Appeal settlement authority is very broad but the Appeals Officer’s intent is to settle the case without litigation. For this reason, settlement through the Appeals Officer cannot be automatic and must go through a certain process. This process involves convincing the Appeals Officer that there is significant uncertainty regarding the facts of a case or the application of the law to the case.
IRS Appeal Settlement Authority
Most of an Appeals Officer’s authority is derived from settling issues based on the hazards of litigation. The hazards of litigation standard provides that an issue should be settled based upon the facts likely to be proven, the credibility of the testimony to be presented in court, and the expected interpretation or application of the law by the court.
Federal Rules of Evidence
The job of an Appeals Officer is to view the case the same as a judge, the difference it the Federal Rules of Evidence are ignored. This means that all kinds of evidence that would normally not be allowed in court can be used in a settlement negotiation with the IRS.