26 U.S.C. § 7123 - Appeals Dispute Resolution Procedures

(a) Early referral to appeals procedures

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) Alternative dispute resolution procedures

• (1) Mediation
  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) Arbitration
  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) Administrative appeal relating to adverse determination of tax-exempt status of certain organizations

• (1) In general
  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) Adverse determinations
  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).

(Added Pub. L. 105–206, title III, § 3465(a)(1), July 22, 1998, 112 Stat. 768; amended Pub. L. 114–113, div. Q, title IV, § 404(a), Dec. 18, 2015, 129 Stat. 3118; Pub. L. 116–25, title I, § 1001(b)(1)(G), July 1, 2019, 133 Stat. 985.)