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Part 8. Appeals

Chapter 10. Appeals Reports and Projects

Section 2. Reports to Outside Officials

8.10.2  Reports to Outside Officials

8.10.2.1  (10-19-2007)
Reports to Officials Outside of Appeals - Reporting Nontax Criminal Violations

  1. Various circumstances require Appeals personnel to prepare reports for officials outside Appeals.

  2. While performing their official duties, Appeals personnel may observe a nontax crime during official duty hours or in their official capacities or receive information relating to a nontax crime under the enforcement jurisdiction of another Federal Agency, or a State or local government authority. Such information or observations may constitute return information as defined in IRC 6103(b), or nontax information not protected by IRC 6103.

  3. Appeals personnel should be aware of such instances for possible disclosure to the appropriate Federal agency pursuant to IRC 6103(i)(3), (See Delegation Order No. 11-2 (formerly Delegation Order No. 156, Rev. 17) located in IRM 1.2.49-2 - Delegation of Authority for Communication, Liaison and Disclosure Activities) or to Federal, State or local law enforcement officials under procedures in IRM 11.3.34,Disclosure of Nontax Criminal Violations, and IRM 11.3.28,Disclosure to Federal Agencies for Administration of Nontax Criminal Laws, whichever provision is applicable.

  4. Information pertaining to possible disclosures to be made under IRC 6103(i)(3) will be reported by memorandum, through channels, to the responsible Disclosure Officer. The memorandum should contain the following information:

    1. Name, social security number, address, and aliases of subject (if known),

    2. Business or occupation of subject (if known),

    3. Facts and circumstances surrounding the nontax violation,

    4. U.S. Code sections believed violated,

    5. Specific source of information, i.e. 3rd party, and the circumstances under which the information was obtained,

    6. Agency to whom this violation would be of interest, i.e., U.S. Attorney (Judicial District), Strike Force Attorney (location), other agency (specify),

    7. System of Records from which information was obtained, and

    8. A statement as to whether or not disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.

  5. For emergency situations, such as when an individual's life or safety is threatened, refer to IRM 11.3, Disclosure of Official Information.

8.10.2.1.1  (10-19-2007)
Reporting of Bribes and Bribery Attempts

  1. Bribe offers are often subtle and indirect. When bribe overtures are recognized by employees, they must promptly report them so that trained personnel can evaluate and initiate an investigation. Any Appeals employee who believes a bribe attempt has been made must:

    1. avoid any implication of acceptance or rejection but hold matter in abeyance;

    2. report the attempt immediately to Treasury Inspector General for Tax Administration (TIGTA);

    3. submit a comprehensive memorandum to TIGTA as soon as possible; and

    4. cooperate fully in any ensuing investigation and avoid unnecessary discussion.

8.10.2.1.2  (10-19-2007)
Reporting of Conduct or Practice Violations by Practitioners

  1. Treasury Department Circular No. 230, Rules Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents and Enrolled Actuaries before the Internal Revenue Service, provides information on the responsibilities of the Office of Professional Responsibility and rules applicable to disciplinary proceedings against practitioners.

  2. Returns and return information may be disclosed to the Office of Professional Responsibility, without written request, when administering the duties set forth in Circular No. 230.

8.10.2.1.2.1  (10-19-2007)
Report to TIGTA

  1. Service employees are required to report directly to TIGTA (Treasury Inspector General for Tax Administration) all information concerning unethical practice by tax practitioners which also involves either alleged misconduct by another Service employee, or an attempt by the practitioner to corrupt another Service employee. Treasury Order 115-01, par. 5.a (1) and (2). The report should contain sufficient detail to substantiate the information regarding each violation.

  2. No report to the Office of Professional Responsibility will be made on any case referred to TIGTA. When appropriate, TIGTA will advise the Office of Professional Responsibility of the complaint against the practitioner.

8.10.2.1.2.2  (10-19-2007)
Report to the Office of Professional Responsibility

  1. Section 10.53 of Circular No. 230, requires Internal Revenue Service employees to make a written report to the Office of Professional Responsibility when the employee has reason to believe that an attorney, certified public accountant, or enrolled agent has violated the rules set forth in the Circular. When the violation does not involve another Service employee, the report is sent to the Office of Professional Responsibility, through the Appeals Area Director. The report should contain sufficient detail, including any documentation or exhibits, to substantiate the information regarding each specific violation. With the exception of reports on IRC 6694(a) penalty violations, reports of violations by attorneys and certified public accountants should contain a statement regarding whether or not the individual is known as a tax practitioner. If possible, a copy of declarations filed pursuant to section 10.3 of Circular No. 230 should be furnished. Unless the practitioner has engaged in actual practice before the Service, disciplinary proceedings may not be instituted.

  2. The Appeals Case Memo may be used as the report to the Office of Professional Responsibility. Care should be taken to ensure that the memo contains all the necessary information.

  3. On a monthly basis, the local Appeals office will forward reports to the Area Director. The report memo will be prepared by the originating office for the signature of the Area Director. The Area Director will mail the reports directly to the Office of Professional Responsibility. The frequency of mailing the reports will be determined by the Area Director.

8.10.2.1.2.3  (10-19-2007)
Referrals to Compliance

  1. Unenrolled preparers of returns are not permitted to represent taxpayers before Appeals. Section 10.7(c)(viii) of Circular 230 authorizes unenrolled return preparers to represent taxpayers only before revenue agents, customer service representatives or similar IRS employees and only in connection with an examination of the taxable year or period covered by a return prepared and signed by the unenrolled return preparer. Unenrolled preparers of returns are not permitted to represent taxpayers before Appeals. Rev. Proc. 81-38, 1981-2 C.B. 592, prescribes the standard of conduct for unenrolled return preparers who exercise their right to limited practice under Circular 230. Conduct of an unenrolled preparer which would render him or her ineligible to appear as the taxpayer's representative should be reported to the appropriate Return Preparer Coordinator.

  2. The method of referring cases to Compliance will be determined by the Area Director.

8.10.2.1.3  (10-19-2007)
Reporting Racketeer Infiltration of Legitimate Businesses

  1. Information about racketeers who infiltrate legitimate businesses should be reported by memorandum to the appropriate Special Agent in Charge, Criminal Investigation Division. Such action is not precluded by the fact that the legitimate income has been correctly reported.

  2. The memorandum should include to the extent known:

    1. name, address and social security number (SSN) of the racketeer;

    2. name, address, and employee identification number (EIN) of the business and description of the business activities;

    3. all known or suspected aliases, nominees, and close business associate;

    4. nature and extent of the investment in and control of business;

    5. if the information relates to extensive or questionable use of a financial institution's services, the nature and extent thereof; and

    6. all other pertinent data including source of information and how obtained.

8.10.2.1.4  (10-19-2007)
Maintaining Liaison in Special Enforcement Program Cases

  1. To wage a more effective fight against organized crime, the Federal Government initiated a program designed to strike a blow at key members of the underworld. The Criminal Division, Department of Justice, is coordinating a program in which Federal agencies concentrate enforcement efforts on designated organized crime subjects in selected cities. Each project is called a "strike force." The Service participates in each strike force by designating one or more persons to represent the Internal Revenue Service.

  2. Normal procedures governing review and processing of organized crime cases are applicable to tax cases resulting from the strike force program. For cases protested to Appeals, the case file will be identified or marked so as to indicate a Strike Force connection and processing of the case will be expedited. The appeals office having jurisdiction will establish liaison with IRS strike force representatives to keep informed of new developments and to inform the Strike Force of the progress and status of the case.

8.10.2.1.5  (10-19-2007)
Legislative and Regulatory Recommendations

  1. The Internal Revenue Service submits tax legislative recommendations and proposed tax regulations to the Treasury Department. Every officer and employee whose work affords an opportunity to recognize needed changes should be alert for opportunities to make recommendations to this program. Appeals employees in the field are especially in a position to observe, evaluate, and submit solutions to tax administration and compliance problems such as improvement in taxpayer relations, simplification, tax avoidance schemes and efforts to counter them, tax loopholes, abuses and inequities.

  2. Recommendations involving changes in tax legislation and tax regulations should not be processed through the Incentive Awards Program but through the Technical Coordination Program described below.

  3. Such recommendations may, after enactment or adoption, be presented for award consideration and recognition, using Form 13380. However, awards will not be paid in advance of enactment of legislation or implementation of a suggested change in a regulation.

8.10.2.1.6  (10-19-2007)
Technical Coordination Program

  1. Technical Coordination Report, Form 3558, is submitted in triplicate to report tax abuses, inequities, or administrative problems in the interpretation and application of the tax laws that are proper for consideration by Headquarters in connection with the clarification of Service positions, amendment of regulations, or legislative recommendations.

  2. Form 3558 prepared by Appeals field personnel will be submitted through channels to the Area Director for evaluation and concurrence. Reports referred by the Area Director to the Director Field Operations will typically include operational procedures in Appeals or settlement guidelines. The Director Field Operations will forward Form 3558 to the Director, Tax Policy and Procedure and/or Director, Technical Guidance.

  3. A copy of any report containing specific examples of tax abuses in the international area should also be furnished to the LMSB Director, International.

  4. Reports concerning any phase of Employee Plans or Exempt Organizations operations, whether pertaining to rulings, regulations, compliance, collection, legislation, forms, etc. should be directed to the TEGE Operating Division, Director, Employee Plans or Director, Exempt Organizations.

  5. Reports (not concerning EP/EO matters) that involve tax forms or instructions or taxpayer and other technical publications, should be directed to the W&I, Director Media and Publications, Tax Forms and Publications Division.

  6. Reports (not concerning EP/EO matters) that suggest, or recommend revisions of, revenue rulings, revenue procedures or the Code or regulations should be directed to the Deputy Chief Counsel (Technical).

8.10.2.1.7  (10-19-2007)
Tax Abuses and Administrative Problems—Report to Commissioner

  1. Technical coordination reports marked "COMMISSIONER'S ATTENTION" should be submitted where significant tax abuses, inequities and administrative problems are noted, and one or more of the following characteristics are present:

    1. A large number of taxpayers is affected.

    2. A large amount of revenue or potential revenue is involved.

    3. The matter relates to a key policy of the President, the Secretary of the Treasury, or the Congress.

    4. The matter is causing or may cause a significant amount of adverse publicity or public controversy.

    5. The matter is creating significant problems in the audit of returns, appeals, or litigation.

  2. These reports are submitted on Form 3558 , Technical Coordination Report, with a brief memorandum explaining why the matter was selected for the Commissioner's attention. The memorandum and form are sent through channels to the Area Director, who, upon concurrence, forwards a copy of the report to the Chief Appeals as well as the Director, Tax Policy and Procedure and/or Director, Technical Guidance.


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