SECTION 2. BACKGROUND

Section 7123(b)(1) of the Code, as enacted by section 3465 of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105–206, 112

Stat. 685, provides the statutory authority for the Appeals mediation program. Section 7123(b)(1)(A) provides that mediation will be available on any issue unresolved at the conclusion of Appeals procedures. Section 7123(b)(1)(B) provides that mediation will be available on any issue unresolved at the conclusion of unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122.

In announcements issued in 1995 and 1997, the IRS established procedures for taxpayers to request mediation in Coordination Examination Program cases assigned to Appeals Team Chiefs. See Announcement 95–86, 1995–44 I.R.B. 27, and Announcement 97–1, 1997–2 I.R.B. 62. In 1998, the IRS announced that it would begin a two-year pilot of an expanded mediation program that would encompass factual issues arising from examination, involving adjustments of $1 million or more. See Announcement 98– 99, 1998–2 C.B. 652. In 2001, that pilot program was extended for an additional year. See Announcement 2001–9, 2001–1 C.B. 357. On July 1, 2002, the IRS published Rev. Proc. 2002–44, 2002–2 C.B. 10, which superseded Announcement 98–99 and Announcement 2001–9, formally established the Appeals mediation program, and further expanded the types of cases for which mediation would be available, including cases where there was an unsuccessful attempt to enter into a closing agreement.

Under these programs, mediation was not available for any collection case or issue. In Announcement 2008–111, 2008–48 I.R.B. 1224, published December 1, 2008, Appeals established a twoyear pilot program to extend mediation and arbitration to certain collection cases. Under the pilot program, certain offer-incompromise (OIC) and Trust Fund Recovery Penalty (TFRP) cases in Appeals offices in select cities were eligible for mediation.

Rev. Proc. 2009–44 updated and superseded Rev. Proc. 2002–44 to again expand and clarify the types of cases that may be mediated in Appeals. In addition, Rev. Proc. 2009–44 provided that mediation may be available for OIC and TFRP

1For purposes of this revenue procedure, the term “mediation” refers only to “non-binding mediation” as set forth in section 7123(b)(1).

December 29, 2014 1014 Bulletin No. 2014–53

Announcement 2008–11 and Announcement 2011–6 did not expressly exclude this issue from the list of TFRP issues where mediation would be available.

.08 Section 9.01 clarifies that a representative from the Appeals Office of Tax Policy and Procedure may participate in the negotiations to select an Appeals mediator.