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

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

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