In yet another blow to taxpayers, the IRS has amended its Internal Revenue Manual, which provides procedures for its employees to follow, to deny the right to have an in-person or face-to-face conference in potentially thousands of cases. Before October 1, 2016, the Internal Revenue Manual allowed taxpayers in Collections Due Process and other IRS Office of Appeals hearings to meet with a live-human, look them in the eye, and engage in the same level of interaction that, despite advancing technology, has been critical to making deals happen around the world. Before October 1, Internal Revenue Manual § 22.214.171.124.1 (11-6-2007) provided the IRS would:
Hold conferences on dates and in locations reasonably convenient to taxpayers and representatives. Generally, use Appeals offices, sub-offices, or other IRS-staffed posts of duty that are not temporary or part-time locations. However, managers may approve holding conferences at other sites when feasible and necessary to provide a convenient conference opportunity. Ordinarily, the amount in dispute is not an important factor in approving another conference site.
Internal Revenue Manual § 126.96.36.199.6.4 (12-14-2010) laid out the requirements and exceptions to allowing in-person meeting, including where the case involves a potentially dangerous taxpayer or the request included frivolous, delaying or impeding reasons.
As of October 1, 2016, the Internal Revenue Manual has been revised, providing in section 188.8.131.52.1:
- Except as set forth below, hold conferences by telephone. Hold conferences on dates that are reasonably convenient for taxpayers and representatives and the ATE.
- There may be situations in which an in-person conference, including circuit riding should be held to help reach resolution. The decision to hold an in-person conference can be made upon the request of the taxpayer or at the suggestion of the ATE. The ATM must concur with the decision. Appeals will consider the following facts and circumstances in making the decision to hold an in-person conference:
- There are substantial books and records to review that cannot be easily referenced with page numbers or indices
- The ATE cannot judge the credibility of the taxpayer’s oral testimony without an in-person conference
- The taxpayer has special needs (e.g. disability, hearing impairment) that can only be accommodated with an in-person conference
There are numerous conference participants (e.g., witnesses) that create a risk of an unauthorized disclosure or breach of confidentiality
- An alternative conference procedure (e.g., Post Appeals Mediation (PAM) or Rapid Appeals Process (RAP)) involving separate caucuses will be used
- Another IRM section specific to the workstream calls for an in-person conference
In part 3 of this section, the IRS encourages live videoconferencing as an alternative. Nonetheless, this feels like another attempt of the IRS to do as little work as possible, since it is much easier to “deny, deny, deny” when you don’t have to acknowledge the real lives in front of you that you are destroying.
Also, how exactly does this save the IRS time and money? These in-person meetings were previously held at IRS offices. It isn’t as though, in most cases, the IRS is the one expending the extra time and money to travel to the taxpayer’s office.
Worst of all, my experience is that the IRS is not only changing these procedures prospectively, but also retroactively, effectively yanking the rug out of taxpayers who thought they were finally going to get to sit down and work with a live person. This change in procedure further disenfranchises those who already distrusted the IRS.
Daniel Layton, the author of this post, is the principal of Tax Attorney OC. He can be contacted at 714-409-3522.