In a response to many years of advocacy and mounting concern from the National Taxpayer Advocate (NTA) Erin Collins, the IRS recently issued internal guidance telling its staff that they should share Appeals Case Memorandums (ACMs) with taxpayers upon an informal request, according to the NTA Blog. The clarification is a meaningful step toward transparency and taxpayer rights, she said.
Collins said that for years she has been trying to convince the IRS Independent Office of Appeals to give taxpayers a copy of the ACM when each case is concluded. The Appeals Office routinely shares the ACMs—which illustrates how and why an Appeals Officer came to a final determination—with IRS Compliance personnel, although historically has not done so to taxpayers in Examination Appeal cases.
As the National Taxpayer Advocate, Collins said she has "raised this issue in multiple Annual Reports to Congress and in this blog, emphasizing that withholding the ACM from taxpayers undermines both the independence and transparency of Appeals."
Collins said that, over the years, she has heard from many taxpayers and practitioners that Appeals Office routinely says no to informal requests for ACMs, saying that there is an alleged policy against sharing them. But, this is a misstatement of existing IRS policy. For more than ten years, Internal Revenue Manual (IRM) 8.1.1.6.4(2) has clearly stated that taxpayers might informally ask for ACMs and that these documents are not categorically exempt from disclosure.
Collins said that sharing an ACM after an informal request falls short of her suggestion that the Appeals Office automatically share ACMs at the close of each case. However, the IRS reaffirming this right sends a strong message. The message is that the Appeals process must be open and accountable to the taxpayers it serves.
The Appeals Office plays a significant role in maintaining taxpayer trust in that agency, Collins said. As an independent forum for resolving disputes, it must uphold the highest standards of fairness and transparency. "Ensuring that taxpayers have access to the same information offered to IRS Compliance is certainly a matter of policy, but it’s also a matter of principle," she said.
Collins stated that the recent guidance is a promising step in the right direction. With further reforms, the Appeals Official can continue to move to a model of true independence and transparency that respects and upholds the rights of all taxpayers.