SECTION 1. PURPOSE

Section 7123 requires the Internal Revenue Service to prescribe procedures by which a taxpayer or the Office of Appeals may request non-binding mediation on any issue unresolved at the conclusion of Appeals procedures, or unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122. Section 7123 also requires the Internal Revenue Service to establish a pilot program by which a taxpayer and the Office of Appeals may jointly request binding arbitration for any issue unresolved under the same circumstances. This announcement modifies Revenue Procedure 2002–44, 2002–2 C.B. 10, and Revenue Procedure 2006–44, 2006–2 C.B. 800, by establishing a two-year test of the mediation and arbitration procedures for Offer in Compromise (OIC) and Trust Fund Recovery Penalty (TFRP) cases that are under the jurisdiction of the Office of Appeals.