SECTION 1. BACKGROUND AND

SUMMARY

.01 This announcement contains the procedures for the Tax Exempt Bond Mediation Dispute Resolution Pilot Program (TEB Mediation). In furtherance of the Service’s goal of resolving tax controversies on a basis that is fair and impartial to both the government and taxpayers, TEB Mediation establishes new opportunities for Issuers (as defined in Rev. Proc. 96–16, 1996–1 C.B. 630) of tax-exempt debt, with the assistance of the Office of Appeals, to expedite the resolution of cases within the Tax Exempt Bond organization.

.02 TEB Mediation is jointly administered by TEB and Appeals and is available to Issuers of tax-exempt debt with cases under examination within TEB. Due to the nature of these cases, conduit borrowers (and in certain limited cases, other interested parties) may participate in TEB Mediation, but every TEB Mediation must involve a person with decision making authority for the Issuer, whether the Issuer itself, an authorized representative of the Issuer pursuant to a power or attorney, or another entity ( e.g., a conduit borrower) pursuant to a power of attorney from the Issuer. See §§ 4.05, 4.09, and 4.10. TEB Mediation takes place prior to the issuance of the proposed adverse determination letter to the Issuer and is designed to be completed in approximately 60 days or less.

.03 TEB Mediation utilizes the services of a trained Appeals mediator with TEB experience (Appeals Mediator), serving as a neutral participant, to facilitate the resolution of factual disputes between the parties. At the Issuer’s expense, TEB and the Issuer (the parties) may use a non-Service co-mediator in the TEB Mediation.