Treasury Issues Proposed Regulations On IRS Appeals Procedures

Taxpayers routinely resolve their tax controversy matters without resort to litigation. Indeed, good tax professionals will often seek to avoid costly and time-consuming litigation, if possible, by utilizing various administrative avenues within the IRS including the IRS Independent Office of Appeals ("IRS Appeals"). Formed originally in 1927, IRS Appeals serves as a quasi-independent government agency staffed with the purpose of, among other things, resolving certain tax controversy matters in a manner fair to both the United States and the taxpayer.

However, IRS Appeals does not hear all tax controversy matters. Rather, it has excepted from its jurisdiction certain tax matters which it feels are not within its scope of review. Generally, this has been accomplished through a hodgepodge of administrative guidance, including publication in revenue procedures and the Internal Revenue Manual ("IRM").