Because the tax system is always being updated, the function of the in-house tax practitioner is constantly becoming more complicated.
The in-house tax practitioner for a company is responsible for remaining constantly watchful and up to date on a wide variety of complicated business, tax, regulatory, and reporting changes that could have an impact on the organisation.
If that were not enough, the tax practitioner might have to justify the company’s chosen tax positions in front of the IRS during an audit.
When this occurs, there are occasionally problems that cannot be solved by working with the IRS examination team.
When this occurs, the in-house practitioner is required to also navigate the dispute resolution process of the IRS, which is typically accomplished by filing an administrative appeal with the IRS Independent Office of Appeals.
The process of appealing a decision is complicated in and of itself, and the details of those difficulties cannot be covered in this article.
However, to put their company in a strong position to resolve a tax dispute with Appeals, the in-house practitioner needs to make several key strategic considerations.
These considerations are listed below. If that were not sufficient, the tax practitioner might have to defend the company’s chosen tax stance in front of the Internal Revenue Service (IRS) throughout an audit.
When something like this takes place, there are often challenges that can’t be handled by working with the IRS examination team.
When this occurs, the in-house practitioner is required to also navigate the dispute resolution process of the IRS. This is typically done by filing an administrative appeal with the IRS Independent Office of Appeals.
When this occurs, the in-house practitioner is required to navigate the dispute resolution process of the IRS. The act of appealing a decision is itself a sophisticated process, and the specifics of the challenges involved cannot be explored in this article due to space limitations.
This article focuses on three essential factors that the in-house practitioner ought to think about either just before starting the appeals procedure or just after it has already begun.
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Know your exposure: The company’s in-house practitioner must do a prompt and precise analysis of the implications of the proposed adjustment made by the IRS for the business.
The in-house practitioner needs to provide an answer that is some variant on the following questions to complete this assessment:
Does the proposed adjustment have a significant impact on the company’s operations (for example, is the proposed adjustment significant enough that it requires changes to the way the company does business, necessitating the involvement of others outside of the tax function?);
(ii) does the proposed adjustment affect more than just the current year under review (for example, is the Internal Revenue Service proposing an accounting method change that will require the company to make a change to not only the year under review?); and
(iii The in-house practitioner can correctly frame the issue for other internal decision makers and begin to construct a plan to remedy the issue that takes into account the impact on the organisation if they answer these questions.
