PRIA, Government Policy, Made Personal

Summary

You can ask to send unresolved issues from an IRS audit or collection case early to the IRS Independent Office of Appeals. If issues are still stuck after appeals, or after failed attempts at a closing agreement or compromise, either you or the Appeals office can request non-binding mediation, and a pilot program lets both sides jointly request binding arbitration. Organizations claiming tax-exempt status can also appeal to that office when the IRS rules against their exemption, their status as a charity eligible for deductible gifts, or their classification as a private foundation or private operating foundation.

Title 26, §7123

Internal Revenue Code, Source: USLM XML via OLRC

(a)The Secretary shall prescribe procedures by which any taxpayer may request early referral of 1 or more unresolved issues from the examination or collection division to the Internal Revenue Service Independent Office of Appeals.

(b)(1)The Secretary shall prescribe procedures under which a taxpayer or the Internal Revenue Service Independent Office of Appeals may request non-binding mediation on any issue unresolved at the conclusion of—

(A)appeals procedures; or

(B)unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122.

(2)The Secretary shall establish a pilot program under which a taxpayer and the Internal Revenue Service Independent Office of Appeals may jointly request binding arbitration on any issue unresolved at the conclusion of—

(A)appeals procedures; or

(B)unsuccessful attempts to enter into a closing agreement under section 7121 or a compromise under section 7122.

(c)(1)The Secretary shall prescribe procedures under which an organization which claims to be described in section 501(c) may request an administrative appeal (including a conference relating to such appeal if requested by the organization) to the Internal Revenue Service Independent Office of Appeals of an adverse determination described in paragraph (2).

(2)For purposes of paragraph (1), an adverse determination is described in this paragraph if such determination is adverse to an organization with respect to—

(A)the initial qualification or continuing qualification of the organization as exempt from tax under section 501(a) or as an organization described in section 170(c)(2),

(B)the initial classification or continuing classification of the organization as a private foundation under section 509(a), or

(C)the initial classification or continuing classification of the organization as a private operating foundation under section 4942(j)(3).

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 7123 was renumbered section 7124 of this title.

Amendments

2019—Pub. L. 116–25 substituted “Internal Revenue Service Independent Office of Appeals” for “Internal Revenue Service Office of Appeals” wherever appearing. 2015—Subsec. (c). Pub. L. 114–113 added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 2015 Amendment Pub. L. 114–113, div. Q, title IV, § 404(b), Dec. 18, 2015, 129 Stat. 3118, provided that: “The amendment made by subsection (a) [amending this section] shall apply to determinations made on or after May 19, 2014.”

§7123 Appeals Dispute Resolution Procedures