SECTION 3. GENERAL SCOPE OF

MEDIATION AND ARBITRATION PROCEDURES

1. The general provisions set forth in Revenue Procedures 2009–44 and 2006–44 apply to the mediation and arbitration, respectively, of OIC and TFRP cases under this program except as specifically stated in this announcement. In accordance with Revenue Procedure 2006–44, arbitration is not available for legal issues.

2. The mediation and arbitration procedures do not create any special authority for settlement by Appeals. During the mediation and arbitration processes, Appeals is still subject to the procedures that would apply if the issue were being considered via the standard Appeals process, including procedures in the Internal Revenue Manual (IRM), found at http://www.irs.gov/irm/index.html, and other administrative guidance.

3. The overall determination whether a taxpayer was required to collect, truthfully account for, and pay over income, employment or excise taxes, and/or whether a taxpayer willfully failed to collect or truthfully account for and pay over such tax or willfully attempted in any manner to evade or defeat the payment of such tax are legal issues for which arbitration is not available. These legal issues, however, are based on factual components that are eligible for arbitration.

4. The overall determination whether a taxpayer’s offer is acceptable under section 7122 may only be made by the Secretary or his delegate and is not a matter for arbitration. See section 7122(a) (giving the Secretary the discretionary authority to compromise tax liabilities) and Del

egation Order 5–1 (delegating that discretionary authority to Appeals). Factual determinations are generally required as part of making the overall offer acceptability determination, however, and these individual factual determinations are eligible for arbitration.

5. The Appeals Area Director must approve the acceptance of all cases for mediation or arbitration.