Ex parte rules depend on whether the Appeals case is docketed

Plain-English summary

Chief Counsel addressed whether Appeals must follow ex parte communication rules while coordinating a settlement with Area Counsel because a related case was in Counsel jurisdiction. If the proposed Appeals settlement concerned a docketed case, Revenue Procedure 2012-18 treated the substantive communication as an exception to the ex parte rules. If it concerned a non-docketed open Appeals case, the rules still applied because the field attorney had acted as an advocate for the originating function in the related case. In that situation, Counsel's oral or written input on the settlement had to be shared with the taxpayer or representative, who had to receive an opportunity to respond.

Ruling snapshot

• Question: Do ex parte communication rules apply when Appeals coordinates a settlement with Area Counsel due to a related case in Counsel jurisdiction?
• Outcome: Advice given
• Key authorities: Rev. Proc. 2012-18 §§ 2.03(13) and 2.06(2)(a); IRM 8.4.1.17.1; CC Notice 2012-010

Full text (IRS public release)

ID: CCA_2014091817230310 [Third Party Communication:

UILC: 9999.00-00
Date of Communication: Month DD, YYYY]

Number: 201504016
Release Date: 1/23/2015
From:
Sent: Thursday, September 18, 2014 5:23:03 PM
To:
Cc:
Bcc:
Subject: RE: Ex Parte Question

You have asked whether Appeals must follow the ex parte communication rules when it is coordinating the settlement of an Appeals case with Area Counsel when there is a related case in Counsel jurisdiction pursuant to the provisions of IRM 8.4.1.17.1, Settlement of Related Cases. That subsection falls under the general heading of IRM 8.4, Appeals Docketed Cases, IRM 8.4.1, Procedures for Processing and Settling Docketed Cases and IRM 8.4.1.17, Settlement of Docketed Cases. IRM 8.4.1.17.1 generally provides that Appeals must coordinate with Counsel, and receive Counsel approval of settlement terms, when settling a case for which a related case is pending in Counsel jurisdiction. It does not make a distinction between Appeals non-docketed cases and Appeals docketed cases. As you know, IRM 8.4.1.17.1 does not appear to have been updated since the clarification of the ex parte communication rules in Revenue Procedure 2012-18.

It is our view that, if the substantive communication between Appeals and Counsel concerning the terms of the proposed Appeals settlement pertains to a docketed case in Appeals jurisdiction, then Rev. Proc. 2012-18 Sec. 2.06(2)(a) would apply as an exception to the ex parte rules. However, if the substantive communication pertains to a non-docketed open Appeals case, the ex parte rules must be observed in accordance with Rev. Proc. 2012-18 Sec. 2.03(13). The field attorney served as an advocate for the originating function in the related case, and the Counsel input (oral or written) on the Appeals settlement would have to be shared with the taxpayer or taxpayer’s representative, with an opportunity for a response, as set forth in Rev. Proc. 2012-18. See also, CC Notice-2012-010, Update of Rules Governing Ex Parte Communications Between Chief Counsel Attorneys and Employees of Appeals.