On October 15, 2015, the IRS issued a proposed revenue procedure (Notice 2015-22)52 that would update Rev. Proc. 87-84, which describes the practices used to manage the flow of docketed cases between the Office of Appeals and the Office of Chief Counsel. The proposed update to Rev. Proc. 87-2453 is not intended to materially modify the current practice of referring docketed cases to Appeals for settlement, but was issued to reflect procedures utilized by the Tax Court in managing the flow of docketed cases between the Office of Appeals ("Appeals") and Office of Chief Counsel, and to ensure that docketed cases are handled consistently nationwide.
The proposed procedures make clear that except for specifically identified exceptions, IRS Counsel will refer all docketed cases to Appeals for settlement consideration. The referral will not be made if Appeals issued the Notice of Deficiency or made the determination that is the basis of the Tax Court's jurisdiction, or if the taxpayer foregoes settlement consideration by Appeals. In addition, IRS Counsel will not need to refer to Appeals any docketed case or issue that has been designated for litigation by IRS Counsel, or if Division Counsel or a higher level of Counsel determines that referral is not in the interest of sound tax administration.
Certain types of cases docketed in the Tax Court are excluded from the proposed revision. This includes cases docketed under Section 6015(e)(1)(A)(i)(11), Section 6110, Sections 6320 and 6330, Section 6402, Section 7428, Section 7476, Section 7477, Section 7478 and Section 7479.
For cases not covered by the exception or exclusions, IRS Counsel is directed to refer the docketed case to Appeals within 30 days of the case becoming "at issue in the Tax Court"—as defined by Tax Court Rule 38, which provides that a case shall be deemed at issue upon the filing of the answer. But the 30 days can be extended an additional 90 days if IRS Counsel identifies a need for additional time. A delay longer than 120 days requires approval by an IRS Counsel executive. Such a delay may arise in cases when IRS Counsel has to do early trial preparation or when new facts, issues or items are raised in the pleadings.
The proposed revenue procedure also seeks to promote greater interaction between IRS Counsel and Appeals without impinging on Appeals' independence. For example, Counsel and Appeals are encouraged to transfer cases from Counsel to Appeals or from Appeals to Counsel, to promote a more efficient disposition of the case, notwithstanding the fact that the case was previously considered by the receiving entity. Appeals is further directed to make the administrative case file available to Counsel when needed, which will not end Appeals' settlement authority. Moreover, Appeals may exclude Counsel from a settlement conference if Appeals determines that Counsel's participation in the settlement conference will not further settlement of the case. However, Appeals is directed to provide Counsel with access to any documents received by Appeals in a settlement conference, and Appeals may obtain advice from Counsel and consider it in conjunction with other factors to reach a basis for settlement.
Footnotes
52 2015-44 IRB 1.
53 1987 -1 C.B. 720.
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