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For years, I have urged the IRS Independent Office of Appeals (Appeals) to provide taxpayers with a copy of the Appeals Case Memorandum (ACM) at the conclusion of every case. Appeals routinely shares the ACM, which explains how and why an Appeals Officer came to a final determination, with IRS Compliance personnel but historically has not done so with the taxpayer in Examination Appeal cases. As the National Taxpayer Advocate, I have raised this issue in multiple Annual Reports to Congress and in this blog, emphasizing that withholding the ACM from taxpayers undermines both the independence and transparency of Appeals.
Over the years I have heard from many taxpayers and practitioners that Appeals routinely refuses informal requests for ACMs, often citing an alleged policy against sharing them. However, this is a misstatement of existing IRS policy. For over a decade, Internal Revenue Manual (IRM) 8.1.1.6.4(2) has made clear that taxpayers may informally request ACMs and that these documents are not categorically exempt from disclosure.
In response to years of advocacy and mounting concern, Appeals recently issued internal guidance reminding employees that they should share ACMs with taxpayers upon an informal request. This clarification is a meaningful step toward transparency and a welcome development for taxpayer rights.
While it falls short of my recommendation that Appeals automatically share ACMs at the close of each case, the reaffirmation of this right sends a strong message: The Appeals process must be open and accountable to the taxpayers it serves.
The ACM is more than a routine administrative document. It is the written analysis prepared by an Appeals Officer detailing the facts, legal conclusions, and rationale behind their proposed resolution for review by the manager. No settlements can become final without management review. Historically, Appeals shares the ACM with the originating IRS examination division to explain how the issues were resolved, which helps inform future enforcement actions. However, when Appeals denies access to this memo, taxpayers may be left without a clear understanding of why their appeal was decided a certain way or what was shared with the IRS Compliance team.
This asymmetry of information erodes the appearance of fairness. It also undermines the independence Congress intended when it codified the IRS Independent Office of Appeals in the Taxpayer First Act of 2019. Appeals has argued that the purpose of sharing the ACM with IRS Compliance is to provide feedback on case resolution and help educate IRS Compliance in future cases. If this is the case, it should also inform the taxpayer, as they have an equally vested interest in the reasoning behind the outcome. When Appeals excludes taxpayers from the same information shared internally, it risks being viewed not as an impartial arbiter but as another branch of IRS enforcement.
Transparency is the cornerstone of public trust. Taxpayers are more likely to accept an adverse decision when they understand the rationale behind it. Conversely, opaque decisions that lack explanation can increase frustration and lead to costly litigation that might otherwise be avoided. Taxpayers have a right to obtain a thorough explanation from the Appeals Office both during settlement discussion and with their ACM write-up. Providing taxpayers a copy of their ACM reinforces their right to be informed and supports taxpayer compliance.
In a recent announcement to employees, Appeals reminded staff that ACMs are not fully exempt from disclosure and that taxpayers may request them informally. The announcement directs Appeals Technical Employees (Appeals Officers, Settlement Officers, and Appeals Team Case Leaders) to follow the procedures in IRM 8.1.1.6.4(2), which requires coordination with Area Counsel and the local Disclosure Officer to determine which portions Appeals must redact. This clarification reaffirms that the longstanding policy is to share ACMs upon request – a fact too often ignored in past practice.
This is an important course correction. It puts Appeals employees on notice that blanket refusals to share ACMs are inconsistent with the IRM and inconsistent with taxpayer rights. It also sends a clear signal to taxpayers and their representatives that they have the right to ask for and receive this critical document.
While I will continue to advocate for automatic disclosure of ACMs in every case, this reaffirmation of the informal request policy is a good first step. It demonstrates that Appeals is listening to stakeholders and willing to promote greater openness in its proceedings.
Despite this positive development, several important issues remain. First, there is currently no indication that Appeals has implemented a system to track whether it is fulfilling ACM requests. Without data collection, there is no way to determine whether Appeals is following the updated guidance or to assess the frequency and nature of denials. Appeals should establish clear metrics to monitor compliance, including how often taxpayers request ACMs, how often Appeals shares them, and whether Appeals is applying redactions appropriately.
Second, it’s possible that Appeals may redact ACMs so heavily as to be useless to the taxpayer. While the IRM requires that Appeals coordinate redactions with Disclosure and Counsel, it does not set standards for ensuring that the final product remains meaningful. Excessive redaction defeats the purpose of the policy. If taxpayers receive a blacked-out document with little substantive content, the promise of transparency is hollow. Appeals should adopt internal standards to ensure that it narrowly tailors redactions and preserves the essence of the analysis.
Finally, and perhaps most critically, there is the issue of taxpayer awareness. Even with the new guidance in place, many taxpayers might never benefit from it because they do not know the ACM exists or that they can ask for a copy. There is currently no standard notice to inform taxpayers of this right, and Appeals’ closing letters do not include such language. As a result, only well-informed taxpayers or those represented by experienced practitioners are likely to benefit.
Appeals should take proactive steps to ensure taxpayers are informed. This could include a simple statement in closing letters, such as: “At the conclusion of your case, you may request a copy of the Appeals Case Memorandum. This document will explain how and why Appeals decided your matter in the way they did.”
Taxpayers have the right to be informed. This includes the right to understand the reasoning behind an IRS decision in their case. At the conclusion of an Appeals case, taxpayers may request a copy of the ACM. You do not need to file a formal Freedom of Information Act. An informal written or verbal request to the Appeals Officer should be sufficient.
Under the current policy, Appeals will likely review and redact the ACM before releasing it to you to remove any sensitive or privileged information, but much of its content should still be accessible. The memo should include a summary of the issues, the facts presented, the legal standards applied, and the rationale behind the settlement, which should be an unbiased analysis of the hazards of litigation surrounding your case.
If you are involved in an Appeals case, ask about the ACM at the end of your proceeding. This is your opportunity to better understand how the IRS evaluated your case and what influenced the final resolution.
I applaud Appeals for reminding its employees of their duty to share ACMs upon request. This move reflects a commitment to transparency and taxpayer service. But Appeals must do more to ensure this commitment is fully realized.
As the National Taxpayer Advocate, I continue to recommend that Appeals:
Appeals plays an important role in maintaining taxpayer trust in the IRS. As an independent forum for resolving disputes, it must uphold the highest standards of fairness and transparency. Ensuring that taxpayers have access to the same information provided to IRS Compliance is certainly a matter of policy, but it’s also a matter of principle.
The recent guidance is a promising step in the right direction. With further reforms, Appeals can continue to move toward a model of true independence and transparency that respects and upholds the rights of all taxpayers.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.