On April 18, 2018, the House passed the Taxpayer First Act (H.R. 5444), which includes provisions that would establish an Internal Revenue Service Independent Office of Appeals (“Independent Appeals”). In an effort to strengthen the independence of the existing IRS Office of Appeals, the bill generally would (i) require the IRS to provide notice and an explanation to a taxpayer whose request for consideration is denied, (ii) require the IRS Office of Chief Counsel (“Chief Counsel”) to ensure any staff that provides advice to Independent Appeals with respect to a matter was not previously involved in such matter, and (iii) entitle certain taxpayers to access to the non-privileged portions of materials developed by the IRS case files on their matters.


The IRS has an Office of Appeals that reviews administrative determinations arising from the IRS’s collection and examination activities and attempts to resolve disputes between the IRS and taxpayers without litigation. Currently, the IRS has broad discretion to determine which taxpayers have access to the Office of Appeals. Although taxpayers generally receive consideration by the Office of Appeals, there are exceptions under which consideration can be denied, such as cases in which inadequate time remains under the statute of limitations. In addition, the Office of Appeals has been criticized for its lack of independence from the other divisions within the IRS.

The Taxpayer First Act includes measures intended to ensure taxpayers’ access to, and strengthen the independence of, the IRS Office of Appeals.

Independent Office of Appeals

Although the IRS historically has had an Office of Appeals, the Taxpayer First Act would for the first time codify it in law, establishing an office to be known as the Internal Revenue Service Independent Office of Appeals. Independent Appeals would be headed by a Chief of Appeals.

Notice Procedures; Congressional Oversight

The bill would require the IRS to prescribe notice and protest procedures for taxpayers who are denied Independent Appeals consideration. The bill would require the procedures to include a requirement that the IRS provide the taxpayer with a written notice that sets forth the facts underlying the basis for the IRS’s denial and a detailed explanation of the reasons for denying the request. The notice also must advise the taxpayer of its right to protest the denial of Independent Appeals consideration.

The bill would also would require the IRS to provide an annual report to Congress detailing the number of cases in which a taxpayer was denied access to Independent Appeals and the reasons for such denials.

There is an exception in the bill under which denied cases that involve only frivolous positions are not subject to these notice procedures.

Advice from Office of Chief Counsel

The Taxpayer First Act also includes measures to ensure that Independent Appeals receives independent advice from Chief Counsel. Under the bill, Chief Counsel would be responsible for ensuring that any advice provided with respect to a matter under consideration by Independent Appeals be provided only by staff who were not involved in (i) advising the IRS employees working on the case prior to its referral to Independent Appeals or (ii) preparing the case for litigation.

Access to Case Files

Currently, to gain access to the case file developed by the IRS, a taxpayer would be required to file a Freedom of Information Act (“FOIA”) request, which can be a complicated filing. The Taxpayer First Act would make it easier for certain taxpayers to gain access to this information.

Under the bill, “specified taxpayers” that have an Independent Appeals conference scheduled would be entitled to receive the IRS case file no later than ten days prior to the conference. For this purpose, a “specified taxpayer” is (i) an individual taxpayer with adjusted gross income below $400,000 or (ii) an entity taxpayer with gross receipts below $5 million.