Chicago Chapter's liaison meeting with Midwest Regional Appeals; February 15, 1995.

• Position: Liaison Meeting Special

On February 15, 1995, representatives of Tax Executives Institute's Chicago Chapter held a liaison meeting with officials of the Internal Revenue Service's Midwest Appeals organization, including the Regional Commissioner. The minutes of the meeting, framed as questions and answers, are reprinted below. Certain questions and answers that relate to the impending reorganization of the Internal Revenue Service are not being reprinted, and certain other questions and answers have been edited to take into account either superseding events or the fact that information on the same subjects has been reprinted elsewhere (e.g., in the minutes of national level liaison meetings).

Opening Remarks

Opening remarks were made by John T. Lyons, Midwest Regional Counsel, and Paul H. Thornton, Regional Director of Appeals, as well as by Judy Zelisko on behalf of the Chicago Chapter.

Status of Alternative Dispute Resolution Forums

1. Have the procedures under Announcement 94-41, regarding early referral from Examination, been implemented in the Midwest Region?

   Yes, Midwest Appeals is fully supportive of using the early referral provisions outlined in the subject announcement and encourages both Examination and taxpayers to avail themselves of its provisions.

2. If any issues have been referred under this methodology, have they contributed to the timely resolution of Examination issues?

   Thus far, two taxpayers have requested use of the provision of Announcement 94-41. One case has been closed with successful completion of the issue involved. The other case is currently pending.

3. Announcement 95-2, relating to mediation, states that the scope of mediation will be limited to those CEP cases that are assigned to Appeals Team Chiefs. Will an effort be made to accommodate such cases?

   The requirement for a taxpayer to qualify for the program is that they be included in District's Coordinated Examination Program and assigned to an Appeals Team Chief. At this time, a case assigned to any other Appeals Officer will not qualify. However, should the program succeed, there would be the possibility of the coverage being expanded further to include non-Team Chief cases.

4. In addition, various issues are excluded from such a process (e.g., issues designated for litigation, ISP issues, etc.) Will the taxpayer be informed up front that the issue is not subject to mediation and for what reason?

   If a taxpayer requests consideration of an issue for mediation and that issue does not qualify, the taxpayer will be afforded a complete explanation including the basis for disqualification.

5. While the mediation process is initiated at the request of the taxpayer, what types of issues does Appeals believe would be most appropriate for the mediation process?

   Mediation will be appropriate for factual issues such as valuations, reasonable compensation, and transfer pricing Issues.

   Status of Intangibles Settlement Initiative

1. Recent publications have indicated that the intangibles settlement initiative has resulted in the settlement of a large number of cases. What has the Midwest Region's experience been in this regard?

   The Midwest Region does not maintain any statistics on the number of cases settled using the intangibles settlement initiative. The Appeals ISP Coordinators for the intangibles issues advise us that the National Office report to Congress on this initiative has not, as yet, been released. This report will include information such as the percentage of eligible taxpayers accepting the intangibles settlement initiative; however, the general statement has been made that the IRS is very satisfied...