With its budget in crisis and facing cuts each year, the IRS has attempted to reduce costs where possible. One idea that the IRS is pushing to reduce costs is to hold Appeals conferences remotely through either conference calls or video conferences. Is this a good idea? In short, the answer is no.
The IRS recently changed the Internal Revenue Manual section on IRS Appeals conferences. The revised manual section states that the Service will no longer automatically offer in-person appeals conferences, and that the IRS prefers teleconferences and video conferences over in-person meetings in order to reduce travel expenses and expedite the settlement of cases.
The IRS, within the last year or so, has begun issuing a final Information Document Request that requests the taxpayer to agree to underlying facts relating to an issue under audit (the Facts IDR).
My general advice to clients is not respond to the Facts IDR.
The Facts IDR is problematic in that you generally do not have the Agent’s Notice of Proposed Adjustment (NOPA) when you are asked to agree upon the facts. Consequently, you are not yet in a position to know the Agent’s legal theory for proposing an adjustment on the tax issue under consideration. It might not be clear whether the facts being set forth are even relevant to the disputed issue. In addition, a list of agreed-upon facts can be used to write many alternative narratives (not alternative facts!), and different conclusions might be drawn from the same facts.