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Part 4. Examining Process

Chapter 70. TE/GE Examinations

Section 2. TEGE Communications with Appeals

4.70.2  TEGE Communications with Appeals

4.70.2.1  (10-01-2002)
Overview

  1. Section 1001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law No. 105-206, 112 Stat. 685, hereinafter referred to as RRA 98 section 1001(a)(4), prohibits ex parte communications between appeals officers and other Internal Revenue Service employees to the extent that such communications appear to compromise the independence of Appeals.

  2. "Ex parte" is a term used in legal proceedings to describe a one-sided or partisan point of view received on behalf of or from one side or party only. In the context of RRA 98 section 1001(a)(4) ex parte communications are communications which take place between appeals officers and other Internal Revenue Service employees, including TEGE employees, without giving the taxpayers/representatives an opportunity to participate in the communications. Communications between appeals officers and other Internal Revenue Service employees are prohibited ex parte communications only if the communications "appear to compromise" the independence of Appeals.

  3. Rev. Proc. 2000-43, 2000-2 C.B. 404 contains guidance for implementing the prohibition on ex parte communications.

  4. This IRM includes a discussion of the instructions contained in Rev. Proc. 2000-43 applicable specifically to TEGE examination employees other than employees involved in the Coordinated Examination Program. See IRM 4.45.10.18 for Coordinated Examination Program guidelines.

  5. To the extent that any instructions, directions or guidance in IRM 4.70 through IRM 4.91 are in conflict with Rev. Proc. 2000-43, the guidance in the revenue procedure shall take precedence.

4.70.2.2  (10-01-2002)
Definitions

  1. For the purposes of this IRM:

    1. "Ex parte communications" are communications between Appeals and TEGE employees without the participation of the taxpayer or the taxpayer's representative.

    2. The term "communications" includes all forms of communications, oral or written (manually or computer generated).

    3. References to "the taxpayer" include the taxpayer and/or the taxpayer's representatives.

4.70.2.3  (10-01-2002)
TEGE Employees Subject to the Provisions of RRA 98 section 1001(a)(4)

  1. Although the ex parte communications between Appeals and TEGE employees discussed in this IRM deal primarily with communications between TEGE reviewers or examiners and Appeals officers, the prohibition against ex parte communications apply to communications between any Appeals employee, e.g., Appeals Officers, Appeals Team Case Leaders, Appeals Tax Computation Specialists and any TEGE Operating Division employee, e.g., Area Managers, Group Managers, Examiners Review Managers, Reviewers.

4.70.2.4  (10-01-2002)
Responsibility for Compliance with the Provisions of RRA 98 section 1001(a)(4)

  1. All IRS and Counsel employees, including TEGE employees, share the responsibility to ensure that communications do not appear to compromise the independence of Appeals.

  2. TEGE examiners and reviewers will request permission from their group manager before initiating any communication with Appeals officers. The TEGE group manager will determine whether the proposed communication is necessary and whether it is an ex parte communication covered by RRA 98 limitations.

    IF the group manager determines the communication is: THEN the group manager will:
    Not necessary Deny the request
    Necessary and is not an ex parte communication Approve the request
    Necessary and is an ex parte communication Approve the request and provide instructions for including the taxpayer in the communication

  3. In most instances it will be the responsibility of Appeals to take the necessary actions to invite the taxpayers/representatives to participate in any verbal communication. If it is necessary for TEGE to issue the invitation, the procedures detailed in Rev. Proc. 2000-43 will be followed.

  4. If a TEGE examiner or reviewer is contacted by an Appeals officer and the information requested appears to be a prohibited ex parte communication, the TEGE examiner or reviewer should discuss this concern with the Appeals officer before any information is provided.

    Note:

    If it is questionable whether a proposed communication would be prohibited under RRA 98, the taxpayer should be invited to participate in the communication.

4.70.2.5  (10-01-2002)
Violations of the Provisions of RRA 98 section 1001(a)(4)

  1. Violations of the Provisions of RRA 98 section 1001(a)(4) will be addressed in accordance with existing administrative and personnel processes.

  2. In addition to being subject to the existing administrative and personnel processes, the initiator may be subject to the penalty provisions of IRC sections 7213, 7213A and 7431 as the communication may fail to qualify as an IRC section 6103(h)(1) disclosure.

    Note:

    IRC section 6103(h)(1) allows the disclosure of returns and return information to officers and employees of the Internal Revenue Service whose official duties require such inspection or disclosure for tax administration purposes.

4.70.2.6  (10-01-2002)
Administrative File

  1. The term "administrative file" as used in Rev. Proc. 2000-43 includes the TEGE return files, workpaper files, administrative record files, and the determination (microfiche) file.

4.70.2.6.1  (10-01-2002)
Submission to Appeals

  1. Under Rev. Proc 2000-43 providing the administrative file to Appeals is not an ex parte communication. The administrative file, containing the proposed determination and the taxpayer's protest or other approved means of communicating disagreement with the proposed determination, sets forth the boundaries of the dispute between the taxpayer and the Service and forms the basis for Appeals to assume jurisdiction.

    Note:

    The term "determination" includes determinations of tax exempt or foundation status and income, excise, or employment tax liabilities.

4.70.2.6.1.1  (10-01-2002)
Rebuttals of the Taxpayer's Protest

  1. Any rebuttal of the issues, facts, law or conclusions presented in the taxpayers' protest included in the administrative file when the case is transmitted to Appeals is a prohibited ex parte communication unless a copy of the rebuttal has been provided to the taxpayer.

4.70.2.6.2  (10-01-2002)
TEGE Review After Transmission to Appeals

  1. If an examiner has been assigned a subsequent year examination of a case currently in Appeals, he or she may review the administrative file for past examination findings. The examiner's review should generally be limited to the information that was included in the administrative file when the case was transmitted to Appeals. During such review, the examiner should not engage in discussions of the strengths and weaknesses of proposed adjustments in the year(s) before Appeals, nor should discussions occur about issues in the current cycle. Such discussions could appear to compromise Appeals' independence.

4.70.2.7  (10-01-2002)
TEGE Review of New Information or Evidence Submitted to Appeals

  1. Appeals will give TEGE the opportunity to review and comment on significant new information presented by the taxpayers/representatives during the appeals proceedings. Appeals is responsible for notifying the taxpayers/representatives when the new material is sent to TEGE and to provide TEGE's response to the taxpayer.

4.70.2.8  (10-01-2002)
Dissenting Memorandums

  1. A dissenting memorandum from TEGE to Appeals stating TEGE's disagreement with Appeals' settlement of a case is not an ex parte communication if all Appeals' action on the case has been finalized before the memorandum is provided to Appeals.

    Note:

    A dissenting memorandum must be approved by the Area Manager before it is sent to Appeals.

4.70.2.9  (10-01-2002)
Communications with the Office of Chief Counsel

  1. Appeals employees are permitted to communicate with attorneys in the Office of Chief Counsel in TEGE cases not docketed in the Untied States Tax court concerning all matters pertaining to the interpretation, administration and enforcement on the internal revenue laws. These communications are not prohibited ex parte communications unless the communication is with a Counsel field attorney who has previously provided advice to a TEGE employee on the same issue in the case. If the communication is with a field attorney who provided advice to a TEGE employee on the same issue in the case, Appeals must provide the taxpayer or the taxpayer's representative with an opportunity to participate in any such communications or must seek the advice of a different Counsel attorney.

  2. To assist Appeals in identifying any field attorney who provided advice to TEGE during the examination, the TEGE examiner will document all communications with field attorneys in the case chronology record. The documentation will include the name, location and telephone number of the field attorney contacted and a general description of the issue(s) discussed.

4.70.2.10  (10-01-2002)
Pre-Appeals Conference Procedures

  1. Pre-Appeals conferences are usually held only in Coordinated Examination Program examinations. If a pre-appeals conference is requested by TEGE in a general program case, the procedures in IRM 4.45.10.18 will be followed.

4.70.2.11  (10-01-2002)
Post-Appeals Conference Procedures

  1. Post-appeals conferences are usually held only in Coordinated Examination Program examinations. They are not prohibited ex parte communications as long as they are limited to discussion of issues in the closed cycle. If a post-appeals conference is requested by TEGE in a general program case the procedures in IRM 4.45.10.18 will be followed.


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