Accessibility Skip to Top Navigation Skip to Main Content Home  |  Change Text Size  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Part 8. Appeals

Chapter 26. Alternative Dispute Resolution (ADR) Program

Section 6. Appeals Arbitration Procedures (Non-Collection Cases)

8.26.6  Appeals Arbitration Procedures (Non-Collection Cases)

8.26.6.1  (06-17-2008)
Introduction to Appeals Arbitration Procedures for Non-Collection Cases

  1. On October 30, 2006, the Service published Revenue Procedure 2006-44, 2006-44, I.R.B. 800. The revenue procedure formally established the Appeals arbitration program.

  2. The Appeals arbitration program was designed to improve tax administration, provide customer service, and reduce taxpayer burden.

  3. Arbitration is available for cases within Appeals jurisdiction that meet the operation requirements of the program.

  4. Publication 4167, Appeals - Introduction to Alternative Dispute Resolution, explains the arbitration process and is included as an enclosure in the Uniform Acknowledgement Letter (UAL) sent by the Appeals Team Manager when the case is received in Appeals.

    Note:

    It should be documented in the Case Activity Record (CAR) that Pub. 4167 was included as an enclosure with the UAL. See IRM 1.4.28.3.1 and IRM 8.2.1.7 for the UAL procedures for ATMs and the Appeals Officers.

8.26.6.2  (06-17-2008)
Headquarter's Involvement

  1. All requests for arbitration for non-collection cases under Rev. Proc. 2006-44, or any successor guidance, require the involvement of the Chief, Appeals, Director, Technical Services - Office of Tax Policy and Procedure (TP&P) (Exam).

  2. This includes, but is not necessarily limited to, Appeals Team Managers (ATM):

    • notifying TP&P (Exam) of the receipt of an arbitration request;

    • providing TP&P (Exam) with a copy of the arbitration request;

    • consulting with TP&P (Exam) before making a decision on denying an arbitration request;

    • including TP&P (Exam) in any conference calls with the taxpayer to discuss the arbitration procedures, process, and discussions concerning the identification and selection of Appeals' arbitrators or non-IRS arbitrators; and

    • having TP&P (Exam) review the arbitration agreement before the ATM signs it on behalf of Appeals.

8.26.6.3  (06-17-2008)
Scope of Arbitration

  1. Binding arbitration may be used to resolve issues while a case is in Appeals after settlement discussions are unsuccessful and, generally, when all other issues are resolved but for the specific factual issue(s) for which arbitration is requested.

  2. Once a case has been closed by Appeals with the issuance of a Statutory Notice of Deficiency, the issuance of a Statutory Notice of Claim Disallowance or issuance of any other closing letter under established closing procedures, the case is no longer in Appeals jurisdiction and no longer eligible for arbitration procedures.

8.26.6.3.1  (06-17-2008)
Cases/Issues Eligible for Arbitration

  1. Cases/issues eligible for arbitration are:

    1. Factual issue(s);

    2. Factual issues for which the taxpayer intends to seek competent authority assistance provided a request for competent authority assistance has not yet been filed; and

    3. Factual issues unresolved at the conclusion of unsuccessful attempts to enter into a closing agreement under IRC §7121 .

8.26.6.3.2  (06-17-2008)
Cases/Issues Not Eligible for Arbitration

  1. Cases/Issues not eligible for arbitration are:

    1. Legal issues;

    2. Cases in which arbitration is not appropriate under either 5 U.S.C. § 572 or 5 U.S.C. § 575, which provide the general authority and guidelines for the use of alternative dispute resolution in the administrative process;

    3. Issues docketed in any court;

    4. Issues in a taxpayer's case designated for litigation;

    5. Compliance Coordinated (formerly Industry Specialization Program) Issues (CCI) or Appeals Coordinated Issues (ACI) listed at: http://www.irs.gov/individuals/article/0,,id=108655,00.html and http://www.irs.gov/individuals/article/0,,id=108652,00.html, respectively. Also see IRM 8.7.3.2.1, Compliance Coordinated Issues, and IRM 8.7.3.2.2,Appeals Coordinated Issues;

    6. Issues for which the taxpayer has requested competent authority assistance or the simultaneous Appeals/Competent Authority procedure;

    7. Collection cases, except for those involving an unsuccessful attempt to enter into a compromise under IRC §7122. However, see IRM 8.23.2.14, Evaluation of Offers in Compromise, and IRM 8.25.1.4 , Trust Fund Recovery Penalty (TFRP) Overview and Authority, for discussions on the availability of ADR programs for these types of cases.

    8. Issues for which arbitration would not be consistent with sound tax administration, e.g. issues governed by closing agreements, by res judicata , or controlling Supreme Court precedent;

    9. "Whipsaw" issues, i.e. issues for which resolution with respect to one party might result in inconsistent treatment in the absence of the participation of another party;

    10. Frivolous issues, such as, but not limited to those identified in Section 6.10 of Rev. Proc. 2007-1, IRB 1, and IRM 4.10.12.1.1, Frivolous Arguments;

    11. Cases where the taxpayer did not act in good faith during Appeals settlement negotiations, e.g. (not all inclusive):

       

      • failure to respond to document requests;

      • failure to respond timely to offers to settle;
        or
       

      • failure to address arguments and precedents raised by Appeals.

    12. Issues that have been otherwise identified as excluded from the arbitration program.

8.26.6.4  (06-17-2008)
Arbitration Process for Non-Collection Cases

  1. Arbitration is optional. Either the taxpayer or Appeals may submit a request to arbitrate after consultation with the other party.

  2. If, in the opinion of the ATCL or AO, the issue(s) does not qualify for arbitration under existing guidance, the ATCL or AO will note this in CARATS. The ATCL's or AO's decision is subject to the review and approval of the ATM.

8.26.6.4.1  (10-23-2007)
Filing Requirements

  1. Where to file. A taxpayer seeks approval for arbitration by sending a written request to the appropriate ATM, with copies to the appropriate Area Director and the Chief, Appeals.

  2. Required information.The taxpayer's arbitration request should:

    1. Provide the taxpayer's name, TIN, address, and the name, title, address and telephone number of a person to contact;

    2. Provide the ATCL's or AO's name;

    3. Identify the taxable period(s) involved;

    4. Describe the issue(s) for which arbitration is being requested, including the dollar amount of the adjustment in dispute; and

    5. Contain a representation that the issue is not an excluded issue. See IRM 8.26.6.3.2.

8.26.6.4.2  (06-17-2008)
Review of Arbitration Request

  1. Upon receipt of the arbitration request, the ATM will submit a copy to TP&P (Exam).

  2. The ATM will confer with TP&P (Exam) before making the decision to deny the request.

  3. Generally, the ATM will respond to the taxpayer and the ATCL or AO within two weeks after the receiving the request for arbitration.

8.26.6.4.2.1  (10-23-2007)
Request Denied

  1. If the ATM denies the arbitration request, he or she will promptly inform the taxpayer in writing and advise the ATCL or AO of the decision. The ATM will provide TP&P (Exam) with a copy of the written denial.

  2. Although no formal appeal procedure exists for the denial of an arbitration request, the taxpayer may request a conference with the ATM to discuss the denial.

  3. The denial of an arbitration request is not subject to judicial review.

8.26.6.4.2.2  (10-23-2007)
Request Approved

  1. If the ATM approves the arbitration request, the he or she will inform the taxpayer and the ATCL or AO.

8.26.6.4.3  (10-23-2007)
Administrative Conference Call

  1. Once the ATM has approved the arbitration request, he or she will schedule a conference or conference call which will include TP&P (Exam) and the taxpayer to:

    1. discuss the arbitration process;

    2. negotiate the terms of the agreement to arbitrate; and

    3. discuss the selection of an arbitrator.

  2. The representative from TP&P (Exam) will act as the Administrator to manage and supervise the arbitration proceeding for non-collection cases and to act as a liaison between the taxpayer and Appeals and between the parties and the Arbitrator

8.26.6.4.4  (06-17-2008)
Agreement to Arbitrate

  1. The taxpayer and Appeals will enter into a written agreement to arbitrate.

  2. The model agreement is designed to serve as a basic framework. See Exhibit 8.26.6-1.If there is mutual agreement, the taxpayer and the ATM may modify or eliminate existing provisions and add new provisions as necessary. The ATM will request that TP&P (Exam) review the agreement prior signing it on Appeals behalf.

  3. The taxpayer and Appeals enter into the agreement to arbitrate in reliance on each other's agreement to be bound by the decision of the Arbitrator.

  4. This agreement will be negotiated during the administrative conference call. See IRM 8.26.6.4.3.

  5. At a minimum, the agreement to arbitrate will:

    1. Specify the agreed upon issue(s) to be arbitrated;

    2. Assign the prescribed task of finding facts to the Arbitrator;

    3. Describe with precision the answer the taxpayer and Appeals seek; e.g., a specific dollar amount, range of dollar values, a "yes" or "no" finding etc.;

    4. Describe and limit the kind of information the Arbitrator may consider, e.g., the taxpayer's and Appeals' agreement as to any legal guidance the Arbitrator must rely upon to reach a decision;

    5. Contain an initial list of witnesses, attorneys, representatives, and observers for the taxpayer and Appeals;

    6. Provide that the time and place of any hearing will be mutually agreed upon; and

    7. Prohibit ex parte contacts between the Arbitrator, the taxpayer and Appeals.

  6. The agreement to arbitrate may limit the number, identity and participation of Participants.

  7. Appeals may withdraw from the arbitration process if a taxpayer's inability to adhere to these time frames is without reasonable cause.

  8. The ATM, in consultation with the ATCL or AO, will sign the agreement to arbitrate on behalf of Appeals.

  9. A copy of the signed agreement will be forwarded to TP&P (Exam).

  10. In executing the agreement to arbitrate, the taxpayer consents to the disclosure by the IRS of the taxpayer's return and return information incident to the arbitration to any participant for the taxpayer identified in the list of participants,

  11. Generally, the agreement to arbitrate will be completed within four weeks after notification that Appeals has approved the arbitration request and proceed to arbitration within 90 days after signing the agreement to arbitrate.

8.26.6.4.5  (10-23-2007)
Participants

  1. Appeals and the taxpayer must notify one another and the Administrator, in a signed writing, not later than thirty (30) days before the arbitration session, of any change to the initial list of Participants contained in the agreement to arbitrate.

  2. By mutual agreement, Appeals and the taxpayer may modify the list of Participants at any time up to and including the date of the arbitration session.

  3. Any changes will be submitted to the Administrator who will then forward to the Arbitrator.

  4. Appeals may elect to have an observer attend the arbitration session. If the taxpayer does not accept observers, the taxpayer's request for arbitration may be denied.

  5. The taxpayer may also have an observer attend any arbitration session.

  6. The identity and affiliation of all observers will be established in the agreement to arbitrate signed prior to the arbitration session.

  7. Appeals reserves the right to have the Office of Chief Counsel assist and participate in the arbitration proceedings.

8.26.6.4.6  (10-23-2007)
Selection of An Arbitrator

  1. By mutual agreement, Appeals and the taxpayer may select an arbitrator from Appeals or from any local or national organization that provides a roster of neutrals.

  2. The selection will be discussed during the conference or conference call.

  3. Criteria for selecting an arbitrator may include some or all of the following:

    • completion of arbitration training;

    • previous arbitration experience

    • a substantive knowledge of tax law and knowledge of industry practices.

  4. The Arbitrator's qualifications and potential conflicts of interest should be thoroughly reviewed prior to selection.

8.26.6.4.6.1  (10-23-2007)
Appeals Arbitrator

  1. If Appeals and the taxpayer select an Appeals arbitrator, the Arbitrator shall be from an Appeals office other than where the case is located, or from the office of the Chief, Appeals.

  2. Appeals will pay all expenses associated with an Appeals arbitrator.

8.26.6.4.6.2  (10-23-2007)
Non-IRS Arbitrator

  1. If Appeals and the taxpayer select a non-IRS arbitrator, they will equally share the compensation, expenses, and related fees and costs of the Arbitrator.

  2. The projected travel costs, hourly fees, and other expenses of a non-IRS arbitrator are subject to the applicable rules and regulations for Government procurement.

8.26.6.4.6.3  (10-23-2007)
Conflict Statement

  1. An arbitrator shall have no official, financial, or personal conflict of interest with respect to Appeals or the taxpayer, unless such interest is fully disclosed in writing to the taxpayer and ATM and they agree that the Arbitrator may serve.

  2. Due to the inherent conflict that results because an Appeals arbitrator is an employee of the IRS, an Appeals arbitrator will provide the taxpayer a written statement:

    • confirming his or her proposed service as an arbitrator,

    • that he or she is a current employee of the IRS, and

    • that a conflict results from his or her continued status as an IRS employee.

8.26.6.4.7  (10-23-2007)
Discussion Summaries

  1. Appeals and the taxpayer will each prepare a discussion summary of their positions for consideration by the Arbitrator.

  2. The summaries should be submitted to the Administrator no later that thirty (30) days before the scheduled arbitration session.

  3. The Arbitrator will look solely to the legal guidance identified by Appeals and the taxpayer. If the Arbitrator desires further legal guidance, Appeals and the taxpayer must agree to provide the guidance and the manner in which it is to be communicated to the Arbitrator.

8.26.6.4.8  (10-23-2007)
Confidentiality

  1. The arbitration process is confidential. Therefore, all information concerning any dispute resolution communication is confidential and may not be disclosed by any party, participant, observer, or arbitrator except as provided by statute, such as IRC 6103 and 5 U.S.C. section 574.

  2. A dispute resolution communication includes all oral or written communications prepared for the purposes of the dispute resolution proceeding.

8.26.6.4.9  (10-23-2007)
Ex Parte Contact Prohibited

  1. There shall be no ex parte communications between the Arbitrator and the Appeals team, the taxpayer, or their respective agents, or other participants, outside the arbitration session.

  2. The Arbitrator may not have contact with any other individuals, including the Participants, outside the arbitration session, concerning the arbitration matter, without the express approval of Appeals and the taxpayer.

8.26.6.4.10  (10-23-2007)
Withdrawal

  1. By mutual agreement, the Appeals team and the taxpayer may withdraw from the arbitration process to reach a final Appeals settlement at any time prior to the date of the arbitration session.

  2. Postponements for good cause shall be determined by agreement between the parties.

8.26.6.4.11  (10-23-2007)
Arbitrator's Report

  1. The Arbitrator will prepare a written report and submit a copy to the Administrator no later than thirty (30) days after the completion of the arbitration proceeding. Because the arbitrator is limited to the task of finding facts, the report will not provide any decision or reasoning that represents an interpretation of the law.

  2. Neither the Appeals team nor the taxpayer may appeal the decision of the Arbitrator or contest the decision in any judicial proceeding

8.26.6.4.12  (10-23-2007)
Appeals Procedures Apply

  1. Once the Arbitrator renders a decision on all or some issues through the arbitration process, Appeals will use established closing procedures (see IRM 8.20.7, Appeals Case Closures ), including, where appropriate, preparation of Form 906, Closing Agreement on Final Determination Covering Specific Matters. See IRM 8.13.1, Closing Agreements.

8.26.6.4.13  (06-17-2008)
Tracking Time

  1. For purposes of accurately tracking the amount of direct time on Appeals cases, the Appeals Arbitrator will be assigned as a team member on the arbitration case.

  2. The Appeals Arbitrator will request that Appeals Processing Services (APS):

    1. first, input the feature code "TL" to create the Team Leader record for the ATL or AO even if there are no other team members on the case besides the Appeals arbitrator;

    2. then, input the feature code "TM" to create the Team Member record for the Appeals arbitrator; and

    3. input the feature code "AR" on the same case to indicate it is an arbitration case. (This feature code will only be used on cases for which the taxpayer requests arbitration while the case is in Appeals jurisdiction.)

  3. The ATCL or AO is responsible for verifying that APS follows the procedures in IRM 8.7.11, Working Appeals Team Cases.

Exhibit 8.26.6-1  (10-23-2007)
Model Arbitration Agreement

Agreement to Arbitrate
1. The Arbitration Process.
  Arbitration is optional and will be used to assist [name of taxpayer] and the Internal Revenue Service (IRS) - Appeals (the Parties) in resolving certain factual issues that are currently in the Appeals administrative process. This arbitration process will be conducted pursuant to Rev. Proc. 2006-44, 2006-44 I.R.B. 800. The Parties to this agreement will submit the issues for arbitration and agree to be bound by the Arbitrator's findings on these issues. Each party enters this agreement in reliance on the other Party's agreement to be bound by the decision of the Arbitrator. There can be no ex parte communication between the Arbitrator and any Party , third party, witness, agent, or other person regarding the issues for arbitration. All communications between the Arbitrator and either Party, including requesting and transferring documentation and information, will be made through the Administrator.
2. participants
  The participants in the arbitration session will be:
    For Taxpayer:
    For Appeals:
  Appeals reserves the right to have an observer attend any arbitration. Taxpayers or their representatives may also have an observer attend the arbitration.
  All witnesses, attorneys, representatives and observers (Participants) who will attend the arbitration on behalf of or at the request of a Party must be set forth in the list of Participants. If a Party subsequently modifies its list, then, no later than thirty (30) days before commencement of the arbitration session, such Party will submit to the Administrator a complete and final list of Participants who will attend the arbitration session. The list must identify, for each Participant, his or her position with the Party or other affiliation and address, telephone and fax numbers. The Administrator will simultaneously submit each Party’s list to the other Party and to the Arbitrator by facsimile or other arrangement agreed to by the Parties. The Parties, by mutual agreement, may modify the list of Participants in writing at any time up to and including the date of the commencement of the arbitration session. Witnesses will be identified in accordance with Section 6 of this agreement.
3. Selection of arbitrator, Costs.
  The Parties have agreed to select an arbitrator from Appeals or from any local or national organization that provides a roster of neutrals. On behalf of the Parties, the Administrator will arrange for the hiring of the Arbitrator. The fees and costs of the Arbitrator will be shared equally by the taxpayer and Appeals, subject to applicable rules and regulations for Government procurement.
4. Issues to be Arbitrated.
  The Parties agree that the issues submitted for resolution by the Arbitrator are factual in nature and do not require the Arbitrator to interpret any law, regulation, ruling or other legal authority. The following issues shall be resolved separately for each of the taxable years at issue:
    Issue #1
    Issue #2
5. GUIDANCE FOR ARBITRATOR.
  The Arbitrator is not permitted to make any determinations of law or provide reasoning that represents an interpretation of the law; however, it may be necessary for the Arbitrator to refer to the existing applicable law in making a finding on the factual issues. In doing so, the Arbitrator shall look solely to the following legal guidance specified by the Parties:
  a. Findings of facts shall be consistent with the legal authorities identified in [Appendix A].
  b. The Parties will follow the Federal Rules of Evidence when proffering testimonial and documentary evidence at the arbitration session. The Arbitrator, in his or her sole discretion, shall apply the Rules with the objective of admitting only evidence that is reliable and credible. The Arbitrator will make final rulings on evidentiary disputes. To the extent the conduct of the Arbitration session is not governed by this agreement, the Parties agree to follow the Federal Rules of Civil Procedure.
  c. At the request of the Arbitrator, the Parties may agree to provide further legal guidance. The Administrator shall determine, after consultation with the Arbitrator and the Parties, the appropriate manner (i.e., verbal or written form and timing) to submit the further legal guidance to the Arbitrator. If no agreement can be reached with respect to the further legal guidance and it is determined by the Arbitrator that further guidance from the Parties is necessary to decide the matter, then the matter cannot be arbitrated and this agreement will terminate.
  d. When legal guidance provided by the Parties is in conflict, the Arbitrator, where practicable, will ignore the guidance and decide the factual issue. If it is not practicable to set aside the Parties’ guidance, then during the arbitration session, the Parties will attempt to agree on the guidance needed to resolve the issue. If the Parties cannot agree and the guidance is necessary to decide the matter, then the matter cannot be arbitrated and this agreement will terminate.
6. SUBMISSION OF MATERIALS.
  Each Party agrees to provide a written summary of the case and their position (not to exceed 25 pages) to the Administrator at least thirty (30) days prior to the date of commencement of the arbitration session. On the due date for the summaries, the Parties will simultaneously exchange the summaries by facsimile or other arrangement agreed to by the Parties and submit a copy to the Administrator for transmittal to the Arbitrator by facsimile or by means of an overnight express delivery service. The Parties will submit testimonial and documentary evidence to the Arbitrator in accordance with the procedures set forth in sections 6 a. and 6 b. below.
  The Arbitrator may order a Party to produce a summary of their documents and other evidence which the Party intends to present in support of its position and may order a Party to produce other documents, exhibits or evidence deemed necessary or appropriate. Any and all information and materials that a Party provides must be submitted to the other Party and Administrator who will simultaneously forward such to the Arbitrator.
  The Parties will attempt to stipulate to as many facts, documents or conclusions as possible prior to the arbitration session. A stipulation shall be submitted to the Arbitrator, through the Administrator, prior to the commencement of the arbitration session. The Parties may jointly submit supplemental stipulations to the Arbitrator, through the Administrator, at any time prior to the date that the report is issued pursuant to section 14.
  a. The Parties may, with mutual agreement and the consent of the Arbitrator, offer witnesses at the arbitration session:
    (1) Witnesses shall be subject to direct examination, cross examination and questions by the Arbitrator. In the discretion of the Arbitrator, Parties may request the opportunity to redirect and recross a witness. The Parties shall submit to the Administrator a listing of potential fact witnesses no later than thirty (30) days prior to the date of commencement of the arbitration session. The listing should include the name, current position (if an employee of [NAME OF COMPANY], current and former positions with the applicable company and period such position(s) were held), and brief description of the anticipated testimony.
    (2) The Administrator shall forward the witness lists to the Arbitrator and the opposing Party on the due date for such documents.
    (3) Once the witness lists have been submitted to the Arbitrator, a Party shall not add additional persons except upon joint agreement of both Parties. A witness will not be entitled to testify at the arbitration session if that person is not included on the listing of witnesses timely submitted to the Administrator.
  b. The Parties may, with mutual agreement, submit to the Arbitrator any reliable and credible documents that are relevant to the issues to be decided by the Arbitrator. Issues of relevance, reliability and credibility shall be resolved by the Arbitrator. All documents shall be based solely on information contained within the existing record.
    (1) All documents to be submitted to the Arbitrator prior to the commencement of the arbitration session shall be by joint agreement of the Parties, unless otherwise ordered by the Arbitrator. The time and manner of the submission shall be by joint agreement of the Parties.
    (2) All documents to be offered by a Party during the arbitration session shall be identified and, if not previously provided, exchanged with the opposing Party no later than thirty (30) days prior to the date of commencement of the arbitration session. The Parties shall submit their documents to the Administrator who will immediately and simultaneously forward them to the Arbitrator. The Parties shall exchange documents directly. Failure to timely exchange documents not previously provided shall preclude the use of such document(s) in the arbitration session, except by a showing of good cause and lack of prejudice to the opposing Party, as determined by the Arbitrator.
  c. The Parties agree that the methodology to be used by the Arbitrator in deciding any issue described in section 4 of this agreement must follow these principles:
    [For example, language describing the answer sought by the Parties from the Arbitrator, e.g., a specific dollar value, a range of values, a ‘yes’ or ‘no’ finding, etc.]
  d. The Parties agree to clarify issues that may arise in calculating any deficiency or overpayment resulting from the Arbitrator’s findings and agree to the tax treatment of the Arbitrator’s findings as follows:
    [For example, the Parties should specify how to calculate the taxpayer’s deficiency based on the Arbitrator’s determination of the value of a particular asset.]
7. CONTACT WITH ARBITRATOR.
  The Parties agree that there shall be no ex parte communication between the Arbitrator and either Party or any Participant. In addition, the Arbitrator may not have contact with any other individuals, except the Administrator, concerning the substance of the arbitration or the arbitration process without the express approval of the Parties. Any contact with the Arbitrator by either Party must be in the presence of the other Party and such contact must be arranged by the Administrator.
8. ARBITRATION SESSION.
  Subject to the approval of the Arbitrator, the arbitration session will commence on the date and time agreed to by the Parties. The procedures for the arbitration session shall be determined by the Arbitrator, e.g., length and order of opening and closing statements, presentation of witnesses, etc. The postponement or continuance of the arbitration session for good cause shall be determined by agreement between the Parties, subject to the final approval of the Arbitrator.
9. Place of arbitration.
  The Parties prefer [NAME OF LOCATION] as the site for the arbitration session, subject to change by agreement among the Parties and the Arbitrator.
10. CONFIDENTIALITY
  IRS and Treasury employees who participate in any way in the arbitration process and any person under contract to the IRS pursuant to Section 6103(n) of the Internal Revenue Code of 1986, as amended, including the Arbitrator, that the IRS invites to participate will be subject to the confidentiality and disclosure provisions of the Internal Revenue Code, including Sections 6103, 7213, and 7431. See also 5 U.S.C. § 574. All information concerning any dispute resolution communication related to the arbitration proceeding is confidential and may not be disclosed by any Party, Participant, Administrator, or Arbitrator except as provided under 5 U.S.C. § 574. A dispute resolution communication includes all oral or written communications prepared for purposes of a dispute resolution proceeding. See 5 U.S.C. § 571(5).
  [NAME OF TAXPAYER] consents to the disclosure by the IRS of the taxpayer’s returns and return information incident to the arbitration to any Participant for the taxpayer identified in the initial list of Participants in section 2 of this agreement, to any Participant identified in writing by the taxpayer subsequent to execution of this agreement, and to any other persons who participate in this arbitration proceeding on behalf of either Party. If the arbitration agreement is executed by a person pursuant to a power of attorney executed by [NAME OF TAXPAYER], that power of attorney must clearly express the grant of authority by [NAME OF TAXPAYER] to consent to disclose the returns and return information of [NAME OF TAXPAYER] by the IRS to third parties, and a copy of that power of attorney must be attached to this agreement.
11. I.R.C. SECTION 7214(a)(8) DISCLOSURE.
  The Parties acknowledge that IRS and all other Treasury employees involved in this arbitration are bound by Section 7214(a)(8) and must report information concerning violations of any revenue law to the Secretary.
12. RECORD.
  The Arbitrator may request a stenographic or other record of the arbitration session. If a record is requested, the Administrator will make the arrangements and the Parties shall bear equally the costs of such record. The Parties agree that any stenographic record or other recording of the arbitration proceeding shall remain confidential and shall be destroyed by the Administrator following the issuance of the Arbitrator’s report pursuant to section 14.
13. WITHDRAWALS AND POSTPONEMENT .
  By mutual agreement, the Parties may withdraw from the arbitration process in order to reach a final Appeals settlement any time before the scheduled arbitration session. Established Appeals procedures apply to any resolution reached by the Parties. The Arbitrator may grant postponements for good cause after a hearing before both Parties.
14. REPORT BY ARBITRATOR.
  The Arbitrator’s report will identify each issue described in section 4 of this agreement, will state the findings of facts for each issue for each tax year, and explain any methodology referred to in section 6 c. of this agreement that was utilized in reaching such findings. The report shall be issued and submitted to the Administrator within thirty (30) days after the conclusion of the arbitration session, unless the Arbitrator requests additional time and the Parties approve such request. The Parties may not unreasonably withhold such approval. The Administrator shall forward the Arbitrator’s report to the Parties.
15. FINALITY OF ARBITRATOR’S DECISION.
  The Parties agree to be bound by the Arbitrator’s findings, as set forth in the report described in section 14 and to incorporate those findings and the final computations determined under section 6 d. of this agreement into an Appeals closing agreement that the Parties will execute. Delegation Order 236 (Rev. 3), or successor delegation order, may apply to settlements resulting from the arbitration process. Neither Party may appeal the findings of the Arbitrator nor contest the finding(s) in any judicial proceeding, including but not limited to the United States Tax Court, United States Court of Federal Claims, or a federal district or federal appellate court.
16. PRECEDENTIAL USE.
  The findings by the Arbitrator will not be binding on, or otherwise control, the Parties for taxable years not covered by the arbitration. Except as provided in this agreement, the findings of facts made by the Arbitrator may not be used as precedent by any Party.
         
  INTERNAL REVENUE SERVICE, APPEALS
  By: ________________________________
  Title: Appeals Team Manager
  Date: ______________________________
         
  name of taxpayer
  By: _______________________________
  Title:
  Date: ______________________________

More Internal Revenue Manual