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8.1.1.3
(10-23-2007)
Examination Cases Under Appeals Jurisdiction
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The Internal Revenue Service is responsible for administering tax laws enacted by Congress. In carrying out this duty, Compliance
examines selected tax returns in Field and Campus offices.
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The following table shows a chronological listing of what happens once Compliance examines the taxpayer's return.
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Appeals also receives Exempt Organization cases where adverse action is proposed on an organization's exempt status or private
foundation classification, and Employee Plans cases involving an employee plan's qualification.
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Appeals jurisdiction includes, but is not limited to, cases subject to notice of deficiency procedures or cases involving
a tax liability.
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In most cases, a preliminary (30 or 60 day) letter is issued to the taxpayer by the Compliance Area Director or Campus Director.
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In general, taxpayers request an Appeals conference and, when required, file a protest against the proposed deficiency, overassessment,
or determination (See IRM 8.6.1, Conference and Issue Resolution).
8.1.1.3.1
(10-23-2007)
No Appeals Conference or Concession on Certain Arguments
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As provided in 26 CFR 601.106(b), Statement of Procedural Rules, the administrative appeal procedures do not extend to cases
solely involving the failure or refusal to comply with the tax laws because of moral, religious, political, constitutional,
conscientious, or similar grounds. Such arguments are given no weight in settlement.
8.1.1.3.2
(10-23-2007)
"No Immediate Tax Consequence"
Cases
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Generally, cases considered by Appeals involve a disputed tax liability. However, in some cases there is no tax liability
in dispute for the period under consideration. These cases are called "No Immediate Tax Consequence"
cases.
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Where required by law, IRS policy, regulation, ruling or procedure, Appeals considers cases that do not have an immediate
tax consequence. This situation most frequently occurs when adjustments result in a potential deficiency or an overassessment
but because of a net operating loss (NOL) carryback, no deficiency or overassessment results; or, adjustments are made to
an NOL carryforward and the carryforward year has not been examined. Other examples of cases with no immediate tax consequences
are estate tax IRC 6166 cases and employee plans determination cases.
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As the Internal Revenue Service’s dispute resolution forum, Appeals grants consideration of these cases when requested by
the taxpayer. (Exam IRM provisions discuss the procedures followed in forwarding these cases to Appeals for consideration.)
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Taxpayers requesting an Appeals conference under the provisions of this section must file a protest addressing the proposed
adjustment. See IRM 8.6.1, Conference and Issue Resolution, for protest requirements.
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Once this type case is accepted in Appeals, it can be transferred from one office to another under the provisions of this
chapter. Procedures for transferring cases are found in IRM 8.20.6, Appeals Case Processing Manual, Interim Actions - Remittances,
Partials, Transfers, and Returns.
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If a conference is held on a "no immediate tax consequence"
case and a settlement is reached, follow normal closing procedures, including preparing an Appeals Transmittal and Case
Memo, Form 5402. Identify the case on Form 5402, item 2 - Special Features, as one involving the settlement of a "no immediate
tax consequence"
case. When appropriate, secure a closing agreement on all agreed cases. Close agreed cases using closing code 03.
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If settlement is not reached, include a statement on Form 5402 stating no agreement was reached. Identify the case as one
involving the settlement of a "no immediate tax consequence"
case on Form 5402, item 2 - Special Features. Close the case as an unagreed case using closing code 13 (unagreed pre-90).
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Policy Statement P-8-3 (formerly P-8-50) governs reopening "no immediate tax consequence"
cases.
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Send a copy of the Appeals Case Memo (ACM) and closing agreement, if applicable, to the appropriate function in the Area or
Campus.
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