Examination Division - This is the common term for the part of the IRS that conducts audits and proposes "assessments" (bills) of tax.
Collection Division - This is the common term for the part of the IRS that is responsible for collection of tax amounts that have been assessed.
Appeals Office - This is the office in the IRS that has initial settlement responsibility in most cases. The Appeals Office is independent of the Examination Division, the collection division and Chief Counsel.
Chief Counsel - These are the attorneys that represent the IRS in Tax Court. Each case is assigned to a local Chief Counsel's office. The cases are handled by attorneys and paralegals who are supervised by managers in the local office.
Internal Revenue Code - The Internal Revenue Code (IRC) sets forth the tax law of the united states. Tax Court cases generally involve a failure to adhere to the requirements of the IRC.
These different branches of the IRS have responsibility for every aspect of a Tax Court case. Unless a taxpayer signs a tax return or other document agreeing to an assessment of tax, the Examination Division must conduct an audit and issue a "notice of deficiency" to propose an assessment of the tax. If the taxpayer wants to challenge the proposed assessment before paying the tax, the taxpayer MUST file a timely petition in the Tax Court.
Once the tax is assessed, the Collection Division collects the tax by filing "liens" to encumber the taxpayer's assets and serving "levies" to collect those assets. The Collection Division must issue notices in connection with liens that are filed and levies that are proposed. These notices give the taxpayer the opportunity to file a Collection Due Process ("CDP") appeal.
The Appeals Office handles appeals from both the Examination Division and the Collection Division. The Appeals Office considers settlement in Tax Court cases if the case has not previously been considered by Appeals. The Appeals Office also reviews the CDP appeals of lien and levy determinations made by the Collection Division. The Appeals Office's primary goal is to reach a fair resolution of the dispute. Every opportunity should be taken to discuss a case with the Appeals Office.
Chief Counsel represents the IRS in Tax Court. Counsel is like the law firm for the IRS. Counsel has the authority to settle cases that have not settled previously and will handle the trial of a case that does not settle.