Proposed Regs Address Access To Appeals

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Last week the IRS released proposed regulations relating to the right to access the IRS Independent Office of Appeals. This comes in light of the Taxpayer First Act (TFA), which formally established the IRS Independent Office of Appeals “to codify the role of the independent administrative appeals function within the IRS.” 


In addition to codifying Appeals and its mission statement, the TFA also added Section 7803(e)(4), which provides that “the resolution process [to resolve Federal tax controversies] shall be generally available to all taxpayers.” 

Access to Appeals, and when the IRS can cut off the general right to Appeals, has generated litigation, some of which we have discussed, such as last month’s 11th Circuit Affirms That Anti-Injunction Act Prevents Taxpayer Seeking Access to Appeals and in pre TFA times, such as Facebook Loses Challenge in District Court.

These proposed regulations address many of the issues that taxpayers have raised when seeking access to Appeals that for a variety of reasons IRS has not granted. On top of the statute noting that the right to Appeals is “generally” available, the preamble discusses the TFA legislative history showing that Congress was aware that IRS would be entitled to limit access to Appeals in certain circumstances.  One way that the proposed regs carve out some types of matters for Appeals consideration is by pegging access to Appeals only to a defined term, “federal tax controversies;” matters that do not implicate federal tax controversies do not trigger Appeals rights under the proposal.

The regulations specifically identify 24 categories of cases that do not trigger Appeals rights. Some of the major exceptions are listed below:

1. Frivolous Positions

2. Penalties Related to Frivolous Positions and False Information

3. Whistleblower Awards

4. Requests for a Taxpayer Assistance Order

5. Rejection of a Taxpayer’s OIC Submitted Under Section 7122 as Nonprocessable or No Longer Processable and Taxpayer Requests Appeals Consideration on the Basis that the OIC Should Be Deemed Accepted

6. Criminal Prosecution is Pending Against Taxpayer

7. IRS’s Automated Process of Certifying a Seriously Delinquent Tax Debt (passport revocation matters)

8.  Issues Barred from Consideration in CDP Cases

9. Authority Over the Matter Rests with Another Office (like Treaty competent authority cases)

10. Challenges Alleging that a Treasury Regulation is Invalid

11. Challenges Alleging that a Notice or Revenue Procedure is Invalid

12. Case or Issue Designated for Litigation or Withheld from Appeals

13. Appeals Issued the Determination that is the Basis of the Tax Court’s Jurisdiction

14. Challenges Alleging that a Statute is Unconstitutional

In addition to requesting comments on the scope and rationale for the newly proposed regulatory exceptions, IRS asks for comments on certain exclusions from Appeals review that are currently part of the IRM but not included in the proposed regs, including

  1. Denials of 9100 relief requests for an extension of time for making an election or other application for relief where the decision is reviewable by a court under an abuse of discretion standard and
  2. Denials of requests to change a taxpayer’s accounting method

The regulations identify other important issues, including requiring that the originating branch complete its action and reach a determination prior to a taxpayer’s access to Appeals; procedural and timing requirements that a taxpayer must meet before Appeals may consider the taxpayer’s Federal tax controversy; and a requirement that there is only one opportunity for Appeals consideration.

With respect to the originating part of IRS completing its actions, the proposed regs and preamble discuss a number of examples where access to Appeals is premature, including a deficiency case where the taxpayer for the first time requests relief from joint liability (query whether in that situation a remand to the centralized review unit should be appropriate, as Carl Smith discussed in Should the Tax Court Allow Remands in Light of the Taxpayer First Act Innocent Spouse Provisions? )

With respect to other timing requirements, the regs provide that the request must, as the preamble notes, be “submitted in the time and manner prescribed in applicable forms, instructions, or other administrative guidance and that all procedural requirements must be complied with for Appeals to consider a Federal tax controversy.” In addition, the regs note that there must be “sufficient time remaining on the appropriate limitations period for Appeals to consider the matter.” This is consistent with current IRM guidance, and proposes to elevate that guidance into regulatory rules.

With respect to the one opportunity/bite at Appeals rule, the preamble notes that “if a Federal tax controversy is eligible for consideration by Appeals and the procedural and timing requirements are followed, a taxpayer generally has one opportunity for Appeals to consider such matter or issue in the same case for the same period or in any type of future case for the same period.” The carve out also applies to taxpayers who failed to respond to an Appeals opportunity. There are important exceptions, including for CDP remands, taxpayers who participated in a variety of Appeals settlement programs like early referral and fast track settlement, and for taxpayers “who provide new information to the IRS and who meet the conditions and requirements for audit reconsideration or for reconsideration of liability issues previously considered by Appeals.”


I anticipate that the IRS will receive comments that will inform the reg drafters. Many issues lurk in the details, including nuances on the listed exceptions and other issues, including whether requests for Appeals access outside time provided in forms or other guidance should be subject to a form of administrative tolling. Comments on the proposed regulations are due by November 14; IRS has scheduled a public hearing on the regulations for November 29. Comments can be submitted via the Federal eRulemaking Portal at (indicate IRS and REG-125693-19). Old fashioned paper submissions are to be directed to CC:PA:LPD:PR (REG-125693-19), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044.

Avatar photo About Leslie Book

Professor Book is a Professor of Law at the Villanova University Charles Widger School of Law.

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