Updated guidelines for ex parte communications.

• Author: Petronchak, Kathy

The IRS on Feb. 15, 2012, issued Rev. Proc. 2012-18, which superseded Rev. Proc. 2000-43 and updated the rules on ex parte communications between IRS Office of Appeals (Appeals) employees and employees of other IRS functions. The mission of Appeals is to resolve disputes "on a basis which is fair and impartial to both the Government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service" (Internal Revenue Manual [section]8.1.1.1(1)). In general, the provisions strive to maintain the independence of Appeals, while balancing the interests of Appeals in being able to seek and maintain technical expertise (Rev. Proc. 2012-18, [section]2.02(2)).

Section 1001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998, P.L. 105-206, required the IRS to "[e]nsure an independent Appeals function within the Internal Revenue Service, including the prohibition in the plan of ex parte communications between appeals officers and other Internal Revenue Service employees to the extent that such communications appear to compromise the independence of the appeals officers." To implement that provision, the IRS and Treasury released Rev. Proc. 2000-43.

In 2011, the IRS issued Notice 201162, which requested comments on the suggested detailed guidance. The IRS stated that "[s]ince the issuance of Rev. Proc. 2000-43 in October 2000, the IRS has made changes to some of its business practices and adopted new ones that did not exist at the time that the revenue procedure was issued." Consequently, Rev. Proc. 2012-18 was issued in February 2012. Several important aspects of the Appeals relationship with other functions have been clarified in Rev. Proc. 2012-18.

Ex parte communications are those that take place between any Appeals employee (e.g., Appeals officers, settlement officers, team case leaders, and tax computation specialists) and employees of other IRS functions (i.e., originating functions, specifically Examination, Collection, and Service Center functions) without the taxpayer or his or her representative being given an opportunity to participate in the communication (Rev. Proc. 2012-18, [section]2.01; and see Regs. Sec. 601.501 (defining representative)).

An "opportunity to participate" means that the taxpayer or the taxpayer's representative is given a reasonable opportunity to attend a meeting or conference call where Appeals and the originating function are discussing the strengths and weaknesses of the facts, issues, or positions in the taxpayer's case (Rev. Proc. 2012-18, [section]2.01(3)). Generally, reasonable accommodations are required to be made to include the taxpayer; however, if there is an unreasonable delay, then...