The Art of Preparing a Successful Written Protest By William P ... - CCH

April–May 2008The Art of Preparing a SuccessfulWritten ProtestBy William P. WigginsWilliam P. Wiggins describes the art of preparing a successful formalwritten protest challenging the findings of the examining agent.IntroductionYour client receives a letter from the IRS. The letterinforms your client that as a result of a recent IRSexamination, her tax liability has increased for theyear under review. The letter goes on to explainthe various options available to your client. Oneoption is to agree with the proposed increase intax liability. If this option is chosen, the letter instructsyour client to sign and return the enclosedagreement form. The second option is to disagreewith the proposed change. This option affords yourclient the opportunity to “protest” the changesproposed posby the examining agent. In the case ofa protest, tyour client must submit a request askingfor an appeals phearing within 30 days from thedate ofthe letter.Not surprisingly, the letter your client received eivfromthe IRS is commonly mo yreferred rredto asa30-day yletter.eDepending on the nature of your client’s case, the 30-day letter may require your client to prepare a formalwritten protest as part of challenging the findings ofthe examining agent. This article describes the art ofpreparing a successful written protest. The first partprovides an overview of the IRS Appeals process.The second part presents and illustrates five proventechniques for preparing an effective and successfulwritten protest.William P. Wiggins is an Attorney in Massachusetts with over15 years of tax controversy experience. He is an Associate Professorof Taxation at Bentley College, Waltham, Massachusetts,and presently serves as Associate Dean of Business. Over theyears, he has served as Director of Bentley’s graduate programin taxation, and has taught graduate-level courses dealing withtax practice and procedure, and tax research techniques. ProfessorWiggins can be reached at wwiggins@bentley.edu.Part I: Overview of the IRSAppeals ProcessBackgroundTaxpayers in the United States have enjoyed someform of tax appeal rights since 1789. 1 More recently,Congress revisited the appeals process in the Restructuringand Reform Act of 1998, which providesin part:The IRS is directed to revise its mission statementto provide greater emphasis on serving the publicand meeting the needs of taxpayers. The IRSCommissioner is directed to restructure the IRS byeliminating or substantially modifying the threetiergeographic structure and replacing it with anorganizational on structure that features operatingunits sserving particular groups of taxpayers withsimilar needs. The plan is also required to ensurean independent appeals function within the IRS. Aspart of ensuring an independent appeals function,the reorganization plan is to prohibit ex parte communicationsbetween appeals officers and otherIRS employees to the extent such communicationsappear to compromise the independence of theappeals officers. 2 [Emphasis added.]As emphasized in the above language, an independentappeals function within the IRS represents anessential part of having an efficient and effective taxadministration system. The IRS reinforces this needin its INTERNAL REVENUE MANUAL (IRM): “The AppealsMission is to resolve tax controversies, without litigation,on a basis which is fair and impartial to both theGovernment and the taxpayer and in a manner that©2008 W.P. WigginsJOURNAL OF TAX PRACTICE & PROCEDURE 37

The Art of Preparing a Successful Written Protestwill enhance voluntary compliance and public confidencein the integrity and efficiency of the Service.” 3What does this mission statement mean for taxpayersand those who represent them? In general terms, itmeans an independent professional within the IRS (anAppeals Officer) will take a fresh look at a taxpayer’scase and work with the taxpayer (and representative)in search for a fair and impartial resolution to the taxcontroversy. In approximately 90 percent of all cases,a fair and impartial resolution is achieved. Indeed,the IRS reports on its Web site that over 100,000cases each year are successfully resolved throughthe appeals process.What Can I Expect When Workingwith an Appeals Officer?According to the IRM, Appeals Officers (AO) are expectedto exhibit the following characteristics whenmeeting with taxpayers and their representatives: 4Confidence in their job knowledgeResponsible actionA judicial attitude when applying tax law in areasonable and impartial mannerUniformity and consistency with respect to taxpayersin similar circumstances and achieving theprimary goal of resolving the disputeAccourteous manner when conducting conferences,providing an atmosphere of openness thatfosters cooperation operain theresolution of disputesGood listening skillsWhat does this definition n mean for you and yourclient? It means you will lhave anexperienced, eriencompetentand skilled tax professional working with youto help find a fair resolution to your dispute. Typically,AOs have “come up through the system” and havemany years of experience in handling complex taxissues. AOs often possess advanced degrees and maybe attorneys or certified public accountants. The IRM’sdefinition of an “Appeals Office” also means that youwill be working with an IRS employee who sharesa common goal with you: to resolve tax disputes inan informal manner as quickly and efficiently as possible.As noted in the IRM: “Experience has shownthat when an AO is able to enlist the cooperation oftaxpayers and representatives, cases are resolved ona mutually satisfactory basis with minimum expense,delay, and inconvenience to taxpayers.” 5AOs come from a variety of backgrounds andexperiences. Not surprisingly, their styles and theapproaches they use to settle tax controversiesvary. However, there are certain basic attributes38we can expect from all AOs. For example, theyare expected to:have an open mind and genuine interest inachieving a mutually acceptable agreement;set realistic target dates for the taxpayer and/or therepresentative to submit additional information,including proposals for settlement;complete the conference in a timely manner andmake accurate and prompt decisions;initiate frank discussions and not consider ideologicalkinds of arguments; andconduct conferences in an open atmosphere thatfosters cooperation in the resolution of disputes. 6Appeals conferences are informal. The discussionwith the AO is usually open and direct, yet sometimesunstructured. There is much give and take. Unlike acourt setting, the AO will not ask that your testimonybe taken under oath. However, the AO may requestthat statements alleged as facts be submitted in theform of an affidavit or otherwise declared to be trueunder the penalties of perjury. Given the informalityof an Appeals conference, meetings often occur in theAO’s office. If space is needed to present documentsor other kinds of visual materials, it is wise to contactthe AO in advance of the meeting to request a largerroom, often a conference room with a table.During the conference, the AO will review thestrengths and weaknesses of your client’s case. Youshould assume the AO is very familiar with the case.The discussion may start with the AO asking youquestions. Alternatively, the AO may invite you tomake an opening statement about the case. Becausethere is no particular protocol for discussing a case,you should be ready to follow the lead establishedby the AO or be ready to take the lead if offeredthe opportunity. There is always the question aboutwhether the AO will raise a new issue or reopenan old issue during the conference. Typically, thisis not done unless the ground for such action is asubstantial one and the potential effect upon the taxliability is material. 7Taxpayers are allowed to represent themselves at anAppeals conference. Alternatively, they are allowedto have another person (a qualified representative)represent them. In general, a qualified representative isan enrolled agent, a certified public accountant, or anattorney authorized to practice before the IRS. Before aqualified representative is allowed to talk with an AO,the representative must complete a power of attorney(Form 2848—Power of Attorney and Declaration ofRepresentative) and deliver it to the AO.

How Do I Request a Conferencewith an AO?Because appealing a case is a voluntary process, youmust make a request to have the case heard. There isno filing fee. The IRS offers several options for makinga request. For example, you may make an oralrequest for Appeals consideration in (1) all officeinterview or correspondence examination cases; or(2) a field examination case if the total amount ofproposed additional tax including penalties, proposedover-assessment, or claimed refund (or, in an offer incompromise, the total amount of assessed tax, penalty,and interest sought to be compromised) is $2,500 orless for any taxable period.In these situations, you arenot required to file a writtenprotest. 8On the other hand,taxpayers are requiredto prepare a brief writtenstatement (a formal writtenProtest is optional) toobtain Appeals considerationin a field examination case if the total amountof the proposed deficiency exceeds $2,500 butdoes snnotexceed $10,000 for any taxable period. 9Finally, a formal written protest is required in thefollowing owsituations:If thetotal amount of the proposed deficiencyexceeds $10,000 00 for any taxable period 10In all employee plan and dexempt emorganizationcases 11In all partnership and S corporation cases 12In some circumstances, you are allowed to makea small case request if the total amount for any onetax period is $25,000 or less by completing IRS Form12203. This form serves as an alternative to the requirementof submitting a written protest.The IRS may refuse to hear a case on appeal in certainsituations. For example, the Appeals Office willnot hear a case involving a deficiency based solelyon the failure or refusal to comply with the tax lawsbecause of moral, religious, political, constitutional,conscientious or similar grounds; and the IRS mayrefuse to hear an appeal where a preliminary reviewof the written protest indicates that it requires furtherwork or development. 13A taxpayer may, of course, choose not to requestan Appeals hearing. In this case the taxpayer willreceive a 90-day letter, which allows the taxpayerAppeals Officers come froma variety of backgrounds andexperiences. Not surprisingly, theirstyles and the approaches they useto settle tax controversies vary.April–May 2008to file a petition in the U.S. Tax Court. Finally, it isimportant to remember that making a request foran Appeals conference does not stop interest andpenalties from accruing. Interest and certain penaltieswill continue to accrue during the Appealsprocess. Under certain circumstances, you maymake a request to stop the accrual of interest andpenalties on proposed adjustments. 14How Long Does theAppeals Process Take?According to the IRS Web site, once you have submitteda written Protest, you will usually hear from theapplicable Appeals Office within 90 days. If morethan 90 days have passed,you should contact theoffice where you sent theprotest. The IRS employeesat this office should beable to tell you when theysent your case to the AppealsOffice. If, for somereason, they were delayedin sending your protest toAppeals, you should expect to hear from someone inthe Appeals Office not later than 90 days from whenthe protest was forwarded to Appeals. If more than 90days have passed from this date, you should contactthe original office where your written protest was sentand ask for the name and contact information of theAOassigned sigtothe case. Once your protest has beenreceived by yanAO, it generally takes anywhere from90 days to a year to resolve the dispute.What Results Can I Expect from theAppeals Process?If after consideration of the case by an AO a satisfactorysettlement is reached between the taxpayerand the government, the taxpayer will be asked tosign Form 870-AD (or a similar agreement formdepending on the circumstances). By signing Form870-AD, the taxpayer agrees to waive restrictions onthe assessment and collection of any deficiency, andagrees to accept any over-assessment resulting fromthe agreed settlement. 15 On the other hand, if a satisfactorysettlement is not reached, a statutory noticeof deficiency will be issued. Once this process hasoccurred, the taxpayer has the right to file a petitionwith the U.S. Tax Court for a redetermination of thedeficiency. The filing must occur within 90 days ofthe mailing of the statutory notice of deficiency. 16JOURNAL OF TAX PRACTICE & PROCEDURE 39

The Art of Preparing a Successful Written ProtestPart II: The Art of Preparing aSuccessful Written ProtestIs There Official Guidance on Howto Prepare a Written Protest?The IRS provides minimal guidance regarding thepreparation of a written protest. Unlike many otherIRS procedures, the IRS does not require the completionof a form when filing a protest. The regulationsprovide that “instructions for the preparation ofwritten protests are sent to the taxpayer with the transmittal(30-day) letter.” 17 The current set of instructionsincluded with the 30-day letter takes the form of IRSPublication 5. 18 The instructions include in Publication5 are relatively straightforward and include thefollowing basic requirements:Taxpayer’s name and address, and a daytimetelephone numberA statement that the taxpayer wants to appeal theIRS findings to the Appeals OfficeA copy of the letter showing the proposed changesand findings the taxpayer doesn’t agree with(or the date and symbols from the letter)The tax periods or years involvedA list of the changes that the taxpayer doesn’tagree e with, and why the taxpayer doesn’t agreeThefacts supporting the taxpayer’s position onanyissue that the taxpayer doesn’t agree withTheelaw or authority, if any, on which the taxpayeris relyingThe taxpayer’s signature on the written protest,stating that it is true, under the penalties of perjuryas follows: “Under the penalties of perjury,I declare that I examined the facts stated in thisprotest, including any accompanying documents,and, to the best of my knowledge and belief, theyare true, correct, and complete.”While the simplicity of these instructions is refreshing,particularly when compared with other IRS formsand publications, its brevity leaves taxpayers andrepresentatives with virtually no guidance on theactual preparation of a written protest. Consequently,a wide range of approaches are available, with noone method trumping the other.The remainder of this article presents and discusses aset of proven techniques for preparing a successful writtenprotest. While recognizing that not all aspects of preparinga successful written protest can be covered in onearticle, the five techniques presented in Table 1 shouldbe considered whenever preparing a written Protest.40Prepare a Roadmap and RememberThat Presentation Matters 19Don’t spend all your time meeting with the client,gathering facts and conducting legal research. Thisis a mistake many taxpayer representatives makewhen preparing a written Protest. Too often, notenough time is spent on planning and presentation.Let us remember that a 30-day letter imposes a tighttimetable. Good planning is essential. As the sayinggoes, “plan the work; work the plan.” And, asyou plan the work, be sure to leave enough time forwriting (developing an effective presentation). Manyhours dedicated to discovering facts and finding relevantlegal authorities can be obfuscated quickly ifyou don’t have sufficient time to prepare a polishedproduct. Remember, the first impression an AO willhave regarding the representation of your client’s caseis your written protest. Preparing a polished writtenprotest does not simply happen. It requires goodplanning, organization and writing.Table 1. Five Techniques for Preparing aSuccessful Written ProtestPrepare a roadmap and remember thatpresentation mattersFocus on factsDevelop logical and convincing argumentsCritique thereport of the examining agentRevise, revise again and revise one more timeA few classic statements about planning and presentation:Matter and manner—we cannot escape them.When they are at one, when what is said has aperfect correspondence with the way of sayingit, we have good writing (or speech) on anylevel. But when this law of appropriateness isbroken, writing (or speech) becomes in varyingdegrees bad. 20The law of attention requires that all writingshould reach the comprehension of the reader inthe easiest way and with instant clearness. Writingmay be likened to a window through whichthe writer shows the reader a view without. If theglass is poor it will distort the view and irritate

April–May 2008the beholder. Glass made ornate with jewels willdraw to itself a part of the attention, and thus impairinterest in the view. The best window-glassis plate, a strong and highly finished product soclear that one looking through it is unconsciousof its presence. 21Let’s consider the following illustration to reinforcethe point about planning and preparation. If you wereplanning a trip to a city located a thousand miles fromyour home, would you simply get into your car andstart driving? Not likely! Most of us would prepare anitinerary, prepare a list of items to bring with us, andchart our course by using a roadmap. In other words,we would spend a fair amount of time planning thetrip before starting the engine.Likewise, before you start to write a protest, taketime to organize your thoughts. Prepare a rough outline,a roadmap. Although different structures existfor preparing a written protest, the following topicalheadings are customary:Issue(s)Proposed Adjustment(s)FactsLawIRS ExaminationArgumentConclusionnUnder each of these headings, develop subheadings.ngs.For example, let’s assume that one of the issuesraised by the examining ng agent involves excessiveescompensation. Under the Facts heading, howwouldyou organize your presentation? Would you have asubheading focusing on the biographical descriptionsof key employees? Would you have anothersubheading describing the company and the natureof its business? Would you have yet another subheadingdealing with financial data about compensationpaid to key employees?These are the types of questions you must ask andanswer before you begin to write. Otherwise, yourpresentation will be confusing at best, incoherent atworst. In the end, it doesn’t matter how you organizethe different components of your written protest; whatmatters is that you have a plan for structuring andorganizing your protest (a roadmap), and that you usethis plan consistently throughout your presentation.Finally, remember that a good presentation requiresmore that good planning and organization. It alsorequires good writing. Bad writing is distracting. Itdistorts what otherwise might be a fine product. Foran AO who knows the rules of grammar, it is highlyannoying to see fundamental grammatical errors ina Protest. Beyond the annoyance factor, however, isa far more serious problem. Bad writing has the potentialof diverting the AO’s attention from the pointyou are trying to make. What to do? Successful andaccomplished writers have a good handbook at theirsides whenever they write. As you prepare your writtenprotest, have a handbook at your side. If you areunsure about the punctuation of a particular sentence(e.g., do these sentence parts call for a comma or asemicolon), look it up. Don’t guess.Focus on FactsRegardless of what factual information you decideto include under each topical heading and subheading,you must also determine the order in which topresent the facts. Consider the following illustration.If you plan to drive from Boston to Chicago, it is unlikelythat you would drive first to Baltimore, then toNashville and finally to Chicago, unless of course timeand money were of no concern. Likewise, an AO willexpect to see some logical order to the presentation ofthe facts in your written Protest. Don’t confuse the AOby driving from Boston to Chicago via Nashville!Fortunately, a variety of techniques exist for orderingthe presentation of facts: there is the chronologicalapproach (e.g., emphasizing the timing and sequenceof key events); there is the biographical approach(e.g., describing key individuals along with facts associatedwith them); and there is the transactionalapproach ach((e.g., e g focusing on the transfer of resourcesfrom one taxpayer to another). Again, it doesn’t matterwhat approach you use in ordering the presentation offacts in your protest; what matters is that you have anapproach and you employ it consistently throughoutyour presentation.Your statement of facts should also tell your client’sstory. James W. McElhaney makes the following pointin his article, “Humans always have used the story tounderstand facts and resolve issues. Everything in thelaw is a story. Every case, every motion, every brief isa story. The winning brief needs to tell a persuasivestory. Lots of thoughtful judges admit they start to takesides—lean one way or another—as soon as they readstatements of facts. The statement of facts is the mostimportant part of the brief because it points the wayto elemental justice.” 22According to McElhaney, there are lots of ways towrite a statement of facts; however, a good statementpasses two essential tests.JOURNAL OF TAX PRACTICE & PROCEDURE 41

The Art of Preparing a Successful Written Protest1. It stands alone. Anyone reading your statementof facts should understand what the case is aboutwithout having to look at anything else.2. The statement of facts should make the readertake your side. It should be persuasive withoutbeing argumentative. 23The point here is that facts, not opinions, willconvince the AO to look favorably upon your client’scase.We need also to consider the unique role that factsplay in an IRS Appeals case. As Table 2 demonstrates,the taxpayer’s representative enjoys certain strategicadvantages over the AO. How? The representativecontrols the facts in ways that the AO does not. Forexample, AOs do not prepare their own cases. AOsare not fact-finders. They are dependent on the examiningagent for the discovery, presentation andanalysis of the facts in a case.As suggested by Table 2, there are certain uniquecharacteristics of the IRS Appeals process thatmay work in the taxpayer’s favor. For example, if aparticular examining agent possesses inadequateinvestigative skills, the development of the facts inthe agent’s report is likely to be of low value. Nonetheless,the AO must deal with that which has beendelivered by the examining agent. On the other hand,the representative is not dependent on the abilitiesand skills of another person. If the representative hasstrong investigative skills, the statement of facts in theprotest tislikely to be of high quality.The process by which an examining agent discoversfacts also has the epotential of impairing an AO’s sunder-standing of a case. Typically, an agent discovers factsthrough the use of an Information Document Request.This process can be slow and cumbersome, usuallyresulting in the examining agent being highly selectivein the fact-gathering process. Budget constraints mayalso limit the extent to which an agent discovers facts,particularly given that most IRS audits are limited interms of time, scope and budget. On the other hand, arepresentative enjoys unlimited access to a client’s recordsand other forms of evidence, allowing for a robustdiscovery and development of relevant facts.In the end, it is important to remember that AOsreceive facts from two sources: the examining agent’sreport and the written protest prepared by the taxpayer’srepresentative. Accordingly, don’t miss thisunique opportunity to tell your client’s story in a waythat makes the AO take your side. Remember—facts,not opinions, represent the ingredients of a successfulwritten protest.Develop Logical andConvincing ArgumentsDeveloping a logical argument requires the repetitiveapplication of the following model:Present the questions (issues) raised by the examiningagentPresent your answers to the questionsPresent the reason(s) for your answerWhen considering this model, it is useful to thinkabout the reasons why we are sometimes ineffectivein developing logical and convincing arguments.First, we include facts in the argument that areunconnected ed to the question being asked. In anygiven case, many facts exist. During the discoveryprocess, we unearth all kinds of interesting facts. Unfortunately,not all interesting facts are relevant facts.Table 2. The Unique Role That Facts Play in an IRS Appeals CaseAppeals OfficerTaxpayer’s RepresentativeNot a fact-finder; must rely on the examiningagent’s reportDependent on the investigative skills, trainingand abilities of the examining agentDoes not prepare the factual presentationDiscovery limited by the scope (and budget)of the examinationBurden of proof “advantage” may diminishthe quantity and quality of the fact gatheringdone by the examining agent42Is a fact-finder; not bound by facts presented inthe examining agent’s reportRelies on own skills and abilitiesPrepares independent factual presentationDiscovery not limited by scope (or budget) ofthe examinationBurden of proof “challenge” may enhance thequantity and quality of the fact gathering doneby the taxpayer’s representative

April–May 2008Discipline is essential. We must constantly remindourselves to include only those facts that are requiredto answer the question asked (issue raised) by theexamining agent. Nothing more, nothing less!Secondly, we inject irrelevant law into the argument.Too often we are enamored with the law. Weread an interesting case and become fascinated byit. However interesting, some cases or other legalauthorities have little bearing on the augment beingdeveloped. Including unnecessary legal authorizes inyour argument is a mistake. It serves only to distractthe attention of the AO, thus weakening your argument.Again, discipline is essential here.Finally, we fail to make logical connections betweenissues, facts and law. We might be diligent inincluding only those facts and law that are essentialto answering the question posed; however, we don’ttake the next step of connecting them. To develop aconvincing argument, we need to connect the facts tothe law in such a way as to create a coherent “whole,”not just a presentation of relevant, but unconnectedfragments of facts and law. Look for the thread thatties issues, facts and law together. Test the plausibilityof your argument. Is your response to the questionasked supported by underlying facts, or have youmade assumptions that cause your argument to bevulnerable? Have you adequately applied the law tothe facts, or does your presentation of legal authoritiesappear to serve no other purpose other than fillingthe page? Frequently, we spend too much time gatheringlegal authorities, but then fail to “put the lawto work” in developing the argument. Every statute,case, regulation and ruling included in your protestshould work to support your argument. If certaincases or rulings are not “working” to support yourargument, get rid of them.The traditional method for making connections ina legal argument is through the use of analogical reasoning.In general, analogical reasoning is a form ofreasoning that allows us to connect issues with factsExample 1. Analogical Reasoning *Suppose, for example, that a court faces a case in which the defendant, a contractor, found buriedmoney under the plaintiff’s garage. The court surveys past cases having to do with things lost and foundand finds the following:Several cases in which someone found money on the floor of a shop or similar premises andthecourts held that the finder was entitled to retain possession as long as the owner of the lostproperty pwas notknownSeveral cases in which someone found money on a table in a shop or on a chair in a bank safedeposit room and the courts held that the owner of the place where the money was found wasentitled topossessionoA case in which someone found a brooch on a window ledge in a house temporarily requisitionedby the government and the court held that the finder was entitled to possessionThe court might then propose the following analogy—warranting rule: when property is found incircumstances that suggest its owner set it down deliberately and then forgot it, the right to possessionshould go to the owner of the place where the property was found. If, however, it seems that the ownerdropped the property inadvertently, possession should go to the finder. This rule leaves one possiblyrecalcitrant case (the case of the brooch), but the rule appears to be justified by a broader analogy—warranting rationale—that owners who have set property down and then forgotten it are more likely toreturn to the site than those who have dropped their property inadvertently. The more likely the owneris to return, the less appealing it is to award the property to finders who are comparatively more difficultfor the owner of the lost property to trace. These ideas in turn can be tested at higher levels of generality:a rule designed to return lost property to its owner will make property rights more secure, secureproperty rights contribute to general prosperity, and so forth. The analogy-warranting rule can also betested against hypothetical future cases to see if it produces satisfying outcomes. If the results of testingare acceptable, and if we assume that the prior decisions were correct, we may now have some reasonto believe that the money found under the garage should stay with the owners of the house.*This example is from Emily Sherwin, A Defense of Analogical Reasoning in Law, 66 U. CHI. L. REV. 1179 (1999), at 1182–83.JOURNAL OF TAX PRACTICE & PROCEDURE 43

The Art of Preparing a Successful Written Protestand legal authorities. The basic idea is that throughthe use of analogies judges (and other decisionmakers,e.g., AOs) will follow the course suggestedby the analogy and thus conform their decisions tothe existing body of law. 24How does analogical reasoning work? As commonlypracticed, it works something like this:“Confronted with an unsettled question, the judgesurveys past decisions, identifies ways in which thesedecisions are similar to or different from each otherand the question before her, and develops a principlethat captures the similarities and differences sheconsiders important. This principle in turn providesthe basis for the judge’s own decision. Whatever onemay think about the merits of analogical decisionmaking,there is little question that judges writingopinions and lawyers addressing judges often casttheir analysis in this form.” 25 Example 1 illustratesanalogical reasoning.What lessons can we learn from Example 1? First,every argument in your written protest must have alogical flow that uses analogies to connect the factsin your case with the legal authorizes you have cited.Secondly, make the AO’s job easier by providing asurvey of past decisions and other relevant legal authorities.Thirdly, point out the ways in which theseauthorities are similar to or different from each other,and relate e them to the issues and facts in your case. Finally,show the AOthe logical conclusion that shouldbe ereached through the use of the analogies.Critique the Report of theExamining AgentOur discussion about the art of preparing a successfulwritten protest would not be complete without adiscussion about the need to critique the report of theexamining agent. Preparing a convincing and compellingargument on behalf of our client is not enough.Why? The examining agent may have prepared anequally strong argument on behalf of the government.If this is the case, the AO may have to decide betweentwo equally strong arguments. Your job in preparingthe protest is to help make the decision easier for theAO. You can accomplish this task by critiquing the caseas developed by the examining agent. Based on ourearlier discussion about how to develop a successfulwritten protest, consider the following methods forcritiquing the examining agent’s report.First, review the agent’s development of the facts. Is thedevelopment complete? Are the stated facts relevant tothe issue raised by the agent? Are there inconsistencies44in the agent’s presentation of the facts? Are there inconsistenciesin the agent’s presentation of the facts whencompared to your presentation of the facts? Has the agentused the facts to tell a story? Is there a logical flow to thepresentation of the facts, and so forth? In other words,don’t allow the agent’s presentation of the facts to gounchallenged. If the presentation is incomplete, point itout. If the facts are inconsistent, point it out. If the presentationof the facts fails to tell a convincing story, point itout. Don’t leave it to the AO to make these observations.By showing inconsistencies and other problems withthe facts, as developed and presented by the examiningagent, you begin to win the confidence of the AO.Secondly, scrutinize the quality and quantity of thelegal research conducted by the examining agent. Determineif the agent identified all relevant legal authorities.Assess whether the agent used the cited legal authoritiescorrectly. Did the agent properly interpret the law? Didthe agent correctly apply the law to the issue and thefacts in the case at hand? Did the agent include legalauthorities in the report, but not use them in the analysisor argument? Don’t leave these questions unanswered.If there are flaws in the legal research conducted by theagent, or flaws in the ways by which the agent used thecited legal authorizes, point it out. Again, don’t leave itto the AO to make these observations.Finally, test the examining agent’s arguments. Hasthe agent adequately connected the issues with thefacts and the law? Have convincing analogies beendeveloped by the agent? Has the agent adequately answereded the questions asked (issued raised) in the agent’sown report? If fthere are flaws in the agent’s argument,point them out. Obviously, AOs will draw their ownconclusions. They are at liberty to accept or reject thepoints you make in your written Protest. However, byconducting a review of the examining agent’s report,you will have achieved the goal of inviting the AO toconsider the quality of the work done by the agent.Revise, Revise Again and ReviseOne More TimeThere is no such thing as good writing. There isonly good rewriting. 26Justice Brandeis was known for revising his opinions15 or more times before he was satisfied withthe final product. I am not suggesting that theaverage person preparing a written protest revise it 15 ormore times. However, you should revise it at least threetimes, more if time and money permit. Sometimes, by

April–May 2008investing several hours to review and revise your protest,you protect the many hours you spent in gathering facts,conducting legal research and preparing your arguments.Excessive use of the passive voice, timid phrases,vague words and other examples of poor writing areoften found in first drafts. After all, a first draft is a roughdraft. It is not a finished product. You will have (and theAO will enjoy) a finished product after you have revisedit at least three times.ConclusionDespite the many hours taxpayer representatives ofteninvest in preparing a written protest, they may failto convince an AO to view their case more favorablythan the government’s case. This result may occur becausethe representative accepted an inherently weakcase. For example, the facts or legal authorities mayfail to support the client’s position on a particular issue.On the other hand, the representative may have astrong case with which to work, but nonetheless failsto develop a successful written protest. Sometimes,there is not much that can be done when handlingan inherently weak case. However, as this articledemonstrates, regardless of the inherent strengths orweaknesses of a given case, there is much that canbe achieved by mastering the art of preparing a successfulwritten protest.1The Act of 1789 that created the TreasuryDepartment in the newly established UnitedStates of America gave the right to appealadverse tax decisions to the comptroller ofthe United States.2Restructuring and Reform Act of 1998 (P.L.109-171).3IRM 8.1.1.1(1) (Oct. 23, 2007).4IRM 8.1.3.4(1) (Oct. 23, 2007).5IRM 8.1.3.4(5) (Oct. 23, 2007).6IRM 8.6.1.3 (Nov. 6, 2007).7IRM 8.6.1.6 (Nov. 6, 2007).8 Reg. §601.106(a)(1)(iii)(a).9 Reg. §601.106(a)(1)(iii)(b).10Reg. §601.106(a)(1)(iii)(c).ENDNOTES11Reg. §601.106(a)(1)(iii)(d).12Reg. §601.106(a)(1)(iii)(e).13Reg. §601.106(b).14See Notice 1016, How to Stop Interest. Foran explanation on how to stop interest fromaccruing on an unpaid balance, refer to IRSPublication 594.15Reg. §601.106(d)(2)(i).16Reg. §601.106(d)(2)(ii).17Reg. §601.105(d)(2)(v).18IRS Publication 5 (Rev. 01-1999), CatalogNumber 460741.19Many of the recommendations presentedin this section of the article are based onideas developed from a close reading of THEELEMENTS OF LEGAL STYLE BY BRYAN A. GARNER(Oxford UP: 2002).20G.H. Vallins, THE BEST ENGLISH 199 (1960).21W.C. Morrow, THE LOGIC OF PUNCTUATION 14(1926).22James W. McElhaney, Legal Writing thatWorks, 93 A.B.A.J. 31 (2007).23Id., at 31–32.24Emily Sherwin, A Defense of AnalogicalReasoning in Law, 66 U. CHI. L. REV. 1179(1999).25Id., at 1179–80.26Justice Louis Brandeis (George W. Pierce,The Legal Profession, 30 THE TORCH 5, at 8(1957) (quoting Justice Brandeis).This article is reprinted with the publisher’s permission from the JOURNAL OF TAX PRACTICE &PROCEDURE, a bi-monthly rinedyj journal lppublished by yCCCH, sa Wolters Kluwer business. Copying ordistribution without the publisher’s permission is prohibited. To subscribe to the JOURNAL OFTAX PRACTICE & PROCEDURE or other CCH Journals please call 800-449-8114 or visitwww.CCHGroup.com. All views expressed in the articles and columns are thoseof the author and not necessarily those of CCH.JOURNAL OF TAX PRACTICE & PROCEDURE 45