Daily Tax Update - November 4, 2016: IRS Appeals Chief Clarifies Appeals Process Changes

IRS Appeals Chief Clarifies Appeals Process ChangesIRS Appeals Chief Kirsten Wielobob clarified certain changes to the IRS appeals process in a letter published by media outlets today.  As noted in prior DTU coverage, recent changes within Appeals had cause concern among some practitioners.  These changes included shifting most Appeals conferences away from in-person meetings to phone conferences, allowing Chief Counsel and/or Compliance to be present for Appeals conferences, and, perhaps of most concern, a widely-reported proposed change to shift authority to settle cases away from Appeals Team Case Leaders (ATCLs) to their managers.

Wielobob responded to practitioner concerns about these changes.  With regard to the settlement authority issue, she clarified that the IRS has decided to modify existing processes, rather than undertaking a wholesale change.  Wielobob confirmed that settlement authority would remain with the ATCLs.  Further, she indicated that Appeals will revise its procedures to be clear that a manager must review a case and propose any changes prior to the ATCL finalizing the settlement. 

Miscellaneous Guidance Released:

Notice 2016-64 provides the adjusted applicable dollar amount that applies for determining the Affordable Care Act’s Patient-Centered Outcomes Research Institute fee on issuers of a specified health insurance policy and on sponsors of an applicable self-insured health plan for policy years and plan years ending on or after October 1, 2016 and before October 1, 2017.

Notice 2016-67 describes the applicability of the market rate of return limitation rules to a defined benefit plan that expresses a participant’s accumulated benefit as the current value of an accumulated percentage of the participant's final average compensation, highest average compensation, or highest average compensation during a limited period of years (a type of plan often referred to as a “pension equity plan” or “PEP”).