rp-00-43.pdf

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October 23, 20004042000–43 I.R.B.
Prohibition of Ex Parte
Communications Between
Appeals Officers And Other
Internal Revenue Service
Employees
Rev. Proc. 2000–43
TABLE OF CONTENTS
SECTION 1. PURPOSE AND SCOPE
SECTION 2. BACKGROUND
SECTION 3. GUIDANCE
CONCERNING THE EX PARTE
COMMUNICATIONS
PROHIBITION DESCRIBED IN
SECTION 1001(a)(4) OF THE
INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM
ACT OF 1998
SECTION 4. EFFECTIVE DATE
SECTION 1. PURPOSE AND SCOPE
Section 1001(a) of the Internal Revenue
Service Restructuring and Reform Act of
1998, Pub. L. 105–206, 112 Stat. 685
(RRA 98), states that “The Commissioner
of Internal Revenue shall develop and im-
plement a plan to reorganize the Internal
Revenue Service. The plan shall ...
(4) ensure an independent appeals
function within the Internal Rev-
enue Service, including the prohibi-
tion in the plan of ex parte commu-
nications between appeals officers
and other Internal Revenue Service
employees to the extent that such
communications appear to compro-
mise the independence of the ap-
peals officers.”
Notice 99–50, 1999–40 I.R.B. 444 (Octo-
ber 4, 1999), set forth a proposed revenue
procedure concerning the ex parte com-
munication prohibition. The proposed
revenue procedure provided guidance in
the form of a series of questions and an-
swers that address situations frequently
encountered by the Service during the
course of an administrative appeal and in-
vited public comment. The Department
of the Treasury and the Internal Revenue
Service have considered all comments re-
ceived, and the proposed revenue proce-
dure has been modified to take into ac-
count the concerns raised. Specifically,
the scope of permissible communications
has been clarified, limitations have been
placed on communications between Ap-
peals and certain employees in the Office
of Chief Counsel, concerns about com-
munications that take place in the context
of multi-functional meetings have been
addressed, and other questions and an-
swers have been modified. In addition,
new questions and answers have been in-
cluded to define key terms and clarify re-
sponsibilities of the parties, permit tax-
payers/representatives to waive the
prohibition, and to address certain man-
agement issues.
SECTION 2. BACKGROUND
In 1927, the Internal Revenue Service
established an administrative appeal
process to resolve tax disputes without lit-
igation. The Appeals mission is to re-
solve tax controversies, without litigation,
on a basis that is fair and impartial to both
the Government and the taxpayer. Local
Appeals Officers have traditionally re-
ported to different managers than the Ser-
vice officials who proposed the adjust-
ment. Appeals has historically been able
to settle the vast majority of the cases that
come within its jurisdiction.
The inventory of cases handled by Ap-
peals falls into two major categories —
nondocketed and docketed B determined
by whether the case is pending in the
United States Tax Court. Nondocketed
cases typically involve an administrative
protest by the taxpayer of the findings and
conclusions of the Examination, Collec-
tion, or other IRS function that initially
considers a taxpayer’s case. The tax-
payer’s protest is typically followed by a
conference, or series of conferences, with
the taxpayer or the taxpayer’s representa-
tive, during which Appeals and the tax-
payer attempt to reach resolution of the is-
sues in dispute. Docketed cases involve
disputes where the taxpayer has filed a
petition in the U.S. Tax Court, contesting
a determination made by the Service in a
statutory notice of deficiency. Following
the filing of the petition, taxpayers who
have not previously availed themselves of
the opportunity for an Appeals conference
generally are afforded an opportunity to
resolve their case with Appeals before the
case proceeds further in the litigation
process. See generallyRev. Proc. 87–24,
1987–1 C.B. 720. In both types of dis-
putes, Appeals has broad authority to ne-
gotiate settlements by applying a “hazards
of litigation” standard.
Proceedings before Appeals have tradi-
tionally followed a much less formal
course than court proceedings. While
proceedings before Appeals are designed
to be fair and impartial, they are not sub-
ject to judicial rules of evidence or proce-
dure. Some early legislative proposals
during 1998 would have required Appeals
to adopt more formal and less flexible
processes. S. Rep. No. 1669, 105
th
Cong.,
2
nd
Sess., § 304(a) (Feb. 24, 1998), would
have established an independent Office of
Appeals in the Internal Revenue Service,
the head of which was to be appointed by
and report directly to the Oversight
Board. Further, this proposal would have
barred Appeals from considering issues
not “raised” by the originating function
and prohibited “any communication” with
the originating function unless the tax-
payer or taxpayer’s representative had an
opportunity to be present.
As ultimately enacted, § 1001(a)(4) of
RRA 98 did not impose a comprehensive
overhaul of Appeals’ processes. Instead,
that section requires the IRS, as part of its
reorganization plan, to establish an inde-
pendent Office of Appeals “within the In-
ternal Revenue Service.” The plan must
prohibit ex parte communications “to the
extent such communications appear to
compromise the independence” of Ap-
peals. When the evolution of § 1001(a)(4)
of RRA 98 during the1998 legislative
process is considered in light of Appeals
longstanding methods of operation, it can
be fairly concluded that Appeals must be
accorded a significant degree of indepen-
dence from other IRS components, and
should be mindful to avoid ex parte com-
munications with other IRS functions that
might appear to compromise that indepen-
dence. The statutory provision cannot,
however, be interpreted as mandating a
major redesign of the fundamental
processes Appeals has traditionally fol-
lowed to carry out its dispute resolution
mission.
The procedures set forth in this Rev-
enue Procedure are designed to accom-
modate the overall interests of tax admin-

2000–43 I.R.B.405October 23, 2000
istration, while preserving operational
features that are vital to Appeals’ case res-
olution processes within the structure of
the IRS and ensuring more open lines of
communication between Appeals and the
taxpayer/representative. Thus, in order to
preserve the informal give-and-take and
flexibilities that have been conducive to
achieving settlements in Appeals, the
guidance provided in this revenue proce-
dure does not adopt the formal ex parte
procedures that would apply in a judicial
proceeding. The guidance is designed to
ensure the independence of the Appeals
organization, while preserving the role of
Appeals as a flexible administrative set-
tlement authority, operating within the In-
ternal Revenue Service’s overall frame-
work of tax administration
responsibilities. For example, as more
fully explained in Section 3 below:
nAppeals will retain procedures for (a)
returning cases that are not ready for
Appeals consideration, (b) raising
certain new issues, and (c) seeking
review and comments from the origi-
nating IRS function with respect to
new information or evidence fur-
nished by the taxpayer or representa-
tive.
nAppeals will continue to be able to
obtain legal advice from the Office of
Chief Counsel, subject to limitations
designed to ensure that the advice to
Appeals is not provided by the same
field attorneys who previously gave
advice on the same issue to the IRS
officials who made the determination
Appeals is reviewing. These limita-
tions adopt some of the suggestions
received in response to Notice 99–50
and reflect a balance between meet-
ing Appeals’ needs for legal assis-
tance and avoiding ex parte commu-
nications that might appear to
compromise Appeals’ independence.
nFinally, the Revenue Procedure
makes clear that the Commissioner
and others responsible for overall
IRS operations (including Appeals)
may continue to communicate ex
parte with Appeals in order to fulfill
their responsibilities.
SECTION 3. GUIDANCE
CONCERNING THE EX PARTE
COMMUNICATIONS
PROHIBITION DESCRIBED IN
SECTION 1001(a)(4) OF THE
INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM
ACT OF 1998
Q-1 What is “ex parte communication”
and when is it prohibited?
A-1 For the purposes of this revenue pro-
cedure, ex parte communications are com-
munications that take place between Ap-
peals and another Service function
without the participation of the taxpayer or
the taxpayer’s representative
(taxpayer/representative). While the legis-
lation refers to “appeals officers,” the
overall intent of the ex parte provision is
to ensure the independence of the entire
Appeals organization. Ex parte communi-
cations between any Appeals employee,
e.g., Appeals Officers, Appeals Team Case
Leaders, Appeals Tax Computation Spe-
cialists, and employees of other Internal
Revenue Service offices are prohibited to
the extent that such communications ap-
pear to compromise the independence of
Appeals.
Q-2 Is the prohibition on ex parte
communications limited to oral
communications?
A-2 No. The prohibition is not limited to
oral communications. It applies to any
form of communication, oral or written
(manually or computer generated).
Q-3 Are communications between
Appeals Officers and other Appeals
employees subject to the prohibition on
ex parte communications?
A-3 No. As indicated in A-1 above, the
ex parte communication prohibition was
intended to preserve the independence of
the Appeals organization as a whole.
Intra-Appeals communications during the
deliberation process do not compromise or
appear to compromise that independence.
Appeals employees may communicate
freely with other Appeals employees with-
out inviting the taxpayer/representative to
participate.
Q-4 Is the administrative file transmitted
to Appeals by the office that made the
determination which is subject to the
Appeals process (the originating
function) considered to be an ex parte
communication within the context of this
revenue procedure?
A-4 No. The administrative file is not
considered to be an ex parte communica-
tion within the context of this revenue pro-
cedure. The administrative file, contain-
ing the proposed determination and the
taxpayer’s protest or other approved
means of communicating disagreement
with the proposed determination, sets
forth the boundaries of the dispute be-
tween the taxpayer and the Service and
forms the basis for Appeals to assume ju-
risdiction.
Q-5 Does the prohibition on ex parte
communications extend to discussions
between Appeals employees and the
originating function during the course
of preliminary review of a newly
assigned case?
A-5 It depends on the nature of the com-
munication. During the preliminary re-
view of a newly assigned case, officials in
Appeals may ask questions that involve
ministerial, administrative, or procedural
matters and do not address the substance
of the issues or positions taken in the
case. For example, Appeals employees
may make the following types of inquiries
without involving the taxpayer/represen-
tative:
nQuestions about whether certain in-
formation was requested and
whether it was received.
nQuestions about whether a document
referred to in the workpapers that the
Appeals Officer cannot locate in the
file is available.
nQuestions to clarify the content of il-
legible documents or writings.
nQuestions about case controls on the
IRS’s management information sys-
tems.
nQuestions relating to tax calculations
that are solely mathematical in na-
ture. Communications with the orig-
inating function which extend be-
yond matters of the type described
above and address the substance of
the issues in the case are prohibited
unless the taxpayer is given the op-
portunity to participate. Examples
of prohibited communications in-
clude:
nDiscussions about the accuracy of
the facts presented by the taxpayer
and the relative importance of the
facts to the determination.
nDiscussions of the relative merits or

October 23, 20004062000–43 I.R.B.
alternative legal interpretations of au-
thorities cited in a protest or in a re-
port prepared by the originating func-
tion.
nDiscussions of the originating func-
tion’s perception of the demeanor or
credibility of the taxpayer or tax-
payer’s representative.
Q-6 Does the ex parte communications
prohibition apply to Appeals
consideration of cases which originated
in the Collection function, e.g.,
collection due process (CDP) appeals,
collection appeals program (CAP) cases,
offers in compromise, trust fund
recovery penalty cases, etc.?
A-6 Yes. The principles applicable to dis-
cussions between Appeals employees and
officials in other originating functions also
apply to discussions between Appeals and
Collection employees. Appeals may not
engage in discussions of the strengths and
weaknesses of the issues and positions in
the case, which would appear to compro-
mise Appeals’ independence. The tax-
payer/representative should be given an
opportunity to participate in any discus-
sion that involves matters other than min-
isterial, administrative or procedural mat-
ters.
Section 3401 of RRA 98 (§§ 6320 and
6330 of the Internal Revenue Code), re-
garding due process in IRS collection ac-
tions, states that at a hearing, the Appeals
Officer must obtain verification that the
requirements of any applicable law or ad-
ministrative procedure have been met.
Communications seeking to verify com-
pliance with legal and administrative re-
quirements are similar to the ministerial,
administrative or procedural inquiries dis-
cussed in A-5 above. Therefore, such
communications are not subject to the pro-
hibition on ex parte communications.
Q-7 Does the prohibition on ex parte
communications change the criteria for
premature referrals?
A-7 As a general rule, there is no change
to current criteria or procedures. In
essence, RRA 98 reinforces the instruc-
tions in Section 8.2.1.2 of the Internal
Revenue Manual (IRM) and reaffirms Ap-
peals’ role as the settlement arm of the
Service. If a case is not ready for Appeals
consideration, Appeals may return it for
further development or for other reasons
described in IRM 8.2.1.2. Appeals may
communicate with the originating func-
tion regarding the anticipated return of the
case, but may not engage in a discussion
of matters beyond the types of ministerial,
administrative or procedural matters set
forth in A-5 as part of a discussion of
whether the premature referral guidelines
require further activity by the originating
function.
Q-8 Is there any change to the Appeals
new issue policy?
A-8 No. The prohibition against ex parte
communications does not affect Appeals’
existing policy about raising new issues in
Appeals. However, any new issue must
first satisfy Appeals’ new issue policy.
New issues must continue to meet the
“material” and “substantial” tests of IRM
8.6.1.4 and succeeding sections. If discus-
sions with the originating function are
needed in order to evaluate the strengths
and weaknesses of the possible new issue,
the taxpayer/representative must be given
an opportunity to participate in such dis-
cussions. Appeals will continue to follow
the principles of Policy Statement P-8-49
and the “General Guidelines” outlined in
IRM 8.6.1.4.2 in deciding whether or not
to raise a new issue.
Q-9 May Appeals continue to have
ongoing communication with the
originating function during the course of
an appeal?
A-9 Yes. However, the prohibition on ex
parte communications will affect the man-
ner in which Appeals has traditionally op-
erated during the course of the appeal.
Appeals must give the taxpayer/represen-
tative the opportunity to participate in any
discussions with the originating function
which concern matters beyond the minis-
terial, administrative or procedural matters
described in A-5 above.
Q-10 What should Appeals do if new
information or evidence is submitted?
Can Appeals still return the new material
to the originating function for review
and comment?
A-10 There is no change to existing pro-
cedures. The principles in IRM 8.2.1.2.2
remain in effect. The originating function
should be given the opportunity to timely
review and comment on significant new
information presented by the taxpayer.
“Significant new information” is informa-
tion of a non-routine nature which, in the
judgment of Appeals, may have had an
impact on the originating function’s find-
ings or which may impact on the Appeals’
independent evaluation of the litigating
hazards. Generally, the review can be ac-
complished by sending the material to the
originating function while Appeals retains
jurisdiction of the case and proceeds with
resolution of other issues. However, if it
appears that important new information or
evidence was purposely withheld from the
originating function, the entire case should
be returned to the originating function and
jurisdiction relinquished pursuant to IRM
8.2.1.2.2(3). The taxpayer/representative
must be notified when a case is returned to
the originating function or new material
not available during initial consideration
has been sent to the originating function.
The results of the originating function’s
review of the new information will be
communicated to the taxpayer/representa-
tive.
Q-11 Does the prohibition on ex parte
communications have any impact on the
relationship between Appeals and
Counsel?
A-11 Chief Counsel is the legal adviser
to the Commissioner of Internal Revenue
and his or her officers and employees (in-
cluding employees of Appeals) on all
matters pertaining to the interpretation,
administration and enforcement of the in-
ternal revenue laws and related statutes.
Attorneys in the Office of Chief Counsel
are expected to provide legal advice based
on a determination of “. . . the reasonable
meaning of various Code provisions in
light of the Congressional purpose in en-
acting them,” without bias in favor of ei-
ther the Government or the taxpayer.
Rev. Proc. 64–22, 1964–1 C.B. 689. To
balance Appeals employees’ need to ob-
tain legal advice with the requirement that
they avoid ex parte communications that
would appear to compromise Appeals’ in-
dependence, the following limitations
will apply to communications between
Appeals employees and attorneys in the
Office of Chief Counsel in cases not
docketed in the United States Tax Court:
Appeals employees should not commu-
nicate ex parte regarding an issue in a
case pending before them with Counsel

2000–43 I.R.B.407October 23, 2000
field attorneys who have previously pro-
vided advice on that issue in the case to
the IRS employees who made the deter-
mination Appeals is reviewing. Counsel
will assign a different attorney to provide
assistance to Appeals. If an Appeals em-
ployee believes it is necessary to seek ad-
vice from any Counsel field attorney who
previously provided advice to the origi-
nating function regarding that issue in the
case, the taxpayer/representative will be
provided an opportunity to participate in
any such communications.
Appeals’ requests for legal advice that
raise questions that cannot be answered
with a high degree of certainty by appli-
cation of established principles of law to
particular facts will be referred to the
Chief Counsel National Office and will
be handled as requests for field service
advice or technical advice, as appropri-
ate, in accordance with applicable proce-
dures. The response of the National Of-
fice to Appeals will be disclosed to the
taxpayer in accordance with § 6110.
Appeals employees are cautioned that,
while they may obtain legal advice from
the Office of Chief Counsel, they remain
responsible for independently evaluating
the strengths and weaknesses of the spe-
cific issues presented by the cases as-
signed to them, and for making indepen-
dent judgments concerning the overall
strengths and weaknesses of the cases
and the hazards of litigation. Consistent
with this assignment of responsibility,
Counsel attorneys will not provide advice
that includes recommendations of settle-
ment ranges for an issue in a case pend-
ing before Appeals or for the case as a
whole.
The foregoing limitations on ex parte
communications do not apply to cases
docketed in the United States Tax Court.
Docketed cases will be handled in accor-
dance with Rev. Proc. 87–24, 1987–1
C.B. 720, and the Tax Court Rules of
Practice and Procedure.
Q-12 Appeals is required to submit
certain cases to the Joint Committee on
Taxation for review. On occasion, the
Joint Committee (or its staff) will
question a settlement or raise a new
issue. Are communications with the
Joint Committee (or its staff) covered by
the ex parte communications
prohibition?
A-12 No. The prohibition applies only
to communications between Appeals and
other Internal Revenue Service employ-
ees.
Q-13 Does the prohibition on ex parte
communications have any impact on the
requirement that Industry
Specialization Program (ISP) issues in
cases in Appeals jurisdiction be reviewed
and approved by the Appeals ISP
Coordinator?
A-13 No. Existing procedures for review
and approval remain in place. The Ap-
peals ISP Coordinator serves as a re-
source person for the Appeals organiza-
tion. The purpose of the review is to
ensure consistency of settlements and ad-
herence to approved settlement guide-
lines. Communications between Appeals
employees and the Appeals ISP Coordina-
tor are entirely internal within Appeals,
and consequently, the ex parte communi-
cations prohibition does not apply.
Q-14 Delegation Order 247, 1996-1
C.B. 356, gives Examination case
managers limited settlement authority to
resolve ISP coordinated issues which
have Appeals Settlement Guidelines,
provided that they secure the review and
approval of both the Examination and
Appeals ISP Coordinators. Would such
communications constitute a violation of
the ex-parte communications
prohibition?
A-14 No. The purpose of the review is to
ensure that the resolution by Examination
fits within the guidelines developed by
Appeals and that the application of the
guidelines is consistent. The role of the
Appeals ISP coordinator is directive in
nature and has no impact on the indepen-
dence of Appeals.
Q-15 Does the prohibition on ex parte
communications apply in the context of
meetings which include representatives
from Appeals, Counsel, Collection and
Examination (ACCE meetings), industry
wide ISP coordination meetings, or
meetings of Compliance Councils or the
Large Case Policy Board?
A-15 Generally, no. Meetings of this
type usually involve general discussions
of how to handle technical issues or pro-
cedural matters. As long as the discus-
sions do not identify specific taxpayers,
the prohibition on ex parte communica-
tions would not apply. Participants in
cross-functional meetings need to remain
cognizant of the prohibition on ex parte
communications and ensure that discus-
sions do not appear to compromise the in-
dependence of Appeals.
Q-16 Does the prohibition on ex parte
communications apply to
communications between Appeals and
the Commissioner or other Service
officials who have overall supervisory
responsibility for IRS operations?
A-16 No. In accordance with § 7803, the
Commissioner is responsible for manag-
ing and directing the administration of the
internal revenue laws and tax conventions
to which the United States is a party. In
the course of exercising that statutory re-
sponsibility, the Commissioner and those
officials, such as the Deputy Commis-
sioner Operations, who have overall su-
pervisory responsibility for IRS opera-
tions may communicate with Appeals
about specific cases or issues and may di-
rect that other IRS officials participate in
meetings or discussions about such cases
or issues without providing the taxpayer
or representative an opportunity to partic-
ipate.
Q-17 Does the prohibition on ex parte
communications apply to discussions
Appeals employees have with personnel
in the IRS competent authority office
regarding a taxpayer’s request for relief
under a tax treaty?
A-17 No. Communications between Ap-
peals employees and IRS officials consid-
ering relief under competent authority
procedures are not subject to the ex parte
prohibitions because the Appeals Officer
may assume that the competent authority
is acting at the request, and with the con-
sent, of the taxpayer.
Q-18 Does the prohibition on ex parte
communications have any impact on
Appeals communications with the
Taxpayer Advocate Service (TAS) on an
open case?
A-18 No. Communications by Appeals
with the TAS that are initiated by the TAS
are not subject to the prohibition because
the Appeals Officer may assume that the

October 23, 20004082000–43 I.R.B.
TAS is acting at the request, and with the
consent, of the taxpayer.
Q-19 Are communications between
Appeals and outside consultants or
experts under contract to the IRS
subject to the ex parte communication
prohibition?
A-19 Yes. Under the ex parte rules
adopted here, outside consultants or ex-
perts under contract to the IRS (other than
those employed directly by Appeals) will
be treated as “other IRS employees.”
Therefore, the principles set forth in A-5
will apply. Appeals must give the tax-
payer/representative the opportunity to
participate in case-specific discussions
that concern matters beyond the non-sub-
stantive ministerial, administrative or pro-
cedural matters described in A-5 above.
Q-20 A number of questions and
answers have referred to
communications with the “originating
function.” How is that term defined?
A-20 An “originating function” is an or-
ganization within the IRS that makes de-
terminations which are subject to the Ap-
peals process. For purposes of this
revenue procedure, the term includes the
Examination, Collection, Service Center,
International, and Tax Exempt/Govern-
ment Entities functions, or their successor
organizations.
Q-21 Several responses in this
document refer to the
taxpayer/representative being given an
“opportunity to participate.” What does
this phrase mean?
A-21 It means that the taxpayer/represen-
tative will be given a reasonable opportu-
nity to attend a meeting or be a participant
in a conference call between Appeals and
the originating function when the
strengths and weaknesses of issues or po-
sitions in the taxpayer’s case are dis-
cussed. The taxpayer/representative will
be notified of a scheduled meeting or con-
ference call and invited to participate. If
the taxpayer/representative is unable to
participate at the scheduled time, reason-
able accommodations will be made to
reschedule. This does not mean that the
Service will delay scheduling a meeting
for a protracted period of time to accom-
modate the taxpayer/representative. Facts
and circumstances will govern what con-
stitutes a reasonable delay.
Q-22 May the taxpayer/representative
waive the prohibition on ex parte
communications?
A-22 Yes. If the taxpayer/representative
is given an opportunity to participate in a
discussion, but decides that such partici-
pation is unnecessary, the prohibition can
be waived. Generally, a waiver will be
granted on a communication-by-commu-
nication basis. However, if the
taxpayer/representative so desires, the
waiver could encompass all communica-
tions that might occur during the course
of Appeals’ consideration of a specified
case. The Appeals Officer should docu-
ment the waiver in the Case Activity
Record.
Q-23 What if the
taxpayer/representative declines to
participate or seeks to delay the
meeting/conference call beyond a
reasonable time?
A-23 Appeals should proceed with the
meeting or discussion and document the
taxpayer/representative’s declination or
the reason for proceeding in the absence
of the taxpayer/representative. This could
be accomplished by an entry in the Case
Activity Record and a letter to the tax-
payer/representative documenting the rea-
son for proceeding.
Q-24 The IRM provides for
computational review within 120 days of
a team case being assigned. If this
review reveals computational errors
affecting the proposed tax liability, can
Appeals discuss these errors with the
originating function without violating
the prohibition on ex parte
communications?
A-24 It depends on the nature of the
error. If the discrepancy is purely mathe-
matical, any discussion would likely be
informational only, and no violation of
the prohibition is likely. Both the tax-
payer/representative and the originating
function would be advised before a math-
ematical correction is made.
However, if the error involves the inter-
pretation of a legal principle or applica-
tion of the law to a particular set of facts,
the taxpayer/representative should be af-
forded the opportunity to participate in
any scheduled meetings with the originat-
ing function to discuss the discrepancy.
In such cases, there may be instances
where the best approach is for Appeals to
return the case for further development
and correction.
Q-25 Does the prohibition on ex parte
communications apply to pre-
conference meetings between Appeals
and Examination?
A-25 Yes. This is clearly a situation
where the intended communications
could appear to compromise the indepen-
dence of Appeals. Pre-conference meet-
ings should not be held unless the tax-
payer/representative is given the
opportunity to participate.
Q-26 Does the prohibition on ex parte
communications apply to post-settlement
conferences between Appeals and
Examination?
A-26 No. The post-settlement confer-
ence with Examination is intended to in-
form Examination about the settlement of
issues and to supply information that may
be helpful in the examination of subse-
quent cycles. Appeals’ objective is to en-
sure that Examination fully understands
the settlement and the rationale for the
resolution. In addition, the conference
provides an opportunity for Appeals to
discuss with Examination the application
of Delegation Orders 236 and 247 (i.e.,
settlement by Examination consistent
with prior Appeals settlement or ISP set-
tlement guidelines) to issues settled by
Appeals.
The tax periods that are the subject of
the post-settlement conference have been
finalized, and the participants are cau-
tioned to limit discussion to the results in
the closed cycle. Discussion of the reso-
lution of issues present in the closed peri-
ods does not jeopardize the independence
of Appeals. Any discussion that ad-
dresses open cycles of the same taxpayer
should be postponed, and the guidance
provided in this revenue procedure relat-
ing to ongoing disputes should be fol-
lowed.
Q-27 Does the prohibition on ex parte
communications alter existing
procedures for handling claims filed late
in the Appeals process?

2000–43 I.R.B.409October 23, 2000
A-27 No. There is no change to existing
procedure. The claim should be referred
to the originating function with a request
for expedited examination. Because such
a referral is in the nature of a ministerial
act and involves no discussion about the
strengths and weaknesses of the issue, the
referral is not subject to the prohibition.
Q-28 How will the Service monitor
compliance with the prohibition on ex
parte communications?
A-28 Employees will receive training on
the contents of this revenue procedure
and will be encouraged to seek manager-
ial guidance whenever they have ques-
tions about the propriety of an ex parte
communication. Managers will consider
feedback from other functions and will
be responsible for monitoring compli-
ance during their day-to-day interaction
with employees, as well as during work-
load reviews and closed case reviews.
Violations will be addressed in accor-
dance with existing administrative and
personnel processes.
Q-29 Are IRS employees assigned to
functions other than Appeals
responsible for complying with the
prohibition on ex parte
communication?
A-29 Yes. It is recognized that Appeals
cannot always fully control communica-
tions from other IRS personnel. Appeals
will make every effort to promptly termi-
nate any discussion that verges into mat-
ters not permitted by these rules. How-
ever, all IRS and Counsel employees
share the responsibility to ensure that
communications do not appear to com-
promise the independence of Appeals.
Violations will be addressed in accor-
dance with existing administrative and
personnel processes.
SECTION 4. EFFECTIVE DATE
This revenue procedure is effective for
communications between Appeals Offi-
cers and other Internal Revenue Service
employees which take place after Octo-
ber 23, 2000, the date this revenue proce-
dure is published in the Internal Revenue
Bulletin.
DRAFTING INFORMATION
The principal author of this revenue proce-
dure is David M. Geber, Appeals LMSB
Operations, Headquarters Appeals. For
further information regarding this revenue
procedure, contact Mr. Geber at (202)
694-1827 (not a toll-free number).
Rev. Proc. 2000–44
count factors under § 846 for accident
year 2000. All the discount factors pre-
sented in this section were determined
using the applicable interest rate under
§ 846(c) for 2000, which is 6.09 percent,
and by assuming all loss payments occur
in the middle of the calendar year.
.02 If the groupings of individual lines
of business on the annual statement
change, taxpayers must discount the un-
paid losses on the affected lines of busi-
ness in accordance with the discounting
patterns that would have applied to those
unpaid losses based on their classification
on the 1995 annual statement. SeeRev.
Proc. 98–11, 1998–1 C. B. 358, section 2,
for additional background on discounting
under section 846 and the use of the Sec-
retary’s tables.
.03 Section V of Notice 88–100,
1988–2 C.B. 439, provides a composite
discount factor to be used in determining
the discounted unpaid losses for accident
years that are not separately reported