Implementation guidance for Appeals Judicial Approach and Culture Project.

• Author: Petronchak, Kathy
• Position: Of the IRS Policy, Quality and Case Support Division

On July 18, the IRS director of Policy, Quality and Case Support issued a memorandum (Control No. AP-08-0713-03) to Appeals employees regarding the first phase of the implementation of the Appeals Judicial Approach and Culture (AJAC) Project. The goal of this project is to promote a quasi-judicial approach in how the Appeals office handles its cases. It is part of an effort to improve internal and external customer perceptions of a fair, impartial, and independent Appeals office.

The memo provides interim guidance to Appeals employees on implementing the AJAC Project and is effective for actions taken after July 18. It contains updated Internal Revenue Manual (IRM) provisions related to the various work flows within Appeals, including examination cases, Collection Due Process (CDP), offers in compromise (01Cs), and the Collection Appeals Program (CAP). Although many of the AJAC changes have already taken effect, the memo states that updated provisions not yet incorporated in the IRM will be incorporated within a year. Although the guidance contains numerous changes to the IRM, rhe most significant change is the updated general policy statement in the IRM. Policy Statement 8-2 (formerly P-8-49) provides:

* New issues are not to be raised by Appeals; and

* Appeals will not raise new issues.

* Appeals also will not reopen an issue on which the taxpayer and the IRS are in agreement.

This updated policy marks a significant change from the previous policy, under which Appeals officers could raise a new issue if the grounds were substantial and the potential impact on the tax liability was material.

The memo provides updated IRM provisions related to various Appeals functions. One example is in Conference and Issue Resolution--General Guidelines (IRM [section]8.6.1.6.2):

Appeals will not raise new issues and will focus dispute resolution efforts on resolving the points of disagreement identified by the parties. The Appeals process is not a continuation or an extension of the examination process. Although Appeals may not raise new issues, it may consider alternative or new legal arguments that support the parties' positions for purposes of hazards-of-litigation analysis. The new guidance also provides that the discussion of new or additional cases (or other authorities) that support a previously raised theory or argument does not constitute a new issue. However, Appeals may only use evidence within the case file to evaluate such theories. It should...