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irrelevant. Moore, supra. We disagreed with the Commissioner’s
reasoning then, and we still disagree now.
Revenue Procedure 2000-43 prohibits ex parte communications
that appear to compromise the Appeals officer: Actual influence
isn’t required, only a reasonable possibility that the prohibited
communication may have compromised the Appeals officer’s
impartiality. See Drake, 125 T.C. at 209-10. We find that this
standard is easily met here: Our personal observation of
Talbott’s testimony--buttressed by a paper trail that shows an
unusual haste to get the hearing over with and rule against
Industrial--compels us to find that as a matter of fact he was
influenced by the cover letter, leaving no doubt that his
impartiality was compromised. We therefore remand the case to
the IRS for a new CDP hearing before a different Appeals officer
who has not been exposed to the ex parte letter. Drake, 125 T.C.
at 210.4
4 It is not entirely clear that this is the only possible
remedy. Another way to cure an ex parte communication might be
to allow the offended party to have an opportunity to review and
comment on it before the Appeals officer presiding over the
remand. This would put Industrial in the same position it would
have been in if the revenue officer had incorporated his letter
into the initial determination and made it part of the
administrative file. As we noted in Moore v. Commissioner, T.C.
Memo. 2006-171, however, the revenue procedure itself doesn’t
address specific administrative remedies. It also seems to
contemplate oral ex parte communications--for example, meetings
or conference calls--and not the sort of written communication
that blindsided Industrial. See Rev. Proc. 2000-43, sec. 3, Q&A-
21, 2000-2 C.B. 404, 408. Since the IRS hasn’t spoken on this
(continued...)
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