The Appeals Mission is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.

Appeals accomplishes this mission by considering protested cases, holding conferences, and negotiating settlements in a manner which ensures the following:

Schedule conferences on dates and/or at locations that are reasonably convenient to taxpayers, representatives and Appeals. If more convenient, settle cases by telephone conference, and/or correspondence.

Appeals provides multilingual services to taxpayers who speak limited English, especially Spanish, to resolve tax controversies in an effective and informative manner. Bilingual employees provide the services, either those on a bilingual position description or those who volunteer.

Generally, definitions of terms used in the Manual are with the material where the term is discussed. See Exhibit 8.1.1-1. for a list and the definitions of the common terms used in Appeals.

Appeals is the Internal Revenue Service’s dispute resolution forum. The Commissioner granted Appeals authority to consider and negotiate settlements of Internal Revenue Service controversies. See Delegation Order No. 66, as revised, in IRM 1.2.47, Delegation of Authorities for the Appeals Process, and Policy Statement P–8–47 in IRM 1.2.1, Policies of the Internal Revenue Service.

Delegations of Authority, more commonly referred to as Delegation Orders, place authority in the position(s) where actual operational responsibility resides. This frees officials from having to consider issues which can be handled at lower levels. Time and resources are saved when matters are forwarded directly to the designated office rather than to Heads of Office for action.

See Exhibit 8.1.1-2. for Delegation Orders applicable to the Appeals' functional authority. See IRM 1.2.2, Delegations of Authority, for an explanation of the renumbering of delegations of authority and a complete listing of delegation orders broken down by IRM section and business process.

Service Policies, commonly referred to as Policy Statements, are major decisions of the Commissioner, Deputy Commissioners, Chiefs and Directors directly reporting to the Commissioner and Deputy Commissioners, Division Commissioners and/or the National Taxpayer Advocate, within the framework of basic tax administrative policies of Treasury and Congress. These "Service Policies" govern and guide Service personnel in the administration of internal revenue laws and do not directly relate to time schedules or the allocation of funds, staffing, equipment or other resources.

The Internal Revenue Service is responsible for administering tax laws enacted by Congress. In carrying out this duty, Compliance examines selected tax returns in Field and Campus offices.

The following table shows a chronological listing of what happens once Compliance examines the taxpayer's return.

Appeals also receives Exempt Organization cases where adverse action is proposed on an organization's exempt status or private foundation classification, and Employee Plans cases involving an employee plan's qualification.

Appeals jurisdiction includes, but is not limited to, cases subject to notice of deficiency procedures or cases involving a tax liability.

In most cases, a preliminary (30 or 60 day) letter is issued to the taxpayer by the Compliance Area Director or Campus Director.

In general, taxpayers request an Appeals conference and, when required, file a protest against the proposed deficiency, overassessment, or determination (See IRM 8.6.1, Conference and Issue Resolution).

Collection Due Process - The IRS Restructuring and Reform Act of 1998 (RRA 98) gives taxpayers the right to a Collection Due Process (CDP) hearing with Appeals when they receive one of the following notices:

IRC 6320 requires the taxpayer be given notice after the filing of a Notice of Federal Tax Lien (NFTL). IRC 6330 requires the taxpayer be given notice of a right to a hearing before taking levy action. The purpose of CDP hearings under IRC 6320 and IRC 6330 is to give the taxpayer an opportunity early in the collection process to work with an independent hearing officer to resolve the collection of the taxpayer's liability. After a CDP hearing and determination by Appeals, taxpayers have the right to challenge Appeals' determination in court.

Equivalent Hearing (EH) - If a taxpayer did not timely request a CDP hearing with Appeals, the taxpayer has the right to request an "Equivalent Hearing" . However, the taxpayer must specifically state he or she wants an Equivalent Hearing. In an Equivalent Hearing, the taxpayer may raise and Appeals will consider all issues raised in CDP, however, the taxpayer does not have the right to seek judicial review of Appeals' decision.

Offer-in-Compromise - An Offer in Compromise (OIC) is an agreement between a taxpayer and the government to settle a tax liability in exchange for payment of less than the full amount owed. Appeals has jurisdiction to make decisions on OIC cases in the following circumstances:

Collection Appeal Program - Collection Appeal Program (CAP) is an administrative appeal for certain collection actions. A taxpayer, or a third party whose property is subject to a collection action, may appeal the following actions under CAP:

CAP decisions by Appeals are binding on the taxpayers and the Collection functions.

Trust Fund Recovery Penalty - Trust Fund Recovery Penalty (TFRP) is a penalty against any person who willfully fails to collect, account for, and pay over taxes held in trust. The TFRP is imposed for:

TFRP under IRC 6672 is equal to the total amount of tax evaded, not collected, or not accounted and paid for. The Collection function is solely responsible for recommending assertion of the TFRP. Before assessing a TFRP, a 60-day notice of proposed assessment is sent or given to the taxpayers, along with their right to an Appeal. The taxpayer has 60 calendar days to file a timely protest (75 calendar days if the letter is addressed outside of the United States). When the taxpayer files a timely protest, the case is sent to Appeals. Appeals is responsible for determining if the party is willful and responsible for the TFRP. Only Appeals can make the final administrative determination with respect to the taxpayer's protest.

Trust Fund Recovery Penalty Claims - The IRS must provide for an appeal of a Form 843, Claim for Refund and Request for Abatement. When the IRS assesses the TFRP, the taxpayer has a right to pay the appropriate amount of the assessment and file a refund claim with the IRS. If Collection denies the taxpayer's claim, Collection sends the taxpayer a letter notifying them of the 60-day time period to file a timely administrative appeal. If a timely administrative appeal is received, the case is heard in Appeals.

Appeals employees perform miscellaneous duties often involving communications with other IRS functions, and outside accounting and/or tax groups. These duties include providing feedback to Compliance, making presentations on Appeals practices and procedures, writing articles for publication, testifying in court cases, and producing records requested by taxpayers.

The following subsections provide specific guidelines to use when performing these miscellaneous duties.

The following chart lists the miscellaneous IRS programs, offices, and IRM references, applicable to the Appeals organization.