IRS Issue Number: IR-2008-135 December
1, 2008
IRS Announces Two New Appeals
Programs
WASHINGTON, December 1, 2008 – The
Internal Revenue Service on December 1, 2008, announced a two-year
test of two new appeal programs: the post-Appeals mediation and arbitration
procedures for
Offer in Compromise (OIC) and Trust Fund Recovery Penalty (TFRP).
Beginning Dec. 1, 2008. for a two-year test period, Appeals will offer
post-Appeals mediation and arbitration for OIC and TFRP cases for taxpayers
whose appeals are considered at the Appeals office in Atlanta, Ga.; Chicago,
Ill.; Cincinnati, Ohio; Houston, Texas; Indianapolis, Ind.; Louisville, Ky.;
Phoenix, Ariz.; and San Francisco, Calif.
Under these two
alternative dispute resolution programs, the taxpayer or Appeals may
request nonbinding mediation. The taxpayer may decline Appeals’ request for
mediation. Appeals will evaluate a taxpayer’s request for mediation based on
the criteria detailed in
Revenue Procedure 2002-44 and Announcement 2008-111. A request for
binding arbitration must be made jointly by the taxpayer and Appeals. The
mediation and arbitration procedures do not create any additional authority
for settlement by Appeals.
During the appeals test period, Appeals employees will advise the
taxpayer of the availability of these alternative dispute strategies and the
deadline for timely requesting such strategies when a rejection of an OIC is
sustained or a proposed TFRP assessment is sustained. An OIC submitted
during Collection Due Process (CDP) as an alternative to a
Collection action is not eligible for these
alternative dispute
resolution strategies during the test period.
The new IRS Post-Appeals mediation process is available for both legal
and factual issues. The mediator’s role is to facilitate settlement
negotiations so the parties can reach their own agreement. The mediator
does not have settlement authority over any issue.
The Arbitration procedure is available for factual issues only. The
arbitrator’s role is to hear both sides of a disputed issue and then render
a decision on the specific factual issue being arbitrated. This decision is
binding on both parties. However, the arbitrator does not have the
authority to decide that the offer in compromise itself must be accepted or
that a person is/is not liable for the TFRP under § 6672. Neither party may
appeal the decision of the arbitrator or contest the decision in any
judicial proceeding.
Complete procedures for initiating a request for post-Appeals mediation
or arbitration are in
Announcement 2008-111.
The agency will seek appropriate Offer in Compromise and Trust Fund Recovery
Penalty cases for both post-Appeals mediation and arbitration during the
two-year test period in order to evaluate the effectiveness of alternative
dispute resolution for these cases.
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