouldn’t be allowed anyway. The IRS attorney assigned to the case had told me it would be assigned to the local Appeals office, but that agreement slipped through the cracks. After some empty threats from the distant Appeals officer, the case was transferred and settled after a local Appeals officer met with my clients and me.

      The problems discussed here, I suspect, involve non-docketed cases that practitioners are trying to keep out of Tax Court, and Settlement officers who are trying to quickly remove them from their inventory. Of course the SO’s are abusing their discretion, but their attitude is that more often than not the taxpayer is just trying to delay or does not understand the alternatives. In collection cases, they can get away with it. In examination cases, if going through the front door to Appeals doesn’t work, it only costs $60 to use the back door.

  10. I received one “cold call” from an appeals officer for a not yet calendared case without receiving the usual letter providing the name and contact information of the appeals officer assigned to the case. As I was not expecting the call, I did not want to proceed with any substantive discussion about the case without reviewing the case file first. At first, the appeals officer did not want to provide me a later date to discuss the case and wanted to get things resolved during the first phone call. I pushed back pointing out the purpose of the appeals process and the fact that the case had not yet been calendared. The officer agreed to revisit the subject in one week. We were not able to resolve the matter during this period.

    While I liked the old method of sending a letter providing the contact information of the appeals officer, I could also get used to a verbal substitute of this communication, so long as this verbal communication was timely and allowed for a reasonable time to prepare for follow up communication. This would allow the appeals process to function as intended and as it did in the past, providing for fair resolutions to cases without overburdening IRS counsel and the U.S. Tax Court.

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