obÌåÓý

The mission of the Independent Office of Appeals (Appeals) is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. Appeals accomplishes its mission by considering protested and Tax Court cases and negotiating settlements in a manner which ensures Appeals employees act in accord with the Taxpayer Bill of Rights (TBOR) in every interaction with taxpayers. See IRM 8.1.1.2, Accomplishing the Appeals Mission.

IRC 6212 authorizes mailing a statutory notice of deficiency to the taxpayer's last known address using certified or registered mail.

Delegation Order No. 8¨C8 gives Appeals Area Directors authority to accept jurisdiction after Compliance issues a statutory notice of deficiency when the case is not docketed in the United States Tax Court and when the taxpayer does not agree with the determination of the IRS and requests consideration by Appeals. See IRM 1.2.2.9.8 Delegation Order 8-8 (Rev. 1) (formerly DO-66, Rev. 15), Authority of Appeals in Protested and Tax Court Cases.

IRC 6212(d) states that the Secretary may, with the consent of the taxpayer, rescind any statutory notice of deficiency mailed to the taxpayer. Whether or not a statutory notice is rescinded is discretionary on the part of the Secretary. A notice of deficiency may only be rescinded with the consent of the taxpayer.

The Director, Operations Support is the executive responsible for Appeals¡¯ policy and procedural guidance.

The Director, Policy, Planning, Quality and Analysis (PPQA) is responsible for program oversight.

PPQA provides trends, data analyses, and detailed summary reports for Appeals.

The table lists commonly used acronyms and their definitions:

Also, see IRM Exhibit 8.1.1-1, Common Terms Used by Appeals.

The following table lists related IRM guidance:

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see /taxpayer-bill-of-rights.

In accordance with IRM 25.30.2.3, Statement of Commitment, Appeals will work collaboratively with the Taxpayer Advocate Service (TAS) to enhance the taxpayer experience. For more information, see IRM 25.30.2, Service Level Agreement between the IRS Independent Office of Appeals and the Taxpayer Advocate Service.

If the Appeals Area Director decides to consider a Compliance Issued SND case during the 90-day suspense period, the ATM immediately assigns the case.

The ATE immediately considers the case to ensure it is resolved prior to the expiration of the 90-day period using the procedures found in IRM 8.6, Conference and Settlement Practices.

Consideration and processing of a 90-day case is similar to a pre-90 day case. A Form 5402, Appeals Transmittal and Case Memo, is required. This form is part of all Appeals Case Memos (ACMs) and may be all that is needed, i.e., for a very simple case, or when the taxpayer concedes in full.

Generally, a longer narrative ACM is needed for a case when settlement is reached, i.e., if it involves a hazard settlement or contains complex legal or factual issues. See IRM 8.6.2, Appeals Case Memo Procedures, for more information.

A 90-day case must be given priority treatment because of the short time frames involved. Sufficient time should be allowed to insure that all case activities, including closing by APS, will be completed before the expiration of the statute of limitations.

When a case is settled during the 90-day period, the settlement computations must be handled as a priority. If a request for settlement computations is sent to the Tax Computation Specialist (TCS) function, mark the case and annotate the Form 3608 as a priority so the TCS manager can easily identify that the case is a priority. This will ensure it is correctly logged into the Technical Automated Control System (TACS).

No audit statement is required if the Commissioner's determination shown in the Compliance Issued SND is agreed in full either during the 90-day period or after filing a petition.

Generally, a Form 5402, Appeals Transmittal and Case Memorandum (ACM) is not required in a 90-day case when a settlement is not reached.

Prepare an informal memorandum (referred to as a 90¨Cday memorandum) and a signed closing letter.

The memorandum lists the following:

The closing letter is mailed to the taxpayer at least 15 days prior to the expiration of the 90-day period.

If a taxpayer residing outside the United States requests that their case come to Appeals, the request is considered by the Appeals International Area Director.

If the Appeals International Area Director accepts the taxpayer's request for Appeals consideration during the Compliance Issued 90-day Suspense Period, the case is forwarded by Compliance to the Appeals Office designated by the Appeals International Area Director.

See IRM 8.6.1.3, Transfer Procedures, for additional guidance on transfer of cases.

Some notices of deficiency, as well as Employee Plans (EP) and Exempt Organizations (EO) final adverse determination letters, will go to Counsel for concurrence before the letter is issued. The administrative file sent to Counsel will contain the following:

Since Appeals Field Offices are not always co-located with their servicing APS Team, but may be co-located with their servicing Counsel Office, it is not mandatory that cases sent to Counsel for Concurrence be routed through APS; however it is mandatory that ACDS accurately reflect the location of the administrative file.

The Appeals employee who forwards the case to Counsel for SND Concurrence must update ACDS with action code SNDC and the current date (date case sent to Counsel) to document the location of the administrative file.

Upon return of the case from Counsel, ACDS must be updated with the date received in the FROMDATE Field. If the case is returned from Counsel directly to the ATE, the ATE must ensure the FROMDATE is entered on ACDS to reflect the return of the case to Appeals. If Counsel returns the case to Appeals through APS, the APS TE will update the FROMDATE on ACDS and forward the case to the ATE for further consideration and action.

On a monthly basis, APS management, or its designated employees, will run the SNDC follow-up list to determine if Counsel has returned the administrative file.

See IRM 8.20.6.9, Compliance-Issued Statutory Notice of Deficiency (SND) - Premature Default/Assessment, for APS SND procedures.

Occasionally, the mail service is unable to deliver a statutory notice of deficiency (SND), either because the taxpayer cannot be located or because the taxpayer will not accept delivery. In these circumstances, the Post Office returns the SND to the Appeals Office Return Address provided on the envelope.

Whomever is responsible for receiving and distributing the Appeals office mail:

The ATE must give priority consideration to the review of the UND/UNC SND, determine whether it was mailed to the last known address for the taxpayer and identify the next action.

If the ATE needs the administrative file to complete their review and decision, submit a written request for APS to pull the case from SND Suspense, forward the administrative file to them and update ACDS accordingly.

The If and Then Table below identifies decision points for the ATE to determine the next action.

For additional information see IRM 4.8.9.23, Undeliverable Notice of Deficiency.

If the ATM or Appeals Area Director decides to grant further consideration of a case during the suspense period, the ATE will:

If no agreement is reached after consideration or reconsideration in the suspense period the ATE will:

See IRM 8.20.6, Interim Actions, for APS procedures.

APS will update ACDS and forward the administrative file to Counsel for Settlement or Trial Preparation.

If Counsel answers the petition and returns the administrative file to Appeals for a second attempt at settlement, APS will update ACDS with Closing Code 42 to put the case/record back in Part 2 of the ATE's inventory.

IRC 6212(d) states that the Secretary may, with the consent of the taxpayer, rescind any statutory notice of deficiency mailed to the taxpayer. Whether or not a statutory notice is rescinded is discretionary on the part of the Secretary. A notice of deficiency may only be rescinded with the consent of the taxpayer.

This provision allows the IRS, through a rescission agreement, to treat a case as if a statutory notice of deficiency was never issued for purposes of -

Limitations regarding credits, refunds, and assessments relating to the rescinded notice are void and the rights and obligations of the parties that existed prior to the issuance of the statutory notice of deficiency are reinstated. A statutory notice of deficiency may later be reissued for the same, or a greater or lesser, amount.

A taxpayer may exercise all administrative and statutory appeal rights from a reissued statutory notice of deficiency. However, the taxpayer has no right to file a petition with the Tax Court based on a rescinded notice.

The determination to rescind a statutory notice of deficiency should be made on a case-by-case basis. Both parties must agree to the rescission.

A rescission will not be entered into if:

If the statutory notice of deficiency was issued to both husband and wife, the rescission agreement must be signed by both parties or authorized representative(s) for both parties.

The rescission agreement must cover all of the same tax periods shown in the statutory notice of deficiency.

The rescission agreement must reflect the same tax deficiency and penalties as the statutory notice of deficiency.

If the IRS does not agree that a statutory notice of deficiency should be rescinded, the taxpayer will be notified in writing and the notice will remain in effect.

All questions regarding the propriety of a rescission agreement on any case should be discussed with Counsel.

There are basically three reasons that a notice is rescinded. They are as follows:

When an administrative error has occurred, the notice may be rescinded. The following are examples of administrative errors:

If a statutory notice of deficiency has been issued for an incorrect or insufficient amount, the notice may be rescinded. However, the taxpayer must be advised that another notice, for a greater amount, may be subsequently issued.

If a taxpayer specifically requests a conference with Appeals for the purpose of entering into settlement negotiations, the notice may be rescinded. However, the notice will be rescinded only if Appeals is confident the case will result in an agreement. Appeals may request that the taxpayer submit, in writing, a protest or similar document that explains their position on the unagreed issues. See IRM 8.4.1, Processing Docketed Cases, for further 90-day case procedures.

If the normal three year period of limitations for assessment has expired do not enter into an agreement to rescind the notice.

If, on the date of rescission, 90 days or less remain before the expiration of the period of limitation on assessment, the notice may be rescinded but only if the taxpayer and the IRS execute a Form 872 to extend the limitation period. When determining how many days remain on the statute, do not consider the additional time created by the issuance of the notice of deficiency.

Generally, a statutory notice of deficiency will not be rescinded if there is an outstanding Form 872-A, Special Consent to Extend the Time to Assess Tax; however, see Rev. Proc. 98¨C54, 1998¨C2 C.B. 531 clarifying the IRS¡¯s position in situations where notice revocations may be considered.

Form 8626, Agreement to Rescind Notice of Deficiency, will be used to secure an agreement between the taxpayer and the Government. When preparing Form 8626, care must be exercised to ensure the accuracy of the information contained within the document and its timely execution by both the taxpayer and the Government.

The rescission agreement form will be prepared in duplicate. Once executed, one copy of Form 8626 will be secured to the return for the latest year covered by the agreement. The second copy will be sent to the taxpayer by mail or given to the taxpayer in person. Copies of the executed rescission agreement will be attached to all other returns covered by that agreement.

One Form 8626 may be used as a rescission agreement for all years contained in the rescinded notice of deficiency. All years covered by the agreement will be entered below the first paragraph under "Tax Year Ended." The deficiencies and additions to tax, as shown on the notice of deficiency, will be entered below the appropriate column headings.

The effective date for a rescission agreement is the date on which the Commissioner or delegate signs the rescission form.

A taxpayer who believes that a statutory notice of deficiency should be rescinded because they wish to enter into settlement negotiations should contact Appeals and request Form 8626.

Authority to rescind statutory notices of deficiency is granted to the Secretary by IRC 6212(d). Delegation Order No. 4-8 (as revised) delegates this authority to Appeals Area Directors, Appeals Team Managers, and Appeals Team Case Leaders on their respective cases.

The authority to rescind does not apply to a Notice of Final Partnership Administrative Adjustment (FPAA).

Delegates listed in Delegation Order No. 4-8 (as revised) will manually sign their own name.