SECTION 1. PURPOSE

This revenue procedure provides procedures for an issuer of tax-exempt bonds to request an administrative appeal to the Office of Appeals (Appeals) within the Internal Revenue Service (Service) from a proposed adverse determination by the Service’s Office of Tax Exempt Bonds (TEB) of the Tax Exempt & Government Entities Division (TE/GE) to the effect that an issue of bonds fails to qualify for the exclusion

of the interest on the bonds from the gross income of the owners under section 103 of the Internal Revenue Code (the Code) and related provisions of the Income Tax Regulations (the Regulations) (Proposed Adverse Determination). This revenue procedure also provides procedures for an issuer of tax-exempt bonds to request such an administrative appeal from a denial by TEB of a claim for recovery of an asserted overpayment of arbitrage rebate under section

2006–42 I.R.B. 694 October 16, 2006

guidance, permit senior Appeals officers to mediate or otherwise assist in the resolution of matters identified during the course of an examination prior to the issuance of a Proposed Adverse Determination. See Revenue Procedure 99–28, 1999–2 C.B. 109, and Announcement 2003–36, 2003–1 C.B. 1093.