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Recognizing Pat Mullarkey

This afternoon in the Great Hall of the Department of Justice people will gather to recognize and celebrate Pat Mullarkey who has served for almost four decades as the Chief of the Northern Trial Section of the Civil Section of the Tax Division.  He retires after working over 52 years at the Department of Justice.  I had the pleasure to work with Pat on several occasions.  He is a great lawyer and a great section chief who has mentored hundreds of trial lawyers over the course of his career.  You can find an interview of Pat about his career here on PT. More recently Pat was interviewed by Paul Merrion for MLex US Tax Watch (Lexis subscription required).

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I reached out to one of his assistants, Henry Riordan, who provided me with the following details about about Pat’s career:

In 1966, Mr. Mullarkey joined the Tax Division as a civil trial attorney.  In recognition of his exceptional talent, he was promoted to an Assistant Chief for the Civil Trial Section’s Western Region in 1977, and then to a Special Litigation Counsel position in early 1979.  Mr. Mullarkey became the Chief of the Civil Trial Section’s Northern Region in July of 1979 and has served continuously in that capacity since his appointment, except for two periods, one for six months and the other for two years, when he served as the Tax Division’s Acting Deputy Assistant Attorney General for Civil Litigation.

Mr. Mullarkey is a 1962 graduate of Marquette University with a B.S. in Accounting.  He received his J.D. from the Georgetown University Law Center in 1965, and an LL.M. in Taxation from that same institution in 1967.  After law school, Mr. Mullarkey was a judicial law clerk for a federal district court judge in the District of Columbia.

Mr. Mullarkey is a legend in the Department, as well as the federal tax bar.  He has been the recipient of a number of governmental awards including the President’s Meritorious Executive Award (twice), the Attorney General’s John Marshal Award for Outstanding Legal Achievement and, most recently, the Attorney General’s Mary C. Lawton Lifetime Service Award. Mr. Mullarkey has been a member of the J. Edgar Murdock Inns of Court of the Tax Court for thirty years.  He has served as an instructor at the Department’s National Advocacy Center and bankruptcy schools sponsored by the Office of Chief Counsel, Internal Revenue Service.  He has been a panelist at tax law conferences sponsored by the Federal Bar Association, sessions presented by the Tax Section of the American Bar Association and programs presented by other groups.  In February 2018, he received the Kenneth H. Liles Award from the Taxation Section of the Federal Bar Association.

Mr. Mullarkey has counseled many attorneys and is well known for his intellect and common sense.  He has supervised and mentored generations of attorneys, who have uniformly recognized their tutelage as the best experience in their careers.  Mr. Mullarkey’s enthusiasm for tax litigation has been infectious and his expertise and institutional knowledge will be greatly missed.

Section Chiefs in the Civil Trial Section play a critical role in developing tax litigation.  Because they serve as the lawyers for the IRS in district and bankruptcy courts, they interact regularly with the attorneys in Chief Counsel’s office where I worked.  Pat worked closely with the Chief Counsel attorneys served by the Northern Trial Section which primarily handles cases in the Northeast and he also worked closely with the Procedure and Administration Division of the National Office of Chief Counsel, IRS.  I reached out to Drita Tunuzi, currently the Deputy Chief Counsel (Operations) who previously served as the head of Procedure and Administration and who started her career in an office in the Northeast.  She had this to say about Pat:

Pat Mullarkey has seen many generations of DOJ and Chief Counsel lawyers over his years and they are all better for having worked for and with him.  He has provided outstanding service and wise counsel to the IRS over his career.  We wish him well in his retirement. 

I also received these comments made by John DiCicco, a colleague of Pat’s at DOJ and a former Acting Assistant Attorney General of the Tax Division:

I am not going to spend time telling you what a great lawyer Pat is.  That is indisputable.  Suffice it to say I learned more from Pat than any other lawyer I worked with. 

Instead, I want to talk about what a fine man Pat is.                 

I relied on Pat from the time I started working in the Division in 1974.  He always patiently answered my questions no matter how stupid they were.  He did the same for all the other lawyers who sought him out.  And seek him out they did.  No matter how busy he was, he would give his time to help the rest of us.               

Inclusive- I remember when I first started with the Division and Pat was a Senior Trial Attorney.  Every morning he would walk by and ask lawyers, especially the new lawyers if they wanted to go next door for breakfast or for coffee.  It made all of us feel we were part of a team working together toward a common goal.  Pat really fostered a sense of camaraderie.  

As an aside, unfortunately, the only place around that served breakfast was something called the “Kitchateria”.  How the Board of Health allowed that place to stay open was always a source of wonderment.   But we went with Pat. Not only to learn about our cases, but to learn about each other.  He made us feel we were working with top people, and maybe more importantly, that the work we did was important.  (Too, we always marveled at how Pat could hold down the “Kitchateria” food.) 

Pat was unceasingly fair and loyal.  He cared about all of his staff, not just his lawyers. And he cared about them not just professionally but personally. He always stood up for and supported his troops.  I remember once he even quit drinking a brand of beer because I had a case (no pun intended) with the Brewery and was always complaining about that piece of litigation. (Of course that I would complain about something was something of a rarity.) 

Pat was one of the four Division employees that I worked with who I always thought were irreplaceable—Pat, Steve Csontos, Bob Markham and Tommy Thompson.  The rest of us were fungible, but not Pat. 

Pat helped me immeasurably when I was the acting AAG. He agreed to serve as my deputy.  I knew that being a deputy was not his first choice (or second choice for that matter), and that he really loved being a section chief. He had little interest in the deputy position, else he would have had it years before.  Nonetheless, he willingly agreed to help, and as always, his help was superb. 

In sum, I owe a debt of deep gratitude for all Pat did for me.  But more importantly, the American people owe him a huge debt of gratitude.  It is outstanding, selfless and unstinting civil servants like Pat, who make our Government function.        

Pat, thank you for all that you have done, and all the best in your new “career”.  I hope it lasts as long as last one. 

For over half a century Pat has impacted tax procedure because of the large role he has played in shaping the litigation strategies at the Tax Division.  The next chief of his section has very large shoes to fill. 

 

 

 

Non – Attorney Admission to Tax Court

On May 6, 2016, the Tax Court issued a press release announcing the next test for admission to the Tax Court for non-attorneys.  Here is a prior announcement.  Tax Court Rule 200 governs practice before the Court.  The general requirement for practice before the Tax Court concerns good moral character and the ability to provide competent representation before the Court.  For those meeting the general requirements, there are two paths to admission.  First, you can be admitted to practice before the Tax Court pursuant to Rule 200(a)(2)  if you are a member in good standing of the Bar of the Supreme Court of the United Sates or of the highest (or other appropriate court) of a State, of D.C., of a commonwealth, territory or possession of the United States.  Members of one of these bars represent, by far, the typical member of the Tax Court bar.  You must submit an application, a fee and proof of good standing in the appropriate bar.  It has been a long time since I became a member of the Tax Court but I remember it as a fairly easy and low cost process.

Even if you are not a member of any bar, it is still possible to practice before the Tax Court using the second path which is available to non-attorneys. This path requires submission of an application and a fee as well but also requires the applicant to take a test.  Tax Court Rule 200(a)(3) provides that this test “will be held no less often than every 2 years.”  This subsection of the Rules also provides that at least six months prior to the administration of this test the Court will make a public announcement of the upcoming test.  Tax Court Rule 200(c) requires that individuals taking the test must be sponsored by at least two persons already admitted to the Court.  The sponsor sends the letter shortly after the person passes the exam and provides the Court with “the sponsor’s opinion of the moral character and repute of the applicant and the sponsor’s opinion of the qualifications of the applicant to practice before” the Court.

Why does the Tax Court admit non-lawyers and how hard is it to get admitted?

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The reason the Tax Court, among all federal courts, admits non-lawyers to its bar is rooted in history. We have discussed the book before but for any reader interested in the history of the Tax Court the “The United States Tax Court – An Historical Perspective” originally by Harold Dubroff and updated in 2015 by Dean Brent Hellwig of Washington & Lee Law School is the authoritative source.  The book is available directly from the Court’s web site and you can read all 953 pages from the privacy of your home computer.  It is excellent.  It devotes some time to the subject of practice by non-lawyers before the Tax Court.

The Tax Court allows non attorneys to practice before it because it did so when it was first created in 1924. When Congress eventually pulled the rug out from under CPAs in allowing them to automatically practice before the Tax Court, the test was created as a safety valve to allay the concerns over the removal of the right CPAs previously had and which they lost.  In 1926 Congress first amended the legislation creating the Tax Court.  In doing so, it created a deliberative body more like a court than a “Board.”  Persons coming before the Board of Tax Appeals (BTA) after the 1926 amendments participated in a process that essentially paralleled the process of a court.  There was some discussion about the appropriateness of having clients represented by CPAs but the rules were not changed and CPAs as well as attorneys could join the Tax Court’s bar in a process similar to the attorney process today.

The next time Congress looked hard at the BTA was 1942. The BTA wanted to become known as a court for several reasons one of which being called a court would make It much easier for it to borrow courtrooms around the country.  Congress changed the name from BTA to Tax Court.  It also made other changes at that time including limiting practice before the Court to those who were attorneys in good standing or who passed the test Congress order the Tax Court to establish and who otherwise showed themselves to be of good moral character.

The Tax Court has published statistics showing the past success rates for taking thee exam.  No law school would want these rates as its bar passage rates.  The descriptions I have heard of the exam from those who have taken it have convinced me that it very hard and I might not pass.  There are organizations, (more here and here) that assist with exam preparation.  One of the members of the pro bono panel at the Harvard Tax Clinic, Charles Markham, is a person who has passed the Tax Court test.  At the most recent Tax Court calendar in Boston, Charles tried his first case.  He came to calendar call to assist with the cases.  One couple needed assistance.  I met with them but was unwilling to represent them due to the income guidelines that govern the grant our clinic receives from the IRS pursuant to IRC 7526.  The grant requires the clinic to represent individuals whose income falls under 250% of poverty.  Although it also allows the clinic to accept as clients 10% of its cases for individuals above that threshold, I try to reserve those cases for ones I think will make a difference in broad legal questions.  Despite my reluctance to take the case, Charles jumped in at the last moment and represented them in a trial that day.  I feel confident that the petitioners he represented appreciated his efforts and that they benefited from them.

Enrolled agents and CPAs seeking the ability to represent their clients in Tax Court should take note of the upcoming test. My impression is that interest in this test is growing.

 

 

How Late Can a Taxpayer Request an Equivalent Hearing?

Today we welcome guest blogger, Charles R. Markham, EA, USTCP.  I referred to Charles in an earlier post.  He has assisted me as I settled into the Harvard clinic this year both as a valued member of our pro bono panel and with issues involving the state of Massachusetts taxes.  He has passed the difficult test to become a non-attorney Tax Court practitioner and regularly represents clients in Tax Court as well as during the administrative process.  In this post he brings attention to an apparent inconsistency in the Collection Due Process (CDP) regulations concerning equivalent hearings.  Because equivalent hearings do not cause an extension of the statute of limitations on assessment and because so few CDP cases in Tax Court result in a reversal of the Appeals employees determination, I sometimes purposefully counsel clients to choose this option and, with those clients who do not appear within 30 days, I am often left with only this option.  Charles points out that perhaps there is a greater opportunity for the equivalent hearing than just the one year window.  Keith 

How much does it matter when the IRS commits an oversight when they amend a regulation?  Can the IRS just overlook the plain language of the resulting regulations because they think they know that’s really not what they meant?  Well, in the case of the regulations governing equivalent hearing that appears to be what’s happening.

The equivalent hearing is not a creature of statute but purely a creature of regulation, and most practitioners will tell you that while not appealable to Tax Court they still serve a valuable safety value that can be used to get a “fresh set of eyes” and hopefully a “cooling off period” (or maybe just a “time out”) when attempting to resolve a taxpayer’s collection matter.

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Administrative History

In Craig v. Commissioner the Tax Court provides an overview of equivalent hearings and their legislative history:

“Whereas the rules for [Collection Due Process] hearings are provided explicitly in the statute, the rules for an equivalent hearing have their genesis in the statute’s legislative history and the regulations implementing Congressional intent as gleaned from that history. See H. Conf. Rept. 105-599, at 266 (1998); 1998-3 C.B. 1020 (in the event that a taxpayer does not timely request a Hearing, “The Secretary must provide a hearing equivalent to the hearing if later requested by the taxpayer”); cf. Johnson v. Commissioner, 86 AFTR 2d 2000-5225, 2000-2 USTC par. 50,591 (D. Or. 2000) (“‘equivalent hearing’ is provided for only by regulation and is not mandated by Section 6330 itself”). The scheme of the regulations as they apply to equivalent hearings generally follows the statutory scheme for Hearings.  Under the regulations, any taxpayer who fails to timely request a Hearing may receive an equivalent hearing. Sec. 301.6330-1(i)(1), Proced. & Admin. Regs. The equivalent hearing (like the Hearing) is held with Appeals, and the Appeals officer considers the same issues which he or she would have considered had the equivalent hearing been a Hearing. Id. The Appeals officer also generally follows the same procedures at an equivalent hearing which he or she would have followed had the equivalent hearing.”

When the first equivalent hearing regulations were published on January 18, 2002, (T.D. 8980, 2002-1 C.B. 477) in the Federal Register (67 FR 2549) along with the 2002 final regulations under section 6320they contained no time limit for requesting an equivalent hearing.  Such a hearing could be requested anytime after the 30 day window for requesting a Collection Due Process (“CDP”) hearing had expired.  This could occur years after the CDP notice was issued.   In 2006, the IRS amended the 6330 regulations and one of the primary changes was to introduce a strict one year time frame for requesting an equivalent hearing.

2006 Regulations   

Under the new regulations, an equivalent hearing could only be requested during the eleven months after the 30 day window for the CDP request period has expired.

This timeframe is stated at §§ 301.6320-1(i)(2)A-I7 and 301.6330-1(i)(2)A-I7:

 Q-I7. When must a taxpayer request an equivalent hearing with respect to a CDP Notice issued under section 6330? 

 A-I7. A taxpayer must submit a written request for an equivalent hearing within the one-year period commencing the day after the date of the CDP Notice issued under section 6330. This period is slightly different from the period for submitting a written request for an equivalent hearing with respect to a CDP Notice issued under section 6320. For a CDP Notice issued under section 6320, a taxpayer must submit a written request for an equivalent hearing within the one-year period commencing the day after the end of the five- business-day period following the filing of the NFTL.

However, when the regulations were amended in 2006, it seems that another passage of the CDP regulations was overlooked and went unchanged.  This passage leaves an alternative window to request equivalent hearings.  The sentence is in the following section (author’s emphasis at end):

§301.6330-1(b)(2) speaks to this in Q&A B2.

 Q-B2. Is the taxpayer entitled to a CDP hearing when the IRS, more than 30 days after issuance of a CDP Notice under section 6330 with respect to the unpaid tax and periods, provides subsequent notice to that taxpayer that the IRS intends to levy on property or rights to property of the taxpayer for the same tax and tax periods shown on the CDP Notice? A-B2. No. Under section 6330, only the first pre-levy or post-levy CDP Notice with respect to the unpaid tax and tax periods entitles the taxpayer to request a CDP hearing. If the taxpayer does not timely request a CDP hearing with Appeals following that first notification, the taxpayer foregoes the right to a CDP hearing with Appeals and judicial review of Appeals’ determination with respect to levies relating to that tax and tax period. The IRS generally provides additional notices or reminders (reminder notifications) to the taxpayer of its intent to levy when no collection action has occurred within 180 days of a proposed levy. Under such circumstances, a taxpayer may request an equivalent hearing as described in paragraph (i) of this section.

This sentence survived the 2006 amendments and remains in the regulations today.  Overlooked, it remains there like a vestigial organ.  But the author argues that this phrasing still has meaning and does not contradict the rest of the regulations and perhaps is not that vestigial after all.  In fact, is could be read to create a whole new class of equivalent hearings–which this article will term as “B-2” hearings, triggered by the 180 day notices that the IRS frequently issues pursuant to IRM 5.11.1.3.3.8 (2)  .

When these B-2 sentences are read in the context of the original regulations (written when there was no deadline on requesting equivalent hearings), their original purpose seems to be simply advisory.  Many times a taxpayer is confronted when the IRS has issued a CDP notice on an account years in the past so the taxpayer’s appeal rights have long lapsed.  Perhaps years ago the situation was actually resolved in the taxpayer’s favor.  Maybe the IRS placed the account in currently non collectible status.  Now circumstances have changed and the IRS is back at the door step, but now the taxpayer no longer has their “once in a lifetime” CDP rights.  The first step in the sequence is for the IRS to issue a 180 day reminder notice.   The purpose of this regulatory passage was simply to note that (at the time) the taxpayer could avail themselves of their equivalent hearing rights since there weren’t any time limits.    In fact in the case of a resolved balance due where the IRS had placed the taxpayer in non-collectible status, the author would argue the taxpayer really isn’t appealing the original CDP notice at all (the balance due had been previously resolved at the time) so much as the taxpayer is appealing the renewed efforts of the IRS to collect on them.

If we now read the regulations as they stand, is there an inherent conflict between this B-2 passage and the section of the regulations that describe an equivalent hearing?  Moreover, is the conflict so great that the 2006 regulations and the deadline stated in I-7 override the lack of a deadline in B-2?  The author would argue these two that these passages can live in harmony.  Unanticipated harmony, perhaps, but harmony nonetheless.

Two Types of Equivalent Hearing

For the two passages to live in peace there must be conceptually two different equivalent hearings.  The equivalent hearings all practitioners are heretofore familiar with for the purposes of this discussion would be “I-7 hearings”, the classic (or regular) hearing (and the hearing the IRS will routinely give you).  Section (i) of the 6330 regulations describes the conduct of all equivalent hearings.  What is different is the triggering event.  An “I-7 hearing” is an “equivalent hearing with respect to a CDP Notice issued under section 6330″.   Thus, there is a direct nexus between the classic “I-7” hearing and the CDP Notice.  Since by definition, there has only been less than a year of time, it is practically impossible for the situation to become “stale” and enter into a “B-2” situation.  However, the language of B-2 is much broader.  While recognizing that a CDP Notice has been issued at some point (and it could have been issued years before), the trigger event is a more recent IRS notice.  Just to review and more carefully read the language of B-2.

If the taxpayer does not timely request a CDP hearing with Appeals following that first notification, the taxpayer foregoes the right to a CDP hearing with Appeals and judicial review of Appeals’ determination with respect to levies relating to that tax and tax period. The IRS generally provides additional notices or reminders (reminder notifications) to the taxpayer of its intent to levy when no collection action has occurred within 180 days of a proposed levy. Under such circumstances, a taxpayer may request an equivalent hearing as described in paragraph (i) of this section.     

Let’s revisit my earlier non-collectible example now with just a few more details.  This is very typical fact pattern that could arise under a “B-2” type scenario, a scenario many practitioners might be familiar with.   The balance due at this point is now perhaps eight years old.  The original CDP notice was issued over five years ago.  In fact the balance due has been classified as currently not collectible by the IRS.  But this status can always be changed.  In fact it recently was, as a recently filed tax return did show an unusually higher level of income than usual but this was actually due to a one time forgiveness of indebtedness.  This “increase” in income is arguably illusory and caused the account to be removed from uncollectible status and the 180 day “reminder notice” to be issued.   The author would argue that the purpose of the equivalent hearing would not be to argue the original CDP Notice from five years ago but really to argue the recent IRS determination to remove the account from non-collectible status.  The purpose of the hearing is “why is the IRS cancelling my non-collectible status?” Other B-2 type hearing issues might be “Why does the IRS now want to levy my social security?” or “I thought this bill has been paid” or “Hasn’t the collection statute expired?”

As we see, for the two passages to live together without I-7’s deadline trumping a B-2 hearing request, a B-2 hearing must be seen as not “in respect of the original CDP levy notice” but the later six month reminder notice.  And if the original levy notice was more than several years prior, is this really a problem?  It’s really the current threat (and why it has occurred) that the taxpayer is concerned about.

In drafting the B-2 Question and Answer, it seems the authors were keenly aware of this context, and in fact, the more one considers this, the more it begins to seem that there is a place for the “B-2” equivalent hearings along side the “I-7” (regular) equivalent hearings and perhaps there wasn’t any oversight in leaving this section of the regulations alone in 2006.

Several sidebar observations

This entire logic would only apply to notices that are advising of the potential for levy not a lien.  So this really has no counterpart in 6320.   Also, the section the regulations that speaks to “no collection action within 180 days” would appear to be critical as well as receipt of the notice.  The regulations state, “in these circumstances”, (note use of the plural) thus the circumstances seem to be both (a) receipt of the appropriate notice and (b) no collection action in the prior 180 days.   Finally, when a Revenue Officer commences a case, they will frequently issue CDP notices on all the relevant periods and six month reminder notices on everything else.  Being able to invoke this will allow everything to be considered by the same settlement officer versus having some periods before a Revenue Officer and some periods before a Settlement Officer in a CDP appeal.

Raising the issue with the IRS

The correct way to raise this issue would be to request an equivalent hearing and to specifically request a “Separate Timeliness Determination” because the equivalent hearing will be inevitably determined to be outside the one year jurisdiction upon initial review.  Occasionally, the author has been occasionally successful in getting someone in the Separate Timeliness Determination unit to actually rule in his client’s favor on the basis of this argument, but generally the argument falls on deaf ears.    (One is never granted an actual hearing with the Separately Timeline Determination unit.  This is all done behind the scenes and the practitioner simply learns of the result.)  The author’s batting average is only about 15% of the time successful.

Nevertheless, it doesn’t appear at this time that many in the IRS are particularly aware of the B-2 equivalent hearing regulation or will adhere to them when advised of them.  After all, what is written doesn’t matter, because that’s really not what we meant! 

When is the Right Time to Bypass Normal Channels at the IRS

When representing a client during an examination, or in the collection process or in Appeals, a time can come when complete frustration sets in and you despair that you can never accomplish what you need for your client. How do you know when it’s time to give up on the normal process and move to a different path? In taking the different path, whether it is going to the manager of the employee handling the case, going to TAS, going to your client’s Congressman, or in very extreme cases making a referral to TIGTA, you know that you may likely burn a bridge with the person at the IRS handling the case. How do you balance between the potential benefit to your client or to the system and the known negative consequence? What duty do you owe to your current client with the problem versus your other clients or future clients whose cases may feel the impact of your broken relations? Does it matter that the IRS person works locally causing you to regularly encounter them versus the employee in a Service Center on the other side of the country? All of these thoughts and more go into the calculus of taking a case out of the mainstream path set by the IRS.

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An article in the Fall 2015 TaxPro Journal by Charles Markham, “Intractable Tax Problems? Consider a Congressional Referral” got me thinking about this issue and whether any empirical research exists on this [See National Taxpayer Advocate Annual Report to Congress 2014, Page 549] or ethical opinions. In the article Charles does a good job of explaining how to go about making a Congressional referral. He also talks about how often you might make a Congressional referral – not often – and why. The discussion made me reflect on my years in Chief Counsel’s office and the attitude of those in my office toward practitioners who could not help themselves from elevating every case, or almost every case, in which they worked and did not get the result they desired. By elevating I mean these practitioners went to the manager, to TAS or to their Congressional representative. These practitioners held a special place in our hearts and it was not a good place.

Yet, moving a case into the hands of someone other than the assigned party needs to happen in some cases in order to assist a client in getting the correct result. The trick is knowing both how to do it and when to do it. Charles’ article is a good starting point. He describes the circumstances of the case in which he used the Congressional referral and the fact that the case was at a standstill. He mentions that “much of its power comes from being used sparingly.” His article gives a detailed and excellent roadmap to making a Congressional referral by describing each document that should go with the request and what to say. Similar thought and care should go into a referral to a manager, to TAS or to TIGTA. Asking to speak to the manager or submitting a 911 should never happen without the same type of detailed presentation that Charles describes in his article for a Congressional request. This will allow the person receiving your request to immediately understand what you want and why. Every effort to avoid personalizing the request should occur.

I thought I would add a few observations and draw on some former IRS employees to add theirs as well. I contacted four former colleagues I worked with in Richmond. Each worked as a manager and, of course, before that worked as the line employee.

Going to an employee’s manager is the easiest and the hardest of these options at the same time. The request to the manager fits into the easiest category since the manager should already have some engagement with the circumstances and certainly should know the general situation in which your request fits. The manager can act more quickly than the other parties to whom you might make your plea and the manager, if convinced, certainly has authority to direct the employee to produce the result you seek. By giving the manager the chance to fix the problem before moving to TAS, TIGTA or to Congress, you allow the manager to diffuse the situation without the problems created by outside intervention which could cause both the employee and the manager to have lasting dislike for you. The more you already have a relationship with the manager, and the employee, the better you can gauge this approach. If it is a local office in which you practice regularly, you may have a good sense of the success the elevation to the manager will bring. On the other hand, the manager must work with this employee every day and their first reaction will generally seek to protect the employee. Many times the employee’s behavior in the case may already reflect the position of the manager.

My former colleague Mike Colley who worked in the collection division observed that

First line managers rarely change the decision made by revenue officers when it is a judgement call. They may not agree that it is the best course of action, but do not want the less gifted revenue officers clearing enforcement actions with them prior to discussing same with POAs. If the revenue office is “off the reservation”, his/her proposed action should be discussed with the manager and will be well received.

Revenue officers and their first line managers share information formally and informally. If a POA frequently requests a meeting with a first line manager, he/she will not be able to negotiate successfully when lobbying for an alternative to actions proposed by a revenue officer. In fact, the manager may be less inclined to grant the action requested to encourage the POA to work with the revenue officer in the future.

Revenue officers not only share info about the actions of POAs with their managers, they also share it with each other. POAs need to understand that a reputation for trying to delay appropriate collection actions spreads quickly and will prevail for a long time.

Revenue officers have a lot of discretion. They have discretion as to actions to be taken, and when such action can be taken. Don’t poke the bear!

Former colleague, Mark Rocawich, who had the unusual distinction to serve as both the Chief of Collection and of Examination in Richmond basically agreed with Mike’s observation about the low chance of success in seeking to elevate a matter to the manager. His remarks focused on getting the revenue officer or agent removed from the case as opposed to simply elevating the matter to seek to have the group manager overrule the employee. He cited the CDP process as an opportunity to take the case out of the hands of a revenue officer where the case might not be going on the desired path, but he also felt CDP was an opportunity to continue working with a revenue officer where it looked like a reasonable resolution was possible. Similarly, in exam cases the case can effectively be removed from the agent by going to Appeals; however, that tactic may have lost some of its value if the representative wants to make arguments not presented to the agent and Appeals returns the case to the examination division at that point.

Former colleague, Bill Branch who worked in the Estate and Gift branch of the examination division, a more genteel practice area, had a more positive take on elevating the case to the manager. Each of my former colleagues has engaged in tax practice after retirement and Bill’s comments reflect both his experience inside and outside the IRS:

This can be a tough call, but I would not resist getting the group manager involved if I thought I was not being treated fairly by an agent.  Since working here, we’ve employed this move in five (?) audits.  I think it proved successful in four.  That is not to say we got everything we wanted, but the manager ended up making some concessions.  One thing to keep in mind [is that] most practitioners will “feel” it when they’re getting the shaft, or, at least, not a “fair shake” on the issues by the agent.  The manager should know that a practitioner isn’t going to ask for a manager’s involvement just to see if he can get a better deal without presenting any arguments of merit.  If the practitioner thinks he’ll get any concessions just by whining, he’s not going to get very far….  If the Taxpayer’s argument has merit, generally, the manager is willing to concede some and, perhaps, all of the issue.

George Gretes, who was the Chief, Appeals, before retirement had the following comments:

I agree with what has been stated above. If the case is in Appeals there should not be a concern about raising a problem to the manager. As noted earlier, these managers who are on the front line are, or should be, aware of the case and can take action to resolve problems and issues quickly and typically without creating additional problems. I also agree that a representative who is constantly going to the manager or elevating issues that have no merit is going to have his / her protest fall on “deaf ears”. In elevating a problem stick to the facts, the issue and try to avoid personality complaints and arguments.

The representative needs to know of all of the alternatives available to his client by including a search of alternative dispute resolution procedures in the Appeals section of the IRS Manual. For example, while the case is still in Examination or Collection (Compliance) and after raising the issue to the manager, consider asking for Fast Track Mediation, Fast Track Settlement or Early Referral to have Appeals involved in the case. Under these procedures Examination or Collection calls Appeals into the discussion to serve as a mediator or settle the issue or the case. Simply asking to use the process may move Compliance toward resolving the issue without involving Appeals. In addition, if the case is still not resolved under these procedures the case can go to Appeals and an Appeals Officer other than the one involved earlier will be assigned to the case.

If the case is in Appeals and the Appeals Officer is not working to resolve issue I would suggest asking to meet with the manager. If the issue is not resolved at that level I would ask for Post Appeals Mediation. Under this process another Appeals Officer or an Appeals manager is called into the process to resolve the issues. The problem with Post Appeals Mediation is that the “decision makers” must be at the meeting. That means the Appeals mediator will have settlement authority, your client may have to be there and they will be looking to make a decision at that meeting. By using the processes in place (after going to the first line manager) you are less likely to create a situation that you may regret in the next case you have before the IRS.

Going to TAS is another internal option before you seek Congressional assistance. If you have a good relationship with the Local Taxpayer Advocate, you may find that calling the advocate to discuss options for addressing the problem will help you in deciding what to do. If the LTA advocates bring it into their office after listening to your concerns and if you have confidence in your LTA, that provides a good sign that taking the case to the LTA will prove beneficial. The LTA may advise talking to the manager or seeking Congressional assistance. That person’s job is to fix problems stuck in the system. A good LTA probably knows the most efficient way to solve the problem. I have had good success partnering with the LTA on the decision of how to attack a problem. The more remote the location from your locality, the less likely the LTA will know the personalities involved but the LTA may still have a good sense of the systemic issues at play allowing her to provide good advice on how to attack it. Mark indicated that he found TAS very helpful in the past but that the budget cuts at the IRS had reduced the office with which he worked to a fraction of its former self making it very difficult to get assistance from TAS. Mike said “My philosophy is to make it easy for TAS to do their job. Be very clear as to the problem; all the actions you have taken (to include copies of letters to the IRS and proof of mailing; copies of correspondence from the IRS; and other information that documents the necessity of assistance from TAS).”

A Congressional request will draw an answer. The IRS will not run away from the request but you need to take care in the types of cases in which you choose to call upon the Congressional office. As Charles describes, in most cases, that office will slap a cover letter on your submission. If you want help in a case in litigation, the response from the IRS will generally be that the case is in litigation. That is not a process where the Congressional office can provide much help. If your case is stuck somewhere within the IRS, as Charles’ was, the letter from the Congressional office, which will draw attention at high levels, may prove the most efficient where you feel talking to the manager would be unproductive.

The nuclear option involves making a referral to TIGTA. This should occur only where you determine the IRS employee has done something wrong. Some things that IRS employees do wrong implicate Section 1203 of RRA 98 and can cost the employee their job. Most wrongful, or perceived wrongful, actions by IRS employees do not lead to dismissal but having a matter investigated by TIGTA can have serious consequences for the employee.

Those representing low income taxpayers may have a different take on working with the IRS because they so rarely encounter a revenue agent or revenue officer. Most of their cases get handled by groups of employees such as correspondence exam or ACS. Getting another employee to work on the case in those matters simply involves making the next contact with the IRS. Each time a different person touches the case. Going to the manager or TAS also involves different considerations since rarely does a relationship exist between a practitioner and an employee in one of the group functions.

Mike summed up his view of the situation with his comment that “the bottom line is that all practitioners will use the appeal process provided by the IRS when it is in the best interest of their client. However, the best practitioners do not file frivolous appeals on an ongoing basis.”

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