George Hani comments on updates to IRS Notice 2011-62, which covers communications between the Office of Appeals (Appeals) and other IRS departments that take place without the taxpayer or the taxpayer’s representative present. “Clearly this is good news for taxpayers. The new revenue procedure gives greater clarity [on the ex parte rules] and clarity is very important to taxpayers. Ex parte problems don’t arise often, but when there is a problem, it really strikes a nerve with taxpayers,” Hani says. For many taxpayers, the fact that Appeals is embedded with IRS is always present and in their mind presents a conflict.

Under the old rules, the line that divided proper communications from improper ones was much clearer. Hani notes that “This is potentially dangerous since it allows field attorneys to chart their own course, and it plays into taxpayer fears.” The IRS decided that Appeals will no longer participate in the issue management teams, which are composed of representative from different IRS departments, and which discuss generally how to resolve technical or procedural matters. “That really drove folks a little crazy. They would wonder whether Appeals would take a legitimate, fresh look at the issue, or were they just going thought the motions and trying to cram down any settlement proposal that the IRS was willing to accept,” Hani comments.