Part III. Administrative, Procedural, and Miscellaneous

.01 Mediation is no longer limited to issues involving an adjustment of $1 million or more; it is now available for any qualifying issues, as described in this revenue procedure, that are already in the Appeals administrative process;

.02 Section 4.02(1) provides that legal issues are now eligible for mediation;

.03 Section 4.02(3) provides that Industry Specialization Program (ISP) issues and Appeals Coordinated Issues (ACI) are now eligible for mediation;

.04 Section 4.02(5) provides that mediation is now available for an issue for which the taxpayer intends to seek competent authority assistance, provided a request for competent authority assistance has not as yet been filed;

.05 Section 4.02(6) provides that mediation is now available after unsuccessful attempts to enter into a closing agreement under § 7121;

.06 Section 4.03(2) provides that Collection cases are excluded from mediation;

.07 Section 4.03(3) provides that issues for which mediation would not be consistent with sound tax administration are excluded from mediation;

.08 Section 4.03(4) provides that frivolous issues are excluded from mediation;

.09 Section 4.03(5) provides that cases where the taxpayer did not act in good faith during settlement negotiations are excluded from mediation;

.10 Section 5.02(2) includes new filing requirements;

.11 Section 5.04 includes express timelines to complete the agreement to mediate and proceed to mediation. A taxpayer’s inability to adhere to these timeframes, without reasonable cause, may result in Appeals’ withdrawal from the mediation process;

.12 Section 5.06 requires the use of Appeals personnel who are trained mediators. Headquarters Appeals will pay the expenses associated with Appeals mediators. Taxpayers may also elect to use a non-Internal Revenue Service mediator, at taxpayers’ expense;

.13 Section 5.11 provides that there will be no ex parte contacts with the mediator outside the mediation session, except as provided by that section;

26 CFR 601.106: Appeals functions. (Also §§ 601.202, 601.203; and Part I, § 7123(b)(1).)

Rev. Proc. 2002–44

CONTENTS