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Tax & AccountingJune 29, 2022

Navigating the IRS appeals process during the pandemic and beyond

By: CCH AnswerConnect Editorial

WASHINGTON—The Internal Revenue Service Independent Office of Appeals, like the rest of the agency, has been working through the challenges presented by the COVID-19 pandemic. But the experience has also created opportunities for how appeals officers are able to interact with taxpayers, something that is expected to continue after the pandemic is in the rearview mirror. 

During a panel discussion at the recent American Bar Association Section of Taxation’s 2022 May Tax Meeting, IRS Independent Office of Appeals Chief Andy Keyso offered some perspective on the challenges the office faced and how those challenges are shaping the office going forward. 

The Independent Office of Appeals handles a wide range of cases, covering appeals, examination adjustments, collection due process revisions (which Keyso said was “our largest single workstream”), and offers in compromise.

“We're not focused by industry segment or by type of issue,” he said.  “So, it really is a lot for our folks to be able to apply the entire Internal Revenue Code over this broad swath of our casework.”

One thing that Keyso stressed when dealing with the office is that it is not the venue to be introducing new evidence to cases. 

“We expect the case to be fully developed in the examination function,” Keyso noted. “If the case comes to appeals and the taxpayer is raising new information to us that they had not raised to the revenue agent at the exam stage, we say, we shouldn't be the first finder of fact,” and the case is sent back to the examiner to look at. 

Making sure all evidence is present in the examination stage will help speed up the process through the appeals process, Kesyo stressed.

If the case comes to appeals and the taxpayer is raising new information to us that they had not raised to the revenue agent at the exam stage, we say, we shouldn't be the first finder of fact
Andy Keyso, IRS Independent Office of Appeals Chief

The fate of virtual meetings

The biggest challenge was the move to virtual meetings after the agency gave the order in March 2020 for employees to begin remote work wherever possible, something Keyso noted caused a backlog of cases. 

“For people who have to be on site, moving paper, it doesn't work so well. And so there was a period of time where things just came to a standstill,” he said. 

Indeed, the Independent Office of Appeals saw cycle times increase over throughout the course of the pandemic, although Keyso said the trend is reversible once the offices were back open to regular activity, which started at the end of June. 

That being said, after the extensive use of video conferencing during the pandemic, Keyso still sees utility for continuing their use once life gets back to the normal in-office operations.

“What I’d like to see going forward is that the adoption continues, because I think there’s a real role for video conferences,” Keyso said. “Some taxpayers are just not near an appeals office. They don’t want to come into an appeals office, and they want something more than telephone. My intention is whole heartedly to continue the availability of video conferencing going forward.”

Jennifer Breen, partner at Morgan Lewis, said her opinion of using video conferencing changed through the pandemic. 

Prior to the pandemic, she was of the opinion that she “would never do a virtual appeal because I am so much more effective in person,” Breen told attendees of the conference. “It is so easy for the appeals officer to say no to me if I'm not sitting right in front of them, and so I'll never do it. And obviously that optionality was taken away from me.”

However, after participating in several virtual conferences, Breen found they were “really successful. I felt like I was wrong. I'm not saying that I'm going to always do virtual appeals conferences, but I'm definitely going to think about it as a possibility. As we move to this new hybrid environment, I'm going to think about it strategically.”

Escalating a situation

Another bit of advice Keyso gave to attendees was to not hesitate if there are issues and a tax practitioner feels someone further up the chain needs to be brought in, with concerns that doing so could harm the professional relationship between the tax professional and the appeals officer. 

Keyso said that appeals officers need to be “more cooperative” with tax professionals and realize that it is not an “us versus them” environment. 

“It led me to believe that maybe we need to address the issue from the front end with the initial letter that goes out to taxpayers,” he said, suggesting that the initial letter contain both the contact information of the appeals officer and the officer’s manager. “That may be a solution so that you don't put practitioners in this position of saying, ‘Well, I'm nervous about asking the appeals officer.’”

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